Conrad Law & Policy Counsel 1155 15th St., N.W., Suite 500 Washington, DC 20005-2725 202-822-1970 202-822-1971 (fax) [email protected] www.conradcounsel.com
January 11, 2016
Congress Enacts Comprehensive Infrastructure Permitting Reform
The landmark five-year transportation bill signed by the President on December 4 includes a title directed toward expediting and bringing greater certainty to the process of obtaining federal approvals for transmission lines, pipelines and other major infrastructure projects.1 Originally a free-standing bill entitled the Federal Permitting Improvement Act (FPIA),2 the new legislation is the most significant “regulatory reform” enactment in some two decades. While its full effect will not be known for some time, the FPIA promises to bring about fundamental change.
Recent years have seen a growing movement to do something about the delays and uncertainties inherent in permitting infrastructure projects. Business groups have documented the problem in a series of reports.3 The President’s Business Council highlighted the issue in 2011,4 prompting the Obama Administration to launch an interagency initiative to modernize infrastructure permitting, including an online Federal Infrastructure Permitting Dashboard.5
The FPIA effectively codifies the Administration’s effort, expands its scope (e.g., power generation) and adds greater rigor and transparency. It also accomplishes things that executive action cannot (e.g., limiting judicial challenges). The net result should be to rationalize and accelerate the current cat-herding process of securing approvals from multiple agencies, to lessen the risk that these approvals will be undone years later, and to make review documents readily available online. The point of the legislation is not to make it any more or less likely that a given project will be approved, but to produce a more reliable answer more openly and within a
1 Title 41 of the Fixing America’s Surface Transportation (FAST) Act, Pub. L. No. 114-94. Title 41 of the bill will eventually be codified in Title 42 of the U.S. Code. 2 See S. 280, introduced January 28, 2015 (a.k.a “Portman/McCaskill”). There was no House companion to S. 280 nor any comparable title in the House version of the FAST Act; the most comparable House bill was the RAPID Act (H.R. 348), which passed the House on September 25, 2015. 3 E.g., Common Good, TWO YEARS, NOT TEN YEARS (Sept. 2015); Business Roundtable, PERMITTING JOBS AND BUSINESS INVESTMENT (April 2012); U.S. Chamber of Commerce, PROJECT NO PROJECT (March 2011). 4 President’s Council on Jobs and Competitiveness, TAKING ACTION, BUILDING CONFIDENCE, Initiative 4 (Oct. 2011). 5 See E.O. 13604, “Improving Performance of Federal Permitting and Review of Infrastructure Projects” (March 22, 2012), 77 Fed. Reg. 18887 (March 28, 2012). The Dashboard is located at https://www.permits.performance.gov. predictably shorter time. The legislation does not amend NEPA,6 but it dovetails with NEPA processes.
This balance of this memorandum explains the mechanisms established by the FPIA and potential mechanics for its implementation.7
Scope
The FPIA applies to “covered projects”; essentially, any construction project subject to NEPA that is likely to: cost more than $200 million (and is not subject to some sort of abbreviated review process); require the preparation of an environmental impact statement (EIS); or involve approvals from two or more agencies; or that is otherwise sufficiently large and complex to benefit from the bill, in the view of the Council discussed immediately below. Transportation and water resources projects are excluded because they are already subject to similar laws.8
Interagency Council
The FPIA creates a Federal Permitting Improvement Steering Council comprising representatives of agencies with authority to approve some aspect of a covered project and chaired by a presidentially-appointed Executive Director (likely to be located at the General Services Administration (GSA)). The Council comprises 13 federal agencies,9 plus the Office of Management & Budget (OMB) and the Council of Environmental Quality (CEQ), and any other agency that the Executive Director invites to join.
The heads of Councilmember agencies must designate: a deputy secretary or higher-level official to represent the agency on the Council; and someone who reports to one of these officials to be the agency’s Chief Environmental Review and Permitting Officer (“CERPO”). CERPOs have
6 The National Environmental Policy Act, 42 U.S.C. §§ 4321-4335. 7 The report of the Senate Committee on Homeland Security & Governmental Affairs on S. 280 provides additional helpful background and detail. See S. Rep. No. 113, 114th Cong., 1st Sess. (2014). 8 See 23 U.S.C. § 139 (transportation) and 33 U.S.C. 2348 (water resources projects). 9 They are the Departments of Agriculture, Commerce, Defense, Energy, Homeland Security, Housing & Urban Development, Interior, and Transportation; the Army; the Environmental Protection Agency, the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission, and the Advisory Council on Historic Preservation.
2 principal responsibility for their agencies’ compliance with the FPIA.
By June 2016, the Executive Director, in consultation with the Council, is required to: develop an inventory of covered projects; categorize the projects; and for each category: identify the most commonly-involved federal approvals and agencies; and designate a “facilitating agency” that will handle project submissions. This information must be published on the Permitting Dashboard, discussed below.
By December 2016, the Executive Director and Council are to develop generic performance schedules for each category of project that sets default milestones for conducting reviews, based on the most efficient process. The FPIA establishes a ratchet mechanism whereby these schedules are to take no longer than the average time to complete reviews in that category, based on the previous 2 years’ experience. The schedules are to be updated every two years. No decision involved in a review or approval can take longer than 180 days after the agency possesses all the information it needs to make the decision.
Also by December 2016, and at least annually thereafter, the Council is to issue recommendations on best practices for early stakeholder engagement, performance metrics, improving coordination among agencies, and other aspects of improving permitting performance.
Particular Projects
Notice of initiation/lead agency
The process established by the FPIA is initiated when the project sponsor submits a notice to the Executive Director and the facilitating agency for that category of project. The notice is not a complete application, but a more summary document that describes: the proposed project’s purposes and objectives; any environmental, cultural, and historic resources; the project sponsor’s technical and financial resources; federal financing, environmental reviews, and authorizations anticipated to be required; and why the proposed project meets the definition of a covered project.
The lead agency for a given project is the lead agency established under existing NEPA practice; i.e., “the agency or agencies preparing or having taken primary
3 responsibility for preparing the environmental impact statement.”10 If no lead agency has been established, the facilitating agency is to act in that role. If, on request of a project sponsor or participating agency, the Executive Director concludes that a project belongs to a different category, he or she can designate a different lead agency. Disputes over lead or facilitating agency designations are to be resolved by CEQ.
Within two weeks after a notice of initiation is submitted, the lead agency must add the project to the Dashboard.
Involvement of coordinating and participating agencies
Within 45 days of adding a project to the Dashboard, the lead agency must invite all Federal and non-Federal agencies and governmental entities likely to have financing, environmental review, authorization, or other responsibilities with respect to the project to become participating or cooperating agencies.11 These agencies must affirmatively opt out by a date certain or they will be assigned those roles.12
Early consultation
The lead agency must provide an expeditious process for early consultation between project sponsors and cooperating and participating agencies. In particular, within 60 days of adding a project to the Dashboard, the lead agency must advise the sponsor regarding: the availability of information and tools to facilitate early planning efforts; key issues of concern to each agency and to the public; and issues that must be addressed before an environmental review or authorization can be completed.
Coordinated Project Plans (incl. timetables)
Within 60 days of adding a project to the Dashboard, the lead agency must issue a Coordinated Project Plan for the project. The plan must include: a list of all agencies participating in the review, and their roles; a project-specific timetable derived from the performance schedule previously established for that category of projects (these timetables must accommodate any other legally-applicable timetables);
10 See 40 C.F.R. § 1508.16. 11 “Cooperating agency” is a NEPA term that refers to agencies that have either jurisdiction over a project or special expertise with respect to any environmental impact involved. Id. § 1508.5. “Participating agencies” are any other agencies participating in a review or authorization for a project. 12 Agencies can opt back in on a showing of changed circumstances.
4 a discussion of potential avoidance, minimization and mitigation strategies, if required by law and known; and a plan and schedule for public outreach.
The project timetable must include intermediate and final deadlines for all required reviews – including, to the maximum extent practicable, any state reviews. Each cooperating agency must concur in the timetable, subject to dispute resolution by OMB. The lead agency may thereafter amend the timetable, after consultation with the project sponsor and participating agencies, only if the cooperating agencies agree. The lead agency must provide written justification therefor. An extension of greater than 30 days requires approval by the Executive Director, after consultation with the project sponsor. An extension that, together with any prior extensions, would extend the final completion date by more than 50% of the originally-approved length requires OMB approval. OMB then has 5 days to notify Congress of the extension and its justification. The lead agency then has to give Congress annual progress reports. A final approval date cannot be extended within 30 days of the date.
If an agency concludes that it cannot meet a deadline contained within an approved project timetable, it must publish that fact on the Dashboard, along with a proposed alternative deadline. It then must finalize that alternative date, in consultation with the Executive Director, and post monthly status updates on the Dashboard.
Extensions of final project approval dates by the Executive Director are not judicially reviewable, nor is any decision by OMB under the Act.
Timetables can be tolled 30 days after a project sponsor fails to respond to request from the Executive Director questioning the sponsor’s technical or financial ability to complete the project.
Coordination of reviews
To the maximum extent practicable, agencies are to: conduct review and approval processes concurrently, and in conjunction with reviews and approvals being conducted by other cooperating or participating agencies (unless they determines that it “would impair the ability of the agency to carry out [its] statutory obligations . . . .”); and formulate and implement mechanisms to enable them to ensure completion of the environmental review process in a timely, coordinated, and environmentally responsible manner.
Agencies are to work cooperatively. In particular, they must communicate to the project sponsor, as early as practicable, any issues of concern that could substantially delay or prevent them from completing a review or approval required
5 for the project.
As soon as possible, but no later than beginning the scoping process under NEPA, the lead agency must engage participating agencies and the public to determine the range of reasonable alternatives to be considered under NEPA. This exercise must be completed by the end of the scoping process. The lead agency is to share relevant information “as early as practicable” with the project sponsor and other agencies.
The lead agency may develop its preferred alternative to a greater level of detail than others so long as it does not prevent itself from choosing impartially from among them or prevent the public from commenting on them.
Public comment periods on a draft EIS must last at least 45 days but cannot exceed 60 days. All other NEPA-related comment periods are capped at 45 days. In either case, the lead agency can extend the cap for good cause or if the project sponsor consents.
Agencies are authorized to adopt, or incorporate by reference, analysis and documentation developed by a state agency reviewing the covered project, so long as the lead agency concludes that they were prepared under processes that allowed for opportunities for public participation and consideration of alternatives, environmental consequences, and other required analyses substantially equivalent to the processes that would have applied under NEPA. If the project has changed significantly, or other significant new information has emerged, since the state work was done, the lead agency can require it to be supplemented, after a minimum 45- day comment period.
State Involvement
State, tribal and local agencies often have review or approval responsibilities for major infrastructure projects under their own legal authorities. Also, states commonly are authorized by federal agencies to administer federal programs; in particular, EPA has authorized most states to administer permitting programs under the Clean Air Act, Clean Water Act and RCRA (the federal hazardous waste law). Accordingly, the FPIA allows states to opt into the process it establishes. It appears that states can do so on a project-by-project basis, with all relevant state agencies bound to participate in any such case. The lead agency is required to coordinate with participating state, tribal and local agencies, and to embody that coordination in a memorandum of understanding, to the maximum extent practicable.
Whenever the Council issues the best practice recommendations referenced on page 3 above, agencies like EPA that have authorized states to administer agency programs have 2 years to conduct a process, with public participation, to formulate
6 recommendations for such states to implement those best practices in their delegated programs.
Finally, the FPIA authorizes groups of 3 or more contiguous states to form interstate compacts establishing regional infrastructure development agencies to facilitate authorization and review of covered projects under State law (including laws exercising delegated permitting authority).
Permitting Dashboard
The “Permitting Dashboard” is to be administered by the Executive Director and GSA.13 The Dashboard’s current transparency function is substantially enhanced, since disclosure on the Dashboard is the principal accountability mechanism under the FPIA. The Dashboard will also take on an important new role as a docket for covered projects. It must contain the following information on every such project: The application and supporting documents, or information on how the public can obtain that information. Documents that are not available by hyperlink must be directly available. This is a major advance over current practice, where review documents are often difficult to obtain. It may well prove difficult to implement. A description of any federal agency action materially affecting the project, and any significant documents supporting that decision. A description of the status of any litigation directly related to the project. The timetable established for that project. These materials must be posted on the Dashboard within 5 business days after the relevant agency receives them.
The Department of Transportation and the Army are instructed to use “best efforts” to enable the Dashboard also to contain information regarding transportation and water resources projects excluded from the FPIA that are expected to cost >$200 million and require an EIS.
Judicial Review
Several provisions of the FPIA offer great potential to reduce the chance – and the associated uncertainty – that, after all the effort and time required to secure agency approvals, they may be upset years later by a lawsuit.
Statute of limitations
Because NEPA does not contain a statute of limitations, challenges based on it are governed by the general limitation on claims against the federal government, which
13 Currently, the Dashboard is housed at the Department of Transportation, the locus of the Administration’s Interagency Infrastructure Permitting Improvement Center. 7 is 6 years.14 The FPIA cuts this to two years. (If a supplemental EIS is prepared based on information obtained after the close of the comment period, it is subject to its own 2-year limitation.)
Prudential standing
The FPIA also narrows the range of persons with standing to challenge a final project approval on NEPA grounds by borrowing a prudential limit established by courts considering challenges to regulations. Under the FPIA, for a challenger to maintain a lawsuit: that person must have filed a comment during the review; and someone must have filed a sufficiently detailed comment to put the lead agency on notice of the relevant issue, unless the agency did not provide a reasonable opportunity for comment on that issue.
Standard for injunction
In some cases, courts considering injunctive actions against infrastructure projects have refused to consider economic impacts like job losses to be irreparable. The FPIA corrects that by requiring courts in such actions to:
(1) consider the potential effects on public health, safety, and the environment, and the potential for significant negative effects on jobs resulting from an order or injunction; and (2) not presume that the harms described in paragraph (1) are reparable.
Notably, the phrase “negative effects on jobs” could well refer to future jobs, an important consideration since most jobs associated with a proposed project have yet to be created.
Reports
Congress will be well-informed about the implementation of the FPIA:
Starting this coming April 15 and for nine years afterward, the Executive Director must report on progress under the Act during the previous fiscal year, including the performance of each participating and lead agency in implementing the Council’s best practices and meeting the performance schedules applicable to types of projects.
By December 2018, GAO must report on the same topics.
By the same date, GAO also must report on whether FPIA’s provisions could be adapted to streamline review and approval processes for smaller projects.
14 28 U.S.C. § 2401(a).
8 Funding
The most recent omnibus spending bill includes $2.5 million for the Department of Transportation to administer the Administration’s Interagency Infrastructure Permitting Improvement Center (IIPIC), which includes the current Dashboard.15 The bill allows other agencies to transfer funds to DOT for IIPIC activities; indeed, it allows other agencies to use the “tools and analysis” developed by the IIPIC only to the extent they have provided it with such funding.
• The omnibus bill also authorizes agencies to transfer an aggregate of $15 million to GSA’s Office of Government-wide Policy— • to support Government-wide and other multi-agency financial, information technology, procurement, and other management innovations, initiatives, and activities, including improving coordination and reducing duplication, as approved by the Director of [OMB], in consultation with the appropriate interagency and multi-agency groups designated by the Director.16
These funds would appear to be available to support FPIA implementation if the Executive Director is housed there.
Finally, the bill authorizes agencies on the Council, by rule, to set fee structures that would allow project sponsors to pay the reasonable costs of the agency’s review and approval of their projects. Agencies would have to set fees at a level calculated by OMB not to exceed 20% of the total costs of the review processes covered by the Act. The fees would go into a dedicated account at the Treasury and would remain available, without appropriation or fiscal year limitation, for the Executive Director to spend, or (with OMB approval) to allocate to other agencies, to cover the costs of implementing the Act.
Effective Date
The Act applies to covered projects pending on March 3, 2016, and to any covered project for which a notice of initiation is filed after enactment.
Sunset
15 See H.R. 2029, div. L, tit. I (2015). 16 Id. div. E, § 721. 9 To palliate the House Natural Resources Committee, the FPIA sunsets in December 2022. By then, however, Congress should have the benefit of ample experience under the Act, and should only be able to improve upon it.
Jamie Conrad
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