Sierra Club Seeks to Require NEPA Impact Statement on Annual Appropriations Proposals

A suit brought by the Sierra Club against the Department of the Interior and the Office of Management and Budget (OMB)¹ raises for the first time the question where NEPA's requirement for environmental impact statements applies to the annual general appropriations process of the federal government. Specifically, the suit seeks a finding that the Department must prepare an environmental impact statement (EIS) on appropriations proposals to Congress for the National Wildlife Refuge System, and a further finding that OMB must establish NEPA compliance procedures with respect to these appropriations proposals.

The suit grew out of the strong concern of members of the Sierra Club and a number of other conservation organizations over threatened cutbacks in federal ownership, management and financing of the Refuge System. The System consists of more than 350 individual refuge units totaling over 30 million acres of land and water, selected primarily on the basis of their value as habitat for wildlife populations, particularly migratory birds and rare animals. Administrative responsibility over the system is exercised by the U.S. Fish and Wildlife Service.

Wildlife Refuge areas are not self-operating. Many have required extensive rehabilitation to correct for past misuses such as overgrzing, improper lumbering, or burning and drainage. All refuges require maintenance and management to function effectively as wildlife habitats. The budget authorized by OMB for "Resource Management," the primary U.S. Treasury account from which Wildlife Refuge System expenditures are drawn, totals about $108 million. While the amount has increased slightly over each of the past several years, the increases have not kept pace with inflation.

OMB and the Department of the Interior do not dispute the assertion that some proposals affecting the size of, construction in, and programs for the Refuge System are proposals which significantly affect the human environment, and that preparation of impact statements with regard to such proposals is therefore required under NEPA. By its own count, the Fish and Wildlife Service has prepared 60 impact statements on the effects of Fish and Wildlife proposals on individual refuges and has prepared others on proposal management changes affecting the Refuge System generally. However, none of these impact statements has addressed proposed cutbacks in, or withdrawals from, the Refuge System. The Service also has under preparation a programmatic EIS on the operation and administration of the System as a whole, with a target draft completion date of June 30, 1975. According to the Director of the Fish and Wildlife Service, the programmatic EIS will discuss the environmental impacts to the System of several bands or levels of appropriations from Congress.

The dispute centers on the Sierra Club's contention that NEPA requires, in addition, preparation of impact statements on specific annual appropriations proposals to Congress for the Refuge System. It is not enough, argues the Sierra Club, that the Wildlife Service prepares impact statements on individual major federal actions affecting the Refuge System, and also prepares programmatic impact statements for operation of the Refuge System as a whole. To comply fully with NEPA, the Sierra club argues, the Fish and Wildlife Service must view its annual budget proposals as acts which in themselves trigger the need for separate impact statements. Such proposals are "proposals for legislation" explicitly covered in § 102(2)(C) of NEPA, and also constitute separate and distinct major federal actions. The objective of the Sierra Club is a court ruling requiring that environmental review be built directly into the basic budgetary process, through which changes in program, personnel levels and total funding are annually established for the System. Such a ruling would not require OMB to prepare environmental impact statements on appropriations proposals; such statements would be prepared, in the case of the Refuge System, by the Department of the Interior. However, if the plaintiffs prevail, OMB would be required to make certain that impact statements had indeed been prepared, and to take its own "hard look" at environmental factors in reviewing the appropriations requests.

The plaintiffs offer a fallback position, asserting that, at a minimum, NEPA requires preparation of impact statements on appropriations proposals which will reduce the operations of the Refuge System, even if the preparation of impact statements is not required for all appropriations proposals for the System.

The Office of Management and Budget, as evidenced by the extensive efforts it has already invested in defending the suit, is taking the challenge very seriously. OMB has never been enthusiastic about assuming a NEPA enforcement function² and wants to avoid any requirements tying environmental review responsibilities to its wide-ranging management and budgetary [5 ELR 10072] functions. Defendants argue that they are in full compliance with NEPA by virtue of Interior's preparation of impact statements triggered by proposals for major actions and by long-range program plans that have no connection with specific annual budgetary proposals. They argue that government officials have discretion as to the appropriate stage in the development of a project or program for the preparation of an impact statement.

According to OMB and Interior, incorporating environmental review procedures and impact statement preparation into the budgetary process is inappropriate for a number of reasons. First, a major segment of the budgetary process (from its commencement 18 months prior to the start of the fiscal year until the President's budget message to Congress a year later) is privileged and confidential, and therefore not amenable to the usual practice under NEPA of distributing draft and final impact statements for public comment. Second, to require the preparation of an EIS for budget options considered during the formation of the budget would break up the continuity and tight scheduling of the process. Third, the public disclosure of information contained in impact statements would generate additional external pressures for increased spending and lead to "narrowly focused, disjointed consideration of the request" by Congress. Finally, an impact statement requirement built into the budgetary process would give undue weight to a single set of factors and thus undermine the ability of the process to weigh other relevant considerations, including effects on the economy, on public borrowing, and on other fiscal circumstances.

Defendants cite a line of cases holding that where preparation of an EIS would interfere with an agency's effort to carry out its mandate, the agency should follow its mandate without preparing an impact statement.³ They assert that some precedents also support the proposition that even where an EIS must eventually be prepared, its preparation is not required at a stage where it would cause such interference.

Defendants place particular reliance on the fact that the Department of Interior has a programmatic environmental impact statement under preparation. They have filed an alternative motion (alternative to their motion for summary judgment) for a stay of proceedings, pending the planned November 1975 filing of the final programmatic EIS. Defendants have indicated in their affidavits that the statement will discuss in detail seven "management and funding alternatives," and will analyze the impact of "some budgetary and appropriations levels," but will not serve as an EIS on any particular budgetary proposal.

The root issue emerging fro the briefs and memoranda being exchanged by the parties — whether NEPA's environmental review requirement should be extended into the budgetary process at an early stage and thereby into federal resource allocation decisions made at the highest levels — puts NEPA advocates up against formidable opposition. OMB and its predecessor, the Bureau of the Budget, have a long tradition of defending the integrity of the budgetary process against those who would urge special consideration of a single interest or factor, such as environmental effects, among the many its must weigh and balance.

On the merits of the controversy, no easy or obvious resolution suggests itself. Clearly, the purpose and spirit of NEPA's impact statement requirement, that all agencies build into their decision making a "hard look" at the environmental aspects of proposed legislation and other federal actions, is more completely carried out by extending the "hard look" to program changes that are developed and proposed as a part of the budget process or that are implied in proposed budget changes. These changes, including additions and deletions to the Wildlife System, changes in personnel levels, scope of program, and level of maintenance, can have significant environmental effects, but may not ever take shape as distinct "major federal actions" because they may never come into focus outside the budgetary process. However, to the extent that an agency prepares impact statements outside the budgetary process on new programs or changes in program level, it makes little sense to require the agency to prepare a second impact statement merely because the action in question is also proposed in a budget request. A sensible rule would be one allowing an agency to omit from impact statements prepared on appropriations proposals discussion of any actions covered in other impact statements prepared by the agency.

A number of subsidiary contentions of the plaintiffs appear to have merit. First, it is reasonable to conclude that Congress did not intend to exclude proposals for appropriations from "proposals for legislation," which require impact statements under NEPA. The argument of the defendants that Congress intended to require impact statements only on substantive legislative proposals, and not on appropriations proposals, seems strained. Moreover, CEQ's Guidelines interpreting NEPA, which are to be accorded great weight, state that requests for appropriations are subject to the statute's impact statement requirement.⁴

Second, courts have consistently ruled that offices in the Executive Office of the President, such as OMB, operate as independent agencies,⁵ and have repeatedly [5 ELR 10073] emphasized that Congress intended the Act to apply to all parts of the federal government.⁶ Thus, plaintiffs argue, OMB is a federal agency which must comply with NEPA. This precise issue has not arisen previously; plaintiffs emphasize that in this case, the Department of Interior would prepare the impact statement, and that OMB's obligation would be to develop procedures, like all other federal agencies, for ensuring full NEPA compliance.

Third, plaintiffs appear to be on safe ground in asserting that changes in funding levels, in personnel ceilings and in program commitments, which are typical of the actions reflected in a budget request, are major federal action for which NEPA requires preparation of an impact statement. Plaintiffs cite an impressive string of much lesser actions that have been held to trigger the impact statement requirement;⁷ moreover, defendants do not seriously contend that alterations in the Refuge System program do not significantly affect the environment.

However, it is what has been described as the defendant's "monkey-wrench argument" — the argument that imposing impact statement requirements on the budgetary process will excessively disrupt a system which is already overburdened by tight time requirements and by the monumental scope of the task it performs — that proves the most troublesome to the plaintiffs' case. The argument has two elements with a legal basis, the first being that communications which make up the budgetary process are privileged and confidential, and the second that to require impact statement monitoring and review would prevent OMB from performing the tasks set forth in its enabling legislation. Both elements of this argument thus reduce to the contention that adding an impact statement requirement would make the budgetary process unworkable. Defendant's brief makes no attempt to be subtle on this point:

To do an EIS on budget recommendations for every program boggles the mind. As absurd as this prospect is, plaintiffs demand EISs for recommendations prior to the final budget recommendations. This is a demand for thousands of EISs — all within a short period of time.

Other types of burdens may also result from extending the impact statement requirement into the bud getary process. Defendants argue first that impact statements would have to be prepared on budget prosposals at a stage when they are still subject to elimination or modification, and that therefore a multiplicity of statements might be required, one on each successive phase of a given proposal. But, early consideration of the environmental aspects of a project, when it is not too late to modify or drop a plan with environmentally harmful aspects, would actually seem an improvement from the viewpoint of NEPA's objectives.

Second, the requirement that both draft and final impact statements be made public and circulated for comment will undoubtedly generate public interest inputs into the budgetary process that will further burden it. Plaintiffs respond to this by contending that the doctrine of privilege extends to consultation and advice (which requires protection so that it can remain frank and open), but not to factual information of the sort which is called for in a statement on the environmental impacts of proposed actions. While this legal argument does not address the practical problem of added burdens to the budgetary process, the Sierra Club might well have argued that it is just this sort of additional burden that the budgetary process needs to make it more responsive to environmental considerations; in the past few years environmental considerations have been identified as having paramount national importance, but have not yet been adequately reflected in budget deliberations.

In the even that District Judge Pratt, who has been assigned the case, cannot be persuaded that these burdens are appropriate, plaintiffs have offered an alternative and more limited proposed rule of law, namely that at a minimum, NEPA requires the preparation of impact statements on appropriations proposals or other proposals and decisions which will significantly reduce the operations of a program that benefits the human environment. This more limited proposal would not impose as burdensome a requirement on agencies and on OMB as would the broader rule.

This more limited rule is not without problems in application, however. It is no easy task to determine the relationship between changes in a budget level and the level of operations of a program. In this very case, in fact, the plaintiffs are faced with the problem of showing that operations of the National Wildlife Refuge System are actually being reduced at a time when the available figures for the most relevant budget accounts show gradually increasing dollar amounts. The assessment involves untangling accounts and their components, as well as taking into consideration increases in salary levels and other changes in per unit costs, a potentially knotty exercise.

Despite its complications, the thrust of the plaintiffs' demand, which is to extend the coverage of NEPA's impact statement process to a range of federal actions not now covered, is basically legitimate. By emphasizing that a new ruling would apply only to those aspects [5 ELR 10074] of annual budgetary proposals not addressed in other impact statements completed or under preparation by the agency, the court could achieve a reasonable extension of NEPA's EIS requirement. Furthermore, a limitation which is inherent in the operation of NEPA as it has developed over the past five years, if recognized by the court, should assist it in viewing this proposed extension of the impact statement requirement as a limited one. Nothing in the statute prevents OMB or any agency from balancing and considering a large number of factors (such as the state of the overall economy, practical political considerations, national policy priorities, and philosophical preferences) in addition to environmental effects, in arriving at final proposals for appropriations legislation. NEPA requires only that environmental factors be identified and considered in the deliberative process; it does not mandate that these factors be assigned a specific weight vis-a-vis other considerations in those deliberations.

By recognizing and emphasizing these limiting factors in extending the impact statement requirement to budget proposals, the court can ensure a higher standard of environmental decisionmaking in the federal administrative agencies without causing unwarranted dislocation or disruption to their operations, or to the budgetary process.

1. Sierra Club, v. Morton, CA No. 74-1017 (Filed July 5, 1974) The National Parks and Conservation Association and the Natural Resources Defense Council are also plaintiffs in the action.

2. Anderson, The National Environmental Policy Act, in Federal Environmantal Law, Environmental Law Institute (1974) pp. 333-335.

3. Defendants cite the following cases: Cohen v. Price Commission, 2 ELR 20178, 337 F. Supp. 1236 (S.D.N.Y. 1972); Gulf Oil Corp. v. Simon, 4 ELR 20367, 373 F. Supp. 1102 (D.D.C. 1974), aff'd, 5 ELR 20021, 502 F.2d 1154 (U.S. Temp. Ct. of App. 1974); Port Authority of New York v. U.S., 451 F.2d 783 (2d Cir. 1971); Dry Color Manufacturers' Assn. v. Hardin, 3 ELR 20855, 478 F.2d 478 (9th Cir. 1973).

4. Guidelines of the Council on Environmental Quality § 1500.5(a)(1); 38 Fed.Reg. 20550 (August 1, 1973); 40 CFR 1500.5(a)(1).

5. Amalgamated Meat Cutters and Butcher Workers v. Connally, 337 F. Supp. 737 (D.D.C. 1971); Gulf Oil Corp. v. Hickel, 308 F. Supp. 31 (D.D.C. 1969), aff'd 435 F.2d 440 (D.C. Cir. 1970); Guadamuz v. Ash, 368 F. Supp. 1233 (D.D.C. 1973).

6. Scientists' Institute for Public Information v. Atomic Energy Commission, 3 ELR 20525, 481 F.2d 1079, 1088 (D.C. Cir. 1973). Calvert Cliffs' Coordinating Committee v. Atomic Energy Commission, 1 ELR 20346, 449 F.2d 1109, at 1112 (D.C. Cir. 1971).

7. For example, approval of an application for a branch bank in Woodstock, Vermont, Billings v. Camp, 2 ELR 20687 (D.D.C. 1972); construction of an incinerator at Walter Reed Hospital, Montgomery County v. Richardson, 2 ELR 20140 (D.D.C. 1972); and, urban renewal in five squares of a downtown area, Businessmen v. D.C. City Council, 2 ELR 20237, 339 F. Supp. 793 (D.D.C. 1972).