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COST – BENEFIT ASSESSMENT

Environmental Policies and Procedures; Compliance with the National Environmental Policy Act (NEPA) and Related 

Authorities Proposed Rule

Summary of Economic Impacts. This rule is expected to improve the efficiency and transparency of FSA’s NEPA process. This rule 

includes new Categorical Exclusions. It clarifies procedures for actions requiring an Environmental Assessment (EA). As a result of 

this rule, some actions that currently require an EA would be categorically excluded from further NEPA review. By consolidating 

Farm Service Agency NEPA procedures into a single rule and more clearly identifying the processes required for different types of 

actions, this rule is expected to increase understanding and consistency, while decreasing the time spent addressing NEPA 

requirements. The new Categorical Exclusions are expected to reduce the number of EAs required, particularly for farm loan actions 

that involve little or no ground disturbance. This rule is expected to result in $345,000 annually in reduced costs. The expected cost 

reduction from fewer EAs is largely due to reduced FSA workload. The public will likely also see non-quantifiable benefits from the 

reduced time required to complete the NEPA process for both farm programs and farm loans actions.

Date: July 31, 2012

Agency: Farm Service Agency, USDA

Contact: Skip Hyberg

Economic and Policy Analysis Staff

Washington, Dc 20250

Phone: 202-720-9222

I. Title: 

Environmental Policies and Procedures; Compliance with the National Environmental Policy Act and Related Authorities

II. Summary
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The Farm Service Agency (FSA) proposes to consolidate and amend its regulations implementing the National Environmental 

Policy Act of 1969, as amended (NEPA). FSA’s NEPA regulations have not been updated since 1980. The proposed changes

would better align FSA’s NEPA regulations with the current President’s Council on Environmental Quality (CEQ) NEPA 

regulations and guidance. In addition to proposed changes to improve the clarity and consistency of the regulations, the proposed 

changes would expand and clarify the list of actions that are categorically excluded from further environmental review because 

those actions typically do not result in individual or cumulative significant environmental effects or impacts. The list of proposed 

categorical exclusions (CatExs) in this proposed rule is longer and more specific than in the current FSA NEPA regulations. The 

expanded list of CatExs would allow FSA to expedite the environmental review process for actions that have typically been shown 

to not require Environmental Assessments (EAs) or Environmental Impact Statements (EISs). This proposed rule would also 

expand and clarify the list of actions that require an EA. Including longer and more specific lists of CatExs and actions requiring 

an EA in the regulations is intended to improve transparency and clarity of the FSA NEPA process for FSA program participants

and to reduce the costs of the NEPA analysis process for some actions.

III. Need For Action

FSA’s NEPA regulations have not been updated since 1980. Significant changes to the structure of FSA and the scope of FSA’s 

programs since that time require changes in FSA’s NEPA regulations. The proposed changes would better align FSA’s NEPA 

regulations with the current CEQ NEPA regulations and guidance. Additionally, the proposed changes will bring greater 

consistency to FSA administration of its NEPA responsibilities and clarify and make more transparent the FSA NEPA process to

FSA program participants.
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NEPA establishes a national environmental policy, sets goals for the protection, maintenance, and enhancement of the 

environment and provides a process for carrying out the policy and working toward those policy goals. The NEPA process 

requires different levels of environmental review and analysis of Federal agency actions, depending on the nature of the action. As 

stated in 40 CFR 1508.18(a), “Actions include new and continuing activities, including projects and programs entirely or partly

financed, assisted, conducted, regulated, or approved by federal agencies; new or revised agency rules, regulations, plans, policies, 

or procedures; and legislative proposals.” Some actions, because of the nature of their potential environmental effects are 

categorically excluded from further environmental analysis and are known as CatExs. 

A CatEx is used typically for actions that do not have a significant impact on the quality of the human environment, such as a farm 

loan consolidation or funding for the maintenance of existing buildings. The general NEPA regulations define the human 

environment as “the natural and physical environment, and the relationship of people with that environment” (40 CFR 1508.14). 

Individual actions are not categorically excluded by the proposed rule; in the future, those actions that fit into a specific category

can be categorically excluded if there are no extraordinary circumstances for the specific proposed action at hand.

If an action is not in a categorically excluded category, then the next step in the NEPA process is usually an EA. An EA is 

prepared to analyze the potential environmental impact of a Federal agency action and alternatives to the action to determine

whether proposed actions can proceed without supplemental environmental review. An EA can result in a proposal not 

proceeding, a Finding of No Significant Impact (FONSI), or a determination that the environmental impact will be significant and 

therefore an EIS is required. If the agency determines at an early stage that there is clearly the potential for significant 

environmental impact, FSA can start the EIS process without first doing an EA.
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IV. Description of Rule Changes Proposed

A. Summary

The proposed rule will: 1) align FSA NEPA policy to reflect changes in FSA structure, environmental laws, Executive Orders, 

and CEQ guidance and policy that have occurred since the FSA NEPA regulations were last updated in 1980; 2) expand and 

more explicitly identify actions that typically do not have a significant impact on the quality of the human environment and are 

therefore categorically excluded from further environmental review (CatEx); 3) expand and clarify the list of actions that 

require an EA, clarify and specify the process used to conduct an EA, and explain the actions that will be taken upon 

completion of the EA, and 4) introduce and describe the use of the new Environmental Screening Worksheet (ESW) to be used 

by FSA staff as an initial screening tool to evaluate and document any likely environmental impacts of proposed actions.

1. Consolidate, Clarify, and Update Regulations

Under the proposed rule, FSA would consolidate, clarify, and update FSA NEPA regulations to establish a single set of 

NEPA regulations for FSA. Since reorganizing in 1995, FSA has been operating under two separate sets of NEPA

regulations, one for the programs within the scope of the former Agricultural Stabilization and Conservation Service 

(ASCS) and one for programs within the scope of the former Farmers Home Administration (FmHA). This proposed rule 

reflects current FSA organizational structure, environmental laws, Executive Orders, and CEQ guidance and policy.

The proposed rule would implement a single consolidated set of FSA NEPA regulations in 7 CFR part 799. As a result, the 

regulations in 7 CFR part 1940, subpart G, would no longer apply to FSA, and would be amended accordingly. The 
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proposed changes are intended to improve clarity in the regulations, allow more efficient program implementation at the 

field level, provide more openness and transparency during FSA’s environmental decision-making, and simplify program 

administration.

In general, FSA has already administratively implemented FSA NEPA procedures to meet current NEPA requirements as 

specified in Executive Orders and CEQ guidance; those currently implemented FSA NEPA procedures are reflected in this 

rule as proposed changes to the regulation. For example, Programmatic EAs (PEAs) are not in the current regulations, but 

FSA already does such analyses in compliance with current CEQ regulations and guidance. So, the proposed provisions 

for PEAs represent a revision to the regulations, which specifically authorize and further explain FSA NEPA procedures.

This proposed rule consolidates and reorganizes the provisions currently in 7 CFR parts 799 and 1940, subpart G, into a 

revised 7 CFR part 799, and as discussed below adds longer and more specific lists of CatExs and of actions requiring an 

EA, and adds new provisions to comply with current CEQ guidance. Many of the proposed changes in this rule are 

essentially minor technical and clarifying changes, some changes reorganize the requirements from the current regulations. 

The following table summarizes how the major provisions in this proposed regulation compare to similar provisions in the 

existing regulations.
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Table 1. Changes from current 7 CFR parts 799 and 1940 to proposed 7 CFR part 799

Major 

Provisions

Current 7 CFR part 799 Current 7 CFR part 1940 Proposed 7 CFR part 799 Additional Information

Categorical 

Exclusions 

(CatEx)..............

The term categorical 

exclusion is not used, 

although there is a list 

of actions not normally

requiring an EA or EIS. 

Some specific Farm Loan 

Programs actions are 

categorically excluded 

under 7 CFR 

1940.310(d).

Lists all categories of FSA 

actions and separates them 

into three categories:

 Actions that are 

always CatExs, 

with no 

documentation 

required

 Actions that are 

categorically

excluded with 

documentation in 

an ESW to 

determine whether 

an extraordinary

circumstance 

exists in which 

case an EA would 

be required

 Actions that 

cannot be CatExs 

and require the 

completion of the 

ESW to determine 

if an EA or EIS is 

required

Proposed rule also includes 

specific process for publishing 

new CatExs in the future, 

including public review and 

comment process.
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Major 

Provisions

Current 7 CFR part 799 Current 7 CFR part 1940 Proposed 7 CFR part 799 Additional Information

Environmental 

Assessments 

(EAs).................

Requires NEPA 

process to be followed 

but does not specify

which Farm Programs 

actions require an EA.

Requires EAs, depending 

on circumstances, for 

certain Farm Loan 

Programs actions. See 7 

CFR 1940.311, 312, 318, 

and 319.

Eliminates the Class I and 

Class II actions for Farm 

Loan Programs. Lists all 

specific FSA actions that 

require an EA, and those 

that require an ESW to 

determine if an EA is 

required.

Some actions that currently

require an EA would be 

categorically excluded actions.

Environmental 

Impact 

Statements 

(EIS)..................

Specifies general 

categories of FSA Farm 

Programs actions that 

are likely to have a 

significant impact on 

the environment, and 

specific programs that 

are not.

Specifies criteria for 

determining significant 

impact, with an emphasis 

on floodplains and 

wetlands. See 7 CFR 

1940.313, 314, and 320

Specifies the general 

categories of FSA actions 

that are likely to have a 

significant impact on the 

environment. Specifies 

the content of an EIS and 

the review process.

No change in the types of actions 

for which an EIS is required, but 

more detail on the content and 

review process of an EIS.

Environmental 

Screening 

Worksheet 

(ESW) ...............

An appendix provides 

the now obsolete 

ASCS-929 form.

Environmental 

Evaluation (RD 1940-22 

(NOTE: RD is a 

successor agency to 

FmHA)) is required to 

determine if a Class I or 

Class II EA should be 

prepared. See 7 CFR 

1940.317(c).

An ESW would be 

required for FSA actions 

that fall into a listed 

CatEx requiring 

documentation to 

determine if an 

extraordinary

circumstance exists and if 

an EA or EIS should be 

prepared.

The description of how to use the 

current FSA Environmental 

Evaluation form (FSA 850) is in 

the handbooks, not the 

regulations. The ESW is shorter 

and has more specific criteria 

than the current FSA 850.
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Major 

Provisions

Current 7 CFR part 799 Current 7 CFR part 1940 Proposed 7 CFR part 799 Additional Information

Programmatic 

NEPA Process...

Not addressed. Not addressed 

specifically, although 

tiering is in 7 CFR 

1940.327.

Specified process for 

conducting programmatic 

NEPA for FSA programs 

and actions that have a 

national scope.

This is not a new process for 

FSA, but the process is currently 

not specified in the FSA 

regulations.

Integration of 

other 

environmental 

laws and 

regulations.........

NEPA and CEQ’s 

NEPA regulations are 

the only environmental 

laws and regulations 

referenced.

Some other 

environmental law 

requirements are 

mentioned, but not in 

detail and with little 

guidance on how they

apply.

Many environmental laws, 

Executive Orders, and 

regulations are added as 

references. Compliance 

with other environmental 

laws such as NHPA is 

explained in detail and 

integrated into the ESW.

FSA already complies with the 

Executive Orders, USDA 

regulations, laws, and CEQ 

guidance listed in the proposed 

rule, but most of those references 

are not in the current regulations.
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2. Expand and Clarify List of Categorical Exclusions (CatExs)

The expanded list of actions that qualify for CatExs would allow FSA to expedite the 

environmental review process for actions that have typically been shown to not 

require EAs or EISs. A specific example of an action that would now qualify for 

CatEx is the installation and maintenance of fencing, which are also actions that are 

considered CatEx by other agencies. This proposed rule includes both new CatExs 

that are excluded without further documentation (for example, an Environmental 

Screening Worksheet) and CatExs that require additional documentation (an 

Environmental Screening Worksheet) to ensure that no extraordinary circumstances 

that would require further analysis exist.

As proposed, 7 CFR part 799, subpart C, specifies the categories of actions that 

would require the use of the ESW and how the ESW would be used. In general, the 

ESW would be required for all actions except those CatExs listed in § 799.31, which 

FSA has determined do not require further documentation (beyond that provided in 

the substantiation for establishing the CatEx and the project file) for specific proposed 

actions.

The list of actions specified in § 799.32 of the proposed rule may be categorically

excluded depending on the outcome of the review documented in the ESW. Those 

CatEx actions would require an ESW to determine if extraordinary circumstances 

exist that require further environmental analysis.

In addition to its use for NEPA review, the ESW would also be required for a list of 

specific actions, specified in § 799.34, that FSA has determined may have the 

potential to affect historic properties.
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For all actions for which there is no applicable CatEx, the ESW would be used to 

determine whether an EA or an EIS is the next step in the NEPA process.

USDA agencies and other Federal agencies have similar environmental screening 

tools (for example, USDA’s Natural Resources Conservation Service (NRCS) and 

Rural Development, the Department of Energy, the Department of Defense). FSA 

reviewed those screening tools and considered these agencies’ approaches during 

development of the ESW.

The ESW would replace the existing form FSA 850 “Environmental Evaluation 

Checklist” document and the RD 1940-22, which local FSA staff and County Office 

Committee reviewers have found to be somewhat lengthy, confusing, and duplicative 

paperwork. Due to its length and complexity, the existing checklist has been used 

inconsistently. The new, more concise ESW is designed to be applied consistently.

3. Expand and Clarify Actions Requiring an EA

The list of actions that typically have the potential to have a significant impact on the 

human environment, and thus may require an EA to determine whether an EIS is 

required, is clarified. The rule specifies the procedures to be used based on the result 

of the EA. This will improve transparency and clarity of the FSA NEPA process for 

FSA program participants. Specifically, the result of the EA process will be either a 

FONSI or a determination that an EIS is required.

If after completing the EA, FSA determines that the proposed action will not have a 

significant effect on the quality of the human environment, FSA will issue a FONSI. 

The FONSI will include the reasons FSA determined that the proposed action will 

have no significant environmental impacts.
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If the decision to issue the FONSI is conditioned upon the implementation of 

measures (mitigation actions) to ensure that impacts will be held to a nonsignificant 

level, the FONSI must include an enforceable commitment to implement such 

measures on the part of FSA, and any applicant or other party responsible for 

implementing the measures will be responsible for the commitments outlined in the 

FONSI.

FSA will make the FONSI available to the public prior to making a decision as 

specified in 40 CFR 1506.6, including publishing a notice of availability of the final 

EA and FONSI in the local media or Federal Register as appropriate.

FSA will make the final EA and FONSI available for public review for at least 15

days before taking any final agency action. FSA will determine whether an EIS is 

required based in part on the comments received during such review.

The procedures for EIS are clarified slightly to be consistent with current CEQ 

requirements, but are not expected to change the number of FSA EISs or EAs. This 

change will simply make it easier to determine whether an EA/EIS is necessary.

4. Environmental Screening Worksheet (ESW)

A new ESW has been developed for FSA staff to use as an initial screening tool to 

evaluate and document any likely environmental impacts of proposed actions. The 

new ESW consolidates the evaluation criteria from multiple forms and checklists 

currently used by FSA for environmental evaluation. Having one form will reduce 

the paperwork for FSA and ensure consistent compliance with NEPA.
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V. Expected Costs and Benefits 

The rule does not directly reduce FSA outlays. The consolidation of two previous rules is 

expected to provide the indirect benefit of greater clarity in the FSA NEPA process. The 

new ESW will further increase clarity by providing a single straightforward process for 

identifying and documenting actions and their likely environmental impacts. While

increased transparency and clarity are desirable and beneficial, the impact of these changes is

difficult to quantify. Another possible non-quantifiable benefit is that the development of the 

ESW for a given type of action will be part of the administrative record that could be used to 

substantiate future categorical exclusions.

Costs were not calculated because the FSA assessment of the modified process does not 

show any expectation for any substantial change in administrative costs. Further, the 

modifications proposed are designed to reduce costs to the public while maintaining 

assurances that appropriate environmental safeguards are in place.

More significant and easier to quantify are the expected benefits from expanding and listing 

categorically excluded actions that have typically been shown to have no significant effect on 

the human environment, either individually or cumulatively. This rule includes new and 

clarified CatExs that would be excluded from environmental review without further 

documentation (not requiring an ESW). Also, the rule provides a list of specific actions that 

would qualify for a CatEx with further documentation using the ESW, provided that the 

ESW determines that extraordinary circumstances do not exist, requiring further 

environmental analysis. The time and expense saved from conducting unnecessary EAs is 

expected to provide benefit to taxpayers from more efficient program administration and to 

program participants from more expeditious program delivery.

Current FSA regulations in 7 CFR part 1940 require an EA for many farm loan actions that 

would be categorically excluded with this rule. Those regulations and FSA procedures refer 

to Class I and Class II EAs; as currently specified by CEQ, there is no variation in EA 

requirements. This proposed rule would therefore have only one type of EA, consistent with 
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current CEQ guidance. It is expected that most of the actions that currently require a Class I 

EA, the type currently done for smaller scale projects with limited potential for 

environmental impact, would be categorically excluded. To estimate the impact of fewer 

EAs, we assume that current programs continue and that most farm loan actions with limited 

scale and potential for environmental impact which currently require a site-level EA would

qualify for either categorical exclusions without documentation (not requiring an ESW) or 

for categorical exclusions that require the use of the ESW. Using these assumptions, this 

proposed rule would have eliminated, on average, the requirement for 314 EAs per year 

between 2002 and 2009 (table 1), had the rule been in effect at that time. In 2008 (the most 

recent year for which data is available), the average cost for these site-level EAs was 

estimated at $1,100, suggesting an annual savings of $345,000 in FSA expenses for 

environmental review.

As can be seen in the table below, the number and types of environmental evaluations that 

take place in any given year varies, depending on the nature of the specific FSA programs in 

question. For example, the number of environmental evaluations associated with farm loan 

programs depends on how many loans are for projects on land that has already been 

disturbed, as opposed to those that involve additional disturbance such as pond or building 

construction and are not eligible for a categorical exclusion without an ESW.

Table 1: FSA Site Level Environmental Assessments (EAs)

2002 280

2003 300

2004 189

2005 310

2006 341

2007 406

2008 417

2009 267

Annual Average 314

This rule does not change the basic requirements for when an EIS is required, so it is not 

expected to result in a change in the number of EISs associated with FSA programs. 
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Therefore, no costs or benefits, other than increased clarity of procedure, are expected for the 

EIS process as a result of this rule.

Because the EA is only one part of the program implementation process, this analysis does 

not attempt to quantify the time the rule might save for program participants. It is expected 

that the rule will have a positive but minimal effect for participants.. FSA recognizes that the 

cumulative benefit could be substantial, but individually the benefits will be small and will 

be on a project by project basis; there is no change expected in the environmental benefits. 

In general, some projects may be quicker to complete due to having less requirements for 

documentation. We do not currently have any way to practically assess the cumulative 

savings due to the wide variation in environmental compliance requirements from project to 

project.

Additional benefits to the public might also occur if additional State Acres for Wildlife 

Enhancement (SAFE) agreements are developed. Under existing rules, these agreements 

require project-level EAs. This rule would provide categorical exclusions for those projects 

involving grants that contain practices that are already categorically excluded, reducing the 

time between project initiation and implementation.