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Subject: ACTION Programmatic Agreements for Categorical Exclusions

Date: February 4, 2015

From: Gloria M. Shepherd
Associate Administrator for Planning, Environment, and Realty

In Reply Refer To: HEPE

To: Directors of Field Services Division Administrators

Section 1318(d)(2) of the Moving Ahead for Progress in the 21st Century Act (MAP-21), P.L. 112-141, 126 Stat. 405, granted FHWA the authority to enter into programmatic agreements with States’ Departments of Transportation (SDOTs) to allow them to make categorical exclusion (CE) determinations on FHWA’s behalf. The FHWA issued a final rule for this authority in 23 CFR §771.117(g) on October 6, 2014 (79 FR 60100, Oct. 6, 2014).

The final rule amending FHWA’s Categorical Exclusion regulations requires all existing PCE agreements to be revised and updated. Existing agreements may continue to function until they are revised and updated. FHWA has developed a PCE agreement template that may be used to implement new or revised PCE agreements. Use of the template is not mandatory, and another format may be used provided that it includes any required information.

While FHWA has entered into PCE agreements with States since 1989, section 1318 of MAP-21 and the new implementing regulations now establish standards for such agreements. As FHWA Division Offices transition to new or revised PCE agreements with their respective States, it is important that we adhere to the standards now applicable to such agreements. The Office of Project Development and Environmental Review (HEPE) and the Office of Chief Counsel (HCC) will review a limited number of renewed agreements, after which we will assess whether it is necessary for HCC and HEPE to continue these reviews.

The Division and SDOT are responsible for drafting the PCE agreement. Once an acceptable draft is completed, the proposed agreement should be forwarded to Gerry Solomon for HEPE and HCC review.

SDOTs and Division Offices may choose one or more of the following options for PCE agreements:

  1. The PCE agreement identifies the SDOT as the decision-maker for some or all of the CEs specifically listed in 23 CFR §771.117(c)-(d). In such cases, no FHWA review or approval of such decisions is required before a project may proceed. For CE actions not listed in regulation, the Division Office should consult with HEPE and HCC on the process to establish such actions for the SDOT’s approval. The SDOT’s decision actions are subject to FHWA oversight pursuant to its program administration responsibilities.
  2. The PCE agreement identifies FHWA as the decision-maker but the SDOT may prepare CE documentation and recommend CE determinations for projects to FHWA. The SDOT recommends a project CE determination by completing a certification process with FHWA making the CE approval within a certain specified time frame or according to an agreed upon process. This method can be used for any CE listed in section 771.117(c) and (d) that is not delegated to the SDOT under paragraph 1. This method is also available when the SDOT wishes to have a project determined to qualify as a CE under the case-by-case CE authority in section 771.117(d). This is the only method that can be used for the case-by-case CE authority under section 771.117(d).
  3. The PCE agreement incorporates provisions of the two options above. It identifies the SDOT as a decision-maker for some projects and FHWA for others. This option allows SDOT CE decisions for some or all listed CEs (paragraph 1) and SDOT CE certification for any CE not delegated or for actions that qualify as a CE under the case-by-case CE authority in section 771.117(d) (paragraph 2).

The PCE agreement needs to establish the specific processes for decision-making. There are programmatic approaches that could streamline FHWA approval, such as having the SDOT provide a list of upcoming projects that the SDOT has certified as meeting the proposed CE and having FHWA approve the list before the projects move forward.

While the template is not mandatory, we encourage you to review it and consider incorporating those provisions that are necessary as you update your existing Agreement. We recognize each State has unique experience in developing their existing PCE Agreement and the updated Agreement, while including mandatory provisions, may not need to be< identical to the template. However, the template is compliant with all the requirements of the regulation.

Thank you in advance for your cooperation with these procedures. If you have any questions about this matter, please contact Gerry Solomon, Director of the Office of Project Development and Environmental Review, at (202) 366-2037, or Jennifer Mayo, Assistant Chief Counsel for Program Legal Services, at (202) 366-1523.