Late last week, following extensive bipartisan negotiations, the House and Senate passed the Fiscal Responsibility Act of 2023, raising the nation’s debt ceiling. President Biden signed the act into law on Saturday afternoon. As part of that legislation, Congress amended the National Environmental Policy Act (NEPA) in several significant ways. Most significantly, the scope of environmental documents has changed, additional guidance is provided on levels of review and lead agencies, timelines and page counts from the revised Council on Environmental Quality (CEQ) NEPA regulations are codified with enforcement mechanisms and reporting to Congress, and Congress has provided funds for CEQ to study the potential for a centralized online NEPA database. Further, the definition of “major federal action” has changed.

1) Environmental documents must now evaluate:

  • The “reasonably foreseeable environmental effects” of the proposed action, not just “the environmental impact” of the proposed action.
  • The “reasonably foreseeable adverse environmental effects which cannot be avoided” should the proposed action be approved, not just “any adverse environmental effects which cannot be avoided” should the proposed action be approved.
  • A “reasonable range of alternatives” to the proposed action, “including an analysis of any negative environmental impacts of not implementing” the proposed action in the no action alternative analysis – these alternatives must be “technically and economically feasible” and “meet the purpose and need of the proposal.”
  • The “irreversible and irretrievable commitments of Federal resources which would be involved in the proposed agency action should it be implemented” instead of just “resources.”

2) The agency must “ensure the professional integrity, including scientific integrity, of the discussion and analysis” in environmental documents, use reliable data and resources, and study, develop, and describe technically and economically feasible alternatives. 

3) In determining the appropriate level of review, NEPA now clarifies that an environmental document is not needed if the proposed agency action is not “final agency action,” it falls under a categorical exclusion, the preparation of an environmental document “would clearly an fundamentally conflict with the requirements of another provision of law,” or the proposed action is nondiscretionary in the sense that the agency is lacking the authority to take “environmental factors” into account when determining whether to take the proposed action.

  • Environmental impact statements are required when a proposed action has a “reasonably foreseeable significant effect on the quality of the human environment.”
  • Environmental assessments are required the proposed action does not have a “reasonably foreseeable significant effect on the quality of the human environment” or “if the significance of the effect is unknown.” The environmental assessment must set forth the basis of the agency’s finding of no significant impact or determination that an environmental impact statement is unnecessary.
  • In making these determinations, the agency may use any reliable data source and is not required to undertake new scientific or technical research unless it is “essential to a reasoned choice among alternatives” and the overall time and cost of obtaining the research is not unreasonable.

4) Criteria for the lead agency are included – the magnitude of each agency’s involvement must be considered, as well as the approval or disapproval authority, expertise concerning effects, plus the duration and sequence of the agency’s involvement.

  • State, Tribal, or local agencies may be appointed as joint leads as the federal agencies determine they are appropriate.
  • The lead agency must supervise the preparation of the environmental document, request participation of each cooperating agency at the earliest possible time and develop a schedule for cooperating agencies’ and applicants’ completion of the environmental review, permit, or authorization. If that schedule cannot be met, the lead agency must notify the responsible party or agency of that deficiency and take appropriate measures to comply with the schedule. The lead agency must also meet with other cooperating agencies at their request.
  • Cooperating agencies are designated by the lead agency and have jurisdiction by law or special expertise with respect to environmental impacts. Cooperating agencies may not submit comments later than the date established by the lead agency. Cooperating agencies may include Tribal agencies.
  • If a lead agency is not designated, any federal, state, or Tribal agency or person substantially affected by the lack of designation may submit a written request for designation to a participating federal agency. That request must be forwarded to the participating Federal agencies and CEQ.

a.) If the participating federal agencies are unable to agree on a lead agency within 45 days of the request, then an affected federal, state, or Tribal agency, or affected person may petition CEQ to designate the lead agency. The federal agencies may respond, and then CEQ shall decide the lead agency.

  • Lead and cooperating agencies are encouraged to evaluate the environmental impacts of a proposed action in a single document.

5) Each notice of intent to prepare an environmental impact statement must include a request for public comment on alternatives or impacts and on relevant information, studies, or analyses with respect to the proposed action.

6) Environmental documents must include a statement of the purpose and need for the proposed action, which is a general codification of the current CEQ regulations.

7) Timelines and page limits from the revised CEQ regulations are now codified into law.

  • Environmental impact statements shall not exceed 150 pages not including citations or appendices. This page limit may be exceeded in cases of “extraordinary complexity,” and then are limited to 300 pages not including citations or appendices.
  • Environmental assessments shall not exceed 75 pages not including citations or appendices.
  • Lead agencies are required to implement procedures to allow a project proponent to prepare environmental assessments or environmental impact statements under the supervision of the agency. The lead agency must independently evaluate the document and take responsibility for its contents.
  • Environmental impact statements must be completed in two years, while environmental assessments must be completed in one year.

a) Timelines are triggered by the soonest of three events: (1) the date on which the agency determines an environmental impact statement or environmental assessment is required, (2) the date when the agency notifies an applicant that their right-of-way application is complete (if applicable), or (3) the date the agency issues a notice of intent to prepare an environmental impact statement or environmental assessment.

b) If delay occurs, the agency may extend the deadline in consultation with the applicant to provide a deadline that “provides only so much additional time as is necessary to complete” the environmental document.

c) Project proponents may petition a court for an agency’s failure to act in accordance with an applicable deadline. If the court finds the agency has failed to meet the deadline, it may set a schedule and deadline for the agency to act as soon as practicable. This timeline may not exceed 90 days from the date that the order is issued, unless the court determines more time is needed to comply with applicable law.

8) The head of each lead agency is required to submit annual reports to the House Committee on Natural Resources and the Senate Committee on Environment and Public Works. These reports will detail environmental impact statements or environmental assessments that did not comply with the deadline requirements and explain the failure to comply. The report must include information on the dates project milestones were completed and when the document is expected to be completed.

9) For programmatic environmental impact statements, the agency may rely on the programmatic analysis in subsequent environmental documents for related actions for five years without additional review of that analysis (unless substantial new circumstances or information on adverse effects has developed).

  • After five years, so long as the agency reevaluates the programmatic analysis and any underlying analysis to ensure it remains valid, the agency may still rely on that analysis.

10) For categorical exclusions, agencies may adopt categorical exclusions from other agencies’ NEPA procedures if they satisfy certain criteria.

11) CEQ is directed to study and report on the potential for online and digital technologies to address delays and improve public accessibility and transparency. The statutory language anticipates a public NEPA portal that allows applicants to submit documents, collaborate with agencies to edit documents in real time, upload and display multimedia, track application progress, include a cloud-based digital tool for more complex reviews by centralizing data, streamlining communications between the agencies and applicant, allow for agency comments and responses in one portal, and generate analytical reports to organize and catalog public comments. The portal would be accessible on mobile devices and the information on it be presented in a manner suitable for lay audiences. Congress has appropriated $500,000 to CEQ to carry out the study of this potential portal.

12) Definitions have been added to NEPA. Significantly, the definition of “major federal action” has changed from “actions with effects that may be major and which are potentially subject to Federal control and responsibility” (43 C.F.R. 1501.18) to “an action that the agency carrying out such action determines is subject to substantial Federal control and responsibility.”

  • The statutory language further clarifies that “major federal actions” do not include non-federal actions with no or minimal federal funding or with no or minimal federal involvement where a federal agency cannot control the outcome of the project. “Major federal actions” also do not include federal funding assistance in the form of general revenue sharing funds that do not provide the federal agency with compliance or enforcement responsibility over the subsequent use of such funds.
  • Loans or other financial guarantees (including loans from the Small Business Administration) that do not include federal control or responsibility over the funds also do not constitute a “major federal action.”
  • Bringing judicial or administrative civil or criminal enforcement actions do not constitute a “major federal action,” nor do extraterritorial decisions or activities (agency decisions or activities with effects located entirely outside the United States).
  • “Activities or decisions that are non-discretionary and made in accordance with the agency’s statutory authority” also do not constitute “major federal actions.”

We anticipate CEQ will have to revise its regulations to comply with these new statutory changes and provide guidance on statutory and regulatory applicability for projects that are already in the permitting pipeline.