As the Trump administration continues rapid-fire revisions to environmental review procedures, much attention has been focused on the Council on Environmental Quality and shifts in how agencies will implement the National Environmental Policy Act (NEPA). Under the new administration, the road map for the NEPA process comes in the form of a dizzying array of new regulations, executive orders, policy statements, and a recent interim final rule published in the Federal Register on February 25, 2025, that rescinds the existing NEPA implementing regulations.
One element of the 2025 guidance is to further restrict the applicability of NEPA when federal funding is involved. Specifically, the guidance reinforces language from the Fiscal Responsibility Act that proposed agency actions with little or no funding—as well as loans, loan guarantees, or other forms of financial assistance where the federal agency does not exercise sufficient control and responsibility of the project—do not constitute a “major federal action” and therefore do not trigger NEPA on their own.
Meredith Parkin of Environmental Science Associates recently provided a masterful overview and tabular comparison regarding these major NEPA process changes.
The 2025 guidance further directs federal agencies to “carefully consider the threshold above which an action would constitute a ‘major Federal action’ in light of this direction from Congress and their specific programs and authorities.”
Keeping abreast of the abrupt evolution in NEPA is challenging, and the shifts in how funding triggers NEPA review may be particularly confusing. If NEPA does not apply to a project because of limited funding, practitioners should not immediately assume that other federal procedural obligations are also exempt. For example, in many limited-funding scenarios, Section 106 of the National Historic Preservation Act, as specified in the implementing regulations (Code of Federal Regulations Title 36, Part 800), would still be required.
The implementation of NEPA and Section 106 of the National Historic Preservation Act is often closely integrated, but the criteria for triggering each law are distinct. Unlike NEPA, which distinguishes “major federal actions,” the requirement for Section 106 review is triggered by the definition of a federal “undertaking” (Code of Federal Regulations Title 36, Part 800.16y), with no exclusion based on the degree of federal involvement. The exact definition is as follows: “Undertaking means a project, activity, or program funded in whole or in part under the direct or indirect jurisdiction of a Federal agency, including those carried out by or on behalf of a Federal agency; those carried out with Federal financial assistance; and those requiring a Federal permit, license or approval.”
The different triggers for federal obligations under NEPA and Section 106 means that there will likely be an increasing subset of partially federally funded projects that do not require NEPA review but where the federal agency is still required to do some degree of Section 106 review and consultation.
We have a team of Section 106 experts at ESA. If you would like more information, please reach out to me at toverly@esassoc.com.
Date
March 6, 2025
