Permitting Reform Hitches a Ride on Debt Ceiling Legislation

The proposed debt ceiling bill, the Fiscal Responsibility Act,[1] incorporates a revised version of Rep. Garret Graves’ (R-La., 6th Dist.) “Building United States Infrastructure through Limited Delays and Efficient Reviews” (BUILDER) Act of 2023 (formerly H.R. 1577), which was included in its entirety in the House Republicans’ debt ceiling bill passed in April.[2] Although the proposed bill was largely modeled after H.R. 1577, it differs from the original text in significant ways.

Increased Interagency Coordination and Efficiency

The proposed bill creates a framework for coordination of environmental review under the National Environmental Policy Act (“NEPA”) between federal agencies which would result in the creation of a single environmental review document for each project and would impose page limits on that document—capping all but the most complex environmental impact statements at 150-pages and capping environmental assessments at 75-pages.[3] For projects that involve multiple federal actions across different agencies, the relevant agencies would be required to designate a lead agency based on the magnitude and duration of each agency’s involvement, as well as their relative expertise concerning the proposed action’s environmental effects.[4] The lead agency would then be responsible for stewarding the project through the environmental review process and preparing the environmental review document.[5]

The bill also creates enforceable deadlines for the completion of environmental review based on a project’s anticipated impact. For projects for which the lead Federal agency determines an environmental impact statement is required, the agency has two years to complete the review, from the notice of intent to prepare an environmental impact statement to the record of decision.[6] For projects which require only an environmental assessment, the agency has one year to complete the review.[7] If an agency were to miss the deadline, the delayed project’s sponsor may seek a court order requiring the agency to act as soon as practicable, not to exceed 90 days from the date on which the order was issued.[8] This differs from the enforcement mechanism in H.R. 1577, which would have required a delinquent agency to pay $100 per day to the project sponsor until a new deadline was set.[9]

Unlike the previous iteration of the BUILDER Act, however, the proposed bill does not alter the existing six-year statute of limitations for judicial review of most agency actions under NEPA.[10] This is significant because reducing the length of the time in which an agency action can be challenged was a goal of several of the permitting reform bills that have been introduced in Congress, including the BUILDER Act.

To further encourage efficiency in the review process, the permit provisions in the Fiscal Responsibility Act (Title III) allow existing data sources to be incorporated into an environmental analysis and do not require a reviewing agency to undertake new scientific or technical research, “unless the new [research] is essential to a reasoned choice among alternatives.”[11] The bill also instructs the Council on Environmental Quality (“CEQ”) to conduct a study of potential online and digital technologies “to address delays in reviews and improve public accessibility and transparency under [NEPA]” by creating a cloud-based online portal.[12] The bill includes a $500,000 appropriation to CEQ to complete that study.[13]

Threshold Determinations – When Must an Environmental Document be Prepared?

In addition to the procedural reforms described above, the proposed bill includes several provisions that impact threshold decision-making around when an environmental review document must be prepared.

Programmatic Reviews and Expansion of Categorical Exclusions

The proposed bill appears to have borrowed from other permitting reform legislation under consideration in Congress, incorporating provisions expanding programmatic reviews and categorical exclusions for agency actions not anticipated to have significant impacts.

Programmatic reviews are typically used to assess the environmental impacts of proposed actions that are broad in reach, such as programs, plans, or policies, or routine actions that are likely to have similar impacts and can be evaluated at a broad scale.[14] A categorical exclusion, on the other hand, is a class of actions that a Federal agency, in consultation with CEQ, has determined do not have a significant impact on the environment.[15] If an agency acts under a categorical exclusion, it does not need to prepare an environmental assessment or environmental impact statement.

In its original form, H.R. 1577 did not address either subject. There have been three permitting reform bills introduced this session in the Senate, and all of them include provisions instructing agencies to identify and develop additional categorical exclusions.[16] The PEER Act further provided for expanded programmatic reviews, especially for certain renewable energy projects.[17]

The proposed bill would expand the shelf life of a programmatic review to five years, allowing agencies to rely on the analysis in subsequent environmental documents without additional review of the original analysis.[18] After the initial five-year period, the agency would be required to re-evaluate the analysis and any underlying assumptions; however, so long as the agency does so, the agency may still rely on the programmatic review.[19]

The bill also authorizes agencies to adopt categorical exclusions already established by another agency.[20]

Major Federal Actions

Some of the more significant changes in the bill are buried in the definitional amendments in Section 111. For example, the bill limits the application of NEPA by narrowing the definition of a “major Federal action” triggering review.[21] The proposed bill expressly excludes extraterritorial activities or decisions, overturning precedent that requires agencies to perform environmental reviews for agency decisions made in the United States even where the impacts will be felt almost exclusively in, for example, Antarctica.[22]

Scope of Review

The Act amends Section 102 of NEPA to narrow agency considerations to “reasonably foreseeable environmental effects of the agency action” instead of “the environmental impact of the proposed action” as currently written.[23] This provision, however, is not as narrow as the provision included in H.R. 1577, which limited agency consideration to “reasonably foreseeable environmental impacts with a reasonably close causal relationship to the proposed action.” The original text of H.R. 1577 appears to have been designed to cabin existing requirements under NEPA to analyze cumulative impacts;[24] however, the text of the proposed bill does not appear to meaningfully narrow cumulative impacts analysis. For example, under current precedent, courts have required agencies to consider downstream effects, such as greenhouse gas emissions anticipated from the completion of a natural gas pipeline, when considering cumulative impacts of an action.[25] Under the revised text, an agency or reviewing court may still argue that emissions are "reasonably foreseeable environmental effects" and must be included in an environmental document. This parallels recent regulatory changes. In 2020, CEQ amended its regulations to remove reference to cumulative effects and to require a reasonably close causal relationship between the action and the effects to be analyzed.[26] That change was reversed in April 2022.[27]

Expansion of FAST Act

In addition to the amendments to NEPA, the bill also amends Title 41 of the Fixing America’s Surface Transportation (“FAST”) Act to include energy storage projects as “covered project[s]” under the Act.[28] The FAST Act created the Federal Permitting Improvement Steering Council as well as the “FAST-41 Dashboard,” which tracks the environmental review processes for certain large or complex infrastructure projects to improve coordination, transparency, and accountability.[29] In addition to increased visibility via the Dashboard, the voluntary program requires the designation of a lead agency and the establishment of a comprehensive permitting timetable within sixty-days of a project being deemed a FAST-41 “covered project.”[30] The Act also imposes a two-year statute of limitations in which agency actions relating to “covered project[s]” may be challenged under NEPA.[31]

Authorization to Complete the Mountain Valley Pipeline

The proposed bill also mandates the expedited completion of the Mountain Valley Pipeline. The bill directs federal agencies to “issue all permits or verifications necessary to complete the construction of the Mountain Valley Pipeline across the waters of the United States; and to allow for the operation and maintenance of the Mountain Valley Pipeline.”[32]

Notably, the bill also expressly limits judicial review of Federal agency action taken pursuant to the legislative mandate and provides original jurisdiction to the United States Court of Appeals for the District of Columbia Circuit over any challenge to the validity of the mandate.[33] This is similar to the provisions of the Trans-Alaska Pipeline Act of 1973, which bypassed NEPA review of that pipeline.[34] It also echoes Congressional actions to force other controversial decisions (sales of old-growth timber and de-listing wolves in the Northern Rocky Mountains), which courts upheld against separation-of-powers challenges.[35]

Transmission

Finally, the proposed bill would commission the Electric Reliability Organization to conduct a study within 18 months of enactment into the current total transfer capability between transmission planning regions.[36] The study must contain the current total transfer capability between each pair of neighboring transmission planning regions and recommendations of prudent additions to total transfer capability between neighboring transmission planning regions that would “demonstrably strengthen reliability within and among” neighboring regions.[37]

For more information about NEPA Reform, please contact Shannon Nelson (snelson@martenlaw.com) or any member of Marten’s Environmental Review practice group.