NEPA required federal agencies to evaluate their activities “significantly affecting the quality of the human environment” by issuing an Environmental Impact Statement (EIS). EISs are required for projects initiated, financed, or permitted by the federal government, with some exceptions (e.g., the USDA commodity support programs are exempt).
There are three levels of evaluation, depending on the magnitude of impact on the environment. Categorical exclusion allows projects meeting predetermined criteria for "no significant environmental impact" to be exempt from detailed evaluation. The second level is Environmental Assessment, or a brief statement of the impacts of an action and alternatives to such an action. Based on results of the Environmental Assessment, the agency may issue a finding of no significant impact (FONSI), which may describe actions that will be taken to reduce potential impacts. The Environmental Assessment may be skipped if the agency expects in advance the project will not meet the standards for FONSI. If there is no FONSI at the second level, the project moves to the third level of analysis, which is an Environmental Impact Statement (EIS). The EIS process has multiple stages:
The EIS is expected to address the environmental impact, unavoidable adverse environmental effects, alternatives to the proposal, short-term, long-term, and irreversible effects. Although NEPA mandates that adverse environmental impacts of proposed projects be identified and evaluated, NEPA does not mandate that projects with adverse impacts be stopped, or that impacts be eliminated, an interpretation upheld in 1989 by the U.S. Supreme Court.
NEPA was signed into Law on January 1, 1970 by President Richard Nixon. The Law also established the Council on Environmental Quality in the executive office of the President of the United States.
Some states have enacted legislation patterned after NEPA which regulate the actions of state agencies, and also require EISs. In Illinois, relevant state legislation includes the Illinois Environmental Protection Act.