USDOT Proposes Regulations Allowing States To Assume USDOT Responsibilities For Environmental Review Under NEPA And Other Laws

by Perkins Coie
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On August 30, 2013, the U.S. Department of Transportation (USDOT) proposed regulations for the Surface Transportation Project Delivery Program, a program that allows states to assume federal environmental review authority for highway, public transit and rail transportation projects.[1]  The proposed regulations define the scope of authority that states may assume and outline the application procedures and eligibility requirements.  

The SAFETEA-LU Pilot Program

In 2005, as part of the transportation bill known as SAFETEA-LU, Congress created a pilot program under 23 U.S.C. § 327.[2]  Under this program, five states were allowed to assume the responsibilities of the Federal Highway Administration (FHWA) for compliance with the National Environmental Policy Act (NEPA) and other federal environmental laws.  As a condition of obtaining FHWA’s environmental review responsibilities, the state was required to agree that its decisions pursuant to the program could be challenged in federal court.

As required by SAFETEA-LU, FHWA issued regulations that defined the application requirements for the pilot program.  The regulations were codified in 23 C.F.R Part 773.

Only one state—California—participated in the SAFETEA-LU pilot program.  According to a study prepared by the California Department of Transportation (Caltrans), the pilot program was very successful.  The Caltrans study reported a median time savings of 11.6 months for projects requiring an Environmental Assessment under NEPA, and a remarkable 89.9 months, more than seven years, in time savings for projects requiring an Environmental Impact Statement. [3]  The same study also found significant time savings for other environmental reviews, including a savings of 5.6 months for Section 7 consultation under the Endangered Species Act.    

Expanded Authority in MAP-21

In 2012, as part of the transportation bill known as MAP-21, Congress broadened the scope of the delegation program under 23 U.S.C. § 327.[4]  Key changes included:

  • Making the program permanent, not a pilot.
  • Opening the program to all states.
  • Allowing the USDOT to assign its responsibilities to states not only for highway projects, but also for public transit, rail and multimodal projects. 

MAP-21 also made several other changes, including:

  • A state cannot be required to give up existing flexibility as a condition of assuming USDOT’s responsibilities.
  • A state can terminate its participation with 90 days’ notice to USDOT.
  • A state can use federal funds for attorney fees incurred in defending lawsuits that challenge actions taken by the State under the program.

MAP-21 also required the USDOT to amend the regulations in 23 C.F.R. Part 773, which define the application requirements for the program.

The Proposed Regulations

The proposed regulations were issued jointly by the FHWA, the Federal Transit Administration (FTA), and the Federal Railroad Administration (FRA).  They update existing regulations to reflect the expanded scope of the program under MAP-21.  They address such issues as: the types of projects that can (and cannot) be assigned to a state; the scope of authority that a state may assume; the conditions that must be met for a state to participate in the program; and the required contents of a state application. 

Key details about the proposed regulations include:

  • Which agencies can assign their responsibilities?
    The proposed regulations would allow the assignment of the responsibilities of FHWA, FTA and FRA.
  • Who can assume the responsibilities? 
    Under the statute, USDOT’s responsibilities could be assigned only to a “state.”  “State” would be defined to include “any agency under the direct jurisdiction of the Governor of any of the 50 States or Puerto Rico, or the mayor in the District of Columbia, which is responsible for implementing highway, railroad, public transportation, or multimodal projects eligible for assignment.”  The definition of “state” would exclude “agencies of local governments, transit authorities or commissions under their own board of directors, or State-owned corporations.”  In addition, the proposed regulations would specifically require that the responsibilities of FHWA and FRA be assigned to a state department of transportation (state DOT); FTA’s responsibilities could be assigned to any entity that falls within the definition of “state.”
  • What types of responsibilities can be assigned? 
    The proposed regulations would allow assignment of responsibilities under NEPA and other federal environmental laws, including Section 106 of the National Historic Preservation Act, Section 7 of the Endangered Species Act, and Section 4(f) of the Department of Transportation Act.  The regulations would impose the following restrictions on the types of responsibilities that could be assigned:
    • Responsibilities for compliance with other environmental laws would not be assigned to a state unless a state assumes responsibility for compliance with NEPA.
    • Responsibility for USDOT’s project-level conformity determinations under Section 176(c) of the Clean Air Act could not be assigned to a state.
    • Responsibility for USDOT’s oversight of the transportation planning process requirements under 23 U.S.C. §§ 134 and 135 could not be assigned to a state, nor could USDOT’s responsibilities relating to consultations with Tribal governments.
    • Responsibilities under non-environmental statutes could not be assigned to a state.  As defined in the proposed regulations, these would include USDOT’s responsibilities for approvals of changes to Interstate access, issuance of Buy America waivers, and approval of Interstate and National Highway System design exceptions.

The proposed regulations also recognize that a state can assume USDOT’s environmental responsibilities for compliance with Executive Orders, such as the Executive Orders on wetlands, floodplains and environmental justice.

  • What types of projects can be assigned? 
    The proposed regulations would allow the assignment of USDOT’s responsibilities for highway, transit, rail and multimodal projects.  Responsibility for rail and public transit projects could not be assigned unless a state assumes responsibility for highway projects as well.  The proposed regulations also would place several additional restrictions on assignment:
    • Responsibility could not be assigned to a state for projects that cross state boundaries or that cross, or are located at, international boundaries.
    • Responsibility could not be assigned to a state for projects designated as “high risk” under 23 U.S.C. § 106, although this term is not defined in either the statute or the proposed regulations.  MAP-21 amended 23 U.S.C. § 106 to prohibit FHWA from authorizing states to approve final design plans for “high risk” projects.
    • Responsibility for Federal Lands Highways projects could not be assigned except for projects that are designed and constructed by a state, rather than by FHWA.
  • What responsibilities can be assigned for a multimodal project? 
    The proposed regulations specifically request input on options for defining the types of multimodal projects eligible for assignment to states.  The rulemaking discusses three options, and expresses a preference for Option 1.
    • Option 1: Option 1 would allow assignment of the USDOT’s responsibilities for actions of FHWA, FTA and FRA, but would not allow assignment of the responsibilities of other USDOT agencies, e.g., the Federal Aviation Administration (FAA).  If a multimodal project required FHWA and FAA approval, the state (acting on behalf of FHWA) would work with FAA to complete the required reviews.
    • Option 2: Option 2 is broader than Option 1.  It would allow assignment of any USDOT responsibilities for a multimodal project, including responsibilities for elements other than highway, public transit and rail—e.g., airports, motor carrier safety, ports and pipeline/hazardous materials safety.  USDOT has expressed uncertainty about whether MAP-21 was intended to authorize such assignments.
    • Option 3: Option 3 is narrower than Option 1.  It would allow assignment of USDOT responsibility for multimodal projects only if the state has obtained assignment of USDOT’s responsibilities for all aspects of the project.  For example, if the project involved highway and rail elements, the state could not conduct the environmental review unless the state has assumed responsibilities of both FHWA and FRA for that type of project.  USDOT states that this option would be easier to administer but may be overly restrictive.
  • Can a state assume responsibility for some projects, but not all?  
    Yes.  The statute says that a state can assume NEPA responsibilities for “1 or more” highway, public transit, rail or multimodal projects.  Pursuant to the statute, the proposed regulations would allow a state to assume responsibility for specific projects, or for a class of projects—for example, all highway projects located outside the Interstate System.  The state also could assume responsibility for all projects, except to the extent that USDOT has specifically excluded projects from delegation, e.g., “high risk” projects.
  • Can a state assume responsibility for some types of NEPA documents, but not all?
    No.  The proposed regulations  “would not permit assignment of only select aspects of the NEPA responsibilities (e.g., developing and approving only EAs and FONSIs).”  This provision means that the state would need to accept an agency’s NEPA responsibilities in full for those projects covered by the assignment.
  • Can a state assume responsibility for some other federal environmental laws, but not all? 
    Yes.  The statute allows the state to assume “all or part” of the USDOT’s responsibilities under other environmental laws, if the state has assumed the USDOT’s responsibility for compliance with NEPA.  Pursuant to the statute, the preamble to the proposed regulations states that the state “must seek all NEPA responsibilities, but may seek either all, some, or none of the Secretary’s responsibilities with respect to the other Federal environmental laws.”
  • Can a state be required to give up existing flexibility as a condition of assuming USDOT responsibilities under this program? 
    No.  As amended by MAP-21, the statute provides that “Secretary may not require a State, as a condition of participation in the program, to forego project delivery methods that are otherwise permissible for projects.”  Prior to MAP-21, FHWA had required a state, as a condition of participating in the program, to forego its ability to acquire rights-of-way and conduct final design with state funds prior to completion of NEPA.  Under MAP-21, states cannot be required to give up that flexibility.
  • What conditions must be met before a state can assume USDOT responsibilities?
    The proposed regulations specify several conditions that must be met in order for a state to be eligible to participate in the program, including:
    • The state must “waive sovereign immunity”—that is, accept the jurisdiction of the federal courts, so that lawsuits challenging the state’s compliance with federal laws in making decisions pursuant to the program can be brought in federal court.
    • The state must have in place laws that authorize the state to take actions necessary to carry out the responsibilities it assumes.
    • The state must have in place laws comparable to the federal Freedom of Information Act (FOIA).
    • The state must demonstrate that it has the financial resources necessary to carry out the responsibilities being assumed.
  • What issues are not addressed in the rulemaking? 
    Some aspects of the program are not addressed in the proposed regulations.  For example, the proposed rules do not address:
    • Auditing and monitoring requirements.
    • Contents of the Memorandum of Understanding under which USDOT assigns responsibilities to the state.
    • Responsibilities associated with litigation, including use of federal funds to pay for attorneys fees’ incurred by a state.

Conclusion

Based on California’s successful experience with the pilot program, other states may be interested in participating in the Surface Transportation Project Delivery Program.  Interested states should review the proposed regulations, which address the scope of federal responsibility that may be assigned and summarize the application and eligibility requirements.  Comments on the proposed rule are due on October 29, 2013.  The rulemaking docket is FHWA-2013-0022.[5]

[1] Surface Transportation Project Delivery Program Application Requirements, 78 Fed. Reg. 53,712 (Aug. 30, 2013).

[2] Section 6005, Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), Pub. Law No. 109-59 (Aug. 10, 2005).

[3] Caltrans, “Median Time Savings for Caltrans Environmental Documents and Coordination Completed under the NEPA Assignment Pilot Program” (table), available on Caltrans website.

[4] Section 1313, Moving Ahead for Progress in the 21st Century Act (MAP-21), P.L. 112-141 (July 6, 2012).

[5] The docket is available at: https://www.federalregister.gov/articles/2013/08/30/2013-20912/surface-transportation-project-delivery-program-application-requirements.

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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