New Momentum for Federal Infrastructure Initiatives and Regulatory Reform
From the earliest days of the Trump Administration, the White House and new leadership in key federal agencies have pushed to increase the volume and pace of infrastructure projects and eliminate regulatory roadblocks. With Executive Orders in January and August 2017, and several federal agency directives driving regulators to streamline and expedite permitting reviews, new ways of doing things are taking shape. And recent developments – the January 30, 2018, State of the Union speech and a February package of legislative proposals – are upping the ante even further, adding funding initiatives and mechanisms to make policy changes legislatively binding. Understanding what changes are in play, and the opportunities and challenges they present, should be a high priority for businesses with a stake in infrastructure issues.
Executive Orders and Agency Action
In the first week of his term, President Trump signed Executive Order (“EO”) 13766 on Expediting Environmental Reviews and Approvals for High Priority Infrastructure Projects. EO 13766 imposed few new requirements, but directed the White House Council on Environmental Quality (“CEQ”) to designate “high priority” infrastructure projects, put them on a fast track, and play a coordinating role among the multiple agencies involved in permit approvals, including setting deadlines for the achievement of identified milestones. To reinforce and broaden these efforts, on August 15, the White House issued EO 13807 on Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects. (See Clark Hill e-Alert analyzing both EOs.)
EO 13807 established a number of new requirements on federal agencies, including:
- Imposing obligations for developing plans, timetables, accountability and tracking systems, and consequences for failure to meet deadlines, with a two-year target for permitting major infrastructure projects;
- Enhancing the role of CEQ and the Office of Management and Budget (“OMB”) in making sure the new directives and deadlines are met;
- Expanding the use of the “One Federal Decision” approach beyond its existing scope, in transportation projects as part of the implementation of the FAST (Fixing America’s Surface Transportation) Act, Pub. L. No. 114-94, to all high priority infrastructure projects. This approach involves designation of a lead agency, developing a single Record of Decision, setting strict deadlines, and automatic elevation of disputes and provisions for interagency mediation to break bureaucratic logjams; and
- Assigning new responsibilities to the Departments of Interior and Agriculture for facilitating energy projects.
In short order after issuance of EO 13807, the Interior Department published Memorandum 3355 on September 7, 2017, to implement the Department’s new duties. The Memorandum prescribes page limits, target dates, and coordinated permitting reviews for infrastructure projects. On September 14, 2017, CEQ published a Federal Register notice setting forth an Initial List of Actions to Enhance and Modernize the Federal Environmental Review and Authorization Process. This list announced CEQ’s plans to develop a framework for implementing the “One Federal Decision” process, revise existing guidance on categorical exclusions under that National Environmental Policy Act (“NEPA”), compile guidance on simplifying and accelerating NEPA reviews for infrastructure projects, and convene an interagency working group to review and improve NEPA regulations and permitting processes. In recent action, the Department of Agriculture’s Forest Service published an Advance Notice of Proposed Rulemaking on January 3, 2018, seeking comment on ways it can expedite NEPA reviews on infrastructure projects under its jurisdiction.
Without a doubt, a great deal of activity is occurring at the federal agency level and some of it will be codified in final agency regulations, which may be challenged in court but could well have a lasting impact. Much of the new process, however, is policy change directed by Executive Orders, and the Trump Administration’s own track record in reversing Obama-era Executive Orders shows how fleeting this type of change can be. Thus, it is not surprising that the White House is pursuing legislation that would imbue infrastructure process changes with the force of law and ensure funding of priority projects.
In his January 30, 2018, State of the Union address, President Trump emphasized his intention to push for bipartisan infrastructure legislation that includes both project funding and permanent changes to the permitting process. The White House followed on February 12 with a 53-page legislative package that proposed a federal government spending of $200 billion over ten years, which is intended to supplement existing programs and create incentives for state, local, and private investment totaling altogether $1.7 trillion. Infrastructure projects covered by the funding would include surface transportation, airports, maritime and inland waterways and ports, flood control, water supply, water resources, drinking water, storm water facilities, brownfields, and Superfund sites. The legislation would also mandate the “one federal decision” approach, set a 24-month deadline for environmental permitting reviews, direct CEQ to revise its NEPA regulations to streamline reviews, and implement numerous, detailed regulatory changes that extend for 15 pages of the outline.
The proposal is both ambitious and controversial, and chances that the full package will become law are low, but some parts may find their way into the omnibus federal appropriations bill currently under development as well as set for consideration for a final vote before the March 23 deadline, and other legislative vehicles.
Opportunities and Challenges
With or without legislative change, it is clear that key federal agencies are moving toward faster environmental reviews and decisions in the infrastructure project approval process. This creates opportunities for project developers and backers, including both those highlighted for priority attention and other types of infrastructure improvements where a case can be made for expediting review and approval. However, with agency resources stretched thin, numerous top political positions still vacant, and many competing demands, securing timely consideration from critical decision-makers may be challenging. In addition, although many agencies are undergoing directional sea change at the headquarters level, regulators in the field will lag in realigning existing practices and culture.
Interested parties should expect to take on an activist role in ensuring that their projects receive needed attention, and must also plan to help provide technical and legal support for desired outcomes, which more likely than not will be challenged in court. Historically, the courts have been responsible for imposing many requirements that have led to infrastructure project delays, and the likelihood of judicial intervention places a heavy premium on building a strong, legally sound administrative record during the permitting process. While the new infrastructure paradigm offers relief from the institutional roadblocks that have frustrated many projects in recent years, it also requires a serious commitment to invest the necessary time and effort to work through the new processes and develop an effective advocacy strategy.
Clark Hill is experienced in developing and implementing informed strategies and in complex regulatory matters at all stages of the process, from initial advocacy to appellate challenges. For more information, please contact Karen C. Bennett, Jane C. Luxton, Kenneth von Schaumburg, William J. Walsh, or another member of Clark Hill's Environment, Energy & Natural Resources or Administrative Law Practice Groups.