Overview
The Fiscal Responsibility Act of 2023 (FRA) amended the National Environmental Policy Act (NEPA),1 in an effort to streamline permitting of "major federal actions." It has been nearly 50 years since NEPA was last amended.2 The NEPA amendments reflect bipartisan recognition that the NEPA process had become uncertain, hindering completion of important infrastructure projects.3 The amendments codify some existing practices, narrow the scope of actions subject to NEPA, introduce process reforms to promote efficiency and certainty, and adopt statutory timelines for completion of required documentation. However, the amendments do not address all the causes of delay in project approval, so their overall impact will likely be limited.
Definition of "Major Federal Action" Narrowed
NEPA’s substantive provisions only apply to "major federal actions", for which agencies must prepare an Environmental Assessment (EA) and, potentially, an Environmental Impact Statement (EIS). The FRA significantly narrows what is considered to be a major federal action so that only agency activities or decisions "subject to substantial federal control and responsibility" trigger NEPA.4 The definition excludes several de minimis federal activities:
- Non-federal actions with “minimal” federal funding or involvement
- Funding assistance, including loan assistance, absent subsequent federal control
- Business loan guarantees provided by the Small Business Administration
- Enforcement actions
- Agency activities or decisions with effects located entirely outside of the US
- Non-discretionary agency activities or decisions5
New statutory language also excludes from NEPA agency actions that: (1) are not "final"; (2) trigger other laws that conflict with NEPA's provisions; or (3) are otherwise identified as categorically excluded by an agency.6 The statute also eases the process by which an agency can simply adopt a categorical exclusion already adopted by another agency.7
These changes slightly narrow the scope of federal actions that trigger NEPA.8 "Major federal action" previously included activities or decisions "subject to Federal control and responsibility," generally,9 but the list of exclusions has not substantially changed.10 Still, these exclusions may take on broader meaning as statutory language as opposed to regulatory standards, which are less susceptible to judicial review. The ambiguities found in these statutory carveouts, such as the bounds of "substantial" control and responsibility and "minimal" federal funding or involvement will be resolved through a combination of agency rulemaking and judicial interpretation. Phase II of the Biden administration’s rulemaking revisions to NEPA are expected to be published for public comment in the coming months.11
Review Limited to "Reasonable" Impacts and Alternatives
Agencies' environmental review, once triggered under NEPA, must consider both the environmental impact of the federal action at issue and alternative courses of action. The FRA codifies the scope of impacts and alternatives that agencies already considered,12 which are limited to only "reasonably foreseeable" environmental effects and "a reasonable range of alternatives that are technically and economically feasible, and meet the purpose and need of the proposal."13 While agencies have always considered "no action" alternatives, they are now required to also consider the adverse environmental impacts of not implementing the proposed agency action.14 For example, when considering the alternative of not permitting construction of a renewable energy source or associated transmission lines, the lead agency will need to consider the missed opportunity for decreased greenhouse gas emissions.
Streamlining and Additional Certainty
The FRA codifies the one-year deadline for completing Environmental Assessments and two-year deadline for completing Environmental Impact Statements previously implemented pursuant to the 2020 CEQ Regulations.15 As these deadlines were frequently missed, FRA expressly authorizes judicial action by project applicants if a deadline is missed.16 The bill authorizes a court to issue an injunction requiring the lead agency to complete its review within 90 days.17
Following the FRA amendments to NEPA, review of environmental effects and alternatives, including associated notice and comment requirements, is to be driven by a single lead agency. The lead agency coordinates the environmental review among various agencies involved in the federal action at issue, and establishes procedures for project applicants to prepare EISs and EAs themselves, empowering applicants.18 These measures should promote interagency cooperation. The action agencies must publish a single EA and/or EIS "to the extent practicable,"19 respectively capped at 75 pages and 150 pages (300 pages if considered "extraordinarily complex").20 The FRA permits agencies to "make use of any reliable data source" and generally avoid duplicative, new research, further streamlining the process.21
Conclusion
The extent to which these amendments will accelerate the NEPA review process remains to be seen. Project applicants should reevaluate the nature of any necessary federal involvement in the project to determine if it constitutes a "major federal action." Those further along in the process should consider whether/how the Amendments can facilitate completion of the NEPA process. The Council on Environmental Quality will update its regulations in the near future to provide guidance on this and other topics, so interested parties should monitor the Federal Register for associated rulemaking proposals.22
On the other hand, the FRA did not alter the availability of judicial review of NEPA determinations. Such litigation has delayed many projects for years. The FRA amendments therefore will likely facilitate completion of the NEPA process for projects that are not sufficiently controversial to spawn litigation. Congress continues to debate additional reforms to address federal siting and permitting concerns.
Endnotes
1 Fiscal Responsibility Act of 2023, H.R. 3746, 118th Cong. § 321 (codified at 42 U.S.C. § 4321 et seq.).
2 Act of Aug. 9, 1975, Pub. Law. No. 94–83, 89 Stat 424.
3 Emman Dumain and Kelsey Burger, The House Democrat trying to move his party on permitting reform, Politico (Feb. 22, 2023, 12:00 P.M.), https://www.politico.com/newsletters/the-long-game/2023/02/22/the-house-democrat-trying-to-move-his-party-on-permitting-reform-00083959.
4 42 U.S.C. § 4336e(10).
5 Id.
6 42 U.S.C. § 4336(a).
7 Id. at § 4336c.
8 The previously applicable definition, found at 40 CFR § 1508.18, defined "major federal action" as "an activity or decision subject to Federal control and responsibility," but the list of exclusions is very similar.
9 40 CFR § 1508.18.
1040 CFR § 1508.1(q).
11 CEQ Fall 2022 Regulatory Agenda, National Environmental Policy Act Implementing Regulations Revisions Phase 2, RIN No. 0331-AA07, https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=
202210&RIN=0331-AA07).
12 “Effects” or "impacts" were defined as "changes to the human environment that are reasonably foreseeable," including direct, indirect, and cumulative effects. 40 C.F.R. Section 1508.1(g). "Reasonable alternatives" were only those "that are technically and economically feasible, and meet the purpose and need for the proposed action." Id. at § 1508.1(z).
13 42 U.S.C. § 4332(c).
14 Id. at §4332(c)(iii).
15 42 U.S.C. § 4336a(g)(1).
16 Id. at §4336a(g)(3).
17 Id.
18 Id. at §4336a(f).
19 Id. at §4336a(a).
20 Id. at §4336a(e).
21 Id. at § 4336(b)(3).
22 Supra, n. 11.
