Federal Register Vol. 81, No.28,

Background

The regulations in 7 CFR part 319 prohibit or restrict the importation of certain plants and plant products into the United States to prevent the introduction of quarantine plant pests. The regulations contained in “Subpart—Plants for Planting,” §§ 319.37 through 319.37-14 (referred to below as the regulations), prohibit or restrict, among other things, the importation of living plants, plant parts, and seeds for propagation or planting.

The regulations differentiate between prohibited articles and restricted articles. Prohibited articles are plants for planting whose importation into the United States is not authorized due to the risk the articles present of introducing or disseminating quarantine plant pests. Restricted articles are articles authorized for importation into the United States, provided that the articles are subject to mitigation measures to address such risk.

Conditions for the importation into the United States of restricted articles in growing media are found in § 319.37-8. Within that section, the introductory text of paragraph (e) lists taxa of restricted articles that may be imported into the United States in approved growing media, subject to the provisions of a systems approach. Paragraph (e)(1) of § 319.37-8 lists the approved growing media, while paragraph (e)(2) contains the provisions of the systems approach. Within paragraph (e)(2), paragraphs (i) through (viii) contain provisions that are generally applicable to all the taxa listed in the introductory text of paragraph (e), while paragraphs (ix) through (xii) contain additional, taxon-specific provisions.

In response to a request from the national plant protection organization (NPPO) of China, on June 1, 2015, in a proposed rule 1 published in the Federal Register (80 FR 30959-30961, Docket No. APHIS-2014-0106), we proposed to amend the introductory text of paragraph (e) of § 319.37-8 to add Phalaenopsis spp. plants for planting from China to the list of taxa authorized for importation into the United States in approved growing media. We also proposed to add a paragraph (e)(2)(xii) to § 319.37-8 that would specify that such plants for planting may only be imported into the continental United States.

We solicited comments concerning our proposal for 60 days ending July 31, 2015. We received eight comments by that date. They were from the NPPO of China, two State departments of agriculture, an organization representing State departments of agriculture, an organization representing horticulture in the State of Hawaii, a plant pathologist specializing in Phalaenopsis spp. plants for planting, and private citizens.

One commenter suggested we finalize the rule, as written. The remaining commenters had questions and comments regarding the rule and its supporting documents. We discuss the comments that we received below, by topic.

In response to the NPPO of China's request, we prepared a pest risk assessment (PRA), titled “Importation of Phalaenopsis spp. Orchids in Growing Media from China into the Continental United States: A Pathway-Initiated Risk Assessment,” to analyze the potential pest risk associated with the importation of Phalaenopsis spp. plants for planting in approved growing media into the continental United States from China. We also prepared a risk management document (RMD), titled “Importation of Phalaenopsis spp. Orchids in Approved Growing Media from China into the Continental United States,” to identify the phytosanitary measures necessary to ensure the safe importation into the continental United States of Phalaenopsis spp. plants for planting in approved growing media from China.

One commenter stated that the PRA did not consider the possibility that viral pathogens of Phalaenopsis spp. plants for planting could be introduced into the continental United States through the importation of Phalaenopsis spp. plants for planting in approved growing media from China.

In developing our PRAs, we first prepare a list of pests of the commodity that we have determined to occur in the particular foreign region. We then determine whether the pests are quarantine pests, which the regulations define as plant pests that are of potential economic importance to the United States and not yet present in the United States, or present but not widely distributed and being officially controlled. If the pests are quarantine pests, we then assess whether they could be introduced into the United States through the importation of the commodity.

The PRA identified five viral pathogens of Phalaenopsis spp. plants for planting that we have determined to occur in China. However, none of these pathogens are quarantine pests. Accordingly, we did not assess whether they are likely to follow the pathway on Phalaenopsis spp. plants for planting in approved growing media from China to the continental United States.

One commenter pointed out that, in the PRA, the list of plant pests of Phalaenopsis spp. plants for planting that are known to occur in China did not include Dickeya dieffenbachiae, a bacterial pathogen, and Colletotrichum karstii, a pathogenic fungus. The commenter stated that these pests occur in China and could follow the pathway on Phalaenopsis spp. plants for planting in approved growing media from China to the continental United States. The commenter concluded that the pests therefore should be added to the PRA, and mitigation measures specific to the pests should be added to the RMD and rule.

D. dieffenbachiae and C. karstii were detected in China after the PRA and RMD were drafted, and we agree with the commenter that they could follow the pathway on Phalaenopsis spp. plants for planting in approved growing media from China to the continental United States. However, we do not consider it necessary to revise the RMD or rule to specify mitigation measures for these pests. We reserve pest-specific mitigation measures for quarantine pests. Neither D. dieffenbachiae nor C. karstii is a quarantine pest: Both are present in the United States, and neither pest is under official control.

Two commenters pointed out that the PRA identified four quarantine pests that could follow the pathway on Phalaenopsis spp. plants for planting in approved growing media from China to the continental United States: Spodoptera litura, Thrips palmi, Cylindrosporium phalaenopsidis, and Lissachatina fulica. The commenters stated that, if these pests became established throughout the United States, they could result in significant economic losses for domestic producers. For this reason, the commenters did not support the proposed rule.

We agree that, if the quarantine pests identified by the PRA were to become established throughout the United States, they could cause economic losses for domestic producers. However, for the reasons specified in the RMD and the proposed rule itself, if the provisions of this rule are adhered to, we have determined that they will mitigate the plant pest risk associated with the importation of Phalaenopsis spp. plants for planting in approved growing media from China.

Because we had identified more pests that could follow the pathway on orchids from Taiwan to the United States than from China to the continental United States, one commenter surmised that we were establishing more favorable trading conditions for China than for Taiwan regarding the export of orchids to the United States.

The commenter's assumption is incorrect. There are more quarantine pests of Oncidium spp. known to occur in Taiwan that could follow the pathway on Oncidium spp. plants for planting in approved growing media from Taiwan to the United States than there are of Phalaenopsis spp. known to occur in China that could follow the pathway on Phalaenopsis spp. plants for planting in approved growing media from China to the continental United States.

Finally, one commenter asked whether we were confident that the PRA had identified all the plant pests of Phalaenopsis spp. plants for planting in China, given China's size.

We are confident. In the PRA, we took into consideration China's size and relied on multiple sources to identify pests of Phalaenopsis spp. plants for planting in China.

One commenter noted that the rule only proposed to authorize the importation of Phalaenopsis spp. plants for planting in approved growing media from China to the continental United States, and did not propose to authorize such importation to Hawaii or the territories of the United States. The commenter asked whether, once Phalaenopsis spp. plants for planting in approved growing media from China enter the continental United States, they subsequently may be shipped to Hawaii or the territories. If the rule does not authorize such reshipment, the commenter asked how we intended to prevent it from occurring.

This rule expressly prohibits such reshipment, and we will use inspections to prevent it from occurring.

We proposed that the Phalaenopsis spp. plants for planting would have to be grown in a greenhouse in which sanitary procedures adequate to exclude quarantine pests are always employed. We proposed that, at a minimum, the greenhouse would have to be free from sand and soil, have screenings with openings of not more than 0.6 mm on all vents and openings except entryways, have entryways equipped with automatic closing doors, regularly clean and disinfect floors, benches, and tools, and use only rainwater that has been boiled or pasteurized, clean well water, or potable water to water the plants.

One commenter stated that plant pest population densities can vary significantly within a foreign region. The commenter expressed concern that sanitary procedures that are adequate to exclude quarantine pests from a greenhouse in one region of China may not be adequate to do so in another region.

Growers must employ sanitary procedures that are adequate to exclude quarantine pests from the Phalaenopsis spp. plants for planting grown at the greenhouse that are intended for export to the United States. These sanitary procedures must therefore correspond to the quarantine pest risk associated with the area in which the greenhouse is located. Accordingly, if the greenhouse is located in an area of China with particularly high population densities of a certain quarantine pest, the grower may need to employ additional safeguards to exclude that pest from affecting plants for planting at the greenhouse. The NPPO of China will make this determination regarding whether additional safeguards are necessary, and will communicate the safeguards needed to the greenhouse in an agreement with the grower. The grower must enter into such an agreement with the NPPO in order to export Phalaenopsis spp. plants for planting in approved growing media to the United States.

Another commenter expressed concern that screenings with openings of 0.6 mm would not preclude T. palmi from entering the greenhouses. The commenter cited studies indicating that 40 to 50 percent of T. palmi that attempt to pass through such an opening can do so.

We agree that screenings with openings of 0.6 mm may not preclude all T. palmi from entering the greenhouse. However, as we mentioned above, in order to comply with the provisions of the systems approach, growers will have to employ sanitary procedures that are sufficient to exclude quarantine pests from the Phalaenopsis spp. intended for export to the United States. Accordingly, growers in areas where T. palmi are present will be expected to develop a pest management plan for T. palmi to address incursions of this pest into the greenhouse; the plan must have sufficient safeguards to prevent Phalaenopsis spp. plants for planting intended for export to the United States from becoming infested with T. palmi. The agreement that the grower enters into with the NPPO of China will specify the additional safeguards that the grower will use.

In the proposed rule, we proposed to add a condition restricting the importation of Phalaenopsis spp. from China in approved growing media to the continental United States to § 319.37-8 as paragraph (e)(2)(xii). In this final rule, it is added as paragraph (e)(2)(xiii).

Therefore, for the reasons given in the proposed rule and in this document, we are adopting the proposed rule as a final rule, with the change discussed in this document.

This rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

In accordance with 5 U.S.C. 604, we have performed a final regulatory flexibility analysis, which is summarized below, regarding the economic effects of this rule on small entities. Copies of the full analysis are available on the Regulations.gov Web site (see footnote 1 in this document for a link to Regulations.gov) or by contacting the person listed under FOR FURTHER INFORMATION CONTACT.

APHIS is amending the regulations in 7 CFR 319.37-8(e) to allow the importation from China into the continental United States of orchids of the genus Phalaenopsis established in an approved growing medium, subject to specified growing, inspection, and certification requirements.

Prior to this rule, Phalaenopsis spp. imported from China were required to be bare-rooted. Eliminating this requirement is expected to increase the number and quality of orchids imported from China by U.S. producers, who then finish the plants for the retail market. This change could result in cost savings for these U.S. producers, which may or may not be passed on to U.S. buyers. The amended regulations could also result in the importation of market-ready Phalaenopsis spp. in approved growing media from China that would directly compete at wholesale and retail levels with U.S. finished potted orchids. The latter scenario is considered unlikely, given the technical challenges and additional marketing costs incurred when shipping finished plants in pots.

While many of the U.S. entities that will be affected by the rule such as orchid producers and importers may be small by Small Business Administration standards, we expect economic effects for these entities to be modest.

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule: (1) Preempts all State and local laws and regulations that are inconsistent with this rule; (2) has no retroactive effect; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

An environmental assessment and finding of no significant impact have been prepared for this final rule. The environmental assessment provides a basis for the conclusion that the importation of Phalaenopsis spp. plants for planting from China, subject to a required systems approach, will not have a significant impact on the quality of the human environment. Based on the finding of no significant impact, the Administrator of the Animal and Plant Health Inspection Service has determined that an environmental impact statement need not be prepared.

The environmental assessment and finding of no significant impact were prepared in accordance with: (1) The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 et seq.), (2) regulations of the Council on Environmental Quality for implementing the procedural provisions of NEPA (40 CFR parts 1500-1508), (3) USDA regulations implementing NEPA (7 CFR part 1b), and (4) APHIS' NEPA Implementing Procedures (7 CFR part 372).

The environmental assessment and finding of no significant impact may be viewed on the Regulations.gov Web site. Copies of the environmental assessment and finding of no significant impact are also available for public inspection at USDA, Room 1141, South Building, 14th Street and Independence Avenue SW., Washington, DC, between 8 a.m. and 4:30 p.m., Monday through Friday, except holidays. Persons wishing to inspect copies are requested to call ahead on (202) 799-7039 to facilitate entry into the reading room. In addition, copies may be obtained by writing to the individual listed under FOR FURTHER INFORMATION CONTACT.

In accordance with section 3507(d) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the information collection or recordkeeping requirements included in this final rule, which were filed under 0579-0439, have been submitted for approval to the Office of Management and Budget (OMB). When OMB notifies us of its decision, if approval is denied, we will publish a document in the Federal Register providing notice of what action we plan to take.

The Animal and Plant Health Inspection Service is committed to compliance with the E-Government Act to promote the use of the Internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes. For information pertinent to E-Government Act compliance related to this final rule, please contact Ms. Kimberly Hardy, APHIS' Information Collection Coordinator, at (301) 851-2727.

Accordingly, we are amending 7 CFR part 319 as follows:

NCUA is correcting a technical error in the final rule NCUA published in the Federal Register on August 11, 2015 (80 FR 48012). This amendment corrects § 702.504(a) of NCUA's regulations by reinstating § 702.504(a)(2) which was inadvertently removed by the August 2015 final rule.

For the reasons discussed above, the National Credit Union Administration amends part 702 as follows:

The FAA has determined that notice of, and opportunity for prior public comment on, these special conditions is impracticable because these procedures would significantly delay issuance of the design approval and thus delivery of the affected airplane.

In addition, the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA therefore finds that good cause exists for making these special conditions effective upon publication in the Federal Register.

We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.

We will consider all comments we receive by the closing date for comments. We may change these special conditions based on the comments we receive.

On January 27, 2012, The Boeing Company applied for an amendment to Type Certificate No. A16WE to include a new Model 737-8 airplane. The Model 737-8 airplane is a narrow-body, transport-category airplane that is a derivative of the Model 737-800 airplane with two CFM LEAP-1B wing-mounted engines.

The Model 737-8 airplane will include electronic flight controls that affect maneuvering.

The current design roll-maneuver requirements in Title 14, Code of Federal Regulations (14 CFR) part 25 are inadequate for addressing an airplane with electronic flight controls that affect maneuvering. These special conditions adjust the current roll-maneuver requirement, § 25.349, to take into account the effects of an electronic flight-control system.

Under the provisions of § 21.101, The Boeing Company must show that the Model 737-8 series airplanes meet the applicable provisions of the regulations listed in type certificate no. A16WE, or the applicable regulations in effect on the date of application for the change except for earlier amendments as agreed upon by the FAA.

The regulations listed in the type certificate are commonly referred to as the “original type-certification basis.” The regulations listed in type certificate no. A16WE are as follows:

14 CFR part 25, effective February 1, 1965, including Amendments 25-1 through 25-134. In addition, the certification basis includes certain special conditions, exemptions, or later amended sections of the applicable part that are not relevant to these special conditions.

If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 25) do not contain adequate or appropriate safety standards for the Model 737-8 series airplanes because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101.

In addition to the applicable airworthiness regulations and special conditions, the Model 737-8 series airplanes must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise-certification requirements of 14 CFR part 36.

The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type-certification basis under § 21.101.

The Model 737-8 series airplanes will incorporate the following novel or unusual design features:

These special conditions differ from current requirements in that they require that the roll maneuver is based on defined actuation of the cockpit roll control as opposed to defined deflections of the aileron itself. Also, the special conditions require an additional load condition at VA, in which the cockpit roll control is returned to neutral following the initial roll input.

These special conditions differ from similar special conditions applied on previous programs. These special conditions are limited to the roll axis only, whereas previous special conditions also included the pitch and yaw axes. Special conditions are no longer needed for the pitch or yaw axes, because Amendment 25-91 takes into account the effects of an electronic flight-control system in those axes (§ 25.331 for pitch and § 25.351 for yaw). On the Model 737-8 series airplanes, only the flight spoilers are fly-by-wire.

These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

As discussed above, these special conditions are applicable to the Boeing Model 737-8 series airplanes. Should Boeing apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, these special conditions would apply to that model as well.

This action affects only certain novel or unusual design features on Boeing Model 737-8 series airplanes. It is not a rule of general applicability.

The substance of these special conditions has been subjected to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. Therefore, because a delay would significantly affect the certification of the airplane, the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting these special conditions upon publication in the Federal Register. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above.

The authority citation for these special conditions is as follows:

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it establishes Class E airspace at Clinton Municipal Airport, Clinton, AR.

On November 30, 2015, the FAA published in the Federal Register a notice of proposed rulemaking (NPRM) to establish Class E airspace extending upward from 700 feet above the surface at Clinton Municipal Airport, Clinton, AR. (80 FR 74736). Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received. The FAA also notes that in the NPRM, the state identifier was incorrectly written as LA, and is corrected in the airspace description to AR.

Class E airspace designations are published in paragraph 6005 of FAA Order 7400.9Z, dated August 6, 2015, and effective September 15, 2015, which is incorporated by reference in 14 CFR part 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

This document amends FAA Order 7400.9Z, Airspace Designations and Reporting Points, dated August 6, 2015, and effective September 15, 2015. FAA Order 7400.9Z is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.9Z lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This action amends Title 14, Code of Federal Regulations (14 CFR), Part 71 by establishing Class E airspace extending upward from 700 feet above the surface within a 6.0-mile radius of Clinton Municipal Airport, Clinton, AR, to accommodate new Standard Instrument Approach Procedures for IFR operations at the airport. Also, the correct state identifier is noted in the airspace description, changing it from LA to AR.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exists that warrant preparation of an environmental assessment.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:

I. Background

The Commission issued the Energy Labeling Rule in 1979, 44 FR 66466 (Nov. 19, 1979) pursuant to the Energy Policy and Conservation Act of 1975 (“EPCA”).1 The Rule covers several categories of major household products, including clothes washers. It requires manufacturers of covered products to disclose specific energy consumption or efficiency information (derived from Department of Energy (“DOE”) test procedures) at the point-of-sale. In addition, each label must include a “range of comparability” indicating the highest and lowest energy consumption or efficiencies for comparable models. The Commission updates these ranges periodically.

The Commission amends its comparability ranges for clothes washers in the Rule based on manufacturer model data derived from the DOE test procedures and submitted to DOE (https://www.regulations.doe.gov/ccms).2 The amendments update the ranges in Appendix F1 and F2 and the sample labels in Appendix L of the Rule. The amendments also include conforming changes to sections 305.7, 305.10, and 305.11 to remove obsolete regulatory text applicable to models produced before March 7, 2015. Manufacturers have until May 11, 2016 to begin using the updated ranges on their labels. As indicated in section 305.10(a) of the Rule, products that have been labeled prior to this effective date need not be relabeled.

The amendments published in this document involve routine, technical and minor, or conforming changes to the labeling requirements in the Rule. Accordingly, the Commission has good cause under section 553(b)(B) of the APA to forgo notice-and comment procedures for these rule amendments. 5 U.S.C. 553(b)(B). These technical amendments merely provide a routine, conforming change to the range information required on EnergyGuide labels. The Commission therefore finds for good cause that public comment for these technical, procedural amendments is impractical and unnecessary.

The provisions of the Regulatory Flexibility Act relating to a Regulatory Flexibility Act analysis (5 U.S.C. 603-604) are not applicable to this proceeding because the amendments do not impose any new obligations on entities regulated under the Energy Labeling Rule. These technical amendments merely provide a routine change to the range information required on EnergyGuide labels. Thus, the amendments will not have a “significant economic impact on a substantial number of small entities.” 3 The Commission has concluded, therefore, that a regulatory flexibility analysis is not necessary, and certifies, under Section 605 of the Regulatory Flexibility Act (5 U.S.C. 605(b)), that the amendments announced today will not have a significant economic impact on a substantial number of small entities.

The current Rule contains recordkeeping, disclosure, testing, and reporting requirements that constitute information collection requirements as defined by 5 CFR 1320.3(c), the definitional provision within the Office of Management and Budget (OMB) regulations that implement the Paperwork Reduction Act (PRA). OMB has approved the Rule's existing information collection requirements through May 31, 2017 (OMB Control No. 3084 0069). The amendments now being adopted do not change the substance or frequency of the recordkeeping, disclosure, or reporting requirements and, therefore, do not require further OMB clearance.

Accordingly, 16 CFR part 305 is amended as follows:

The Commission has issued the following Order:

Commission Regulations governing the offer and sale of commodity futures and option contracts traded on or subject to the regulations of a foreign board of trade to customers located in the U.S. are contained in Part 30 of the Commission's regulations.1 These regulations include requirements for intermediaries with respect to registration, disclosure, capital adequacy, protection of customer funds, recordkeeping and reporting, and sales practice and compliance procedures that are generally comparable to those applicable to transactions on U.S. markets.

In formulating a regulatory program to govern the offer and sale of foreign futures and option products to customers located in the U.S., the Commission, among other things, considered the desirability of ameliorating the potential impact of such a program. Based upon these considerations, the Commission determined to permit persons located outside the U.S. and subject to a comparable regulatory structure in the jurisdiction in which they were located to seek an exemption from certain of the requirements under Part 30 of the Commission's regulations based upon substituted compliance with the regulatory requirements of the foreign jurisdiction.2

Appendix A to Part 30—Interpretative Statement With Respect to the Commission's Exemptive Authority Under § 30.10 of Its Rules (“Appendix A”), generally sets forth the elements the Commission will evaluate in determining whether a particular regulatory program may be found to be comparable for purposes of exemptive relief pursuant to Regulation 30.10.3 These elements include: (1) Registration, authorization or other form of licensing, fitness review or qualification of persons that solicit and accept customer orders; (2) minimum financial requirements for those persons who accept customer funds; (3) protection of customer funds from misapplication; (4) recordkeeping and reporting requirements; (5) sales practice standards; (6) procedures to audit for compliance with, and to take action against those persons who violate, the requirements of the program; and (7) information sharing arrangements between the Commission and the appropriate governmental and/or self-regulatory organization to ensure Commission access on an “as needed” basis to information essential to maintaining standards of customer and market protection within the U.S.

Moreover, the Commission specifically stated in adopting Regulation 30.10 that no exemption of a general nature would be granted unless the persons to whom the exemption is to be applied: (1) Submit to jurisdiction in the U.S. by designating an agent for service of process in the U.S. with respect to transactions subject to Part 30 and filing a copy of the agency agreement with the National Futures Association (“NFA”); (2) agree to provide access to their books and records in the U.S. to the Commission and Department of Justice representatives; and (3) notify NFA of the commencement of business in the U.S.4

On January 23, 2009, KRX petitioned the Commission on behalf of its member firms, located and conducting a financial investment business in the Republic of Korea, for an exemption from the application of the Commission's Part 30 Regulations to those firms. KRX amended its petition on May 3, 2013 with additional information. In support of its petition, KRX stated that granting such an exemption with respect to such firms that it has authorized to conduct foreign futures and option transactions on behalf of customers located in the U.S. would not be contrary to the public interest or to the purposes of the provisions from which the exemption is sought because such firms are subject to a regulatory framework comparable to that imposed by the Act and the regulations thereunder.

Based upon a review of the petition and supplementary materials filed by KRX, the Commission has concluded that the standards for relief set forth in Regulation 30.10 and, in particular, Appendix A thereof, have been met and that compliance with applicable Korean law and KRX rules may be substituted for compliance with those sections of the Act and regulations thereunder more particularly set forth herein.

By this Order, the Commission hereby exempts, subject to specified conditions, those firms identified to the Commission by KRX as eligible for the relief granted herein from:

• Registration with the Commission for firms and for firm representatives;

• The requirement in Commission Regulation 30.6(a) and (d), 17 CFR 30.6(a) and (d), that firms provide customers located in the U.S. with the risk disclosure statements in Commission Regulation 1.55(b), 17 CFR 1.55(b), and Commission Regulation 33.7, 17 CFR 33.7, or as otherwise approved under Commission Regulation 1.55(c), 17 CFR 1.55(c);

• The separate account requirement contained in Commission Regulation 30.7, 17 CFR 30.7;

• Those sections of Part 1 of the Commission's financial regulations that apply to foreign futures and options sold in the U.S. as set forth in Part 30; and

• Those sections of Part 1 of the Commission's regulations relating to books and records which apply to transactions subject to Part 30,

This determination to permit substituted compliance is based on, among other things, the Commission's finding that the regulatory framework governing persons in Korea who would be exempted hereunder provides:

(1) A system of qualification or authorization of firms who deal in transactions subject to regulation under Part 30 that includes, for example, criteria and procedures for granting, monitoring, suspending and revoking licenses, and provisions for requiring and obtaining access to information about authorized firms and persons who act on behalf of such firms;

(2) Financial requirements for firms including, without limitation, a requirement for a minimum level of working capital and daily mark-to-market settlement and/or accounting procedures;

(3) A system for the protection of customer assets that is designed to preclude the use of customer assets to satisfy house obligations and requires separate accounting for such assets;

(4) Recordkeeping and reporting requirements pertaining to financial and trade information;

(5) Sales practice standards for authorized firms and persons acting on their behalf that include, for example, required disclosures to prospective customers and prohibitions on improper trading advice;

(6) Procedures to audit for compliance with, and to redress violations of, the customer protection and sales practice requirements referred to above, including, without limitation, an affirmative surveillance program designed to detect trading activities that take advantage of customers, and the existence of broad powers of investigation relating to sales practice abuses; and

(7) Mechanisms for sharing of information between the Commission, KRX and the Korean regulatory authorities on an “as needed” basis including, without limitation, confirmation data, data necessary to trace funds related to trading futures products subject to regulation in Korea, position data, and data on firms' standing to do business and financial condition.

Commission staff has concluded, upon review of the petition of KRX and accompanying exhibits, that KRX's regulation of financial futures and options intermediaries is comparable to that of the U.S. in the areas specified in Appendix A of Part 30, as described above.

This Order does not provide an exemption from any provision of the Act or regulations thereunder not specified herein, such as the antifraud provision in Regulation 30.9. Moreover, the relief granted is limited to brokerage activities undertaken on behalf of customers located in the U.S. with respect to transactions entered on or subject to the rules of KRX for products that customers located in the U.S. may trade.5 The relief does not extend to regulations relating to trading, directly or indirectly, on U.S. exchanges, and does not pertain to any transaction in swaps, as defined in Section 1a(47) of the Act. For example, a KRX member trading in U.S. markets for its own account would be subject to the Commission's large trader reporting requirements.6 Similarly, if such a firm were carrying positions on a U.S. exchange on behalf of foreign clients and submitted such transactions for clearing on an omnibus basis through a firm registered as a futures commission merchant under the Act, it would be subject to the reporting requirements applicable to foreign brokers.7 The relief herein is inapplicable where the firm solicits or accepts orders from customers located in the U.S. for transactions on U.S. markets. In that case, the firm must comply with all applicable U.S. laws and regulations, including the requirement to register in the appropriate capacity.

The eligibility of any firm to seek relief under this exemptive Order is subject to the following conditions:

(1) The regulatory or self-regulatory organization responsible for monitoring the compliance of such firms with the regulatory requirements described in the Regulation 30.10 petition must represent in writing to the Commission that:

(a) Each firm for which relief is sought is registered, licensed or authorized, as appropriate, and is otherwise in good standing under the standards in place in Korea; such firm is engaged in business with customers located in Korea as well as in the U.S.; and such firm and its principals and employees who engage in activities subject to Part 30 would not be statutorily disqualified from registration under Section 8a(2) of the Act, 7 U.S.C. 12a(2);

(b) It will monitor firms to which relief is granted for compliance with the regulatory requirements for which substituted compliance is accepted and will promptly notify the Commission or NFA of any change in status of a firm that would affect its continued eligibility for the exemption granted hereunder, including the termination of its activities in the U.S.;

(c) All transactions with respect to customers located in the U.S. will be made subject to the regulations of KRX, and the Commission will receive prompt notice of all material changes to the relevant laws in Korea, any rules promulgated thereunder and KRX rules;

(d) Customers located in the U.S. will be provided no less stringent regulatory protection than Korea customers under all relevant provisions of Korean law; and

(e) It will cooperate with the Commission with respect to any inquiries concerning any activity subject to regulation under the Part 30 Regulations, including sharing the information specified in Appendix A on an “as needed” basis and will use its best efforts to notify the Commission if it becomes aware of any information that in its judgment affects the financial or operational viability of a member firm doing business in the U.S. under the exemption granted by this Order.

(2) Each firm seeking relief hereunder must represent in writing that it:

(a) Is located outside the U.S., its territories and possessions and, where applicable, has subsidiaries or affiliates domiciled in the U.S. with a related business (e.g., banks and broker/dealer affiliates) along with a brief description of each subsidiary's or affiliate's identity and principal business in the U.S.;

(b) Consents to jurisdiction in the U.S. under the Act by filing a valid and binding appointment of an agent in the U.S. for service of process in accordance with the requirements set forth in Regulation 30.5;

(c) Agrees to provide access to its books and records related to transactions under Part 30 required to be maintained under the applicable statutes and regulations in effect in Korea upon the request of any representative of the Commission or U.S. Department of Justice at the place in the U.S. designated by such representative, within 72 hours, or such lesser period of time as specified by that representative as may be reasonable under the circumstances after notice of the request;

(d) Has no principal or employee who solicits or accepts orders from customers located in the U.S. who would be disqualified under Section 8a(2) of the Act, 7 U.S.C. 12a(2), from doing business in the U.S.;

(e) Consents to participate in any NFA arbitration program that offers a procedure for resolving customer disputes on the papers where such disputes involve representations or activities with respect to transactions under Part 30, and consents to notify customers located in the U.S. of the availability of such a program; provided, however, that the firm may require its customers located in the U.S. to execute a consent concerning the exhaustion of certain mediation or conciliation procedures made available by KRX prior to bringing an NFA arbitration proceeding; and

(f) Undertakes to comply with the applicable provisions of Korean laws and KRX rules that form the basis upon which this exemption from certain provisions of the Act and regulations thereunder is granted.

The Commission also confirms that KRX members that receive confirmation of relief set forth herein may engage in limited marketing conduct with respect to certain qualified customers located in the U.S. from a non-permanent location in the U.S., subject to the terms and conditions set forth in prior Commission Orders.9 The Commission notes that any firm and their employees or other representatives which engage in marketing conduct pursuant to this relief are deemed to have consented to the Commission's jurisdiction over such marketing activities by their filing of a valid and binding appointment of an agent in the U.S. for service of process.

This Order will become effective as to any designated KRX firm the later of the date of publication of the Order in the Federal Register or the filing of the consents set forth in paragraphs (2)(a)-(f). Upon filing of the notice required under paragraph (1)(b) as to any such firm, the relief granted by this Order may be suspended immediately as to that firm. That suspension will remain in effect pending further notice by the Commission, or the Commission's designee, to the firm and KRX.

This Order is issued pursuant to Regulation 30.10 based on the representations made and supporting material provided to the Commission and the recommendation of the staff, and is made effective as to any firm granted relief hereunder based upon the filings and representations of such firms required hereunder. Any material changes or omissions in the facts and circumstances pursuant to which this Order is granted might require the Commission to reconsider its finding that the standards for relief set forth in Regulation 30.10 and, in particular, Appendix A, have been met. Further, if experience demonstrates that the continued effectiveness of this Order in general, or with respect to a particular firm, would be contrary to public policy or the public interest, or that the systems in place for the exchange of information or other circumstances do not warrant continuation of the exemptive relief granted herein, the Commission may condition, modify, suspend, terminate, withhold as to a specific firm, or otherwise restrict the exemptive relief granted in this Order, as appropriate, on its own motion.

The Commission will continue to monitor the implementation of its program to exempt firms located in jurisdictions generally deemed to have a comparable regulatory program from the application of certain of the foreign futures and option regulations and will make necessary adjustments if appropriate.

The Burlington Northern Santa Fe Railroad company requested a temporary deviation from the operating schedule for the swing span drawbridge across Des Allemands Bayou, mile 14.0, at Des Allemands, St. Charles and Lafourche Parishes, Louisiana. The deviation was requested to accommodate a necessary swing span replacement. The draw currently operates under 33 CFR 117.440(b).

For purposes of this deviation, the bridge will remain closed to navigation from 6 a.m. February 21, 2016 through 11:59 p.m. April 1, 2016. During this 42-day deviation, vessels will not be allowed to pass through the bridge. The bridge has a vertical clearance of three feet above mean high water in the closed-to-navigation position and unlimited in the open-to-navigation position. Navigation on the waterway consists of tugs with tows, fishing vessels and recreational craft.

The Coast Guard will also inform the users of the waterway through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge. The bridge will not be able to open for emergencies and there is no immediate alternate route for vessels to pass.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

The Burlington Northern Santa Fe Railway Company requested a temporary deviation from the operating schedule of the Galveston Causeway Railroad Vertical Lift Bridge across the Gulf Intracoastal Waterway, mile 357.2 west of Harvey Locks, at Galveston, Galveston County, Texas. This deviation was requested to allow the bridge owner to complete cable lubing and scheduled semi-annual maintenance. This bridge is governed by 33 CFR 117.5.

This deviation allows the vertical lift bridge to remain closed to navigation from 7 a.m. to 11 a.m. and then again from 1 p.m. to 5 p.m., daily, beginning March 7 through March 11, 2016. The bridge has a vertical clearance of 8.0 feet above mean high water, elevation 3.0 feet (NAVD88), in the closed-to-navigation position and 73 feet above mean high water in the open-to-navigation position. Navigation at the site of the bridge consists mainly of tows with barges and some recreational pleasure craft.

Vessels able to pass through the bridge in the closed position may do so at any time and should pass at the slowest safe speed. The bridge can open in case of emergency. No alternate routes are available.

The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

The Contract Disputes Act of 1978, as amended, established the Postal Service Board of Contract Appeals (PSBCA), and prescribed that its members consist of judges appointed by the Postmaster General, who shall meet the qualifications of and serve in the same manner as the members of the Civilian Board of Contract Appeals. (See 41 U.S.C. 7105(d)). The Board's current rules of practice state at 39 CFR 955.1(b)(2) that the Board consists of the Judicial Officer as Chairman, the Associate Judicial Officer as Vice Chairman, and the Judges of the Board, as appointed by the Postmaster General in accordance with the Contract Disputes Act of 1978, 41 U.S.C. 7101-7109, which reflected the Board's structure at the time the rules were implemented. While the Judicial Officer is appointed in accordance with the provisions of 39 U.S.C. 204, and serves as Chairman of the PSBCA, there is no statutory or other legal requirement that the Associate Judicial Officer serve as Vice Chairman.

Accordingly, to enhance the efficiency and operational flexibility of the PSBCA, this document amends § 955.1(b)(2) by removing the statement reflecting the PSBCA's previously existing structure where the Associate Judicial Officer served as Vice Chairman of the Board, thus allowing any Judge of the Board to serve in that capacity. No other changes to the rules have been made.

Accordingly, for the reasons stated, the Postal Service hereby amends 39 CFR part 955 as follows:

Throughout this document, “we,” “us,” and “our” refer to the EPA.

On March 10, 2015 and January 13, 2016, the Arizona Department of Environmental Quality (ADEQ) submitted rescissions of certain statutory and regulatory provisions from the applicable Arizona State Implementation Plan (SIP). The rescissions relate to certain statutory provisions, administrative and prohibitory rules, and test methods. In the January 13, 2016 submittal, ADEQ included evidence of public notification of the rescissions (including the rescissions submitted on March 10, 2015), provision of a 30-day comment period, and opportunity for public hearing. See appendix A to the January 13, 2016 SIP revision submittal for documentation of ADEQ's public process prior to adoption and submittal of the revision to the EPA.

Table 1 lists the statutory and regulatory provisions that ADEQ has rescinded,1 the dates on which the EPA approved the provisions as part of the SIP, and the dates on which ADEQ submitted the rescissions to the EPA. Under section 110(k)(3) of the Clean Air Act (CAA or “Act”), the EPA is obligated to approve, disapprove, or conditionally approve SIPs and SIP revisions, including rescissions.

Generally, SIP requirements must be enforceable (see section 110(a) of the Act), and SIP revisions must not modify the SIP inconsistent with sections 110(l) and 193. Section 110(l) prohibits the EPA from approving a revision to a SIP if the revision would interfere with any applicable requirement concerning attainment and reasonable further progress or any other applicable requirement of the CAA. Section 193 states that no control requirement in effect, or required to be adopted by an order, settlement agreement, or plan in effect before November 15, 1990, in any area which is a nonattainment area for any pollutant may be modified after November 15, 1990 in any manner unless the modification insures equivalent or greater emissions reductions of such air pollutant.

In today's action, we review, evaluate, and approve ADEQ's submittals dated March 10, 2015 and January 13, 2016 of revisions to the Arizona SIP involving rescissions of certain statutory and regulatory provisions that fall into four categories: (1) Declarations of policy and legal authority, (2) jurisdiction over Indian lands, (3) prohibitory rules, and (4) test methods and performance test specifications.

The EPA approved ARS section 36-1700 (“Declaration of Policy”) in May 1972 as part of the original Arizona SIP, and then approved it again in July 1972, and then again, as amended, in June 1982. See table 1 above. ARS section 36-1700 is a general statement of policy by the Arizona Legislature and sets forth the intent of the Legislature in establishing an air pollution control program in the state. As such, ARS section 36-1700 does not provide specific authority to any administrative agency to fulfill any particular regulatory function, nor does it establish any type of emissions standard or address any particular requirement for SIPs under the CAA. As such, we find that ARS section 36-1700 need not be retained in the Arizona SIP and thus find the state's corresponding rescission to be acceptable.

As shown in table 1, the EPA approved Arizona air pollution control rule 7-1-9.1 (“Policy and legal authority”) in July 1972 and then again as amended and renumbered (as R9-3-1001) in August 1978. Arizona rule 7-1-9.1 (R9-3-1001) cites the legal authority under which the rules relating to motor vehicle inspection and maintenance are adopted and also includes a general statement of policy. The specific statutory provisions cited by rule 7-1-9.1 (R9-3-1001) have been approved into the applicable SIP and, as discussed above, general statements of policy are not required for SIPs. As such, we find no need to retain rule 7-1-9.1 or its renumbered version R9-3-1001 in the applicable Arizona SIP. Therefore, we find the state's rescission of the two rules from the Arizona SIP to be acceptable.

The EPA approved chapter 2, section 2.9 (“Legal authority—Jurisdiction over Indian Lands”) and ARS section 36-1801 (“Jurisdiction over Indian Lands”) in July 1972. As described in chapter 2, section 2.9 of the Arizona SIP, under ARS section 36-1801, the State of Arizona assumed jurisdiction relating to air pollution control on all lands within the state including Indian tribal lands, reservations, and allotments.

ARS section 36-1801 was recodified as ARS section 49-561 in 1986, but is no longer found in Arizona law. More importantly, the state's assumption of jurisdiction relating to air pollution control on Indian reservations conflicts with federal law. See generally CAA section 301(d) and the EPA's tribal authority rule at 40 CFR part 49 (“Indian country: air quality planning and management”). More specifically, within the boundaries of an Indian reservation and any other area for which the EPA or a tribe has demonstrated that a tribe has jurisdiction, the EPA or authorized tribe has regulatory jurisdiction under the Clean Air Act. See Oklahoma Department of Environmental Quality v. EPA, 740 F.3d 185 (D.C. Cir. 2014). As such, ARS section 36-1801 should not be retained, and the EPA finds the state's corresponding rescissions of chapter 2, section 2.9 and ARS section 36-1801 from the Arizona SIP to be appropriate.

On March 10, 2015, the ADEQ submitted rescissions of the following rules from the Arizona SIP because there are no secondary lead smelters, secondary brass and bronze ingot productions plants, iron and steel plants, or electric arc furnaces (EAF) under the ADEQ's jurisdiction:

• R9-3-511, Standards of Performance for Existing Secondary Lead Smelters,

• R9-3-512, Standards of Performance for Existing Secondary Brass and Bronze Ingot Production Plants,

• R9-3-513, Standards of Performance for Existing Iron and Steel Plants, and

• R9-3-517, Standards of Performance for Steel Plants; Existing Electric Arc Furnaces (EAF).

To determine that there are no operating facilities in the state that fall under one of the specified source categories, ADEQ reviewed its permit and emissions inventory systems and consulted with knowledgeable staff. As a result of these searches, ADEQ determined that there are no operating facilities within ADEQ's jurisdiction that fall under these source categories.

On January 13, 2016, ADEQ also submitted a rescission of another rule, Arizona air pollution control rule 7-1-4.3 (“Sulfur Pulp Mills”), which was approved by the EPA in July 1972 and again in July 1978 as rule 7-1-4.3 (R9-3-403) (”Sulfur Emissions: Sulfite Pulp Mills”). Like the four prohibitory rules discussed above, no facilities remain in operation in Arizona that are subject to the requirements of rule 7-1-4.3. Therefore, we find the ADEQ's rescissions of the prohibitory rules discussed above from the Arizona SIP to be acceptable.

In April 1982, the EPA approved sections 3 and 4 of the Arizona Testing Manual for Air Pollutant Emissions (“Arizona Testing Manual”) as a revision to the Arizona SIP. Section 3 of the Arizona Testing Manual includes certain test methods from 40 CFR part 60, appendix A, and section 4 of the Arizona Testing Manual includes certain performance test specifications from 40 CFR part 60, appendix B. Both the test methods and performance test methods approved into the Arizona SIP date from the 1970s.

Over the years, the EPA's test methods and performance specifications in 40 CFR part 60 have been revised, and thus, the versions of the test methods and performance test specifications approved as part of the Arizona SIP are outdated. Also, in recent years, the EPA has approved two state rules that in effect incorporate more recent versions of the EPA's test methods and performance specifications into the Arizona SIP. See Arizona Administrative Code (AAC) R18-2-311 (“Test Methods and Procedures”) and appendix 2 (“Test Methods and Protocols”) for AAC, title 18, chapter 2.2 See 80 FR 67319 (November 2, 2015) and 79 FR 56655 (September 23, 2014). As such, the outdated test methods and performance test specifications approved as part of the Arizona Testing Manual need not be retained in the Arizona SIP. Thus, we find ADEQ's rescission of them to be acceptable.

The EPA has evaluated all the submittal documentation and has determined that the rescission of the statutory and regulatory provisions listed in table 1 is approvable because (1) the statements of policy and legal authority are not necessary to fulfill any CAA SIP purpose; (2) the provisions asserting jurisdiction over Indian reservations conflict with federal law; (3) ADEQ has adequately demonstrated that there are no existing sources subject to the listed prohibitory rules; and (4) the test methods and performance test specifications are outdated and other SIP provisions provide for use of more up-to-date procedures. Furthermore, with respect to the subject prohibitory rules, the emissions from any new facilities of the type that would have been subject to these rules will be subject to applicable New Source Review rules and New Source Performance Standards, which can reasonably be assumed to result in more stringent emission limits than would apply under these rules.

Therefore, rescission of the statutory provisions and rules listed in table 1 would not interfere with attainment or maintenance of any of the national ambient air quality standards or any other requirements of the Clean Air Act and would not affect emissions of nonattainment pollutants. As such, the rescission would comply with sections 110(l) and 193 of the Clean Air Act. For these reasons, we approve ADEQ's rescissions of the statutory and regulatory provisions listed in table 1 from the Arizona SIP.

Section 110(k)(6) of the CAA provides in relevant part that, whenever the EPA determines that the EPA's action approving, disapproving, or promulgating any SIP or SIP revision was in error, the EPA may in the same manner as the approval, disapproval, or promulgation revise such action as appropriate without requiring any further submission from the state. In today's action, we are correcting four errors made in previous rulemakings approving revisions to the Arizona SIP.

First, on July 31, 1978 (43 FR 33245), we approved certain state prohibitory rules as a revision to the Arizona SIP. Among the rules listed as approved was R9-3-301 (“Visible emissions—General”). However, the preamble of our July 31, 1978 final rule clearly indicates that the EPA did not intend to take action on this rule (see 43 FR 33245, at 33246) but mistakenly listed R9-3-301 as approved in the regulatory portion of the final rule. In this action, we are correcting the error in our July 31, 1978 final rule by removing the entry for R9-3-301 from the relevant paragraph in 40 CFR 52.120 (“Identification of plan”).

Second, on October 10, 1980 (45 FR 67345), we approved the state's January 26, 1979 request to redesignate the Air Quality Control Regions (AQCRs) in Arizona as a revision to the Arizona SIP. However, the state's request for redesignation of the Arizona AQCRs was made under section 107, not section 110, of the CAA, and while the EPA appropriately made certain administrative changes to 40 CFR part 52 (“Approval and promulgation of implementation plans”), subpart D (“Arizona”) and 40 CFR part 81 (“Designation of areas for air quality planning purposes”), subpart B (“Designation of air quality control regions”), the redesignation request itself was not a SIP revision. As such, we erred in listing the state's January 26, 1979 redesignation request as an approved revision to the Arizona SIP in 40 CFR part 52 (“Approval and promulgation of implementation plans”), subpart D (“Arizona”), section 52.120 (“Identification of plan”), paragraph 52.120(c)(30). In today's action, we are removing the entry of the state's January 26, 1979 redesignation request from 40 CFR 52.120.

Third, on June 18, 1982 (47 FR 26382), we approved certain statutory provisions as a revision to the Arizona SIP. In so doing, we approved Arizona Revised Statutes (ARS) section 36-1720.02 (“Defenses”). However, the correct citation for this particular statutory provision was ARS section 36-1720.01, not ARS section 36-1720.02. In today's action, we are correcting the citation to this statutory provision in the relevant paragraph in 40 CFR 52.120 (“Identification of plan”).

Fourth, on March 10, 2005 (70 FR 11882), we approved a request submitted on September 13, 2004 by the ADEQ to clarify the description of the air quality planning area for the Phoenix PM10 nonattainment area. In our March 10, 2005 final rule, we revised the PM10 table in 40 CFR part 81 (“Designation of areas for air quality planning purposes”), subpart C (“Section 107 attainment status designations”), section 81.303 (“Arizona”) accordingly, but we also listed the state's September 13, 2004 boundary clarification request as an approval of a revision to the Arizona SIP. However, the state's September 13, 2005 request was submitted under CAA section 107, not as a revision to the SIP under section 110, and thus our listing of it as part of the SIP in 40 CFR 52.120 (“Identification of plan”) was in error. In today's action, we are removing the entry of the ADEQ's September 13, 2004 boundary clarification request from 40 CFR 52.120.

Lastly, in a final rule published by the Federal Communications Commission at 63 FR 16441 (April 3, 1998), 40 CFR 52.111 (“Toll free number assignment”) was inadvertently added to subpart D (“Arizona”) of part 52 (“Approval and promulgation of implementation plans”). The provisions now found at 40 CFR 52.111 were intended to be promulgated in title 47, not title 40, and have nothing to do with SIPs. In today's action, we are correcting this error by removing 40 CFR 52.111 from the CFR.

As authorized in section 110(k)(3) of the Act, the EPA is approving the state's rescission of the statutory and regulatory provisions listed in table 1 from the Arizona SIP because we believe they are no longer necessary to retain. Under section 110(k)(6), we are also correcting errors in certain previous actions by the EPA on prior Arizona SIP revisions. The error corrections relate to an inadvertent listing of a rule on which the EPA did not take action in the Arizona SIP, a typographical error, and erroneous approvals of non-SIP submittals as part of the SIP.

We do not think anyone will object to these actions, so we are finalizing them without proposing them in advance. However, in the Proposed Rules section of this Federal Register, we are simultaneously proposing rescission of the same provisions and correction of the same errors. If we receive adverse comments by March 14, 2016, we will publish a timely withdrawal in the Federal Register to notify the public that the direct final approval will not take effect and we will address the comments in a subsequent final action based on the proposal. If we do not receive timely adverse comments, the direct final approval will be effective without further notice on April 11, 2016.

Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely rescinds state statutes, rules, and test methods as unnecessary to retain in the applicable SIP and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

• is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);

• does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and

• does not provide the EPA with the discretionary authority to address disproportionate human health or environmental effects with practical, appropriate, and legally permissible methods under Executive Order 12898 (59 FR 7629, February 16, 1994).

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. The EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by April 11, 2016. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel notice of proposed rulemaking for this action published in the Proposed Rules section of today's Federal Register, rather than file an immediate petition for judicial review of this direct final rule, so that the EPA can withdraw this direct final rule and address the comment in the proposed rulemaking. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).

Part 52, Chapter I, Title 40 of the Code of Federal Regulations is amended as follows:

Background

Section 7(a)(2) of the Act requires Federal agencies, in consultation with and with the assistance of the Secretaries of the Interior and Commerce, to insure that their actions are not likely to jeopardize the continued existence of endangered or threatened species or result in the destruction or adverse modification of critical habitat of such species (16 U.S.C. 1536(a)(2)). The Act defines critical habitat as the specific areas within the geographical area occupied by the species, at the time it is listed in accordance with the provisions of section 4 of the Act, on which are found those physical or biological features (1) essential to the conservation of the species and (2) which may require special management considerations or protection, as well as specific areas outside the geographical area occupied by the species at the time it is listed in accordance with the provisions of section 4 of the Act, upon a determination by the Secretary that such areas are essential for the conservation of the species (16 U.S.C. 1532(5)(A)). Conservation means to use and the use of all methods and procedures that are necessary to bring any endangered species or threatened species to the point at which the measures provided pursuant to the Act are no longer necessary (16 U.S.C. 1532(3)). The Act does not define “destruction or adverse modification.” The Services carry out the Act via regulations in title 50 of the Code of Federal Regulations (CFR).

In 1978, the Services promulgated regulations governing interagency cooperation under section 7(a)(2) of the Act that defined “destruction or adverse modification” in part as a “direct or indirect alteration of critical habitat which appreciably diminishes the value of that habitat for survival and recovery of a listed species. Such alterations include but are not limited to those diminishing the requirements for survival and recovery . . . ” (43 FR 870, January 4, 1978). In 1986, the Services amended the definition to read “a direct or indirect alteration that appreciably diminishes the value of critical habitat for both the survival and recovery of a listed species. Such alterations include, but are not limited to, alterations adversely modifying any of those physical or biological features that were the basis for determining the habitat to be critical” (51 FR 19926, June 3, 1986; codified at 50 CFR 402.02). In 1998, the Services provided a clarification of usage of the term “appreciably diminish the value” in the Endangered Species Consultation Handbook: Procedures for Conducting Consultation and Conference Activities Under Section 7 of the Act (i.e., the Handbook; http://http://www.fws.gov/endangered/esa-library/pdf/esa_section7_handbook.pdf) as follows: “to considerably reduce the capability of designated or proposed critical habitat to satisfy requirements essential to both the survival and recovery of a listed species.”

In 2001, the Fifth Circuit Court of Appeals reviewed the 1986 definition and found it exceeded the Service's discretion by requiring an action to appreciably diminish a species' survival and recovery to trigger a finding of “destruction or adverse modification.” Sierra Club v. U.S. Fish and Wildlife Service, 245 F.3d 434 (5th Cir. 2001). As stated in the decision (Sierra Club, at 441-42 (citations omitted) (emphasis in original)):

In 2004, the Ninth Circuit Court of Appeals also reviewed the 1986 definition and found portions of the definition to be facially invalid. Gifford Pinchot Task Force v. U.S. Fish and Wildlife Service, 378 F.3d 1059 (9th Cir. 2004). The Ninth Circuit, following similar reasoning set out in the Sierra Club decision, determined that Congress viewed conservation and survival as “distinct, though complementary, goals, and the requirement to preserve critical habitat is designed to promote both conservation and survival.” Gifford Pinchot Task Force, at 1070. Specifically, the court found that “the purpose of establishing `critical habitat' is for the government to designate habitat that is not only necessary for the species' survival but also essential for the species' recovery.” Id. “Congress said that `destruction or adverse modification' could occur when sufficient critical habitat is lost so as to threaten a species' recovery even if there remains sufficient critical habitat for the species' survival.” Id.

After the Ninth Circuit's decision, the Services each issued guidance to discontinue the use of the 1986 definition (FWS Acting Director Marshall Jones Memo to Regional Directors, “Application of the `Destruction or Adverse Modification' Standard under Section 7(a)(2) of the Act, 2004;” NMFS Assistant Administrator William T. Hogarth Memo to Regional Administrators, “Application of the `Destruction or Adverse Modification' Standard under Section 7(a)(2) of the Act, 2005”). Specifically, in evaluating an action's effects on critical habitat as part of interagency consultation, the Services began directly applying the definition of “conservation” as set out in the Act. The guidance instructs the Services' biologists, after examining the baseline and the effects of the action, to determine whether critical habitat would remain functional (or retain the current ability for the primary constituent elements to be functionally established) to serve the intended conservation role for the species, upon implementation of the Federal action under consultation. “Primary constituent elements” was a term introduced in the critical habitat designation regulations (50 CFR 424.12) to describe aspects of “physical or biological features,” which are referenced in the statutory definition of “critical habitat”; the Services have proposed to remove the term “primary constituent elements” and return to the statutory term “physical or biological features.” See 79 FR 27066, May 12, 2014.

On May 12, 2014, the Services proposed the following regulatory definition to address the relevant case law and to formalize the Services' guidance: “Destruction or adverse modification means a direct or indirect alteration that appreciably diminishes the conservation value of critical habitat for listed species. Such alterations may include, but are not limited to, effects that preclude or significantly delay the development of the physical or biological features that support the life-history needs of the species for recovery.” See 79 FR 27060, May 12, 2014. In the preamble to the proposed rule, we explained that the proposed definition was intended to align with the conservation purposes of the Act. The first sentence captured the role that critical habitat should play for the recovery of listed species. The second sentence acknowledged that some physical or biological features may not be present or may be present in suboptimal quantity or quality at the time of designation.

We solicited comments on the proposed rule for a total of 150 days. We received 176 comments.

This final rule aligns the regulatory definition of “destruction or adverse modification” with the conservation purposes of the Act and the Act's definition of “critical habitat.” It continues to focus on the role that critical habitat plays for the conservation of listed species and acknowledges that the development of physical and biological features may be necessary to enable the critical habitat to support the species' recovery. Though we made minor changes to clarify our intent, these changes do not alter the overall meaning of the proposed definition. We do not expect this final rule to alter the section 7(a)(2) consultation process from our current practice, and previously completed biological opinions do not need to be reevaluated in light of this rule.

In our final definition, to avoid unnecessary confusion and more closely track the statutory definition of critical habitat, we replaced two “terms of art” introduced in the proposed definition with language that explained the intended meanings. In addition, we modified the second sentence of the definition to avoid unintentionally giving the impression that the proposed definition had a narrower focus than the 1986 definition.

First, as described in detail under the Summary of Comments section below, many commenters suggested that we replace two terms, “conservation value” and “life-history needs,” in the proposed definition with simpler language more clearly conveying their intended meanings. After reviewing the comments, we agreed that use of these terms was unnecessary and led to unintended confusion. We modified the proposed definition accordingly. Specifically, we replaced “conservation value of critical habitat for listed species” with “the value of critical habitat for the conservation of a listed species.” We also replaced “physical or biological features that support life-history needs of the species for recovery” in the second sentence with “physical or biological features essential to the conservation of a listed species.” These revisions avoid introducing previously undefined terms without changing the meaning of the proposed definition. Furthermore, these revisions better align with the conservation purposes of the Act, by using language from the statutory definition of “critical habitat” (i.e., “physical or biological features essential to the conservation of the species”).

Second, commenters also expressed concern that, in their perception, the Services proposed a significant change in practice by appearing to focus the definition on the preclusion or delay of the development of physical or biological features, to the exclusion of the alteration of existing features. We did not intend the proposed definition to signal such a shift in focus. Rather, we believed the first sentence of the proposed definition captured both types of alteration: those of existing features as well as those that would preclude or delay future development of such features. We intended the second sentence of the proposed definition to merely emphasize this latter type of alteration because of its less obvious nature. Because the second sentence of the 1986 definition expressly refers to alterations adversely modifying physical or biological features and to avoid any perceived shift in focus, we revised the proposed definition to explicitly reference alterations affecting the physical or biological features essential to the conservation of a species, as well as those that preclude or significantly delay development of such features.

After considering public comments, Congressional intent, relevant case law, and the Services' collective experience in applying the “destruction or adverse modification” standard over the last three decades, we finalize the following regulatory definition: Destruction or adverse modification means a direct or indirect alteration that appreciably diminishes the value of critical habitat for the conservation of a listed species. Such alterations may include, but are not limited to, those that alter the physical or biological features essential to the conservation of a species or that preclude or significantly delay development of such features.

As described in the preamble to the proposed rule, the “destruction or adverse modification” definition focuses on how Federal actions affect the quantity and quality of the physical or biological features in the designated critical habitat for a listed species and, especially in the case of unoccupied habitat, on any impacts to the critical habitat itself. Specifically, the Services will generally conclude that a Federal action is likely to “destroy or adversely modify” designated critical habitat if the action results in an alteration of the quantity or quality of the essential physical or biological features of designated critical habitat, or that precludes or significantly delays the capacity of that habitat to develop those features over time, and if the effect of the alteration is to appreciably diminish the value of critical habitat for the conservation of the species. If the Services make a destruction or adverse modification determination, they will develop reasonable and prudent alternatives on a case by case basis and based on the best scientific and commercial data available.

As also described in the preamble to the proposed rule, the Services may consider other kinds of impacts to designated critical habitat. For example, some areas that are currently in a degraded condition may have been designated as critical habitat for their potential to develop or improve and eventually provide the needed ecological functions to support species' recovery. Under these circumstances, the Services generally conclude that an action is likely to “destroy or adversely modify” the designated critical habitat if the action alters it to prevent it from improving over time relative to its pre-action condition. It is important to note that the “destruction or adverse modification” definition applies to all physical or biological features; as described in the proposed revision to the current definition of “physical or biological features” (50 CFR 424.12), “[f]eatures may include habitat characteristics that support ephemeral or dynamic habitat conditions” (79 FR 27066, May 12, 2014).

In our proposed rule (79 FR 27060, May 12, 2014), we requested written comments from the public for 60 days, ending July 11, 2014. We received several requests to extend the public comment period, and we subsequently published a notice (79 FR 36284, June 26, 2014) extending the comment period by an additional 90 days, through October 9, 2014.

During the public comment period, we received approximately 176 comments. We received comments from Tribes, State and local governments, industry, conservation organizations, private citizens, and others.

We considered all substantive information provided during the comment period and, as appropriate, incorporated suggested revisions into this final rule. Here, we summarize the comments, grouped by issue, and provide our responses.

Comment on “conservation” versus “recovery”: A few commenters suggested that conservation is not recovery. One commenter suggested that Congress intended critical habitat to mean areas that are essential to the continued existence of the species, i.e., its survival.

Our Response: We disagree with the commenter that “conservation” means “survival.” Instead, we agree with the courts that Congress intended critical habitat to focus on conservation, which addresses more than mere survival. While we recognize the distinction between “conservation” and “recovery,” we also acknowledge that the courts and the Services often use the terms synonymously.

The statutory definition of critical habitat includes the phrase “essential to [or for] the conservation of the species” twice; it does not include the word “survival” or the phrase, “the continued existence of the species” (16 U.S.C. 1532(5)(A)). Conservation means to use and the use of all methods and procedures that are necessary to bring any endangered species or threatened species to the point at which the measures provided pursuant to the Act are no longer necessary (16 U.S.C. 1532(3)). The statutory definition does not include the word “survival” or the phrase, “the continued existence of the species.” This does not appear to be an oversight. Congress used the word “survival” in other places in the Act; they also used the phrase “continued existence of a species” elsewhere and specifically in reference to the jeopardy standard under section 7(a)(2) of the Act.

In 2001, the Fifth Circuit concluded that “ `conservation' is a much broader concept than mere survival” and “speaks to the recovery” of species: “Indeed, in a different section of the ESA, the statute distinguishes between `conservation' and `survival.' ” Sierra Club, at 441-42. In 2004, the Ninth Circuit added, “Congress said that `destruction or adverse modification' could occur when sufficient critical habitat is lost so as to threaten a species' recovery even if there remains sufficient critical habitat for the species' survival.” Further, the Ninth Circuit indicated that the 1986 definition “fails to provide protection of habitat when necessary only for species' recovery.” Gifford Pinchot Task Force, at 1070. Throughout these decisions, the courts used the words “recovery” and “conservation” interchangeably.

The Services view “conservation” as the process used to achieve “recovery,” that is, the improvement in the status of listed species to the point at which listing is no longer appropriate under the criteria set out in section 4(a)(1) of the Act (50 CFR 402.02). In the proposed regulatory definition of “conserve, conserving, and conservation,” the Services included the phrase “i.e., the species is recovered” to clarify the link between conservation and recovery of the species. See 79 FR 27066, May 12, 2014 (proposing revisions to 50 CFR 424.02). Despite the distinction between the two terms, we often use the terms interchangeably in practice. We believe that this is consistent with Congress's intent for “conservation” to encompass the procedures necessary to achieve “recovery.”

Comments on “appreciably diminish”: We received 63 comments regarding our use and explanation of the term “appreciably diminish.” Many commenters considered the explanation of the term vague, confusing, and giving too much discretion to the Services. Some suggested that “appreciably diminish” should apply only to the reduction in quality, significance, magnitude, or worth of the physical or biological features that were the basis for determining the habitat to be critical. Others suggested alternatives to “appreciably,” including significantly, measurably, and considerably. Several commenters suggested simply removing the words “both the survival and” from the clarification of usage in the Services' Handbook. Some commenters believed the Services were “lowering the bar,” while others felt that the Services were “raising the bar” with the definition. Commenters disagreed on whether the Services should consider every perceptible diminishment to critical habitat to be destruction or adverse modification.

Our Response: In the proposed rule, the Services requested comments on whether the phrase “appreciably diminish” is clear and can be applied consistently across consultations. Though this phrase has been part of the definition of “destruction or adverse modification” since 1978, we invited the public to suggest any alternative phrases that might improve clarity and consistency. Though several commenters responded that phrase is unclear or unable to be consistently applied, they did not present clearer alternatives or examples of inconsistent application.

The courts have not identified problems with the clarity or consistent application of the “appreciably diminish” standard. Though the Fifth (2001) and Ninth Circuits (2004) invalidated the existing regulatory definition because it included the phrase “both the survival and recovery,” they did not comment unfavorably on the word “appreciably” or the term “appreciably diminish.” In 2010, the Ninth Circuit expressly noted that its decision in Gifford Pinchot “did not alter the rule that an `adverse modification' occurs only when there is `a direct or indirect alteration that appreciably diminishes the value of critical habitat.' ” Butte Environmental Council v. U.S. Army Corps of Engineers, 620 F.3d 936, 948 (9th Cir. 2010) (emphasis in original).

Commenters generally agreed that “diminish” means to reduce; however, several commenters disagreed with our use of the word “appreciably” and suggested we use alternative qualifiers (i.e., significantly, measurably, or considerably). In the preamble of the proposed rule, we discussed the word “appreciably,” as well as the suggested alternatives, which are similar in meaning to the word “appreciably” but also have multiple possible meanings. In light of all the comments received, our review of case law, and our previous experience with the term, we have concluded that no alternative has a sufficiently clear meaning to warrant changing this longstanding term in the regulation. Without a clearly superior alternative, the Services retain the phrase “appreciably diminish” in the definition of “destruction or adverse modification.”

In the preamble to the proposed rule, we further clarified the meaning of “appreciably diminish” by explaining that the relevant question is whether the reduction has some relevance because we can recognize or grasp its quality, significance, magnitude, or worth in a way that negatively affects the value of the critical habitat as a whole for the conservation of a listed species. Some commenters objected to this clarification and advocated for the retention of the Handbook language, with edits to remove the phrase “both the survival and.”

Courts have looked to the Handbook as guidance for interpreting the “appreciably diminish” standard. In 2008, the U.S. District Court for the Eastern District of California held that the Handbook's definition of “appreciably diminish” is reasonable and therefore would be applied by the court as guidance. See Pacific Coast Federation of Fishermen's Associations v. Gutierrez, 606 F. Supp. 2d 1195, 1208-09 (E.D. Cal. 2008) (according deference to the agencies' interpretation under the principles of Skidmore v. Swift & Co., 323 U.S. 134, 139-40 (1944)). The court thus applied “appreciably diminish” as meaning “considerably reduce.” Other district courts have similarly applied the “considerably reduce” language contained in the Handbook's definition of “appreciably diminish the value.” See Wild Equity Institute v. City and County of San Francisco, No. C 11-00958 SI, 2011 WL 5975029, *7 (N.D. Cal. Nov. 29, 2011) (unreported) (noting that, in Gutierrez, “The court accepted the FWS' definition of `appreciably diminish' to mean `considerably reduce'”); Forest Guardians v. Veneman, 392 F.Supp.2d 1082, 1092 (D. Ariz. 2005) (applying the handbook's definition of “appreciably diminish” as guidance for interpreting “reduce appreciably” as used in section 7(a)(2)'s jeopardy standard).

In the preamble to the proposed rule, we acknowledged that the Handbook's language referring to “both the survival and recovery” as part of its definition of “appreciably diminish the value” is no longer valid. We also indicated that the term “considerably,” taken alone, may lead to disparate outcomes because it can mean “large in amount or extent,” “worthy of consideration,” or “significant.” In light of the comments urging the Services to retain the Handbook clarification, the Services take this opportunity to clarify that the term “considerably,” in this context, means “worthy of consideration” and is another way of stating that we can recognize or grasp the quality, significance, magnitude, or worth of the reduction in the value of critical habitat. We believe that this clarification will allow the Services to reach consistent outcomes, and we reiterate that the Handbook reference to “both the survival and” is no longer in effect.

We disagree with commenters who suggest that every diminishment, however small, should constitute destruction or adverse modification. We find it necessary to qualify the word “diminish” to exclude those adverse effects on critical habitat that are so minor in nature that they do not impact the conservation of a listed species. It is appropriate for the Services to consider the biological significance of a reduction when conducting a section 7(a)(2) consultation. The U.S. District Court for the Eastern District of California rejected as “overly expansive” the plaintiff's suggestion that “appreciably” means “perceptible”. Gutierrez, 606 F.Supp.2d at 1208-09. The guidance issued by the Services in 2004 and 2005 directed the Services to discuss the “significance of anticipated effects to critical habitat,” which the U.S. District Court for the Northern District of California found appropriate and “sufficient to implement an `appreciably diminish' standard.” In re Consolidated Salmonid Cases, 791 F. Supp.2d 802, 872 (E.D. Cal. 2011) (applying NMFS' 2005 guidance), affirmed in part, reversed in part on other grounds, San Luis & Delta-Mendota Water Authority v. Locke, 776 F.3d 971 (9th Cir. 2014). Similarly, in the context of applying the jeopardy standard from section 7(a)(2) of the Act, which also includes the term “appreciably” (in the phrase “appreciably reduce”), the U.S. District Court for the District of Columbia rejected the argument that the Services are required to recognize every reduction in the likelihood of survival or recovery that is capable of being perceived or measured; the court instead held that the Services have discretion to evaluate a reduction to determine if it is “meaningful from a biological perspective.” Oceana, Inc. v. Pritzker, F.Supp.3d, No. 08-1881, 2014 WL 7174875, *8-9 (D.D.C. December 17, 2014).

Thus, our explanation in this final rule of the meaning of “appreciably diminish” is consistent with previous usage; “the bar” for determining whether a proposed action is likely to result in destruction or adverse modification of critical habitat is neither raised nor lowered by this rule. A Federal action may adversely affect critical habitat in an action area without appreciably diminishing the value of the critical habitat for the conservation of the species. In such cases, a conclusion of destruction or adverse modification would not be appropriate. Conversely, we would conclude that a Federal action would result in destruction or adverse modification if it appreciably diminishes the value of critical habitat for the conservation of the species, even if the size of the area affected by the Federal action is small.

In summary, the Services have applied the term “appreciably diminish” from the definition of “destruction or adverse modification” for decades (43 FR 870, January 4, 1978). With the clarifications of usage in this rule, we find no basis in either the comments received or in court decisions to abandon this well-established language.

Comments on “conservation value”: We received 68 comments on the term “conservation value,” suggesting that the term was vague, unnecessary, and confusing.

Our Response: In the proposed rule, the Services requested comments on whether the phrase “conservation value” is clear and can be applied consistently across consultations. We invited the public to suggest alternatives that might improve clarity and consistency in implementing the “destruction or adverse modification” standard.

Upon reviewing the comments, we agreed that inclusion of a new, undefined term, “conservation value,” was unnecessary. We wish to clarify that by introducing the term “conservation value” in the proposed definition, we did not intend to introduce a new concept but rather to reiterate that critical habitat is designated because it has been found to contribute to the conservation of the species, in keeping with the statutory definition of critical habitat. However, to avoid any confusion, we revised the first sentence of the final definition to replace the term “conservation value” with a phrase that conveys its intended meaning, i.e., “the value of critical habitat for the conservation of a listed species.” This minor revision retains the meaning of “conservation value” without introducing a new term. Like the statutory definition of critical habitat, it emphasizes the role of critical habitat in the conservation of a species.

Comments on “survival or recovery”: Several commenters suggested that the Services should simply substitute “or” for “and” in the phrase “survival and recovery” from the 1986 definition.

Our Response: The Services find that simply changing “and” to “or” in the existing regulatory definition would not go far enough to incorporate the refined understanding we now have regarding the role of critical habitat. The Services' regulations introduced the term “survival” into the 1978 definition; the statutory definition of critical habitat focuses on conservation, which the courts have explained emphasizes recovery. (See Sierra Club, at 441: “The ESA's definition of `conservation' speaks to the recovery of a threatened or endangered species.”) The Ninth Circuit further indicates that “Congress said that `destruction or adverse modification' could occur when sufficient critical habitat is lost so as to threaten a species' recovery even if there remains sufficient critical habitat for the species' survival” (Gifford Pinchot Task Force, at 1070).

In Gifford Pinchot, the Ninth Circuit supported the use of “or” in place of “and”; however, this in no way limits our discretion to revise the definition to more clearly implement Congressional intent. In its definition of critical habitat, Congress uses the word “conservation” and not “survival”; therefore, it is appropriate for the Services to revise the definition to unambiguously emphasize the value of critical habitat for conservation. By doing so, we have produced a regulatory definition that is less confusing, less susceptible to misinterpretation, and more consistent with the intent of Congress than by merely substituting “or” for “and.”

Comments on linking the definition to existing physical and biological features: We received a few comments requesting that the definition explicitly include alterations of existing physical and biological features.

Our Response: In the proposed definition, we did not intend to disregard the alteration of existing physical or biological features; rather, our goal was to highlight certain types of alterations that may not be as evident as direct alterations, specifically those that preclude or significantly delay development of features. We reiterate and reaffirm that the first sentence of our final definition (Destruction or adverse modification means a direct or indirect alteration that appreciably diminishes the value of critical habitat for the conservation of a listed species.) is meant to encompass all potential types of alterations if they reduce the value of the habitat for conservation, including alterations of existing features.

In response to comments and to avoid further confusion, we revise the second sentence to specifically reference alterations of existing physical and biological features (as does the 1986 definition), in addition to those that preclude or significantly delay development of essential physical or biological features, as examples of effects that may constitute destruction or adverse modification of critical habitat. We believe that the revised sentence provides clarity and transparency to the definition and its implementation while retaining the core idea of the proposed definition.

Comments on “may include, but are not limited to”: We received three comments on the use of the phrase “may include, but are not limited to.” Commenters found this language “overbroad” and thought the definition should be less vague or narrowed or both. One commenter thought it allowed a “catch-all provision” too favorable to the Federal Government, against prospective good-faith challengers.

Our Response: The phrase, “may include, but are not limited to” emphasizes that the types of direct or indirect alterations that appreciably diminish the value of critical habitat for listed species include not only those that affect physical or biological features, but also those that may affect the value of critical habitat itself. The concept of non-exhaustive inclusion is not new to the regulatory definition of “destruction or adverse modification.” Both 1978 and 1986 definitions included the phrase. This language has not proven problematic in application. Indeed, this phrase is commonly used by the Services to account for the variation that occurs in biological entities and ecological systems, and to preserve the role of the inherent discretion and professional judgment the Services must use to evaluate all relevant factors when making determinations regarding such entities and systems.

We retain the phrase in our final definition, as we believe its meaning is clear and that it serves an important function in the definition. It allows that there may be impacts to an area of critical habitat itself that are not impacts to features. This is particularly important for unoccupied habitat, for which no physical or biological features may have been identified (because physical or biological features are not required to be present in order to designate such an area as critical habitat under the second part of the statutory definition of “critical habitat”). For occupied habitat, the Services must retain the flexibility to address impacts to the area itself, such as those that would impede access to or use of the habitat. As noted in the proposed rule, a destruction or adverse modification analysis begins with impacts to the features but does not end there (79 FR 27060, May 12, 2014). For these reasons, we retain this phase in the final definition.

Comments on “life-history needs”: We received 12 comments regarding the phrase “physical or biological features that support the life-history needs.” The commenters considered the phrase to be vague and poorly defined. Some commenters felt that the phrase misinterpreted or “lowered the bar” from that intended by the statutory language “physical or biological features essential to the conservation of a species.” Commenters recommended describing the physical and biological features as “essential” or “necessary.”

Our Response: We did not intend the phrase, “physical or biological features that support the life-history needs” to “lower the bar” for identifying physical and biological features, as established in the statutory definition of critical habitat. Rather, our intent was to explain that physical or biological features provide for the life-history needs, which are essential to the conservation of the species.

However, based on review of the public comments on this issue, we recognized the confusion caused by introducing a new “term of art” in the proposed definition. To avoid confusion, we revised the second sentence of the definition to replace the phrase, “support the life-history needs,” with its intended meaning, “essential to the conservation of a species.” In accordance with the statutory definition of critical habitat, the revision emphasizes our focus on those physical or biological features that are essential to the conservation of the species. We believe that the revised sentence, which aligns more closely to the statutory language, provides clarity and transparency to the definition and its implementation.

Comments on “preclude or significantly delay:” We received many comments regarding the terms “preclude or significantly delay” in the proposed definition. Commenters believed these concepts are vague, undefined, and allow for arbitrary determinations. One commenter asserted that focusing on effects that preclude or significantly delay development of features was an expansion of authority that conflicted with E.O. 13604 (Improving Performance of Federal Permitting and Review of Infrastructure Projects).

Our Response: Our proposed definition of “destruction or adverse modification” expressly included effects that preclude or significantly delay the development of physical or biological features that support the life-history needs of the species for recovery. Although we have revised the definition in minor respects from the proposed rule (see Summary of Changes from the Proposed Definition, above), we retain its forward-looking aspect.

Our determination of “destruction or adverse modification” is based not only on the current status of the critical habitat but also, in cases where it is degraded or depends on ongoing ecological processes, on the potential for the habitat to provide further support for the conservation of the species. While occupied critical habitat would always contain at least one or more of the physical or biological features essential to the conservation of the listed species, an area of critical habitat may be in a degraded condition or less than optimal successional stage and not contain all physical or biological features at the time it is designated or those features may be present but in a degraded or less than optimal condition. The area may have been designated as critical habitat, however, because of the potential for some of the features not already present or not yet fully functional to be developed, restored, or improved and contribute to the species' recovery. The condition of the critical habitat would be enhanced as the physical or biological features essential to the conservation of the species are developed, restored, or improved, and the area is able to provide the recovery support for the species on which the designation is based. The value of critical habitat also includes consideration of the likely capability of the critical habitat to support the species' recovery given the backdrop of past and present actions that may impede formation of the optimal successional stage or otherwise degrade the critical habitat. Therefore, a proposed action that alters habitat conditions to preclude or significantly delay the development or restoration of the physical or biological features needed to achieve that capability (relative to that which would occur without the proposed action undergoing consultation), where the change appreciably diminishes the value of critical habitat for the conservation of the species, would likely result in destruction or adverse modification.

This is not a new concept or expansion of authority. The Services have previously recognized and articulated the need for this forward-looking aspect in the analysis of destruction or adverse modification of critical habitat. As discussed in the Background section, each Service issued substantially identical guidance following the decisions of the Fifth and Ninth Circuits invalidating the current regulatory definition (FWS 2004; NMFS 2005). For the past 10 years, the Services have evaluated whether, with implementation of the proposed Federal action, critical habitat would remain functional (or retain the current ability for the primary constituent elements to be functionally established) to serve the intended conservation role for the species. As noted above, “primary constituent elements” was a term introduced in the critical habitat designation regulations (50 CFR 424.12) to describe aspects of “physical or biological features.” On May 12, 2014, the Services proposed to revise these regulations to remove the use of the term “primary constituent elements” and replace it with the statutory term “physical or biological features” (79 FR 27066). However, the shift in terminology does not change the approach used in conducting a “destruction or adverse modification” analysis, which is the same regardless of whether the original designation identified primary constituent elements, physical or biological features, or both.

Several commenters asserted that assessing the projected condition of the habitat and projected development of physical and biological features would be inconsistent with the Act. The Services disagree. The Act defines critical habitat to include both areas occupied at the time of listing that contain features “essential to the conservation” of the species, as well as unoccupied areas that are “essential for the conservation” of listed species. Unoccupied habitat by definition is not required to contain essential physical or biological features to qualify for designation, and even occupied habitat is not required to contain all features throughout the area designated. Yet, the obligation to preserve the value of critical habitat for the conservation of listed species applies to all designated critical habitat. At some point in the recovery process, habitat must supply features that are essential to the conservation of the species. It is thus important to recognize not only the features that are already present in the habitat, but the potential of the habitat to naturally develop the features over time. Therefore, the Services believe it is necessary (and consistent with the Act) to examine a project's effects on the natural development of physical and biological features essential to the conservation of a species.

“Preclusion” prevents the features from becoming established. The phrase “significantly delay” requires more explanation. We intend this phrase to encompass a delay that interrupts the likely natural trajectory of the development of physical and biological features in the designated critical habitat to support the species' recovery. That trajectory is viewed in the context of the current status of the designated critical habitat and with respect to the conservation needs of the listed species.

If the Services make a destruction or adverse modification determination, they will develop reasonable and prudent alternatives on a case by case basis and based on the best scientific and commercial data available.

Comments on “foreseeable future:” We received many comments regarding the term “foreseeable future,” as used in the preamble to the proposed rule. Commenters believed this concept is vague and undefined, and requires speculation on the part of the Services.

Our Response: In the preamble to the proposed rule (79 FR 27060, May 12, 2014), we used the term “foreseeable future” to explain and provide context for the forward-looking aspect of the destruction or adverse modification analysis; we explained that the conservation value of critical habitat also includes consideration of the likely capability, in the foreseeable future, of the critical habitat to support the species' recovery given the backdrop of past and present actions that may impede formation of the optimal successional stage or otherwise degrade the critical habitat. Therefore, an action that would preclude or significantly delay the development or restoration of the physical or biological features needed to achieve that capability, to an extent that it appreciably diminishes the value of critical habitat for the conservation of the species relative to that which would occur without the action undergoing consultation, is likely to result in destruction or adverse modification.

In the proposed rule, we used the language “foreseeable future” not as specifically used in the definition of the term “threatened species” but as a generally understood concept; that is, in regards to critical habitat, we consider its future capabilities only so far as we are able to make reliable projections with reasonable confidence. The Services do not speculate when evaluating whether a Federal action would preclude or significantly delay the development of features. As required by the Act, we rely on the best scientific and commercial data available to determine whether the action is likely to destroy or adversely modify critical habitat (16 U.S.C. 1536(a)(2)). This rule formalizes in regulation the forward-looking aspect of the destruction or adverse modification analysis adopted in the 2004 and 2005 guidance.

Additional comments relating to forward-looking aspect of definition: Several commenters felt that considerations regarding “precluding” or “significant delay” and “foreseeable future” would result in more consultations and longer review times.

Our Response: As noted above and in the proposed rule, the Services have applied these concepts since the 2004 and 2005 guidance documents, and no significant increase in the number of consultations or review times has occurred as a result. The Services do not believe that adopting this approach in our regulations will result in more or lengthier consultations.

Comments on defining “destruction or adverse modification” instead of defining “destruction” and “adverse modification” separately: We received three comments requesting that we define “destruction” and “adverse modification” independently.

Our Response: “Destruction or adverse modification of critical habitat” was not defined in the statute. The Services defined the term in the 1978 regulations and amended the definition in 1986. The Services have thus applied the term as a singular concept for many years without difficulty.

Independently defining “destruction” and “adverse modification” is unnecessary and would not alter the outcome of section 7(a)(2) consultations. If, through consultation, the Services determine that a proposed Federal action likely would result in the destruction or adverse modification of critical habitat, we would, if possible, provide a reasonable and prudent alternative to the action. Such alternative must not violate section 7(a)(2) of the Act, must be economically and technologically feasible, must be capable of being implemented in a manner consistent with the intended purpose of the action, and must be capable of being implemented consistent with the scope of the Federal agency's legal authority and jurisdiction (16 U.S.C. 1536(b)(3)(A); 50 CFR 402.14(h); 50 CFR 402.02 (defining “reasonable and prudent alternatives”)).

Independently defining “destruction” and “adverse modification” would unnecessarily complicate the process without improving it or changing the outcome. The key distinction is whether the action appreciably diminishes the value of critical habitat for the conservation of the species, not whether the action destroys critical habitat or adversely modifies it. The time and effort applied to determine whether the action destroyed or adversely modified critical habitat would be better spent on the identification of reasonable and prudent alternatives to the proposed action. Therefore, we do not independently define “destruction” and “adverse modification.”

Comments on the need for a quantitative definition: Eight commenters suggested the need for a quantitative definition that minimizes the Services' discretion.

Our Response: We did not receive any examples of a quantitative definition. We are not able to provide such a definition because Federal actions, species, and critical habitat designations are complex and differ considerably. Our analyses of the actions and their effects on critical habitat require case-by-case consideration that does not fit neatly into a mathematical formula. Congress anticipated the need for the Services to use their professional judgment by requiring us to provide our opinion, detailing how the action affects species and critical habitat. This opinion must be based on the best available scientific and commercial information available for a particular action and species. The level of specificity and precision in available data will vary across actions and across species, and therefore a one-size-fits-all standard would not be workable.

Further, the U.S. Court of Appeals for the Ninth Circuit has specifically held that nothing in the Act or current regulations requires that the analysis of destruction or adverse modification be quantitative in nature. Butte Environmental Council, 620 F.3d at 948 (agency not required to calculate rate of loss of habitat). See also San Luis & Delta-Mendota Water Authority v. Salazar, 760 F.Supp.2d 855, 945 (E.D. Cal. 2010) (Services not required to set threshold for determining destruction or adverse modification), affirmed in part, reversed in part on other grounds sub nom. San Luis & Delta-Mendota Water Auth. v. Jewell, 747 F.3d 581 (9th Cir. 2014).

Therefore, we find that attempting to specify a quantitative threshold is neither feasible nor required.

Comments on the scale of analysis: Many commenters expressed confusion or concern regarding the scale at which the determination of destruction or adverse modification of critical habitat is made. Some commenters agreed with the Services' interpretation of the statute and the existing implementing regulations at 50 CFR 402.14, as described in the preamble to the proposed rule, that determinations on destruction or adverse modification are based on critical habitat as a whole, not just on the areas where the action takes place or has direct impacts. These commenters requested clarification of the process used to make such determinations or thought that the language, “critical habitat, as a whole,” should be included in the rule and not just the preamble. Other commenters disagreed with the Services' interpretation that the destruction or adverse modification determination should be based on critical habitat as a whole and recommended that the Services evaluate destruction or adverse modification at the smallest scale relevant to determining whether the species has met its recovery criteria.

Our Response: As explained in the preambles to this rule and the proposed rule, the determination of “destruction or adverse modification” will be based on the effect to the value of critical habitat for the conservation of a listed species. In other words, the question is whether the action will appreciably diminish the value of the critical habitat as a whole, not just in the action area (i.e., 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).

The section 7 process involves multiple determinations, made by the action agency or the Services or both, regarding critical habitat. Where critical habitat has already been designated, section 7(a)(2) of the Act applies. Under the implementing regulations, the Federal agency first determines if its proposed action may affect critical habitat. If such a determination is made, formal consultation is required unless the Federal agency determines, with the written concurrence of the Services, that the action is not likely to adversely affect critical habitat. In accordance with the Act, our implementing regulations at 50 CFR 402.14(g)(1) through (g)(4), and the 2004 and 2005 guidance documents issued by FWS and NMFS (see the Background section), the formal consultation process generally involves four components: (1) The status of critical habitat, which evaluates the condition of critical habitat that has been designated for the species in terms of physical or biological features, the factors responsible for that condition, and the intended conservation role of the critical habitat overall; (2) the environmental baseline, which evaluates the current condition of the critical habitat in the action area, the factors responsible for that condition, and the relationship of the affected critical habitat in the action area to the entire critical habitat with respect to the conservation of the listed species; (3) the effects of the action, which includes the direct and indirect effects of the action (and the effects of any interrelated or interdependent activities) and describes how those effects alter the value of critical habitat within the action area; and (4) cumulative effects (as defined at 50 CFR 402.02), which evaluates the effects of future, non-Federal activities in the action area and describes how those effects are expected to alter the value of critical habitat within the action area. After synthesizing and integrating these four components, the Services make their final determination regarding the impact of the action on the overall value of the critical habitat designation. The Services conclude whether critical habitat would remain functional (or retain the current ability for the features to be functionally established in areas of currently unoccupied but capable habitat) to fulfill its value for the conservation of the species, or whether the action appreciably reduces the value of critical habitat for the conservation of the species.

Where critical habitat has only been proposed for designation, a distinct but related process applies under section 7(a)(4) of the Act. The action agency must initiate a conference with the Services on the effects of its proposed action when the action is likely to result in destruction or adverse modification of the proposed critical habitat (50 CFR 402.10(b)). Although a conference generally will consist of informal discussions leading to advisory recommendations, action agencies have the option of conducting the conference under the same procedures that apply to formal consultations so that a conference opinion is produced (and later adopted as a biological opinion upon finalization of the critical habitat designation, provided certain conditions are met; 50 CFR 402.10(c) and (d)). While there are important differences between the consultation and conference processes, the same analytical steps as described in the paragraph above apply in the Services' evaluation of impacts to critical habitat.

Adverse effects to critical habitat within the action area may not necessarily rise to the level of destruction or adverse modification to the designated critical habitat. The Handbook expressly provides that adverse effects to single elements or segments of critical habitat generally do not result in destruction or adverse modification unless that loss, when added to the environmental baseline, is likely to appreciably diminish the capability of the critical habitat to satisfy essential requirements of the species. Courts have concurred that a proposed action may result in destruction of some areas of critical habitat and still not necessarily result in a finding of “destruction or adverse modification.” See Conservation Congress v. U.S. Forest Service, 720 F.3d 1048, 1057 (9th Cir. 2013) (“Even completely destroying 22 acres of critical habitat does not necessarily appreciably diminish the value of the larger critical habitat area.”); Butte Environmental Council, 620 F.3d at 948 (applying the Handbook provision to support the conclusion that “[a]n area of a species' critical habitat can be destroyed without appreciably diminishing the value of critical habitat for the species' survival or recovery.”).

The analysis thus places an emphasis on the value of the designated critical habitat as a whole for the conservation of a species, in light of the role the action area serves with regard to the function of the overall designation. Just as the determination of jeopardy under section 7(a)(2) of the Act is made at the scale of the entire listed entity, a determination of destruction or adverse modification is made at the scale of the entire critical habitat designation. Even if a particular project would cause adverse effects to a portion of critical habitat, the Services must place those impacts in context of the designation to determine if the overall value of the critical habitat is likely to be reduced. This could occur where, for example, a small affected area of habitat is particularly important in its ability to support the conservation of a species (e.g., a primary breeding site). Thus, the size or proportion of the affected area is not determinative; impacts to a small area may in some cases result in a determination of destruction or adverse modification, while impacts to a large geographic area will not always result in such a finding.

Because the existing consultation process already ensures that destruction or adverse modification of critical habitat is analyzed at the appropriate scale, the Services decline to include language referring to determinations based on critical habitat “as a whole” in the definition of “destruction or adverse modification.”

Comments on aggregate effects: Several commenters expressed concern that aggregate adverse impacts to critical habitat are not adequately addressed in the Services' analyses and that the proposed rule should be revised to expressly require the evaluation of aggregate effects to critical habitat that multiple actions will have on a species' recovery. One commenter urged the Services to develop a system to track the aggregate effects that destroy or degrade critical habitat.

Our Response: The Services' biological opinion provides an assessment of the status of the critical habitat (including threats and trends), the environmental baseline of the action area (describing all past and present impacts), and cumulative effects. Under the implementing regulations of the Act, cumulative effects are defined as 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 (50 CFR 402.02). Following the definition, we only consider cumulative effects within the action area. The effects of any particular action are evaluated in the context of this assessment, which incorporates the effects of all current and previous actions. This avoids situations where each individual action is viewed as causing only insignificant adverse effects but, over time, the aggregate effects of these actions would erode the conservation value of the critical habitat.

Comments on the role of mitigation in “destruction or adverse modification” findings: Four commenters thought the “net effects” of an action, including consideration of “mitigation and offsetting beneficial” measures, should be considered in the revised regulatory definition. One commenter suggested that the Services should develop an explicit framework for allowing project proponents to avoid a destruction or adverse modification finding by restoring the same biological or physical feature of critical habitat that they degrade, provided there is evidence the restoration is likely to succeed.

Our Response: As stated in the Services' 2004 and 2005 guidance, conservation activities (e.g., management, mitigation, etc.) outside of designated critical habitat should not be considered when evaluating effects to critical habitat. However, conservation activities within critical habitat, included as part of a proposed action to mitigate the adverse effects of the action on critical habitat, are considered by the Services' in formulating our biological opinion as to whether an action is likely to result in the destruction or adverse modification of critical habitat. This consideration of beneficial actions is consistent with the implementing regulations at 50 CFR 402.14(g)(8), which set forth that in formulating its biological opinion, any reasonable and prudent alternatives, and any reasonable and prudent measures, the Service will use the best scientific and commercial data available and will give appropriate consideration to any beneficial actions taken by the Federal agency or applicant, including any actions taken prior to the initiation of consultation. The Services welcome the inclusion of beneficial conservation activities as part of proposed actions. However, because the question of whether beneficial actions can compensate for impacts to critical habitat is complicated and must be evaluated on a case-by-case basis, it would be advisable for Federal agencies and applicants to coordinate closely with the Services on such activities.

Comments on continuation of current uses: Two commenters discussed current land practices and other uses on areas that may be designated as critical habitat. One commenter specifically requested that the final rule indicate that continuation of current uses does not constitute destruction or adverse modification.

Our Response: There is nothing in the Act to suggest that previously ongoing activities are or may be exempted from analysis during section 7(a)(2) consultations. Accordingly, our longstanding regulatory framework does not distinguish between ongoing and other actions. “Action” is defined broadly at 50 CFR 402.02 to include all activities or programs of any kind authorized, funded, or carried out, in whole or in part, by Federal agencies in the United States or upon the high seas. The applicability provision of the regulations further explains that section 7(a)(2) obligations arise so long as there is discretionary Federal involvement or control (50 CFR 402.03). It would be unsupported and beyond the scope of the definition of “destruction or adverse modification” to change these well-established principles.

Comments regarding the use of recovery documents as a basis for a destruction or adverse modification determination: We received three comments requesting that the Services clarify that criteria, goals, or programs established in recovery plans are not enforceable and may not be used as a basis for a destruction or adverse modification decision.

Our Response: The Services agree that recovery plans convey guidance and are not regulatory documents that compel any action to occur. In addition, section 7(a)(2) of the Act describes a standard of prohibition rather than a mandate to further recovery. However, criteria, goals, and programs for recovery that are established in these plans may be used in our evaluation of whether, with implementation of the proposed action, critical habitat would retain its value for the conservation of the species. Recovery plans, in addition to critical habitat rules, may provide the best scientific and commercial information available on the value of critical habitat to the conservation of the species, thus assisting the Services with evaluating the effects of a proposed action on critical habitat.

Comments on undue burden: We received 14 comments regarding the perceived potential for undue burden on Tribes, State and local governments, and various industries. The commenters suggested that the proposed definition would prevent the issuance of permits or impose unwarranted restrictions and requirements on permit applicants, resulting in additional costs for project redesign, reductions in productivity, and increases in the time and effort required to submit permit applications. Some commenters predicted an increase in the number of section 7(a)(2) consultations, especially formal consultations. Others predicted that the Services would conclude destruction or adverse modification of critical habitat more frequently.

Our Response: Because the final regulatory definition largely formalizes existing guidance that FWS and NMFS have implemented since 2004 and 2005, respectively, we conclude that the section 7(a)(2) consultation process will not significantly change. The final definition does not “raise the bar” in any way. We will not reinitiate consultations as a result of this rule. We will consult on ongoing actions in a similar manner as we have since the issuance of the guidance. Therefore, we do not anticipate changes in the costs related to section 7(a)(2) consultations or the frequency at which the Services conclude destruction or adverse modification of critical habitat. The decision to consult is made prior to and independent of our analysis of destruction or adverse modification of critical habitat (i.e., by a Federal agency applying the “may affect” standard of 50 CFR 402.14(a) to determine whether their action may affect designated critical habitat). If a Federal agency determines, with the written concurrence of the Services, that the proposed action is not likely to adversely affect critical habitat, formal consultation is not required (50 CFR 402.14(b)), and the Services would not perform an analysis of destruction or adverse modification of critical habitat. Therefore, the number of section 7(a)(2) consultations, and formal consultations in particular, is not likely to be affected by this rule.

Comments on Tribe, State, and local coordination: We received five comments from Tribes, State and local governments, and industry groups indicating that we should consult or coordinate with Tribes, States, and local governments to finalize the proposed rule.

Our Response: The Services have undertaken numerous efforts to ensure that our State, Tribal, and other partners had full notice and opportunity to provide input into the development of this rule. We reached out to industry groups, environmental organizations, intergovernmental organizations, and Federal agencies. We worked with the Association of Fish and Wildlife Agencies and the Native American Fish and Wildlife Society to distribute information to Tribes, States, and local governments about the proposed rule. The Services notified their respective Tribal liaisons, who sent letters to Tribes regarding this rule. We also hosted a webinar for the States on May 23, 2014. We considered all submitted comments, which included comments from Tribes, States, and local governments, and, as warranted, applied suggestions to the final rule.

Comments on NEPA: We received 11 comments suggesting that a categorical exclusion from the NEPA was not appropriate for the proposed rule and that the Services should analyze the environmental impacts of this action.

Our Response: The Services believe this rule likely would qualify for one or more categorical exclusions adopted by the Department of the Interior and the National Oceanic and Atmospheric Administration, respectively. Nevertheless, in an abundance of caution, the Services have completed an environmental assessment, which is available at the Federal e-rulemaking portal: http://www.regulations.gov (see ADDRESSES).

Comments on Energy Supply, Distribution, and Use (E.O. 13211), Takings (E.O. 12630), and Economic Analyses (E.O. 12866, the Regulatory Flexibility Act, and the Unfunded Mandates Reform Act): We received comments that the Services should prepare a Statement of Energy Effects (E.O. 13211, 1 comment), a regulatory flexibility analysis (2 comments), and an economic analysis (2 comments).

Our Response: This rule clarifies existing requirements for Federal agencies under the Act. Based on procedures applied through existing agency guidance, the rule is substantially unlikely to lead to different conclusions in section 7(a)(2) consultations. The rule clarifies the standard by which we will evaluate the effect of agency actions on critical habitat pursuant to section 7(a)(2) of the Act. For further information, please see the relevant sections under Required Determinations, below.

Comments on extension of the comment period: Many commenters requested an extension of the public comment period announced in the draft policy. Additionally, we received requests to reopen the comment period that ended on October 9, 2014.

Our Response: On June 26, 2014 (79 FR 36284), we extended the public comment period on the draft policy for an additional 90 days to accommodate this request and to allow for additional review and public comment. The comment period for the draft policy was therefore open for 150 days, which provided adequate time for all interested parties to submit comments and information.

Comments on the proposed rule being “beyond the scope of the Act”: We received 25 comments stating that the proposed definition exceeded the authority of the Act. Some commenters wrote that it was beyond the scope of the Act. Some expressed concern that the proposed definition implied an affirmative conservation requirement or mandate for recovery.

Our Response: As the agencies charged with administering the Act, it is within our authority to promulgate and amend regulations to ensure transparent and consistent implementation. Under general principles of administrative law, an agency may resolve ambiguities and define or clarify statutory language as long as the agency's interpretation is a permissible interpretation of the statute. The term “destruction or adverse modification” was not defined by Congress. Consequently, the Services first promulgated a regulatory definition in 1978, and then later in 1986. As previously mentioned, the “survival and recovery” standard of our earlier definitions was invalidated by courts. We believe that this revised definition comports with the language and purposes of the Act.

As explained in the preamble to the proposed rule, section 7(a)(2) only applies to discretionary agency actions and does not create an affirmative duty for action agencies to recover listed species (79 FR 27060, May 12, 2014). Similarly, the definition of “destruction or adverse modification” is a prohibitory standard only. The definition does not, and is not intended to, create an affirmative conservation requirement or a mandate for recovery. Consistent with the Ninth Circuit's opinion, in the context of describing an action that “jeopardizes” a species, in National Wildlife Federation v. NMFS, 524 F.3d 917 (9th Cir. 2008), the Services believe that an action that “destroys” or “adversely modifies” critical habitat must cause a deterioration in the value of critical habitat, which includes its ability to provide recovery support to the species based on ongoing ecological processes. Section 7(a)(2) of the Act requires Federal agencies to insure that any action they authorize, fund, or carry out is not likely to result in the destruction or adverse modification of critical habitat. Under this section of the Act, Federal agencies are not required to recover species; however, they must insure that their actions are not likely to prevent or impede the recovery of the species through the destruction or adverse modification of critical habitat. To be clear, Federal actions are not required to improve critical habitat, but they must not reduce its existing capacity to conserve the species over time. Section 7(a)(2) and the definition of “destruction or adverse modification” are implemented independent of section 7(a)(1), which directs Federal agencies to utilize their authorities to carry out affirmative conservation programs for listed species.

Comments suggesting revision or withdrawal of the rule: We received 15 comments requesting that we revise or withdraw the proposed rule.

Our Response: In order to administer the Act, the Services need a regulatory definition of “destruction or adverse modification.” The Fifth and Ninth Circuits found the current regulatory definition to be invalid over a decade ago because it required that both the survival and the recovery of listed species be impacted. As discussed previously, in 2004 and 2005, the Services issued internal guidance instructing their biologists to discontinue use of the regulatory definition and to instead consider whether critical habitat would continue to contribute (or have the potential to contribute) to the conservation of the species. After several years of implementation, the Services herein formalize this guidance by modifying the regulatory definition. In response to public comments, we have made minor revisions to the proposed definition; however, the meaning and implementation of the standard remains unchanged. The final definition is clear, implementable, and consistent with the Act.

The Office of Management and Budget (OMB) has determined that this final rule is a significant regulatory action and has reviewed this rule under E.O. 12866 because it may raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive order.

Under the Regulatory Flexibility Act (as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996; 5 U.S.C. 601 et seq.), whenever a Federal agency is required to publish a notice of rulemaking for any proposed or final rule, it must prepare, and make available for public comment, a regulatory flexibility analysis that describes the effect of the rule on small entities (i.e., small businesses, small organizations, and small government jurisdictions). However, no regulatory flexibility analysis is required if the head of an agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. SBREFA requires Federal agencies to provide a statement of the factual basis for certifying that a rule will not have a significant economic impact on a substantial number of small entities. We certify that this rule will not have a significant economic effect on a substantial number of small entities. The following discussion explains our rationale.

This rule clarifies existing requirements for Federal agencies under the Act. Federal agencies are the only entities that are directly affected by this rule, and they are not considered to be small entities under SBREFA's size standards. No other entities are directly affected by this rule.

This rule will be applied in determining whether a Federal agency has ensured, in consultation with the Services, that any action it would authorize, fund, or carry out is not likely to result in the destruction or adverse modification of critical habitat. Based on procedures applied through existing agency guidance, this rule is unlikely to affect our determinations. The rule provides clarity to the standard with which we will evaluate agency actions pursuant to section 7(a)(2) of the Act.

In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.):

(a) This rule will not “significantly or uniquely” affect small governments. We have determined and certify under the Unfunded Mandates Reform Act (2 U.S.C. 1502 et seq.) that this rule will not impose a cost of $100 million or more in any given year on local or State governments or private entities. A Small Government Agency Plan is not required. As explained above, small governments would not be affected because the regulation will not place additional requirements on any city, county, or other local municipalities.

(b) This rule will not produce a Federal mandate of $100 million or greater in any year (i.e., it is not a “significant regulatory action” under the Unfunded Mandates Reform Act). This regulation would not impose any additional management or protection requirements on the States or other entities.

In accordance with E.O. 12630, we have determined the rule does not have significant takings implications.

A takings implication assessment is not required because this rule (1) will not effectively compel a property owner to suffer a physical invasion of property and (2) will not deny all economically beneficial or productive use of the land or aquatic resources. Indeed, this regulation provides broad program direction for the Services' application of section 7(a)(2) in consultations on future proposed Federal actions and does not itself result in any particular action concerning a specific property. Further, this rule substantially advances a legitimate government interest (conservation and recovery of listed species) and does not present a barrier to all reasonable and expected beneficial use of private property.

In accordance with E.O. 13132, we have considered whether this rule will have significant Federalism effects and have determined that a federalism summary impact statement is not required. This rule pertains only to determinations of Federal agency compliance with section 7(a)(2) of the Act, and will not have substantial direct effects on the States, on the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the various levels of government.

This rule will not unduly burden the judicial system and meets the applicable standards provided in sections 3(a) and 3(b)(2) of E.O. 12988. This rule clarifies how the Services will make determinations on whether a Federal agency has ensured that any action it authorizes, funds, or carries out is not likely to result in the destruction or adverse modification of critical habitat.

In accordance with Executive Order 13175 (“Consultation and Coordination with Indian Tribal Governments”, November 6, 2000), the Department of the Interior Manual at 512 DM 2, the Department of Commerce (DOC) Tribal Consultation and Coordination Policy (May 21, 2013), DOC Departmental Administrative Order (DAO) 218-8, and NOAA Administrative Order (NAO) 218-8 (April 2012), we have considered possible effects of this final rule on Federally recognized Indian Tribes. Following an exchange of information with tribal representatives, we have determined that this rule, which modifies the general framework for conducting consultations on Federal agency actions under section 7(a)(2) of the Act, does not have tribal implications as defined in Executive Order 13175. We will continue to collaborate and coordinate with Tribes on issues related to Federally listed species and their habitats and work with them as appropriate as we engage in individual section 7(a)(2) consultations. See Joint Secretarial Order 3206 (“American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act”, June 5, 1997).

This rule does not contain any collections of information that require approval by the OMB under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.). This rule does not impose recordkeeping or reporting requirements on Tribes, State or local governments, individuals, businesses, or organizations. 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.

In the proposed rule, we invited the public to comment on whether and how the regulation may have a significant effect upon the human environment, including any effects identified as extraordinary circumstances at 43 CFR 46.215. After considering the comments received and further evaluating whether there is any arguable basis to require preparation of an environmental assessment, we analyzed this rule in accordance with the criteria of the National Environmental Policy Act, the Department of the Interior regulations on Implementation of the NEPA (43 CFR 46.10-46.450), the Department of the Interior Manual (516 DM 1-6 and 8), and National Oceanographic and Atmospheric Administration Administrative Order 216-6. This analysis was undertaken in an abundance of caution only, as we believe the rule would qualify for one or more categorical exclusions. Based on a review and evaluation of the information contained in the Environmental Assessment, we made a determination that the Final Definition for the phrase “destruction or adverse modification” of critical habitat will not have a significant effect on the quality of the human environment under the meaning of section 102(2)(c) of the National Environmental Policy Act of 1969 (as amended).

Executive Order 13211 requires agencies to prepare Statements of Energy Effects when undertaking certain actions. This rule is not expected to affect energy supplies, distribution, or use. Therefore, this action is a not a significant energy action, and no Statement of Energy Effects is required.

A complete list of all references cited in this document is available upon request from the U.S. Fish and Wildlife Service (see FOR FURTHER INFORMATION CONTACT).

Accordingly, we amend part 402, subchapter A of chapter IV, title 50 of the Code of Federal Regulations, as set forth below:

Today, we publish in the Federal Register three related documents that are final agency actions. This document is one of the three, of which two are final rules and one is a final policy:

• A final rule that amends the regulations governing section 7 consultation under the Endangered Species Act to revise the definition of “destruction or adverse modification” of critical habitat. That regulatory definition had been invalidated by several courts for being inconsistent with the Act. This final rule amends title 50 of the Code of Federal Regulations (CFR) at part 402. The Regulation Identifier Numbers (RIN) are 1018-AX88 and 0648-BB82, and the final rule may be found on http://www.regulations.gov at Docket No. FWS-R9-ES-2011-0072.

• A final rule that amends the regulations governing the designation of critical habitat under section 4 of the Act. A number of factors, including litigation and the Services' experience over the years in interpreting and applying the statutory definition of “critical habitat,” highlighted the need to clarify or revise the regulations. This final rule amends 50 CFR part 424. It is published under RINs 1018-AX86 and 0648-BB79 and may be found on http://www.regulations.gov at Docket No. FWS-HQ-ES-2012-0096.

• A final policy pertaining to exclusions from critical habitat and how we may consider partnerships and conservation plans, conservation plans permitted under section 10 of the Act, Tribal lands, national-security and homeland-security impacts and military lands, Federal lands, and economic impacts in the exclusion process. This final policy complements the final rule amending 50 CFR 424.19 and provides for a predictable and transparent exclusion process. The policy is published under RINs 1018-AX87 and 0648-BB82 and is set forth below in this document. The policy may be found on http://www.regulations.gov at Docket No. FWS-R9-ES-2011-0104.

The National Marine Fisheries Service (NMFS) and U.S. Fish and Wildlife Service (FWS) are charged with implementing the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.) (Act), the goal of which is to provide a means to conserve the ecosystems upon which listed species depend and to provide a program for listed species conservation. Critical habitat is one tool in the Act that Congress established to achieve species conservation. In section 3(5)(A) of the Act Congress defined “critical habitat” as:

(i) The specific areas within the geographical area occupied by the species, at the time it is listed in accordance with the provisions of section 4 of this Act, on which are found those physical or biological features (I) essential to the conservation of the species and (II) which may require special management considerations or protection; and

(ii) specific areas outside the geographical area occupied by the species at the time it is listed in accordance with the provisions of section 4 of this Act, upon a determination by the Secretary that such areas are essential for the conservation of the species.

Specifying the geographic location of critical habitat helps facilitate implementation of section 7(a)(1) by identifying areas where Federal agencies can focus their conservation programs and use their authorities to further the purposes of the Act. In addition to serving as an educational tool, the designation of critical habitat also provides a significant regulatory protection—the requirement that Federal agencies consult with the Services under section 7(a)(2) to insure their actions are not likely to destroy or adversely modify critical habitat.

Section 4 of the Act requires the Services to designate critical habitat, and sets out standards and processes for determining critical habitat. Congress authorized the Secretaries to “exclude any area from critical habitat if [s]he determines that the benefits of exclusion outweigh the benefits of specifying such area as part of the critical habitat, unless [s]he determines, based on the best scientific and commercial data available, that the failure to designate such area as critical habitat will result in the extinction of the species concerned” (section 4(b)(2)).

Over the years, legal challenges have been brought to the Services' process for considering exclusions. Several court decisions have addressed the Services' implementation of section 4(b)(2). In 2008, the Solicitor of the Department of the Interior issued a legal opinion on implementation of section 4(b)(2) (http://www.doi.gov/solicitor/opinions.html). That opinion is based on the text of the Act and principles of statutory interpretation and relevant case law. The opinion explained the legal considerations that guide the Secretary's exclusion authority, and discussed and elaborated on the application of these considerations to the circumstances commonly faced by the Services (e.g., habitat conservation plans, Tribal lands).

To provide greater predictability and transparency regarding how the Services generally consider exclusions under section 4(b)(2), the Services announce this final policy regarding several issues that frequently arise in the context of exclusions. This policy on implementation of specific aspects of section 4(b)(2) does not cover the entire range of factors that may be considered as the basis for an exclusion in any given designation, nor does it serve as a comprehensive interpretation of all the provisions of section 4(b)(2).

This final policy sets forth the Services' position regarding how we consider partnerships and conservation plans, conservation plans permitted under section 10 of the Act, Tribal lands, national-security and homeland-security impacts and military lands, Federal lands, and economic impacts in the exclusion process. The Services intend to apply this policy when considering exclusions from critical habitat. That being said, under the terms of the policy, the Services retain a great deal of discretion in making decisions with respect to exclusions from critical habitat. This policy does not mandate particular outcomes in future decisions on critical habitat designations.

Below are a summary of changes to the proposed policy elements as a result of public comment and review. The final policy elements can be found at the end of this policy.

1. Added language to policy element 2 to make clear that the list presented in this policy is not a list of requirements for non-permitted plans, but rather factors the Services will use to evaluate non-permitted plans and partnerships. This list is not exclusive; all items may not apply to every plan.

2. In policy element 2(c), added text to the criterion in the non-permitted plans policy element to clarify that required determinations may be a factor considered in a discretionary 4(b)(2) exclusion analysis where such determinations are “necessary and appropriate.”

3. Removed the phrase, “not just providing guidelines,” from paragraph 3(c).

4. Made several other minor edits to increase clarity and readability of the policy elements.

On August 28, 2013 (78 FR 53058), the Services published a final rule revising 50 CFR 424.19. In that rule the Services elaborated on the process and standards for implementing section 4(b)(2) of the Act. This final policy is meant to complement those revisions to 50 CFR 424.19, and provides further clarification as to how the Services will implement section 4(b)(2) when designating critical habitat.

Section 4(b)(2) of the Act provides that:

In 1982, Congress added this provision to the Act, both to require the Services to consider the relevant impacts of designating critical habitat and to provide a means for the Services to reduce potentially negative impacts of designation by excluding, in appropriate circumstances, particular areas from a designation. The first sentence of section 4(b)(2) sets out a mandatory requirement that the Services consider the economic impact, impact on national security, and any other relevant impacts prior to designating an area as part of a critical habitat designation. The Services always consider such impacts, as required under this sentence, for each and every designation of critical habitat. (Although the term “homeland security” was not in common usage in 1982, the Services conclude that Congress intended that “national security” includes what we now refer to as “homeland security.”)

The second sentence of section 4(b)(2) outlines a separate, discretionary process by which the Secretaries may elect to determine whether to exclude an area from the designation, by performing an exclusion analysis. The Services use their consideration of impacts under the first sentence of section 4(b)(2), their consideration of whether to engage in the discretionary exclusion analysis under the second sentence of section 4(b)(2), and any exclusion analysis that the Services undertake, as the primary basis for satisfying the provisions of Executive Orders 12866 and 13563. E.O. 12866 (incorporated by E.O. 13563) requires agencies to assess the costs and benefits of a rule, and, to the extent permitted by law, to propose or adopt the rule only upon a reasoned determination that the benefits of the intended regulation justify the costs.

Conducting an exclusion analysis under section 4(b)(2) involves balancing or weighing the benefits of excluding a particular area from a designation of critical habitat against the benefits of including that area in the designation. If the benefits of exclusion outweigh the benefits of inclusion, the Secretaries may exclude the particular area, unless they determine that the exclusion will result in the extinction of the species concerned. The discretionary 4(b)(2) exclusion analysis is fully consistent with the E.O. requirements in that the analysis permits excluding an area where the benefits of exclusion outweigh the benefits of inclusion, and would not lead to exclusion of an area when the benefits of exclusion do not outweigh the benefits of inclusion.

This policy sets forth specific categories of information that we often consider when we enter into the discretionary 4(b)(2) exclusion analysis and exercise the Secretaries' discretion to exclude areas from critical habitat. We do not intend to cover in these examples all the categories of information that may be relevant, or to limit the Secretaries' discretion to consider and assign weight to any relevant benefits as appropriate.

Moreover, our implementing regulations at 50 CFR 424.19 further clarify the exclusion process for critical habitat and address statutory changes and case law. The regulations at 50 CFR 424.19, as well as the statute itself, state that the Secretaries have the discretion to exclude any particular area from the critical habitat upon a determination that the benefits of such exclusion outweigh the benefits of specifying the particular area as part of the critical habitat. Furthermore, the Secretaries may consider any relevant benefits. The weight and consideration given to those benefits is within the discretion of the Secretaries. The regulations at 50 CFR 424.19 provide the framework for how the Services intend to implement section 4(b)(2) of the Act. This policy further details the discretion available to the Services (acting for the Secretaries), and provides detailed examples of how the Services may consider partnerships and conservation plans, conservation plans permitted under section 10 of the Act, Tribal lands, national-security and homeland-security impacts and military lands, Federal lands, and economic impacts in the exclusion process when we undertake a discretionary 4(b)(2) exclusion analysis.

When the Services determine that critical habitat is prudent and determinable for species listed as endangered or threatened species under the Act, they must follow the statutory and regulatory provisions of the Act to designate critical habitat. The Act's language makes clear that biological considerations drive the initial step of identifying critical habitat. First, the Act's definition of “critical habitat” requires the Secretaries to identify areas based on the conservation needs of the species. Second, section 4(b)(2) expressly requires designations to be made based on the best scientific data available. (It is important to note that, once the Secretaries identify specific areas that meet the definition of “critical habitat,” the Secretaries do not have the discretion to decline to recognize those areas as potential critical habitat. Only areas subject to an integrated natural resources management plan (INRMP) that meets the requirements of section 4(a)(3)(B)(i) are categorically ineligible for designation.)

Having followed the biologically driven first step of identifying “critical habitat” for a species, the Secretaries turn to the remaining procedures set forth in section 4(b)(2), which allow for consideration of whether those areas ultimately should be designated as critical habitat. Thus, pursuant to the first sentence of section 4(b)(2), the Secretaries then undertake the mandatory consideration of impacts on the economy and national security, as well as any other impact that the Secretaries determine is relevant.

The Act provides a mechanism that allows the Secretaries to exclude particular areas only upon a determination that the benefits of exclusion outweigh those of inclusion, so long as the exclusion will not result in the extinction of the species concerned. The Services call this the discretionary 4(b)(2) exclusion analysis. Neither the Act nor the implementing regulations at 50 CFR 424.19 require the Secretaries to conduct a discretionary 4(b)(2) exclusion analysis (see, e.g., Cape Hatteras Access Preservation Alliance v. DOI, 731 F. Supp. 2d 15, 29-30 (D.D.C. 2010)). Rather, the Secretaries have discretion as to whether to conduct that analysis. If a Secretary decides not to consider exclusion of any particular area, no additional analysis is required. However, if the Secretary contemplates exclusion of a particular area, an initial screening may be conducted to evaluate potential exclusions. The Secretary may undertake a preliminary evaluation of any plans, partnerships, economic considerations, national-security considerations, or other relevant impacts identified after considering the impacts required by the first sentence of section 4(b)(2). Following the preliminary evaluation, the Secretary may choose to enter into the discretionary 4(b)(2) exclusion analysis for any particular area. If the Secretary does so, the Secretary has broad discretion as to what factors to consider as benefits of inclusion and benefits of exclusion, and what weight to assign to each factor—nothing in the Act, its implementing regulations, or this policy limits this discretion.

When conducting a discretionary 4(b)(2) exclusion analysis, one of the factors that the Secretaries may consider is the effect of existing conservation plans or programs. Those plans and programs can reduce the benefits of including particular areas in a designation of critical habitat. To state this another way, because there are already conservation actions occurring on the ground as a result of the plan or program, the regulatory benefit of overlaying a designation of critical habitat may be reduced, because the designation may be redundant, or may provide little more conservation benefit compared to what is already being provided through the conservation plan or program. As a result, the existence of these conservation plans or programs reduces the benefits of including an area in critical habitat. As a matter of logic, however, the conservation benefits of an existing conservation plan or program generally cannot be considered benefits of excluding the area it covers from designation as critical habitat. This is because the conservation plan or program neither results from the exclusion being contemplated, nor is its continuation dependent on the exclusion being contemplated. The conservation plan or program is materially unaffected regardless of inclusion or exclusion from critical habitat.

In addition, the Services wish to encourage and foster conservation partnerships, which can lead to future conservation plans that benefit listed species. This is particularly important because partnerships can lead to conservation actions that provide benefits, with respect to private lands, that often cannot be achieved through designation of critical habitat and section 7 consultations. Because conservation partnerships are voluntary, the Services have concluded that excluding areas covered by existing plans and programs can encourage land managers to partner with the Services in the future, by removing any real or perceived disincentives for engaging in conservation activities. Those future partnerships do not necessarily reduce the benefits of including an area in critical habitat now; they may, however, provide a benefit by encouraging future conservation action. That benefit is a benefit of excluding an area from the designation. Thus, an existing plan or program can reduce the benefits of inclusion of an area covered by the plan or program, and at the same time the Secretaries' choice to exclude the area may encourage future conservation partnerships. Moreover, because the fostering and maintenance of partnerships can greatly further the conservation goals of the Act, we generally give great weight to the benefits of excluding areas where we have demonstrated partnerships.

In a discretionary 4(b)(2) exclusion analysis, the Services compare benefits of inclusion with benefits of exclusion. Some examples of benefits of including a particular area in critical habitat include, but are not limited to: (1) The educational benefits of identifying an area as critical habitat (e.g., general increase of awareness of listed species and their designated critical habitat); and (2) the regulatory benefit of designating an area as critical habitat as realized through an adverse modification analysis in a section 7 consultation. As discussed above, these benefits of inclusion may be reduced by the conservation provisions of a plan or program, in that the educational benefit may have already been realized through development of the plan, and the on-the-ground conservation actions may already provide some or all of the benefit that could be reasonably expected as the outcome of a section 7 consultation. The weights assigned to the benefits of inclusion in any particular case are determined by the Secretaries. Some examples of benefits of excluding a particular area from critical habitat include: (1) Where there is an existing conservation plan or program, the encouragement of additional conservation partnerships in the future; and (2) the avoidance of probable negative incremental impacts from designating a particular area as critical habitat, including economic impacts and impacts to national security and public safety.

The next step in the discretionary 4(b)(2) exclusion analysis is for the Secretaries to determine if the benefits of exclusion outweigh the benefits of inclusion for a particular area. If so, they may exclude that area, unless they determine that the exclusion will result in the extinction of the species concerned. We note that exclusions primarily based on conservation plans will likely maintain the overall level of protection for the species in question, because the plans will have reduced or eliminated the benefit of designating that area, as discussed above. In contrast, exclusions primarily based on economic or national security considerations may result in less overall protection for the species (i.e., forgoing significant benefits of inclusion). However, regardless of conservation outcome as outlined above, the Secretaries may still exclude such areas as long as they conclude that the benefits of exclusion outweigh the benefits of inclusion (and the exclusion itself would not result in extinction of the species).

The Act affords a great degree of discretion to the Services in implementing section 4(b)(2). This discretion is applicable to a number of aspects of section 4(b)(2) including whether to enter into the discretionary 4(b)(2) exclusion analysis and the weights assigned to any particular factor used in the analysis. Most significant is that the decision to exclude is always discretionary, as the Act states that the Secretaries “may” exclude any areas. Under no circumstances is exclusion required under the second sentence of section 4(b)(2).

This policy explains how the Services generally exercise their discretion to exclude an area when the benefits of exclusion outweigh the benefits of inclusion. In articulating this general practice, the Services do not intend to limit in any manner the discretion afforded to the Secretaries by the statute.

We sometimes exclude specific areas from critical habitat designations based in part on the existence of private or other non-Federal conservation plans or agreements and their attendant partnerships. A conservation plan or agreement describes actions that are designed to provide for the conservation needs of a species and its habitat, and may include actions to reduce or mitigate negative effects on the species caused by activities on or adjacent to the area covered by the plan. Conservation plans or agreements can be developed by private entities with no Service involvement, or in partnership with the Services. In the case of a habitat conservation plan (HCP), safe harbor agreement (SHA), or a candidate conservation agreement with assurances (CCAA), a plan or agreement is developed in partnership with the Services for the purposes of attaining a permit under section 10 of the Act. See paragraph c, below, for a discussion of HCPs, SHAs, and CCAAs.

We evaluate a variety of factors to determine how the benefits of any exclusion and the benefits of inclusion are affected by the existence of private or other non-Federal conservation plans or agreements and their attendant partnerships when we undertake a discretionary 4(b)(2) exclusion analysis. A non-exhaustive list of factors that we will consider for non-permitted plans or agreements is shown below. These factors are not required elements of plans or agreements, and all items may not apply to every plan or agreement.

(i) The degree to which the record of the plan supports a conclusion that a critical habitat designation would impair the realization of benefits expected from the plan, agreement, or partnership;

(ii) The extent of public participation in the development of the conservation plan;

(iii) The degree to which there has been agency review and required determinations (e.g., State regulatory requirements), as necessary and appropriate;

(iv) Whether National Environmental Policy Act (NEPA; 42 U.S.C. 4321 et seq.) compliance was required;

(v) The demonstrated implementation and success of the chosen mechanism;

(vi) The degree to which the plan or agreement provides for the conservation of the essential physical or biological features for the species;

(vii) Whether there is a reasonable expectation that the conservation management strategies and actions contained in a management plan or agreement will be implemented; and

(viii) Whether the plan or agreement contains a monitoring program and adaptive management to ensure that the conservation measures are effective and can be modified in the future in response to new information.

HCPs for incidental take permits under section 10(a)(1)(B) of the Act provide for partnerships with non-Federal entities to minimize and mitigate impacts to listed species and their habitat. In some cases, HCP permittees agree to do more for the conservation of the species and their habitats on private lands than designation of critical habitat would provide alone. We place great value on the partnerships that are developed during the preparation and implementation of HCPs.

CCAAs and SHAs are voluntary agreements designed to conserve candidate and listed species, respectively, on non-Federal lands. In exchange for actions that contribute to the conservation of species on non-Federal lands, participating property owners are covered by an “enhancement of survival” permit under section 10(a)(1)(A) of the Act, which authorizes incidental take of the covered species that may result from implementation of conservation actions, specific land uses, and, in the case of SHAs, the option to return to a baseline condition under the agreements. The Services also provide enrollees assurances that we will not impose further land-, water-, or resource-use restrictions, or require additional commitments of land, water, or finances, beyond those agreed to in the agreements.

When we undertake a discretionary 4(b)(2) exclusion analysis, we will always consider areas covered by a permitted CCAA/SHA/HCP, and we anticipate consistently excluding such areas from a designation of critical habitat if incidental take caused by the activities in those areas is covered by the permit under section 10 of the Act and the CCAA/SHA/HCP meets all of the following conditions:

1. The permittee is properly implementing the CCAA/SHA/HCP, and is expected to continue to do so for the term of the agreement. A CCAA/SHA/HCP is properly implemented if the permittee is, and has been, fully implementing the commitments and provisions in the CCAA/SHA/HCP, Implementing Agreement, and permit.

2. The species for which critical habitat is being designated is a covered species in the CCAA/SHA/HCP, or very similar in its habitat requirements to a covered species. The recognition that the Services extend to such an agreement depends on the degree to which the conservation measures undertaken in the CCAA/SHA/HCP would also protect the habitat features of the similar species.

3. The CCAA/SHA/HCP specifically addresses the habitat of the species for which critical habitat is being designated and meets the conservation needs of the species in the planning area.

We will undertake a case-by-case analysis to determine whether these conditions are met and, as with other conservation plans, whether the benefits of exclusion outweigh the benefits of inclusion.

The benefits of excluding lands with CCAAs, SHAs, or properly implemented HCPs that have been permitted under section 10 of the Act include relieving landowners, communities, and counties of any additional regulatory burdens that might be imposed as a result of the critical habitat designation. A related benefit of exclusion is the unhindered, continued ability to maintain existing partnerships, and the opportunity to seek new partnerships with potential plan participants, including States, counties, local jurisdictions, conservation organizations, and private landowners. Together, these entities can implement conservation actions that the Services would be unable to accomplish without private landowners. These partnerships can lead to additional CCAAs, SHAs, and HCPs. This is particularly important because HCPs often cover a wide range of species, including listed plant species (for which there is no general take prohibition under section 9 of the Act), and species that are not State or federally listed (which do not receive the Act's protections). Neither of these categories of species are likely to be protected from development or other impacts in the absence of HCPs.

As is the case with conservation plans generally, the protections that a CCAA, SHA, or HCP provide to habitat can reduce the benefits of including the covered area in the critical habitat designation. However, those protections may not eliminate the benefits of critical habitat designation. For example, because the Services generally approve HCPs on the basis of their efficacy at minimizing and mitigating negative impacts to listed species and their habitat, these plans generally offset those benefits of inclusion. Nonetheless, HCPs often allow for development of some of the covered area, and the associated permit provides authorization of incidental take caused by that development (although a properly designed HCP should steer development toward the least biologically important habitat). Thus, designation of the areas specified for development that meet the definition of “critical habitat” may still provide a conservation benefit to the species. In addition, if activities not covered by the HCP are affecting or may affect an area that is identified as critical habitat, then the benefits of inclusion of that specific area may be relatively high, because additional conservation benefits may be realized by the designation of critical habitat in that area. In any case, the Services will weigh the benefits of inclusion against the benefits of exclusion (usually the fostering of partnerships that may result in future conservation actions).

We generally will not exclude from a designation of critical habitat any areas likely to be covered by CCAAs, SHAs, and HCPs that are still under development when we undertake a discretionary 4(b)(2) exclusion analysis. If a CCAA, SHA, or HCP is close to being approved, we will evaluate these draft plans under the framework of general plans and partnerships (subsection b, above). In other words, we will consider factors, such as partnerships that have been developed during the preparation of draft CCAAs, SHAs, and HCPs, and broad public benefits, such as encouraging the continuation of current and development of future conservation efforts with non-Federal partners, as possible benefits of exclusion. However, we will generally give little weight to promises of future conservation actions in draft CCAAs, SHAs, and HCPs; therefore, we will generally find that such promises will do little to reduce the benefits of inclusion in the discretionary 4(b)(2) exclusion analysis, even if they may directly benefit the species for which a critical habitat designation is proposed.

There are several Executive Orders, Secretarial Orders, and policies that relate to working with Tribes. These guidance documents generally confirm our trust responsibilities to Tribes, recognize that Tribes have sovereign authority to control Tribal lands, emphasize the importance of developing partnerships with Tribal governments, and direct the Services to consult with Tribes on a government-to-government basis.

A joint Secretarial Order that applies to both FWS and NMFS, Secretarial Order 3206, American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act (June 5, 1997) (S.O. 3206), is the most comprehensive of the various guidance documents related to Tribal relationships and Act implementation, and it provides the most detail directly relevant to the designation of critical habitat. In addition to the general direction discussed above, S.O. 3206 explicitly recognizes the right of Tribes to participate fully in the listing process, including designation of critical habitat. The Order also states: “Critical habitat shall not be designated in such areas unless it is determined essential to conserve a listed species. In designating critical habitat, the Services shall evaluate and document the extent to which the conservation needs of the listed species can be achieved by limiting the designation to other lands.” In light of this instruction, when we undertake a discretionary 4(b)(2) exclusion analysis, we will always consider exclusions of Tribal lands under section 4(b)(2) of the Act prior to finalizing a designation of critical habitat, and will give great weight to Tribal concerns in analyzing the benefits of exclusion.

However, S.O. 3206 does not preclude us from designating Tribal lands or waters as critical habitat, nor does it state that Tribal lands or waters cannot meet the Act's definition of “critical habitat.” We are directed by the Act to identify areas that meet the definition of “critical habitat” (i.e., areas occupied at the time of listing that contain the essential physical or biological features that may require special management or protection and unoccupied areas that are essential to the conservation of a species), without regard to landownership. While S.O. 3206 provides important direction, it expressly states that it does not modify the Secretaries' statutory authority.

Section 4(a)(3)(B)(i) of the Act (16 U.S.C. 1533(a)(3)(B)(i)), as revised in 2003, provides: “The Secretary shall not designate as critical habitat any lands or other geographical areas owned or controlled by the Department of Defense (DoD), or designated for its use, that are subject to an integrated natural resources management plan [INRMP] prepared under section 101 of the Sikes Act Improvement Act of 1997 (Sikes Act) (16 U.S.C. 670a), if the Secretary determines in writing that such plan provides a benefit to the species for which critical habitat is proposed for designation.” In other words, as articulated in the final revised regulations at 50 CFR 424.12(h), if the Services conclude that an INRMP “provides a benefit” to the species, the area covered is ineligible for designation and thus cannot be designated as critical habitat.

Section 4(a)(3)(B)(i) of the Act, however, may not cover all DoD lands or areas that pose potential national-security concerns (e.g., a DoD installation that is in the process of revising its INRMP for a newly listed species or a species previously not covered). If a particular area is not covered under section 4(a)(3)(B)(i), national-security or homeland-security concerns are not a factor in the process of determining what areas meet the definition of “critical habitat.” Nevertheless, when designating critical habitat under section 4(b)(2), the Secretaries must consider impacts on national security, including homeland security, on lands or areas not covered by section 4(a)(3)(B)(i). Accordingly, we will always consider for exclusion from the designation areas for which DoD, Department of Homeland Security (DHS), or another Federal agency has requested exclusion based on an assertion of national-security or homeland-security concerns.

We cannot, however, automatically exclude requested areas. When DoD, DHS, or another Federal agency requests exclusion from critical habitat on the basis of national-security or homeland-security impacts, it must provide a reasonably specific justification of an incremental impact on national security that would result from the designation of that specific area as critical habitat. That justification could include demonstration of probable impacts, such as impacts to ongoing border-security patrols and surveillance activities, or a delay in training or facility construction, as a result of compliance with section 7(a)(2) of the Act. If the agency requesting the exclusion does not provide us with a reasonably specific justification, we will contact the agency to recommend that it provide a specific justification or clarification of its concerns relative to the probable incremental impact that could result from the designation. If the agency provides a reasonably specific justification, we will defer to the expert judgment of DoD, DHS, another Federal agency as to: (1) Whether activities on its lands or waters, or its activities on other lands or waters, have national-security or homeland-security implications; (2) the importance of those implications; and (3) the degree to which the cited implications would be adversely affected in the absence of an exclusion. In that circumstance, in conducting a discretionary 4(b)(2) exclusion analysis, we will give great weight to national-security and homeland-security concerns in analyzing the benefits of exclusion.

We recognize that we have obligations to consider the impacts of designation of critical habitat on Federal lands under the first sentence of section 4(b)(2) and under E.O. 12866. However, as mentioned above, the Services have broad discretion under the second sentence of 4(b)(2) on how to weigh those impacts. In particular, “[t]he consideration and weight given to any particular impact is completely within the Secretary's discretion.” (H.R. Rep. No. 95-1625, at 17 (1978)). In considering how to exercise this broad discretion, we are mindful that Federal land managers have unique obligations under the Act. First, Congress declared its policy that “all Federal departments and agencies shall seek to conserve endangered species and threatened species and shall utilize their authorities in furtherance of the purposes of this Act.” (section 2(c)(1)). Second, all Federal agencies have responsibilities under section 7 of the Act to carry out programs for the conservation of listed species and to ensure their actions are not likely to jeopardize the continued existence of listed species or result in the destruction or adverse modification of critical habitat.

We also note that, while the benefits of excluding non-Federal lands include development of new conservation partnerships, those benefits do not generally arise with respect to Federal lands, because of the independent obligations of Federal agencies under section 7 of the Act. Conversely, the benefits of including Federal lands in a designation are greater than non-Federal lands because there is a Federal nexus for projects on Federal lands. Thus, if a project for which there is discretionary Federal involvement or control is likely to adversely affect the critical habitat, a formal section 7 consultation would occur and the Services would consider whether the project would result in the destruction or adverse modification of the critical habitat.

Under the Act, the only direct consequence of critical habitat designation is to require Federal agencies to ensure, through section 7 consultation, that any action they fund, authorize, or carry out does not destroy or adversely modify designated critical habitat. The costs that this requirement may impose on Federal agencies can be divided into two types: (1) The additional administrative or transactional costs associated with the consultation process with a Federal agency, and (2) the costs to Federal agencies and other affected parties, including applicants for Federal authorizations (e.g., permits, licenses, leases), of any project modifications necessary to avoid destruction or adverse modification of critical habitat. Consistent with the unique obligations that Congress imposed for Federal agencies in conserving endangered and threatened species, we generally will not consider avoidance of the administrative or transactional costs associated with the section 7 consultation process to be a “benefit” of excluding a particular area from a critical habitat designation in any discretionary 4(b)(2) exclusion analysis. We will, however, consider the extent to which such consultation would produce an outcome that has economic or other impacts, such as by requiring project modifications and additional conservation measures by the Federal agency or other affected parties.

Federal lands should be prioritized as sources of support in the recovery of listed species. To the extent possible, we will focus designation of critical habitat on Federal lands in an effort to avoid the real or perceived regulatory burdens on non-Federal lands. We do greatly value the partnership of other Federal agencies in the conservation of listed and non-listed species. However, for the reasons listed above, we will focus our exclusions on non-Federal lands. We are most likely to determine that the benefits of excluding Federal lands outweigh the benefits of including those lands when national-security or homeland-security concerns are present.

The first sentence of section 4(b)(2) of the Act requires the Services to consider the economic impacts (as well as the impacts on national security and any other relevant impacts) of designating critical habitat. In addition, economic impacts may, for some particular areas, play an important role in the discretionary 4(b)(2) exclusion analysis under the second sentence of section 4(b)(2). In both contexts, the Services will consider the probable incremental economic impacts of the designation. When the Services undertake a discretionary 4(b)(2) exclusion analysis with respect to a particular area, they will weigh the economic benefits of exclusion (and any other benefits of exclusion) against any benefits of inclusion (primarily the conservation value of designating the area). The conservation value may be influenced by the level of effort needed to manage degraded habitat to the point where it could support the listed species. The Services will use their discretion in determining how to weigh probable incremental economic impacts against conservation value. The nature of the probable incremental economic impacts and not necessarily a particular threshold level triggers considerations of exclusions based on probable incremental economic impacts. For example, if an economic analysis indicates high probable incremental impacts of designating a particular critical habitat unit of low conservation value (relative to the remainder of the designation), the Services may consider exclusion of that particular unit.

On May 12, 2014, we published a document in the Federal Register (79 FR 27052) that requested written comments and information from the public on the draft policy regarding implementing section 4(b)(2) of the Act. In that document, we announced that the comment period would be open for 60 days, ending July 11, 2014. We received numerous requests to extend the comment period, and we subsequently published a document on June 26, 2014 (79 FR 36330), extending the comment period to October 9, 2014. Comments we received are grouped into general categories specifically relating to the draft policy.

Comment (1): Many commenters, including federally elected officials, requested an extension of the public comment period announced in the draft policy. Additionally, we received requests to reopen the comment period that ended on October 9, 2014.

Our Response: On June 26, 2014 (79 FR 36330), we extended the public comment period on the draft policy for an additional 90 days to accommodate this request and to allow for additional review and public comment. The comment period for the draft policy was, therefore, open for 150 days, which provided adequate time for all interested parties to submit comments and information. Additionally, the Services held numerous outreach initiatives that included briefings and webinars for elected officials, States, potentially affected Federal agencies, and interest groups, both environmental- and industry-focused.

Comment (2): We received many comments regarding the Services' delegated discretion from the Secretaries. Commenters expressed concern that the Services' delegated discretion is too broad, the assigning of weight to benefits is subjective, and the proposed policy would greatly extend the Services' discretionary authority and allow for subjective disregard of voluntary State and private conservation efforts.

Our Response: This policy does not expand or reduce Secretarial authority. The policy reflects only the discretion expressly provided for in the Act. The word “shall” is used to denote mandatory actions or outcomes, and “may” is used to indicate where there is discretion in particular matters. In the Act, the word “may,” as it prefaces the phrase “exclude a particular area,” thus clearly provides the Secretaries a choice, the ability to decide whether areas should be excluded based on weighing benefits of inclusion against the benefits of exclusion. The Secretaries may choose to exclude particular areas if those benefits of exclusion outweigh benefits of inclusion, unless the exclusion will result in the extinction of the species concerned. Commenters appear to be questioning the Secretary's ability to choose whether to enter into the discretionary weighing of benefits. Congress expressly provided the Secretaries discretion to decide whether to enter into the exclusion analysis described in the second sentence of section 4(b)(2). By contrast, the Secretaries do not have discretion when it comes to the requirement to consider the economic impact, impacts to national security, and any other relevant impact of specifying an area as critical habitat, as described in the first sentence of section 4(b)(2).

Finally, this policy generally reflects the practices followed by the Services regarding their implementation of section 4(b)(2), and provides greater transparency by explaining to the public how the Services generally exercise the discretion granted by the Act.

Comment (3): Some commenters suggested that the Services need to clarify that the Secretaries have discretion in whether to conduct an exclusion analysis. They stated that, while the draft policy does identify the discretionary nature of exclusions under 4(b)(2), language in other areas of the policy, such as “we will always consider” and “generally exclude,” may cause confusion, and appear contradictory. Furthermore, some commenters stated that discussion of the discretionary 4(b)(2) exclusion analysis should clearly state that such analysis occurs only after the Secretary has identified an area she “may” consider for exclusion, based on consideration of the economic impact, the impact on national security, and any other relevant impact (see M-Opinion at 2. Step 2, p. 17).

Our Response: We agree with the commenter, and have made edits in the final policy to reflect and clarify what are requirements under the Act and where discretion is provided, in particular with the discretionary 4(b)(2) exclusion analysis.

Comment (4): Commenters noted that the Services are required to consider all reasonable requests for exclusion, which is in contrast to the Services' position that they cannot be required to grant an exclusion request, and state that “in no circumstances is exclusion required.” The commenters stated that the Services' narrow view of section 4(b)(2) cannot be reconciled with the Act, or the history surrounding the 1978 amendments, and there is nothing in the statute that confers broad discretion. The two sentences of 4(b)(2) require the Services to “consider” economic impacts, and then to consider excluding a particular area from the designation of critical habitat. The commenters suggested that these are not separate obligations, and that it is illogical for the Services to suggest that Congress intended to require the Services to identify the economic impacts without intending for the Services to apply any consideration of those impacts.

Our Response: We disagree with the commenter. Section 4(b)(2) of the Act sets forth a mandatory consideration of impacts and a discretionary consideration of possible exclusions. The commenter is mistaken that the Act requires any particular “action” that must be taken following the consideration of impacts. The text of the Act is clear in the second sentence of section 4(b)(2):

Recent court decisions have resoundingly upheld the discretionary nature of the Secretaries' consideration of whether to exclude areas from critical habitat. See Bldg. Indus. Ass'n v. U.S. Dept. of Commerce, 792 F.3d.1027 (9th Cir. 2015), aff'g 2012 WL 6002511 (N.D. Cal. Nov. 30, 2012) (unreported); Bear Valley Mut. Water Co. v. Jewell, 790 F.3d. 977 (9th Cir. 2015); Cape Hatteras Access Pres. Alliance v. DOI, 731 F. Supp. 2d 15, 28-30 (D.D.C. 2010). The operative word is “may.” There is no requirement to exclude, or even to enter into a discretionary 4(b)(2) exclusion analysis for, any particular area identified as critical habitat. The Services do consider economic impacts, and apply the consideration of those probable incremental economic impacts in considering whether to enter into the discretionary 4(b)(2) exclusion analysis. Based on the results of the economic analysis, the Services may elect not to enter into the discretionary 4(b)(2) exclusion analysis based on economic impact alone. If they engage in a discretionary exclusion analysis, the Services may consider information from different sources (e.g., the economic analysis and conservation plan) in one section 4(b)(2) exclusion analysis.

Comment (5): Numerous commenters interpreted the draft policy as a significant change in how the Services will consider exclusions under 4(b)(2).

Our Response: The Services are not changing our practice of considering or conducting discretionary 4(b)(2) exclusion analyses. The 2008 Department of the Interior Solicitor's Section 4(b)(2) memorandum (M-37016, “The Secretary's Authority to Exclude Areas from a Critical Habitat Designation under Section 4(b)(2) of the Endangered Species Act” (Oct. 3, 2008)) (DOI 2008) and the regulations at 50 CFR 424.19 provide general guidance on how to implement section 4(b)(2) of the Act, and form the basis for this policy. This policy generally reflects the practices followed by the Services, and provides greater transparency by explaining to the public how the Services generally exercise the discretion granted by the Act.

Comment (6): A commenter noted that, rather than considering partnership opportunities as a benefit of exclusion, the Services expect that benefits of an existing conservation plan will continue regardless of critical habitat designation and, therefore, do not consider an existing plan when weighing the benefits of exclusion. Furthermore, the Services will consider these benefits to reduce the benefits of inclusion. The commenter expressed concern that this position could serve as a disincentive for voluntary conservation. Furthermore, the commenter suggested that under the new policy, the Services will have to review for potential exclusion each plan on a case-by-case basis, giving the Services broader discretion than previously held.

Our Response: Because we received many similar comments, we have added a section, General Framework for Considering an Exclusion and Conducting a Discretionary 4(b)(2) Exclusion Analysis, to the preamble of this document to clarify the way we consider and conduct exclusions. Furthermore, this section explains the way in which we consider conservation plans and partnerships when conducting a discretionary 4(b)(2) exclusion analysis. In brief, the commenters appear to misunderstand how we account for the benefits of conservation plans. The accounting that we use (what counts as a benefit of exclusion, and what serves to reduce benefits of inclusion) is the only logical way of parsing the effects of conservation plans consistent with the statute. But in no way does this accounting discount the benefits of conservation plans—it just puts those benefits in the proper context. Therefore, we disagree with the commenters that our accounting will in any way act as a disincentive for voluntary conservation. In fact, one of the primary purposes of this policy is to explain the important role that conservation plans play in our implementation of section 4(b)(2), and thus, in effect, to explain the existing incentive for land managers to create those plans.

The Services have reviewed and will continue to review each plan for potential exclusion on a case-by-case basis; we are continuing our existing practice, and not broadening our discretion. Adopting a policy that would exclude areas without an analysis and weighing of the benefits of inclusion and exclusion on a case-by-case basis, as the commenters appear to suggest, would not be consistent with the requirements of the Act or our implementing regulations at 50 CFR 424.19.

Comment (7): One commenter suggested that the policy should be revised to give greater detail on the processes the Services will use to review and exclude areas covered by existing conservation plans. When determining whether the benefits of exclusion outweigh the benefits of inclusion, the commenter noted that the Services will evaluate a variety of factors; however, no metrics were provided. For example, it is uncertain if each factor must be considered or if only three or four are sufficient. The commenter posed questions such as: will the Services give all factors equal weight or will some be deemed more important, and what evidence must be provided to demonstrate that the thresholds have been met? While the factors provide general direction, the commenter stated the Services provide no indication of how the evaluations will be conducted or what the thresholds might be. Finally, the commenter suggested it is unclear how the Services plan on evaluating whether the agreements are being properly implemented and how the Services will evaluate whether the permittee is expected to continue to properly implement the agreement.

Our Response: The Services cannot prescribe which factors should be used when developing a conservation plan that does not have Federal involvement. The list provided in the draft policy and in this final policy is not exhaustive; rather, it is intended to illustrate the types of factors that the Services will use when evaluating such plans.

Conservation plans that lead to the issuance of a permit under section 10 of the Act (including HCPs) go through a rigorous analysis under the Act to qualify for that permit. As discussed above, we will often exclude areas covered by such conservation plans. On the other hand, non-permitted conservation plans may not go through such analysis, and therefore must be more thoroughly analyzed before we will consider excluding areas covered by these plans.

The list of factors for non-permitted plans is not exclusive, not all factors may apply to every instance of evaluating a plan or partnership, and the listed factors are not requirements of plans or partnerships to be considered for exclusion. Criteria for non-permitted plans differ from criteria for permitted plans because the latter have already undergone rigorous analysis for the issuance of the associated permit and may have been measured or evaluated by additional criteria. For example, NEPA analysis has already been conducted before a permitted plan is finalized and a permit issued.

Comment (8): Several commenters suggested that the methodology for exclusion should be defined, and the draft policy grants the agencies much more leeway to include or exclude lands from critical habitat designation, by requiring that each area considered for exclusion be reviewed on a case-by-case basis. Commenters also stated that, although the policy states that the benefits of designation of critical habitat will be weighed against the costs of such designation in a cost/benefit analysis, there is no clearly defined methodology included in the draft policy. Commenters stated that, when exercising their discretion, the Services should explain fully the basis, including the weighing of benefits, for any determination that exclusion is not warranted for any of the areas covered by the policy.

Our Response: As discussed in our response to comment (2) above, this policy does not increase the discretion granted to the Secretaries by the Act. Moreover, each area considered for exclusion is unique, and evaluations are highly fact-specific; thus it is not possible to give a simple, formulaic methodology that will be used in all landscapes and situations. Further, it is important that the Secretaries retain discretion in assigning appropriate weight to benefits of inclusion and exclusion. Whenever the Services exclude areas under section 4(b)(2), they will explain the factors considered and the weighing of benefits. If the Services do not exclude an area that has been requested to be excluded through public comment, the Services will respond to this request. However, although the Services will explain their rationale for not excluding a particular area, that decision is committed to agency discretion. (Cape Hatteras Access Preservation Alliance v. DOI, 731 F. Supp. 2d 15, 29-30 (D.D.C. 2010)).

Comment (9): Many commenters suggested there is a lack of certainty that areas covered by permitted conservation plans will be excluded. Commenters stated that permitted conservation plans, including HCPs, SHAs, and CCAAs, provide a much greater conservation benefit to private land areas than other programs implemented under the Act. Many commenters asked that the final policy be modified to categorically exclude from critical habitat lands covered by permitted plans, provided that the plan is being properly implemented and the species is a covered species under the plan. Commenters noted that the conservation benefits from such agreements and the investment of effort and collaboration between the private sector and the Services should be acknowledged, and areas covered by conservation agreements developed and approved by the Services should expressly be excluded from designation of critical habitat. Commenters expressed concern that the need for a factual balancing test each time critical habitat is designated for a covered species poses major uncertainties for permittees.

Our Response: The Services agree with the goal of providing greater certainty through this policy. However, each plan is different, covers different areas with different objectives, and will likely have differences in implementation and effectiveness, differences in duration, and so forth. Therefore, the Services must consider each plan on a case-by-case basis.

As stated above, the Services do greatly value the commitments of private landowners and conservation partners to conserve species and their habitats. Even so, the Services cannot presumptively exclude particular areas from a designation of critical habitat. Should the Services enter into a discretionary 4(b)(2) exclusion analysis, the Act requires the Services to compare the benefits of including a particular area in critical habitat with the benefits of excluding the particular area. The Secretary may exclude an area if the benefits of exclusion outweigh those of inclusion, as long as the exclusion will not result in extinction of the species. Where they have decided to exclude an area, the Services must provide a reasonable consideration of factors on each side of the balance. The Services' draft policy and this final policy articulate clearly that the Services will give great weight and consideration to partnerships resulting from the development of HCPs, SHAs, and CCAAs. Additionally, the Services will give great weight to the conservation measures delivered on the ground by the plans mentioned above. The weight of the conservation measures will be applied to reduce the benefits of inclusion of that particular area in critical habitat, and in many cases the benefits of exclusion will outweigh the benefits of inclusion.

However, a permitted plan and a critical habitat designation may further different conservation goals. A permitted plan for a covered species addresses certain specific activities in a discrete area. It is designed to mitigate or minimize impacts from specific projects. By contrast, we designate critical habitat to conserve a species throughout its range (and sometimes beyond) in light of the varying threats facing the species. Thus, in a discretionary 4(b)(2) exclusion analysis, the Services must undertake a thorough balancing analysis for those areas that may be excluded, and cannot presume that the fact pattern is the same for each specific instance of a general category of plans.

Comment (10): Despite acknowledging the utility of non-permitted private and non-Federal conservation plans and partnerships, several commenters expressed the concern that the exclusion of these areas is not automatically guaranteed. Instead, the commenters noted that the Services will “sometimes exclude specific areas” from a critical habitat designation based on the existence of these plans or partnerships. In order to be successful, commenters stated private/non-Federal plans must be supported by the Services and automatically excluded from critical habitat designations. If not, future conservation plans may be at risk because applicants will feel uncertainty regarding the utility of their efforts. Commenters requested the Services to codify this change and ensure that land protected through voluntary conservation efforts will not be subjected to critical habitat overlays.

Our Response: Please see our response to the previous comment. Just as the Services cannot automatically guarantee exclusion of permitted conservation plans, we cannot presumptively exclude, or automatically exclude, private and non-Federal plans. When undertaking the discretionary 4(b)(2) exclusion analysis, the Services are obligated by section 4(b)(2) to weigh the benefits of inclusion and exclusion. The Services conduct this evaluation on a case-by-case, fact-specific basis. In this context, automatically excluding certain classes of lands or certain classes of agreements would be arbitrary.

However, as noted above, the Services do highly value private and non-Federal conservation plans and partnerships, and our objective is to encourage participation in voluntary conservation planning and collaborative partnerships. When entering into the discretionary 4(b)(2) exclusion analysis, the Services will consider fully the value and benefits of such plans and partnerships. The Services acknowledge that such programs and partnerships can implement conservation actions that the Services would be unable to accomplish without private and non-Federal landowners and partners.

Comment (11): Certain States requested the addition of a policy element to categorically or presumptively exclude all lands managed by State wildlife agencies. They stated that the Services should consider partnerships with State wildlife agencies similarly to the way they consider partnerships with Native American Tribes, and exclude lands managed by the State as they do Tribal lands. Whether a State conservation plan has been vetted through the public process should not have any relevance to the exclusion of such lands from critical habitat.

Our Response: As noted above, the Services must follow the direction of the Act and identify those lands meeting the definition of “critical habitat,” regardless of landownership. It is only after the identification of lands that meet the definition of “critical habitat” that we can consider other relevant factors. It appears that the commenter is requesting presumptive exclusion of specific State lands without a case-by-case analysis. As discussed above, the Act does not give the Secretaries the authority to exclude areas from critical habitat without first undertaking a discretionary 4(b)(2) exclusion analysis. As we consider areas for potential exclusion, as discussed throughout this policy, we give great weight and consideration to conservation partnerships, including those partnerships with States and Tribes. The Services note that S.O. 3206 has no applicability to State governments or State lands. Even in the context in which it applies, S.O. 3206 does not provide a blanket exclusion or automatic exemption of Tribal lands.

Comment (12): To further provide incentives for landowners or local and State governments to enter into conservation plans, agreements, or partnerships, a commenter stated the Services should, if they conduct a discretionary exclusion analysis, always exclude such areas from critical habitat designation if the benefits of exclusion outweigh the benefits of inclusion. The commenter stated that exclusion may incentivize parties to participate in future conservation plans or partnerships, especially the prelisting conservation measures encouraged by the Fish and Wildlife Service's recent draft policy regarding voluntary prelisting conservation actions.

Our Response: The Services agree that recognition of partnerships through exclusion from critical habitat may serve to remove any real or perceived disincentive that a designation of critical habitat may produce, and encourage parties to further engage in future conservation planning efforts. Should the Services elect to conduct a discretionary 4(b)(2) exclusion analysis, and if the benefits of exclusion outweigh the benefits of inclusion, in almost all situations we expect to exclude that particular area. Although the Services find it necessary to retain some discretion for the Secretaries because we cannot anticipate all fact patterns that may occur in all situations when considering exclusions from critical habitat, it is the general practice of the Services, consistent with E.O. 12866, to exercise this discretion to exclude an area when the benefits of exclusion outweigh the benefits of inclusion. However, the Secretaries may not exclude a particular area if the exclusion will result in the extinction of the species concerned. Please see the section General Framework for Considering an Exclusion and Conducting a Discretionary 4(b)(2) Exclusion Analysis, above, for more information regarding the exclusion process.

Comment (13): One commenter suggested that the draft policy should not contain a categorical rejection of an agreement with “guidelines” for habitat management. Even if the agreement provides guidelines relating to the species' habitat, rather than specifically addressing habitat, the commenter noted that if those guidelines were followed they may provide a greater benefit to the species than would a critical habitat designation. Finally the commenter noted that each plan should be analyzed individually for its benefit to the species; this would support the Services' stated policy of encouraging the development of section 10 agreements.

Our Response: We agree with the commenter regarding plans with guidelines that, if followed, may provide a greater benefit to a species than would a designation of critical habitat. However, should the Services choose to enter into the discretionary 4(b)(2) exclusion analysis for a plan that only has guidelines, the Services will evaluate the benefits of inclusion and exclusion based on the specific facts of the plan in question. We have removed the language regarding guidelines from the final policy.

Comment (14): One commenter stated that the Services should not designate or exclude mere portions of HCPs. An HCP, taken as a whole, is designed to meet the conservation needs of the species and is specifically developed to meet those needs while still allowing certain development impacts to occur. The commenter suggested the policy would allow the Services to exclude just beneficial parts of an approved HCP, and designate those areas that are less desirable but still an integral component of the HCP.

Our Response: If the HCP has been approved and permitted, and if the Services undertake a discretionary 4(b)(2) exclusion analysis and find that the benefits of exclusion outweigh the benefits of inclusion, we intend to exclude the entire area covered by the HCP from the final designation of critical habitat for the species.

Comment (15): One commenter stated that the Services should consider excluding areas covered by HCPs and SHAs that are under development, but not yet completed or fully implemented. The draft policy proposes to give very little weight to section 10 agreements that are in process but not formalized. The commenter expressed a concern that not giving weight to developing voluntary conservation plans could greatly reduce incentives for private landowners and other entities to continue these efforts. The Services should analyze in-progress agreements individually. The agreements will vary greatly in scope, coverage, and the level of protections granted to the species and the extent of progress towards a formal agreement. If a comprehensive agreement is close to being formalized at the time of critical habitat designation, the commenter suggested there is no reason for the Services to designate that land as critical habitat and ignore the effort of the parties involved to benefit the species and its habitat. To ignore those efforts would discourage other landowners from pursuing similar plans or partnerships in the future, undermining future cooperation for the benefit of the species. Finally, the commenter suggested that the policy should be revised to give greater detail on the processes the Services will use to efficiently review and exclude areas covered by conservation plans being developed.

Our Response: Should the Services elect to undergo a discretionary 4(b)(2) exclusion analysis of an area in which a voluntary conservation plan is being developed, we will consider the facts specific to the situation. If a draft HCP has undergone NEPA and section 7 analysis, the Services could evaluate that plan under the provisions of this policy that are applicable to conservation plans and partnerships for which no section 10 permit has been issued. The track record of the partnership and the time taken to develop the draft HCP would be considerations in any discretionary 4(b)(2) exclusion analysis. The Services would not ignore ongoing efforts to develop plans. Some of the factors we consider are the degree of certainty that the plan will be implemented, that it will continue into the future, and that it may provide equal or greater protection of habitat than would a critical habitat designation. Therefore, the Services would expect to evaluate draft permitted plans on a case-by-case basis, and may evaluate them under the non-permitted-plans-and-partnerships sections of this policy.

Comment (16): A commenter asked the Services to clarify that not every conservation plan will undergo a weighing and balancing process. Paragraph 3 of the draft policy states: “When we undertake a discretionary exclusion analysis, we will always consider areas covered by an approved CCAA/SHA/HCP, and generally exclude such areas from a designation of critical habitat if three conditions are met. . . .” The commenter questioned whether the discretionary analysis is triggered by potential “severe” impacts (as described in step 2 of the M Opinion at p. 17: “if [she] deems the impacts of the designation severe enough, [she] will proceed with an exclusion analysis under section 4(b)(2)”) on a particular area covered by a CCAA/SHA/HCP, or whether the presence of such conservation plan(s) triggers the discretionary analysis regardless of impacts. If the former, the Services should clarify that only the potentially affected conservation plan(s) will be subjected to the discretionary exclusion analysis. If the latter, the commenter expressed a concern that the result of such a policy is to significantly limit Secretarial discretion.

Our Response: The Services are not limiting Secretarial discretion through this policy. The presence of a conservation plan or partnership does not mandate a discretionary 4(b)(2) exclusion analysis. If the Secretary decides to enter into the discretionary 4(b)(2) exclusion analysis, the Services may consider, among other things, whether a plan is permitted, or whether we receive information during a public comment period that we should consider a certain plan for exclusion. However, it is possible that the Secretaries will not conduct a discretionary 4(b)(2) exclusion analysis for each and every conservation plan. As noted in the final rule revising 50 CFR 424.19, the Secretaries are particularly likely to conduct this discretionary analysis if the consideration of impacts mandated under the first sentence suggests that the designation will have significant incremental impacts.

Comment (17): Numerous Tribes have asked to have their lands presumptively or categorically excluded from critical habitat designation. The commenters stated that, absent evidence that exclusion would lead to the extinction of the species, Tribal lands should always be excluded. While the Tribes appreciate the Services giving great weight and consideration to excluding Tribal lands, Tribes would prefer their lands to be categorically excluded.

Our Response: While the Services recognize their responsibilities and commitments under Secretarial Order 3206 and in light of Tribal sovereignty, the statute is clear on the process of designating critical habitat, and does not allow for presumptive exclusion of any areas, regardless of ownership, from critical habitat without conducting a discretionary 4(b)(2) exclusion analysis. If we determine that Tribal lands meet the definition of “critical habitat,” the statute requires we identify those lands as meeting that definition. However, as discussed in the draft and this final policy, great weight and consideration will be given to Tribal partnerships and conservation plans if the Services enter into the discretionary 4(b)(2) exclusion analysis.

Comment (18): Many commenters expressed that the designation of critical habitat on Tribal lands would have an unfortunate and substantial negative impact on the working relationships the Services and Tribes have established. The Services should state that, when they undertake a discretionary exclusion analysis, they will always consider exclusions of Tribal lands and not designate such areas, unless it is determined such areas are essential to conserve a listed species.

Our Response: The Services recognize our trust responsibilities with Tribes, and value our collaborative conservation partnerships. Secretarial Order 3206, which provides guidance to the Departments in exercising their statutory authorities—but does not modify those authorities—states:

Comment (19): Several Tribes expressed a concern that the new policy will result in greater economic and social burdens on Tribes. Tribes bear a disproportionate burden through the consultation process under section 7 of the Act, as compared to State and local governments and private citizens, because so many basic Tribal functions are contingent on actions authorized, funded, or carried out by Federal agencies. Therefore, the commenters stated that, where Tribal lands are designated as critical habitat, the proposed regulations and policies will require an onerous, time-consuming, bureaucratic process that infringes on Tribal sovereignty and treaty rights and frustrates the ability of the Tribe to provide basic government services and achieve wildlife-conservation and economic-development goals.

Our Response: While the Services recognize that a critical habitat designation may have real or perceived direct and indirect impacts, the Services are committed to assisting Tribes in conserving listed species and their habitats on Tribal lands, where appropriate. Where collaborative conservation partnerships and programs have been developed with Tribes, many of these real or perceived impacts have been ameliorated or relieved. The revised regulations and new policy are intended to provide clarity, transparency, and certainty regarding the development and designation of critical habitat, and provide for a more predictable and transparent critical-habitat-exclusion process. All three initiatives work together to provide greater clarity to the public and Tribes as to how the Services develop and implement critical habitat designations.

Comment (20): One commenter stated that, as written, the policy fails to acknowledge the sovereignty of Tribes and Tribal self-governance by noting only that “Tribal concerns” will be considered in the discretionary exclusion analysis. These proposed regulations and policies represent a missed opportunity to effectuate the letter and spirit of Secretarial Orders 3206 and 3335, and to ameliorate the potentially harsh consequences on Tribes of the proposed regulatory revisions for designating critical habitat. Of even more concern, the Service completely ignores the fundamental disagreement concerning the applicability of the Endangered Species Act to Tribes.

Our Response: Secretarial Order 3206 explicitly recognizes the right of Tribes to participate fully in the listing process, including designation of critical habitat. The Order states:

However, S.O. 3206 does not limit the Services' authorities under the ESA or preclude the Services from designating Tribal lands or waters as critical habitat, nor does it suggest that Tribal lands or waters cannot meet the Act's definition of “critical habitat.” We are directed by the Act to identify areas that meet the definition of “critical habitat” (i.e., occupied lands that contain the essential physical or biological features that may require special management considerations or protection and unoccupied areas that are essential to the conservation of a species) without regard to landownership. While S.O. 3206 provides important guidance, it does not relieve or supersede the Secretaries' statutory obligation to identify as critical habitat those specific areas meeting the definition of “critical habitat” and to designate such areas unless otherwise exempted by statute or excluded following the discretionary 4(b)(2) exclusion analysis.

Further, following the language and intent of S.O. 3206, when we undertake a discretionary 4(b)(2) exclusion analysis we will always consider exclusions of Tribal lands prior to finalizing a designation of critical habitat, and will give great weight to the collaborative conservation partnerships the Services have with the Tribes, as well as Tribal conservation programs and plans that address listed species and their habitats. The effects of critical habitat designation on Tribal sovereignty and the Services' working relationship with Tribes are relevant impacts that the Services will generally consider in the context of any exclusion analysis under Section 4(b)(2). See, e.g., Center for Biological Diversity v. Norton, 240 F. Supp. 2d 1090, 1105 (D. Ariz. 2003).

Comment (21): One commenter asked the Services to use the same standards for evaluating State conservation plans as those used for evaluating federally permitted plans for possible exclusions. The commenter noted that in the draft policy the Services have outlined different conditions for exclusion for HCPs, SHAs, and CCAAs versus all other conservation plans (including State plans). The former must only meet three conditions, while the latter are evaluated based on eight factors. Justification is not provided for why two different sets of criteria are being used. For example, HCP/SHA/CCAA plans need only be “properly implemented” while other conservation plans must show not only implementation but also “success of the chosen mechanism.” No explanation for this difference is provided. Furthermore, the commenter noted that all plans should be held to the same threshold for exclusion consideration. States spend enormous amounts of time to craft species-conservation plans. Finally, the commenter stated that plans are developed and implemented based on extensive scientific expertise housed in State wildlife agencies and they are crafted to meet State and Federal laws, rules, and regulations applicable to the protection of wildlife.

Our Response: The Services recognize that considerable time and expertise go into creating State management plans. Any requests for exclusions by States will be considered, whether based on a State management plan or for a State wildlife area. The Services need to evaluate any exclusion request on a case-by-case, fact-specific basis. The Services recognize that not all State plans are the same, and not all plans are designed to meet applicable Federal laws, rules, and regulations. The eight factors presented in this final policy regarding non-permitted plans are factors the Services will consider when conducting a discretionary 4(b)(2) exclusion analysis evaluating a State conservation plan or wildlife management area for exclusion. We will not hold State or other non-Federal conservation plans to higher standards than permitted plans; the list of eight factors simply indicates the types of factors we will evaluate in any conservation plan. It should be noted that HCPs and SHAs have already been subjected to rigorous analyses of numerous criteria through the permitting process that are not expressly listed in the policy.

Comment (22): A commenter suggested that the Services add the following language to the policy regarding State lands:

Our Response: As stated above, the Services decline to add a specific policy element suggesting that we would give great weight to recommendations of our State partners when evaluating critical habitat on State lands. The Services agree with the commenter's premise that conservation of endangered and threatened species cannot be done without cooperation of State partners. We also agree that we generally will consider exclusions of State lands if requested by States; however, we are under no obligation to exclude such lands, even where requested.

Comment (23): One commenter stated that the Services should not “focus” designation of critical habitat on Federal lands, nor assume that the benefits of critical habitat designations on Federal lands “are typically greater” than the benefits of excluding these areas.

Our Response: When designating critical habitat, the Services follow the Act and implementing regulations to develop a designation based solely on the best scientific data available, and that identifies physical or biological features essential to the conservation of a species or areas that are essential for the conservation of a species. This initial identification of eligible areas that meet the definition of “critical habitat” is conducted without regard to landownership or the identity of land managers. Before finalizing a designation of critical habitat, the Services must consider economic impacts, the impact on national security, and any other relevant impact of designating critical habitat. It is following this consideration of potential impacts that the Secretary may then exclude particular areas from critical habitat, but only if the exclusion will not result in the extinction of the species.

The Services look to the Congressional intent of the Act—in particular, section 2(c) states that all Federal agencies shall seek to conserve listed species and their habitats. Additionally, section 7(a)(2) of the Act requires Federal agencies that fund, authorize, or carry out projects to ensure their actions are not likely to destroy or adversely modify critical habitat. The commenter does not explain why the Services should not focus, to the extent practicable and allowed by the Act, on designation of critical habitat on Federal lands. Also, the commenter does not provide an explanation to support its view that the benefits of including Federal lands in a designation of critical habitat are not typically greater than including other areas. In fact, because Federal agencies are required to ensure that their actions are not likely to destroy or adversely modify critical habitat, the benefits of including Federal lands are typically greater than the benefits of including other areas.

Comment (24): Another commenter asked the Services to consider excluding Federal lands that are subject to special management by land-management agencies. Congress has mandated that Federal lands, such as lands managed by the Bureau of Land Management (BLM) and the U.S. Forest Service, be available for multiple uses. The commenter stated the Services' designation of critical habitat primarily on Federal lands upsets the balance struck in land-management decisions made by the agencies charged with administering Federal lands and, moreover, interferes with the directives established by Congress.

Our Response: Complying with the Act does not interfere with other Federal agency mandates. The Act is one of many Federal mandates with which all Federal agencies must comply, and Federal agencies must use available discretion to take into account the needs of listed species when implementing their other duties. The Services are also required to comply with the Act as they manage their lands, monuments, trust resources, and sanctuaries for multiple purposes. It has been the experience of the Services that listing or designating critical habitat for species does not drastically alter existing management schemes of other Federal agencies. In those instances where conflicts arise, the Services have successfully worked with the affected Federal agency to reduce conflicts with its mission. The Services are committed to continuing the collaborative relationships with other Federal agencies to further conservation of species and their habitats.

Comment (25): One commenter stated that a reasonable exclusion policy should allow the Services to recognize and consider exclusions for all types of conservation projects, whether they occur on Federal or non‐Federal lands. The commenter understands the Services' intent to reduce regulatory burdens on private lands. However, the commenter opposes a policy that would disqualify exclusions on Federal lands, while prioritizing them for recovery. The commenter strongly stated that exclusions should be based on the criteria outlined in section 4(b)(2) of the Act, whether the land is Federal or non‐Federal. Section 4(b)(2) of the Act provides the Secretary the discretion to “exclude any area from critical habitat if [s]he determines that the benefits of exclusion outweigh the benefits of specifying such area as part of the critical habitat,” but does not delineate whether landownership should play a factor in the decision to exclude lands from designation.

Our Response: To the extent that the commenter is suggesting that discretionary 4(b)(2) exclusion analyses are done on a case-by-case basis and are highly fact-specific, we agree. This policy does not preclude exclusions of Federal lands; in fact, the Services have excluded particular Federal lands in the recent past. However, the Services maintain their policy position that Federal lands will typically have greater benefits of inclusion compared to the benefits of exclusion. This position is consistent with the purposes of the Act as outlined in section 2. Section 2(c)(1) states:

Additionally, section 7(a)(1) restates this responsibility and specifically requires all Federal agencies to consult with the Services to carry out programs for conservation of endangered and threatened species. Because the section 7 consultation requirements apply to projects carried out on Federal lands where there is discretionary Federal involvement or control, designation of critical habitat on Federal lands is more likely to benefit species than designation of critical habitat on private lands without a Federal nexus.

Comment (26): A commenter suggested that the Services should create an incentive for Federal land managers. The Services could consider a similar approach to Federal land exclusions that are provided for Department of Defense installations. Applying this same standard to all Federal lands, the commenter stated, would create a stronger incentive for more agencies to live up to the requirements of section 7(a)(1) of the Act.

Our Response: Congress intended for Federal agencies to participate in the conservation of endangered and threatened species. As discussed above, section 2(c)(1) of the Act clearly states this responsibility. Additionally, section 7(a)(1) restates this responsibility and specifically requires all Federal agencies to consult with the Services to carry out programs for conservation of endangered and threatened species. Section 7(a)(2) of the Act requires Federal agencies to consult with the Services to “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 of such species.”

Exemption of Department of Defense lands from critical habitat is mandated under section 4(a)(3)(B)(i) of the Act, and is thus entirely different from discretionary exclusions of particular lands from a designation of critical habitat under section 4(b)(2). Exemption of an area covered under an INRMP under the Sikes Act is based on the statutory condition that the Secretary has determined the plan provides a benefit to a species, whereas an exclusion of a particular area is based on the discretionary 4(b)(2) weighing of the benefits of inclusion and exclusion.

Comment (27): A commenter asked the Services to provide details of how costs and benefits are evaluated. The draft policy does not clearly define how benefits and costs will be determined, giving the Services a great deal of discretion. The commenter noted that the draft policy does not adequately explain how the consideration of economic impacts will be applied during the exclusion process. The phrase “nature of those impacts” in the draft policy fails to provide a description that will give adequate notice of what will actually be considered.

Our Response: The policy is not intended to present a detailed treatment of economic impact analysis methodology. The Summary of Comments and Recommendations section of the Service's final rule regarding revisions to the regulations for impact analyses of critical habitat, which was published on August 28, 2013 (78 FR 53058), contains a discussion of cost and benefit analysis of critical habitat designations.

To aid in the consideration of probable incremental economic impacts under section 4(b)(2) of the Act, the Services conduct an economic analysis of the designation of critical habitat, which satisfies the mandatory consideration of economic impacts. Should the Secretaries consider excluding a particular area from critical habitat, the economic analysis is one tool the Secretaries may use to inform their decision whether to exclude the particular area.

The commenter points out that the phrase “nature of those impacts” is not defined. The Services intentionally did not define this phrase, because it has been the experience of the Services that economic impacts of critical habitat designations vary widely, making it infeasible to quantify the level of impacts that would trigger further consideration in all cases.

Comment (28): Because the Services use an incremental approach to estimating economic impacts, one commenter suggested that the economic impacts of critical habitat are vastly underestimated. The commenter suggested the Services should conduct an economic analysis that evaluates the cumulative and co-extensive costs of critical habitat. Focusing on incremental economic impacts does not provide an accurate picture, as it discounts the full financial implications of a listing for landowners, businesses, and communities. The commenter expressed the opinion that the incremental approach effectively shifts the economic costs of critical habitat designations to the listing process under the Act where the Service is prohibited from considering costs. Ultimately, because this approach will result in fewer costs being attributed to critical habitat designation, it will greatly reduce the usefulness of the 4(b)(2) process.

Our Response: We disagree. Our final rule amending 50 CFR 424.19, published August 28, 2013 (78 FR 53058), codified the use of the incremental method for conducting impact analyses, including economic analyses, for critical habitat designations. That final rule contains responses to public comments that clearly lay out the Services' rationale for using the incremental method. Please refer to that rule for more information. Evaluating incremental impacts that result from a regulation being promulgated, rather than considering coextensive impacts that may be ascribed to various previous regulations, is further supported by Executive Order 12866, as applied by OMB Circular A-4.

Comment (29): Congress expressly required the Secretaries to consider economic impacts when they designate critical habitat (16 U.S.C. 1533(b)(2)). A commenter stated the Services have interpreted this requirement to limit their use of the economic analysis to the exclusion process. The commenter further noted that the draft policy restricts discussions of the economic impacts from critical habitat designation to determinations of whether an area will be excluded from a critical habitat designation. Economic concerns are arguably the most important consideration for those being regulated. The commenter expressed the opinion that the designation of critical habitat has economic impacts on States, counties, local governments, and landowners. These impacts include increased regulatory burdens that delay projects. The commenter stated it is important that the Services recognize the economic impacts of critical habitat designation and consider those impacts throughout the designation process, as required by Congress under the Endangered Species Act. The commenter asked that the draft policy be amended to emphasize use of economic impacts analyses in each stage of the designation process, not just exclusion of an area from a critical habitat designation.

Our Response: We agree that the mandatory consideration of economics is an important step in the designation of critical habitat. However, we disagree that economic impact analyses should be used at each step of the designation process. The process of developing a designation is based on the best available scientific information, and consists of a determination of what is needed for species conservation. Congress expressly prohibited the Secretaries from using anything other than the best available scientific information in identifying areas that meet the definition of “critical habitat.” However, Congress expressly required the Secretaries to consider economic impacts, national-security impacts, and other relevant impacts before finalizing the critical habitat designation.

The Services prepare an economic analysis of each proposed designation of critical habitat and may use that information in discretionary 4(b)(2) exclusion analyses. Our final rule that amended our implementing regulations at 50 CFR 424.19, which was published on August 28, 2013 (78 FR 53058), contains more information regarding impact analyses, including economics. This final policy is focused on the discretionary process of excluding areas under section 4(b)(2).

Comment (30): A commenter stated that the economic impact of critical habitat designations on the exercise of rights to Federal lands is significant and should not be discounted. In the preamble to the draft policy, the Services state that they “generally will not consider avoiding the administrative or transactional costs associated with the section 7 consultation process to be a `benefit' of excluding a particular area from a critical habitat designation in any discretionary exclusion analysis.” The commenter suggested this statement ignores that administrative and transactional costs of critical habitat designations can be significant, particularly when critical habitat will cover a large area. The commenter stated that Federal agencies are not the only entities that must absorb the costs of section 7 consultation. Administrative and transactional costs are also borne by non-Federal parties, such as applicants for permits or licenses. The commenter further noted that, if the exclusion analysis is limited to non-Federal lands, where section 7 consultation is often not triggered, the economic benefits of exclusion will rarely be considered. For proponents of large projects on Federal lands, these economic benefits of exclusion can be significant.

Our Response: We agree with the commenter that the Services should consider the indirect effects resulting from a designation of critical habitat. In fact, the Services are required to evaluate the direct and indirect costs of the designation of critical habitat under the provisions of Executive Order 12866, and we do so through the economic analyses of the designation of critical habitat. However, as noted previously, we do not consider avoidance of transactional costs associated with section 7 consultation to be a benefit of exclusion. Rather, those costs represent the inherent consequence of Congress' decision to require Federal agencies to avoid destruction or adverse modification. Please refer to the Summary of Comments and Recommendations section of the final rule amending 50 CFR 424.19 (78 FR 53058, August 28, 2013), particularly our response to Comment 44, for more information regarding direct and indirect costs.

Comment (31): One commenter suggested that the Services should also consider potential economic benefits of inclusion. Economic benefits of designating critical habitat include a potentially faster rate of recovery for the species, which could result in less long-term costs for the agency and partners.

Our Response: The Act requires a mandatory consideration of the economic impact of designating a specific area as critical habitat. The Services interpret this statement to be inclusive of benefits and costs that result from the designation of critical habitat. This interpretation is further supported by Executive Order 12866 as clarified in OMB Circular A-4. The Services do consider non-consumptive use benefits, such as hiking, increased tourism, or appreciation of protected open or green areas, in a qualitative manner where credible data are available. Further, in rare circumstances, when independent and credible research can be conducted on the benefits for a particular species, that information is used. However, for most species, credible studies and data related to potential economic benefits of designating their habitat as critical habitat are not available or quantifiable.

Comment (32): One commenter expressed the opinion that listing decisions under the Act have real economic impacts for State and local governments, through restriction on rangeland grazing, hunting, tourism, and development of resources on public and private lands. It may well be that, in some circumstances, the economic benefits of exclusion outweigh the conservation benefits of inclusion. The commenter suggested that such situations should be recognized by the Services and granted exclusion in order to provide maximum flexibility for a balanced mix of conservation and economic activities.

Our Response: The Services recognize that the listing of species may result in an economic impact; however, the Act does not allow the consideration of potential economic impacts when listing a species. The Act expressly limits the basis of our determination of the status of a species to the best scientific and commercial information available. The Services also cannot consider the potential economic impact of listing a species in an exclusion analysis under section 4(b)(2) of the Act. This consideration of economics in the discretionary 4(b)(2) exclusion analysis is to be based on the incremental impacts that result solely from the designation of critical habitat, and not those impacts that may result from the listing of the species. 50 CFR 424.19.

We assume the commenter is referring to considerations of economics prior to finalizing a designation of critical habitat. The Services always consider potential economic impacts that may result from the designation of critical habitat. The purpose of the second sentence of section 4(b)(2) is to authorize the Secretaries to exclude particular areas from a designation if the benefits of exclusion outweigh the benefits of inclusion. The Services recognize that there may be circumstances when the economic benefits of exclusion (together with any other benefits of exclusion) do in fact outweigh the conservation benefits of inclusion (together with any other benefits of inclusion). In that case, the Services may decide to exclude the particular area at issue (unless exclusion will result in extinction of the species). The Services will evaluate the best available scientific information when undertaking a discretionary 4(b)(2) exclusion analysis.

Comment (33): A commenter noted that the Services should consider financial commitments made in HCPs, SHAs, and CCAAs. Proponents could commit serious finances only to have the area later designated as critical habitat.

Our Response: The Services do not consider the financial commitments made in HCPs, SHAs, or CCAAs, as a standalone factor when evaluating areas for exclusion. The Services, however, do consider the conservation benefits associated with financial commitments of a plan to reduce the benefits of including a particular area in critical habitat. The fostering and maintenance of conservation partnerships can be a benefit of exclusion, and can serve as an incentive to future financial commitments to further conservation. The Services greatly value the on-the-ground conservation delivered by these partnerships and their associated permitted plans.

Comment (34): A commenter asked the Services to clarify how national-security concerns will be considered. The commenter stated that the Services say they will give “great weight” to these concerns, but this phrase is a subjective term and could use additional clarity. The use of the phrase implies national-security concerns will always outweigh the benefits of inclusion. The commenter recommends expanding or altering this phrase to better clarify how national-security concerns will be considered.

Our Response: The Services do not consider the phrase “great weight” to imply a predetermined exclusion based on national-security concerns, as the commenter is suggesting. The Services always consider for exclusion from the designation areas for which DoD, DHS, or another Federal agency has requested exclusion based on an assertion of national-security or homeland-security concerns. The agency requesting such exclusion must provide a reasonably specific rationale for such exclusion. The Service will weigh heavily those concerns regarding the probable incremental impact to national security as a result of designating critical habitat. This does not mean the Services will then in turn give little weight to any benefits of inclusion. It is not the Services' intent to predetermine the outcome of a discretionary 4(b)(2) exclusion analysis.

Comment (35): One commenter asked for an explanation of how the two proposed critical habitat rules and draft policy will work together, discussing the challenges and benefits they provide together. E.O. 13563 states that regulations “must promote predictability and reduce uncertainty.”

Our Response: The regulations and policy are intended to provide clarity, transparency, and certainty regarding the development and implementation of critical habitat, and provide for a more predictable and transparent process for designating critical habitat. All three initiatives work together to provide greater clarity to the public as to how the Services develop and implement critical habitat designations. The rule amending 50 CFR part 424 provides new definitions and clarifications that will inform the process of designating critical habitat. The rule revising the definition of “destruction or adverse modification” (at 50 CFR 402.02) redefines that term and clarifies its role in section 7 consultations. This policy focuses on how the Services implement section 4(b)(2) of the Act, with regard to excluding areas from critical habitat designations.

Comment (36): The draft policy states that it will be prospective only and will not apply to any “previously completed” critical habitat designations. One commenter stated the policy should more clearly state that the revised language will not be used in reassessing or reassigning critical habitat; only future designations of critical habitat will fall under the new policy.

Our Response: The commenter is correct that this final policy does not apply to designations of critical habitat finalized prior to the effective date of this policy (see DATES, above). This policy applies to future designations of critical habitat that are completed after the effective date of this policy. If the Services choose to revise previous designations, the Services will use the operative regulations and policies in place at the time of such revision. Of course, as we have indicated elsewhere, this policy does not establish binding standards that mandate particular outcomes.

Comment (37): We received many comments that the policy proposed changes that were arbitrary and without merit, because they will deprive private property owners and States of incentives and tools to conserve species and their habitat.

Our Response: The Services have developed, and continue to develop, considerable tools to assist landowners in the conservation of species and their habitats. Nothing in this policy takes away from those tools and reliance on, and recognition of, collaborative conservation partnerships. Rather, the Services believe the elements of this policy provide greater clarity and certainty on how those conservation tools are regarded and evaluated when considering designations of critical habitat. Additionally, the Services' goal is to remove any real or perceived disincentive for voluntary conservation plans and collaborative partnerships, whether permitted under section 10 of the Act or developed outside of those provisions.

Comment (38): A commenter stated that monitoring and adaptive management of conservation plans should not be used as standards for determining exclusions. The commenter noted that critical habitat designations do not have this standard, which elevates the exclusionary determination above that which the Services use in their critical habitat designations.

Our Response: In order to exclude an area from critical habitat, the benefits of exclusion must outweigh those of inclusion, and the exclusion must not result in the extinction of the species. As the commenter correctly notes, adaptive management and monitoring are not a prescribed part of critical habitat designations and implementation. However, monitoring the implementation of conservation actions is essential to determine effectiveness of such actions, and using adaptive management is critical to the long-term success of conservation plans. Therefore, these factors are important considerations in evaluating the degree to which the existence of the conservation plan reduces the benefits of inclusion of an area in critical habitat.

Comment (39): A commenter stated that in the list of eight factors the Services say they will consider when evaluating lands for exclusion based on non-permitted conservation plans, the Services should clarify what they mean by, “The degree to which there has been agency review and required determinations.” The commenter asked which agencies would review the conservation plan, agreement, or partnership—the Services, other Federal agencies, or State or local agencies? What determinations are “required determinations?”

Our Response: Should the Services choose to enter into the discretionary 4(b)(2) exclusion analysis, we would evaluate any information supplied by the requester for exclusion, including whether the plan has complied with applicable local, State, and Federal requirements, and any determinations required therein. For example, a county-level ordinance requiring habitat set-asides for development may require State environmental review and public scoping. This type of required review or determination would be taken into consideration when evaluating particular areas for exclusion. The Services are not prescribing any suite of required determinations. The burden is on the requester to provide relevant information pertaining to review of the plan by any agency. This is important information that will be used in our evaluation of the effectiveness of a conservation plan in the discretionary 4(b)(2) exclusion analysis.

Comment (40): One commenter disagreed with the Services' proposal to consider whether a permittee “is expected to continue to [properly implement the conservation agreement] for the term of the agreement.” The commenter stated the Services should rely on their authority to revoke permits and revise critical habitat rather than speculating about future implementation of conservation agreements. Accordingly, the commenter requests that the Services remove the phrase “and is expected to continue to do so for the term of the agreement” from the first condition related to the exclusion of conservation plans related to section 10 permits.

Our Response: The Services need to evaluate whether there is reasonable certainty of implementation and completion of conservation plans. Permittees are expected to fulfill the provisions of their permits for the agreed-upon time period. However, given the voluntary nature of agreements, it is possible, even in permitted plans, that permittees may not implement the plan as conditioned or may cancel an agreement at any time. Therefore, certainty of the continuance of any conservation plan is an important consideration.

Comment (41): One commenter stated that the Services should emphasize the benefits of critical habitat and expressed disappointment that the Services' draft policy attempts to minimize the actual benefits that derive from critical habitat with an extremely cursory description of critical habitat's benefits at the beginning of the preamble to the draft policy.

Our Response: The Services in no way intend to understate the important functions of critical habitat. We recognize that the primary threat faced by most endangered and threatened species has been, and continues to be, loss and fragmentation of suitable habitat. Critical habitat designation is one conservation tool in the Act that attempts to address this situation, by identifying habitat features and areas essential to the conservation of the species. It provides educational benefits by bringing these important areas to the public's and landowners' attention, and requires consultation with the Services for proposed activities by Federal agencies, on Federal lands, or involving a Federal nexus, to ensure that such activities are not likely to cause the destruction or adverse modification of the critical habitat. These benefits are considered by the Services on a case-by-case basis in the context of the discretionary consideration of exclusions under Section 4(b)(2).

Comment (42): A commenter stated that the Services should clarify that this policy provides broad program guidance, not specific prescriptions of exclusion analysis and designation. It does not concern a specific action concerning a specific property. Also, the commenter stated the Services should point out that the 4(b)(2) policy could be used to avoid a Fifth Amendment taking if extensive property restrictions would occur due to critical habitat designation.

Our Response: We agree that the purpose of this policy is to provide guidance and clarity as to how the Services consider exclusions under section 4(b)(2) of the Act, rather than formulaic prescriptions as to how exclusion analyses are performed. As noted above, each area considered for exclusion from a particular critical habitat designation is unique, and the factors considered in such evaluation are fact-specific. Thus, there is no simple, one-size-fits-all approach; rather, the Services take a case-by-case approach in considering the factors in a weighing and balancing analysis, and the relative importance (or weight) of each of those factors.

The Services do not consider the designation of critical habitat to impose property restrictions such that a Fifth Amendment taking issue would arise.

Comment (43): One commenter noted that the Services should clarify that exclusion of private lands from critical habitat designation is not a “reward.” The commenter stated the draft policy may be perceived as contradictory to key messaging being promoted through outreach efforts to landowners and that the Services' outreach messaging has been that critical habitat designation does not affect private landowners, unless their activity is authorized, funded, or carried out by a Federal agency. The commenter's opinion is that the draft policy, however, appears to “reward” landowners by excluding their land from critical habitat if their land is covered by a conservation plan.

Our Response: We agree in part with the commenter. It is true that critical habitat does not create a regulatory impact on private lands where there is no Federal nexus, and that even when there is a Federal nexus, the potential impact of a designation of critical habitat sometimes is minimal. Nevertheless, the Services are keenly aware of the significant concerns that some landowners have about critical habitat. We also recognize that landowners invest time and money for proactive conservation plans on their lands. The Services do not exclude particular areas from a designation of critical habitat as a reward to landowners for conservation actions they undertake. Rather, the existence of a conservation plan; effective, implemented conservation actions; and a demonstrated partnership are relevant factors that should be considered in any discretionary 4(b)(2) analysis. If the Services find the benefits of exclusion outweigh inclusion based on the specific facts, the particular area covered by the conservation plan may be excluded, provided the exclusion will not result in the extinction of the species.

Comment (44): A commenter asked the Services to define “partnerships” and how they will be evaluated.

Our Response: Partnerships come in many forms. Some partnerships have a long-standing track record of the partners working together for the conservation of species and their habitat, some partnerships are newly formed, and others are generally anticipated to occur in the future. We greatly appreciate and value these conservation partnerships, and will consider the specifics of what each partnership contributes to the conservation of the species when conducting discretionary 4(b)(2) exclusion analyses. We will also consider the general benefits that excluding areas will have on encouraging future partnerships. Because the specifics and context of partnerships vary so much, we conclude that it would not be useful to attempt to expressly define “partnerships,” or to set out uniform guidance as to how they will be evaluated.

Comment (45): One commenter stated that the length of a conservation plan and the certainty it will continue to be implemented should be added to the criteria used to evaluate HCPs, SHAs, and CCAAs. None of the conditions account for the temporary nature of these agreements, nor is this aspect discussed elsewhere in the draft policy or preamble. A commenter recommended adding a fourth condition to address the expected longevity of the CCAA/SHA/HCP.

Our Response: We have already captured this in the first condition we evaluate, which states: “The permittee is properly implementing the CCAA/SHA/HCP and is expected to continue to do so for the term of the agreement. A CCAA/SHA/HCP is properly implemented if the permittee is and has been fully implementing the commitments and provisions in the CCAA/SHA/HCP, Implementing Agreement, and permit.” We have determined not to be more prescriptive than this, because we need to retain flexibility in our evaluations. We may use the track record of partnership in our discretionary 4(b)(2) exclusion analysis, which may include the length of the permitted plan. For example, some plans have long-term implementation schedules in which additional conservation measures are developed or phased in over time, so it would not be appropriate to expect all measures will be put into place immediately. The Services expect that plans will be fully implemented regardless of their term of agreement or operation. When issuing permits, the Services considera whether the term of any such plan is sufficient to produce meaningful conservation benefits to the species. Therefore, it is not necessary in all cases to evaluate the term of a permit as a condition for exclusion from critical habitat. However, the Services have retained their flexibility to evaluate plans on a case-by-case basis, and may consider the term of the plan if appropriate.

Comment (46): A commenter requested that the Services exclude transportation infrastructure from critical habitat designations. The commenter suggested that a new paragraph or policy element be added. The paragraph would state the Services will always consider in their discretionary exclusion analysis that dedicated transportation infrastructure and rights-of-way (ROWs) be excluded from critical habitat, given that transportation lands are managed primarily for the use and safety of the travelling public and usually have very little conservation value for listed species.

Our Response: The Services recognize the importance of maintaining transportation infrastructure and ROWs for the safe conveyance of people and goods. However, the Services do not agree that creating a dedicated policy element giving great weight and consideration to exclusion of transportation infrastructure and ROWs is necessary. Some areas seemingly included within the overall boundaries of critical habitat designations consist of manmade structures and impervious surfaces that do not contain the features essential to the conservation of a species. This occurs because of the scale and resolution of the maps used to depict critical habitat. To remedy this, all regulations designating critical habitat contain language stating that manmade structures (such as buildings, aqueducts, runways, roads, and other paved areas) and the land on which they are located are not included in critical habitat. Therefore, a Federal action involving these lands will not trigger section 7 consultation with respect to the requirement that the Federal agency insure that the action is not likely to adversely modify critical habitat, unless the specific action would affect the physical or biological features in the adjacent critical habitat.

Portions of ROWs may not contain manmade structures, and may be included in areas that otherwise meet the definition of “critical habitat.” In some cases, the footprint of ROWs themselves may not have the features essential to the conservation of the species at issue. In this case, should the Services engage in a discretionary 4(b)(2) exclusion analysis, the Services may determine that that there is little or no benefit of inclusion, and that the benefits of exclusion outweigh the benefits of inclusion, and, therefore, decide to exclude the ROWs from the designation.

Comment (47): The designation of critical habitat on an airport may serve to attract wildlife to the airport environment. The Federal Aviation Administration (FAA) requests that an element be added to the policy that would convey great weight and consideration to excluding aircraft-movement areas, runway and taxi areas, object-free areas, and runway-protection zones from designations of critical habitat. Designation of critical habitat could also impair the airport owner's ability to expand facilities, and thus have economic costs. FAA requests that safety be a specific consideration in any exclusion analysis.

Our Response: The Services disagree that a dedicated policy element is needed in this particular instance. When identifying areas that meet the definition of “critical habitat,” the Act does not authorize the Services to consider landownership. It is a process that relies on the best scientific data available to determine the specific occupied areas containing features essential to the conservation of a species that may require special management considerations or protection and unoccupied areas that may be essential for the conservation of the species. Active airport areas that do not meet the definition of “critical habitat” (i.e., occupied areas that do not contain the features essential to the conservation of a particular species that may require special management considerations or protection or unoccupied areas that are not essential for the conservation of the species) will not be designated critical habitat. As mentioned above, manmade structures (such as buildings, aqueducts, runways, roads, and other paved areas) and the land on which they are located are generally not included in critical habitat. Therefore, a Federal action involving these lands will not trigger section 7 consultation with respect to the requirement that the Federal agency insure that the action is not likely to destroy or adversely modify critical habitat, unless the specific action would affect the physical or biological features in the adjacent critical habitat.

In some particular instances, the Services may identify areas within airport boundaries that meet the definition of “critical habitat” as applied to a particular species. In these instances, the Services generally would consider any request for exclusion from the designation received from airport managers or FAA under the general authority of section 4(b)(2) or applicable elements of this policy, e.g., the non-permitted plans and partnerships provision of this policy. In addition, the Services encourage airport managers to consider developing HCPs that would address incidental take of listed species and conservation of their habitat.

Comment (48): The Services have determined that a categorical exclusion (CE) from the NEPA requirements applies to the draft policy. CEs address categories of actions that do not individually or cumulatively have a significant effect on the human environment. The commenter stated that a CE is not appropriate for NEPA compliance on issuance of this draft policy, given the potential expansion in future critical habitat designations and the significant effect on environmental and economic resources in areas to be designated as a result of these initiatives.

The commenter asserted that the Services' proposed actions constitute a “major federal action significantly affecting the quality of the human environment” (42 U.S.C. part 4321, et seq.). Furthermore, the commenter noted, the Services are required to prepare a full Environmental Impact Statement (EIS), in draft and final, as part of this process and prior to any final Federal decisionmaking on the proposed rules and guidance. An EIS is justified by the sweeping geographic scope of the proposals and their potentially significant effects on environmental resources, land-use patterns, growth and development, and regulated communities.

Our Response: Following our review of the statutory language of section 4(b)(2) and our requirements for compliance under the National Environmental Policy Act of 1969 (NEPA), we find that the categorical exclusion found at 43 CFR 46.210(i) and NOAA Administrative Order 216-6 applies to this policy. As reflected in the DOI regulatory provision, the Department of the Interior has found that the following category of actions would not individually or cumulatively have a significant effect on the human environment and is, therefore, categorically excluded from the requirement for completion of an environmental assessment or environmental impact statement: “Policies, directives, regulations, and guidelines: that are of an administrative, financial, legal, technical, or procedural nature . . . .” NOAA Administrative Order 216-6 contains a substantively identical exclusion for “policy directives, regulations and guidelines of an administrative, financial, legal, technical or procedural nature.” Section 6.03c.3(i). The NOAA provision also excludes “preparation of regulations, Orders, manuals or other guidance that implement, but do not substantially change these documents, or other guidance.” Id.

At the time the DOI categorical exclusion was promulgated, there was no preamble language that would assist in interpreting what kinds of actions fall within the categorical exclusion. However, in 2008, the preamble for a language correction to the categorical exclusion provisions gave as an example of an action that would fall within the exclusion the issuance of guidance to applicants for transferring funds electronically to the Federal Government.

This final policy is an action that is fundamentally administrative or procedural in nature. Although the policy addresses more than the timing of procedural requirements, it is nevertheless administrative and procedural in nature, because it goes no further than to clarify, in expressly non-binding terms, the existing 4(b)(2) exclusion process by describing how the Services undertake discretionary exclusion analyses as a result of statutory language, legislative history, case law, or other authority. This final policy is meant to complement the revisions to 50 CFR 424.19 regarding impact analyses of critical habitat designations and provide for a more predictable and transparent critical-habitat-exclusion process. This final policy is nonbinding and does not limit Secretarial discretion because it does not mandate particular outcomes in future decisions regarding exclusions from critical habitat. As elaborated elsewhere in this final policy, the exclusion of a particular area from a particular critical habitat designation is, and remains, discretionary.

Specifically, this final policy explains how the Services consider partnerships and conservation plans, conservation plans permitted under section 10 of the Act, Tribal lands, national-security and homeland-security impacts and military lands, Federal lands, and economic impacts in the exclusion process. The policy does not constrain the Services' discretion in making decisions with respect to exclusions from critical habitat. The considerations in this policy are consistent with the Act, its legislative history, and relevant circuit court opinions. Therefore, the policy statements are of an administrative (e.g., describing the current practices of the Service that have come about as a result of legislative history, case law, or other authority), technical (e.g., edits for plain language), and/or procedural (e.g., clarifying an existing process for a Service or NMFS activity) nature.

FWS reviewed the regulations at 43 CFR 46.215: Categorical Exclusions: Extraordinary Circumstances, and we have determined that none of the circumstances apply to this situation. Although the final policy will provide for a credible, predictable, and transparent critical-habitat-exclusion process, the effects of these changes would not “have significant impacts on species listed, or proposed to be listed, on the List of Endangered or Threatened Species or have significant impacts on designated Critical Habitat for these species,” as nothing in the policy is intended to determine or change the outcome of any critical habitat determination. Moreover, the policy would not require that any previous critical habitat designations be reevaluated on this basis. Furthermore, the 4(b)(2) policy does not “[e]stablish a precedent for future action or represent a decision in principle about future actions with potentially significant environmental effects” (43 CFR 46.215(e)). None of the extraordinary circumstances in 43 CFR 46.215(a) through (l) apply to the policy on implementing section 4(b)(2) of the Act.

NMFS also reviewed its exceptions and has found that this policy does not trigger any of the exceptions that would preclude reliance on the categorical exclusion provisions. It does not involve a geographic area with unique characteristics, is not the subject of public controversy based on potential environmental consequences, will not result in uncertain environmental impacts or unique or unknown risks, does not establish a precedent or decision in principle about future proposals, will not have significant cumulative impacts, and will not have any adverse effects upon endangered or threatened species or their habitats. NOAA Administrative Order 216-6, § 5.05c.

Comment (49): A commenter stated that NEPA review should not be a standard when evaluating conservation plans and that the Services should not evaluate whether a conservation plan, agreement, or partnership was subject to NEPA review when determining whether to exclude areas from critical habitat designations. See 79 FR 27057 (May 12, 2014) (section 2.d. of the draft policy). Consideration of this factor discounts the many worthwhile conservation plans developed by private entities and State and local governments. The commenter stated that because NEPA only requires analysis of Federal actions (see 42 U.S.C. 4332(2)(C)), conservation plans that are not approved by a Federal agency—such as those developed by citizens and State and local governments—would not undergo NEPA review. States, which are principal managers of wildlife within their borders, frequently develop conservation plans to benefit listed and non-listed species. Also, landowners can establish conservation banks or conservation easements without NEPA review or public input. Thus, the commenter stated that the application of this factor to plans and agreements for which they are often inapplicable would seem to automatically weigh against exclusion in most instances. Instead, the commenter suggests that the Services should focus on the effectiveness of the plan and its conservation value, regardless of the procedural processes used to establish the plan.

Our Response: The list of factors the Services will consider in connection with exclusion analysis of non-permitted plans seems to have been misunderstood as absolute requirements for excluding areas covered by such plans. For some plans that the Services may evaluate (those that are Federal and may have a significant impact on the environment), it would be appropriate to consider whether NEPA reviews have been completed; for other plans, it may not be. The Services are not suggesting that every plan needs to have undergone NEPA review. Not all of the items listed under paragraph 2 (described above under the heading, Private or Other Non-Federal Conservation Plans and Partnerships, in General) are needed to ensure the Services consider a plan. To this end, the Services have modified the language preceding the list of factors for evaluating non-permitted conservation plans, to clarify that some of the factors may not be relevant to all plans.

Comment (50): Several commenters suggested specific line edits or word usage.

Our Response: We have addressed these comments as appropriate in this document.

Comment (51): A commenter suggested changing the phrase “and meets the conservation needs of the species” to “and maintains the physical or biological features essential for the conservation of the species” in draft policy element 3(c), which relates to permitted plans under section 10 of the Act. This change is suggested to maintain consistency in the use of terms related to critical habitat designations and exclusions.

Our Response: The Services have elected not to make the suggested change. The language in question refers to permitted HCPs, SHAs, and CCAAs, and more specifically their underlying conservation plans. Plans developed to support these conservation vehicles are not necessarily designed using the terminology applicable to critical habitat designation. Therefore, we conclude that it is more appropriate to retain the more general language used in our proposal.

Comment (52): One commenter stated it will be very difficult for the Services to determine if excluding one piece of habitat “will result in the extinction of a species,” as stated in the draft policy element 8. Therefore, the commenter recommends the language be changed to express a likelihood the action will result in the extinction of the species and stated this determination should be made according to the best available science. The commenter suggests the following as replacement language: “We must not exclude an area if the best available science indicates that failure to designate it will likely result in the extinction of the species.”

Our Response: Part 8 of the policy is a restatement of the statutory provision of the Act that states the Secretary shall not exclude an area if the exclusion will result in the extinction of the species concerned. To the extent that the statutory language is ambiguous, we decline to interpret it at this time.

Comment (53): One commenter remarked there remains a fair amount of vague language in the factors that are considered during a discretionary 4(b)(2) exclusion analysis. Specifically, the commenter stated it is unclear if factors that begin with “Whether” will rank higher if the answer is affirmative. Also, factors that begin with “The degree to which,” “The extent or,” and “The demonstrated implementation” must be clarified and quantified before they can be appropriately and fairly assigned weight in a designation of critical habitat.

Our Response: The examples of language noted above from the draft policy were carefully chosen. As this is a policy and not a regulation, the Services chose language such as “the degree to which” to accommodate the gradations and variations in certain fact patterns relating to conservation partnerships and plans. Not all plans and partnerships are developed in the same manner, and no one set of evaluation criteria would apply. Rather, the Services' intent in drafting the language was to provide latitude in evaluating different types of plans and partnerships. Further, the commenter does not provide any examples of how to quantify measures, nor does the commenter provide alternate language or suggested revisions to this section of the policy.

Comment (54): One commenter suggested adding an additional factor under non-permitted plans and partnerships, “Plans must be reasonably expected to achieve verifiable, beneficial results to qualify for exclusion from critical habitat designation.”

Our Response: We appreciate the suggestions, but we believe these factors are already captured in the factors in the policy under paragraphs 2.f. (“The degree to which the plan or agreement provides for the conservation of the essential physical or biological features for the species.”) and 2.h. (“Whether the plan or agreement contains a monitoring program and adaptive management to ensure that the conservation measures are effective and can be modified in the future in response to new information.”) The existence of a monitoring program and adaptive management (paragraph 2.h.) speaks to verifiable results, and the statements regarding providing for the conservation of the essential features and effective conservation measures (paragraph 2.f.) relate to beneficial results. Therefore, we did not adopt the suggested additions.

Comment (55): One commenter suggested adding a fourth condition under the permitted plans section of the policy: “If plans cannot be implemented or do not achieve the intended results, a re-evaluation of critical habitat designation may be required.”

Our Response: As discussed in this final policy in the framework section, we base the exclusion not only on the plan, but on the conservation partnership. Therefore, our first step would be to work with that partner to implement the plan, bring the plan into compliance, or adjust the conservation management or objectives of the plan to be effective for the conservation of the covered species. We of course retain the authority under the Act to revise the designation, if necessary, through the rulemaking process to include these areas in critical habitat, if appropriate. For the above reasons, while we considered the suggestion to add a policy element, we have determined that it is not necessary.

Comment (56): One commenter suggested adding the following language to the draft policy element paragraph 5: “If the agency requesting the exclusion does not provide us with a specific justification, we will contact the agency to require that it provide a specific justification. When the agency provides a specific justification, we will defer to the expert judgment of the DoD, DHS, or another Federal agency.”

Our Response: The suggested text is paraphrased from the policy preamble. Therefore, the Services do not agree that this language adds substantively to the clarity of the policy, and we did not adopt this suggestion.

Comment (57): A commenter suggested we add the following language to the policy regarding private lands: “The Service recognizes that many listed species are found primarily or partially on private lands. For some endemic species, their entire range may be wholly on private lands, making partnerships with those landowners far more valuable than any expected gain that might be achieved through the incremental gains expected through a critical habitat designation and subsequent section 7 consultations. We acknowledge the potential incremental gain in conservation value from designating critical habitat on private land can be undermined if the landowner is not a partner in that designation or is opposed to that designation. Private land tracts that are proposed as critical habitat are likely to maximize their recovery value for listed species if the landowner is amenable to conservation and recovery activities on their lands. Therefore, landowners whose property has been proposed as critical habitat and wish to be excluded from that designation will be given serious consideration for exclusion if they provide information concerning how the lands will be managed for the conservation of the species.”

Our Response: The Services generally will consider exclusion of private lands from a designation of critical habitat if specifically requested. Private lands are needed for the conservation of endangered and threatened species. If a private landowner requests exclusion, and provides a reasoned rationale for such exclusion, including measures undertaken to conserve species and habitat on the land at issue (such that the benefit of inclusion is reduced), the Services would consider exclusion of those lands. However, the Services decline to include a policy element in this policy covering this particular suggestion.

Comment (58): A commenter suggested that we give great weight and consideration to exclusion of lands whose landowners allow access to their lands for purposes of surveys, monitoring, and other conservation and research activities.

Our Response: The Services would consider and give appropriate weight, on a case-by-case basis, to the benefits of the information gathered, should the Secretaries choose to enter into the discretionary 4(b)(2) exclusion analysis. If not yet established, we hope that arrangements of this sort with landowners could lead to conservation partnerships in the future. Development of those partnerships could result in furthering the conservation of the species.

Comment (59): A commenter suggested that the Services should include specific text in the policy regarding the importance of private landowner partnership and cooperation in species recovery efforts. Furthermore, the commenter suggests the Services give great weight to excluding private lands whose owners have expressed interest in participation in voluntary recovery efforts.

Our Response: The Services agree that recovery of listed species relies on the cooperation of private landowners and managers. The commenter brings to light an inherent tension with listing and recovery under the Act. One might think that the process of listing, designating critical habitat, developing a recovery plan, carrying out recovery plan objectives, and ultimately delisting a species should be a linear process. It is not. Adding species to the Federal Lists of Endangered and Threatened Wildlife and Plants and identifying areas that meet the definition of “critical habitat” are science-based processes. Areas meeting the definition of “critical habitat” for a given species must be identified as eligible for designation as critical habitat, regardless of landownership or potential future conflict with recovery opportunities, such as mentioned by the commenter. The Secretary may, however, exclude areas based on non-biological factors. The subject of this policy is to make transparent how the Services plan to address certain fact patterns under which the Secretaries will consider excluding particular areas from a designation. The presumption of cooperation for purposes of recovery of a species is not a particular fact pattern the Services have chosen to include, but is inherently captured under the partnership element of this policy. As stated in the permitted plans section of this policy, the Services would not weigh heavily a prospective partnership in which a landowner merely may choose to cooperate with the Services. If habitat-based threats are the main driver for a species' listing, the designation of critical habitat could be an important tool for species conservation.

Comment (60): We received numerous specific comments in several categories that were not directly relevant to this final policy on exclusions from critical habitat, and, therefore, they are not addressed in this section. While not directly relevant to this policy, we may address some of these issues in future rulemaking or policy development by the Services. These include:

• Issues regarding earlier coordination with States in the designation of critical habitat;

• Development and designation processes for critical habitat;

• Development of conservation plans;

• Relocation of existing critical habitat designations from airport lands; and

• Nonessential experimental populations.

We intend to look to this policy as general non-binding guidance when we consider exclusions from critical habitat designations. The policy does not limit the Secretaries' discretion in particular designations. In each designation, we are required to comply with various Executive Orders and statutes for those individual rulemakings. Below we discuss compliance with several Executive Orders and statutes as they pertain to this final policy.

Executive Order 12866 provides that the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget will review all significant rules. OIRA has determined that this final policy is a significant action because it may create a serious inconsistency with other agency actions.

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

In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.):

(a) We find this final policy will not “significantly or uniquely” affect small governments. We have determined and certify pursuant to the Unfunded Mandates Reform Act, 2 U.S.C. 1502, that this policy will not impose a cost of $100 million or more in any given year on local or State governments or private entities. Small governments will not be affected because the final policy will not place additional requirements on any city, county, or other local municipalities.

(b) This final policy will not produce a Federal mandate on State, local, or Tribal governments or the private sector of $100 million or greater in any year; that is, it is not a “significant regulatory action” under the Unfunded Mandates Reform Act. This policy will impose no obligations on State, local, or Tribal governments because this final policy is meant to complement the amendments to 50 CFR 424.19, and is intended to clarify expectations regarding critical habitat and provide for a more predictable and transparent critical-habitat-exclusion process. The only entities directly affected by this final policy are the FWS and NMFS. Therefore, a Small Government Agency Plan is not required.

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

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

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

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 (44 U.S.C. 3501 et seq.). This final policy will not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

We have analyzed this policy in accordance with the criteria of the National Environmental Policy Act (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), the Department of the Interior's NEPA procedures (516 DM 2 and 8; 43 CFR part 46), and NOAA's Administrative Order regarding NEPA compliance (NAO 216-6 (May 20, 1999)).

We have determined that this policy is categorically excluded from NEPA documentation requirements consistent with 40 CFR 1508.4 and 43 CFR 46.210(i). This categorical exclusion applies to policies, directives, regulations, and guidelines that are “of an administrative, financial, legal, technical, or procedural nature.” This action does not trigger an extraordinary circumstance, as outlined in 43 CFR 46.215, applicable to the categorical exclusion. Therefore, this policy does not constitute a major Federal action significantly affecting the quality of the human environment.

We have also determined that this action satisfies the standards for reliance upon a categorical exclusion under NOAA Administrative Order (NAO) 216-6. Specifically, the policy fits within two categorical exclusion provisions in § 6.03c.3(i)—for “preparation of regulations, Orders, manuals, or other guidance that implement, but do not substantially change these documents, or other guidance” and for “policy directives, regulations and guidelines of an administrative, financial, legal, technical or procedural nature.” NAO 216-6, § 6.03c.3(i). The policy would not trigger an exception precluding reliance on the categorical exclusions because it does not involve a geographic area with unique characteristics, is not the subject of public controversy based on potential environmental consequences, will not result in uncertain environmental impacts or unique or unknown risks, does not establish a precedent or decision in principle about future proposals, will not have significant cumulative impacts, and will not have any adverse effects upon endangered or threatened species or their habitats. Id. § 5.05c. As such, it is categorically excluded from the need to prepare an Environmental Assessment. Issuance of this rule does not alter the legal and regulatory status quo in such a way as to create any environmental effects.

In accordance with Executive Order 13175 (“Consultation and Coordination with Indian Tribal Governments”, November 6, 2000), the Department of the Interior Manual at 512 DM 2, the Department of Commerce (DOC) Tribal Consultation and Coordination Policy (May 21, 2013), DOC Departmental Administrative Order (DAO) 218-8, and NOAA Administrative Order (NAO) 218-8 (April 2012), we have considered possible effects of this final policy on federally recognized Indian Tribes. Following an exchange of information with tribal representatives, we have determined that this policy, which is general in nature, does not have tribal implications as defined in Executive Order 13175. Our intent with this policy is to provide non-binding guidance on our approach to considering exclusion of areas from critical habitat, including tribal lands. This policy does not establish a new direction. We will continue to collaborate and coordinate with Tribes on issues related to federally listed species and their habitats and work with them as we promulgate individual critical habitat designations, including consideration of potential exclusions on the basis of tribal interests. See Joint Secretarial Order 3206 (“American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act”, June 5, 1997).

Executive Order 13211 “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” requires agencies to prepare Statements of Energy Effects when undertaking certain actions. This final policy is not expected to significantly affect energy supplies, distribution, or use. Therefore, this action is not a significant energy action and no Statement of Energy Effects is required.

1. The decision to exclude any particular area from a designation of critical habitat is always discretionary, as the Act states that the Secretaries “may” exclude any area. In no circumstances is an exclusion of any particular area required by the Act.

2. When we undertake a discretionary 4(b)(2) exclusion analysis, we will evaluate the effect of non-permitted conservation plans or agreements and their attendant partnerships on the benefits of inclusion and the benefits of exclusion of any particular area from critical habitat by considering a number of factors. The list of factors that we will consider for non-permitted conservation plans or agreements is shown below. This list is not exclusive; all items may not apply to every non-permitted conservation plan or agreement and are not requirements of plans or agreements.

a. The degree to which the record of the plan supports a conclusion that a critical habitat designation would impair the realization of benefits expected from the plan, agreement, or partnership.

b. The extent of public participation in the development of the conservation plan.

c. The degree to which there has been agency review and required determinations (e.g., State regulatory requirements), as necessary and appropriate.

d. Whether National Environmental Policy Act (NEPA; 42 U.S.C. 4321 et seq.) compliance was required.

e. The demonstrated implementation and success of the chosen mechanism.

f. The degree to which the plan or agreement provides for the conservation of the essential physical or biological features for the species.

g. Whether there is a reasonable expectation that the conservation management strategies and actions contained in the conservation plan or agreement will be implemented.

h. Whether the plan or agreement contains a monitoring program and adaptive management to ensure that the conservation measures are effective and can be modified in the future in response to new information.

3. When we undertake a discretionary 4(b)(2) exclusion analysis, we will always consider areas covered by a permitted candidate conservation agreement with assurances (CCAA), safe harbor agreement (SHA), or habitat conservation plan (HCP), and we anticipate consistently excluding such areas from a designation of critical habitat if incidental take caused by the activities in those areas is covered by the permit under section 10 of the Act and the CCAA/SHA/HCP meets all of the following conditions:

a. The permittee is properly implementing the CCAA/SHA/HCP and is expected to continue to do so for the term of the agreement. A CCAA/SHA/HCP is properly implemented if the permittee is and has been fully implementing the commitments and provisions in the CCAA/SHA/HCP, Implementing Agreement, and permit.

b. The species for which critical habitat is being designated is a covered species in the CCAA/SHA/HCP, or very similar in its habitat requirements to a covered species. The recognition that the Services extend to such an agreement depends on the degree to which the conservation measures undertaken in the CCAA/SHA/HCP would also protect the habitat features of the similar species.

c. The CCAA/SHA/HCP specifically addresses that species' habitat and meets the conservation needs of the species in the planning area.

We generally will not rely on CCAAs/SHAs/HCPs that are still under development as the basis of exclusion of a particular area from a designation of critical habitat.

4. When we undertake a discretionary 4(b)(2) exclusion analysis, we will always consider exclusion of Tribal lands, and give great weight to Tribal concerns in analyzing the benefits of exclusion. However, Tribal concerns are not a factor in determining what areas, in the first instance, meet the definition of “critical habitat.”

5. When we undertake a discretionary 4(b)(2) exclusion analysis, we will always consider exclusion of areas for which a Federal agency has requested exclusion based on an assertion of national-security or homeland-security concerns, and will give great weight to national-security or homeland-security concerns in analyzing the benefits of exclusion. National-security and/or homeland-security concerns are not a factor, however, in the process of determining what areas, in the first instance, meet the definition of “critical habitat.”

6. Except in the circumstances described in 5 above, we will focus our exclusions on non-Federal lands. Because the section 7(a)(2) consultation requirements apply to projects carried out on Federal lands where there is discretionary Federal involvement or control, the benefits of designating Federal lands as critical habitat are typically greater than the benefits of excluding Federal lands or of designating non-Federal lands.

7. When the Services are determining whether to undertake a discretionary 4(b)(2) exclusion analysis as a result of the probable incremental economic impacts of designating a particular area, it is the nature of those impacts, not necessarily a particular threshold level, that is relevant to the Services' determination.

8. For any area to be excluded, we must find that the benefits of excluding that area outweigh the benefits of including that area in the designation. Although we retain discretion because we cannot anticipate all fact patterns that may occur, it is the general practice of the Services to exclude an area when the benefits of exclusion outweigh the benefits of inclusion. We must not exclude an area if the failure to designate it will result in the extinction of the species.

The primary authors of this policy are the staff members of the Endangered Species Program, U.S. Fish and Wildlife Service, 5275 Leesburg Pike, Falls Church, VA 22041-3803, and the National Marine Fisheries Service's Endangered Species Division, 1335 East-West Highway, Silver Spring, MD 20910.

The authority for this action is section 4(h) of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.).