CHIPS and Environmental Compliance

The National Environmental Policy Act (NEPA) (42 U.S.C. 4321 et seq.) requires federal agencies to consider the effects of proposed actions on the human environment. The Council on Environmental Quality (CEQ) has issued regulations to implement NEPA (40 CFR Parts 1500–1508) that apply to all federal agencies.

The National Environmental Policy Act (NEPA) is one of several environmental laws that may be relevant to the CHIPS Incentive Program. Other key federal laws include the Clean Air Act (CAA) (42 U.S.C. 7401 et seq.), Clean Water Act (CWA) (33 U.S.C. 1251 et seq.), Resource Conservation and Recovery Act (RCRA) (42 U.S.C. 6901 et seq.), Endangered Species Act (ESA) (16 U.S.C. 1531 et seq.), and National Historic Preservation Act (NHPA) (54 U.S.C. 300101 et seq.). In some cases, state, Tribal, or local laws also may apply. Additionally, state, Tribal, or local agencies may be involved in related federal environmental review processes, such as consultation under Section 106 of the NHPA.

While some or all of these laws may apply to proposed projects, there are critical distinctions between when and how these laws apply. For instance, NEPA and NHPA are triggered by the provision of federal agency funding for certain projects, as well as certain requirements under the ESA. In contrast, other laws, such as the CWA and CAA, apply to projects regardless of how they are funded, and applicants will need to obtain required permits from federal, state, Tribal, or local government agencies. The CHIPS Program Office (CPO) expects applicants for funding to demonstrate that they will be able to obtain these permits.

The CHIPS Program Office (CPO), on behalf of the National Institute of Standards and Technology, is responsible for any required environmental review under the National Environmental Policy Act (NEPA). While CPO is responsible for the accuracy, scope, and content of any required NEPA documents, applicants are required to participate in the environmental review process, and CPO will direct applicants to prepare required technical analyses or draft environmental documents (see “What are the applicant’s responsibilities?”). CPO will provide guidance, participate in the preparation of, and independently review draft environmental documents prepared by applicants or their contractors. CPO is also responsible for issuing findings of no significant impact or records of decisions based on its review of those documents. Applicants should expect that CPO will carefully review and offer feedback on draft documents submitted to CPO for review.

Where applicable, CPO is responsible for consultation under the Endangered Species Act (ESA) and National Historic Preservation Act (NHPA) with the relevant federal, state, or Tribal agencies. CPO will require applicants or their contractors to assist in preparing documents or studies related to these consultations.

Applicants are encouraged to familiarize and orient themselves with state, Tribal, and local government concerns regarding their proposed projects and to involve state, Tribal, and local governments and agencies at an early stage in the process.  Only federal agencies, however, can engage in formal government-to-government consultation with federally recognized Tribes.

The applicant is responsible for complying with all laws that apply directly to project sponsors, such as the Clean Air Act (CAA) (42 U.S.C. 7401 et seq.), Clean Water Act (CWA) (33 U.S.C. 1251 et seq.), and Resource Conservation and Recovery Act (RCRA) (42 U.S.C. 6901 et seq.).  The CHIPS Program Office (CPO) does not apply for or obtain required permits on behalf of applicants but will request that applicants provide CPO with information related to the status of applicant’s required permits and authorizations.

Applicants are also responsible for completing the Environmental Questionnaire included in the pre-application and application materials.

Finally, CPO will direct applicants to conduct required technical analyses and prepare draft environmental documents that are required for the environmental review under the National Environmental Policy Act (NEPA) and as directed by CPO.

There are three levels of National Environmental Policy Act (NEPA) review: environmental impact statement (EIS); environmental assessment (EA); and categorical exclusion (CE). The CHIPS Program Office (CPO) determines the appropriate level of review for each action based on the scope of the action covered by NEPA and the environmental impacts that are likely to result.  For applications submitted under the CHIPS Incentives Program—Commercial Fabrication Facilities Notice of Funding Opportunity (NOFO), CPO intends to make this determination after agreeing on the Preliminary Memorandum of Terms described in Section V.C.1 of the NOFO.

CPO will require the applicant to submit environmental information, such as maps, surveys and technical studies, for use in CPO’s NEPA process. CPO will also direct applicants to prepare a draft environmental document (e.g., EA, EIS) under CPO’s supervision, consistent with CPO procedures for applicant-prepared environmental documents.

If a proposed action falls into an available categorical exclusion (CE) -- i.e., a category of action that CPO has determined normally does not significantly affect the quality of the human environment -- CPO will determine if extraordinary circumstances are present.  If not, or if significant effects can be avoided despite the presence of extraordinary circumstances, CPO will apply the CE.

If a proposed action is not likely to have significant environmental effects but does not fall into an available CE, CPO will work with the applicant to prepare an EA, which is a more concise analysis than an EIS. Following the EA, CPO may conclude that the action will have no significant effects and document that conclusion in a finding of no significant impact (FONSI).

If CPO concludes, initially or after preparing an EA, that the action is likely to have significant effects, then CPO will work with the applicant to prepare an EIS and document CPO’s decision in a record of decision (ROD).

1.  The Agency Identifies an Action Subject to NEPA Review. The CHIPS Program Office (CPO) will work with the applicant to determine which project(s) or activities may receive an incentive and negotiate a Preliminary Memorandum of Terms (PMT).  CPO will begin considering potential environmental impacts as early as possible, and will determine the proposed action or actions requiring NEPA review and the level of review required after agreeing on a PMT.

2.  Are Environmental Effects Likely to Be Significant? CPO will independently review the information submitted by the applicant (the Environmental Questionnaire and any supporting studies or reports) to determine whether the environmental effects of a proposed action are likely to be significant.

3.  Proposed Action is Described in Agency Categorical Exclusion (CE). CPO will determine whether a proposed action falls within an available CE.  A description of the 11 categorical exclusions currently published by the Department of Commerce (DOC) can be found within the notice issued by DOC at 74 Fed. Reg. 3304 (July 10, 2009) or on the following webpage: Categorical Exclusions.

4.  Does the Proposal Have Extraordinary Circumstances? If a proposed action is covered by an existing CE, CPO will determine whether any extraordinary circumstances are present requiring further analysis in an environmental assessment (EA) or environmental impact statement (EIS). “Extraordinary circumstances” are factors or circumstances, such as environmental settings, that help federal agencies identify situations in which a normally excluded action may have a significant effect.

5.  Significant Environmental Effects Unlikely or Uncertain and No Agency CE. If a proposed action is not likely to have significant effects or the significance of the effects is unknown, and no agency CE is applicable, CPO will prepare or request the applicant to prepare an EA, as described in step 6.

6.  Develop Environmental Assessment. An EA is a concise public document used to aid an agency’s compliance with NEPA and support its determination of whether to prepare an EIS or to make a finding of no significant impact.

7.  Finding of No Significant Impact. If, based on the EA, CPO determines that the proposed action will not have a significant effect on the human environment, it will prepare a “finding of no significant impact,” or FONSI. 

8.  Significant Environmental Impacts May or Will Occur. If, based on the EA or information submitted by the applicant, CPO determines that the proposed action may or will have a significant effect on the human environment, it will move to step 9 and prepare an EIS.

9.  Notice of Intent to Prepare Environmental Impact Statement (EIS). As soon as practicable after determining that the proposed action is sufficiently developed to allow for meaningful public comment and requires an EIS, CPO will publish a notice of intent to prepare an EIS in the Federal Register. An EIS is a detailed written statement required by Section 102(2)(C) of NEPA.

10.  Public Scoping and Appropriate Public Involvement. CPO will use an early and open process to determine the scope of issues for analysis in an EIS, including identifying the important issues and eliminating from further study less important issues. Scoping may begin as soon as practicable after the proposal for action is sufficiently developed for agency consideration, and include work conducted prior to publication of the notice of intent.

11.  Draft EIS. CPO will work with the applicant to prepare a Draft EIS in accordance with the scope decided upon during the scoping process.

12.  Public Review and Comment and Appropriate Public Involvement. CPO will make the Draft EIS available for public comment for a minimum of 45 days.

13.  Final EIS. CPO will work with the applicant to prepare a Final EIS that addresses the comments submitted.

14.  Public Availability of Final EIS. CPO will publish the Final EIS, after which CPO is generally required to wait 30 days before making a final decision on a proposed action.

15.  Record of Decision. The EIS process ends with the issuance of a Record of Decision (ROD). The ROD will explain CPO’s decision, describe the alternatives that were considered, and discuss any plans for mitigation and monitoring.

The CHIPS Program Office (CPO) will determine whether an environmental impact statement (EIS) or an environmental assessment (EA) is required using criteria found under the Council on Environmental Quality’s (CEQ’s) regulations (40 CFR 1501.3(b)). CPO’s determination will be based on information provided by the applicant, including the Environmental Questionnaire and any supporting studies or reports, as well as any other relevant information. This determination may also require consultation with other federal agencies with jurisdiction over aspects of the proposal.

An EA can result in a finding of no significant impact (FONSI). CPO may reach a FONSI if the proposed action includes mitigation to address potentially significant effects. (40 CFR 1501.6). If the EA results in a determination that the proposed action is likely to have significant effects, CPO will direct the applicant to prepare an EIS or assist CPO in preparing an EIS.

If CPO concludes that a proposed action is likely to result in significant environmental effects and requires an EIS (whether at the outset or after preparing an EA), the applicant may choose to revise its proposal to avoid or mitigate the anticipated effects.

The CHIPS Program Office (CPO) will determine if a CE can be applied on a case-by-case basis. A description of the 11 categorical exclusions currently published by the Department of Commerce (DOC) can be found within the notice issued by DOC at 74 Fed. Reg. 3304 (July 10, 2009) or on the following webpage: Categorical Exclusions. NIST also is working to develop additional CEs and identify other agency CEs that CPO could adopt and apply to its actions (42 U.S.C. 4336c).

The CHIPS Program Office (CPO), the applicant, or a contractor can prepare an environmental assessment (EA) or environmental impact statement (EIS), but CPO must independently evaluate the document and is responsible for its contents after considering the document’s accuracy, scope, and contents. For the CHIPS Incentives Program, CPO will direct applicants to prepare a draft EA or EIS and will closely supervise the drafting process. 

The components of an environmental impact statement (EIS) are listed in the Council on Environmental Quality’s (CEQ’s) regulations (40 CFR 1502.10 through 1502.19) and include: a statement of the purpose and need for the proposed action; a description of the proposed action, the no-action alternative, and any reasonable alternatives; a description of the affected environment; and a description of the anticipated effects of each of the alternatives on the affected environment. Potential measures for mitigating the environmental effects should be considered as part of the analysis. Many EISs include a record of consultations and a series of relevant appendices.

The components of an environmental assessment (EA) are similar, but an EA is typically more concise than an EIS (40 CFR 1501.5).

National Environmental Policy Act (NEPA) documents are public documents, and applicants should work with the CHIPS Program Office (CPO) to ensure that CPO can comply with its NEPA obligations, including its public disclosure obligations, without needing to disclose any confidential business information. The CPO is instituting robust protocols, technology solutions, and organizational practices to keep all confidential data safe, secure, and limited in distribution.  In general, confidential applicant information will be accessible only to federal employees, consultants, and contractors who have a need to know.

The applicant should start preparing for the National Environmental Policy Act (NEPA) process as early as possible. Key steps that applicants can take include preparing a description of the project site; identifying any cultural (including historical, architectural, and archeological) and natural resources that might be affected by the proposed project; identifying any potential mitigation measures that might reduce the project’s impacts; conducting technical studies to further describe the affected environment and identify potential effects on that environment; and, if relevant, identifying any reasonable alternatives.  Applicants should also consider whether proposed projects are located in or near disadvantaged communities[1] or other communities with environmental justice concerns. Applicants may directly engage with potentially affected communities to develop measures to avoid, minimize and mitigate impacts.

A required and crucial step in preparing for the CHIPS Program Office (CPO) NEPA process is completing the Environmental Questionnaire, which the applicant must submit as part of the Pre-Application (if one is submitted) or as part of the Full Application. 

As part of their preparations for the NEPA process, applicants should assess whether they have adequate resources in-house, or whether they should engage consultants or contractors to assist with the NEPA process.

Applicants are asked to respond to each question according to the information that is available at the time the Environmental Questionnaire (EQ) is being completed.

The 26 questions in the Environmental Questionnaire (EQ) are a roadmap for understanding typical areas of environmental impact. An environmental assessment (EA) or environmental impact statement (EIS) may include additional information, such as more detailed information about site-specific impacts, a description of the purpose and need for the proposed project, and, as relevant, a discussion of reasonable alternatives that can accomplish the purpose and need of the proposed action. 

 In choosing a consultant to support the NEPA process and environmental permitting, the CHIPS Program Office (CPO) suggests that the applicant consider:

• The consultant’s track record of success in completing environmental assessments (EAs) and environmental impact statements (EISs) for federal agencies.
• The consultant’s previous work on projects related to construction, expansion, and/or modernization of large manufacturing facilities.
• The consultant’s work on projects related to operation of semiconductor manufacturing facilities. 
• The consultant’s technical and scientific experience with environmental issues.
• The consultant’s staffing availability.
• The consultant’s track record in completing EAs and EISs expeditiously and without undue delay.

CPO may begin reviewing the environmental impacts of the applicant’s proposed project as soon as it receives the applicant’s Environmental Questionnaire (EQ).  Upon receiving the EQ, CPO may begin to prepare for the NEPA review process by working with the applicant or its consultant to evaluate all resource areas potentially affected and the corresponding potential environmental and cultural resource impacts.

CPO intends to make a determination regarding the appropriate level of NEPA review (i.e., categorical exclusion (CE), environmental assessment (EA) or environmental impact statement (EIS)) after agreement on the Preliminary Memorandum of Terms described in Section V.C.1 of the CHIPS Incentives Program—Commercial Fabrication Facilities Notice of Funding Opportunity occurs.

CPO’s ability to expeditiously complete its NEPA review is highly dependent upon the timeliness and quality of the environmental information submitted by the applicant. The size and quality of the team assigned by the applicant to complete NEPA technical studies, coordination and documentation may also impact the time required for the process.

Depending on the level of National Environmental Policy Act (NEPA) review, the NEPA process may include several opportunities for public participation. For an environmental impact statement (EIS), the NEPA regulations provide two opportunities for public comment: one during “scoping,” when CPO publishes the Notice of Intent to prepare an EIS, and another after CPO releases a draft EIS. CPO may also invite federal, state, or Tribal government agencies with jurisdiction or special expertise related to the proposal to participate in the NEPA process as cooperating agencies. If a proposal will have substantial direct effects on one or more federally recognized Tribes, CPO will formally consult with those Tribes, and CPO will consult with State and Tribal Historic Preservation Officers, local certified governments, and the Advisory Council on Historic Preservation as appropriate or required under the National Historic Preservation Act (NHPA). CPO encourages applicants to engage with communities with environmental justice concerns that may be affected by the project to identify any environmental concerns and potential methods to address these concerns regardless of the level of NEPA review.

CPO will post all documents that are available for public review at CHIPS.gov.  Additionally, an Environmental Compliance overview and FAQs, applicant guides and templates, and a webinar schedule (including recordings of prior webinars) will be available at CHIPS.gov.

The CHIPS Program Office (CPO) will post completed environmental assessments (EAs) on www.CHIPS.gov. 

The Environmental Questionnaire (EQ) is a tool the CHIPS Program Office (CPO) will use to help determine the appropriate level of environmental review under the National Environmental Policy Act (NEPA) for the proposed project. Pursuant to NEPA’s implementing regulations under 40 CFR 1501.3(a), in assessing the appropriate level of NEPA review, CPO will determine whether the proposed action:

1. Normally does not have significant effects and is categorically excluded (40 CFR 1501.4);
2. Is not likely to have significant effects or the significance of the effects is unknown and is therefore appropriate for an environmental assessment (40 CFR 1501.5); or
3. Is likely to have significant effects and is therefore appropriate for an environmental impact statement (40 CFR 1502).

If an EA or EIS is needed, the applicant and CPO will, among other things, conduct an alternatives analysis and consider mitigation measures. The analysis and review will be incorporated into the NEPA documents. This information is likely to be developed after the EQ is submitted.

A National Environmental Policy Act (NEPA) document, such as an environmental impact statement (EIS) or environmental assessment (EA), is not required in order to submit an application for CHIPS funding. Applicants must complete the CHIPS Environmental Questionnaire. An application also must include a Climate and Environmental Responsibility Plan, as described in the CHIPS Incentives Program—Commercial Fabrication Facilities Notice of Funding Opportunity. Although the Environmental Questionnaire and the Climate and Environmental Responsibility Plan required for an application are not NEPA documents, CPO will use the information provided to help determine the level of NEPA review required for the proposed action or actions.

During the National Environmental Policy Act (NEPA) process, the CHIPS Program Office (CPO) will look at three types of effects of the proposed action: direct effects, indirect effects, and cumulative effects (40 CFR 1508.1(g)).

• Direct effects are effects that are caused by the action and occur at the same time and place. These effects might include, for example, loss of wildlife habitat from building a new fab using CHIPS funds, or air or water emissions originating from that fab.
• Indirect effects are effects caused by the action and occur later in time or farther removed in geographic distance but are still reasonably foreseeable. These effects might include, for example, emissions or habitat loss from a new road or support facility built to support the CHIPS-funded fab.
• Cumulative effects are effects that result from the incremental effects of the action when added to the effects of other past, present, and reasonably foreseeable future actions. These effects might include, for example, the overall effects on local or regional air quality or wildlife habitat that result from ongoing industrial development in the area.

Consistent with 42 U.S.C. 4332(C)(iii), CPO will also consider any negative environmental impacts of not implementing the proposed agency action.

The CHIPS Program Office (CPO) cannot control what an applicant does with its own funds. However, once a PMT is agreed upon and the NEPA review process for a proposed action has begun, if an applicant takes actions that have an adverse environmental impact or limit CPO’s choice of reasonable alternatives, such actions could put the NEPA review and issuance of an award at risk, and CPO will take appropriate action to ensure that the objectives and procedures of NEPA are fulfilled. An applicant may consult with CPO to ensure that any groundbreaking and construction work the applicant plans to take on the project site will not cause an adverse environmental impact or limit CPO’s choice of reasonable alternatives. 40 CFR 1506.1. The fact that an applicant has started work on a site does not create any obligation on the part of CPO to issue an award.

In addition to the National Environmental Policy Act (NEPA), the CHIPS Program Office (CPO) is responsible for compliance with other environmental and cultural resource laws. To the extent practicable, CPO will integrate the NEPA process with compliance with other applicable environmental laws, such as Section 106 of the National Historic Preservation Act (NHPA). It is imperative that required collaboration under these laws takes place as early as possible, for instance when notifying Tribes, State Historic Preservation Offices (SHPOs), or the U.S. Fish and Wildlife Service of the proposed action. Applicants are encouraged to engage CPO early on to coordinate, sequence and manage the project and related requirements.

The ESA requires CPO to assess the impact of proposed actions on federally listed threatened and endangered species and their critical habitat. CPO must consult with the U.S. Fish and Wildlife Service and/or the National Marine Fisheries Service if endangered species are affected by a project. Additional information on the ESA can be found at http://www.fws.gov/endangered/esa-library/pdf/ESAall.pdf and https://ecos.fws.gov/ecp/.

The NHPA requires CPO to assess the effects of its undertakings on historic properties, which can include archeological and historical resources, and sites of religious and cultural significance to Tribes. CPO must consult with State and Tribal Historic Preservation Officers to determine if a proposed action/undertaking will adversely affect any historic properties, based upon information provided by the applicant.

An initial step of any NHPA review is to ascertain if the site includes any historical properties that are listed on, or eligible for listing on, the National Register of Historic Places (NRHP) (see https://www.nps.gov/subjects/nationalregister/publications.htm). To assist CPO in making such a determination, the applicant should review the NRHP and contact the appropriate SHPO or THPO for assistance in identifying potential historic properties in the project area. If the site includes any properties that are listed or eligible for listing, CPO will want to know if the applicant believes the proposed project design will result in adverse effects to the features that made the properties eligible for listing on the NRHP. Adverse effects do not disqualify a project from receiving CHIPS funding, but these effects will be taken into consideration when making award decisions, and applicants may be required to mitigate these effects.

Resolution of adverse effects generally results in a Memorandum of Agreement that describes how the adverse effects will be minimized and/or mitigated. Additional information on the NHPA can be found on the website of the Advisory Council on Historic Preservation, at https://www.achp.gov/digital-library-section-106-landing/national-historic-preservation-act.