Infrastructure Bill to Impact Permitting Process

On November 15, 2021, President Biden signed the $1.2 trillion Infrastructure Investment and Jobs Act (H.R. 3684) (IIJA). The IIJA was passed by the Senate with a 69-30 vote and passed the House by a slimmer margin of 221-201. The goal of the IIJA is to invest in America’s infrastructure, improve the nation’s competitiveness, and tackle climate change.

What is in the Infrastructure Bill?

Money borrowed through the IIJA will be distributed to states over the next five years. States will primarily be responsible for making a final decision on how the funding is spent. According to The Wall Street Journal, the IIJA also includes about $120 billion that will be allocated by the federal government partially through competitive grants

The White House highlights the following distribution of funds for specific infrastructure needs:

• $110 billion for roads, bridges, and major projects
• $55 billion to expand access to clean drinking water and eliminate lead pipes
• $65 billion to ensure that all Americans have access to high-speed broadband internet
• $89.9 billion to expand public transit
• $39 billion to modernize existing transit systems
• $42 billion to address maintenance backlogs in ports, waterways, and airports
• $66 billion to address Amtrak maintenance backlogs and modernize the Northeast Corridor
• $7.5 billion to build a national network of 500,000 electric vehicles (EV) charging stations
• $65 billion to upgrade electric transmission lines and expand renewable energy sources
• $50 billion to protect against extreme weather events and build climate resilience
• $21 billion to clean up Superfund and brownfield sites, reclaim abandoned mines, and cap orphaned gas wells
• $5 billion competitive grant that focuses on relaxing zoning rules for affordable housing

While the IIJA promotes the Biden Administration’s lofty goals to cut U.S. greenhouse gas emissions by 50-52% by 2030 and achieve a zero-emissions economy by 2050, securing political support and funding are not the only challenges that threaten a decarbonized future.

Current Permitting Process

Fully-funded development projects still face regulatory hurdles that can cause significant delays or derail projects. A National Environmental Policy Act (NEPA) environmental review, required for all projects that receive federal funds, occur on federal lands, or necessitate federal action, can extend a project’s timeline by several years.

NEPA requires projects to comply with standards set by federal, state, and local governments, including the Clean Air Act, Clean Water Act, Endangered Species Act, National Historic Preservation Act, state siting aces, and many others, often referred to as the “NEPA Umbrella.”

Proponents of NEPA hail the half-centuries-old regulation for protecting natural and cultural resources while also providing an avenue for public involvement in federal decision-making and supporting environmental justice. They argue that the lengthy process provides the detailed investigation necessary to make an informed decision.

Opponents assert that NEPA slows much-needed development, creates unnecessary and unclear regulatory barriers, discourages investment, and eliminates jobs. Additionally, permitting prolongs dependence on outdated and inefficient technologies, ultimately slowing our transition to a decarbonized economy and costing the public and private sectors trillions.

A 2020 study conducted by the Council of Environmental Quality (CEQ) found that the average completion time for an Environmental Impact Statement (EIS) between 2013 and 2018 was 4.5 years, with one-quarter of EISs taking over six years to complete. Approximately 500 EISs are prepared each year.

Environmental Reviews  Categorized Into Three Classes

Categorical Exclusions (CATEX)

According to the NEPA website, (CATEX) is “a class of actions that a federal agency has determined... do not individually or cumulatively have a significant effect on the human environment... The use of categorical exclusions can reduce paperwork and save time and resources.” CATEXs are typically actions that have been previously conducted and are repeatable; therefore, an extensive review of those actions is not required.

Environmental Assessment (EA)

According to the National Preservation Institute, if a project may have environmental impacts, an EA must be conducted to determine if an action is considered a “major federal action significantly affecting the quality of the human environment.” About 50,000 EAs are performed each year for varying land use types.

Finding of No Significant Impact (FONSI)

Projects that will not have significant impacts will receive a FONSI, concluding the review process. If significant impacts are anticipated, an Environmental Impact Statement (EIS), the most rigorous form of an environmental review, must be completed.

Permitting Process Changes in the Infrastructure Bill

The IIJA was not the first attempt to clarify and streamline environmental reviews under NEPA.

In 2015, former President Barack Obama enacted the Fixing America’s Surface Transportation (FAST) Act. Title 41 of FAST, referred to as FAST-41, established new environmental review procedures that hastened the review of over 50 infrastructure projects. FAST-41 created an online permitting dashboard for regulatory agencies to coordinate reviews. FAST-41 also established the Federal Permitting Improvement Steering Council, which includes interagency deputy secretaries “charged with improving the transparency, predictability, and outcomes of the Federal environmental review and reauthorization process.”

FAST-41 created procedures intended to streamline the environmental review process for “covered projects,” which are infrastructure projects exceeding $200 million subject to a NEPA permit but are not eligible for abbreviated processes. It also set a two-year statute of limitations for lawsuits to be filed against projects filed under FAST-41, reduced from the previous six-year statute of limitations. FAST-41 was set to expire in December 2022; however, the IIJA codified FAST-41, making it permanent.

Additionally, the IIJA codified the One Federal Decision (OFD) process, which sets a government-wide goal to reduce the average timeline for environmental reviews to two years.

The OFD process was developed in response to Executive Order (EO) 13807, which former President Donald Trump issued in 2017. Initially revoked through executive order by President Biden on his first day in office [16], EO 13807 directs Federal agencies responsible for conducting environmental reviews for major infrastructure projects to develop a single permitting timeline, prepare a single EIS document, and sign a single record of decision (ROD). The OFD shortens the lead agency’s time to invite other agencies to review from 45 to 21 days. The OFD also requires permitting agencies to issue a ROD within 90 days of issuing a final EIS, reduced from an average of five months.

The EIS process experienced the most meaningful changes from the passage of the IIJA. Land developers seeking NEPA approval for major projects may experience a multi-year reduction in their permit timeline and alleviate frustrations by preparing only a single EIS document, with a 200-page limit to the main body of the EIS. NEPA permittees may request the preparation of multiple documents if preferred. EIS applicants can also expect to receive a ROD much quicker than before.

It is essential to remember that most NEPA projects do not require an EIS. The IIJA also made some changes to the CATEX process.

The IIJA directs the Secretary of Transportation to consult with the Departments of the Interior, Army, Commerce, Agriculture, Energy, Defense, and other agencies that have participated in an environmental review process to “identify the categorical exclusions that would accelerate delivery of a project if those categorical exclusions were available to those agencies” within six months of IIJA enactment and every four years after that.

After the Secretary of Transportation has provided this list to cooperating agencies, the agency will have one year to publish a notice of proposed rulemaking (NOPR) to present any categorical exclusions from the list applicable to the agency. The agency issuing the NOPR may solicit public comment regarding the categorical exclusions’ eligibility criteria.

Changes to the EA process are less substantial. In 2019, the U.S. Department of Transportation (USDOT) published the “Interim Policies on Page Limits for National Environmental Policy Act Documents and the Application of the One Federal Decision Process for DOT Projects,” which attempted to set a 150-page limit for EISs and a 75-page limit for EAs. The IIJA requires the preparation of a single document for EAs and a two-year timeline for significant projects; however, it does not establish a page limit for EAs.

Administrative Choices in Implementing These Changes

It may take several years for Americans to see substantial changes to our infrastructure, partially due to how funding will be allocated and because infrastructure projects can take many years to complete. Planning, contracting, permitting, construction, and unforeseen delays can contribute to infrastructure projects taking upwards of 5 to 10 years to complete.

Congress expects most IIJA funds to be allocated over the next five years. Still, some money may be released within the next few months, according to Kate Lobosco of CNN: “Most of the funding will pass through the U.S. Department of Transportation, and either will be awarded to states annually based on a formula or disbursed through a competitive grant program.”

Funds to state Departments of Transportation for highway maintenance are expected to be distributed quickly. These monies will be more flexible for state DOTs to address their greatest needs.

On January 14, the USDOT announced that more than $27 billion would be allocated to states and tribes to address replacement, rehabilitation, preservation, protection, and construction of over 15,000 bridges nationwide. Deputy Federal Highway Administrator Stephanie Pollack said, “[The funding will] modernize bridges to withstand the effects of climate change and to make them safer for all users, including cyclists and pedestrians. Every state has bridges in poor condition and in need of repair, including bridges with weight restrictions that may force lengthy detours for travelers, school buses, first responders, or trucks carrying freight.”

Some programs will require more time and a comprehensive plan to determine how the IIJA funds will be spent. Competitive grants are expected to take longer than formula fund programs. About $100 billion will be allocated through competitive grants; however, the timeline for these grants remains unclear.

Railway projects are typically more extensive and complex than roadways and require more time and planning. Additionally, the USDOT will require more time to design the EV charging stations program, the first of its kind.

Land developers, especially those working in the renewable energy and transportation sectors, can expect to see an increase in publicly available funding over the next five years.

Due to its public nature, projects utilizing IIJA funding will be required to comply with NEPA along with state and local government permitting and zoning. While significant projects may experience considerable savings in time and paperwork, most projects will undergo similar environmental permitting timelines and should continue to avoid developing on protected natural resources, such as wetlands, endangered species habitats, and properties on the National Register of Historic Places.

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