The U.S. Department of Transportation (DOT) and its operating administrations issued updates to their National Environmental Policy Act (NEPA) procedures on July 3, 2025. Because these procedures constitute a significant departure from long-running policies, rail and transit project sponsors undertaking NEPA review should assess whether the updates apply to their projects and carefully review their current environmental review processes, documentation, and timelines. Sponsors also should consider whether the updated procedures and regulations present opportunities to expedite environmental review and project delivery, as well as how to manage any risks of litigation.

Revisions to Joint NEPA Regulations: The Federal Railroad Administration (FRA), Federal Transit Administration (FTA), and Federal Highway Administration (FHWA) issued an interim final rule updating their joint NEPA regulations (23 CFR Part 771). The updated rules are effective immediately, but the agencies are accepting public comment through August 4, 2025 and may make further changes.

Key revisions to the FRA, FTA, and FHWA joint NEPA regulations include:

• Applicability: Increased agency discretion to determine the applicability of the joint regulations’ procedural requirements.
• Sponsor Preparation: New provisions allowing sponsors to prepare their own environmental documents.
• Corridor Identification and Development (CID) Program: New language explicitly allowing analyses, studies, and work developed pursuant to the CID program to be incorporated into the NEPA process.
• Conflicts of Interest: Removal of references to conflict of interest requirements previously derived from Council on Environmental Quality (CEQ) regulations.
• Deadlines: Timelines for completing an environmental assessment (EA) or environmental impact statement (EIS) in accordance with NEPA’s statutory deadlines, distinguishing when an action is a major project subject to the different timelines in 23 U.S.C. 139, the statute that supplements NEPA and provides environmental review processes for surface transportation and multimodal projects requiring DOT approval.
• Page Limits: Page limits for environmental documents in accordance with NEPA’s statutory requirements, distinguishing when an action is a major project subject to the different page limits in 23 U.S.C. 139.
• Reliance and Adoption: New language addressing situations in which a proposed action is substantially the same as an action covered in an existing environmental document or categorical exclusion determination.

Revisions to DOT-Wide NEPA Processes: DOT rescinded its previous NEPA procedures (DOT Order 5610.1C) and issued updated department-wide NEPA procedures. The order is effective immediately, but DOT is soliciting public comment through August 4, 2025 and may update the procedures based on the comments received.

Key updates in the new DOT Order 5610.1D include:

• Categorical Exclusions: Expanded use of categorical exclusions. New language allowing DOT agencies to apply a categorical exclusion established in another DOT agency’s procedures, adopt another non-DOT agency’s categorical exclusion (subject to NEPA’s statutory notice and consultation requirements), and rely on another agency’s categorical exclusion determination.
• Applicant Preparation: New procedures for the preparation of environmental documents by applicants and applicant-hired contractors.
• Roles and Responsibilities: Clarification of the roles of the lead agency, joint lead agency, cooperating agencies, and participating agencies.
• Scope: Limitation of the required scope of review in environmental documents.
• Mitigated Findings of No Significant Impact (FONSIs): New language allowing agencies to rely on mitigation measures to reduce impacts below the level of significance that would require an EIS.
• Re-Evaluations and Supplements: Clarification of when a re-evaluation is appropriate and when an environmental document must be supplemented.

Scope of Projects Impacted: Rail and transit project sponsors should be aware that ongoing environmental reviews may be subject to the new procedures outlined in the updated regulations and order. The Federal Register notice for the FRA, FTA, and FHWA interim final rule states that “revised agency procedures will have no effect on sufficiently advanced ongoing NEPA reviews, where the Department, following CEQ guidance, has held that it will continue to apply existing procedures.” The agencies did not provide any clarification as to which reviews will be considered “sufficiently advanced.” The new DOT Order 5610.1D states that it does not apply to decisions or final environmental documents issued prior to its effective date, but that it should be applied to “actions” initiated on or after its effective date. DOT did not clarify the new order’s applicability for ongoing NEPA reviews where the review was initiated prior to the order’s effective date but for which the agency action at issue will occur after.

Additional Changes to NEPA in the “One Big Beautiful Bill Act”: In addition to these administrative developments, the President signed into law the legislation commonly referred to as the “One Big Beautiful Bill Act” last week. Section 60026 of the Act amends NEPA to provide for project sponsor opt-in fees for environmental reviews that allow a project sponsor to pay a fee for the expedited preparation of an EA or EIS (180 days for an EA and 1 year for an EIS). The statute sets the fee at 125 percent of the anticipated cost for the sponsor to prepare the EA or EIS or for the agency to supervise the preparation of the EA or EIS. DOT has not yet stated how it will implement this new provision, but it will present an opportunity for project sponsors to expedite environmental reviews.

NEPA practice is changing rapidly and practitioners will need to be nimble to capture opportunities to deliver projects more quickly and ensure their environmental processes and documentation accord with the new policies. For additional questions, please contact Allison Ishihara Fultz, Ayelet Hirschkorn, John Putnam, Chuck Spitulnik, Christian Alexander, Casey Morris, or Grant Glovin.