Council on Environmental Quality and Office of Management and Budget Issue Joint Guidance for State Transportation Departments with NEPA Assignment

On February 26, 2019, the Council on Environmental Quality (CEQ) and Office of Management and Budget (OMB) issued a joint memorandum (Memo) clarifying how state transportation departments that have been delegated responsibility under National Environmental Policy Act (NEPA) should implement federal directives to streamline the environmental review and approvals of major infrastructure projects. While the Memo establishes no new affirmative duties on these state agencies, it reflects yet another step in the Trump administration’s continued efforts to ensure collective adherence to its goal of expediting environmental review under NEPA.

Specifically, the Memo addresses the application to the states of President Trump’s August 15, 2017 Executive Order (EO) 13807, Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects. EO 13807, which applies to federal agencies, seeks to streamline environmental review and approval of major infrastructure projects by, among other things, expediting completion of environmental impact statements (EISs) within an average of two years and requiring federal agencies to issue all project approvals within 90 days of the lead agency’s Record of Decision (ROD) — a policy known as “One Federal Decision.” OMB and CEQ subsequently issued guidance for federal agencies on implementing EO 13807, but the EO and guidance were silent as to whether and how they applied to state agencies delegated NEPA responsibilities.

The Transportation Project Delivery Program (23 U.S.C. 327) authorizes the Secretary of Transportation to assign NEPA responsibilities for environmental review, consultation and other actions required to review and approve highway projects. To date, six states have assumed NEPA assignment under the Program: Alaska, California, Florida, Ohio, Texas and Utah. Each state agency entered into a Memorandum of Understanding (MOU) with the Federal Highway Administration (FHWA) which requires the state agency to follow the same procedural and substantive requirements applicable to FHWA, including EOs. Accordingly, the state agencies were already obligated to carry out the directives of EO 13807 prior to the Memo. Nevertheless, the Memo reinforces that state agencies with NEPA assignment must also seek to complete environmental reviews within an average of two years, adhere to the One Federal Decision policy, and implement the following additional components of EO 13807:

• Permitting Timetables – State agencies must develop permitting timetables, including milestones updated quarterly during project review.
• Issue Resolution – State agencies must ensure that an effective process is in place to elevate decisions to higher level officials, including senior agency leadership, to timely resolve cases where permitting timetable milestones are, or are expected to be, missed or delayed.

Notably, the Memo recognizes that state transportation departments are not held to the same accountability system as are federal agencies. State agencies with NEPA assignment are not subject to the interagency Memorandum of Understanding on EO 13807 implementation, signed by eleven federal agencies in 2018, or to OMB Memorandum M-18-25, which established an accountability system for federal agencies to track performance with the EO’s goals. Nevertheless, the state agencies are encouraged to track their own performance and take all practicable steps to ensure timely completion of NEPA reviews and project approvals. In addition, the Memo directs the U.S. Department of Transportation to develop guidance on application of the federal interagency MOU to the states. It remains to be seen what mechanisms the state agencies with NEPA assignment will develop to implement these requirements and track their performance, and what the consequences might be for a state that fails to achieve the two-year average or One Federal Decision goal. However, under the state assignment program which began under Presidents Bush and Obama, some states have already reported substantial improvements in NEPA review times. (See, e.g., reports from California and Ohio.)  This trend is likely to continue and be reinforced by the Trump administration’s NEPA streamlining policies.