The National Environmental Policy Act (NEPA) recognizes categories of actions, known as categorical exclusions (CATEXs), that typically do not have a significant effect on the human environment, and therefore may be examined under the lowest level of environmental review.  In Section 788 of the FAA Reauthorization Act of 2024, Congress created two new CATEXs for airport projects.  Section 788(a) applies to projects that receive limited federal financial assistance.  Section 788(b) applies to certain emergency repairs.

In late December 2024, FAA released guidance on implementation of Section 788(a).  The guidance does not address the Section 788(b) CATEX, which is applicable to emergencies.

The CATEX for limited federal financial assistance applies to “an action by FAA to approve, permit, finance, or otherwise authorize any airport project” that either: (1) receives less than $6 million of federal funds or passenger facility charges (PFCs); or (2) has a total estimated cost of not more than $35 million and federal funds comprise less than 15% of the total project cost.  It is important to note that the first clause applies to both federal funds and PFCs, but the second clause applies only to federal funds.   

In its guidance, FAA makes the following conclusions regarding applicability of the new CATEX:

• FAA will apply the CATEX before it is formally included in FAA’s Order 1050.1 (Environmental Impacts: Policies and Procedures).  However, until the new CATEX is formally incorporated into that Order, FAA will first attempt to apply any available CATEXs currently contained in the Order, and will only evaluate the applicability of the new CATEX if no other CATEX applies.
• FAA takes the position that for the new CATEX to apply, the proposed action must receive at least some funding under Title 49 of the U.S. Code or be at least partially funded with PFCs.  This interpretation suggests that FAA will not allow use of the new CATEX for a project that is paid for entirely with non-federal funds but is otherwise subject to FAA approval (e.g., as part of an ALP change).
• The FAA’s position is that once the federal funding and/or PFC funding requirement is met, all federal funding, regardless of the source, needs to be accounted for in calculating whether the dollar value thresholds are met.  PFCs would be counted for purposes of the $6 million threshold under Section 788(a)(1), but not the 15% threshold under Section 788(a)(2).
• This CATEX is still subject to the standard “extraordinary circumstances” analysis requirement – in other words, the CATEX does not apply if there are factors or circumstances that indicate that the project may have a significant effect on the environment.
• Airport sponsors should pay close attention to funding details.  Any changes that occur that raise the level of federal funding or total project cost beyond the thresholds will trigger re-evaluation of the NEPA analysis and FAA may require additional NEPA documentation.

The CATEX under Section 788(a) is atypical because it is based on the level of federal financial investment rather than on the level of environmental impacts.  While there is no conclusive evidence of specific Congressional intent, it is likely that Congress wanted to provide sponsors with an additional catch-all CATEX to streamline environmental review for smaller projects with limited federal financial engagement.  The FAA’s position that a project must receive some federal funds in order for the new CATEX to apply appears to undercut the value of the new CATEX for projects that receive zero federal funds.

For additional questions on the new guidance or other airport NEPA issues, please contact Katie van Heuven, Peter Kirsch, or Nick Clabbers.