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[Federal Register Volume 90, Number 9 (Wednesday, January 15, 2025)]
[Rules and Regulations]
[Pages 3703-3706]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-00473]

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COUNCIL ON ENVIRONMENTAL QUALITY

40 CFR Part 1518

RIN 0331-AA09

Office of Environmental Quality Management Fund

AGENCY: Council on Environmental Quality.

ACTION: Final rule.

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SUMMARY: The Council on Environmental Quality (CEQ) is amending its 
Office of Environmental Quality Management Fund regulations to clarify 
their meaning, modernize them to reflect developments in CEQ's 
practices in administering the Office of Environmental Quality 
Management Fund (the Management Fund) since CEQ first adopted its 
regulations, and make administrative changes.

DATES: This rule is effective January 15, 2025.

FOR FURTHER INFORMATION CONTACT: Samuel Roth, Associate General 
Counsel, 202-395-5750, [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    The Environmental Quality Improvement Act, as amended (Pub. L. 91-
224, Title II, April 3, 1970; Pub. L. 97-258, September 13, 1982; and 
Pub. L. 98-581, October 30, 1984) established the Management Fund to 
receive advance payments from other agencies or accounts that may be 
used solely to finance (1) study contracts that are jointly sponsored 
by the Office of Environmental Quality (OEQ) and one or more other 
Federal agencies; and (2) Federal interagency environmental projects 
(including task forces) in which OEQ participates. 42 U.S.C. 4375(a). 
The statute requires the Director of the Office of Environmental 
Quality (OEQ) to promulgate regulations setting forth policies and 
procedures for operation of the OEQ Management Fund. 42 U.S.C. 
4375(c).\1\
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    \1\ OEQ houses the professional and administrative staff of CEQ, 
and the Chair of CEQ is the Director of OEQ ex officio. 42 U.S.C. 
4372(a), (d)(1). This preamble refers to the Chair of CEQ and the 
Director of OEQ, and to CEQ and OEQ, interchangeably.
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    The CEQ Chair approved internal policies and procedures for 
operation of the Management Fund in January 1985. On October 4, 2002, 
the CEQ Chair promulgated regulations governing the operation of the 
Management Fund.\2\
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    \2\ CEQ, Office of Environmental Quality Management Fund, 67 FR 
62189 (Oct. 4, 2002).
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II. Summary of the Final Rule

    CEQ is amending its Management Fund regulations to clarify their 
meaning, including for consistency with the Plain Writing Act of 2010 
(Pub. L. 111-274) and the Federal Plain Language Guidelines,\3\ 
modernize them to reflect developments in CEQ's practices in 
administering the Management Fund since CEQ first adopted its 
regulations, and make administrative changes.
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    \3\ Federal Plain Language Guidelines (1st rev. May 2011), 
https://www.plainlanguage.gov/media/FederalPLGuidelines.pdf.
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    Section 1518.1--Purpose. CEQ revises this section to describe the 
purpose of the Office of Environmental Quality Management Fund as well 
as the purpose of part 1518, which is to set forth CEQ's procedures for 
administering the Management Fund.
    Section 1518.2--Definitions. CEQ revises this section to define key 
terms that appear throughout part 1518. In particular, CEQ removes the 
definitions of the terms ``advance payment,'' which the prior 
regulations defined but did not use elsewhere in part 1518, and 
``source,'' which no longer appears in the regulations as revised. CEQ 
adds definitions for ``environmental project'' and ``study contract'' 
to clarify the meaning of those terms. These definitions are consistent 
with CEQ's authorities under National Environmental Policy Act of 1969 
(NEPA) and the Environmental Quality Improvement Act of 1970. CEQ also 
adds a definition of ``personnel costs'' to clarify the types of 
expenditures that CEQ may make from the Management Fund. Finally, CEQ 
adds definitions for ``payment'' and ``reallocation'' to clarify how 
the regulations use those terms to describe the movement of funds to 
and from the Management Fund.
    Section 1518.3--Policy and general requirements. CEQ revises this 
section to more clearly explain the internal policies and procedures by 
which CEQ administers the Management Fund, including the types of 
expenditures that CEQ may make from the Management Fund, and to 
eliminate outdated provisions that no longer reflect CEQ's business 
processes.
    Section 1518.4--Charters. CEQ revises this section, which describes 
the purpose of charters for environmental projects and study contracts 
that receive support from the Management Fund, to more clearly set 
forth what a charter must contain and to better explain the roles of 
the Director and the Project Officer in approving and amending a 
charter.
    Section 1518.5--Finances and accounting. CEQ moves the provisions 
on Management Fund finances and accounting from the previous 40 CFR 
1518.4(b) to Sec.  1518.5. This section explains how agencies make 
payments into the Management Fund and specifies procedures for making 
expenditures from the Management Fund. CEQ makes clarifying changes to 
this section to improve its readability and better reflect current 
practices. Paragraph (a) requires the Project Officer for each 
environmental project or study contract receiving support from the 
Management Fund to prepare a budget estimate and update it annually. 
CEQ adds a new provision in paragraph (c)(1) that, consistent with 
longstanding practice, requires the Director to transmit a letter to an 
agency when requesting a payment into the Management Fund.

III. Regulatory Analysis and Notices

A. Administrative Procedure Act

    This rule relates to a matter of agency management or personnel and 
is a rule of agency organization, procedure, or practice. As such, this 
rule is exempt from the usual requirements of prior notice and comment 
and a 30-day delay in effective date. See 5 U.S.C. 553(a)(2), (b), and 
(d). The rule is effective upon signature.

B. Regulatory Flexibility Act and Executive Order 13272, Proper 
Consideration of Small Entities in Agency Rulemaking

    The Regulatory Flexibility Act (RFA), as amended, 5 U.S.C. 601 et 
seq., and E.O. 13272, Proper Consideration of Small Entities in Agency 
Rulemaking,\4\ require agencies to assess the impacts of rules on small 
entities. Under the RFA, small entities include small businesses, small 
organizations, and small governmental jurisdictions. An agency must 
prepare a final regulatory flexibility analysis unless it determines 
and certifies that a final rule, if

[[Page 3704]]

promulgated, would not have a significant economic impact on a 
substantial number of small entities. 5 U.S.C. 605(b).
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    \4\ 67 FR 53461 (Aug. 16, 2002).
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    This rule relates to a matter of agency management or personnel and 
is a rule of agency organization, procedure, or practice. Accordingly, 
CEQ hereby certifies that the rule will not have a significant economic 
impact on a substantial number of small entities.

C. Unfunded Mandates Reform Act

    Section 201 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4, 2 U.S.C. 1531), requires Federal agencies to assess the effects 
of their regulatory actions on state, local, and Tribal governments, 
and the private sector to the extent that such regulations incorporate 
requirements specifically set forth in law. Before promulgating a rule 
that may result in the expenditure by a state, Tribal, or local 
government, in the aggregate, or by the private sector of $100 million, 
adjusted annually for inflation, in any 1 year, an agency must prepare 
a written statement that assesses the effects on state, Tribal, and 
local governments and the private sector. 2 U.S.C. 1532. This rule 
relates to a matter of agency management or personnel and is a rule of 
agency organization, procedure, or practice, and accordingly will not 
result in expenditures of $100 million or more for state, local, and 
Tribal governments, in the aggregate, or the private sector in any 1 
year. This rule also does not impose any enforceable duty, contain any 
unfunded mandate, or otherwise have any effect on small governments 
subject to the requirements of 2 U.S.C. 1531 through 1538.

D. Executive Order 12866, Regulatory Planning and Review

    E.O. 12866, as supplemented and affirmed by E.O. 13563 and amended 
by E.O. 14094, provides that the Office of Information and Regulatory 
Affairs will review any regulatory action that qualifies as a 
``significant regulatory action'' within the meaning of the E.O.\5\ The 
rule does not qualify as a significant regulatory action.
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    \5\ See E.O. 12866, Regulatory Planning and Review, 58 FR 51735, 
51737 (Oct. 4, 1993); E.O. 14094, Modernizing Regulatory Review, 88 
FR 21879, 21879-80 (Apr. 11, 2023); E.O. 13563, Improving Regulation 
and Regulatory Review,76 FR 3821, 3822 (Jan. 21, 2011).
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E. Executive Order 12988, Civil Justice Reform

    Under section 3(a) of E.O. 12988,\6\ agencies must review their 
regulations to eliminate drafting errors and ambiguities, draft them to 
minimize litigation, and provide a clear legal standard for affected 
conduct. Section 3(b) provides a list of specific matters that agencies 
must consider when conducting the review required by section 3(a). CEQ 
has conducted this review and determined that this rule complies with 
the requirements of E.O. 12988.
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    \6\ 61 FR 4729 (Feb. 7, 1996).
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F. Paperwork Reduction Act

    This rule does not impose any new information collection burden 
that would require additional review or approval by OMB under the 
Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq.

G. National Environmental Policy Act (NEPA)

    The National Environmental Policy Act of 1969 (NEPA) (Pub. L. 118-
5, 42 U.S.C. 4321 et seq.), as amended, and the CEQ regulations that 
implement NEPA, 40 CFR parts 1500 through 1508, require consideration 
of the environmental effects of proposed actions in agency decision 
making. NEPA provides for three levels of review. First, agencies may 
establish in their agency-specific NEPA procedures categorical 
exclusions (CEs) for categories of actions that normally do not have a 
significant effect on the human environment, individually or in the 
aggregate, and apply CEs to individual actions, as appropriate.\7\ If 
an agency proposes to take an action that does not fall within a CE but 
is not likely to have significant environmental effects (or the 
significance of whose effects is unknown), CEQ's NEPA regulations 
direct the agency to prepare an environmental assessment (EA).\8\ If, 
as a result of this assessment, the agency determines that the proposed 
action will not have significant effects, the agency may make a finding 
of no significant impact (FONSI), in which case the agency may proceed 
with the action.\9\ Otherwise, the agency must prepare an environmental 
impact statement (EIS).\10\
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    \7\ 40 CFR 1501.4(a).
    \8\ Id. Sec.  1501.5(a).
    \9\ Id. Sec.  1501.6.
    \10\ 40 CFR part 1502.
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    CEQ has not established a CE for the preparation, revision, and 
adoption of regulations generally. Accordingly, CEQ has prepared an EA 
to determine whether the revisions to the Management Fund regulations 
would have a significant effect on the human environment. Because, as 
set forth below, the regulation will likely have no discernable effect 
on the use of resources in CEQ's administration of the Management Fund, 
CEQ finds that the regulation will have no significant impact on the 
human environment and that it is therefore unnecessary to prepare an 
EIS.
1. Environmental Assessment
    Purpose and Need: As set forth in the Background (part I of this 
preamble) and Summary of the Final Rule (part II of this preamble), CEQ 
adopted its Management Fund regulations in 2010 and has not updated 
them to reflect developments in CEQ's practices in administering the 
Management Fund since then. Furthermore, clarifying the regulations and 
making administrative changes will make the regulations easier to 
understand and use.
    Proposed Action and Alternatives: A summary of the proposed action 
is set forth above in the Summary of the Final Rule. Under a ``no 
action'' alternative, CEQ would continue to operate under its current 
regulations, resolving ambiguities and addressing inconsistencies 
between the regulations and current CEQ practices on a case-by-case 
basis. CEQ has decided that this approach is undesirable because it 
requires CEQ staff to address ambiguities and inconsistencies that CEQ 
can obviate by updating the regulation.
    CEQ's preferred alternative is to amend its regulations as set 
forth in this Final Rule, for the reasons set forth in part II of this 
preamble.
    Environmental Effects of Alternatives: CEQ's administration of the 
Management Fund affects the environment primarily through CEQ's use of 
energy and other office resources. CEQ's use of resources for these 
purposes has remained within the range typical of the operations of a 
small office. CEQ anticipates that the amendments set forth in this 
rulemaking will have minimal or no discernable effects on its use of 
resources in administering the Management Fund.
    List of Agencies and Persons Consulted: CEQ's NEPA staff reviewed 
and commented on this EA and this final rulemaking.
2. Finding of No Significant Impact
    Based on the foregoing EA, CEQ finds that implementation of the 
regulations in this notice would have minimal or no discernable effects 
on CEQ's use of energy and other office resources in CEQ's 
administration of the Management Fund. Thus, there would be no 
significant effects associated with implementation of the proposed 
action, and it is not necessary for CEQ to prepare an EIS.

[[Page 3705]]

    CEQ further finds that the action is not one that normally requires 
the preparation of an EIS, closely similar to such an action, or an 
action without precedent.

List of Subjects in 40 CFR Part 1518

    Accounting, Administrative practice and procedure, Environmental 
impact statements and Environmental Quality Office.

Brenda Mallory,
Chair, Council on Environmental Quality, and Director, Office of 
Environmental Quality.

    For the reasons discussed in the preamble, the Council on 
Environmental Quality amends 40 CFR part 1518 by revising and 
republishing it to read as follows:

PART 1518--OFFICE OF ENVIRONMENTAL QUALITY MANAGEMENT FUND

1518.1 Purpose.
1518.2 Definitions.
1518.3 Policy and general requirements.
1518.4 Charters.
1518.5 Finances and accounting.

    Authority:  42 U.S.C. 4375.

Sec.  1518.1  Purpose.

    (a) The purpose of the Office of Environmental Quality Management 
Fund is to finance:
    (1) Study contracts that the Office of Environmental Quality and at 
least one other Federal agency jointly sponsor; and
    (2) Federal interagency environmental projects (including task 
forces) in which the Office of Environmental Quality participates.
    (b) The purpose of the regulations in this part is to set forth 
policies and procedures for operation of the Management Fund, in order 
to support its effective administration and to set forth the Office of 
Environmental Quality's internal procedures and practices with respect 
to the Management Fund.

Sec.  1518.2  Definitions.

    Council on Environmental Quality, as used in this part, includes 
the Office of Environmental Quality.
    Director means the Director of the Office of Environmental Quality 
(or delegate). The Environmental Quality Improvement Act, 42 U.S.C. 
4372(a), specifies that the Chair of the Council on Environmental 
Quality serves as the Director of the Office of Environmental Quality.
    Environmental project means an official activity pertaining to the 
environment that requires coordination by or the involvement of the 
Council on Environmental Quality and other Federal agencies, such as an 
interagency task force.
    Interagency agreement means a document jointly executed by the 
Office of Environmental Quality and at least one other Federal agency 
that sets forth the details of a jointly sponsored study contract or 
environmental project and the funding arrangements for such a study or 
project.
    Management Fund means the Office of Environmental Quality 
Management Fund.
    Payment means a transfer of funds from an agency or another account 
to the Management Fund.
    Personnel costs include an employee's salary or wages and benefits 
and other direct expenses of employment, such as administrative costs 
associated with an official background investigation of the employee.
    Project Officer means the Federal employee responsible for direct 
supervision of a study contract or environmental project that receives 
support from the Management Fund.
    Reallocation means a transfer of funds from the Management Fund to 
another account or between subaccounts of the Management Fund.
    Study contract means an agreement with a public or private agency, 
institution, organization, or individual (including, without 
limitation, an agency, committee, or official of the Federal 
Government) to prepare or support the development of a report, 
analysis, or recommendation.

Sec.  1518.3  Policy and general requirements.

    (a) To receive support from the Management Fund, an environmental 
project or study contract must advance the purposes and goals of the 
National Environmental Policy Act, 42 U.S.C. 4321 et seq., or the 
Environmental Quality Improvement Act, 42 U.S.C. 4371 et seq.
    (b) When the Director accepts agency funds for payment into the 
Management Fund, the interagency agreement must specify the permissible 
uses of the funds, and any restrictions relating thereto, such as a 
limitation on the funds' period of availability, consistent with Sec.  
1518.5 of this part.
    (c) The Director may authorize the Project Officer to make 
expenditures to support Management Fund study contracts and 
environmental projects, including:
    (1) Acquisition of office space, equipment, supplies, and other 
goods and services, whether by purchase, lease, or otherwise;
    (2) Personnel costs;
    (3) Official travel;
    (4) Publication of documents;
    (5) Services of consultants, experts, or contractors;
    (6) Conferences, public meetings, and events;
    (7) Access to information, such as scientific and technical data;
    (8) Public engagement activities; and
    (9) Other necessary expenses.
    (d) The Director must not authorize expenditures from the 
Management Fund that would solely benefit the Council on Environmental 
Quality or another Federal agency or that would reimburse the Council 
on Environmental Quality or another Federal agency for expenses not 
related to an environmental project or a study contract. For example:
    (1) The Director may authorize expenditures pursuant to paragraph 
(c)(2) of this section for the personnel costs of an employee whose 
duties are limited to carrying out the objectives of a study contract 
or an environmental project, but not for the personnel costs of an 
employee who carries out duties unrelated to a study contract or an 
environmental project.
    (2) If a portion of an employee's duties will carry out the 
objectives of an environmental project or a study contract, the 
Director may authorize expenditures pursuant to paragraph (c)(2) of 
this section for a proportional share of the employee's personnel 
costs.
    (e) In carrying out the purposes of the Management Fund, 42 U.S.C. 
4372(e) authorizes the Director to contract with public or private 
agencies, institutions, organizations and individuals, by negotiation, 
without regard to 31 U.S.C. 3324(a) and (b), 41 U.S.C. 6101.

Sec.  1518.4  Charters.

    (a) The Director must not authorize expenditures from the 
Management Fund for an environmental project or a study contract until 
the Director has approved a charter for the environmental project or 
study contract.
    (b) The Project Officer must prepare a charter for each 
environmental project or a study contract and obtain the Director's 
approval of the charter.
    (c) The charter must:
    (1) Describe the environmental project or study contract;
    (2) Clearly explain how the environmental project or study contract 
is consistent with the goals, purposes, and statutory authority of the 
Office of Environmental Quality;
    (3) Identify the Federal agency or agencies (and any State, Tribal, 
or local agencies) participating in the environmental project or study 
contract; and

[[Page 3706]]

    (4) Provide the names, titles, and contact information of the 
Project Officer and an administrative point of contact.
    (d) The Project Officer may amend a charter in writing with the 
Director's approval of the amended charter.
    (e) The Office of Environmental Quality must provide the Office of 
Administration in the Executive Office of the President with a copy of 
each charter and amendment that the Director approves.

Sec.  1518.5  Finances and accounting.

    (a) The Project Officer for each environmental project or study 
contract receiving support from the Management Fund must prepare a 
budget estimate as part of the charter and update the budget estimate 
annually following the charter's approval. The Office of Environmental 
Quality must provide copies of these budget estimates to the Office of 
Administration.
    (b) The Council on Environmental Quality may make a payment into 
the Management Fund by a letter of transmittal that specifies the 
particular environmental project or study contract it is funding. The 
Office of Environmental Quality will provide a copy of each such 
transmittal letter to the Office of Administration.
    (c) Agencies other than the Council on Environmental Quality may 
make advance payments to the Management Fund using the following 
procedure:
    (1) The Director must provide the agency with a letter that 
specifies the particular environmental project or study contract to 
which the Director will apply the payment.
    (2) The Director and the agency must enter an interagency agreement 
for the payment. The interagency agreement should indicate any 
statutory authority appropriate to the transaction, including 42 U.S.C. 
4375(a).
    (d) The Management Fund is a no-year appropriations account, which 
can accept funds with any period of availability or funds that remain 
available until expended (i.e., ``one-year,'' ``multiple-year,'' or 
``no-year'' funds). Appropriated funds that an agency pays into the 
Management Fund expire under the terms of the appropriation under which 
they originated. The Office of Environmental Quality must account 
separately for each payment of funds into the Management Fund and track 
when each such payment will expire.
    (e) In addition to or in lieu of an advance payment into the 
Management Fund, any agency, including the Council on Environmental 
Quality, may support an environmental project or study contract by 
providing technical expertise, physical resources, facilities, 
equipment, or other assets; performing support or administrative 
services; or assigning detailees or agency representatives.
    (f) The Office of Environmental Quality must maintain a separate 
subaccount within the Management Fund for each environmental project or 
study contract.
    (g) The Director or the Project Officer must approve all of the 
expenditures for a particular environmental project or study contract. 
The Management Fund may only accept payments in advance of expenditure; 
accordingly, the Director or the Project Officer may only approve 
expenditures for which the Management Fund has received adequate 
payments in advance.
    (h) The Director may approve the reallocation of funds from the 
Management Fund to another Federal account (or from one Management Fund 
subaccount to another) provided that:
    (1) The agency that originally made the payment of the funds in 
question to the Management Fund approves the reallocation in writing;
    (2) The reallocation would promote the statutory mission of the 
Office of Environmental Quality; and
    (3) The Director determines the reallocation is in the best 
interest of the Federal Government.
    (i) The Office of Environmental Quality must classify each 
financial transaction involving a Management Fund subaccount in 
sufficient detail to meet the Office of Environmental Quality's 
management planning, fiscal control, and financial audit requirements.

[FR Doc. 2025-00473 Filed 1-14-25; 8:45 am]
BILLING CODE 3325-FA-P
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