Companion Guide to Video August 2012

www.fhwa.dot.gov/federal-aidessentials

Environment

NEPA Regulatory Framework and Process

NEPA Compliance and Class of Actions

The National Environmental Policy Act, also 

known as NEPA, is an environmental law that 

established the decision-making process that 

agencies must follow prior to the design and 

construction of transportation projects using 

Federal funding or requiring Federal approval. 

Following the right process or class of action is 

important and is determined by the significance 

of the impacts your project is likely to have on 

the human and natural environment. The 

significance of its impact, not its size or cost will

direct you to the appropriate class of action and 

will help you to identify the requirements for 

other essential elements such as 

documentation, public involvement, and 

coordination.

Context, or the 

environmental 

setting, and 

intensity of the 

impact on a particular resource are two 

considerations when determining the 

significance of impact.

To explain, assume your project is not the type 

generally associated with a significant impact

such as adding a turn lane to an existing 

intersection. But what if the project is within a 

historic district? 

In this context, the environmental impact of your 

project may be greater than you initially 

assumed.

As another example, let's assume you’re 

displacing a private home to widen a lane on a 

city street. Again, this may not appear to be 

significant. But what if a day care facility is 

operated out of the home and it’s the only one 

within a twenty mile radius? The potential effects 

on a number of local families are felt more 

intensely, and the significance of the impact may 

need to be examined in more 

detail.

Depending on the significance of 

the impact, there are three 

classes of action that may be 

initiated to comply with NEPA. 

They include, in order of 

significance: categorical exclusions, 

environmental assessments, and environmental 

impact statements

The categorical 

exclusion 

determination is for 

types of projects 

identified in regulations that are not expected to 

have significant impacts. Even so, there are 

requirements for documenting that

Three classes of action are used for evaluation of impacts a project 

is likely to have on the human and natural environment
Federal-aid Essentials for Local Public Agencies

expectation. Federal-aid projects qualify for a 

categorical exclusion more than 90 percent of 

the time.

The environmental 

assessment is for 

projects that have 

uncertainty about 

whether the proposed action will have a 

significant impact on the environment. The 

purpose of this process is to clarify any 

uncertainty and document your finding. If no 

significant impacts are found, the process is 

concluded alternatively. If significant impacts are 

found, an environmental impact statement is 

prepared. 

The environmental 

impact statement 

is prepared for 

projects that are 

expected to 

significantly affect 

the quality of our human or natural environment. 

Typically, these are major transportation 

improvements costing millions of dollars – but 

not always. Significant impacts can result from 

minor projects in sensitive environmental or 

cultural areas and highly developed urban areas 

as well. 

All Federal Highway Administration (FHWA)

funded or approved projects are subject to the 

NEPA process – each requires environmental 

analysis, review, and public involvement. It’s the 

amount of analysis and review and the level of 

involvement that differs, depending on the class 

of action and nature of the project.

For example, a project being processed as a 

categorical exclusion may be as simple as 

completing a checklist, form, or memo to 

document the environmental impacts of the 

project.

On the other end of the spectrum, a project in 

the environmental impact statement class will 

include the examination of alternatives and 

perhaps additional mitigation strategies. It will 

also include formalized processes to collect 

public comments circulate information and 

document findings.

Your State department of transportation (State 

DOT) has considerable knowledge and 

expertise in all areas of NEPA compliance. The 

people there can help you ask the right 

questions early on to determine the significance 

of the impacts on your project and, 

consequently, the appropriate class of action. 

The FHWA can also partner with your State 

DOT on behalf of your agency’s project by 

providing technical assistance and coordination 

with other Federal agencies. The FHWA is the 

final authority when determining the appropriate 

class of action and all other aspects related to 

NEPA compliance. Therefore, it’s essential that 

you engage the State DOT and, when 

appropriate, 

FHWA early and 

throughout your 

project’s entire 

process
Federal-aid Essentials for Local Public Agencies

The content of this 

document is not a 

substitute for 

information obtained 

from State departments 

of transportation, 

appropriate FHWA 

Division Offices, and 

applicable laws. 

Scenarios have been 

simplified for emphasis 

and do not necessarily 

reflect the actual range of 

requirements applicable 

to the scenario or this 

topic. This document

was created under 

contract number

DTFH61-11-D-00025 by 

the Federal Highway 

Administration, U.S. 

Department of 

Transportation, and is 

offered to the public to 

heighten and focus 

awareness of Federal-aid 

requirements within the 

local public agencies 

community and 

reinforces the 

importance of these 

necessary policies, 

procedures, and 

practices.

This companion resource 

is the script content for 

the video production of 

the same name. 

Additional Resources

• FHWA guidance on essential elements of the NEPA process

http://environment.fhwa.dot.gov/projdev/pd3tdm.asp

• Federal regulations on the three classes of action: categorical exclusions, 

environmental assessments, and environmental impact statements

http://www.ecfr.gov/cgi/t/text/textidx?c=ecfr&sid=91f7725b7571367f4499a277c826ae65&rgn=div8&view=text

&node=23:1.0.1.8.43.0.1.8&idno=23

• Federal regulations on environmental impact and related procedures

http://www.ecfr.gov/cgi-bin/textidx?c=ecfr&SID=b2fefc14ca9484c58a6c19cc830575bf&rgn=div5&view=text

&node=23:1.0.1.8.43&idno=23

• Text of National Environmental Policy Act of 1969

http://ceq.hss.doe.gov/nepa/regs/nepa/nepaeqia.htm

• Council on Environmental Quality's regulations for implementing NEPA

http://ceq.hss.doe.gov/nepa/regs/ceq/toc_ceq.htm