On September 8, 2020, the U.S. Fish and Wildlife Service (USFWS) published a proposed rule codifying procedures for excluding areas of “critical habitat” under section 4 of the Endangered Species Act (ESA). ESA section 4(b)(2) provides discretionary authority to the USFWS and National Marine Fisheries Service (NMFS), as administrators of the ESA, to exclude certain areas from critical habitat designations for species within their purview. These agencies can exclude areas from a critical habitat designation where the agencies conclude the benefits of excluding the areas outweigh the benefits of inclusion, provided that exclusion will not result in the extinction of the species concerned. NMFS does not join the USFWS in this proposed rulemaking.

The proposed rule codifies, with changes, the existing “Policy Regarding Implementation of Section 4(b)(2) of the Endangered Species Act” (Policy). 81 Fed. Reg. 7226 (Feb. 11, 2016) (to be codified at 50 C.F.R. pt. 424). The proposed rule in part responds to the Supreme Court case Weyerhaeuser Co. v. U.S. Fish & Wildlife Serv.139 S. Ct. 361 (2018). In Weyerhaeuser Co., the Court found that ESA section 4(b)(2) “requires the Secretary to consider economic impact and relative benefits before deciding whether to exclude an area from critical habitat or to proceed with designation[.]” Id. at 371. The USFWS suggests that the decision in Weyerhaeuser Co. creates a judicially reviewable action if the USFWS declines to conduct a section 4(b)(2) exclusion analysis.

In response to Weyerhaeuser Co., the proposed rule clarifies two circumstances under which the USFWS will conduct an exclusion analysis: (1) “when a proponent of excluding the area has presented credible information in support of the request [to conduct an exclusion analysis];” and (2) when the USFWS exercises its “discretion to evaluate any particular area for potential exclusion.” In explaining what constitutes “credible information,” the USFWS acknowledges the limitations to its expertise, and proposes to conduct its exclusion analysis by giving appropriate weight to those with relevant expertise presenting information on nonbiological impacts.

While the proposed rule echoes much of the existing Policy, it also makes notable changes. The proposed rule reverses the Policy’s position that federal lands will generally not be excluded from critical habitat designation. Instead, the proposed rule directs the USFWS to consider the avoidance of administrative or transactional costs when deciding to exclude federal lands. Further, the proposed rule directs the USFWS to consider nonbiological impacts identified by those with federal land permits, leases, or contracts. The proposed rule also adds consideration of community impacts identified by state and local governments as part of the critical habitat exclusion analysis.

This proposed rule has a 30 day comment period, and will be open until October 8, 2020.