What Businesses Should Expect in Pursuing Certain Development Projects:
Since the passage of the Minnesota Environmental Protection Act (MEPA) in 1973, Minnesota law has required specific procedures for the assessment and analysis of the effect that certain development projects will have on the human environment. In recent years, an increasing number of businesses have begun integrating environmental sustainability into their plans for growth and development, either proactively or through increased government regulation. Still, it remains important for businesses to know the basics of environmental assessment. Understanding the process can help businesses in planning and implementing development strategies.
Under the MEPA, environmental impact review is required for any proposed development that will or may have “significant environmental effects.” MEPA is based on the National Environmental Policy Act (NEPA), which requires federal agencies to evaluate the environmental impact of, and alternatives to, all proposed “major Federal actions that may significantly affect the quality of the human environment.” MEPA applies to a broad range of development projects, including any project that is wholly or partially permitted, assisted, financed, regulated, or approved by any state or federal governmental unit.
In accordance with MPEA, the Minnesota Environmental Quality Board (MEQB) has developed environmental review process intended to discuss and evaluate any potential environmental effects of a proposed development project. Under the MEBQ’s rules, a “responsible governmental unit” (RGU) is charged with implementing the review process and is selected based on factors including the nature of the proposed development, the entity requesting environmental review, and the number of governmental units involved.
MEPA creates two methods of environmental review: the Environmental Assessment Worksheet (EAW) and the Environmental Impact Statement (EIS). Development that is subject to either an EAW or EIS (or both) may not be initiated, and governmental approval may not be given, until environmental review requirements are satisfied. However, certain aspects of a development project, such as initiation of condemnation proceedings, may occur before the environmental review process is complete.
An EAW is a “brief document prepared in worksheet format which is designed to rapidly assess the environmental effects which may be associated with a proposed project.” It is intended to assist in determining if a proposed development project will require an EIS and, if an EIS is required, its scope. An EAW is mandatory for certain projects, including construction or expansion of certain residential developments, pipelines, metallic and non-metallic mining facilities, and projects that will affect more than one acre of wetlands or protected waters or destroy historic places. Multiple projects and separate but connected stages of the same project are considered in determining whether an EAW is required. An EAW is also required when an RGU or the MEQB determines that a project “may have the potential for significant environmental effects.” An EAW may be voluntarily initiated when the party pursuing the development desires to initiate the review process to determine if a project has the potential for significant environmental effects. Certain development projects are exempt from the EAW process, including certain residential developments involving less than a threshold number of units and certain industrial, commercial, or institutional developments involving expansions in production, impact or space of less than a threshold amount.
An EAW should be prepared “as early as practicable in the development of the proposed project.” The EAW form developed by the MEBQ requires compilation of information regarding the party pursuing the development project, the nature and possible environmental effects of the project, sustainability measures that have or may be built into the project, and governmental reviews, approvals or funding that are or may be necessary.
The party pursuing the project must initially provide certain information to the RGU, which then prepares the EAW. When the EAW is completed, the RGU must circulate it to the public for review and comment over a 30-day period. Following the comment period, the RGU determines, based on the EAW and any public comments received, whether an EIS is required and, potentially, the scope of any EIS.
An EIS is required for any project that has “the potential for significant environmental effects.” Whether a project meets that standard depends on the type, extent, and reversibility of any environmental effects and the extent to which such effects may be mitigated, anticipated, or controlled by regulatory authority or environmental studies. Based on its analysis, an RGU makes either a “negative declaration” or a “positive declaration” regarding the need for an EIS. RGUs are require to record and maintain findings that support their decisions, including specific facts and the RGUs’ “responses to all substantive and timely comments on the EAW.”
An EIS is a written statement that “describes the proposed action in detail, analyzes its significant environmental impacts, discusses appropriate alternatives to the action and their impacts, and explores methods by which adverse environmental impacts of an action could be mitigated.” Like an EAW, an EIS is mandatory for certain projects, including construction or expansion of certain residential developments, pipelines, and metallic and non-metallic mining facilities that exceed certain space, impact, or production thresholds. However, the thresholds above which an EIS is required are generally greater than those for which an EAW is required. An EIS is also required when an RGU, based on the EAW process, determines that the proposed development project has “the potential for significant environmental effects.” As with EAWs, multiple projects and multiple stages of a single project that are connected must be considered together in determining the need for an EIS, certain projects are exempted from the EIS process, and a party pursuing a project may voluntarily submit to the EIS process.
If an EIS is required, the RGU must first define the relevant issues to be addressed in the EIS, define the scope of the assessment, and identify any governmental permits necessary to completing the project. This process, called “scoping,” requires preparation of three documents: (1) unless an EAW has already been completed, an EAW that identifies the impacts and alternatives that should be addressed in the EIS; (2) a draft that provides a preliminary view of the RGU’s intended scope for the EIS; and (3) the final scoping decision, which is prepared after the end of the scoping period and establishes the scope of the EIS. The final scoping decision establishes the issues to be addressed in the EIS, sets time limits for preparing the EIS, lists permits for which information will be gathered concurrently, describes project alternatives that will be analyzed in the EIS, and identifies the potential impact areas and necessary studies related to the project.
Once the scoping process is complete, the RGU prepares a draft EIS that describes the project and lists (1) all necessary governmental permits and approvals, (2) reasonable project alternatives, (3) environmental, economic, employment, and sociological impacts of the project and of each major alternative, and (4) measures for mitigating potential negative impacts. The RGU then circulates the draft EIS for public review and comment. Following the review period, the RGU prepares a final EIS, which must respond to substantive comments on the draft EIS. The RGU, or the MEQB in some circumstances, then determines the adequacy of the EIS. If the EIS is deemed inadequate, the RGU must publish an adequate EIS within 60 days of the determination of inadequacy. The RGU must publish a supplemental EIS if, after a final EIS is published and determined adequate but before all final project approvals or implementation, changes occur that affect the potential environmental effects of the project or new information becomes available regarding potential environmental effects or feasible and prudent alternatives, if such changes occur or information becomes available after a final EIS has been determined adequate.
Governmental units must generally render any necessary permitting decisions within 90 days following a determination of adequacy for an EIS. For a permit identified during the EIS scoping process as requiring a record of decision, the appropriate governmental unit must, at the time of decision, provide a concise public record describing how that it considered the EIS in its permitting decision.
Review of RGU Decisions
Any of the decisions described above, including the need for an EAW and the need for, or adequacy of, an EIS, may be reviewed by a Minnesota District Court through a declaratory judgment action filed within 30 days after the decision is rendered. Actions must be filed in the county in which the development project is proposed to be undertaken. A party challenging an RGU decision must generally show that the decision reflects an error of law or was based on findings that were arbitrary and capricious or unsupported by substantial evidence.
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Many major development projects require some form of environmental review prior to government approval. Businesses that are proponents of other projects may voluntarily submit to the assessment process. In either case, businesses should be aware of all that the EAW and/or EIS processes entail in order to appropriately plan financing, construction, or other aspects of their development projects. Some businesses may find that the guidance and insight of an attorney familiar with MEPA and its corresponding regulations useful in planning and executing their projects.
By: Eric Johnson
Published in Business North, August 2012.