## Facts

- Hawai‘i County’s Department of Water Supply planned the Kohala Water Transmission System Project, a transbasin diversion system intended to move up to 20 million gallons per day of groundwater to support potable water needs and resort development.
- The United States Geological Survey partially funded and participated in preliminary groundwater-availability studies and test drilling and pumping in the North Kohala aquifer.
- Congress allocated a $500,000 special-purpose grant administered by the Department of Housing and Urban Development for conducting an environmental-impact statement related to a Kohala water resource system; HUD provided application materials and advisory assistance.
- Total federal funding associated with the project was approximately $1.3 million (less than 2% of the estimated $80 million total cost); most funding came from state/county sources, including bond financing.
- Neither USGS nor HUD exercised decision-making authority or control over whether or how the overall project would proceed; their roles were described as advisory and limited.
- A citizens’ coalition sued under NEPA, seeking to halt project work until a federal environmental impact statement was prepared.
- The district court granted summary judgment to all defendants, and the plaintiff appealed.

## Issues

1. Whether limited federal funding and participation in studies and grant-related assistance converted a predominantly local water project into “major Federal action” requiring an EIS under NEPA.
2. Whether HUD’s environmental-review regulations required an EA or EIS for the overall water project based on the special-purpose grant.

## Decision

- The Ninth Circuit affirmed summary judgment for the defendants.
- The court held the project was not “major Federal action” because federal funds were minimal relative to total cost and federal agencies lacked decision-making authority or control over the project.
- The court held HUD’s regulations did not require an EIS for the overall project where the special-purpose grant funded environmental studies/EIS preparation activities that were exempt from EA/EIS requirements.

## Legal Principles

- A local or state project becomes “major Federal action” under NEPA only when federal involvement is sufficiently substantial, commonly reflected in significant federal funding and/or meaningful federal control or authority over project decisions.
- Limited federal financial participation—especially a small percentage of total project costs—tends to weigh against characterizing a project as “major Federal action.”
- Federal participation that is advisory (technical studies, information, recommendations) and not tied to discretionary approval or control over the overall project generally does not trigger NEPA’s EIS requirement for the full project.
- Agency environmental-review regulations may exempt certain activities (such as environmental studies or EIS-preparation work) from EA/EIS obligations, limiting the scope of required review to the funded activity rather than the broader project.

## Conclusion

Because federal involvement consisted largely of small-scale funding and advisory study-related assistance without decision-making authority over the project, NEPA did not require a federal EIS for the county water transmission project, and HUD’s special-purpose grant did not expand federal environmental-review duties to the entire project.


Ka Makani ‘O Kohala Ohana, Inc. v. County of Haw. Dep’t of Water Supply, 295 F.3d 955 (9th Cir. 2002)