Trump Infrastructure Plan Takes Aim at Statutory Review Requirements

The White House's $1.5 trillion "Legislative Outline for Rebuilding Infrastructure in America," released on Monday, February 12, 2018, contains a 16-page section devoted to "Infrastructure Permitting Improvement." The plan sets forth multiple legislative proposals to streamline, consolidate, expedite, and in some cases eliminate, the environmental review and approval procedures for infrastructure projects under the National Environmental Policy Act (NEPA) and other environmental statutes. Although the prospects for legislation are unclear, if adopted by Congress the plan would significantly alter the environmental law framework for such projects. The White House also devoted an important section to brownfields and Superfund reform.

This advisory provides highlights of the plan's environmental proposals. Companies affected by or interested in infrastructure projects broadly defined—cutting across all sectors, including but not limited to conventional and renewable energy, transmission, telecommunications, transportation, real estate, water, environmental cleanup and restoration—will want to follow these developments closely.

The infrastructure plan's environmental proposals are in many cases the codification or outgrowth of regulatory directives issued by President Trump during his first year in office. Further information can be found in this article, in which we describe these previous initiatives in detail, focusing particularly on Executive Order 13807, "Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects" (August 2017).

Proposed Legislative Changes to NEPA's Environmental Review Process: Key Points

The White House plan proposes to "reduce inefficiencies" in the environmental review process for major infrastructure projects, focusing especially on NEPA. Key features include:

• Imposing a "firm deadline" of 21 months for completion of NEPA environmental review through the issuance of a finding of no significant impact (FONSI) or record of decision (ROD), and a three-month deadline from that point forward for permit decisions.
• Requiring a "One Federal Decision" framework, in which the lead review agency must produce a single federal environmental review document to be utilized by all agencies, and a single ROD to be signed by the lead agency and all cooperating agencies.
• Limiting the scope of NEPA review (e.g., by providing that alternatives outside an agency's authority or applicant's capability are not feasible).
• Eliminating EPA's statutory responsibility for reviewing the environmental impact statements of other agencies.
• Allowing certain actions to take place prior to completion of NEPA review (e.g., final design, acquisition of rail rights-of-way).
• Authorizing all lead federal agencies for infrastructure projects to opt in to streamlined environmental review procedures previously available only for highway and transit projects.

In addition, the plan would create a "Performance-Based Pilot" program that would allow up to 10 infrastructure projects to bypass compliance with NEPA and other environmental laws altogether. Instead, project sponsors would agree to design their projects to meet performance standards and permitting parameters established by a lead federal agency. The plan also sketches out a proposal for a "Negotiated Mitigation Pilot" program that would authorize the Department of Transportation or other agencies to "establish an alternative decision-making process in lieu of NEPA, based on negotiated mitigation agreements and supporting mitigation markets that address anticipated project impacts for a specific set of projects."

The plan would also have major ramifications for access to the courts, seeking to "reform" judicial review standards in environmental cases in order to "avoid protracted litigation and ... make court decisions more consistent." In particular, with respect to cases challenging projects for non-compliance with NEPA, the plan would limit injunctive relief to "exceptional circumstances" and drastically reduce the applicable statute of limitations from six years to 150 days. (Judicial review of federal approvals for certain surface transportation projects is already subject to a 150-day statute of limitations.) In addition, the plan would limit the ability of plaintiffs to seek judicial review of environmental analysis and permit decisions based on "the currentness of data," so long as agencies were in compliance with their internal guidelines.

Brownfields and Superfund Reform: Key Points

The White House plan also includes several provisions that could potentially bolster remediation of contaminated sites. It creates two new grant programs that would include Superfund and brownfield sites as projects eligible for federal funding, and proposes significant revisions to existing federal lending programs, such as the Water Infrastructure and Innovation Act (WIFIA), to address cleanup of such sites. Moreover, the proposal includes a separate section on Brownfields/Superfund reforms containing provisions intended to spur private development in site restoration and reuse, such as allowing National Priorities List sites to be eligible for brownfields grants, clarifying the relief available to public entities acquiring contaminated sites, expanding EPA authority to enter into administrative settlements to expedite site remediation, and authorizing EPA to integrate infrastructure needs into remediation decisions. Cumulatively, these elements could enhance EPA's authority and resources to incentivize non-liable third parties to invest in development projects that include remediation of contaminated properties.

Going Significantly Beyond the President's August 2017 Executive Order

As noted, the White House legislative plan seeks to codify a number of the NEPA-related initiatives announced in President Trump's August 2017 Executive Order (E.O. 13807), including the proposal to create a "One Federal Decision" framework, and provisions that require the Council on Environmental Quality to "modernize" and "streamline" its NEPA regulations. But the White House plan goes significantly beyond the Executive Order to include proposed statutory changes that could not be accomplished without Congress, and would seek to amend laws beyond just NEPA, including the Clean Water Act, Clean Air Act, Section 4(f) of the Department of Transportation (DOT) Act, National Historic Preservation Act, among others.

Some of the more far-reaching legislative proposals include:

• Eliminating EPA's authority to veto a Section 404 permit under the Clean Water Act, and consolidation in the Army Corps of Engineers of the authority to make Section 404 jurisdictional determinations.
• Allowing federal agencies to select and use nationwide permits under Section 404 of the Clean Water Act without additional Army Corps of Engineers review (although the Corps would retain the right to reinitiate review under certain circumstances).
• Increasing the term of National Pollutant Discharge Elimination System Permits under Section 402 of the Clean Water Act from 5 to 15 years, and providing for automatic renewals of such permits.
• Imposing time limits on state agencies' completeness determinations in applications for water quality certifications under Section 401 of the Clean Water Act.
• Exempting impacts on historic sites from the Section 4(f) review requirements if an infrastructure project is undertaken pursuant to an agreement under Section 106 of the National Historic Preservation Act.
• Authorizing the Secretary of the Interior to approve rights-of-way for pipelines and energy production facilities across National Park Service-administered lands without need for congressional approval.

Navigating a Complex Congressional Matrix

The White House Legislative Outline faces an uncertain path for implementation in Congress. The plan responds to a bipartisan desire to supplement traditional federal infrastructure program funds with $200 billion in direct funds that would be distributed to eligible entities through a variety of channels. However, Republican and Democratic leaders disagree as to whether $200 billion is sufficient. Others wonder how Congress will pay for this investment—particularly since federal revenue sources will likely diminish during implementation of the Tax Cuts and Job Act—while still others (including prominent Democratic leaders) roundly criticized the plan's regulatory reform initiatives for "gut[ting] bedrock environmental, clean water, and clean air protections under the guise of speeding up projects."

The White House will be forced to navigate a complex political matrix that will require the President and his allies on the Hill to strike a balance between regulatory reform; revenue commitment; and new financing ideas that will make many stakeholders uncomfortable. The willingness to compromise will determine whether the President is able to secure a major campaign commitment heading into a critical midterm election in November of 2018.

Save the Date: May 10, 2018

Conference on Infrastructure Review and Permitting: Next Wave of Reform

This Advisory highlights only a few of the more striking legislative proposals in the White House's infrastructure plan; it contains many other proposals to change the process for siting, designing, and constructing infrastructure projects under the nation's environmental laws. While the prospects of these concepts being translated into actual legislation are unclear at this point, they raise important issues for companies across all sectors affected by federal review and permitting regimes.

These and other issues related to infrastructure review and permitting will be explored in depth by leading experts at a conference in Washington, D.C. co-sponsored by Arnold & Porter and the Environmental Law Institute on May 10, 2018. More details will be forthcoming—please save the date!

*Margaret Barry contributed to this Advisory.