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07.14.2020 Legal News

Regulatory Prescriptions for COVID-19: Trump Continues Efforts for Regulatory Reform and Expedited Infrastructure Review

Two recent executive orders (“EOs”) issued by President Trump require additional efforts by federal agencies to facilitate regulatory reform and to expedite infrastructure projects, relying greatly on emergency and special exception authorities within federal statutes and regulations.  One EO, issued May 19 and entitled, “Executive Order on Regulatory Relief to Support Economic Recovery,” focuses on general regulatory relief in the face of the COVID-19 pandemic (“Regulatory Relief EO”).  The second EO, issued June 4 and entitled, “Accelerating the Nation’s Economic Recovery from the COVID-19 Emergency by Expediting Infrastructure Investments and Other Activities,” requires agencies with permitting, oversight and review roles under various environmental and other programs to expedite review and processing of these projects (“Infrastructure Review EO”).

These EOs continue the President’s overarching theme of reducing environmental regulatory burdens for business, utilities, and infrastructure network developers and managers, which began before COVID-19 began to take its full toll.  (For other examples, see our February 2020 newsletter.)  However, these EOs are targeted in their timing and overlapping in their purposes to spur recovery from the COVID pandemic’s damage to the nation’s economy.  In this sense, they build on other, more agency-specific guidance for program administration in light of COVID-19.  (See our alerts on EPA COVID-related guidance here and here).

The Regulatory Relief EO requires federal agencies to “address this economic emergency by rescinding, modifying, waiving, or providing exemptions from regulations and other requirements that may inhibit economic recovery, consistent with applicable law and with protection of the public health and safety, with national and homeland security, and with budgetary priorities and operational feasibility.”  Particular concern is expressed for small business relief.  To implement this objective, federal agencies must determine and consider actions “consistent with applicable law” to alleviate regulatory burdens on the economy – including rulemakings, exemptions, waivers, and another means – and consider use of “appropriate temporary enforcement discretion or appropriate temporary extensions of time.”  In addition, agencies must consider whether any temporary or emergency actions taken in the face of the COVID-19 crisis to provide regulatory and enforcement relief are worthy of permanent implementation to help sustain any economic gains.  Furthermore, agencies must provide compliance assistance and implement 10 principles of “fairness in [their] administrative enforcement and adjudications.”  These principles include enforcement directives that may significantly curtail agency enforcement practices, such as the directive that administrative adjudicators may not be enforcement staff and that the agency must provide all relevant evidence in its possession to the subject of any enforcement action.   

The Infrastructure Review EO charts a similar course using agency authorities and emergency procedures to reduce the time and degree of review needed for infrastructure projects.  This will help ensure they can be kept on track for commencement and or funding to help reinvigorate the economy.  The EO directs all federal agencies to “take all appropriate steps to use their lawful emergency authorities and other authorities to respond to the national emergency and to facilitate the Nation's economic recovery.”  More specifically, they “should take all reasonable measures to speed infrastructure investments and to speed other actions . . . while providing appropriate protection for public health and safety, natural resources, and the environment, as required by law.”  Certain agency project oversight roles receive special attention, namely: (i) the Secretary of Transportation for transportation projects; (ii) the U.S. Army Corps of Engineers for civil works (such as channel dredging, flood control and beach restoration projects) and wetland permitting of infrastructure projects; (iii) the Secretaries of Defense, Interior and Agriculture for projects on federal lands; (iv) all agencies for administration of project review pursuant to the National Environmental Protection Act (“NEPA”) based on current regulations and guidance of the Council on Environmental Quality addressing emergency circumstances; and (v) all agencies for reviews required pursuant to the Endangered Species Act and coordination of such reviews with the Secretaries of the Interior and Commerce.  Affected agencies must prepare within 30 days a list of projects eligible for the contemplated relief applicable to their respective review roles.  

Despite the sense of urgency in these EOs, it is not clear what beneficial effects these EOs will produce and when.  Each EO requires reporting by the agencies to demonstrate their level of effort, and each EO states clearly that the implementation of its terms shall be “consistent with applicable law and subject to the availability of appropriations.”  These provisions should allow parties to track how well the EOs are implemented and should provide some assurance that the underlying legal requirements of the environmental laws are met.  It should be no surprise that environmental groups have reacted generally negatively to these EOs alleging that they reduce project scrutiny and protections and let noncompliance go unchecked.  On the other hand, industry and certain infrastructure-based parties are hoping the EOs result in greater flexibility and speed for project review and approvals and for reasonable discretion regarding compliance and enforcement under difficult and unexpected operating conditions.  

In addition, although much regulatory review and/or funding occurs at the federal level for major projects and infrastructure, regulatory relief at that level hardly removes all challenges or hurdles.  Perhaps most significantly, states, tribes and even localities are in many, if not most, cases in charge of the environmental permitting, land use approvals and infrastructure project reviews.  These lead roles arise by having received authority to administer the federal environmental program in question, by independent state law, or through local zoning and land use control powers.  So, while regulatory relief may yet come at the federal level, most major projects require federal, state and local approvals to move forward.  The approach or degree of action these other regulators take in tandem with the EOs will likely vary, leaving a fair degree of uncertainty still to be managed. 

There is no question that COVID-19 and the associated public health concerns have caused great hardship for many companies and other economic stakeholders.  National regulatory relief could play a helpful role in putting the economy back on track, but it remains to be seen whether these EOs will provide timely and material relief given the additional review often required at the state, tribal and local level. 

Executive Order 13,924, “Regulatory Relief to Support Economic Recovery,” 85 Fed. Reg. 31353 (May 22, 2020).

Executive Order 13,927, “Accelerating the Nation’s Economic Recovery from the COVID-19 Emergency by Expediting Infrastructure Investments and Other Activities,” 85 Fed. Reg. 35165 (June 9, 2020).