Bipartisan SPEED Act Aims to Streamline NEPA Environmental Reviews for Federal Grant and Loan Recipients

As US Congress and the Trump Administration move forward with examining how to improve federal environmental review and permitting processes, the bill offers potential solutions to simplify the issuance of many federal grants, loan guarantees, and other assistance, including financial assistance to energy producers, manufacturers, infrastructure developers, agricultural producers, private entities, and nonprofits.

Recipients of federal funding and other financial assistance have long faced delays and increased costs due to the federal environmental review process required under the National Environmental Policy Act (NEPA). These reviews are triggered when a project or activity is deemed a “major Federal action,” a threshold that has historically swept in a wide range of federal funding, loan guarantees, and other forms of assistance. Recent bipartisan legislation (H.R.4776) introduced in the US House of Representatives by Rep. Bruce Westerman (R-AR) and Rep. Jared Golden (R-ME) — the Standardizing Permitting and Expediting Economic Development (SPEED) Act — proposes reforms that would narrow the circumstances under which a NEPA review is required, with important implications for recipients of federal funds.

Key Changes Proposed by the SPEED Act Specific to Recipients of Federal Financial Assistance

The SPEED Act would amend NEPA to clarify and limit when the federal environmental review process is triggered, particularly in the context of federal financial assistance.

• The bill would require that, for federal assistance to trigger NEPA, the federal agency must have “complete control and responsibility over the effect of the action.” This is a departure from prior interpretations, which have often found NEPA review triggered by more limited federal involvement.
• The legislation explicitly states that an agency action may not be determined to be a covered major federal action based solely on the provision of federal funds, including grants, loans, loan guarantees, and other funding assistance. This means that simply receiving federal financial support would not, by itself, subject a project to NEPA review.
• The bill specifically exempts certain US Department of Agriculture farm ownership loans and operating loan guarantees from NEPA review. This provides clarity and relief for agricultural borrowers.
• The legislation clarifies that federal grants, a form of federal assistance, may not automatically constitute a “major Federal action.”

Implications for Recipients of Federal Financial Assistance

If enacted, the SPEED Act would represent a major shift in the federal environmental review landscape. Recipients of federal funds would benefit from:

• Reduced Risk of Delay: Fewer projects would be subject to NEPA review, meaning NEPA reviews will not slow the receipt and use of federal assistance.
• Lower Compliance Costs: By narrowing the definition of “major Federal action,” the bill would reduce the need for costly and time-consuming environmental assessments and impact statements.

ArentFox Schiff is here to monitor how NEPA can be applied under existing law and amended to improve project timelines.