[Federal Register Volume 85, Number 248 (Monday, December 28, 2020)]
[Rules and Regulations]
[Pages 84213-84229]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26395]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Parts 773 and 778

Federal Railroad Administration

49 CFR Part 264

Federal Transit Administration

49 CFR Part 662

[Docket No. FHWA-2016-0037]
FHWA RIN 2125-AF73; FRA RIN 2130-AC66; FTA RIN 2132-AB32


Program for Eliminating Duplication of Environmental Review

AGENCY: Federal Highway Administration (FHWA), Federal Railroad 
Administration (FRA), Federal Transit Administration (FTA), U.S. 
Department of Transportation (DOT).

ACTION: Final rule.

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SUMMARY: FHWA, FRA, and FTA are issuing this final rule to establish 
the regulations governing the DOT Program for Eliminating Duplication 
of Environmental Reviews (Pilot Program). Section 1309 of the Fixing 
America's Surface Transportation (FAST) Act, as further amended, 
directed the Secretary of Transportation to establish a pilot program 
authorizing up to two States to conduct environmental reviews and make 
approvals for projects under State environmental laws and regulations, 
instead of the National Environmental Policy Act (NEPA), under certain 
circumstances. Section 1309(c) requires the Secretary, in consultation 
with the Chair of the Council on Environmental Quality (CEQ), to 
promulgate regulations to implement the requirements of the Pilot 
Program, including application requirements and criteria necessary to 
determine whether State laws and regulations are at least as stringent 
as the applicable Federal law.
    This final rule also implements Section 1308 of the FAST Act, which 
amends the corrective action period of the Surface Transportation 
Project Delivery Program (Section 327 Program).

DATES: This final rule is effective January 27, 2021.

FOR FURTHER INFORMATION CONTACT: For FHWA, James Gavin, Office of 
Project Development and Environmental Review, (202) 366-1473, or Diane 
Mobley, Office of Chief Counsel, (202) 366-1366. For FRA, Michael 
Johnsen, Office of Railroad Policy and Development, (202) 493-1310, or 
Chris Van Nostrand, Office of Chief Counsel, (202) 493-6058. For FTA, 
Megan Blum, Office of Planning and Environment, (202) 366-0463, or Mark 
Montgomery, Office of Chief Counsel, 202-366-1017. The Agencies are 
located at 1200 New Jersey Ave. SE, Washington, DC 20590. Office hours 
are from 9:00 a.m. to 5:00 p.m. ET, Monday through Friday, except 
Federal holidays.

SUPPLEMENTARY INFORMATION:

Background

    Section 1309 of the FAST Act (Pub. L. 114-94, 129 Stat. 1312), 
codified at 23 U.S.C. 330, established a pilot program that allows the 
Secretary to approve up to five States (to include the District of 
Columbia and Puerto Rico) to use one or more State environmental laws 
instead of the NEPA process for a State's environmental review of 
surface transportation projects. Section 1309 required the Secretary, 
in consultation with the Chair of CEQ, to promulgate regulations 
governing the Pilot Program. FHWA, FRA, and FTA, herein referred to as 
the ``Agencies'' or, when singular, the ``Agency,'' are promulgating 
these regulations under a delegation from the Secretary.
    This final rule establishes the Pilot Program, specifies 
application requirements, and defines the criteria the Agencies will 
use to determine whether a State law or regulation is as stringent as 
the Federal requirements under NEPA, the procedures implementing NEPA, 
and NEPA-related regulations and executive orders. As a prerequisite to 
a State's participation in the Pilot Program, it must have assumed the 
Secretary's responsibilities for

[[Page 84214]]

environmental reviews under 23 U.S.C. 327 (the Section 327 Program).
    After publication of the NPRM, Section 578 of the FAA 
Reauthorization Act of 2018 (Pub. L. 115-254) amended 23 U.S.C. 
330(a)(2), reducing the number of States eligible to participate in the 
pilot from five to two. In addition, it amended 23 U.S.C. 330 (e)(2)(A) 
and (e)(3)(B)(i), changing the statute of limitations from 2 years to 
150 days as set forth in 23 U.S.C. 139(l). In addition, CEQ issued a 
final rule comprehensively updating the regulations implementing NEPA. 
85 FR 43304 (July 16, 2020). These regulations became effective on 
September 14, 2020.
    In addition to creating the Pilot Program authorized under Section 
1309, the FAST Act also amended 23 U.S.C. 327, which authorizes DOT's 
Section 327 Program. Notably, section 1308(5) changed the termination 
procedures for the Section 327 Program by: (1) Lengthening the time the 
Agencies must provide to a State to take corrective action following a 
notice of non-compliance from 30 days to at least 120 calendar days, 
and (2) requiring the Agencies to provide a detailed description of 
each responsibility in need of corrective action, upon the request of 
the Governor of the State. 23 U.S.C. 327(j)(1).

Notice of Proposed Rulemaking (NPRM)

    On September 28, 2017, the Agencies published their NPRM at 82 FR 
45220. In the NPRM, the Agencies proposed regulations to implement the 
Pilot Program and its application and stringency requirements, and 
proposed amending the corrective action period that the Agencies must 
provide to a State participating in the Section 327 Program.
    The public comment period closed on November 27, 2017. The Agencies 
considered all comments received when adopting this final rule.

Summary of Comments and Responses

    The Agencies received 18 comment letters in response to the NRPM 
from the following groups or individuals: 1 private citizen, 4 surface 
transportation industry interest groups (the American Association of 
State Highway and Transportation Officials, the American Road and 
Transportation Builders Association, the Association of American 
Railroads, and the Associated General Contractors of America), 1 
regional transportation agency (the Transportation Corridor Agencies), 
2 States (California Department of Transportation and Maryland State 
Highway Administration (MD SHA)), 1 public transportation agency (the 
San Francisco Municipal Transportation Agency), 14 public interest 
groups (the Southern Environmental Law Center, the Natural Resources 
Defense Council, Earthjustice, WE ACT for Environmental Justice, 
Earthworks, Environmental Law & Policy Center, Waterkeeper Alliance, 
Western Watersheds Project Wilderness Workshop, Wyoming Outdoor 
Council, Center for Biological Diversity, Klamath Forest Alliance, Save 
EPA, Environmental Protection Information Center, and the Defenders of 
Wildlife), 2 resource/regulatory agencies (the Arizona Fish and Game 
Department and the Department of the Interior), 1 port authority (Port 
of Long Beach), 1 railroad company (Modesto and Empire Traction 
Company), 3 local governments (Orange County Public Works, Orange 
County Transportation Authority, and the Contra Costa Transportation 
Authority), and 1 anonymous commenter.
    The majority of comments addressed several common issues. The 
following section-by-section discussion of changes identifies and 
addresses the significant comments received. The Agencies responded to 
all comments except those related to Sec.  779.109. CEQ responded to 
the comments related to Sec.  779.109 because that section addresses 
CEQ's mandate to develop the criteria necessary to determine whether 
State laws and regulations are at least as stringent as the applicable 
Federal law.

Discussion of Comments Received to the NPRM

Section-by-Section Discussion of Changes

Section 778.101--Purpose

    An anonymous commenter noted there is no discussion on the purpose 
of the Pilot Program. The commenter recommended that additional 
information be added to 23 CFR 778.101 entitled ``Purpose.'' The 
Agencies decline to make the proposed change. The statute sets forth 
the purpose in section 1309(a) and requires the Secretary to establish 
the Pilot Program; therefore, the Agencies have determined a separate 
purpose section in the regulations is unnecessary. However, for 
clarity, the background section of the preamble for this final rule 
explains the Pilot Program's basic purpose and history.

Section 778.103--Eligibility and Certain Limitations

    One public transportation agency expressed reservations about a 
State transportation agency having the lead role in the environmental 
review and approval process, including oversight. Specifically, the 
commenter noted that federally funded transit projects located outside 
State rights-of-way do not fall within the State departments of 
transportation (State DOT) jurisdiction, so the proposed rules could 
place responsibility for environmental compliance on an agency that 
would not otherwise have a role in developing or approving a proposed 
project. The commenter suggested that additional coordination and 
review periods would lengthen the overall time and cost to complete the 
Federal NEPA process for transit projects. The public transportation 
agency also noted that, in certain States, individual jurisdictions, 
not State DOTs, may implement the State's environmental laws. Under 
that process, the State's only involvement in the environmental review 
of local projects would take place when there is a pass-through of FHWA 
funds, or when there is an affected State-owned facility or right-of-
way. The public transportation agency expressed concern that adding 
another reviewer to the process would add new coordination 
requirements, leading to a lengthened documentation schedule.
    The Pilot Program, as authorized by Congress, allows a State--not 
local agencies or jurisdictions--to substitute an alternative 
environmental review and approval process for NEPA. However, in some 
situations a State may exercise authority under the Pilot Program on 
behalf of a local government pursuant to 23 U.S.C. 330(h). Consistent 
with Sec.  778.107(h), a local government must request that the State 
exercise authority under the Pilot Program for the local government's 
locally administered projects. If a local government does not submit 
such a request, NEPA, not the State's alternative environmental review 
and approval process, would apply to such projects.
    In addition, the Agencies anticipate learning whether 
implementation of the Pilot Program has resulted in more efficient 
review of projects and identifying any recommendations for 
modifications to the program.
    A surface transportation industry interest group commented that in 
implementing the Pilot Program, the Agencies should be mindful that the 
Pilot Program's purpose is to reduce delay in the environmental review 
process. The commenter suggested that, in determining which States 
participate in the Pilot Program, the Agencies should consider whether 
a State's participation will improve the efficiency of the 
environmental review and approval process. In addition, the commenter 
suggested that, if applying a

[[Page 84215]]

State environmental review process would add time or complication to 
the review, NEPA should apply instead.
    The Agencies decline to make the proposed change. The criteria for 
a State to receive approval to participate in the Pilot Program is 
established in 23 U.S.C. 330(d). The Agencies have determined that the 
statute does not permit the Agencies to consider a State's demonstrated 
ability to reduce delays in the environmental review process as part of 
the application approval. However, the Agencies expect a State would 
consider whether the Pilot Program would lead to more efficient 
environmental reviews when deciding whether to submit an application.
    One surface transportation industry interest group proposed 
language that would exclude FRA or railroad projects from the Pilot 
Program. The surface transportation industry interest group argued that 
the Interstate Commerce Commission Termination Act of 1994 (ICCTA), 49 
U.S.C. 10501(b), establishes a broad preemption standard preventing the 
application of State and local laws to rail operations.
    The Agencies decline to make the proposed change. While in certain 
circumstances, ICCTA may preempt the application of State law under the 
Pilot Program, the Agencies do not believe it would do so in every 
case. Railroad projects are potentially eligible to participate in the 
Pilot Program and excluding them would be inconsistent with the 
statute. Prior to executing a written agreement under Sec.  778.111(d), 
the applicable Agency will conduct a fact-specific review to determine 
the appropriateness of applying State law to a railroad project or 
class of railroad projects. The review will be based on the information 
the State submits with its application and the consideration of the 
law(s) a State identifies pursuant to Sec.  778.105(b), as they may 
relate to ICCTA preemption. In making this determination, the 
applicable Agency may consult with the Surface Transportation Board. 
The Agencies will memorialize the types of projects to which State law 
will be applied in the written agreement.
    A railroad company raised a similar concern and asked the Agencies 
to clarify that the Pilot Program would apply only to projects 
requiring both State and Federal environmental review, and that it 
would not apply to projects that are subject to Federal environmental 
review only. In such cases, the commenter suggests that a Federal lead 
Agency would be responsible for the environmental review, applying 
Federal law.
    Similar to the Section 327 program, the Pilot Program would apply 
to those actions where the State's approval would normally require a 
Federal environmental review by one of the Agencies in the event the 
State was not participating in the Pilot Program. The statute does not 
limit the application to only those instances where both a State and 
Federal environmental review are required. Therefore, the Pilot Program 
would apply when an approval would require both a State and a Federal 
environmental review, as well as in cases only requiring Federal 
environmental review. The key question is whether the project or class 
of projects is within the scope of the application and the final 
written agreement.
    A railroad company commented that the State of California would not 
be well-suited for the Pilot Program and further suggested that if 
California applies and is approved to participate in the Pilot Program, 
then freight rail infrastructure projects in California should be 
excluded.
    The Agencies note that 23 U.S.C. 330 does not give the Agencies 
discretion to preemptively exclude a State from participation in the 
Pilot Program. The Agencies will make determinations on a State's 
participation in the Pilot Program only after receiving an application 
and following the process described in 23 U.S.C. 330 and 23 CFR 
778.107.
    Two commenters suggested that the Agencies create an ``opt-out'' 
provision. First, a railroad company suggested that a project proponent 
should be able to opt out of the Pilot Program at its discretion. 
Second, a public transportation agency suggested that local agencies 
should be allowed to opt out of the Pilot Program on a project-by-
project basis in instances where participation in the Pilot Program 
would hinder, rather than streamline, the environmental review process.
    Due to logistical and administrative complications for the 
approving Agency and the participating State (e.g., managing, tracking, 
or auditing the Pilot Program, as appropriate), the Agencies decline to 
create an opt-out provision for project proponents or local agencies in 
the Pilot Program. Project sponsors concerned with how the Pilot 
Program would apply to their projects should coordinate with the State 
during the development of the application to ensure their concerns are 
addressed. With respect to the local agencies, the Agencies have 
modified Sec.  778.107(h) by adding a new paragraph to require the 
State to provide the Agency with a copy of the local government's 
written request for the State to apply the approved alternative review 
and approval procedures to a locally administered project. This new 
prerequisite would eliminate the possibility that a State could apply 
the Pilot Program to a project or projects over the objections of the 
local agency.
    In addition, the Agencies note that 23 U.S.C. 330(f) gives a State 
participating in the Pilot Program the discretion to apply NEPA instead 
of the State's alternative environmental review and approval 
procedures. How a State would communicate such a decision to the Agency 
and complete the environmental review would be further defined in the 
written agreement between the State and the approving Agency.
    A State suggested the Agencies should use the term ``existing'' 
rather than ``alternative'' when describing the State's environmental 
review process. The commenter suggested that the Agencies assume that 
States applying for the Pilot Program have existing environmental 
review and approval procedures that will be used to substitute for the 
Federal NEPA process.
    The Agencies decline to make the suggested change. The term 
``alternative'' is consistent with the statutory language in 23 U.S.C. 
330(a)(3). As described in statute, the term ``alternative 
environmental review and approval procedures'' means substitution of 
one or more State environmental laws and substitution of one or more 
State environmental regulations. The Agencies have modified Sec.  
778.103(a)(4) to use the term ``alternative'' rather than 
``equivalent'' for consistency.
    A State suggested clarifying the two limitations in Sec.  
778.103(b) to eliminate redundancy because the limitations in 
paragraphs (b)(1) and (b)(2) are the same. The Agencies disagree the 
limitations are the same and, therefore, decline to make the suggested 
changes. The two limitations in Sec.  778.103(b) distinguish the 
conditions governing a State's participation in the Pilot Program. The 
limitation in paragraph (b)(1) identifies which Federal laws the 
State's alternative environmental review and approval procedures may 
substitute, whereas paragraph (b)(2) states that such procedures may 
not substitute for other Federal environmental laws. However, the 
Agencies have added a clause to (b)(2) to provide additional clarity.
    One public transportation agency requested the Agencies clarify and 
expand the phrase ``related regulations and Executive orders'' used in 
Sec.  778.103(b)(1)(iii). The Agencies

[[Page 84216]]

decline to provide an exhaustive list in the Pilot Program regulation 
since regulations and executive orders change over time. During the 
negotiation of the written agreement, the approving Agency will 
identify which executive orders are related and applicable at that time 
and will provide for changes in law, including by regulation or 
executive order.
    One local government suggested that the regulation should address 
how the Agencies would treat (1) environmental documents started before 
a State participates in the Pilot Program and (2) environmental 
documents started during a State's participation in the Pilot Program 
but not completed prior to the termination of the written agreement. 
The Agencies intend to address those scenarios in the written 
agreements between the approving Agency and the State, similar to how 
these situations are treated under the existing Section 327 program. 
This approach allows for the desired flexibility.

Section 778.105--Application Requirements for Participation in the 
Program

    A local government suggested that the regulation address whether 
each State that has already assumed the responsibilities under the 
existing Section 327 Program would have to go through an application 
process under this Pilot Program. The commenter further suggested that, 
if a separate application process is required, the regulation should 
clarify how this process would be undertaken and whether States would 
still be able to process documents under their existing Section 327 
Program agreements while applying to participate in the Pilot Program.
    Pursuant to 23 U.S.C. 330(a)(1) and Sec.  778.103(a)(3), the State 
must already be a participant in the Section 327 Program to participate 
in the Pilot Program. To participate in the Pilot Program, a State must 
go through a separate application process, as described in Sec. Sec.  
778.105 and 778.107. Although the Pilot Program is intended to build on 
the established responsibility assumed by the State under the Section 
327 Program, the programs are different and have separate application 
and participation requirements.
    With respect to how a State should process documents during the 
Pilot Program application process, the Agencies expect the State will 
continue to follow the requirements of its executed Section 327 Program 
agreement. In addition, the Section 327 Program allows a State to take 
on broader environmental review responsibilities than can be 
substituted under the Pilot Program. Therefore, it is likely the State 
will retain some responsibilities to conduct Federal environmental 
reviews under the Section 327 Program, where such reviews cannot be 
substituted by the State's alternative environmental review and 
approval process under the Pilot Program.
    Two surface transportation industry interest groups noted the 
proposed application requirements call for the applicant to provide a 
``detailed explanation of how the State environmental law and 
regulation intended to substitute for a Federal environmental 
requirement is at least as stringent as the Federal requirement'' 
(Sec.  778.105(b)(4)). The commenters noted that wording in the NPRM 
implies that the State must separately demonstrate consistency with 
each Federal requirement. In addition, the commenters noted that it is 
more practical and consistent with the way the stringency criteria are 
defined to allow the application to address consistency with the 
Federal NEPA process and 23 U.S.C. 139 requirements together by 
addressing each of the stringency criteria listed in the regulations.
    The commenters are correct that the application should address the 
criteria for determining stringency set forth in Sec.  778.109 as part 
of the application requirements in Sec.  778.105(b)(4). The States 
should include an explanation of how the State environmental law or 
regulation satisfies each of the stringency criteria in Sec.  778.109. 
It is the Agencies' expectation that the application will identify how 
the State law or regulation meets the criteria; however, the Agencies 
do not expect that the State law or regulation will have to follow all 
of the CEQ regulations implementing the NEPA standards associated with 
the criteria. As an example, the explanation could be in the form of a 
side-by-side comparison or walk-through of the stringency requirements 
and the appropriate State laws and regulations that meet the 
requirements. However, a State could address the application 
requirement in Sec.  778.105(b)(4) in a different manner if the 
application demonstrates how the requirement is met. The Agencies 
expect there will be differences on each specific detail of the various 
criteria, and the application process will facilitate a discussion with 
the respective States on the specific areas to ensure adequacy.
    A State commented that the term ``classes'' in Sec.  778.105(b)(5) 
needs to be better defined. The State recommended using the terms 
``actions'' or ``class of actions.'' The Agencies decline to make the 
suggested changes because the term ``classes of projects'' is the 
statutory term. Further, the terms ``actions'' and ``class of actions'' 
have different meanings under 23 U.S.C. 139. With respect to how the 
Agencies will apply the term ``class of projects,'' the Agencies intend 
to be consistent with the Section 327 Program, which uses the same 
term. As defined in 23 CFR part 773, a class of projects ``means either 
a defined group of projects or all projects to which Federal 
environmental laws apply.'' For purposes of the Pilot Program, ``class 
of projects'' would be defined as ``either a defined group of projects 
or all projects to which NEPA, the procedures governing the 
implementation of NEPA and related procedural laws under the authority 
of the Secretary, including 23 U.S.C. 109 and 139, and related 
regulations and Executive orders would apply.'' This definition has 
been added to Sec.  778.105(b)(5) to provide clarity.
    One public interest group noted that, in numerous places, the 
proposed rule requires that the participating State's Attorney General 
certify that the State has certain laws in place. The commenter 
recommended that, in each instance, the regulation should require 
identification of the State law(s) that form the basis for the 
certification. The Agencies decline the recommendation because the 
Agencies intend to be consistent with the requirements in the Section 
327 Program, which does not require a similar identification (see 23 
CFR 773.109(a)(7)). Furthermore, no issues have arisen with the State 
certification process under the Section 327 Program.
    One regional transportation agency noted that, according to 
proposed Sec.  778.105(b)(9)(B), the State must consent to exclusive 
Federal court jurisdiction for the compliance, discharge, and 
enforcement of any responsibility under the Pilot Program. The 
commenter requested that the Agencies clarify that any such lawsuit 
would need to be brought in Federal court for Federal court 
jurisdiction to apply and that a lawsuit brought in State court against 
the State environmental document would remain in State court.
    As described in the NPRM preamble, 23 U.S.C. 330(e)(1) provides 
Federal district courts with exclusive jurisdiction over a State's 
compliance, discharge, and enforcement of any responsibility under the 
Pilot Program.

[[Page 84217]]

Section 778.105(b)(9)(B) sets forth the application requirements for 
the Pilot Program with respect to waiver of sovereignty immunity.
    One public interest group expressed support for the requirement 
that States must consent to the jurisdiction of the Federal courts to 
be eligible to participate in the Pilot Program. However, it 
recommended that the Agencies require that a State have laws with a 
standard of review at least as stringent as the Administrative 
Procedure Act (APA). In the alternative, if States do not have a State 
law as stringent as the APA, the commenter suggested that the Agencies 
require the State to expressly submit to the jurisdiction of the APA 
for judicial review. The public interest group also suggested that the 
Agencies clarify which laws and standards will govern the review of the 
State laws substituting for the NEPA process. Specifically, the 
commenter sought clarification on the standards for determining 
standing and the applicability of arbitration.
    The Agencies agree that decisions under State law must be 
reviewable. To address the commenter's concerns, the Agencies add a new 
application requirement in Sec.  778.105(b)(9)(D) requiring a State to 
identify the jurisdictional requirements and standard of review that 
will be applicable to judicial review of decisions under the 
environmental laws proposed for substitution under the Pilot Program. 
The Agencies expect the information a State provides in response to 
this requirement will address the commenter's concern about identifying 
the applicable standards and requirements under the State's laws.
    One public interest group commented that the proposed language does 
not clearly require that a State waive its sovereign immunity before 
participating in the Pilot Program. The commenter recommended that the 
Agencies require a State to expressly waive immunity under each State 
law that would substitute for the Federal NEPA process. The commenter 
further suggested that, in some circumstances, the waiver of sovereign 
immunity should apply to the State's equivalent of the APA, which 
``creates the basis for the cause of action.'' Similarly, 13 public 
interest groups commented that the rule should clarify that the right 
to judicial review remains when a State has assumed the 
responsibilities of the Secretary.
    An interested State must waive its sovereign immunity under the 
U.S. Constitution's 11th Amendment to the extent needed to accept the 
jurisdiction of the Federal courts for the compliance, discharge, and 
enforcement of the environmental review responsibilities under the 
Pilot Program. A State's consent to accept the exclusive jurisdiction 
of the Federal courts for compliance, discharge, and enforcement of any 
responsibility, as required under the Pilot Program, is the functional 
equivalent of the State's waiver of the State's sovereign immunity. The 
Agencies revised Sec.  778.103(a)(2) to clarify that a waiver of 
sovereign immunity is necessary to participate in this Pilot Program. 
The Agencies also revised Sec.  778.105(b)(9)(B) to ensure the State 
includes documentation regarding the waiver of sovereign immunity as 
part of its application for the Pilot Program. This sovereign immunity 
waiver is a significant precondition for the State's participation that 
may require State legislative action (in some States gubernatorial 
action may be sufficient).
    A public interest group stated that it is important the Agencies 
ensure a State has a law similar to the Equal Access to Justice Act. 
The Agencies lack the authority under Section 1309 to require a State 
to have a law similar to the Equal Access to Justice Act. The Pilot 
Program covers the substitution of the procedures governing the 
implementation of NEPA and related procedural laws under the authority 
of the Secretary, including 23 U.S.C. 109 and 139, and NEPA-related 
regulations and executive orders. It also identifies other laws a State 
must have in place--for example, a law comparable to the Freedom of 
Information Act (FOIA). However, since the statute does not require the 
State to have a law similar to the Equal Access to Justice Act, the 
Agencies cannot impose this requirement in a rulemaking as a condition 
of a State's participation in the Pilot Program.
    One State DOT asked whether a State must provide a separate consent 
to Federal court jurisdiction in order to participate in this Pilot 
Program where the State has already given such consent pursuant to the 
Section 327 Program. The Agencies clarify that the certification and 
explanation required under Sec.  778.105(b)(9) must be met separately 
for participation in the Pilot Program, i.e., the certification and 
explanation must be included in a State's application to participate in 
the Pilot Program. The Agencies acknowledge that several States have 
provided this certification and explanation with applications to assume 
responsibilities under the Section 327 Program; however, the Agencies 
require the inclusion of this certification and explanation in a 
State's application for this Pilot Program to facilitate the approving 
Agency's review of a complete application package.
    One public interest group supports the requirement that an 
interested State must demonstrate that it has a State public records 
law comparable to FOIA. However, the commenter suggested that the word 
``comparable'' is ambiguous and suggested that the Agencies instead 
consider using the phrase ``at least as stringent as the Freedom of 
Information Act (FOIA).'' The commenter also recommended that any 
decision made under the State public records law must be reviewable in 
court. Additionally, the commenter recommended that, when evaluating a 
State's public records law, the Agencies ensure that the law includes a 
fee waiver provision, a requirement that the State respond to a request 
for records within a specific time frame that is no less than the 
Federal 20-day obligation, and a requirement that each participating 
State certify that it has sufficient resources to comply with the 
provisions of its State public records law.
    The Agencies disagree with the commenter's proposal to require 
States to have laws (and regulations) in effect that are at least as 
stringent as FOIA and decline to adopt the three suggested 
requirements. Under 23 U.S.C. 330(d)(1)(D)(iii)(III)(bb), the Secretary 
must approve a State's application to participate in the Pilot Program 
if the State executed an agreement with the Secretary in which the 
State, among other requirements, ``certifies that State laws (including 
regulations) are in effect that . . . are comparable to [FOIA]. . . .'' 
This certification is consistent with that required by the Section 327 
program (23 CFR 773.106(b)(7)). The statutory language does not 
establish factors to assess comparability. However, the Agencies have 
added an additional stringency requirement in Sec.  778.109 that 
applicable State law must provide for public access to the 
documentation necessary to review the potential impacts of projects.
    One resource/regulatory agency commented that there is no mention 
of how the States will coordinate with other agencies during 
environmental reviews. The resource/regulatory agency recommended that 
State wildlife agencies be identified as cooperating agencies based on 
their regulatory authority and special expertise for wildlife and 
wildlife resources for high-level NEPA analyses. The Agencies 
considered the comment, but decline to make the recommended change 
because the identification of cooperating agencies is a project-
specific determination and not appropriate in this rulemaking. However, 
the Agencies

[[Page 84218]]

note that the stringency criteria in Sec.  778.109 address the need for 
coordination with other agencies, including those that have 
jurisdiction by law or special expertise.
    The resource/regulatory agency also noted that full public 
disclosure of impacts is a key component of NEPA and recommended that 
States be required to analyze impacts to all resources required under 
NEPA. Public disclosure and analysis of impacts to affected resources 
is considered as part of the evaluation of whether a State law or 
regulation is as stringent as NEPA (see Sec. Sec.  778.109(f)-(i)).
    The same resource/regulatory agency recommends revising the 
requirements to direct that environmental review and analyses be 
documented in one all-encompassing report in accordance with NEPA 
standards. The CEQ regulations implementing NEPA (40 CFR parts 1500-
1508) encourage the concurrent preparation and integration of the 
Federal NEPA process with other environmental impact analyses and 
surveys and studies required by other Federal laws. The CEQ regulations 
also encourage combining documents and processes to eliminate 
duplication and reduce paperwork (see 40 CFR 1506.2 and 1506.4). 
However, these are best practices allowed under the CEQ regulations and 
are appropriately addressed in State applications. The Agencies, 
therefore, decline to make the commenter's recommended change.

Section 778.107--Application Review and Approval

    A regional transportation agency and a port authority suggest the 
Agencies consider streamlining the application and approval process by 
eliminating the separate requirements for a State to seek public 
comment on its application before submittal to the Agencies and for the 
Agencies to seek public comment before approving or disapproving an 
application. Instead, the commenters suggest requiring a State and the 
Agencies to seek one set of public comments. Similarly, one State 
questioned the need for two public comment periods, noting that Sec.  
778.105(b)(7) requires that the State seek public input on the 
application prior to submitting it to the approving Agency.
    The Agencies decline to make the suggested change. Two public 
comment periods are required by 23 U.S.C. 330. As reflected in Sec.  
778.105(b)(7), 23 U.S.C. 330(b)(7) requires that the application 
include evidence that the State sought and addressed public comments on 
its application. Additionally, as reflected in Sec.  778.107(a), 23 
U.S.C. 330(c)(1) and (d)(1)(A)-(B) require the Secretary to accept and 
consider public comments on applications submitted. These requirements 
are separate; the pre-submission comment period provides the public an 
opportunity to inform the State's application, while the post-
submission comment period provides the public an opportunity to inform 
the approving Agency's consideration of the application and the terms 
of the agreement with the State. Additionally, the second opportunity 
for public comment ensures transparency during the approval process.
    A regional transportation agency and a port authority recommended 
that the regulations require an approving Agency to approve the 
application within 60 days instead of 120 days. The Agencies decline 
the suggested change because the timeframe in Sec.  778.107(b) is 
prescribed in the statute. Under 23 U.S.C. 330(c)(2), the Secretary 
must approve or disapprove an application not later than 120 days after 
the date of receipt of an application that the Secretary determines is 
complete.
    A State commented that the requirement that a written agreement be 
made between the Governor or Senior Transportation Official and the 
approving Agency prior to approval of the application appears to be out 
of sequence. The State commented that the Agency should approve the 
application before the written agreement between the State and the 
approving Agency is finalized. The State also expressed confusion with 
the assertion in Sec.  778.107(f) that the approving Agency's execution 
of the agreement will constitute approval of the application and the 
assertion in Sec.  778.111(b) that, after making a decision on an 
application, the approving Agency must transmit the decision in writing 
to the State with a statement explaining the decision.
    The Agencies decline the commenter's recommendation to approve the 
application prior to finalizing the written agreement. Section 330(d) 
of Title 23, U.S.C., authorizes approval of an application only if the 
State has executed an agreement with the approving Agency that 
memorializes the State's responsibilities under the Pilot Program. The 
Agencies interpret this provision to require States to sign a written 
agreement prepared by the approving Agency during the approving 
Agency's application review process to demonstrate the State's ability 
to comply with all Pilot Program requirements. The approving Agency 
will sign and execute the agreement after the State, and only when it 
has determined approval of the State's application is appropriate. The 
Agencies clarify the approving Agency's signature on and execution of 
the agreement constitutes approval of a State's application. The 
approving Agency's transmittal of the agreement with the approving 
Agency's signature will serve as the notice of approval required under 
23 U.S.C. 330(c). For clarity, the Agencies modify the text of Sec.  
778.107(f).
    In a joint letter, 13 public interest groups recommended changes to 
clarify the role of the Agencies in the review and approval of a 
State's application to the Pilot Program. The commenters noted concerns 
about the lack of a requirement for the Agencies to respond to comments 
received during the public comment period following the State's 
submission of an application. In addition, they noted concerns about 
the public's ability to participate in the project-specific review and 
comment process once State environmental laws and regulations are 
substituted for the NEPA process under the Pilot Program.
    The Agencies read the statute to require the Agency receiving an 
application to accept and consider public comments on a State's 
application, but the statute does not require the Agencies to respond 
to these public comments. The Agencies will seek and consider public 
comments before taking action on a State's application, consistent with 
how the Agencies seek and consider public comments under the Section 
327 Program, and the written agreement approving a State's 
participation in the Pilot Program will address, as appropriate, these 
comments. In addition, the Agencies confirm that the public will retain 
the same ability to review and comment on projects as currently 
provided under the NEPA process per Sec.  778.109(i). Under the Section 
327 Program, a State that assumes responsibility must meet the same 
procedural and substantive requirements as if the responsibility was 
carried out by the Secretary. Any environmental documentation developed 
under State environmental laws and regulations under this Pilot Program 
would still be required to comply with the notification, publication, 
and comment procedures as would be required under NEPA.
    The public interest groups also suggested that the final rule 
should require the Agencies to publish approval of the State's 
application and a copy of the executed agreement in the Federal 
Register and clarify that such approval is a final Agency action 
subject to judicial review under the APA. The Agencies intend to 
approve applications

[[Page 84219]]

for participation in the Pilot Program in a manner consistent with that 
used by the Section 327 Program (see 23 U.S.C. 327(b)(3)), which 
includes providing public notice as required by 23 U.S.C. 330(c)(1).

Section 778.109--Criteria for Determining Stringency

    A State commented that the Sec.  778.109 requirements ``are overly 
detailed and may prohibit States from participating'' in the Pilot 
Program. Rather than detailing an exhaustive list of separate 
requirements, the State suggested that the State law be evaluated for 
equivalency to the NEPA process as a whole, with provisions included in 
the NPRM to address shortcomings or deficiencies, should any be 
identified. The State indicated that most of such issues could be 
easily addressed through the written agreement. Similarly, two surface 
transportation industry interest groups expressed concern that the 
requirement to satisfy 14 distinct criteria as a ``minimum'' 
requirement could end up disqualifying States from participating in the 
Pilot Program even when the State law is ``equally as stringent or more 
stringent than NEPA overall.'' They commented that even a State law 
with extremely stringent requirements, such as the California 
Environmental Quality Act (CEQA), may require a lower level of detail 
than NEPA in some specific areas. These commenters cited CEQ's handbook 
on NEPA-CEQA integration where it points out that the alternative 
analysis and cumulative impact analysis under NEPA may need more detail 
than in the CEQA process. The surface transportation industry interest 
groups recommended that the final rule include language stating that 
the Agencies will base the stringency determination on an assessment of 
the State law as a whole, so that minor differences in the level of 
detail required on specific issues do not prevent the stringency 
requirement from being met.
    Section 1309(c)(2)(A) of the FAST Act requires CEQ to develop the 
criteria the Secretary will use to determine whether the State law or 
regulation is at least as stringent as the Federal requirements. At a 
minimum, the criteria for determining stringency must provide for 
protection of the environment, provide opportunity for public 
participation and comment, allow access to the documentation necessary 
to review the potential impacts of projects, and ensure consistency of 
review of projects. A broad criterion based on an assessment of the 
State law as a whole would fail to establish an objective way to 
compare the State and Federal requirements. For example, the State 
commenters point to CEQA as an example of a statute that is more 
stringent than NEPA, but did not explain how they arrived at this 
conclusion. In the absence of specific criteria to make a comparison, a 
similar conclusory statement could be said for many, if not all, of the 
other State laws or regulations that are comparable to NEPA.
    The Agencies clarify the expectations with regards to policies and 
guidance developed for NEPA for each of these criteria. The CEQ 
analyzed NEPA, the Regulations for Implementing the Procedural 
Provisions of NEPA, and 23 U.S.C. 139 to determine the core elements 
that would ensure protection of the environment and consistency of 
review. The CEQ also took into account the existing State laws and 
regulations that are comparable to the NEPA process. A State law or 
regulation that meets each of the listed general criterion would meet 
the stringency required by the statute. The State law or regulation 
would meet the test if the statutory text, implementing regulations, 
policies, or guidance address each general criterion in Sec.  778.109. 
The State law or regulation does not have to adopt or follow the 
Federal guidance, policy, and interpretation used for implementing the 
standard under NEPA. For example, the alternatives analysis criterion 
(Sec.  778.109(e)) would be met if the State law or regulation requires 
alternatives evaluation consistent with the criterion, but would not 
need to follow the CEQ guidance and interpretation on alternatives for 
NEPA such as those available in the 40 Most Asked Questions (46 FR 
18026 (March 23, 1981)) or based on NEPA case law. The same approach 
would follow for cumulative effects consideration. The Agencies do not 
require the State to follow CEQ guidance on cumulative effects analyses 
that is applicable to NEPA reviews, nor do they expect the cumulative 
effects case law under NEPA to apply to the State law or regulation 
implementation of its cumulative effects analysis expectations.
Proposed Rule Sec.  778.109(a)
    A public interest group expressed concerns that subsection (a) of 
the stringency criteria requires States to ``define the types of 
actions that normally require an environmental impact statement.'' By 
using the term ``environmental impact statement,'' a term of art under 
NEPA, the commenter asserts it is unclear whether the rule is requiring 
States to define what types of projects would be subject to NEPA review 
overall, or which projects would rise to the level of impact 
necessitating an environmental impact statement (EIS) rather than an 
environmental assessment (EA) or categorical exclusion (CE). The 
commenter recommended the rule make clear that States must first define 
the types of actions that are subject to NEPA review and then specify 
the level of documentation that will be required for different 
categories of projects.
    The Agencies, revised the language for additional clarity. Section 
778.109(a) does not address the various levels of environmental impact 
evaluations or documentation that may be acceptable for particular 
types of projects. Proposed section 778.109(a) did not use the NEPA-
specific term ``environmental impact statement'' to refer to the 
various types of environmental evaluations and documents required and 
produced under different State laws and regulations. The Agencies 
expect the State laws or regulations to be substituted for NEPA to 
establish which actions trigger environmental review. Actions requiring 
environmental review should include government-sponsored actions, 
including those receiving Federal financial assistance or permits. The 
classification of the appropriate environmental impact evaluations or 
documentation required for particular types of projects is addressed as 
part of Sec.  778.109(b).
Proposed Rule Sec.  778.109(b)
    A public interest group recommended amending the last sentence in 
Sec.  778.109(b) by changing the word ``should'' to ``must'' to ensure 
that scoping for actions that may result in significant impacts on the 
human environment is guaranteed to be an ``open and public process.'' 
The commenter also suggested the rule require participating States to 
provide public notification and public involvement, to the extent 
practicable, during the scoping process for State environmental reviews 
equivalent to EAs.
    The Agencies agree to change ``should'' to ``must'' in the last 
sentence of Sec.  778.109(b) to mirror the CEQ regulations scoping 
requirements for actions with potential significant impacts. The 
Agencies decline to require the State to provide public notification 
and public involvement during the scoping process for State 
environmental reviews equivalent to EAs. The CEQ regulations do not 
include similar requirements for EAs.
Proposed Rule Sec.  778.109(d)
    A public interest group commended the effort in Sec.  778.109(d) to 
ensure a participating State's objective analysis

[[Page 84220]]

by preventing conflicts of interest from affecting environmental 
reviews and by requiring States to certify all environmental reviews 
performed and compiled for a project analysis. The commenter 
recommended the Agencies further safeguard against State reliance on 
substandard work from outside contractors by requiring States to ensure 
the ``professional integrity,'' including ``scientific integrity,'' of 
the discussions and analyses in environmental evaluations and documents 
and to document the methodologies used, as required under 40 CFR 
1502.24 (these requirements are now set forth in 40 CFR 1502.23). The 
Agencies agree States participating in the Pilot Program should be 
required to comply with the intent of 40 CFR 1502.23 to protect the 
scientific integrity of environmental analyses and methodologies. 
Accordingly, the Agencies are adding language to paragraph (f) to 
address this comment.
Proposed Rule Sec.  778.109(e)
    A public interest group commented that, although Sec.  778.109(e) 
properly tailors the evaluation of reasonable alternatives to a 
proposed action's purpose and need, it does not ensure that the purpose 
and need for a project will be defined reasonably--a key first step in 
the NEPA process. To ensure that environmental reviews under State 
programs are not rendered meaningless by purpose and need statements 
drawn so narrowly that the proposed project is a foregone conclusion, 
or so broadly to be meaningless, the public interest group recommended 
the Agencies revise the rule to clarify that the same rule of reason 
applies to the definition of purpose and need and selection of a range 
of alternatives under State programs. The commenter also asserted it is 
essential that any State program include a requirement similar to CEQ's 
regulations that mandate a brief discussion of the reasons for 
eliminating any alternatives not explored in detail in an environmental 
review document. The commenter stressed that only through this 
procedure will the public be able to determine if a ``reasonable 
range'' of alternatives has been considered.
    The Agencies decline to make changes because the Agencies believe 
the existing language adequately addresses the commenter's concern.
Proposed Rule Sec.  778.109(f)
    A public interest group commented that Sec.  778.109(f) suggests 
that an assessment of reasonably foreseeable direct, indirect, and 
cumulative impacts of a proposed action (and any reasonable 
alternatives) should be compared with ``existing environmental 
conditions.'' The commenter noted that courts have been clear that the 
environmental effects of the proposed action and alternative solutions 
should not be compared with existing environmental conditions, but 
rather with the ``baseline'' or ``no action'' condition described in 40 
CFR 1502.14(d) (now set out at 40 CFR 1502.14(c)). The public interest 
group added that the proposed rule, therefore, requires further 
clarification, noting that where Sec.  778.109(e) does describe the 
baseline ``no action'' alternative as essential to NEPA compliance, the 
introduction in Sec.  778.109(f) of a comparison with ``existing 
environmental conditions'' could result in considerable confusion and 
departure from the legal requirements of NEPA. While initially a ``no 
action'' alternative may be the same as ``existing conditions,'' the 
future analysis that NEPA requires will likely require the projection 
of a future ``no action'' baseline that is distinct from ``existing 
conditions.'' The public interest group suggested that the rule be 
rewritten to clarify that the necessary comparison is to the ``no 
action'' alternative.
    The Agencies agree with the public interest group comments that 
including in the criteria the need for comparison between the 
environmental impacts and existing environmental conditions was 
confusing. The Regulations for Implementing the Procedural Provisions 
of NEPA (40 CFR parts 1500-1508) do not have this requirement; rather 
they require comparison among alternatives. Therefore, the Agencies 
revise Sec.  778.109(f) to make this clarification.
Proposed Rule Sec.  778.109(h)
    A public interest group commended the mandate in Sec.  778.109(h), 
which properly requires States to coordinate and consult with 
interested parties. However, the public interest group noted the words 
``adequate'' and ``appropriate'' leave the proposed rule vague as to 
the degree of coordination and consultation required. The commenter 
recommended deleting both words. The Agencies believe that retaining 
``adequate'' is warranted in this context. The need for and level of 
participation will depend on the type of analysis involved and the 
specific circumstances of the proposed project. Similarly, the Agencies 
believe that retaining ``appropriate'' is warranted because the review 
would not always require coordination with all the parties mentioned in 
the paragraph.
    A public interest group expressed particular concern that Federal 
agencies should continue to fulfill the independent obligation to 
determine whether there is a Tribal interest in an undertaking and 
consult with Tribal authorities. The public interest group suggested 
that the regulation should make clear that participating States' 
obligations to consult with Tribal authorities are additional to the 
Federal obligation to do so and that the efforts should be coordinated. 
Similarly, in a joint letter, 13 public interest groups recommended 
that the proposed rule should explicitly acknowledge the Federal 
obligation to consult with Tribes regardless of any delegation of other 
responsibilities to States.
    The Agencies agree with the comments related to coordination and 
consultation with Tribes. The Federal Government's responsibility to 
engage in government-to-government consultation with Tribes is a 
requirement independent of NEPA and, therefore, it is not subject to 
assignment under the Pilot Program. It is also excluded from the 
Section 327 Program. States must coordinate with Tribes as part of 
their responsibilities to assess environmental impacts, but this should 
not be interpreted as assigning the Federal Government's unique 
responsibility to consult with Tribes when needed.
    One resource/regulatory agency recommended that the term 
``appropriate coordination and consultation'' in Sec.  778.109(h) be 
strengthened to ensure that Federal agencies with jurisdiction by law 
or special expertise be invited as cooperating agencies to ensure that 
interagency consultation occurs early and throughout the environmental 
review process. The Agencies decline to make the recommended change. 
Requiring the establishment of cooperating agency relationships would 
be overly prescriptive. A State law or regulation may provide for 
establishing coordination relationships that are as equally effective 
as the concept of cooperating agency under the NEPA process.
    In their joint letter, 13 public interest groups noted that 
Congress did not authorize delegation of the review responsibility of 
the Environmental Protection Agency (EPA). The public interest groups 
recommended that the final rule explicitly address the requirement 
that, if a State does not incorporate EPA's review into its NEPA 
process, the applicable Agency will have to do so before it can 
finalize project approval. The statue does not address the delegation 
of EPA's review responsibility and it would be inappropriate for the 
Agencies to

[[Page 84221]]

determine the limitations of another Federal Agency's authority. 
Therefore, the Agencies decline the commenters' proposed edit on this 
point.
Proposed Rule Sec.  778.109(i)
    A public interest group commented that Sec.  778.109(i) requires 
that States ``provide an opportunity for public participation and 
comment that is commensurate with the significance of the proposal's 
impacts on the human environment.'' The public interest group commented 
that this statement is overly vague and suggested that the rule must 
establish the bare minimum required for public participation, namely: 
(1) The right to notice and comment on draft EISs; (2) the right to 
notice and comment on draft EAs where the proposed project is 
controversial or where mitigation is relied upon to avoid potential 
significant impacts; and (3) the right to view all environmental review 
documents prior to a decision being made, including those supporting 
the application of CEs. The commenter also suggested that the rule make 
clear that, beyond simply providing an opportunity for the public to 
comment, States will ``affirmatively solicit comments from persons or 
organizations who may be interested or affected.'' The commenter 
recommended that the proposed rule refer States to the 2016 report of 
the Federal Interagency Working Group on Environmental Justice and its 
NEPA Committee titled, ``Promising Practices for Environmental Justice 
Methodologies in NEPA Reviews,'' and subsequent guidance from these 
bodies. The public interest group further noted that the rule should 
stress that a State's duty is not limited to allowing for public 
comment, but that it also encompasses a duty to carefully consider 
public comment and respond to all comments--including opposing 
viewpoints--in subsequent NEPA documents.
    The Agencies decline to make the recommended changes. State law or 
regulations may create different categories of analysis that would not 
be the same as an EIS, EA, or CE. The criteria should be flexible 
enough to allow differences in the categorization of environmental 
analyses. The Agencies also do not find it necessary to require the 
same public comment standard as NEPA since the State law or regulations 
must have adequate public involvement procedures that are as equally 
effective and are consistent with State law.
    In their joint letter, 13 public interest groups commented that the 
proposed rule should identify specific requirements for notice and 
comment that a State must provide to meet the guarantees of public 
participation currently provided by NEPA, including the right to notice 
and comment on draft EAs and draft EISs, and the right to all 
environmental review documents in time for non-expert members of the 
public to understand, assess, and provide informed comment on the 
decision being made.
    The Agencies agree with the commenters that public participation 
procedures under NEPA are worth emulating. However, requiring that a 
State law or regulation adopt the same public requirements applicable 
to NEPA ignores the fact that States have their own public involvement 
procedures and applicable laws. The State law or regulation may have 
adequate public involvement procedures that are equally effective.
    The public interest groups also requested that a State's use of CEs 
be limited to those established by Federal transportation agencies 
after public notice and comment. The Agencies decline this request. If 
the States in the Pilot Program choose to propose and develop 
additional categories of projects to exclude from detailed 
environmental analysis under the applicable State law, that process 
would be handled consistent with the State's legal authority that was 
determined to be as stringent as NEPA. Once a State is in the Pilot 
Program, it would no longer apply Agencies' CEs.
Proposed Rule Sec.  778.109(j)
    In their joint letter, 13 public interest groups noted that, under 
existing law, other Federal agencies can refer environmental reviews to 
CEQ (see 40 CFR 1504.3). The public interest groups commented that the 
final rule should also address the requirement that, if a Federal 
agency refers concerns about a proposed project to CEQ, CEQ must 
resolve those concerns before the project is approved. The Agencies 
agree that a referral process should be part of the stringency criteria 
and revise the regulation in Sec.  778.109(j) to add a referral 
process. However, the Agencies believe that requiring the same referral 
process as required for the Federal NEPA process would be overly 
prescriptive. A State law or regulation may provide for a referral 
process that is as equally effective as the referral process under 40 
CFR part 1504.
Proposed Rule Sec.  778.109(l)
    A public interest group noted the rule should make clear that 
supplemental environmental documents must be ``prepared and circulated 
in a similar fashion'' to the original environmental documents. The 
Agencies believe that this proposed change would be overly restrictive. 
Requiring that a State law or regulation adopt the same circulation 
requirement applicable to NEPA ignores the fact that States have their 
own public involvement procedures and applicable laws. The State law or 
regulation may have adequate public involvement procedures that are 
equally effective. Although the Agencies are not making changes in 
response to the commenter, the Agencies intend to consider each State 
application's treatment of this issue by evaluating the alternative 
environmental review and approval procedures that States propose in 
their applications to the Pilot Program and through the review process 
established in Sec.  778.111.
Proposed Rule Sec.  778.109(m)
    A public interest group noted that Sec.  778.109(m) risks seriously 
undermining the effectiveness of the proposed rule because it requires 
procedures to ``facilitate process efficiency'' without requiring that 
any such abbreviated procedures be at least as protective as their 
Federal equivalents. The public interest group commented that this 
subsection has the potential to become a large loophole for a State 
inclined to avoid environmental reviews by, for example, designating 
excessively large categories of actions exempt, conducting overly broad 
programmatic reviews, or similar actions. The commenter suggested that 
Sec.  778.109(m) should be removed entirely, or at least any 
requirement to adopt abbreviated procedures should be separated from 
the stringency analysis. Beyond that, the commenter recommended the 
rule should make clear that any procedures set in place to ``facilitate 
process efficiency'' must be at least as stringent as their Federal 
equivalents.
    The Agencies decline to make the proposed changes. The Agencies and 
CEQ have pursued measures to make the process more efficient, starting 
with Executive Order 11514 onward to the latest efforts captured in 
Executive Order 13807, as well as regulations implementing the Moving 
Ahead for Progress in the 21st Century Act (MAP-21) and the FAST Act. 
The public comment process on State guidance and procedures, along with 
judicial review, provide the appropriate check on attempts to avoid 
compliance with applicable environmental reviews. Furthermore, as part 
of ongoing monitoring, the Agencies maintain the opportunity to provide 
oversight of any updated State environmental review procedures.

[[Page 84222]]

Additional Requirements
    In their joint letter, 13 public interest groups recommended that 2 
additional elements that are part of the current NEPA process be added 
to what is required in a State submission: (1) A requirement that the 
State review address disproportionate impacts on low-income and 
minority populations, and (2) an enforceable requirement that, when 
avoiding potentially significant impacts, any mitigation measures 
identified in the State review be incorporated as conditions of 
approval in the Federal decision that the State review supports. 
Similarly, a public interest group commented that the rule should make 
clear that States have a responsibility to address disproportionate 
impacts on minority and low-income communities.
    The Agencies decline to make the proposed changes. First, the 
Agencies acknowledge the commenter's concern regarding the 
consideration of disproportionate impacts on minority and low-income 
communities and note they must be evaluated as part of the 
environmental review process per Executive Order 12898. While this is a 
process typically integrated into the NEPA process, it is not one that 
may be substituted under this Pilot Program. However, State agencies 
continue to have this responsibility and must comply with the Federal 
standard. Second, allowing a project with potential significant impacts 
to proceed with an EA and a Finding of No Significant Impact instead of 
an EIS, if there are mitigation commitments that reduce the impacts 
below the threshold of significance, is a NEPA-specific concept. There 
may be some State laws or regulations that allow a similar process, but 
this would be subject to State law. The Agencies are not requiring the 
adoption of the same concepts of EIS, EA, and CE as in the NEPA process 
and, therefore, do not believe that there is a need to require this 
NEPA-specific concept from State law or regulations.
    The public interest groups also requested clarification on the role 
of Federal agencies in project approval. The commenters noted that 
Congress provided States the opportunity to stand in the shoes of the 
Secretary for compliance with other Federal environmental laws as well 
as NEPA (23 U.S.C. 327(a)(2)(B)(i)). This could include, for example, 
the obligation to consult with U.S. Fish & Wildlife Service under the 
Endangered Species Act. It could also possibly include compliance with 
the National Historic Preservation Act. The project approval, however, 
remains with the Secretary. The commenters recommended that the 
proposed rule should explicitly state so to avoid any confusion.
    The Agencies agree with the commenters regarding project approval, 
but do not find that any additional clarification is needed. The 
procedures for the Section 327 Program make clear that the only 
assignable responsibilities under the Section 327 Program are the 
environmental review responsibilities; project approvals are not 
authorized to be assigned under the Section 327 Program (see 23 CFR 
773.105(b)(5)). With regard to the Pilot Program, Sec. Sec.  778.101 
and 778.103(b) make clear that the only requirements being substituted 
are those related to NEPA.
    One local government recommended that the Pilot Program regulations 
include an allowance for granting environmental review exemptions for 
categories of projects that have been determined not to have a 
significant effect on the environment. The Agencies find that this 
suggestion is addressed in Sec.  778.109(b) (classification of the 
appropriate assessment of environmental impacts) and Sec.  778.109(m) 
(categories of action). However, the Agencies want to highlight that, 
as with a CE under NEPA, these are not exemptions from the 
applicability of the State law or regulation, but rather are situations 
where the analysis is more limited and where consideration of 
extraordinary circumstances evaluation is warranted.

Section 778.111--Review and Terminations

    One local government suggested that the proposed rule should 
provide what the compliance and reporting measures would be for States 
participating in the Pilot Program. The Agencies acknowledge the 
comment and agree States participating in the Pilot Program should be 
informed about required compliance and reporting measures. The Agencies 
believe that the appropriate place to do this is the written agreement 
consistent with the Section 327 Program. In addition, the Agencies want 
to further clarify that the frequency of review of the State's 
performance in implementing the requirements of the Pilot Program will 
be determined as necessary by the approving Agency and included in the 
written agreement.
    One public interest group noted concerns about the mechanisms for 
ensuring State compliance with the proposed review and the termination 
requirements, including the public's opportunity to provide input, and 
recommended many changes. The Agencies agree that monitoring and 
auditing each approved State's performance implementing the Pilot 
Program is critical to its success, and the Agencies possess the right 
and responsibility to terminate a State's participation in the Pilot 
Program early (see Sec.  778.111(c)). The Agencies will provide the 
necessary compliance and reporting measures as part of the written 
agreement required between the approving Agency and the State.
    In their joint letter, 13 public interest groups noted that the 
proposed rule fails to provide the public an opportunity to petition 
the Secretary to rescind approval for a State to participate in the 
Pilot Program, stating that such opportunity is a fundamental aspect of 
delegation of other authority to States to implement and enforce 
environmental laws. The Agencies determine that a public or formal 
petition process is not necessary or supported by statute. However, the 
public can submit concerns regarding a State's implementation of the 
Pilot Program to the Secretary at any time. In addition, the Agencies 
note that, under Sec.  778.111(b), the Agencies must review each 
participating State's performance in implementing the requirements of 
the Pilot Program at least once every 5 years and must provide notice 
and an opportunity for public comment during that review.

Section 778.111--Review and Terminations

    One State noted concerns with termination of the Pilot Program 
after 12 years of enactment of the FAST Act. Specifically, the 
commenter indicated participation in the Pilot Program would likely 
require it to revise its processes and procedures for completing 
applicable environmental review under existing regulations and, 
therefore, the definable and finite termination of the Pilot Program 
after 12 years under Sec.  778.111 would place a burden on the State to 
revise its regulations again to account for Pilot Program termination. 
The commenter also noted termination of the Pilot Program after 12 
years could confuse staff and resource agencies required to switch 
between legal standards. The Agencies acknowledge the concern; however, 
the termination provision is prescribed by the statute. Congress 
mandated in 23 U.S.C. 330(k) that the Pilot Program terminate 12 years 
after the date the FAST Act was signed into law. The Agencies have 
added a new section to address the termination of the Pilot Program and 
a sunset of the regulations absent Congressional action to extend the 
program.

[[Page 84223]]

Locally Administered Projects

    A public transportation agency and a port authority requested that 
the Agencies clarify that States can change the local governments that 
participate in the Pilot Program, as needed, provided the total number 
of local governments participating at one time does not exceed 25. The 
Agencies decline to provide additional clarification in the regulation. 
Under Sec.  778.107(h), a State is responsible for ensuring that the 
requirements of the approved alternative State procedures are met when 
applying the alternative procedures to locally administered projects. 
Procedures for identifying the local governments participating in the 
Pilot Program will be defined in the written agreement between the 
State and the approving Agency.
    One State requested that the provision that limits the application 
to only 25 local government agencies be eliminated, noting that other 
State-administered Federal programs, such as the Recreational Trails 
Program, do not include this limitation. Section 778.107(h) is 
consistent with the statute. Accordingly, the Agencies decline the 
suggested change. The number of local governments participating in the 
Pilot Program is limited by 23 U.S.C. 330(h)(1), which specifies that a 
State with an approved Pilot Program, at the request of a local 
government, may exercise authority under that program for up to 25 
local governments for locally administered programs.
    One public interest group noted that the proposed rule provides 
little detail beyond the text of 23 U.S.C. 330(h) about how States and 
local governments might apply the alternative environmental review and 
approval procedures to locally administrated projects. The commenter 
noted the proposed rule does not describe or limit which projects or 
local governments may qualify for or be eligible to implement the 
State's alternative environmental review and approval procedures, nor 
does the proposed rule define ``locally administered project'' or 
``local government.''
    The Agencies decline to provide additional clarification of the 
terms ``locally administered project'' and ``local government'' in the 
regulation due to differing program definitions and requirements among 
the Agencies, but may define expectations regarding locally 
administered projects and local governments in the written agreement. 
Under the Pilot Program, the State is the responsible party that must 
meet the Pilot Program requirements. Any local governments 
participating in the Pilot Program may conduct the environmental 
analyses or reviews, but the State is responsible for ensuring that the 
requirements of the approved alternative State procedures are met for 
those projects (see Sec.  778.107(h)).
    A local government suggested that the Agencies consider requiring 
States to participate in the Pilot Program so that local agencies, 
which are responsible for delivering local transportation projects, can 
benefit from the Pilot Program. The commenter also noted that, if State 
participation in the Pilot Program is optional, local agencies should 
be given the opportunity to demonstrate their ability to participate in 
the Pilot Program. Similarly, another local government commented that 
the Pilot Program should provide administrative delegation of the 
proposed regulations to a local agency to further streamline the 
process and review of environmental documents.
    The Agencies acknowledge the commenters' interest in the Pilot 
Program and concerns with the proposed rule. However, 23 U.S.C. 330(a) 
only allows, and does not require, States to participate in the Pilot 
Program. The scope of the Pilot Program in relation to locally 
administered projects is established by 23 U.S.C. 330(h). It provides 
that a State with an approved program, at the request of a local 
government, may exercise authority under that program on behalf of up 
to 25 local governments for locally administered projects and, for up 
to 25 local governments selected by a State participating in the Pilot 
Program, the State shall be responsible for ensuring compliance with 
Federal and State law and the Pilot Program.

Statutes of Limitations

    Several commenters raised concerns with the statute of limitations 
in the proposed rule. A public transportation agency commented that the 
2-year statute of limitations established under Section 1309 of the 
FAST Act is a deterrent to participation in the Pilot Program. A 
surface transportation industry interest group noted the statute of 
limitations for any claims challenging actions taken by a State under 
the Pilot Program is different from the 150-day period that otherwise 
would apply to claims challenging actions taken by State agencies 
approving a highway or transit project under the Section 327 Program. 
The surface transportation industry interest group commented that the 
disparity between these two statutes of limitations means that a 
lawsuit challenging a single State decision approving a highway or 
transit project could be subject to two different limitations periods; 
a 2-year period relative to a State's action under the State law 
substituted for NEPA, and a 150-day period relative to State's action 
under other Federal laws not covered by the Pilot Program (e.g., 49 
U.S.C. 303, commonly known as ``Section 4(f)''). To provide clarity for 
applicants and for States participating in the Pilot Program, the 
commenter recommended that the Agencies include a section in the 
regulations specifically addressing the issuance of statute of 
limitations notices under the Pilot Program. The surface transportation 
industry interest group commented that the regulations should confirm 
that the State can still issue a 150-day statute of limitations notice 
for all actions taken by the State or other Federal agencies under 
other Federal laws.
    Similarly, a State seeks clarification on whether the statute of 
limitations is two years following the publication in the Federal 
Register of the Notice of Final Federal Agency Action. The commenter 
also noted that, if the statute of limitations under the Pilot Program 
is set at two years, this is significantly longer than the 150-day 
period currently afforded to other surface transportation projects by 
MAP-21. The State DOT commented that, in order to streamline project 
delivery, the statute of limitations under the Pilot Program should be 
the same period established by the State law that will be used to 
substitute for NEPA, or the 150-day period established by MAP-21, 
whichever period is shorter. A local government also suggested the 
Pilot Program consider adopting the 150-day statute of limitations for 
NEPA actions and decisions, provided a Notice of Final Agency Action is 
placed in the Federal Register. A local government, a regional 
transportation agency, and a port authority all commented that, since 
the Pilot Program would allow States to substitute their environmental 
review procedures for Federal procedures, the State's statute of 
limitations should apply to legal challenges related to the 
environmental review. Finally, a public interest group sought 
clarification on the applicable statute of limitations.
    After publication of the NPRM, Section 578 of the FAA 
Reauthorization Act of 2018 (Pub. L. 115-254) amended 23 U.S.C. 
330(a)(2), reducing the number of States eligible to participate in the 
pilot from five to two. In addition, it amended 23 U.S.C. 330 (e)(2)(A) 
and (e)(3)(B)(i), changing the statute of limitations from two years to 
150 days as set forth in 23 U.S.C. 139(l). This statutory change 
regarding the applicable statute of limitations is reflected in the 
rulemaking and

[[Page 84224]]

otherwise responds to and clarifies the comments received regarding the 
applicable statute of limitations.

Environmental Permits

    A regional transportation agency and a port authority commented 
that there were benefits to be realized from State and local 
governments using State environmental review procedures to satisfy the 
NEPA process. However, these two commenters expressed concerns that the 
State and local governments may not be able to obtain required permits 
from Federal resource agencies if the State reviews are not given the 
required deference. The two commenters stated that approved State and 
local governments in the Pilot Program should be treated the same as a 
Federal participating agency. Under the Pilot Program, the Agencies 
intend for the approved State agency to have the same standing as would 
a lead Federal agency under the NEPA process. This intent also applies 
to those local governments or locally administered projects that are 
subject to the approved Pilot Program application and written 
agreement, though the State will retain the responsibility for ensuring 
the requirements of the approved alternative State procedures are met.
    One local government noted that Federal environmental resource 
agency review and approvals to obtain environmental permits continue to 
be a challenge and suggested the Pilot Program consider streamlining 
Federal environmental resource agency approvals and potentially assign 
environmental permitting to the State. Similarly, a public 
transportation agency recommended that States look for ways to maximize 
and utilize a project's environmental document for not only NEPA, but 
also for other Federal agency reviews and permitting requirements, in 
order to minimize duplicative efforts and streamline the environmental 
review process. While these comments are outside the scope of this 
rule, the Agencies direct the commenters to Executive Order 13807 and 
its corresponding One Federal Decision memorandum of understanding, 
which aim to condense Federal environmental review and authorization 
(e.g., permitting) decisions to the maximum extent practicable.

Performance Measurement

    A surface transportation industry interest group and a local 
government suggested that the Agencies establish a system for tracking 
and benchmarking the performance of the Pilot Program. The two 
commenters noted this system would allow DOT and Congress to compare 
the Pilot Program's timelines with those of States and the Federal 
Government applying NEPA requirements. Similarly, a private citizen 
noted the Pilot Program can provide key data regarding the possibility 
of saving money, whether State laws can substitute Federal 
environmental laws, and whether this program impacts project delivery. 
The private citizen recommended that DOT be sure to maintain careful 
records about the successes and failures of the Pilot Program to help 
determine whether the Pilot Program should be extended to more States.
    Per 23 U.S.C. 330(j), the Agencies must submit a report to Congress 
that describes the administration of the Pilot Program. As such, the 
Agencies will collect the necessary data and information needed to 
comply with these requirements. However, the Agencies do not believe it 
is necessary to address data collection for the Pilot Program in 
regulation.

Miscellaneous

    A private citizen expressed support for the proposed rulemaking and 
its attempt to aid in the reduction of duplicative environmental 
reviews at the State and Federal levels. The citizen also noted that 
the reduction in environmental reviews and subsequent potential cost 
savings could lead to a reallocation of increased transportation 
funding for infrastructure. The individual requested that the Agencies 
seek to expand the Pilot Program beyond five States to gain a better 
understanding of the efficacy of the Pilot Program across the country 
since limiting it to only five States could create a limited data set 
to analyze. The Agencies note that the limit of State participation is 
based upon a statutory mandate in 23 U.S.C. 330(a)(2), which the FAA 
Reauthorization Act of 2018 reduced to two States. This rulemaking is 
consistent with that statute.

49 CFR Part 264

    The Agencies are modifying the heading and list of authorities to 
align with the Final Rule published on October 29, 2018 (83 FR 54480). 
These changes are administrative in nature.

Rulemaking Analyses and Notices

Statutory/Legal Authority for This Rulemaking

    The Agencies have the authority for this rulemaking action under 49 
U.S.C. 322(a), which provides authority to ``[a]n officer of the 
Department of Transportation [to] prescribe regulations to carry out 
the duties and powers of the officer.'' The Secretary delegated this 
authority to the Agencies' Administrators in 49 CFR 1.81(a)(3), which 
provides that the authority to prescribe regulations contained in 49 
U.S.C. 322(a) is delegated to each Administrator ``with respect to 
statutory provisions for which authority is delegated by other sections 
in [49 CFR part 1].''

Rulemaking Analyses and Notices

    The Agencies considered all comments received before the close of 
business on the comment closing date indicated above. The comments are 
available for examination in the docket (FHWA-2017-20561) at 
www.regulations.gov. The Agencies also considered comments received 
after the comment closing date to the extent practicable.

Executive Order 12866 (Regulatory Planning and Review), Executive Order 
13563 (Improving Regulation and Regulatory Review), and DOT Regulatory 
Policies and Procedures

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). The 
Agencies have determined that this action would not be a significant 
regulatory action under section 3(f) of Executive Order 12866 and would 
not be significant within the meaning of U.S. Department of 
Transportation Regulatory Policies and Procedures. Executive Order 
13563 emphasizes the importance of quantifying both costs and benefits, 
reducing costs, harmonizing rules, and promoting flexibility. This 
action complies with Executive Orders 12866 and 13563.

Executive Order 13771 (Reducing Regulation and Controlling Regulatory 
Costs)

    This final rule is considered an E.O. 13771 deregulatory action. 
The Agencies expect minor cost savings from this rulemaking that cannot 
be quantified.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 
5 U.S.C. 601-612), the Agencies have evaluated the effects of this rule 
on small entities and anticipate that this action would not have a 
significant economic impact on a substantial number of small entities. 
``Small entities'' include small

[[Page 84225]]

businesses, not-for-profit organizations that are independently owned 
and operated and are not dominant in their fields, and governmental 
jurisdictions with populations under 50,000. The proposed rule 
addresses application requirements for States wishing to participate in 
the Pilot Program. As such, it affects only States, and States are not 
included in the definition of small entity set forth in 5 U.S.C. 601. 
Therefore, the Regulatory Flexibility Act does not apply, and the 
Agencies certify that this action would not have a significant economic 
impact on a substantial number of small entities.

Unfunded Mandates Reform Act of 1995

    This final rule would not impose unfunded mandates as defined by 
the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48). 
This final rule will not result in the expenditure by State, local, and 
Tribal governments, in the aggregate, or by the private sector, of $155 
million or more in any one year (2 U.S.C. 1532). In addition, the 
definition of ``Federal mandate'' in the Unfunded Mandates Reform Act 
excludes financial assistance of the type in which State, local, or 
Tribal governments have authority to adjust their participation in the 
program in accordance with changes made in the program by the Federal 
Government.

Executive Order 13132 (Federalism Assessment)

    Executive Order 13132 requires agencies to ensure meaningful and 
timely input by State and local officials in the development of 
regulatory policies that may have a substantial, direct effect on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. The Agencies analyzed this action in 
accordance with the principles and criteria contained in Executive 
Order 13132 and determined that it would not have sufficient Federalism 
implications to warrant the preparation of a federalism assessment. The 
Agencies have also determined that this final rule would not preempt 
any State law or State regulation or affect the States' ability to 
discharge traditional State governmental functions.

Executive Order 13175 (Tribal Consultation)

    The Agencies have analyzed this action under Executive Order 13175, 
and determined that it would not have substantial direct effects on one 
or more Indian Tribes; would not impose substantial direct compliance 
costs on Indian Tribal governments; and would not preempt Tribal law. 
Therefore, a Tribal summary impact statement is not required.

Executive Order 13211 (Energy Effects)

    The Agencies have analyzed this action under Executive Order 13211, 
Actions Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. The Agencies have determined that this action is 
not a significant energy action under Executive Order 13211 because it 
is not likely to have a significant adverse effect on the supply, 
distribution, or use of energy. Therefore, a Statement of Energy 
Effects under Executive Order 13211 is not required.

Executive Order 12372 (Intergovernmental Review)

    DOT's regulations implementing Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities (49 
CFR part 17) apply to this program. The Agencies solicited comments on 
this issue with the proposed rulemakings but did not receive any 
comments pertaining to Executive Order 12372.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et 
seq.), Federal agencies must obtain approval from the Office of 
Management and Budget for each collection of information they conduct, 
sponsor, or require through regulations. The Agencies have determined 
that this final rule does not contain collection of information 
requirements for the purposes of the PRA.

Executive Order 12988 (Civil Justice Reform)

    This action meets applicable standards in sections 3(a) and 3(b)(2) 
of Executive Order 12988, Civil Justice Reform, to minimize litigation, 
eliminate ambiguity, and reduce burden.

Executive Order 12630 (Taking of Private Property)

    The Agencies do not anticipate that this action would affect a 
taking of private property or otherwise have taking implications under 
Executive Order 12630, Governmental Actions and Interference with 
Constitutionally Protected Property Rights.

National Environmental Policy Act

    Agencies are required to adopt implementing procedures for NEPA 
that establish specific criteria for, and identification of, three 
classes of actions: Those that normally require preparation of an EIS; 
those that normally require preparation of an EA; and those that are 
categorically excluded from further NEPA review (40 CFR 1507.(e)(2)).
    This action qualifies for CEs under 23 CFR 771.116(c)(15) 
(promulgation of rules), 23 CFR 771.117(c)(20) (promulgation of rules, 
regulations, and directives) and 771.117(c)(1) (activities that do not 
lead directly to construction), 23 CFR 771.118(c)(4) (planning and 
administrative activities which do not involve or lead directly to 
construction). The Agencies have evaluated whether this action would 
involve unusual or extraordinary circumstances and have determined that 
this action would not involve such circumstances.
    Under the Pilot Program, a selected State may conduct environmental 
reviews and make approvals for projects under State environmental laws 
and regulations instead of NEPA. These State environmental laws and 
regulations must be at least as stringent as the Federal requirements. 
As a result, the Agencies find that this rulemaking would not result in 
significant impacts on the human environment.

Regulation Identifier Number

    A regulation identifier number (RIN) is assigned to each regulatory 
action listed in the Unified Agenda of Federal Regulations. The 
Regulatory Information Service Center publishes the Unified Agenda in 
April and October of each year. The RIN contained in the heading of 
this document can be used to cross reference this action with the 
Unified Agenda.

List of Subjects

23 CFR Part 773

    Environmental protection, Surface Transportation Project Delivery 
Program application requirements and termination, Highways and roads

23 CFR Part 778

    Environmental protection, eliminating duplication of environmental 
reviews pilot program, Highways and roads

49 CFR Part 264

    Environmental protection, Eliminating duplication of environmental 
reviews pilot program, Railroads

49 CFR Part 622

    Environmental protection, Environmental impact and related 
procedures, Public transportation, Transit


[[Page 84226]]


    Issued in Washington, DC, under authority delegated in 49 CFR 
1.81(a)(5), 1.85, and 1.91:
Nicole R. Nason,
Administrator, Federal Highway Administration.
Quintin C. Kendall,
Deputy Administrator, Federal Railroad Administration.
K. Jane Williams,
Deputy Administrator, Federal Transit Administration.

    For the reasons set out in the preamble the Federal Highway 
Administration mends title 23, chapter I of the Code of Federal 
Regulations as follows:

TITLE 23--HIGHWAYS

PART 773--SURFACE TRANSPORTATION PROJECT DELIVERY PROGRAM 
APPLICATION REQUIREMENTS AND TERMINATION

0
1. The authority citation for part 773 continues to read as follows:

    Authority: 23 U.S.C. 315 and 327; 49 CFR 1.81(a)(4)-(6); 49 CFR 
1.85.


0
2. Amend Sec.  773.117 by revising paragraph (a)(2) and adding 
paragraph (a)(3) to read as follows:
    (a) * * *
    (2) The Operating Administration(s) may not terminate a State's 
participation without providing the State with notification of the 
noncompliance issue that could give rise to the termination, and 
without affording the State an opportunity to take corrective action to 
address the noncompliance issue. The Operating Administration(s) must 
provide the State a period of no less than 120 days to take corrective 
actions. The Operating Administration(s) is responsible for making the 
final decision on whether the corrective action is satisfactory.
    (3) On the request of the Governor of the State (or in the case of 
the District of Columbia, the Mayor), the Operating Administration(s) 
shall provide a detailed description of each responsibility in need of 
corrective action regarding an inadequacy identified by the Operating 
Administration(s).
* * * * *

0
3. Add part 778 to read as follows:

PART 778--PILOT PROGRAM FOR ELIMINATING DUPLICATION OF 
ENVIRONMENTAL REVIEWS

Sec.
778.101 Purpose.
778.103 Eligibility and Certain Limitations.
778.105 Application requirements for participation in the Pilot 
Program.
778.107 Application review and approval.
778.109 Criteria for Determining Stringency.
778.111 Review and Termination.
778.113 Program Termination and Regulations Sunset

    Authority: 23 U.S.C. 330; 49 CFR 1.81.


Sec.  778.101  Purpose.

    The purpose of this part is to establish the requirements for a 
State to participate in the Pilot Program for eliminating duplication 
of environmental reviews (``Pilot Program''), authorized under 23 
U.S.C. 330. The Pilot Program allows States to conduct environmental 
reviews and make approvals for projects under State environmental laws 
and regulations instead of the National Environmental Policy Act of 
1969 (42 U.S.C. 4321 et seq.).


Sec.  778.103  Eligibility and Certain Limitations.

    (a) Applicants. To be eligible for the Pilot Program, a State must:
    (1) Act by and through the Governor or top-ranking State 
transportation official who is charged with responsibility for highway 
construction;
    (2) Consent to a waiver of its sovereign immunity for the 
compliance, discharge, and enforcement of any responsibility under this 
Pilot Program;
    (3) Have previously assumed the responsibilities of the Secretary 
under 23 U.S.C. 327 related to environmental review, consultation, or 
other actions required under certain Federal environmental laws; and
    (4) Identify laws authorizing the State to take the actions 
necessary to carry out the alternative environmental review and 
approval procedures under State laws and regulations.
    (b) Certain Limitations. (1) State environmental laws and 
regulations may only be substituted as a means of complying with:
    (i) NEPA;
    (ii) Procedures governing the implementation of NEPA and related 
procedural laws under the authority of the Secretary, including 23 
U.S.C. 109, 128, and 139; and
    (iii) Related regulations and executive orders.
    (2) Compliance with State environmental laws and regulations may 
not substitute for the Secretary's responsibilities regarding 
compliance with any other Federal environmental laws other than those 
set forth in (b)(1).


Sec.  778.105  Application requirements for participation in the Pilot 
Program.

    (a) To apply to participate in the Pilot Program, a State must 
submit an application to the applicable Operating Administration(s) 
(i.e., FHWA, FRA, or FTA).
    (b) Each application submitted must contain the following 
information:
    (1) A full and complete description of the alternative 
environmental review and approval procedures, including:
    (i) The procedures the State uses to engage the public and consider 
alternatives to the proposed action; and
    (ii) The extent to which the State considers environmental 
consequences or impacts on resources potentially impacted by the 
proposed actions (such as air, water, or species).
    (2) Each Federal environmental requirement the State is seeking to 
substitute, within the limitations of Sec.  778.103(b);
    (3) Each State environmental law and regulation the State intends 
to substitute for a Federal environmental requirement, within the 
limitations of Sec.  778.103(b);
    (4) A detailed explanation (with supporting documentation, 
incorporated by reference where appropriate and reasonably available) 
of the basis for concluding the State environmental law or regulation 
intended to substitute for a Federal environmental requirement is at 
least as stringent as that requirement;
    (5) A description of the projects or classes of projects (defined 
as either a defined group of projects or all projects to which NEPA, 
the procedures governing the implementation of NEPA and related 
procedural laws under the authority of the Secretary, including 23 
U.S.C. 109 and 139, and related regulations and Executive orders would 
apply) for which the State would exercise the authority that may be 
granted under the Pilot Program;
    (6) Verification that the State has the financial and personnel 
resources necessary to fulfill its obligations under the Pilot Program;
    (7) Evidence that the State has sought public comments on its 
application prior to the submittal and the State's response to any 
comments it received;
    (8) A point of contact for questions regarding the application and 
a point of contact regarding potential implementation of the Pilot 
Program (if different);
    (9) Certification and explanation by the State's Attorney General 
or other State official empowered by State law to issue legal opinions 
that bind the State:
    (i) That the State has legal authority to enter into the Pilot 
Program;
    (ii) That the State waives its sovereign immunity to the extent 
necessary to consent to exclusive Federal court jurisdiction for the 
compliance, discharge, and enforcement of any responsibility under this 
Pilot Program;

[[Page 84227]]

    (iii) That the State has laws that are comparable to the Freedom of 
Information Act, 5 U.S.C. 552 (FOIA), including laws that allow for any 
decision regarding the public availability of a document under those 
laws to be reviewed by a court of competent jurisdiction;
    (iv) Identifying within the State's laws the jurisdictional 
requirements and standards of review applicable to judicial review of 
decisions under the environmental laws proposed for substitution under 
the Pilot Program; and
    (10) The State Governor's (or in the case of the District of 
Columbia, the Mayor's) or the State's top-ranking transportation 
official's signature approving the application.


Sec.  778.107  Application review and approval.

    (a) The Operating Administration must solicit public comments on 
the application and must consider comments received before making a 
decision to approve or disapprove the application. Materials made 
available for this public review must include the State's application 
and supporting materials.
    (b) After receiving an application the Operating Administration 
deems complete, the Operating Administration must make a decision on 
whether to approve or disapprove the application within 120 calendar 
days. The Operating Administration must transmit the decision in 
writing to the State with a statement explaining the decision.
    (c) The Operating Administration will approve an application only 
if it determines the following conditions are satisfied:
    (1) The State is party to an agreement with the Operating 
Administration under 23 U.S.C. 327;
    (2) The Operating Administration has determined, after considering 
any public comments received, the State has the capacity, including 
financial and personnel, to undertake the alternative environmental 
review and approval procedures; and
    (3) The Operating Administration, in consultation with the Office 
of the Secretary, with the concurrence of the Chair of CEQ, and after 
considering public comments received, has determined that the State 
environmental laws and regulations described in the State's application 
are at least as stringent as the Federal requirements for which they 
substitute.
    (d) The State must enter into a written agreement with the 
Operating Administration.
    (e) The written agreement must:
    (1) Be executed by the Governor (or in the case of the District of 
Columbia, the Mayor) or top-ranking transportation official in the 
State charged with responsibility for highway construction;
    (2) Provide that the State agrees to assume the responsibilities of 
the Pilot Program, as identified by the Operating Administration;
    (3) Provide that the State, in accordance with the sovereign 
immunity waiver process required by State law, expressly consents to 
and accepts Federal court jurisdiction with respect to compliance, 
discharge, and enforcement of any responsibility undertaken as part of 
the Pilot Program;
    (4) Certify that State laws and regulations exist that authorize 
the State to carry out the responsibilities of the Pilot Program;
    (5) Certify that State laws and regulations exist that are 
comparable to FOIA (5 U.S.C. 552), including a provision that any 
decision regarding the public availability of a document under the 
State laws and regulations is reviewable by a court of competent 
jurisdiction;
    (6) Contain a commitment that the State will maintain the personnel 
and financial resources necessary to carry out its responsibilities 
under the Pilot Program;
    (7) Have a term of not more than 5 years, the term of a State's 
agreement with the Operating Administration in accordance with 23 
U.S.C. 327, or a term ending on December 4, 2027, whichever is sooner; 
and
    (8) Be renewable.
    (f) The State must execute the agreement before the Operating 
Administration executes the agreement. The Operating Administration's 
execution of the agreement and transmittal to the State will constitute 
approval of the application.
    (g) The agreement may be renewed at the end of its term, but may 
not extend beyond December 4, 2027.
    (h) A State approved to participate in the Pilot Program may apply 
the approved alternative environmental review and approval procedures 
to locally administered projects, for up to 25 local governments at the 
request of those local governments. For such locally administered 
projects, the State shall be responsible for ensuring that the 
requirements of the approved alternative State procedures are met.


Sec.  778.109  Criteria for determining stringency.

    To be considered at least as stringent as a Federal requirement 
under this Pilot Program, the State laws and regulations, must, at a 
minimum:
    (a) Define the types of actions that normally require an assessment 
of environmental impacts, including government-sponsored projects such 
as those receiving Federal financial assistance or permit approvals. 
(42 U.S.C. 4332(2)(C); 40 CFR 1501.1(a)(4), 1501.3, 1507.3(e)(2)(i), 
1508.1(q);
    (b) Ensure an early process for determining the scope of the action 
and issues that need to be addressed, identifying the significant 
issues, and for the classification of the appropriate assessment of 
environmental impacts in accordance with the significance of the likely 
impacts. For actions that may result in significant impacts on the 
environment, the scoping process must be an open and public process. 
(23 U.S.C. 139(e); 40 CFR 1501.5, 1501.9, 1506.6, 1507.3(c), 1507.3(e), 
1508.1(y), and 1508.1(cc));
    (c) Prohibit agencies and nongovernmental proponents from taking 
action concerning the proposal until the environmental impact 
evaluation is complete when such action would:
    (1) Have adverse environmental impacts or
    (2) Limit the choice of reasonable alternatives. (40 CFR 1506.1 and 
1506.11(b)).
    (d) Protect the integrity and objectivity of the analysis by 
requiring the agency to take responsibility for the scope and content 
of the analysis, and by preventing conflicts of interest among the 
parties developing the analysis and the parties with financial or other 
interest in the outcome of the project. (42 U.S.C. 4332(2)(D); 40 CFR 
1506.5);
    (e) Based on a proposed action's purpose and need, require 
objective evaluation of reasonable alternatives to the proposed action 
(including the alternative of not taking the action) if it may result 
in significant impacts to the environment or, for those actions that 
may not result in significant impacts, consideration of alternatives if 
they will involve unresolved conflicts concerning alternative uses of 
available resources (42 U.S.C. 4332(2)(C)(iii); 42U.S.C. 4332(2)(E); 23 
U.S.C. 330(b)(1)(A); 40 CFR 1502.13, and 1502.14);
    (f) Using procedures that ensure professional and scientific 
integrity of the discussions and analysis, require an assessment of the 
changes to the human environment from the proposed action or 
alternatives that are reasonably foreseeable and have a reasonably 
close causal relationship to the proposed action or alternatives. (42 
U.S.C. 4332(2)(C); 23 U.S.C. 330(b)(1)(B); 40 CFR 1501.5(c)(2), 
1502.16, 1502.23, and 1508.1(g);

[[Page 84228]]

    (g) Require the consideration of appropriate mitigation for the 
impacts associated with a proposal and reasonable alternatives 
(including avoiding, minimizing, rectifying, reducing or eliminating 
the impact over time, and compensating for the impact) (40 CFR 
1502.14(e), 1502.16(a)(9), and 1508.1(s));
    (h) Provide for adequate interagency participation, including 
appropriate coordination and consultation with State, Federal, Tribal, 
and local agencies with jurisdiction by law, special expertise, or an 
interest with respect to any environmental impact associated with the 
proposal, and for collaboration that would eliminate duplication of 
reviews. For actions that may result in significant impacts to the 
environment, the process should allow for the development of plans for 
interagency coordination and public involvement, and the setting of 
timetables for the review process (42 U.S.C. 4332(2)(C); 23 U.S.C. 
139(d) and 139(g); 40 CFR 1500.5(g), 1501.8, 1501.9(b), 1502.174, and 
part 1503);
    (i) Provide an opportunity for public participation and comment 
that is commensurate with the significance of the proposal's impacts on 
the environment, and require public access to the documentation 
developed during the environmental review and a process to respond to 
public comments (42 U.S.C. 4332(2)(C); 23 U.S.C. 330(b)(1)(A); FAST 
Act, Sec. 1309(c)(2)(B)(ii); 40 CFR 1502.20, part 1503, and 1506.6; and 
Executive Order 11514, Sec.1(b));
    (j) Provide for public access to the documentation necessary to 
review the potential impacts of projects;
    (k) Include procedures for the elevation, resolution, and referral 
of interagency disputes prior to a final decision on the proposed 
project (23 U.S.C. 139(h); 40 CFR part 1504);
    (l) For the conclusion of the environmental review process, require 
a concise documentation of findings (for actions that would not likely 
result in significant impacts to the environment) or, for actions that 
may result in significant impacts, a concise record that states the 
agency decision that:
    (1) Identifies all alternatives considered (specifying which were 
environmentally preferable),
    (2) Identifies and discusses all factors that were balanced by the 
agency in making its decision and states how those considerations 
entered into the decision,
    (3) States whether all practicable means to avoid or minimize 
environmental harm have been adopted, and if not, why they were not; 
and
    (4) Describes the monitoring and enforcement program that is 
adopted, where applicable, for any mitigation (40 CFR 1501.6(c), 
1505.2, and 1505.3).
    (m) Require the agency to supplement assessments of environmental 
impacts if there are substantial changes in the proposal that are 
relevant to environmental concerns or significant new circumstances or 
information relevant to environmental concerns and have a bearing on 
the proposed action or its impacts. (23 U.S.C. 330(e)(3); 40 CFR 
1502.9(d)); and
    (n) Allow for the use of procedures to facilitate process 
efficiency, such as tiering, programmatic approaches, adoption, 
incorporation by reference, approaches to eliminate duplication with 
other Federal requirements, and special procedures to address emergency 
situations. Where the procedures allow for the identification and 
establishment of categories of actions that normally do not have a 
significant impact on the environment and are therefore excluded from 
further review, ensure that the procedures require the consideration of 
extraordinary circumstances that would warrant a higher level of 
analysis in which a normally excluded action may have a significant 
environmental effect. (23 U.S.C. 139(b)(3); 40 CFR 1500.4, 1500.5, 
1501.4, 1501.11, 1501.12, 1502.24, 1506.2, 1506.3, and 1506.4).


Sec.  778.111  Review and termination.

    (a) Review. The Operating Administration must review each 
participating State's performance in implementing the requirements of 
the Pilot Program at least once every 5 years.
    (1) The Operating Administration must provide notice and an 
opportunity for public comment during the review.
    (2) At the conclusion of its last review prior to the expiration of 
the term, the Operating Administration may extend a State's 
participation in the Pilot Program for an additional term of not more 
than 5 years (as long as such term does not extend beyond the 
termination date of the Pilot Program) or terminate the State's 
participation in the Pilot Program.
    (b) Early Termination. (1) If the Operating Administration, in 
consultation with the Office of the Secretary and the Chair of CEQ, 
determines that a State is not administering the Pilot Program 
consistent with the terms of its written agreement, or the requirements 
of this part or 23 U.S.C. 330, the Operating Administration must 
provide the State notification of that determination.
    (2) After notifying the State of its determination under paragraph 
(c)(1), the Operating Administration must provide the State a maximum 
of 90 days to take the appropriate corrective action. If the State 
fails to take such corrective action, the Operating Administration may 
terminate the State's participation in the Pilot Program.


Sec.  778.113  Program termination and regulations sunset.

    (a) In General. The Pilot Program shall terminate December 4, 2027, 
unless Congress extends the authority under 23 U.S.C. 330.
    (b) Sunset. Unless Congress extends the authority for the Pilot 
Program that sunsets 12 years after the date of enactment, this rule 
shall expire on December 4, 2027.
    For the reasons set out in the preamble the Federal Railroad 
Administration amends 49 CFR part 264 as follows:

TITLE 49--TRANSPORTATION

PART 264--ENVIRONMENTAL IMPACT AND RELATED PROCEDURES

0
4. The authority citation for part 264 is revised to read as follows:

    Authority: 42 U.S.C. 4321 et seq.; 49 U.S.C. 303; 23 U.S.C. 139, 
327, 330; 40 CFR parts 1500-1508; 49 CFR 1.81; Pub. L. 112-141, 126 
Stat. 405, Section 1319; and Pub. L. 114-94, 129 Stat. 1312, 
Sections 1309, 1432, 11502, and 11503.


0
5. Revise Sec.  264.101 to read as follows:


Sec.  264.101  Cross reference to environmental impact and related 
procedures.

    The procedures for complying with the National Environmental Policy 
Act of 1969, as amended (42 U.S.C. 4321 et seq.), and related statutes, 
regulations, and orders are set forth in part 771 of title 23 of the 
Code of Federal Regulations. The procedures for complying with 49 
U.S.C. 303, commonly known as ``Section 4(f),'' are set forth in part 
774 of title 23 of the Code of Federal Regulations. The procedures for 
complying with the Surface Transportation Project Delivery Program 
application requirements and termination are set forth in part 773 of 
title 23 of the CFR. The procedures for participating in and complying 
with the program for eliminating duplication of environmental reviews 
are set forth in part 778 of title 23 of the CFR.
    For the reasons set forth in the preamble, the Federal Transit 
Administration amends 49 CR part 622 as follows:

[[Page 84229]]

PART 622--ENVIRONMENTAL IMPACT AND RELATED PROCEDURES

Subpart A--Environmental Procedures

0
7. The authority citation for subpart A of part 622 is revised to read 
as follows:

    Authority: 42 U.S.C. 4321 et seq.; 49 U.S.C. 303 and 5323(q); 23 
U.S.C. 139, 326, 327, and 330; Pub. L. 109-59, 119 Stat. 1144, 
Sections 6002 and 6010; 40 CFR parts 1500-1508; 49 CFR 1.81; Pub. L. 
112-141, 126 Stat.405, Sections 1315, 1316, 1317, and 1318; and Pub. 
L. 114-94, Section 1309.


0
8. Revise Sec.  622.101 to read as follows:


Sec.  622.101  Cross-reference to procedures.

    The procedures for complying with the National Environmental Policy 
Act of 1969, as amended (42 U.S.C. 4321 et seq.), and related statutes, 
regulations, and Executive Orders are set forth in part 771 of title 23 
of the CFR. The procedures for complying with 49 U.S.C. 303, commonly 
known as ``Section 4(f),'' are set forth in part 774 of title 23 of the 
CFR. The procedures for complying with the Surface Transportation 
Project Delivery Program application requirements and termination are 
set forth in part 773 of title 23 of the CFR. The procedures for 
participating and complying with the program for eliminating 
duplication of environmental reviews are set forth in part 778 of title 
23 of the CFR.

[FR Doc. 2020-26395 Filed 12-23-20; 8:45 am]
BILLING CODE 4910-22-P