Implementing Regulation for National Environmental Policy Act (NEPA): Environmental Effects of the Department of Veterans Affairs Actions

Congress enacted NEPA to declare a national policy “to use all practicable means and measures, including financial and technical assistance, in a manner calculated to foster and promote the general welfare, to create and maintain conditions under which man and nature can exist in productive harmony, and [to] fulfill the social, economic, and other requirements of present and future generations of Americans.” 42 U.S.C. 4331(a).

NEPA furthers this national policy by requiring Federal agencies to prepare an environmental impact statement (EIS)--“in essence, a report”--for proposed “major Federal actions significantly affecting the quality of the human environment” (42 U.S.C. 4332(2)(C); Seven County Infrastructure Coalition v. Eagle County, Colorado, 145 S. Ct. at 1497, 1507 (2025)). This statement must address: (1) the reasonably foreseeable environmental effects of the proposed agency action; (2) any reasonably foreseeable adverse environmental effects that cannot be avoided should the proposal be implemented; (3) a reasonable range of alternatives to the proposed agency action, including an analysis of any negative environmental impacts of not implementing the proposed agency action in the case of a no action alternative, that are technically and economically feasible, and meet the purpose and need of the proposal; (4) the relationship between local short-term uses of man's environment and the maintenance and enhancement of long-term productivity; and (5) any irreversible and irretrievable commitments of Federal resources which would be involved in the proposed action should it be implemented. 42 U.S.C. 4332(2)(C).

NEPA does not mandate particular results or substantive outcomes. Seven County, 145 S. Ct. at 1510-12. Rather, NEPA requires Federal agencies to consider the environmental effects of proposed actions as part of agencies' decision-making processes. NEPA provides requirements to facilitate timely and unified Federal reviews, including provisions clarifying lead, joint lead, and cooperating agency designations, generally requiring the development of a single environmental document, directing agencies to develop procedures for project sponsors to prepare environmental assessments (EAs) and EISs, and prescribing page limits and deadlines. 42 U.S.C. 4336a. NEPA also sets forth the circumstances under which agencies may rely on programmatic environmental documents (42 U.S.C. 4336b) and adopt and use another agency's categorical exclusions (CATEXs) (42 U.S.C. 4336c).

NEPA identifies three levels of review--CATEX, EA, and EIS. 42 U.S.C. 4336a. A CATEX is “a category of actions that a Federal agency has determined normally does not significantly affect the quality of the human environment within the meaning of [NEPA] section 102(2)(C)”. 42 U.S.C. 4336e(1). An EA is a “concise” document “set[ting] forth the basis of [an] agency's finding of no significant impact or determination that an environmental impact statement is necessary,” prepared in connection with a proposed agency action that does not have a significant impact or the significance of whose impact is unknown. 42 U.S.C. 4336(b)(2). An EIS is a document analyzing a proposed agency action with significant impact, governed by the provisions of 42 U.S.C. 4332(2)(C) and 4336(b)(1).

VA developed its NEPA implementing procedures in 1986 and amended them in 1989 “in accordance with” the Council on Environmental Quality's (CEQ's) NEPA implementing regulations (title 38 Code of Federal Regulations (CFR) 26.1). Since that time, VA policies and activities have changed and expanded. Moreover, CEQ has rescinded its NEPA implementing regulations, effective April 11, 2025 (Removal of National Environmental Policy Act Implementing Regulations, 90 FR 10610, Feb. 25, 2025). This action was necessitated by, and is consistent with, Executive Order 14154, Unleashing American Energy (90 FR 8353, Jan. 20, 2025), in which President Trump rescinded President Carter's Executive Order 11991, Relating to Protection and Enhancement of Environmental Quality (42 FR 26967, May 24, 1977), which was the basis CEQ had invoked for its authority to make rules to begin with. VA's regulations thus stand in obvious need of fundamental revision. President Trump, in Executive Order 14154, further directed agencies to revise their NEPA implementing procedures, consistent with the executive order, including its direction to CEQ to rescind its regulations.

In addition, Congress amended NEPA in substantial part in 2023 through the Fiscal Responsibility Act of 2023 (Public Law (Pub. L.) 118-5 (June 3, 2023)). Congress added substantial detail and direction in Title I of NEPA, including in particular on procedural issues that CEQ addressed in its regulations and that individual action agencies had previously addressed in their own NEPA implementing procedures. VA recognized the need to update its regulations in light of these substantial legislative changes. Since VA's regulations were originally written in accordance with CEQ's NEPA implementing regulations, VA had been awaiting CEQ action before revising its regulations, consistent with CEQ direction. See 40 CFR 1507.3(b) (2024); see also 86 FR 34154 (June 29, 2021). However, with CEQ's regulations now rescinded, and with VA's NEPA implementing procedures still

unmodified more than two years after this substantial legislative overhaul, it is exigent that VA quickly conform its procedures to the statute as amended.

Moreover, the Supreme Court on May 29, 2025, issued the landmark Seven County Infrastructure Coalition decision, in which it decried the “transform[ation]” of NEPA from its roots as “a modest procedural requirement,” into a “substantive roadblock” that “paralyze[s]” “agency decisionmaking”.145 S.Ct. at 1507, 1513 (quotations omitted). The Supreme Court explained that part of that problem had been caused by decisions of lower courts, which it rejected, issuing a “course correction” mandating that courts give “substantial deference” to reasonable agency conclusions underlying their NEPA processes. 145 S.Ct. at 1513-14. But the Court also acknowledged, and through its course correction sought to address, the effect on “litigation-averse agencies” which, in light of judicial “micromanage[ment],” had been “tak[ing] ever more time and . . . prepar[ing] ever longer EISs for future projects”. 145 S.Ct. at 1513. VA is therefore issuing this interim final rule to align its actions with the Supreme Court's decision and streamline its process of ensuring reasonable NEPA decisions.

Finally, Congress again amended NEPA in 2025 through section 60026 of the One Big Beautiful Bill Act (Pub. L. 119-21 (July 4, 2025)), adding section 112 of NEPA, entitled “Project Sponsor Opt-in Fees for Environmental Reviews.” This provision allows project sponsors to pay a fee to obtain shortened NEPA review deadlines.

Thus, VA is revising its NEPA regulations to reflect the current policies and activities within VA, the rescission of the CEQ NEPA implementing regulations, recent case law, and to comply with NEPA, as revised. Further, this revision standardizes the approach to improve both the quality and timeliness of VA's NEPA process. This revision has been called for, authorized, and directed by all three branches of government at the highest possible levels.