NEPA Rules Rewrite: What Else Do You Need to Know?

Nossaman eAlert

This is the eighth in a series of eAlerts on revisions to National Environmental Policy Act (NEPA) regulations published in the Federal Register on July 16, 2020 by the Council on Environmental Quality (CEQ). The CEQ’s revised rules amend 40 C.F.R. Parts 1500-1508. Nossaman attorneys Ed Kussy, Rob Thornton, Svend Brandt-Erichsen, Rebecca Hays Barho, Brooke Marcus Wahlberg, David Miller and Stephanie Clark are contributors for this series.

Previously, we provided eAlerts focused on changes the CEQ has made to the definitions section of the NEPA regulations, changes to the beginning of the NEPA process for preparation of an environmental impact statement (EIS), changes the CEQ has made to clarify and enhance the use of categorical exclusions (CE) and environmental assessments (EA), changes the CEQ has made to the required contents of an EIS, public involvement, changes the CEQ has made influencing judicial review and potential impacts to Federal-State Environmental Reviews and Studies.

In this eAlert, we focus on a variety of changes that do not fit neatly into any category, but are nonetheless significant. Broadly, these changes focus on actions that can be taken for a project while a NEPA determination is still pending, the adoption of other documents into a NEPA document, the timing of NEPA decisions, individual agencies’ NEPA procedures and the availability of an agency’s NEPA program information. While some of these changes in the new regulations more broadly implement procedures that have long been followed in transportation projects, others have the potential to cause some confusion and may actually increase some of the administrative burdens on federal agencies under NEPA.

  • 1506.1 – Limitations on Actions During NEPA Process

The new regulations make relatively few substantive revisions to this section, instead opting to clarify the existing language from the 1978 CEQ Regulations. However, one substantive change that the new regulations make to this section is to remove the explicit reference to the Rural Electrification Administration. Specifically, this change makes it clear that no agency is precluded from engaging in design work, planning or other activities that typically precede federally funded projects (e.g., acquisition of properties within a project right of way, purchase of long lead-time equipment, etc.).  These actions are often characterized as being “at risk,” as work done on a project destined to receive federal funding may not reflect the final choice of alternatives made in the NEPA process. While this has long been understood to be the case for federal highway projects, the new regulations explicitly state that all federal or federally-funded projects, beyond the transportation sector, needing to engage in some preliminary planning, drafting or long lead time activities before NEPA approval can expressly do so. This seemingly small revision is not insignificant, as lawsuits regarding NEPA compliance have been filed under the old regulations based on these preliminary planning activities, even against transportation projects. While few changes to the text of the regulation were made, the new regulations should offer some certainty regarding preliminary planning activities that may precede a final NEPA determination. 

  • 1506.3 - Adoption

The new regulations expand on the provisions governing the adoption of NEPA documents, in whole or in part, into another NEPA document. See 40 C.F.R. § 1506.3. One of the more troubling aspects of NEPA documents is that they rarely use relevant material from other previous NEPA documents. Thus, the same research into relevant environmental and other impacts is repeated over and over, wasting both time and money. The provisions of Title XLI of the Fixing America’s Surface Transportation Act, Pub. L. 114-94 (Dec. 4, 2015) (FAST Act) aim to help with this problem. The FAST Act established permitting improvement procedures government-wide, many of which are already found in a series of surface transportation laws, starting in the mid-1990s. Title XLI goes further.  Among other things, it provides for a Permitting Improvement Council composed of various federal department heads and an Executive Director who reviews EISs for quality and establishes a “library” of EISs for projects costing more than $200 million. Presumably, agencies could access these documents.

As in the old regulations, the new regulations cover adoption of documents for EISs both by cooperating agencies and other agencies. The new rules did not make a substantive change in the process. What is new is that adoption procedures are also set forth for EAs and CEs. Adopted EAs may be used in a Finding of No Significant Impacts (FONSI), provided the procedures generally applicable to FONSIs are followed. Unlike the provisions specific to EISs, the new regulations do not distinguish between cooperating and other agencies for adopting NEPA documents into EAs and FONSIs. 

The adoption provisions for CEs are rather significant because agencies may now use CEs of another agency if the underlying action is substantially the same.  Thus, if an agency is able to use one of its CEs for a particular project, another agency with permitting responsibilities for that project may use the CE even if the permitting agency does not have a CE of its own to cover the project. This could result in real time savings for a number of projects. 

Finally, the new regulation spells out notice requirements where the adopted document is not final, is the subject of unresolved litigation or is involved in a pending pre-decisional referral. Here, the NEPA document for the project must identify these facts in the adoption record. However the rule does not prevent the adoption of such documents.    

  • 1506.11 – Timing of Agency Action

We have previously touched on this section , but the revisions in the new regulations specific to timing exceptions are worthy of some attention of their own. The old regulations directed agencies not to adopt a Record of Decision (ROD) until either 90 days from the publication of a notice in the Federal Register regarding the availability of a draft EIS, or 30 days after the publication of a notice in the Federal Register regarding the availability of a final EIS, whichever is later. The new regulations retain the 30- and 90-day time periods from publication in the Federal Register, but recognize that other statutes may provide for exceptions to those time periods. There is a specific reference to the statutory provision that encourages the Federal Highway Administration (FHWA) and Federal Transit Administration to combine an abbreviated Final EIS and ROD where there are no significant changes made from the draft EIS.

The second change is more minor, but still significant. The new regulations establish that there are two separate exceptions to the 30- and 90-day timeframes: one where an agency has an internal appeals process following publication of a final EIS, and the other where the agency is involved in rulemaking under the Administrative Procedure Act (or other similar law). While the old regulations largely contained the same exceptions, the new regulations explicitly state that they are separate exceptions and that they are specific exceptions to the 30- and 90-day time periods. In all, the new regulations clarify that there are three exceptions to the 30- and 90-day time periods for adoption of a ROD: (1) where a statute provides otherwise; (2) where the lead agency has an internal appeals process that follows publication of a final EIS; and (3) where the lead agency is involved in rulemaking as part of the action.

  • 1507.3 – Agency NEPA Procedures

The new regulations substantially rewrite this section. Most significantly, the new regulations make clear that existing NEPA procedures adopted by individual agencies will be overruled and superseded to the extent that they are inconsistent with the new regulations. This provision essentially reiterates the change made to § 1506.13, but may cause issues for federal agencies that have adopted their own agency-specific procedures by regulation. As a practical matter, it is unlikely that the majority of individual agency NEPA procedures would be inconsistent with the new regulations. The new regulations also make clear that all of the CEs existing in individual agency NEPA procedures as of September 14, 2020 are considered consistent with the new regulations.

Somewhat confusingly, the next provision gives all federal agencies 12 months after September 14, 2020 to revise their existing NEPA procedures, as necessary, to comply with the new regulations.  This could set up a catch-22 for federal agencies that do need to revise their NEPA procedures, where all or portions of their existing procedures would be invalid on September 14, 2020, but they still have 12 months to bring their procedures into compliance with the new regulations. For agencies with extensive existing NEPA procedures, this could lead to some confusion for ongoing projects. The new regulations also eliminate the requirement that new or revised agency NEPA procedures include explanatory guidance.

Beyond those changes, the new regulations establish additional subjects that must be covered by agency NEPA procedures. The new regulations direct that agency NEPA procedures require the combination of NEPA documents with other agency documents where those other documents can be used to satisfy NEPA. This is consistent with the streamlining intent of the new regulations. The new regulations also require that agency NEPA procedures specify activities and decisions not subject to NEPA and specifically require that six categories of activities not subject to NEPA be included. These categories are: (1) activities exempt under another statute; (2) activities where NEPA compliance would conflict with another statute; (3) activities where NEPA compliance would be inconsistent with the Congressional intent expressed in another statute; (4) activities that are non-major Federal actions; (5) activities that are non-discretionary actions, in whole or in part; and (6) actions where compliance with another statute serves the function of NEPA compliance. The fifth category is perhaps the most notable, with the new regulations providing that a decision that is only partially non-discretionary can be exempt from NEPA simply because an agency lacks authority to consider the environmental impact of one portion of its decision. This provision is likely to be a target in litigation over the new regulations.

Finally, the new regulations direct agencies to include the adoption provisions of § 1506.3(d) dealing with adoptions of CEs in their individual procedures.  That section is described in more detail above. 

  • 1507.4 - Agency NEPA Program Information

This new section (40 C.F.R. § 1507.4) requires agencies to use their websites or other means to make environmental documents, relevant notices and other relevant information available. Such documents include pending and final environment documents, planning and guidance documents, policies, etc., all searchable by geographic information, document status, document type and project type. Many agencies have websites that provide very good information about NEPA and other environmental laws, regulations, guidance materials and the like. Some agencies go further. For example, FHWA has long maintained a site called “reNEPA” that contains a good deal of guidance and other material, as well as an ongoing online discussion about various questions and issues among environmental professionals in the federal government and the states. This is in addition to sites that provide environmental information, regulatory materials and guidance.

However, the new regulation goes further than even a site as comprehensive as the one operated by FHWA. For example, pending and final environmental documents for FHWA-funded projects are usually available on sites maintained by the state departments of transportation and not on a centralized website. Thus, considerable effort will be required to pull this information from each individual state agency’s website and add it to FHWA’s website, especially because some states will not have all the information that is required by the new regulations. A similar problem could exist for federal agencies, despite the new regulations, due to differences in how federal agencies may present or store NEPA information on their individual websites.

The new regulation attempts to address this problem by requiring agencies to “provide for efficient and effective interagency coordination…of their websites.” This deceptively simple requirement will require a huge effort to implement across the U.S. Government, which could take some time to complete. That being said, if fully implemented, the new section will be of great benefit to NEPA practitioners. The public will also benefit because it could enhance understanding of federal environmental programs and project information. 

This installment concludes our analysis of the substance of the new regulations.  The next and final eAlert in this series addresses what the future may hold for the new regulations.

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