Biden Administration Proposes Undoing Recent ESA Regulatory Reforms and Expanding Section 7 Consultations

On June 22, 2023, U.S. Fish and Wildlife Services (FWS) and the National Marine Fisheries Service (NMFS) (together “the Services”) issued three proposals largely aimed at undoing the Trump administration’s recent regulatory amendments under Sections 4 and 7 of the Endangered Species Act (ESA).

The proposed rules would respectively:

1. Restore FWS’s blanket 4(d) rule that affords threatened species the same level of protection as species listed as endangered and revise its Section 9 regulations to increase Tribal involvement in threatened species conservation and to clarify the ESA’s protections of endangered plants;
2. Update the Services’ joint regulations for listing, reclassifying, and delisting species and designating critical habitat; and
3. Revise the Services’ joint regulations for completing Section 7 consultations.

If finalized as proposed, these changes would erase many key ESA improvements secured by the regulated community in 2019, substantially impacting project development and ESA compliance nationwide. The Services will receive public comment on each proposal through August 21, 2023.

Key Takeaways

• FWS proposes to restore its recently rescinded “blanket 4(d) rule,” under which each new species FWS lists as threatened automatically receives the same ESA protections as endangered species unless FWS develops a species-specific “special 4(d) rule” relaxing those protections.
• FWS proposes to revise its Section 9 regulations to provide Tribal entities greater authority in the aid, salvage, or disposal of threatened species.
• The Services propose reinstating language in their joint Section 4 regulations clarifying that economic and other impacts are not relevant considerations when listing, delisting, or reclassifying a species under the statute.
• The Services propose revising their joint Section 4 regulations to again increase designations of unoccupied critical habitat even when occupied critical habitat areas are available for designation.
• The Services propose revising their joint Section 7 consultation regulations, including by:
  • Rescinding important recent clarifying language on the “reasonable certainty” and “clear and substantial information” standards for evaluating potential effects;
  • Reversing longstanding agency policy so that the Services may now impose species and habitat mitigation requirements as reasonable and prudent measures to offset incidental take of listed species in biological opinions;
  • Reiterating that the obligation to reinitiate consultation rests with the Federal action agency rather than the Services; and
  • Amending the definitions of “environmental baseline.”

ESA Section 4(d) and ESA Section 9: Programmatic Protections for FWS’s Threatened Listings, Increased Tribal Involvement, and Clarified Plant Protections

FWS’s proposal would reinstate its “blanket 4(d) rule” to again automatically extend the ESA’s endangered species protections to all of FWS’s newly listed threatened species unless the agency issues a species-specific rule providing otherwise.

Additionally, FWS’s proposal would revise certain related prohibitions and exceptions under its Section 9 regulations by (1) adding federally recognized Tribes to the entities authorized to aid, salvage, or dispose of threatened species and (2) adding a provision clarifying that it is unlawful to “maliciously damage or destroy” an endangered plant species on land under Federal jurisdiction and unlawful to “remove, cut, dig up, or damage or destroy” an endangered plant species on any area that is not under Federal jurisdiction in knowing violation of a State law or regulation.

ESA Section 4: Species Listings and Critical Habitat Designations

The Services’ joint proposed Section 4 rule seeks to accomplish three primary purposes:

• Remove uncertainty they believe resulted from the 2019 regulatory amendments regarding consideration of economic impacts when making species listing decisions under the ESA. While the proposal would not preclude the Services from evaluating economic data and information related to a possible listing decision, it would reaffirm the longstanding prohibition on economic impacts influencing a listing decision and prevent the agencies from referencing this information in their final actions.
• Amend the concept of “foreseeable future,” the time horizon used for listing a species as threatened based on the likelihood of that species later declining to endangered status, to “extend[] as far into the future as the Services can reasonably rely on information about the threats to the species and the species’ responses to those threats.” 
• Revise the standard and process for designating critical habitat by rescinding and revising several regulatory changes that the Services adopted in 2019. Specifically, the proposal would eliminate the recently-added language clarifying that designating critical habitat is not “prudent” if the recognized species threats derive solely from causes, like climate change, that management actions under the ESA cannot address. The proposal would also rescind the Services’ 2019 revisions that emphasized the designation of only occupied critical habitat areas over unoccupied areas and again require the agencies to designate unoccupied areas if they conclude doing so is appropriate for species conservation – even if areas that are occupied by the species are available for designation.

ESA Section 7: Agency Consultation and New Mitigation Requirements

The Services’ joint proposed Section 7 rule first seeks to clarify that “consequences” to listed species or critical habitats that result from activities caused by, but not part of, the proposed action will be considered “effects of the action” during the interagency consultation process provided that the effects satisfy a two-part causation test, e.g. “but-for” causation. But the proposal would eliminate important clarifications from the 2019 amendments by eliminating:

1. Language specifying that the effects analysis is limited to aspects of the proposed action that are “reasonably certain to occur;”
2. Language requiring the Services to demonstrate that effects of the action deemed “reasonably certain to occur” must be backed by “clear and substantial information;” and
3. The non-exhaustive list of factors intended to inform whether an activity is “reasonably certain to occur.”

Of at least equal significance, the proposal would codify a wholly new interpretation of the appropriate scope of “reasonable and prudent measures” (RPMs) identified in incidental take statements. If finalized, that new interpretation would reverse decades-old policy prohibiting the Services from identifying RPMs to “offset” (i.e., mitigate) impacts from the taking of species individuals through measures other than by avoiding or reducing the level of incidental take from the proposed action “in the action area.” This well-known policy has been crucial in protecting countless project proponents from being subjected to species mitigation requirements during Section 7 consultation. The proposal would scuttle this important policy, enabling the Services for the first time to impose affirmative species and habitat mitigation conditions on proposed actions through the Section 7 process and to do so outside of the proposal’s action area “when incidental take cannot be avoided” – a curious qualification given that Section 7’s requirements would not apply to a species for which incidental take would be avoided. 

Though far less impactful, the proposal would also slightly revise the definition of “environmental baseline,” but the Services acknowledge that the “application of the definition in consultations will not change.” Finally, under the proposed rule, the Services reiterate their longstanding policy that the obligation to reinitiate consultation rests with the Federal action agency, not the Services.

Next Steps

As the ESA regulatory landscape continues to change, it is critical that project proponents stay current on these developments to protect their ongoing and planned activities. This new set of standards may cause delays in agency reviews, which could prolong project timelines and create additional legal challenges.

Project proponents should carefully review the Services’ proposed rules and consider submitting comments by the August 21, 2023, deadline.

Beveridge & Diamond’s Endangered Species and Wildlife Protection and Infrastructure and Project Development and Permitting practice groups provide strategic counseling and compliance advice to project proponents in all industries to minimize the impacts of threatened and endangered species listings and critical habitat designations on our clients’ activities and help clients in numerous industries achieve compliance with the ever-changing regulatory landscape thereby reducing cost and risk to operations. For more information on this development, please contact the authors.