Major Changes Could Be Coming In Regulations Governing How Environmental Concerns Factor Into Federal Approvals, Funding Process

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Organizations across industries that receive federal funding or need federal approval to advance a project may want to participate in the current comment period open until August 20, 2018, concerning changes being considered to regulations guiding federal agency decision-making required under the National Environmental Policy Act (NEPA). The comment period was just extended this week by the Council of Environmental Quality (CEQ), the oversight body that sets guidelines for applying NEPA, which requires federal agencies to factor environmental concerns into decision-making on proposed “major Federal actions significantly affecting the quality of the human environment.” Over the years, this category of actions has been deemed to include a lot more than the original statutory language might suggest—such as federal funding toward private projects and sometimes a seemingly minor federal approval for an entirely private project.

The CEQ has asked for public comments on 20 questions to help CEQ develop a more efficient, timely and effective process for federal agencies to weigh NEPA concerns in their decision-making. One of the more important questions is how to define a “major Federal action.” This defines the level of federal involvement that is needed to subject a private project to NEPA. Over the years, environmental groups that are opposed to a private project have learned to look for any federal approval or involvement to argue that NEPA applies, and to thereby subject that project to significant delay and expense. For example, if an agency or court concludes that a private project such as a real estate development, on-site energy generation installation, warehouse expansion, or other project requires an environmental impact statement, that typically means a delay of several years.

While federal agencies are directed to produce their own regulations implementing NEPA as part of the decision-making involved in their programs, CEQ’s regulations are given substantial deference in interpreting NEPA, and are controlling in situations where a federal agency lacks a regulation addressing a particular topic (subject only to CEQ’s regulations not being inconsistent with statutory requirements). Consequently, any substantive amendment to the CEQ regulations could have a very significant impact—requiring federal agencies to amend their NEPA-related regulations accordingly, and setting the relevant standard for those agencies in the meantime.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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