[Federal Register Volume 85, Number 248 (Monday, December 28, 2020)]
[Rules and Regulations]
[Pages 84213-84229]
[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,<PHONE_NUMBER>, or Diane
Mobley, Office of Chief Counsel,<PHONE_NUMBER>. For FRA, Michael
Johnsen, Office of Railroad Policy and Development,<PHONE_NUMBER>, or
Chris Van Nostrand, Office of Chief Counsel,<PHONE_NUMBER>. For FTA,
Megan Blum, Office of Planning and Environment,<PHONE_NUMBER>, or Mark
Montgomery, Office of Chief Counsel,<PHONE_NUMBER>. 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

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

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

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.

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

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

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

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

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.

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.

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

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

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

    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;

    (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);

    (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:

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