Significant Changes to the National Environmental Policy Act

As part of the Fiscal Responsibility Act (also known as the debt ceiling bill) in June 2023, Congress made the most significant revisions to the National Environmental Policy Act (NEPA) since the statute was enacted in 1970. While some provisions codify existing regulations, principles in case law, and longstanding practices, there are also some noteworthy changes. These statutory changes — as well as the Council on Environmental Quality’s (CEQ) recent revisions to its NEPA regulations, which were published in the Federal Register on May 1, 2024, and are beyond the scope of this article — have important implications for developers of projects that require federal agency permits/authorizations or receive federal funding.

The Fiscal Responsibility Act included the following notable changes to NEPA:

• • Analytical Requirements. Agencies must “ensure the professional integrity, including scientific integrity” of the discussion and analysis in environmental impact statements (EIS), environmental assessments (EA), and Findings of No Significant Impact (FONSI), and must use “reliable data and resources” in carrying out NEPA. Further, the law codifies the longstanding principle that an EIS must consider only environmental effects that are “reasonably foreseeable.”
  • Alternatives Analysis. An EIS must consider a reasonable range of alternatives that are technically and economically feasible and meet the purpose and need of the proposal, as well as the no action alternative.
  • NEPA Applicability. NEPA’s existing requirement to prepare an EIS applies to “major federal actions significantly affecting the quality of the human environment.” The law defines “major federal action” to mean “an action that the agency carrying out such action determines is subject to substantial federal control and responsibility.” The law also lists a number of actions that are excluded from the definition of “major federal action,” most notably including (among others):
    • • • a non-federal action with no or minimal federal funding
        • a non-federal action with no or minimal federal involvement where a federal agency cannot control the outcome of the project
        • loans, loan guarantees, or other forms of financial assistance where a federal agency does not exercise sufficient control and responsibility over the subsequent use of such financial assistance or the effect of the action
        • certain business loan guarantees provided by the Small Business Administration
        • non-discretionary activities or decisions

• • Threshold Determinations. The law codifies longstanding practice and regulations for circumstances under which federal agencies must prepare an EIS (when a proposed action has a reasonably foreseeable significant environmental effect) or an EA (when a proposed action does not have a reasonably foreseeable significant environmental effect, or if the significance of environmental effects is unknown). In making this threshold determination, an agency may use any reliable data source and is not required to undertake new scientific or technical research unless the new research is essential to a reasoned choice among alternatives and the overall costs and time of obtaining it are not unreasonable. The law lists the following circumstances when an EIS or EA is not required:
    • • • the proposed agency action is not a final agency action within the meaning of the Administrative Procedure Act
        • the proposed agency action is excluded pursuant to a categorical exclusion or another provision of law
        • the preparation of an EIS or EA would clearly and fundamentally conflict with another provision of law
        • the proposed agency action is a nondiscretionary action with respect to which the agency does not have authority to consider environmental factors in determining whether to take the action

• • Lead Agency Designation. The law establishes standards for determining which agency will be the lead agency for a project when multiple federal agencies are involved. It also establishes procedures for requesting designation of a lead agency, including a process for designation of a lead agency by CEQ if participating federal agencies are not able to timely agree on the designation of a lead agency.
  • Schedule. The lead agency must develop a schedule — in consultation with cooperating agencies, the project applicant, and such other entities as the lead agency determines appropriate — for completing any environmental review, permit, or authorization required for the project. If the lead agency determines that a deadline in the schedule will not be met, it must notify the responsible agency and request that the agency take such measures as it determines appropriate to comply with the schedule.
  • Time Limits. An EIS must be completed within 2 years and an EA within 1 year. The clock begins to run on the date on which the lead agency (1) determines that NEPA requires the preparation of an EIS or EA, (2) notifies the project applicant that the application to establish a right-of-way for the project is complete, or (3) issues a notice of intent to prepare an EIS or EA, whichever is earlier. If the lead agency is not able to meet this deadline, it may extend the deadline, in consultation with the project applicant, to provide only so much additional time as is necessary to complete the EIS or EA. If the lead agency does not meet required deadlines, a project applicant can seek a court order compelling the lead agency to act.
  • Page Limits. An EIS must not exceed 150 pages, or 300 pages for projects of “extraordinary complexity,” and an EA must not exceed 75 pages (not including citations and appendices).
  • One Environmental Document. If a project will require action by multiple federal agencies, the lead and cooperating agencies must evaluate the project in a single environmental document, to the extent practicable.
  • Sponsor-Prepared Environmental Documents. Federal agencies must prescribe procedures to allow a project sponsor to prepare an EIS or EA under the lead agency’s supervision. The lead agency may provide guidance and assist in the preparation of the document, and the lead agency must independently evaluate the document and take responsibility for its contents.
  • Categorical Exclusions. The law establishes a process by which agencies may adopt other agencies’ categorical exclusions.
  • Tiering. An agency may rely upon the analysis in an earlier programmatic environmental document to comply with NEPA for a later project. Within 5 years of the programmatic environmental document, no additional review of the programmatic analysis is required unless there are substantial new circumstances or information about the significance of adverse effects that bear on the analysis. After 5 years, the agency may rely upon the programmatic analysis so long as the agency reevaluates the analysis and any underlying assumptions to ensure reliance on the analysis remains valid.
  • Cooperating Agency Roles. A lead agency may designate as cooperating agencies any federal, state, tribal, or local agency that has jurisdiction by law or special expertise with respect to any environmental impact. The lead agency must request the participation of each cooperating agency at the earliest practicable time; must consider any analysis or proposal created by a cooperating agency; and must meet with a cooperating agency upon request. A cooperating agency may submit comments to the lead agency by the deadline set in the schedule.
  • Joint Lead Agencies. Participating federal agencies may appoint state, tribal, and local agencies to serve as joint lead agencies, which must jointly carry out the lead agency’s statutory responsibilities for the project.