Endangered and Threatened Wildlife and Plants; Endangered Species Act Compensatory Mitigation Policy, 95316-95349 [2016-30929]

Download as PDF 95316 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices Background both the public and private sectors to work with us to conserve species and the ecosystems on which they depend. This collaborative effort includes conservation of endangered and threatened (listed) species and their designated critical habitat protected under the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531 et seq.), and other species proposed for listing or at-risk of being listed. The purposes of the ESA are to provide a means whereby the ecosystems upon which listed species depend may be conserved, and to provide a program for the conservation of such species. The Service and National Oceanic and Atmospheric Administration’s National Marine Fisheries Service share responsibilities for administering the ESA. However, this policy only applies to the Service and species under our jurisdiction. This policy is the first comprehensive treatment of compensatory mitigation under authority of the ESA to be issued by the Service. Both the 1995 interagency policy on the establishment and operation of wetland mitigation banks (60 FR 58605, November 28, 1995) and the 2000 interagency policy on the use of in-lieu fee arrangements (65 FR 66914, November 7, 2000) are specific to wetland mitigation, but provide guidance that is generally applicable to conservation banking and in-lieu fee programs for species associated with wetlands or uplands. These interagency policies were superseded by the Environmental Protection Agency—U.S. Army Corps of Engineers 2008 Compensatory Mitigation Rule for Losses of Aquatic Resources (73 FR 19594, April 10, 2008). In 2003, the Service issued guidance on the establishment, use, and operation of conservation banks (68 FR 24753, May 8, 2003). In 2008, we issued recovery crediting guidance (73 FR 44761, July 31, 2008). This ESA Compensatory Mitigation Policy clarifies Service expectations regarding all compensatory mitigation mechanisms recommended or supported by the Service when implementing the ESA, including, but not limited to, conservation banks, inlieu fee programs, habitat credit exchanges, and permittee-responsible mitigation. The mission of the U.S. Fish and Wildlife Service (Service or USFWS) is working with others to conserve, protect, and enhance fish, wildlife, and plants and their habitats for the continuing benefit of the American people. As part of our mission, we continually seek opportunities to engage Purpose and Importance of the Policy The primary intent of the policy is to provide Service personnel with direction and guidance in the planning and implementation of compensatory mitigation, primarily through encouraging strategic planning at the landscape level and setting standards DEPARTMENT OF THE INTERIOR Fish and Wildlife Service [Docket No. FWS–HQ–ES–2015–0165; FXES11140900000– 178nmdash;FF09E33000] Endangered and Threatened Wildlife and Plants; Endangered Species Act Compensatory Mitigation Policy Fish and Wildlife Service, Interior. ACTION: Notice of final policy. AGENCY: We, the U.S. Fish and Wildlife Service (Service or USFWS), announce the final Endangered Species Act (ESA) Compensatory Mitigation Policy. The new policy steps down and implements recent Executive Office, Department of the Interior, and Service mitigation policies that reflect a shift from project-by-project to landscapescale approaches to planning and implementing compensatory mitigation. The new policy is established to improve consistency and effectiveness in the use of compensatory mitigation as recommended or required under the ESA. The ESA Compensatory Mitigation Policy covers permittee-responsible mitigation, conservation banking, inlieu fee programs, and other third-party mitigation mechanisms, and stresses the need to hold all compensatory mitigation mechanisms to equivalent and effective standards. DATES: This policy is effective on December 27, 2016. ADDRESSES: Comments and materials received, as well as supporting documentation used in the preparation of this policy, including an environmental assessment, are available on the Internet at http:// www.regulations.gov at Docket Number FWS–HQ–ES–2015–0165. FOR FURTHER INFORMATION CONTACT: Craig Aubrey, U.S. Fish and Wildlife Service, Division of Environmental Review, 5275 Leesburg Pike, Falls Church, VA 22041–3803; telephone 703–358–2442. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Relay Service at 800–877–8339. SUPPLEMENTARY INFORMATION: asabaliauskas on DSK3SPTVN1PROD with NOTICES SUMMARY: VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 that mitigation programs and projects must meet to achieve conservation that is effective and sustainable. Compensatory mitigation is defined in this policy as compensation for remaining unavoidable impacts after all appropriate and practicable avoidance and minimization measures have been applied, by replacing or providing substitute resources or environments (see 40 CFR 1508.20) through the restoration, establishment, enhancement, or preservation of resources and their values, services, and functions (part 600, chapter 6 of the Departmental Manual (600 DM 6.4C)). While this policy addresses only the role of compensatory mitigation under the ESA, avoidance and minimization of impacts retain their central role in both the section 7 and section 10 processes. Guidance on the application of the mitigation hierarchy is provided in our Mitigation Policy (81 FR 83440, November 21, 2016), regulations implementing the ESA, and other policies and guidance documents specific to various sections of the ESA. Alignment of the Policy With Existing Directives By memorandum (80 FR 68743, November 6, 2015), the President directed all Federal agencies that manage natural resources, ‘‘to avoid and then minimize harmful effects to land, water, wildlife, and other ecological resources (natural resources) caused by land- or water-disturbing activities, and to ensure that any remaining harmful effects are effectively addressed, consistent with existing mission and legal authorities.’’ This policy is consistent with the Presidential memorandum (‘‘Mitigating Impacts on Natural Resources From Development and Encouraging Related Private Investment’’) issued November 3, 2015; the Department of the Interior (Department) Secretarial Order 3330 entitled, ‘‘Improving Mitigation Policies and Practices of the Department of the Interior,’’ issued October 31, 2013; the new Interior Departmental Manual Chapter on Landscape-Scale Mitigation Policy, 600 DM 6 (October 23, 2015); and is intended to institute the policies and procedures reflected in the guiding principles on mitigation established by the Department through the report to the Secretary entitled, ‘‘A Strategy for Improving the Mitigation Policies and Practices of The Department of the Interior,’’ issued in April 2014 (Clement et al. 2014). These directives emphasize a comprehensive landscape-scale approach to planning and implementing mitigation programs, and they also include a mitigation goal to improve E:\FR\FM\27DEN2.SGM 27DEN2 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices (i.e., ‘‘net gain’’) or, at a minimum, to maintain (i.e., ‘‘no net loss’’) the current status of affected resources, as allowed by applicable statutory authority and consistent with the responsibilities of action proponents under such authority, primarily for important, scarce, or sensitive resources, or as required or appropriate. The mitigation principles set forth in the above directives, including the landscape scale approach and the goal of ‘‘net gain,’’ have been adopted in both the Service’s Mitigation Policy (81 FR 83440, November 21, 2016), and in this policy. The landscape-scale approach to mitigation is not a new concept. For example, in 2013, the Service issued mitigation guidance for two listed songbirds in central Texas based on recovery goals for these species. The songbird mitigation guidance sets minimum standards that must be met by mitigation providers and encourages the use of consolidated compensatory mitigation in the form of permanent protection and management of large, contiguous patches of the species’ habitat. Proactive approaches, such as this example, provide greater regulatory certainty for project proponents and encourage the establishment of conservation banks and other mitigation opportunities by mitigation sponsors for use by project proponents. The mitigation goal (i.e., ‘‘net gain’’ or, at a minimum, ‘‘no net loss’’) is not necessarily based on habitat area, but on numbers of individuals, size and distribution of populations, the quality and carrying capacity of habitat, or the capacity of the landscape to support stable or increasing populations of the affected species after the action (including all proposed conservation measures) is implemented. In other words, it is based on those factors that determine the ability of the species to be conserved. asabaliauskas on DSK3SPTVN1PROD with NOTICES Benefits of the Policy This policy sets forth standards for compensatory mitigation that implement the tenets in the directives cited above and reflect the many lessons learned by the Service during our more than 40-year history implementing the ESA, particularly sections 7 and 10 of the ESA. The standards apply to all compensatory mitigation mechanisms (i.e., permittee-responsible mitigation, conservation banks, in-lieu fee programs, habitat exchanges, and other third-party mitigation arrangements), which are instrumental to achieving effective compensatory mitigation on the landscape and encouraging private investment in compensatory mitigation. VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 Adherence to the mitigation principles and compensatory mitigation standards identified in this policy will achieve greater consistency, predictability, and transparency in implementation of the ESA. Service offices are encouraged to work with Federal agencies and other partners to establish compensatory mitigation programs based on landscape-scale conservation plans, such as more efficient, better coordinated, and expedited regulatory processes, which can provide project applicants with incentives to mitigate their actions. Compensatory mitigation programs and projects designed and implemented in accordance with the standards set forth in this policy are expected to achieve the best conservation outcomes for listed, proposed, and at-risk species through effective management of the risks associated with compensatory mitigation. This policy encourages the use of market-based compensatory mitigation programs such as conservation banking in conjunction with programmatic approaches to ESA section 7 consultations and habitat conservation plans (HCPs) that can be designed to achieve a ‘‘no net loss’’ or a ‘‘net gain’’ mitigation goal. Consultations and HCPs that establish a ‘‘program’’ to address multiple, similar actions and/or impacts to one or more species operate on a larger landscape scale and expedite regulatory processes. Market-based mitigation programs improve regulatory predictability, provide efficiencies of scale, and incentivize private investment in species conservation (Fox and Nino-Murcia 2005). The benefits provided by these mitigation programs generally encourage Federal agencies and incentivize applicants to develop proposed actions that fully compensate for adverse impacts to affected species anticipated as a result of their actions. Discussion ‘‘In enacting the ESA, Congress recognized that individual species should not be viewed in isolation, but must be viewed in terms of their relationship to the ecosystem of which they form a constituent element. Although the regulatory mechanisms of the [ESA] focus on species that are formally listed as endangered or threatened, the purposes and policies of the [ESA] are far broader than simply providing for the conservation of individual species or individual members of listed species’’ (Conference Report No. 97–835 House of Representatives, September 17, 1982). This comment, made over 30 years ago during reauthorization of the ESA, is a PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 95317 reminder of the challenges still before us. Incorporating a landscape-scale approach to development and conservation planning, including mitigation, that ensures a ‘‘net gain’’ or, at a minimum, ‘‘no net loss’’ in the status of affected resources, as directed by the Presidential memorandum (80 FR 68743, November 6, 2015), helps address the additive impacts that lead to significant deterioration of resources over time and has the potential to foster recovery of listed species and avoid listing of additional species. As discussed later in this document, the Service’s authority to require compensatory mitigation under the ESA is limited and differs under sections 7 and 10. However, we can more broadly recommend the use of compensatory mitigation to offset the adverse impacts of actions under certain provisions of the ESA and under other authorities, such as the Fish and Wildlife Coordination Act (16 U.S.C. 661 et seq.) and the National Environmental Policy Act (NEPA; 42 U.S.C. 4321 et seq.). This policy encourages Service offices to work with Federal agencies and applicants, and to recommend or require, if appropriate, the inclusion of compensatory mitigation for all unavoidable adverse impacts to listed, proposed, and at-risk species and their habitat anticipated as a result of any proposed action. While this practice currently exists for some species, it is not used broadly throughout the Service. Recommending, where applicable, that Federal agencies use their authorities to fully mitigate the adverse effects of their actions (i.e., ensure ‘‘no net loss’’ in the status of affected resources) is consistent with the Presidential memorandum (80 FR 68743, November 6, 2015), the Department’s and the Service’s mitigation planning goals, and the purposes of the ESA. Effective mitigation that fully offsets the impacts of an action prevents that action from causing a decline in the status of affected species (i.e., achieves ‘‘no net loss’’). Compensatory Mitigation Under Sections 7 and 10 of the ESA The additive effects of impacts adversely affecting listed and at-risk species as a result of many past and current human-caused actions are significant. The number of listed species has increased from slightly more than 300 in 1982 (when the ESA was reauthorized) to more than 1,500 by the end of 2016. While some listed species have been reclassified from endangered to threatened (i.e., ‘‘downlisted’’) or E:\FR\FM\27DEN2.SGM 27DEN2 95318 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES removed from either the Federal List of Endangered and Threatened Wildlife or List of Endangered and Threatened Plants (i.e., ‘‘delisted’’) within the last 40 years, the projected increase in human population growth, increasing demand on our natural resources associated with this projected population growth, accelerated climate change, continued introductions of invasive species, and other stressors are putting even more species at risk and compromising the essential functions of ecosystems necessary to improve the status and recover these species. We cannot expect to change the status trajectories of these species without a commitment to responsible and implementable standards for accomplishing effective, sustainable compensatory mitigation that fully offsets the adverse impacts of actions to species and other resources of concern. Compensatory mitigation is a conservation measure that can be used within an appropriate context under section 7 of the ESA to address proposed actions that may result in adverse impacts to listed species that cannot be avoided. For example, under section 7(a)(1) of the ESA, all Federal agencies are required to use their authorities to carry out conservation programs for listed species. Federal agencies may choose to develop and implement section 7(a)(1) conservation programs for listed species in conjunction with section 7(a)(2) consultation through a coordinated program. The Service supports these efforts, and we encourage Federal agencies to coordinate with us on development of such programs. Compensatory mitigation can be used under section 10(a)(1)(B) of the ESA through HCPs developed to address adverse impacts of non-Federal actions on listed and other covered species that cannot be avoided. Landscape-scale HCPs developed for use by multiple applicants to conserve multiple resources are generally the most efficient and effective approaches. The Service supports these efforts and encourages applicants, particularly local and State agencies and organizations, to coordinate with us on the development of such plans. Landscape-Level Approaches to Compensatory Mitigation Taking a landscape-level approach to mitigation will assist the Service to modernize our compensatory mitigation procedures and practices and better meet the challenges posed by the growing human population’s demands on our natural resources and changing conditions such as those resulting from VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 climate change. Conservation banking is a market-based compensatory mitigation mechanism based on a landscape approach to mitigation that achieves compensation for listed and other resources of concern in advance of project impacts. In-lieu fee programs also establish compensatory mitigation sites but generally not in advance of impacts and often not through a marketbased approach. Habitat credit exchanges are a relatively new marketbased compensatory mitigation mechanism based on a clearinghouse model that may or may not accomplish mitigation in advance of project impacts. All three of these mitigation mechanisms use a landscape-level approach to consolidate and locate compensatory mitigation in areas identified as conservation priorities. These programs have designated service areas within which proposed actions that meet certain criteria may be mitigated with Service approval. The functions and services provided for listed, proposed, and at-risk species by these compensatory mitigation programs are represented by credits. Credits are used to offset impacts (often referred to as debits). Most credit transactions involve a permittee purchasing the amount of credits needed to offset the anticipated adverse effects of an action from the mitigation project sponsor. The Service must approve credit transactions as to their conservation value and appropriate application for use related to any authorization or permit issued under the ESA. The conservation banking model is generally perceived as successful at achieving effective conservation outcomes and, when used in conjunction with section 7 consultations and section 10 HCPs, has achieved notable regulatory efficiencies. Results include ecological performance that usually achieves ‘‘no net loss,’’ and often a net benefit, in species conservation; increased regulatory predictability for Federal agencies and applicants; and more efficient and better coordinated permitting processes, especially when multiple agencies with overlapping regulatory jurisdictions are involved. Permittee-responsible mitigation for many small to moderate impacts often cannot provide adequate compensation because it is often difficult to achieve effective conservation on a small scale. Small mitigation sites are often not ecologically defensible, and it is often difficult to ensure long-term stewardship of these sites. Most individual actions result in small or moderate impacts to species and habitat, yet the additive effects of these actions PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 (often referred to as ‘‘death by a thousand cuts’’), when not compensated for, can have substantial adverse effects on these resources by degrading the environmental baseline and impairing the potential for future actions. In general, conservation banking, in-lieu fee programs, and similar mitigation mechanisms that consolidate compensatory mitigation on larger landscapes are designed to serve project proponents with small to moderate impact actions, are ecologically more effective, and provide more economical options to achieve compensation than permittee-responsible mitigation. Furthermore, larger landscape-scale conservation programs with marketbased compensatory mitigation opportunities create an economic incentive for private landowners, investors, and mitigation project sponsors to participate in these programs. The most robust programs generate competition among mitigation sponsors and may provide cost-effective means for complying with natural resource laws such as the ESA. To be successful, these market-based and other compensatory mitigation programs must operate transparently and be held to high standards that are uniformly applied across all compensatory mitigation mechanisms. Equally important is transparency in the implementation of the ESA and the development of mitigation programs for use by regulated communities. Mitigation Defined Because endangered and threatened species are by definition in danger of extinction or likely to become so in the foreseeable future, avoiding, minimizing, and compensating for impacts to their populations are all forms of mitigation that the Service may consider when administering the ESA. The Council on Environmental Quality (CEQ) NEPA regulations (40 CFR 1508.20) state that mitigation includes: • Avoiding the impact altogether by not taking a certain action or parts of an action; • Minimizing impacts by limiting the degree or magnitude of the action and its implementation; • Rectifying the impact by repairing, rehabilitating, or restoring the affected environment; • Reducing or eliminating the impact over time by preservation and maintenance operations during the life of the action; and • Compensating for the impact by replacing or providing substitute resources or environments. In 600 DM 6, the Department of the Interior states that mitigation, as E:\FR\FM\27DEN2.SGM 27DEN2 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES enumerated by CEQ, is compatible with Departmental policy; however, as a practical matter, the mitigation elements are categorized into three general types that form a sequence: Avoidance, minimization, and compensatory mitigation for remaining unavoidable (also known as residual) impacts. Historically, those administering the ESA have often used a condensed mitigation sequence—avoid, minimize, and compensate; or avoid, minimize, and mitigate. This policy adopts the Department’s definition of compensatory mitigation: Compensation for remaining unavoidable impacts after all appropriate and practicable avoidance and minimization measures have been applied, by replacing or providing substitute resources or environments (see 40 CFR 1508.20) through the restoration, establishment, enhancement, or preservation of resources and their values, services, and functions (600 DM 6.4C). Throughout this policy, ‘‘compensatory mitigation’’ or ‘‘compensation’’ is used in this broad sense to include any measure that would rectify, reduce, or compensate for an impact to an affected resource. We also use the term ‘‘minimize’’ in the broad sense throughout this policy to include any conservation measure, including compensation, which would lessen the impact of the action on the species or other affected resource. We recognize there is some overlap in the use of these terms but, as a practical matter, this use in practice is consistent with the intent of the ESA. Information regarding avoidance and observance of the mitigation sequence can be found at our Mitigation Policy (81 FR 83440, November 21, 2016). This ESA Compensatory Mitigation Policy covers permittee-responsible mitigation, conservation banking, in-lieu fee programs, and all other compensatory mitigation mechanisms. Implementation The Service will issue interim guidance containing specific operational steps to assist Service staff in implementing this policy. This interim guidance will be issued in the form of a Director’s memorandum, which will be used to develop a Service Manual chapter at a later date. Throughout this policy, the term ‘‘implementation guidance’’ will be used when referencing the interim guidance and future Service Manual chapter. Changes From the Draft Policy This final policy differs from the draft policy in a few substantive respects, which we list below, and contains editorial changes in response to VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 comments we received that requested greater clarity of expression regarding various aspects of the policy’s purpose, authorities, scope, general principles, framework for formulating mitigation measures, and definitions. The most common editorial change to the final policy addresses the concern that the Service lacks authority to apply compensatory mitigation to the ESA. Reasons cited by the commenters for not applying compensatory mitigation to the ESA included: (a) The ESA does not provide authority to require mitigation; and (b) policy concepts such as ‘‘net conservation gain’’ and a ‘‘landscape approach’’ to conservation are inconsistent with ESA statutory authority and regulatory requirements. This final policy adds new text to 2. Authorities and Coordination that identifies those circumstances under which we have specific authority to require, consistent with other applicable laws and regulations, one or more forms of compensatory mitigation for impacts to federally listed species, proposed species, and candidates as defined in the ESA. This policy provides a common framework for the Service when identifying and implementing compensatory mitigation measures pursuant to the ESA. The policy, however, cannot and does not alter or substitute for the regulations implementing the ESA. We summarize below the few substantive changes from the draft policy, listed by section. Section 5 in the draft policy, Application of Compensatory Mitigation Under the ESA, was moved in its entirety to replace section 4, as we felt it more appropriate to discuss the policy’s application under the ESA after section 2. Authorities and Coordination, and section 3. Scope. Section 4 in the draft policy, Compensatory Mitigation Standards, is now section 5 in this final policy. In section 5.1, Siting Sustainable Compensatory Mitigation, this final policy focuses on overarching considerations and leaves specific factors or examples to be explained in the implementation guidance. In section 6.1.3, ‘‘Preference for Consolidated Compensatory Mitigation,’’ we removed habitat credit exchanges as a specifically identified preference for compensatory mitigation because we do not yet have the record of success with this mechanism that we have with other mechanisms such as conservation banks. The bulk of sections 6.2.3, ‘‘Ensuring Durability on Public Lands,’’, and 6.2.4, ‘‘Transfer of Private Mitigation Lands to Public Agencies,’’ was removed from the policy and will be discussed in the PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 95319 implementation guidance, as well as the prescriptive operational detail from section 6.6, Managing Risk and Uncertainty. In section 7.1.4 ‘‘Habitat Credit Exchange,’’ we added text indicating that habitat credit exchanges are a relatively new mitigation mechanism, and warrant additional care and consideration when implementing them. We also removed section 7.1.5, ‘‘Other Third-party Compensatory Mitigation,’’ as this is a purely hypothetical mechanism which seems to differ little from proponentresponsible mitigation, and it was redundant with section 7.3, Other Compensatory Mitigation Programs or Projects. In Table 1. ‘‘Comparison of Habitatbased Compensatory Mitigation Sites Established Under Different Mechanisms,’’ we removed the column ‘‘Instrument Required’’ because all discussion of instruments will be in the implementation guidance, and we removed the final row of the table: ‘‘Other Third-party Mitigation Site.’’ We removed the draft policy’s section 8, Establishment and Operation of Compensatory Mitigation Programs and Projects; it will form the basis of the implementation guidance. Section 9 of the draft policy, Criteria for Use of Third-party Mitigation, has been re-numbered in this policy, and is now section 8. The majority of section 10, Compliance and Tracking, has been removed from the policy, and will be discussed in the implementation guidance; accordingly, the remaining paragraph has been renumbered in this policy as section 9. Regarding appendix B, Glossary of Terms Related to Compensatory Mitigation, we removed several terms that are more appropriate for the implementation guidance document as well as items that could be confused with terms used in the ESA’s implementing regulations. Finally, we have removed appendix C, Requirement of the Marine Mammal Protection Act, to avoid confusion with the policy’s focus on implementing the ESA. Summary of Comments and Responses The September 2, 2016, notice announcing our draft Endangered Species Act Compensatory Mitigation Policy (draft policy) (81 FR 61032) requested written comments, information, and recommendations from governmental agencies, tribes, the scientific community, industry groups, environmental interest groups, and any other interested members of the public. E:\FR\FM\27DEN2.SGM 27DEN2 asabaliauskas on DSK3SPTVN1PROD with NOTICES 95320 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices That notice established a 45-day comment period, ending October 17, 2016, on the draft policy. Several commenters (1) requested an extension of time to provide their comments; (2) asked the Service to revise and recirculate the draft policy for comment; or (3) asked the Service to withdraw the draft policy to allow interested parties additional time to comment. The November 3, 2015, Presidential Memorandum on Mitigation states, ‘‘Within 1 year of the date of this memorandum, the Department of the Interior, through the U.S. Fish and Wildlife Service, shall finalize a revised mitigation policy that applies to all of the U. S. Fish and Wildlife Service’s authorities and trust responsibilities. The U.S. Fish and Wildlife Service shall also finalize an additional policy that applies to compensatory mitigation associated with its responsibilities under the Endangered Species Act of 1973.’’ In order to finalize the policy as close as possible to the date outlined in the Presidential Memorandum on Mitigation, we were unable to publish an extension or reopen the comment period. During the comment period, we received approximately 150 public comment letters, including comments from Federal, State, and local government entities; industry; trade associations; conservation organizations; nongovernmental organizations; private citizens; and others. The range of comments varied from those that provided general statements of support or opposition to the draft policy, to those that provided extensive comments and information supporting or opposing the draft policy in its entirety or specific aspects of the draft policy. The majority of comments submitted included detailed suggestions for revisions addressing major concepts, as well as editorial suggestions for specific wording or line edits. All comments submitted during the comment period have been fully considered in preparing this final policy. All substantive information provided has been incorporated, where appropriate, directly into this final policy or is addressed below. The comments we received were grouped into general issues specifically relating to the draft policy, and are presented below along with the Service’s responses to these substantive comments. We received several comments requesting clarification on various aspects of the draft policy, including: Reporting; monitoring; financial instruments; coordination with States, tribes, and local groups; the VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 compensatory mitigation mechanisms; and other implementation elements. We recognize the value of these comments and are giving them due consideration. We have removed these elements from this policy and will address them in the implementation guidance. A. Definitions Comment (1): One commenter suggested a more precise definition of compensatory mitigation. The commenter stated the draft policy’s definition suggests any remaining impacts must be ‘‘unavoidable’’ and not simply ‘‘un-avoided.’’ The commenter suggests the draft policy’s definition is confusing and inconsistent with the ESA language that uses ‘‘minimize’’ and ‘‘mitigate.’’ Response: The definition of ‘‘compensatory mitigation’’ in this policy derives from the Department of the Interior’s Department Manual (600 DM 6.4C). This definition gives more flexibility in the use of avoidance and minimization measures for listed species than the recommendation provided in the comment. The use of the terms ‘‘appropriate and practicable’’ in this policy’s definition give deference to project proponents and Federal agencies. Comment (2): Comments included a statement that the definition of landscape-scale approach is unclear. Response: Our definition of landscape-scale approach is informed by the definition used in 600 DM 6 and our Service’s mitigation policy. The landscape approach to conservation considers the functional context of the species or habitat under consideration. For example, activities involving fairy shrimp might be evaluated at a vernal pool complex or regional scale. Issues affecting sturgeon may require strategies that consider an entire river system, thousands of miles long. Fundamental to this approach is an understanding of what is important to ensure the ecological function of the species or habitat in question, at the appropriate scale. Examples include the North American Waterfowl Management Plan, many fisheries management plans, recovery plans for federally listed species, watershed restoration plans, and State wildlife plans. B. Policy Is Based on Existing Authority i. ESA Sections 7 and 10 Comment (3): Several commenters stated that the mitigation sequence that uses ‘‘avoidance’’ cannot be required under sections 7 and 10 of the ESA, unless it alleviates a jeopardy situation. One of the commenters noted that PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 ‘‘avoidance’’ is voluntary on the part of an action agency or applicant. Response: The use of ‘‘avoidance’’ in the mitigation sequence is not a requirement in the sense that all impacts to listed species or critical habitat must be avoided. Through the policy, we are neither requiring nor mandating avoidance. One of the stated purposes of the ESA at section 2(b) is to ‘‘provide a means whereby the ecosystems upon which endangered species and threatened species depend may be conserved.’’ Developing options to avoid impacts to listed resources under sections 7 and 10 is important to furthering this purpose and effectively implementing the ESA. The policy is consistent with the Presidential memorandum (‘‘Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment’’) issued November 3, 2015 (see 80 FR 68743, November 6, 2015), in which the President directed all Federal agencies that manage natural resources ‘‘to avoid and then minimize harmful effects to land, water, wildlife, and other ecological resources (natural resources) caused by land- or waterdisturbing activities, and to ensure that any remaining harmful effects are effectively addressed, consistent with existing mission and legal authorities.’’ The Service agrees that some impacts to listed species or critical habitat may be unavoidable and that the ESA provides a mechanism for both Federal agencies (section 7) and non-Federal entities (section 10) to receive take coverage in the case of any unavoidable impacts. There are multiple sections of our implementing regulations in title 50 of the Code of Federal Regulations (CFR) at 50 CFR part 402 (§§ 402.10, 402.13) that direct the Service to suggest modifications or make advisory recommendations to Federal action agencies and applicants to avoid the likelihood of adverse effects to listed species or critical habitat. Additionally, if the Service is required to provide a reasonable and prudent alternative under section 7 consultation, the regulations state that such an alternative must be one ‘‘that the Director believes would avoid the likelihood of jeopardizing the continued existence of listed species or resulting in the destruction or adverse modification of critical habitat’’ (50 CFR 402.02). Use of the full mitigation sequence including avoidance and minimization of impacts to listed species is consistent with the purposes and mandates set forth in the ESA. Comment (4): Several commenters suggested compensatory mitigation cannot be required under section 7 of E:\FR\FM\27DEN2.SGM 27DEN2 asabaliauskas on DSK3SPTVN1PROD with NOTICES Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices the ESA, and that there is no authority to include such mitigation in reasonable and prudent measures (RPMs) and the accompanying mandatory terms and conditions that the Service includes in incidental take statements. Some stated that compensation is limited to voluntary actions on behalf of the action agency and recommendations on the part of the Service. One comment stated compensation was not appropriate in both RPMs and reasonable and prudent alternatives (RPAs). Another suggested that compensation under section 7 consultation was appropriate but not under section 7(a)(4) conference. Commenters cited the ESA, its implementing regulations, and the Service’s 1998 Consultation Handbook. Response: As discussed in sections 4.1.2 and 4.1.3 of this policy, compensatory mitigation can play an important role in section 7(a)(2) consultations and 7(a)(4) conferences. Compensatory mitigation can appropriately be included as part of an action subject to consultation, or in reasonable and prudent alternatives to avoid the likelihood of jeopardy, in order to reduce the net adverse effect of an action on proposed or listed species or designated critical habitat. This policy clarifies those circumstances where it may be appropriate to incorporate mitigation into reasonable and prudent measures and terms and conditions as part of a section 7(a)(2) consultation. For example, throughout this policy, ‘‘compensatory mitigation’’ or ‘‘compensation’’ is used to include any measure that would rectify, reduce, or compensate for an impact to an affected resource. Rectifying the impact means ‘‘repairing, rehabilitating, or restoring the affected environment’’ (40 CFR 1508.20). Restoring impacted habitat is a commonly used reasonable and prudent measure that meets the definition of compensatory mitigation in this policy, minimizes the amount or extent of incidental take, and can be accomplished consistent with the ESA and its implementing regulations at 50 CFR part 402. Comment (5): Commenters said the policy’s emphasis on the role of conservation in the section 7 consultation process is misdirected. Section 7(a)(2) does not include a conservation requirement for Federal agencies. Response: The Service respectfully disagrees. Section 7(a)(2) requires that Federal agencies ensure their actions do not jeopardize the continued existence of endangered and threatened species or result in the destruction or adverse modification of critical habitat. This requirement is accomplished through VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 the consultation process, which concludes with the Service’s biological opinion. In the event a section 7 consultation concludes with a jeopardy or adverse modification determination, the Service will include reasonable and prudent alternatives (RPAs), when possible, that the action agency can implement to avoid violation of section 7(a)(2) of the ESA. Options for RPAs can include compensatory mitigation in order to avoid a jeopardy or adverse modification situation, as long as they are consistent with the definitions at 50 CFR 402.02. When the Service’s biological opinion concludes that the agency action would not result in jeopardy or adverse modification, the Service will include reasonable and prudent measures (RPMs) to minimize any incidental take associated with the action. As described in the policy, minimization of impacts of the taking on the species may include compensation as consistent with the ESA implementing regulations. The Service provides technical assistance during the section 7(a)(2) consultation process to help reduce the need for RPMs and RPAs. These measures fall within the ESA’s definition of ‘‘conserve,’’ which means ‘‘to use and the use of all methods and procedures which are necessary to bring any endangered species or threatened species to the point at which the measures provided pursuant to [the ESA] are no longer necessary.’’ Comment (6): Several commenters expressed concern that the policy would complicate the process for sections 7 and 10, and cause project delays. The commenters stated that such delays could create increased project costs. Response: The Service respectfully disagrees. Mitigation provided in advance of impacts, such as through a conservation banking program, can expedite project reviews by the Service, because the mitigation is already established and has already gone through the due diligence process. Clear guidance on application of compensatory mitigation mechanisms as provided in this policy, should assist Service staff and project proponents implement their ESA responsibilities in a timely fashion. Furthermore, conducting compensatory mitigation may assist in the compliance with other required laws, which may expedite the project process. For example, compensatory mitigation may lower the level of analysis required by NEPA (allowing a mitigated environmental assessment/finding of no significant impact instead of an environmental impact statement). PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 95321 Comment (7): One commenter objected to the phrase ‘‘recovery measure’’ when discussing section 7(a)(1) of the ESA. The commenter provided substantial information, including a section of the preamble from the Service’s 1986 interagency cooperation rulemaking (51 FR 19926, June 3, 1986), noting the ESA does not mandate specific actions under section 7(a)(1), nor does it authorize the Service to mandate how or when Federal agencies should implement their section 7(a)(1) responsibilities. Specifically, the commenter said that section 7(a)(1) is not a recovery measure, and the policy failed to properly state the basis for such a characterization. Response: We agree that the directive under section 7(a)(1) of the ESA does not give the Service authority over other Federal agencies, nor does it specifically authorize actions to be implemented. It does, however, direct other Federal agencies to consult with the Service when developing conservation programs under section 7(a)(1). To this end, the policy provides guidance and recommendations on how Federal agencies may achieve the greatest effectiveness when implementing their section 7(a)(1) obligations. The policy clearly describes the basis for the use of the term ‘‘recovery measure’’ when describing section 7(a)(1), which comes from the definition of the terms ‘‘conserve,’’ ‘‘conserving,’’ and ‘‘conservation’’ in section 3 of the ESA. Although the word ‘‘recovery’’ is not used in the definition, it clearly describes recovery as ‘‘the use of all methods and procedures which are necessary to bring any endangered species or threatened species to the point at which the measures provided pursuant to [the ESA] are no longer necessary.’’ Additionally, section 7(a)(1) directs all Federal agencies to ‘‘utilize their authorities in furtherance of the purposes of [the ESA]’’. One of the stated purposes of the ESA is to ‘‘provide a means whereby the ecosystems upon which endangered and threatened species depend may be conserved.’’ The intent is that all Federal agencies have a responsibility, using their existing authorities, to help recover listed species. Comment (8): One commenter stated the policy should focus only on implementation of voluntary mitigation actions under the ESA. The commenter noted that mitigation guidance for sections 7 and 10 under the ESA are provided in the habitat conservation planning and consultation handbooks. Response: This policy provides greater clarity and detail with regard to mitigation implementation than the E:\FR\FM\27DEN2.SGM 27DEN2 asabaliauskas on DSK3SPTVN1PROD with NOTICES 95322 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices section 7 and habitat conservation planning handbooks. As stated earlier, this policy reflects the many lessons learned by the Service during our more than 40-year history implementing the ESA, particularly sections 7 and 10. We agree that the use of voluntary mitigation programs and actions that further the purposes of the ESA should be encouraged. The development and implementation of voluntary mitigation programs should also be effective and consistent with other forms of mitigation. The policy will guide such voluntary efforts to promote consistency in the same way it will guide mitigation efforts in regulatory processes. Comment (9): One commenter recommended we add ‘‘and applicants’’ following ‘‘Federal agencies’’ in two sentences in section 4.1.2. Response: Applicants are not typically involved in the establishment of mitigation programs such as conservation banks and in-lieu fee programs; moreover, the responsibility for ensuring a Federal action does not violate section 7(a)(2) of the ESA ultimately lies with the Federal agency proposing the action. We did not make the suggested change. Comment (10): One commenter thought the Service should recognize the importance of the Habitat Conservation Plan (HCP) Assurances (‘‘No Surprises’’) Rule (63 FR 8859, February 23, 1998) and explicitly state that remediation and alternative mitigation will not erode protections afforded by the No Surprises Rule. Response: The Service does recognize the importance of the No Surprises Rule in the section 10 process, and agrees that remediation and alternative mitigation should not erode protections afforded by the No Surprises Rule. The Service works with applicants to develop HCPs that include contingencies for mitigation that does not function as expected, including remediation or alternative mitigation. The No Surprises Rule is not eroded in this case, because these contingencies are included in the HCPs and agreed upon ahead of time. Comment (11): One commenter requested clarification of how the draft policy would apply to reinitiation of consultations under section 7(a)(2) of the ESA. Specifically, what would be different, especially with regard to the concepts of ‘‘net gain’’ and ‘‘no net loss?’’ Response: During the reinitiation process under section 7(a)(2), the concepts under this policy and their application to any consultation do not change. The ESA’s directive to agencies to ensure any action is not likely to VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 jeopardize the continued existence of any endangered or threatened species or adversely modify its critical habitat guides that process. The Service will recommend actions consistent with this policy, including consideration of the goal of a ‘‘net gain’’ or, at a minimum, ‘‘no net loss.’’ Considering the variety of actions under consultation, the reasons for reinitiation, and the multitude of species covered, it is not possible for the policy to provide specific details regarding the application of such concepts during the consultation process. Comment (12): One commenter was concerned about section 4.7 (Effective Conservation Outcomes and Accountability Through Monitoring, Adaptive Management, and Compliance) of the draft policy, which states that: ‘‘A process for achieving remediation or alternative mitigation for compensatory mitigation failures beyond the control of the responsible party (e.g., unforeseen circumstances) must be clearly described in the mitigation instrument, biological and/or conference opinion, or permit.’’ The commenter asked the Service to the clarify the statement to say that biological opinions issued in connection with section 7 consultations with Federal agencies, other than the Service itself, are not required to provide for unforeseen circumstances, saying that such a requirement is associated with ESA section 10(a) HCPs, but is not required in the context of section 7 consultations by the section 7 handbook, or existing law or regulations. They were concerned the current language of the draft policy could be misinterpreted to mean that section 7 biological opinions must include alternative mitigation for compensatory mitigation failures ‘‘beyond the control of the responsible party,’’ and this policy should not change the section 7 requirements for avoiding jeopardy to the species and adverse modification of critical habitat. Response: The development and implementation of mitigation programs should be effective and consistent among all forms of mitigation offered in sections 7 and 10 of the ESA, regardless of whether the mitigation is voluntary or required. Planning for unforeseen circumstances is part of effective mitigation. The policy will guide efforts to promote consistency, and Service staff will work with applicants and Federal agencies to explain how all mitigation standards can be incorporated into their mitigation plans. Nevertheless, the ESA and its implementing regulations ultimately determine how the Service makes PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 decisions regarding listed species. We do not include the statement in question in this final policy; we will address this topic in implementation guidance. Comment (13): One commenter stated the Service has no statutory authority to require section 7 consultation on candidate or at-risk species or to include such species in HCPs. If the policy pursues a conservation goal in excess of the Service’s actual regulatory and statutory authorities, separate guidance should be issued to draw this clear distinction, in order to provide complete transparency and direction to both Service staff and others in actual implementation. Response: The commenter is correct that the Service cannot require section 7 consultation for candidate or at-risk species. ESA section 7 regulations provide for a conference between a Federal action agency and the Service for actions that are likely to jeopardize the continued existence of a proposed species or likely to result in destruction or adverse modification of proposed critical habitat (50 CFR 402.10). Including candidate or other at-risk species in conferences would be voluntary on the part of the Federal agency; however, it is encouraged by the Service and through this policy, and other Federal agencies may voluntarily conference to expedite possible future re-consultations. This is consistent with ESA goals of recovering listed species and, ideally, avoiding the need to list species because threats to them have been addressed. Further, intra-Service consultations and conferences will consider effects of the Service’s actions on listed, proposed, and candidate species. Candidate species are treated as if they are proposed for listing for purposes of conducting internal Service conferencing. Additionally, under section 10 of the ESA, HCPs are voluntary and developed by the applicant, in consultation with the Service. It is the applicant who decides which candidate or non-listed at-risk species they wish to include. The Service has found that many applicants elect to include at-risk species to receive ‘‘no surprises’’ assurances and preclude the need to amend the associated incidental take permit, should the species become listed in the future. The voluntary inclusion of at-risk species in both the conference and HCP processes are proactive approaches to reduce the need for future listing of the species. Comment (14): One commenter said the Service mixes the concepts of voluntary conservation recommendations that can be provided under ESA section 7(a)(1) with requirements under ESA section 7(a)(2). E:\FR\FM\27DEN2.SGM 27DEN2 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES They also commented that neither standard under ESA section 10 imposes a ‘‘no net loss’’ requirement. Response: Federal agencies are directed to consult with the Service under ESA section 7(a)(1) to assist their development of programs to conserve listed species. Technical assistance to agencies with actions that require compliance with section 7(a)(2) is a logical nexus for the Service to advise Federal agencies about section 7(a)(1) conservation opportunities associated with these actions. Similarly, technical assistance to non-Federal applicants for incidental take permits under section 10(a)(1)(B) is a logical nexus to advise them about conservation opportunities associated with these actions. This policy provides a framework for such recommendations, and does not otherwise alter or substitute for standards under the ESA or the regulations implementing ESA sections 7(a)(2) and 10(a)(1)(B). Though not required, striving for ‘‘no net loss’’ in the status of the species’ conservation is an appropriate mitigation goal, and may be to the benefit of the other agency or private landowner in greater future regulatory certainty or expedited future compliance (e.g., including ‘‘at-risk’’ species). ii. Authorities—Other Comment (15): One commenter requested that we revise section 5.3 of the draft policy to provide more detail about how compensatory mitigation would work in relation to section 4(d) rules for threatened species. Response: This policy is intended to be general in nature. More detailed guidance documents covering specific activities may be developed in the future, such as for rules promulgated under section 4(d) of the ESA. Comment (16): One commenter said that it was unclear how the policy would ‘‘replace’’ rules promulgated by other Federal agencies for guiding implementation of Federal laws such as the Clean Water Act (33 U.S.C. 1251 et seq.) and natural resources such as ‘‘waters of the United States.’’ They requested clarification of how the April 10, 2008, joint rulemaking of the U.S. Army Corps of Engineers (USACE) and the Environmental Protection Agency (EPA) (73 FR 19594) applies to ESA actions and what the impact of the policy would be. Response: The Service has added clarification to this final policy that it does not replace or alter the referenced April 10, 2008, rule (73 FR 19594). Processes established by applicable statutes and regulations remain in effect and are not superseded by this policy. VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 This policy applies to compensatory mitigation for all species and habitat protected under the ESA and for which the Service has jurisdiction. The April 10, 2008, rule (73 FR 19594) applies to impacts to aquatic resources permitted by section 404 of the Clean Water Act. Comment (17): One commenter said that issuance of this policy violates the Administrative Procedure Act (APA; 5 U.S.C. subchapter II) or the Regulatory Freedom Act (RFA). Response: The Service complied with all necessary requirements in publishing the final policy. We are unaware of the Regulatory Freedom Act but for the purposes of this response, will assume the commenter is referring to the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.). The policy does not require compliance with the APA or the RFA because it is not a regulatory document. Comment (18): One commenter was concerned that voluntary mitigation could be abused if an agency were to unreasonably withhold action for the purpose of applying undue pressure to force an applicant to volunteer mitigation measures. They said the policy should acknowledge and protect against this possibility. Response: We agree with the commenter that such an approach by Service or other agency staff would be unacceptable. It would also be contrary to this policy and existing authority. Processes established by applicable statutes and regulations remain in effect and are not superseded by this policy. Comment (19): One commenter stated that the policy goes beyond the authorities granted the Service in both sections 7 and 10 of the ESA. The other authorities relied on by the Service in adopting this policy, including the Presidential directives and memoranda, cannot legally form the basis for the promulgation of the policy. Response: This policy is designed to improve and clarify implementation of the ESA. Towards that end, it seeks to provide a framework for effecting mitigation that reflects a permissible reading of the law, while fulfilling the conservation purposes of the ESA. Federal agencies are directed to consult with the Service under ESA section 7(a)(1) to assist their development of programs to conserve listed species. A mitigation framework may provide valuable expertise for an agency considering their section 7(a)(1) responsibilities. Additionally, a framework may assist agencies with actions that require compliance with section 7(a)(2) of the ESA. Similarly, technical assistance to non-Federal applicants for incidental take permits PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 95323 under section 10(a)(1)(B) of the ESA is a logical nexus to advise them about conservation opportunities associated with these actions. The policy provides a framework for such recommendations and does not otherwise alter or substitute for the regulations implementing ESA sections 7(a)(2) and 10(a)(1)(B). Authority to make recommendations to mitigate impacts to resources covered by the ESA is provided by that statute. Promulgation of this policy is consistent with not only the ESA, but also the Office of Management and Budget’s guidelines on interpretive policies. Those guidelines state that public policies, such as this one, guide administrative processes while increasing an agency’s predictability to external parties. Comment (20): One commenter noted the ESA imposes different standards and prohibitions with respect to prelisting versus post-listing activities for candidate conservation agreements with assurances (CCAAs) and safe harbor agreements (SHAs). By incorporating the net conservation benefit standard used for SHAs, the Service fails to account for these differences and conflates its treatment of pre-listing and post-listing activities. Response: The Service does not intend to change the requirements for CCAAs and SHAs. The intent of the policy is to describe the requirements for converting either of these agreements to a mitigation agreement should a landowner desire to make their conservation more permanent and use it for mitigation. iii. NEPA Comment (21): One commenter said that the policy should recommend that the Service comment on NEPA documents apart from, or in addition to, section 7 consultation. Response: We agree that application of the Service’s authority to make advisory comments and recommendations under NEPA provides a powerful capability for influencing conservation of a broad array of natural resources while helping agencies and proponents identify appropriate project alternatives. The Service will continue to comment on NEPA documents in addition to conducting section 7 consultations whenever warranted. Our application of NEPA in a mitigation context is covered in the Service mitigation policy (81 FR 83440, November 21, 2016). Comment (22): One commenter said the policy would increase the time and resources required by Federal agencies to comply with section 7 of the ESA and by proponents of any projects that may E:\FR\FM\27DEN2.SGM 27DEN2 95324 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices adversely affect an at-risk species. The commenter said that the policy meets the definition of a major Federal action defined at 40 CFR 1508.18 and should be analyzed in an environmental impact statement to comply with NEPA. Response: As explained in more detail below, neither of the two alternatives evaluated in the NEPA assessment would be expected to result in significant effects to the human environment within the meaning of NEPA and the CEQ regulations. Although we describe potential actions and consequences that could flow from each of the alternatives, the nature and scope of environmental consequences that are likely to result from any of the alternatives would depend on a variety of intervening circumstances that are impossible to identify in this analysis. However, we find there is no basis to infer that any such effects, even viewed generously, would be significant. In addition, because of the programmatic nature of the draft policy and the breadth of activities under consideration, the analyses of environmental effects must be very general, addressing the consequences from each alternative at a programmatic scale. Regardless of the alternative, we anticipate that the majority of the specific actions covered under the policy would receive additional projectspecific NEPA review, either by other Federal agencies during their project review or by the Service during review of an ESA section 10(a)(1)(B) application. Those project-specific reviews would include development of appropriately detailed alternatives based on information necessary to complete informed and meaningful effects analyses. That information (e.g., location, timing, duration, and affected resources, etc.) is currently not available. More detailed information is contained in the environmental assessment, which is available on the Internet at http://www.regulations.gov at Docket Number FWS–HQ–ES–2015– 0165. asabaliauskas on DSK3SPTVN1PROD with NOTICES C. Net Conservation Gain/No Net Loss Comment (23): One commenter stated the policy should more consistently emphasize throughout that ‘‘conservation’’ is the goal for protected species and their habitat, using our full suite of authorities including the ESA. While ‘‘no net loss’’ is appropriate under certain statutes like the Clean Water Act (as acknowledged in the April 10, 2008, joint rulemaking of USACE and EPA (73 FR 19594), for example), ‘‘no net loss’’ is a lower standard than what they have sought in VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 conservation banking and in-lieu fee programs. Response: The Service’s mitigation policy (81 FR 83440, November 21, 2016) sets a mitigation planning goal of ‘‘net conservation gain,’’ which seeks to improve the status of affected resources, and, at a minimum, maintain the status of those resources (i.e., ‘‘no net loss’’). Adhering to the standards discussed in section 5 of this policy (Compensatory Mitigation Standards) is the best way to attain this goal, although we recognize that achieving a net conservation gain will not be possible in every circumstance, and in those cases will strive for ‘‘no net loss.’’ Comment (24): One commenter strongly opposed the goal of a ‘‘net gain’’ in the policy, stating the Service lacks the underlying statutory authority to require it under the ESA and it will likely result in an uncompensated taking in violation of the U.S. Constitution. The commenter stated that the obligations under the policy, with the use of mandatory language such as ‘‘must’’ and ‘‘shall,’’ constitute a rulemaking. Response: This policy adopts mitigation principles established by the Service’s mitigation policy (81 FR 83440, November 21, 2016) and establishes compensatory mitigation standards to guide the use of compensatory mitigation under the ESA. The mitigation goal of ‘‘net gain’’ or, at a minimum, ‘‘no net loss,’’ is to assist the Service and its partners in developing mitigation programs and projects to further the purposes of the ESA. One of the stated purposes under section 2 of the ESA is to ‘‘provide a means whereby the ecosystems upon which endangered and threatened species depend may be conserved.’’ Section 3 of the ESA defines ‘‘conserved’’ as ‘‘the use of all methods and procedures which are necessary to bring any endangered species or threatened species to the point at which the measures provided pursuant to this Act are no longer necessary.’’ This conservation purpose of the ESA is served by the policy’s goal of a ‘‘net gain’’ when developing compensatory mitigation. In this context, the policy is not a legally binding rulemaking; the ESA and its implementing regulations determine the Service’s decisions for listed species. The policy will not effectively compel a property owner to suffer a physical invasion of property and will not deny all economically beneficial or productive use of the land or aquatic resources. This policy provides consistent standards for the Service, and its partners, to apply when developing PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 compensatory mitigation programs or projects, as appropriate under the authority of the ESA. The use of the terms ‘‘must’’ and ‘‘shall’’ in the policy are directed toward the Service’s authority in implementing the ESA. The policy is broadly framed to encompass all species covered under the ESA, but does not result in any particular actions concerning specific properties. Additionally, this policy substantially advances a legitimate government interest (conservation of species and their habitats) and does not present a barrier to all reasonable and expected beneficial use of private property. Comment (25): One commenter stated that the Service does not explain how it will determine or impose mitigation measures to meet a mitigation target that is somewhere between maintaining and improving the status of affected resources. Response: The Service, being national in scope of operations, wrote this policy to allow for further clarification on a regional and local scale. This will allow the Service to work with Federal agencies and applicants to develop mitigation measures that meet objectives based on local conditions and tailored to the specific species that are impacted. A less flexible policy could cause rigid adherence to a protocol, which may be more suitable in one region, or for one species, versus another. Comment (26): Commenters stated that the ESA requirements to avoid jeopardy or adverse modification and to minimize the impact of any take of listed species do not equate to the no net loss or net gain goal articulated in the draft policy, and the Service has no authority under the ESA to require measures that will result in a ‘‘net gain’’ or ‘‘no net loss.’’ In addition, one commenter said a ‘‘net gain’’ or ‘‘no net loss’’ goal is incompatible with wellestablished standards for administering sections 7 and 10 of the ESA. Response: Action agencies or proponents may adopt Service recommendations provided under this policy as part of their proposed actions, but electing to do so does not change the applicable standards under the ESA or otherwise alter the processes prescribed under the ESA and its regulations. The Service does not view a ‘‘net gain’’ or ‘‘no net loss’’ goal as incompatible with well-established standards for administering sections 7 and 10 of the ESA. Instead, it is complementary to the ESA requirements to avoid jeopardizing the continued existence of any listed species, or destroying or adversely modifying any designated critical habitat. To achieve E:\FR\FM\27DEN2.SGM 27DEN2 asabaliauskas on DSK3SPTVN1PROD with NOTICES Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices this goal, an action agency or applicant need not abandon the actions they have taken to avoid jeopardizing the continued existence of any listed species, or destroying or adversely modifying any designated critical habitat. Instead, they may complement these actions by including additional measures that allow their action to reach the ‘‘net gain’’ or ‘‘no net loss’’ goal. Comment (27): One commenter said by encouraging Service staff to work with applicants to implement ‘‘no net loss’’ or ‘‘net conservation gain,’’ the judgment of applications will no longer be standardized. They said the policy does not state how conservation gain will be measured, whether on a numerical basis or under what circumstances the Service will make a qualitative judgment regarding the level of mitigation that achieves this standard. Response: This policy is national in scope, and it is beyond the scope of the policy to provide specific quantifiable measures to achieve a ‘‘net conservation gain’’ or specify the methodology for assessing or measuring the ‘‘net conservation gain.’’ The Service’s mitigation goal is to achieve a ‘‘net conservation gain’’ or, at a minimum, ‘‘no net loss’’ of the affected resources. The policy provides the framework for formulating compensatory mitigation measures to achieve this goal. The geographical and ecological breadth of this policy’s coverage combined with the variation in project and impact types affecting species and habitats nationwide make the detailed specifications for calculating ‘‘no net loss’’ or ‘‘net gain’’ impossible to include. Such determinations will either be made on a case-by-case basis or will be addressed through additional guidance or planning processes. Comment (28): Commenters said the policy should be revised to help Service staff avoid crossing the line between ‘‘encouraging’’ Federal agencies and applicants to achieve ‘‘a net gain or, at a minimum, no net loss in the conservation of listed species’’ and incorrectly representing to Federal agencies and applicants that they are somehow ‘‘required’’ to achieve a ‘‘net gain’’ or, at a minimum, ‘‘no net loss’’ in the conservation of listed species. Commenters added that Service staff should be instructed by the policy to clearly disclose to Federal agencies and applicants at all times that section 7 of the ESA does not require such a ‘‘no net loss in the conservation of listed species’’ or a ‘‘net gain’’ in relation to the ‘‘no jeopardy’’ and ‘‘no adverse modification’’ standards. VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 Response: This policy clearly states that the mitigation planning goal is a goal, not a requirement. We expect further clarification on a regional and local scale to reiterate this distinction. Comment (29): One commenter stated the goal of ‘‘no net loss’’ is admirable and adequate with respect to the Presidential Memorandum (80 FR 68743, November 6, 2015); however, the commenter is concerned this new language may unfairly prohibit or require mitigation for agricultural actions without due process of assessment. Response: The Service will consider the facts specific to the actions that we review under our authorities. This policy does not provide for the Service to categorically deny development or agricultural activities. Instead, our decisions and opinions on those activities will be guided by relevant statutes and regulations. Comment (30): One commenter said the sentence, ‘‘Losses of habitat that require many years to restore may be best offset by . . . preservation of existing habitat . . .,’’ is counter to the ‘‘no net loss policy.’’ Response: The entire sentence reads, ‘‘Losses of habitat that require many years to restore may best be offset by a combination of restored habitat, preservation of existing high-quality habitat, and improved management of existing habitat.’’ It is the combination and ratios of these three habitat mitigation types that can create a ‘‘no net loss’’ scenario. Improved management can create an immediate conservation benefit and habitat restoration creates a long-term conservation benefit, while preservation of high quality habitat protects existing habitat from being lost. Long-term land management is included in the durability standard. D. Applicability Comment (31): Several commenters had concerns about the applicability of the policy to existing mitigation programs, HCPs and associated incidental take permits, and ongoing section 7 consultations that were initiated between the Federal agency and the Service prior to the effective date of the final policy. The comments requested clarity that the policy does not apply to existing projects or projects currently under development, including the associated real estate and financial assurances. Response: The policy states that it applies to Federal and non-Federal actions permitted or otherwise authorized or approved prior to issuance of the policy only under PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 95325 circumstances where the action may require additional compliance review under the ESA. In addition, the policy states that it does not apply where the Service has already agreed in writing to mitigation measures for pending actions, except where new activities or changes in current activities associated with those actions would result in new impacts, or where new authorities or failure to implement agreed-upon recommendations warrant new consideration regarding mitigation. Service offices may elect to apply this policy to actions that are under review as of its effective date (see DATES, above). Comment (32): The draft policy does not include any de minimus size consideration. While consultation considers the extent of potential impacts to ESA-listed species, the draft policy does not. It talks in general terms about credit valuation and ratios, but at some point, there should be a consideration of a de minimus project size to which this draft policy would not apply. Response: The policy is intended to guide compensatory mitigation projects for listed and at-risk species regardless of the scope, magnitude, or size of the project. As such, it would not be reasonable to attempt to define ‘‘de minimis’’ limits for the application of the policy that would cover all species and mitigation projects across the country. However, step-down guidance derived from this policy for particular species would be more specific for the biological needs of the species and therefore likely consider factors related to the scope of compensatory mitigation projects. E. Scope of the Policy Comment (33): One commenter said that the Service should identify activities and projects that are exempt from the policy. Response: We agree that the scope of coverage should be clearly described and have listed those circumstances when the policy does not apply in section 3, Scope. Comment (34): One commenter said that it is important for the policy to address species protected under additional Federal laws, including the Bald and Golden Eagle Protection Act (BGEPA; 16 U.S.C. 668–668d) and the Migratory Bird Treaty Act (MBTA; 16 U.S.C. 703–712). Response: We agree that conservation of the resources under BGEPA and MBTA is important. However, those resources, and processes specified by those Acts and any implementing regulations or guidance, are beyond the scope of this policy. We discuss these E:\FR\FM\27DEN2.SGM 27DEN2 95326 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES authorities in the Service mitigation policy (81 FR 83440, November 21, 2016). Comment (35): One commenter said that the policy should be limited to listed threatened species, listed endangered species, candidate species, and designated critical habitat. Response: We agree that the commenter’s list of covered resources is similar to our description of covered resources in section 3, Scope, of this policy. There we state that the policy applies to all species and habitat protected under the ESA and for which the Service has jurisdiction. Endangered and threatened species, species proposed as endangered or threatened, designated critical habitat, and proposed critical habitat are the primary focus of this policy. We also state that candidates and other at-risk species would benefit from adherence to this policy, and encourage all Service programs to develop programs and tools in cooperation with States and other partners. F. At-Risk Species Comment (36): Several commenters suggested only listed species should be covered by the policy, and ‘‘at-risk’’ species references should be removed. Commenters suggested there is no ESA basis for including at-risk species in the policy, that no standards exist for the definition of at-risk species, and that it would create additional burdens on the public. One comment requested clarification of the jurisdiction of the Service, States, and tribes regarding atrisk species. Response: The Service has addressed at-risk species through implementation of the ESA under many voluntary programs. Often partners (e.g., other agencies, private landowners) voluntarily consider ‘‘at-risk’’ species for greater regulatory certainty and to expedite future compliance if these ‘‘atrisk’’ species are later listed under the ESA. Under section 6 of the ESA, the Service partners with the States to fund research and recovery actions on listed and at-risk species. Candidate conservation agreements with assurances (CCAAs) are a highly successful program for private landowners providing voluntary conservation for at-risk species. Many HCPs under section 10 of the ESA also include voluntary coverage for at-risk species. These and other proactive efforts for at-risk species, including our draft Policy Regarding Voluntary Prelisting Conservation Actions (79 FR 42525, July 22, 2014), focus on preventing the need to list species under the ESA. The Service also values its VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 partnerships with the States and tribes in conservation of fish and wildlife resources. This final policy aims to strengthen these partnerships and does not extend the Service’s jurisdiction over at-risk species. We have included at-risk species, as appropriate, in the policy to further these efforts in preventing the decline of species to the point that protection under the ESA is necessary. G. Equivalent Standards Comment (37): One commenter thought the policy should emphasize that there are no prescribed standards that will dictate mitigation but that every situation will be considered factspecific and flexible, and be based upon the voluntary actions of the proponent. Response: The Service has written this policy in a manner that facilitates further clarification on a regional scale. As with many of the decisions made in impact analysis, determination of when and what type of mitigation should be implemented occurs on a project-byproject basis, under the authority at hand, with information most appropriate for the site or region of impact. Section 7 of this policy, Compensatory Mitigation Mechanisms, allows the Service flexibility in the type of mitigation mechanism used to meet this need. Section 5 of the policy, Compensatory Mitigation Standards, describes the standards we will require or recommend that all mechanisms meet. H. Landscape-Scale Approach Comment (38): Individual actions that harm ESA-listed, proposed, and at-risk species must not be discounted or minimized because they are considered to impart only small or moderate impacts within the broader context of the landscape. The policy should consider how these site-specific impacts could be identified and accounted for prior to development of the most appropriate compensatory approach. Response: The Service agrees that small or moderate impacts that have cumulative effects are important to address. In each situation, the project effects analyses should identify all effects to the species under consideration, as well as measures to avoid, minimize, and compensate adverse effects. These analyses can characterize repeated, ongoing actions that may affect a species at a larger scale, and can help inform recovery efforts at a local or regional level. Ideally, the project proponent and the Service would also identify opportunities to support recovery/ conservation of that species and include PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 them in the action, if possible. This is a collaborative approach to conservation, consistent with relevant statutes and regulations, and can help offset the cumulative effects of many actions on the landscape. Comment (39): One commenter said the draft policy should provide additional guidance on how landscapescale indirect effects would be evaluated for buffers surrounding existing mitigation sites, including mitigation banks. They recommend clarification regarding the process when additional compensation may be necessary for landscape-scale indirect effects to existing mitigation sites. Response: It is difficult at this time to provide specific guidance on buffers and indirect effects given the potential universe of actions that could arise and fact-specific situations of each mitigation site. We declined to provide such guidance in this policy. Comment (40): Some commenters were concerned that the landscape-level approach to mitigation planning would focus too narrowly on certain species to the detriment of others, or that purchasing credits from a conservation bank or in-lieu fee program would not equate to replacing lost habitat. Response: The goal of a landscapescale approach to mitigation is to ensure functionally successful compensatory mitigation efforts for the habitats or species under consideration. While no project or habitat benefits all species all the time, using a landscape context to frame mitigation actions should reinforce functionality at the appropriate scale (i.e., tract, regional, range) to benefit the target resource, and in most cases, other resources/species that also rely on that functional system. Using a landscape approach will help ensure the compensatory mitigation measures will meaningfully offset adverse effects to a species/habitat in a way that is ecologically sustainable over the long term. This is a more holistic approach to ensuring the functionality of the ecosystems on which federally listed and at-risk species depend. Comment (41): One commenter recommends that the Service consider revising the guidance provided under section 5.1.2 of the draft policy to discuss not only economies of scale associated with conservation banks and small impacts, but also to state that large-scale impacts require large-scale mitigation and such development projects have the potential to create landscape-scale conservation benefit for species, which may not be best achieved through banks. Response: The Service agrees largescale projects have the potential to E:\FR\FM\27DEN2.SGM 27DEN2 asabaliauskas on DSK3SPTVN1PROD with NOTICES Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices provide large-scale mitigation measures to offset adverse effects and ideally contribute to recovery. The examples given in section 5.1.2 of the draft policy are compensatory mitigation programs that can be established in advance of impacts, such as conservation banking or in-lieu fee programs. A large-scale mitigation project implemented in advance of impacts will likely offset the impacts of multiple projects, and is essentially a conservation bank. Comment (42): One commenter stated that landscape-scale mitigation is unauthorized and unfeasible. Landscape-scale impact evaluations and required mitigation measures on this basis imports a policy objective into official ESA decisions in excess of statutory authority and is incongruent with the ESA. Response: The goal of the ESA is to conserve endangered and threatened species and the ecosystems on which they depend. Through science and technological advances, conservation has more tools than ever to effectively evaluate land use, populations, hydrology, and so forth, at scales relevant to the needs of federally listed and at-risk species. To ensure the most effective mitigation measures for these resources, it is critical to put them in an ecologically functional context, i.e., a landscape. That does not mean every action requires advanced, ecosystemlevel quantitative evaluations, but rather that the effects of an action and mitigation measures to offset those effects take into consideration truly functional strategies that will continue to provide long-term resource benefits. This does not expand any existing authorities for ESA implementation. Comment (43): We received comments requesting clarification of when programmatic approaches to mitigation would be appropriate. Response: This policy does not require the development of programmatic documents to support infrequent compensatory mitigations needs. The decision to develop programmatic approaches to mitigation will be made based upon resourcespecific circumstances, such as how frequently agencies and applicants will need to compensate for their impacts. Comment (44): Comments included concerns about the Service’s proposed extension of critical habitat to areas not currently occupied by a listed species, on the basis that an area may become critical because the species’ range is expected to expand to that area. In determining the scale of a landscapelevel approach to mitigation, the Service should not ignore the need for a rational connection to the area of actual impact VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 of a proposed project. Instead, it should base requirements for landscape-scale mitigation on demonstrable connections between truly foreseeable or predictable impacts, rather than speculative projections of habitat or range modifications due to climate change. Response: The Service agrees that compensatory mitigation must be based on the best available science, and have a rational connection between project effects and proposed mitigation measures. The landscape approach provides the context within which to frame that connection. As our understanding of species’ needs, habitats, and climate change increases, we will be better able to address potential future needs of species and their habitats. In planning mitigation strategies, it is also important to recognize uncertainties in future conditions, including habitats, water supplies, temperatures, etc. Those uncertainties should be built into the mitigation strategies to ensure that the proposed mitigation benefits adequately offset adverse effects over the long term. The policy does not address the designation of critical habitat; the regulations for the designation of critical habitat are found at 50 CFR 424.12. Comment (45): One commenter said the focus on landscape-scale conservation is laudable, but the draft policy introduces new processes and standards that could make achieving this goal more costly, time-consuming, and burdensome. The policy should include ways to incentivize the creation of landscape-scale mitigation projects that capitalize on the multiple ecosystem services and efficiencies that landscapes provide. More consideration for the self-regulating aspects of natural landscapes that could reduce management and monitoring burdens (lowering costs), and the ability to unstack credits for different listed species when their habitats overlap in space but not in function (increasing market returns), would help make landscapes a priority for the conservation marketplace. Response: The landscape approach to conservation provides a conceptual framework to design effective and durable mitigation strategies. The intent is to approach mitigation planning and implementation from an ecologically functional perspective for more effective, durable outcomes. Designing mitigation that works with natural landscapes will help reduce management costs and increase effectiveness. Monitoring also will help confirm our underlying understanding of mitigation benefits and may help identify where our assumptions need PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 95327 revision. This is critical to mitigation success. Bundled or stacked credits cannot be unbundled or unstacked to offset the effects of multiple projects but can only be used to offset the effects of a single project. Once a unit of habitat is used as mitigation for one project, regardless of the number of listed species it supports, it cannot be used as mitigation a second time. Comment (46): One comment suggested that it is unclear why the required inclusion of adjacent ecosystems and human systems, which is how landscapes are defined, into conservation plans will provide a benefit to species that do not require those habitats or ecosystems for survival. The Service should clarify whether it intends mitigation consistent with a landscape-scale approach to require grouping of permittee proposed compensatory mitigation projects or grouping of project proponents, and in situations where this is desired, the benefits should be explained. Response: Including consideration of adjacent ecosystems and human systems into a landscape approach to compensatory mitigation recognizes the potential effects those systems may have on the species and habitats under consideration. This is especially important in ensuring long-term ecologic functioning of the compensatory mitigation that benefits the species/habitat. We are increasingly aware that adjacent landscapes and human management actions can significantly affect what was perceived as a protected area. This policy explicitly recognizes those factors in developing long-term, comprehensive conservation strategies for the resources under consideration. Because those strategies will be implemented using market-based and collaborative mitigation tools, the Service will work with our conservation partners to develop effective, feasible measures to put conservation on the ground. The policy does not require permittee proposed mitigation projects to be grouped, but they should be considered in the context of the landscape in which they occur. Comment (47): One commenter said that most species lack an up-to-date analysis of conservation status, and few have forward-looking strategies that the Service intends to rely on in implementing the policy. Furthermore, not all landscape-scale conservation strategies noted by the Service are peerreviewed, publicly vetted, scientifically sound, or without controversy. If the Service intends to rely on such strategies in the context of preparing E:\FR\FM\27DEN2.SGM 27DEN2 asabaliauskas on DSK3SPTVN1PROD with NOTICES 95328 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices recovery plans, status reviews, and similar documents, then these landscape-scale conservation strategies and the process for implementing them must be vastly improved. The Service should let the conservation market identify lands that represent valuable conservation targets and take advantage of ‘‘market efficiencies’’ that are a benefit of the conservation banking and in-lieu fee forms of mitigation. Response: The Service agrees on the importance of using the best available scientific information in developing conservation strategies. We rely on our conservation partners to bring their information and expertise into a collaborative process to help us develop those strategies. We also appreciate the assistance of the conservation market in designing, implementing, and expanding our suite of conservation tools to benefit listed and at-risk species. Comment (48): One commenter said the policy would benefit from greater recognition that activities associated with the management, monitoring, protections, and assurances need not be as robust in some instances, yet will achieve a functional landscape that is capable of supporting the conservation of listed and at-risk species, different from the actions necessary to provide compensatory mitigation for wetlands and other aquatic resources. Response: The Service agrees that some larger landscapes may require less intensive management than smaller areas. However, in most areas of the country, there are few ‘‘self-regulating’’ systems left that are not greatly influenced by invasive species, altered hydrology, ongoing erosion, and climate change. It is important in designing feasible, meaningful mitigation to appropriately scale the monitoring and management actions to most effectively provide resource benefits. This will depend on the resources, landscapes, and scale of the project, and should have a rational connection between the effects being offset and the benefits provided. We declined to modify the policy based on this comment. Comment (49): One commenter said the draft policy’s example of a proactive, landscape-scale mitigation approach provided by songbird mitigation guidance in Texas to encourage compensatory mitigation opportunities is misleading. The commenter cited two instances in which potential conservation banks were precluded from establishing species credits due to the requirements in the guidance. Response: We respectfully disagree. The example used in the policy is VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 intended to show instances where the Service has taken landscape-scale approaches for species conservation and compensatory mitigation. We recognize that not all proposals developed under the Texas example or other local guidance will ultimately be finalized and implemented, but the intent of this policy is to promote consistency and predictability so that mitigation providers may develop programs that are more likely to be implemented. Comment (50): Some commenters indicated that the policy should offer far more guidance on when and how the Service would apply a ‘‘landscape-level approach’’ to ESA mitigation, questioned whether the Service would apply a landscape approach differently to species with different range sizes, and stated that the draft policy does not explicitly describe how or whether a landscape approach would apply to listed species with narrow ranges. Response: The landscape approach to conservation considers the functional context of the species or habitat under consideration. Working with our conservation partners and project proponents, the Service will use a landscape context to provide the most effective and durable mitigation for listed and at-risk species, while preserving the greatest flexibility to implement those measures at many scales. Given the breadth of species and landscapes under consideration, it is impossible to give a ‘‘one size fits all’’ set of instructions. Using a landscape context to frame mitigation actions should reinforce functionality at the appropriate scale (i.e., tract, regional, range) to benefit the target resource and, in most cases, other resources/species that also rely on that functional system. Though some species may have relatively narrow ranges, their threats may be best addressed at a landscape scale (e.g., invasive species, altered hydrology, climate change). This approach will help ensure the compensatory mitigation measures will meaningfully offset adverse effects to a species/habitat in a way that is ecologically sustainable over the long term. Comment (51): One commenter noted that the statement requiring compensatory mitigation to be ‘‘sited in locations that have been identified in landscape level conservation plans or mitigation strategies’’ does not take into account the limited lands available for acquisition or restoration in some areas of the United States and the need to acquire property from willing sellers. Response: The Service recognizes conservation opportunities vary across the country by species and habitats. The PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 landscape-scale approach is a way to place those opportunities in an ecologically functional context. The policy allows for compensatory mitigation on public lands (provided certain criteria are met, e.g., ‘‘additionality’’) and on private lands. It also encourages market-based tools and incentives to take advantage of the unique circumstances in each area. While there may be limitations in available lands in some regions, the policy includes a suite of tools that should provide meaningful options for feasible, durable compensatory mitigation nationwide. Comment (52): The policy will result in the creation of a landscape-scale system of conservation banks and other mitigation sites controlled by the Service that will take private land and their resources out of productive use. Response: The landscape approach to conservation considers the functional context of the species or habitat under consideration. It does not affect land ownership or control. Working with our conservation partners and project proponents, the Service will use a landscape context to provide the most effective and durable mitigation for listed and at-risk species, while preserving the greatest flexibility to implement those measures at many scales. Providing incentives for a market-based approach to conservation allows many tools to better meet the needs of species as well as the needs of landowner/project proponents. Generally, the use of conservation banking and other mitigation projects will not take resources out of ‘‘productive’’ use. Rather, conservation banks and other mitigation projects located on private land remain under control of the property owner and often provide other productive uses, such as grazing livestock. I. Metrics Comment (53): One commenter stated that the policy should clarify that actions can meet ESA conservation standards using mitigation when adverse effects, and mitigation offsets of those effects, are calculated using tools that consider more than mere gain or loss of animals or habitat. For example, tools like Habitat Equivalency Analysis consider spatial, temporal, and functional parameters that look beyond mere loss or gain to calculate the extent and quality of mitigation required in given situations. Response: A discussion of tools used to calculate mitigation is not within the scope of this policy. Comment (54): Several commenters were concerned that adequate detail E:\FR\FM\27DEN2.SGM 27DEN2 asabaliauskas on DSK3SPTVN1PROD with NOTICES Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices about how assessment methodologies are developed and applied was not provided in the draft policy. Commenters were also concerned that the numerical loss and benefit to a site is largely a qualitative measurement, and the no methodology for quantification is offered. They said that transparent formulas to calculate ‘‘mitigation ratios’’ are needed to reduce subjectivity and increase transparency. They also noted that equivalent metrics for determining losses due to impacts and gains due to mitigation would aid in the assessment of ‘‘no net loss’’ or ‘‘net gain.’’ Response: The Service agrees that transparent formulas to calculate ‘‘mitigation ratios’’ reduce subjectivity and increase transparency. We also agree that equivalent metrics for determining losses due to impacts and gains due to mitigation would aid in the assessment of ‘‘no net loss’’ or ‘‘net gain.’’ This policy does include a statement that equivalent metrics should be used whenever possible. Details about how to develop and apply assessment methodologies that are quantitative and transparent were not included in the draft, or this final, policy, because these details are speciesspecific and too complex to describe adequately within the framework of the policy. When detailed descriptions of assessment methodology development and application are prepared by the Service for a species-specific mitigation program, these descriptions are routinely shared with the public. Comment (55): One commenter said that since buffers are so important, they should be counted in the crediting of a mitigation site at some ratio of a full credit. Response: The Service agrees with this comment. In section 6.6, the policy states, ‘‘If buffers also provide functions and services for the species or other resources of concern, compensatory mitigation credit will be provided at a level commensurate with the level of functions and/or services provided to the species.’’ Comment (56): One commenter stated that for the purposes of mitigation, the Service has not shown compelling evidence that adequate assessment methodologies exist to consider adverse and beneficial actions that are fundamentally different in nature. Determining the numerical loss and benefit to a site is largely a qualitative measurement, and the draft policy offers no quantification methodology. Response: The policy describes types of mitigation programs or projects that do not directly replace species or habitat losses resulting from development VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 projects. These are the types of programs in which the adverse actions, like habitat development, would be offset by an action that is fundamentally different in nature, such as gating of caves that serve as habitat for the species. The Service acknowledges that these types of credit/debit systems can often be more subjective than the traditional habitat-for-habitat type of mitigation. However, this type of mitigation has been the exception rather than the rule, and we expect Service staff to use other programs or projects only when they are the best option to alleviate the greatest threats to the species involved. When these programs or projects are allowed as mitigation, the Service will clearly explain the link between the threat and the selected mitigation. Comment (57): One commenter was concerned that there was no discussion of how successful ‘‘surrogate’’ indicators of incidental take have been in assuring adequate mitigation. Response: The use of surrogate indicators for the species impacted, such as the species’ habitat, when applying compensatory mitigation in accordance with 50 CFR 402.14(i)(1)(i) is discussed at section 5.2 of the policy. We declined to add additional detail to that discussion. Comment (58): One commenter suggested that the Service require that all credits and debits associated with the same species and region be aggregated and reported across all compensatory mitigation mechanisms. They indicated this is critical to ensure an offset achieves ‘‘net conservation gain,’’ to ensure the offsets created by all mechanisms are using the best available science, and to ensure equivalency across multiple mechanisms. They also suggested when the same metric is not used by two different mechanisms; the requirement to define ‘‘the relationship (conservation) between credits and debits’’ can also be used to define the relationship between different credit metrics. Response: Currently, the Service uses the Regulatory In-lieu Fee and Banking Information Tracking System (RIBITS) to track credits and debits for conservation banks. The Service intends to work with the USACE to adapt RIBITS for use by the Service to also track credits and debits for in-lieu fee programs. The type of credits that are acceptable for a given species is determined by the Service when a mitigation program for a specific species is developed and implemented. The Service agrees that tracking the types and amounts of credits used across a species’ range is a good idea, as it PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 95329 informs our understanding of the species’ status. Collecting this type of information and working to achieve consistency requires coordination among Service staff, including those from different program areas. Describing the actions necessary to ensure this coordination occurs is beyond the scope of this policy. Comment (59): One commenter suggested a monitoring and verification process should be required of all mitigation. They said the verification process should include a method to verify that the outcomes of the project achieve the performance standard throughout the entire life of the mitigation project, and that method could be the initial assessment method or an abbreviated assessment that still quantifies the quality of the resource. They also suggested the party responsible for conducting the verification should be identified upfront. Response: We agree that these are important requirements to ensure that mitigation remains adequate over time. Specific methodologies for such verification are beyond the scope of this policy. Comment (60): One commenter said it should be made explicitly clear that while adaptive management is critical as knowledge and conditions change, the necessary updates to metrics or plans do not invalidate previous metrics or credits. They suggested that each credit, and debit if applicable, should be labeled with the method used at the time of assessment. They also suggested that reports should acknowledge when metrics are modified, but credits should still be aggregated across time. They noted that it may be necessary to use a correction method, and these correction methods should be transparent, scientifically supported, and included in all reports. Response: We agree in concept; however, this comment goes beyond the scope of the policy. Comment (61): One commenter asked that we clarify that plans should rely more on the criteria that define highquality habitat, including criteria for landscape-scale attributes, indicating these criteria should be consistently reflected in the development of metrics used to define credits and debits within the region. They noted that opportunities to enhance and protect habitat may be outside of predefined conservation areas, but they must meet the definition for high-quality habitat and be deemed acceptable. Response: We agree that metrics should define high-quality habitat. We also agree that opportunities to enhance E:\FR\FM\27DEN2.SGM 27DEN2 95330 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES and protect habitat may be outside of predefined conservation areas, and regardless of location, they should meet the definition for high-quality habitat and be deemed acceptable. This concept is captured in the final policy. Comment (62): One commenter liked the concept that ecological performance criteria must be tied to conservation goals and specific objectives identified in compensatory mitigation programs and projects, but they did not think the draft policy adequately describes how to accomplish this objective. Response: The level of detail necessary to describe how to accomplish this objective is beyond the scope of this policy and may be addressed in implementation guidance. Comment (63): One commenter stated the draft policy should more explicitly recognize the uncertainty associated with mitigation for certain species and describe a framework for managing the uncertainty. They said the policy should describe a framework the Service would use to assess the appropriate balance of avoidance, minimization, and mitigation, as informed by the likelihood of mitigation effectiveness and the species’ recovery needs. Response: The Service agrees that there is uncertainty associated with mitigation for certain species. This policy includes a discussion of risk management tools. These tools can be used after the Service determines that a mitigation program or project is appropriate. Assessing risks and determining if mitigation is appropriate for a species is not within the scope of this policy, as uncertainty associated with mitigation for certain species will be fact specific. J. Additionality Comment (64): We received two comments on the draft policy’s use of ‘‘additionality’’ when developing compensatory mitigation on both public and private lands. Commenters believed additionality is not feasible when coupled with the ‘‘no net loss’’ goal, and that some inconsistencies exist in the descriptions in the text of the draft policy. Response: One purpose of using ‘‘additionality’’ as a standard in the policy is to promote the ‘‘net gain/no net loss’’ goal. There are many examples of mitigation sites and programs that have achieved these standards. The concept of compensatory measures providing additional benefits above baseline conditions is described in general terms in the policy. Those descriptions in the text are intended to give context to the conservation benefits of mitigation actions being additive to VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 baseline conditions on both private and public lands. K. Durability Comment (65): Some commenters were concerned that the requirement for perpetual management of mitigation sites places an undue burden on mitigation providers, or that perpetual management would be detrimental to the resource. They said that the imposition of perpetual endowment and adaptive management places burdens on all projects, and it would be impossible for industry to manage and maintain mitigation sites in perpetuity. Response: Perpetual management of mitigation sites is essential to assure durability of compensatory mitigation. The species and resources present on a mitigation site will dictate what management actions are undertaken. Management plans are tailored to the needs of the site. Mitigation providers should carefully consider the long-term commitment they are making when they agree to implement a compensatory mitigation project. Mitigation that is permanent is expected to have appropriate financial and real estate assurances to meet the durability standard in the policy. L. Collaboration and Coordination Comment (66): One commenter said the policy would mandate the Service to work directly with landowners, potentially resulting in the loss of confidential information. The commenter noted recent conservation plans produced in Texas were developed by stakeholders and administered through State agencies to preserve confidentiality of private landowners. Response: The Service has a long history of working with private landowners to conserve fish and wildlife resources, including endangered and threatened species. Our partnerships with private landowners are essential to achieving our conservation mission. The policy does not include a mandate to work directly with landowners, but supports the ESA and its implementing regulations, which allows us to work with a variety of entities towards the recovery of listed species, and encourages cooperative conservation with all of our partners, including the exchange of ideas and information to better inform species management and evaluation. As noted in the policy, transparency in compensatory mitigation programs and ESA implementation is essential to achieving success. The Service is considerate of confidentiality, and any personal information maintained by the PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 Service is protected by law (e.g., Freedom of Information Act, 5 U.S.C. 552; Privacy Act, 5 U.S.C. 552a) to prevent unlawful dissemination. Comment (67): One commenter was concerned that the Service developed the policy without having addressed concerns raised by States and other parties regarding the Service’s mitigation policy. They said that moving forward with this guidance without finalizing the overarching mitigation policy was premature, and created uncertainty and confusion over what the Service was likely to adopt. Response: This compensatory mitigation policy is a step-down policy under the final Service mitigation policy, which published in the Federal Register on November 21, 2016 (81 FR 83440). There were no substantial changes between the draft and final Service mitigation policy. In finalizing the Service’s mitigation policy, we fully considered all comments and concerns raised by States and other parties. We also considered those comments as we developed this policy. Comment (68): Two commenters addressed the relationship between this policy and mitigation policy developments underway in other agencies. One commenter was concerned that while interagency cooperation is addressed in the draft policy, it only provided a history of previous ESA requirements. They were concerned that the draft policy did not address the relationship between similar policies being developed by other Federal land management agencies such as the Bureau of Land Management and the U.S. Forest Service. Another commenter noted that other Federal agencies are also responding to the Presidential memorandum (‘‘Mitigating Impacts on Natural Resources From Development and Encouraging Related Private Investment’’) issued November 3, 2015. They said that this created the opportunity for the Service to enter into agreements with other Federal agencies to work together on the implementation of similar mitigation policies and to avoid conflicts, delays, and inefficiencies. Response: At the time this policy is being finalized, neither the Bureau of Land Management nor the U.S. Forest Service has published final mitigation policies or regulations. The Service did provide comments on their proposed policies, and we did receive comments on this policy from those agencies. This policy, like the Service mitigation policy published November 21, 2016 (81 FR 83440), was developed in accordance with the November 3, 2015, Presidential Memorandum; the E:\FR\FM\27DEN2.SGM 27DEN2 asabaliauskas on DSK3SPTVN1PROD with NOTICES Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices Secretary of the Interior’s Order 3330 entitled, ‘‘Improving Mitigation Policies and Practices of the Department of the Interior’’ (October 31, 2013); and Departmental Manual chapter (600 DM 6) on Landscape-Scale Mitigation Policy (October 23, 2015). The commenter’s concern is anticipated by those documents, which envision the various agencies’ mitigation policies applying common principles, terms, and approaches, thereby providing greater consistency and predictability for the public. Subsequent agreements between the Service and other agencies may be developed as need arises. Comment (69): One commenter said the draft policy would be improved if it built upon and utilized the USACE and EPA’s definitions and mitigation policies. They said that a reconciliation of terms and process should be part of the Service’s next steps. Response: We agree that this policy should apply concepts and definitions compatible with those developed through decades of mitigation practice under the Clean Water Act. Accordingly, we have developed this policy to use the same terms and approaches found in regulations and guidance promulgated by the USACE and EPA whenever possible. In some cases, we also recognized the need for language tailored to authorities, processes, and resources covered by the ESA rather than the Clean Water Act; in these cases, the policy’s language complies with the Departmental Manual on Landscape-Scale Mitigation Policy (600 DM 6). Comment (70): One commenter said that the implementation of this policy will establish an inconsistent ESA framework because the National Marine Fisheries Service did not adopt the Service’s mitigation policy (81 FR 83440, November 21, 2016). The commenter said this approach is contrary to the typical practice of promulgating joint regulations by the two agencies that provide for uniform application of the ESA. The commenter stated that by unilaterally proposing this policy and the Service mitigation policy (81 FR 83440, November 21, 2016), the Service is creating disparate requirements that will impose significant and additional regulations on project sponsors based on the possibility of a species being affected. Response: This policy is not a rulemaking and cannot otherwise alter or substitute for the existing regulations applied by both the National Oceanic and Atmospheric Administration (NOAA) and the Service in implementing the ESA. We also have coordinated development of both this VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 policy and the Service mitigation policy (81 FR 83440, November 21, 2016) with NOAA, and incorporated their suggestions and modifications. Also, this policy was required under the Presidential Memorandum on Mitigation, the Department of the Interior Secretarial Order 3330, and 600 DM 6. Comment (71): One commenter said that the Service and other agencies risk unnecessary duplication of efforts and conflicting requirements, which will further delay project approval. They encouraged the Service to consider mitigation frameworks already in place before adding another layer of mitigation requirements to an already complex and burdensome project approval process. Response: We agree that existing mitigation programs and frameworks, as well as existing mitigation and conservation plans, should be considered. The Service recognizes that there may be existing plans developed by State and local governments and other stakeholders with characteristics that may be useful in mitigation planning depending on the specific action and the affected resources. The Service will work with project proponents and other stakeholders in reviewing existing programs, frameworks, and plans for applicability in the context of a specific action. Comment (72): One commenter said the policy would complicate other agencies’ processes. They said that it would increase opportunities for the Service to force concessions from other Federal agencies and permittees, and that it has the potential to violate organic acts and will undoubtedly complicate the approval process for mining operations and other land users. Response: The scope of this policy does not limit the existing discretion of an action agency, or hold the action agency or applicant responsible for mitigation beyond an action agency’s own authority, mission, and responsibilities. The Service recognizes that the authorities and processes of different agencies may limit or provide discretion regarding the level of mitigation for a project. This policy is not controlling upon other agencies, and the Service acknowledges that there may be limitations (e.g., agency-specific authorities and 600 DM 6) on the implementation of measures that would achieve the policy’s goal of ‘‘net conservation gain’’ or a minimum of ‘‘no net loss’’ when the costs of such mitigation are reimbursable by project beneficiaries under laws and regulations controlling agencies’ activities (e.g., Bureau of Reclamation). Other agencies PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 95331 may voluntarily adopt Service recommendations, which may expedite their other requirements. Comment (73): Some commenters expressed interest in a collaborative approach to mitigation planning on a landscape level. One commenter expressed support for additional engagement with stakeholders; another commented that the role of State wildlife data, analyses, and expertise should be utilized to the greatest extent possible; another commenter was skeptical of the collaborative approach preferred by the Service. Response: The Service agrees that developing multi-scale conservation plans and strategies benefits from many invested stakeholders that bring their unique insights and perspectives to ensure a more comprehensive and robust blueprint, and looks forward to building on our conservation partnerships through collaborative planning efforts. Our State partners in particular are critical to successful compensatory mitigation of federally listed and at-risk species. They bring statutory responsibility, data, expertise, and management capabilities to better ensure successful, durable mitigation efforts on the ground. Comment (74): Several commenters were concerned about the level of coordination undertaken by the Service on establishment of mitigation programs, and encouraged the Service to engage with both mitigation partners and with State agencies, to avoid duplication of effort and crossjurisdictional issues and to improve outcomes. One commenter urged the Service to expedite reviews by working with agencies that already have established mitigation policies and programs. Response: The Service agrees that we have common goals with our partners and achieve much better outcomes when we work together on coordinated mitigation programs, especially where our jurisdiction overlaps with that of other agencies as it often does with our State wildlife agency partners. The Service intends to continue working with all of our partners. M. Transparency Comment (75): One commenter requested clarification on the Service’s meaning of ‘‘direct oversight’’ in the draft policy regarding compensatory mitigation programs and projects. The commenter also requested clarification on use of third-party evaluators in preparing monitoring reports for programs or projects. Response: The policy identifies the Service’s authority for direct oversight E:\FR\FM\27DEN2.SGM 27DEN2 95332 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES of compensatory mitigation programs and projects through sections 7 and 10 of the ESA. Under sections 7 and 10, the Service oversees the terms and conditions of the incidental take permit (section 10) or of the incidental take statement (section 7). Details on the roles of third-party evaluators involved in specific project actions are beyond the scope of the policy. Comment (76): We received several comments pertaining to the availability of information generated from mitigation programs. Commenters recommended the policy include standards for transparency of data and documents, participation of stakeholders, and consistency of data reported through mitigation programs. Response: Information on conservation banks is available to the public on the Regulatory In-lieu Fee and Banking Information Tracking System (RIBITS), and the Service intends to work with the USACE to add Serviceapproved in-lieu fee programs to that platform. As noted in the policy, the Service will share appropriate information concerning mitigation programs with the public, with the exception of personally identifiable information or other information that would be exempt under the Freedom of Information Act. We declined to add specific standards for transparency to the policy. Prescriptive standards for the type of data to be shared would not be reasonable for a policy that covers the myriad listed species across the country. Such standards would be better suited for species-specific guidance. N. Preference for Advance Mitigation Comment (77): One commenter stated the policy should adopt an approach similar to that taken in the HCP handbook to identify exceptions to the requirement to mitigate in advance of impacts. Response: The policy is intended to provide standards and guidance to improve consistency of compensatory mitigation programs and projects for listed, proposed, and at-risk species. The preference for advance mitigation is based on the years of experience with compensatory mitigation programs. We realize that in some cases advance mitigation may not be possible, or even preferable; however, attempting to identify exceptions for this preference would not be reasonable, considering the vast diversity of species and programs that would occur across the country. Comment (78): Several commenters were concerned about the draft policy’s preference for compensatory mitigation in advance of project impacts. One VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 commenter specifically identified that reclamation of mining operations often lacks the ability for advanced mitigation on site. Other commenters cited that: The process of project permitting and financing determinations would likely not allow for advanced mitigation; the Service should provide incentives such as higher ratios for ‘‘after impact mitigation’’; advance mitigation would be considered pre-decisional; or it is impossible to provide mitigation in advance of impacts. Response: We recognize that project scheduling and implementing on-site mitigation may not always align with the Service’s preference for advance mitigation; however, conservation banks, in-lieu-fee programs, and other third-party mechanisms provide advanced mitigation options that reduce timing and other constraints. The Service’s current practice to recommend mitigation in advance of impacts under sections 7 and 10 of the ESA is based on years of experience in compensatory mitigation practices. This policy promotes the development of advanced mitigation mechanisms, providing more options for mitigation users. The Service agrees that mitigation ratios can be used to incentivize mitigation accomplished in advance of impacts, but the discussion of specifics is beyond the scope of this policy. The Service does not consider advance mitigation to be pre-decisional, as the majority of advance mitigation programs, such as conservation banking, are established prior to any impacts, and projects that will mitigate at such sites may be unknown at the time of bank establishment. In all cases, the Service will evaluate the appropriateness of using a specific site or proposal as compensatory mitigation to offset the unavoidable impacts of a project at the time the Service reviews the project that will likely result in the impacts. O. Eligible Lands Comment (79): Several commenters supported mitigation projects and programs on public lands and wanted us to add more flexibility to the policy. One commenter stated that if mitigation projects and programs occur on public lands, the land manager should be prepared to implement and fund alternative mitigation if a change in law allows incompatible uses to occur on mitigation lands. One commenter did not support mitigation projects and programs on Federal lands, but was in favor of it on State lands, and wanted State lands specifically mentioned in the policy. Response: Compensatory mitigation can occur on public lands, either PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 Federal or State lands, and in some cases, such siting may lead to the best ecological outcome. Compensatory mitigation for impacts on public lands can be sited on both public and private lands. Compensatory mitigation for impacts on private lands can be located on public lands, but it is this combination, or that particular change in ownership classification, where Service staff should be attentive to additional considerations before making such a recommendation. These additional considerations are necessary to achieve the ‘‘net gain’’ or, at a minimum ‘‘no net loss,’’ goal of the policy. Comment (80): Several commenters provided comments on split estates. Commenters said the Service is arbitrarily limiting areas on which mitigation can occur by not allowing lands with split estates to qualify as mitigation lands; split estates do not necessarily result in an unsuitable mitigation site; and the holder of the rights would have to secure their own authorization under the ESA from the Service prior to exercising their rights. Response: The Service agrees that there are cases in which lands with split estates can be used for mitigation. The policy advises caution because we strive to ensure the durability of mitigation projects and programs, but the policy does mention possible remedies and that there could be other approaches to using lands with split estates for mitigation. A detailed discussion of remedies and other approaches is not within the scope of this policy. P. Tribal Lands/Tribal Rights Comment (81): We received some comments regarding the siting of mitigation projects on tribal lands or on lands on which tribes hold treaty rights. One commenter expressed the need for local mitigation projects to be sited in or near reservation lands as well as on traditional off-reservation sites, to benefit the natural resources of the native peoples; another commenter was concerned that locating mitigation outside of treaty areas for projects that impact the resources in treaty areas would harm the treaty rights and the resources of the tribes. Other commenters asked that tribes be consulted in the siting and approval of mitigation sites and programs. Others were concerned about the impacts of habitat restoration and long-term management on treaty resources. Response: The Service is committed to upholding our trust responsibilities to federally recognized tribes to conserve shared natural resources, consistent with the Service’s Native American E:\FR\FM\27DEN2.SGM 27DEN2 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES Policy (revised January 2016; see 81 FR 4638, January 27, 2016). This is accomplished under this policy by ensuring that mitigation projects and programs are located in areas that provide the most benefit to the affected resources, while respecting treaty rights. The Service recognizes the importance of tribal involvement and expertise when siting mitigation projects and when developing service areas and management plans for conservation banks and other types of mitigation mechanisms. Specific guidance on Service coordination with tribes is beyond the scope of this policy. Comment (82): We received some comments requesting specific guidance on facilitating creation of conservation banks on tribal lands, comments on including tribal cultural uses and practices as allowable uses on mitigation lands, and a suggestion for developing mitigation principles similar to those developed with the USACE in the State of Washington for specific mitigation programs. Response: The Service agrees that these are all important considerations, and such guidance and suggestions will be more effectively addressed in stepdown guidance at a later time. Comment (83): We received comments regarding the applicability of the policy to tribes, or to a specific HCP under development, and a suggestion that the Service consult with any tribes who so request before finalizing this policy. Response: The Service notified tribal contacts when we made the draft policy available for review and comment (81 FR 61032, September 2, 2016). We addressed all tribal comments, as appropriate, as we developed the final policy. The policy applies to all forms of compensatory mitigation for all species and habitat protected under the ESA and for which the Service has jurisdiction. The policy is flexible with regard to its application to specific mitigation projects or programs that are under development at the time this policy is finalized, leaving that decision to individual Service offices. Q. Service Areas Comment (84): Several commenters requested more detail in the policy about requirements for developing service areas. Response: Specific considerations for developing service areas are beyond the scope of this policy and will be provided in implementation guidance. R. Credit Bundling Comment (85): A few commenters were concerned about credit bundling, VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 also known as credit stacking, where multiple resources exist on the same unit area. One commenter was concerned that any resources bundled or stacked with a listed species would suffer, as the site would be managed only for the benefit of the listed species and not the other resource(s), and wanted multi-agency review teams to be aware of this when authorizing mitigation banks. Other commenters wanted the Service to make it clear that credits could potentially be used for multiple purposes, and another wanted the Service to allow mitigation credits to be used to compensate for multiple impact projects. Response: The Service encourages credit bundling where multiple resources exist on the same unit area and where management actions benefit those multiple resources. However, bundled credits can only be used to compensate for one impact project (i.e., the credits can never be ‘‘unbundled’’ or ‘‘unstacked’’ to compensate for multiple projects). If two resources, such as a California red-legged frog (CRLF) and a wetland regulated pursuant to section 404 of the Clean Water Act are bundled together in a credit, that credit may be used to compensate for impacts to both resources from the same project, or to compensate for impacts to CRLF or to wetlands. If the credit were used to compensate for CRLF, then it can no longer be used to compensate for wetlands (i.e., that portion of the credit is ‘‘retired’’). Unbundling these functions and services would result in a net loss of habitat and would undermine the Service’s efforts to conserve the species. This approach is consistent with the policies and regulations of the USACE, and other State and Federal agencies the Service works with on multi-agency-approved mitigation projects and programs. S. Mitigation Mechanisms Comment (86): One commenter suggested the Benefits of the Draft Policy section be clarified to include other mitigation mechanisms that may not be market-based. The commenter suggested that the first sentence of the final paragraph of that section be modified to read: ‘‘This draft policy would encourage mitigation in conjunction with programmatic approaches to ESA section 7 consultations and HCPs designed to focus on conservation outcomes that achieve ‘‘no net loss’’ or ‘‘net gain’’ through the use of market-based approaches (e.g., conservation banks), in-lieu fee programs, permitteeresponsible, and other third-party implemented mitigation programs.’’ PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 95333 Response: The Service considers that one of the benefits of this policy is the opportunity it creates for a market-based approach to mitigation as highlighted in the Presidential Memorandum of November 3, 2015, on Mitigating Impacts on Natural Resources From Development and Encouraging Related Private Investment (80 FR 68743, November 6, 2015), especially those that can be established in advance of impacts. Conservation banking is a proven example of this approach. The policy does not preclude the other mechanisms mentioned by the commenter. We declined to adopt the commenter’s suggested sentence. Comment (87): Several commenters stated that the draft policy was confusing and complex, citing the Service’s definition of compensatory mitigation being too broad, lack of a mitigation protocol, and need for a guidance document to ensure a separation of regulatory and nonregulatory authority, goals, and standards. One comment stated the complexity of obtaining approval, as well as cost, for a mitigation site would discourage investment. Response: One purpose of the policy is to provide predictability and thereby reduce uncertainty of investment for market-based mitigation programs. We acknowledge that the nature of existing compensatory mitigation mechanisms and programs currently being implemented is complex. We have revised the draft policy so that this final policy addresses overarching goals and standards only, and we will later provide more detailed implementation guidance. However, providing a mitigation ‘‘protocol’’ that covers the breadth of species and circumstances across the country would not be reasonable. We anticipate species- or geographic-specific guidance to be developed under the umbrella of this policy. Comment (88): We received two comments regarding section 7.2, ShortTerm Compensatory Mitigation, in the draft policy. One comment indicated it may not be helpful, particularly when dealing with aquatic species. The other requested more detail in this section and stressed it should be more widely used. Response: The use of short-term compensatory mitigation is a novel approach, with long-term results yet to be evaluated. The policy fully acknowledges that it is likely to be limited in use, for a variety of reasons, primarily the ability to predict all temporal losses of an impact in order to provide an appropriate offset for those losses. However, the concept may be E:\FR\FM\27DEN2.SGM 27DEN2 95334 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES useful in some circumstances. Thus, it is included in the policy in an effort to provide additional flexibility to conserve listed, proposed, and at-risk species. Comment (89): Several commenters requested that the Service express a preference for conservation bank credits over other forms of compensatory mitigation. One commenter requested the Service add a preference for rehabilitation or restoration over preservation and that the Service prohibit use of alternative forms of mitigation if conservation bank credits are available in the same proposed service area. Response: As stated in section 6 of this policy, the appropriate form of compensatory mitigation must be based on the species’ needs and the nature of the impacts adversely affecting the species. All mitigation tools listed in the policy are capable of being strategically sited, consolidated, and provided in advance of impacts if they are designed to do so. These preferences will provide the best outcomes for species when they are implemented in any mitigation tool, and, therefore, we have retained flexibility for applicants when selecting mitigation tools. We decline to prohibit the use of alternative forms of mitigation where conservation bank credits are available, as that would limit flexibility and inherent choice of the applicant(s). T. Climate Change Comment (90): Several commenters addressed sections of the draft policy that referenced climate change for consideration in mitigation planning. Some commenters were concerned about the uncertainty of calculating the effects of climate change for compensatory mitigation and the use of mitigation ratios to address climate change. One commenter said the policy should provide more detail on integrating climate change effects in the analysis of mitigation programs. Another requested the basis for the term ‘‘accelerated’’ climate change used in the policy. Response: Consistent with the Departmental Manual (600 DM 6), the Service recommends that climate change be considered when evaluating the effects of an action and developing appropriate mitigation measures. The Service recognizes the science of climate change is advancing, and assessment methodologies are continually being refined to address the effects of climate change to specific resources and at differing scales. Including specific information on these topics is beyond the scope of this policy. Therefore, the policy is written VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 with language to ensure that it does not become quickly outdated as methodologies evolve. We use the term ‘‘accelerated climate change’’ in a general sense to reference a substantial portion of scientific literature and scholarly articles on the subject, including reports produced by the Intergovernmental Panel on Climate Change. The final policy follows: U.S. Fish and Wildlife Service Endangered Species Act Compensatory Mitigation Policy 1. Purposes This policy adopts the mitigation principles established in the U.S. Fish and Wildlife Service (Service) Mitigation Policy (81 FR 83440, November 21, 2016), establishes compensatory mitigation standards, and provides guidance for the application of compensatory mitigation through implementation of the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531 et seq.). Compensatory mitigation (compensation) is defined in this policy as compensation for remaining unavoidable impacts after all appropriate and practicable avoidance and minimization measures have been applied, by replacing or providing substitute resources or environments (see 40 CFR 1508.20) through the restoration, establishment, enhancement, or preservation of resources and their values, services, and functions (600 DM 6.4C). This policy applies to all Service compensatory mitigation requirements and recommendations involving ESA compliance. It is also intended to assist other Federal agencies carrying out their statutory and regulatory responsibilities under the ESA and to provide applicants with guidance on the appropriate use of compensatory mitigation for proposed actions. The standards and guidance in the policy will also assist mitigation providers in developing compensatory mitigation project proposals. Adherence to the principles, standards, and guidance identified in this policy is expected to: (1) Provide greater clarity on applying compensatory mitigation to actions subject to ESA compliance requirements; (2) improve consistency and predictability in the implementation of the ESA by standardizing compensatory mitigation practices; and (3) promote the use of compensatory mitigation at a landscape scale to help achieve the purposes of the ESA. PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 This policy encourages Service personnel to collaborate with other agencies, academic institutions, nongovernmental organizations, tribes, and other partners to develop and implement compensatory mitigation measures and programs through a landscape-scale approach to achieve the best possible conservation outcomes for activities subject to ESA compliance. It also encourages the use of programmatic approaches to compensatory mitigation that have the advantages of advance planning and economies of scale to: (1) Achieve a net gain in species’ conservation; (2) reduce the unit cost of compensatory mitigation; and (3) improve regulatory procedural efficiency. Appendices A and B provide a list of acronyms and a glossary of terms used in this policy, respectively. 2. Authorities and Coordination This policy is focused on compensatory mitigation that can be achieved under the ESA. The Service’s authority to require mitigation is limited, and our authority to require a ‘‘net gain’’ in the status of endangered and threatened (listed) or at-risk species has little or no application under the ESA. However, we can recommend the use of mitigation, and in particular compensatory mitigation, to offset the adverse impacts of actions under the ESA. Other statutes also provide the Service with authority for recommending compensatory mitigation for actions affecting fish, wildlife, plants, and their habitats (e.g., Fish and Wildlife Coordination Act (FWCA; 16 U.S.C. 661–667e), National Environmental Policy Act (NEPA; 42 U.S.C. 4321 et seq.), and Oil Pollution Act (33 U.S.C. 2701 et seq.)). In addition, statutes such as the Clean Water Act (CWA; 33 U.S.C. 1251 et seq.) and Federal Power Act (16 U.S.C. 791a– 828c) provide other Federal agencies with authority to recommend or require compensatory mitigation for actions that result in adverse effects to species or their habitats. These other authorities are often used in combination with, or to supplement the authorities under, the ESA to recommend or require compensatory mitigation for a variety of resources including at-risk species and their habitats. For example, the ESA and the Federal Land Policy and Management Act (43 U.S.C. 1701 et seq.) together provide a greater impetus to conserve desert tortoise habitat than either statute alone. Synchronizing environmental review processes, especially through early coordination with project proponents, allows the Service to provide comments E:\FR\FM\27DEN2.SGM 27DEN2 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices and recommendations for all mitigation types (i.e., avoidance, minimization, and compensation) included as part of proposed actions in an effort to reduce impacts to listed, proposed, and at-risk species and designated and proposed critical habitat. For example, the Service may comment on proposed actions under NEPA and State environmental review statutes (e.g., California Environmental Quality Act and Hawaii Environmental Policy Act). Coordination of environmental review processes generally results in conservation outcomes that have a greater likelihood of meeting the Service’s mitigation goal. The supplemental mandate of NEPA (42 U.S.C. 4335) adds to the existing authority and responsibility of the Service to protect the environment when carrying out our mission under the ESA. The Service’s goal is to provide a coordinated review and analysis of the impacts of proposed actions on listed, proposed, and at-risk species, and designated and proposed critical habitat that are also subject to the requirements of other statutes such as NEPA, CWA, and FWCA. Consultation, conference, and biological assessment procedures under section 7 and permitting procedures under section 10(a)(1)(B) of the ESA can be integrated with interagency cooperation procedures required by other statutes such as NEPA or FWCA. This is particularly the case for cumulative effects. Cumulative effects are often difficult to analyze, are defined differently under different statutes, and are often not adequately considered when making decisions affecting the type and amount of mitigation recommended or required. asabaliauskas on DSK3SPTVN1PROD with NOTICES 3. Scope The ESA Compensatory Mitigation Policy covers all forms of compensatory mitigation, including, but not limited to, permittee-responsible mitigation, conservation banking, in-lieu fee programs, and other third-party mitigation projects or arrangements, for all species and habitat protected under the ESA and for which the Service has jurisdiction. Endangered and threatened species, species proposed as endangered or threatened, and designated and proposed critical habitat, are the primary focus of this policy. Candidates and other at-risk species would also benefit from adherence to the standards set forth in this policy, and all Service programs are encouraged to develop compensatory mitigation programs and tools to conserve at-risk species in cooperation with States and other partners. VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 95335 This policy does not apply retroactively to approved mitigation programs; however, it does apply to amendments and modifications to existing conservation banks, in-lieu fee programs, and other third-party compensatory mitigation arrangements unless otherwise stated in the mitigation instrument. Examples of amendments or modifications to which this policy applies include authorization of additional sites under an existing instrument or agreement, expansion of an existing site, or addition of a new type of resource credit such as addition of a new species credit. This policy does apply to other Federal or non-Federal actions permitted or otherwise authorized or approved prior to issuance of this policy under circumstances where the action may require additional compliance review under the ESA if: New information becomes available that reveals effects of the action to listed species or critical habitat not previously considered; the action is modified in a manner that causes effects to listed species and critical habitat not previously considered; authorized levels of incidental take are exceeded; a new species is listed or critical habitat is designated that may be affected by the actions; or the project proponent specifically requests the Service to apply the policy. This policy does not apply to actions that are specifically exempted under the ESA. It also does not apply where the Service has already agreed in writing to mitigation measures for pending actions, except where new activities or changes in current activities associated with those actions would result in new impacts, or where new authorities, or failure to implement agreed upon recommendations warrant new consideration regarding mitigation. Service offices may elect to apply this policy to actions that are under review as of December 27, 2016, This policy clarifies guidance given in the Service’s ‘‘Guidance for the Establishment, Use, and Operation of Conservation Banks,’’ published in the Federal Register on May 8, 2003 (68 FR 24753), and ‘‘Guidance on Recovery Crediting for the Conservation of Threatened and Endangered Species,’’ published in the Federal Register on July 31, 2008 (73 FR 44761). authorities within the context of compensatory mitigation. The compensatory mitigation standards set forth in section 5. Compensatory Mitigation Standards of this policy apply to compensatory mitigation programs and projects established under the ESA, as appropriate. 4. Application of Compensatory Mitigation Under the ESA Sections of the ESA under which the Service has authority to recommend or require compensatory mitigation for species or their habitat are identified below. In this section, we provide guidance on applications of these ESA 4.1.1. Section 7(a)(1) Section 7(a)(1) of the ESA states, ‘‘. . . Federal agencies shall, in consultation with and with the assistance of the Secretary, utilize their authorities in furtherance of the purposes of [the ESA] by carrying out programs for the conservation of PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 4.1. Section 7—Interagency Cooperation Section 2(c)(1) of the ESA directs all Federal departments and agencies to conserve endangered and threatened species. ‘‘Conserve’’ is defined in section 3 of the ESA as all actions necessary to bring the species to the point that measures provided pursuant to the ESA are no longer necessary (i.e., recovery or the process through which recovery of listed species is accomplished). This requirement to contribute to the conservation of listed species is reaffirmed in section 7(a)(1) of the ESA. Congress recognized the important role Federal agencies have in conserving listed species. When the ESA was enacted in 1973, section 7 was a single paragraph directing ‘‘all Federal departments and agencies . . . [to] utilize their authorities in furtherance of the purposes of [the ESA] by carrying out programs for the conservation of endangered species and threatened species listed pursuant to section 4 of [the ESA] and [emphasis added] by taking such action necessary to insure that actions authorized, funded, or carried out by them do not jeopardize the continued existence of such endangered species and threatened species or result in the destruction or modification of habitat of such species which is determined . . . to be critical.’’ In 1979, section 7 was amended to create subsections 7(a)(1) and 7(a)(2). Federal agencies have separate responsibilities concerning species and their habitats under these two subsections. Section 7(a)(1) is a recovery measure that requires Federal agencies to carry out programs for the conservation of listed species. Section 7(a)(2) is a stabilization measure that requires Federal agencies to ensure actions they authorize, fund, or carry out are not likely to jeopardize the continued existence of a listed species or destroy or adversely modify critical habitat. E:\FR\FM\27DEN2.SGM 27DEN2 asabaliauskas on DSK3SPTVN1PROD with NOTICES 95336 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices endangered species and threatened species.’’ The Secretary’s section 7(a)(1) consultation role has been delegated to the Service, and the Service therefore consults with and assists Federal agencies to accomplish these conservation programs. ‘‘Conservation,’’ as it is defined in section 3 of the ESA, means ‘‘to use and the use of all methods and procedures which are necessary to bring any endangered species or threatened species to the point at which the measures provided pursuant to this Act are no longer necessary.’’ Through this policy, the Service encourages Federal agencies to use section 7(a)(1) to achieve a goal of a ‘‘net gain’’ through their mitigation policies and approaches so that they may help bring endangered and threatened species to the point where they no longer need to be listed pursuant to the ESA. Mitigation Goal: Development of landscape-scale conservation programs for listed and at-risk species that are designed to achieve a net gain in conservation for the species. Guidance: One way that Federal agencies can meet their responsibility under section 7(a)(1) of the ESA is by working with the Service and other conservation partners to develop landscape-scale conservation plans that include compensatory mitigation programs designed to contribute to species recovery. Landscape-scale approaches to compensatory mitigation, such as conservation banking and inlieu fee programs, are more likely to be successful if Federal agencies, especially those that carry out, fund, permit, or otherwise authorize actions that can use these programs, are involved in their establishment and support their use. For example, the Federal Highway Administration, as part of its long-term planning process, can use its authorities to work with the Service and other conservation partners on conservation programs for listed species that may be impacted by anticipated future actions. The conservation programs can include identifying priority conservation areas, developing crediting methodologies to value affected species, and developing guidance for offsetting those impacts that is expected to achieve ‘‘no net loss,’’ or even a ‘‘net gain,’’ in conservation for the species. These tools and information can then be used by conservation bank sponsors and other mitigation providers to develop compensatory mitigation opportunities (e.g., conservation banks) for use by the Federal Highway Administration, and also by State departments of transportation and other public and VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 private entities seeking compensation to offset the impacts of their actions for those same species. The resulting compensatory mitigation program provides conservation for the species that would otherwise not have been achieved—a contribution to listed species conservation under section 7(a)(1) of the ESA by the Federal agency. 4.1.2. Section 7(a)(2) Section 7(a)(2) of the ESA states, ‘‘[e]ach Federal agency shall . . . insure that any action authorized, funded, or carried out, by such agency . . . is 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.’’ The Service determines through consultation under section 7(a)(2) whether or not the proposed action is likely to jeopardize the continued existence of listed species or destroy or adversely modify critical habitat. The Service then issues a biological opinion stating our conclusion and, in the case of a finding of no jeopardy (or jeopardy accompanied by reasonable and prudent alternatives that can be taken by the Federal agency to avoid jeopardy), formulates an incidental take statement, if such take is reasonably certain to occur, that identifies the anticipated amount or extent of incidental take of listed species and specifies reasonable and prudent measures necessary or appropriate to minimize such impacts under section 7(b)(4) of the ESA. If the proposed action is likely to adversely affect critical habitat, the Service’s biological opinion also analyzes whether adverse modification is likely to occur and specifies reasonable and prudent alternatives to avoid adverse modification, as necessary and if available. If the listed species is a marine mammal, incidental taking is authorized pursuant to section 101(a)(5) of the Marine Mammal Protection Act (MMPA; 16 U.S.C. 1361 et seq.) prior to issuance of an incidental take statement under the ESA. Mitigation Goal: The Service should work with Federal agencies to assist them in proposing actions that are not likely to jeopardize the continued existence of any listed species or result in the destruction or adverse modification of any designated critical habitat, as required under section 7(a)(2) of the ESA. While not required under section 7(a)(2), the Service may also encourage Federal agencies and applicants (consistent with Federal action agency authorities) to include compensation as part of their proposed actions to offset any anticipated impacts PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 to these resources that are not avoided to achieve a ‘‘net gain’’ or, at a minimum, ‘‘no net loss’’ in the conservation of listed species. Guidance: The Service should coordinate with Federal agencies and encourage them to use their authorities under appropriate statutes (e.g., Federal Land Policy and Management Act) to avoid, minimize, and offset adverse impacts to listed species and designated critical habitat using the full mitigation sequence. Compensation is a component of the mitigation sequence that can be applied to offset adverse effects of actions on listed species and critical habitat. Furthermore, the Service can work with Federal agencies to establish compensatory mitigation programs such as conservation banking and in-lieu fee programs that incentivize offsetting the effects of their actions through the appropriate use of compensation while expediting regulatory processes for the Federal agencies and applicants. Due to economies of scale, such mitigation programs are particularly effective at providing more effective and costefficient compensation opportunities for offsetting the effects of multiple actions that individually have small impacts. 4.1.2.1. Proposed Actions and Project Descriptions To better implement section 7(a)(2) of the ESA and prevent species declines, the Service will work with Federal agencies and applicants to identify conservation measures, using the full mitigation sequence, that can be included as part of proposed actions for unavoidable impacts to listed species and critical habitat to achieve, at a minimum, ‘‘no net loss’’ in the species’ conservation. The mitigation sequence should be observed (i.e., avoid first, then minimize, then compensate), except where circumstances may warrant a departure from this preferred sequence. For example, it may be preferable to compensate for the loss of an occupied site that will be difficult to maintain based on projected future land use (e.g., the site is likely to be isolated from the population in the future) or climate change impacts. The Service will consider conservation measures, including compensatory mitigation, as appropriate, proposed by the action agency or applicant as part of the proposed action when developing a biological opinion addressing the effects of the proposed action on listed species and critical habitat. This consideration of beneficial actions (i.e., compensatory mitigation) is consistent with our implementing regulations at 50 CFR 402.14(g)(8). Federal agencies should coordinate early with the Service on the E:\FR\FM\27DEN2.SGM 27DEN2 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices appropriateness of such beneficial actions as compensation for anticipated future actions. 4.1.2.2. Jeopardy or Adverse Modification Determinations and RPAs When the Service issues a biological opinion with a finding of jeopardy or adverse modification of critical habitat, we include reasonable and prudent alternatives (RPAs) when possible. RPAs may include any and all forms of mitigation, including compensatory mitigation, that can be applied to avoid proposed actions from jeopardizing the existence of listed species or destroying or adversely modifying critical habitat, provided they are consistent with the regulatory definition of RPAs at 50 CFR 402.02. asabaliauskas on DSK3SPTVN1PROD with NOTICES 4.1.2.3. No Jeopardy and No Adverse Modification Determinations and RPMs When the Service issues a biological opinion with a finding of no jeopardy, we provide the Federal agency and applicant (if any) with an incidental take statement, if take is reasonably certain to occur, in accordance with section 7(b)(4) of the ESA. The incidental take statement specifies the amount or extent of anticipated take, the impact of such take on the species, and any reasonable and prudent measures (RPMs) and implementing terms and conditions determined by the Service to be necessary or appropriate to minimize the impact of the take. RPMs can include mitigation, in appropriate circumstances, if such a measure minimizes the effect of the incidental take on the species, and as long as the measure is consistent with the interagency consultation regulations at 50 CFR 402.14. RPMs should also be commensurate with and proportional to the impacts associated with the action. The Service should provide an explanation of why the measures are necessary or appropriate. If the proposed action includes conservation measures sufficient to fully compensate for incidental take, it may not be necessary to include additional minimization measures (beyond monitoring) through RPMs. 4.1.3. Section 7(a)(4) Section 7(a)(4) of the ESA states, ‘‘[e]ach Federal agency shall confer with [the Service] on any agency action which is likely to jeopardize the continued existence of any species proposed to be listed . . . or result in the destruction or adverse modification of critical habitat proposed to be designated for such species.’’ The conference is designed to assist the Federal agency and any applicant to VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 95337 required should the species become listed during the term of the CCAA. Under a safe harbor agreement (SHA), private and other non-Federal property owners may voluntarily undertake management activities on their property to enhance, restore, or maintain habitat benefiting species listed under the ESA in exchange for assurances that there will not be any increased property use restrictions as a result of their efforts that either attract listed species to their property or that increase the numbers or distribution of listed species already on their property during the term of the agreement. Both types of agreements are designed to encourage conservation of species on non-Federal land. Mitigation Goal: Transitioning CCAAs and SHAs into long-term/permanent conservation that can serve as compensatory mitigation when appropriate and desired by landowners. Such transitions provide greater assurance that the species conservation efforts begun under the CCAA or SHA will persist on the landscape beyond the term of the original agreement. Guidance: CCAAs or SHAs are not intended to be mitigation programs and do not require site protection and financial assurances that meet the compensatory mitigation standards set forth in this policy, however, the conservation achieved through implementation of a CCAA or SHA may be ‘rolled over’ for use as compensatory mitigation if: (1) The CCAA or SHA permit has expired or is surrendered; (2) the landowner is in compliance with the terms and conditions of the CCAA or SHA at the time of transition; (3) any commitments for conservation for which financial compensation from public sources was received has been fulfilled and if not fulfilled is prorated and deducted from the mitigation credit assigned to the property; and (4) all other requirements for providing compensatory mitigation are met. If the Service determines the CCAA or SHA would provide greater conservation to 4.2. Section 10—Conservation Plans and the species as compensatory mitigation, then the Service should inform the Agreements landowner of this assessment and 4.2.1. Safe Harbor and Candidate provide the landowner with the Conservation Agreements opportunity to transition their property Under a candidate conservation from a CCAA or SHA site to a mitigation agreement with assurances (CCAA), site. Landowners enrolled in CCAAs while private and other non-Federal property the species remains unlisted can owners may voluntarily undertake provide compensatory mitigation under conservation management activities on a State or other non-Service mitigation their properties to address threats to unlisted species and to enhance, restore, program if the actions related to the mitigation are additional to those taken or maintain habitat benefiting species to satisfy the CCAA requirement. that are candidates or proposed for Should the species become listed before listing under the ESA or other at-risk the CCAA expires, the landowner has species in exchange for assurances that the option to roll over the existing no further action on their part is identify and resolve potential conflicts at an early stage in the planning process. Mitigation Goal: The Service should work with Federal agencies to assist them in proposing actions that are not likely to jeopardize the continued existence of any species proposed for listing or result in the destruction or adverse modification of any proposed critical habitat, in accordance with section 7(a)(4) of the ESA. The Service should also encourage Federal agencies and applicants to include compensation as part of their proposed actions to offset any anticipated impacts to resources that are not avoided to achieve a net gain or, at a minimum, no net loss in their conservation. Guidance: The Service should coordinate with Federal agencies and encourage them to use their authorities to avoid and minimize adverse impacts to proposed and at-risk species and proposed critical habitat using the full mitigation sequence. The Service may recommend compensatory mitigation for adverse effects to proposed or at-risk species during informal conference or in a conference report or conference opinion, or the Federal action agency or applicant may propose compensatory mitigation as part of the action. If a conference opinion or report determines that a proposed action is likely to jeopardize the continued existence of a proposed species or adversely modify or destroy proposed critical habitat, the Service will include RPAs, if any are available, that may include compensatory mitigation. If the species is subsequently listed or critical habitat is designated prior to completion of the action, the Service will give appropriate consideration to compensatory mitigation when confirming the conference opinion as a biological opinion or if formal consultation is necessary. This consideration of beneficial actions is consistent with our implementing regulations at 50 CFR 402.14(g)(8). PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 E:\FR\FM\27DEN2.SGM 27DEN2 95338 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices mitigation agreement to a Serviceapproved mitigation instrument that meets the standards established in this policy. asabaliauskas on DSK3SPTVN1PROD with NOTICES 4.2.2. Habitat Conservation Plans Section 10(a)(1)(B) of the ESA allows the Service to issue an incidental take permit for ‘‘any taking otherwise prohibited by section 9(a)(1)(B) [of the ESA] if such taking is incidental to, and not the purpose of, the carrying out of an otherwise lawful activity.’’ If, under section 10(a)(2)(B) of the ESA, the Service finds the issuance criteria are met by the applicant, including that the applicant will, ‘‘to the maximum extent practicable, minimize and mitigate the impacts of such taking,’’ the Service will issue a permit. Plant species and unlisted animal species may also be covered in the habitat conservation plan (HCP), provided the applicant meets requirements for their coverage described in the implementing regulations. The Service incorporates these measures as terms and conditions of the permit. Regulations governing incidental take permits for endangered and threatened wildlife species are found at 50 CFR 17.22 and 17.32. The Service is required to conduct a section 7(a)(2) consultation on issuance of an incidental take permit. Mitigation Goal: Consistent with the purposes and polices of the ESA, the Service should work with applicants to assist them in developing HCPs that achieve a ‘‘net gain’’ or, at a minimum, ‘‘no net loss’’ in the conservation of covered species and critical habitat. Though the statute does not require this of HCP applicants, applicants often will request additional measures for greater future assurances. This is generally achievable through programmatic approaches, which provide opportunities for the use of landscapescale compensatory mitigation programs to offset impacts of actions. Guidance: Compensatory mitigation should be concurrent with or in advance of impacts, whenever possible. Programmatic approaches are recommended when they will produce regulatory efficiency and improved conservation outcomes for the covered species. These HCPs operate on a landscape scale and often use conservation banks, in-lieu fee programs, or other compensatory mitigation opportunities established by mitigation sponsors and approved by the Service. These landscape-scale programmatic approaches can achieve a net gain in conservation for the covered species as a result of economies of scale. See the revised HCP Handbook for the VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 various options available to address compensatory mitigation for HCPs. 4.3. Other Sections of the ESA Where Compensatory Mitigation Can Play a Role Section 4(d) of the ESA authorizes the Service to issue protective regulations that are necessary and advisable to provide for the conservation of threatened species. The Service used this authority to extend the prohibition of take (section 9 of the ESA) to all threatened species by regulation in 1978, through promulgation of a ‘‘blanket 4(d) rule’’ (50 CFR 17.31). This blanket 4(d) rule can be modified by a species-specific 4(d) rule (e.g., Special Rule Concerning Take of the Threatened Coastal California Gnatcatcher (58 FR 65088, December 10, 1993)). Depending on the threats, the inclusion of compensatory mitigation in a speciesspecific 4(d) rule may help offset habitat loss, and could hasten recovery or preclude the need to reclassify the species as endangered. Section 5 of the ESA provides authority for the Service and the U.S. Department of Agriculture, with respect to the National Forest System, to establish and implement a program to conserve fish, wildlife, and plants, including those which are listed as endangered species or threatened species through: • Use of land acquisition and other authority under the Fish and Wildlife Act of 1956, as amended (16 U.S.C. 742a–742j, not including 742d–1); the Fish and Wildlife Coordination Act, as amended (16 U.S.C. 661 et seq.); and the Migratory Bird Conservation Act (16 U.S.C. 715–715d, 715e, 715f–715r), as appropriate; and • Acquisition by purchase, donation, or otherwise, of lands, waters, or interests therein. Establishment of compensatory mitigation programs that conserve listed or at-risk species on lands adjacent to National Forests could be used to offset losses to those species and their habitats by actions authorized by the Service and also help buffer National Forests from incompatible neighboring land uses. 5. Compensatory Mitigation Standards The mitigation principles, as described in the Service’s Mitigation Policy (81 FR 83440, November 21, 2016), are goals the Service intends to achieve, in part through recommending or requiring, as appropriate, under the ESA and other applicable authorities, the inclusion of compensatory mitigation in proposed actions with adverse impacts to listed, proposed, or at-risk species, and designated or PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 proposed critical habitat. The compensatory mitigation standards described in this section of the policy will implement the mitigation principles, as outlined in the Mitigation Policy, including using a landscape approach to inform mitigation and aspiring to meet the goal to improve (i.e., a ‘‘net gain’’) or, at minimum, to maintain (i.e., ‘‘no net loss’’) the current status of affected resources, as allowed by applicable statutory authority and consistent with the responsibilities of action proponents under such authority. Compensatory mitigation programs, projects, and measures that are consistent with the mitigation principles and adhere to the compensatory mitigation standards set forth in this section of the policy are expected to achieve the best conservation outcomes. The compensatory mitigation standards apply to all compensatory mitigation mechanisms (i.e., permittee-responsible mitigation, conservation banks, in-lieu fee programs, etc.) and all forms of compensatory mitigation (i.e., restoration, preservation, establishment, and enhancement) approved by the Service. Specific operational details regarding the standards will be in the implementation guidance to be issued by the Service. The standards are as follows: 5.1. Siting Sustainable Compensatory Mitigation Compensatory mitigation will be sited in locations that have been identified in landscape-scale conservation plans or mitigation strategies as areas that will meet conservation objectives and provide the greatest long-term benefit to the listed, proposed, and/or at-risk species and other resources of primary conservation concern. The Service will rely upon existing conservation plans that are based upon the best available scientific information, consider climatechange adaptation, and contain specific objectives aimed at the biological needs of the affected resources. Where existing conservation plans are not available that incorporate all of these elements or are not updated with the best available scientific information, Service personnel will otherwise incorporate the best available science into mitigation decisions and recommendations and continually seek better information in areas of greatest uncertainty. 5.2. In-Kind for Species Compensatory mitigation must be inkind for the listed, proposed, or at-risk species affected by the proposed action. The same requirement does not E:\FR\FM\27DEN2.SGM 27DEN2 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES necessarily apply to the habitat type affected, as the best conservation outcome for the species may not be an offset of the same habitat type or ecological attribute of the habitat impacted by the action. Many species use different habitat types at different life stages or for different life-history requirements such as feeding, breeding, and sheltering. For example, some species are migratory. Selecting a habitat type different from that impacted by the action or selecting more than one type of habitat for compensatory mitigation may best meet the conservation needs of the species. Offsetting impacts to designated or proposed critical habitat through the use of compensatory mitigation should target the maintenance, restoration, or improvement of the recovery support function of the affected critical habitat as described in the relevant biological or conference opinion, conservation or mitigation plan, mitigation instrument, permit, or conference report. Recovery plans, 5-year reviews, proposed and final critical habitat rules, and the best available science on species status, threats, and needs should be relied on to inform the selection of habitat types subject to compensatory mitigation actions for unavoidable adverse impacts to species or critical habitat. The use of compensatory mitigation to minimize the impacts of incidental take on listed species can be based on habitat or another surrogate such as a similarly affected species or ecological conditions under circumstances where it is not practicable to express or monitor the amount or extent of take in terms of the number of individuals of the species, in accordance with 50 CFR 402.14(i)(1)(i). A causal link between the surrogate and take of the species must be explained and must be scientifically defensible. For example, occupied habitat of a listed species has been used as a surrogate to express the amount or extent of take of the vernal pool fairy shrimp (Branchinecta lynchi) because quantification of take in terms of individuals is not practicable, but the surface area of occupied vernal pool habitat is easily measured and monitored. 5.3. Reliable and Consistent Metrics Metrics that measure ecological functions and/or services at compensatory mitigation sites and impact sites must be science-based, quantifiable, consistent, repeatable, and related to the conservation goals for the species. These metrics may be speciesor habitat-based. Metrics used to calculate credits should be the same as those used to calculate debits for the VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 same species or habitat type. If they are not the same, the relationship (conversion) between credits and debits must be transparent and scientifically defensible. Metrics must account for duration of the impact, temporal loss to the species, management of risk associated with compensatory mitigation, and other such measures. This does not mean that metrics developed to measure losses and gains on the landscape must be precise, as this is rarely possible in biological systems, but uncertainty should be noted where it exists and metrics must be based on the best scientific data available to gauge the adequacy of the compensatory mitigation. Modifying existing metrics on which approved conservation banks or other compensatory mitigation programs are based and still in use warrants careful consideration and must be based on best available science. Scientifically defensible metrics also are needed to measure biological and ecological performance criteria used to monitor the outcome of compensatory mitigation. It may be necessary to adjust metrics over time through monitoring and adaptive management processes in order to respond to changing conditions and ensure they remain effective at assessing the conservation objectives of the compensatory mitigation program. However, modifying metrics used to monitor performance should not be a substitute for lack of compliance or failure to implement adaptive management. 5.4. Judicious Use of Additionality Compensatory mitigation must provide benefits beyond those that would otherwise have occurred through routine or required practices or actions, or obligations required through legal authorities or contractual agreements. A compensatory mitigation measure is ‘‘additional’’ when the benefits of the measure improve upon the baseline conditions of the impacted resources and their values, services, and functions in a manner that is demonstrably new and would not have occurred without the compensatory mitigation measure (600 DM 6.4G). The additional benefits may result from restoration or enhancement of habitat; preservation of existing habitat that lacks adequate protection; management actions that protect, maintain, or create habitat (e.g., regularly scheduled prescribed burns or purchase of rights in a split estate); or other activities (e.g., an action that reduces threats from disease or predation, or captive breeding and reintroduction of individuals or populations). Baseline conditions for PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 95339 the habitat relevant to the species must be assessed prior to implementing the compensatory mitigation project for comparison to conditions after completion of the compensatory mitigation project in order to quantify and verify the additional benefits derived from the mitigation project. Demonstrating additionality on lands already designated for conservation purposes can be challenging, particularly when the lands under consideration are public lands. In general, credit can only be authorized for compensatory mitigation on public lands if additionality can be clearly demonstrated and is legally attainable. See section 6.2. Eligible Lands for guidance on using public lands for compensatory mitigation. 5.5. Timing and Duration Compensatory mitigation projects must achieve conservation objectives within a reasonable timeframe and for at least the duration of the impacts. Ideally, compensatory mitigation should be implemented in advance of the action that adversely impacts the species or critical habitat. When this is not possible or practicable, temporal losses to the affected species must be compensated through some means (e.g., increased mitigation ratio that reflects the degree of temporal loss). Temporal loss may include indirect effects of the action on the species that occur beyond the time period of any direct effects of the action (e.g., removal of habitat during a season when individuals of a migratory species are absent). Temporal loss to the species as a result of both direct and indirect adverse effects must be addressed when determining appropriate compensatory mitigation. Losses of habitat that require many years to restore may best be offset by a combination of restored habitat, preservation of existing high-quality habitat, and improved management of existing habitat. The amount of temporal loss, the form of compensatory mitigation (i.e., establishment, enhancement, restoration, preservation, or some combination of these forms), and the time anticipated to establish the compensatory mitigation on the landscape should be used to determine the amount of compensatory mitigation needed to meet the mitigation goal for the species, critical habitat, and/or other resources of concern. 5.6. Ensure Durability Compensatory mitigation must be secured by adequate legal, real estate, and financial protections that ensure the success of the mitigation. Most compensatory mitigation projects are E:\FR\FM\27DEN2.SGM 27DEN2 95340 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices permanent, and the viability of the assurances to achieve long-term stewardship of a mitigation site must be carefully planned and implemented to ensure durability. A compensatory mitigation measure is ‘‘durable’’ when the effectiveness of the measure is sustained for the duration of the associated impacts (including direct and indirect impacts) of the authorized action (600 DM 6.4H). asabaliauskas on DSK3SPTVN1PROD with NOTICES 5.7. Effective Conservation Outcomes and Accountability The Service has authority to conduct direct oversight of all compensatory mitigation programs and projects for which we have exempted or permitted incidental take under the ESA. A standard condition of HCP incidental take permits provides for such oversight. Incidental take exemptions provided by statute to Federal agencies and applicants through the ESA section 7 process require that mandatory terms and conditions included with the take statement must be implemented by the Federal agency or its applicant to activate the exemption in 7(o)(2) of the Act. Should a mitigation project fail to meet its performance criteria and therefore fail to provide the expected conservation for the species, the responsible party must provide equivalent compensation through other means. 5.8. Encourage Collaboration Successful landscape-scale compensatory mitigation depends on the engagement of affected communities and stakeholders. Governments, communities, organizations, and individuals support what they help to develop. The Service will provide opportunities for and encourage appropriate stakeholder participation in development of landscape-scale compensatory mitigation strategies that affect listed, proposed, and at-risk species, and proposed and designated critical habitat through appropriate public processes such as those used for programmatic habitat conservation plans (HCPs). Programmatic approaches to compensatory mitigation programs for at-risk species are also encouraged, particularly when led by State agencies, and the Service will make every effort to participate in the planning, establishment, and operation of such programs as described in our draft Policy Regarding Voluntary Prelisting Conservation Actions (79 FR 42525, July 22, 2014). The Service’s regional and field offices will determine or assist in determining, as appropriate, the level and methods of public participation using transparent processes. VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 5.9. Maintain Transparency and Predictability Consistent implementation of ESA programs that permit or authorize incidental take of listed species will provide regulatory predictability for everyone. The Service will share appropriate information on the availability of compensatory mitigation programs and projects with the public through online media or other appropriate means. Information regarding conservation banks is available on the Regulatory In-lieu fee and Bank Information Tracking System (RIBITS) (https://ribits.usace.army.mil). The Service anticipates working with the USACE to update RIBITS so that it may be used for our in-lieu fee programs. Similar information for habitat credit exchanges and other thirdparty sponsored mitigation projects, or when it is not otherwise possible to use RIBITS, must be made publicly accessible. 6. General Considerations Specific operational details, in addition to the information provided below in this section, will be in implementation guidance issued by the Service. 6.1. Preferences The appropriate form of compensatory mitigation (i.e., preservation, restoration, enhancement, establishment, or a combination of some or all of these forms) must be based on the species’ needs and the nature of the impacts adversely affecting the species. The Service has the following general preferences related to compensatory mitigation. 6.1.1. Preference for Strategically Sited Compensatory Mitigation Preference shall be given to compensatory mitigation projects sited within the boundaries of priority conservation areas identified in existing landscape-scale conservation plans as described in the Service’s Mitigation Policy (81 FR 83440, November 21, 2016). Priority conservation areas for listed species may be identified in documents such as species status assessments, recovery plans, and/or 5year reviews. 6.1.2. Preference for Compensatory Mitigation in Advance of Impacts After following the principles and standards outlined in this policy and all other considerations being equal, preference will be given to compensatory mitigation projects implemented in advance of impacts to the species. Mitigation implemented in PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 advance of impacts reduces risk and uncertainty. Demonstrating that mitigation is successfully implemented in advance of impacts provides ecological and regulatory certainty that is rarely matched by a proposal of mitigation to be accomplished concurrent with, or subsequent to, the impacts of the actions even when that proposal is supplemented with higher mitigation ratios. While conservation banking is by definition mitigation in advance of impacts, other third-party mitigation arrangements and permitteeresponsible mitigation may also satisfy this preference by implementing compensatory mitigation in advance of impacts. In-lieu fee programs can also satisfy this preference through a ‘‘jump start’’ that achieves and maintains a supply of credits that offer mitigation in advance of impacts. 6.1.3. Preference for Consolidated Compensatory Mitigation Mitigation mechanisms that consolidate compensatory mitigation on the landscape, such as conservation banks and in-lieu fee programs, are generally preferred to small, disjunct compensatory mitigation sites spread across the landscape. Consolidated mitigation sites generally have several advantages over multiple, small, isolated mitigation sites. These advantages include: • Avoidance of a piecemeal approach to conservation efforts that often results in small, non-sustainable parcels of habitat scattered throughout the landscape; • Sites that are usually a component of a landscape-level strategy for conservation of high-value resources; • Cost effective compensatory mitigation options for small projects, allowing for effective offsetting of the cumulative adverse effects that result from numerous, similar, small actions; • An increase in public-private partnerships that plan in advance and a landscape-scale approach to mitigation to provide communities with opportunities to conserve highly valued natural resources while still allowing for community development and growth; • Greater capacity for bringing together financial resources and scientific expertise not practicable for small conservation actions; • Economies of scale that provide greater resources for design and implementation of compensatory mitigation sites and a decreased unit cost for mitigation; • Improved administrative and ecological compliance through the use of third-party oversight; E:\FR\FM\27DEN2.SGM 27DEN2 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices • Greater regulatory and financial predictability for project proponents, greatly reducing the uncertainty that often causes project proponents to view compensatory mitigation as a burden; and • Expedited regulatory compliance processes, particularly for small projects, saving all parties time and money. 6.2. Eligible Lands asabaliauskas on DSK3SPTVN1PROD with NOTICES 6.2.1. Lands Eligible for Use as Compensatory Mitigation Compensatory mitigation sites may be established by willing parties on private, public, or tribal lands that provide the maximum conservation benefit for the listed, proposed, and atrisk species and other affected resources. Maintaining the same classification of land ownership between the impact area and mitigation site may be important in preventing a long-term net loss in conservation, in particular a reduction in the range of the species. Because most private lands are not permanently protected for conservation and are generally the most vulnerable to development actions, the use of private lands for mitigating impacts to species occurring on any type of land ownership is usually acceptable as long as durability can be ensured. Locating compensatory mitigation on public lands for impacts to species on private lands is also possible, and in some circumstances may best achieve the conservation objectives for species, but should be carefully considered—see section 6.2.2. Use of Public Land to Mitigate Impacts on Private Land for additional guidance. Good candidates for compensatory mitigation sites are unprotected lands that are high value for conservation and that are acceptable to the Service. Designations of high conservation value may include lands with existing highvalue habitat or habitat that when restored, enhanced, established, or properly managed will provide high value to the species. In addition to these general considerations, lands that may be good candidates for compensatory mitigation sites include: • Lands previously secured through easements or other means but that lack the full complement of protections necessary to conserve the species (e.g., buffer lands for a military installation that do not include management, or private lands with existing conservation easements for which landowners have not received financial compensation from public sources or regulatory assurances from the Service.); VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 • Lands adjacent to undeveloped, protected public lands such as National Wildlife Refuges or State Wildlife Management Areas; • Private lands enrolled in programs that provide financial compensation from public sources to landowners in exchange for agreements that protect, restore, or create habitat for federally listed or at-risk species for a limited period of time, such as the Service’s Partners for Wildlife Program or some Farm Bill programs (e.g., Environmental Quality Incentives Program) if additional conservation benefits are provided above and beyond the terms and conditions of the agreement or if the agreement/easement has expired; and • Private lands enrolled in programs that provide regulatory assurances to the landowner such as SHAs or CCAAs that can be transitioned into compensatory mitigation, after all terms and conditions of the agreement have been met and the agreement has expired or the permit is surrendered in exchange for a mitigation instrument (see section 4.2.1. Safe Harbor and Candidate Conservation Agreements for additional guidance). See section 5.1. Siting Sustainable Compensatory Mitigation for other considerations when selecting a site suitable for compensatory mitigation. Lands that generally do not qualify as compensatory mitigation sites include: • Lands without clear title unless the existing encumbrances (e.g., liens, rights-of-way) are compatible with the objectives of the mitigation site or can be legally removed or subordinated; • Split estates (i.e., lands that have separate owners of various surface and subsurface rights, usually mineral rights), unless a remedy can be found (see below for guidance on split estates); • Private or public lands already designated for conservation purposes, unless the proposed compensatory mitigation project would add additional conservation benefit for the species above and beyond that attainable under the existing land designation; • Private lands enrolled in government programs that compensate landowners who permanently protect, restore, or create habitat for federally listed or at-risk species (e.g., Wetland Reserve Program easements administered by the United States Department of Agriculture’s Natural Resources Conservation Service); • Inventory and debt restructure properties under the Food Security Act of 1985 (16 U.S.C. 3801 et seq.); and • Lands protected or restored for conservation purposes under fee title transfers. PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 95341 Additional guidance on limitations involving Federal funding and mitigation, including grants, is provided in the Service’s Mitigation Policy (81 FR 83440, November 21, 2016). Lands with split estate ownership and laws and policies governing existing rights (e.g., mining laws) may prevent land protection instruments (e.g., permanent conservation easements) from providing sufficient protection from future development of mineral rights, including oil and gas exploration or development. Many potential highvalue conservation properties throughout the United States are split estates. The risk of using split estate properties as compensatory mitigation should be carefully considered. When legal remedies to restore single ownership are not possible or practicable, other approaches to managing the risks may be available to bolster durability on split estates. A mineral deed acquisition, mineral assessment report, or subsurface use agreement are a few of the options for managing mineral rights on compensatory mitigation sites that provide varying levels of protection (Raffini 2012). Service personnel tasked with assessing the viability of split estates as mitigation sites should work with the Service’s Realty Specialists and the Department of the Interior Solicitor to assess risks and possible remedies or other approaches. 6.2.2. Use of Public Land To Mitigate Impacts on Private Land In general, the Service supports compensatory mitigation on public lands that are already designated for the conservation of natural resources to offset impacts to the species on private lands only if additionality is clearly demonstrated and is legally attainable. Additionality is a reasonable expectation that the conservation benefits associated with the compensatory mitigation actions would not occur in the foreseeable future without those actions. Offsetting impacts to private lands by locating compensatory mitigation on public lands already designated for conservation purposes generally risks a long-term net loss in landscape capacity to sustain species (e.g., future reduction in the range of the species) by relying increasingly on public lands to serve conservation purposes. However, we recognize under certain circumstances this offset arrangement may provide the best possible conservation outcome for the species based on best available science. When this is the case, the Service will consider mitigation on E:\FR\FM\27DEN2.SGM 27DEN2 95342 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES public lands to offset impacts to the species on private lands appropriate if: • Compensatory mitigation is an appropriate means of achieving the mitigation planning goal for the species; • Additionality can be clearly demonstrated and quantified, and is supplemental to conservation the public agency is foreseeably expected to implement absent the mitigation (only conservation benefits that provide additionality are counted towards achieving the mitigation planning goal); • Durability of the compensatory mitigation is ensured (see section 6.2.3. Ensuring Durability on Public Lands); • It is consistent with and not otherwise prohibited by all relevant statutes, regulations, and policies; and • Private lands suitable for compensatory mitigation are unavailable or are available but cannot provide an equivalent or greater contribution towards offsetting the impacts to meet the mitigation planning goal for the species. When the public lands under consideration for use as compensatory mitigation for impacts on private lands are National Wildlife Refuge (NWR) System lands, the Service’s Final Policy on the NWR System and Compensatory Mitigation Under the Section 10/404 Program (USFWS 1999) states that the Regional Director must recommend the mitigation to the Service Director for approval. Additional considerations may apply to NWR System lands for habitat losses authorized through the section 10/404 program (i.e., Rivers and Harbors Act/Clean Water Act). 6.2.3. Ensuring Durability on Public Lands Ensuring the durability of compensatory mitigation on public lands presents particular challenges, especially regarding site protection assurances, long-term management, and funding assurances for long-term stewardship. Mechanisms available for ensuring durability of land protection for compensatory mitigation on public lands vary from agency to agency, are subject to site-specific limitations, and are likely to be politically and administratively challenging to secure. Some mechanisms may require a legislative act while other mechanisms can be achieved administratively at various levels of an agency’s organization. To ensure the durability of long-term management on public lands, there should be a high degree of confidence that incompatible uses are removed or precluded to ensure that uses of the public lands do not conflict with or compromise the conservation of the VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 species for which the compensatory mitigation project was established. 6.2.4. Transfer of Private Mitigation Lands to Public Agencies Private mitigation lands may be transferred to public agencies with a conservation mission if allowed by applicable laws, regulations, and policies. 6.2.5. Compensatory Mitigation on Tribal Lands Tribal lands are generally eligible as compensatory mitigation sites if they meet the standards and other requirements set forth in this policy. Ensuring durability, particularly site protection, is usually a sensitive issue for a tribal nation because a conservation easement entrusts the land to another entity (Terzi 2012), but acceptable entities may be available to hold easements. Additional guidance regarding mitigation and tribes is included in the Service’s Mitigation Policy (81 FR 83440, November 21, 2016). 6.3. Service Areas A service area is the geographic area assigned to a compensatory mitigation site within which credits for a specific resource (e.g., a species) can be utilized. The impacts for which mitigation is sought must be located within the designated service area for the species, unless otherwise approved by the Service. If a proposed action is located within the identified service area of a specific conservation bank, in-lieu fee program, or other third-party mitigation program or site, then the proponent of that action may offset unavoidable impacts, with the Service’s approval, through transfer of the appropriate type and number of credits from that mitigation program or site. Use of the credits outside of service areas is subject to approval by the Service. Service areas that apply to all mitigation mechanisms may be designated by the Service’s regional or field offices, usually through issuance of species-specific mitigation guidance. The service area is an important component for a potential mitigation sponsor who will need to evaluate the market for credits prior to committing to a mitigation project. The mitigation sponsor has the responsibility to determine if a proposed mitigation project or program will be financially feasible and if they will move forward with the action. 6.4. Crediting and Debiting A credit is a defined unit representing the accrual or attainment of ecological PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 functions and/or services at a mitigation site. Credits are often expressed as a measure of surface area (e.g., an acre or hectare), linear distance of constant width (e.g., stream miles), number of individuals or mating pairs of a particular species, habitat function (e.g., habitat suitability index), or other appropriate metric that can be consistently quantified. Metrics developed to support credits by measuring an increase in ecological functions and services at compensatory mitigation sites and those developed to measure an expected loss or debit in ecological functions and services at impact sites must be science-based, quantifiable, consistent, repeatable, and related to the conservation goals for the species. In general, the method of calculating credits at a mitigation site should be the same as calculating debits at project impact sites. If use of a common ‘‘currency’’ between credits and debits is not practicable, the conversion between crediting and debiting metrics must be transparent. Credits are available for use as mitigation once they are verified and released by the Service. Credits are released in proportion to administrative and ecological milestones. Credits are considered retired if they are no longer available for use as mitigation, including credits that have been transferred to fulfill mitigation obligations. Credits may also be voluntarily retired, without being used for mitigation, which may help achieve no net loss or net conservation benefit goals. Credits are not to be traded among developers or anyone else and cannot be re-sold. Once a credit has been transferred as mitigation for a particular action, it may not be used again. A mitigation site may contain habitat that is suitable for multiple listed species or other resources in the same spatial area. When this occurs, it is important to establish how the credits will be stacked or bundled and if they can be unstacked and transferred separately. See section 8.3. Credit Stacking and Bundling for guidance. Compensatory mitigation programs that use credits are voluntary, and permittees are never required to purchase credits from these compensatory mitigation sources. Pricing of credits is solely at the discretion of the mitigation provider. 6.5. Timelines The Service does not have mandated timelines for review of conservation banks, in-lieu fee programs, or other compensatory mitigation projects that are not part of a consultation or permit decision. However, this does not mean E:\FR\FM\27DEN2.SGM 27DEN2 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices that compensatory mitigation programs and projects are not a priority for the Service. Establishment of programmatic compensatory mitigation options for project proponents will provide efficiencies, particularly when developed in coordination with programmatic consultations and HCPs for large landscapes. These efficiencies include reducing the Service’s workloads associated with ESA sections 7 and 10, expediting incidental take authorization for project proponents, and achieving better conservation outcomes for listed and other at-risk species. asabaliauskas on DSK3SPTVN1PROD with NOTICES 6.6. Managing Risk and Uncertainty Compensatory mitigation can be a valuable conservation tool for offsetting unavoidable adverse impacts to listed and at-risk species if the risk can be sufficiently managed. Predictions about the effectiveness of compensatory mitigation measures have varying degrees of uncertainty. Compensatory mitigation accounting systems (e.g., debiting and crediting methodologies) should consider risk and adjust metrics and mitigation ratios to account for uncertainty. An exact accounting of the functions and services lost at the impact sites and gained at the mitigation sites is rarely possible due to the variability and uncertainty inherent in biological systems and ecological processes. To buffer risk and reduce uncertainty, it is often helpful to design compensatory mitigation programs and projects to achieve measures beyond no net loss to attain sufficient conservation benefits for the species. Designing conservation plans with mitigation that is expected to achieve more than no net loss in species conservation generally increases regulatory predictability and can result in shorter project reviews and facilitated permitting. 7. Compensatory Mitigation Mechanisms Compensatory mitigation mechanisms can be divided broadly into habitatbased mechanisms and other nonhabitat-based mitigation programs or projects. Whatever mechanism(s) are selected, compensatory mitigation is expected to provide either equivalent or additional conservation for the species to that lost as a result of the action. Specific operational details regarding compensatory mitigation mechanisms will be in the implementation guidance to be issued by the Service. 7.1. Habitat-Based Compensatory Mitigation Mechanisms Compensatory mitigation mechanisms based on habitat acquisition and VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 protection may consist of restoration of damaged or degraded habitat, enhancement of existing habitat, establishment of new habitat, preservation of existing habitat not already protected, or some combination of these that offsets the impacts of the action and results in or contributes to sustainable, functioning ecosystems for the species. Preservation of existing habitat often includes a change in land management that renders the site suitable for the species or provides additional ecological function or services for the species. Preservation includes site protection and is a valid mechanism for achieving compensatory mitigation that, at a minimum, reduces threats to the species. Existing habitat that is not protected and managed for the long term is vulnerable to loss and cannot count toward recovery of listed species. The five habitat-based mitigation mechanisms described below and compared in Table 1 differ by: (1) The party responsible for the success of the mitigation site (the permittee or a third party); (2) whether the mitigation site is within or adjacent to the action area (onsite) or elsewhere (off-site); and (3) whether credits are generated at the mitigation site for use by more than one action. Habitat-based compensatory mitigation will be held to equivalent standards (the standards set forth in this policy) regardless of the mitigation mechanism(s) proposed. Habitat-based compensatory mitigation programs developed to credit conservation actions that benefit unlisted species should meet all compensatory mitigation standards set forth in this policy if they are intended to be used as compensatory mitigation for adverse impacts of actions undertaken after listing. 7.1.1. Permittee-Responsible Compensatory Mitigation Permittee-responsible compensatory mitigation is a conserved and managed mitigation site that provides ecological functions and services as part of the conservation measures associated with a permittee’s proposed action. Permitteeresponsible mitigation sites are usually permanent, as most proposed actions with a need for compensatory mitigation are anticipated to result in permanent impacts to the species. The permittee retains responsibility for ensuring the required compensatory mitigation is completed and successful. This includes long-term management and maintenance when the mitigation is intended to be permanent. Permitteeresponsible compensatory mitigation may be on-site or off-site, and each permittee-responsible mitigation site is PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 95343 linked to the specific action that required the mitigation. Permitteeresponsible mitigation approved for a specific action is not transferable to other actions and cannot be used for other mitigation needs. 7.1.2. Conservation Bank Program A conservation bank is a site or suite of sites that is conserved and managed in perpetuity and provides ecological functions and services expressed as credits for specified species that are later used to compensate for adverse impacts occurring elsewhere to the same species. Bank sponsors may be public or private entities. Ensuring the required compensatory mitigation measures for a permitted action are completed and successful is the responsibility of the bank sponsor. The responsibility for success of the mitigation is transferred to the bank sponsor through the transfer (usually a purchase by the permittee) of credits. Conservation banks provide mitigation in advance of impacts. 7.1.3. In-Lieu Fee Program An in-lieu fee site is a conserved and managed compensatory mitigation site established as part of an in-lieu fee program that provides ecological functions and services expressed as credits for specified species and used to compensate for adverse impacts occurring elsewhere to the same species. In-lieu fee sites are usually permanent as most proposed actions with a need for compensatory mitigation are anticipated to result in permanent impacts to the species. In-lieu fee programs may be sponsored by a government agency or an environmental, conservation-based, notfor-profit organization with a mission that is consistent with species or habitat conservation. The in-lieu fee sponsor collects fees from permittees that have been approved by the Service to use the in-lieu fee program, instead of providing permittee-responsible compensatory mitigation. An in-lieu fee site that meets the mitigation requirements for the impacts of permittees’ actions will be established when the in-lieu fee program has collected sufficient funds. All responsibility for ensuring the required compensatory mitigation measures are completed and successful, including long-term management and maintenance, is transferred from the permittee to the in-lieu fee program sponsor through the transfer (usually purchase) of credits. In-lieu fee programs generally do not provide mitigation in advance of impacts. In-lieu fee programs can also be established to fund non-habitat-based compensatory mitigation measures. See E:\FR\FM\27DEN2.SGM 27DEN2 95344 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices section 7.3 Other Compensatory Mitigation Programs or Projects for guidance on these types of programs. 7.1.4. Habitat Credit Exchange Habitat credit exchanges are relatively new and warrant additional care and consideration when being considered as a mitigation mechanism. A habitat credit exchange is an environmental market that operates as a clearinghouse in which an exchange administrator, operating as a mitigation sponsor, manages credit transactions between compensatory mitigation providers and project permittees. This is in contrast to the direct transactions between compensatory mitigation providers and permittees that generally occur through conservation banking and in-lieu fee programs. Exchanges provide ecological functions and services expressed as credits that are conserved and managed for specified species and are used to compensate for adverse impacts occurring elsewhere to the same species. Exchanges may be designed to provide credits for permanent compensatory mitigation sites, short-term compensatory mitigation sites, or both types of sites. Habitat credit exchanges may operate at a local or larger landscape scale, may consist of one or more mitigation sites, and may obtain credits from conservation banks or inlieu fee programs. Exchange administrators may be public or private entities. Exchanges developed for federally listed species will require Service approval as with all other mitigation mechanisms described in this policy. TABLE 1—COMPARISON OF HABITAT-BASED COMPENSATORY MITIGATION SITES ESTABLISHED UNDER DIFFERENT MECHANISMS Responsible party Credits generated Permittee-responsible Mitigation Site ............................ Conservation Bank ......................................................... In-lieu Fee Program Site ................................................ Habitat Credit Exchange Site ......................................... asabaliauskas on DSK3SPTVN1PROD with NOTICES Mitigation mechanism Permittee ........................................................................ Bank Sponsor ................................................................ In-lieu Fee Sponsor ....................................................... Exchange Administrator, Mitigation Sponsor, or other identified responsible entity. No ................ Yes ............... Yes ............... Yes ............... 7.2. Short-Term Compensatory Mitigation The concept of short-term compensatory mitigation has merit if it serves the conservation goals of the species. Short-term compensatory mitigation may be appropriate in some situations to offset impacts that can be completely rectified by repairing, rehabilitating, or restoring the affected environment within a short and predictable timeframe. Under this policy, short-term compensatory mitigation includes rectifying the damage at the impact site and providing short-term compensation to offset the temporal loss caused by the action to achieve a conservation outcome that results in, at a minimum, no net loss to the species. A short-term impact is defined in this policy as an action that meets the following criteria: (1) The impact is limited to harassment or other forms of nonlethal take; (2) the impact can be completely rectified through natural or active processes, and the site will function long term within the landscape at the same or greater level than before the impact; (3) restoration of the impact site can occur within a short and predictable timeframe based on current science and the knowledge of the species; and (4) all temporal loss to the species by the impact can be estimated and compensated. Opportunities for short-term compensation are likely to be very limited and may not apply to most species. Inherent in applying short-term compensatory mitigation is the recovery VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 of the affected species’ populations to pre-disturbance levels and any additional increase in population levels that was anticipated to occur if the action had not taken place (i.e., adjusted for temporal loss). Determining the amount and duration of compensatory mitigation needed requires substantial knowledge of the biology of the species (e.g., abundance, distribution, fecundity). Actions that meet the criteria for short-term impacts are not limited to short-term compensatory mitigation as a mitigation option. The Service prefers mitigation mechanisms that protect conservation values in perpetuity. Permanent compensatory mitigation either at the same or a reduced mitigation ratio (determined by the Service) is usually an alternative. Conservation banks or in-lieu fee programs with available credits that meet the compensatory mitigation needs for actions with short-term impacts are usually a good alternative to short-term compensatory mitigation. 7.3. Other Compensatory Mitigation Programs or Projects Compensatory mitigation is based on the concept of replacing or providing substitute resources or environments for the impacted resource (40 CFR 1508.20). However, mechanisms or conservation measures that do not exactly meet this definition, but that meet the conservation objectives for the specified species and are expected to compensate for adverse effects to species or their habitats, may be suitable as compensatory mitigation. These types of PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 Responsibility transferable No. Yes. Yes. Yes. compensatory mitigation measures are acceptable if they are closely tied to recovery actions identified in species status assessments, recovery plans, 5year reviews, or best available science on the threats and needs of the species. Compensatory mitigation of this type is often funded through an in-lieu fee program. Examples of potentially suitable compensatory measures include, but are not limited to: a. Transfer and retirement of timber, water, mineral, or other severed rights to an already existing conservation site, thereby significantly reducing or eliminating the risk of future development on the site that would be incompatible with conservation of the species; b. Restricting human use of waterways or other public spaces through legal means to allow for increased or exclusive use by the species; c. Controlled propagation, population augmentation, and reintroduction of individuals of the species to offset losses from an action; d. Captive rearing and release of individuals of the species to offset losses from an action; e. Administering vaccination programs vital to species survival and recovery; f. Gating of caves that serve as habitat for the species; g. Construction of wildlife overpasses or underpasses to protect migratory passages for the species; and/or h. Programs that reduce the exposure of the species to contaminants in the E:\FR\FM\27DEN2.SGM 27DEN2 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices environment that are known to cause injury or mortality. In rare circumstances, research or education that can be linked directly to the relative threats to the species and provide a quantifiable benefit to the species may be included as part of a mitigation package. Although research can assist in identifying substitute resources, it does not replace impacted resources or adequately compensate for adverse effects to species or habitat. See the Service’s Mitigation Policy (81 FR 83440, November 21, 2016) for additional guidance on appropriate uses of research or education as mitigation. 8. Criteria for Use of Third-Party Mitigation Specific operational details regarding the use of third-party mitigation will be in the implementation guidance to be issued by the Service. 8.1. Project Applicability Activities regulated under sections 7 or 10 of the ESA may be eligible to use third-party sponsored mitigation, if the adverse impacts to the species from the particular project can be offset by transfer of the appropriate type and number of credits provided by the thirdparty sponsored mitigation program. The impacts for which third-party sponsored mitigation is sought must be located within the service area for the species provided by the third-party sponsored mitigation program unless otherwise approved by the Service. In no case may the same credit(s) be used to compensate for more than one action. However, the same credit(s) may be used to compensate for a single action that requires authorization under more than one regulatory authority (e.g., a vernal pool restoration credit that provides mitigation for a listed species under the ESA and wetlands under section 404 of the CWA). Only credits that have been verified by the Service and released are considered available. Only available credits can be used to mitigate actions. asabaliauskas on DSK3SPTVN1PROD with NOTICES 8.2. Transfer of Responsibility The mitigation sponsor assumes responsibility for success of the mitigation through the transfer (usually a purchase by the permittee) of credits or other quantified amount of compensatory mitigation. The Service’s role is regulatory. Credit transfers are subject to approval by the Service, as to their conservation value and appropriate application for use related to any authorization or permit issued under the ESA. Market and legal risks arising from the purchase and use VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 of mitigation credits are borne solely by the parties to the sale of such credits. 8.3. Credit Stacking and Bundling The Service recognizes the inherent efficiencies in leveraging multiple conservation efforts on the landscape and encourages these coordinated efforts. However, compensatory mitigation and other conservation actions that occur on the same mitigation site must be accounted for separately, and all aspects of the different actions must be managed and tracked in a transparent manner. Stacking mitigation credits within a mitigation site (i.e., more than one credit type on spatially overlapping areas) is allowed, but the stacked credits cannot be used to provide mitigation for more than one permitted impact action even if all the resources included in the stacked credit are not needed for that action. To do so would result in a net loss of resources in most cases because using a species credit separately from the functions and services that accompany its habitat, such as carbon sequestration or pollination services, would result in double counting (i.e., ‘‘double dipping’’). Double counting is selling or using a unit of the same ecosystem function or service on the ground more than once. This can occur through an accounting error in which the credit is sold twice, and it also can occur when stacked credits are unstacked and one or more functions or services are sold separately. For example, a credit representing an acre of habitat is sold once as a species habitat credit for a permitted action and again as a carbon credit for a different action in a different location. The loss of species habitat at the first impact site included all functions and services associated with that habitat including carbon sequestration, so selling that same unit of compensatory mitigation again for carbon sequestration results in no carbon offset for the loss of carbon sequestration at the second impact location. Using a stacked credit separately to reflect its various values is an ecologically challenging accounting exercise. Compensatory mitigation projects may be designed to holistically address requirements under multiple programs and authorities for the same action and may use bundled credits to accomplish this goal. For example, a stream credit may satisfy requirements for an U.S. Army Corps of Engineers section 404 CWA permit and issuance of incidental take authority under the ESA for a listed mussel species occurring in that stream, or a county-wide HCP may establish an in-lieu fee program for which a single PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 95345 fee is collected from project applicants for a permit which covers multiple mitigation obligations under Federal, State, and local authorities. In both these examples, the bundled credit is used as a single commodity (i.e., it is not unbundled or unstacked) and is only used once. 8.4. Use of Credits for Mitigation Under Authorities Other Than the ESA Compensatory mitigation projects established for use under one Service program (e.g., Ecological Services) may also be used to satisfy the environmental requirements of other Service programs (e.g., Migratory Birds or Refuges) or other Federal, State, or local agency programs consistent with the laws and requirements of each respective program. However, the same credits may not be used for more than one authorized or permitted action (i.e., no double counting of mitigation credits). 9. Compliance and Tracking A tracking system is essential in ensuring compliance with the mitigation instruments used to implement compensatory mitigation programs described in this policy. Tracking systems also facilitate consistency in the implementation of compensatory mitigation programs and projects. It is vital that the Service track compliance directly for permitteeresponsible mitigation and, at a minimum, through third parties responsible for operating compensatory mitigation programs or projects such as in-lieu fee programs and habitat exchanges. Transactions (credit withdrawals) at a Service authorized mitigation program or project that are not related to ESA compliance and are not approved by the Service must be tracked in the same tracking system. The Service is not liable for any event or transaction that eludes detection through the Service’s tracking function. Specific operational details regarding compliance and tracking will be in the implementation guidance to be issued by the Service. References Cited Clement, J.P. et al. 2014. A strategy for improving the mitigation policies and practices of the Department of the Interior. A report to the Secretary of the Interior from the Energy and Climate Change Task Force, Washington, DC. 25 pp. Fox, J. and A. Nino-Murcia. 2005. Status of Species Conservation Banking in the United States. Conservation Biology 19:996–1007. Presidential Memorandum (PM). 2015. ‘‘Mitigating Impacts on Natural E:\FR\FM\27DEN2.SGM 27DEN2 95346 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices Resources for Development and Encouraging Related Private Investment.’’ Issued November 3, 2015. Raffini, E. 2012. Mineral Rights and Banking. National Environmental Newsletter 34:9–10. Environmental Law Institute, Washington, DC. Terzi, G. 2012. The Lummi Nation Wetland and Habitat Bank—Restoring a Piece of History. National Wetlands Newsletter 34:12–13. Environmental Law Institute, Washington, DC. U.S. Fish and Wildlife Service. 1999. Final Policy on the National Wildlife Refuge System and Compensatory Mitigation Under the Section 10/404 Program. September 10, 1999. Federal Register 64:49229–49234. U.S. Fish and Wildlife Service. 2003. Guidance on the Establishment, Use, and Operation of Conservation Banks. May 2, 2003. U.S. Department of the Interior Fish and Wildlife Service. 18 pp. U.S. Fish and Wildlife Service. 2008. Guidance on Recovery Crediting for the Conservation of Threatened and Endangered Species. July 2008. U.S. Department of the Interior Fish and Wildlife Service. U.S. Fish and Wildlife Service. 2013. Guidelines for the Establishment, Management, and Operations of Goldencheeked Warbler and Black-capped Vireo Mitigation Lands. July 2013. U.S. Department of the Interior Fish and Wildlife Service Southwest Region. U.S. Fish and Wildlife Service. 2016. U.S. Fish and Wildlife Service Mitigation Policy. November 21, 2016. U.S. Department of the Interior Fish and Wildlife Service. Williams, B.K., R.C. Szaro, and C.D. Shapiro. 2009. Adaptive Management: The U.S. Department of the Interior Technical Guide. Adaptive Management Working Group, U.S. Department of the Interior, Washington, DC. asabaliauskas on DSK3SPTVN1PROD with NOTICES Appendix A: List of Acronyms and Abbreviations Used in This Policy CCAA—Candidate conservation agreement with assurances CEQ—Council on Environmental Quality CFR—Code of Federal Regulations CWA—Clean Water Act EPA—Environmental Protection Agency ESA—Endangered Species Act FWCA—Fish and Wildlife Coordination Act HCP—Habitat conservation plan MMPA—Marine Mammal Protection Act NEPA—National Environmental Policy Act NWR—National Wildlife Refuge RPA—Reasonable and prudent alternative RPM—Reasonable and prudent measure RIBITS—Regulatory In-lieu fee and Bank Information Tracking System SHA—Safe harbor agreement USACE—United States Army Corps of Engineers USFWS—United States Fish and Wildlife Service Appendix B: Glossary of Terms Related to Compensatory Mitigation Definitions in this section apply to the implementation of the U.S. Fish and Wildlife VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 Service (Service) Endangered Species Act Compensatory Mitigation Policy and were developed to provide clarity and consistency. Some definitions are defined in Service authorities such as the Endangered Species Act or the National Environmental Policy Act, or in regulations or policies existing at the time this policy was issued. Other definitions have been developed based on compensatory mitigation practices. Definitions in the glossary do not substitute for statutory or regulatory definitions in the exercise of those authorities. Action—an activity or program implemented, authorized, or funded, in whole or in part, by Federal agencies; or a non-Federal activity or program for which one or more of the Service’s authorities apply to make mitigation recommendations, specify mitigation requirements, or provide technical assistance for mitigation planning (81 FR 83440; November 21, 2016). Action area—all areas to be affected directly or indirectly by the Federal action and not merely the immediate area involved in the action (50 CFR 402.02). Adaptive management—a systematic approach for improving resource management by learning from management outcomes. An adaptive approach involves exploring alternative ways to meet management objectives, predicting the outcomes of alternatives based on the current state of knowledge, implementing one or more of these alternatives, monitoring to learn about the impacts of management actions, and then using the results to update knowledge and adjust management actions. Adaptive management focuses on learning and adapting, through partnerships of managers, scientists, and other stakeholders who learn together how to create and maintain sustainable resource systems (Williams et al. 2009). As applied to compensatory mitigation, it is a management strategy that anticipates likely challenges associated with compensatory mitigation projects and provides for the implementation of activities to address those challenges, as well as unforeseen changes to those projects. It requires consideration of the risk, uncertainty, and dynamic nature of compensatory mitigation projects and guides modification of those projects to achieve stated biological goals. It includes the selection of appropriate measures that will ensure that the resource functions and services are provided and involves analysis of monitoring results to identify potential problems of a compensatory mitigation project and the identification and implementation of measures to rectify those problems (modified from 33 CFR 332.2). Additionality—conservation benefits of a compensatory mitigation measure that improve upon the baseline conditions of the impacted resources and their values, services, and functions in a manner that is demonstrably new and would not have occurred without the compensatory mitigation measure (600 DM 6.4G). Additive impacts, additive effects—the combined effects of past actions on a species, other resource, or community; impacts of an action may be relatively insignificant on their own, but when considered with the impacts PO 00000 Frm 00032 Fmt 4701 Sfmt 4700 from other actions as they accumulate over time collectively lead to significant overall loss or degradation of resources. See also ‘‘cumulative effects.’’ Applicant—any person who requires formal approval or authorization from a Federal agency as a prerequisite to conducting an action (50 CFR 402.02); ‘‘person’’ means an individual, corporation, partnership, trust, association, or any other private entity; or any officer, employee, agent, department, or instrumentality of the Federal Government, of any State, municipality, or political subdivision of a State, or of any foreign government; any State, municipality, or political subdivision of a State; or any other entity subject to the jurisdiction of the United States (16 U.S.C. 1532(13)). At-risk species—candidate species and other unlisted species that are declining and are at risk of becoming a candidate for listing under the Endangered Species Act. This may include, but is not limited to, State listed species, species identified by States as species of greatest conservation need, or species with State heritage ranks of G1 or G2. Avoidance—avoiding the impact altogether by not taking a certain action or parts of an action (40 CFR 1508.20). Bank Sponsor—any public or private entity responsible for establishing and, in most circumstances, operating a conservation bank. Bank sponsors are most often private individuals, companies, or Limited Liability Corporations, but they may also be nongovernmental organizations, Tribes, or government agencies. See also ‘‘mitigation sponsor.’’ Baseline—the pre-existing condition of a defined area of habitat or a species population that can be quantified by an appropriate metric to determine level of functions and/or services and re-measured at a later time to determine if the same area of habitat or species population has increased, decreased, or maintained the same level of functions and/or services. Candidate conservation agreement with assurances (CCAA)—a formal agreement between the Service or the National Marine Fisheries Service and one or more nonFederal parties who voluntarily agree to manage their lands or waters to remove threats to candidate or proposed species and in exchange receive assurances that their conservation efforts will not result in future regulatory obligations in excess of those they agreed to at the time they entered into the agreement. The management activities included in the agreement must significantly contribute to elimination of the need to list the target species when considered in conjunction with other landowners conducting similar management activities within the range of the species (USFWS CCAA Policy). Candidate species (candidate)—any species being considered by the Secretary for listing as an endangered or threatened species, but not yet the subject of a proposed rule (50 CFR 424.02); a species for which the Service or the National Marine Fisheries Service has on file sufficient information on biological vulnerability and threats to support a proposal to list as endangered or E:\FR\FM\27DEN2.SGM 27DEN2 asabaliauskas on DSK3SPTVN1PROD with NOTICES Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices threatened under the Endangered Species Act. Compensatory mitigation (compensation)—compensation for remaining unavoidable impacts after all appropriate and practicable avoidance and minimization measures have been applied, by replacing or providing substitute resources or environments (see 40 CFR 1508.20) through the restoration, establishment, enhancement, or preservation of resources and their values, services, and functions (600 DM 6.4C). Compensatory mitigation project— compensatory mitigation implemented by the action agency, a permittee, or a mitigation sponsor. Compensatory mitigation projects include permittee-responsible mitigation, conservation banks, in lieu fee programs and sites, habitat credit exchanges, and other third-party compensatory mitigation projects. Conservation, conserve, conserving—to use and the use of all methods and procedures which are necessary to bring any endangered or threatened species to the point at which the measures provided pursuant to the Endangered Species Act are no longer necessary (16 U.S.C. 1532(3)). Conservation bank—a site, or suite of sites, that is conserved and managed in perpetuity and provides ecological functions and services expressed as credits for specified species that are later used to compensate for impacts occurring elsewhere to the same species. Conservation easement—a recorded legal document established to conserve biological resources for a specified duration, usually in perpetuity, on a identified conservation property and which restricts certain activities and requires certain habitat management obligations for the conservation property. Conservation measures (conservation actions)—measures pledged in the project description that the Federal agency or applicant will implement to minimize, rectify, reduce, and/or compensate for the adverse impacts of the development project on the species. Conservation measures designed to compensate for unavoidable impacts may include the restoration, enhancement, establishment, and/or preservation of species habitat or other measures conducted for the purpose of offsetting adverse impacts to the species. Upon issuance of a permit, license or other such authorization associated with the proposed project, implementation of that project requires implementation of the conservation measures as well as any other terms and conditions of the permit. Conservation objective—a measurable expression of a desired outcome for a species or its habitat resources. Population objectives are expressed in terms of abundance, trend, vital rates, or other measurable indices of population status. Habitat objectives are expressed in terms of the quantity, quality, and spatial distribution of habitats required to attain population objectives, as informed by knowledge and assumptions about factors influencing the ability of the landscape to sustain the species (81 FR 83440; November 21, 2016). Conservation plan (species conservation plan)—a plan developed by Federal, State, VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 and/or local government agencies, Tribes, or appropriate nongovernmental organizations, in consultation with relevant stakeholders, for the specific goal of conserving one or more listed or at-risk species. A conservation plan is developed using a landscape-scale approach and addresses the status of, needs of, and threats to the species, and usually includes recommended conservation measures for the conservation/recovery of the species. Examples of species conservation plans include species conservation frameworks, rangewide conservation plans, and conservation plans developed as part of a large landscape habitat conservation plan. Covered species—species specifically included in a conservation bank, habitat conservation plan, safe harbor agreement, candidate conservation agreement with assurances, rangewide conservation plan, or other such conservation plan for which a commitment is made to achieve specific conservation measures for the species. Credit (species credit, habitat credit)—a defined unit representing the accrual or attainment of ecological functions and/or services for a species at a mitigation site or within a mitigation program. Credit bundling—allowing a single unit of a mitigation site to provide compensation for two or more spatially overlapping ecosystem functions or services that are grouped together into a single credit type and used as a single commodity to compensate for a single permitted action. A bundled credit may be used to compensate for all or a subset of the functions or services included in the credit type but may only be used once, even if all functions and services represented in the credit type were not required for the permitted action. See also ‘‘credit stacking.’’ Credit reserve account—credits set aside in reserve to offset force majeure or other unforeseen events as agreed to by the Service, allowing a mitigation program to continue uninterrupted. Credit stacking—allowing a single unit of a mitigation site to provide two or more credit types representing spatially overlapping ecosystem functions or services which can be unstacked and used as separate commodities to compensate for different permitted actions. Credit stacking can result in double counting (i.e., a net loss of resources on the landscape) if the same functions or services are not also accounted for separately at all impact sites. See also ‘‘credit bundling’’ and ‘‘double-counting.’’ Credit transfer—the use, sale, or conveyance of credits by a bank sponsor or mitigation provider to a permittee or other entity for the purposes of offsetting impacts of an action. Critical habitat—specific areas within the geographical area occupied by the species at the time it is listed as endangered or threatened under the Endangered Species Act, on which are found those physical or biological features essential to the conservation of the species and which may require special management considerations or protection; and specific areas outside the geographical area occupied by the species at the time it is listed, which are determined by the Secretary of the Department of the Interior to be areas essential for the PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 95347 conservation of the species (16 U.S.C. 1532(5)(A)). Cumulative effects—those effects of future State or private activities, not involving Federal activities, that are reasonably certain to occur within the action area of the Federal action subject to consultation under the Endangered Species Act (50 CFR 402.14(g)(3)). Under the National Environmental Policy Act, cumulative effects are defined as the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency (Federal or nonFederal) or person undertakes such other actions (40 CFR 1508.7). Debit—a defined unit representing the loss of ecological functions and/or services for a species at an impact site. Debits should be expressed using the same metrics used to value credits at mitigation sites. Direct effects—those effects to the species or other resource that are caused by the action and occur at the same time and place (81 FR 83440; November 21, 2016). Double-counting (double-dipping)—using a credit, however defined, representing the same unit of ecosystem function or service on a mitigation site more than once. This is not allowed. Durability—the condition or state in which the measurable environment benefits of the compensatory mitigation project or measure are sustained, at a minimum, for the duration of the associated impacts (including direct and indirect impacts) of the authorized action. To be durable, mitigation measures effectively compensate for remaining unavoidable impacts that warrant compensatory mitigation; use long-term administrative and legal provisions to prevent actions that are incompatible with the measure; and employ financial instruments to ensure the availability of sufficient funding for the measure’s longterm monitoring, site protection, and management (600 DM 6.4G). Effects (effects of the action)—changes in the environmental conditions caused by an action that are relevant to the species or other resources (81 FR 83440; November 21, 2016), including the direct, indirect, and cumulative effects of the action on the species and other activities that are interrelated to, or interdependent with, that action as defined at 50 CFR 402.02. See also ‘‘cumulative effects.’’ Endangered species—any species which is in danger of extinction throughout all or a significant portion of its range (16 U.S.C. 1532(6)). Endowment—as used in this policy, funds that are conveyed solely for the long-term stewardship of a mitigation property and are permanently restricted to paying the costs of management and stewardship of that property. The management of endowment funds is generally governed by State and Federal laws, as applicable. Endowments do not include funds conveyed for meeting short-term performance objectives of a mitigation project. Enhancement—activities conducted in existing habitat of the species that improve one or more ecological functions or services for that species, or otherwise provide added E:\FR\FM\27DEN2.SGM 27DEN2 asabaliauskas on DSK3SPTVN1PROD with NOTICES 95348 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices benefit to the species and do not negatively affect other resources of concern. Compare with ‘‘restoration.’’ Establishment—construction of habitat of a type that did not previously exist on a mitigation site but which will provide a benefit to the species and does not negatively affect other resources of concern. Compare with ‘‘restoration.’’ Fee title (fee)—an interest in land that is the most complete and absolute ownership in land; it is of indefinite duration, freely transferable, and inheritable. Functions—the physical, chemical, and biological processes that occur in ecosystems (33 CFR 332.2); functions are the ecological processes necessary for meeting species’ habitat and lifecycle needs. Habitat—an area with spatially identifiable physical, chemical, and biological attributes that supports one or more life-history processes for the species (81 FR 83440; November 21, 2016). Habitat conservation plan (HCP)—a planning document that describes the anticipated effects of a proposed activity on the taking of federally listed species, how those impacts will be minimized and mitigated, and how the plan will be funded (16 U.S.C. 1539). The HCP is required as part of an incidental take permit application to the Service or the National Marine Fisheries Service (see ‘‘incidental take’’). Habitat credit exchange (habitat credit exchange program)—a market-based system that operates as a clearinghouse in which an exchange administrator, acting as a mitigation sponsor, manages credit transactions between compensatory mitigation providers and permittees or others authorized to implement actions that adversely affect protected species. Impact(s) (of an action)—adverse effects relative to the affected resources (81 FR 83440; November 21, 2016). More specifically under this policy, adverse effects on the species or its habitat anticipated in a proposed action or resulting from an authorized or permitted action. Incidental take—take of any endangered or threatened species that results from, but is not the purpose of, carrying out an otherwise lawful activity conducted by a Federal agency or an applicant (50 CFR 402.02). Incidental take may be authorized for endangered or threatened species through section 7 or 10, or for threatened species, through a rule codified under section 4(d) of the Endangered Species Act. (See also, ‘‘take.’’) Indirect effects—those effects to the species that are caused by the action at a later time or another place, but are reasonably certain to occur (50 CFR 402.02). In-kind—a resource of a similar structural and functional type to the impacted resource (33 CFR 332.2); when used in reference to a species, in-kind means the same species. In-lieu fee program—a program involving the restoration, establishment, enhancement, and/or preservation of habitat through funds paid to a governmental or nonprofit natural resources management entity to satisfy compensatory mitigation requirements for impacts to specified species or habitat (modified from 33 CFR 332.2). VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 In-lieu fee program sponsor—any government agency or nonprofit natural resources management organization responsible for establishing, and in most circumstances, operating an in-lieu fee program. See also, ‘‘sponsor.’’ In-lieu fee site—a compensatory mitigation site established under an approved in-lieu fee program. Landscape—an area encompassing an interacting mosaic of ecosystems and human systems that is characterized by a set of common management concerns. The landscape is not defined by the size of the area, but rather by the interacting elements that are relevant and meaningful in a management context (600 DM 6D). Landscape-scale approach—an approach to conservation planning that applies the mitigation hierarchy for impacts to resources and their values, services, and functions at the relevant scale, however narrow or broad, necessary to sustain, or otherwise achieve established goals for those resources and their values, services, and functions. A landscape-scale approach should be used when developing and approving strategies or plans, reviewing projects, or issuing permits. The approach identifies the needs and baseline conditions of targeted resources and their values, services and functions, reasonably foreseeable impacts, cumulative impacts of past and likely projected disturbance to those resources, and future disturbance trends. The approach then uses such information to identify priorities for avoidance, minimization, and compensatory mitigation measures across that relevant area to provide the maximum benefit to the impacted resources and their values, services, and functions, with full consideration of the conditions of additionality and durability (600 DM 6E). Listed species—any species or subspecies of fish, wildlife, or plant which has been determined to be endangered or threatened under section 4 of the Endangered Species Act (50 CFR 402.02). Listed species are found at 50 CFR 17.11 and 17.12. Management plan—the stewardship plan prepared to instruct the land manager in the operations and biological management for the compensatory mitigation site to, at a minimum, maintain the functions and services for specified species and other resources on the mitigation site. These are generally long-term plans that include a detailed estimate of the itemized costs for all management actions required by the plan. These annual costs are used to estimate the size of the endowment that will be needed to maintain and monitor the mitigation site for the intended duration. Mitigation (mitigation hierarchy, mitigation sequence)—as defined and codified in the Council on Environmental Quality (CEQ) National Environmental Policy Act (42 U.S.C. 4321 et seq.) regulations (40 CFR 1508.20), mitigation includes: • Avoid the impact altogether by not taking the action or parts of the action; • Minimize the impact by limiting the degree or magnitude of the action and its implementation; • Rectify the impact by repairing, rehabilitating, or restoring the affected environment; PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 • Reduce or eliminate the impact over time by preservation and maintenance operations during the life of the action; and • Compensate for the impact by replacing or providing substitute resources or environments. This sequence is often condensed to: Avoidance, minimization, and compensation. Mitigation ratio—the relationship between the amount of the compensatory offset for, and the impacts to, the species, habitat for the species, or other resource of concern. Mitigation sponsor (mitigation project sponsor, sponsor, mitigation provider)—any public or private entity responsible for establishing, and in most circumstances, operating a compensatory mitigation program or project such as a conservation bank, inlieu fee program, or habitat credit exchange (modified from 33 CFR 332.2). Off-site—a mitigation area that is located neither on nor adjacent to the same parcel of land as the impact site (33 CFR 332.2). On-site—a mitigation site located on or adjacent to the same parcel of land as the impact site (33 CFR 332.2). Performance criteria—observable or measurable administrative and ecological (physical, chemical, or biological) attributes that are used to determine if a compensatory mitigation project meets the agreed upon conservation objectives identified in a mitigation instrument or the conservation measures proposed as part of a permitted or otherwise authorized action. Permittee—any person who receives formal approval or authorization, generally in the form of a permit or license, from a Federal agency to conduct an action. See also, ‘‘applicant.’’ Permittee-responsible mitigation— activities or projects undertaken by a permittee or an authorized agent or contractor to provide compensatory mitigation for which the permittee retains full responsibility. As used in this policy, permittee-responsible mitigation also includes compensatory mitigation undertaken by Federal agencies to offset impacts resulting from actions carried out directly by the Federal agency. Perpetuity—endless or infinitely long duration or existence; permanent. Practicable—available and capable of being done after taking into consideration existing technology, logistics, and cost in light of a mitigation measure’s beneficial value and a land use activity’s overall purpose, scope, and scale (81 FR 83440; November 21, 2016). Preservation—the protection and management of existing resources for the species that would not otherwise be protected through removal of a threat to, or preventing the decline of, the resources to compensate for the loss of the same species or resources elsewhere. Proponent (project proponent)—the agency proposing an action, and if applicable, any applicant(s) for agency funding or authorization to implement a proposed action (81 FR 83440; November 21, 2016). For purposes of this policy, any person, organization, or agency advocating a development proposal that is anticipated to result in adverse impacts to one or more listed or at-risk species. See also, ‘‘applicant’’ and ‘‘permittee.’’ E:\FR\FM\27DEN2.SGM 27DEN2 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES Resources (resources of concern)—fish, wildlife, plants, and their habitats for which the Service has authority to recommend or require the mitigation of impacts resulting from proposed actions (81 FR 83440; November 21, 2016) . Restoration—repairing or rehabilitating habitat for the benefit of the species on a mitigation site with the goal of returning it to its natural/historic habitat type with the same or similar functions where they have ceased to exist, or exist in a substantially degraded state. Retired credit—a credit that is no longer available for use as mitigation. Credits that have been sold or otherwise used to fulfill a mitigation obligation are considered retired. Credits may also be voluntarily retired or forfeited, without being used for mitigation. Safe harbor agreement (SHA)—formal agreement between the Service or National Marine Fisheries Service and one or more non-Federal property owners in which property owners voluntarily manage for listed species for an agreed amount of time providing a net conservation benefit to the species and, in return, receive assurances from the Service or National Marine Fisheries Service that no additional future regulatory restrictions will be imposed (USFWS Safe Harbor Policy). Under the Safe Harbor Policy, ‘‘net conservation benefit’’ is defined as contributing to the recovery of the listed species covered by the SHA. Service area—the geographic area within which impacts to the species or other resources of concern can be mitigated at a specific compensatory mitigation site. Species—the term ‘‘species’’ includes any species, subspecies of fish, or wildlife, or plants, and any distinct population segment of any species of vertebrate fish or wildlife which interbreeds when mature (16 U.S.C. 1532(16)). Take—means to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture or collect a federally listed species, or to attempt to engage in any such conduct (16 U.S.C. 1532(19)). ‘‘Take’’ applies only to fish and wildlife, not plants. Temporal loss—the cumulative loss of functions and/or services relevant to the species attributed to the time between the loss of habitat functions and/or services or individuals of the population(s) caused by the action and the replacement of habitat functions and/or services or repopulation of the species at the compensatory mitigation VerDate Sep<11>2014 21:38 Dec 23, 2016 Jkt 241001 site to the same level had the action not occurred. Threatened species—any species which is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range (16 U.S.C. 1532(20)). Unavoidable impact—an impact for which an appropriate and practicable alternative to the proposed action that would not cause the impact is not available (81 FR 83440; November 21, 2016). Determinations Under Other Authorities As mentioned above, we intend to apply this policy when considering the adequacy of compensatory mitigation programs, projects, and measures proposed by Federal agencies and applicants as part of a proposed action and mitigation sponsors. Below we discuss compliance with several Executive Orders and statutes as they pertain to this policy. National Environmental Policy Act (NEPA) We have analyzed this policy in accordance with the criteria of the National Environmental Policy Act, as amended (NEPA) (42 U.S.C. 4332(c)), the Council on Environmental Quality’s regulations for implementing the procedural provisions of NEPA (40 CFR parts 1500–1508), and the Department of the Interior’s NEPA procedures (516 DM 2 and 8; 43 CFR part 46). Issuance of policies, directives, regulations, and guidelines are actions that may generally be categorically excluded under NEPA (43 CFR 46.210(i)). Based on comments received, we determined that a categorical exclusion can apply to this policy; nevertheless, the Service chose to prepare an environmental assessment (EA) to inform decision makers and the public regarding the possible effects of the policy revisions. We announced our intent to prepare an EA pursuant to NEPA when we published the draft policy. We requested comments on the scope of the NEPA review, information regarding important environmental issues that should be addressed, the alternatives to be analyzed, and issues that should be addressed at the programmatic stage in order to inform the site-specific stage during the comment period on the draft policy. Comments from the public were considered in the drafting of the final EA. The final EA is available on the Internet at http:// www.regulations.gov under Docket Number FWS–HQ–ES–2015–0165. PO 00000 Frm 00035 Fmt 4701 Sfmt 9990 95349 Paperwork Reduction Act of 1995 This final policy does not contain any new collections of information that require approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). OMB has reviewed and approved the information collection requirements for applications for incidental take permits, annual reports, and notifications of incidental take for native endangered and threatened species for safe harbor agreements, candidate conservation agreements with assurances, and habitat conservation plans under OMB Control Number 1018–0094, which expires on January 31, 2017. We are currently in the process of seeking renewal for OMB Control Number 1018–0094. We 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. 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, we have considered possible effects on federally recognized Indian tribes and have determined that there are no potential adverse effects of issuing this policy. Our intent with the policy is to provide a consistent approach to the consideration of compensatory mitigation programs, projects, and measures, including those taken on Tribal lands. We will work with Tribes as applicants proposing compensatory mitigation as part of proposed actions and with Tribes as mitigation sponsors. Authority: The authorities for this action include the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.), and the National Environmental Policy Act (42 U.S.C. 4321 et seq.). Dated: December 15, 2016. Daniel M. Ashe, Director, U.S. Fish and Wildlife Service. [FR Doc. 2016–30929 Filed 12–23–16; 8:45 am] BILLING CODE 4333–15–P E:\FR\FM\27DEN2.SGM 27DEN2

Agencies

[Federal Register Volume 81, Number 248 (Tuesday, December 27, 2016)]
[Notices]
[Pages 95316-95349]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-30929]



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Vol. 81

Tuesday,

No. 248

December 27, 2016

Part II





Department of the Interior





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Fish and Wildlife Service





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Endangered and Threatened Wildlife and Plants; Endangered Species Act 
Compensatory Mitigation Policy; Notice

Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / 
Notices

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DEPARTMENT OF THE INTERIOR

Fish and Wildlife Service

[Docket No. FWS-HQ-ES-2015-0165; FXES11140900000-178nmdash;FF09E33000]


Endangered and Threatened Wildlife and Plants; Endangered Species 
Act Compensatory Mitigation Policy

AGENCY: Fish and Wildlife Service, Interior.

ACTION: Notice of final policy.

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SUMMARY: We, the U.S. Fish and Wildlife Service (Service or USFWS), 
announce the final Endangered Species Act (ESA) Compensatory Mitigation 
Policy. The new policy steps down and implements recent Executive 
Office, Department of the Interior, and Service mitigation policies 
that reflect a shift from project-by-project to landscape-scale 
approaches to planning and implementing compensatory mitigation. The 
new policy is established to improve consistency and effectiveness in 
the use of compensatory mitigation as recommended or required under the 
ESA. The ESA Compensatory Mitigation Policy covers permittee-
responsible mitigation, conservation banking, in-lieu fee programs, and 
other third-party mitigation mechanisms, and stresses the need to hold 
all compensatory mitigation mechanisms to equivalent and effective 
standards.

DATES: This policy is effective on December 27, 2016.

ADDRESSES: Comments and materials received, as well as supporting 
documentation used in the preparation of this policy, including an 
environmental assessment, are available on the Internet at http://www.regulations.gov at Docket Number FWS-HQ-ES-2015-0165.

FOR FURTHER INFORMATION CONTACT: Craig Aubrey, U.S. Fish and Wildlife 
Service, Division of Environmental Review, 5275 Leesburg Pike, Falls 
Church, VA 22041-3803; telephone 703-358-2442. Persons who use a 
telecommunications device for the deaf (TDD) may call the Federal Relay 
Service at 800-877-8339.

SUPPLEMENTARY INFORMATION:

Background

    The mission of the U.S. Fish and Wildlife Service (Service or 
USFWS) is working with others to conserve, protect, and enhance fish, 
wildlife, and plants and their habitats for the continuing benefit of 
the American people. As part of our mission, we continually seek 
opportunities to engage both the public and private sectors to work 
with us to conserve species and the ecosystems on which they depend. 
This collaborative effort includes conservation of endangered and 
threatened (listed) species and their designated critical habitat 
protected under the Endangered Species Act of 1973, as amended (ESA; 16 
U.S.C. 1531 et seq.), and other species proposed for listing or at-risk 
of being listed. The purposes of the ESA are to provide a means whereby 
the ecosystems upon which listed species depend may be conserved, and 
to provide a program for the conservation of such species. The Service 
and National Oceanic and Atmospheric Administration's National Marine 
Fisheries Service share responsibilities for administering the ESA. 
However, this policy only applies to the Service and species under our 
jurisdiction.
    This policy is the first comprehensive treatment of compensatory 
mitigation under authority of the ESA to be issued by the Service. Both 
the 1995 interagency policy on the establishment and operation of 
wetland mitigation banks (60 FR 58605, November 28, 1995) and the 2000 
interagency policy on the use of in-lieu fee arrangements (65 FR 66914, 
November 7, 2000) are specific to wetland mitigation, but provide 
guidance that is generally applicable to conservation banking and in-
lieu fee programs for species associated with wetlands or uplands. 
These interagency policies were superseded by the Environmental 
Protection Agency--U.S. Army Corps of Engineers 2008 Compensatory 
Mitigation Rule for Losses of Aquatic Resources (73 FR 19594, April 10, 
2008). In 2003, the Service issued guidance on the establishment, use, 
and operation of conservation banks (68 FR 24753, May 8, 2003). In 
2008, we issued recovery crediting guidance (73 FR 44761, July 31, 
2008). This ESA Compensatory Mitigation Policy clarifies Service 
expectations regarding all compensatory mitigation mechanisms 
recommended or supported by the Service when implementing the ESA, 
including, but not limited to, conservation banks, in-lieu fee 
programs, habitat credit exchanges, and permittee-responsible 
mitigation.

Purpose and Importance of the Policy

    The primary intent of the policy is to provide Service personnel 
with direction and guidance in the planning and implementation of 
compensatory mitigation, primarily through encouraging strategic 
planning at the landscape level and setting standards that mitigation 
programs and projects must meet to achieve conservation that is 
effective and sustainable. Compensatory mitigation is defined in this 
policy as compensation for remaining unavoidable impacts after all 
appropriate and practicable avoidance and minimization measures have 
been applied, by replacing or providing substitute resources or 
environments (see 40 CFR 1508.20) through the restoration, 
establishment, enhancement, or preservation of resources and their 
values, services, and functions (part 600, chapter 6 of the 
Departmental Manual (600 DM 6.4C)). While this policy addresses only 
the role of compensatory mitigation under the ESA, avoidance and 
minimization of impacts retain their central role in both the section 7 
and section 10 processes. Guidance on the application of the mitigation 
hierarchy is provided in our Mitigation Policy (81 FR 83440, November 
21, 2016), regulations implementing the ESA, and other policies and 
guidance documents specific to various sections of the ESA.

Alignment of the Policy With Existing Directives

    By memorandum (80 FR 68743, November 6, 2015), the President 
directed all Federal agencies that manage natural resources, ``to avoid 
and then minimize harmful effects to land, water, wildlife, and other 
ecological resources (natural resources) caused by land- or water-
disturbing activities, and to ensure that any remaining harmful effects 
are effectively addressed, consistent with existing mission and legal 
authorities.'' This policy is consistent with the Presidential 
memorandum (``Mitigating Impacts on Natural Resources From Development 
and Encouraging Related Private Investment'') issued November 3, 2015; 
the Department of the Interior (Department) Secretarial Order 3330 
entitled, ``Improving Mitigation Policies and Practices of the 
Department of the Interior,'' issued October 31, 2013; the new Interior 
Departmental Manual Chapter on Landscape-Scale Mitigation Policy, 600 
DM 6 (October 23, 2015); and is intended to institute the policies and 
procedures reflected in the guiding principles on mitigation 
established by the Department through the report to the Secretary 
entitled, ``A Strategy for Improving the Mitigation Policies and 
Practices of The Department of the Interior,'' issued in April 2014 
(Clement et al. 2014). These directives emphasize a comprehensive 
landscape-scale approach to planning and implementing mitigation 
programs, and they also include a mitigation goal to improve

[[Page 95317]]

(i.e., ``net gain'') or, at a minimum, to maintain (i.e., ``no net 
loss'') the current status of affected resources, as allowed by 
applicable statutory authority and consistent with the responsibilities 
of action proponents under such authority, primarily for important, 
scarce, or sensitive resources, or as required or appropriate.
    The mitigation principles set forth in the above directives, 
including the landscape scale approach and the goal of ``net gain,'' 
have been adopted in both the Service's Mitigation Policy (81 FR 83440, 
November 21, 2016), and in this policy. The landscape-scale approach to 
mitigation is not a new concept. For example, in 2013, the Service 
issued mitigation guidance for two listed songbirds in central Texas 
based on recovery goals for these species. The songbird mitigation 
guidance sets minimum standards that must be met by mitigation 
providers and encourages the use of consolidated compensatory 
mitigation in the form of permanent protection and management of large, 
contiguous patches of the species' habitat. Proactive approaches, such 
as this example, provide greater regulatory certainty for project 
proponents and encourage the establishment of conservation banks and 
other mitigation opportunities by mitigation sponsors for use by 
project proponents.
    The mitigation goal (i.e., ``net gain'' or, at a minimum, ``no net 
loss'') is not necessarily based on habitat area, but on numbers of 
individuals, size and distribution of populations, the quality and 
carrying capacity of habitat, or the capacity of the landscape to 
support stable or increasing populations of the affected species after 
the action (including all proposed conservation measures) is 
implemented. In other words, it is based on those factors that 
determine the ability of the species to be conserved.

Benefits of the Policy

    This policy sets forth standards for compensatory mitigation that 
implement the tenets in the directives cited above and reflect the many 
lessons learned by the Service during our more than 40-year history 
implementing the ESA, particularly sections 7 and 10 of the ESA. The 
standards apply to all compensatory mitigation mechanisms (i.e., 
permittee-responsible mitigation, conservation banks, in-lieu fee 
programs, habitat exchanges, and other third-party mitigation 
arrangements), which are instrumental to achieving effective 
compensatory mitigation on the landscape and encouraging private 
investment in compensatory mitigation.
    Adherence to the mitigation principles and compensatory mitigation 
standards identified in this policy will achieve greater consistency, 
predictability, and transparency in implementation of the ESA. Service 
offices are encouraged to work with Federal agencies and other partners 
to establish compensatory mitigation programs based on landscape-scale 
conservation plans, such as more efficient, better coordinated, and 
expedited regulatory processes, which can provide project applicants 
with incentives to mitigate their actions. Compensatory mitigation 
programs and projects designed and implemented in accordance with the 
standards set forth in this policy are expected to achieve the best 
conservation outcomes for listed, proposed, and at-risk species through 
effective management of the risks associated with compensatory 
mitigation.
    This policy encourages the use of market-based compensatory 
mitigation programs such as conservation banking in conjunction with 
programmatic approaches to ESA section 7 consultations and habitat 
conservation plans (HCPs) that can be designed to achieve a ``no net 
loss'' or a ``net gain'' mitigation goal. Consultations and HCPs that 
establish a ``program'' to address multiple, similar actions and/or 
impacts to one or more species operate on a larger landscape scale and 
expedite regulatory processes. Market-based mitigation programs improve 
regulatory predictability, provide efficiencies of scale, and 
incentivize private investment in species conservation (Fox and Nino-
Murcia 2005). The benefits provided by these mitigation programs 
generally encourage Federal agencies and incentivize applicants to 
develop proposed actions that fully compensate for adverse impacts to 
affected species anticipated as a result of their actions.

Discussion

    ``In enacting the ESA, Congress recognized that individual species 
should not be viewed in isolation, but must be viewed in terms of their 
relationship to the ecosystem of which they form a constituent element. 
Although the regulatory mechanisms of the [ESA] focus on species that 
are formally listed as endangered or threatened, the purposes and 
policies of the [ESA] are far broader than simply providing for the 
conservation of individual species or individual members of listed 
species'' (Conference Report No. 97-835 House of Representatives, 
September 17, 1982). This comment, made over 30 years ago during 
reauthorization of the ESA, is a reminder of the challenges still 
before us.
    Incorporating a landscape-scale approach to development and 
conservation planning, including mitigation, that ensures a ``net 
gain'' or, at a minimum, ``no net loss'' in the status of affected 
resources, as directed by the Presidential memorandum (80 FR 68743, 
November 6, 2015), helps address the additive impacts that lead to 
significant deterioration of resources over time and has the potential 
to foster recovery of listed species and avoid listing of additional 
species.
    As discussed later in this document, the Service's authority to 
require compensatory mitigation under the ESA is limited and differs 
under sections 7 and 10. However, we can more broadly recommend the use 
of compensatory mitigation to offset the adverse impacts of actions 
under certain provisions of the ESA and under other authorities, such 
as the Fish and Wildlife Coordination Act (16 U.S.C. 661 et seq.) and 
the National Environmental Policy Act (NEPA; 42 U.S.C. 4321 et seq.). 
This policy encourages Service offices to work with Federal agencies 
and applicants, and to recommend or require, if appropriate, the 
inclusion of compensatory mitigation for all unavoidable adverse 
impacts to listed, proposed, and at-risk species and their habitat 
anticipated as a result of any proposed action. While this practice 
currently exists for some species, it is not used broadly throughout 
the Service. Recommending, where applicable, that Federal agencies use 
their authorities to fully mitigate the adverse effects of their 
actions (i.e., ensure ``no net loss'' in the status of affected 
resources) is consistent with the Presidential memorandum (80 FR 68743, 
November 6, 2015), the Department's and the Service's mitigation 
planning goals, and the purposes of the ESA. Effective mitigation that 
fully offsets the impacts of an action prevents that action from 
causing a decline in the status of affected species (i.e., achieves 
``no net loss'').

Compensatory Mitigation Under Sections 7 and 10 of the ESA

    The additive effects of impacts adversely affecting listed and at-
risk species as a result of many past and current human-caused actions 
are significant. The number of listed species has increased from 
slightly more than 300 in 1982 (when the ESA was reauthorized) to more 
than 1,500 by the end of 2016. While some listed species have been 
reclassified from endangered to threatened (i.e., ``downlisted'') or

[[Page 95318]]

removed from either the Federal List of Endangered and Threatened 
Wildlife or List of Endangered and Threatened Plants (i.e., 
``delisted'') within the last 40 years, the projected increase in human 
population growth, increasing demand on our natural resources 
associated with this projected population growth, accelerated climate 
change, continued introductions of invasive species, and other 
stressors are putting even more species at risk and compromising the 
essential functions of ecosystems necessary to improve the status and 
recover these species. We cannot expect to change the status 
trajectories of these species without a commitment to responsible and 
implementable standards for accomplishing effective, sustainable 
compensatory mitigation that fully offsets the adverse impacts of 
actions to species and other resources of concern.
    Compensatory mitigation is a conservation measure that can be used 
within an appropriate context under section 7 of the ESA to address 
proposed actions that may result in adverse impacts to listed species 
that cannot be avoided. For example, under section 7(a)(1) of the ESA, 
all Federal agencies are required to use their authorities to carry out 
conservation programs for listed species. Federal agencies may choose 
to develop and implement section 7(a)(1) conservation programs for 
listed species in conjunction with section 7(a)(2) consultation through 
a coordinated program. The Service supports these efforts, and we 
encourage Federal agencies to coordinate with us on development of such 
programs.
    Compensatory mitigation can be used under section 10(a)(1)(B) of 
the ESA through HCPs developed to address adverse impacts of non-
Federal actions on listed and other covered species that cannot be 
avoided. Landscape-scale HCPs developed for use by multiple applicants 
to conserve multiple resources are generally the most efficient and 
effective approaches. The Service supports these efforts and encourages 
applicants, particularly local and State agencies and organizations, to 
coordinate with us on the development of such plans.

Landscape-Level Approaches to Compensatory Mitigation

    Taking a landscape-level approach to mitigation will assist the 
Service to modernize our compensatory mitigation procedures and 
practices and better meet the challenges posed by the growing human 
population's demands on our natural resources and changing conditions 
such as those resulting from climate change. Conservation banking is a 
market-based compensatory mitigation mechanism based on a landscape 
approach to mitigation that achieves compensation for listed and other 
resources of concern in advance of project impacts. In-lieu fee 
programs also establish compensatory mitigation sites but generally not 
in advance of impacts and often not through a market-based approach. 
Habitat credit exchanges are a relatively new market-based compensatory 
mitigation mechanism based on a clearinghouse model that may or may not 
accomplish mitigation in advance of project impacts. All three of these 
mitigation mechanisms use a landscape-level approach to consolidate and 
locate compensatory mitigation in areas identified as conservation 
priorities. These programs have designated service areas within which 
proposed actions that meet certain criteria may be mitigated with 
Service approval. The functions and services provided for listed, 
proposed, and at-risk species by these compensatory mitigation programs 
are represented by credits. Credits are used to offset impacts (often 
referred to as debits). Most credit transactions involve a permittee 
purchasing the amount of credits needed to offset the anticipated 
adverse effects of an action from the mitigation project sponsor. The 
Service must approve credit transactions as to their conservation value 
and appropriate application for use related to any authorization or 
permit issued under the ESA.
    The conservation banking model is generally perceived as successful 
at achieving effective conservation outcomes and, when used in 
conjunction with section 7 consultations and section 10 HCPs, has 
achieved notable regulatory efficiencies. Results include ecological 
performance that usually achieves ``no net loss,'' and often a net 
benefit, in species conservation; increased regulatory predictability 
for Federal agencies and applicants; and more efficient and better 
coordinated permitting processes, especially when multiple agencies 
with overlapping regulatory jurisdictions are involved.
    Permittee-responsible mitigation for many small to moderate impacts 
often cannot provide adequate compensation because it is often 
difficult to achieve effective conservation on a small scale. Small 
mitigation sites are often not ecologically defensible, and it is often 
difficult to ensure long-term stewardship of these sites. Most 
individual actions result in small or moderate impacts to species and 
habitat, yet the additive effects of these actions (often referred to 
as ``death by a thousand cuts''), when not compensated for, can have 
substantial adverse effects on these resources by degrading the 
environmental baseline and impairing the potential for future actions. 
In general, conservation banking, in-lieu fee programs, and similar 
mitigation mechanisms that consolidate compensatory mitigation on 
larger landscapes are designed to serve project proponents with small 
to moderate impact actions, are ecologically more effective, and 
provide more economical options to achieve compensation than permittee-
responsible mitigation.
    Furthermore, larger landscape-scale conservation programs with 
market-based compensatory mitigation opportunities create an economic 
incentive for private landowners, investors, and mitigation project 
sponsors to participate in these programs. The most robust programs 
generate competition among mitigation sponsors and may provide cost-
effective means for complying with natural resource laws such as the 
ESA. To be successful, these market-based and other compensatory 
mitigation programs must operate transparently and be held to high 
standards that are uniformly applied across all compensatory mitigation 
mechanisms. Equally important is transparency in the implementation of 
the ESA and the development of mitigation programs for use by regulated 
communities.

Mitigation Defined

    Because endangered and threatened species are by definition in 
danger of extinction or likely to become so in the foreseeable future, 
avoiding, minimizing, and compensating for impacts to their populations 
are all forms of mitigation that the Service may consider when 
administering the ESA. The Council on Environmental Quality (CEQ) NEPA 
regulations (40 CFR 1508.20) state that mitigation includes:
     Avoiding the impact altogether by not taking a certain 
action or parts of an action;
     Minimizing impacts by limiting the degree or magnitude of 
the action and its implementation;
     Rectifying the impact by repairing, rehabilitating, or 
restoring the affected environment;
     Reducing or eliminating the impact over time by 
preservation and maintenance operations during the life of the action; 
and
     Compensating for the impact by replacing or providing 
substitute resources or environments.
    In 600 DM 6, the Department of the Interior states that mitigation, 
as

[[Page 95319]]

enumerated by CEQ, is compatible with Departmental policy; however, as 
a practical matter, the mitigation elements are categorized into three 
general types that form a sequence: Avoidance, minimization, and 
compensatory mitigation for remaining unavoidable (also known as 
residual) impacts. Historically, those administering the ESA have often 
used a condensed mitigation sequence--avoid, minimize, and compensate; 
or avoid, minimize, and mitigate. This policy adopts the Department's 
definition of compensatory mitigation: Compensation for remaining 
unavoidable impacts after all appropriate and practicable avoidance and 
minimization measures have been applied, by replacing or providing 
substitute resources or environments (see 40 CFR 1508.20) through the 
restoration, establishment, enhancement, or preservation of resources 
and their values, services, and functions (600 DM 6.4C). Throughout 
this policy, ``compensatory mitigation'' or ``compensation'' is used in 
this broad sense to include any measure that would rectify, reduce, or 
compensate for an impact to an affected resource. We also use the term 
``minimize'' in the broad sense throughout this policy to include any 
conservation measure, including compensation, which would lessen the 
impact of the action on the species or other affected resource. We 
recognize there is some overlap in the use of these terms but, as a 
practical matter, this use in practice is consistent with the intent of 
the ESA. Information regarding avoidance and observance of the 
mitigation sequence can be found at our Mitigation Policy (81 FR 83440, 
November 21, 2016). This ESA Compensatory Mitigation Policy covers 
permittee-responsible mitigation, conservation banking, in-lieu fee 
programs, and all other compensatory mitigation mechanisms.

Implementation

    The Service will issue interim guidance containing specific 
operational steps to assist Service staff in implementing this policy. 
This interim guidance will be issued in the form of a Director's 
memorandum, which will be used to develop a Service Manual chapter at a 
later date. Throughout this policy, the term ``implementation 
guidance'' will be used when referencing the interim guidance and 
future Service Manual chapter.

Changes From the Draft Policy

    This final policy differs from the draft policy in a few 
substantive respects, which we list below, and contains editorial 
changes in response to comments we received that requested greater 
clarity of expression regarding various aspects of the policy's 
purpose, authorities, scope, general principles, framework for 
formulating mitigation measures, and definitions. The most common 
editorial change to the final policy addresses the concern that the 
Service lacks authority to apply compensatory mitigation to the ESA. 
Reasons cited by the commenters for not applying compensatory 
mitigation to the ESA included: (a) The ESA does not provide authority 
to require mitigation; and (b) policy concepts such as ``net 
conservation gain'' and a ``landscape approach'' to conservation are 
inconsistent with ESA statutory authority and regulatory requirements. 
This final policy adds new text to 2. Authorities and Coordination that 
identifies those circumstances under which we have specific authority 
to require, consistent with other applicable laws and regulations, one 
or more forms of compensatory mitigation for impacts to federally 
listed species, proposed species, and candidates as defined in the ESA. 
This policy provides a common framework for the Service when 
identifying and implementing compensatory mitigation measures pursuant 
to the ESA. The policy, however, cannot and does not alter or 
substitute for the regulations implementing the ESA. We summarize below 
the few substantive changes from the draft policy, listed by section.
    Section 5 in the draft policy, Application of Compensatory 
Mitigation Under the ESA, was moved in its entirety to replace section 
4, as we felt it more appropriate to discuss the policy's application 
under the ESA after section 2. Authorities and Coordination, and 
section 3. Scope. Section 4 in the draft policy, Compensatory 
Mitigation Standards, is now section 5 in this final policy.
    In section 5.1, Siting Sustainable Compensatory Mitigation, this 
final policy focuses on overarching considerations and leaves specific 
factors or examples to be explained in the implementation guidance.
    In section 6.1.3, ``Preference for Consolidated Compensatory 
Mitigation,'' we removed habitat credit exchanges as a specifically 
identified preference for compensatory mitigation because we do not yet 
have the record of success with this mechanism that we have with other 
mechanisms such as conservation banks.
    The bulk of sections 6.2.3, ``Ensuring Durability on Public 
Lands,'', and 6.2.4, ``Transfer of Private Mitigation Lands to Public 
Agencies,'' was removed from the policy and will be discussed in the 
implementation guidance, as well as the prescriptive operational detail 
from section 6.6, Managing Risk and Uncertainty.
    In section 7.1.4 ``Habitat Credit Exchange,'' we added text 
indicating that habitat credit exchanges are a relatively new 
mitigation mechanism, and warrant additional care and consideration 
when implementing them. We also removed section 7.1.5, ``Other Third-
party Compensatory Mitigation,'' as this is a purely hypothetical 
mechanism which seems to differ little from proponent-responsible 
mitigation, and it was redundant with section 7.3, Other Compensatory 
Mitigation Programs or Projects.
    In Table 1. ``Comparison of Habitat-based Compensatory Mitigation 
Sites Established Under Different Mechanisms,'' we removed the column 
``Instrument Required'' because all discussion of instruments will be 
in the implementation guidance, and we removed the final row of the 
table: ``Other Third-party Mitigation Site.''
    We removed the draft policy's section 8, Establishment and 
Operation of Compensatory Mitigation Programs and Projects; it will 
form the basis of the implementation guidance.
    Section 9 of the draft policy, Criteria for Use of Third-party 
Mitigation, has been re-numbered in this policy, and is now section 8.
    The majority of section 10, Compliance and Tracking, has been 
removed from the policy, and will be discussed in the implementation 
guidance; accordingly, the remaining paragraph has been renumbered in 
this policy as section 9.
    Regarding appendix B, Glossary of Terms Related to Compensatory 
Mitigation, we removed several terms that are more appropriate for the 
implementation guidance document as well as items that could be 
confused with terms used in the ESA's implementing regulations.
    Finally, we have removed appendix C, Requirement of the Marine 
Mammal Protection Act, to avoid confusion with the policy's focus on 
implementing the ESA.

Summary of Comments and Responses

    The September 2, 2016, notice announcing our draft Endangered 
Species Act Compensatory Mitigation Policy (draft policy) (81 FR 61032) 
requested written comments, information, and recommendations from 
governmental agencies, tribes, the scientific community, industry 
groups, environmental interest groups, and any other interested members 
of the public.

[[Page 95320]]

    That notice established a 45-day comment period, ending October 17, 
2016, on the draft policy. Several commenters (1) requested an 
extension of time to provide their comments; (2) asked the Service to 
revise and recirculate the draft policy for comment; or (3) asked the 
Service to withdraw the draft policy to allow interested parties 
additional time to comment. The November 3, 2015, Presidential 
Memorandum on Mitigation states, ``Within 1 year of the date of this 
memorandum, the Department of the Interior, through the U.S. Fish and 
Wildlife Service, shall finalize a revised mitigation policy that 
applies to all of the U. S. Fish and Wildlife Service's authorities and 
trust responsibilities. The U.S. Fish and Wildlife Service shall also 
finalize an additional policy that applies to compensatory mitigation 
associated with its responsibilities under the Endangered Species Act 
of 1973.'' In order to finalize the policy as close as possible to the 
date outlined in the Presidential Memorandum on Mitigation, we were 
unable to publish an extension or reopen the comment period.
    During the comment period, we received approximately 150 public 
comment letters, including comments from Federal, State, and local 
government entities; industry; trade associations; conservation 
organizations; nongovernmental organizations; private citizens; and 
others. The range of comments varied from those that provided general 
statements of support or opposition to the draft policy, to those that 
provided extensive comments and information supporting or opposing the 
draft policy in its entirety or specific aspects of the draft policy. 
The majority of comments submitted included detailed suggestions for 
revisions addressing major concepts, as well as editorial suggestions 
for specific wording or line edits.
    All comments submitted during the comment period have been fully 
considered in preparing this final policy. All substantive information 
provided has been incorporated, where appropriate, directly into this 
final policy or is addressed below. The comments we received were 
grouped into general issues specifically relating to the draft policy, 
and are presented below along with the Service's responses to these 
substantive comments.
    We received several comments requesting clarification on various 
aspects of the draft policy, including: Reporting; monitoring; 
financial instruments; coordination with States, tribes, and local 
groups; the compensatory mitigation mechanisms; and other 
implementation elements. We recognize the value of these comments and 
are giving them due consideration. We have removed these elements from 
this policy and will address them in the implementation guidance.

A. Definitions

    Comment (1): One commenter suggested a more precise definition of 
compensatory mitigation. The commenter stated the draft policy's 
definition suggests any remaining impacts must be ``unavoidable'' and 
not simply ``un-avoided.'' The commenter suggests the draft policy's 
definition is confusing and inconsistent with the ESA language that 
uses ``minimize'' and ``mitigate.''
    Response: The definition of ``compensatory mitigation'' in this 
policy derives from the Department of the Interior's Department Manual 
(600 DM 6.4C). This definition gives more flexibility in the use of 
avoidance and minimization measures for listed species than the 
recommendation provided in the comment. The use of the terms 
``appropriate and practicable'' in this policy's definition give 
deference to project proponents and Federal agencies.
    Comment (2): Comments included a statement that the definition of 
landscape-scale approach is unclear.
    Response: Our definition of landscape-scale approach is informed by 
the definition used in 600 DM 6 and our Service's mitigation policy. 
The landscape approach to conservation considers the functional context 
of the species or habitat under consideration. For example, activities 
involving fairy shrimp might be evaluated at a vernal pool complex or 
regional scale. Issues affecting sturgeon may require strategies that 
consider an entire river system, thousands of miles long. Fundamental 
to this approach is an understanding of what is important to ensure the 
ecological function of the species or habitat in question, at the 
appropriate scale. Examples include the North American Waterfowl 
Management Plan, many fisheries management plans, recovery plans for 
federally listed species, watershed restoration plans, and State 
wildlife plans.

B. Policy Is Based on Existing Authority

i. ESA Sections 7 and 10
    Comment (3): Several commenters stated that the mitigation sequence 
that uses ``avoidance'' cannot be required under sections 7 and 10 of 
the ESA, unless it alleviates a jeopardy situation. One of the 
commenters noted that ``avoidance'' is voluntary on the part of an 
action agency or applicant.
    Response: The use of ``avoidance'' in the mitigation sequence is 
not a requirement in the sense that all impacts to listed species or 
critical habitat must be avoided. Through the policy, we are neither 
requiring nor mandating avoidance. One of the stated purposes of the 
ESA at section 2(b) is to ``provide a means whereby the ecosystems upon 
which endangered species and threatened species depend may be 
conserved.'' Developing options to avoid impacts to listed resources 
under sections 7 and 10 is important to furthering this purpose and 
effectively implementing the ESA.
    The policy is consistent with the Presidential memorandum 
(``Mitigating Impacts on Natural Resources from Development and 
Encouraging Related Private Investment'') issued November 3, 2015 (see 
80 FR 68743, November 6, 2015), in which the President directed all 
Federal agencies that manage natural resources ``to avoid and then 
minimize harmful effects to land, water, wildlife, and other ecological 
resources (natural resources) caused by land- or water-disturbing 
activities, and to ensure that any remaining harmful effects are 
effectively addressed, consistent with existing mission and legal 
authorities.'' The Service agrees that some impacts to listed species 
or critical habitat may be unavoidable and that the ESA provides a 
mechanism for both Federal agencies (section 7) and non-Federal 
entities (section 10) to receive take coverage in the case of any 
unavoidable impacts. There are multiple sections of our implementing 
regulations in title 50 of the Code of Federal Regulations (CFR) at 50 
CFR part 402 (Sec. Sec.  402.10, 402.13) that direct the Service to 
suggest modifications or make advisory recommendations to Federal 
action agencies and applicants to avoid the likelihood of adverse 
effects to listed species or critical habitat. Additionally, if the 
Service is required to provide a reasonable and prudent alternative 
under section 7 consultation, the regulations state that such an 
alternative must be one ``that the Director believes would avoid the 
likelihood of jeopardizing the continued existence of listed species or 
resulting in the destruction or adverse modification of critical 
habitat'' (50 CFR 402.02). Use of the full mitigation sequence 
including avoidance and minimization of impacts to listed species is 
consistent with the purposes and mandates set forth in the ESA.
    Comment (4): Several commenters suggested compensatory mitigation 
cannot be required under section 7 of

[[Page 95321]]

the ESA, and that there is no authority to include such mitigation in 
reasonable and prudent measures (RPMs) and the accompanying mandatory 
terms and conditions that the Service includes in incidental take 
statements. Some stated that compensation is limited to voluntary 
actions on behalf of the action agency and recommendations on the part 
of the Service. One comment stated compensation was not appropriate in 
both RPMs and reasonable and prudent alternatives (RPAs). Another 
suggested that compensation under section 7 consultation was 
appropriate but not under section 7(a)(4) conference. Commenters cited 
the ESA, its implementing regulations, and the Service's 1998 
Consultation Handbook.
    Response: As discussed in sections 4.1.2 and 4.1.3 of this policy, 
compensatory mitigation can play an important role in section 7(a)(2) 
consultations and 7(a)(4) conferences. Compensatory mitigation can 
appropriately be included as part of an action subject to consultation, 
or in reasonable and prudent alternatives to avoid the likelihood of 
jeopardy, in order to reduce the net adverse effect of an action on 
proposed or listed species or designated critical habitat. This policy 
clarifies those circumstances where it may be appropriate to 
incorporate mitigation into reasonable and prudent measures and terms 
and conditions as part of a section 7(a)(2) consultation. For example, 
throughout this policy, ``compensatory mitigation'' or ``compensation'' 
is used to include any measure that would rectify, reduce, or 
compensate for an impact to an affected resource. Rectifying the impact 
means ``repairing, rehabilitating, or restoring the affected 
environment'' (40 CFR 1508.20). Restoring impacted habitat is a 
commonly used reasonable and prudent measure that meets the definition 
of compensatory mitigation in this policy, minimizes the amount or 
extent of incidental take, and can be accomplished consistent with the 
ESA and its implementing regulations at 50 CFR part 402.
    Comment (5): Commenters said the policy's emphasis on the role of 
conservation in the section 7 consultation process is misdirected. 
Section 7(a)(2) does not include a conservation requirement for Federal 
agencies.
    Response: The Service respectfully disagrees. Section 7(a)(2) 
requires that Federal agencies ensure their actions do not jeopardize 
the continued existence of endangered and threatened species or result 
in the destruction or adverse modification of critical habitat. This 
requirement is accomplished through the consultation process, which 
concludes with the Service's biological opinion. In the event a section 
7 consultation concludes with a jeopardy or adverse modification 
determination, the Service will include reasonable and prudent 
alternatives (RPAs), when possible, that the action agency can 
implement to avoid violation of section 7(a)(2) of the ESA. Options for 
RPAs can include compensatory mitigation in order to avoid a jeopardy 
or adverse modification situation, as long as they are consistent with 
the definitions at 50 CFR 402.02. When the Service's biological opinion 
concludes that the agency action would not result in jeopardy or 
adverse modification, the Service will include reasonable and prudent 
measures (RPMs) to minimize any incidental take associated with the 
action. As described in the policy, minimization of impacts of the 
taking on the species may include compensation as consistent with the 
ESA implementing regulations. The Service provides technical assistance 
during the section 7(a)(2) consultation process to help reduce the need 
for RPMs and RPAs. These measures fall within the ESA's definition of 
``conserve,'' which means ``to use and the use of all methods and 
procedures which are necessary to bring any endangered species or 
threatened species to the point at which the measures provided pursuant 
to [the ESA] are no longer necessary.''
    Comment (6): Several commenters expressed concern that the policy 
would complicate the process for sections 7 and 10, and cause project 
delays. The commenters stated that such delays could create increased 
project costs.
    Response: The Service respectfully disagrees. Mitigation provided 
in advance of impacts, such as through a conservation banking program, 
can expedite project reviews by the Service, because the mitigation is 
already established and has already gone through the due diligence 
process. Clear guidance on application of compensatory mitigation 
mechanisms as provided in this policy, should assist Service staff and 
project proponents implement their ESA responsibilities in a timely 
fashion. Furthermore, conducting compensatory mitigation may assist in 
the compliance with other required laws, which may expedite the project 
process. For example, compensatory mitigation may lower the level of 
analysis required by NEPA (allowing a mitigated environmental 
assessment/finding of no significant impact instead of an environmental 
impact statement).
    Comment (7): One commenter objected to the phrase ``recovery 
measure'' when discussing section 7(a)(1) of the ESA. The commenter 
provided substantial information, including a section of the preamble 
from the Service's 1986 interagency cooperation rulemaking (51 FR 
19926, June 3, 1986), noting the ESA does not mandate specific actions 
under section 7(a)(1), nor does it authorize the Service to mandate how 
or when Federal agencies should implement their section 7(a)(1) 
responsibilities. Specifically, the commenter said that section 7(a)(1) 
is not a recovery measure, and the policy failed to properly state the 
basis for such a characterization.
    Response: We agree that the directive under section 7(a)(1) of the 
ESA does not give the Service authority over other Federal agencies, 
nor does it specifically authorize actions to be implemented. It does, 
however, direct other Federal agencies to consult with the Service when 
developing conservation programs under section 7(a)(1). To this end, 
the policy provides guidance and recommendations on how Federal 
agencies may achieve the greatest effectiveness when implementing their 
section 7(a)(1) obligations.
    The policy clearly describes the basis for the use of the term 
``recovery measure'' when describing section 7(a)(1), which comes from 
the definition of the terms ``conserve,'' ``conserving,'' and 
``conservation'' in section 3 of the ESA. Although the word 
``recovery'' is not used in the definition, it clearly describes 
recovery as ``the use of all methods and procedures which are necessary 
to bring any endangered species or threatened species to the point at 
which the measures provided pursuant to [the ESA] are no longer 
necessary.'' Additionally, section 7(a)(1) directs all Federal agencies 
to ``utilize their authorities in furtherance of the purposes of [the 
ESA]''. One of the stated purposes of the ESA is to ``provide a means 
whereby the ecosystems upon which endangered and threatened species 
depend may be conserved.'' The intent is that all Federal agencies have 
a responsibility, using their existing authorities, to help recover 
listed species.
    Comment (8): One commenter stated the policy should focus only on 
implementation of voluntary mitigation actions under the ESA. The 
commenter noted that mitigation guidance for sections 7 and 10 under 
the ESA are provided in the habitat conservation planning and 
consultation handbooks.
    Response: This policy provides greater clarity and detail with 
regard to mitigation implementation than the

[[Page 95322]]

section 7 and habitat conservation planning handbooks. As stated 
earlier, this policy reflects the many lessons learned by the Service 
during our more than 40-year history implementing the ESA, particularly 
sections 7 and 10. We agree that the use of voluntary mitigation 
programs and actions that further the purposes of the ESA should be 
encouraged. The development and implementation of voluntary mitigation 
programs should also be effective and consistent with other forms of 
mitigation. The policy will guide such voluntary efforts to promote 
consistency in the same way it will guide mitigation efforts in 
regulatory processes.
    Comment (9): One commenter recommended we add ``and applicants'' 
following ``Federal agencies'' in two sentences in section 4.1.2.
    Response: Applicants are not typically involved in the 
establishment of mitigation programs such as conservation banks and in-
lieu fee programs; moreover, the responsibility for ensuring a Federal 
action does not violate section 7(a)(2) of the ESA ultimately lies with 
the Federal agency proposing the action. We did not make the suggested 
change.
    Comment (10): One commenter thought the Service should recognize 
the importance of the Habitat Conservation Plan (HCP) Assurances (``No 
Surprises'') Rule (63 FR 8859, February 23, 1998) and explicitly state 
that remediation and alternative mitigation will not erode protections 
afforded by the No Surprises Rule.
    Response: The Service does recognize the importance of the No 
Surprises Rule in the section 10 process, and agrees that remediation 
and alternative mitigation should not erode protections afforded by the 
No Surprises Rule. The Service works with applicants to develop HCPs 
that include contingencies for mitigation that does not function as 
expected, including remediation or alternative mitigation. The No 
Surprises Rule is not eroded in this case, because these contingencies 
are included in the HCPs and agreed upon ahead of time.
    Comment (11): One commenter requested clarification of how the 
draft policy would apply to reinitiation of consultations under section 
7(a)(2) of the ESA. Specifically, what would be different, especially 
with regard to the concepts of ``net gain'' and ``no net loss?''
    Response: During the reinitiation process under section 7(a)(2), 
the concepts under this policy and their application to any 
consultation do not change. The ESA's directive to agencies to ensure 
any action is not likely to jeopardize the continued existence of any 
endangered or threatened species or adversely modify its critical 
habitat guides that process. The Service will recommend actions 
consistent with this policy, including consideration of the goal of a 
``net gain'' or, at a minimum, ``no net loss.'' Considering the variety 
of actions under consultation, the reasons for reinitiation, and the 
multitude of species covered, it is not possible for the policy to 
provide specific details regarding the application of such concepts 
during the consultation process.
    Comment (12): One commenter was concerned about section 4.7 
(Effective Conservation Outcomes and Accountability Through Monitoring, 
Adaptive Management, and Compliance) of the draft policy, which states 
that: ``A process for achieving remediation or alternative mitigation 
for compensatory mitigation failures beyond the control of the 
responsible party (e.g., unforeseen circumstances) must be clearly 
described in the mitigation instrument, biological and/or conference 
opinion, or permit.'' The commenter asked the Service to the clarify 
the statement to say that biological opinions issued in connection with 
section 7 consultations with Federal agencies, other than the Service 
itself, are not required to provide for unforeseen circumstances, 
saying that such a requirement is associated with ESA section 10(a) 
HCPs, but is not required in the context of section 7 consultations by 
the section 7 handbook, or existing law or regulations. They were 
concerned the current language of the draft policy could be 
misinterpreted to mean that section 7 biological opinions must include 
alternative mitigation for compensatory mitigation failures ``beyond 
the control of the responsible party,'' and this policy should not 
change the section 7 requirements for avoiding jeopardy to the species 
and adverse modification of critical habitat.
    Response: The development and implementation of mitigation programs 
should be effective and consistent among all forms of mitigation 
offered in sections 7 and 10 of the ESA, regardless of whether the 
mitigation is voluntary or required. Planning for unforeseen 
circumstances is part of effective mitigation. The policy will guide 
efforts to promote consistency, and Service staff will work with 
applicants and Federal agencies to explain how all mitigation standards 
can be incorporated into their mitigation plans. Nevertheless, the ESA 
and its implementing regulations ultimately determine how the Service 
makes decisions regarding listed species. We do not include the 
statement in question in this final policy; we will address this topic 
in implementation guidance.
    Comment (13): One commenter stated the Service has no statutory 
authority to require section 7 consultation on candidate or at-risk 
species or to include such species in HCPs. If the policy pursues a 
conservation goal in excess of the Service's actual regulatory and 
statutory authorities, separate guidance should be issued to draw this 
clear distinction, in order to provide complete transparency and 
direction to both Service staff and others in actual implementation.
    Response: The commenter is correct that the Service cannot require 
section 7 consultation for candidate or at-risk species. ESA section 7 
regulations provide for a conference between a Federal action agency 
and the Service for actions that are likely to jeopardize the continued 
existence of a proposed species or likely to result in destruction or 
adverse modification of proposed critical habitat (50 CFR 402.10). 
Including candidate or other at-risk species in conferences would be 
voluntary on the part of the Federal agency; however, it is encouraged 
by the Service and through this policy, and other Federal agencies may 
voluntarily conference to expedite possible future re-consultations. 
This is consistent with ESA goals of recovering listed species and, 
ideally, avoiding the need to list species because threats to them have 
been addressed. Further, intra-Service consultations and conferences 
will consider effects of the Service's actions on listed, proposed, and 
candidate species. Candidate species are treated as if they are 
proposed for listing for purposes of conducting internal Service 
conferencing.
    Additionally, under section 10 of the ESA, HCPs are voluntary and 
developed by the applicant, in consultation with the Service. It is the 
applicant who decides which candidate or non-listed at-risk species 
they wish to include. The Service has found that many applicants elect 
to include at-risk species to receive ``no surprises'' assurances and 
preclude the need to amend the associated incidental take permit, 
should the species become listed in the future. The voluntary inclusion 
of at-risk species in both the conference and HCP processes are 
proactive approaches to reduce the need for future listing of the 
species.
    Comment (14): One commenter said the Service mixes the concepts of 
voluntary conservation recommendations that can be provided under ESA 
section 7(a)(1) with requirements under ESA section 7(a)(2).

[[Page 95323]]

They also commented that neither standard under ESA section 10 imposes 
a ``no net loss'' requirement.
    Response: Federal agencies are directed to consult with the Service 
under ESA section 7(a)(1) to assist their development of programs to 
conserve listed species. Technical assistance to agencies with actions 
that require compliance with section 7(a)(2) is a logical nexus for the 
Service to advise Federal agencies about section 7(a)(1) conservation 
opportunities associated with these actions. Similarly, technical 
assistance to non-Federal applicants for incidental take permits under 
section 10(a)(1)(B) is a logical nexus to advise them about 
conservation opportunities associated with these actions. This policy 
provides a framework for such recommendations, and does not otherwise 
alter or substitute for standards under the ESA or the regulations 
implementing ESA sections 7(a)(2) and 10(a)(1)(B). Though not required, 
striving for ``no net loss'' in the status of the species' conservation 
is an appropriate mitigation goal, and may be to the benefit of the 
other agency or private landowner in greater future regulatory 
certainty or expedited future compliance (e.g., including ``at-risk'' 
species).
ii. Authorities--Other
    Comment (15): One commenter requested that we revise section 5.3 of 
the draft policy to provide more detail about how compensatory 
mitigation would work in relation to section 4(d) rules for threatened 
species.
    Response: This policy is intended to be general in nature. More 
detailed guidance documents covering specific activities may be 
developed in the future, such as for rules promulgated under section 
4(d) of the ESA.
    Comment (16): One commenter said that it was unclear how the policy 
would ``replace'' rules promulgated by other Federal agencies for 
guiding implementation of Federal laws such as the Clean Water Act (33 
U.S.C. 1251 et seq.) and natural resources such as ``waters of the 
United States.'' They requested clarification of how the April 10, 
2008, joint rulemaking of the U.S. Army Corps of Engineers (USACE) and 
the Environmental Protection Agency (EPA) (73 FR 19594) applies to ESA 
actions and what the impact of the policy would be.
    Response: The Service has added clarification to this final policy 
that it does not replace or alter the referenced April 10, 2008, rule 
(73 FR 19594). Processes established by applicable statutes and 
regulations remain in effect and are not superseded by this policy. 
This policy applies to compensatory mitigation for all species and 
habitat protected under the ESA and for which the Service has 
jurisdiction. The April 10, 2008, rule (73 FR 19594) applies to impacts 
to aquatic resources permitted by section 404 of the Clean Water Act.
    Comment (17): One commenter said that issuance of this policy 
violates the Administrative Procedure Act (APA; 5 U.S.C. subchapter II) 
or the Regulatory Freedom Act (RFA).
    Response: The Service complied with all necessary requirements in 
publishing the final policy. We are unaware of the Regulatory Freedom 
Act but for the purposes of this response, will assume the commenter is 
referring to the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et 
seq.). The policy does not require compliance with the APA or the RFA 
because it is not a regulatory document.
    Comment (18): One commenter was concerned that voluntary mitigation 
could be abused if an agency were to unreasonably withhold action for 
the purpose of applying undue pressure to force an applicant to 
volunteer mitigation measures. They said the policy should acknowledge 
and protect against this possibility.
    Response: We agree with the commenter that such an approach by 
Service or other agency staff would be unacceptable. It would also be 
contrary to this policy and existing authority. Processes established 
by applicable statutes and regulations remain in effect and are not 
superseded by this policy.
    Comment (19): One commenter stated that the policy goes beyond the 
authorities granted the Service in both sections 7 and 10 of the ESA. 
The other authorities relied on by the Service in adopting this policy, 
including the Presidential directives and memoranda, cannot legally 
form the basis for the promulgation of the policy.
    Response: This policy is designed to improve and clarify 
implementation of the ESA. Towards that end, it seeks to provide a 
framework for effecting mitigation that reflects a permissible reading 
of the law, while fulfilling the conservation purposes of the ESA. 
Federal agencies are directed to consult with the Service under ESA 
section 7(a)(1) to assist their development of programs to conserve 
listed species. A mitigation framework may provide valuable expertise 
for an agency considering their section 7(a)(1) responsibilities. 
Additionally, a framework may assist agencies with actions that require 
compliance with section 7(a)(2) of the ESA. Similarly, technical 
assistance to non-Federal applicants for incidental take permits under 
section 10(a)(1)(B) of the ESA is a logical nexus to advise them about 
conservation opportunities associated with these actions. The policy 
provides a framework for such recommendations and does not otherwise 
alter or substitute for the regulations implementing ESA sections 
7(a)(2) and 10(a)(1)(B). Authority to make recommendations to mitigate 
impacts to resources covered by the ESA is provided by that statute. 
Promulgation of this policy is consistent with not only the ESA, but 
also the Office of Management and Budget's guidelines on interpretive 
policies. Those guidelines state that public policies, such as this 
one, guide administrative processes while increasing an agency's 
predictability to external parties.
    Comment (20): One commenter noted the ESA imposes different 
standards and prohibitions with respect to pre-listing versus post-
listing activities for candidate conservation agreements with 
assurances (CCAAs) and safe harbor agreements (SHAs). By incorporating 
the net conservation benefit standard used for SHAs, the Service fails 
to account for these differences and conflates its treatment of pre-
listing and post-listing activities.
    Response: The Service does not intend to change the requirements 
for CCAAs and SHAs. The intent of the policy is to describe the 
requirements for converting either of these agreements to a mitigation 
agreement should a landowner desire to make their conservation more 
permanent and use it for mitigation.
iii. NEPA
    Comment (21): One commenter said that the policy should recommend 
that the Service comment on NEPA documents apart from, or in addition 
to, section 7 consultation.
    Response: We agree that application of the Service's authority to 
make advisory comments and recommendations under NEPA provides a 
powerful capability for influencing conservation of a broad array of 
natural resources while helping agencies and proponents identify 
appropriate project alternatives. The Service will continue to comment 
on NEPA documents in addition to conducting section 7 consultations 
whenever warranted. Our application of NEPA in a mitigation context is 
covered in the Service mitigation policy (81 FR 83440, November 21, 
2016).
    Comment (22): One commenter said the policy would increase the time 
and resources required by Federal agencies to comply with section 7 of 
the ESA and by proponents of any projects that may

[[Page 95324]]

adversely affect an at-risk species. The commenter said that the policy 
meets the definition of a major Federal action defined at 40 CFR 
1508.18 and should be analyzed in an environmental impact statement to 
comply with NEPA.
    Response: As explained in more detail below, neither of the two 
alternatives evaluated in the NEPA assessment would be expected to 
result in significant effects to the human environment within the 
meaning of NEPA and the CEQ regulations. Although we describe potential 
actions and consequences that could flow from each of the alternatives, 
the nature and scope of environmental consequences that are likely to 
result from any of the alternatives would depend on a variety of 
intervening circumstances that are impossible to identify in this 
analysis. However, we find there is no basis to infer that any such 
effects, even viewed generously, would be significant.
    In addition, because of the programmatic nature of the draft policy 
and the breadth of activities under consideration, the analyses of 
environmental effects must be very general, addressing the consequences 
from each alternative at a programmatic scale. Regardless of the 
alternative, we anticipate that the majority of the specific actions 
covered under the policy would receive additional project-specific NEPA 
review, either by other Federal agencies during their project review or 
by the Service during review of an ESA section 10(a)(1)(B) application. 
Those project-specific reviews would include development of 
appropriately detailed alternatives based on information necessary to 
complete informed and meaningful effects analyses. That information 
(e.g., location, timing, duration, and affected resources, etc.) is 
currently not available. More detailed information is contained in the 
environmental assessment, which is available on the Internet at http://www.regulations.gov at Docket Number FWS-HQ-ES-2015-0165.

C. Net Conservation Gain/No Net Loss

    Comment (23): One commenter stated the policy should more 
consistently emphasize throughout that ``conservation'' is the goal for 
protected species and their habitat, using our full suite of 
authorities including the ESA. While ``no net loss'' is appropriate 
under certain statutes like the Clean Water Act (as acknowledged in the 
April 10, 2008, joint rulemaking of USACE and EPA (73 FR 19594), for 
example), ``no net loss'' is a lower standard than what they have 
sought in conservation banking and in-lieu fee programs.
    Response: The Service's mitigation policy (81 FR 83440, November 
21, 2016) sets a mitigation planning goal of ``net conservation gain,'' 
which seeks to improve the status of affected resources, and, at a 
minimum, maintain the status of those resources (i.e., ``no net 
loss''). Adhering to the standards discussed in section 5 of this 
policy (Compensatory Mitigation Standards) is the best way to attain 
this goal, although we recognize that achieving a net conservation gain 
will not be possible in every circumstance, and in those cases will 
strive for ``no net loss.''
    Comment (24): One commenter strongly opposed the goal of a ``net 
gain'' in the policy, stating the Service lacks the underlying 
statutory authority to require it under the ESA and it will likely 
result in an uncompensated taking in violation of the U.S. 
Constitution. The commenter stated that the obligations under the 
policy, with the use of mandatory language such as ``must'' and 
``shall,'' constitute a rulemaking.
    Response: This policy adopts mitigation principles established by 
the Service's mitigation policy (81 FR 83440, November 21, 2016) and 
establishes compensatory mitigation standards to guide the use of 
compensatory mitigation under the ESA. The mitigation goal of ``net 
gain'' or, at a minimum, ``no net loss,'' is to assist the Service and 
its partners in developing mitigation programs and projects to further 
the purposes of the ESA. One of the stated purposes under section 2 of 
the ESA is to ``provide a means whereby the ecosystems upon which 
endangered and threatened species depend may be conserved.'' Section 3 
of the ESA defines ``conserved'' as ``the use of all methods and 
procedures which are necessary to bring any endangered species or 
threatened species to the point at which the measures provided pursuant 
to this Act are no longer necessary.'' This conservation purpose of the 
ESA is served by the policy's goal of a ``net gain'' when developing 
compensatory mitigation.
    In this context, the policy is not a legally binding rulemaking; 
the ESA and its implementing regulations determine the Service's 
decisions for listed species. The policy will not effectively compel a 
property owner to suffer a physical invasion of property and will not 
deny all economically beneficial or productive use of the land or 
aquatic resources. This policy provides consistent standards for the 
Service, and its partners, to apply when developing compensatory 
mitigation programs or projects, as appropriate under the authority of 
the ESA. The use of the terms ``must'' and ``shall'' in the policy are 
directed toward the Service's authority in implementing the ESA.
    The policy is broadly framed to encompass all species covered under 
the ESA, but does not result in any particular actions concerning 
specific properties. Additionally, this policy substantially advances a 
legitimate government interest (conservation of species and their 
habitats) and does not present a barrier to all reasonable and expected 
beneficial use of private property.
    Comment (25): One commenter stated that the Service does not 
explain how it will determine or impose mitigation measures to meet a 
mitigation target that is somewhere between maintaining and improving 
the status of affected resources.
    Response: The Service, being national in scope of operations, wrote 
this policy to allow for further clarification on a regional and local 
scale. This will allow the Service to work with Federal agencies and 
applicants to develop mitigation measures that meet objectives based on 
local conditions and tailored to the specific species that are 
impacted. A less flexible policy could cause rigid adherence to a 
protocol, which may be more suitable in one region, or for one species, 
versus another.
    Comment (26): Commenters stated that the ESA requirements to avoid 
jeopardy or adverse modification and to minimize the impact of any take 
of listed species do not equate to the no net loss or net gain goal 
articulated in the draft policy, and the Service has no authority under 
the ESA to require measures that will result in a ``net gain'' or ``no 
net loss.'' In addition, one commenter said a ``net gain'' or ``no net 
loss'' goal is incompatible with well-established standards for 
administering sections 7 and 10 of the ESA.
    Response: Action agencies or proponents may adopt Service 
recommendations provided under this policy as part of their proposed 
actions, but electing to do so does not change the applicable standards 
under the ESA or otherwise alter the processes prescribed under the ESA 
and its regulations.
    The Service does not view a ``net gain'' or ``no net loss'' goal as 
incompatible with well-established standards for administering sections 
7 and 10 of the ESA. Instead, it is complementary to the ESA 
requirements to avoid jeopardizing the continued existence of any 
listed species, or destroying or adversely modifying any designated 
critical habitat. To achieve

[[Page 95325]]

this goal, an action agency or applicant need not abandon the actions 
they have taken to avoid jeopardizing the continued existence of any 
listed species, or destroying or adversely modifying any designated 
critical habitat. Instead, they may complement these actions by 
including additional measures that allow their action to reach the 
``net gain'' or ``no net loss'' goal.
    Comment (27): One commenter said by encouraging Service staff to 
work with applicants to implement ``no net loss'' or ``net conservation 
gain,'' the judgment of applications will no longer be standardized. 
They said the policy does not state how conservation gain will be 
measured, whether on a numerical basis or under what circumstances the 
Service will make a qualitative judgment regarding the level of 
mitigation that achieves this standard.
    Response: This policy is national in scope, and it is beyond the 
scope of the policy to provide specific quantifiable measures to 
achieve a ``net conservation gain'' or specify the methodology for 
assessing or measuring the ``net conservation gain.'' The Service's 
mitigation goal is to achieve a ``net conservation gain'' or, at a 
minimum, ``no net loss'' of the affected resources. The policy provides 
the framework for formulating compensatory mitigation measures to 
achieve this goal. The geographical and ecological breadth of this 
policy's coverage combined with the variation in project and impact 
types affecting species and habitats nationwide make the detailed 
specifications for calculating ``no net loss'' or ``net gain'' 
impossible to include. Such determinations will either be made on a 
case-by-case basis or will be addressed through additional guidance or 
planning processes.
    Comment (28): Commenters said the policy should be revised to help 
Service staff avoid crossing the line between ``encouraging'' Federal 
agencies and applicants to achieve ``a net gain or, at a minimum, no 
net loss in the conservation of listed species'' and incorrectly 
representing to Federal agencies and applicants that they are somehow 
``required'' to achieve a ``net gain'' or, at a minimum, ``no net 
loss'' in the conservation of listed species. Commenters added that 
Service staff should be instructed by the policy to clearly disclose to 
Federal agencies and applicants at all times that section 7 of the ESA 
does not require such a ``no net loss in the conservation of listed 
species'' or a ``net gain'' in relation to the ``no jeopardy'' and ``no 
adverse modification'' standards.
    Response: This policy clearly states that the mitigation planning 
goal is a goal, not a requirement. We expect further clarification on a 
regional and local scale to reiterate this distinction.
    Comment (29): One commenter stated the goal of ``no net loss'' is 
admirable and adequate with respect to the Presidential Memorandum (80 
FR 68743, November 6, 2015); however, the commenter is concerned this 
new language may unfairly prohibit or require mitigation for 
agricultural actions without due process of assessment.
    Response: The Service will consider the facts specific to the 
actions that we review under our authorities. This policy does not 
provide for the Service to categorically deny development or 
agricultural activities. Instead, our decisions and opinions on those 
activities will be guided by relevant statutes and regulations.
    Comment (30): One commenter said the sentence, ``Losses of habitat 
that require many years to restore may be best offset by . . . 
preservation of existing habitat . . .,'' is counter to the ``no net 
loss policy.''
    Response: The entire sentence reads, ``Losses of habitat that 
require many years to restore may best be offset by a combination of 
restored habitat, preservation of existing high-quality habitat, and 
improved management of existing habitat.'' It is the combination and 
ratios of these three habitat mitigation types that can create a ``no 
net loss'' scenario. Improved management can create an immediate 
conservation benefit and habitat restoration creates a long-term 
conservation benefit, while preservation of high quality habitat 
protects existing habitat from being lost. Long-term land management is 
included in the durability standard.

D. Applicability

    Comment (31): Several commenters had concerns about the 
applicability of the policy to existing mitigation programs, HCPs and 
associated incidental take permits, and ongoing section 7 consultations 
that were initiated between the Federal agency and the Service prior to 
the effective date of the final policy. The comments requested clarity 
that the policy does not apply to existing projects or projects 
currently under development, including the associated real estate and 
financial assurances.
    Response: The policy states that it applies to Federal and non-
Federal actions permitted or otherwise authorized or approved prior to 
issuance of the policy only under circumstances where the action may 
require additional compliance review under the ESA. In addition, the 
policy states that it does not apply where the Service has already 
agreed in writing to mitigation measures for pending actions, except 
where new activities or changes in current activities associated with 
those actions would result in new impacts, or where new authorities or 
failure to implement agreed-upon recommendations warrant new 
consideration regarding mitigation. Service offices may elect to apply 
this policy to actions that are under review as of its effective date 
(see DATES, above).
    Comment (32): The draft policy does not include any de minimus size 
consideration. While consultation considers the extent of potential 
impacts to ESA-listed species, the draft policy does not. It talks in 
general terms about credit valuation and ratios, but at some point, 
there should be a consideration of a de minimus project size to which 
this draft policy would not apply.
    Response: The policy is intended to guide compensatory mitigation 
projects for listed and at-risk species regardless of the scope, 
magnitude, or size of the project. As such, it would not be reasonable 
to attempt to define ``de minimis'' limits for the application of the 
policy that would cover all species and mitigation projects across the 
country. However, step-down guidance derived from this policy for 
particular species would be more specific for the biological needs of 
the species and therefore likely consider factors related to the scope 
of compensatory mitigation projects.

E. Scope of the Policy

    Comment (33): One commenter said that the Service should identify 
activities and projects that are exempt from the policy.
    Response: We agree that the scope of coverage should be clearly 
described and have listed those circumstances when the policy does not 
apply in section 3, Scope.
    Comment (34): One commenter said that it is important for the 
policy to address species protected under additional Federal laws, 
including the Bald and Golden Eagle Protection Act (BGEPA; 16 U.S.C. 
668-668d) and the Migratory Bird Treaty Act (MBTA; 16 U.S.C. 703-712).
    Response: We agree that conservation of the resources under BGEPA 
and MBTA is important. However, those resources, and processes 
specified by those Acts and any implementing regulations or guidance, 
are beyond the scope of this policy. We discuss these

[[Page 95326]]

authorities in the Service mitigation policy (81 FR 83440, November 21, 
2016).
    Comment (35): One commenter said that the policy should be limited 
to listed threatened species, listed endangered species, candidate 
species, and designated critical habitat.
    Response: We agree that the commenter's list of covered resources 
is similar to our description of covered resources in section 3, Scope, 
of this policy. There we state that the policy applies to all species 
and habitat protected under the ESA and for which the Service has 
jurisdiction. Endangered and threatened species, species proposed as 
endangered or threatened, designated critical habitat, and proposed 
critical habitat are the primary focus of this policy. We also state 
that candidates and other at-risk species would benefit from adherence 
to this policy, and encourage all Service programs to develop programs 
and tools in cooperation with States and other partners.

F. At-Risk Species

    Comment (36): Several commenters suggested only listed species 
should be covered by the policy, and ``at-risk'' species references 
should be removed. Commenters suggested there is no ESA basis for 
including at-risk species in the policy, that no standards exist for 
the definition of at-risk species, and that it would create additional 
burdens on the public. One comment requested clarification of the 
jurisdiction of the Service, States, and tribes regarding at-risk 
species.
    Response: The Service has addressed at-risk species through 
implementation of the ESA under many voluntary programs. Often partners 
(e.g., other agencies, private landowners) voluntarily consider ``at-
risk'' species for greater regulatory certainty and to expedite future 
compliance if these ``at-risk'' species are later listed under the ESA. 
Under section 6 of the ESA, the Service partners with the States to 
fund research and recovery actions on listed and at-risk species. 
Candidate conservation agreements with assurances (CCAAs) are a highly 
successful program for private landowners providing voluntary 
conservation for at-risk species. Many HCPs under section 10 of the ESA 
also include voluntary coverage for at-risk species. These and other 
proactive efforts for at-risk species, including our draft Policy 
Regarding Voluntary Prelisting Conservation Actions (79 FR 42525, July 
22, 2014), focus on preventing the need to list species under the ESA. 
The Service also values its partnerships with the States and tribes in 
conservation of fish and wildlife resources. This final policy aims to 
strengthen these partnerships and does not extend the Service's 
jurisdiction over at-risk species. We have included at-risk species, as 
appropriate, in the policy to further these efforts in preventing the 
decline of species to the point that protection under the ESA is 
necessary.

G. Equivalent Standards

    Comment (37): One commenter thought the policy should emphasize 
that there are no prescribed standards that will dictate mitigation but 
that every situation will be considered fact-specific and flexible, and 
be based upon the voluntary actions of the proponent.
    Response: The Service has written this policy in a manner that 
facilitates further clarification on a regional scale. As with many of 
the decisions made in impact analysis, determination of when and what 
type of mitigation should be implemented occurs on a project-by-project 
basis, under the authority at hand, with information most appropriate 
for the site or region of impact. Section 7 of this policy, 
Compensatory Mitigation Mechanisms, allows the Service flexibility in 
the type of mitigation mechanism used to meet this need. Section 5 of 
the policy, Compensatory Mitigation Standards, describes the standards 
we will require or recommend that all mechanisms meet.

H. Landscape-Scale Approach

    Comment (38): Individual actions that harm ESA-listed, proposed, 
and at-risk species must not be discounted or minimized because they 
are considered to impart only small or moderate impacts within the 
broader context of the landscape. The policy should consider how these 
site-specific impacts could be identified and accounted for prior to 
development of the most appropriate compensatory approach.
    Response: The Service agrees that small or moderate impacts that 
have cumulative effects are important to address. In each situation, 
the project effects analyses should identify all effects to the species 
under consideration, as well as measures to avoid, minimize, and 
compensate adverse effects. These analyses can characterize repeated, 
ongoing actions that may affect a species at a larger scale, and can 
help inform recovery efforts at a local or regional level. Ideally, the 
project proponent and the Service would also identify opportunities to 
support recovery/conservation of that species and include them in the 
action, if possible. This is a collaborative approach to conservation, 
consistent with relevant statutes and regulations, and can help offset 
the cumulative effects of many actions on the landscape.
    Comment (39): One commenter said the draft policy should provide 
additional guidance on how landscape-scale indirect effects would be 
evaluated for buffers surrounding existing mitigation sites, including 
mitigation banks. They recommend clarification regarding the process 
when additional compensation may be necessary for landscape-scale 
indirect effects to existing mitigation sites.
    Response: It is difficult at this time to provide specific guidance 
on buffers and indirect effects given the potential universe of actions 
that could arise and fact-specific situations of each mitigation site. 
We declined to provide such guidance in this policy.
    Comment (40): Some commenters were concerned that the landscape-
level approach to mitigation planning would focus too narrowly on 
certain species to the detriment of others, or that purchasing credits 
from a conservation bank or in-lieu fee program would not equate to 
replacing lost habitat.
    Response: The goal of a landscape-scale approach to mitigation is 
to ensure functionally successful compensatory mitigation efforts for 
the habitats or species under consideration. While no project or 
habitat benefits all species all the time, using a landscape context to 
frame mitigation actions should reinforce functionality at the 
appropriate scale (i.e., tract, regional, range) to benefit the target 
resource, and in most cases, other resources/species that also rely on 
that functional system. Using a landscape approach will help ensure the 
compensatory mitigation measures will meaningfully offset adverse 
effects to a species/habitat in a way that is ecologically sustainable 
over the long term. This is a more holistic approach to ensuring the 
functionality of the ecosystems on which federally listed and at-risk 
species depend.
    Comment (41): One commenter recommends that the Service consider 
revising the guidance provided under section 5.1.2 of the draft policy 
to discuss not only economies of scale associated with conservation 
banks and small impacts, but also to state that large-scale impacts 
require large-scale mitigation and such development projects have the 
potential to create landscape-scale conservation benefit for species, 
which may not be best achieved through banks.
    Response: The Service agrees large-scale projects have the 
potential to

[[Page 95327]]

provide large-scale mitigation measures to offset adverse effects and 
ideally contribute to recovery. The examples given in section 5.1.2 of 
the draft policy are compensatory mitigation programs that can be 
established in advance of impacts, such as conservation banking or in-
lieu fee programs. A large-scale mitigation project implemented in 
advance of impacts will likely offset the impacts of multiple projects, 
and is essentially a conservation bank.
    Comment (42): One commenter stated that landscape-scale mitigation 
is unauthorized and unfeasible. Landscape-scale impact evaluations and 
required mitigation measures on this basis imports a policy objective 
into official ESA decisions in excess of statutory authority and is 
incongruent with the ESA.
    Response: The goal of the ESA is to conserve endangered and 
threatened species and the ecosystems on which they depend. Through 
science and technological advances, conservation has more tools than 
ever to effectively evaluate land use, populations, hydrology, and so 
forth, at scales relevant to the needs of federally listed and at-risk 
species. To ensure the most effective mitigation measures for these 
resources, it is critical to put them in an ecologically functional 
context, i.e., a landscape. That does not mean every action requires 
advanced, ecosystem-level quantitative evaluations, but rather that the 
effects of an action and mitigation measures to offset those effects 
take into consideration truly functional strategies that will continue 
to provide long-term resource benefits. This does not expand any 
existing authorities for ESA implementation.
    Comment (43): We received comments requesting clarification of when 
programmatic approaches to mitigation would be appropriate.
    Response: This policy does not require the development of 
programmatic documents to support infrequent compensatory mitigations 
needs. The decision to develop programmatic approaches to mitigation 
will be made based upon resource-specific circumstances, such as how 
frequently agencies and applicants will need to compensate for their 
impacts.
    Comment (44): Comments included concerns about the Service's 
proposed extension of critical habitat to areas not currently occupied 
by a listed species, on the basis that an area may become critical 
because the species' range is expected to expand to that area. In 
determining the scale of a landscape-level approach to mitigation, the 
Service should not ignore the need for a rational connection to the 
area of actual impact of a proposed project. Instead, it should base 
requirements for landscape-scale mitigation on demonstrable connections 
between truly foreseeable or predictable impacts, rather than 
speculative projections of habitat or range modifications due to 
climate change.
    Response: The Service agrees that compensatory mitigation must be 
based on the best available science, and have a rational connection 
between project effects and proposed mitigation measures. The landscape 
approach provides the context within which to frame that connection. As 
our understanding of species' needs, habitats, and climate change 
increases, we will be better able to address potential future needs of 
species and their habitats. In planning mitigation strategies, it is 
also important to recognize uncertainties in future conditions, 
including habitats, water supplies, temperatures, etc. Those 
uncertainties should be built into the mitigation strategies to ensure 
that the proposed mitigation benefits adequately offset adverse effects 
over the long term. The policy does not address the designation of 
critical habitat; the regulations for the designation of critical 
habitat are found at 50 CFR 424.12.
    Comment (45): One commenter said the focus on landscape-scale 
conservation is laudable, but the draft policy introduces new processes 
and standards that could make achieving this goal more costly, time-
consuming, and burdensome. The policy should include ways to 
incentivize the creation of landscape-scale mitigation projects that 
capitalize on the multiple ecosystem services and efficiencies that 
landscapes provide. More consideration for the self-regulating aspects 
of natural landscapes that could reduce management and monitoring 
burdens (lowering costs), and the ability to unstack credits for 
different listed species when their habitats overlap in space but not 
in function (increasing market returns), would help make landscapes a 
priority for the conservation marketplace.
    Response: The landscape approach to conservation provides a 
conceptual framework to design effective and durable mitigation 
strategies. The intent is to approach mitigation planning and 
implementation from an ecologically functional perspective for more 
effective, durable outcomes. Designing mitigation that works with 
natural landscapes will help reduce management costs and increase 
effectiveness. Monitoring also will help confirm our underlying 
understanding of mitigation benefits and may help identify where our 
assumptions need revision. This is critical to mitigation success.
    Bundled or stacked credits cannot be unbundled or unstacked to 
offset the effects of multiple projects but can only be used to offset 
the effects of a single project. Once a unit of habitat is used as 
mitigation for one project, regardless of the number of listed species 
it supports, it cannot be used as mitigation a second time.
    Comment (46): One comment suggested that it is unclear why the 
required inclusion of adjacent ecosystems and human systems, which is 
how landscapes are defined, into conservation plans will provide a 
benefit to species that do not require those habitats or ecosystems for 
survival. The Service should clarify whether it intends mitigation 
consistent with a landscape-scale approach to require grouping of 
permittee proposed compensatory mitigation projects or grouping of 
project proponents, and in situations where this is desired, the 
benefits should be explained.
    Response: Including consideration of adjacent ecosystems and human 
systems into a landscape approach to compensatory mitigation recognizes 
the potential effects those systems may have on the species and 
habitats under consideration. This is especially important in ensuring 
long-term ecologic functioning of the compensatory mitigation that 
benefits the species/habitat. We are increasingly aware that adjacent 
landscapes and human management actions can significantly affect what 
was perceived as a protected area. This policy explicitly recognizes 
those factors in developing long-term, comprehensive conservation 
strategies for the resources under consideration. Because those 
strategies will be implemented using market-based and collaborative 
mitigation tools, the Service will work with our conservation partners 
to develop effective, feasible measures to put conservation on the 
ground. The policy does not require permittee proposed mitigation 
projects to be grouped, but they should be considered in the context of 
the landscape in which they occur.
    Comment (47): One commenter said that most species lack an up-to-
date analysis of conservation status, and few have forward-looking 
strategies that the Service intends to rely on in implementing the 
policy. Furthermore, not all landscape-scale conservation strategies 
noted by the Service are peer-reviewed, publicly vetted, scientifically 
sound, or without controversy. If the Service intends to rely on such 
strategies in the context of preparing

[[Page 95328]]

recovery plans, status reviews, and similar documents, then these 
landscape-scale conservation strategies and the process for 
implementing them must be vastly improved. The Service should let the 
conservation market identify lands that represent valuable conservation 
targets and take advantage of ``market efficiencies'' that are a 
benefit of the conservation banking and in-lieu fee forms of 
mitigation.
    Response: The Service agrees on the importance of using the best 
available scientific information in developing conservation strategies. 
We rely on our conservation partners to bring their information and 
expertise into a collaborative process to help us develop those 
strategies. We also appreciate the assistance of the conservation 
market in designing, implementing, and expanding our suite of 
conservation tools to benefit listed and at-risk species.
    Comment (48): One commenter said the policy would benefit from 
greater recognition that activities associated with the management, 
monitoring, protections, and assurances need not be as robust in some 
instances, yet will achieve a functional landscape that is capable of 
supporting the conservation of listed and at-risk species, different 
from the actions necessary to provide compensatory mitigation for 
wetlands and other aquatic resources.
    Response: The Service agrees that some larger landscapes may 
require less intensive management than smaller areas. However, in most 
areas of the country, there are few ``self-regulating'' systems left 
that are not greatly influenced by invasive species, altered hydrology, 
ongoing erosion, and climate change. It is important in designing 
feasible, meaningful mitigation to appropriately scale the monitoring 
and management actions to most effectively provide resource benefits. 
This will depend on the resources, landscapes, and scale of the 
project, and should have a rational connection between the effects 
being offset and the benefits provided. We declined to modify the 
policy based on this comment.
    Comment (49): One commenter said the draft policy's example of a 
proactive, landscape-scale mitigation approach provided by songbird 
mitigation guidance in Texas to encourage compensatory mitigation 
opportunities is misleading. The commenter cited two instances in which 
potential conservation banks were precluded from establishing species 
credits due to the requirements in the guidance.
    Response: We respectfully disagree. The example used in the policy 
is intended to show instances where the Service has taken landscape-
scale approaches for species conservation and compensatory mitigation. 
We recognize that not all proposals developed under the Texas example 
or other local guidance will ultimately be finalized and implemented, 
but the intent of this policy is to promote consistency and 
predictability so that mitigation providers may develop programs that 
are more likely to be implemented.
    Comment (50): Some commenters indicated that the policy should 
offer far more guidance on when and how the Service would apply a 
``landscape-level approach'' to ESA mitigation, questioned whether the 
Service would apply a landscape approach differently to species with 
different range sizes, and stated that the draft policy does not 
explicitly describe how or whether a landscape approach would apply to 
listed species with narrow ranges.
    Response: The landscape approach to conservation considers the 
functional context of the species or habitat under consideration. 
Working with our conservation partners and project proponents, the 
Service will use a landscape context to provide the most effective and 
durable mitigation for listed and at-risk species, while preserving the 
greatest flexibility to implement those measures at many scales. Given 
the breadth of species and landscapes under consideration, it is 
impossible to give a ``one size fits all'' set of instructions. Using a 
landscape context to frame mitigation actions should reinforce 
functionality at the appropriate scale (i.e., tract, regional, range) 
to benefit the target resource and, in most cases, other resources/
species that also rely on that functional system. Though some species 
may have relatively narrow ranges, their threats may be best addressed 
at a landscape scale (e.g., invasive species, altered hydrology, 
climate change). This approach will help ensure the compensatory 
mitigation measures will meaningfully offset adverse effects to a 
species/habitat in a way that is ecologically sustainable over the long 
term.
    Comment (51): One commenter noted that the statement requiring 
compensatory mitigation to be ``sited in locations that have been 
identified in landscape level conservation plans or mitigation 
strategies'' does not take into account the limited lands available for 
acquisition or restoration in some areas of the United States and the 
need to acquire property from willing sellers.
    Response: The Service recognizes conservation opportunities vary 
across the country by species and habitats. The landscape-scale 
approach is a way to place those opportunities in an ecologically 
functional context. The policy allows for compensatory mitigation on 
public lands (provided certain criteria are met, e.g., 
``additionality'') and on private lands. It also encourages market-
based tools and incentives to take advantage of the unique 
circumstances in each area. While there may be limitations in available 
lands in some regions, the policy includes a suite of tools that should 
provide meaningful options for feasible, durable compensatory 
mitigation nationwide.
    Comment (52): The policy will result in the creation of a 
landscape-scale system of conservation banks and other mitigation sites 
controlled by the Service that will take private land and their 
resources out of productive use.
    Response: The landscape approach to conservation considers the 
functional context of the species or habitat under consideration. It 
does not affect land ownership or control. Working with our 
conservation partners and project proponents, the Service will use a 
landscape context to provide the most effective and durable mitigation 
for listed and at-risk species, while preserving the greatest 
flexibility to implement those measures at many scales. Providing 
incentives for a market-based approach to conservation allows many 
tools to better meet the needs of species as well as the needs of 
landowner/project proponents. Generally, the use of conservation 
banking and other mitigation projects will not take resources out of 
``productive'' use. Rather, conservation banks and other mitigation 
projects located on private land remain under control of the property 
owner and often provide other productive uses, such as grazing 
livestock.

I. Metrics

    Comment (53): One commenter stated that the policy should clarify 
that actions can meet ESA conservation standards using mitigation when 
adverse effects, and mitigation offsets of those effects, are 
calculated using tools that consider more than mere gain or loss of 
animals or habitat. For example, tools like Habitat Equivalency 
Analysis consider spatial, temporal, and functional parameters that 
look beyond mere loss or gain to calculate the extent and quality of 
mitigation required in given situations.
    Response: A discussion of tools used to calculate mitigation is not 
within the scope of this policy.
    Comment (54): Several commenters were concerned that adequate 
detail

[[Page 95329]]

about how assessment methodologies are developed and applied was not 
provided in the draft policy. Commenters were also concerned that the 
numerical loss and benefit to a site is largely a qualitative 
measurement, and the no methodology for quantification is offered. They 
said that transparent formulas to calculate ``mitigation ratios'' are 
needed to reduce subjectivity and increase transparency. They also 
noted that equivalent metrics for determining losses due to impacts and 
gains due to mitigation would aid in the assessment of ``no net loss'' 
or ``net gain.''
    Response: The Service agrees that transparent formulas to calculate 
``mitigation ratios'' reduce subjectivity and increase transparency. We 
also agree that equivalent metrics for determining losses due to 
impacts and gains due to mitigation would aid in the assessment of ``no 
net loss'' or ``net gain.'' This policy does include a statement that 
equivalent metrics should be used whenever possible.
    Details about how to develop and apply assessment methodologies 
that are quantitative and transparent were not included in the draft, 
or this final, policy, because these details are species-specific and 
too complex to describe adequately within the framework of the policy. 
When detailed descriptions of assessment methodology development and 
application are prepared by the Service for a species-specific 
mitigation program, these descriptions are routinely shared with the 
public.
    Comment (55): One commenter said that since buffers are so 
important, they should be counted in the crediting of a mitigation site 
at some ratio of a full credit.
    Response: The Service agrees with this comment. In section 6.6, the 
policy states, ``If buffers also provide functions and services for the 
species or other resources of concern, compensatory mitigation credit 
will be provided at a level commensurate with the level of functions 
and/or services provided to the species.''
    Comment (56): One commenter stated that for the purposes of 
mitigation, the Service has not shown compelling evidence that adequate 
assessment methodologies exist to consider adverse and beneficial 
actions that are fundamentally different in nature. Determining the 
numerical loss and benefit to a site is largely a qualitative 
measurement, and the draft policy offers no quantification methodology.
    Response: The policy describes types of mitigation programs or 
projects that do not directly replace species or habitat losses 
resulting from development projects. These are the types of programs in 
which the adverse actions, like habitat development, would be offset by 
an action that is fundamentally different in nature, such as gating of 
caves that serve as habitat for the species. The Service acknowledges 
that these types of credit/debit systems can often be more subjective 
than the traditional habitat-for-habitat type of mitigation. However, 
this type of mitigation has been the exception rather than the rule, 
and we expect Service staff to use other programs or projects only when 
they are the best option to alleviate the greatest threats to the 
species involved. When these programs or projects are allowed as 
mitigation, the Service will clearly explain the link between the 
threat and the selected mitigation.
    Comment (57): One commenter was concerned that there was no 
discussion of how successful ``surrogate'' indicators of incidental 
take have been in assuring adequate mitigation.
    Response: The use of surrogate indicators for the species impacted, 
such as the species' habitat, when applying compensatory mitigation in 
accordance with 50 CFR 402.14(i)(1)(i) is discussed at section 5.2 of 
the policy. We declined to add additional detail to that discussion.
    Comment (58): One commenter suggested that the Service require that 
all credits and debits associated with the same species and region be 
aggregated and reported across all compensatory mitigation mechanisms. 
They indicated this is critical to ensure an offset achieves ``net 
conservation gain,'' to ensure the offsets created by all mechanisms 
are using the best available science, and to ensure equivalency across 
multiple mechanisms. They also suggested when the same metric is not 
used by two different mechanisms; the requirement to define ``the 
relationship (conservation) between credits and debits'' can also be 
used to define the relationship between different credit metrics.
    Response: Currently, the Service uses the Regulatory In-lieu Fee 
and Banking Information Tracking System (RIBITS) to track credits and 
debits for conservation banks. The Service intends to work with the 
USACE to adapt RIBITS for use by the Service to also track credits and 
debits for in-lieu fee programs. The type of credits that are 
acceptable for a given species is determined by the Service when a 
mitigation program for a specific species is developed and implemented. 
The Service agrees that tracking the types and amounts of credits used 
across a species' range is a good idea, as it informs our understanding 
of the species' status. Collecting this type of information and working 
to achieve consistency requires coordination among Service staff, 
including those from different program areas. Describing the actions 
necessary to ensure this coordination occurs is beyond the scope of 
this policy.
    Comment (59): One commenter suggested a monitoring and verification 
process should be required of all mitigation. They said the 
verification process should include a method to verify that the 
outcomes of the project achieve the performance standard throughout the 
entire life of the mitigation project, and that method could be the 
initial assessment method or an abbreviated assessment that still 
quantifies the quality of the resource. They also suggested the party 
responsible for conducting the verification should be identified 
upfront.
    Response: We agree that these are important requirements to ensure 
that mitigation remains adequate over time. Specific methodologies for 
such verification are beyond the scope of this policy.
    Comment (60): One commenter said it should be made explicitly clear 
that while adaptive management is critical as knowledge and conditions 
change, the necessary updates to metrics or plans do not invalidate 
previous metrics or credits. They suggested that each credit, and debit 
if applicable, should be labeled with the method used at the time of 
assessment. They also suggested that reports should acknowledge when 
metrics are modified, but credits should still be aggregated across 
time. They noted that it may be necessary to use a correction method, 
and these correction methods should be transparent, scientifically 
supported, and included in all reports.
    Response: We agree in concept; however, this comment goes beyond 
the scope of the policy.
    Comment (61): One commenter asked that we clarify that plans should 
rely more on the criteria that define high-quality habitat, including 
criteria for landscape-scale attributes, indicating these criteria 
should be consistently reflected in the development of metrics used to 
define credits and debits within the region. They noted that 
opportunities to enhance and protect habitat may be outside of 
predefined conservation areas, but they must meet the definition for 
high-quality habitat and be deemed acceptable.
    Response: We agree that metrics should define high-quality habitat. 
We also agree that opportunities to enhance

[[Page 95330]]

and protect habitat may be outside of predefined conservation areas, 
and regardless of location, they should meet the definition for high-
quality habitat and be deemed acceptable. This concept is captured in 
the final policy.
    Comment (62): One commenter liked the concept that ecological 
performance criteria must be tied to conservation goals and specific 
objectives identified in compensatory mitigation programs and projects, 
but they did not think the draft policy adequately describes how to 
accomplish this objective.
    Response: The level of detail necessary to describe how to 
accomplish this objective is beyond the scope of this policy and may be 
addressed in implementation guidance.
    Comment (63): One commenter stated the draft policy should more 
explicitly recognize the uncertainty associated with mitigation for 
certain species and describe a framework for managing the uncertainty. 
They said the policy should describe a framework the Service would use 
to assess the appropriate balance of avoidance, minimization, and 
mitigation, as informed by the likelihood of mitigation effectiveness 
and the species' recovery needs.
    Response: The Service agrees that there is uncertainty associated 
with mitigation for certain species. This policy includes a discussion 
of risk management tools. These tools can be used after the Service 
determines that a mitigation program or project is appropriate. 
Assessing risks and determining if mitigation is appropriate for a 
species is not within the scope of this policy, as uncertainty 
associated with mitigation for certain species will be fact specific.

J. Additionality

    Comment (64): We received two comments on the draft policy's use of 
``additionality'' when developing compensatory mitigation on both 
public and private lands. Commenters believed additionality is not 
feasible when coupled with the ``no net loss'' goal, and that some 
inconsistencies exist in the descriptions in the text of the draft 
policy.
    Response: One purpose of using ``additionality'' as a standard in 
the policy is to promote the ``net gain/no net loss'' goal. There are 
many examples of mitigation sites and programs that have achieved these 
standards. The concept of compensatory measures providing additional 
benefits above baseline conditions is described in general terms in the 
policy. Those descriptions in the text are intended to give context to 
the conservation benefits of mitigation actions being additive to 
baseline conditions on both private and public lands.

K. Durability

    Comment (65): Some commenters were concerned that the requirement 
for perpetual management of mitigation sites places an undue burden on 
mitigation providers, or that perpetual management would be detrimental 
to the resource. They said that the imposition of perpetual endowment 
and adaptive management places burdens on all projects, and it would be 
impossible for industry to manage and maintain mitigation sites in 
perpetuity.
    Response: Perpetual management of mitigation sites is essential to 
assure durability of compensatory mitigation. The species and resources 
present on a mitigation site will dictate what management actions are 
undertaken. Management plans are tailored to the needs of the site. 
Mitigation providers should carefully consider the long-term commitment 
they are making when they agree to implement a compensatory mitigation 
project. Mitigation that is permanent is expected to have appropriate 
financial and real estate assurances to meet the durability standard in 
the policy.

L. Collaboration and Coordination

    Comment (66): One commenter said the policy would mandate the 
Service to work directly with landowners, potentially resulting in the 
loss of confidential information. The commenter noted recent 
conservation plans produced in Texas were developed by stakeholders and 
administered through State agencies to preserve confidentiality of 
private landowners.
    Response: The Service has a long history of working with private 
landowners to conserve fish and wildlife resources, including 
endangered and threatened species. Our partnerships with private 
landowners are essential to achieving our conservation mission. The 
policy does not include a mandate to work directly with landowners, but 
supports the ESA and its implementing regulations, which allows us to 
work with a variety of entities towards the recovery of listed species, 
and encourages cooperative conservation with all of our partners, 
including the exchange of ideas and information to better inform 
species management and evaluation. As noted in the policy, transparency 
in compensatory mitigation programs and ESA implementation is essential 
to achieving success. The Service is considerate of confidentiality, 
and any personal information maintained by the Service is protected by 
law (e.g., Freedom of Information Act, 5 U.S.C. 552; Privacy Act, 5 
U.S.C. 552a) to prevent unlawful dissemination.
    Comment (67): One commenter was concerned that the Service 
developed the policy without having addressed concerns raised by States 
and other parties regarding the Service's mitigation policy. They said 
that moving forward with this guidance without finalizing the 
overarching mitigation policy was premature, and created uncertainty 
and confusion over what the Service was likely to adopt.
    Response: This compensatory mitigation policy is a step-down policy 
under the final Service mitigation policy, which published in the 
Federal Register on November 21, 2016 (81 FR 83440). There were no 
substantial changes between the draft and final Service mitigation 
policy. In finalizing the Service's mitigation policy, we fully 
considered all comments and concerns raised by States and other 
parties. We also considered those comments as we developed this policy.
    Comment (68): Two commenters addressed the relationship between 
this policy and mitigation policy developments underway in other 
agencies. One commenter was concerned that while interagency 
cooperation is addressed in the draft policy, it only provided a 
history of previous ESA requirements. They were concerned that the 
draft policy did not address the relationship between similar policies 
being developed by other Federal land management agencies such as the 
Bureau of Land Management and the U.S. Forest Service. Another 
commenter noted that other Federal agencies are also responding to the 
Presidential memorandum (``Mitigating Impacts on Natural Resources From 
Development and Encouraging Related Private Investment'') issued 
November 3, 2015. They said that this created the opportunity for the 
Service to enter into agreements with other Federal agencies to work 
together on the implementation of similar mitigation policies and to 
avoid conflicts, delays, and inefficiencies.
    Response: At the time this policy is being finalized, neither the 
Bureau of Land Management nor the U.S. Forest Service has published 
final mitigation policies or regulations. The Service did provide 
comments on their proposed policies, and we did receive comments on 
this policy from those agencies. This policy, like the Service 
mitigation policy published November 21, 2016 (81 FR 83440), was 
developed in accordance with the November 3, 2015, Presidential 
Memorandum; the

[[Page 95331]]

Secretary of the Interior's Order 3330 entitled, ``Improving Mitigation 
Policies and Practices of the Department of the Interior'' (October 31, 
2013); and Departmental Manual chapter (600 DM 6) on Landscape-Scale 
Mitigation Policy (October 23, 2015). The commenter's concern is 
anticipated by those documents, which envision the various agencies' 
mitigation policies applying common principles, terms, and approaches, 
thereby providing greater consistency and predictability for the 
public. Subsequent agreements between the Service and other agencies 
may be developed as need arises.
    Comment (69): One commenter said the draft policy would be improved 
if it built upon and utilized the USACE and EPA's definitions and 
mitigation policies. They said that a reconciliation of terms and 
process should be part of the Service's next steps.
    Response: We agree that this policy should apply concepts and 
definitions compatible with those developed through decades of 
mitigation practice under the Clean Water Act. Accordingly, we have 
developed this policy to use the same terms and approaches found in 
regulations and guidance promulgated by the USACE and EPA whenever 
possible. In some cases, we also recognized the need for language 
tailored to authorities, processes, and resources covered by the ESA 
rather than the Clean Water Act; in these cases, the policy's language 
complies with the Departmental Manual on Landscape-Scale Mitigation 
Policy (600 DM 6).
    Comment (70): One commenter said that the implementation of this 
policy will establish an inconsistent ESA framework because the 
National Marine Fisheries Service did not adopt the Service's 
mitigation policy (81 FR 83440, November 21, 2016). The commenter said 
this approach is contrary to the typical practice of promulgating joint 
regulations by the two agencies that provide for uniform application of 
the ESA. The commenter stated that by unilaterally proposing this 
policy and the Service mitigation policy (81 FR 83440, November 21, 
2016), the Service is creating disparate requirements that will impose 
significant and additional regulations on project sponsors based on the 
possibility of a species being affected.
    Response: This policy is not a rulemaking and cannot otherwise 
alter or substitute for the existing regulations applied by both the 
National Oceanic and Atmospheric Administration (NOAA) and the Service 
in implementing the ESA. We also have coordinated development of both 
this policy and the Service mitigation policy (81 FR 83440, November 
21, 2016) with NOAA, and incorporated their suggestions and 
modifications. Also, this policy was required under the Presidential 
Memorandum on Mitigation, the Department of the Interior Secretarial 
Order 3330, and 600 DM 6.
    Comment (71): One commenter said that the Service and other 
agencies risk unnecessary duplication of efforts and conflicting 
requirements, which will further delay project approval. They 
encouraged the Service to consider mitigation frameworks already in 
place before adding another layer of mitigation requirements to an 
already complex and burdensome project approval process.
    Response: We agree that existing mitigation programs and 
frameworks, as well as existing mitigation and conservation plans, 
should be considered. The Service recognizes that there may be existing 
plans developed by State and local governments and other stakeholders 
with characteristics that may be useful in mitigation planning 
depending on the specific action and the affected resources. The 
Service will work with project proponents and other stakeholders in 
reviewing existing programs, frameworks, and plans for applicability in 
the context of a specific action.
    Comment (72): One commenter said the policy would complicate other 
agencies' processes. They said that it would increase opportunities for 
the Service to force concessions from other Federal agencies and 
permittees, and that it has the potential to violate organic acts and 
will undoubtedly complicate the approval process for mining operations 
and other land users.
    Response: The scope of this policy does not limit the existing 
discretion of an action agency, or hold the action agency or applicant 
responsible for mitigation beyond an action agency's own authority, 
mission, and responsibilities. The Service recognizes that the 
authorities and processes of different agencies may limit or provide 
discretion regarding the level of mitigation for a project. This policy 
is not controlling upon other agencies, and the Service acknowledges 
that there may be limitations (e.g., agency-specific authorities and 
600 DM 6) on the implementation of measures that would achieve the 
policy's goal of ``net conservation gain'' or a minimum of ``no net 
loss'' when the costs of such mitigation are reimbursable by project 
beneficiaries under laws and regulations controlling agencies' 
activities (e.g., Bureau of Reclamation). Other agencies may 
voluntarily adopt Service recommendations, which may expedite their 
other requirements.
    Comment (73): Some commenters expressed interest in a collaborative 
approach to mitigation planning on a landscape level. One commenter 
expressed support for additional engagement with stakeholders; another 
commented that the role of State wildlife data, analyses, and expertise 
should be utilized to the greatest extent possible; another commenter 
was skeptical of the collaborative approach preferred by the Service.
    Response: The Service agrees that developing multi-scale 
conservation plans and strategies benefits from many invested 
stakeholders that bring their unique insights and perspectives to 
ensure a more comprehensive and robust blueprint, and looks forward to 
building on our conservation partnerships through collaborative 
planning efforts. Our State partners in particular are critical to 
successful compensatory mitigation of federally listed and at-risk 
species. They bring statutory responsibility, data, expertise, and 
management capabilities to better ensure successful, durable mitigation 
efforts on the ground.
    Comment (74): Several commenters were concerned about the level of 
coordination undertaken by the Service on establishment of mitigation 
programs, and encouraged the Service to engage with both mitigation 
partners and with State agencies, to avoid duplication of effort and 
cross-jurisdictional issues and to improve outcomes. One commenter 
urged the Service to expedite reviews by working with agencies that 
already have established mitigation policies and programs.
    Response: The Service agrees that we have common goals with our 
partners and achieve much better outcomes when we work together on 
coordinated mitigation programs, especially where our jurisdiction 
overlaps with that of other agencies as it often does with our State 
wildlife agency partners. The Service intends to continue working with 
all of our partners.

M. Transparency

    Comment (75): One commenter requested clarification on the 
Service's meaning of ``direct oversight'' in the draft policy regarding 
compensatory mitigation programs and projects. The commenter also 
requested clarification on use of third-party evaluators in preparing 
monitoring reports for programs or projects.
    Response: The policy identifies the Service's authority for direct 
oversight

[[Page 95332]]

of compensatory mitigation programs and projects through sections 7 and 
10 of the ESA. Under sections 7 and 10, the Service oversees the terms 
and conditions of the incidental take permit (section 10) or of the 
incidental take statement (section 7). Details on the roles of third-
party evaluators involved in specific project actions are beyond the 
scope of the policy.
    Comment (76): We received several comments pertaining to the 
availability of information generated from mitigation programs. 
Commenters recommended the policy include standards for transparency of 
data and documents, participation of stakeholders, and consistency of 
data reported through mitigation programs.
    Response: Information on conservation banks is available to the 
public on the Regulatory In-lieu Fee and Banking Information Tracking 
System (RIBITS), and the Service intends to work with the USACE to add 
Service-approved in-lieu fee programs to that platform. As noted in the 
policy, the Service will share appropriate information concerning 
mitigation programs with the public, with the exception of personally 
identifiable information or other information that would be exempt 
under the Freedom of Information Act. We declined to add specific 
standards for transparency to the policy. Prescriptive standards for 
the type of data to be shared would not be reasonable for a policy that 
covers the myriad listed species across the country. Such standards 
would be better suited for species-specific guidance.

N. Preference for Advance Mitigation

    Comment (77): One commenter stated the policy should adopt an 
approach similar to that taken in the HCP handbook to identify 
exceptions to the requirement to mitigate in advance of impacts.
    Response: The policy is intended to provide standards and guidance 
to improve consistency of compensatory mitigation programs and projects 
for listed, proposed, and at-risk species. The preference for advance 
mitigation is based on the years of experience with compensatory 
mitigation programs. We realize that in some cases advance mitigation 
may not be possible, or even preferable; however, attempting to 
identify exceptions for this preference would not be reasonable, 
considering the vast diversity of species and programs that would occur 
across the country.
    Comment (78): Several commenters were concerned about the draft 
policy's preference for compensatory mitigation in advance of project 
impacts. One commenter specifically identified that reclamation of 
mining operations often lacks the ability for advanced mitigation on 
site. Other commenters cited that: The process of project permitting 
and financing determinations would likely not allow for advanced 
mitigation; the Service should provide incentives such as higher ratios 
for ``after impact mitigation''; advance mitigation would be considered 
pre-decisional; or it is impossible to provide mitigation in advance of 
impacts.
    Response: We recognize that project scheduling and implementing on-
site mitigation may not always align with the Service's preference for 
advance mitigation; however, conservation banks, in-lieu-fee programs, 
and other third-party mechanisms provide advanced mitigation options 
that reduce timing and other constraints. The Service's current 
practice to recommend mitigation in advance of impacts under sections 7 
and 10 of the ESA is based on years of experience in compensatory 
mitigation practices. This policy promotes the development of advanced 
mitigation mechanisms, providing more options for mitigation users. The 
Service agrees that mitigation ratios can be used to incentivize 
mitigation accomplished in advance of impacts, but the discussion of 
specifics is beyond the scope of this policy. The Service does not 
consider advance mitigation to be pre-decisional, as the majority of 
advance mitigation programs, such as conservation banking, are 
established prior to any impacts, and projects that will mitigate at 
such sites may be unknown at the time of bank establishment. In all 
cases, the Service will evaluate the appropriateness of using a 
specific site or proposal as compensatory mitigation to offset the 
unavoidable impacts of a project at the time the Service reviews the 
project that will likely result in the impacts.

O. Eligible Lands

    Comment (79): Several commenters supported mitigation projects and 
programs on public lands and wanted us to add more flexibility to the 
policy. One commenter stated that if mitigation projects and programs 
occur on public lands, the land manager should be prepared to implement 
and fund alternative mitigation if a change in law allows incompatible 
uses to occur on mitigation lands. One commenter did not support 
mitigation projects and programs on Federal lands, but was in favor of 
it on State lands, and wanted State lands specifically mentioned in the 
policy.
    Response: Compensatory mitigation can occur on public lands, either 
Federal or State lands, and in some cases, such siting may lead to the 
best ecological outcome. Compensatory mitigation for impacts on public 
lands can be sited on both public and private lands. Compensatory 
mitigation for impacts on private lands can be located on public lands, 
but it is this combination, or that particular change in ownership 
classification, where Service staff should be attentive to additional 
considerations before making such a recommendation. These additional 
considerations are necessary to achieve the ``net gain'' or, at a 
minimum ``no net loss,'' goal of the policy.
    Comment (80): Several commenters provided comments on split 
estates. Commenters said the Service is arbitrarily limiting areas on 
which mitigation can occur by not allowing lands with split estates to 
qualify as mitigation lands; split estates do not necessarily result in 
an unsuitable mitigation site; and the holder of the rights would have 
to secure their own authorization under the ESA from the Service prior 
to exercising their rights.
    Response: The Service agrees that there are cases in which lands 
with split estates can be used for mitigation. The policy advises 
caution because we strive to ensure the durability of mitigation 
projects and programs, but the policy does mention possible remedies 
and that there could be other approaches to using lands with split 
estates for mitigation. A detailed discussion of remedies and other 
approaches is not within the scope of this policy.

P. Tribal Lands/Tribal Rights

    Comment (81): We received some comments regarding the siting of 
mitigation projects on tribal lands or on lands on which tribes hold 
treaty rights. One commenter expressed the need for local mitigation 
projects to be sited in or near reservation lands as well as on 
traditional off-reservation sites, to benefit the natural resources of 
the native peoples; another commenter was concerned that locating 
mitigation outside of treaty areas for projects that impact the 
resources in treaty areas would harm the treaty rights and the 
resources of the tribes. Other commenters asked that tribes be 
consulted in the siting and approval of mitigation sites and programs. 
Others were concerned about the impacts of habitat restoration and 
long-term management on treaty resources.
    Response: The Service is committed to upholding our trust 
responsibilities to federally recognized tribes to conserve shared 
natural resources, consistent with the Service's Native American

[[Page 95333]]

Policy (revised January 2016; see 81 FR 4638, January 27, 2016). This 
is accomplished under this policy by ensuring that mitigation projects 
and programs are located in areas that provide the most benefit to the 
affected resources, while respecting treaty rights. The Service 
recognizes the importance of tribal involvement and expertise when 
siting mitigation projects and when developing service areas and 
management plans for conservation banks and other types of mitigation 
mechanisms. Specific guidance on Service coordination with tribes is 
beyond the scope of this policy.
    Comment (82): We received some comments requesting specific 
guidance on facilitating creation of conservation banks on tribal 
lands, comments on including tribal cultural uses and practices as 
allowable uses on mitigation lands, and a suggestion for developing 
mitigation principles similar to those developed with the USACE in the 
State of Washington for specific mitigation programs.
    Response: The Service agrees that these are all important 
considerations, and such guidance and suggestions will be more 
effectively addressed in step-down guidance at a later time.
    Comment (83): We received comments regarding the applicability of 
the policy to tribes, or to a specific HCP under development, and a 
suggestion that the Service consult with any tribes who so request 
before finalizing this policy.
    Response: The Service notified tribal contacts when we made the 
draft policy available for review and comment (81 FR 61032, September 
2, 2016). We addressed all tribal comments, as appropriate, as we 
developed the final policy. The policy applies to all forms of 
compensatory mitigation for all species and habitat protected under the 
ESA and for which the Service has jurisdiction. The policy is flexible 
with regard to its application to specific mitigation projects or 
programs that are under development at the time this policy is 
finalized, leaving that decision to individual Service offices.

Q. Service Areas

    Comment (84): Several commenters requested more detail in the 
policy about requirements for developing service areas.
    Response: Specific considerations for developing service areas are 
beyond the scope of this policy and will be provided in implementation 
guidance.

R. Credit Bundling

    Comment (85): A few commenters were concerned about credit 
bundling, also known as credit stacking, where multiple resources exist 
on the same unit area. One commenter was concerned that any resources 
bundled or stacked with a listed species would suffer, as the site 
would be managed only for the benefit of the listed species and not the 
other resource(s), and wanted multi-agency review teams to be aware of 
this when authorizing mitigation banks. Other commenters wanted the 
Service to make it clear that credits could potentially be used for 
multiple purposes, and another wanted the Service to allow mitigation 
credits to be used to compensate for multiple impact projects.
    Response: The Service encourages credit bundling where multiple 
resources exist on the same unit area and where management actions 
benefit those multiple resources. However, bundled credits can only be 
used to compensate for one impact project (i.e., the credits can never 
be ``unbundled'' or ``unstacked'' to compensate for multiple projects). 
If two resources, such as a California red-legged frog (CRLF) and a 
wetland regulated pursuant to section 404 of the Clean Water Act are 
bundled together in a credit, that credit may be used to compensate for 
impacts to both resources from the same project, or to compensate for 
impacts to CRLF or to wetlands. If the credit were used to compensate 
for CRLF, then it can no longer be used to compensate for wetlands 
(i.e., that portion of the credit is ``retired''). Unbundling these 
functions and services would result in a net loss of habitat and would 
undermine the Service's efforts to conserve the species. This approach 
is consistent with the policies and regulations of the USACE, and other 
State and Federal agencies the Service works with on multi-agency-
approved mitigation projects and programs.

S. Mitigation Mechanisms

    Comment (86): One commenter suggested the Benefits of the Draft 
Policy section be clarified to include other mitigation mechanisms that 
may not be market-based. The commenter suggested that the first 
sentence of the final paragraph of that section be modified to read: 
``This draft policy would encourage mitigation in conjunction with 
programmatic approaches to ESA section 7 consultations and HCPs 
designed to focus on conservation outcomes that achieve ``no net loss'' 
or ``net gain'' through the use of market-based approaches (e.g., 
conservation banks), in-lieu fee programs, permittee-responsible, and 
other third-party implemented mitigation programs.''
    Response: The Service considers that one of the benefits of this 
policy is the opportunity it creates for a market-based approach to 
mitigation as highlighted in the Presidential Memorandum of November 3, 
2015, on Mitigating Impacts on Natural Resources From Development and 
Encouraging Related Private Investment (80 FR 68743, November 6, 2015), 
especially those that can be established in advance of impacts. 
Conservation banking is a proven example of this approach. The policy 
does not preclude the other mechanisms mentioned by the commenter. We 
declined to adopt the commenter's suggested sentence.
    Comment (87): Several commenters stated that the draft policy was 
confusing and complex, citing the Service's definition of compensatory 
mitigation being too broad, lack of a mitigation protocol, and need for 
a guidance document to ensure a separation of regulatory and 
nonregulatory authority, goals, and standards. One comment stated the 
complexity of obtaining approval, as well as cost, for a mitigation 
site would discourage investment.
    Response: One purpose of the policy is to provide predictability 
and thereby reduce uncertainty of investment for market-based 
mitigation programs. We acknowledge that the nature of existing 
compensatory mitigation mechanisms and programs currently being 
implemented is complex. We have revised the draft policy so that this 
final policy addresses overarching goals and standards only, and we 
will later provide more detailed implementation guidance. However, 
providing a mitigation ``protocol'' that covers the breadth of species 
and circumstances across the country would not be reasonable. We 
anticipate species- or geographic-specific guidance to be developed 
under the umbrella of this policy.
    Comment (88): We received two comments regarding section 7.2, 
Short-Term Compensatory Mitigation, in the draft policy. One comment 
indicated it may not be helpful, particularly when dealing with aquatic 
species. The other requested more detail in this section and stressed 
it should be more widely used.
    Response: The use of short-term compensatory mitigation is a novel 
approach, with long-term results yet to be evaluated. The policy fully 
acknowledges that it is likely to be limited in use, for a variety of 
reasons, primarily the ability to predict all temporal losses of an 
impact in order to provide an appropriate offset for those losses. 
However, the concept may be

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useful in some circumstances. Thus, it is included in the policy in an 
effort to provide additional flexibility to conserve listed, proposed, 
and at-risk species.
    Comment (89): Several commenters requested that the Service express 
a preference for conservation bank credits over other forms of 
compensatory mitigation. One commenter requested the Service add a 
preference for rehabilitation or restoration over preservation and that 
the Service prohibit use of alternative forms of mitigation if 
conservation bank credits are available in the same proposed service 
area.
    Response: As stated in section 6 of this policy, the appropriate 
form of compensatory mitigation must be based on the species' needs and 
the nature of the impacts adversely affecting the species. All 
mitigation tools listed in the policy are capable of being 
strategically sited, consolidated, and provided in advance of impacts 
if they are designed to do so. These preferences will provide the best 
outcomes for species when they are implemented in any mitigation tool, 
and, therefore, we have retained flexibility for applicants when 
selecting mitigation tools. We decline to prohibit the use of 
alternative forms of mitigation where conservation bank credits are 
available, as that would limit flexibility and inherent choice of the 
applicant(s).

T. Climate Change

    Comment (90): Several commenters addressed sections of the draft 
policy that referenced climate change for consideration in mitigation 
planning. Some commenters were concerned about the uncertainty of 
calculating the effects of climate change for compensatory mitigation 
and the use of mitigation ratios to address climate change. One 
commenter said the policy should provide more detail on integrating 
climate change effects in the analysis of mitigation programs. Another 
requested the basis for the term ``accelerated'' climate change used in 
the policy.
    Response: Consistent with the Departmental Manual (600 DM 6), the 
Service recommends that climate change be considered when evaluating 
the effects of an action and developing appropriate mitigation 
measures. The Service recognizes the science of climate change is 
advancing, and assessment methodologies are continually being refined 
to address the effects of climate change to specific resources and at 
differing scales. Including specific information on these topics is 
beyond the scope of this policy. Therefore, the policy is written with 
language to ensure that it does not become quickly outdated as 
methodologies evolve. We use the term ``accelerated climate change'' in 
a general sense to reference a substantial portion of scientific 
literature and scholarly articles on the subject, including reports 
produced by the Intergovernmental Panel on Climate Change.
    The final policy follows:

U.S. Fish and Wildlife Service

Endangered Species Act Compensatory Mitigation Policy

1. Purposes

    This policy adopts the mitigation principles established in the 
U.S. Fish and Wildlife Service (Service) Mitigation Policy (81 FR 
83440, November 21, 2016), establishes compensatory mitigation 
standards, and provides guidance for the application of compensatory 
mitigation through implementation of the Endangered Species Act of 
1973, as amended (ESA; 16 U.S.C. 1531 et seq.). Compensatory mitigation 
(compensation) is defined in this policy as compensation for remaining 
unavoidable impacts after all appropriate and practicable avoidance and 
minimization measures have been applied, by replacing or providing 
substitute resources or environments (see 40 CFR 1508.20) through the 
restoration, establishment, enhancement, or preservation of resources 
and their values, services, and functions (600 DM 6.4C). This policy 
applies to all Service compensatory mitigation requirements and 
recommendations involving ESA compliance. It is also intended to assist 
other Federal agencies carrying out their statutory and regulatory 
responsibilities under the ESA and to provide applicants with guidance 
on the appropriate use of compensatory mitigation for proposed actions. 
The standards and guidance in the policy will also assist mitigation 
providers in developing compensatory mitigation project proposals.
    Adherence to the principles, standards, and guidance identified in 
this policy is expected to: (1) Provide greater clarity on applying 
compensatory mitigation to actions subject to ESA compliance 
requirements; (2) improve consistency and predictability in the 
implementation of the ESA by standardizing compensatory mitigation 
practices; and (3) promote the use of compensatory mitigation at a 
landscape scale to help achieve the purposes of the ESA.
    This policy encourages Service personnel to collaborate with other 
agencies, academic institutions, nongovernmental organizations, tribes, 
and other partners to develop and implement compensatory mitigation 
measures and programs through a landscape-scale approach to achieve the 
best possible conservation outcomes for activities subject to ESA 
compliance. It also encourages the use of programmatic approaches to 
compensatory mitigation that have the advantages of advance planning 
and economies of scale to: (1) Achieve a net gain in species' 
conservation; (2) reduce the unit cost of compensatory mitigation; and 
(3) improve regulatory procedural efficiency.
    Appendices A and B provide a list of acronyms and a glossary of 
terms used in this policy, respectively.

2. Authorities and Coordination

    This policy is focused on compensatory mitigation that can be 
achieved under the ESA. The Service's authority to require mitigation 
is limited, and our authority to require a ``net gain'' in the status 
of endangered and threatened (listed) or at-risk species has little or 
no application under the ESA. However, we can recommend the use of 
mitigation, and in particular compensatory mitigation, to offset the 
adverse impacts of actions under the ESA. Other statutes also provide 
the Service with authority for recommending compensatory mitigation for 
actions affecting fish, wildlife, plants, and their habitats (e.g., 
Fish and Wildlife Coordination Act (FWCA; 16 U.S.C. 661-667e), National 
Environmental Policy Act (NEPA; 42 U.S.C. 4321 et seq.), and Oil 
Pollution Act (33 U.S.C. 2701 et seq.)). In addition, statutes such as 
the Clean Water Act (CWA; 33 U.S.C. 1251 et seq.) and Federal Power Act 
(16 U.S.C. 791a-828c) provide other Federal agencies with authority to 
recommend or require compensatory mitigation for actions that result in 
adverse effects to species or their habitats. These other authorities 
are often used in combination with, or to supplement the authorities 
under, the ESA to recommend or require compensatory mitigation for a 
variety of resources including at-risk species and their habitats. For 
example, the ESA and the Federal Land Policy and Management Act (43 
U.S.C. 1701 et seq.) together provide a greater impetus to conserve 
desert tortoise habitat than either statute alone.
    Synchronizing environmental review processes, especially through 
early coordination with project proponents, allows the Service to 
provide comments

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and recommendations for all mitigation types (i.e., avoidance, 
minimization, and compensation) included as part of proposed actions in 
an effort to reduce impacts to listed, proposed, and at-risk species 
and designated and proposed critical habitat. For example, the Service 
may comment on proposed actions under NEPA and State environmental 
review statutes (e.g., California Environmental Quality Act and Hawaii 
Environmental Policy Act). Coordination of environmental review 
processes generally results in conservation outcomes that have a 
greater likelihood of meeting the Service's mitigation goal.
    The supplemental mandate of NEPA (42 U.S.C. 4335) adds to the 
existing authority and responsibility of the Service to protect the 
environment when carrying out our mission under the ESA. The Service's 
goal is to provide a coordinated review and analysis of the impacts of 
proposed actions on listed, proposed, and at-risk species, and 
designated and proposed critical habitat that are also subject to the 
requirements of other statutes such as NEPA, CWA, and FWCA. 
Consultation, conference, and biological assessment procedures under 
section 7 and permitting procedures under section 10(a)(1)(B) of the 
ESA can be integrated with interagency cooperation procedures required 
by other statutes such as NEPA or FWCA. This is particularly the case 
for cumulative effects. Cumulative effects are often difficult to 
analyze, are defined differently under different statutes, and are 
often not adequately considered when making decisions affecting the 
type and amount of mitigation recommended or required.

3. Scope

    The ESA Compensatory Mitigation Policy covers all forms of 
compensatory mitigation, including, but not limited to, permittee-
responsible mitigation, conservation banking, in-lieu fee programs, and 
other third-party mitigation projects or arrangements, for all species 
and habitat protected under the ESA and for which the Service has 
jurisdiction. Endangered and threatened species, species proposed as 
endangered or threatened, and designated and proposed critical habitat, 
are the primary focus of this policy. Candidates and other at-risk 
species would also benefit from adherence to the standards set forth in 
this policy, and all Service programs are encouraged to develop 
compensatory mitigation programs and tools to conserve at-risk species 
in cooperation with States and other partners.
    This policy does not apply retroactively to approved mitigation 
programs; however, it does apply to amendments and modifications to 
existing conservation banks, in-lieu fee programs, and other third-
party compensatory mitigation arrangements unless otherwise stated in 
the mitigation instrument. Examples of amendments or modifications to 
which this policy applies include authorization of additional sites 
under an existing instrument or agreement, expansion of an existing 
site, or addition of a new type of resource credit such as addition of 
a new species credit.
    This policy does apply to other Federal or non-Federal actions 
permitted or otherwise authorized or approved prior to issuance of this 
policy under circumstances where the action may require additional 
compliance review under the ESA if: New information becomes available 
that reveals effects of the action to listed species or critical 
habitat not previously considered; the action is modified in a manner 
that causes effects to listed species and critical habitat not 
previously considered; authorized levels of incidental take are 
exceeded; a new species is listed or critical habitat is designated 
that may be affected by the actions; or the project proponent 
specifically requests the Service to apply the policy. This policy does 
not apply to actions that are specifically exempted under the ESA. It 
also does not apply where the Service has already agreed in writing to 
mitigation measures for pending actions, except where new activities or 
changes in current activities associated with those actions would 
result in new impacts, or where new authorities, or failure to 
implement agreed upon recommendations warrant new consideration 
regarding mitigation. Service offices may elect to apply this policy to 
actions that are under review as of December 27, 2016,
    This policy clarifies guidance given in the Service's ``Guidance 
for the Establishment, Use, and Operation of Conservation Banks,'' 
published in the Federal Register on May 8, 2003 (68 FR 24753), and 
``Guidance on Recovery Crediting for the Conservation of Threatened and 
Endangered Species,'' published in the Federal Register on July 31, 
2008 (73 FR 44761).

4. Application of Compensatory Mitigation Under the ESA

    Sections of the ESA under which the Service has authority to 
recommend or require compensatory mitigation for species or their 
habitat are identified below. In this section, we provide guidance on 
applications of these ESA authorities within the context of 
compensatory mitigation. The compensatory mitigation standards set 
forth in section 5. Compensatory Mitigation Standards of this policy 
apply to compensatory mitigation programs and projects established 
under the ESA, as appropriate.

4.1. Section 7--Interagency Cooperation

    Section 2(c)(1) of the ESA directs all Federal departments and 
agencies to conserve endangered and threatened species. ``Conserve'' is 
defined in section 3 of the ESA as all actions necessary to bring the 
species to the point that measures provided pursuant to the ESA are no 
longer necessary (i.e., recovery or the process through which recovery 
of listed species is accomplished). This requirement to contribute to 
the conservation of listed species is reaffirmed in section 7(a)(1) of 
the ESA. Congress recognized the important role Federal agencies have 
in conserving listed species.
    When the ESA was enacted in 1973, section 7 was a single paragraph 
directing ``all Federal departments and agencies . . . [to] utilize 
their authorities in furtherance of the purposes of [the ESA] by 
carrying out programs for the conservation of endangered species and 
threatened species listed pursuant to section 4 of [the ESA] and 
[emphasis added] by taking such action necessary to insure that actions 
authorized, funded, or carried out by them do not jeopardize the 
continued existence of such endangered species and threatened species 
or result in the destruction or modification of habitat of such species 
which is determined . . . to be critical.'' In 1979, section 7 was 
amended to create subsections 7(a)(1) and 7(a)(2). Federal agencies 
have separate responsibilities concerning species and their habitats 
under these two subsections. Section 7(a)(1) is a recovery measure that 
requires Federal agencies to carry out programs for the conservation of 
listed species. Section 7(a)(2) is a stabilization measure that 
requires Federal agencies to ensure actions they authorize, fund, or 
carry out are not likely to jeopardize the continued existence of a 
listed species or destroy or adversely modify critical habitat.
4.1.1. Section 7(a)(1)
    Section 7(a)(1) of the ESA states, ``. . . Federal agencies shall, 
in consultation with and with the assistance of the Secretary, utilize 
their authorities in furtherance of the purposes of [the ESA] by 
carrying out programs for the conservation of

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endangered species and threatened species.'' The Secretary's section 
7(a)(1) consultation role has been delegated to the Service, and the 
Service therefore consults with and assists Federal agencies to 
accomplish these conservation programs. ``Conservation,'' as it is 
defined in section 3 of the ESA, means ``to use and the use of all 
methods and procedures which are necessary to bring any endangered 
species or threatened species to the point at which the measures 
provided pursuant to this Act are no longer necessary.'' Through this 
policy, the Service encourages Federal agencies to use section 7(a)(1) 
to achieve a goal of a ``net gain'' through their mitigation policies 
and approaches so that they may help bring endangered and threatened 
species to the point where they no longer need to be listed pursuant to 
the ESA.
    Mitigation Goal: Development of landscape-scale conservation 
programs for listed and at-risk species that are designed to achieve a 
net gain in conservation for the species.
    Guidance: One way that Federal agencies can meet their 
responsibility under section 7(a)(1) of the ESA is by working with the 
Service and other conservation partners to develop landscape-scale 
conservation plans that include compensatory mitigation programs 
designed to contribute to species recovery. Landscape-scale approaches 
to compensatory mitigation, such as conservation banking and in-lieu 
fee programs, are more likely to be successful if Federal agencies, 
especially those that carry out, fund, permit, or otherwise authorize 
actions that can use these programs, are involved in their 
establishment and support their use. For example, the Federal Highway 
Administration, as part of its long-term planning process, can use its 
authorities to work with the Service and other conservation partners on 
conservation programs for listed species that may be impacted by 
anticipated future actions. The conservation programs can include 
identifying priority conservation areas, developing crediting 
methodologies to value affected species, and developing guidance for 
offsetting those impacts that is expected to achieve ``no net loss,'' 
or even a ``net gain,'' in conservation for the species. These tools 
and information can then be used by conservation bank sponsors and 
other mitigation providers to develop compensatory mitigation 
opportunities (e.g., conservation banks) for use by the Federal Highway 
Administration, and also by State departments of transportation and 
other public and private entities seeking compensation to offset the 
impacts of their actions for those same species. The resulting 
compensatory mitigation program provides conservation for the species 
that would otherwise not have been achieved--a contribution to listed 
species conservation under section 7(a)(1) of the ESA by the Federal 
agency.
4.1.2. Section 7(a)(2)
    Section 7(a)(2) of the ESA states, ``[e]ach Federal agency shall . 
. . insure that any action authorized, funded, or carried out, by such 
agency . . . is 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.'' The Service determines 
through consultation under section 7(a)(2) whether or not the proposed 
action is likely to jeopardize the continued existence of listed 
species or destroy or adversely modify critical habitat. The Service 
then issues a biological opinion stating our conclusion and, in the 
case of a finding of no jeopardy (or jeopardy accompanied by reasonable 
and prudent alternatives that can be taken by the Federal agency to 
avoid jeopardy), formulates an incidental take statement, if such take 
is reasonably certain to occur, that identifies the anticipated amount 
or extent of incidental take of listed species and specifies reasonable 
and prudent measures necessary or appropriate to minimize such impacts 
under section 7(b)(4) of the ESA. If the proposed action is likely to 
adversely affect critical habitat, the Service's biological opinion 
also analyzes whether adverse modification is likely to occur and 
specifies reasonable and prudent alternatives to avoid adverse 
modification, as necessary and if available. If the listed species is a 
marine mammal, incidental taking is authorized pursuant to section 
101(a)(5) of the Marine Mammal Protection Act (MMPA; 16 U.S.C. 1361 et 
seq.) prior to issuance of an incidental take statement under the ESA.
    Mitigation Goal: The Service should work with Federal agencies to 
assist them in proposing actions that are not likely to jeopardize the 
continued existence of any listed species or result in the destruction 
or adverse modification of any designated critical habitat, as required 
under section 7(a)(2) of the ESA. While not required under section 
7(a)(2), the Service may also encourage Federal agencies and applicants 
(consistent with Federal action agency authorities) to include 
compensation as part of their proposed actions to offset any 
anticipated impacts to these resources that are not avoided to achieve 
a ``net gain'' or, at a minimum, ``no net loss'' in the conservation of 
listed species.
    Guidance: The Service should coordinate with Federal agencies and 
encourage them to use their authorities under appropriate statutes 
(e.g., Federal Land Policy and Management Act) to avoid, minimize, and 
offset adverse impacts to listed species and designated critical 
habitat using the full mitigation sequence. Compensation is a component 
of the mitigation sequence that can be applied to offset adverse 
effects of actions on listed species and critical habitat. Furthermore, 
the Service can work with Federal agencies to establish compensatory 
mitigation programs such as conservation banking and in-lieu fee 
programs that incentivize offsetting the effects of their actions 
through the appropriate use of compensation while expediting regulatory 
processes for the Federal agencies and applicants. Due to economies of 
scale, such mitigation programs are particularly effective at providing 
more effective and cost-efficient compensation opportunities for 
offsetting the effects of multiple actions that individually have small 
impacts.
4.1.2.1. Proposed Actions and Project Descriptions
    To better implement section 7(a)(2) of the ESA and prevent species 
declines, the Service will work with Federal agencies and applicants to 
identify conservation measures, using the full mitigation sequence, 
that can be included as part of proposed actions for unavoidable 
impacts to listed species and critical habitat to achieve, at a 
minimum, ``no net loss'' in the species' conservation. The mitigation 
sequence should be observed (i.e., avoid first, then minimize, then 
compensate), except where circumstances may warrant a departure from 
this preferred sequence. For example, it may be preferable to 
compensate for the loss of an occupied site that will be difficult to 
maintain based on projected future land use (e.g., the site is likely 
to be isolated from the population in the future) or climate change 
impacts. The Service will consider conservation measures, including 
compensatory mitigation, as appropriate, proposed by the action agency 
or applicant as part of the proposed action when developing a 
biological opinion addressing the effects of the proposed action on 
listed species and critical habitat. This consideration of beneficial 
actions (i.e., compensatory mitigation) is consistent with our 
implementing regulations at 50 CFR 402.14(g)(8). Federal agencies 
should coordinate early with the Service on the

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appropriateness of such beneficial actions as compensation for 
anticipated future actions.
4.1.2.2. Jeopardy or Adverse Modification Determinations and RPAs
    When the Service issues a biological opinion with a finding of 
jeopardy or adverse modification of critical habitat, we include 
reasonable and prudent alternatives (RPAs) when possible. RPAs may 
include any and all forms of mitigation, including compensatory 
mitigation, that can be applied to avoid proposed actions from 
jeopardizing the existence of listed species or destroying or adversely 
modifying critical habitat, provided they are consistent with the 
regulatory definition of RPAs at 50 CFR 402.02.
4.1.2.3. No Jeopardy and No Adverse Modification Determinations and 
RPMs
    When the Service issues a biological opinion with a finding of no 
jeopardy, we provide the Federal agency and applicant (if any) with an 
incidental take statement, if take is reasonably certain to occur, in 
accordance with section 7(b)(4) of the ESA. The incidental take 
statement specifies the amount or extent of anticipated take, the 
impact of such take on the species, and any reasonable and prudent 
measures (RPMs) and implementing terms and conditions determined by the 
Service to be necessary or appropriate to minimize the impact of the 
take.
    RPMs can include mitigation, in appropriate circumstances, if such 
a measure minimizes the effect of the incidental take on the species, 
and as long as the measure is consistent with the interagency 
consultation regulations at 50 CFR 402.14. RPMs should also be 
commensurate with and proportional to the impacts associated with the 
action. The Service should provide an explanation of why the measures 
are necessary or appropriate. If the proposed action includes 
conservation measures sufficient to fully compensate for incidental 
take, it may not be necessary to include additional minimization 
measures (beyond monitoring) through RPMs.
4.1.3. Section 7(a)(4)
    Section 7(a)(4) of the ESA states, ``[e]ach Federal agency shall 
confer with [the Service] on any agency action which is likely to 
jeopardize the continued existence of any species proposed to be listed 
. . . or result in the destruction or adverse modification of critical 
habitat proposed to be designated for such species.'' The conference is 
designed to assist the Federal agency and any applicant to identify and 
resolve potential conflicts at an early stage in the planning process.
    Mitigation Goal: The Service should work with Federal agencies to 
assist them in proposing actions that are not likely to jeopardize the 
continued existence of any species proposed for listing or result in 
the destruction or adverse modification of any proposed critical 
habitat, in accordance with section 7(a)(4) of the ESA. The Service 
should also encourage Federal agencies and applicants to include 
compensation as part of their proposed actions to offset any 
anticipated impacts to resources that are not avoided to achieve a net 
gain or, at a minimum, no net loss in their conservation.
    Guidance: The Service should coordinate with Federal agencies and 
encourage them to use their authorities to avoid and minimize adverse 
impacts to proposed and at-risk species and proposed critical habitat 
using the full mitigation sequence. The Service may recommend 
compensatory mitigation for adverse effects to proposed or at-risk 
species during informal conference or in a conference report or 
conference opinion, or the Federal action agency or applicant may 
propose compensatory mitigation as part of the action. If a conference 
opinion or report determines that a proposed action is likely to 
jeopardize the continued existence of a proposed species or adversely 
modify or destroy proposed critical habitat, the Service will include 
RPAs, if any are available, that may include compensatory mitigation. 
If the species is subsequently listed or critical habitat is designated 
prior to completion of the action, the Service will give appropriate 
consideration to compensatory mitigation when confirming the conference 
opinion as a biological opinion or if formal consultation is necessary. 
This consideration of beneficial actions is consistent with our 
implementing regulations at 50 CFR 402.14(g)(8).

4.2. Section 10--Conservation Plans and Agreements

4.2.1. Safe Harbor and Candidate Conservation Agreements
    Under a candidate conservation agreement with assurances (CCAA), 
private and other non-Federal property owners may voluntarily undertake 
conservation management activities on their properties to address 
threats to unlisted species and to enhance, restore, or maintain 
habitat benefiting species that are candidates or proposed for listing 
under the ESA or other at-risk species in exchange for assurances that 
no further action on their part is required should the species become 
listed during the term of the CCAA. Under a safe harbor agreement 
(SHA), private and other non-Federal property owners may voluntarily 
undertake management activities on their property to enhance, restore, 
or maintain habitat benefiting species listed under the ESA in exchange 
for assurances that there will not be any increased property use 
restrictions as a result of their efforts that either attract listed 
species to their property or that increase the numbers or distribution 
of listed species already on their property during the term of the 
agreement. Both types of agreements are designed to encourage 
conservation of species on non-Federal land.
    Mitigation Goal: Transitioning CCAAs and SHAs into long-term/
permanent conservation that can serve as compensatory mitigation when 
appropriate and desired by landowners. Such transitions provide greater 
assurance that the species conservation efforts begun under the CCAA or 
SHA will persist on the landscape beyond the term of the original 
agreement.
    Guidance: CCAAs or SHAs are not intended to be mitigation programs 
and do not require site protection and financial assurances that meet 
the compensatory mitigation standards set forth in this policy, 
however, the conservation achieved through implementation of a CCAA or 
SHA may be `rolled over' for use as compensatory mitigation if: (1) The 
CCAA or SHA permit has expired or is surrendered; (2) the landowner is 
in compliance with the terms and conditions of the CCAA or SHA at the 
time of transition; (3) any commitments for conservation for which 
financial compensation from public sources was received has been 
fulfilled and if not fulfilled is prorated and deducted from the 
mitigation credit assigned to the property; and (4) all other 
requirements for providing compensatory mitigation are met. If the 
Service determines the CCAA or SHA would provide greater conservation 
to the species as compensatory mitigation, then the Service should 
inform the landowner of this assessment and provide the landowner with 
the opportunity to transition their property from a CCAA or SHA site to 
a mitigation site.
    Landowners enrolled in CCAAs while the species remains unlisted can 
provide compensatory mitigation under a State or other non-Service 
mitigation program if the actions related to the mitigation are 
additional to those taken to satisfy the CCAA requirement. Should the 
species become listed before the CCAA expires, the landowner has the 
option to roll over the existing

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mitigation agreement to a Service-approved mitigation instrument that 
meets the standards established in this policy.
4.2.2. Habitat Conservation Plans
    Section 10(a)(1)(B) of the ESA allows the Service to issue an 
incidental take permit for ``any taking otherwise prohibited by section 
9(a)(1)(B) [of the ESA] if such taking is incidental to, and not the 
purpose of, the carrying out of an otherwise lawful activity.'' If, 
under section 10(a)(2)(B) of the ESA, the Service finds the issuance 
criteria are met by the applicant, including that the applicant will, 
``to the maximum extent practicable, minimize and mitigate the impacts 
of such taking,'' the Service will issue a permit. Plant species and 
unlisted animal species may also be covered in the habitat conservation 
plan (HCP), provided the applicant meets requirements for their 
coverage described in the implementing regulations. The Service 
incorporates these measures as terms and conditions of the permit. 
Regulations governing incidental take permits for endangered and 
threatened wildlife species are found at 50 CFR 17.22 and 17.32. The 
Service is required to conduct a section 7(a)(2) consultation on 
issuance of an incidental take permit.
    Mitigation Goal: Consistent with the purposes and polices of the 
ESA, the Service should work with applicants to assist them in 
developing HCPs that achieve a ``net gain'' or, at a minimum, ``no net 
loss'' in the conservation of covered species and critical habitat. 
Though the statute does not require this of HCP applicants, applicants 
often will request additional measures for greater future assurances. 
This is generally achievable through programmatic approaches, which 
provide opportunities for the use of landscape-scale compensatory 
mitigation programs to offset impacts of actions.
    Guidance: Compensatory mitigation should be concurrent with or in 
advance of impacts, whenever possible. Programmatic approaches are 
recommended when they will produce regulatory efficiency and improved 
conservation outcomes for the covered species. These HCPs operate on a 
landscape scale and often use conservation banks, in-lieu fee programs, 
or other compensatory mitigation opportunities established by 
mitigation sponsors and approved by the Service. These landscape-scale 
programmatic approaches can achieve a net gain in conservation for the 
covered species as a result of economies of scale. See the revised HCP 
Handbook for the various options available to address compensatory 
mitigation for HCPs.

4.3. Other Sections of the ESA Where Compensatory Mitigation Can Play a 
Role

    Section 4(d) of the ESA authorizes the Service to issue protective 
regulations that are necessary and advisable to provide for the 
conservation of threatened species. The Service used this authority to 
extend the prohibition of take (section 9 of the ESA) to all threatened 
species by regulation in 1978, through promulgation of a ``blanket 4(d) 
rule'' (50 CFR 17.31). This blanket 4(d) rule can be modified by a 
species-specific 4(d) rule (e.g., Special Rule Concerning Take of the 
Threatened Coastal California Gnatcatcher (58 FR 65088, December 10, 
1993)). Depending on the threats, the inclusion of compensatory 
mitigation in a species-specific 4(d) rule may help offset habitat 
loss, and could hasten recovery or preclude the need to reclassify the 
species as endangered.
    Section 5 of the ESA provides authority for the Service and the 
U.S. Department of Agriculture, with respect to the National Forest 
System, to establish and implement a program to conserve fish, 
wildlife, and plants, including those which are listed as endangered 
species or threatened species through:
     Use of land acquisition and other authority under the Fish 
and Wildlife Act of 1956, as amended (16 U.S.C. 742a-742j, not 
including 742d-1); the Fish and Wildlife Coordination Act, as amended 
(16 U.S.C. 661 et seq.); and the Migratory Bird Conservation Act (16 
U.S.C. 715-715d, 715e, 715f-715r), as appropriate; and
     Acquisition by purchase, donation, or otherwise, of lands, 
waters, or interests therein.
    Establishment of compensatory mitigation programs that conserve 
listed or at-risk species on lands adjacent to National Forests could 
be used to offset losses to those species and their habitats by actions 
authorized by the Service and also help buffer National Forests from 
incompatible neighboring land uses.

5. Compensatory Mitigation Standards

    The mitigation principles, as described in the Service's Mitigation 
Policy (81 FR 83440, November 21, 2016), are goals the Service intends 
to achieve, in part through recommending or requiring, as appropriate, 
under the ESA and other applicable authorities, the inclusion of 
compensatory mitigation in proposed actions with adverse impacts to 
listed, proposed, or at-risk species, and designated or proposed 
critical habitat. The compensatory mitigation standards described in 
this section of the policy will implement the mitigation principles, as 
outlined in the Mitigation Policy, including using a landscape approach 
to inform mitigation and aspiring to meet the goal to improve (i.e., a 
``net gain'') or, at minimum, to maintain (i.e., ``no net loss'') the 
current status of affected resources, as allowed by applicable 
statutory authority and consistent with the responsibilities of action 
proponents under such authority. Compensatory mitigation programs, 
projects, and measures that are consistent with the mitigation 
principles and adhere to the compensatory mitigation standards set 
forth in this section of the policy are expected to achieve the best 
conservation outcomes. The compensatory mitigation standards apply to 
all compensatory mitigation mechanisms (i.e., permittee-responsible 
mitigation, conservation banks, in-lieu fee programs, etc.) and all 
forms of compensatory mitigation (i.e., restoration, preservation, 
establishment, and enhancement) approved by the Service. Specific 
operational details regarding the standards will be in the 
implementation guidance to be issued by the Service. The standards are 
as follows:

5.1. Siting Sustainable Compensatory Mitigation

    Compensatory mitigation will be sited in locations that have been 
identified in landscape-scale conservation plans or mitigation 
strategies as areas that will meet conservation objectives and provide 
the greatest long-term benefit to the listed, proposed, and/or at-risk 
species and other resources of primary conservation concern. The 
Service will rely upon existing conservation plans that are based upon 
the best available scientific information, consider climate-change 
adaptation, and contain specific objectives aimed at the biological 
needs of the affected resources. Where existing conservation plans are 
not available that incorporate all of these elements or are not updated 
with the best available scientific information, Service personnel will 
otherwise incorporate the best available science into mitigation 
decisions and recommendations and continually seek better information 
in areas of greatest uncertainty.

5.2. In-Kind for Species

    Compensatory mitigation must be in-kind for the listed, proposed, 
or at-risk species affected by the proposed action. The same 
requirement does not

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necessarily apply to the habitat type affected, as the best 
conservation outcome for the species may not be an offset of the same 
habitat type or ecological attribute of the habitat impacted by the 
action. Many species use different habitat types at different life 
stages or for different life-history requirements such as feeding, 
breeding, and sheltering. For example, some species are migratory. 
Selecting a habitat type different from that impacted by the action or 
selecting more than one type of habitat for compensatory mitigation may 
best meet the conservation needs of the species.
    Offsetting impacts to designated or proposed critical habitat 
through the use of compensatory mitigation should target the 
maintenance, restoration, or improvement of the recovery support 
function of the affected critical habitat as described in the relevant 
biological or conference opinion, conservation or mitigation plan, 
mitigation instrument, permit, or conference report. Recovery plans, 5-
year reviews, proposed and final critical habitat rules, and the best 
available science on species status, threats, and needs should be 
relied on to inform the selection of habitat types subject to 
compensatory mitigation actions for unavoidable adverse impacts to 
species or critical habitat.
    The use of compensatory mitigation to minimize the impacts of 
incidental take on listed species can be based on habitat or another 
surrogate such as a similarly affected species or ecological conditions 
under circumstances where it is not practicable to express or monitor 
the amount or extent of take in terms of the number of individuals of 
the species, in accordance with 50 CFR 402.14(i)(1)(i). A causal link 
between the surrogate and take of the species must be explained and 
must be scientifically defensible. For example, occupied habitat of a 
listed species has been used as a surrogate to express the amount or 
extent of take of the vernal pool fairy shrimp (Branchinecta lynchi) 
because quantification of take in terms of individuals is not 
practicable, but the surface area of occupied vernal pool habitat is 
easily measured and monitored.

5.3. Reliable and Consistent Metrics

    Metrics that measure ecological functions and/or services at 
compensatory mitigation sites and impact sites must be science-based, 
quantifiable, consistent, repeatable, and related to the conservation 
goals for the species. These metrics may be species- or habitat-based. 
Metrics used to calculate credits should be the same as those used to 
calculate debits for the same species or habitat type. If they are not 
the same, the relationship (conversion) between credits and debits must 
be transparent and scientifically defensible. Metrics must account for 
duration of the impact, temporal loss to the species, management of 
risk associated with compensatory mitigation, and other such measures. 
This does not mean that metrics developed to measure losses and gains 
on the landscape must be precise, as this is rarely possible in 
biological systems, but uncertainty should be noted where it exists and 
metrics must be based on the best scientific data available to gauge 
the adequacy of the compensatory mitigation. Modifying existing metrics 
on which approved conservation banks or other compensatory mitigation 
programs are based and still in use warrants careful consideration and 
must be based on best available science.
    Scientifically defensible metrics also are needed to measure 
biological and ecological performance criteria used to monitor the 
outcome of compensatory mitigation. It may be necessary to adjust 
metrics over time through monitoring and adaptive management processes 
in order to respond to changing conditions and ensure they remain 
effective at assessing the conservation objectives of the compensatory 
mitigation program. However, modifying metrics used to monitor 
performance should not be a substitute for lack of compliance or 
failure to implement adaptive management.
5.4. Judicious Use of Additionality
    Compensatory mitigation must provide benefits beyond those that 
would otherwise have occurred through routine or required practices or 
actions, or obligations required through legal authorities or 
contractual agreements. A compensatory mitigation measure is 
``additional'' when the benefits of the measure improve upon the 
baseline conditions of the impacted resources and their values, 
services, and functions in a manner that is demonstrably new and would 
not have occurred without the compensatory mitigation measure (600 DM 
6.4G). The additional benefits may result from restoration or 
enhancement of habitat; preservation of existing habitat that lacks 
adequate protection; management actions that protect, maintain, or 
create habitat (e.g., regularly scheduled prescribed burns or purchase 
of rights in a split estate); or other activities (e.g., an action that 
reduces threats from disease or predation, or captive breeding and 
reintroduction of individuals or populations). Baseline conditions for 
the habitat relevant to the species must be assessed prior to 
implementing the compensatory mitigation project for comparison to 
conditions after completion of the compensatory mitigation project in 
order to quantify and verify the additional benefits derived from the 
mitigation project.
    Demonstrating additionality on lands already designated for 
conservation purposes can be challenging, particularly when the lands 
under consideration are public lands. In general, credit can only be 
authorized for compensatory mitigation on public lands if additionality 
can be clearly demonstrated and is legally attainable. See section 6.2. 
Eligible Lands for guidance on using public lands for compensatory 
mitigation.
5.5. Timing and Duration
    Compensatory mitigation projects must achieve conservation 
objectives within a reasonable timeframe and for at least the duration 
of the impacts. Ideally, compensatory mitigation should be implemented 
in advance of the action that adversely impacts the species or critical 
habitat. When this is not possible or practicable, temporal losses to 
the affected species must be compensated through some means (e.g., 
increased mitigation ratio that reflects the degree of temporal loss). 
Temporal loss may include indirect effects of the action on the species 
that occur beyond the time period of any direct effects of the action 
(e.g., removal of habitat during a season when individuals of a 
migratory species are absent). Temporal loss to the species as a result 
of both direct and indirect adverse effects must be addressed when 
determining appropriate compensatory mitigation. Losses of habitat that 
require many years to restore may best be offset by a combination of 
restored habitat, preservation of existing high-quality habitat, and 
improved management of existing habitat. The amount of temporal loss, 
the form of compensatory mitigation (i.e., establishment, enhancement, 
restoration, preservation, or some combination of these forms), and the 
time anticipated to establish the compensatory mitigation on the 
landscape should be used to determine the amount of compensatory 
mitigation needed to meet the mitigation goal for the species, critical 
habitat, and/or other resources of concern.
5.6. Ensure Durability
    Compensatory mitigation must be secured by adequate legal, real 
estate, and financial protections that ensure the success of the 
mitigation. Most compensatory mitigation projects are

[[Page 95340]]

permanent, and the viability of the assurances to achieve long-term 
stewardship of a mitigation site must be carefully planned and 
implemented to ensure durability. A compensatory mitigation measure is 
``durable'' when the effectiveness of the measure is sustained for the 
duration of the associated impacts (including direct and indirect 
impacts) of the authorized action (600 DM 6.4H).
5.7. Effective Conservation Outcomes and Accountability
    The Service has authority to conduct direct oversight of all 
compensatory mitigation programs and projects for which we have 
exempted or permitted incidental take under the ESA. A standard 
condition of HCP incidental take permits provides for such oversight. 
Incidental take exemptions provided by statute to Federal agencies and 
applicants through the ESA section 7 process require that mandatory 
terms and conditions included with the take statement must be 
implemented by the Federal agency or its applicant to activate the 
exemption in 7(o)(2) of the Act. Should a mitigation project fail to 
meet its performance criteria and therefore fail to provide the 
expected conservation for the species, the responsible party must 
provide equivalent compensation through other means.
5.8. Encourage Collaboration
    Successful landscape-scale compensatory mitigation depends on the 
engagement of affected communities and stakeholders. Governments, 
communities, organizations, and individuals support what they help to 
develop. The Service will provide opportunities for and encourage 
appropriate stakeholder participation in development of landscape-scale 
compensatory mitigation strategies that affect listed, proposed, and 
at-risk species, and proposed and designated critical habitat through 
appropriate public processes such as those used for programmatic 
habitat conservation plans (HCPs). Programmatic approaches to 
compensatory mitigation programs for at-risk species are also 
encouraged, particularly when led by State agencies, and the Service 
will make every effort to participate in the planning, establishment, 
and operation of such programs as described in our draft Policy 
Regarding Voluntary Prelisting Conservation Actions (79 FR 42525, July 
22, 2014). The Service's regional and field offices will determine or 
assist in determining, as appropriate, the level and methods of public 
participation using transparent processes.
5.9. Maintain Transparency and Predictability
    Consistent implementation of ESA programs that permit or authorize 
incidental take of listed species will provide regulatory 
predictability for everyone. The Service will share appropriate 
information on the availability of compensatory mitigation programs and 
projects with the public through online media or other appropriate 
means. Information regarding conservation banks is available on the 
Regulatory In-lieu fee and Bank Information Tracking System (RIBITS) 
(https://ribits.usace.army.mil). The Service anticipates working with 
the USACE to update RIBITS so that it may be used for our in-lieu fee 
programs. Similar information for habitat credit exchanges and other 
third-party sponsored mitigation projects, or when it is not otherwise 
possible to use RIBITS, must be made publicly accessible.

6. General Considerations

    Specific operational details, in addition to the information 
provided below in this section, will be in implementation guidance 
issued by the Service.
6.1. Preferences
    The appropriate form of compensatory mitigation (i.e., 
preservation, restoration, enhancement, establishment, or a combination 
of some or all of these forms) must be based on the species' needs and 
the nature of the impacts adversely affecting the species. The Service 
has the following general preferences related to compensatory 
mitigation.
6.1.1. Preference for Strategically Sited Compensatory Mitigation
    Preference shall be given to compensatory mitigation projects sited 
within the boundaries of priority conservation areas identified in 
existing landscape-scale conservation plans as described in the 
Service's Mitigation Policy (81 FR 83440, November 21, 2016). Priority 
conservation areas for listed species may be identified in documents 
such as species status assessments, recovery plans, and/or 5-year 
reviews.
6.1.2. Preference for Compensatory Mitigation in Advance of Impacts
    After following the principles and standards outlined in this 
policy and all other considerations being equal, preference will be 
given to compensatory mitigation projects implemented in advance of 
impacts to the species. Mitigation implemented in advance of impacts 
reduces risk and uncertainty. Demonstrating that mitigation is 
successfully implemented in advance of impacts provides ecological and 
regulatory certainty that is rarely matched by a proposal of mitigation 
to be accomplished concurrent with, or subsequent to, the impacts of 
the actions even when that proposal is supplemented with higher 
mitigation ratios. While conservation banking is by definition 
mitigation in advance of impacts, other third-party mitigation 
arrangements and permittee-responsible mitigation may also satisfy this 
preference by implementing compensatory mitigation in advance of 
impacts. In-lieu fee programs can also satisfy this preference through 
a ``jump start'' that achieves and maintains a supply of credits that 
offer mitigation in advance of impacts.
6.1.3. Preference for Consolidated Compensatory Mitigation
    Mitigation mechanisms that consolidate compensatory mitigation on 
the landscape, such as conservation banks and in-lieu fee programs, are 
generally preferred to small, disjunct compensatory mitigation sites 
spread across the landscape. Consolidated mitigation sites generally 
have several advantages over multiple, small, isolated mitigation 
sites. These advantages include:
     Avoidance of a piecemeal approach to conservation efforts 
that often results in small, non-sustainable parcels of habitat 
scattered throughout the landscape;
     Sites that are usually a component of a landscape-level 
strategy for conservation of high-value resources;
     Cost effective compensatory mitigation options for small 
projects, allowing for effective offsetting of the cumulative adverse 
effects that result from numerous, similar, small actions;
     An increase in public-private partnerships that plan in 
advance and a landscape-scale approach to mitigation to provide 
communities with opportunities to conserve highly valued natural 
resources while still allowing for community development and growth;
     Greater capacity for bringing together financial resources 
and scientific expertise not practicable for small conservation 
actions;
     Economies of scale that provide greater resources for 
design and implementation of compensatory mitigation sites and a 
decreased unit cost for mitigation;
     Improved administrative and ecological compliance through 
the use of third-party oversight;

[[Page 95341]]

     Greater regulatory and financial predictability for 
project proponents, greatly reducing the uncertainty that often causes 
project proponents to view compensatory mitigation as a burden; and
     Expedited regulatory compliance processes, particularly 
for small projects, saving all parties time and money.
6.2. Eligible Lands
6.2.1. Lands Eligible for Use as Compensatory Mitigation
    Compensatory mitigation sites may be established by willing parties 
on private, public, or tribal lands that provide the maximum 
conservation benefit for the listed, proposed, and at-risk species and 
other affected resources. Maintaining the same classification of land 
ownership between the impact area and mitigation site may be important 
in preventing a long-term net loss in conservation, in particular a 
reduction in the range of the species. Because most private lands are 
not permanently protected for conservation and are generally the most 
vulnerable to development actions, the use of private lands for 
mitigating impacts to species occurring on any type of land ownership 
is usually acceptable as long as durability can be ensured. Locating 
compensatory mitigation on public lands for impacts to species on 
private lands is also possible, and in some circumstances may best 
achieve the conservation objectives for species, but should be 
carefully considered--see section 6.2.2. Use of Public Land to Mitigate 
Impacts on Private Land for additional guidance.
    Good candidates for compensatory mitigation sites are unprotected 
lands that are high value for conservation and that are acceptable to 
the Service. Designations of high conservation value may include lands 
with existing high-value habitat or habitat that when restored, 
enhanced, established, or properly managed will provide high value to 
the species. In addition to these general considerations, lands that 
may be good candidates for compensatory mitigation sites include:
     Lands previously secured through easements or other means 
but that lack the full complement of protections necessary to conserve 
the species (e.g., buffer lands for a military installation that do not 
include management, or private lands with existing conservation 
easements for which landowners have not received financial compensation 
from public sources or regulatory assurances from the Service.);
     Lands adjacent to undeveloped, protected public lands such 
as National Wildlife Refuges or State Wildlife Management Areas;
     Private lands enrolled in programs that provide financial 
compensation from public sources to landowners in exchange for 
agreements that protect, restore, or create habitat for federally 
listed or at-risk species for a limited period of time, such as the 
Service's Partners for Wildlife Program or some Farm Bill programs 
(e.g., Environmental Quality Incentives Program) if additional 
conservation benefits are provided above and beyond the terms and 
conditions of the agreement or if the agreement/easement has expired; 
and
     Private lands enrolled in programs that provide regulatory 
assurances to the landowner such as SHAs or CCAAs that can be 
transitioned into compensatory mitigation, after all terms and 
conditions of the agreement have been met and the agreement has expired 
or the permit is surrendered in exchange for a mitigation instrument 
(see section 4.2.1. Safe Harbor and Candidate Conservation Agreements 
for additional guidance).
    See section 5.1. Siting Sustainable Compensatory Mitigation for 
other considerations when selecting a site suitable for compensatory 
mitigation.
    Lands that generally do not qualify as compensatory mitigation 
sites include:
     Lands without clear title unless the existing encumbrances 
(e.g., liens, rights-of-way) are compatible with the objectives of the 
mitigation site or can be legally removed or subordinated;
     Split estates (i.e., lands that have separate owners of 
various surface and subsurface rights, usually mineral rights), unless 
a remedy can be found (see below for guidance on split estates);
     Private or public lands already designated for 
conservation purposes, unless the proposed compensatory mitigation 
project would add additional conservation benefit for the species above 
and beyond that attainable under the existing land designation;
     Private lands enrolled in government programs that 
compensate landowners who permanently protect, restore, or create 
habitat for federally listed or at-risk species (e.g., Wetland Reserve 
Program easements administered by the United States Department of 
Agriculture's Natural Resources Conservation Service);
     Inventory and debt restructure properties under the Food 
Security Act of 1985 (16 U.S.C. 3801 et seq.); and
     Lands protected or restored for conservation purposes 
under fee title transfers.
    Additional guidance on limitations involving Federal funding and 
mitigation, including grants, is provided in the Service's Mitigation 
Policy (81 FR 83440, November 21, 2016).
    Lands with split estate ownership and laws and policies governing 
existing rights (e.g., mining laws) may prevent land protection 
instruments (e.g., permanent conservation easements) from providing 
sufficient protection from future development of mineral rights, 
including oil and gas exploration or development. Many potential high-
value conservation properties throughout the United States are split 
estates. The risk of using split estate properties as compensatory 
mitigation should be carefully considered. When legal remedies to 
restore single ownership are not possible or practicable, other 
approaches to managing the risks may be available to bolster durability 
on split estates. A mineral deed acquisition, mineral assessment 
report, or subsurface use agreement are a few of the options for 
managing mineral rights on compensatory mitigation sites that provide 
varying levels of protection (Raffini 2012). Service personnel tasked 
with assessing the viability of split estates as mitigation sites 
should work with the Service's Realty Specialists and the Department of 
the Interior Solicitor to assess risks and possible remedies or other 
approaches.
6.2.2. Use of Public Land To Mitigate Impacts on Private Land
    In general, the Service supports compensatory mitigation on public 
lands that are already designated for the conservation of natural 
resources to offset impacts to the species on private lands only if 
additionality is clearly demonstrated and is legally attainable. 
Additionality is a reasonable expectation that the conservation 
benefits associated with the compensatory mitigation actions would not 
occur in the foreseeable future without those actions. Offsetting 
impacts to private lands by locating compensatory mitigation on public 
lands already designated for conservation purposes generally risks a 
long-term net loss in landscape capacity to sustain species (e.g., 
future reduction in the range of the species) by relying increasingly 
on public lands to serve conservation purposes. However, we recognize 
under certain circumstances this offset arrangement may provide the 
best possible conservation outcome for the species based on best 
available science. When this is the case, the Service will consider 
mitigation on

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public lands to offset impacts to the species on private lands 
appropriate if:
     Compensatory mitigation is an appropriate means of 
achieving the mitigation planning goal for the species;
     Additionality can be clearly demonstrated and quantified, 
and is supplemental to conservation the public agency is foreseeably 
expected to implement absent the mitigation (only conservation benefits 
that provide additionality are counted towards achieving the mitigation 
planning goal);
     Durability of the compensatory mitigation is ensured (see 
section 6.2.3. Ensuring Durability on Public Lands);
     It is consistent with and not otherwise prohibited by all 
relevant statutes, regulations, and policies; and
     Private lands suitable for compensatory mitigation are 
unavailable or are available but cannot provide an equivalent or 
greater contribution towards offsetting the impacts to meet the 
mitigation planning goal for the species.
    When the public lands under consideration for use as compensatory 
mitigation for impacts on private lands are National Wildlife Refuge 
(NWR) System lands, the Service's Final Policy on the NWR System and 
Compensatory Mitigation Under the Section 10/404 Program (USFWS 1999) 
states that the Regional Director must recommend the mitigation to the 
Service Director for approval. Additional considerations may apply to 
NWR System lands for habitat losses authorized through the section 10/
404 program (i.e., Rivers and Harbors Act/Clean Water Act).
6.2.3. Ensuring Durability on Public Lands
    Ensuring the durability of compensatory mitigation on public lands 
presents particular challenges, especially regarding site protection 
assurances, long-term management, and funding assurances for long-term 
stewardship. Mechanisms available for ensuring durability of land 
protection for compensatory mitigation on public lands vary from agency 
to agency, are subject to site-specific limitations, and are likely to 
be politically and administratively challenging to secure. Some 
mechanisms may require a legislative act while other mechanisms can be 
achieved administratively at various levels of an agency's 
organization.
    To ensure the durability of long-term management on public lands, 
there should be a high degree of confidence that incompatible uses are 
removed or precluded to ensure that uses of the public lands do not 
conflict with or compromise the conservation of the species for which 
the compensatory mitigation project was established.
6.2.4. Transfer of Private Mitigation Lands to Public Agencies
    Private mitigation lands may be transferred to public agencies with 
a conservation mission if allowed by applicable laws, regulations, and 
policies.
6.2.5. Compensatory Mitigation on Tribal Lands
    Tribal lands are generally eligible as compensatory mitigation 
sites if they meet the standards and other requirements set forth in 
this policy. Ensuring durability, particularly site protection, is 
usually a sensitive issue for a tribal nation because a conservation 
easement entrusts the land to another entity (Terzi 2012), but 
acceptable entities may be available to hold easements. Additional 
guidance regarding mitigation and tribes is included in the Service's 
Mitigation Policy (81 FR 83440, November 21, 2016).

6.3. Service Areas

    A service area is the geographic area assigned to a compensatory 
mitigation site within which credits for a specific resource (e.g., a 
species) can be utilized. The impacts for which mitigation is sought 
must be located within the designated service area for the species, 
unless otherwise approved by the Service. If a proposed action is 
located within the identified service area of a specific conservation 
bank, in-lieu fee program, or other third-party mitigation program or 
site, then the proponent of that action may offset unavoidable impacts, 
with the Service's approval, through transfer of the appropriate type 
and number of credits from that mitigation program or site. Use of the 
credits outside of service areas is subject to approval by the Service. 
Service areas that apply to all mitigation mechanisms may be designated 
by the Service's regional or field offices, usually through issuance of 
species-specific mitigation guidance.
    The service area is an important component for a potential 
mitigation sponsor who will need to evaluate the market for credits 
prior to committing to a mitigation project. The mitigation sponsor has 
the responsibility to determine if a proposed mitigation project or 
program will be financially feasible and if they will move forward with 
the action.

6.4. Crediting and Debiting

    A credit is a defined unit representing the accrual or attainment 
of ecological functions and/or services at a mitigation site. Credits 
are often expressed as a measure of surface area (e.g., an acre or 
hectare), linear distance of constant width (e.g., stream miles), 
number of individuals or mating pairs of a particular species, habitat 
function (e.g., habitat suitability index), or other appropriate metric 
that can be consistently quantified.
    Metrics developed to support credits by measuring an increase in 
ecological functions and services at compensatory mitigation sites and 
those developed to measure an expected loss or debit in ecological 
functions and services at impact sites must be science-based, 
quantifiable, consistent, repeatable, and related to the conservation 
goals for the species. In general, the method of calculating credits at 
a mitigation site should be the same as calculating debits at project 
impact sites. If use of a common ``currency'' between credits and 
debits is not practicable, the conversion between crediting and 
debiting metrics must be transparent.
    Credits are available for use as mitigation once they are verified 
and released by the Service. Credits are released in proportion to 
administrative and ecological milestones. Credits are considered 
retired if they are no longer available for use as mitigation, 
including credits that have been transferred to fulfill mitigation 
obligations. Credits may also be voluntarily retired, without being 
used for mitigation, which may help achieve no net loss or net 
conservation benefit goals. Credits are not to be traded among 
developers or anyone else and cannot be re-sold. Once a credit has been 
transferred as mitigation for a particular action, it may not be used 
again.
    A mitigation site may contain habitat that is suitable for multiple 
listed species or other resources in the same spatial area. When this 
occurs, it is important to establish how the credits will be stacked or 
bundled and if they can be unstacked and transferred separately. See 
section 8.3. Credit Stacking and Bundling for guidance.
    Compensatory mitigation programs that use credits are voluntary, 
and permittees are never required to purchase credits from these 
compensatory mitigation sources. Pricing of credits is solely at the 
discretion of the mitigation provider.

6.5. Timelines

    The Service does not have mandated timelines for review of 
conservation banks, in-lieu fee programs, or other compensatory 
mitigation projects that are not part of a consultation or permit 
decision. However, this does not mean

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that compensatory mitigation programs and projects are not a priority 
for the Service. Establishment of programmatic compensatory mitigation 
options for project proponents will provide efficiencies, particularly 
when developed in coordination with programmatic consultations and HCPs 
for large landscapes. These efficiencies include reducing the Service's 
workloads associated with ESA sections 7 and 10, expediting incidental 
take authorization for project proponents, and achieving better 
conservation outcomes for listed and other at-risk species.

6.6. Managing Risk and Uncertainty

    Compensatory mitigation can be a valuable conservation tool for 
offsetting unavoidable adverse impacts to listed and at-risk species if 
the risk can be sufficiently managed. Predictions about the 
effectiveness of compensatory mitigation measures have varying degrees 
of uncertainty. Compensatory mitigation accounting systems (e.g., 
debiting and crediting methodologies) should consider risk and adjust 
metrics and mitigation ratios to account for uncertainty. An exact 
accounting of the functions and services lost at the impact sites and 
gained at the mitigation sites is rarely possible due to the 
variability and uncertainty inherent in biological systems and 
ecological processes. To buffer risk and reduce uncertainty, it is 
often helpful to design compensatory mitigation programs and projects 
to achieve measures beyond no net loss to attain sufficient 
conservation benefits for the species. Designing conservation plans 
with mitigation that is expected to achieve more than no net loss in 
species conservation generally increases regulatory predictability and 
can result in shorter project reviews and facilitated permitting.

7. Compensatory Mitigation Mechanisms

    Compensatory mitigation mechanisms can be divided broadly into 
habitat-based mechanisms and other non-habitat-based mitigation 
programs or projects. Whatever mechanism(s) are selected, compensatory 
mitigation is expected to provide either equivalent or additional 
conservation for the species to that lost as a result of the action. 
Specific operational details regarding compensatory mitigation 
mechanisms will be in the implementation guidance to be issued by the 
Service.

7.1. Habitat-Based Compensatory Mitigation Mechanisms

    Compensatory mitigation mechanisms based on habitat acquisition and 
protection may consist of restoration of damaged or degraded habitat, 
enhancement of existing habitat, establishment of new habitat, 
preservation of existing habitat not already protected, or some 
combination of these that offsets the impacts of the action and results 
in or contributes to sustainable, functioning ecosystems for the 
species. Preservation of existing habitat often includes a change in 
land management that renders the site suitable for the species or 
provides additional ecological function or services for the species. 
Preservation includes site protection and is a valid mechanism for 
achieving compensatory mitigation that, at a minimum, reduces threats 
to the species. Existing habitat that is not protected and managed for 
the long term is vulnerable to loss and cannot count toward recovery of 
listed species.
    The five habitat-based mitigation mechanisms described below and 
compared in Table 1 differ by: (1) The party responsible for the 
success of the mitigation site (the permittee or a third party); (2) 
whether the mitigation site is within or adjacent to the action area 
(on-site) or elsewhere (off-site); and (3) whether credits are 
generated at the mitigation site for use by more than one action. 
Habitat-based compensatory mitigation will be held to equivalent 
standards (the standards set forth in this policy) regardless of the 
mitigation mechanism(s) proposed. Habitat-based compensatory mitigation 
programs developed to credit conservation actions that benefit unlisted 
species should meet all compensatory mitigation standards set forth in 
this policy if they are intended to be used as compensatory mitigation 
for adverse impacts of actions undertaken after listing.
7.1.1. Permittee-Responsible Compensatory Mitigation
    Permittee-responsible compensatory mitigation is a conserved and 
managed mitigation site that provides ecological functions and services 
as part of the conservation measures associated with a permittee's 
proposed action. Permittee-responsible mitigation sites are usually 
permanent, as most proposed actions with a need for compensatory 
mitigation are anticipated to result in permanent impacts to the 
species. The permittee retains responsibility for ensuring the required 
compensatory mitigation is completed and successful. This includes 
long-term management and maintenance when the mitigation is intended to 
be permanent. Permittee-responsible compensatory mitigation may be on-
site or off-site, and each permittee-responsible mitigation site is 
linked to the specific action that required the mitigation. Permittee-
responsible mitigation approved for a specific action is not 
transferable to other actions and cannot be used for other mitigation 
needs.
7.1.2. Conservation Bank Program
    A conservation bank is a site or suite of sites that is conserved 
and managed in perpetuity and provides ecological functions and 
services expressed as credits for specified species that are later used 
to compensate for adverse impacts occurring elsewhere to the same 
species. Bank sponsors may be public or private entities. Ensuring the 
required compensatory mitigation measures for a permitted action are 
completed and successful is the responsibility of the bank sponsor. The 
responsibility for success of the mitigation is transferred to the bank 
sponsor through the transfer (usually a purchase by the permittee) of 
credits. Conservation banks provide mitigation in advance of impacts.
7.1.3. In-Lieu Fee Program
    An in-lieu fee site is a conserved and managed compensatory 
mitigation site established as part of an in-lieu fee program that 
provides ecological functions and services expressed as credits for 
specified species and used to compensate for adverse impacts occurring 
elsewhere to the same species. In-lieu fee sites are usually permanent 
as most proposed actions with a need for compensatory mitigation are 
anticipated to result in permanent impacts to the species. In-lieu fee 
programs may be sponsored by a government agency or an environmental, 
conservation-based, not-for-profit organization with a mission that is 
consistent with species or habitat conservation. The in-lieu fee 
sponsor collects fees from permittees that have been approved by the 
Service to use the in-lieu fee program, instead of providing permittee-
responsible compensatory mitigation. An in-lieu fee site that meets the 
mitigation requirements for the impacts of permittees' actions will be 
established when the in-lieu fee program has collected sufficient 
funds. All responsibility for ensuring the required compensatory 
mitigation measures are completed and successful, including long-term 
management and maintenance, is transferred from the permittee to the 
in-lieu fee program sponsor through the transfer (usually purchase) of 
credits. In-lieu fee programs generally do not provide mitigation in 
advance of impacts.
    In-lieu fee programs can also be established to fund non-habitat-
based compensatory mitigation measures. See

[[Page 95344]]

section 7.3 Other Compensatory Mitigation Programs or Projects for 
guidance on these types of programs.
7.1.4. Habitat Credit Exchange
    Habitat credit exchanges are relatively new and warrant additional 
care and consideration when being considered as a mitigation mechanism. 
A habitat credit exchange is an environmental market that operates as a 
clearinghouse in which an exchange administrator, operating as a 
mitigation sponsor, manages credit transactions between compensatory 
mitigation providers and project permittees. This is in contrast to the 
direct transactions between compensatory mitigation providers and 
permittees that generally occur through conservation banking and in-
lieu fee programs. Exchanges provide ecological functions and services 
expressed as credits that are conserved and managed for specified 
species and are used to compensate for adverse impacts occurring 
elsewhere to the same species. Exchanges may be designed to provide 
credits for permanent compensatory mitigation sites, short-term 
compensatory mitigation sites, or both types of sites. Habitat credit 
exchanges may operate at a local or larger landscape scale, may consist 
of one or more mitigation sites, and may obtain credits from 
conservation banks or in-lieu fee programs. Exchange administrators may 
be public or private entities. Exchanges developed for federally listed 
species will require Service approval as with all other mitigation 
mechanisms described in this policy.

    Table 1--Comparison of Habitat-Based Compensatory Mitigation Sites Established Under Different Mechanisms
----------------------------------------------------------------------------------------------------------------
                                                                                              Responsibility
        Mitigation mechanism             Responsible party         Credits generated           transferable
----------------------------------------------------------------------------------------------------------------
Permittee-responsible Mitigation      Permittee..............  No......................  No.
 Site.
Conservation Bank...................  Bank Sponsor...........  Yes.....................  Yes.
In-lieu Fee Program Site............  In-lieu Fee Sponsor....  Yes.....................  Yes.
Habitat Credit Exchange Site........  Exchange Administrator,  Yes.....................  Yes.
                                       Mitigation Sponsor, or
                                       other identified
                                       responsible entity.
----------------------------------------------------------------------------------------------------------------

7.2. Short-Term Compensatory Mitigation

    The concept of short-term compensatory mitigation has merit if it 
serves the conservation goals of the species. Short-term compensatory 
mitigation may be appropriate in some situations to offset impacts that 
can be completely rectified by repairing, rehabilitating, or restoring 
the affected environment within a short and predictable timeframe. 
Under this policy, short-term compensatory mitigation includes 
rectifying the damage at the impact site and providing short-term 
compensation to offset the temporal loss caused by the action to 
achieve a conservation outcome that results in, at a minimum, no net 
loss to the species.
    A short-term impact is defined in this policy as an action that 
meets the following criteria: (1) The impact is limited to harassment 
or other forms of nonlethal take; (2) the impact can be completely 
rectified through natural or active processes, and the site will 
function long term within the landscape at the same or greater level 
than before the impact; (3) restoration of the impact site can occur 
within a short and predictable timeframe based on current science and 
the knowledge of the species; and (4) all temporal loss to the species 
by the impact can be estimated and compensated. Opportunities for 
short-term compensation are likely to be very limited and may not apply 
to most species.
    Inherent in applying short-term compensatory mitigation is the 
recovery of the affected species' populations to pre-disturbance levels 
and any additional increase in population levels that was anticipated 
to occur if the action had not taken place (i.e., adjusted for temporal 
loss). Determining the amount and duration of compensatory mitigation 
needed requires substantial knowledge of the biology of the species 
(e.g., abundance, distribution, fecundity). Actions that meet the 
criteria for short-term impacts are not limited to short-term 
compensatory mitigation as a mitigation option. The Service prefers 
mitigation mechanisms that protect conservation values in perpetuity. 
Permanent compensatory mitigation either at the same or a reduced 
mitigation ratio (determined by the Service) is usually an alternative. 
Conservation banks or in-lieu fee programs with available credits that 
meet the compensatory mitigation needs for actions with short-term 
impacts are usually a good alternative to short-term compensatory 
mitigation.

7.3. Other Compensatory Mitigation Programs or Projects

    Compensatory mitigation is based on the concept of replacing or 
providing substitute resources or environments for the impacted 
resource (40 CFR 1508.20). However, mechanisms or conservation measures 
that do not exactly meet this definition, but that meet the 
conservation objectives for the specified species and are expected to 
compensate for adverse effects to species or their habitats, may be 
suitable as compensatory mitigation. These types of compensatory 
mitigation measures are acceptable if they are closely tied to recovery 
actions identified in species status assessments, recovery plans, 5-
year reviews, or best available science on the threats and needs of the 
species. Compensatory mitigation of this type is often funded through 
an in-lieu fee program. Examples of potentially suitable compensatory 
measures include, but are not limited to:
    a. Transfer and retirement of timber, water, mineral, or other 
severed rights to an already existing conservation site, thereby 
significantly reducing or eliminating the risk of future development on 
the site that would be incompatible with conservation of the species;
    b. Restricting human use of waterways or other public spaces 
through legal means to allow for increased or exclusive use by the 
species;
    c. Controlled propagation, population augmentation, and 
reintroduction of individuals of the species to offset losses from an 
action;
    d. Captive rearing and release of individuals of the species to 
offset losses from an action;
    e. Administering vaccination programs vital to species survival and 
recovery;
    f. Gating of caves that serve as habitat for the species;
    g. Construction of wildlife overpasses or underpasses to protect 
migratory passages for the species; and/or
    h. Programs that reduce the exposure of the species to contaminants 
in the

[[Page 95345]]

environment that are known to cause injury or mortality.
    In rare circumstances, research or education that can be linked 
directly to the relative threats to the species and provide a 
quantifiable benefit to the species may be included as part of a 
mitigation package. Although research can assist in identifying 
substitute resources, it does not replace impacted resources or 
adequately compensate for adverse effects to species or habitat. See 
the Service's Mitigation Policy (81 FR 83440, November 21, 2016) for 
additional guidance on appropriate uses of research or education as 
mitigation.

8. Criteria for Use of Third-Party Mitigation

    Specific operational details regarding the use of third-party 
mitigation will be in the implementation guidance to be issued by the 
Service.

8.1. Project Applicability

    Activities regulated under sections 7 or 10 of the ESA may be 
eligible to use third-party sponsored mitigation, if the adverse 
impacts to the species from the particular project can be offset by 
transfer of the appropriate type and number of credits provided by the 
third-party sponsored mitigation program. The impacts for which third-
party sponsored mitigation is sought must be located within the service 
area for the species provided by the third-party sponsored mitigation 
program unless otherwise approved by the Service. In no case may the 
same credit(s) be used to compensate for more than one action. However, 
the same credit(s) may be used to compensate for a single action that 
requires authorization under more than one regulatory authority (e.g., 
a vernal pool restoration credit that provides mitigation for a listed 
species under the ESA and wetlands under section 404 of the CWA).
    Only credits that have been verified by the Service and released 
are considered available. Only available credits can be used to 
mitigate actions.

8.2. Transfer of Responsibility

    The mitigation sponsor assumes responsibility for success of the 
mitigation through the transfer (usually a purchase by the permittee) 
of credits or other quantified amount of compensatory mitigation.
    The Service's role is regulatory. Credit transfers are subject to 
approval by the Service, as to their conservation value and appropriate 
application for use related to any authorization or permit issued under 
the ESA. Market and legal risks arising from the purchase and use of 
mitigation credits are borne solely by the parties to the sale of such 
credits.

8.3. Credit Stacking and Bundling

    The Service recognizes the inherent efficiencies in leveraging 
multiple conservation efforts on the landscape and encourages these 
coordinated efforts. However, compensatory mitigation and other 
conservation actions that occur on the same mitigation site must be 
accounted for separately, and all aspects of the different actions must 
be managed and tracked in a transparent manner. Stacking mitigation 
credits within a mitigation site (i.e., more than one credit type on 
spatially overlapping areas) is allowed, but the stacked credits cannot 
be used to provide mitigation for more than one permitted impact action 
even if all the resources included in the stacked credit are not needed 
for that action. To do so would result in a net loss of resources in 
most cases because using a species credit separately from the functions 
and services that accompany its habitat, such as carbon sequestration 
or pollination services, would result in double counting (i.e., 
``double dipping''). Double counting is selling or using a unit of the 
same ecosystem function or service on the ground more than once. This 
can occur through an accounting error in which the credit is sold 
twice, and it also can occur when stacked credits are unstacked and one 
or more functions or services are sold separately. For example, a 
credit representing an acre of habitat is sold once as a species 
habitat credit for a permitted action and again as a carbon credit for 
a different action in a different location. The loss of species habitat 
at the first impact site included all functions and services associated 
with that habitat including carbon sequestration, so selling that same 
unit of compensatory mitigation again for carbon sequestration results 
in no carbon offset for the loss of carbon sequestration at the second 
impact location. Using a stacked credit separately to reflect its 
various values is an ecologically challenging accounting exercise.
    Compensatory mitigation projects may be designed to holistically 
address requirements under multiple programs and authorities for the 
same action and may use bundled credits to accomplish this goal. For 
example, a stream credit may satisfy requirements for an U.S. Army 
Corps of Engineers section 404 CWA permit and issuance of incidental 
take authority under the ESA for a listed mussel species occurring in 
that stream, or a county-wide HCP may establish an in-lieu fee program 
for which a single fee is collected from project applicants for a 
permit which covers multiple mitigation obligations under Federal, 
State, and local authorities. In both these examples, the bundled 
credit is used as a single commodity (i.e., it is not unbundled or 
unstacked) and is only used once.

8.4. Use of Credits for Mitigation Under Authorities Other Than the ESA

    Compensatory mitigation projects established for use under one 
Service program (e.g., Ecological Services) may also be used to satisfy 
the environmental requirements of other Service programs (e.g., 
Migratory Birds or Refuges) or other Federal, State, or local agency 
programs consistent with the laws and requirements of each respective 
program. However, the same credits may not be used for more than one 
authorized or permitted action (i.e., no double counting of mitigation 
credits).

9. Compliance and Tracking

    A tracking system is essential in ensuring compliance with the 
mitigation instruments used to implement compensatory mitigation 
programs described in this policy. Tracking systems also facilitate 
consistency in the implementation of compensatory mitigation programs 
and projects. It is vital that the Service track compliance directly 
for permittee-responsible mitigation and, at a minimum, through third 
parties responsible for operating compensatory mitigation programs or 
projects such as in-lieu fee programs and habitat exchanges. 
Transactions (credit withdrawals) at a Service authorized mitigation 
program or project that are not related to ESA compliance and are not 
approved by the Service must be tracked in the same tracking system. 
The Service is not liable for any event or transaction that eludes 
detection through the Service's tracking function. Specific operational 
details regarding compliance and tracking will be in the implementation 
guidance to be issued by the Service.

References Cited

Clement, J.P. et al. 2014. A strategy for improving the mitigation 
policies and practices of the Department of the Interior. A report 
to the Secretary of the Interior from the Energy and Climate Change 
Task Force, Washington, DC. 25 pp.
Fox, J. and A. Nino-Murcia. 2005. Status of Species Conservation 
Banking in the United States. Conservation Biology 19:996-1007.
Presidential Memorandum (PM). 2015. ``Mitigating Impacts on Natural

[[Page 95346]]

Resources for Development and Encouraging Related Private 
Investment.'' Issued November 3, 2015.
Raffini, E. 2012. Mineral Rights and Banking. National Environmental 
Newsletter 34:9-10. Environmental Law Institute, Washington, DC.
Terzi, G. 2012. The Lummi Nation Wetland and Habitat Bank--Restoring 
a Piece of History. National Wetlands Newsletter 34:12-13. 
Environmental Law Institute, Washington, DC.
U.S. Fish and Wildlife Service. 1999. Final Policy on the National 
Wildlife Refuge System and Compensatory Mitigation Under the Section 
10/404 Program. September 10, 1999. Federal Register 64:49229-49234.
U.S. Fish and Wildlife Service. 2003. Guidance on the Establishment, 
Use, and Operation of Conservation Banks. May 2, 2003. U.S. 
Department of the Interior Fish and Wildlife Service. 18 pp.
U.S. Fish and Wildlife Service. 2008. Guidance on Recovery Crediting 
for the Conservation of Threatened and Endangered Species. July 
2008. U.S. Department of the Interior Fish and Wildlife Service.
U.S. Fish and Wildlife Service. 2013. Guidelines for the 
Establishment, Management, and Operations of Golden-cheeked Warbler 
and Black-capped Vireo Mitigation Lands. July 2013. U.S. Department 
of the Interior Fish and Wildlife Service Southwest Region.
U.S. Fish and Wildlife Service. 2016. U.S. Fish and Wildlife Service 
Mitigation Policy. November 21, 2016. U.S. Department of the 
Interior Fish and Wildlife Service.
Williams, B.K., R.C. Szaro, and C.D. Shapiro. 2009. Adaptive 
Management: The U.S. Department of the Interior Technical Guide. 
Adaptive Management Working Group, U.S. Department of the Interior, 
Washington, DC.

Appendix A: List of Acronyms and Abbreviations Used in This Policy

CCAA--Candidate conservation agreement with assurances
CEQ--Council on Environmental Quality
CFR--Code of Federal Regulations
CWA--Clean Water Act
EPA--Environmental Protection Agency
ESA--Endangered Species Act
FWCA--Fish and Wildlife Coordination Act
HCP--Habitat conservation plan
MMPA--Marine Mammal Protection Act
NEPA--National Environmental Policy Act
NWR--National Wildlife Refuge
RPA--Reasonable and prudent alternative
RPM--Reasonable and prudent measure
RIBITS--Regulatory In-lieu fee and Bank Information Tracking System
SHA--Safe harbor agreement
USACE--United States Army Corps of Engineers
USFWS--United States Fish and Wildlife Service

Appendix B: Glossary of Terms Related to Compensatory Mitigation

    Definitions in this section apply to the implementation of the 
U.S. Fish and Wildlife Service (Service) Endangered Species Act 
Compensatory Mitigation Policy and were developed to provide clarity 
and consistency. Some definitions are defined in Service authorities 
such as the Endangered Species Act or the National Environmental 
Policy Act, or in regulations or policies existing at the time this 
policy was issued. Other definitions have been developed based on 
compensatory mitigation practices. Definitions in the glossary do 
not substitute for statutory or regulatory definitions in the 
exercise of those authorities.
    Action--an activity or program implemented, authorized, or 
funded, in whole or in part, by Federal agencies; or a non-Federal 
activity or program for which one or more of the Service's 
authorities apply to make mitigation recommendations, specify 
mitigation requirements, or provide technical assistance for 
mitigation planning (81 FR 83440; November 21, 2016).
    Action area--all areas to be affected directly or indirectly by 
the Federal action and not merely the immediate area involved in the 
action (50 CFR 402.02).
    Adaptive management--a systematic approach for improving 
resource management by learning from management outcomes. An 
adaptive approach involves exploring alternative ways to meet 
management objectives, predicting the outcomes of alternatives based 
on the current state of knowledge, implementing one or more of these 
alternatives, monitoring to learn about the impacts of management 
actions, and then using the results to update knowledge and adjust 
management actions. Adaptive management focuses on learning and 
adapting, through partnerships of managers, scientists, and other 
stakeholders who learn together how to create and maintain 
sustainable resource systems (Williams et al. 2009). As applied to 
compensatory mitigation, it is a management strategy that 
anticipates likely challenges associated with compensatory 
mitigation projects and provides for the implementation of 
activities to address those challenges, as well as unforeseen 
changes to those projects. It requires consideration of the risk, 
uncertainty, and dynamic nature of compensatory mitigation projects 
and guides modification of those projects to achieve stated 
biological goals. It includes the selection of appropriate measures 
that will ensure that the resource functions and services are 
provided and involves analysis of monitoring results to identify 
potential problems of a compensatory mitigation project and the 
identification and implementation of measures to rectify those 
problems (modified from 33 CFR 332.2).
    Additionality--conservation benefits of a compensatory 
mitigation measure that improve upon the baseline conditions of the 
impacted resources and their values, services, and functions in a 
manner that is demonstrably new and would not have occurred without 
the compensatory mitigation measure (600 DM 6.4G).
    Additive impacts, additive effects--the combined effects of past 
actions on a species, other resource, or community; impacts of an 
action may be relatively insignificant on their own, but when 
considered with the impacts from other actions as they accumulate 
over time collectively lead to significant overall loss or 
degradation of resources. See also ``cumulative effects.''
    Applicant--any person who requires formal approval or 
authorization from a Federal agency as a prerequisite to conducting 
an action (50 CFR 402.02); ``person'' means an individual, 
corporation, partnership, trust, association, or any other private 
entity; or any officer, employee, agent, department, or 
instrumentality of the Federal Government, of any State, 
municipality, or political subdivision of a State, or of any foreign 
government; any State, municipality, or political subdivision of a 
State; or any other entity subject to the jurisdiction of the United 
States (16 U.S.C. 1532(13)).
    At-risk species--candidate species and other unlisted species 
that are declining and are at risk of becoming a candidate for 
listing under the Endangered Species Act. This may include, but is 
not limited to, State listed species, species identified by States 
as species of greatest conservation need, or species with State 
heritage ranks of G1 or G2.
    Avoidance--avoiding the impact altogether by not taking a 
certain action or parts of an action (40 CFR 1508.20).
    Bank Sponsor--any public or private entity responsible for 
establishing and, in most circumstances, operating a conservation 
bank. Bank sponsors are most often private individuals, companies, 
or Limited Liability Corporations, but they may also be 
nongovernmental organizations, Tribes, or government agencies. See 
also ``mitigation sponsor.''
    Baseline--the pre-existing condition of a defined area of 
habitat or a species population that can be quantified by an 
appropriate metric to determine level of functions and/or services 
and re-measured at a later time to determine if the same area of 
habitat or species population has increased, decreased, or 
maintained the same level of functions and/or services.
    Candidate conservation agreement with assurances (CCAA)--a 
formal agreement between the Service or the National Marine 
Fisheries Service and one or more non-Federal parties who 
voluntarily agree to manage their lands or waters to remove threats 
to candidate or proposed species and in exchange receive assurances 
that their conservation efforts will not result in future regulatory 
obligations in excess of those they agreed to at the time they 
entered into the agreement. The management activities included in 
the agreement must significantly contribute to elimination of the 
need to list the target species when considered in conjunction with 
other landowners conducting similar management activities within the 
range of the species (USFWS CCAA Policy).
    Candidate species (candidate)--any species being considered by 
the Secretary for listing as an endangered or threatened species, 
but not yet the subject of a proposed rule (50 CFR 424.02); a 
species for which the Service or the National Marine Fisheries 
Service has on file sufficient information on biological 
vulnerability and threats to support a proposal to list as 
endangered or

[[Page 95347]]

threatened under the Endangered Species Act.
    Compensatory mitigation (compensation)--compensation for 
remaining unavoidable impacts after all appropriate and practicable 
avoidance and minimization measures have been applied, by replacing 
or providing substitute resources or environments (see 40 CFR 
1508.20) through the restoration, establishment, enhancement, or 
preservation of resources and their values, services, and functions 
(600 DM 6.4C).
    Compensatory mitigation project--compensatory mitigation 
implemented by the action agency, a permittee, or a mitigation 
sponsor. Compensatory mitigation projects include permittee-
responsible mitigation, conservation banks, in lieu fee programs and 
sites, habitat credit exchanges, and other third-party compensatory 
mitigation projects.
    Conservation, conserve, conserving--to use and the use of all 
methods and procedures which are necessary to bring any endangered 
or threatened species to the point at which the measures provided 
pursuant to the Endangered Species Act are no longer necessary (16 
U.S.C. 1532(3)).
    Conservation bank--a site, or suite of sites, that is conserved 
and managed in perpetuity and provides ecological functions and 
services expressed as credits for specified species that are later 
used to compensate for impacts occurring elsewhere to the same 
species.
    Conservation easement--a recorded legal document established to 
conserve biological resources for a specified duration, usually in 
perpetuity, on a identified conservation property and which 
restricts certain activities and requires certain habitat management 
obligations for the conservation property.
    Conservation measures (conservation actions)--measures pledged 
in the project description that the Federal agency or applicant will 
implement to minimize, rectify, reduce, and/or compensate for the 
adverse impacts of the development project on the species. 
Conservation measures designed to compensate for unavoidable impacts 
may include the restoration, enhancement, establishment, and/or 
preservation of species habitat or other measures conducted for the 
purpose of offsetting adverse impacts to the species. Upon issuance 
of a permit, license or other such authorization associated with the 
proposed project, implementation of that project requires 
implementation of the conservation measures as well as any other 
terms and conditions of the permit.
    Conservation objective--a measurable expression of a desired 
outcome for a species or its habitat resources. Population 
objectives are expressed in terms of abundance, trend, vital rates, 
or other measurable indices of population status. Habitat objectives 
are expressed in terms of the quantity, quality, and spatial 
distribution of habitats required to attain population objectives, 
as informed by knowledge and assumptions about factors influencing 
the ability of the landscape to sustain the species (81 FR 83440; 
November 21, 2016).
    Conservation plan (species conservation plan)--a plan developed 
by Federal, State, and/or local government agencies, Tribes, or 
appropriate nongovernmental organizations, in consultation with 
relevant stakeholders, for the specific goal of conserving one or 
more listed or at-risk species. A conservation plan is developed 
using a landscape-scale approach and addresses the status of, needs 
of, and threats to the species, and usually includes recommended 
conservation measures for the conservation/recovery of the species. 
Examples of species conservation plans include species conservation 
frameworks, rangewide conservation plans, and conservation plans 
developed as part of a large landscape habitat conservation plan.
    Covered species--species specifically included in a conservation 
bank, habitat conservation plan, safe harbor agreement, candidate 
conservation agreement with assurances, rangewide conservation plan, 
or other such conservation plan for which a commitment is made to 
achieve specific conservation measures for the species.
    Credit (species credit, habitat credit)--a defined unit 
representing the accrual or attainment of ecological functions and/
or services for a species at a mitigation site or within a 
mitigation program.
    Credit bundling--allowing a single unit of a mitigation site to 
provide compensation for two or more spatially overlapping ecosystem 
functions or services that are grouped together into a single credit 
type and used as a single commodity to compensate for a single 
permitted action. A bundled credit may be used to compensate for all 
or a subset of the functions or services included in the credit type 
but may only be used once, even if all functions and services 
represented in the credit type were not required for the permitted 
action. See also ``credit stacking.''
    Credit reserve account--credits set aside in reserve to offset 
force majeure or other unforeseen events as agreed to by the 
Service, allowing a mitigation program to continue uninterrupted.
    Credit stacking--allowing a single unit of a mitigation site to 
provide two or more credit types representing spatially overlapping 
ecosystem functions or services which can be unstacked and used as 
separate commodities to compensate for different permitted actions. 
Credit stacking can result in double counting (i.e., a net loss of 
resources on the landscape) if the same functions or services are 
not also accounted for separately at all impact sites. See also 
``credit bundling'' and ``double-counting.''
    Credit transfer--the use, sale, or conveyance of credits by a 
bank sponsor or mitigation provider to a permittee or other entity 
for the purposes of offsetting impacts of an action.
    Critical habitat--specific areas within the geographical area 
occupied by the species at the time it is listed as endangered or 
threatened under the Endangered Species Act, on which are found 
those physical or biological features essential to the conservation 
of the species and which may require special management 
considerations or protection; and specific areas outside the 
geographical area occupied by the species at the time it is listed, 
which are determined by the Secretary of the Department of the 
Interior to be areas essential for the conservation of the species 
(16 U.S.C. 1532(5)(A)).
    Cumulative effects--those effects of future State or private 
activities, not involving Federal activities, that are reasonably 
certain to occur within the action area of the Federal action 
subject to consultation under the Endangered Species Act (50 CFR 
402.14(g)(3)). Under the National Environmental Policy Act, 
cumulative effects are defined as the impact on the environment 
which results from the incremental impact of the action when added 
to other past, present, and reasonably foreseeable future actions 
regardless of what agency (Federal or non-Federal) or person 
undertakes such other actions (40 CFR 1508.7).
    Debit--a defined unit representing the loss of ecological 
functions and/or services for a species at an impact site. Debits 
should be expressed using the same metrics used to value credits at 
mitigation sites.
    Direct effects--those effects to the species or other resource 
that are caused by the action and occur at the same time and place 
(81 FR 83440; November 21, 2016).
    Double-counting (double-dipping)--using a credit, however 
defined, representing the same unit of ecosystem function or service 
on a mitigation site more than once. This is not allowed.
    Durability--the condition or state in which the measurable 
environment benefits of the compensatory mitigation project or 
measure are sustained, at a minimum, for the duration of the 
associated impacts (including direct and indirect impacts) of the 
authorized action. To be durable, mitigation measures effectively 
compensate for remaining unavoidable impacts that warrant 
compensatory mitigation; use long-term administrative and legal 
provisions to prevent actions that are incompatible with the 
measure; and employ financial instruments to ensure the availability 
of sufficient funding for the measure's long-term monitoring, site 
protection, and management (600 DM 6.4G).
    Effects (effects of the action)--changes in the environmental 
conditions caused by an action that are relevant to the species or 
other resources (81 FR 83440; November 21, 2016), including the 
direct, indirect, and cumulative effects of the action on the 
species and other activities that are interrelated to, or 
interdependent with, that action as defined at 50 CFR 402.02. See 
also ``cumulative effects.''
    Endangered species--any species which is in danger of extinction 
throughout all or a significant portion of its range (16 U.S.C. 
1532(6)).
    Endowment--as used in this policy, funds that are conveyed 
solely for the long-term stewardship of a mitigation property and 
are permanently restricted to paying the costs of management and 
stewardship of that property. The management of endowment funds is 
generally governed by State and Federal laws, as applicable. 
Endowments do not include funds conveyed for meeting short-term 
performance objectives of a mitigation project.
    Enhancement--activities conducted in existing habitat of the 
species that improve one or more ecological functions or services 
for that species, or otherwise provide added

[[Page 95348]]

benefit to the species and do not negatively affect other resources 
of concern. Compare with ``restoration.''
    Establishment--construction of habitat of a type that did not 
previously exist on a mitigation site but which will provide a 
benefit to the species and does not negatively affect other 
resources of concern. Compare with ``restoration.''
    Fee title (fee)--an interest in land that is the most complete 
and absolute ownership in land; it is of indefinite duration, freely 
transferable, and inheritable.
    Functions--the physical, chemical, and biological processes that 
occur in ecosystems (33 CFR 332.2); functions are the ecological 
processes necessary for meeting species' habitat and lifecycle 
needs.
    Habitat--an area with spatially identifiable physical, chemical, 
and biological attributes that supports one or more life-history 
processes for the species (81 FR 83440; November 21, 2016).
    Habitat conservation plan (HCP)--a planning document that 
describes the anticipated effects of a proposed activity on the 
taking of federally listed species, how those impacts will be 
minimized and mitigated, and how the plan will be funded (16 U.S.C. 
1539). The HCP is required as part of an incidental take permit 
application to the Service or the National Marine Fisheries Service 
(see ``incidental take'').
    Habitat credit exchange (habitat credit exchange program)--a 
market-based system that operates as a clearinghouse in which an 
exchange administrator, acting as a mitigation sponsor, manages 
credit transactions between compensatory mitigation providers and 
permittees or others authorized to implement actions that adversely 
affect protected species.
    Impact(s) (of an action)--adverse effects relative to the 
affected resources (81 FR 83440; November 21, 2016). More 
specifically under this policy, adverse effects on the species or 
its habitat anticipated in a proposed action or resulting from an 
authorized or permitted action.
    Incidental take--take of any endangered or threatened species 
that results from, but is not the purpose of, carrying out an 
otherwise lawful activity conducted by a Federal agency or an 
applicant (50 CFR 402.02). Incidental take may be authorized for 
endangered or threatened species through section 7 or 10, or for 
threatened species, through a rule codified under section 4(d) of 
the Endangered Species Act. (See also, ``take.'')
    Indirect effects--those effects to the species that are caused 
by the action at a later time or another place, but are reasonably 
certain to occur (50 CFR 402.02).
    In-kind--a resource of a similar structural and functional type 
to the impacted resource (33 CFR 332.2); when used in reference to a 
species, in-kind means the same species.
    In-lieu fee program--a program involving the restoration, 
establishment, enhancement, and/or preservation of habitat through 
funds paid to a governmental or nonprofit natural resources 
management entity to satisfy compensatory mitigation requirements 
for impacts to specified species or habitat (modified from 33 CFR 
332.2).
    In-lieu fee program sponsor--any government agency or nonprofit 
natural resources management organization responsible for 
establishing, and in most circumstances, operating an in-lieu fee 
program. See also, ``sponsor.''
    In-lieu fee site--a compensatory mitigation site established 
under an approved in-lieu fee program.
    Landscape--an area encompassing an interacting mosaic of 
ecosystems and human systems that is characterized by a set of 
common management concerns. The landscape is not defined by the size 
of the area, but rather by the interacting elements that are 
relevant and meaningful in a management context (600 DM 6D).
    Landscape-scale approach--an approach to conservation planning 
that applies the mitigation hierarchy for impacts to resources and 
their values, services, and functions at the relevant scale, however 
narrow or broad, necessary to sustain, or otherwise achieve 
established goals for those resources and their values, services, 
and functions. A landscape-scale approach should be used when 
developing and approving strategies or plans, reviewing projects, or 
issuing permits. The approach identifies the needs and baseline 
conditions of targeted resources and their values, services and 
functions, reasonably foreseeable impacts, cumulative impacts of 
past and likely projected disturbance to those resources, and future 
disturbance trends. The approach then uses such information to 
identify priorities for avoidance, minimization, and compensatory 
mitigation measures across that relevant area to provide the maximum 
benefit to the impacted resources and their values, services, and 
functions, with full consideration of the conditions of 
additionality and durability (600 DM 6E).
    Listed species--any species or subspecies of fish, wildlife, or 
plant which has been determined to be endangered or threatened under 
section 4 of the Endangered Species Act (50 CFR 402.02). Listed 
species are found at 50 CFR 17.11 and 17.12.
    Management plan--the stewardship plan prepared to instruct the 
land manager in the operations and biological management for the 
compensatory mitigation site to, at a minimum, maintain the 
functions and services for specified species and other resources on 
the mitigation site. These are generally long-term plans that 
include a detailed estimate of the itemized costs for all management 
actions required by the plan. These annual costs are used to 
estimate the size of the endowment that will be needed to maintain 
and monitor the mitigation site for the intended duration.
    Mitigation (mitigation hierarchy, mitigation sequence)--as 
defined and codified in the Council on Environmental Quality (CEQ) 
National Environmental Policy Act (42 U.S.C. 4321 et seq.) 
regulations (40 CFR 1508.20), mitigation includes:
     Avoid the impact altogether by not taking the action or 
parts of the action;
     Minimize the impact by limiting the degree or magnitude 
of the action and its implementation;
     Rectify the impact by repairing, rehabilitating, or 
restoring the affected environment;
     Reduce or eliminate the impact over time by 
preservation and maintenance operations during the life of the 
action; and
     Compensate for the impact by replacing or providing 
substitute resources or environments.
    This sequence is often condensed to: Avoidance, minimization, 
and compensation.
    Mitigation ratio--the relationship between the amount of the 
compensatory offset for, and the impacts to, the species, habitat 
for the species, or other resource of concern.
    Mitigation sponsor (mitigation project sponsor, sponsor, 
mitigation provider)--any public or private entity responsible for 
establishing, and in most circumstances, operating a compensatory 
mitigation program or project such as a conservation bank, in-lieu 
fee program, or habitat credit exchange (modified from 33 CFR 
332.2).
    Off-site--a mitigation area that is located neither on nor 
adjacent to the same parcel of land as the impact site (33 CFR 
332.2).
    On-site--a mitigation site located on or adjacent to the same 
parcel of land as the impact site (33 CFR 332.2).
    Performance criteria--observable or measurable administrative 
and ecological (physical, chemical, or biological) attributes that 
are used to determine if a compensatory mitigation project meets the 
agreed upon conservation objectives identified in a mitigation 
instrument or the conservation measures proposed as part of a 
permitted or otherwise authorized action.
    Permittee--any person who receives formal approval or 
authorization, generally in the form of a permit or license, from a 
Federal agency to conduct an action. See also, ``applicant.''
    Permittee-responsible mitigation--activities or projects 
undertaken by a permittee or an authorized agent or contractor to 
provide compensatory mitigation for which the permittee retains full 
responsibility. As used in this policy, permittee-responsible 
mitigation also includes compensatory mitigation undertaken by 
Federal agencies to offset impacts resulting from actions carried 
out directly by the Federal agency.
    Perpetuity--endless or infinitely long duration or existence; 
permanent.
    Practicable--available and capable of being done after taking 
into consideration existing technology, logistics, and cost in light 
of a mitigation measure's beneficial value and a land use activity's 
overall purpose, scope, and scale (81 FR 83440; November 21, 2016).
    Preservation--the protection and management of existing 
resources for the species that would not otherwise be protected 
through removal of a threat to, or preventing the decline of, the 
resources to compensate for the loss of the same species or 
resources elsewhere.
    Proponent (project proponent)--the agency proposing an action, 
and if applicable, any applicant(s) for agency funding or 
authorization to implement a proposed action (81 FR 83440; November 
21, 2016). For purposes of this policy, any person, organization, or 
agency advocating a development proposal that is anticipated to 
result in adverse impacts to one or more listed or at-risk species. 
See also, ``applicant'' and ``permittee.''

[[Page 95349]]

    Resources (resources of concern)--fish, wildlife, plants, and 
their habitats for which the Service has authority to recommend or 
require the mitigation of impacts resulting from proposed actions 
(81 FR 83440; November 21, 2016) .
    Restoration--repairing or rehabilitating habitat for the benefit 
of the species on a mitigation site with the goal of returning it to 
its natural/historic habitat type with the same or similar functions 
where they have ceased to exist, or exist in a substantially 
degraded state.
    Retired credit--a credit that is no longer available for use as 
mitigation. Credits that have been sold or otherwise used to fulfill 
a mitigation obligation are considered retired. Credits may also be 
voluntarily retired or forfeited, without being used for mitigation.
    Safe harbor agreement (SHA)--formal agreement between the 
Service or National Marine Fisheries Service and one or more non-
Federal property owners in which property owners voluntarily manage 
for listed species for an agreed amount of time providing a net 
conservation benefit to the species and, in return, receive 
assurances from the Service or National Marine Fisheries Service 
that no additional future regulatory restrictions will be imposed 
(USFWS Safe Harbor Policy). Under the Safe Harbor Policy, ``net 
conservation benefit'' is defined as contributing to the recovery of 
the listed species covered by the SHA.
    Service area--the geographic area within which impacts to the 
species or other resources of concern can be mitigated at a specific 
compensatory mitigation site.
    Species--the term ``species'' includes any species, subspecies 
of fish, or wildlife, or plants, and any distinct population segment 
of any species of vertebrate fish or wildlife which interbreeds when 
mature (16 U.S.C. 1532(16)).
    Take--means to harass, harm, pursue, hunt, shoot, wound, kill, 
trap, capture or collect a federally listed species, or to attempt 
to engage in any such conduct (16 U.S.C. 1532(19)). ``Take'' applies 
only to fish and wildlife, not plants.
    Temporal loss--the cumulative loss of functions and/or services 
relevant to the species attributed to the time between the loss of 
habitat functions and/or services or individuals of the 
population(s) caused by the action and the replacement of habitat 
functions and/or services or repopulation of the species at the 
compensatory mitigation site to the same level had the action not 
occurred.
    Threatened species--any species which is likely to become an 
endangered species within the foreseeable future throughout all or a 
significant portion of its range (16 U.S.C. 1532(20)).
    Unavoidable impact--an impact for which an appropriate and 
practicable alternative to the proposed action that would not cause 
the impact is not available (81 FR 83440; November 21, 2016).

Determinations Under Other Authorities

    As mentioned above, we intend to apply this policy when 
considering the adequacy of compensatory mitigation programs, 
projects, and measures proposed by Federal agencies and applicants 
as part of a proposed action and mitigation sponsors. Below we 
discuss compliance with several Executive Orders and statutes as 
they pertain to this policy.

National Environmental Policy Act (NEPA)

    We have analyzed this policy in accordance with the criteria of 
the National Environmental Policy Act, as amended (NEPA) (42 U.S.C. 
4332(c)), the Council on Environmental Quality's regulations for 
implementing the procedural provisions of NEPA (40 CFR parts 1500-
1508), and the Department of the Interior's NEPA procedures (516 DM 
2 and 8; 43 CFR part 46). Issuance of policies, directives, 
regulations, and guidelines are actions that may generally be 
categorically excluded under NEPA (43 CFR 46.210(i)). Based on 
comments received, we determined that a categorical exclusion can 
apply to this policy; nevertheless, the Service chose to prepare an 
environmental assessment (EA) to inform decision makers and the 
public regarding the possible effects of the policy revisions.
    We announced our intent to prepare an EA pursuant to NEPA when 
we published the draft policy. We requested comments on the scope of 
the NEPA review, information regarding important environmental 
issues that should be addressed, the alternatives to be analyzed, 
and issues that should be addressed at the programmatic stage in 
order to inform the site-specific stage during the comment period on 
the draft policy. Comments from the public were considered in the 
drafting of the final EA. The final EA is available on the Internet 
at http://www.regulations.gov under Docket Number FWS-HQ-ES-2015-
0165.

Paperwork Reduction Act of 1995

    This final policy does not contain any new collections of 
information that require approval by the Office of Management and 
Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.). OMB has reviewed and approved the information 
collection requirements for applications for incidental take 
permits, annual reports, and notifications of incidental take for 
native endangered and threatened species for safe harbor agreements, 
candidate conservation agreements with assurances, and habitat 
conservation plans under OMB Control Number 1018-0094, which expires 
on January 31, 2017. We are currently in the process of seeking 
renewal for OMB Control Number 1018-0094. We 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.

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, we have considered 
possible effects on federally recognized Indian tribes and have 
determined that there are no potential adverse effects of issuing 
this policy. Our intent with the policy is to provide a consistent 
approach to the consideration of compensatory mitigation programs, 
projects, and measures, including those taken on Tribal lands. We 
will work with Tribes as applicants proposing compensatory 
mitigation as part of proposed actions and with Tribes as mitigation 
sponsors.

    Authority: The authorities for this action include the 
Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.), 
and the National Environmental Policy Act (42 U.S.C. 4321 et seq.).

    Dated: December 15, 2016.
Daniel M. Ashe,
Director, U.S. Fish and Wildlife Service.
[FR Doc. 2016-30929 Filed 12-23-16; 8:45 am]
 BILLING CODE 4333-15-P