Policy Regarding Implementation of Section 4(b)(2) of the Endangered Species Act, 27051-27059 [2014-10502]

Agencies

• DEPARTMENT OF COMMERCE
• National Oceanic and Atmospheric Administration
• Fish and Wildlife Service
• DEPARTMENT OF THE INTERIOR

[Federal Register Volume 79, Number 91 (Monday, May 12, 2014)]
[Notices]
[Pages 27051-27059]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10502]



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Vol. 79

Monday,

No. 91

May 12, 2014

Part II





Department of the Interior





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Fish and Wildlife Service





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 Department of Commerce





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 National Oceanic and Atmospheric Administration





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Policy Regarding Implementation of Section 4(b)(2) of the Endangered 
Species Act; Notice; Interagency Cooperation--Endangered Species Act of 
1973, as Amended; Definition of Destruction or Adverse Modification of 
Critical Habitat; Listing Endangered and Threatened Species and 
Designating Critical Habitat; Implementing Changes to the Regulations 
for Designating Critical Habitat; Proposed Rules

Federal Register / Vol. 79 , No. 91 / Monday, May 12, 2014 / 
Notices

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DEPARTMENT OF THE INTERIOR

Fish and Wildlife Service

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

[Docket No. FWS-R9-ES-2011-0104; Docket No. 120206102-336501; 
4500030114]
RIN 1018-AX87; 0648-BB82


Policy Regarding Implementation of Section 4(b)(2) of the 
Endangered Species Act

AGENCIES: U.S. Fish and Wildlife Service (FWS), Interior; National 
Marine Fisheries Service (NMFS), National Oceanic and Atmospheric 
Administration, Commerce.

ACTION: Announcement of draft policy and solicitation of public 
comment.

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SUMMARY: We, the U.S Fish and Wildlife Service and the National Marine 
Fisheries Service, announce a draft policy on exclusions from critical 
habitat under the Endangered Species Act. This draft policy provides 
the Services' position on how we consider partnerships and conservation 
plans, conservation plans permitted under section 10 of the Act, tribal 
lands, national security and homeland security impacts and military 
lands, Federal lands, and economic impacts in the exclusion process. 
This draft policy is meant to complement the amendments to our 
regulations regarding impact analyses of critical habitat designations 
and is intended to clarify expectations regarding critical habitat and 
provide for a credible, predictable, and simplified critical-habitat-
exclusion process.

DATES: We will accept comments from all interested parties until July 
11, 2014. Please note that if you are using the Federal eRulemaking 
Portal (see ADDRESSES section below), the deadline for submitting an 
electronic comment is 11:59 p.m. Eastern Standard Time on this date.

ADDRESSES: You may submit comments by one of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. In 
the Search box enter the Docket number for this proposed policy, which 
is FWS-R9-ES-2011-0104. You may enter a comment by clicking on 
``Comment Now!.'' Please ensure that you have found the correct 
document before submitting your comment.
     U.S. mail or hand delivery: Public Comments Processing, 
Attn: Docket No. FWS-R9-ES-2011-0104; Division of Policy and Directives 
Management; U.S. Fish and Wildlife Service; 4401 N. Fairfax Drive, PDM-
2042; Arlington, VA 22203.
    We will post all comments on https://www.regulations.gov. This 
generally means that we will post any personal information you provide 
us (see the Request for Information section below for more 
information).

FOR FURTHER INFORMATION CONTACT: Douglas Krofta, U.S. Fish and Wildlife 
Service, Division of Conservation and Classification, 4401 N Fairfax 
Drive, Suite 420, Arlington, VA, 22203, telephone 703/358-2171; 
facsimile 703/358-1735; or Marta Nammack, National Marine Fisheries 
Service, Office of Protected Resources, 1315 East-West Highway, Silver 
Spring, MD 20910, telephone 301/713-1401; facsimile 301/713-0376. If 
you use a telecommunications device for the deaf (TDD), call the 
Federal Information Relay Service (FIRS) at 800-877-8339.

SUPPLEMENTARY INFORMATION: Today, we publish in the Federal Register 
three related documents that are now open for public comment. We invite 
the public to comment individually on these documents as instructed in 
their preambles. This document is one of the three, of which two are 
proposed rules and one is a draft policy:
     A proposed rule to amend the existing regulations 
governing section 7 consultation under the Endangered Species Act to 
revise the definition of ``destruction or adverse modification'' of 
critical habitat. The current regulatory definition has been 
invalidated by several courts for being inconsistent with the language 
of the Act. This proposed rule would revise title 50 of the Code of 
Federal Regulations (CFR) at part 402. The Regulatory Identifier Number 
(RIN) is 1018-AX88, and the proposed rule may be found on https://www.regulations.gov at Docket No. FWS-R9-ES-2011-0072.
     A proposed rule to amend existing regulations governing 
the designation of critical habitat under section 4 of the Act. A 
number of factors, including litigation and the Services' experience 
over the years in interpreting and applying the statutory definition of 
critical habitat, have highlighted the need to clarify or revise the 
current regulations. This proposed rule would revise 50 CFR part 424. 
It is published under RIN 1018-AX86 and may be found on https://www.regulations.gov at Docket No. FWS-HQ-ES-2012-0096.
     A draft policy pertaining to exclusions from critical 
habitat and how we consider partnerships and conservation plans, 
conservation plans permitted under section 10 of the Act, tribal lands, 
national security and homeland security impacts and military lands, 
Federal lands, and economic impacts in the exclusion process. This 
policy is meant to complement the proposed revisions to 50 CFR part 424 
and to provide for a simplified exclusion process. The policy is 
published under RIN 1018-AX87 and may be found on https://www.regulations.gov at Docket No. FWS-R9-ES-2011-0104.

Background

    The National Marine Fisheries Service (NMFS) and Fish and Wildlife 
Service (FWS) are charged with implementing the Endangered Species Act 
of 1973, as amended (16 U.S.C. 1531 et seq.) (Act), the goal of which 
is to provide a means to conserve the ecosystems upon which listed 
species depend and a program for listed species conservation. Critical 
habitat is one tool in the Act that Congress established to achieve 
species conservation. In section 3(5)(A) of the Act Congress defined 
``critical habitat'' as:
    (i) The specific areas within the geographical area occupied by the 
species, at the time it is listed in accordance with the provisions of 
section 4 of this Act, on which are found those physical or biological 
features (I) essential to the conservation of the species and (II) 
which may require special management considerations or protection; and
    (ii) specific areas outside the geographical area occupied by the 
species at the time it is listed in accordance with the provisions of 
section 4 of this Act, upon a determination by the Secretary that such 
areas are essential for the conservation of the species.
    Specifying the geographic location of critical habitat helps 
facilitate implementation of section 7(a)(1) by identifying areas where 
Federal agencies can focus their conservation programs and utilize 
their authorities to further the purposes of the Act. In addition to 
serving as a notification tool, the designation of critical habitat 
also provides a significant regulatory protection--the requirement that 
Federal agencies consult with the Services under section 7(a)(2) to 
insure their actions are not likely to destroy or adversely modify 
critical habitat.
    Section 4 of the Act requires the Services to designate critical 
habitat and sets out standards and processes for determining critical 
habitat. Congress authorized the Secretaries to ``exclude any area from 
critical habitat if [s]he determines that the benefits of exclusion 
outweigh the benefits of specifying such

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area as part of the critical habitat, unless he determines, based on 
the best scientific and commercial data available, that the failure to 
designate such area as critical habitat will result in the extinction 
of the species concerned'' (section 4(b)(2)).
    Over the years there have been legal challenges to the Services' 
process for considering exclusions. Several court decisions have 
addressed the Services' implementation of section 4(b)(2). In 2008, the 
Solicitor of the Department of the Interior issued a legal opinion on 
implementation of section 4(b)(2) (https://www.doi.gov/solicitor/opinions.html). That opinion is based on the text of the Act and 
principles of statutory interpretation and relevant case law. The 
opinion explained the legal considerations that guide the Secretary's 
exclusion authority and discussed and elaborated on the application of 
these considerations to the circumstances commonly faced by the 
Services (e.g., habitat conservation plans, Tribal lands).
    To provide predictability and transparency regarding how the 
Services consider exclusions under section 4(b)(2), the Services are 
announcing a draft policy on several issues that frequently arise in 
the context of exclusions. The draft policy on implementation of 
specific aspects of section 4(b)(2) does not cover the entire range of 
factors that may be considered as the basis for an exclusion in any 
given designation, nor does it serve as a comprehensive interpretation 
of all the provisions of section 4(b)(2).
    This draft policy, when finalized, will set forth the Services' 
position regarding how we consider partnerships and conservation plans, 
conservation plans permitted under section 10 of the Act, tribal lands, 
national security and homeland security impacts and military lands, 
Federal lands, and economic impacts in the exclusion process. The 
Services intend to apply this policy when considering exclusions from 
critical habitat. That being said, under the terms of the policy as 
proposed, the Services retain a great deal of discretion in making 
decisions with respect to exclusions from critical habitat.

Implementation of Section 4(b)(2) of the Act

    On August 24, 2012 (77 FR 51503) the Services published a proposed 
rule to revise 50 CFR 424.19. In that rule the Services proposed to 
elaborate on the process and standards for implementing section 4(b)(2) 
of the Act. The final rule was published on August 28, 2013 (78 FR 
53058). This draft policy is meant to complement those revisions to 50 
CFR 424.19 and provides further clarification as to how we will 
implement section 4(b)(2) when designating critical habitat.
    Section 4(b)(2) of the Act provides that:

    The Secretary shall designate critical habitat, and make 
revisions thereto, under subsection (a)(3) on the basis of the best 
scientific data available and after taking into consideration the 
economic impact, the impact on national security, and any other 
relevant impact, of specifying any particular area as critical 
habitat. The Secretary may exclude any area from critical habitat if 
he determines that the benefits of such exclusion outweigh the 
benefits of specifying such area as part of the critical habitat, 
unless he determines, based on the best scientific and commercial 
data available, that the failure to designate such area as critical 
habitat will result in the extinction of the species concerned.

    In 1982, Congress added this provision to the Act, both to require 
the Services to consider the broader impacts of designation of critical 
habitat and to provide a means for the Services to ameliorate 
potentially negative impacts of designation by excluding, in 
appropriate circumstances, particular areas from a designation. The 
first sentence of section 4(b)(2) sets out a mandatory requirement that 
the Services consider the economic impact, impact on national security, 
and any other relevant impacts prior to designating an area as part of 
a critical habitat designation. The Services will always consider such 
impacts, as required under this sentence, for each and every 
designation of critical habitat. Although the term ``homeland 
security'' was not in common usage in 1982, the Services acknowledge 
that homeland security is fairly embodied within the mandatory 
requirement that the Services consider impacts on national security 
within the intent and meaning of section 4(b)(2).
    The second sentence of section 4(b)(2) outlines a separate, 
discretionary process by which the Secretaries may elect to go further 
in order to determine whether to exclude such an area from the 
designation, by performing an exclusion analysis. The Services use 
their compliance with the first sentence of section 4(b)(2), their 
consideration of whether to engage in the discretionary exclusion 
analysis under the second sentence of section 4(b)(2), and any 
exclusion analysis that the Services undertake, as the primary basis 
for satisfying the provisions of Executive Orders 12866 and 13563. E.O. 
12866 (and incorporated by E.O. 13563) requires agencies to assess the 
costs and benefits of a rule, and, to the extent permitted by law, to 
propose or adopt the rule only upon a reasoned determination that the 
benefits of the intended regulation justify the costs.
    Conducting an exclusion analysis under section 4(b)(2) involves 
balancing or weighing the benefits of excluding a specific area from a 
designation of critical habitat against the benefits of including that 
area in the designation. If the benefits of exclusion outweigh the 
benefits of inclusion, the Secretaries may exclude the specific area so 
long as an explicit determination is made that an exclusion of the 
specific area would not result in the extinction of the species 
concerned. The discretionary 4(b)(2) exclusion analysis is fully 
consistent with the E.O. requirements in that it permits excluding an 
area where the benefits of exclusion outweigh the benefits of 
inclusion, and not excluding an area when the benefits of exclusion do 
not outweigh the benefits of inclusion. This draft policy sets forth 
specific categories of information that we often consider when we enter 
into the discretionary 4(b)(2) exclusion analysis and exercise the 
Secretaries' discretion to exclude areas from critical habitat. We do 
not intend to cover in these examples all the categories of information 
that may be relevant, or to limit the Secretaries' discretion under 
this section to weight the benefits as appropriate.
    Moreover, revisions to 50 CFR 424.19 further explain how the 
Services clarify the exclusion process for critical habitat and address 
statutory changes and case law. The revisions to 50 CFR 424.19 state 
that the Secretaries have the discretion to exclude any particular area 
from the critical habitat upon a determination that the benefits of 
such exclusion outweigh the benefits of specifying the particular area 
as part of the critical habitat. Furthermore, the Secretaries may 
consider any relevant benefits, and the weight and consideration given 
to those benefits is within the discretion of the Secretaries. The 
revisions to 50 CFR 424.19 provide the framework for how the Services 
intend to implement section 4(b)(2) of the Act. This draft policy 
further details the discretion available to the Services (acting for 
the Secretaries) and provides detailed examples of how we consider 
partnerships and conservation plans, conservation plans permitted under 
section 10 of the Act, tribal lands, national security and homeland 
security impacts and military lands, Federal lands, and economic 
impacts in the exclusion process when we undertake a discretionary 
exclusion analysis.
a. The Services' Discretion
    The Act affords a great degree of discretion to the Services in

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implementing section 4(b)(2). This discretion is applicable to a number 
of aspects of section 4(b)(2). Most significant is that the decision to 
exclude is always completely discretionary, as the Act states that the 
Secretaries ``may'' exclude areas. In no circumstance is exclusion 
required under the second sentence of section 4(b)(2).
    It is the general practice of the Services to exercise this 
discretion to exclude an area when the benefits of exclusion outweigh 
the benefits of inclusion, and not exclude an area when the benefits of 
exclusion do not outweigh the benefits of inclusion. In articulating 
this general practice, the Services do not intend to limit in any 
manner the discretion afforded to the Secretaries by the statute.
b. Private or Other Non-Federal Conservation Plans and Partnerships, in 
General
    We sometimes exclude specific areas from critical habitat 
designations in part based on the existence of private or other non-
Federal conservation plans or partnerships. A conservation plan 
describes actions that minimize and/or mitigate impacts to species and 
their habitats. Conservation plans can be developed by private entities 
with no Service involvement, or in partnership with the Services. In 
the case of a habitat conservation plan (HCP), safe harbor agreement 
(SHA), or a candidate conservation agreement with assurances (CCAA), a 
plan or agreement is developed in partnership with the Services for the 
purposes of attaining a permit under section 10 of the Act. See 
paragraph C, below, for a discussion of HCPs, SHAs, and CCAAs.
    In determining how the benefits of exclusion and the benefits of 
inclusion are affected by the existence of private or other non-Federal 
conservation plans and partnerships, when we undertake a discretionary 
exclusion analysis, we evaluate a variety of factors. These factors 
include:
    (i) The degree to which the record supports a conclusion that a 
critical habitat designation would impair the realization of benefits 
expected from the plan, agreement, or partnership;
    (ii) The extent of public participation in the development of the 
conservation plan;
    (iii) The degree to which there has been agency review and required 
determinations;
    (iv) Whether National Environmental Policy Act (NEPA) compliance 
was required;
    (v) The demonstrated implementation and success of the chosen 
mechanism;
    (vi) The degree to which the plan or agreement provides for the 
conservation of the essential physical or biological features for the 
species;
    (vii) Whether there is a reasonable expectation that the 
conservation management strategies and actions contained in a 
management plan or agreement will be implemented; and
    (viii) Whether the plan or agreement contains a monitoring program 
and adaptive management to ensure that the conservation measures are 
effective and can be modified in the future in response to new 
information.
    Whether a plan or agreement has previously been subject to public 
comment, agency review, and NEPA compliance processes are factors that 
may indicate the degree of critical analysis the plan or agreement has 
already received. These factors influence the Services' determination 
of the appropriate weight that should be given in any particular case.
    Achieving the conservation benefits of a particular existing plan 
is usually not a benefit of exclusion, because we expect such plans to 
be implemented and, therefore, those conservation benefits are expected 
to occur, regardless of inclusion or exclusion of the covered areas in 
critical habitat. Instead, the benefit of excluding from critical 
habitat a specific area covered by an existing plan is typically the 
maintenance of an existing partnership or the potential for creation of 
new conservation partnerships with the plan's signatories or other 
parties. On the other hand, the conservation benefits of a particular 
existing plan, agreement, or partnership may serve to reduce the 
benefits of including in critical habitat a specific area that is 
covered by an existing plan. The benefits of inclusion in critical 
habitat include that amount of conservation of the species habitat 
provided by the designation of critical habitat above the baseline 
(i.e., above the conservation benefits from listing of the species or 
other measures not dependent on this designation of critical habitat). 
Where there is an existing plan, that plan (and the conservation 
benefits it provides) may appropriately be included in the baseline. 
Therefore, to the extent the plan provides some protection for the 
species' habitat that would to some degree be duplicated by designating 
the area at issue as critical habitat, the benefits of inclusion of 
that area covered by the plan are reduced.
c. Private or Other Non-Federal Conservation Plans Related to Permits 
Under Section 10 of the Act
    Habitat conservation plans (HCPs) for incidental take permits under 
section 10(a)(1)(B) of the Act provide for partnerships with non-
Federal entities to minimize and mitigate impacts to listed species and 
their habitat. In most cases HCP permittees agree to do more for the 
conservation of the species and their habitats on private lands than 
designation of critical habitat would provide alone. We place great 
value on the partnerships that are developed during the preparation and 
implementation of HCPs.
    Candidate conservation agreements with assurances (CCAAs) and safe 
harbor agreements (SHAs) are voluntary agreements designed to conserve 
candidate and listed species, respectively, on non-Federal lands. In 
exchange for actions that contribute to the conservation of species on 
non-Federal lands, participating property owners are covered by an 
enhancement of survival permit under section 10(a)(1)(A) of the Act, 
which authorizes incidental take of the covered species that may result 
from implementation of conservation actions, specific land uses, and 
return to baseline under the agreements. The Services also provide 
enrollees assurances that we will not impose further land-, water-, or 
resource-use restrictions or additional commitments of land, water, or 
finances beyond those agreed to in the agreements.
    When we undertake a discretionary exclusion analysis, we will 
always consider areas covered by an approved CCAA/SHA/HCP, and 
generally exclude such areas from a designation of critical habitat if 
three conditions are met:
    (1) The permittee is properly implementing the CCAA/SHA/HCP and is 
expected to continue to do so for the term of the agreement. A CCAA/
SHA/HCP is properly implemented if the permittee is and has been fully 
implementing the commitments and provisions in the CCAA/SHA/HCP, 
Implementing Agreement, and permit.
    (2) The species for which critical habitat is being designated is a 
covered species in the CCAA/SHA/HCP, or very similar in its habitat 
requirements to a covered species. The recognition that the Services 
extend to such an agreement depends on the degree to which the 
conservation measures undertaken in the CCAA/SHA/HCP would also protect 
the habitat features of the similar species.
    (3) The CCAA/SHA/HCP specifically addresses that species' habitat 
(and does

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not just provide guidelines) and meets the conservation needs of the 
species in the planning area.

We will undertake a case-by-case analysis to determine whether these 
conditions are met and, as with other conservation plans, whether the 
benefits of exclusion outweigh the benefits of inclusion.
    The benefits of excluding lands with CCAAs, SHAs, or properly 
implemented HCPs that have been permitted under section 10 of the Act 
from critical habitat designation include relieving landowners, 
communities, and counties of any potential additional regulatory burden 
that might be imposed as a result of the critical habitat designation. 
A related benefit of exclusion is the unhindered, continued ability to 
maintain existing partnerships and seek new partnerships with potential 
plan participants, including States, counties, local jurisdictions, 
conservation organizations, and private landowners. Together, these 
entities can implement conservation actions that the Services would be 
unable to accomplish without private landowners. These partnerships can 
lead to additional CCAAs, SHAs, and HCPs. This is particularly 
important because HCPs often cover a wide range of species, including 
listed plant species (for which there is no general take prohibition 
under section 9 of the Act) and species that are not state or federally 
listed (which do not receive the Act's protections). Neither of these 
categories of species may receive much protection from development in 
the absence of HCPs.
    As is the case with conservation plans generally, the protection 
that a CCAA, SHA, or HCP provides to habitat can reduce the benefits of 
including the area covered by a CCAA, SHA, or HCP in the designation. 
With specific regard to HCPs, because the Services generally approve 
HCPs on the basis of their efficacy to minimize and mitigate impacts to 
listed species and their habitat, these plans tend to be very effective 
at reducing those benefits of inclusion. Nonetheless, HCPs often are 
written with the understanding that some of the covered area will be 
developed, and the associated permit provides authorization of 
incidental take caused by that development (although a properly 
designed HCP will tend to steer development toward the least 
biologically important habitat). Thus, designation of the areas 
specified for development that meet the definition of ``critical 
habitat'' may still conceivably provide a conservation benefit to the 
species. In addition, if activities not covered by the HCP are 
affecting or may affect an area that is identified as critical habitat, 
then the benefits of inclusion of that specific area may be relatively 
high because additional conservation benefits may be realized by the 
designation of critical habitat in that area. In any case, the Services 
will weigh whatever benefits of inclusion there are against the 
benefits of exclusion (usually the fostering of partnerships that may 
result in future conservation actions).
    For CCAAs, SHAs, and HCPs that are still under development, when we 
undertake a discretionary exclusion analysis, we generally will not 
exclude those areas from a designation of critical habitat. If a CCAA, 
SHA, or HCP is close to being approved, we will evaluate these draft 
plans under the framework of general plans and partnerships (subsection 
b, above). In other words, we will consider factors such as 
partnerships that have been developed during the preparation of draft 
CCAAs, SHAs, and HCPs and broad public benefits such as encouraging the 
continuation of current and development of future conservation efforts 
with non-Federal partners, and consider these factors as possible 
benefits of exclusion. However, promises of future conservation actions 
in draft CCAAs, SHAs, and HCPs will be given little weight in the 
discretionary exclusion analysis, even if they may directly benefit the 
species for which a critical habitat designation is proposed.
d. Tribal Lands
    There are several Executive Orders, Secretarial Orders, and 
policies that relate to working with tribes. These guidance documents 
generally confirm our trust responsibilities to Tribes, recognize that 
Tribes have sovereign authority to control Tribal lands, emphasize the 
importance of developing partnerships with Tribal governments, and 
direct the Services to consult with Tribes on a government-to-
government basis.
    A joint Secretarial Order that applies to both FWS and NMFS, 
Secretarial Order 3206, American Indian Tribal Rights, Federal-Tribal 
Trust Responsibilities, and the Endangered Species Act (June 5, 1997) 
(S.O. 3206), is the most comprehensive of the various guidance 
documents related to Tribal relationships and ESA implementation, and 
it provides the most detail directly relevant to the designation of 
critical habitat. In addition to the general direction discussed above, 
S.O. 3206 explicitly recognizes the right of Tribes to participate 
fully in the listing process, including designation of critical 
habitat. The Order also states: ``Critical habitat shall not be 
designated in such areas unless it is determined essential to conserve 
a listed species. In designating critical habitat, the Services shall 
evaluate and document the extent to which the conservation needs of the 
listed species can be achieved by limiting the designation to other 
lands.'' In light of this instruction, when we undertake a 
discretionary exclusion analysis we will always consider exclusions of 
Tribal lands under section 4(b)(2) of the Act prior to finalizing a 
designation of critical habitat and will give great weight to Tribal 
concerns in analyzing the benefits of exclusion.
    However, S.O. 3206 does not preclude us from designating Tribal 
lands or waters as critical habitat nor does it state that Tribal lands 
or waters cannot meet the Act's definition of ``critical habitat.'' We 
are directed by the Act to identify areas that meet the definition of 
``critical habitat,'' (i.e., occupied lands that contain the essential 
physical or biological features that may require special management or 
protection and identification of unoccupied areas that are essential to 
the conservation of a species) without regard to landownership. While 
S.O. 3206 provides important direction, it expressly states that it 
does not modify the Departments' statutory authority.
e. Impacts on National Security and Homeland Security
    Section 4(a)(3)(B)(i) of the Act (16 U.S.C. 1533(a)(3)(B)(i)), as 
revised in 2003 provides: ``The Secretary shall not designate as 
critical habitat any lands or other geographical areas owned or 
controlled by the Department of Defense [DoD], or designated for its 
use, that are subject to an integrated natural resources management 
plan prepared under section 101 of the Sikes Act Improvement Act of 
1997 (Sikes Act) (16 U.S.C. 670a), if the Secretary determines in 
writing that such plan provides a benefit to the species for which 
critical habitat is proposed for designation.'' In other words, as 
articulated in the proposed rule revising 50 CFR 424.12(h) published 
elsewhere in today's edition of the Federal Register, if the Services 
conclude that an INRMP ``provides a benefit'' to the species, the area 
covered is ineligible for designation. Thus that area cannot be 
designated as critical habitat.
    Section 4(a)(3)(B)(i) of the Act, however, may not cover all DoD 
lands or areas that pose potential national security concerns (e.g., a 
DoD installation that is in the process of revising its integrated 
natural resources management plan). If a particular area is

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not covered under section 4(a)(3)(B)(i), national security or homeland-
security concerns are not a factor in the process of determining what 
areas meet the definition of ``critical habitat.'' Nevertheless, when 
designating critical habitat under section 4(b)(2), the Secretaries 
must consider impacts on national security, including homeland 
security, on DoD lands or areas ineligible for consideration under 
section 4(a)(3)(B)(i). Accordingly, we will always consider for 
exclusion from the designation areas for which DoD, DHS, or another 
Federal agency has requested exclusion based on an assertion of 
national security or homeland-security concerns.
    We cannot, however, automatically exclude requested areas. When 
DoD, DHS, or another Federal agency requests exclusion from critical 
habitat on the basis of national-security or homeland-security impacts, 
it must provide a specific justification. Such justification could 
include demonstration of probable impacts, such as impacts to ongoing 
border security patrols and surveillance activities, or a delay in 
training or facility construction, as a result of compliance with 
section 7(a)(2) of the Act. If the agency requesting the exclusion does 
not provide us with a specific justification, we will contact the 
agency to recommend that it provide a specific justification. If the 
agency provides a specific justification, we will defer to the expert 
judgment of DoD, DHS, or another Federal agency as to: (1) Whether 
activities on its lands or waters, or its activities on other lands or 
waters, have national-security or homeland-security implications; and 
(2) the importance of those implications. In that circumstance, in 
conducting a discretionary exclusion analysis, we will give great 
weight to national-security and homeland security concerns in analyzing 
the benefits of exclusion.
f. Federal Lands
    We recognize that we have obligations to consider the impacts of 
designation of critical habitat on Federal lands under the first 
sentence of section 4(b)(2) and under E.O. 12866. However, as mentioned 
above, the Services have broad discretion under the second sentence of 
4(b)(2) on how to weigh those impacts. In particular, ``[t]he 
consideration and weight given to any particular impact is completely 
within the Secretary's discretion.'' H.R. Rep. No. 95-1625, at 17 
(1978). In considering how to exercise this broad discretion, we are 
mindful that Federal land managers have unique obligations under the 
Act. First, Congress declared that it was its policy that ``all Federal 
departments and agencies shall seek to conserve endangered species and 
threatened species and shall utilize their authorities in furtherance 
of the purposes of this Act.'' Section 2(c)(1). Second, all Federal 
agencies have responsibilities under section 7 of the Act to carry out 
programs for the conservation of listed species and to ensure their 
actions are not likely to jeopardize the continued existence of listed 
species or result in the destruction or adverse modification of 
critical habitat.
    We also note that, while the benefits of excluding non-Federal 
lands include development of new conservation partnerships and 
fostering existing partnerships, those benefits do not generally arise 
with respect to Federal lands, because of the independent obligations 
of Federal agencies under section 7 of the Act. Conversely, the 
benefits of including Federal lands in a designation are greater than 
non-Federal lands because there is a Federal nexus for any project on 
Federal lands that may affect critical habitat, so section 7 
consultation would be triggered and an analysis under the destruction 
and adverse-modification standard would always be conducted.
    Under the Act, the only direct consequence of critical habitat 
designation is to require Federal agencies to ensure, through section 7 
consultation, that any action they fund, authorize, or carry out does 
not destroy or adversely modify designated critical habitat. The costs 
that this requirement may impose on Federal agencies can be divided 
into two types: The additional administrative or transactional costs 
associated with the consultation process, and the costs to Federal 
agencies and other affected parties, including applicants for Federal 
permits, of any project modifications necessary to avoid adverse 
impacts to critical habitat. Consistent with the unique obligations 
that Congress created for Federal agencies in conserving endangered and 
threatened species, we generally will not consider avoiding the 
administrative or transactional costs associated with the section 7 
consultation process to be a ``benefit'' of excluding a particular area 
from a critical habitat designation in any discretionary exclusion 
analysis. We will, however, consider the extent to which such 
consultation would produce an outcome that has economic or other 
impacts, such as by requiring project modifications and additional 
conservation measures by the Federal agency or other affected parties.
    Lands owned by the Federal government should be prioritized as 
sources of support in the recovery of listed species. To the extent 
possible, we will focus designation of critical habitat on Federal 
lands in an effort to avoid the real or perceived regulatory burdens on 
non-Federal lands. We do greatly value the partnership of other Federal 
agencies in the conservation of listed and non-listed species. However, 
for the reasons listed above, we will focus our exclusions on non-
Federal lands. Circumstances where we determine that the benefits of 
excluding Federal lands outweigh the benefits of not doing so are most 
likely when national security or homeland-security concerns are 
present.
g. Economic Impacts
    The first sentence of section 4(b)(2) of the ESA requires the 
Services to consider the economic impacts (as well as the impacts on 
national security and any other relevant impacts) of designating 
critical habitat. In addition, economic impacts may for some particular 
areas play an important role in the discretionary exclusion analysis 
under the second sentence of section 4(b)(2). In both contexts, the 
Services will consider the probable incremental economic impacts of the 
designation. When the Services undertake a discretionary exclusion 
analysis with respect to a particular area, they will weigh the 
economic benefits of exclusion (and any other benefits of exclusion) 
against any benefits of inclusion (primarily the conservation value of 
designating the area). The conservation value may be influenced by the 
level of effort needed to manage degraded habitat to the point where it 
could support the listed species. The Services will use their 
discretion in determining how to weigh probable incremental economic 
impacts against conservation value. It is the nature of the probable 
incremental economic impacts, not necessarily a particular threshold 
level, that triggers considerations of exclusions based on probable 
incremental economic impacts. For example, if an economic analysis 
indicates high probable incremental impacts in a proposed critical 
habitat unit of low conservation value (relative to the remainder of 
the designation), the Services may consider exclusion of that 
particular unit.

Draft Policy on Implementation of Section 4(b)(2) of the Act

    1. The decision to exclude any specific area from a designation of 
critical habitat is always discretionary, as the Act states that the 
Secretaries

[[Page 27057]]

``may''' exclude any area. In no circumstances is an exclusion of any 
specific area required by the Act.
    2. When we undertake a discretionary exclusion analysis, we will 
evaluate the effect of conservation plans and partnerships on the 
benefits of inclusion and the benefits of exclusion of any particular 
area from critical habitat by considering a number of factors 
including:
    a. The degree to which the record supports a conclusion that a 
critical habitat designation would impair the realization of benefits 
expected from the plan, agreement, or partnership.
    b. The extent of public participation in the development of the 
conservation plan.
    c. The degree to which there has been agency review and required 
determinations.
    d. Whether National Environmental Policy Act (NEPA) compliance was 
required.
    e. The demonstrated implementation and success of the chosen 
mechanism.
    f. The degree to which the plan or agreement provides for the 
conservation of the essential physical or biological features for the 
species.
    g. Whether there is a reasonable expectation that the conservation 
management strategies and actions contained in the management plan or 
agreement will be implemented.
    h. Whether the plan or agreement contains a monitoring program and 
adaptive management to ensure that the conservation measures are 
effective and can be modified in the future in response to new 
information.
    3. When we undertake a discretionary exclusion analysis, we will 
always consider areas covered by a permitted CCAA, SHA, or HCP, and 
generally exclude such areas from a designation of critical habitat if 
incidental take caused by the activities in those areas is covered by a 
permit under section 10 of the Act and the CCAA/SHA/HCP meets the 
following conditions:
    a. The permittee is properly implementing the CCAA/SHA/HCP and is 
expected to continue to do so for the term of the agreement. A CCAA/
SHA/HCP is properly implemented if the permittee is and has been fully 
implementing the commitments and provisions in the HCP, Implementing 
Agreement, and permit.
    b. The species for which critical habitat is being designated is a 
covered species in the CCAA/SHA/HCP, or very similar in its habitat 
requirements to a covered species. The recognition that the Services 
extend to such an agreement depends on the degree to which the 
conservation measures undertaken in the CCAA/SHA/HCP would also protect 
the habitat features of the similar species.
    c. The CCAA/SHA/HCP specifically addresses that species' habitat 
(not just providing guidelines) and meets the conservation needs of the 
species in the planning area.

We generally will not rely on CCAAs/SHAs/HCPs that are still under 
development as the basis of exclusion from a designation of critical 
habitat.
    4. When we undertake a discretionary exclusion analysis, we will 
always consider exclusion of Tribal lands, and give great weight to 
Tribal concerns in analyzing the benefits of exclusion. However, Tribal 
concerns are not a factor in determining what areas, in the first 
instance, meet the definition of ``critical habitat.''
    5. When we undertake a discretionary exclusion analysis, we will 
always consider exclusion of areas for which a Federal agency has 
requested exclusion based on an assertion of national-security or 
homeland-security concerns, and give great weight to national-security 
or homeland-security concerns in analyzing the benefits of exclusion. 
National-security and or homeland-security concerns are not a factor, 
however, in the process of determining what areas, in the first 
instance, meet the definition of ``critical habitat.''
    6. Except in the circumstances described in 5 above, we will focus 
our exclusions on non-Federal lands. Because all actions on Federal 
lands are subject to the requirements of Section 7(a)(2) of the Act, 
the benefits of designating Federal lands as critical habitat are 
always present and are typically greater than the benefits of not 
designating Federal lands or of designating other lands.
    7. When the Services are determining whether to undertake a 
discretionary exclusion analysis as a result of the probable 
incremental economic impacts of designating a particular area, it is 
the nature of those impacts, not necessarily a particular threshold 
level, that is relevant to the Services' determination.
    8. For any area to be excluded, we must find that the benefits of 
excluding that area outweigh the benefits of including that area in the 
designation. We must not exclude an area if the failure to designate it 
will result in the extinction of the species.

Request for Information

    We intend that a final policy will consider information and 
recommendations from all interested parties. We, therefore, solicit 
comments, information, and recommendations from governmental agencies, 
Indian Tribes, the scientific community, industry groups, environmental 
interest groups, and any other interested parties. All comments and 
materials received by the date listed above in DATES will be considered 
prior to the approval of a final document.
    If you submit information via https://www.regulations.gov, your 
entire submission--including any personal identifying information--will 
be posted on the Web site. If your submission is made via a hardcopy 
that includes personal identifying information, you may request at the 
top of your document that we withhold this information from public 
review. However, we cannot guarantee that we will be able to do so. We 
will post all hardcopy submissions on https://www.regulations.gov.
    We seek comments and recommendations in particular on:
    1. Whether this policy sets out clearly defined expectations 
regarding critical habitat and the exclusion process. If not, please 
provide detailed comments so we can clarify our draft policy.
    2. Whether this draft policy provides enough or too little detail 
regarding how the Services will consider and conduct the discretionary 
4(b)(2) exclusion analysis for each of the categories described in this 
draft policy.
    3. Whether, in general, there may be other factors or 
considerations that we should evaluate when considering exclusions from 
critical habitat.
    4. Regarding consideration of conservation plans and partnerships, 
whether our draft policy appropriately characterizes the importance of 
partnerships relative to the conservation benefits of a plan or 
partnership.
    5. Regarding habitat conservation plans (HCPs), whether our draft 
policy works for large-scale regional plans as well as smaller project-
specific plans
    6. Relative to our consideration for Tribal lands, whether our 
draft policy provides clearly defined expectations and appropriate 
consideration of Tribal sovereignty. If not, please describe in detail 
how we could improve this consideration.
    7. Whether our consideration of impacts to national security and 
homeland security accurately captures our responsibilities under the 
Act and the Sikes Act (16 U.S.C. 670a).

Required Determinations

    As mentioned above, we intend to apply this policy, when finalized, 
in considering exclusions from critical habitat designations. The 
general policy reserves much discretion that will be applied by the 
agencies in particular designations, and in each we are required to 
comply with various

[[Page 27058]]

Executive Orders and statutes for those individual rulemakings. Below 
we discuss compliance with several Executive Orders and statutes as 
they pertain to this draft policy.

Regulatory Planning and Review (Executive Orders 12866 and 13563)

    Executive Order 12866 provides that the Office of Information and 
Regulatory Affairs (OIRA) in the Office of Management and Budget will 
review all significant rules. OIRA has determined that this is a 
significant rule.
    Executive Order 13563 reaffirms the principles of E.O. 12866 while 
calling for improvements in the nation's regulatory system to promote 
predictability, to reduce uncertainty, and to use the best, most 
innovative, and least burdensome tools for achieving regulatory ends. 
The executive order directs agencies to consider regulatory approaches 
that reduce burdens and maintain flexibility and freedom of choice for 
the public where these approaches are relevant, feasible, and 
consistent with regulatory objectives. E.O. 13563 emphasizes further 
that our regulatory system must be based on the best available science 
and that the rulemaking process must allow for public participation and 
an open exchange of ideas. We have developed this policy in a manner 
consistent with these requirements.

Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.)

    In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501 
et seq.):
    (a) We find this draft policy would not ``significantly or 
uniquely'' affect small governments. We have determined and certify 
pursuant to the Unfunded Mandates Reform Act, 2 U.S.C. 1502, that this 
policy would not impose a cost of $100 million or more in any given 
year on local or State governments or private entities. Small 
governments would not be affected because the draft policy would not 
place additional requirements on any city, county, or other local 
municipalities.
    (b) This draft policy would not produce a Federal mandate on State, 
local, or Tribal governments or the private sector of $100 million or 
greater in any year; that is, it is not a ``significant regulatory 
action''' under the Unfunded Mandates Reform Act. This policy would 
impose no obligations on State, local, or tribal governments because 
this draft policy is meant to complement the amendments to 50 CFR 
424.19, and is intended to clarify expectations regarding critical 
habitat and provide for a credible, predictable, and simplified 
critical-habitat-exclusion process. The only entities directly affected 
by this draft policy are the FWS and NMFS. As such, a Small Government 
Agency Plan is not required.

Takings--Executive Order 12630

    In accordance with Executive Order 12630, this draft policy would 
not have significant takings implications. This draft policy would not 
pertain to ``taking'' of private property interests, nor would it 
directly affect private property. A takings implication assessment is 
not required because this draft policy (1) would not effectively compel 
a property owner to suffer a physical invasion of property and (2) 
would not deny all economically beneficial or productive use of the 
land or aquatic resources. This draft policy would substantially 
advance a legitimate government interest (clarify expectations 
regarding critical habitat and provide for a credible, predictable, and 
simplified critical-habitat-exclusion process) and would not present a 
barrier to all reasonable and expected beneficial use of private 
property.

Federalism--Executive Order 13132

    In accordance with Executive Order 13132 (Federalism), this draft 
policy does not have significant Federalism effects and a Federalism 
assessment is not required. This draft policy pertains only to 
exclusions from designations of critical habitat under section 4 of the 
Act, and would not have substantial direct effects on the States, on 
the relationship between the Federal Government and the States, or on 
the distribution of power and responsibilities among the various levels 
of government.

Civil Justice Reform--Executive Order 12988

    In accordance with Executive Order 12988 (Civil Justice Reform), 
this draft policy would not unduly burden the judicial system and meets 
the requirements of sections 3(a) and 3(b)(2) of the Order. The 
clarification of expectations regarding critical habitat and providing 
a credible, predictable, and simplified critical-habitat-exclusion 
process will make it easier for the public to understand our critical-
habitat-designation process, and thus should not significantly affect 
or burden the judicial system.

Paperwork Reduction Act of 1995

    This draft policy does not contain any new collections of 
information that require approval by OMB under the Paperwork Reduction 
Act (44 U.S.C. 3501 et seq.). This draft policy will not impose 
recordkeeping or reporting requirements on State or local governments, 
individuals, businesses, or organizations. An agency may not conduct or 
sponsor, and a person is not required to respond to, a collection of 
information unless it displays a currently valid OMB control number.

National Environmental Policy Act (NEPA)

    We are analyzing this draft policy in accordance with the criteria 
of the National Environmental Policy Act (NEPA), the Department of the 
Interior regulations on Implementation of the National Environmental 
Policy Act (43 CFR 46.10-46.450), the Department of the Interior Manual 
(516 DM 1-6 and 8), and National Oceanic and Atmospheric Administration 
(NOAA) Administrative Order 216-6. We invite the public to comment on 
the extent to which any of these proposed regulations may have a 
significant impact on the human environment, or fall within one of the 
categorical exclusions for actions that have no individual or 
cumulative effect on the quality of the human environment. We will 
complete our analysis, in compliance with NEPA, before finalizing this 
draft policy.

Government-to-Government Relationship With Tribes

    In accordance with the President's memorandum of April 29, 1994, 
``Government-to-Government Relations with Native American Tribal 
Governments'' (59 FR 22951), Executive Order 13175 ``Consultation and 
Coordination with Indian Tribal Governments,'' and the Department of 
the Interior Manual at 512 DM 2, and the Department of Commerce 
American Indian and Alaska Native Policy (March 30, 1995), we have 
considered possible effects on federally recognized Indian tribes and 
have preliminarily determined that there are no potential adverse 
effects of issuing this draft policy. Our intent with this draft policy 
is to provide a consistent approach to the consideration of exclusion 
of areas from critical habitat, including Tribal lands. This draft 
policy does not establish a new irection, but does establish a 
consistent approach and direction for the Services. We will continue to 
work with Tribes as we finalize this draft policy and promulgate 
individual critical habitat designations.

Energy Supply, Distribution, or Use

    Executive Order 13211 (Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use) requires 
agencies

[[Page 27059]]

to prepare Statements of Energy Effects when undertaking certain 
actions. This draft policy, if made final, is not expected to 
significantly affect energy supplies, distribution, or use. Therefore, 
this action is not a significant energy action and no Statement of 
Energy Effects is required.

Clarity of This Draft Policy

    We are required by Executive Orders 12866 and 12988 and by the 
Presidential Memorandum of June 1, 1998, to write all rules in plain 
language. This means that each rule or policy we publish must:
    a. Be logically organized;
    b. Use the active voice to address readers directly;
    c. Use clear language rather than jargon;
    d. Be divided into short sections and sentences; and
    e. Use lists and tables wherever possible.
    If you feel that we have not met these requirements, send us 
comments by one of the methods listed in ADDRESSES. To better help us 
revise this draft policy, your comments should be as specific as 
possible. For example, you should tell us the numbers of the sections 
or paragraphs that are unclearly written, which sections or sentences 
are too long, the sections where you feel lists or tables would be 
useful, etc.

Authors

    The primary authors of this draft policy are the staff members of 
the Endangered Species Program, U.S. Fish and Wildlife Service, 4401 N. 
Fairfax Drive, Arlington, VA 22203, and the National Marine Fisheries 
Service's Endangered Species Division, 1335 East-West Highway, Silver 
Spring, MD 20910.

Authority

    The authority for this action is the Endangered Species Act of 
1973, as amended (16 U.S.C. 1531 et seq.).

    Dated: April 28, 2014.
 Rachel Jacobson,
Principal Deputy Assistant Secretary for Fish and Wildlife and Parks.
    Dated: April 28, 2014.
Samuel D. Rauch III,
Deputy Assistant Administrator for Regulatory Programs, National Marine 
Fisheries Service.
[FR Doc. 2014-10502 Filed 5-9-14; 8:45 am]
BILLING CODE 4310-55-P; 3510-22-P