The Fiscal Responsibility Act of 2023 (FRA)

Environmental professionals play a crucial role in maintaining the delicate balance between human activities and the environment. With the recent enactment of the “Fiscal Responsibility Act of 2023 (FRA),” it has become imperative for these experts, especially those providing consultation services for decisions governed by the National Environmental Policy Act (NEPA) of 1969, to fully comprehend the profound implications of this legislation. The FRA introduces significant changes that directly affect NEPA regulations, making it crucial for professionals to gain a comprehensive understanding of its complexities.

The FRA, while primarily aimed at addressing the debt ceiling to prevent default, carries far-reaching implications that reshape the National Environmental Policy Act. For the first time since its inception in 1969, NEPA undergoes historic modifications, particularly streamlining the permitting process for ‘Major Federal Actions.’

These amendments mark a significant milestone in NEPA’s nearly 50-year history, and they introduce a crucial emphasis on cost-effectiveness and financial discipline. Consequently, a complex challenge emerges finding the delicate balance between fiscal prudence and environmental protection and conservation. This dynamic may lead to comprehensive assessments of environmental projects and policies.

This intersection of environmental considerations and fiscal responsibilities represents a profound transformation, propelled by the introduction of the FRA. As the landscape continues to evolve, environmental professionals, especially those advising federal agencies, find themselves at a pivotal juncture.

NEPA, often referred to as the ‘Umbrella law’ or ‘Common law,’ stands as a foundational environmental statute, mandating lead federal agencies to consider all pertinent environmental requirements and coordinate with other agencies. Its global significance parallels the historic ‘Magna Carta‘ of 1215, which safeguarded individuals from monarchical rule.

In this article, we delve into the intricate interplay between this new legislation and NEPA’s enduring environmental mandate. We explore the specific changes the FRA introduces to NEPA and the multifaceted challenges they pose, shedding light on the evolving landscape where environmental professionals navigate their responsibilities.

Understanding the Fiscal Responsibility Act of 2023

In March 2023, the Republican majority in the House introduced H.R. 1335, known as the “Transparency, Accountability, Permitting, and Production of American Resources Act.” The primary aim of this bill was to incorporate regulatory changes from the Trump administration’s 2020 “Update to the Regulations Implementing the Procedural Provisions of NEPA” into the National Environmental Policy Act of 1969 (NEPA) Section 102 (42 U.S.C. 4332).

On June 3, 2023, the Fiscal Responsibility Act (FRA), also referred to as H.R. 3746 or Public Law 118-5, was signed into law. Its central objective was to extend the nation’s debt limit into 2025, effectively averting the threat of a federal default. Framed as a response to economic challenges, the FRA places paramount importance on fiscal prudence and long-term financial stability. It seeks to achieve this through stringent fiscal measures designed to manage public debt, control government expenditures, and foster economic growth.

Public Law 118-5 encompasses significant sections, including Division C – Grow the Economy, and Title III – Permitting Reform. Of particular relevance to our discussion is Section 321, known as the ‘Building United States Infrastructure through Limited Delays and Efficient Reviews Act’ (Builder Act). This section plays a pivotal role in shaping the federal permitting process and constitutes a focal point of our exploration of the FRA’s impact on environmental policy.

Fiscal Responsibility Act of 2023 (An Act): Division C – Grow the Economy|Title III – Permitting Reform|Section 321. Builder Act

The Fiscal Responsibility Act of 2023 (FRA) introduces the Builder Act in Section 321, signifying a significant departure from the National Environmental Policy Act (NEPA) established in 1970. These changes redefine the scope of “Major Federal Actions” and introduce new provisions to streamline the NEPA process.

Under the Builder Act, Section 321(a), NEPA’s Subchapter 1 (42 U.S.C. 4332), Section 102(2) undergoes amendments that focus on:

• Reasonably Foreseeable Environmental Effects: The Builder Act amends Section 102(2)(C) of the NEPA to center on the “Reasonably foreseeable environmental effects of the proposed agency action” instead of the broader “Environmental impact” as previously required.
• Any Reasonably Foreseeable Adverse Environmental Effects: Section 102(2)(C)(ii) of NEPA codifies the existing regulatory definition of “Any adverse environmental effects” with “Reasonably foreseeable adverse environmental effects which cannot be avoided should the proposal be implemented.”
• Clarification of a “Reasonable Range of Alternatives”: Section 102(2)(C)(iii) of NEPA codifies the existing regulatory definition of “Alternatives to the proposed action” to clarify their criteria and mandates an analysis of negative environmental impacts for no-action alternatives that are technically and economically feasible and meet the purpose and need of the proposal.
• “Lead agency”: The FRA empowers the “Lead agency” to take the lead in multi-agency actions, reducing the role of cooperating agencies in NEPA reviews.
• Professional and Scientific Integrity, and Use of Reliable Data: The Act redesignated Section 102(2) subparagraphs (D) through (I) as subparagraphs (G) through (L) of NEPA (42 U.S.C. 4332), codifies and ensures the professional integrity, including scientific integrity of the discussion and analysis in an environmental document, and makes use of reliable data and resources in carrying out this Act.

NEPA’s New Sections

The Builder Act, introduced in Section 321 of the Fiscal Responsibility Act of 2023 (FRA), brings substantial changes to the National Environmental Policy Act (NEPA). These changes redefine the criteria for assessing environmental effects, streamline the NEAP process, and emphasize fiscal prudence. As NEPA enters this new era marked by these amendments, environmental professionals and federal agencies face a pivotal juncture in balancing environmental protection and fiscal responsibility.

• Section 106. Procedure for Determination of Level of Review (42 USC 4336):

New NEPA Section 106 provides a procedure for determining whether an agency needs to prepare an Environmental Assessment (EA) instead of an Environmental Impact Statement (EIS). It specifies that no NEPA analysis is required when the proposed action is non-discretionary or not a final action under the Administrative Procedure Act.

This section also clarifies that in any level of NEPA review, the agency “Is not required to undertake new scientific or technical research unless the new scientific or technical research is essential to a reasoned choice among the alternatives, and the overall costs and time frame of obtaining it are not unreasonable.”

• Section 107. Timely and Unified Federal Reviews (42 USC 4336a):

• Subsection (a): New NEPA Section 107 and subsection (a) require the agencies to designate a “Lead agency” to establish and enforce a review schedule. If the agencies cannot agree on a lead, the Council on Environmental Quality (CEQ) can appoint one.
• Subsection (b): One Document – The statute requires “One document,” if a proposed agency action will require action by more than one Federal agency and the lead agency has determined that it requires the preparation of an environmental document, the lead and cooperating agencies shall evaluate the proposal in a single environmental document.
• Subsection (c): Request for Public Comment – The statute explicitly requires agencies to include a “Request for public comment on alternatives or impacts and on relevant information, studies, or analyses with respect to the proposed agency action.”
• Subsection (e): Page Limits – The statute imposes page limits for EAs and EISs. An EA shall not exceed 75 pages and an EIS 150 pages, not including any citations or appendices.
• Subsection (f): Sponsor Preparation – The FRA requires agencies to prescribe procedures to permit project sponsors to prepare their own EAs and EISs with agency supervision. The statute also requires the “Lead agency to independently evaluate the environmental document and take responsibility for the contents.”
• Subsection (g): Deadlines – The statute requires agencies to complete an EA within one year and an EIS within two years. The time limits begin on the earlier date when the agency decides to prepare the EA or EIS, or the date the agency issues a notice of intent to prepare the environmental document.

In addition, Section 107(g)(3) permits a project sponsor to file a petition in federal court if the reviewing agency fails to adhere to the statutory deadline. If the court agrees, it may order the agency to comply with the deadline in 90 days.

• Subsection (h): Report – The statute requires lead agencies to file annual reports to the Senate and the House on their compliance with these deadlines.

• Section 108. Programmatic Environmental Document (42 USC 4336b):

This section allows agencies to rely on a final programmatic environmental document for five years without additional review provided substantial new circumstances or information about the significance of adverse effects that bear on the analysis. The agency may rely on the programmatic document beyond the five-year limit if it reevaluates the analysis and underlying assumptions.

• Section 109. Adoption of Categorical Exclusions (42 USC 4336c):

The statute permits agencies to adopt categorical exclusions (CATEXs) listed in another agency’s NEPA procedures, provided the agency shall:

• Identify the categorical exclusion Consult listed in another agency’s NEPA procedures that covers a category of proposed actions or related actions;
• Consult with the agency that established the categorical exclusion to ensure that the proposed adoption of the categorical exclusion to a category of actions is appropriate;
• Identify to the public the categorical exclusion that the agency plans to use for its proposed actions; and
• Document the adoption of the categorical exclusion.

• Section 110. E-NEPA (42 USC 4336d):

The statute now directs CEQ to study and submit a report to Congress within one year of the FRA’s enactment “On the potential for online and digital technologies to address delays in reviews and improve public accessibility and transparency under NEPA.

• Section 111. Definitions (42 USC 4336e):

This new Section defines several terms, especially the term “Major Federal Action” which means an action that the agency carrying out such action determines is subject to substantial Federal control and responsibility.

Conclusion

The Fiscal Responsibility Act of 2023 (FRA) has ushered in substantial changes to the National Environmental Policy Act (NEPA) through the introduction of the Builder Act in Section 321. These changes redefine the criteria for assessing environmental effects, streamline the NEPA process, and emphasize fiscal prudence. As NEPA enters a new era marked by these amendments, environmental professionals and federal agencies face a pivotal juncture in balancing environmental protection and fiscal responsibility.

The FRA’s provisions, as outlined in Sections 106 through 111, introduce clear procedures, timelines, and opportunities for public input, while also allowing for advancements in digital technologies. This intricate interplay between the FRA and NEPA’s enduring environmental mandate underscores the critical need for environmental professionals to navigate these complexities with precision and care.

As we move forward, it will be essential to closely monitor these changes, adapt to new practices, and uphold the core principles of environmental protection that have long defined NEPA.