Sneak Preview: Agencies Amend NEPA Implementation Regs, Policies
(The following was excerpted from a recent Thompson Grants Compliance Expert article.)
Several federal agencies on July 3 amended their regulations and policies implementing requirements under the National Environmental Policy Act (NEPA) to reflect changes made under a Trump administration executive order that removed the Council on Environmental Quality’s (CEQ) general oversight of federal NEPA regulations, as well as in response to other legislative and judicial actions.
NEPA established a federal national environmental policy “to use all practicable means and measures to foster and promote the general welfare, create and maintain conditions under which humans and nature can exist in productive harmony, and fulfill the social, economic and other requirements of present and future generations of Americans” (see ¶522 in the Federal Grants Management Module). The law established CEQ as an advisory agency within the White House to assist and advise the president on certain environmental matters and the implementation of NEPA’s national policy. Among federal grant recipients, those overseeing highway, construction and environmental projects would be most impacted by NEPA regulations. The Office of Management and Budget addresses NEPA in one reference in the uniform guidance pertaining to the full text of the grant application at Appendix I.B.4.i.D.
Trump’s Executive Order (EO) 14154, “Unleashing American Energy,” removed CEQ’s prior asserted basis for issuing and maintaining its NEPA regulations, and directed CEQ to provide guidance to federal agencies on implementing NEPA “to expedite and simplify the permitting process.” CEQ issued an interim final rule, which became effective on March 27, removing the CEQ regulations, many of which had been in place since 1978, and directed federal agencies to develop, by Feb. 19, 2026, new NEPA implementation procedures that are consistent governmentwide (see “CEQ Set To Remove Its NEPA Regulations,” April 2025).
Also affecting the issuances of these July 3 NEPA-related actions was the implantation of new statutory requirements related to environmental reviews under the Fiscal Responsibility Act of 2023 (Pub. L. 118-5), signed on June 3, 2023. The actions also reflected a decision in a May 29 U.S. Supreme Court case, Seven County Infrastructure Coalition v. Eagle County, Colo., 145 S. Ct. 1497 (2025), that made a major “course correction” to NEPA concerning the environmental review and permitting process. The court expressed concern about the “transformation” of NEPA from its roots as “a modest procedural requirement,” into a significant “substantive roadblock” that “paralyze[s] agency decisionmaking.” The court’s ruling requires agencies to consider the environmental effects of proposed actions as part of federal agency decisionmaking, not on separate projects that may occur later, thereby allowing for quicker, more efficient environmental reviews.
The Department of Transportation (DOT) took three actions on July 3. First, it issued a joint interim final rule to amend Federal Highway Administration, Federal Railroad Administration and Federal Transit Administration regulations (23 C.F.R. Part 771, 49 C.F.R. Part 264 and 49 C.F.R. Part 622) to remove cross-references to the CEQ regulations and implement new statutory requirements related to environmental reviews under the Fiscal Responsibility Act of 2023. It also updated DOT Order 5610.1C, ‘‘Procedures for Considering Environmental Impacts,’’ which establishes the agency’s procedures for complying with NEPA, and rescinded Federal Aviation Administration Order 1050.1F, “Environmental Impacts: Policies and Procedures,” in light of EO 14154.
(The full version of this story has now been made available to all for a limited time here.)
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