Following this assessment, the federal agency may decide to prepare an environmental impact statement or may issue a "finding of no significant impact," i.e., a finding that the impact of the Federal action does not require preparation of an environmental impact statement. Some Federal actions are exempt from NEPA because the Federal agency performs a review that is "functionally equivalent" to NEPA review. See Alabama v. U.S. Envtl. Protection Agency, 911 F.2d 499 (11th Cir. 1990).
The Federal agency must consider the recommendations of an environmental impact statement but is not obliged to follow the recommendations.
A Federal agency decision not to prepare an environmental impact statement and the sufficiency of an environmental impact statement may be subjected to judicial review under the Administrative Procedure Act (see below). Judicial review is normally limited to the record made before the agency, i.e., new evidence is not admissible in court. Thus, persons must be sure to present to the agency prior to the final agency action that evidence they intend to rely on in court. The court shall award to the prevailing party (other than the United States) modest attorney fees and expenses unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust. 28 USC § 2412.
National Environmental Policy Act
42 USC § 4332(2)(C) requires the preparation of an environmental impact statement for "major Federal actions significantly affecting the quality of the human environment." The Council on Environmental Quality has adopted guidance implementing NEPA in 40 CFR §§ 1500-1508. Other federal agencies have adopted their own guidance or regulations.
An "environmental assessment" is often prepared first.