On May 12, 2014, the U.S. Fish and Wildlife Service (FWS) and National Marine Fisheries Service (NMFS) (collectively, the “Services”) proposed two new rules and a draft policy relating to designations of  “critical habitat” for endangered and threatened species. The first rule proposes to broaden the  definition of what constitutes a “destruction or adverse modification” of critical habitat for purposes of agency consultations under Section 7 of the Endangered Species Act (ESA). The second rule amends procedures and criteria for designating critical habitat and, although described as primarily administrative by the agencies, notably expands the types of habitat areas that may be considered for designation. Finally, the draft policy provides guidance on when and how the agencies may decide to exclude certain lands from a critical habitat designation.

These proposed rules and policy, if adopted, will have a direct impact on projects that are either approved, funded, or carried out by a federal agency and that may affect designated critical habitat.  The Services are accepting comments on the two proposed rules and the draft policy until July 11, 2014. If you are interested in learning more about the rules and policy, please contact a member of Bryan Cave’s Environmental Client Service Group below.

Proposed Rule Modifying Definition of “Destruction or Adverse Modification” of Critical Habitat

The ESA requires federal agencies to ensure their actions are “not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification” of critical habitat of such species. Under the current regulations, “destruction or adverse modification” is defined, in pertinent part, as “a direct or indirect alteration that appreciably diminishes the value of critical habitat for both the survival and recovery of a listed species.” 50 C.F.R. § 402.02. Federal appeals courts in both 2001 and 2004 found that this definition sets too high of a threshold because it requires both the survival and the recovery of a listed species to be negatively impacted in order for an agency to find that a proposed project will adversely modify critical habitat. See Sierra Club v. U.S. Fish and Wildlife Service, 245 F.3d 434 (5th Cir. 2001); Gifford Pinchot Task Force v. U.S. Fish and Wildlife Service, 378 F.3d 1059 (9th Cir. 2004).

In response to these court decisions, the Services have proposed the following revised definition, which replaces the terms “survival and recovery” with a new term, “conservation value”:

Destruction or adverse modification means a direct or indirect alteration that appreciably diminishes the conservation value of critical habitat for listed species. Such alterations may include, but are not limited to, effects that preclude or significantly delay the development of physical or biological features that support the life-history needs of the species for recovery.

According to the Services, this new concept of “conservation value” is intended to capture the role that critical habitat should play in the recovery of a species. A determination of conservation value will require the agencies to consider “the likely capability, in the foreseeable future, of the critical habitat to support the species’ recovery given the backdrop of past and present actions that may impede formation of the optimal successional stage or otherwise degrade the critical habitat.”

Although the revised definition would not require proposed projects to actively contribute to the recovery of a listed species, under the new rules a proposed project could potentially be denied approval if it  would somehow prevent habitat from developing characteristics over time that would support the  recovery of a listed species.

In proposing the new definition for “destruction or adverse modification,” the Services are establishing “prospective standards only.” Nothing in the proposed rule is intended to require that any previously completed biological opinion must be reevaluated on this basis.

Proposed Rule Amending Procedures for Designating Critical Habitat

The second rule proposed by the Services, although primarily administrative, is nonetheless significant in that it defines the previously undefined term, “geographical area occupied by the species.” The agencies propose to define this term to expressly include areas that are “used throughout all or part of the species’ life cycle, even if not used on a regular basis (e.g., migratory corridors, seasonal habitats, and habitats used periodically, but not solely by vagrant individuals).” (emphasis added). In other words, under the proposed definition, an area may be designated as critical habitat if it fills a particular life cycle need for  a listed species, even if it is occupied only temporarily.

Further, the proposed rule notes that unoccupied areas may be designated as critical habitat for a listed species even if they do not currently demonstrate the features that are deemed necessary to support that species’ recovery, so long as the area may develop those features over time. These proposed modifications may ultimately lead to more critical habitat designations, including movement corridors and/or “emerging” habitat that is not currently occupied but “will eventually become” occupied by a listed species.

As was true for the new definition of “destruction or adverse modification,” this second rule establishes prospective standards only. Nothing in the rule is intended to require that any previously completed critical habitat designation must be reevaluated on this basis.

Draft Policy on Critical Habitat Exclusions

Section 4(b)(2) of the ESA allows the Services to exclude, with limited exception, any area from a critical habitat designation provided that “the benefits of such exclusion outweigh the benefits of specifying such area as part of the critical habitat.” The proposed policy would clarify the circumstances under which the Services choose to exercise this discretion. In particular, the draft policy reiterates that, when the Services undertake a discretionary exclusion analysis, they will typically consider excluding the following areas from a critical habitat designation: (1) where a private or other non-Federal conservation plan or partnership has been developed with a goal of minimizing and/or mitigating impacts to species and their habitats; (2) where a Habitat Conservation Plan (HCP) is in place as part of an incidental take permit  issued under Section 10 of the ESA; (3) Tribal lands; (4) lands owned or controlled by the Department of Defense or areas that otherwise pose potential national security concerns; and (5) areas of low conservation value where designation would create high probable economic impacts. The draft policy also emphasizes that the Services will prioritize Federal lands over non-Federal lands for designation, where feasible.

Notably, under the proposed policy, the mere existence of a private conservation plan or partnership is no longer sufficient to warrant excluding the area covered by the plan from a critical habitat designation. Rather, the draft policy outlines specific criteria the Services will consider in determining whether a private conservation plan or partnership creates sufficient conservation benefit to warrant excluding that area from a critical habitat designation on a case-by-case basis. These new criteria suggest that proposed conservation plans may be subject to more detailed review than in prior years.