Summarizing Changes to NEPA in the Fiscal Responsibility Act (P.L. 118-5)


The National Environmental Policy Act (NEPA) was signed into law on January 1, 1970, and it has rarely been amended or revised since then. NEPA is basically a procedural statute which requires Federal permitting authorities, before a major federal project is approved, to carefully consider the significant environmental consequences of the proposed federal action. NEPA has been employed to conduct a probing review of wide variety of federal projects and actions, and the President’s Council on Environmental Quality (CEQ) has promulgated a comprehensive set of rules and guidance documents that must be followed or consulted. (See 40 CFR Section 1500 et seq.) The first set of NEPA rules was issued in 1978, and very little was done to bring the rules up to date until 2020. The first phase of this review has been completed, and a second and final phase will soon be underway. The NEPA review process includes the use of “categorical exclusions,” environmental assessments and environmental impact statements to measure the environmental impact of a proposed project. Over time, the rules and their implementation and judicial interpretation have become ever more complex, and an enormous body of NEPA case law has resulted.

The recent Congressional debt limit deliberations provided an opportunity to revise some of these procedures, and the Fiscal Responsibility Act, signed into law on June 3, 2023, included at Title III, a section devoted to “Permitting Reform.”

Section 321 (a) of the Act is entitled the “Builder Act,” and Section 321 (b) of the Act amends Title I of NEPA to make several changes to the overall NEPA process.

The Changes to NEPA
The Act makes significant changes to the National Environmental Policy Act. A major focus of this legislation was, of course, to approve an increase in the federal debt ceiling, to allow the Federal Government to raise the large sums of money needed to finance the Federal Government’s activities and obligations. Unfortunately, the text of these changes to NEPA is complex and somewhat difficult to follow. Title III of Division C of the Act is entitled “Permitting Reform.” It begins with Section 321 of the Act, and it is entitled the “Builder Act.” This section contains all of the FRA’s amendments to NEPA. For example, Subsection (a) amends existing NEPA Section 102(2), changing the word “insure” to “ensure.” More significantly, the phrase, “consistent with the provisions of this Act except where compliance would be inconsistent with other statutory requirements” is another limiting condition to NEPA and its implementation. Then existing clauses (i) through (v) are stricken and are replaced with new provisions.

Subsection (b) new sections to NEPA: Sections 106, 107, 108, 109, 110 and 111.

These new provisions are described here:

Sec. 321. Builder Act
Agencies were already required to include statements in recommendations or reports on proposals for legislation or other major Federal actions affecting the environment. This amendment clarifies the standard for when these reports are required from “environmental impacts” to “reasonably foreseeable environmental impacts.” Additionally, the amendment clarifies the standard for what alternatives must be included in the statement by changing the language from “alternatives to the action” to a “reasonable range of alternatives.” It also reduces the scope of these statements to only cover commitment of Federal resources. The agency must use reliable data and analysis. All of this is for the lead agency to oversee.

Sec.106. Procedure for Determination of Level of Review

Threshold determinations
The amendment also establishes the threshold determinations for when an agency is required to prepare an environmental document. An agency is not required to prepare an environmental document if:

  1. The proposed agency action is not a final action;
  2. The action is categorically excluded;
  3. The preparation of the document would conflict with another law; or
  4. The action is nondiscretionary, so the agency has no authority to take environmental factors into consideration.

Levels of review
This section also clarifies when different levels of review are necessary. An Environmental Impact Statement (EIS) shall be issued when an agency action has a reasonably foreseeable significant effect on the quality of the human environment. An Environmental Assessment (EA) shall be prepared when the action does not have such a reasonably foreseeable effect, or if the significance of the effect is unknown. No new research is required of the agency, but reliable data must be used.

Sec. 107. Timely and Unified Federal Reviews

Lead agency
If two or more Federal agencies participate in an action, they will determine a lead agency based on:

  • Magnitude of involvement;
  • Project approval authority;
  • Expertise on action’s environmental effects;
  • Duration of agency’s involvement; and
  • Sequence of agency’s involvement.

There may be joint lead agencies: one Federal, and one state, tribal or local agency. The lead agency’s role is to:

  • Supervise;
  • Request participation of cooperating agencies;
  • Develop schedules for completing reviews, permits, and authorizations; and
  • Notify cooperating agencies when the schedule will not be met.

Cooperating agencies can be state, local, or tribal authorities. Importantly, any agency or person affected by the lack of a lead agency may request a designation of a lead agency.

One document/document restrictions
If practicable, actions requiring actions by more than one agency should evaluate proposal in a single document. Notice of intent to prepare an EIS shall include a request for public comments. Each document shall include a statement of purpose and need for the action.

New page limits are set. Each EIS shall not exceed 150 pages, unless it is extraordinarily complex, in which case 300 pages are allowed. EAs are not to exceed 75 pages. The lead agency shall prescribe procedures to allow the project sponsor to prepare an EA or EIS under supervision.

The amendment sets deadlines for issuance of these documents. EISs must be issued within two years, and EAs within one year, of when they are deemed necessary. Sponsors now have the right to petition the court for failure to meet the deadlines, in which case the court may set a schedule for completion. The head of each lead agency shall annually submit reports to Congress identifying documents that were not completed on time and explaining why they failed to meet the deadline.

Sec. 108. Programmatic Environmental Document
When an agency prepares a programmatic environmental document for which judicial review was available, the agency may rely on the analysis for five years without reviewing it. After five years, the agency may only rely on the analysis if it is reviewed to ensure that it is still valid.

Sec. 109. Adoption of Categorical Exclusions
An agency may adopt a categorical exclusion listed in another agency’s NEPA procedures. This is a category of actions that an agency has determined normally doesn’t affect the environment.

Sec. 110. E-NEPA
The Council on Environmental Quality shall conduct a study on the potential for online and digital technologies to address delays in review, including a portal that would:

  • Let applicants submit required documents or materials for their project in one portal, collaborate with agencies, upload visual features, and track application progress;
  • Have a cloud-based tool for more complex reviews; and
  • Boost transparency in agency processes for lay audience.

Sec. 111. Definitions
In addition to defining “categorical exclusions”; “environmental assessment”; “environmental impact statement”; “finding of no significant impact”; and “major federal action,” Section 111 states that NEPA will not apply to actions that have extraterritorial effects outside the jurisdiction of the United States.

Sec. 322. Interregional Transfer Capability Determination Study
This section commissions a study on interregional transfer capability between adjacent transmission planning regions, to be completed within 18 months.

Sec. 323. Permitting Streamlining for Energy Storage
This section amends the FAST Act to add energy storage as a type of project that is subject to a streamlined approval process.

Sec. 324. Expediting Completion of the Mountain Valley Pipeline
This section requires expedited completion of the Mountain Valley Pipeline, approving all permits necessary. It also takes away the jurisdiction of any court to review actions taken by a Secretary or agency that are in furtherance of the pipeline’s completion.

What’s Next?
The Act was made effective on June 3, 2023. At this time, many agencies of the Federal Government are engaged in complex NEPA-mandated reviews of innumerable federal projects at a time when the fundamental law has changed. To date, neither the CEQ nor the Executive Branch have issued any guidance on how these reviews will be conducted.

Since the Fiscal Responsibility Act of 2023 became effective on June 3, 2023, it is anticipated that implementing guidance will soon be published.


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