[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]



 
   LAND AND MONEY MITIGATION REQUIREMENTS IN ENDANGERED SPECIES ACT 
                              ENFORCEMENT

=======================================================================

                           OVERSIGHT HEARING

                               before the

                         COMMITTEE ON RESOURCES
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                               __________

                      MAY 26, 1999, WASHINGTON, DC

                               __________

                           Serial No. 106-34

                               __________

           Printed for the use of the Committee on Resources


                                



 Available via the World Wide Web: http://www.access.gpo.gov/congress/house
                                   or
           Committee address: http://www.house.gov/resources
                                 ---------

                      U.S. GOVERNMENT PRINTING OFFICE
 58-723                      WASHINGTON : 1999


                         COMMITTEE ON RESOURCES

                      DON YOUNG, Alaska, Chairman
W.J. (BILLY) TAUZIN, Louisiana       GEORGE MILLER, California
JAMES V. HANSEN, Utah                NICK J. RAHALL II, West Virginia
JIM SAXTON, New Jersey               BRUCE F. VENTO, Minnesota
ELTON GALLEGLY, California           DALE E. KILDEE, Michigan
JOHN J. DUNCAN, Jr., Tennessee       PETER A. DeFAZIO, Oregon
JOEL HEFLEY, Colorado                ENI F.H. FALEOMAVAEGA, American 
JOHN T. DOOLITTLE, California            Samoa
WAYNE T. GILCHREST, Maryland         NEIL ABERCROMBIE, Hawaii
KEN CALVERT, California              SOLOMON P. ORTIZ, Texas
RICHARD W. POMBO, California         OWEN B. PICKETT, Virginia
BARBARA CUBIN, Wyoming               FRANK PALLONE, Jr., New Jersey
HELEN CHENOWETH, Idaho               CALVIN M. DOOLEY, California
GEORGE P. RADANOVICH, California     CARLOS A. ROMERO-BARCELO, Puerto 
WALTER B. JONES, Jr., North              Rico
    Carolina                         ROBERT A. UNDERWOOD, Guam
WILLIAM M. (MAC) THORNBERRY, Texas   PATRICK J. KENNEDY, Rhode Island
CHRIS CANNON, Utah                   ADAM SMITH, Washington
KEVIN BRADY, Texas                   WILLIAM D. DELAHUNT, Massachusetts
JOHN PETERSON, Pennsylvania          CHRIS JOHN, Louisiana
RICK HILL, Montana                   DONNA CHRISTIAN-CHRISTENSEN, 
BOB SCHAFFER, Colorado                   Virgin Islands
JIM GIBBONS, Nevada                  RON KIND, Wisconsin
MARK E. SOUDER, Indiana              JAY INSLEE, Washington
GREG WALDEN, Oregon                  GRACE F. NAPOLITANO, California
DON SHERWOOD, Pennsylvania           TOM UDALL, New Mexico
ROBIN HAYES, North Carolina          MARK UDALL, Colorado
MIKE SIMPSON, Idaho                  JOSEPH CROWLEY, New York
THOMAS G. TANCREDO, Colorado         RUSH D. HUNT, New Jersey

                     Lloyd A. Jones, Chief of Staff
                   Elizabeth Megginson, Chief Counsel
              Christine Kennedy, Chief Clerk/Administrator
                John Lawrence, Democratic Staff Director



                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held Month Day, 1999.....................................     1

Statement of Members:
    Miller, Hon. George, a Representative in Congress from the 
      State of California........................................     3
    Pombo, Hon. Richard, a Representative in Congress from the 
      State of California........................................     1
        Prepared statement of....................................     2

Statement of Witnesses:
    Bean, Michael J., Senior Attorney, Environmental Defense 
      Fund, Washington, DC.......................................   140
        Prepared statement of....................................   142
    Bruton, Vinton Charles, North Carolina Department of 
      Transportation, Raleigh, North Carolina....................    64
        Prepared statement of....................................    66
    Clark, Jamie, Director, U.S. Fish and Wildlife Service, 
      Washington, DC; accompanied by Mike Spear, Manager, 
      California-Nevada Operations Office........................     5
        Prepared statement of....................................     7
    Dalton, Penelope, Assistant Administrator for Fisheries, 
      National Marine Fisheries Service, Silver Spring, Maryland; 
      accompanied by Jim Lecky, Assistant Regional Administrator 
      for Protected Resources, Southeast Region; Ted Eutler, 
      Attorney, National Oceanic and Atmospheric Administration, 
      Office of General Counsel..................................    17
        Prepared statement of....................................    20
        Questions for Penelope Dalton from the Committee.........   161
    Johnston, James R., Counsel, Foundation for Habitat 
      Conservation, Seattle, Washington..........................   133
        Prepared statement of....................................   134
    Schulz, Dave, Chair, Okanogan County, Okanogan, Washington...    57
        Prepared statement of....................................    59
        Additional material submitted by.........................   164
    Tsakopoulos, Angelo K., AKT Development Corporation, 
      Sacramento, California.....................................   109
        Prepared statement of....................................   112
    Weinberg, Edward R., National Association of Home Builders, 
      Washington, DC.............................................   119
        Prepared statement of....................................   120
    Weygandt, Robert M., Chairman, Board of Supervisors, Placer 
      County, California.........................................    52
        Prepared statement of....................................    53
    Worden, Dwight C., Brondi Development, Incorporated, Fair 
      Oaks, California...........................................   123
        Prepared statement of....................................   126
    Workman, William P., City Manager, City of Corona, Corona, 
      California.................................................    42
        Prepared statement of....................................    44

Additional material supplied:
    Nielsen, J. Mark, Chairman, Board of Directors, El Dorado 
      County Water Agency, prepared statement of.................   159



    OVERSIGHT HEARING ON LAND AND MONEY MITIGATION REQUIREMENTS IN 
                   ENDANGERED SPECIES ACT ENFORCEMENT

                              ----------                              


                        WEDNESDAY, MAY 26, 1999

                          House of Representatives,
                                    Committee on Resources,
                                                   Washington, D.C.
    The Committee met, pursuant to notice, at 10:13 a.m., in 
Room 1324, Longworth House Office Building, Hon. Richard Pombo 
presiding.

 STATEMENT OF HON. RICHARD POMBO, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. Pombo. [presiding] Good morning. I would like to 
welcome you all here today to this oversight hearing of the 
Committee on Resources on how mitigation is used in the 
enforcement of the Endangered Species Act. Chairman Don Young 
is not able to be here today and has asked that I Chair this 
hearing.
    Today, we are going to hear testimony regarding the 
experience of a number of communities and private property 
owners regarding their efforts to work with the Fish and 
Wildlife Service and National Marine Fisheries Services to 
obtain permits and approvals to use either private property or 
provide public services at the local level.
    The Endangered Species Act prohibits the take of threatened 
or endangered species and also prohibits the take of the land 
on which they live. This means that a property owner whose land 
is found by the government to be habitat for a listed species 
cannot use his or her land without the risk of criminal and 
civil prosecution under the Endangered Species Act. In 1982, 
Congress amended the ESA to allow these property owners to 
obtain what we call an ``incidental take permit'' so that they 
can use their property as long as their take of species or its 
habitat is only incidental to an otherwise legal use of the 
property. Within the last four years, the Fish and Wildlife 
Service and the National Marine Fisheries Service has issued 
over 250 incidental take permits.
    In addition, if the use of private land depends on a 
Federal permit of any type, the Fish and Wildlife Service and 
National Marine Fisheries Service also require a section 7 
consultation. This is particularly prevalent where there are 
wetlands and the Corps of Engineers must issue a wetlands 
permit.
    Landowners who find themselves needing a permit are being 
asked to mitigate for the loss of species habitat on their land 
by either setting aside a portion of the property they own or 
paying money for the purpose of buying land elsewhere. This is 
a growing industry, particularly in California where the great 
majority of mitigation is required.
    The purpose of our hearing is to examine how this system is 
working. I am concerned about the potential for abuse of 
landowners who may not be in the position to bargain over the 
amount of mitigation being required. Do these demands for 
mitigation violate the Fifth Amendment of the Constitution? The 
Supreme Court has addressed this issue in the case of Florence 
Dolan v. City of Tigard and found that there are limits on the 
amount of mitigation or exactions that can be demanded from 
private property owners.
    The Federal Government has required private property owners 
around the country to pay more than $62 million to various 
parties as a condition of obtaining section 10 permits. This 
does not include the value of the land they have required to be 
set aside and protected ``in perpetuity.'' This Committee will 
examine how these funds are spent and whether they are being 
spent wisely.
    Let me say to our witnesses that we appreciate your coming 
here today to testify regarding your experiences. I realize 
that there are many individuals who are truly afraid to make 
their concerns public or to share their experiences for fear of 
retribution and retaliation. Under the ESA, these Federal 
agencies exercise great power over the lives of the people who 
live in the areas where there are endangered species. They can 
literally destroy a small business just by refusing to process 
a permit or complete a consultation. So, I know the risks you 
are taking, and I want to thank you for living up to your 
responsibility as good citizens.
    With that in mind, I ask Director Clark to listen closely 
to the testimony of the other witnesses. Director Clark and I 
have had several conversations about the future of the species 
protection and recovery in this country, and although we may 
not see eye to eye on the best way to improve our Federal laws 
on this issue, I respect and hold her views in high regard. 
Since she took the reign two years ago, I believe she has put 
forward a genuine effort to positively address concerns raised 
by this Committee. However, as today's testimony will echo, 
these exact concerns have been routinely disregarded by the 
Fish and Wildlife Service regional offices. Therefore, 
responsibility for failure to follow policy by agency staff and 
employees has to fall into the Director's lap.
    [The prepared statement of Mr. Pombo follows:]

Statement of Hon. Richard Pombo, a Representative in Congress from the 
                          State of California

    Good Morning. I would like to welcome all of you today to 
this oversight hearing of the Committee on Resources on how 
mitigation is used in the enforcement of the Endangered Species 
Act. Chairman Don Young is not able to be here today and has 
asked that I chair this hearing.
    Today, we are going to hear testimony regarding the 
experience of a number of communities and private property 
owners regarding their efforts to work with the Fish and 
Wildlife Service and the National Marine Fisheries Service to 
obtain permits and approvals to use either private property or 
provide public services at the local level.
    The Endangered Species Act prohibits the take of threatened 
or endangered species and also prohibits the take of the land 
on which they live. This means that a property owner whose land 
is found by the government to be habitat for a listed species 
cannot use his or her land without the risk of criminal and 
civil prosecution under the ESA. In 1982, Congress amended the 
ESA to allow these property owners to obtain what we call an 
``incidental take permit'' so that they can use their property 
as long as their take of the species or its habitat is only 
incidental to an otherwise legal use of the property. Within 
the last four years the Fish and Wildlife Service and the 
National Marine Fisheries Service has issued over 250 
incidental take permits.
    In addition, if the use of private land depends on a 
Federal permit of any type, the Fish and Wildlife Service and 
NMFS also require a section 7 consultation. This is 
particularly prevalent where there are wetlands and the Corps 
of Engineers must issue a wetlands permit.
    Landowners who find themselves needing a permit are being 
asked to mitigate for the loss of species habitat on their land 
by either setting aside a portion of the property they own or 
paying money for the purpose of buying land elsewhere. This is 
a growing industry, particularly in California where the great 
majority of mitigation is required.
    The purpose of our hearing is to examine how this system is 
working. I am concerned about the potential for abuse of 
landowners who may not be in a position to bargain over the 
amount of mitigation being required. Do these demands for 
mitigation violate the 5th Amendment of the Constitution. The 
Supreme Court has addressed this issue in the case of Florence 
Dolan v. City of Tigard and found that there are limits on the 
amount of mitigation or exactions that can be demanded from 
private property owners.
    The Federal Government has required private property owners 
around the country to pay more than $62,354,875 to various 
third parties as a condition of obtaining section 10 permits. 
This does not include the value of land they have required to 
be set aside and protected ``in perpetuity.'' This Committee 
will examine how these funds are spent and whether they are 
being spent wisely.
    Let me say to our witnesses that we appreciate your coming 
here today to testify regarding your experiences. I realize 
that there are many individuals who are truly afraid to make 
their concerns public or to share their experiences for fear of 
retribution or retaliation. Under the ESA, these Federal 
agencies exercise great power over the lives of the people who 
live in areas where there are endangered species. They can 
literally destroy a small business just by refusing to process 
a permit or complete a consultation. So I know the risk you are 
taking and I want to thank you for living up to your 
responsibility as good citizens.
    With that in mind, I ask Director Clark to listen closely 
to the testimony of the other witnesses. Director Clark and I 
have had several conversations about the future of species 
protection and recovery in this country, and, although we may 
not see eye to eye on the best way to improve our Federal laws 
on this issue, I respect and hold her views in high esteem. 
Since she took the reigns two years ago, I believe she has put 
forward a genuine effort to positively address concerns raised 
by this Committee. However, as today's testimony will echo, 
these exact concerns have been routinely disregarded by the FWS 
regional offices. Therefore, responsibility for failure to 
follow policy by agency staff and employees has to fall into 
the Director's lap.
    Before I introduce our witnesses, I would recognize our 
ranking minority member for his opening statement.

    Mr. Pombo. Before I introduce our witnesses, I would 
recognize our Ranking Member for his opening statement. Mr. 
Miller.

 STATEMENT OF HON. GEORGE MILLER, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. Miller. Thank you very much, Mr. Chairman, and I thank 
you for calling this hearing, and I welcome our witnesses 
today, and I look forward to their testimony on the ESA 
implementation.
    We are all naturally concerned about ongoing ESA disputes 
that pit development against species and their habitat. I, for 
one, would welcome the opportunity to legislate in a 
responsible way on this issue, because I think that all parties 
deserve a better ESA management and enforcement program than 
exists today.
    It is clear that the major objectives to this law is not 
being currently met. More than 1,800 species are already 
listed, and the number is going to continue to grow as more and 
more habitat is lost. The United States has lost approximately 
117 million acres of wetlands in the lower 48; 25 million acres 
of ancient forest in the Northwest; 22 million acres of native 
grasslands just in California. Our national forests contain 
nearly 360,000 miles of road, 8 times more than the interstate 
highway system. As States like California continue to grow, the 
conflicts will continue to mount. While some of the witnesses 
will tell us that the Fish and Wildlife Service has been making 
the law operate more effectively and fairly, others, I 
understand, will focus on the remaining delays and obstacles 
and question whether the costs of mitigation are authorized 
under law.
    The Endangered Species Act requires the activities that 
will impact listed species must be minimized and mitigated. 
This is not new nor is it unique to the ESA. The Clean Water 
Act, the National Environmental Policy Act, and many other laws 
require that Federal agencies and private landowners mitigate 
their negative impacts on the environment just as many county 
and city planning commissions do in terms of the human 
environment. I hesitate to think of how unpleasant it would be 
if we lived in a U.S. where these laws did not exist and 
mitigation was not required.
    We will also hear that the Fish and Wildlife Service is 
hopelessly slow in processing permits to allow development to 
move forward, particularly in the rapidly growing areas of the 
country, like California. These delays cost time and money, 
and, frankly, they concern me. The biggest cause of delays, 
some will tell us, is inadequate staffing yet, ironically, just 
a year ago, this Committee was holding hearings to criticize 
Fish and Wildlife Service for putting too many staff in Region 
1 and neglecting other areas of the country. Well, you can't 
have it both ways. You can't criticize Fish and Wildlife for 
using its limited resources where the biggest demands are and 
then criticize them when they are not doing the job fast 
enough. If this Committee wants the Fish and Wildlife Service 
to be able to do its job in a timely manner, then we need to 
provide the financial and personnel resources that are 
required, and to stop wasting time with endless congressional 
inquiries and subpoenas for information that divert staff from 
the job the witnesses and the people here today want to see 
done.
    The bottom line is that the overwhelming majority of 
Americans support the recovery the endangered species just as 
they support the laws that ensure that we have clean water and 
clean air. The leadership of the Resources Committee should 
demonstrate its willingness to write comprehensive reform 
legislation to reauthorize the Endangered Species Act that will 
ensure that we recover the species and get them off the list. 
This is the real way to reduce the restrictions on landowners. 
Thank you.
    Mr. Pombo. Thank you. I ask unanimous consent that all 
other opening statements be included in the record.
    I would also like to ask unanimous consent that Mr. 
Hastings from Washington be allowed to sit on the dais and 
participate in the hearing.
    I would like to welcome our first panel. The Honorable 
Jamie Clark, Director, U.S. Fish and Wildlife Service, Ms. 
Penelope Dalton, Mr. William P. Workman, Mr. Robert M. 
Weygandt, Mr. Dave Schulz, and Dr. Vinton Charles Bruton, join 
us at the witness table, please.
    Before you all sit down, I would like you to stand and 
raise your right hand to take the oath.
------------
    Oath: Do you solemnly swear or affirm under the penalty of 
perjury that the responses given and statements made will be 
the whole truth and nothing but the truth?
    [Witnesses sworn.]
    Let the record show they all answered in the affirmative. 
Thank you very much.
    I would like to welcome you all here today, and, Ms. Clark, 
we will start with you.

  STATEMENT OF JAMIE CLARK, DIRECTOR, U.S. FISH AND WILDLIFE 
 SERVICE, WASHINGTON, DC; ACCOMPANIED BY MIKE SPEAR, MANAGER, 
              CALIFORNIA-NEVADA OPERATIONS OFFICE

    Ms. Clark. Thank you, Mr. Chairman. Good morning, Mr. 
Chairman and members of the Committee.
    I really do appreciate this opportunity to discuss section 
7 and section 10 implementation under the Endangered Species 
Act. I am accompanied by Mike Spear, the Manager of the 
California-Nevada Operations Office and other key folks in 
California.
    The Fish and Wildlife Service is working with many partners 
to provide flexibility and certainty in the way we administer 
the Endangered Species Act. We have instituted many reforms 
during this administration to make the Act work better for both 
people and species, and our reforms are paying off. The United 
States economy has never been stronger; at the same time, more 
species are being protected and recovered than ever before. The 
American public has demonstrated that they want to preserve our 
national heritage while allowing economic development to 
continue. We are achieving that goal through the Endangered 
Species Act.
    Consultation, habitat conservation planning, and recovery 
workloads have increased dramatically at the same time that the 
administration has been working to streamline implementation of 
the law. Fulfilling the President's Fiscal Year 2000 budget 
request for endangered species is essential to enable the 
Service to support the increasing technical assistance requests 
from private landowners and to expedite consultation and 
permitting actions throughout the Nation. I urge the Congress 
to adopt the President's budget request for the Endangered 
Species Program for Fiscal Year 2000.
    I would like to explain to the Committee how the term 
``mitigation'' is applied in the context of the Endangered 
Species Act since it is often misunderstood. Mitigation refers 
only to activities that may be done to offset or rectify the 
impact of an action. Avoiding or reducing the impact is 
referred to as minimization. Though the Service tries to 
distinguish among the many forms of the term ``mitigation,'' 
applicants, action agencies, and, as you stated before, even we 
sometimes use the term broadly. This leads to confusion over 
the difference between minimization and mitigation under the 
Endangered Species Act.
    Under section 10, the Service helps the applicant identify 
the minimization and mitigation actions required to reduce or 
offset potential adverse effects of a proposed activity on a 
species covered the Habitat Conservation Plan. The law requires 
that applicants minimize and mitigate the effects of their 
actions to the maximum extent practicable.
    Minimization and mitigation requirements can take many 
forms depending on the habitat needs and the individual status 
of the species and the size and scope of the project. Because 
applicants come to us with many types of projects that vary in 
size, scope, and impact, we try to be flexible in meeting the 
needs of the applicants. We don't use a cookie cutter approach 
in developing HCPs.
    During the section 7 consultation process, the Federal 
action agency and the Service may work together to identify 
what measures may be incorporated into a proposed project to 
avoid jeopardy and to minimize the effects on listed species. 
Because they are incorporated into the project before the 
Service completes a biological opinion, it is not mitigation in 
the same way that it is used under section 10.
    I am mindful, Mr. Chairman, that the Committee believes 
that the Fish and Wildlife Service required mitigation through 
reasonable and prudent measures on some occasions. I have 
received Chairman Young's letter earlier this month that raises 
this concern in detail. I take this issue very seriously and 
will look into it closely in concert with the regional 
directors who are responsible for implementing the consultation 
program in the regions. Specifically, I will review the 
projects that were raised in the letter to determine if the 
guidance concerning the scope of reasonable and prudent 
measures is being adhered to consistently across the country.
    In closing, I would like to address the demands facing the 
Fish and Wildlife Service nationwide that challenge our ability 
on an ongoing basis to make the Endangered Species Act work. 
For example, California--your home State--is facing rapid 
population growth and urbanization and has more federally 
listed species today than any other State except for Hawaii. 
The challenges in California are especially difficult in 
offices like Carlsbad where we have many entities seeking 
immediate assistance in project planning related to listed 
species, wetlands, and other natural resource issues. I have 
seen a copy of the letter sent to this Committee by 26 
California members that asked Chairman Young to enlist the 
General Accounting Office to review the work of our Carlsbad 
office. We welcome this opportunity to have an objective third 
party look at and explain to the public the demands and 
expectations put on our Carlsbad office, very much 
representative of what is happening nationwide.
    I am proud of the hard work that our dedicated Fish and 
Wildlife Service employees do all over the country to further 
our mission, while addressing the needs of private landowners 
and species conservation.
    Thank you, Mr. Chairman. I would be happy to answer any 
questions.
    [The prepared statement of Ms. Clark follows:]

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    Mr. Pombo. Thank you.
    Next, we have Ms. Dalton who is the Assistant Administrator 
for Fisheries, National Marine Fisheries Service.

   STATEMENT OF PENELOPE DALTON, ASSISTANT ADMINISTRATOR FOR 
 FISHERIES, NATIONAL MARINE FISHERIES SERVICE, SILVER SPRING, 
    MARYLAND; ACCOMPANIED BY JIM LECKIE, ASSISTANT REGIONAL 
 ADMINISTRATOR FOR PROTECTED RESOURCES, SOUTHEAST REGION; TED 
      EUTLER, ATTORNEY, NATIONAL OCEANIC AND ATMOSPHERIC 
           ADMINISTRATION, OFFICE OF GENERAL COUNSEL

    Ms. Dalton. Mr. Chairman and members of the Committee, I am 
pleased to be here today on behalf of the National Marine 
Fisheries Service. Accompanying me is Mr. Jim Lecky, Assistant 
Regional Administrator for Protected Resources for NMFS' 
Southeast Region, and Mr. Ted Eutler, Attorney in NOAA's Office 
of General Counsel. NOAA is a partner with the Fish and 
Wildlife Service in administering the ESA and works with other 
Federal agencies, States, counties, tribes, and private 
landowners to carry out its requirements.
    Mr. Pombo. Ms. Dalton, could I have you just pull the mike 
just a little----
    Ms. Dalton. Sure.
    Mr. Pombo. Thank you.
    Ms. Dalton. Attached to my written testimony is a summary 
of all section 10 incidental take permits or Habitat 
Conservation Plans (HCPs) that currently are being monitored or 
negotiated by NMFS. To date, we have issued only one major 
permit and that was to PALCO this year in California. However, 
we are a party to four implementing agreements associated with 
section 10 permits issued by the Fish and Wildlife Service in 
the Pacific Northwest. In addition, we currently are 
negotiating about 35 additional HCPs. Most of these agreements 
involve management of large tracts of timber in the Pacific 
Northwest and northern California. None of the permits or 
agreements that we have issued to date require mitigation 
payments or mandatory set asides of property. While we have 
rarely used off-site mitigation, we believe it is appropriate 
where habitat losses are unavoidable, such as compensating for 
the mortality of juvenile salmon in the operation of specific 
hydro-electric dams.
    One example which demonstrates our commitment to working 
with private landowners and carrying out our ESA 
responsibilities is the PALCO HCP. This plan is being 
implemented through a section 10 incidental take permit and 
consists of interrelated elements to minimize, mitigate, and 
monitor the effects of timber harvesting activities on aquatic 
species. Prescriptive measures for any permit activity can be 
modified based on watershed analysis, new scientific studies, 
and monitoring as long as the plan continues to meet the 
objective of maintaining or achieving necessary habitat 
functions for threatened or endangered aquatic species.
    Although PALCO and other timber related permits require 
management of riparian buffers, this is not a permanent set 
aside of private land. At the end of the permit period or 
sooner, if new information indicates it is appropriate or the 
species recovers, these areas could become available for timber 
activity. In addition, some riparian buffers are not off limits 
to harvest, and they even require cutting for effective 
management.
    One important point is that in exchange for agreeing to 
carry out certain measures to minimize or mitigate effects of 
actions on listed species, the landowner receives an ESA 
exception. In addition, the landowner receives assurances that 
the government will not come back for the lifetime of the 
permit and ask for more land, water, or money that was not 
provided for in the permit or its implementing agreement. This 
assurance is a key element of the Administration's ``No 
Surprises'' policy which the Services put into place last year.
    With respect to section 7, NMFS works with Federal agencies 
and applicants to minimize the impacts of taking listed species 
incidental to projects authorized, funded, or permitted by 
those agencies. NMFS does not require payments into any kind of 
fund or mitigation bank as a reasonable or prudent measure in 
an incidental take statement. Measures which we have proposed 
have ranged from habitat restoration, inner-bank stabilization 
projects, to permitting an activity at a time of year when it 
will have the least impact on a species. For example, time-of-
year restrictions are used for such activities as fishing, 
dredging, and general construction.
    NMFS has made significant progress over the past five years 
in making the ESA more workable for the American people. First, 
we partnered with the Fish and Wildlife Service to issue joint 
guidance on conducting section 7 consultations and developing 
HCPs. The HCP handbook includes guidance for evaluating whether 
plans will be effective and accomplish minimization and 
mitigation goals. The section 7 handbook is extremely useful to 
Federal agencies and their applicants, because it tells them 
what to expect when they enter into the consultation process.
    Second, we have worked within NMFS to make sure that our 
regions receive the guidance needed to implement the ESA fairly 
and consistently. The policies and regulations that are now in 
place should provide economic assurances and greater 
certainties to landowners. In addition, they have strengthened 
cooperation among Federal, State, and local officials and non-
governmental groups and private citizens.
    In addition to its ESA program, NMFS has initiated habitat 
restoration projects in many parts of the country. These 
projects contribute to the recovery of listed species and 
encourage local community involvement. One example is the 
Haskell Slough in Washington State where NMFS supplied initial 
funding and worked with State and local partners to implement a 
plan for restoring habitat. Participants included Northwest 
Chinook Recovery, private landowners, Trout Unlimited, the 
Upper Skagit Indian Tribe, People for Salmon, Washington 
Department of Fish and Wildlife, and others. Volunteers dug 
ditches and moved earth to reconnect the Slough to the 
Skionmish River, providing salmon with 3.5 miles of critical 
habitat they need to spawn, feed, and grow. Adult salmon 
returned to these streams within 24 hours of its opening last 
November. This is habitat salmon once had access to and now 
have access to again.
    Finally, the Administration has requested substantial 
increases in the Fiscal Year 2000 budget for recovery of 
protected species, conserving ocean biodiversity, and 
enforcement and monitoring. The salmon initiative is an 
ambitious approach that challenges State, local, and tribal 
authorities to take the lead in developing recovery plans with 
Federal guidance and assistance. The request will establish a 
Pacific Coastal Salmon Conservation Fund to be matched dollar 
for dollar with non-Federal contributions and made available 
for agreements with the Pacific States.
    In summary, recovering threatened and endangered species is 
an enormous challenge with profound social, economic, and 
ecological implications. With budgetary investments and a 
commitment to making it work, we believe the ESA can be 
implemented without unnecessary economic burden on any sector 
of the economy.
    Mr. Chairman, this concludes my testimony. I would be 
pleased to respond to any questions.
    [The prepared statement of Ms. Dalton follows:]

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    Mr. Pombo. Thank you.
    At this time, I would like to recognized Mr. Calvert.
    Mr. Calvert. Thank you, Mr. Chairman. I am happy to 
recognize my good friend and the city manager of the city of 
Corona, Bill Workman, who is with us today and his able 
assistant Laura Manchester who is in the audience. The city of 
Corona is a growing city right next to Orange County. It is 
right in the heart of southern California. It is probably, if 
not the fastest-growing city in the United States right now, it 
is probably in the top 10, and it is difficult to balance the 
needs of a city--crime, fire protection, parks, open space, 
water, a multitude of problems that face any community--and, 
certainly, we have our fair share of problems regarding ESA and 
mitigating for ESA, and I think Mr. Workman will point out that 
it is not mitigation that we are concerned about, it is 
reasonable mitigation, and I look forward to his testimony, and 
I appreciate you giving me the opportunity to introduce Bill 
Workman.
    Mr. Pombo. Mr. Workman?

STATEMENT OF WILLIAM P. WORKMAN, CITY MANAGER, CITY OF CORONA, 
                       CORONA, CALIFORNIA

    Mr. Workman. Thank you, Mr. Chair and members of the 
Committee. As Mr. Calvert indicated, I am Bill Workman, the 
city manager of Corona, California, and I am appreciative of 
your invitation to speak today on the effectiveness of the Fish 
and Wildlife Service and its administration of its regulatory 
duties as well as improving its service to clients, such as the 
city of Corona. I have submitted a written statement which I 
will briefly summarize.
    Let my message to you begin by saying that changes are 
needed in the operation of the Fish and Wildlife Service's 
Carlsbad office. Based on our experience in Corona, changes are 
specifically needed in two areas. First, the timely processing 
of environmental clearances under Federal regulations and, 
second, the acceptance of mitigation plans that reasonably 
compensate for justifiable environmental impacts. I speak to 
you on this subject from a base of 20 years experience serving 
communities both as an administrator and a planner. My 
experience includes resolving difficult environmental issues in 
communities located in Los Angeles, Orange, San Diego, and 
Riverside County. I am personally and professionally committed 
to ensuring that critical environmental habitat be protected in 
balance with the land use needs of our human population.
    It is with this background that I will relate to you our 
frustrated efforts to reach closure on a project known as 
Corona's Operations and Maintenance Manual. This project is 
illustrative of the problems that need to be addressed in the 
Carlsbad office of the Fish and Wildlife Service. In short 
form, the city of Corona conducts municipal operations and 
maintenance activities for a variety of public facilities 
within the Prado Basin in southern California. These activities 
occur on land that is owned by the city as well as leased from 
the Army Corps of Engineers.
    At the urging of the Army Corps of Engineers and the Fish 
and Wildlife Service, the city of Corona, five year ago, began 
development of a Prado Basin Operations and Maintenance Manual. 
The manual's intent is twofold: one, protect critical habitat, 
and, secondly, permit the city to conduct its routine 
maintenance and operations activities.
    After hundreds of hours of work, hundreds of thousands of 
dollars of investment and multiple agency reviews, we submitted 
the Operations and Maintenance Manual through the Army Corps of 
Engineers to the Fish and Wildlife Service for a section 7 
consultation on March 17, 1998. The Corps formally requested of 
Fish and Wildlife a section 7 consultation on May 20, 1998. 
More than a year later, I sit before you with the United States 
Fish and Wildlife Service refusing to initiate a formal section 
7 consultation, a clear disregard for the processing deadlines 
detailed in Federal regulations. I sit before you with a crazy 
quilt of oral and written explanations why the Fish and 
Wildlife Service cannot do its prescribed duties.
    Most distressing in this process was the outrageous demands 
for mitigation that are both physically and financially 
punitive. I direct your attention to the Fish and Wildlife 
Agency's letter of August 4, 1998. It is listed as exhibit 3 in 
our documents. Here is where in writing they seek 3 to 1 
mitigation and also 10 to 1 mitigation--threaten 10 to 1 
mitigation for routine city operations and maintenance. We are 
not talking about new construction but just the routine 
operations and maintenance. They have additionally told us that 
they have to have mitigation for maintenance activities that 
have occurred in past years but which has not been mitigated to 
their satisfaction. To translate that, what that means is that 
the Fish and Wildlife Service wants retroactive mitigation for 
the city's 30 years of doing day-to-day things, such as mowing 
the ballfields in our parks, and this mitigation is on top of 
mitigation the city has already provided in nine mitigation 
sites through the Prado Basin.
    Let me say that I thank you for calling this hearing today. 
We believe that it is important to gain a better understanding 
of the procedures and mitigation requirements employed by the 
Fish and Wildlife Service, particularly in Carlsbad, in their 
implementation of the Endangered Species Act. We urge the 
Committee to seek timely section 7 consultations from the 
Carlsbad office as well as adhere to reasonable mitigations for 
maintenance of public facilities.
    That concludes my remarks. Thank you.
    [The prepared statement of Mr. Workman follows:]

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    Mr. Pombo. Thank you.
    Mr. Weygandt.

      STATEMENT OF ROBERT M. WEYGANDT, CHAIRMAN, BOARD OF 
             SUPERVISORS, PLACER COUNTY, CALIFORNIA

    Mr. Weygandt. Thank you, Mr. Chair and members of the 
Committee. I appreciate the opportunity to speak before you 
today.
    My name is Robert Weygandt. I am chairman of the Placer 
Country Board of Supervisors. I have submitted my written 
testimony, and, today, I would like to, I think, emphasize, 
summarize three key points.
    First, we believe that the Endangered Species Act needs to 
be implemented in a way that preserves and emphasizes local 
land use planning controls. We think that this can actually be 
done in a very effective way that integrates the mission of 
Fish and Wildlife and other agencies.
    Second, I would like to support a notion that a market-
based approach to supporting these missions is probably the 
best way to bridge the challenges that face the Service as well 
as those of us at a local level and especially the private 
sector players.
    Third, Fish and Wildlife recently, in our jurisdiction, 
have been dealing with what they refer to as service area 
impacts or, according to California Environmental Quality Act 
law, we refer to it as cumulative impacts on a project, and I 
would like to develop some discussion about that.
    A little bit of background about Placer County. It starts 
at the Valley floor of Sacramento at an elevation that is 
almost zero and extends all the way up to Lake Tahoe. So, it 
includes a very diverse and complicated habitat; also provides 
for our residents a tremendous quality of life, but it reflects 
a complex set of circumstances by which to deal with these 
issues before us today. It also, in that it has that quality of 
life, has been one of the fastest growing counties in the State 
of California. Our population has grown from about 170,000 
people to 220,000 people over the last 10 years; that is a 
growth rate of 30 percent. And by the year 2010, we are 
expected to house about 350,000 residents. That is a doubling 
of our population in 20 years, and it will require an 
additional 50,000 dwelling units.
    With regards to preserving local control over the decision-
making process, the county adopted its most recent general plan 
in 1994, and it includes, in that general plan, a huge set of 
items that are the concerns of the Federal regulatory agencies. 
In addition to that, recently, in April of 1998, the board of 
supervisors implemented what we call Placer Legacy Open Space 
Conservation Project. That is a huge undertaking that is an 
effort to essentially implement the open space policies of the 
1994 general plan. A component of that we will hope will be the 
successful completion of Natural Communities Conservation Plan, 
or an NCCP. And, again, one of the key goals of doing that is 
to create a much more clear set of rules and regulations and 
permitting processes and emphasize that permitting down at the 
local level but in fact with compliance of the mission of 
especially Fish and Wildlife.
    We believe that this is the most effective way to deal with 
these issues, because, in fact, we believe that at the local 
level our constituents have a better voice in this effort, and, 
in fact, it is not in conflict with the mission of Fish and 
Wildlife or other Federal regulatory agencies but in fact is in 
concert with them. We think, in fact, that if you consider our 
review processes at the local level that in fact it would be 
simple for the Service to focus in and integrate their efforts 
with ours, and in fact the county--we have a culture of 
actually requesting that to happen up-front, and we have 
experienced good success on that basis.
    With regards to the market-based approach to trying to 
achieve these goals, the county in its general plan does not 
focus on attempting to be confrontational with private property 
rights, market economics, or, in fact, individual freedoms, 
but, in fact, to embrace those. And we have some good examples 
that reflect the results of that in the county. We have a 
privately--perhaps the first permitted privately owned 
mitigation bank. It provides a streamlined process for 
developers to buy inexpensive credit. It has created some great 
habitat. We have some premium priced lots that are open space 
lots adjacent to nice habitat. The enforcement of the 
protection of those is done through the county's planning 
department as well as homeowners associations, so the cost is 
low, and our business community enjoys a much higher level of 
predictability as to their operations, because they are 
protected from incompatible uses by our general plan.
    We also think, though, that in our recent experiences, the 
Service especially needs to focus on what they call service 
area impacts in their review. Recently, we have seen some 
letters and memorandums that basically reflect the notion that 
if you have, let us say, 5 projects that require disturbance of 
2 acres each, that if you approve one of those, it has an 
impact of disturbing 2 acres, but taken all 5 together, it 
would have more than a cumulative impact of the 10 acres. We 
actually think that this concept has merit, but, in fact, 
according to CEQA and our planning review process, we already 
consider that, and the key problem we have had recently is that 
there have been recent public infrastructure projects that are 
required to support existing entitlements that in fact are 
basically having to go through that cumulative impact review 
process twice. So, we think that there is a great role there 
for review and streamlining and probably renovation of that 
policy.
    In conclusion, our goal as a county is to up-front try to 
deal with these issues so that we are consistent with not only 
the goals of our constituents but the mission of protection of 
endangered species as well as ``no net loss'' policy, and in 
that effort we think there are great opportunities. Thank you.
    [The prepared statement of Mr. Weygandt follows:]

   Statement of Robert Weygandt, Chair, Board of Supervisors, Placer 
                           County, California

    Mr. Chairman and Members of the Committee:
    Thank you for this opportunity to share with the Committee 
the experiences of Placer County in working with the U.S. Fish 
and Wildlife Service to satisfy the mandates of the Federal 
Endangered Species Act. As I will describe in more detail 
below, by seeking to anticipate and address endangered species 
issues rather than react to crises once they emerge, Placer 
County is looking to approach endangered species regulatory 
requirements in a way that harmonizes property rights with 
natural resources imperatives by relying on local land use 
planning.
I. INTRODUCTION

    Placer County rises from the expansive grasslands of the 
Sacramento Valley to the spectacular shores of Lake Tahoe high 
in the Sierra Nevada mountain range. This geologic and climatic 
diversity makes Placer County home to a rich variety of plant 
and animal species and contributes to the County's reputation 
as one of the scenic treasures of California.
    Over the last 150 years, much of the County's once vast 
grasslands, woodlands, and riparian areas has been dedicated to 
urban, rural, suburban, industrial, and agricultural uses. 
Today, Placer County is one of the fastest growing counties in 
California. Since 1990, the County's population has grown from 
170,000 to about 220,000, an increase of nearly 30 percent. By 
2010, nearly 350,000 people are projected to live in the 
County, representing a doubling of the population in 20 years 
and requiring the addition of nearly 50,000 units to the 
present housing stock. Looking even further into the future, 
the California Department of Finance projects a population of 
522,214 persons at the year 2040.
    Residents and businesses continue to be attracted to Placer 
County by the opportunity to live, work and recreate in a place 
of such remarkable natural beauty. As more and more people are 
lured to Placer County, the region risks losing the natural and 
scenic qualities which distinguish it from other places in the 
country--unless it engages in thoughtful planning for its 
future.
    General Plan. To begin to address this need, in August of 
1994, Placer County adopted a new General Plan containing a 
number of goals and policies to ensure that there is a balance 
between growth, economic development and the health of the 
environment. For example, the General Plan provides that fish 
and wildlife habitat is to be protected, restored and enhanced 
to support fish and wildlife species so as to maintain 
populations at viable levels. It specifies that open space and 
natural areas are to be of sufficient size to protect 
biodiversity, to accommodate wildlife movement and to maintain 
self-sustaining ecosystems. It also prescribes that wetland 
impacts are to be reduced to a point of no net loss of habitat 
area, function and values. To implement these and other 
policies and goals, the General Plan requires the development 
of comprehensive implementation programs to preserve a 
sufficient quantity of Placer County's natural inheritance to 
maintain a high quality of life and an abundance of diverse 
natural communities, while supporting the economic viability of 
the County and enhancing property values.
    Placer Legacy Open Space Conservation Project. To this end, 
in April, 1998 the Placer County Board of Supervisors 
authorized planning staff to proceed with the Placer Legacy 
Open Space Conservation Project to further the various open 
space and natural resource goals of the Placer County General 
Plan and associated General Plans of the six cities in Placer 
County. The Board, reflecting community consensus, has voted 
unanimously to proceed with this project on every policy issue. 
The Board directed staff to develop a program that will protect 
a wide range of open spaces in Placer County including:

         agricultural lands;
         natural features for outdoor recreation;
         scenic and historic areas;
         areas to ensure public safety;
         areas that create a separation of urban communities; 
        and
         areas that provide for plant and animal diversity and 
        the protection of special status species.
    The last objective, in particular, is to be addressed through the 
preparation of a Natural Communities Conservation Plan (NCCP) for 
Placer County. A Natural Communities Conservation Plan is a regional 
habitat conservation plan that is based upon California State Fish and 
Game statutes. It can provide regulatory relief from California 
endangered species andrelated laws and it can satisfy the requirements 
of the Federal Endangered Species Act under Section 10 for a range of 
species. The County's NCCP will also be designed to obtain regulatory 
relief from Section 404 of the Federal Clean Water Act for wetland 
impacts. The County envisions this effort to be a unique collaboration 
between local, state and Federal agencies, private sector interests and 
other members of the community. We have already established a 
collaborative team of public and private sector interests who are 
working together on the sucessful implementation of this or some 
similar program that affords us the opportunity to achieve the 
aforementioned comprehensive and long range goals.
    The County, in beginning to undertake regional conservation 
planning, has engaged in constructive discussions with the Fish & 
Wildlife Service. The County, because it has taken a leadership role in 
promoting responsible conservation and development through its General 
Plan, is developing a cooperative effort with the Service to help it 
fulfill its statutory mandates in a manner sensitive to local land use 
decision making. We are very early in this process, but are encouraged 
about the prospects of collaborating with the Service on a multi-
species conservation plan that will address species issues on a long-
term basis, provided that adequate provisions are made for permitting 
key public infrastructure projects in ways that respect and retain 
local government land use decision making prerogatives.

II. THE REASONS FOR THE PLACER COUNTY APPROACH

    Conservation planning of the sort being pursued by the Placer 
Legacy Project promises benefits for the environment, the development 
community, and local governments.
    Conserving Resources for the Long-Term. In authorizing habitat 
conservation plans, Congress anticipated that such plans would, at 
their best, be comprehensive in that they would address the 
conservation of not only listed, but also unlisted species and the 
ecosystems upon which they depend. Regional conservation planning is 
also comprehensive in another way. Because of the project-by-project 
nature of traditional Federal and state species permitting, 
conservation plans have often been developed in isolation, with 
judgments about the rules of development made in a piecemeal, ad hoc 
manner. As a result, mitigation requirements have sometimes lacked 
consistency from one project to another and mitigation areas have at 
times been unconnected and have failed to maximize conservation 
opportunities. Needed public infrastructure and other economic 
development projects have at times not been integrated by the Service 
into local land use decision making. Because of its broader scope, 
regional conservation planning enables habitat preservation areas to be 
designed in ways that maximize their capacity to maintain the workings 
of natural systems and sustain biodiversity across ecosystems. The 
conservation plan can focus on the long-term stability of natural 
communities and habitats, and not just on the unique habitat needs of a 
few sensitive species. With this in mind, we believe our opportunity is 
unique in that we are acting long before other jurisdictions that have 
undertaken similar efforts but did so in a more crisis situation.
    Respecting Private Property and Minimizing Economic Impacts. 
Conservation planning is voluntary. Neither land owners nor 
jurisdictions are required to participate. And land for habitat 
conservation areas will only be acquired from willing sellers. Federal 
and state resource agencies do not have their jurisdiction or authority 
over private property augmented by conservation planning efforts. To 
the contrary, their roles in development permitting of specific 
projects are diminished by it, as is discussed below. In a word, 
conservation planning efforts can be structured to fully respect and 
maintain private property and local decision making.
    While voluntary, conservation planning offers numerous benefits 
that encourage local governments and landowners to participate. 
Regional conservation planning moderates the impact of regulatory 
requirements on the economic concerns of an area, thereby reducing the 
potential for conflict between environmental and developmental 
interests. The broader scope of regional conservation planning provides 
greater opportunity for accommodation of interests and appropriate 
balancing of land uses. The comprehensive nature of regional 
conservation planning further provides land developers with the 
prospect of far greater certainty and predictability in their planning 
and land acquisition decisions. If species covered by a plan are later 
listed under Federal or state law, landowners are relieved of any 
additional conservation requirements and are assured the development 
plans can proceed unimpeded. This is the important ``No Surprises'' 
Policy, which says, ``a deal is a deal.''
    Furthermore, regional conservation planning offers landowners the 
opportunity to resolve local, state, and Federal endangered species 
issues once and for all and, more generally, can streamline the array 
of local, state, and Federal regulatory processes by collapsing 
complicated layers of regulatory requirements and procedures into a 
single, unified process at the local government level. Appropriate 
mitigation for impacts on biological resources are established through 
a single plan, rather than through a series of disjointed processes 
independently derived by the different levels of government to achieve 
similar objectives.
    Strengthening Local Land Use Decision Making. Through regional 
conservation planning, primary responsibility is placed in the hands of 
local governments to implement Federal and state wildlife, habitat, and 
wetlands conservation objectives, while the Federal and state 
governments play a role more limited to setting standards, monitoring 
performance, and providing technical and financial assistance. This 
approach recognizes that decisions about the use of the land are best 
left to local government, and that the tools of local land use 
planning, unavailable to the Federal and state governments, are ideally 
suited to protecting natural resources. In the process of integrating 
wildlife protection objectives into the regulatory processes of local 
government, opportunities are enhanced for citizens to participate in 
the shaping of plans that will affect the long-term environmental and 
economic character of their communities.
    The Placer Legacy Project is being developed to deliver all of 
these benefits. The conservation needs of all of the plants and animals 
which are currently, or may in the future, be protected by the state 
and Federal Endangered Species Acts will be addressed. Through the 
adoption of a NCCP which will satisfy the requirements of the Federal 
Endangered Species Act, the County will be in a position to provide 
immediate solutions and options to the development community related to 
compliance with state and Federal regulations. With such a program, the 
County can become the permit issuing authority for compliance with 
state and Federal rules, thus retaining maximum local control over land 
development activities. This will add certainty to the development 
process and will reduce the amount of time normally required to address 
these issues, while at the same time providing a state-of-the-art 
conservation plan with the greatest potential to maintain the function 
and values of preserved natural communities. It will help spread the 
costs of implementation more broadly and equitably to all 
beneficiaries, rather than imposing undue costs on one principal 
sector, such as new development. It is our hope that, the preparation 
of a NCCP may lead to the availability of substantial financial 
assistance for the acquisition and preservation of open space areas.

III. NEED FOR POLICY GUIDANCE ON SERVICE AREA IMPACTS

    While Placer County is excited about the regional conservation 
planning efforts underway, there is concern about the need for a more 
consistent and uniform treatment of mitigation for what the Service is 
calling ``service area impacts,'' especially regarding public 
infrastructure projects and their potential impacts within the areas 
they are servicing. Broader conservation planning will not succeed if 
projects to service existing and anticipated development cannot be 
effectively integrated into the planning effort, and if the mitigation 
required for them, cannot be determined on the basis of clearly 
articulated policy delivered in a timely manner.
    It must be remembered that habitat conservation planning programs 
are voluntary. Ideally, they involve the collaboration of local 
governments, land owners, and other community interests with Federal 
and state agencies. Removing impediments to local government 
participation in such efforts, therefore, is critical to the success of 
such programs.
    Specifically, one impediment has been the lack of a clear Service 
policy with respect to mitigation associated with permitting public 
infrastructure projects. Currently, the Service requires mitigation for 
public infrastructure development based on service area-wide impacts, 
in addition to the direct on-site impacts caused by construction of the 
public facility itself. Thus, when a local government builds a road or 
a wastewater treatment plant to better service already existing 
development and anticipate realistic, future needs, the Service will 
require mitigation for both the direct impacts caused to endangered 
species by that particular development as well as for the impacts being 
caused by the activity it is servicing throughout the region. Sometimes 
the Service will require mitigation for so-called ``indirect effects'' 
that have tenuous connection to the infrastructure project. In such 
cases, it is unclear upon what basis the Service has determined that an 
infrastructure project is the direct cause of a future development 
impact.
    The Service has some legitimate concerns on this issue, but it has 
failed to articulate criteria by which potential service area impacts 
can be identified and evaluated. How broad is the reasonable scope? 
Does it apply equally to both existing, entitled development and to 
anticipated future development?
    To prevent any real or perceived unfair treatment of local 
governments, therefore, Placer County recommends consideration be given 
to a policy reflecting a thoughtful and restrained approach to 
mitigation required by the Service for public infrastructure projects--
specifically, a policy that would clarify the scope of legitimate 
public infrastructure service area impacts and would exclude impacts 
for which mitigation has already been provided. It is essential that 
the Service remember the cumulative impacts of all major planning 
projects are already an integral part of our local planning efforts as 
dictated under the California Environmental Quality Act.

IV. CONCLUSION

    Placer County is committed to responsible development and 
conservation of the natural resources that make the County such a 
special place to live. The Legacy Project promises to achieve both. For 
the NCCP component of Legacy to fully fulfill the mission of both the 
Counties' General Plan and policies of the Service, several conditions 
must be met. The County can provide local planning, implementation, and 
enhanced enforcement of our mutual goals. The Service will need to 
honor the ``No Surprises'' Policy, acknowledge local land use planning, 
and clarify or reform the ``service area impact'' issue especially on 
public infrastructure projects necessary to support existing 
entitlements. The result from both parties must be a more clearly 
defined and streamlined permitting process. Placer County looks forward 
to having the Fish and Wildlife Service as a constructive resource in 
protecting the County's natural inheritance while facilitating 
permitting for projects to meet the County's growing needs.
    In conclusion, the County's policies are based on the notion that 
the most effective path to achieving environmental quality is not to 
compromise private property rights, market economics, or individual 
freedoms, but in fact to embrace them. Already we have witnessed 
several examples. We have a local privately owned mitigation bank that 
sells credits. The result is newly developed and spectacular habitat, 
less expensive and more timely creation of small acreage credits 
available to the development community, and profit opportunity for 
entrepreneurs. We have seen subdivision lots adjacent to protected open 
space sell for premium prices and their maintenance secured by 
partnerships between the County's code enforcement and homeowner's 
associations. Our local business community enjoys a more long term and 
predictable operating environment because strict zoning protects their 
facilities from the encroachment by incompatible uses and the quality 
of life of their employees.
    Towards these multiple goals, there is a role for all the existing 
players; Federal, state, and local governments, property and business 
owners, and community interests. Certainly, there is room for reform 
that scrutinizes and thereby reorganizes the appropriate roles and 
relationships among these players. If our policies provide value to our 
constituents, adhere to private property rights, market economics, and 
good science, environmental enhancement will certainly be forthcoming.

    Mr. Pombo. Thank you.
    Mr. Schulz.

  STATEMENT OF DAVE SCHULZ, CHAIR, OKANOGAN COUNTY, OKANOGAN, 
                           WASHINGTON

    Mr. Schulz. Thank you, and good morning. For the record, my 
name is Dave Schulz, and I am chairman of the Okanogan County 
Commission, the general executive and legislative authority for 
the government of Okanogan County in the State of Washington. I 
appear on behalf of the Okanogan County to provide the Members 
of Congress with an example of the pitfalls of the 
implementation of the Endangered Species Act and to propose a 
more constructive approach to implementation that will promote 
the recovery of the protected species and broad scale 
compliance with ESA. It is our hope that the National Marine 
Fisheries Service and U.S. Fish and Wildlife, collectively 
called the Services, share our views on a preferable model for 
ESA implementation and that the Services will use practical, 
flexible, and incentive-based approaches that hold more promise 
for long-term species recovery while minimizing the disruption 
to the life and economy of communities affected by the ESA 
listings.
    Ninety-one percent of the lands in the Methow are public 
lands owned by the United States Forest Service or by the State 
of Washington. The natural resources of timber, mineral waters, 
and agriculture are the economy. The exceptional scenic value 
of the Methow Valley has placed the County at the heart of 
several controversial issues concerning Federal and State 
natural resource policies, including a landmark decision by the 
U.S. Supreme Court on the procedural nature of NEPA. That 
designation ski resort was never built. The spotted owl, the 
grizzly bear recovery zones, and now in August 1997, we added 
steelhead as endangered; June 1998, bull trout were added, and 
on March 1 of this year, the chinook were added. The Methow 
Valley is intensely impacted because of the extensive use of 
irrigational water diverted to more than 50 ditches serving 
hundreds of small farms and landowners. The ESA listing in 
Okanogan County places the exercise of private water rights by 
small farms and businesses on a potential collision course from 
the ESA.
    Okanogan County, once again, is a test-case for Federal 
environmental policy, and the outcome is certain to be a 
setting precedent for the future implementation of ESA and 
other watersheds in Washington and throughout the West. 
Okanogan County, therefore, urges Congress and the Services to 
promote ESA implementation in a way that emphasizes creative 
and cooperative programmic compliance rather than a case-by-
case enforcement and controversy.
    Section 7 talks about special use permits issued by the 
United States Forest Service. In March 1998, the Forest Service 
prepared and submitted to the Services the biological 
assessment for the renewal or continued use of special use 
permits held by irrigation ditch companies in the Methow. Under 
the most generous interpretations of ESA, formal consultation 
on ditch permits should have been completed by the fall of 
1998. As of this date of this hearing, however, consultation 
remains incomplete and effected irrigation ditches in the 
Methow are not permitted to divert water even though the 
irrigation season began back in April. I looked at a letter 
today from Mr. Stow and it says, ``Staffing limitations have 
hampered our ability to process the workload.'' Simply, they 
need money and people to help in this process.
    Under section 9, the county exercises no authority over the 
use of water rights, and the authority of the State is very 
limited in that regard. There simply is no authority by which 
the State or the county may immediately impose regulatory 
restrictions that curtail the use of private water rights, and 
there is certainly no appropriations to provide compensation 
that would necessarily accompany the regulatory taking of 
private property interests.
    Under an agreement between the State and the county, a 
waterbank will be established in State rules and county 
ordinances. A waterbank, or HCP, is a programmic solution that 
minimizes legal conflict while providing the correct incentives 
to provide interest to take volunteer actions to efficiently 
use water, conserve, and restore ESA listed fish and comply 
with ESA.
    What are the barriers and recommended solutions? In your 
packet, I have give you a number of those. There are four of 
them. I think it would be well worth the time to look at those. 
Most of the water that is required to satisfy NMFS fundamental 
condition is the property of numerous third parties. Neither 
the county nor the State can make the commitments required by 
National Marine Fisheries Service. The requested action that I 
am asking is a commitment for the Services to work 
cooperatively on a waterbank HCP with the county and the State 
of Washington. Mitigation credit for immediate action is there 
so the HCP development and approval through increments, and, 
thirdly, financial support, unfunded mandates. We simply need 
money as well as NMFS and others. Fourth, interim action and 
relief, and we have House bill 2514, 2496; we are trying to 
implement that.
    Thank you for listening from our 38,400 residents from 
Okanogan County.
    [The prepared statement of Mr. Schulz follows:]

 Statement of Dave Schulz, Chair, Okanogan County Commission, Okanogan 
                           County, Washington

    For the record, my name is Dave Schulz, and I am chairman 
of the Okanogan County Commission, the general executive and 
legislative authority for the government of Okanogan County, 
Washington. I appear on behalf of Okanogan County to provide 
Members of Congress with an example of the pitfalls for 
implementation of the Endangered Species Act (``ESA''), and to 
propose a more constructive approach to implementation that 
will promote the recovery of protected species and broad-scale 
compliance with the ESA. It is our hope that the National 
Marine Fisheries Service (``NMFS'') and the U.S. Fish and 
Wildlife Service (``FWS'') (collectively the ``Services'') 
share our views on a preferable model for ESA implementation, 
and that the Services will use practical, flexible, and 
incentive-based approaches that hold more promise for long-term 
species recovery while minimizing disruption to the life and 
economy of communities affected by ESA listings.

I. Okanogan County's Methow Valley:
A Report from the Frontline of ESA Implementation

    Washington State's Okanogan County is a vast county 
covering 5,268 square miles along the Canadian border and 
extending east from the crest of the Cascade Mountains to the 
Columbia River. See Attachment 1 (Maps of Okanogan County and 
Methow Valley). The Methow River flows southeast from its 
headwaters in the North Cascades National Park through the 
semi-arid and irrigated Methow Valley and into the mainstem 
Columbia River. Okanogan County and the Methow Valley are 
exceptionally scenic areas, generously endowed with natural 
resources and populated with communities who enjoy and depend 
on outdoor recreation and natural resources for their 
livelihoods.
    The United States and the State of Washington own and 
manage a majority of the land in Okanogan County, and those 
public lands are the source of timber, mineral, water, and 
range resources upon which much of the regional economy is 
established. Like many rural and natural resource-dependent 
counties, Okanogan County has suffered a long-term decline in 
the vitality of its timber, mining, ranching, and agricultural 
sectors. Growth in rural tourism has been beneficial to the 
County, but is not expected to fully replace the employment and 
income lost through the decline of resource industries. The 
Okanogan County Commission does not seek to stop change or turn 
back the clock, but the Commissioners do feel that it is 
essential that Federal, state, and local governments assist 
private interests to make adjustments and transitions in the 
face of change, especially when change is wrought by policies 
and laws imposed by government.
    Not surprisingly, Okanogan County's abundance of natural 
resources and the exceptional scenic value of the Methow Valley 
have placed the County at the heart of several controversies 
concerning Federal and state natural resource policy. In the 
1980's, a destination ski resort proposed for the Methow Valley 
was the subject of special land exchange legislation enacted by 
Congress and litigation that led to a landmark decision by the 
U.S. Supreme Court on the procedural nature of the National 
Environmental Policy Act. The resort was never built. In 1982, 
the North Cascades Grizzly Bear Recovery Zone was established 
to promote land management for the conservation of grizzly 
bears listed as threatened under the ESA. The zone includes 
much of Okanogan County, including the Methow Valley and cities 
such as Twisp and Winthrop. In the 1990's the northern spotted 
owl was listed as a threatened species, and national forest 
lands in Okanogan County are now subject to added management 
restrictions under the Northwest Forest Plan Also in the 
1990's, the State of Washington formulated a special management 
plan designed to conserve lynx habitat in the 130,000-acre 
Loomis State Forest. Lynx are now proposed for listing as a 
threatened species under the ESA. Ironically, completion of the 
Loomis plan spawned a citizen suit in 1997 alleging that the 
state management plan would take grizzly bears in violation of 
the ESA. In 1998, Omak Wood Products, one of the County's 
largest private employers and a major purchaser of timber from 
the Loomis Forest, declared bankruptcy and closed its doors. 
And, in 1999, after years of permit processing and 
environmental analysis, the Crown Jewel Mine proposed for 
Okanogan County was denied final approval in a Federal record 
of decision based on an unprecedented interpretation of Federal 
mining law with consequences for the mining industry 
nationwide.
    Okanogan County clearly is no stranger to natural resource 
controversy, but now faces a new crisis in the implementation 
of the ESA that may affect the County more profoundly than all 
of the litany of natural resource controversies that have 
visited the County over the past three decades. Beginning in 
1997, NMFS and FWS listed three fish species found in Okanogan 
County for protection under the ESA. In August of 1997, NMFS 
listed the Upper Columbia Steelhead Evolutionary Significant 
Unit (``ESU'') as endangered under the ESA, and NMFS added the 
Upper Columbia Chinook ESU as an endangered species in March 
1999. In June 1998, FWS listed Columbia Basin bull trout as a 
threatened species. Because the habitat of these fish depends 
on water quality, the use of water resources, the quality of 
riparian habitat,and land use in general, fish listings pose 
what is probably the greatest natural resource challenge to the 
economic and social stability and health of Okanogan County.
    While there have been several ESA listings of anadromous 
fish throughout the Pacific Northwest, Okanogan County has been 
more immediately and severely impacted by ESA listings for 
salmonids because it is among the few places where the fish are 
classified as endangered. The Methow Valley is intensely 
impacted because of the extensive use of irrigation water 
diverted through more than 50 ditches serving hundreds of small 
farms and landowners. In short, the ESA listings in Okanogan 
County place the exercise of private water rights by small 
farms and businesses on a potential collision course with the 
mandates and prohibitions of the ESA.
    Okanogan County is once again a test-case for Federal 
environmental policy, and the outcome is certain to be a 
precedent for future implementation of the ESA in other 
watersheds in Washington and throughout the West. 
Implementation of the ESA in the County provides an opportunity 
to build a model for ESA compliance and species recovery that 
can be used elsewhere, but it also presents a risk that 
adversarial implementation will work against the long-term 
prospects for species recovery and cooperative compliance by 
landowners and water users in Okanogan County and elsewhere. 
Okanogan County therefore urges the Congress and the Services 
to promote ESA implementation in a way that emphasizes creative 
and cooperative programmatic compliance rather than case-by-
case enforcement and controversy.

II. Case-by-Case Enforcement:
A Formula for Conflict and High Costs Without Recovery

    Okanogan County recognizes that the Services are required 
to implement and enforce the ESA, and must do so with limited 
resources. It is this combination of limited resources and a 
host of compliance requirements for innumerable Federal and 
nonfederal actions that begs for programmatic solutions that 
avoid individual review and enforcement for every single 
activity and litigation that will consume limited agency 
resources and provoke additional errors and delays. At this 
time, however, it appears that implementation of the ESA in the 
Methow Valley is at risk of slipping into a mode of adversarial 
enforcement that will do more to harm the objectives of the ESA 
than it will to recover salmon.
    The risk of adversarial enforcement of the ESA is centered 
on two issues: (1) Section 7 consultation on special use 
permits issued by the United States Forest Service (``Forest 
Service'') to ditch companies for the conveyance of water on 
rights-of-way across Federal land, and (2) threatened 
enforcement actions by the United States or citizens alleging 
violation of the ESA's ``take'' prohibition.
    Under the ESA and both rules and guidelines implementing 
the ESA, Section consultation is subject to certain procedural 
requirements and time limitations. In March 1998, the Forest 
Service prepared and submitted to the Services the biological 
assessments for the renewal or continued use of special use 
permits held by irrigation ditch companies in the Methow. Under 
the most generous interpretation of the ESA, formal 
consultation on the ditch permits should have been completed by 
the Fall of 1998. As of the date of this hearing, however, 
consultation remains incomplete and affected irrigation ditches 
in the Methow Valley are not permitted to divert water even 
though the irrigation season began in April. See Attachment 2 
(April 22, 1999 Letter from U.S. Forest Service to NMFS 
concerning consultation issues in Methow Valley). There is no 
apparent excuse for this delay, and the delay imposes a severe 
hardship on Methow Valley landowners. Id. The Services are now 
engaged in an effort to conclude consultation with haste, but 
consultation is not expected to be complete for another month 
or two, during which affected ditches are forbidden to divert 
water. The situation appears to be ripe for litigation that 
will drain the resources of the Services and will be 
destructive for the affected landowners and water users.
    There is a substantial risk that the Services, in their 
recent haste to complete consultation, may render an ill-
considered biological opinion that imposes unduly harsh 
targeted stream flow conditions through an incidental take 
statement. Under such a statement, affected ditches would be 
required to curtail diversions when affected stream reaches 
drop below a flow level set by the incidental take statement. 
Because watersheds are shared resources with multiple users, an 
incidental take statement with terms and conditions based on 
targeted stream flows threatens to impose on a single permittee 
an unfair condition that may be beyond the control of that 
permittee. Establishing terms and conditions for targeted flows 
is also a threat to water rights that are not subject to 
consultation because the terms and conditions may promote 
citizen suits to enforce the targeted flow as a standard for 
take. Water resource users who may be affected by such a 
precedent have no opportunity to evaluate and comment on the 
scientific basis or economic impact of target flows. The County 
and the State are currently engaged in an active public 
planning process to address instream flows as part of a 
comprehensive water resource planning effort for the Methow 
Valley, but that process requires time and scientific evidence. 
Okanogan County is concerned that flawed Federal biological 
opinions could become a stumbling block for long-term water 
resource planning, ESA compliance, and salmon recovery by 
establishing an unrealistic precedent for targeted stream flows 
deemed necessary to avoid jeopardy or prevent take of listed 
salmonids.
    Coupled with the mired consultation process in the Methow 
Valley are threats of enforcement based on allegations of take 
prohibited by Section 9 of the ESA. In a recent letter, NMFS 
asserts that the County and the State of Washington should take 
emergency action under state law to restore instream flows or 
risk liability for take. See Attachment 3 (Undated Letter from 
NMFS to Tom Fitzsimmons, Director, Washington Department of 
Ecology). The interpretation of the ESA set forth in the NMFS 
letter is inconsistent with the legal obligations and 
authorities of both the County and the State. The County 
exercises no regulatory authority over the use of water rights, 
and the authority of the State is very limited in that regard. 
There simply is no authority by which the State or the County 
may immediately impose regulatory restrictions that curtail the 
use of existing private water rights, and there certainly is no 
appropriation to provide compensation that would necessarily 
accompany the regulatory taking of private property interests 
in water rights. At most, the State may adjust instream flows 
established by rule, but any adjustments will not and cannot 
curtail existing water rights to achieve those flows. 
Implementation of the ESA must be consistent with the authority 
and realistic resources of the State and County if it is to be 
successful. Threats of liability will not change the law or the 
resources under which the County and State must operate.
    The Services should look to the County and State as 
cooperators who must work within their own constraints. 
Okanogan County appears before the Congress today to declare 
that it is prepared to cooperate with the Services in 
developing constructive long-term ESA compliance and 
conservation solutions that avoid the difficulties that 
currently afflict the Methow Valley. Toward that end, Okanogan 
County offers with this testimony its recommendations and 
requests for implementation of the ESA.

III. Programmatic Compliance and Recovery:
Building Cooperative, Flexible, and Incentive-Based Habitat 
Conservation Plans

    In response to ESA listings for anadromous fish, the State 
of Washington has provided funding and authority for counties 
and other interested stakeholders to formulate and implement 
watershed-based plans for water resource management, protection 
of water quality, and conservation of protected species and 
their habitat. In 1998, Okanogan County was awarded a 
substantial grant to commence this planning process and the 
County also agreed to work with the Washington Department of 
Ecology to create a waterbank that will be used to implement 
water resource objectives.
    Under an August 4, 1998 Memorandum of Agreement (``MOA'') 
between Okanogan County and the State, a waterbank for the 
Methow Valley will be established in State rules and County 
ordinances. See Attachment 4 (MOA and Notice of Proposed 
Rulemaking). The MOA guiding the creation of the waterbank was 
concluded before the current controversy involving the Services 
and consultation on irrigation ditches in the Methow Valley. 
The waterbank will facilitate the transfers of water rights, 
changes in use or point of diversion of water resources, and 
use of water saved through efficiency, conservation, and reuse. 
As part of the process for conducting a transaction permitted 
by the waterbank, the holder of a water right will relinquish 
an established fraction of the water right for deposit in the 
State's instream flow trust account. In this way, the State and 
the County will provide incentives for holders of private water 
rights to rebuild instream flows through efficiencies and 
changes in use that are voluntarily implemented by private 
interests. This method of rebuilding instream flows serves the 
desired biological objective without regulatory ``cat and 
mouse'' or other means beyond the authority and financial 
resources of the State and County. The waterbank promises to 
deliver biological results more promptly and with less 
controversy and cost than general adjudication of water rights, 
enforcement actions, or regulatory mandates.
    The County strongly believes that the waterbank jointly 
developed by the County and the State should serve as the basis 
for a Habitat Conservation Plan (``HCP'') and programmatic 
incidental take permit issued by the Services under Section 10 
of the ESA. In principle, when a holder of a private water 
right relinquishes part of that right to assist in the 
restoration of instream flows beneficial to ESA-listed salmon, 
he or she should receive the benefit of assurance that the 
exercise of the remaining water right is lawful under the ESA 
for the duration of the incidental take permit. By granting 
such an assurance, the United States is able to create a strong 
incentive to restore instream flows that does not require an 
appropriation of funds or compensation to the holder of the 
water right.
    A waterbank HCP is a programmatic solution that minimizes 
litigation and legal conflict while providing the correct 
incentives for private interests to take voluntary action to 
efficiently use water, conserve and restore ESA-listed fish, 
and comply with the ESA. Such an HCP makes more effective use 
of the Services' resources by promoting broadscale voluntary 
compliance and conservation efforts instead of case-by-case 
enforcement. In addition, participating landowners and 
irrigation ditches covered by the incidental take permit will 
no longer require separate review and conditioning under 
Section 7 consultation where a Federal authorization is 
involved. This will add efficiency and savings for other 
Federal agencies such as the Forest Service, which is currently 
embroiled in consultation issues involving special use permits 
in the Methow Valley. Finally, a successful waterbank HCP will 
provide a model that may be replicated in other watersheds 
throughout the range of West Coast salmonids listed under the 
ESA, and throughout the United States where water rights are in 
conflict with instream flows and ESA-listed fish.

IV. Barriers and Recommended Solutions:
Changing ESA Implementation Without Changing the Law

    Early discussions indicate that NMFS is highly skeptical 
concerning the conservation benefits of the proposed Methow 
Valley waterbank. Specifically, NMFS demands that any 
conservation plan guarantee that specific instream flows will 
be achieved within a specific time frame. See Exhibit 5 (April 
27, 1999 Letter from NMFS to Okanogan County Commission). It is 
the County's view that the guaranteed increase of instream 
flows within a guaranteed period of time is not possible under 
state law. Most of the water that is required to satisfy NMFS's 
fundamental condition is the property of numerous third 
parties. Neither the County nor the State can make the 
commitments required by NMFS. To bridge this gap, NMFS will 
have to exercise its discretion to exchange regulatory 
assurances under an incidental take permit for voluntary 
commitments that restore instream flows in an incremental 
fashion. The County appreciates that NMFS has expressed its 
willingness to work cooperatively with the community, but a 
realistic recognition of the limitations on mitigation that can 
be guaranteed by the County or State is essential to progress. 
Otherwise, the opportunity to build instream flows through 
voluntary, incentive-based action will be lost. To prevent such 
a result, we recommend the following:

          1. Accept that Immediate Regulatory Action to Build Instream 
        Flows and Guaranteed Biological Outcomes are Legally and 
        Biologically Impracticable: The Services, and particularly 
        NMFS, appear to insist that any programmatic solution for ESA 
        compliance offered by the County and State must provide 
        immediate and certain assurances that specified levels of 
        mitigation such as higher instream flows will be achieved. If 
        there is to be any hope of a cooperative relationship between 
        the Services, the State, and the County, the Services must 
        realize that the ESA does not command immediate regulatory 
        action by the State or County. The ESA must be implemented 
        through cooperation, recognizing the legal and financial 
        limitations that the County and the State must abide, just as 
        the Services are limited in their legal authority and fiscal 
        resources. Moreover, as biologists, the Services must accept 
        that biological certainties are impossible and, at best, 
        biological probabilities are the target. The ESA, itself, uses 
        standards based on biological probabilities. The Services 
        should feel comfortable in proceeding with cooperative efforts 
        that improve the probabilities that fish habitat will be 
        improved over time. Programmatic HCPs that provide incentives 
        for voluntary participation should not be ignored only because 
        they do not guarantee participation or biological outcomes.
          2. Accept Voluntary Incentive-Based Programs That Achieve 
        Mitigation Objectives in Increments: The Services should 
        recognize the benefit of providing incidental take coverage for 
        voluntary actions that are sure to benefit listed fish, even in 
        the absence of a regulatory framework that commands action 
        beneficial to listed fish. While, in theory, a regulatory 
        approach to ESA compliance seems more certain to achieve ESA 
        conservation objectives, it requires overwhelming resources to 
        establish and enforce regulatory oversight and it often 
        requires a change in law. A voluntary approach is more likely 
        to be immediately accepted, and it is consistent with the basic 
        structure of the ESA, which requires voluntary compliance by 
        nonFederal entities. Indeed, the FWS has, in the past, approved 
        incidental take permits that are extended to third parties who 
        voluntarily commit to implementing the terms of a programmatic 
        HCP. Through a waterbank HCP, the County brokers ESA compliance 
        and mitigation for individual property owners that NMFS would 
        otherwise have to approach separately to obtain the same 
        commitments. The Services should embrace and build upon the 
        programmatic and voluntary approach rather than abandon it 
        based on unrealistic expectations.
          3. Target Federal Funds for Salmon Restoration and Columbia 
        River Federal Power System Mitigation to Programmatic Efforts 
        Such as Waterbank HCPs: Okanogan County is aware of the fish 
        and wildlife mitigation program overseen by the Northwest Power 
        Planning Council in connection with the operation of the 
        Federal power system and dams in the Columbia Basin. Okanogan 
        County has also learned of Federal appropriations that have 
        been made or are under consideration for salmon recovery in 
        Washington State and along the West Coast. Okanogan County 
        urges that these substantial Federal funds for salmon recovery 
        be used, in part, to support programmatic long term solutions 
        such as the waterbank HCP proposed by Okanogan County.
          4. Encourage the Environmental Protection Agency to Integrate 
        Clean Water Act Compliance Objectives and Assurances with 
        Waterbank/Watershed HCPs that Address Water Quality Issues Such 
        as Low Flows and Temperature: Many of the issues addressed in 
        water resource planning are also issues of water quality. Where 
        a water resource planning mechanism, such as a waterbank HCP, 
        addresses water quality issues such as low flows and high 
        temperatures, regulatory assurances from the Environmental 
        Protection Agency and state-delegated Clean Water Act program 
        should also be extended to the permittees. Although many agree 
        with this principle, the Federal family of agencies has yet to 
        work out a means by which the ESA and Clean Water Act can be 
        integrated through the same mitigation and compliance efforts. 
        Integrated compliance under the ESA and Clean Water Act should 
        be a top priority in Federal regulatory innovations.

    V. Requested Action

          1. A Commitment from the Services to Work Cooperatively on a 
        Waterbank HCP: The County will soon prepare a waterbank HCP 
        conceptual proposal that it will share with the Services and 
        the State of Washington. The County hopes that the Services 
        will be encouraged to treat the waterbank HCP as a serious 
        proposal, and will commit through a memorandum of understanding 
        to provide the resources and attention necessary to work 
        together with the County and the State to build a model 
        waterbank HCP.
          2. Mitigation Credit for Immediate Action In Advance of HCP 
        Development and Approval: The County will move forward with the 
        State in conducting watershed planning and establishing a 
        waterbank. The County hopes that the Services will give the 
        County full mitigation credit for these early efforts and will 
        confirm that position in a memorandum of understanding with the 
        County for proceeding with an HCP.
          3. Financial Support: The County requests that Federal 
        funding be made available through the Federal Columbia River 
        mitigation program or other federally-funded salmon restoration 
        initiatives to assist rural counties such as Okanogan County 
        with the development and implementation of programmatic HCPs 
        for the benefit of the broader public and ESA-listed fish.
          4. Interim Action and Relief: While the County and State of 
        Washington work to complete watershed planning and establish a 
        waterbank, the legal requirements of the ESA continue to impact 
        and threaten the stability of Okanogan County. The County 
        recognizes that the Services must enforce the ESA, but several 
        interim measures should be considered to minimize ESA impacts 
        on the community.
          First, it appears that 1999 will be an exceptionally high 
        water year in the Methow Valley. As such, it would be 
        appropriate for the Services to permit irrigation diversions 
        affected by consultation to proceed pending the completion of 
        biological opinions because the diversions will not be 
        irreversible or irretrievable commitments of resources. The 
        Services have provided some relief to a few irrigators under 
        Section 7(d) of the ESA, but many Methow Valley water users 
        remain hamstrung by incomplete consultation.
          Second, it is essential that the Services expressly disclose 
        in biological opinions issued for the Methow Valley in 1999 
        that those opinions are based on incomplete information that is 
        likely to be revised in the future in accordance with better 
        data that will be forthcoming through the State-County 
        watershed planning process. To discourage unfounded citizen 
        suits, it would also be helpful if 1999 biological opinions 
        explained that reasonable and prudent alternatives or terms and 
        conditions set forth in an incidental take statement should not 
        be used as a presumptive standard for take in connection with 
        the use of water resources by other parties who are not subject 
        to the consultation.
          Third, it is recommended that the Services consider working 
        cooperatively with irrigation ditches to research the effects 
        of ditch operations on stream flows and fish and provide the 
        irrigators with incidental take permits for cooperative 
        scientific research under Section 10(a)(1)(A) of the ESA. 
        Information collected in this fashion would be helpful to the 
        County's watershed planning process and to the development of a 
        waterbank HCP.

    Mr. Pombo. Thank you.
    Mr. Bruton.

 STATEMENT OF VINTON CHARLES BRUTON, NORTH CAROLINA DEPARTMENT 
           OF TRANSPORTATION, RALEIGH, NORTH CAROLINA

    Mr. Bruton. Yes, sir. Mr. Chairman, Committee members, my 
name is Charles Bruton, and I am the assistant manager for the 
Project Development and Environmental Analysis Branch for the 
North Carolina Department of Transportation.
    Today, I take great pride in telling you about the most 
recent effort we have undertaken to protect the habitat of an 
endangered species, the red-cockaded woodpecker, in North 
Carolina. The most recent endangered species mitigation project 
funded by the North Carolina Department of Transportation is 
the acquisition of a tract of about 10,000 acres in rural 
Tyrrell County on the Albermarle Sound in eastern North 
Carolina. This $16.3 million real estate transaction took place 
on April 28, 1999 with funds provided by the North Carolina DOT 
to the Conservation Fund, a Maryland non-profit corporation. 
The Conservation Fund, which conveyed a conservation easement 
to NCDOT, used the proceeds to purchase the tract from the 
Prudential Insurance Company of America operating as Pru-
Timber.
    The idea for this acquisition was conceived back in October 
1997 when the U.S. Fish and Wildlife Service expressed in 
writing their intent in NCDOT purchasing the Pru-Timber tract. 
The Service's letter stated that the tract is rich in 
biological diversity containing federally listed species. The 
letter further stated that there is excellent potential for 
NCDOT to receive mitigation credits for wetlands as well as 
red-cockaded woodpeckers.
    In February 1998, the Environmental Defense Fund sent a 
letter to North Carolina secretary of Transportation, Norris 
Tulson, urging his department to increase its efforts to avoid, 
protect, and mitigate habitat for endangered red-cockaded 
woodpeckers in its highway construction program. The tract, 
which borders the Alligator River, is to be known as the 
Palmetto-Peartree Wildlife Management Area and is now under 
protection. The site also has some potential for wetland 
restoration and preservation.
    The voluntary partnership forged between NCDOT, the 
Conservation Fund, and the U.S. Fish and Wildlife Service will 
protect one of North Carolina's largest populations of red-
cockaded woodpeckers, containing 18 active clusters. A 
memorandum of agreement dated April 22, 1999 was executed by 
U.S. Fish and Wildlife Service, the Conservation Fund, and 
NCDOT to allow for the tract to be managed as a red-cockaded 
woodpecker sanctuary. The parties to the agreement anticipate 
that good management of the sanctuary will actually increase 
the number of active clusters over the existing 18.
    The NCDOT intends to use mitigation credits generated from 
the management and development of the preserve as a means of 
red-cockaded woodpecker mitigation for future highway 
construction projects throughout the coastal plain of North 
Carolina. NCDOT has estimated that over the next seven years, 
five highway construction projects in the coastal plain, which 
potentially impact the red-cockaded woodpecker, will have a 
combined cost of $450 million. The management area will be 
utilized in the future as needed when NCDOT can demonstrate to 
the satisfaction of U.S. Fish and Wildlife Service that there 
are no available or potential red-cockaded woodpecker avoidance 
and minimization alternatives.
    In addition to its mitigation value, the management area is 
planned to be a primary destination on the North Carolina Bird 
Trail which is modeled after the successful Texas Bird Trail. 
Managed by the Conservation Fund in cooperation with Duke 
University's Nicholas School of the Environment, the sanctuary 
is expected to increase year-round, nature-based tourism in 
eastern North Carolina and generate valuable year-round 
economic benefits to the area. The Conservation Fund will 
manage the sanctuary for an agreed period of time, after which, 
it will be turned over to the U.S. Fish and Wildlife Service or 
if the Service is unwilling to accept the land, to the State of 
North Carolina or an agency thereof.
    Furthermore, the sanctuary will compliment the soon to be 
constructed Walter B. Jones Center for the Sounds in Tyrrell 
County which will include an environmental education center and 
the U.S. Fish and Wildlife headquarters for Pocosin Lakes 
National Wildlife Refuge.
    Mr. Chairman, in closing, the NCDOT is pleased to work 
cooperatively with the U.S. Fish and Wildlife Service toward 
enhancing and protecting the environment through initiatives 
like the one just presented for Tyrrell County. We urge all 
individuals and agencies in this process to facilitate the 
means and methods to allow similar environmental initiatives in 
a manner that allows flexibility in infrastructure development 
as well as mitigation. We believe that the best method of 
providing sustainable development and an enhanced environment 
is through partnership with multiple agencies, and we would 
appreciate legislative support that fosters this inter-agency 
corporation.
    Thank you.
    [The prepared statement of Mr. Bruton follows:]

Statement of Vinton Charles Bruton, Ph.D., North Carolina Department of 
                Transportation, Raleigh, North Carolina

    Mr. Chairman, Members of the Committee, and Guests: Over 
the past 25 years, Federal Legislation, Executive Orders and 
related regulations have produced major changes in 
environmental protection. As a result, the protection of 
natural resources such as endangered and threatened species, as 
well as wetlands, have become high priorities in North 
Carolina.
    The North Carolina DOT and the Federal Highway 
Administration frequently encounter endangered species during 
the process of locating and designing highway projects. In 
North Carolina, one such species is the red-cockaded woodpecker 
(Picoides borealis). Whenever impacts to this species' habitat 
cannot be avoided, as is frequently the case with widening and 
major new location highway construction projects in the coastal 
plain of North Carolina, the use of mitigation measures is 
required by the U.S. Fish and Wildlife Service.
    Such measures are designed to enhance or preserve the 
remaining habitat as a means of eliminating ecological damage 
and preserving the species. Without such mitigation measures, 
state highway construction projects such as the Fayetteville 
Outer Loop (serving a major city and military base Fort Bragg), 
the Wilmington Bypass (serving a major city port) and U.S. 64 
in Tyrrell and Dare Counties (serving national and 
international tourism to the Outer Banks and emergency 
evacuation purposes) would not be authorized by Federal 
environmental resource agencies to proceed to construction. 
Thus, in order to avoid potential future project delays, the 
North Carolina Department of Transportation believes that it is 
important to acquire and manage valuable red-cockaded 
woodpecker sites in advance of highway construction.
    The most recent endangered species mitigation project 
funded by the North Carolina DOT is the acquisition of a tract 
of about ten thousand acres in rural Tyrrell County (see 
Attachment 1), on the Albemarle Sound in eastern North 
Carolina. This $16.3 million real estate transaction took place 
on April 28, 1999 with funds provided by the North Carolina DOT 
to The Conservation Fund, a Maryland non-profit corporation. 
The Conservation Fund, which conveyed a conservation easement 
to North Carolina DOT, used the proceeds to purchase the tract 
from The Prudential Insurance Company of America, operating as 
``Pru-Timber.''
    The idea for this acquisition was conceived back in October 
1997, when the U.S. Fish and Wildlife Service expressed in 
writing their intent in North Carolina DOT purchasing the Pru-
Timber tract. The Service's letter, included as Attachment 2, 
stated that the tract ``is rich in biological diversity- 
containing federally-listed species, migratory birds, estuarine 
and freshwater fisheries, diverse natural communities, and 
various types of wetlands.'' The letter further stated that 
there is ``excellent potential for North Carolina DOT to 
receive mitigation credits for wetlands as well as red-cockaded 
woodpecker (RCW's).'' In February 1998, the Environmental 
Defense Fund sent a letter (Attachment 3) to North Carolina 
Secretary of Transportation Norris Tolson, urging his 
Department ``to increase its efforts to avoid, protect and 
mitigate habitat for endangered red-cockaded woodpeckers in its 
highway construction program.'' The U.S. Fish and Wildlife 
Service again acknowledged its support in a letter dated August 
7, 1998 (Attachment 4).
    The tract, which borders the Alligator River, is to be 
known as ``The Palmetto-Peartree Wildlife Management Area'' and 
is now under protection. The site also has some potential 
wetland restoration and preservation. A letter of support from 
Tyrrell County is included as Attachment 5.
    The voluntary partnership forged between the North Carolina 
DOT, The Conservation Fund and the U.S. Fish and Wildlife 
Service, will protect one of North Carolina's largest 
populations of red-cockaded woodpeckers, containing eighteen 
(18) active clusters. A Memorandum of Agreement number 1448-
40181-99-KK-005, dated April 22, 1999 (Attachment 6) was 
executed between The U.S. Fish and Wildlife Service, The 
Conservation Fund, and the North Carolina DOT to allow for the 
tract to be managed as a red-cockaded woodpecker sanctuary. The 
parties to the agreement anticipate that good management of the 
sanctuary will actually increase the number of active clusters 
over the existing eighteen. The North Carolin DOT intends to 
use mitigation credits generated from the management and 
development of the preserve as a means of red-cockaded 
woodpecker mitigation for future highway construction projects 
throughout the coastal plain area of North Carolina. The North 
Carolina DOT has estimated that, over the next seven years, 
five highway construction projects in the coastal plain which 
potentially impact the red-cockaded woodpecker will have a 
combined cost of about $450 million dollars. The Palmetto-
Peartree Wildlife Management Area will be utilized in the 
future as needed whenever North Carolina DOT can demonstrate to 
the satisfaction of U.S. Fish and Wildlife Service that there 
are no available or potential red cockaded woodpecker avoidance 
and minimization alternatives.
    In addition to its mitigation value, the Palmetto-Peartree 
Wildlife Management Area is planned to be a primary destination 
on the ``North Carolina Bird Trail,'' which is modeled after 
the successful Texas Bird Trail. Managed by The Conservation 
Fund in cooperation with Duke University's Nicholas School of 
the Environment, the sanctuary is expected to increase year-
round, nature-based tourism in Eastern North Carolina and 
generate valuable year-round economic benefits to the area. The 
Conservation Fund will manage the sanctuary for an agreed 
period of time, after which it will be turned over to the U.S. 
Fish and Wildlife Service or, if the Service is unwilling or 
unable to do so, to the State of North Carolina or an agency 
thereof furthermore, the sanctuary will complement the soon-to-
be constructed Walter B. Jones Center for the Sounds in Tyrrell 
County, which will include an environmental education center, 
and the U.S. Fish and Wildlife headquarters for Pocosin Lakes 
National Wildlife Refuge.
    Mr. Chairman, in closing, the North Carolina DOT is pleased 
to work cooperatively with the U.S. Fish and Wildlife Service 
toward enhancing and protecting the environment through 
initiatives like the one just presented for Tyrrell County. We 
urge all individuals and agencies involved in this process to 
facilitate means and methods to allow similar environmental 
initiatives in a manner that allows flexibility in 
infrastructure development as well as mitigation. We believe 
that the best method of providing sustainable development and 
an enhanced environment is through partnership with multiple 
agencies and we would appreciate legislative support that 
fosters this interagency cooperation.

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    Mr. Pombo. Thank you. Thank all the panel for their 
testimony.
    Ms. Clark, just to start off with, I would like to ask you 
just more of a process question. After the witness list was 
formalized and made public, a number of the witnesses received 
phone calls from Fish and Wildlife Service inquiring as to what 
the nature of the testimony that the witnesses would be giving 
here today. Were you aware that that was going on?
    Ms. Clark. Well, Mr. Chairman, I actually saw the final 
witness list at about quarter to nine this morning. So, I was 
still trying to figure out where I sequenced in on the panels. 
I don't know specifically that there were conversations, but I 
don't think it is unusual for conversations to occur among 
folks that are going to testify, but I didn't--or people 
voluntarily told me that they were testifying. I did hear from 
some of the witnesses that either left me messages or with my 
secretary suggesting that they were testifying at this hearing 
today.
    Mr. Pombo. In your testimony, you state that you do not 
require mitigation as part of the section 7 consultation, and 
yet the story that we hear is that it is required. How do you 
square that?
    Ms. Clark. Very carefully, Mr. Chairman. I actually had 
significant conversations over the last few days about the word 
``mitigation'' and what is meant by mitigation, and, as I tried 
to summarize in my oral statement, it is very clear to me that 
the term ``mitigation'' in the technical sense is used much 
more loosely than is probably efficient, and we do take 
responsibility for that. When we are dealing with a kind of 
merging of the Clean Water Act, Endangered Species Act, all the 
kind of planning responsibilities and trying to be most 
efficient in addressing the needs of species and the needs of 
economic growth, I believe sometimes the word ``mitigation'' is 
used much more loosely than the technical or statutory term 
would allow. Mitigation in the legal sense, the policy sense, 
is truly only allowable in section 7 when it is part of a 
reasonable and prudent alternative; that alternative that is 
necessary to offset or avoid the jeopardy to a listed species. 
But the term ``mitigation,'' the term ``minimization,'' the 
term ``offset'' are used very loosely among all the parties 
negotiating what is needed.
    Mr. Pombo. What term would you use if someone was 
developing a piece of property and they were told they had to 
set aside a third of their property as habitat that would be 
under control of either Fish and Wildlife Service or an NGO 
that would be named, or if they had off-site mitigation and 
they had to buy three acres of land for every acre they were 
developing, what term would you use to describe that?
    Ms. Clark. It would depend on the project, and it would 
depend on the species, and to answer you directly, many of the 
species that we are dealing with--let us just use California as 
an example, since it is high on people's minds--many of the 
species that are listed today in California are in dire shape. 
They are highly endangered and some approaching blinking out or 
extinction. And, so the notion of the status of the species, 
many of them are very close to a jeopardy baseline. So, if in 
fact we were dealing with a project that encompassed a large 
part of those species' remaining range and it were through 
section 10, we would be minimizing and mitigating. If it were 
through a Corps of Engineers or an EPA or some other Federal 
connection and the species would receive a jeopardy biological 
opinion, a reasonable and prudent alternative would be some 
form of mitigation. Otherwise----
    Mr. Pombo. I don't know why we are going back and forth on 
this. We can use whatever term you want to use. The Fish and 
Wildlife Service routinely requires an exaction out of the 
people that they are dealing with, whether it is development--I 
mean, when we dealt with the floods in California two years 
ago, there was a 5 to 1 mitigation, 5 to 1 exaction. I mean, 
you required them to mitigate--you don't want to use the word 
``mitigation''--you required an exaction out of them in order 
to do that, and there has been a series of these exactions that 
have been required, and in looking through the records and the 
testimony that has been presented here today, it appears that 
California, for some reason, is almost all the exactions that 
are being required are being done in California. Very few are 
being done outside of California proportionately. Even if you 
are talking about similar species and similar topography, we do 
not see the same kind of exactions that are being required in 
California being required elsewhere, and that is one of the 
reasons why a lot people begin to question the activity of Fish 
and Wildlife Service in California, because they don't see it 
in other places.
    We had testimony about irrigation ditches and what the 
exaction would be for them to be able to use their irrigation 
ditches, and I am sure that--well, Mr. Gilchrest stepped out--
but I am sure Mr. Gilchrest his farmers don't have the same 
kind of exactions in order to use their irrigation ditches. So, 
that question is out there.
    I have more questions, but I will pick them up on the 
second round.
    Would you like to respond to that?
    Ms. Clark. Well, again, I can respond to it in summary, but 
we will end up getting into a specifics discussion very 
quickly. The longstanding work that has been done in California 
has really set up some processes that blend all of the 
environmental statutes, and it blends all of the involved 
parties. So, the condition of the species, the projects that 
are involved often dictate the terms and an attempt to be 
equitable and an attempt to be efficient and an attempt to 
streamline processes, oftentimes, these kind of negotiated 
offset, mitigations, minimizations are arrive at. But what we 
try very hard to do is not have a cookie cutter approach. So, 
what may happen on the Eastern Shore of Maryland would not be 
what is happening in Sacramento, California. It is species-
specific; it is project-specific, and it is negotiation-
specific.
    Mr. Pombo. I am not necessarily asking for a cookie cutter 
approach; in fact, you and I have had these discussions before.
    Ms. Clark. Right.
    Mr. Pombo. But with the elderberry beetle, there was not a 
jeopardy decision that was issued. With the fairy shrimp, there 
was not. It seems like you are just requiring exactions in 
California every time that you come in on a section 7 or a 
section 10, and that is one of the concerns.
    Mr. Miller?
    Mr. Miller. Thank you, very much, and thank you to the 
panel. Ms. Clark, just so you don't feel like you were alone in 
talking to members of the panel or prospective members of the 
panel, many members of this Committee talked to members of the 
panel and people who didn't want to testify and people who 
wanted to testify and weren't allowed to testify, so it all 
kind of washes out here.
    Let me follow up--you know, obviously--and we will hear 
from cities and developers and others--it is not easy to be a 
city and not easy to be a developer, whether you are commercial 
or residential or whether you are a city trying to expand its 
infrastructure, and it seems to me that if you look at the 
process in this country, at all levels of government, if you 
are a developer, the school board goes to the city council and 
says, ``We need new schools. This is going to be new 
development. This development is going to have to take 100 
percent responsibility for the capital costs, and they have to 
develop a school.'' Somebody else says ``They are going to have 
to pay for the increased capacity in the sewer plant, in the 
waterworks.'' Somebody else says, ``Well, we need the roads 
widened,'' so they are going to have to widen the roads, and if 
you want to build a tall structure in an urban area, they say, 
``We want setbacks'' from the property line so you don't block 
viewsheds. I mean, this is a constant, constant practice of 
extractions from people who want to develop their property, 
whether it is under zoning or whether it is under neighborhood 
mitigation or wildlife mitigation, in this particular case, the 
client are species. But if the client is the school district or 
the client is the community that says, ``Fine, we will accept 
100 homes, but we want them to be transportation sensitive; we 
want them to be mass transit-friendly; we want running trails 
and hiking trails, and we want open spaces and parks, people 
say, ``Yes, that is the way you create a community,'' and that 
generally has the support of the people who are there. And then 
somebody has to come in a advocate on behalf of endangered 
species because we have made a national decision about 
protecting and recovery of endangered species. So, I don't know 
that this all terribly foreign to the people involved in it.
    I think when we get to the species, however, there is more 
ambiguity, if you will, or questions of whether it is listed or 
whether there are jeopardy opinions that starts to drift over. 
One of the witnesses later will testify about the effort to try 
to protect soil, and soil is not part of that. After long 
negotiations, finally, the admission was made, yes, really, 
they didn't have the legal authority to protect the soil in 
this case, and the entire nature of the mitigation was changed.
    I think what I find as I deal with these from various 
communities and developers and others is that you don't want a 
cookie cutter approach; you want to customize to the needs and 
the species and the nature of the property and the habitat, but 
by the same token there really aren't very bright lines about 
how to proceed, and I think that is why a lot of people hold 
out hope for HCPs in the sense that you would then know on a 
larger landscape area how you can proceed and on a timely 
basis. But by the same token, we don't appear to have the 
resources to develop the HCPs within the Service.
    I mean, time and again, the witnesses here this morning and 
the people who have come to my office and other Members of 
Congress, there is a long timeframe of trying to process these, 
and I just wondered if you could sort of tell us where you are 
in intensive areas like the southeast or certainly in the State 
of California in terms of matching up the demand and the 
resources? Maybe we will learn this from the GAO report too.
    Ms. Clark. And I do hope we do, because I think there is an 
amazing story to tell.
    The notion of advocating for species certainly is the 
responsibility of the Fish and Wildlife Service and National 
Marine Fisheries Service, and I will tell you, to add to your 
list, it is not easy being a Fish and Wildlife Service employee 
these days either. But the idea of trying to respond to an 
increasing demand for economic growth and economic expansion--
which is a good thing--and the need to try to balance it with 
species conservation needs--which is a good thing--is elevating 
and increasing exponentially, and I have seen it in my career 
in the Fish and Wildlife Service pretty dramatically.
    We have had previous hearings where we discussed the 
deployment of resources in the Fish and Wildlife Service, but I 
am happy to have that discussion over and over again, because I 
think it is instructive. We try to deploy our resources where 
the biological hotspots, where the biological diversity, merges 
particularly with elevated and increasing economic growth, so 
it is not a surprise to see resources on the west coast, 
resources in the Southeast, resources being sent to the 
Southwest. That is where the biological hotspots are, and that 
is where the fastest growing parts of our country are.
    We continue to juggle workload ourselves, as do our 
colleagues in the National Marine Fisheries Service, to address 
technical assistance demands and technical assistance needs, 
and when thing are going well, I don't tend to hear about them 
here in Washington, but when somebody is not getting a permit 
fast enough or negotiations are slowed down because we have 
moved onto something else, you can best believe I hear about 
it, and then we start sequencing and rearranging deck chairs. 
But the workloads are increasing dramatically, which is why I 
continue to go back to the President's budget request.
    Over the past few years, our number one budget request has 
been in the endangered species consultation arena. That is the 
part of the budget that deals with technical assistance for 
HCPs and compliance with section 7. It continues not to be met, 
and we continue to stagnate in our ability to provide 
accelerated response time, which is frustrating not only for 
the applicants and the Federal agencies and the landowners, it 
is very frustrating for us as we try to work out creating 
landscape solutions. So, we continue to try to balance and to 
try to address the most demanding needs as best we can in 
hotspots around the country.
    Mr. Miller. Thank you. Just quickly, Mr. Bruton--my time is 
up--as I calculated, the mitigation costs for the Department of 
Transportation was roughly about, what, 3 or 4 percent?
    Mr. Bruton. Three and a half percent, sir.
    Mr. Miller. Three and a half percent? Thank you.
    Mr. Bruton. Yes, sir; that was those five projects that I 
mentioned, and over the $16 million divided by the $450 
million, roughly, is about 3.5 percent, I think.
    Mr. Miller. Thank you.
    Mr. Pombo. Mr. Calvert?
    Mr. Calvert. Thank you, Mr. Chairman. Ms. Clark, you are 
the one--I am one of those people you have been hearing from, I 
suspect. I want to thank you for coming before the Committee 
today to address some of our concerns with the enforcement of 
the Endangered Species Act.
    I last saw you in March at the hearing before the Fisheries 
Subcommittee, and the Subcommittee sent some follow-up 
questions to you back on March 3, and, unfortunately, we have 
yet to see a response to those questions. So, I am hoping to 
see a response to those questions sooner rather than later; in 
fact, with the permission of the chairman, I would ask that we 
insert them into the record.
    Mr. Pombo. So ordered.
    Mr. Calvert. With regard to the Corona case that the city 
manager of Corona indicated, the Corps initiated a formal 
consultation on May 20, 1998 and has yet to be resolved. This 
is certainly well over a year ago, well beyond the 135-day 
requirement under the Act. This appears to be a pattern. As you 
know, I have a number of those type of issues before us, 
especially around my district, which probably is impacted as 
anywhere in the country. How often does the Service meet the 
required deadlines?
    Ms. Clark. We generally--I can't give you a specific 
percentage, though I would be happy to tell you----
    Mr. Calvert. How about just a general idea.
    Ms. Clark. I would say, as a general matter, we meet it a 
good bit of the time----
    Mr. Calvert. Do you ever meet it in my area, in southern 
California?
    Ms. Clark. They tell me yes.
    Mr. Calvert. Any particular instance where you can point 
out that they have met that required deadline?
    Ms. Clark. I will tell you what I can do: I can get back to 
you a list of----
    Mr. Calvert. Yes, why don't you give me an idea, a 
percentage of the times in southern California you actually 
meet the required deadline under the Act.
    Ms. Clark. I would be happy to.
    Mr. Calvert. Does the Endangered Species Act allow 
retroactive mitigation on projects you have already permitted 
as far as 30 years, as in the case of the city of Corona?
    Ms. Clark. Retroactive mitigation----
    Mr. Calvert. Retroactive mitigation on projects that you 
want to have mitigated for 30 years of disturbance prior to 
today's date.
    Ms. Clark. Put the way you said it, Congressman, no. What 
it does do is allow us to evaluate the environmental baseline 
at the time that we are conducting the evaluation and address 
the conservation needs based on the environmental baseline.
    Mr. Calvert. So, the Endangered Species Act does not allow 
retroactive mitigation on projects----
    Ms. Clark. For something that has already occurred?
    Mr. Calvert. For something that already occurred.
    Ms. Clark. Not to my knowledge.
    Mr. Calvert. Mr. Workman, in your section 7 consultation 
for your maintenance projects, have the employees at the Fish 
and Wildlife Service demanded or required any mitigation for 
the take of species and what did they demand?
    Mr. Workman. Well, I would refer to that letter of August 
that I had mentioned earlier where the Corps has continually 
demanded 3 to 1 mitigation and threatened 10 to 1 mitigation, 
and what is interesting about all that is that our 
conversations as well as the tenor and tone as related to this 
long-term impact. A number of the discussions today have talked 
about not wanting a cookie cutter approach to solving these 
issues, but I would submit that we need a level playing field 
across the country, running from Maine to California, in how we 
deal with these things, and then, secondly, we need some sort 
of certainty that there is going to be something that is going 
to happen.
    With your permission, I would like to give you another 
quick illustration of the things with regards to litigation, 
and in our particular case, we have an airport, a small 
recreational airport, located in the Prado Basin that has been 
there 35 years, and the FAA has continually told us we need to 
cut the trees down to improve the safety of the pilots flying 
into that airport. In contrast, the Fish and Wildlife Service 
sends us letters as well as orally tells us that they don't 
want any plane crashes there, because it hurts the environment. 
Well, I have got one agency saying, ``Don't have any plane 
crashes;'' another agency saying, ``Don't cut down the trees,'' 
which is Fish and Wildlife Service. ``And if you do cut down 
the trees, Mr. Workman, it has to be on a 3 to 1 basis,'' not 
three trees for every tree you cut down but three acres for 
every acre. If there is one tree in a acre and it is cut down, 
that relates to providing three acres of mitigation. So, if 
there was an approach that we would hope the Committee would 
take a look at and the Service would take a look at would be 
some reasonableness. If you are cutting down one tree to meet 
FAA regulations, that you plant another tree, and then we move 
on instead of this 3 to 1 mitigation that really becomes 
extraordinary.
    Mr. Calvert. But in comment to that, as a former pilot who 
used to fly in and out of that airport, I appreciate keeping 
those trees trimmed to a certain level.
    Thank you, Mr. Chairman.
    Mr. Pombo. Mr. Doolittle--I am sorry--Mr. Udall.
    Mr. Udall of Colorado. Thank you, Mr. Chairman. Good 
morning, panel. We appreciate you taking time to join us here 
in Washington.
    Director Clark, I had a couple of questions for you. As you 
know, in Colorado, we have been grappling with a listed 
species, the Preble's Meadow jumping mouse, and in 1998, the 
appropriations bill included $400,000 for the Service to work 
with all these various entities to try and develop some 
momentum in this area. And, in addition, I understand another 
$400,000 has been appropriated for this year, but what I am 
hearing back home is that the money hasn't reached the people 
who need it, and, as you also know, recently I wrote you a 
letter, and I was curious if you had any update on that 
situation?
    Ms. Clark. I did, in fact, Congressman, talk to the 
regional director about that, and the response to your letter 
should be coming very shortly, and I will check into that as 
soon as I get back. But I know that there is a lot of effort 
and energy being expended in a very collaborative fashion. We 
have had folks out there from our Washington office to deal 
with both Colorado and Wyoming on it, and my impression is that 
the money that was appropriated is being allocated as it was 
intended, but I will gladly respond to you with the specifics 
of where the money is and where it went.
    Mr. Udall of Colorado. I would really appreciate that.
    [The information follows:]
    Mr. Udall of Colorado. As you know, when these situations 
arise, it looks like delaying and stalling is occurring when 
instead there are very good intentions on the part of your 
Service and other people to move this ahead. So, let us 
continue to work together.
    Ms. Clark. I will be glad to follow up.
    Mr. Udall of Colorado. Let me move on to a related matter. 
I think you know, last week, Secretary Richardson was in 
Colorado. Congressman Tancredo and I and others were out at the 
Rocky Flats Plant, and the Secretary set aside 800 acres there 
for a wildlife preserve, and, as I understand, turned it over 
to you all to manage part of this buffer zone around Rocky 
Flats. Can you tell me a little bit about the timetable on 
which you are operating? What kind of consultations you are 
going to have with neighboring communities? What kind of 
resources you may need to implement this agreement?
    Ms. Clark. Sure. What Secretary Richardson announced at 
Rocky Flats, along with our regional director, was a 
cooperative effort whereby Energy has asked the Fish and 
Wildlife Service for technical assistance in evaluating the 
buffer areas of the Rocky Flats for their unique values and for 
their appropriateness as a wildlife conservation area. We made 
the commitment to Energy that we would conduct a biological 
inventory of the Rocky Flats lands and provide Energy with a 
sense of their richness. We did not make a specific commitment 
to bring the Rocky Flats buffer area into the refuge system, 
but we did make a commitment that we would evaluate it and 
consider it, along with the Secretary of Energy. So, the MOU or 
the commitment that was made is that we would work with Energy 
in a public collaboration to inventory the biological richness 
of the Flats area.
    Mr. Udall of Colorado. Do you foresee any need for 
legislative authority to move ahead in this regard?
    Ms. Clark. Not to my knowledge, but I will be glad to go 
back and check. I believe Energy and Interior both felt they 
had what they needed to work across agency and within the 
government to conduct the inventory.
    Mr. Udall of Colorado. I would like to make another comment 
on that particular site. I think it has been characterized to 
be very effective and I think model ground-up, grassroots 
effort where a lot of the local community citizen groups, other 
stakeholders have been involved in creating a vision for Rocky 
Flats and what it might look like after the post-cleanup. So, 
the more you can participate in that, as you move ahead, I 
think the better for all of us.
    Ms. Clark. Great.
    Mr. Udall of Colorado. Let me to another species--the 
black-tailed prairie dog. I know you have begun a nine-month 
process to evaluate the research and to consider whether it 
should be listed. Can you talk again about that process and how 
the public would be consulted and take part?
    Ms. Clark. Sure. We responded positively to a petition to 
list the black-tailed prairie dog throughout its range, 
primarily due to habitat fragmentation and some other threats 
to its existence. We, in the 90-day finding, suggested that we 
would do a more detailed status review, and that is underway 
right now in advance of ultimately a decision that will be made 
whether or not to propose it for listing. The Fish and Wildlife 
Service, along with the involved States and a number of the 
conservation community folks and agricultural community, have 
come together in a much more collaborative environment, bigger 
than the black-tailed prairie dog, because there are a number 
of species, like the black-tailed prairie dog, that are 
beginning to disappear in that part of the country, like the 
swift fox, like the mountain plover, and so they are looking at 
a more holistic way of addressing the needs of the species 
across that range. So, we are dealing with the petition process 
for an individual species, while we are actually trying to deal 
in a much more open landscape, public involvement restoration 
opportunity for the habitat throughout that part of the 
country.
    Mr. Udall of Colorado. Mr. Chairman, I know my time is up, 
but if I could make one last comment? I was out at the Rocky 
Mountain Arsenal a few weeks ago and want to commend the Fish 
and Wildlife Service for the work that is going on our there. 
We are truly turning weapons into wildlife, and while I was 
there, it was pointed out to me that the prairie dog, when you 
look at the whole ecosystem profile, that there are 140 species 
that are tied into the survival of the prairie dog. So, I think 
at great risk do we ignore the fact that we need to preserve 
this species.
    Ms. Clark. Thank you.
    Mr. Pombo. Mr. Doolittle.
    Mr. Doolittle. Thank you. Mr. Weygandt, as your constituent 
in Placer County, I am very happy to see you here today.
    From your testimony, it seems as if Placer County has been 
one of the more proactive jurisdictions in implementing much of 
the Fish and Wildlife Service has been asking. Yet despite this 
fact, it is troubling to me that the Sacramento field office 
has made the approval of important public infrastructure 
projects unnecessarily burdensome, and I just wondered if, for 
the benefit of the Committee, would you explain how the Fish 
and Wildlife Service's policy of service area impacts has been 
an impediment to the timely approval of important public 
infrastructure projects in Placer County?
    Mr. Weygandt. Yes. There are three current public 
infrastructure projects that are very important to the existing 
development of the country from an economic perspective as well 
as accommodating the growth pressures that we are experiencing. 
There are two interchanges on a freeway, and one is a sewage 
treatment facility expansion.
    Again, the idea of service area impacts, or what in 
California we refer to as cumulative impact, is not something 
new to us. We also think that the notion has merit, but, 
clearly, there needs to be clarification and improvement as to 
the delivery of those policies as it relates to the Service.
    In our experience, recently, beginning with the 
interchanges, there was correspondence issued that related the 
concerns about these cumulative impacts, but, in fact, when the 
county became involved initially in the process, the original 
discussions were simply a communication to the Service that the 
service area impacts, the cumulative impacts, in the first 
case, the Blue Oaks Interchange, were much more restrictive 
than for the map that Fish and Wildlife Service had reflected. 
In other words, we were collecting fees to build these 
interchanges based on a region that was far smaller than the 
large map that the Service had reflected in its letter. So, we 
communicated that; we communicated the methodology by which we 
had done the calculation of the fees, and we were able to make 
progress in that communication, but there clearly is a learning 
curve; there clearly was a delay in the project. The tenor of 
the communication caused a huge amount of anxiety, I think, in 
the community, and it is an area that in fact had already been 
taken into consideration in the local review processes that 
were necessary for that project.
    And that is similar with the other interchange, the 
Pleasant Grove Interchange, and also in the city of Roseville 
Sewage Treatment Facility, it in fact was actually a regional 
facility. There are phases of it. The first phase, which needs 
to be initiated immediately, has included a huge amount of 
environmental review, years of environmental review, a huge of 
investment in that. And, again, that first phase is something 
that is going to be necessary to serve entitlements that have 
already been the through the review process. In the development 
community, they call the public sector taking two bites out of 
an apple for which they should only get one bite, and in fact I 
think everybody would acknowledge that environmental quality 
has a cost to it. What is incumbent upon those of us in the 
public sector is to make sure that that cost provides value, 
and if we are wasting costs by basically going through the cost 
cycle twice, it decreases the value, and all of us that are 
involved in the regulatory process, I think, needs to have 
incentives in providing that value to the constituents at the 
lowest cost, because that in fact is going to further 
environmental quality.
    Mr. Doolittle. How many months do you think you lost on 
those three projects having to duplicate this analysis on the 
service area?
    Mr. Weygandt. I would say that on the one interchange, Blue 
Oaks, with which I am most familiar, because it is also in my 
supervisorial district, there, clearly, had processes been 
different, were probably three months that were unnecessary in 
terms of the timeframe that was used for the evaluation, and, 
in fact, if the process was such that the Service plugged into 
the review process in the very beginning, the evaluations could 
have been done concurrently, and there would have been no extra 
time or cost necessary.
    In addition to that, politically, as the county was going 
through our legacy process, the implementation of our open 
space program, it created a huge amount of anxiety locally 
amongst the cities of Rockland and a local development 
community, which didn't even help us further the politics of 
our legacy program, which has broad-based support amongst our 
constituents and unanimous at the board of supervisor level. 
So, there are other costs just in terms of time; it is politics 
also.
    Mr. Doolittle. My time is up, but is it only just three 
months. Is that the only amount of time we are talking about or 
was it a longer period when you consider all three of the 
projects, as you discussed?
    Mr. Weygandt. That is a good point, and it is not something 
I guess I have the ability to definitively answer here. I know 
that the first correspondence that I saw was issued in early 
January. The Blue Oaks permits were received a couple of three 
weeks ago, perhaps, and I understand that the permits on the 
other two infrastructure projects were essentially completed or 
received as of yesterday.
    Mr. Miller. Would the gentleman yield just for a second? I 
know you are yielding your time that has run out.
    Mr. Doolittle. Well, yes, I will yield the time I don't 
have. Go ahead.
    Mr. Miller. On this point, Mr. Weygandt--because in the 
meeting I had with some of the Roseville people, the 
entitlements in phase 1 here were all agreed to and approved. 
Is that correct?
    Mr. Weygandt. It is my understanding that those are 
correct, but that would have been a permit that was issued.
    Mr. Miller. And this was negotiations over a change in the 
footprint on the treatment facility?
    Mr. Weygandt. That I don't know.
    Mr. Miller. I think that is the case, and I think this is 
sort of a little bit of a case--if I might make this point, Ms. 
Clark--is that there really was no authority to turn down the 
treatment plant and the phase 1, because it had been approved, 
but then through a tiny, tiny modification on the footprint, 
discussions were then leveraged into the phase 2 and what would 
the city be prepared to do and what would the waste treatment 
facility be prepared to do, which then started to threaten your 
ability to get underway in phase 1 to meet your commitments to 
developers, and I guess some commercial development or economic 
development was also taking place.
    Mr. Weygandt. That is correct.
    Mr. Miller. And while there was no authority, you don't 
want to upset the people who are then going to rule on phase 2. 
So, you engaged in fairly protracted long discussions here 
under the cloak of some legal authority, but it probably wasn't 
really there, and I think that is what drives cities, 
developers, and others kind of people crazy from time to time, 
because a project that has, for all intents and purposes, been 
approved, is now being held up to try to leverage some 
discussions about future activities, because Placer County and 
Roseville, as I understand it, has this legacy, and Roseville 
is part of that, and this service area would be part of that, 
although the county is much larger than that. And, so you are 
kind of watching two scorpions dance here, and nobody wants to 
upset the other person when, in fact, even in this case, I 
believe the Service admitted, ``Well, yes, we know you can go 
ahead, but we want to talk to you about this,'' and that is 
where some of the delay came from in terms of, then, people 
being able to time the development with the treatment facility 
being able to take them on-line. And I just--you know, there is 
nothing illegal about this, I guess--but it is this drift 
sometimes where you are kind of leveraged into a position, 
because you are talking to the regulator, and sometimes that 
turns out to be real time and money for a city or for a 
developer or for others.
    Mr. Weygandt. And, in fact, if I may, in phase 1 on the 
sewage treatment facility, not only was the permitting process 
evaluated in the sewage treatment facility, itself, the 
entitlements----
    Mr. Miller. Which it was going to service.
    Mr. Weygandt. [continuing] which it would still be serving, 
have also gone through exactly the same exhaustive and 
expensive review, and, frankly, in my opinion, there is 
absolutely no need for any time delay at all, but it is a 
function of the culture and the effectiveness----
    Mr. Miller. And, as I understand it, the sewage treatment 
is part of the larger HCP, but it was all leveraging them into 
that decision. They could have gone alone on an individual 
permit, and I understand that, and, as I understand it, this 
thing, more or less, is going forward now, and it is okay, but 
it is that kind of leverage, I think, that disturbs people. I 
don't know--Director Clark might want to respond.
    Mr. Weygandt. But then in addition to--with the Blue Oaks 
Interchange, specifically, there is public financing and 
bonding that was involved in a partnership between the city of 
Rockland and the local development community. The timing of 
that was very critical, and, again, the anxiety that drove the 
local politics kept me busy for a while more than I wished I 
would have been.
    Mr. Doolittle. Mr. Chairman, if you would indulge us, could 
we invite the Director to respond to the issues Mr. Miller and 
I have raised?
    Mr. Miller. I realize you don't have all of the facts, but 
I think this is the drift that we, as Members of Congress, hear 
all too often at the local level in terms of those who are 
trying to process the applications for permits and do other 
actions.
    Mr. Pombo. This is the root of a lot of the problems that 
we hear about all the time. Exactly in the way this question 
and answer were laid out for you is the root of a lot of the 
problems we hear. I mean, what Mr. Calvert laid out a few 
minutes ago was a very similar problem. So, I think that I 
would like to hear your response to it.
    Ms. Clark. Well, I will respond, maybe not so much to the 
specifics, but I get enough of the gist of the frustration that 
I clearly endorse the frustration, and I can appreciate it on a 
number of projects.
    What it does is send a signal to me, very strongly, that 
early involvement and early collaboration is key to success of 
these projects, and when you have sequenced issues, like the 
State CEQA process, that then is followed up by the Federal 
Corps process; it then has a Clean Water Act provision; then 
you have the Endangered Species Act, the county or the 
landowner, or whoever is having to deal with the ``regulator'' 
are seeing bite after bite after bite at the apple, and they 
think they have something figured out, and they think they have 
a deal, and then in comes another piece.
    And in this particular project, what I do know about it is 
there was a lot of stop and start, and there was some confusion 
over trying to understand the terms of the project and trying 
to understand the specifics involved, and I think it is back on 
course. But, I have talked with our folks, and we encourage 
them to try to get involved earlier in the process, so that if 
we resolve it during, for instance, the State CEQA process, 
then, quite frankly, we have no business coming back and 
tinkering and asking for more or asking for supplements. But, 
oftentimes, it is an issue of deployment of resources. What 
comes in the door first and just the shear demand for technical 
assistance that we don't have the ability to kind of stick with 
the process and get engaged in understanding the process 
sufficiently to address the counties' or the landowners' needs. 
But I believe a lot of this is and can be--without minimizing 
the notion of communication and early involvement--can be 
resolved if folks are working together simultaneously versus 
sequentially, which happens in a lot of these projects.
    Mr. Pombo. Ms. Clark, I don't think that with these two 
projects, that either one was a surprise to Fish and Wildlife 
or they didn't know it was happening; that they weren't in on 
the process early; that they weren't completely and fully aware 
of everything that was going on. It was not a lack of funds or 
a lack of employees or anything. I think you basically had them 
over a barrel, and you were going to get a little bit more.
    Ms. Clark. Well, Mr. Chairman----
    Mr. Pombo. Because you get to say yes or no, and they know 
that, and that is how we end up doing hearings like this.
    Ms. Clark. True, true. Well, this is, as I said in my 
opening statement, it is projects like these that I am happy to 
get personally involved in and look at with the regional 
directors and the folks. I think there are different stories 
and different perceptions here, from what I hear, but certainly 
looking at it personally is something I am happy to do in 
trying to keep these issues on track.
    Mr. Pombo. Well, in my working with you, I know you have 
been willing to do that, and, unfortunately, you will probably 
have to move to California by the end of the hearing.
    [Laughter.]
    Mr. Gilchrest.
    Mr. Gilchrest. That is not a bad thing.
    [Laughter.]
    Thank you, Mr. Chairman. Well, I am from Maryland, and my 
district is both sides of the Chesapeake Bay. This was not one 
of my original questions, but I will bring it up. I would like 
maybe some of the Fish and Wildlife people from California to 
move over here to my district, some of the enforcement people, 
because we are about ready to dump dredge material overboard 
into the bay that we have seen and the Corps of Engineers has 
concurred with us that it is going to equal the amount of 
nutrients that you get from the sewage treatment plant from the 
city of Annapolis as far as the ammonia and phosphorus release 
is concerned, and the Feds and the State don't require a permit 
for that release of nutrients. So, we are fighting that, and so 
if you have anybody from Fish and Wildlife in California who 
wants to move over here and enforce that in my district, we 
will accept them, and we can send a guy here over there. He is 
a nice fellow, but the fellow here is okay, and he has been 
helping with this.
    Some of the inconsistencies of the application of 
regulations is pretty amazing.
    Mr. Doolittle. If the gentleman will yield, I believe 
California has 193 out of a total of 345 nationwide.
    Mr. Gilchrest. And the Chesapeake Bay has four. But, 
anyway, the early collaboration, I think, is really crucial on 
people that are able to feel that their opinions are respected 
to resolve some of these issues.
    We have an issue, Ms. Dalton, that you are probably 
familiar with--it is a State issue, more or less; deals with 
the States, and it is Menhaden. Menhaden in the lower 
Chesapeake Bay does not need any management plan. You can catch 
as much fish as you want, and we are seeing a decline of a 
whole range of other species and problems as a result of 
overfishing of Menhaden.
    So, we got a group of people together over a series of 
meetings--Fish and Wildlife, National Marine Fisheries Service, 
local Department of Natural Resources, charter boat captains, 
fishermen, all kinds of people--and we decided that the 
management plan for Menhaden has to be a certain amount for the 
charter boat captains, for the fishermen, for a range of other 
people that want those fish for economic reasons, plus, enough 
has to be set aside for rock fish to eat. They need, in order 
for the ecosystem to work, a certain number of Menhaden.
    And the third thing that was important, among many other 
things, was that Menhaden are filter feeders. At certain 
stages, they eat zooplankton and they eat phytoplankton, and 
they filter the bay to make it cleaner, like oysters. And, so 
the bay depends on a certain number of Menhaden to do that 
particular job.
    And, so, basically, what everybody did, through a series of 
meetings, almost coming to a successful conclusion, is 
understand, literally, the complexity, the virtual infinite 
number of variations and the mechanics of natural processes, 
and I think we have reached a stage of our development as human 
beings since the frontier is gone, our resources are being 
diminished, the population is increasing, and all we have left 
in all these communities is the democratic process and the 
character of the people engaged in that democratic process. 
And, so we really need to respect the motivations of other 
people; let them be heard; have a collaborative effort at the 
very beginning, and then move on, but understanding human 
beings have activities that impact the natural processes and 
not in the same way as Menhaden and rock fish used.
    Agriculture is the biggest industry in my district, and we 
have seen improved management practices, so that not only is 
the bay coming back because of greater buffer strips, the grass 
is coming back and a whole range of other things. The whole 
region is becoming more prosperous for a lot of reasons--
tourism is up and things like that--and I didn't mean to talk 
my whole five minutes.
    The point is that--and I am not too--these guys will attest 
that my too crazy--Ken will attest it; Rick may not attest it--
--
    [Laughter.]
    [continuing] Jim Hansen--I am not too crazy, but, 
basically, we are marooned here on planet Earth. We are 
marooned here; this is it. We have the planet; we have our 
community. The children depend on responsible adults to 
collaborate and find out the best kind of information. I didn't 
know that Menhaden were filter feeders. I didn't know the 
reason large numbers of rock fish were dying of starvation was 
because they didn't enough to eat in certain portions of the 
bay. We got everybody together, and we stopped fighting, and we 
stopped arguing. We said, ``How can we hold on to the resources 
that we have; manage what is left, because they are being 
diminished?''
    Anyway, I think everybody up here has given fine testimony. 
You have each picked out a piece of the problem, and I think 
all of us together can help solve it.
    Mr. Pombo. Mr. Sherwood.
    Mr. Sherwood. Thank you, Mr. Chairman. I want to thank the 
panel. It has been very illustrative for me today to get into 
the depths of some of these issues, and, Ms. Clark, I would 
like to explore white-tailed deer with you a little more; that 
is an area of interest to me.
    But one of the things that I am not satisfied with what we 
have done here today is I think you very frankly told us that 
you didn't think mitigation for prior--retroaction mitigation 
was in the law, and yet as I heard Mr. Workman's testimony, I 
am afraid your two statements are inconsistent, and I would 
like to explore that just a little more, because sometimes we 
don't see the facts the same, and I am not sure exactly what 
they are, but I have been trying to listen to both sides, and I 
think your position and maybe your office's position or Mr. 
Workman's testimony of your office's position are at odds, and 
I think that is one of the areas we need to run down, because 
there is a perception around that we all want the same goals. I 
think we all want the same goals that are the goals of the Fish 
and Wildlife Service, but we often hear that the ends to those 
goals create a lot of obstacles, and I think this is a good 
example of that, and I would like to explore that a little 
further.
    Ms. Clark. Be happy to. I was carefully listening to the 
testimony of the other panelists to see if I could isolate some 
specific challenges. The notion of retroactive mitigation, the 
notion of requiring something for something that has been 
already approved is an issue that I need to look into more 
specifically given specific projects and the policy that I 
believe.
    But, again, I am convinced that some of this might be an 
issue of communication and perception and that some of this is 
related to--you have a project. Either the project changes or 
something changes, and there is a requirement for an additional 
permit, and when our folks are evaluating the environmental 
effects, they are looking at the baseline of the species; they 
are looking at the environmental condition of the cumulative 
effects of everything that has gone on before or they are 
looking at the baseline of the species and its habitat at the 
time they are evaluating the impacts of the additional 
extension, expansion, whatever is on the table before them. And 
it is based on that that they are making the recommendation of 
the decision on what is appropriate for mitigation and 
minimization.
    So, as I was leaning back and talking to some of the 
California folks, I think it is entirely appropriate that the 
question is being asked and that we consider in detail some of 
these cases and see if in fact we do have a policy, which I am 
not clearly prepared to admit, or we have a mechanics, 
communication issue, and I would be glad to get to back you 
once I have had some more, kind of, detailed involvement in 
some of these projects.
    Mr. Sherwood. Thank you. Mr. Workman, you made the 
statement about 30 years of mowing ballfields. Now, I would 
like to know specifically why you used that phrase? Is that a 
phrase that came from Fish and Wildlife or is that your 
interpretation of what they are doing?
    Mr. Workman. That is an illustration. When we talk about 
maintenance activities in the Prado Basin. In the Prado Basin, 
we have a variety of things that are going on--recreational 
activities, such as the airport I mentioned, the ballfields; we 
have a sewer treatment plant; we have drainage facilities; we 
have roads that serve the public. And that cumulative impact 
over 30 years has been with us, and we have dealt with it. We 
have worked effectively on a number of projects with the Fish 
and Wildlife Service, but in this particular case, in this 
Maintenance Manual, which is basically for not new construction 
but for things that are currently in place and what things we 
need to continue to maintain, whether it be drainage ditches or 
the ballfields, that is something specific that our staffs have 
discussed and looked for in terms of what that mitigation is 
going to be, and in making notes to myself here, I continue to 
think of things through this mitigation process and just to do 
these maintenance types of things.
    They are also requesting that I hire a full-time patrol 
position in the Basin, so I have the means to respond quickly, 
quickly control any fires, environmental contamination spills, 
and the like to protect the environment. Well, this Basin is 
acres and acres and acres, and I would have to hire another 
fire department and police department to do what is being 
requested here.
    So, when I use the term ``ballfield,'' that is just one 
part of the things that are going on in the Prado Basin and 
that we are willing to talk about mitigation and very willing 
to mitigate for things, but 30 years of mowing ballfields and 
30 years of cleaning ditches and 30 years of running airplanes 
in and out of an airport, that becomes difficult for us to 
understand.
    Mr. Sherwood. Thank you.
    Mr. Pombo. Mr. Gibbons.
    Mr. Gibbons. Thank you very much, Mr. Chairman, and as I 
sat here today listening to this panel and their presentation, 
my recommendation would be that we hold one of these hearings 
on the endangered species every week so that we can bring the 
administration to the table with many of the constituents in 
all our districts to have them hear some of the same horror 
stories, and I appreciate their patience with us today.
    Mr. Chairman, of course, I represent most of Clark County, 
Nevada, which has the infamous desert tortoise, a species now 
which has accumulated over $30 million toward its restoration. 
I am curious just exactly how much money it is going to restore 
this species? If there is a time deadline, how many golden 
habitats do we have to build for the desert tortoise at this 
rate to achieve a significant recovery plan? How many more 
millions are we going to have to spend on this species?
    Ms. Clark. Well, I am assuming that is directed at me?
    Mr. Gibbons. Yes, ma'am.
    Ms. Clark. I can't give you the specific answer about what 
it is going to cost to recover a species. I could go into a 
long biological litany that our species didn't get to the 
status that they are overnight, for sure, and that there is a 
lot of development that has gone on that has affected them. But 
the desert tortoise actually does have a very comprehensive 
recovery plan that lays out a series of action tasks and 
responsibilities and implementation tasks that will ensure its 
recovery and ultimately delisting, and, from what I understand, 
it has been a pretty involved process and a pretty 
collaborative process that involves academia, even, in 
assessing the biological status and biological needs of the 
species.
    Mr. Gibbons. Could you give us an update what the status is 
today with the desert tortoise? Whether it is recovering? What 
your predictions are as far as having it recovered?
    Ms. Clark. I would be glad to get back to you for the 
record. I don't have the specific information.
    Mr. Gibbons. Let me go off on another area. I noticed from 
these special funds, which--of course, the desert tortoise has 
a Desert Tortoise Public Lands Conservation Fund, which we have 
just talked about--which has over $30 million in it. That is 
for one endangered species in Nevada, and yet I see Hawaii on 
the list here with 298 endangered species with no section 10 
permit requirements, no habitat conservation plans. Can you 
tell me how many special funds there are in Hawaii for these 
298 endangered species at the present time?
    Ms. Clark. I don't know if there are any special funds, but 
I can tell you a little bit about the difference between Hawaii 
and Nevada.
    Mr. Gibbons. Well, I think everybody in this room can tell 
you the difference between Hawaii and Nevada, but I think it is 
the species we are after. Why the difference between Hawaii, 
which has 298 endangered species, doesn't have any section 10 
permits, doesn't have any habitat conservation plans, and why 
aren't there special funds for these?
    Ms. Clark. What I was referring to, Congressman, I was 
trying to get at, was the difference between the State laws, 
and the State of Hawaii, until very recently, had a State 
endangered species law that prohibited the take of species, 
which was actually much more stringent than the Federal ESA, 
which allowed for permits to take species. So, the State law 
often trumped the Federal law in protective capabilities and 
protective oversight of the Hawaii listed species. Unlike 
Nevada, which tracks much more closely to the Federal law that 
allows for mitigation, allows for incidental take of listed 
species. It was very recently that Hawaii relaxed, if you will, 
or clarified their law to allow for incidental take, and in 
fact we are engaged with the State and private landowners in 
habitat conservation planning and consultations to permit the 
take of listed species.
    Mr. Gibbons. So, in the future, we will see the same 
habitat conservation plans enacted in Hawaii, the same special 
funds for species recovery?
    Ms. Clark. You very well may see--and I would expect you 
would--habitat conservation plans developed for species in 
Hawaii in accordance with State and Federal laws.
    Mr. Gibbons. The same type of mitigation requirements in a 
3 or 10 to 1 offset?
    Ms. Clark. Again, it would be species-specific and project-
specific, so I can't dictate or project the--predict the 
outcome of these negotiations, but it would be done according 
to the species and individual needs of the project.
    Mr. Gibbons. One final question, Mr. Chairman, to parallel 
your first question that you asked Ms. Clark, did you initiate, 
request, or direct yourself or anyone on your staff to question 
the panelists on what their testimonies would be?
    Ms. Clark. No, sir; I did not.
    Mr. Gibbons. Thank you. Thank you, Mr. Chairman.
    Mr. Pombo. Mrs. Chenoweth.
    Mrs. Chenoweth. Thank you, Mr. Chairman. Director Clark, I 
wanted to ask you, does your agency or, Ms. Dalton, does your 
agency issue incidental take permits to people who are fishing 
in the ocean for the salmon--commercial fishermen?
    Ms. Dalton. Basically, the way that we have dealt with 
ocean fishing is through a fishery management plan. For 
example, we just had a fishery that was opened up for hatchery-
raised Coho Salmon, and what they will do is manage it, in 
part, under an incidental take statement pursuant to a 
Biological Opinion rather than a section 10.
    Mrs. Chenoweth. Under this plan, is there mitigation 
required for replacement of the take, like 5 to 1, like we have 
heard testimony?
    Ms. Dalton. Well, the fishery, itself, is directed entirely 
on hatchery-raised and released fish, so there is no mitigation 
required. Fishers are required to release any non-fin-clipped 
salmon that they catch, and those are generally released alive.
    Mrs. Chenoweth. Director Clark, what is being done about 
the problems with the terns at the mouth of the Columbia that 
are taking thousands and thousands of salmon through predation?
    Ms. Clark. Our folks are working, along with National 
Marine Fisheries Service and others, I believe the Corps of 
Engineers, to look to phase the terns off of the island and to 
try to move this colonial nesting colony to other islands. So, 
we are actively engaging with the other Federal agencies in the 
State to try to move the terns. It is only part of the 
solution, for sure, but we have not stood in the way of either 
National Marine Fisheries Service or the Corps in trying to 
phase these birds over into some other historic nesting 
habitat.
    Mrs. Chenoweth. There is something wrong with this picture. 
We just heard Commissioner Schulz testify that because of the 
listing of three anadromous fish they can't turn their water 
out to their ditches, and their farmers are not able to 
irrigate, and yet we have massive taking in the oceans through 
commercial fishing; we have massive taking through predation, 
and both Services are imposing unbelievable restrictions on 
Okanogan County, and, frankly, I strongly suggest that there is 
no jurisdiction for the agencies to do this.
    Mr. Schulz, I think your testimony was utterly shocking. In 
light of a recent Supreme Court decision, Bennett v. Plenner, 
the court ruled unanimously that humans are within the zone of 
interest to plead for their damages, and in your testimony, you 
have set forth four terms that you would like for us to 
cooperate with you on. One of the terms is, you would like some 
financial support, and I can understand why; your county is 
drying up. Your mining has gone down; your timbering has gone 
down, and now they are going after your farmers, and your 
farmers aren't able to get their water. And you come to the 
Congress and request that Federal funding be made available 
through the Federal Columbia River Mitigation Program, hoping 
that a few crumbs will trickle down to Okanogan County.
    Well, Commissioner, I want to suggest that what the 
Services are doing is taking the property, and you ought to be 
in this Congress demanding with your property owners--who, 
without that kind of production on their property, your tax 
base shrinks--you ought to be demanding from this body the full 
restitution for the take. Now, the President has been sent 
numerous times, most recently with the new world mines where 
the taxpayer ponied up $66 million for the taking of a mine.
    I suggest to Mr. Schulz, I am just furious that by 
mitigation when the agencies say, ``We don't want to do away 
with the hope of cooperative agreements,'' they get the county 
to sit down and mitigate an HCP plan on waterbanking, and the 
county becomes involved in an agreement where they accept 
liability. The State, your watermasters in Idaho--I mean, in 
Washington, also, work directly for the State, not for the 
county, and so the county has become involved in an agreement 
and accepting liability for something the Federal Government is 
imposing, and the recent Supreme Court decision, such as 
Bennett v. Plenner, such as Page v. U.S.--Bennett v. Plenner 
was a Supreme Court decision; Page was a court of claims or a 
claims court decision. It is instructive out there; they have 
no jurisdiction in your ditches, and I would just encourage the 
county--excuse me, Mr. Chairman; I would like just one more 
minute--I would--one more minute? I would encourage the county 
to protect your property rights, protect your water, because 
the way things are going, the county is being set up for a 
liability that you shouldn't have to assume. The Feds have to 
be asked for permission to sue, but you don't.
    So, I just think that you need to take another legal look 
at what is happening out there in Okanogan County with the 
whole line of Supreme Court cases and water cases are on your 
side, and I would encourage your ditchmasters and watermasters 
to open those head gates and let that water flow, and if the 
Federal Government doesn't like it, they can try to stand on 
your line of cases that have stood with the irrigators in the 
States. Your testimony was startling, and I wish you luck, sir.
    Mr. Schulz. May I briefly comment?
    Mr. Pombo. Yes.
    Mr. Schulz. I have been involved in the planning department 
for 17 years and 7 years now as a commissioner. So, 25 years, 
we have worked very hard in Okanogan County to protect the 
environment. We are very concerned about the environment. On 
the PDs, that is the plan year development--we have very tough 
zoning laws--we allowed a development, a very small one of 
eight units to go in, and that individual put 97 percent of his 
land in open space for our key and critical and all our 
different species. He gave up 80 percent of his water right for 
in-stream flow, and I was told last week that is not enough. 
They will shut him down completely, because there is not enough 
water in his in-stream flow.
    Mr. Pombo. I have got to interject. Who said it is not 
enough?
    Mr. Schulz. The National Marine Fisheries Service.
    Mr. Pombo. But they don't require mitigation, so----
    Mr. Schulz. They are working on that now.
    Mr. Pombo. Mr. Tauzin?
    Mr. Tauzin. Thank you, Mr. Chairman. Let me, first, make a 
couple points, and then I will get some responses. We are 
seeing several trends associated with mitigation, which is one 
of the reasons we are so concerned about the way it may be 
inappropriately used in the ESA cases. One of the trends, of 
course, is good on the one hand, it is the development of 
mitigation banks, such as has been described to us in North 
Carolina. Other States are developing mitigation banks. 
Landowners are putting their lands in mitigation banks, in some 
cases, and making a killing, however, because the ratio of 
mitigation keeps going up--1 to 1, 2 to 1, 5 to 1, 10 to 1. We 
have a case in Louisiana where there is now a 2,200 percent 
increase in the rate of valuation of mitigation required in 
wetlands cases--2,200 percent increase in a couple years. Some 
landowners who are lucky enough to be in that mitigation bank 
are making a killing.
    The problem is, is that it has to do with two things. 
Number one, there is no apparent legal definition of what the 
ratios ought to be, so that somebody ends up having 
discretionary power to decide whether it is going to be a 2 to 
1, 5 to 1, 10 to 1, or 2,200 to 1 ratio in mitigation, because 
Congress has never defined what is appropriate in terms of a 
formula to decide what is proper mitigation. Somebody out there 
has the power of King John or King Richard who walk around the 
land deciding, on an individual case, who is going to 
contribute how much to the general fund depending upon their 
particular view of the situation out there. How many chickens, 
how many eggs, how many cows have to be slaughtered to satisfy 
the King today? And there is no law governing, no protection 
for the citizen, but there is a limit on that individual. The 
problem with the mitigation banks, which have been generally 
regarded as good features on the landscape, is that very 
wealthy applicants keep raising the bar for everybody else. On 
the one hand, they enjoy the relative bargaining power, because 
they may have some ability to bargain better with the agency on 
what is going to be required of them in a mitigation 
circumstance. On the other hand, because they have such good 
resources at their disposal, they are building a big 
development project or it is an oil company that is going to 
spend a ton of money to develop a property for mineral value or 
a coalminer or whatever it is, a mineral mining company, that 
they raise the bar. They agree to these large percentage 
mitigation requirements, and all of sudden that becomes the 
standard for every small landowner who doesn't have that kind 
of bargaining power--the farmer down the street; the family 
that wants to build on a one half acre plot of ground, build a 
home for their kids. The bar gets established and all of a 
sudden they all have to meet it, because that is what is 
required. You have got to contribute to the mitigation bank, 
and if there is a 2,200 percent increase this year, so be it, 
even though Congress never enacted a tax to that degree for the 
purposes of conducting whatever protection we want to conduct 
in this country.
    And individuals working for your agencies end up making 
those decisions. We hear from the testimony and from the 
evidence presented to this Committee, that biologists are going 
around requiring mitigation under section 7 when the agency 
says it is most inappropriate to do so. I guess, we have sort 
of turned the Fifth Amendment on its head. The Fifth Amendment 
says you are going to be compensated when the government takes 
your property. That is now been turned on its head, and the 
government, through a biologist, can tell you how much you have 
got to pay to use your property, and they can determine how 
much that is going to be on a given day. And the rich in our 
society are setting the bar for the poor. This is becoming a 
real ugly mess, and it is not creating a world where landowners 
are cooperative agents in preserving species. They are becoming 
enemies, and we ought to be working together for a common 
cause. We have got to do better.
    Let me ask this--I just want to get one answer from each 
one of you, Ms. Dalton and Director Clark. If you catch your 
biologist requiring mitigation when you testify it is 
inappropriate, what is your responsibility? What are you 
supposed to do in those circumstances? Either one of you.
    Ms. Clark. Let me try and clarify your question. If----
    Mr. Tauzin. If you are presented with a case where your 
biologists out there are requiring or pressuring or leveraging 
the power of the government to insist on mitigation, either on- 
or off-site, when you have testified and your agency policy 
says that it is inappropriate to do so, what is your obligation 
under those circumstances, each one of you?
    Ms. Clark. Well, certainly, my obligation--if I believe 
that the mitigation or minimization doesn't match the project 
design, my obligation, as Director, is to correct it, and----
    Mr. Tauzin. How about where it is not required at all, and 
it is being required, what is your obligation?
    Ms. Clark. Well, I think it falls under the same category. 
If in fact I have not seen--in the earlier part of the 
discussion in this hearing, we talked about the confusion over 
the term ``mitigation'' and the fact that mitigation is tied to 
the specific projects and the specific species, but, certainly, 
if indeed anybody in the agency, including myself, has made a 
call that could have been different, could have been better, 
then I think we are obligated to correct the call and to fix 
the decision.
    Mr. Tauzin. Which means to undo the requirement of 
mitigation?
    Ms. Clark. If that is the issue. I have not seen----
    Mr. Tauzin. Ms. Dalton, is that your responsibility too?
    Ms. Dalton. As an agency we probably have had less 
experience with this. Most of it has been in the area of 
endangered salmon. My understanding is that we do have a fairly 
standard practice when there is riparian habitat that is 
eliminated or lost in the course of an activity. We have a 3 to 
1 replanting requirement.
    Mr. Tauzin. Who decided that it was 3 to 1?
    Ms. Dalton. From the biological standpoint, what we 
estimate is that if they replant the area in a 3 to 1 ratio, 
the net productivity that they get out of the final product----
    Mr. Tauzin. Could you change it to four tomorrow if you 
wanted to? If you decide--your biologists tell you to move it 
to 4 or 5 or 10 next week, if they wanted to?
    Ms. Dalton. It would be incumbent on us, I think, to use 
the best biological information we have available.
    Mr. Tauzin. But you could do it, couldn't you?
    Ms. Dalton. Sure.
    Mr. Tauzin. Yes. Thank you, Mr. Chairman.
    Mr. Pombo. Yes, we are going to do a second round.
    Mr. Workman and Mr. Weygandt, both--you both talked about 
accumulated impacts with this service area or whatever. How do 
you mitigate for accumulated impacts? So, let us say, 
activities over the past 30 years, if you have a new 
development or new activity coming in to your city or county 
and Fish and Wildlife says that you have mitigate for 
activities over the past 30 years, how do you pay for that? 
Where does the money come from?
    Mr. Workman. Well, one of my areas of expertise is 
governmental finance, and I always use the term ``it is a 
mandated cost,'' either from the State of California or from 
the Federal Government, and I don't have a way to pay for that, 
particularly for it being a public use in the Prado Basin that 
we are talking about. There is a long-term lease from the 
Federal Government, so I can't go back and charge anybody for 
the types of things that are going on there.
    Mr. Pombo. In a current law, you can't charge a developer 
for accumulated impacts. You can charge him for his impacts.
    Mr. Workman. I imagine I can charge him for his impacts, 
but, again, in the city of Corona's case, I would be charging 
myself and charging the citizens of Corona----
    Mr. Pombo. So, there would have to be a general obligation 
bond for the city of Corona.
    Mr. Workman. Obligation bond or raise the property tax or 
divert money from other areas that are very important to the 
city.
    Mr. Pombo. Mr. Weygandt?
    Mr. Weygandt. Pretty similar answer. One of the benefits I 
think that we have at our disposal in Placer County is that as 
we start this NCCP process or HCP process or whatever it ends 
up being, if that ends up being a constructive effort on our 
part, we feel that we are a good 20 years before being in a 
crisis situation, so the cumulative impacts, especially as it 
relates to endangered species, are something that we some 
management flexibility in. But, again, in the context of 
economics, obviously there is a cost of those mitigations. From 
the private sector it, in our county, is born by the developer, 
which essentially passes it on to the consumer.
    Mr. Pombo. But you can't charge the developer for anything 
more than his developments impact.
    Mr. Weygandt. That is correct. There is the nexus rule, so 
there has to be a strict correlation between that project's 
impact and what is extracted from them with regards to traffic 
or whatever else there is. But, if, for example, in their 
negotiations with other agencies, those mitigations are 
different, then obviously that cost is borne by them and the 
result is on the consumer. If it is a public works project, the 
cost is borne by the residents who live there in the same way.
    And as it relates to ratios, one of the--as this 
technology, if you will, develops, we, again, have a mitigation 
bank in our county, and I am a proponent of that notion. Our 
bank, because it has been effective, has the ability to sell 
credits down to--I am sure it is at least one-tenth of an acre; 
it could be one-hundredth of an acre, I am not certain. So, 
getting pretty good at that science and the question of ratios 
and the resulting costs are, again, another area that certainly 
could be reviewed and visited upon as it relates, again, to the 
economics or the context of all of this.
    Mr. Pombo. And you entered into this habitat conservation 
plan, countywide habitat conservation plan, in an effort to 
satisfy Fish and Wildlife?
    Mr. Weygandt. We had multiple incentives for doing it. The 
county, again, in its general plan has a ``no net loss'' 
policy, and there is a lot of policy articulation with regards 
to protection of habitat and specifically endangered species, 
so part of what I am saying is that we have incentives that are 
local that reflect those goals. The NCCP component of Legacy 
which, again, is only a component of it, is desired for a 
couple of reasons. One is, we want to maximize local control 
over that process, so if we can negotiate an agreement with the 
Service and the Army Corps of Engineers and essentially be the 
permit-issuing entity at the local level, especially as it 
relates to economic development programs, for example, when a 
company, like HP, looks in our area--and we are fortunate to 
have some very quality manufacturers in South Placer--they need 
a very quick timeframe by which to typically make their 
decisions to do a site location. So, if we can even streamline 
that process at the county, there is huge benefit to it.
    Mr. Pombo. Now, let me ask you this question: after you 
have this set up and in your effort to satisfy the Federal 
agencies, in your effort to meet your own general plan 
objectives, if there is a new endangered species that is listed 
and Fish and Wildlife revokes your ability to mitigate your 
impact by using this and you have to go back to the drawing 
table, you have to go back to the negotiating table with Fish 
and Wildlife, what kind of position does that put you in for 
the future?
    Mr. Weygandt. It could potentially be devastating, so we 
will be going through those processes. Again, the cost is 
tremendous.
    Mr. Pombo. You would be starting all over again.
    Mr. Weygandt. We would be, and we are going forward under 
the notion that--the theory of ``a deal is a deal'' is going to 
be honored by both sides as we complete those negotiations. 
And, again, that is also a policy issue, but we are working 
hard to have our policies based on good science which not only 
considers our existing endangered species but, in total, the 
habitat and the county and potentially any likely to come 
listings but also the context of just good management for those 
resources.
    Mr. Pombo. According to a recent report, the Fish and 
Wildlife Service plans to add a new twist to ``no surprises'' 
rule that they would allow the HCPs to be revoked if they are 
found to jeopardize species.
    Mr. Weygandt. And, again, those--we will be going through 
those negotiations, but----
    Mr. Pombo. Then they are telling you a deal is not a deal.
    Mr. Weygandt. Well, and if that were true, it would be 
potentially devastating to our negotiations.
    Mr. Pombo. Mr. Miller?
    Mr. Miller. Thank you. I want to revisit--Director Clark, I 
want to make sure that we are properly interpreting your 
answer. When we talk about retroactive mitigation, your answer 
to that when asked was about reviewing the baseline, and that 
is obviously you take the habitat or the species in the 
condition in which you find them and then the question of 
whether or not a use of the property is going to cause further 
degradation of that species or habitat, then it has to be dealt 
with on that property. And, so one of the problems I find is 
that it is sort of the last person through the door pays the 
heaviest price, and I think that is why a lot of developers and 
others like the idea of an HCP, so you can spread it out across 
the landscape. In one form or another, more or less, you are 
dealing with a degradation of species and habitat because of 
prior uses of the land and decision that have been made in the 
local community. Is that a fair statement?
    Ms. Clark. That is a fair statement.
    Mr. Miller. I don't see--I guess we keep treating this as 
somehow foreign or unique, but there is a lot of landowners 
today that have 30-foot or 60-foot setbacks on their property, 
because of traffic loads that are already in the community, and 
other people on their property had 10-foot setbacks, and I 
appreciate that there is a nexus--we all like to pretend there 
is a nexus--but I think the local planning commissions and city 
councils and boards of supervisors stretch the nexus sometimes 
the way we are critical of Fish and Wildlife stretching the 
nexus.
    I know developers that have to build child care centers 
that far exceed the capacity of their subdivision. I know 
developers that have to build a school that far exceeds the 
capacity of their subdivision, and I know people who can move 
into that community in an older home with seven kids and don't 
pay anything, but they are going to send their kids to that 
school. We have made a decision that we are going to load all 
of these costs on a new development. Every city council, every 
board of supervisors does that time and again. If we are 
pretending that the only obligation to the developer is for the 
burdens of the subdivision, it just isn't so, because there is 
a lot of developments that are designed for people whose 
families are more or less grown, have very little burden on the 
school system, but they still have to meet a square foot tax on 
bedrooms or however it is to meet the obligations the 
obligations of the local communities. That would be retroactive 
mitigation; in some cases, futuristic mitigation beyond even 
that development.
    So, I am not sure that this is all so unusual as cities 
plan, as counties plan, and as Fish and Wildlife or National 
Marine Fisheries requires. Mitigation in ocean for example, you 
were asked by Mrs. Chenoweth about this. People in California 
have had their seasons shortened. They lost 10 fishing days or 
20 fishing days. The sizes move from 31 inches to 35 inches. If 
you are a party boat owner or you are a commercial fisherman, 
that is big time mitigation, and that is true--we have done 
that just as we do for recreational fishermen; For hunters, we 
limit the number of ducks; we limit the kinds ducks; we limit 
the number of days you can hunt; For fishermen, we limit the 
number days you fish, what you can take, what you can't; some 
streams, people decide are barbless or not barbless or catch 
and release or not catch and release. That is all mitigation. I 
mean, that is sort of the glue that holds this together as a 
society is that different people make a series of different 
decisions that have a cumulative impact, and if you don't do it 
right, then the people take into their own hands, like they are 
doing in the congressional district next to mine where we have 
four initiatives on the ballot that say if you want to develop 
more than 10 houses, you have got to go to the people in a 
direct initiative.
    If you think developers are unhappy with mitigation, try 
ballot initiatives. That is why I think they now want to sit 
down and talk about having an HCP in Contra Costa and Alameda 
Country, because they would rather have one HCP than have to go 
to every community on a ballot initiative. Those ballot 
initiatives are probably going to pass this fall. Now, you are 
talking about serious mitigation when you have to run a 
campaign every time you want to develop your property. So, let 
us not pretend like this is a one-way street.
    I have got 20 seconds left here. Let me just ask you a 
question. When we talk about resources, Director Clark, if HCPs 
seem sort of what county government is looking forward to doing 
for getting certainty--Mr. Tsakopoulos will testify later as a 
major developer in the Sacramento area. The HCPs make sense, 
developers in my area think so, counties, the cities. Is there 
a way or should we be thinking about putting additional 
resources available to you for the development of these HCPs, 
because you seem to be sort of doing that on one hand and then 
trying to do the individual permits on the other hand? You have 
got the plates and the sticks going pretty well here, and then 
somebody suggested we have a hearing a week, so you can put 
that plate on a stick and do it, and the we are going to send 
you some subpoenas, and you can do that.
    But on the question of HCPs, does it make sense to try to 
talk to the Appropriations Committee about putting additional 
resources so that we can get some of these landscapes done, 
because one of the things I have heard from other counties is, 
``Yes, we would love to have that, but there is really no 
benefit in the timeline to getting that or getting individual 
permits.'' There is all the benefits that are outlined in this 
book in terms of certainty, in terms of public participation, 
and all these other things that take place between individual 
permits and HCPs, but it takes so long to get to the end of the 
HCP where then you have the certainty you are looking for.
    Again, time is money in this world. Does it make any sense 
for us to look at whether or not, for these projects, whether 
that would make sense in our region so we could get these HCPs 
done? I think in your county you said you are waiting approval 
of the one in San Joaquin, and everybody is watching to see if 
that will really work.
    Ms. Clark. Well, certainly, it makes great sense to get any 
support this Committee is willing to----
    Mr. Miller. But can you segment your workforce like that?
    Ms. Clark. Pardon?
    Mr. Miller. Can you segment your workforce for people that 
would do HCPs?
    Ms. Clark. Well, we can segregate. In fact, that has 
happened to some degree in California, and, as I said earlier, 
our number one demand for Fish and Wildlife resources is either 
in the section 10 HCP or the section 7 consultation arena, and 
that--California is a much greater scale of what is happening 
nationwide. It is our number one budget request for the 
Endangered Species Program in 2000. So, any support the 
Committee would give us or National Marine Fisheries Service 
would be welcome.
    Mr. Miller. Well, that is a good question. This is all sort 
of a roll of the dice.
    Mr. Pombo. We were just talking--yes, this is a roll of the 
dice, because you are being challenged on your HCPs in court, 
and what happens if all these developers and counties all go 
into HCPs, and we put more money into developing HCPs, and you 
lose in court?
    Ms. Clark. Well, there are challenges, Mr. Chairman, on a 
number of fronts. We are very proud to stand with the 
applicants on the deals that are made for the HCPs that have 
been approved by us. We are being challenged in areas that are 
very concerning to the Fish and Wildlife Service. Certainly, 
the ``no surprises'' issue continues to be challenged, but we 
are working very hard on that issue. We are being challenged in 
areas like whether or not we are following through on the 
monitoring requirements and the effectiveness evaluations of 
the HCPs that we have already approved. We don't, quite 
frankly, have the resources to go back and evaluate whether the 
terms of these HCPs that have been approved, negotiated and 
approved, are actually being carried out. So, we have folks out 
there that are coming to us or filing suit suggesting that the 
deals that we made or the deals that we entered into in fact 
aren't being evaluated, and we are getting challenged for not 
enforcing the Endangered Species Act, so to speak. But, 
clearly, the deals that we have made, if followed and 
implemented according to the terms of the agreement, are ones 
that we feel very confident can withstand any challenge.
    So, where we are being challenged is not necessarily, 
though, in some cases, are on the substance, and we are happy--
I am happy to put any of our biologists on the stand to debate 
what they ultimately negotiated and whether or not they believe 
it is appropriate for the species, because I know them well 
enough to know they wouldn't enter into a deal they didn't 
believe in.
    Mr. Pombo. But the bottom line is you are being challenged 
on the very ability of Fish and Wildlife Service to enter into 
HCPs.
    Ms. Clark. No, we are being----
    Mr. Pombo. Because those HCPs, in order for them to work, 
have to include the ``no surprises,'' have to include the other 
things you are being challenged on, and if those provisions are 
thrown out, then the HCP crumbles.
    Ms. Clark. Well, you are right, but the ``no surprises'' 
policy, regulation, is under challenge. Our folks feel very 
confident that we are going to withstand that challenge, and we 
have a lot of folks working hard at that and solicitors and the 
Justice Department.
    Mr. Tauzin. Will the gentleman yield?
    Mr. Pombo. Yes.
    Mr. Tauzin. Is part of the defense of the ``no surprise'' 
policy that you can surprise the landowners, nevertheless? 
Aren't you proposing a change in the rules that would say that 
the biologist who enters the HCP can later on determine that 
because of so-called unforeseen circumstances the ``no 
surprise'' is avoided? I mean, that is the argument you made in 
court. I am reading from an article in the Endangered Species/
Wetland Report: ``The Fish and Wildlife Service plans to add a 
new twist to `no surprises' rule, which would allow''--the 
argument in court is that under very narrow circumstances, they 
would in fact revoke the incidental take permits despite the 
``no surprises'' agreement.
    Ms. Clark. I don't know what you are specifically referring 
to, Congressman, but I believe what this issue is all about 
what we have been asked on a number of occasions: Is a deal a 
deal? And in the event unforeseen circumstances come up and the 
species is in jeopardy, what would we do? Would we stand by the 
terms of the deal and allow the species to go extinct or would 
we step in and address the permit? Both Secretaries have said 
on numerous occasions, as have we, in negotiating these deals 
that we believe there are adequate Federal authorities to step 
in before a species would reach jeopardy, but it is----
    Mr. Calvert. Would the gentleman yield?
    Mr. Tauzin. The Chair has the time. If I could just 
finish--would the gentleman yield further, just quickly?
    The story goes on to indicate that the Assistant Secretary 
of Fish and Wildlife and Parks, Don Barry, he signed a final 
rule on this matter on March 22; expected in the Office of 
Management and Budget and cleared for publication. So, there is 
a new rule coming out saying that the ``no surprises'' 
agreements can be voided at the discretion of the biologist?
    Ms. Clark. There is a rule jointly between our agencies 
that clarifies the jeopardy issue. This isn't new; it never has 
been new, and the issue of jeopardy to a species has always 
been inherent in all the negotiations. What Assistant Secretary 
Don Barry has also testified to, we had to clarify what 
jeopardy means for the regulation, but we also feel very 
confident that there are enough incentives; there are enough 
other authorities, and there are enough other opportunities to 
address the species' needs that would continue to decline 
through no fault of the implementation terms of an HCP, such 
that jeopardy would not be arrived at. It has never happened 
yet, and we intend for it not to happen through our 
negotiations.
    Mr. Pombo. Mr. Calvert.
    Mr. Calvert. Thank you, Mr. Chairman. Isn't it true that 
San Diego County has an HCP?
    Ms. Clark. Yes, it is.
    Mr. Calvert. What happened recently with the Quino Checker 
Spot Butterfly? Would you say that that is a violation of the 
``no surprise'' letter? Since the Quino Checker Spot Butterfly 
was added--since it was not on the list of species, supposedly; 
it was entered into under the original HCP. Somebody mistakenly 
had forgotten that particular species. Haven't you, in effect, 
obliterated the HCP process in San Diego County?
    Ms. Clark. No, Congressman, we haven't. The ``no 
surprise''----
    Mr. Calvert. What would you call it to the landowners in 
San Diego who are unable to develop their property; who went in 
good faith to put together an HCP; who are now, in effect, 
being held in jeopardy, whether you want to call it that or 
not, because they can't get permits to develop their property?
    Ms. Clark. ``No surprises'' is a policy and is a part of 
the deal that is made under the terms of an HCP, but the ``no 
surprises,'' ``a deal is a deal'' is extended to those species 
that are covered by the deal. The Quino Checker Spot was not 
covered by the deal.
    Mr. Calvert. Well, if you mistakenly--there is, as you 
know, the process of putting together this list, and nobody, I 
guess, foresaw the Quino Checker Spot Butterfly. I understand 
in Orange County--the gentleman from Louisiana pointed out--
where wealthy people can tend to make deals, there are two or 
three landowners that own most of Orange County, were able to 
enter into an HCP by concentrating density of development in 
certain areas and putting up the rest of the property as open 
space. They are frantically looking through their list right 
now wanting to amend their HCP process because certain 
environmental groups are coming on saying that the HCP is not 
enforceable, because there is going to be species added to--
that are endangered that are not on that list, and isn't it a 
fact that you can then, if they are added to the list, that you 
can stop development within those areas even though they have 
an HCP?
    Ms. Clark. Species that are not covered by the terms of an 
HCP that we or the applicant haven't anticipated are not 
covered by the ``no surprises'' regulation, but----
    Mr. Calvert. Okay, and, furthermore, in the Agua Mansa 
industrial area in Mira Loma where the developer was required 
by the lender to go out and get a clearance letter from Fish 
and Wildlife who picked the biologist and showed the property 
clear of endangered species. And then went ahead and put $60 
million worth of infrastructure, and then down the road Fish 
and Wildlife finds the Flower-Loving Delhi Sand fly and stops 
development in the Agua Mansa industrial area. Wouldn't you say 
that that is a violation of the ``no surprise'' letter?
    Ms. Clark. I don't know the specifics of that case. I would 
have to look at it.
    Mr. Calvert. I just wanted to point out to the chairman and 
to the Committee that there are some problems with the HCP 
process that we are going to have work out, because at 
Riverside County, we are--as you know, we are trying to put 
together an HCP, and we are trying to work with the landowners, 
the developers in good faith, but at the end of the process, we 
must know that we have an agreement; that we are not going to 
be back here in three months or six months or two years and 
revisit this issue in an area such as southern California where 
we are always going to have conflicts.
    Thank you, Mr. Chairman.
    Mr. Pombo. If the gentleman would yield for just a second, 
this is the problem with the agency doing something and 
Congress never authorizing it, because it is a habitat 
conservation plan, not a species conservation plan, but it is 
being adopted as a habitat conservation plan but being 
implemented as a species conservation plan, and Congress has 
never laid out the ground rules that they are supposed to play 
by, and this is why when we try to look at reauthorizing the 
Endangered Species Act that these issues need to be addressed, 
because these guys are going to lose their habitat conservation 
plans before this is over with.
    Mr. Tauzin. I just want to make a point. I know the 
gentleman from California earlier made the point that somehow 
mitigation is all around us, and it is natural in the order of 
things. The courts have said otherwise, Mr. Chairman. The 
courts have said very clearly that where agreements are 
designed for the good of all the parties who are subject to the 
agreement, that no taking under the Fifth Amendment occur, such 
as zoning agreement, building codes, standards that are 
developed, laws in which we agree to operate under in a 
community that benefit all those in a community. They said very 
clearly many decisions that where something is done by 
government for the general good of the population, such as 
species preservation but a very few people in our society end 
up bearing the burdens for carrying out that policy, that a 
taking can and often does occur for which compensation should 
be provided.
    The city of Tigard is a good example of that. It was a case 
where in fact a property owner, a business, was being told by 
the government, ``You have to give up some of your property for 
a green space and we are not going to pay you for it. 
Otherwise, we are not going to give you a building permit.'' 
And the Supreme Court said ``You can't do that.'' They 
basically said under that case that government can extort from 
individuals money and obligations that the Constitution says 
the government take from them in order to do something for the 
general good.
    I was just thinking about the way this mitigation stuff is 
working. It is literally like the government, through a 
biologist, going to a single landowner and saying, ``The job 
you are doing is not as clean as the job somebody else is 
doing. We like accountants; they do clean work. We don't like 
plumbers; they do dirty work. So, we are deciding that plumbers 
are going to have to pay an 80 percent income tax, and 
accountants will only pay a 20 percent income tax.'' We 
couldn't do that constitutionally, but that happens in 
mitigation. Biologists decide that somebody in our society is 
going to have to put up an 80 percent tax, a 2,200 percent tax 
in Louisiana, and somebody else, on the other hand, is only 
going to have to put a 10 percent tax, a 20 percent tax, or no 
tax at all.
    I know my friend from California likes to make that broad 
analogy about all of us in government agreeing to mitigate our 
activities, mitigate our obligations or our responsibilities to 
one another. That is generally true, but the courts have 
clearly said that when it comes to exacting from landowners 
obligations for the general good, that takings occur for which 
compensation should be provided. There are limits to this 
stuff, and the problem we have got is that because we haven't 
spoken on what the limits of an HCP are, what the limits of 
mitigation ought to be, and what the ratios ought to be--we 
haven't spoken; we have left it up to bureaucrats to make those 
decisions and to tax people at different levels and at their 
own discretion and that should not pertain in our society, and 
that is probably why, Mr. Chairman, we, at some point, are 
going to have try to legislate as to what is a proper 
mitigation? What is a proper taking? What is a proper 
obligation of some of us in this society for the good of all of 
us in species preservation? And until we do that, we are going 
to continue to have great problems with agencies that do this 
on their own and do it so subjectively
    And, Mr. Miller, let me make one other point about his 
comment: It is true that government often extorts from 
individual obligations, and individuals yield to that 
extortion, because they want a permit so badly. Mrs. Dolan, her 
husband could have yielded. Instead, he filed a suit that went 
to the Supreme Court. He died in the process of that suit. His 
wife carried it on. She could have given up any step of the 
way; most people do. Most people say, ``Here, take that 
property. I am not going to the Supreme Court to defend my 
rights.'' But she fought it all the way, and she established 
something for the rest of us.
    So, there are limits to this stuff. Yes, we want to 
preserve species; that is for the good of all of us, but you 
simply can't keep asking a few individuals in America to bear 
all that cost at the discretion of a biologist. That is 
inappropriate, and it is our fault if we don't settle this 
somewhere. If we leave it to bureaucrats to make those 
decisions on a case-by-case basis, and if we can't, in this 
Congress, define what an HCP is and give it the authority of 
law, you betcha, it is going to constantly come under attack; 
you betcha, it is going to be invalidated, because, in the 
future, some biologist will say, ``Oops, we made a mistake; it 
doesn't count anymore.'' Surprise, surprise. Mr. Chairman, it 
is our fault if we don't clear this mess up, and we ought to 
try.
    Thank you, Mr. Chairman.
    Mr. Pombo. Mr. Doolittle.
    Mr. Doolittle. Director Clark, I want to get back to 
something Mr. Workman was talking about with the trees. What is 
your reaction to the idea that if one tree needs to be cut 
down, why can't we just replant another tree, and that would be 
the end of it? How do you react to that idea, instead of having 
apparently three acres of mitigation occur as a result of that 
one tree being cut down?
    Ms. Clark. Certainly, Congressman, given the facts of the 
case, which is--what you just said is all I know, it makes 
sense on its face, but I don't know the specific facts of the 
case, and I would hesitate to try to engage without knowing the 
species involved and the specifics of the term, but I am happy 
to look into it.
    Mr. Calvert. Would the gentleman yield for a moment?
    Mr. Doolittle. Yes, I will yield.
    Mr. Calvert. You know, at some point, sometimes you make 
this easy on us as critics. Don't you think at some point there 
is some common sense--in the issue that the city manager 
brought up, this is in front of a runway--airplanes take off--
don't you think it is common sense that those trees have to be 
cut off a clearance zone at the end of the runway, which has 
always been there, and then all of sudden someone changes their 
mind and says, ``Look, we have to mitigate for keeping an area 
clear of trees and obstructions for the safety of the pilots?'' 
Don't you think that is just common sense?
    Ms. Clark. I absolutely do think it is common sense----
    Mr. Calvert. Thank you.
    Ms. Clark. [continuing] to get obstructions out of the way, 
but I can't dictate the terms not knowing the specifics of the 
case, but, certainly, I imagine it is a safety issue.
    Mr. Pombo. But they don't require mitigations, so it is 
voluntary.
    Mr. Doolittle. Well, let me--I have to raise two or three 
issues with you, Director, and, frankly, I am encouraged to 
hear your willingness to meet, and I am going to ask, if I may, 
that you and I meet specifically on the situation I am about to 
bring up, but I would like to briefly describe it to you, so I 
can understand a little bit more about it.
    I have a very fast growing district in the foothills, and 
one of these counties, El Dorado County, has a severe problem. 
Seven years ago, legislation was passed through here allowing 
several jurisdictions--and this being one of them--to take more 
water out of Folsom Reservoir. I guess, under the NEPA process 
it is required that different affected Federal agencies be able 
to sign off on that.
    Now, it so happens, this county, they discovered five rare 
and endangered plants that only grow in a certain type of soil, 
and that happens to be in this county. The water that we seek 
to take really has nothing to do with the plants at all, but it 
has been the non-jeopardy opinion to be issued has been held 
up, and the strong suggestion has been given that they are not 
going to get the non-jeopardy opinion until they set aside 
thousands of acres of plant preserve.
    Now, they have put together a $12 million preservation plan 
for the plants, but now Fish and Wildlife has issued a draft 
recovery plan for the species, and it is projected to--in order 
to meet the requirements of that plan, it is going to cost up 
to $50 million. This is really a semi-rural developing county. 
We would just literally bankrupt the county to do that.
    I just don't understand why should two unrelated issues--it 
doesn't seem right to me, and I don't think the law should 
allow for the Fish and Wildlife Service to hold up giving their 
sign-off so that the Bureau of Reclamation can execute a 
contract with El Dorado County for the water, because they are 
trying to make something else happen that has no relationship. 
Have I given you enough of the flavor of this that you could 
respond in any way?
    Ms. Clark. You have given me enough of the flavor to know I 
need to meet with you.
    [Laughter.]
    Mr. Doolittle. Okay.
    Ms. Clark. And I would be glad to do that. I would like to 
go back and talk with the California folks and get some of the 
specifics and then answer you in a----
    Mr. Doolittle. All right. Well, I would welcome that 
opportunity, and we will get in touch with your office.
    Let me just ask you this: If you could explain to me, the 
Service's current policy in evaluating the economic impacts of 
its decisions, do you believe that that policy is being carried 
out uniformly?
    Ms. Clark. Evaluating the economic effects of its 
decisions.
    Mr. Doolittle. Yes. Well, of its decisions on the affected 
area.
    Ms. Clark. Let me answer your question in a general way, 
because I am not sure I get the specifics.
    Mr. Doolittle. Sure.
    Ms. Clark. It depends on where in the Endangered Species 
Act you are talking. We do not factor in economics when we are 
determining whether or not to list a species. That is a 
biological decision.
    Mr. Doolittle. Yes, I do understand that.
    Ms. Clark. By policy, when developing recovery plans, we 
look at multiple ways to achieve the recovery and ultimate 
delisting of the species, and, by policy, we work to minimize, 
along with stakeholders and partners, minimize the social and 
economic impacts associated with species recovery. So, 
certainly, in developing recovery plans and implementing 
recovery tasks, we look for ways to minimize the effects on 
constituents and local communities----
    Mr. Doolittle. I guess I am----
    Ms. Clark. [continuing] while achieving the biological 
goals of recovery.
    Mr. Doolittle. All right. Are there specific criteria that 
exist under this? I guess, it is just a policy that you have, 
right?
    Ms. Clark. Yes, sir.
    Mr. Doolittle. Do they exist in writing?
    Ms. Clark. Yes. There is a policy that was drafted in 1994 
that talks about minimizing social and economic impacts of 
recovery planning and implementation. I will be glad to share 
that with you.
    Mr. Doolittle. Did you believe this in your mind that that 
policy is being carried out uniformly by Fish and Wildlife 
throughout the country?
    Ms. Clark. I believe there is a misconception of what is 
usually contained in recovery plans. In recovery plans, we 
often have a series of recovery tasks and menus of recovery 
tasks of implementation strategies that, if followed in some 
form, will ultimately result in recovery. People often mistake 
it as a all-inclusive, everything adds up, and everything needs 
to be incorporated, which is how a lot of times we get these 
huge price tags. But I do believe across the board that our 
folks are working very hard to minimize the effects of 
achieving species conservation, which is their responsibility, 
and effects on the economy.
    Mr. Doolittle. Well, let me just say, I do thank you for 
appearing before the Committee today. I am going to thank all 
the members of the panel.
    Director, the interaction between your Sacramento field 
office and my constituents is very important to me, and I just 
want to say that I, along with Senator Feinstein and others, 
are going to be looking very closely at what goes on with the 
expectation that we can get a fair and reasonable and 
expeditious resolution to these difficult issues that seem to 
exist to a greater degree in our region and Mr. Calvert's than 
in many others, and I am encouraged by the comments I have 
heard from you today, and I will look forward to meeting with 
you personally.
    Ms. Clark. Thank you.
    Mr. Doolittle. Thank you.
    Mr. Pombo. If there are no further questions--Ms. 
Chenoweth, did you have further questions?
    Mrs. Chenoweth. No.
    Mr. Pombo. If there are no further questions, I will 
dismiss this panel. Thank all of you for--thank you for your 
testimony. There will probably be further questions that will 
be submitted to you in writing. If you could answer those in 
writing for the Committee. Ms. Clark, I understand that there 
are people from your agency who have agreed to stay throughout 
the hearing in case there are further questions?
    Ms. Clark. Yes, Mr. Chairman. Mike Spear, our Operations 
Manager for California-Nevada is here. He is the ranking 
official here and will back me up as I have to leave for 
another appointment.
    Mr. Pombo. All right. Thank you very much, and I will 
excuse this panel.
    I would like to call up the second panel--Mr. Angelo 
Tsakopoulos, Mr. Edward Weinberg, Mr. Dwight Worden, Mr. James 
Johnston, and Mr. Michael Bean.
    Thank you. If I could have this panel stand and take the 
oath for just a minute. Raise your right hand.
    [Witnesses sworn.]
    Let the record show they all answered in the affirmative.
    Thank you very much, and I appreciate your patience. Mr. 
Tsakopoulos, we will begin with you.

      STATEMENT OF ANGELO K. TSAKOPOULOS, AKT DEVELOPMENT 
              CORPORATION, SACRAMENTO, CALIFORNIA

    Mr. Tsakopoulos. Thank you, Mr. Chairman, and good 
afternoon, members of the Committee. My name is Angelo 
Tsakopoulos. I am a farmer, builder, and developer of 
masterplan communities in California's beautiful Central Valley 
in the Sacramento area. Over the last three decades, our 
company has helped to develop projects that are now home or 
will soon be home to over 100,000 people and 20 million square 
feet of businesses.
    Throughout these years, our team has worked in close 
coordination with the communities where we live and develop 
land. Our projects take many years to plan and to complete. 
They involve public-private partnerships with the cities, the 
counties, original officials, close coordination with community 
and neighborhood groups, and the identification of and 
mitigation for possible impacts to the environment as required 
by the California Environmental Quality Act.
    But with the extending role of the U.S. Fish and Wildlife 
Service and the U.S. Army Corps of Engineers, the development 
process has become unnecessarily difficult. I would like to 
summarize one example. In 1993, we obtained a permit from the 
Army Corps for the fill of 2.8 acres of vernal pools for now a 
520-acre Stoneridge project, which is located in the city of 
Roseville.
    On April of 1998, after a 10-year planning process and 60 
public hearings, Stoneridge was approved, but, by this time, 
the Corps permit had expired, and we were forced to reapply to 
fill the wetland. When the Service issued their biological 
opinion, they stated that there may be fairy shrimp living in 
that 2.8 acres, and this potential shrimp may have evolved 
differently from those living nearby, because the soil was 
different. As a result, we could not mitigate but would have to 
create a preserve in the center of the project. I should note, 
we already had a 117-acre preserve on-site which was mandated 
by the city of Roseville, which included other wetlands but not 
these wetlands, not these 2.8 acres. This new preserve would 
have to take the site of key infrastructure improvements and 
the elementary school. The estimate cost for this mitigation 
measure was approximately $14 million; that is for 2.8 acres of 
vernal pools.
    We just now appeared to have resolved the situation but 
only after involving the offices of Senators Feinstein, Boxer, 
and Representatives Doolittle and Matsui who questioned the 
need for such expense. So, it is a result, but even this 
solution will cost us $2 million to $3 million; more like $3 
million for a solution that a few years earlier we would have 
had to pay nothing.
    This example and others are described in our formal 
submission to the record in our letter to the Committee and all 
point to the fact that the process is broken and needs fixing. 
To help do this, we suggest you consider the following 
recommendations: individual Service staff has a great deal of 
latitude to interpret their ESA mandate. There must be 
increased oversight to ensure consistency in the implementation 
of ESA as well as equal treatment among permitees. For 
instances, President Bush's mandate in 1991 was for ``no net 
loss'' of wetlands, but in our area, we are required to 
mitigate at an arbitrary rate of a 3 to 1 ratio instead of 
President Bush's 1 to 1, and, in some cases, a lot more than 3 
to 1.
    Two, Service staff must state under consideration the 
economic impacts of its decisions. The President and the Vice 
President, again and again, have stated that our ecology and 
our economy should co-exist. The Service should take that under 
consideration.
    Three, Service staff often use the permitees as 
adversaries. They look at us as enemies rather than as 
partners. They must be directed to work together with the 
permitees, with the private sector to determine what to 
implement--to determine and implement efficient and effective 
solutions. We have got to work together.
    Four, permits, once issued, should not be able to expire. 
Once the mitigation has been carried out, it is totally unfair 
to get a permit, to mitigate for that permit,and then have the 
Service come back at a later date and ask for additional 
mitigation.
    Five, prohibit double-dipping. Service staff use these 
loopholes and minor inconsistencies in validly issued permits 
to extract additional mitigation or to stack mitigation on top 
of mitigation.
    Six, require recovery plans to be developed 
contemporaneously with the listing of species. Let the 
regulated public know in that sense what the regional staff 
expects to accomplish for each species listed under the 
Endangered Species Act.
    Seven, encourage the preparation and timely implementation 
of habitat conservation plans--and this is very important--by 
providing sufficient funds for such activities. I feel if we 
give them the funds, they must perform. They would not have 
anymore excuses, hopefully. But be sure to establish and 
require strict adherence to timeliness to prevent the process 
from experiencing undue delay.
    To the greatest degree possible, standardize HCPs, so that 
each jurisdiction is not forced to reinvent the wheel.
    I hope my comments and written submission are of use to the 
Committee in its deliberations on this important matter. I 
welcome questions or comments. I thank you for the opportunity 
to appear before you.
    [The prepared statement of Mr. Tsakopoulos follows:]

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    Mr. Pombo. Thank you.
    Mr. Weinberg.

 STATEMENT OF EDWARD R. WEINBERG, NATIONAL ASSOCIATION OF HOME 
                    BUILDERS, WASHINGTON, DC

    Mr. Weinberg. Chairman Pombo and members of the Resources 
Committee, thank you for the opportunity to appear today before 
you and share my experience regarding implementation of the 
Endangered Species Act.
    My name is Ed Weinberg. I am president of EW Consultants, 
an environmental consulting firm that regularly practices in 
the field of Endangered Species Act regulation as well as an 
associate member of the Florida Homebuilders Association.
    I am here today on behalf of the 197,000-member firms of 
the National Association of Home Builders to discuss reform of 
the ESA and its mitigation requirements. As a professional 
biologist and a conservationist, I am a firm believer in the 
goals and principles of the Act. Unfortunately, in my 
experience, there are two fundamental areas that the Act is 
falling short of those goals in its day-to-day application. 
First, many species continue to be in decline, because the 
recovery planning and critical habitat designations mandated by 
the Act are not being completed in a timely or scientific 
fashion.
    Second, the implementation of the Act places an inordinate 
burden of protecting listed species on private property owners, 
especially in the building industry. Builders and developers 
are consistently forced to provide expansive and expensive 
preserves to which the public benefits without any such burden 
or responsibility.
    To help understand some of these day-to-day problems that 
are occurring with the Act, I would offer the following 
example: in the early 1990's, I was a consultant to a landowner 
on a 500-acre residential development in Brevard County, 
Florida. The project secured an Army Corps of Engineers 
wetlands permit in 1991. In February of 1992, the Fish and 
Wildlife Service informed the landowner that the property may 
provide habitat for the Florida scrub jay, a threatened 
species. Over the next 16 months, the landowner was required to 
reapply for a new Corps permit, including a section 7 
consultation through the Fish and Wildlife Service. The permit 
was ultimately issued in June of 1993 and required 14 acres of 
scrub jay mitigation land to be purchased outside the project 
area with an additional $1,000 per acre to fund perpetual 
management of the mitigation. Later, in 1993, an individual 
that was not affiliated with the project reported to the 
Service that he had observed scrub jays on the construction 
site. Based on this report, the Service sent a letter to the 
landowner advising that all construction and lot sales cease 
immediately or he would be in violation of the Endangered 
Species Act. This was on a site that had already been reviewed 
and permitted through the Service.
    Fish and Wildlife Service data indicated that approximately 
110 acres of the site were inhabited by scrub jays. The 
scientific surveys that I conducted personally at the 
landowner's expense concluded that only 28 acres were actually 
inhabited by scrub jays. Nearly two year after being shut down, 
a section 10 permit and HCP was issued that required 80 acres 
of land to be purchased off the project site for scrub jay 
mitigation and $20,000 in cash for perpetual management of that 
property. There was little, if any, scientific relationship 
between the 80 acres of mitigation and the 28 acres of scrub 
jay habitat.
    In addition to the landowner's direct costs, the time delay 
he experienced was onerous. The time consuming bureaucratic 
delays included the Fish and Wildlife Service conducting a 
section 7 consultation with itself to determine whether the 
section 10 permit was consistent with the Act. Redundant 
regulatory requirements like this cause delays to landowners, 
and they divert the Service's staff and resources away from 
actually protecting listed species.
    I am not one to identify problems without offering a 
solution. I believe the Act can minimize these kinds of 
problems in the future by incorporating a clear, concise, and 
scientifically-based regulatory framework. This should include 
research-based methodology for providing landowners with 
certainty about the presence of listed species or habitat 
within their property. There should be scientifically-based 
recovery plans available to landowners in a timely fashion so 
that appropriate conservation measures can be planned for 
rather than applied on an ad hoc basis. When mitigation is 
required, it should reasonably reflect the project scope. And, 
finally, the Act should include meaningful incentives that 
create a desire for stewardship on the part of landowners 
rather than an atmosphere of uncertainty about listed species. 
If the Act can provide this kind of predictability and 
certainty to landowners, they will become your partners in the 
process of protecting and recovering the national treasure that 
our listed species represent.
    Thank you.
    [The prepared statement of Mr. Weinberg follows:]

   Statement of Edward R. Weinberg, The National Association of Home 
                                Builders

    I am an environmental consultant, President of EW 
Consultants, Inc., practicing primarily in the State of 
Florida, and regularly in the field of Endangered Species Act 
(ESA) issues. I have conducted field surveys, documentation, 
and permit negotiations under both Section 7 and Section 10 of 
the ESA on behalf of public entities such as municipalities, as 
well as private landowners and builders. I am here today on 
behalf of the National Association of Home Builders' (NAHB's) 
197,000 members, to discuss the reform of the Endangered 
Species Act including mitigation under the Act. Throughout my 
experience, I have encountered a variety of situations and 
circumstances where applicants have been unnecessarily delayed, 
landowners have felt they were not treated fairly, and resource 
decisions that are not in the best interest of listed species 
have been made. As a result of these experiences, I have 
prepared this written statement, as well as presenting oral 
testimony as to how the ESA could be improved so that these 
types of experiences are kept to a minimum.
    As a biologist and conservationist, I am a firm believer in 
the goals and principles of the ESA. It is incumbent on all of 
us to do our part to protect and preserve these species. 
Unfortunately, as noble as the principles and goals of the ESA 
are, there are many instances where we are falling short of 
achieving those goals. Federal agencies are holding private 
landowners to unpredictable and often unreasonable mitigation 
standards to address conservation needs for listed species. In 
addition, sufficient scientific data is often lacking when 
establishing the mitigation requirements.
    In my experience, there are two fundamental areas that the 
ESA and its present form of implementation have not achieved 
their desired or intended goals. First, there are a variety of 
species that continue to be in decline, and additionally there 
is a long list of species that are candidates to become listed. 
Although there have been several well-publicized delistings or 
changes from endangered to threatened status, there are more 
species being added to the list than there are being removed. 
One of the basic principles that the ESA is based on is the 
creation and implementation of recovery plans with the goal of 
delisting species because they are no longer threatened with 
extinction, rather than because they have become extinct. It is 
my understanding that the Senate is currently addressing this 
issue as it pertains to establishing reasonable timelines for 
developing recovery plans and designating critical habitat.
    The second fundamental shortfall is that the present form 
of implementation of the ESA often places inordinate burden on 
select groups of individuals, especially private property 
owners in the building industry. All citizens have the 
opportunity to benefit equally from the protection and recovery 
of listed species. However, not everyone is sharing equally in 
the responsibility for protecting these species. Often, a 
landowner that is honest and forthright enough to point out the 
presence of listed species on his property is required to 
establish large preserve areas and/or participate financially 
in mitigation programs to protect and manage the species. The 
adjacent owners and the public at large all benefit from the 
protection provided at the expense of this individual or group, 
but they are not shouldered with any of the burden of affording 
that protection.
    Certain existing mitigation requirements offer little 
incentive to the private property owner to preserve species and 
their habitat, in fact, the threat of mitigation requirements 
can do the opposite. For example, in my home state, the Florida 
scrub jay is a listed species that is well adapted to human 
contact, and often able to coexist with low-density residential 
development. Their status as a listed species, as well as the 
implementation of protective measures for their habitat through 
the ESA have led individual homeowners to remove and replace 
their landscaping with vegetation that does not attract scrub 
jays. In this case, the uncertainty as to the repercussions of 
scrub jays on private property has led landowners to reduce 
habitat opportunities for scrub jays and further hamper their 
recovery. Reasonable incentives are necessary to preserve 
habitat rather than an approach that penalizes private 
landowners without tangible benefits to the environment.

Application of ESA and Justification for ESA Reform

    The preceding discussion hinted at several areas where the 
practical application of the ESA has not met its stated goals 
and purpose. The following example is from my own personal 
experience as a consultant to landowners that worked through 
the process. My experience is limited primarily to the 
southeastern U.S. and Puerto Rico, however discussions with 
professionals practicing in this field elsewhere in the U.S. 
indicate that there are similar occurrences throughout the 
country. An example from my experience follows.
    In the early 90's, I worked on a residential project called 
Cypress Creek in Brevard County, FL. The project covered an 
area of approximately 500 acres, and was divided into three 
phases. As part of the approval process for the project, an 
Army Corps of Engineers Section 404 permit was necessary, and 
was issued in 1991. Subsequently in February 1992, the U.S. 
Fish and Wildlife Service (USFWS) informed the landowner that 
the property may provide habitat for the Florida scrub jay, a 
threatened species. Site surveys were conducted and scrub jays 
were determined to be present. Over the next 16 months, the 
landowner was required to re-apply for a Corps permit and 
conduct a Section 7 consultation through USFWS. The permit was 
ultimately issued in June 1993, and required provision of 14 
acres of off site preserve (purchased by the applicant) and 
$1,000/acre funding for perpetual maintenance and management.
    In August 1993, a field scientist that was not affiliated 
with the project entered the site, observed scrub jays, and 
reported to the USFWS that up to four families of scrub jays 
were present in Phase I of the project, which was under 
construction. This was subsequent to having had the site 
surveyed and permitted by USFWS. A letter was sent to the 
landowner from USFWS advising that all construction activity 
cease immediately or the landowner would be in violation of the 
ESA. The field information from the scientist that initially 
observed the scrub jays indicated that approximately 110 acres 
of the 155-acre Phase I area was occupied by scrub jays. In 
January 1994, the landowner entered into the Section 10 
permitting process, and collected field data approved by the 
USFWS indicating that approximately 28 acres of Phase I were 
occupied by scrub jays. More than 21 months after being 
instructed to cease construction activity, a Section 10 permit 
was issued to the landowner. It required purchase and 
preservation of nearly 80 acres, donation of the land to 
Brevard County, and a cash payment to the County of nearly 
$20,000 for management of the property. The combination of on-
going uncertainty for the private landowner, insufficient 
scientific data, and lack of predictable mitigation 
requirements placed an unreasonable burden on this landowner. 
There was little, if any scientific basis for requiring 80 
acres of mitigation land and $20,000 in cash to replace 28 
acres of occupied habitat.
    One of the unique characteristics in this particular 
situation was that there were a number of lots within the 
subdivision that had been sold prior to the requirement by 
USFWS to cease construction. Although several of these lots 
fell within the area that was ultimately determined to be scrub 
jay habitat, the owners of the lots were allowed to proceed 
with construction of their homes as long as scrub jay nests 
were not present. The logic that was the basis for this was 
that it would somehow be unfair for a single lot owner who was 
not aware of the presence of scrub jays to bear the burden of 
protecting them on these single lots. There was little if any 
technical difference between habitat on ``sold'' lots and those 
lots that had not yet sold. Although this approach was 
certainly helpful to those individual lot owners, it allowed 
for differing levels of protection for scrub jays, and put the 
entire burden for their protection onto the project landowner.
    This example provides a number of instances where the 
application of the ESA fell short of its goals and principles. 
Perhaps the most important concern in this situation was that 
it took more than three years from the first time the USFWS 
addressed the presence of scrub jays on the site until the 
issue was finally resolved. This kind of delay and hold up is 
enough to bankrupt many landowners and/or builders. Fortunately 
in this case, the landowner had not borrowed money to construct 
the project; thus he was not in a position of making payments 
without revenue. Under different circumstances, this project 
may have ended up in foreclosure, with a bank holding listed 
species habitat as their collateral.
    In this case, the delays are directly attributable to the 
lack of clear and concise habitat requirements and evaluation 
for scrub jays. Throughout the process, there were examples of 
areas that did not meet the habitat requirements for scrub jays 
that initially were not required to be surveyed, and ultimately 
were required to be protected in an effort to ``err on the side 
of the species.'' The initial habitat delineation of 110 acres 
that was relied upon by USFWS was nearly 80 acres more than the 
28 acres that was scientifically determined to be habitat at 
the landowners expense. According to all of the published 
literature, much of which formed the basis of the listing for 
this species, there should not have been scrub jays in this 
area. Although the occurrence of scrub jays here made for an 
interesting academic discovery, it created an intractable 
circumstance for the landowner. The landowner had proceeded in 
all good faith, secured all necessary permits, coordinated 
directly with the USFWS, set aside mitigation and provided for 
protection of scrub jays, and none the less was shut down in an 
area that was not considered habitat.
    The implementation of the ESA on the Cypress Creek project 
was a ``learn as you go'' process for all involved. Clearly 
this placed an undue burden on the landowner who was on hold 
while new information about the habitat tolerances of the 
Florida scrub jays were discovered on his property. I am not 
personally aware of the sum total of the data and information 
that was used to determine that scrub jays should be listed. 
However, it appears that either some information was not 
available, or it was not provided in a readily accessible form 
such that USFWS staff, practicing professionals, and the 
general public could make use of it in evaluating decisions 
regarding property and regulation. In this case, if the habitat 
tolerances of scrub jays are much wider than what was assumed 
in the basis for the listing, perhaps the listing was premature 
or unnecessary.
    When I look back on this experience, what strikes me most 
is the amount of public and private resources that were 
expended in this effort. There were hundreds and hundreds of 
hours of my time, the landowner's time, and perhaps most 
importantly USFWS staff time committed to this particular 
project. Much of that time was the result of attempting to 
resolve the technical issues in a regulatory framework that is 
at best ever changing. The ESA's provisions for understanding 
and protecting habitat rather than species are very sketchy, 
and result in reinventing the wheel on a regular basis. The 
rules appear to be made up as you go along, and there are a 
variety of bureaucratic hurdles that extend the process 
interminably.
    The best example that I can remember from this process is 
this. The permit issued in this case was an incidental take 
permit under Section 10 of the ESA. It authorized taking of 
scrub jays incidental to the project construction and required 
mitigation through habitat protection. You would think that 
would be a sufficient authorization for the project to 
continue. However, according to the ESA, the USFWS was required 
to conduct a Section 7 consultation with itself to determine 
whether the ``Federal action'' of issuing the Section 10 permit 
was consistent with the ESA. Every hour spent by USFWS staff 
meeting circular regulatory requirements such as these is one 
less hour spent actually protecting listed species.
    Although I take great professional pride in having worked 
through the process described above, and achieving a successful 
resolution in this case, I would like to think that things 
could be done much more efficiently and provide more stable 
protection for listed species. In this case there was constant 
negotiation and compromise that resulted in a permitted 
solution under the rules that existed and their implementation. 
However, within the same project area, scrub jays on single 
lots were afforded less protection than those on lots still 
held by the project landowner. Further, the mitigation program 
that was ultimately agreed to will provide habitat for scrub 
jays, but there is no scientific understanding of whether that 
habitat or those scrub jays will contribute in any way to the 
long term recovery and stability of this species. 
Unfortunately, the decisions seem to have been made in a vacuum 
from the perspective of achieving the goal of delisting this 
species. The results of the regulatory program were that at 
least a backward step was not taken. However, until the ESA can 
make forward steps toward recovery in its regulatory program, 
it will be more and more difficult to recover our listed 
species.

Opportunities for ESA Reform

    Although the information I have provided may seem critical 
of the ESA and its implementation, the intent is to try to 
develop solutions that can eliminate these concerns in the 
future. Identifying these concerns provides the framework for 
developing the solutions that can make the ESA successful in 
achieving what the Act intended, recovery of our listed 
species.
    First, the ESA needs a clear, concise, and scientifically 
based regulatory framework that consists of a predictable set 
of scientific criteria for determining the presence of listed 
species. There are a variety of publications and generic 
information, however, no comprehensive research based 
methodologies for providing a landowner with certainty about 
the presence, or absence of listed species. The result is that 
these discoveries are often made ``after the fact,'' which 
precludes the ability to plan for and accommodate these species 
where and when they occur. By requiring that the appropriate 
scientific data and criteria be made available at the time of 
listing and in recovery plans, the burden is no longer placed 
solely on the private landowner. With the availability of 
sufficient scientific data early in the process, ESA 
stakeholders are able to identify appropriate conservation 
measures and predictable, reasonable mitigation.
    Finally, the ESA needs to include a set of meaningful 
incentives to create a desire for stewardship on the part of 
all landowners. It is the uncertainty of the ESA requirements 
for conservation measures and mitigation that causes landowner 
concern. This uncertainty could be eliminated with incentives 
that codify ``No Surprises,'' Candidate Conservation 
Agreements, and Safe Harbor Agreements. In addition, 
uncertainty is reduced when timelines are established for 
developing recovery plans and designating critical habitat. But 
most importantly, landowners should be ensured that they are 
able to proceed with desired land use when appropriate measures 
have been taken to reduce the threat of land use activities on 
listed species and reasonable mitigation has been identified.
    If we can provide the necessary predictability and 
certainty to landowners both small and large, we can harness 
the power of all our citizens to join in protecting the 
national treasure that our listed species represent.

    Mr. Pombo. Thank you.
    Mr. Worden.

      STATEMENT OF DWIGHT C. WORDEN, BRONDI DEVELOPMENT, 
              INCORPORATED, FAIR OAKS, CALIFORNIA

    Mr. Worden. Chairman Pombo, Resources Committee, my name is 
Dwight Worden, and I live in Fair Oaks, California, and I am a 
corporate government liaison for Brondi Development Corporation 
in Santa Rosa. It is an honor to be here, and I wish I had more 
time to say all that I know, because I have been living this 
problem for two years that you are trying to legislate. So, I 
find it possible to make, through this Committee, possibly, 
Fish and Wildlife more accountable.
    My testimony is on requirements for mitigation, which the 
Department of Interior and Secretary Babbitt, Fish and Wildlife 
Service Director Jamie Clark are directly responsible, but they 
refuse to answer specific regulatory and policy questions. And 
other staff screened my attempts to contact them directly, and 
I don't get any responses because of their screening.
    Now, we have a prior use of land, which is a former air 
base, Army air base, back in the World War II area. It has got 
ammunition dumps, nerve gas buried, equipment buried. It is a 
non-jeopardy, a non-critical habitat, low-quality land, but we 
have got problems, and they go something like this: The Corps, 
Army Corps in San Francisco issued an individual permit with 
conditions for mitigation based upon Fish and Wildlife's 
programmatic formal consultation which was produced on 17 July 
1998. It was developed by the Fish and Wildlife Service and 
utilized by both the Fish and Wildlife Service and the Corps, 
but they became opponents, non-flexible, unfair, and 
unreasonable in their carrying out this particular 
programmatic. This was not in accordance with a White House 
Executive Order Flexibility Act and other Executive Orders that 
are related.
    One of the things that was a problem was that there was no 
mechanism to implement it, and the Fish and Wildlife Service's 
programmatic, which is attached to your copy of this testimony, 
is based on flawed, federally funded task force information, 
and the mitigation ratios are unreasonable and unworkable. The 
preservation mitigation is misleading and non-functional, 
because the congressional intent is not practiced in using 
policy.
    Now, the President's wetlands plan, 1993, clearly 
emphasizes the implementation of the Clean Water Act and the 
Endangered Species Act based upon a goal of ``no overall net 
loss.'' The ``no overall net loss'' was trimmed down in words 
to ``no net loss,'' and in practice is used as a cookie cutter 
approach. In fact, not all mitigations are the same, but Fish 
and Wildlife wants to treat everyone the same, and that is the 
problem.
    Resultantly, an excessive amount of power was assumed and 
exercised and abused in consultations with this corporation 
which turned into dictatorial demands on the Corps and the 
applicants and permitees, and Director Clark was contacted but 
refused to answer. I have contacted Secretary Babbitt; no 
answer. He did get an answer when I had to go to the extent of 
having a letter delivered to him through the Cabinet at a 
Cabinet meeting. It was the only way I could get it to him, and 
the Office of the Inspector General, Donald Berry, refused to 
answer me. The White House called and asked his staff to 
contact me, and they refused to contact me or to deal with this 
matter; on and on.
    But one of the things that came out of this is that a 
permit with special conditions was issued for endangered 
species, goldfields in this particular instance, and we had to 
have what they call seeds and soil, and when we had these seeds 
and soil of this endangered species, we had to collect it and 
store it, but it turns out that this programmatic didn't have 
any means of implementing it. So, we ended up keeping it for 
nine months instead of the Fish and Wildlife taking care of it 
within a six-month period. So, the Fish and Wildlife Service 
resisted and refused and delayed. It still hasn't been 
completed like it should have been. It has cost us some 
$300,000 for something that should have cost maybe $10,000.
    We have a new application, and I asked for a section 7 
consultation, and we had meetings, but nothing was done. They 
don't understand the regulations. They don't understand ``no 
overall net loss'' policies, and that is a problem. If they 
would use the ``no overall net loss'' goal, then they wouldn't 
have to issue a permit for every mitigation consultation--for 
every permit that would be applied for.
    Thank you for my opportunity to contribute to the 
Committee's efforts, and I am ready to answer any questions 
that you have.
    [The prepared statement of Mr. Worden follows:]

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    Mr. Pombo. Thank you.
    Mr. Johnston.

STATEMENT OF JAMES R. JOHNSTON, COUNSEL, FOUNDATION FOR HABITAT 
               CONSERVATION, SEATTLE, WASHINGTON

    Mr. Johnston. Thank you, Mr. Chairman, members of the 
Committee. My name is Jim Johnston. I am here from Seattle. I 
serve as counsel to the Foundation for Habitat Conservation, 
and I am here today on their behalf as well as a similar 
organization, the Coalition for Habitat Conservation, which is 
based in southern California.
    The foundation that I represent is comprised primarily of 
forest landowners. We have about 800,000 acres currently 
committed under successfully operating HCPs. We are working on 
about two million acres more worth of forest land HCPs.
    The Coalition's members are primarily members of a 
development community in southern California and have been 
deeply involved in the community conservation planning projects 
in southern California.
    I am pleased, also, to say that the American Forest and 
Paper Association has endorsed our comment today.
    My focus is on HCPs, and the Coalition and the Foundation 
sent me here to tell you four things. One, we believe that HCPs 
are very good things. We believe that they are good for 
landowners; we believe that they are good for species. Some of 
the very best science being done today on threatened and 
endangered species is a direct outflow of the habitat 
conservation planning process. Second, I am here to tell you 
that the ``no surprises'' rule is a critical component of 
successful habitat conservation plans. Third, there are issues 
related to section 7 consultations that I believe Congress must 
address if we are to sustain a successful HCP Program. And, 
finally, we are here to help. Our two organizations are 
actively engaged in conversations with both Services. Some of 
the members of the foundation met just last week with Secretary 
Daly and Secretary Babbitt, and we are pleased with their 
cooperation and support for the multi-species and single-
species HCPs.
    Now, about HCPs, I look at them from three perspectives--
the landowner, the species, and then from the government's 
perspective. From the private landowner's perspective, if I 
have got an endangered species on my property or I think I do, 
I have the section 9 take prohibition that I have to deal with. 
Either I have to run risks or I have to find ways to find 
greater certainties. The HCP process, frankly, is the best game 
in town for me to find a reasonable level of certainty for the 
future, so that I can support the kinds investments in both the 
business side, financially, as well as the conservation 
measures that are going to be benefiting the species. Without 
certainties, the process simply won't work.
    One of the key things is to be able to cover unlisted 
species. The multi-species plan is very critical. It avoids 
some of the problems of getting a plan, making some 
commitments, and finding out a year later that you have got a 
whole other species to deal with.
    The last thing about conservation planning that is the most 
important, perhaps, is that it is in fact voluntary. I do not 
have to do an HCP. I can choose to live with the regulatory 
structure; that is the landowner's choice.
    From the species perspective and with the incidental take 
permit issuance, I have an opportunity to manage my land in a 
way where I am not constantly worried about section 9. Section 
9 is a disincentive. How can I allow habitat to grow on my 
property if it is going to attract a species that later 
precludes me from using my property? The HCP takes that away; 
it removes the disincentive. The very process of doing an HCP 
educates the landowner. The landowner is only going to be a 
better steward of his or her land if you know what the needs of 
the species living on your land are.
    It also provides the opportunity for protection of unlisted 
species. Section 9's take prohibition simply doesn't apply to 
them. A multi-species HCP plan gives them advanced protection, 
and, hopefully, if there are enough of them and they are 
successful, we won't have as many new listings.
    From the government resources standpoint, what are the 
options? You can enforce section 9 individual species-by 
individual species, beak-by-beak, and member-by-member or you 
can try to collect things into an HCP, whether it is a 
statewide or a regional plan. We have a successful 
opportunity--or so far a successful opportunity--in Washington 
State on a statewide plan covering eight million acres that 
will ultimately lead, if it is successful, to a statewide HCP 
providing coverage for large and small landowners for the whole 
forest products sector.
    The ``no surprises'' policy is an essential component of 
any HCP. We would urge that the ``no surprises'' policy simply 
be made part of the Endangered Species Act. We are confident 
the Services will be successful in defending the lawsuit, but 
this is a cloud that should be taken away.
    Finally--and I realize I am at the end of my time--I want 
to talk for a moment about section 7 consultations. Section 7 
consultations, as interpreted by one of the district court 
judges in northern California, precludes the irreversible 
commitment of resources during consultation by an HCP 
applicant. In this case, as it applied in the situation of the 
PALCO HCP, the judge said that no timber harvest could occur 
while consultation was underway and also said that consultation 
means all consultation, all discussions with the Services. That 
would be the ultimate sacrifice a landowner would be asked to 
make; to have to shut your entire operation down while you are 
in consultation. So, section 7(d) should simply be made not 
applicable to permits issued under section 10, and in fact one 
could argue that I think with a great amount of force that 
section 7, itself, is largely, if not completely, redundant 
when applied to HCPs. Some of the resources that are being 
spent on section 7 now for HCPs could be redirected elsewhere.
    Thank you for the indulgence in running over my time, and I 
would be happy to answer any questions.
    [The prepared statement of Mr. Johnston follows:]

Statement of James R. Johnston, Foundation for Habitat Conservation and 
                 The Coalition for Habitat Conservation

Introduction

    My name is Jim Johnston. Thank you for the opportunity to 
testify.
    I serve as counsel to the Foundation for Habitat 
Conservation, based in Seattle. I also come to you with the 
background of having worked with several landowners on habitat 
conservation planning efforts.
    I am testifying today on behalf of both the Foundation and 
a similar organization--The Coalition for Habitat 
Conservation--headquartered in Laguna Hills, California. I am 
also pleased that the American Forest and Paper Association, 
the national trade association of the pulp, paper, paperboard 
and wood products industry, has endorsed our statement today.
    I am pleased to appear before the Committee today to 
discuss the Endangered Species Act. The specific focus of my 
testimony is the habitat conservation planning (HCP) program 
under Section 10 of the ESA.
    The Foundation and Coalition strongly support viable 
voluntary habitat conservation planning under the Endangered 
Species Act (ESA). It is a very valuable tool for private 
landowners, and for preserving species and their habitat. HCPs 
will remain viable only if HCPs provide reasonable certainty at 
a reasonable cost. To succeed, an HCP must mesh scientific 
credibility with business sensibility.
    The Foundation and Coalition commend the agencies for their 
support of the HCP program. The recently issued joint directive 
of Secretaries Babbitt and Daley documents the agencies 
commitment to HCPs. Yet, both the Coalition and Foundation see 
challenges facing landowners (and the agencies) that, left 
unchecked--will significantly reduce the incentives for 
voluntary private contributions to species preservation.
    Specifically, for HCPs--and all the good they can do--to 
remain viable, the No Surprises Rule must be protected and the 
ESA Section 7 problems fixed.

The Foundation for Habitat Conservation

    The Foundation for Habitat Conservation (www.habcon.org) is 
a not-for-profit (501 (c)(6)) organization formed in April of 
1998. The Foundation's purpose is to ``research, communicate, 
and support the workings, role, and benefits of habitat 
conservation plans and related, incentive-based private 
conservation initiatives.'' The Foundation has participated in 
a number of forums discussing HCPs and ways to improve them.
    The Foundation's members include a number of landowners 
that either hold HCPs, are developing HCPs, or both. At 
present, the members of the Foundation have over 820,000 acres 
of land in operating HCPs in three states, and have HCPs in 
various stages of development on over 2 million additional 
acres in a total of seven states. Foundation members own 
timberland and focus mainly on forestry HCPs, while Coalition 
members develop property covered by current and proposed 
regional HCPs. Some of our members have also been very active 
supporters of a collaborative state-private-Federal effort to 
put a statewide regulatory plan in place in Washington state 
under which a programmatic HCP will be used to address the 
needs of salmon and other species on over 8 million acres of 
private land. The plan, called ``Forests and Fish'' was 
approved by the Washington State Legislature last week.

The Coalition for Habitat Conservation

    The Coalition for Habitat Conservation is a group of 
Southern California property owners and public utilities that 
together own more than 300,000 acres of land in Orange, 
Riverside and San Diego counties. It was formed in 1991 as a 
501(c)(6) corporation to pursue the mutual interests of its 
members in finding solutions to endangered species issues that 
are sound environmentally and economically.
    The Coalition has supported California's Natural 
Communities Conservation Planning Act as a vehicle to create 
large-scale HCPs that protect multiple species, and has 
promoted these plans in forums throughout the region. Coalition 
members have participated in several HCPs that involved the 
creation of habitat preserve systems totaling more than 210,000 
acres in Southern California, and are currently participating 
in the development of plans that will cover significant 
additional acres. A signature of these plans is that, while 
landowners make large contributions of private lands to the 
HCPs, others participate as well. In the case of the Orange 
County Central & Coastal Natural Communities Conservation Plan, 
for example, 21,000 acres were contributed by a private 
landowner and 17,000 acres were contributed by a transportation 
authority, state and local jurisdictions, all of whom are 
dedicated to the success of the plan.

The Value of Habitat Planning under the ESA
HCPs provide incentives for voluntary, private contributions to 
species.

    In many parts of the country, significant populations of 
threatened and endangered species are found on privately owned 
lands. Section 10 of the ESA is the only mechanism currently 
available that gives incentives to the private sector to 
voluntarily provide extensive land and resources to protect 
threatened and endangered species. Without the ESA-related 
certainty that the government can offer a private landowner 
through the HCP program, few if any landowners could afford or 
justify to make the kinds of commitments that have and are 
being made in the context of HCPs. And, for the agencies, the 
alternative is a regulatory enforcement program that must be 
implemented on an ``individual-by-individual'' basis. From the 
standpoint of agency resources and landowner participation, 
HCPs are advantageous.
    For example, in my home state of Washington, through the 
historic ``Forests and Fish'' Agreement, owners of 8 million 
acres of forestland have committed to a massive overhaul of 
riparian management practices under a proposal that will lead 
to statewide HCP coverage for all forest landowners. Over 2 
billion dollars of timber and tree growing capacity is being 
set aside to achieve greatly increased streamside buffers. This 
unprecedented and voluntary commitment would not have been 
possible if not for the ability (and willingness) of the 
National Marine Fisheries Service (NMFS) and U.S. Fish & 
Wildlife Service (FWS) to offer long-term certainty to 
landowners regarding fish and a number of amphibians that are 
or might become listed under the ESA. The extensive and long-
lasting benefits of such a program cannot be seriously 
questioned. Nor can I envision another mechanism whereby the 
government could obtain--in one fell swoop--covering 8 million 
acres with carefully considered and negotiated conservation 
measures.
    A good measure of the value of HCPs is to compare results 
under them with results in their absence. Under the ``no take'' 
rules, circles around owl or gnatcatcher nests are protected 
but landowners are left to harvest or develop other areas 
effectively preventing the development of new habitat over 
time. The ``take'' prohibition creates a powerful disincentive 
to ever allow non-habitat to grow into habitat. Under the 
Simpson HCP in Northern California some incidental take is 
allowed but the HCP is devised to allow habitat to grow and 
increase over Simpson's ownership over time, because of the HCP 
removed the disincentive. Owls have prospered on that ownership 
and owl habitat will increase significantly over the life of 
the HCP with Simpson carrying out a successful timber 
operation. The HCP made success for the owl and for Simpson 
possible. Southern California's Central & Coastal NCCP provides 
protection for rich habitat areas and creates links between 
these areas, while allowing development in poor habitat areas. 
The net effect is better habitat capable of supporting greater 
numbers of threatened and endangered species--while still 
allowing the development necessary to meet the needs of a 
growing human population.

Multi-species plans offer especially important opportunities.

    Multi-species plans are a particularly valuable part of the 
HCP program, as they are most likely to focus management or 
development of property from the broadest possible wildlife 
perspective. And, by covering unlisted species, they provide 
certainty to long-term land managers that investments today are 
likely to result in meaningful returns. From the perspective of 
wildlife, multi-species plans also provide tangible benefits to 
species that are not yet listed and for which no regulatory or 
``take'' restriction exists.

Single or limited species plans must remain a viable option as 
well.

    On the other hand, single-species or focused plans (e.g., 
fish only) are equally appropriate in some settings, either 
because of landscape-specific circumstances, landowner and 
agency priorities or simple landowner preference. Single-
species planning is particularly conducive to development of 
mitigation banks, where private landowners have additional 
incentives to create and maintain habitat.

No Surprises Rule

    The No Surprises Rule is the heart of the HCP program. It 
represents the primary guarantee of certainty essential for 
voluntary conservation planning by a landowner. It also 
represents certainty on the part of the wildlife agencies that 
the plans have a sound design, and are, in effect, low-risk 
propositions. Yet, the No Surprises Rule is under heavy attack. 
Public and legal challenges have sought to erode its strength 
over time. Without the No Surprises Rule, voluntary HCP 
commitments will cease, and the superior species protections 
afforded by large-scale HCPs will terminate. Both the Coalition 
and Foundation believe that Congress should codify No Surprises 
as the most important element to ensure HCPs' success.
    From the standpoint of business, the reasonable certainty 
afforded by No Surprises is needed to attract and sustain long-
term investments. For businesses affected by listed species, 
HCPs are the best mechanism that Congress has provided to 
attain certainty. HCPs, quite simply, are the only game in 
town, and No Surprises is the most important player in that 
game.

Adaptive Management

    Certainty for landowners under HCPs is, of course, not 
boundless. Both the Foundation and Coalition recognize that 
adaptive management provisions are appropriate elements of many 
long-term HCPs. Adaptive management--through appropriate 
monitoring and a focused feedback mechanism--can result in more 
efficient and effective management techniques. This can result 
in the HCP performing more effectively as we learn more--by 
improving results without increasing burdens on the HCP holder 
beyond that incorporated into the adaptive management 
provisions established during development of the HCP.
    Of course, adaptive management must be based on something 
measurable. Information to drive adaptive management comes from 
monitoring the HCP results, from new research discoveries, or 
both. It is not appropriate to require HCP holders to perform 
or fund research. Reasonable monitoring requirements are 
appropriate, but should be focused on events that occur.
    Adaptive management is a tool that can be very valuable if 
it is used in the context of the ``best science available.'' 
Some of the best science being done today is in conjunction 
with HCPs. However, adaptive management can be misused if it is 
a substitute for a reopener clause to force new mitigation 
techniques which undermine certainty. It is also inappropriate 
if the agencies insist on very stringent restrictions--using 
``worst case'' assumptions--and then require landowners to use 
expensive research to ``prove'' the worst case scenario 
incorrect. On the other hand, adaptive management can also be 
very valuable if it is used as a method to resolve questions of 
science that could delay development of the HCP and ensure that 
mitigation will provide the intended benefits, which start with 
reasonable operating assumptions, and allow for appropriate 
adjustments. Finally, while adaptive management works both 
ways, it must have some bounds, or it will subsume all notions 
of certainty. Those bounds must be set during HCP development, 
as they are but one part of the ``package'' of commitments a 
HCP holder is making.

HCP process concerns and ESA Section 7

    Of course, for all their good, HCPs must be affordable and 
``doable'' within a reasonable time frame. The HCP process must 
be streamlined so applicants can move through it at a 
reasonable pace and cost, thus allowing timely protection of 
resources. Foundation members and others have been meeting with 
the agencies to discuss this. Last week, the joint directive of 
the Secretaries of Interior and Commerce committed the agencies 
to measures that should help them do a better job managing the 
HCP ``process.'' We will continue to work with them to make the 
HCP program a success.
    Other than an adverse outcome in the current lawsuit 
challenging the No Surprise Rule, Section 7 of the ESA 
currently poses the biggest single risk to the continued 
viability of the HCP program, and one that Congress can and 
should fix. Section 7(a)(2) requires that all Federal agencies 
``consult'' with NMFS or FWS, as appropriate, prior to issuing 
a permit or funding an activity whenever the agency believes 
that such action ``may adversely affect'' a listed species. The 
agencies construe Section 7 consultation as applying to their 
issuance of an incidental take permit upon approval of an HCP. 
Accordingly, the agencies ``consult'' with themselves before 
approving an HCP.
    The purpose of consultation is to determine whether the 
proposed agency action ``is not likely to jeopardize'' the 
continued existence of any listed species or result in the 
adverse modification of critical habitat. As elucidated in 
NMFS/FWS regulations, if the determination is ``no'', then the 
agency action can proceed. If the determination is ``yes'', 
then the consulted agency must propose reasonable and prudent 
alternative measures that would mitigate the likely jeopardy. 
The agency then must consider the jeopardy opinion, the 
alternatives, and decide for itself whether it believes 
jeopardy is likely. The applicant will then decide how it 
wishes to proceed. Of course, in the context of an HCP, where 
NMFS or FWS is consulting ``with itself'' (or themselves), the 
jeopardy opinion is conclusive, and the action cannot proceed 
unless an alternative is found.

Is consultation on HCPs appropriate?

    There is a legitimate argument, based on careful review of 
the ESA and its history, that Section 7(a)(2) consultation on 
HCPs was not intended at all and that Section 7 consultation 
standards are redundant with the Section 10 HCP approval 
standards. In developing an HCP, the applicant and agencies are 
engaged in the focused consideration of how to minimize and 
mitigate the impacts on the species to the maximum extent 
practicable. An activity cannot pass muster under the HCP 
standard of ESA Section 10 and still be found to pose jeopardy 
to the species. If the consultation concept is believed to 
``add value'' to the HCP process, we believe that it should be 
incorporated into the Section 10 HCP development and evaluative 
processes.

The impact of ESA Section 7(d).

    Section 7(d) of the ESA provides that after initiation of 
``consultation,'' neither the agency nor the applicant may make 
any:

        irreversible or irretrievable commitment of resources with 
        respect to the agency action which has the effect of 
        foreclosing the formulation or implementation of any reasonable 
        and prudent alternative measures which would not violate 
        subsection (a)(2).
    An interest group has argued--and one court has recently agreed--
that under this subsection, an HCP applicant cannot continue to engage 
in everyday management practices that alter habitat because such 
alteration--otherwise an entirely legal activity--would foreclose a 
possible alternative that called for that particular habitat to be left 
unaltered under the HCP. This came up in the context of a forestry 
HCP--under the logic of the ruling, no harvest activity could occur 
during consultation. Moreover, the court construed ``consultation'' as 
including the entire time period that the applicant and the agencies 
are working together. Thus, under such an interpretation, an HCP 
applicant who was engaged in consultation would have to cease all 
operations on the land covered by the HCP. This interpretation and the 
potential erosion of the No Surprises Rule are the most serious clouds 
over the HCP program today. No prudent manager would risk the expense, 
uncertainty, and disruption if such a suit might succeed.
    Arguably, the Section 7(d) problem goes beyond the HCP approval 
stage. That is because under agencies' regulations, a completed 
consultation may be ``reinitiated'' when certain circumstances are 
present (where agency discretion or control over the HCP holder is 
retained, and some new information or issue arises). While one court 
has (correctly) held that as a general matter, having an HCP does not 
give an agency general discretion or control so to cause reinitiation 
of consultation just because a new species (not covered by HCP but 
arguably present in the area) was listed, there are circumstances under 
many HCPs where some agency discretion is retained. A good example of 
this is adaptive management, where in ongoing HCP negotiations the 
agencies are seeking approval functions as a part of the process. Under 
this view of Section 7(d), every time adaptive management was underway 
the HCP holder could be forced to shut down the whole operation.
    A relatively easy fix for this problem is possible. Either a 
different standard should be articulated for HCP holders, or, more 
simply and effectively, Section 7(d) should not apply to incidental 
take permits applied for or issued under Section 10 of the ESA.

Recovery of a species is not an appropriate requirement of an HCP 
applicant.

    While, under the ESA, recovery is clearly not the responsibility of 
the private landowner, HCPs offer the most constructive way for private 
parties to contribute to the ultimate goal of recovery while meeting 
their requirements to mitigate for the privilege of obtaining an 
incidental take permit. While recovery is the government's 
responsibility, care must be taken not to let that overall governmental 
goal become translated into the standard for HCP approval.
    ESA Section 10 requires landowners to minimize and mitigate the 
impacts of any taking of covered species the landowner would cause--and 
to do so to the maximum extent practicable. In other words, the 
mitigation burden imposed on each landowner in the HCP process is 
intended to be dependent upon the impacts of taking that would be 
caused by the landowner's future activities. We believe that ESA 
Section 10 is consistent with the Supreme Court's Dolan decision--the 
burden imposed on the applicant must be proportional to the impacts 
that would be authorized by the incidental take permit.
    If landowners are asked in the HCP context to assume responsibility 
for--and agree to correct--all landscape conditions that are believed 
to be inadequate, including conditions not caused by the applicant, 
then this proportionality concept is lost. Under a ``properly 
functioning habitat'' standard, applicants are asked to ensure that 
their ownerships will develop the same ``ideal'' habitat conditions, 
regardless of the extent of the impacts on covered species the 
landowner's future operations would actually cause or the pre-existing 
conditions of the property. By definition, there is no proportionality 
under the properly functioning habitat standard.

The Role of ``Science'' and How to Measure Success.

    Of late, much has been said about the role of science in HCPs. HCP 
opponents raise the battlecry that ``HCPs are not based on science.'' 
For starters, this ignores the important concept that HCPs are more 
than scientific documents. They are also business plans. The Foundation 
and Coalition agree that available scientific data should be used in 
developing the HCP measures. We do not believe that it serves a useful 
purpose that every HCP becomes a written compendium of every known fact 
about a species. That adds unnecessary cost and delay. Science should 
play an important role in formulating an HCP, but ultimately the plan 
must balance the minimization of impacts with the notion of 
practicability. It is a balance.
    We also do not support the contention of some that where there are 
significant gaps in science, an HCP may be inappropriate. There are and 
always will be gaps in our knowledge, and how significant our gaps are 
is not even known until after the fact. There are at least two reasons 
that denial of HCP coverage in the face of uncertainty is 
inappropriate. First, we adhere to the tenet that if the agencies knew 
enough to list a species, they know enough to cover it in an HCP. 
Second, even if significant species-specific data is not available, 
often there is data concerning the general habitat requirements of 
other, similar species, and the HCP can be crafted to move management 
into the realm of what is likely to be required. Those situations could 
also be candidates for reasonable adaptive management provisions.
    The ``success'' of any HCP must be judged by a blend of both 
scientific and business criteria, tempered by practicability. Any 
purely ``biological'' or ``scientific'' review of HCPs misses a good 
deal of the equation. Perfection can be the enemy of the good.
    HCPs should not be measured based on whether they ``guarantee'' 
achievement of certain population recovery goals. First, private 
landowners by law have no responsibility to ``recover'' a species. 
Second, HCPs can only cover a portion of the landscape. The actions of 
others, including government, can profoundly affect a species' status. 
All HCP holders can do is provide or protect habitat. Third, most 
species can move in and out of the HCP area. Whether members of a 
species actually use the habitat that the HCP holder provides or 
whether the species continues to be adversely impacted by other 
causative agents--natural or human-induced--is often outside the 
control of the HCP holder. For example, if an HCP holder provides 
habitat for salmon, but fish are not (?) returning to the HCP area due 
to passage restrictions, poor ocean conditions, predation by marine 
mammals, unnatural congregations of birds, or over-fishing, that HCP 
should not be held accountable for fish populations. That 
responsibility can only be the government's, as only the government has 
the power to influence all pertinent factors.

The Solutions

         Make No Surprises the law.
         Fix the Section 7 consultation--and the Section 7(d) 
        problem in particular. Section 7(d) should not be applicable to 
        HCPs. Consultation for HCPs should be streamlined and 
        incorporated into Section 10.
         Bolster support for multi-species plans. We commend 
        Secretaries Babbitt and Daley, along with leadership in the 
        agencies, for their support of such plans.
         Keep HCPs affordable and available in a timely manner.
         Prevent adaptive management, which is also vital to 
        the HCP process, from swallowing No Surprises.
    Mr. Chairman, both the Coalition and Foundation are working on 
solutions to these issues, and stand ready to assist you in whatever 
manner we can. Thank you for the opportunity to testify today.

                       FOLLOWUP AND SUMMARY SHEET
U.S. House of Representatives Resources Committee on May 26, 1999 on 
behalf of Foundation for Habitat Conservation and Coalition for Habitat 
Conservation
Witness:
James R. Johnston
Perkins Coie LLP
1201 Third Avenue, 40th Floor
Seattle, WA 98101-3099

tel. no. 206-583-8626
fax no. 206-583-8500
email: [email protected]

Outline of Testimony:

The Value of Habitat Planning under the ESA
No Surprises Rule
Adaptive Management.
HCP process concerns and ESA Section 7
Recovery of a species is not an appropriate requirement of an HCP 
applicant.
The Role of ``Science'' and How to Measure Success.
         Make No Surprises the law.
         Fix the Section 7 consultation--and the Section 7(d) 
        problem in particular. Section 7(d) should not be applicable to 
        HCPs. Consultation for HCPs should be streamlined and 
        incorporated into Section 10.
         Bolster support for multi-species plans.
         Keep HCPs affordable and available in a timely manner.
         Prevent adaptive management, which is also vital to 
        the process, from swallowing No Surprises.

    Mr. Pombo. Thank you.
    Mr. Bean.

 STATEMENT OF MICHAEL J. BEAN, SENIOR ATTORNEY, ENVIRONMENTAL 
                  DEFENSE FUND, WASHINGTON, DC

    Mr. Bean. Yes, thank you, Mr. Pombo--Mr. Chairman and 
members of the Committee. It is a pleasure to have a chance to 
testify before you today.
    I am Michael Bean, and I am representing the Environmental 
Defense Fund for which I work. The Environmental Defense Fund 
is an environmental organization, but I want to point out to 
the Committee that we have worked closely with a number of 
landowners in developing HCPs and addressing other issues that 
have arisen under the Endangered Species Act. Most recently, 
for example, we worked closely with International Paper Company 
in developing its HCP for its forest practices affecting the 
red-cockaded woodpecker. We have worked with Westvaco 
Corporation in South Carolina, but we have also worked with 
some very small landowners and small business interests. We 
worked, for example, with the North Carolina Pine Needle 
Producers Association. These are, literally, people who make 
their living by raking pine needles off the forest floor in the 
Sandhills area of North Carolina, and we worked with them in 
putting together the first habitat conservation plan that 
embodies a safe harbor agreement.
    In the testimony I want to give this morning, I don't 
pretend to speak for any of those landowning interests, but I 
do think that the experience I have had working with those 
different landowners has informed my conclusions about this 
topic of mitigation. I have just a few points I want to 
emphasize. First, we unfortunately know very little about the 
efficacy of mitigation, and we need to know much more about 
that. I think Mr. Weygandt, this morning, in the first panel, 
said that if we are incurring costs, we have to know that we 
are getting value back, and the unfortunate reality is that we 
often don't know how well mitigation is working. The only way 
to find out, frankly, is to do the monitoring of the efficacy 
of that. That will require resources, and I would like to echo 
what Mr. Tsakopoulos and others, this morning, have said about 
the need for giving the agencies resources to do those sort of 
tasks.
    The second point I want to make is that to measure the 
efficacy of mitigation, you need to have some articulated and 
measurable goals that mitigation is to serve, and those goals 
need to be set with reference not to whether particular actions 
are taken but whether those particular actions have an 
anticipated benefit or impact on affected species. In setting 
those goals, the question then becomes what kind of standards 
should guide them? It seems to me very clear that what 
mitigation should try to accomplish is that the combined effect 
of the permitted action coupled with its mitigation measures 
should not diminish the viability of the species that we are 
concerned about.
    You brought up, Mr. Pombo, in your opening statement this 
morning, the Supreme Court's decision in the City of Tigard v. 
Dolan. That case articulated the rule of proportionality; that 
is the exactions or the mitigation requirements imposed on 
landowners should be proportional to the impact they cause to 
public goods; in this case, endangered species impacts. 
Frankly, from my perspective, if we could achieve 
proportionality and if mitigation did offset or mitigation did 
improve the prospects of survival by an amount roughly equal to 
which development and other projects are diminishing prospects 
of survival, we would be much better off than we currently are.
    The fourth point I want to make is that compliance with 
mitigation cannot be simply assumed. Indeed, my testimony cites 
the results of one study carried out in Florida a few years ago 
that found widespread non-compliance, and in some cases total 
non-compliance with mitigation requirements. There is a need to 
monitor implementation of mitigation and that, too, will 
require resources which the agencies largely lack at the 
present time.
    The fifth point is I think that certain types of mitigation 
should be strongly discouraged. I have identified in my written 
testimony the practice that has occurred in the Southeast for 
several red-cockaded woodpecker HCPs of requiring landowners to 
pay a sum that is then used to manage Federal lands; in most 
cases, to manage Federal lands in ways that those lands should 
be managed anyway, and it seems to me that is shortchanging a 
species to mitigate in that manner.
    A final point I want to make is that we need to be creative 
with mitigation requirements and create incentives for 
landowners to do beneficial things for species conservation, 
and in saying that, I think I am echoing what many members of 
these two panels have said this morning already. Mr. Weygandt 
of Placer County talked about the need for market-based 
approaches; Mr. Schulz emphasized the need for incentives, and 
the gentleman from the North Carolina Department of 
Transportation gave an example of using the marketplace to 
design effective mitigation strategies.
    I want to emphasize to you one of the recent HCPs with 
which we worked that I think embodies exactly that--and I will 
wrap up here very quickly. The International Paper HCP creates 
an incentive for that company to do better on a parcel of land 
that it is managing for mitigation purposes than it has to, 
because if it does better, it can then earn mitigation credits 
that it can then sell to third parties, those third parties 
that are in need of mitigation. That, I think, is a very 
creative approach. Many of the mitigation banks that have been 
established in California about which you have had some 
testimony this morning were the response to Governor Wilson's 
initiative in 1995 to encourage those banks, and, by and large, 
that is a market-based, incentive-driven instrument that I 
think can play a useful role in endangered species 
conservation.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Bean follows:]

Statement of Michael J. Bean, Chairman, Wildlife Program, Environmental 
                              Defense Fund

    In 1982, Congress relaxed a nearly absolute prohibition 
against taking endangered species. It did so by authorizing the 
U.S. Fish and Wildlife Service and National Marine Fisheries 
Service to issue permits allowing the taking of endangered 
species ``incidental to . . . an otherwise lawful activity.'' 
Previously, the Services could issue permits authorizing the 
taking of protected species only for scientific research and a 
few other, very limited purposes. As a result of the 1982 
amendments, however, private landowners and other non-Federal 
parties secured a means of avoiding the prior prohibition 
against any action that incidentally took an endangered 
species. To receive such a permit, however, the statute 
provides that a permittee must ``to the maximum extent 
practicable, minimize and mitigate'' the impacts of the 
authorized incidental taking. Absent such mitigation, no permit 
may issue. This mitigation requirement, embodied in section 
10(a)(2) of the Endangered Species Act, is the primary focus of 
the testimony that follows. A secondary focus is on the 
requirements that attach to private land activities requiring 
some other type of Federal permit and therefore subject to 
review under Section 7 of the Endangered Species Act.
    Three principal conclusions can be drawn from the 
experience to date with mitigation under these provisions. 
First, the goals that mitigation measures are intended to serve 
need to be explicitly stated. Second, the Fish and Wildlife 
Service has sometimes inappropriately used the mitigation 
requirements of the Endangered Species Act to shift onto 
private landowners some of the costs of managing Federal lands 
in accordance with the requirements of that same Act. Third, 
and perhaps most important, some recently approved mitigation 
strategies offer the salutary potential to improve the survival 
prospects of imperiled species while at the same time creating 
economic incentives for private landowners to become active and 
willing partners in conservation efforts. These new strategies 
thus may be capable of making the Endangered Species Act both 
less onerous for landowners and more effective for rare 
species. Each of these conclusions is developed in more detail 
below.

The goals that mitigation measures are intended to serve need 
to be explicitly stated.

    Mitigation under the Endangered Species Act has the same 
purpose as it has under the Clean Water Act, the Fish and 
Wildlife Coordination Act, the National Environmental Policy 
Act, and other laws. In its ordinary, dictionary sense, 
mitigation refers to the ``abatement or diminution of something 
painful, harsh, severe, afflictive, or calamitous.'' It is, in 
other words, a means of making a bad thing less bad, of neutral 
consequence, or even beneficial. In a variety of environmental 
contexts, mitigation refers to the efforts undertaken to reduce 
or offset the negative environmental consequences of activities 
that are permitted to occur, notwithstanding their negative 
impact.
    In the endangered species context, the reason that 
mitigation requirements must be imposed when the incidental 
taking of an endangered species is permitted is quite 
straightforward: in general, any taking of a species already 
facing a high probability of extinction increases that 
probability and thus runs directly counter to the law's goal of 
achieving the recovery of such species. Mitigation, if 
effective, is a means of accommodating non-conservation 
objectives by allowing otherwise prohibited activities to go 
forward without necessarily reducing an imperiled species' 
likelihood of survival.
    Unfortunately, very often the biological goals that 
mitigation requirements are intended to achieve are never 
clearly stated. With a clear statement of goals, one can at 
least determine whether the particular mitigation requirements 
imposed one project worked sufficiently well to impose them 
again on another similar project. Without a clear statement of 
goals, the most that one can determine after the fact is 
whether the mitigation requirements were carried out, not 
whether they actually accomplished anything useful to 
conservation. Surprisingly, sometimes the mitigation 
requirements are not even carried out. A 1990 Fish and Wildlife 
Service review of the implementation of quite simple and 
inexpensive mitigation requirements associated with permits 
authorizing the construction of fourteen marinas in areas 
occupied by endangered manatees found widespread noncompliance. 
The review found that--

        77 percent failed to supply a required manatee education 
        display board;
        62 percent did not post required manatee warning signs;
        38 percent failed to establish slow-speed zones near the 
        marina;
        three failed to comply with any manatee permit conditions; and
        only two complied with all manatee permit conditions.
    These findings underscore the need to ensure that Federal 
conservation agencies have sufficient resources to monitor 
compliance with permit conditions. The failure of some 
permittees to carry out their mitigation responsibilities will 
only make it more likely that later permittees will face even 
more stringent mitigation requirements or even permit denial.
    The Fish and Wildlife Service has sometimes inappropriately 
used the mitigation requirements of the Endangered Species Act 
to shift onto private landowners some of the costs of managing 
Federal lands in accordance with the requirements of that same 
Act.
    The Endangered Species Act's prohibition against taking 
protected species applies broadly to all parties, both Federal 
and non-Federal. In addition, however, the law imposes special 
duties on Federal agencies. They must avoid actions that 
jeopardize the continued existence of any listed species and 
they must affirmatively use their various authorities to 
further the conservation of listed species. These affirmative 
duties have special significance for Federal land managing 
agencies. Because of their land ownership and broad management 
authority, they can create, restore, enhance, and manage 
habitat so as to further the goal of recovering listed species. 
To the extent they actually carry out such affirmative 
measures, they can lighten the burden that private landowners 
may otherwise bear.
    In fact, however, mitigation requirements imposed under 
Section 10(a)(2) have sometimes had the effect of shifting to 
private landowners the cost of carrying out the very 
affirmative Federal land management that Section 7 requires. At 
least five habitat conservation plans approved in the Southeast 
require private landowners to mitigate for the impacts of 
timber harvest on red-cockaded woodpeckers by paying specified 
sums to Federal land management agencies to enable those 
agencies to carry out affirmative habitat management on Federal 
lands. Other habitat conservation plans elsewhere follow 
similar strategies of exacting payments from private landowners 
that will be used to fund beneficial management on Federal 
lands.
    Arrangements such as these shortchange the species they are 
intended to protect. The actions that these mitigation payments 
buy are actions that Federal land managing agencies ought to be 
undertaking anyway, pursuant to their obligations under Section 
7, and with their own appropriated dollars. Moreover, it is 
often impossible to ascertain what management actions were 
bought with these mitigation payments and what other actions 
were carried out with the agencies' own appropriated funds. 
Thus, it is impossible to determine whether the mitigation even 
worked. Finally, the practice of allowing endangered species 
mitigation to take the form of payments to Federal agencies for 
actions that such agencies are supposed to undertake anyway is 
fundamentally inconsistent with the U.S. Fish and Wildlife 
Service's own recent draft policy disallowing most wetland 
losses elsewhere to be mitigated on National Wildlife Refuge 
lands, precisely because those sorts of improvements are 
supposed to occur there anywhere.
    Though I am strongly critical of the above practice, let me 
be clear that the blame does not rest entirely with the Fish 
and Wildlife Service. The reality is that Congress has often 
failed to appropriate sufficient funds to enable land managing 
agencies to do the beneficial management that Section 7 
requires. In doing so, Congress has been penny wise and pound 
foolish, effectively forcing the agencies to look to mitigation 
payments from private landowners as a source of funding for 
beneficial management practices on Federal land. If Congress 
consistently gave Federal land managing agencies the resources 
to restore, enhance, and beneficially manage habitat for 
endangered species, many species would be further along on the 
road to recovery, and the need to exact significant mitigation 
requirements from private landowners would be reduced.
    Some recently approved mitigation strategies offer the 
salutary potential to improve the survival prospects of 
imperiled species while at the same time creating economic 
incentives for private landowners to become active and willing 
partners in conservation efforts.
    Because many endangered species mitigation requirements 
have been onerous from the landowner's perspective and 
ineffective from the conservationist's perspective, there is a 
clear need to explore new strategies. There are, in fact, some 
recent models that offer the potential of being simultaneously 
more effective at producing conservation benefits and more 
attractive to the landowner. These are deserving of more 
widespread use.
    An example of a recent innovative approach to mitigation is 
contained in the recently approved habitat conservation plan of 
the forest products company, International Paper. International 
Paper worked closely with the Environmental Defense Fund to 
develop a habitat conservation plan for the red-cockaded 
woodpecker unlike any other that had been done for this 
species. The essence of the plan is that International Paper 
has committed to managing a part of its ``Southlands 
Experimental Forest'' in Georgia with the goal of establishing 
and maintaining up to 30 family groups of red-cockaded 
woodpeckers there. Only three solitary males of this species 
survived on this site when work on this plan began. If 
International Paper succeeds in meeting the foregoing goal, it 
will be permitted to take, incidental to timber harvest 
operations, red-cockaded woodpeckers found elsewhere on its 
operational timber lands in the Southeast. Although 
International Paper has extensive land holdings in the 
Southeast, only 16 family groups of red-cockaded woodpeckers 
are known to persist in widely scattered remnants on its 
operational land. Thus, if the population goal set for the 
Southlands Experimental Forest is achieved, International Paper 
will have created more woodpecker groups than currently exist 
on all its land and it will be able to earn ``credits'' for the 
excess that it may be able to sell to others as mitigation for 
new highway projects or other developments in woodpecker 
habitat. As a result, as International Paper's Craig Hedman 
noted in The Charlotte Observer, ``[i]nstead of a problem to 
overcome, you can view that species as an asset.''
    On a smaller scale, another forest products company, 
Champion International, has already accomplished exactly that. 
It recently agreed to assume the mitigation responsibility for 
another landowner's development project in Texas in return for 
a substantial monetary payment. In its case, endangered species 
habitat that the company has voluntarily enhanced with no 
expectation of financial return has in fact produced a 
substantial return.
    What International Paper and Champion International have 
recently done is closely akin to an idea that former California 
Governor Pete Wilson championed with a formal 1995 policy to 
encourage ``conservation banking'' for endangered species and 
sensitive habitats. Pursuant to that policy, dozens of 
conservation banks have been created in California, including 
in Alameda, Kern, Riverside, Sacramento, San Bernardino, San 
Diego, San Joaquin, Santa Barbara, Shasta, Sonoma, and Tehama 
Counties. Many of these are the result of entrepreneurs 
recognizing the potential to profit from investing in 
conservation--entrepreneurs that range, by the way, from the 
Bank of America to the Boys and Girls Clubs of East County 
Foundation in San Diego County. They are, moreover, giving 
other landowners who must mitigate development actions 
elsewhere a choice that they would not otherwise have.
    When Governor Wilson's policy was announced in 1995, Bank 
of America Vice Chairman Martin Stein hailed it as ``a common 
sense, market-based initiative that will help move development 
forward while still providing a significant level of 
environmental preservation.'' Other major companies that have 
entered the conservation banking business include Chevron and 
Arco, although most of the conservation banks established in 
California are operated by much smaller interests. It is clear 
that any conservation bank for endangered species must be 
designed with considerable care and scientific rigor. Evidence 
of successful restoration of endangered species must be clear 
and unambiguous before the bank is allowed to earn and sell 
credits. While the jury is still out on the success or failure 
of the conservation banks currently in operation, they 
represent a creative, positive response to the need to design 
effective mitigation for authorized development actions. If 
they work, they will have given landowners a choice they did 
not otherwise have, they will have given rare species better 
mitigation results than they have often gotten, and they will 
have reduced the overall cost of achieving conservation goals.

    Mr. Pombo. Thank you.
    Mr. Johnston, you said something in your testimony about 
HCPs being voluntary, and you brought up the PALCO situation. 
If I remember correctly, when negotiations over the HCP began 
to break down, there was a statement made by one of the Fish 
and Wildlife agents--in fact, I have it here--it said that if 
PALCO Pacific Lumber didn't come back to the table, a Federal 
agent promised extremely stringent enforcement of the 
Endangered Species Act beginning on Tuesday. Does that sound 
voluntary to you?
    Mr. Johnston. Well, I had heard--someone else had read me 
that same quote before, and I wasn't involved in that 
situation, so I don't have any first-hand knowledge, but it is 
clear that the take prohibition exists, and the landowner has 
to live with it. I mean, I guess, really, that goes to a 
question of the discretion of the agency to enforce it, and in 
some cases I suppose you could say that enforcement might be 
used as stick. I think, perhaps, that is what you are 
suggesting. Then, it is something less than voluntary. Well, I 
guess, in one sense, if the take prohibition--well, the take 
prohibition is a given; that is the starting point that every 
landowner has to deal with. Now, as a landowner, I can make a 
choice, and I could----
    Mr. Pombo. You could make the choice to use your land and 
enter into the HCP or not use your land.
    Mr. Johnston. Well, I could use my land to avoid take, and 
if it is impossible to use my--your question would only arise 
when it was impossible to use my land, and I don't think, at 
least in my experience, is usually the case. It is a question 
of landowner----
    Mr. Pombo. In your experience, you have dealt with HCPs 
which are basically managing a landscape.
    Mr. Johnston. Yes.
    Mr. Pombo. And, Mr. Tsakopoulos, Mr. Weinberg, Mr. Worden, 
in their cases, if they were to enter into and HCP, there is an 
exaction from them. In Mr. Tsakopoulos' case, I believe it 
was--he had to give up--what did you say, 170 acres in the 
middle or----
    Mr. Tsakopoulos. One hundred and seventeen acres.
    Mr. Pombo. One hundred and seventeen acres in the middle of 
his project.
    Mr. Tsakopoulos. Mr. Chairman, that was not an HCP.
    Mr. Pombo. But that was an exaction that came out of you in 
order for you to use your property, and the point is, is that 
there a huge difference between a timber company and an HCP 
which is able to manage their holdings and manage their 
landscape in a way that satisfies Fish and Wildlife and 
National Marine Fisheries, in many cases, and someone else who 
is using their land, that in order for them to use it for 
development purposes, they either give up a large portion of 
their property or they have to pay a substantial amount of 
money into a fund. Mr. Gibbons brought up earlier Los Vegas. In 
that particular case, they have raised in the last 4 years--I 
believe it is--over $30 million. It is a per acre fee that is 
going into a fund that every property owner has to participate 
in if they want to use their land. That is not voluntary.
    Mr. Johnston. Well, I do agree with you that there are 
differences between different kinds of lands uses as you 
approach the HCP process, and while a developer faces one set 
of challenges, we face on the forestry side some others; that 
being that we plan to manage the entire landscape over the 
long-term, and the ``no surprises'' assurances and the ability 
to have multi-species plans becomes critical for us.
    Mr. Pombo. I am not saying you don't have problems. I am 
very well aware of what has gone into the negotiations on a 
number of the HCPs that have been entered into and how 
difficult it has been to get from here to there, and in some 
cases I didn't think it was going to happen, and it ultimately 
did, and it is very difficult. But I do take somewhat issue 
with you saying that they are voluntary, because they are 
anything but voluntary, and Fish and Wildlife may take the 
official position that they voluntary, but for people out in 
the real world, they are not voluntary. It is either pay the 
piper or you don't use your land.
    Mr. Doolittle.
    Mr. Doolittle. Mr. Tsakopoulos, in your written testimony, 
you refer to a problem with Fish and Wildlife staff double-
dipping for mitigation. Could you briefly describe what double-
dipping is, and tell us your experiences with it?
    Mr. Tsakopoulos. What I refer to is a particular project 
that we had permitted. We went ahead and destroyed the wetlands 
that we were permitted to destroy, and the project was 
underway. We sold the portion of the property that was 
permitted to be developed, and the contractor's agent--one of 
the tractors did not see one of the posts and clipped one of 
the vernal pools, 100 to 200 square feet. That was sufficient 
reasoning for the Army Corps and Fish and Wildlife to come back 
and declare that we should revisit or they should revisit the 
whole permit, and they have requested--we still have not 
settled that particular problem--they requested that we 
mitigate for off-site indirect effects, and the indirect 
effects are enormous. We already had mitigated, quite 
substantially, for all the damages. This is the double-dipping. 
They find an excuse to come back, and when they do come back, 
they exact additional pounds of flesh, as we sometimes call it. 
These people that worked at Fish and Wildlife--young people, 
usually, who have tunnel vision and who believe that their 
mission in life is to exact as much protection for the species 
as they possibly can without regards to property rights or what 
the law is or what is fair and just and prudent. This is why, 
Mr. Doolittle, we very strongly recommend that the formation of 
HCPs, similar to the one we have in North Natoma, prevent a lot 
of this from happening. You know what the fee is and when they 
set up the HCP, there is a lot of pubic hearings, and that 
prevents Fish and Wildlife from asking too much. So, hopefully, 
you come up with a fair agreement, and then everybody knows 
what the rules are.
    Mr. Doolittle. So, If I understand, in this particular 
instance, you had already gotten all of the permits needed for 
this; you sold off a part of it. The part you sold off, the 
fellow clipped one of the vernal pools, and then the Corps 
consulted with Fish and Wildlife, and Fish and Wildlife thought 
it could get a whole new biological opinion and go back and now 
seek mitigation for indirect effects? Is that what happened?
    Mr. Tsakopoulos. Yes, that is correct.
    Mr. Doolittle. Well, that sounds utterly arbitrary and 
capricious.
    Mr. Tsakopoulos. It is.
    Mr. Doolittle. And it sounds like that is, frankly, your 
concern with individual personnel; that you are not dealing 
with any standard of certainty of having fairness involved. It 
appears to be at the personal whim of the government official 
who is assigned to the particular project.
    Mr. Tsakopoulos. There is no question that the way the law 
is today, Fish and Wildlife and Army Corps of Engineers is 
together, they are the sheriff, they are the judge, the jury, 
and the executioner as far as the private sector or whoever the 
permittee is. They decide; they have such an extreme latitude 
that they can make decisions that are not fair, that are not 
just, and that are not prudent.
    Mr. Doolittle. I guess I would just observe, Mr. Chairman, 
this is exactly why our Founders gave us a written Constitution 
and a separation of powers and a Federal system and a bill of 
rights, so the power against a citizen by government officials 
could not be used in a arbitrary and capricious fashion, and 
yet it seems we have repeated examples of that displayed in the 
testimony today.
    I wonder, Mr. Tsakopoulos, based on your experiences with 
the south Sacramento habitat conservation plan, if you could 
explain to the Committee what you consider to be the single 
biggest problem with the HCP process?
    Mr. Tsakopoulos. I wish I could put my finger on the 
biggest problem; there are quite of few of them. We started 
working on the south Sacramento HCP approximately five years 
ago at the request of Secretary Babbitt. We were hoping to 
complete it within a year or year and a half. Five years down 
the line it is not done, one of the reasons is that the staff 
at Fish and Wildlife is overstretched. They don't have 
sufficient people to put on this particular project to complete 
it, and not only to participate but to give direction. We need 
people that are knowledgeable with HCPs that would give 
direction and work together with the county and the developers 
to put it together. I know they ran out of money a couple of 
times. The private sector agreed to provide a lot of the funds, 
and we have done so, but the time is going by--five years have 
gone by, and it is not done yet. Now, it appears that within a 
year, we may be able to get that particular HCP done, but that 
is why, Mr. Doolittle, if at all possible, if the funds can be 
provided so that they can provide knowledgeable people from the 
Service to make sure that they can give direction, proper 
direction, to get the HCPs formed. The HCPs will be very 
beneficial to the present and future requests for permits.
    Mr. Doolittle. In reading your testimony, it sounds like 
one of the biggest benefits you feel exists with HCPs is that 
they are done in more of an impersonal, public forum where you 
get more fairness and less arbitrariness, I guess, in the 
decision-making. Is that a fair reading of your comments?
    Mr. Tsakopoulos. Yes.
    Mr. Doolittle. It is funny, as I have considered HCPs, 
those things would never have occurred to me, and yet you have 
dealt with it on this practical level, and it is interesting to 
me to hear your comments.
    Mr. Tsakopoulos. We at least hope that is what will happen. 
There was a tremendous battle to get the HCP done in North 
Natoma this year, but at least it is there, and we know what 
the cost is; we have agreed to it, and we are moving. When we 
were forming that HCP, it looked like we were paying way too 
much. Looking at today, that was a good deal. We are happy with 
it. Let us move on with it, because the time, to us, is 
critical, and we cannot lose time in the development.
    Mr. Doolittle. I guess, speaking as a developer, I would 
assume time is always critical in that kind of a business, 
isn't it?
    Mr. Tsakopoulos. Yes, sir.
    Mr. Doolittle. Mr. Chairman, I have a couple more 
questions. I would be happy to yield back to you and go for a 
second round.
    Mr. Pombo. We can do a second round.
    Mr. Doolittle. Okay.
    Mr. Pombo. Ms. Napolitano?
    Ms. Napolitano. Thank you, Mr. Chairman. The things I am 
hearing from this panel--and I apologize for not being here, 
but I had another committee that I had to sit in on--is that 
there is a consensus that the HCPs are workable for both the 
preservation of the habitat and also for the development of 
land and working with the developers and its users. If the 
HCP--and excuse me, I am not quite sure how the HCPs are set 
up. Who asks for them? How do they begin to work for these 
communities?
    Part of the other question that I have--and I am hearing 
and read some of the information--that a lot has to do with 
either not enough personnel to be able to help work through the 
project or on the HCP as well as possibly the funding to be 
able to establish or expedite the process to be able to become 
more timely on both sides of the fence, and I would like to Mr. 
Johnston to address some of these, because I don't know what 
timeframes that the agencies give the developers to be able to 
begin the process of approving the projects, themselves, or 
does it help to go through the HCP? Where would funding help to 
be able to be to expedite the process to help both? I am 
assuming both are in agreement that there is a way to work 
together, and that is what we are--especially, in my case, I am 
very interested in finding a way to be able to work together. 
Let me start off with those.
    Mr. Johnston. I am not sure I got them all, but I will take 
a stab at what I think the salient ones were. In terms of the 
process and the way I look at it and the way clients that I 
work with individually look at it, is if we have an endangered 
species issue, whether we have one on a piece of property or we 
think we might or we have habitat that could support a species, 
one has to make a decision or a judgment, an assessment, of 
whether you want to go the pure regulatory route; that is 
assume that you are going to have to live with the take 
prohibition of section 9, or whether you think a planning 
process might achieve a greater degree of certainty for you. 
And if you, as a private individual, decide you want to go that 
way, then, procedurally, either you develop the kinds of 
measures or the kinds of mitigation features that you think 
would be sufficient to meet the standards in section 10 of the 
Act for issuance of an incidental take permit or you work 
cooperatively, more typically, cooperatively with the Services, 
or the Services, to try to develop what those measures might be 
and how they might apply on your particular piece of property.
    Now, once you have reached a basic agreement, then you 
start the formal application process, and this is how it pretty 
much works in the field. And that process, then, is taking the 
written document that you have worked up and beginning the 
process through the ESA approval and through National 
Environmental Policy Act compliance.
    One of the criticisms that has been expressed to me and 
that we have heard here today is the timeliness issue. How long 
does it take to process one of these things? Well, that has 
been a concern of ours, as well, and, in fact, recently, the 
Secretaries Daly and Babbitt have announced a commitment to 
have their agencies sit down with the applicants at the front 
end of the process and develop a timeline, and this was not 
something that was typically done before. I think that is a 
step in the right direction.
    I think it is clear that specific devotion of resources for 
the section 10 HCP Programs would be a step in the right 
direction, and, as I said in my initial testimony, I think 
there are some things that can be done to streamline it, and 
that is what many of our members have been trying to work with 
the Services on. We believe in the process. We think good can 
come out of it. It has to be made more efficient than it has 
been in some of the cases.
    Mr. Tsakopoulos. I would appeal most of your questions to 
Fish and Wildlife. They can tell you a lot better as to how it 
is run; how it is formed. They are the experts.
    What I can tell is that once the HCP is formed, it makes it 
a lot easier for someone to get a permit to utilize their land. 
Now, whether it is clear or not or whether we should paying as 
much as we are, et cetera, those are things that have to be 
discussed probably at different times. What we hope to do is to 
make the process a little friendlier, and I think we can do 
that.
    Now, I know there are experts here from Fish and Wildlife 
if they want to answer some of your questions.
    Ms. Napolitano. We can do without the HCP background. I can 
find that out essentially by contacting the Director or asking 
staff.
    But my concern is--and I hope no one takes offense--but I 
found, not only at the State level but the Federal level, that 
the agency bureaucracy sometimes is insurmountable and that you 
go into a package that you have to contact your representative 
or go beyond to try to get some faster solution or some sanity 
to an issue that shouldn't be that hard, and while I wouldn't 
say that all agencies are the same, sometimes that happens 
because maybe from the administrative level there is not enough 
information coming down to the people who actually handle the 
caseloads to understand what the definition is of be able to 
user-friendly. And I am using very basic terms, because that is 
how people come at me and ask me for assistance and support in 
getting projects looked at just for resolution, never mind 
partisanship. We are trying to get things done, because they 
want them done. I think it is just fairness.
    Mr. Bean. Mrs. Napolitano, in my experience, frequently I 
have had developers and development interests say to me that 
because time is money to them, they would put far more money on 
the table for conservation purposes if they could get a 
resolution of these issues quickly. Now, unfortunately, they 
can't get a resolution of these issues quickly. If the agencies 
charged with processing these permit applications don't have 
the resources to proceed more quickly----
    Ms. Napolitano. That was my other point.
    Mr. Bean. [continuing] we would be much better served and 
conservation would be better served if these agencies had 
resources commensurate with that task.
    Mr. Tsakopoulos. I agree with the answer that was given, 
that it appears that--there are two things that happen. One, 
that we do not have sufficient upper management people that 
understand the whole process that probably are willing to be 
responsive to the public with this tremendous permit request. 
Number two is that you have people who are trained into biology 
that have tunnel vision only, and time is not important to 
them, neither is the economic factor, and that tends to cause a 
lot of problems.
    Ms. Napolitano. Thank you.
    Mr. Pombo. Mr. Doolittle?
    Mr. Doolittle. Mr. Tsakopoulos, in your testimony, you said 
that you believe the Fish and Wildlife Service must take 
greater consideration of the economic impacts of its decisions, 
and we did hear from the Director that the policy, which is a 
written policy, that they try to implement. Do you feel that in 
the Sacramento area that the Sacramento field office has done 
an adequate job of considering the economic impacts of the 
decisions it has made on your projects?
    Mr. Tsakopoulos. I do not believe they have done a good job 
considering economic factors.
    Mr. Doolittle. Do you have any suggestions as to what we 
might do or they might do to improve the situation?
    Mr. Tsakopoulos. I do. We must remind them what the 
leadership is saying again and again. I don't know if--I assume 
the President and the Vice President mean what they say that 
the economy and the environment must co-exist, and, my 
goodness, it must. We live on this Earth, and we have got to 
take care of it, because it has to be prudent and reasonable. 
That is important. The possibility of having an ombudsperson--
do you understand me; ombudsman or ombudsperson--that is 
neutral to check some of these decisions from time to time may 
be a solution. Right now, there is no such person.
    Mr. Doolittle. That is an interesting thought.
    Mr. Chairman, I wonder, it was my understanding that there 
is a Fish and Wildlife person here, even though the Director is 
not here. I wonder if we could invite that person to come 
forward and react to Mr. Tsakopoulos' comments?
    Mr. Pombo. Yes. If you could join us at the table and 
identify yourself for the record.
    Mr. Spear. My name is Mike Spear. I am the Manager of the 
California-Nevada Operations Office for the Fish and Wildlife 
Service.
    Mr. Pombo. Thank you. Mr. Doolittle?
    Mr. Doolittle. Mr. Spear, you have heard the interplay 
about the Sacramento field office and the concern about not 
taking into account the economic impact. Could you share with 
us your perspective on this?
    Mr. Spear. Well, my perspective on the subject of the 
panels, in general, I would certainly like to share, but 
specifically to the question about economics brings in a 
challenge in the law, itself, where the fundamental biology is 
basically our direction. In recovery planning, there is, in the 
way we prepare them these days where we have both a technical, 
biological, scientific group as well as stakeholder community--
the idea being we get the best biology and then we develop 
stakeholders to help design the best economical way to develop 
that plan--is one way economics is brought in. It is brought in 
also in the critical habitat determinations. Specifically, as 
it relates to section 7 type analysis, which Mr. Tsakopoulos is 
referring to here, a jeopardy determination, for instance, or 
an analysis is very specifically a scientific, biologically-
driven determination.
    I think a big element, though, that is within our 
discretion that has a lot to do with economics, and that is the 
pure concept of time is money, and speeding things up, 
expediting the process, working with people early, coming to 
conclusions, not revisiting them, et cetera--those are 
principles that have economic consequences deriving from 
biology and things which I subscribe to. I was listening to Mr. 
Tsakopoulos' list of 10 points, and I found very little, 
really, to disagree with.
    If the chairman might indulge me a second, I would like to 
make a couple comments about--what I would say, drawing from 
the members and my own experience--I have had as much 
experience, frankly, as anybody in the Service in preparing 
HCPs, both forest types in the Northwest and urban types in San 
Diego and Orange County and a big effort now in Riverside 
County--let me just list some things about the HCP countywide 
effort. The local government is in control. I tend to agree 
with the Chairman's comments about how they are voluntary, and 
I try not to use the word. I think it can be overused about the 
voluntary nature of them, but when the county comes to us or a 
group of local jurisdictions and says they would like to do a 
multi-species plan, a countywide HCP or a large landscape--and 
I would say 100 square miles or better--they are leading that 
plan, and we see that over and over. Those plans cannot proceed 
without them. I am working very closely with the board of 
supervisors, for instance, from Riverside County; talk to them 
weekly about developing a plan. There is wide participation 
from all stakeholders.
    The biology is reviewed, and there is peer review of that 
biology for the purposes of making sure in the end that we 
conserve the species and we can also defend against mitigation. 
Nobody wants a plan that fails later on, but the key is 
everybody sees the biology.
    Mitigation ratios you talked about. Sometimes plans have 
mitigation ratios. Those are a negotiated mitigation ratio 
related to the biology and the specific circumstances, but 
stakeholders, landowners, et cetera are part of that process. 
San Diego has a series of mitigation ratios embedded in the 
plan. If this happens, then everybody knows why they are there; 
how they got there; what the biology behind them is. There was 
differences, yes, but in the end this is the--the determination 
was made. and now it is applied, and they are agreed to in 
advance.
    There is broad support when you get all done or else it 
doesn't get done, quite frankly, because it usually has to be 
voted by a city council or a board of supervisors. I attended 
many meetings in San Diego, Orange County, Riverside County in 
front of city councils and boards, and started ``From the 
Federal point of view, here is what this plan is; here is what 
we offer'' responding to their questions at the local level. 
They are the land use entity.
    It is efficient. From our point of view, it is efficient; 
from the landowner's point of view, it is efficient, and from 
the county's point of view, it is efficient, and that is, we 
stay away from project-by-project review. We simply cannot, in 
the State of California, conduct ESA project-by-project, and 
that is part of the complaint we are hearing. We are 
overwhelmed with the kind of development that is going on right 
now and the ubiquitous nature of the species.
    So, we have to move towards larger landscape level 
countywide. I have taken this approach to the Secretary about 
three weeks ago; briefed him on it; briefed many of the members 
of the Department. There are 30 plus counties in the State that 
really should be thinking that way. We are working with 
probably half of them in some ways and some of them we have 
very direct relationships--I mentioned Riverside and Placer 
Counties, specifically--others, we are in more formative 
stages, but there are probably 30 of them we ought to be 
working with.
    It is a great opportunity to spread the cost, because you 
have the local decisionmakers who have taxing powers, that can 
decide whether they want the last developer to pay or to spread 
it throughout the community, and that is a decision they can 
make, and, again, sometimes it has to be voted on. The public 
sees, how did the costs get spread to these agencies?
    And, finally, from our point of view, it is best for the 
species. We get landscape type of plans that do a lot better 
and are less expensive overall for the species. So, for all 
those reasons, our direction, I think, has to point that way or 
else we are going to have a lot of these sorts of issues you 
have heard about today for many different reasons.
    Thank you.
    Mr. Doolittle. May I continue, Mr. Chairman, or what would 
you prefer since my time is up?
    Mr. Pombo. I will let you continue. I do have questions 
that deal specifically with the way Mr. Spear just described 
that, but I know you had specific questions, so go ahead.
    Mr. Doolittle. I don't object--go ahead. My questions are 
going to take an entirely different text, so go ahead and ask 
your questions related to----
    Mr. Pombo. One question I have for you, Mr. Spear, is why--
I understand Mr. Tsakopoulos wanting an HCP because of the 
certainty. I made the comment earlier that you have to pay the 
piper to use your land. Well, with him, he at least knows what 
he owes them up front, and he is getting it out of the way up 
front, and he has some certainty in being able to do that. And 
that is if you accept the process that is in place as being, 
number one, legal, and, number two, being necessary.
    Why is it that in California we need large regional HCPs, 
countywide HCPs; large property owners have to enter into HCP. 
Throughout the entire region you are from or that you represent 
here today, that it is necessary that we do that, and yet in 
the rest of the country, they issue almost no section 10 
permits. They don't go through large regional HCPs with the 
exception of--I think it is Austin--Austin, Texas. They don't 
have the large regional HCPs. They don't go through all of 
this. They don't have the conflicts on a daily basis. The 
congressmen that represent those areas don't have people in and 
out of their offices every day complaining about the Fish and 
Wildlife Service.
    Why is that your region needs all of this, and the other 
regions of the country don't? And I won't buy the bio-
diversity--the hotbed of bio-diversity that we have in 
California, because there are similar hotbeds of bio-diversity 
throughout the country where they don't have this.
    Mr. Spear. I know in other hotbeds of bio-diversity, they 
do have it, and you mentioned Austin, and we heard earlier 
about Florida scrub jays; Washington County, Utah with their 
desert tortoise problem. They are having a huge issue right now 
in Tucson, Hema County, over an owl and I am not sure what 
else, a cactus. The idea that this doesn't occur elsewhere is 
just not correct.
    Mr. Pombo. I am just going by the records that Fish and 
Wildlife Service gave us as to where their HCPs were, where 
their section 10 permits were issued. If they gave us 
inaccurate information for this hearing, please correct it. I 
will give you the opportunity to do that.
    Mr. Spear. I know for a fact that there is a huge issue in 
southeast Arizona right now over--it is in Hema County, largely 
Tucson, over exactly these sorts of issues. I was involved in 
the early days of the Austin HCP where when I was Regional 
Director in Albuquerque, and that one has continued because 
of--but the other factor, it is not just bio-diversity; there 
has to be growth and change. Not all parts of the country are 
expanding anywhere near some of the issues along the Southeast 
or the Southwest or, in particular, California. We have up in 
the Northwest, the forest issues, largely single landowner 
HCPs. But that situation is changing because of the salmon 
listing. The city of Portland, the city of Seattle, some of the 
other cities up there are now seeing their urban landscape 
affected by anadromous fish listings traveling through those 
areas and finding out that some of the practices of cities, or 
urban environments are going to affect it. So, you will see up 
there, as well.
    I won't try to use the bio-diversity, but I will indicate 
to you that it is this notion--it is the element, also, of the 
rapid development. To the extent that you have listed species 
in most places, when somebody goes to develop--and that is the 
difficult about habitat conservation planning. I tend to agree 
with your argument about voluntary. If you don't do it 
countywide, then you have to do it project-by-project, and if 
we can't get it done project-by-project, the unfortunate thing 
is it is not as if the problem doesn't still exist, because 
then they face section 9 enforcement if they go ahead, and that 
leave us in a terrible circumstance. We are in a situation 
where we can say no to people, because they have no recourse, 
then, but to face section 9.
    I just have to indicate, Mr. Chairman, California is the 
example, the poster child, for this issue. It is not the sole 
area, but it is--there is more there than anywhere else.
    Mr. Pombo. There is no question; it is not even close. And 
if we compare other areas of the country that are experiencing 
rapid growth--the suburbs of Washington, DC, which are 
experiencing rapid growth, they don't have any regional HCPs 
here.
    Mr. Spear. I don't know if there is any endangered 
species----
    Mr. Pombo. There are endangered species. In fact, there is, 
I believe, three in Washington, DC, itself. There is little or 
no enforcement of the Endangered Species Act here. There are 
next to no employees in this area, and there is almost zero 
enforcement of the Endangered Species Act here. In the State of 
Hawaii, which is probably as biologically diverse of any of the 
States, why do they not have section 9 problems there? Why are 
there not takes there? I mean, I was in Hawaii last year, and I 
saw a new roadway that was built through the middle of a 
rainforest, and they were talking about how fantastic this was 
that they were able to have a new roadway through here so 
people could see it, and it is a tourist thing. Why was there 
no section 10 permit issues there? Why was there no section 9 
problem with takes on that one?
    Mr. Spear. Mr. Chairman, I can't speak to the specifics of 
the road, but I--having been Regional Director prior to coming 
to Sacramento, covering Hawaii--and Director Clark mentioned it 
earlier, some differences--up until very recently, there was no 
authority. They couldn't get State permits, so they were not 
going to get a Federal permit for take when it wasn't allowed 
by the State----
    Mr. Pombo. I understand that, but they build the road. I 
have got a road that they are building in my district that you 
are holding up, because they have not sufficiently mitigated 
their impact on the San Joaquin kitfox. It is an existing road 
that they are widening and the Fish and Wildlife Service is 
holding up the process of them doing that right now. They built 
a road through the middle of a biologically diverse area. You 
can't tell me that you don't have authority there in the State 
of Hawaii, but you have authority in San Joaquin County, 
California.
    Mr. Spear. The primary problem in Hawaii is not the habitat 
issue; it is the exotic species. The threat to most species is 
the exotic plant, animals, insects that have altered the 
landscapes of generally the species that are on the hillside. 
This road is an obvious exception, but there is not the 
immediate development impact on most of those species. The 
problems come from the plants coming in, overtaking, changing 
the habitat and not so much from a development issue. So, we 
have a character change as to why things are affected. So, if 
you didn't you find a jeopardy on the road----
    Mr. Pombo. I will have to ask the Committee's indulgence on 
this, because I believe this is extremely important.
    I have, in my hometown, a developer who wanted to develop a 
piece of property that had development on four sides. It was 
700 acres; it had development on four sides of it, and he still 
had to pay a 3 to 1 mitigation in order to develop that 
property. It was not a change of landscape issue. It was an 
abandoned railroad site. It had been used since the 1860's--
1865 of 1864--it had been used, and yet in order for him to use 
that, he had to mitigate. The problem that we have got in 
California is that it has become mandatory that if you are 
doing anything with your property, you have to mitigate 
regardless of the impact; regardless of the jeopardy decision; 
regardless of anything else. That is why we have these regional 
HCPs. That is why we have individual property owners who have 
problems. It is because the official position in your region 
has become that if you are doing anything, you have a mandatory 
mitigation, a mandatory exaction from property owner who is 
doing that.
    The reason they don't have this in Hawaii or elsewhere 
throughout the country is because they look at these cases, 
case-by-case, or they don't look at them at all, and they don't 
have a mandatory exaction from every property owner, and that 
is the difference.
    In your region of the country it is mandatory, and that is 
why we are ground zero for these problems with mitigation is 
because sometimes they just don't make sense. Sometimes it is 
not necessary to mitigate; sometimes it may be, but sometimes 
it is not necessary, and that is why we have so many problems 
in California with this particular issue.
    Mr. Doolittle?
    Mr. Doolittle. Mr. Spear, you indicated that it was science 
that was driving the determination of the Fish and Wildlife 
Service on these issues, but you heard Mr. Tsakopoulos. I think 
the idea has been implicit in the comments of--or the testimony 
of many of the other witnesses. I mean, Mr. Tsakopoulos used 
words like personal bigotries of the individual or unchecked 
discretion, conveying the idea that there is a good deal that 
is arbitrary, capricious, and subjective. Do those 
characterizations give you concern that, perhaps, it isn't as 
objective as it might be amongst certain people in your area?
    Mr. Spear. I would say, of course they give me concern, if 
that is the perception of the way our people operated. I think 
that Mr. Tsakopoulos also went on to say that he thought that 
we have got to get this to a more cooperative, user-friendly 
basis, and I would totally agree with that, and I wouldn't 
agree with his characterization that that is the way our people 
operate in any sort of a general fashion. Could I sit here and 
say that none of my people have ever acted in such a way that 
they might appear arbitrary sometimes? No, I can't say that, 
because we all know that people make statements at times that 
you later regret. But, as a generalization, I certainly do not 
agree--but I do agree that that is the way we ought to be 
striving to.
    I have spent a lot of time, I know, working with landowners 
on these kinds of issues, particularly, as I say, with local 
units of government trying to help wade through these problems, 
and, frankly, sometimes I bring a broader perspective to bear 
on an issue to try to break through logjams, but I increasingly 
feel that our focus on California, as we have had experience 
with this program--and, as I say, some of the--most of the 
experience anywhere in the country, our people are--every day 
they get better at being able to make sure that they can 
deliver these kinds of programs to the public efficiently, with 
sound advice, and to help move things through. I mean, the 
difficulty is we just don't have enough people to deal with 
enough people that want to talk to us at any one time. But they 
are causing me concern, and I will continue to work on it.
    Mr. Doolittle. I mean, you have got 55 people. Isn't that 
the second largest office in the United States?
    Mr. Spear. In Sacramento?
    Mr. Doolittle. Yes.
    Mr. Spear. It might be the largest.
    Mr. Doolittle. Well, it looks like Carlsbad has that 
distinction.
    Mr. Spear. Okay, they are close. They are both big.
    Mr. Doolittle. You know, I was just thinking about Mr. 
Pombo's comments. We all lean back here, and we see what goes 
on around here. This has got to be one of the most quickly 
developing regions in the United States, and I think this is in 
the Chesapeake Bay region, and they have got 4 as opposed to 
our 55. Now, I know you are going to tell me the difference in 
listed species, but I bet you if you gave them 55, they would 
find a few more species around here, too.
    I am going to share with you my opinion based on what I 
hear through my office. It is almost impossible for me to go 
anyplace in my district where I don't hear bitter complaints 
about actions of the Fish and Wildlife Service. Now, I am not 
in a position to know whether those are or are not well 
grounded, but I do know that I hear a lot about it, and there 
is a strong feeling that is a great deal of unfairness and a 
great deal of abuse of power because of this life and death 
power, at least financially, they have over people of what they 
are going to do. And, so they will agree to all kinds of 
extraordinary demands. It seems to me--and if you care to react 
to this, I would be interested in hearing your reaction--but in 
that example on the Silver Spring project that Mr. Tsakopoulos 
talked about where some guy he sold a property to accidentally 
clipped one of these vernal pools. For the Fish and Wildlife 
Service person to go in and reopen up the whole thing about 
indirect impacts when that had already been addressed once 
before, is totally arbitrary, capricious, and absolutely 
outrageous, in my opinion.
    Do you want to react to that?
    Mr. Spear. Yes, the circumstances that are indicated here 
cause me concern, okay? And it is something I will look into 
when I get back.
    Mr. Doolittle. You know, I wish you would, and if you 
wouldn't mind, I would appreciate an update, because it is 
heartening that you and the Director, both, when you were made 
aware of specific things, it seems like--I mean, you didn't sit 
there and defend them--it seem like you were concerned, too, 
and that gives me encouragement. If our government officials--
because you are the ones who manage these people, and if there 
is--I mean, here is another way you have got that we didn't get 
into too much specifically, but it is in his testimony, called 
the Kramer Ranch project where they got permission to scrape 
off the vernal pools, and they mitigated for these in another 
place, and then Fish and Wildlife delayed it so long that 
somehow the vernal pools reestablished themselves, and then 
they were going to make them go through the whole ESA take 
analysis all over again after they had gone through extensive 
studies, original mitigations, and then, because of this delay 
brought on by the Fish and Wildlife Service, itself, and the 
puddle forms and fairy shrimp spring to life. All of a sudden, 
they have got to go through this analysis all over again? I 
mean, that it just ludicrous, I think. What do you think?
    Mr. Spear. Well, I have learned that when these things come 
up, you have got to look behind them and see. One of the things 
that does occur is that you can get a listing--and I don't know 
if that is the case here--where all of a sudden you go back and 
if you were to say that, ``Well, we already did that before 
even though we have had this listing in the interim and maybe 
the permit has expired and you have to come back.'' The dilemma 
is you leave the developer out there subject to third parties. 
If you haven't dealt with the fact that there is a list of a 
species and in some way made recommendations as to how to 
handle it, come to some conclusion, if you just ignore it, then 
nobody is served.
    Mr. Doolittle. I mean, in this case, they knew about the 
listed species. They got specific permission to scrape it all 
off and reestablish somewhere else, and then because of the 
delays of the Fish and Wildlife bureaucracy, these things 
formed all over again on the land that had been scraped off. I 
mean, that sounds--it just sounds unbelievable to me.
    Mr. Spear. Well, frankly, it does to me, too.
    Mr. Doolittle. Well, would you look into that and get back? 
Mr. Spear, would you be willing to look into that and get back 
to the Committee?
    Mr. Spear. Yes, I would.
    [The information follows:]
    Mr. Doolittle. Okay, good. Thank you, Mr. Chairman.
    Mr. Pombo. Ms. Napolitano?
    Ms. Napolitano. Thank you. I think I will make mine real 
brief. I think we have a vote to go after.
    But I remembered Mr. Johnston made a point of saying that 
Congress must address the section 7 issue, and I would like to 
know why and what we can do with it?
    Mr. Johnston. Thank you. Well, one of the requirements of 
section 7--well, let me back up and start at the beginning--
section 7 consultation is required when the agencies take an 
action, like issuing a permit, and in the issuance of a habitat 
conservation plan or the issue of a permit for a plan, that is 
construed as being such an action that is subject to section 7 
where the Service will consult with itself, which is sort of an 
interesting concept, but that is the way it has been 
interpreted. So, they prepare the plan and then enter into a 
consultation process that is specified in their regulations. 
During that period, both the Services and the applicant are 
prohibited from making any irretrievable or irreversible 
commitment of resources--that is the phrase in section 7(d)--
while consultation is underway, you cannot make any commitment, 
and now the court, at least one court, in the context of a 
forestry HCP, that means you can't cut any trees, so you have 
got to shut your operation down during consultation, and, by 
the way, consultation means all forms of consultation, not the 
formal 135-day consultation in the regulations, but once I 
start talking to the Service, I am arguably subject to having 
to shut my operation down. That is a pretty clear problem for 
anybody looking at HCP given the opportunities for third 
parties to bring a lawsuit, and that is also one that, frankly, 
would be pretty easy for Congress to fix.
    Mr. Pombo. We have a series of votes on the floor. Because 
we are probably going to be over there for quite some time, I 
am going to go ahead and adjourn the hearing.
    I want to thank you all for your testimony----
    Mr. Worden. Can I make one more comment, real quick?
    Mr. Pombo. Yes, you can.
    Mr. Worden. If there is a ``no overall net loss'' goal to 
be used as a goal and Fish and Wildlife would stop using it as 
a policy, I think it would solve all of these problems, because 
you don't have to give a permit for every--in every instance, 
and that is what the goal is. And if they would just read the 
regs and do what Congress has mandated, it would solve--like 
what you said, it is in place--if they would use it and follow 
the ``no overall net loss'' goal instead of using it as policy, 
it would work. I hope you can do something to make that come 
about.
    Mr. Pombo. Well, I agree with you, and I appreciate you 
being here. I appreciate all of you being here and for sharing 
your testimony with the Committee. Unfortunately, we do have to 
run over to the floor, but thank you all very much, and the 
hearing is adjourned.
    [The information follows:]
    [Whereupon, at 2:21 p.m., the Committee was adjourned.]
    [Additional material submitted for the record follows.]
 Statement of J. Mark Nielsen, Chairman, Board of Directors, El Dorado 
                          County Water Agency

Dear Chairman Young:
    On behalf of the El Dorado County Board of Supervisors, 
sitting as the Board of Directors of the El Dorado County Water 
Agency, I appreciate the opportunity to submit the following 
testimony for the Committee's consideration. My testimony 
addresses the role that the United States Fish & Wildlife 
Service is playing in one of the most deeply divisive issues El 
Dorado County has ever faced. It dramatically illustrates how 
the demands of the Federal Endangered Species Act (the Act) 
frequently create intractable dilemmas for both Fish & Wildlife 
and local government.
    A small region of unique soils in western El Dorado County 
harbors five plant species listed as endangered or threatened 
under the Act. The primary jeopardy to these species is the 
destruction and fragmentation of their habitat resulting from 
rural residential development in the fast-growing Sierra 
foothills. Ironically, this means that many of the parties 
responsible for pushing the species into listed status, having 
completed their developments, cannot now be compelled to help 
solve the problem they participated in creating.
    Over the past decade, the County has struggled mightily to 
define and shoulder its legal responsibilities to preserve this 
habitat. The County's first step was to convene an expert 
advisory committee and commission a professional study to 
propose a rare plant preservation program, years before the 
species were listed under the Act. This committee, which 
included a representative from Fish & Wildlife, as well as the 
state Department of Fish & Game, recommended that the County 
adopt and fund a 3,500-acre system of five plant preserves, 
spread among the north, central, and southern portions of the 
plants' range.
    At that time, however, the County agreed to designate only 
four preserves, and took no funding actions. The fifth, 
southern preserve was rejected as too expensive and 
inappropriate, given the landowner's vociferous opposition and 
its location on prime commercial and residential land in 
downtown Cameron Park, just north of the main thoroughfare in 
the county, U.S. Highway 50.
    The County's rejection of the southern preserve and its 
failure to establish funding mechanisms for acquisition and 
operation of the preserve system were express factors in Fish & 
Wildlife's subsequent decisions in 1994 and 1996 to propose 
listing, and then to list, the plant species under the Act. 
Significantly, Fish & Wildlife's listing action was also 
prompted by the settlement of a citizens' lawsuit that alleged 
it was neglecting its legal duties under the Act. Meanwhile, 
others filed lawsuits to invalidate the County Water Agency's 
and the County's water-supply and land-use plans, respectively, 
in part because of the claimed inadequacy of the County's rare 
plant preservation program.
    Contemporaneously, Fish & Wildlife and the United States 
Bureau of Reclamation (USBR) put the water purveyor to this 
part of the county, El Dorado Irrigation District (EID), on 
notice that the preservation of these plants would be a key 
factor in EID's ability to increase--or even maintain--its 
water supplies from Federal facilities such as Folsom and Sly 
Park Reservoirs, via the ``Section 7 consultation'' required by 
the Act in conjunction with the execution of water supply and 
Warren Act contracts with USBR.
    These factors prompted the County and EID to overcome their 
prior reluctance and take the following actions, starting in 
1997: they agreed to designate a southern preserve of several 
hundred prime commercial and residential lands in downtown 
Cameron Park; they spent a combined total of nearly $2.7 
million dollars to help fund the immediate acquisition of that 
preserve; and they imposed heavy building permit and water 
hookup fees to fund the future costs of acquiring, maintaining, 
and operating the entire $12 million, 3,500-acre, five-preserve 
system previously recommended by Fish & Wildlife and all other 
experts.
    It is no exaggeration to say that these were perhaps the 
most unpopular actions that these elected officials have ever 
taken. The conservative citizens of this rural county simply 
could not understand why their leaders committed $12 million to 
rare plant preservation when so many other critical public 
needs in the county were going unmet.
    Nevertheless, these county entities struggled forward in 
good-faith belief that these agonizing actions would meet their 
legal responsibilities under the Act. As mentioned, the 
preserve system and funding program they adopted met the prior 
recommendations of the expert task force. Fish & Wildlife 
willingly contributed $500,000 toward the acquisition of the 
southern preserve. Further, the state Department of Fish & Game 
issued a written endorsement of the County's program as 
sufficient to avoid jeopardy to the plant species. Moreover, 
the County's actions were consistent with the dictates of Fish 
& Wildlife's own 1995 biological opinion for Central Valley 
Project water contract interim renewals.
    Unlike state Fish & Game, however, Fish & Wildlife declined 
to take a position at that time on whether this locally funded, 
five-preserve, 3,500-acre program was sufficient to avert 
jeopardy to the listed species. Also, the Section 7 
consultations related to EID's present and future water 
supplies still loom on the horizon today, their outcomes 
unknown. In the meantime, Fish & Wildlife has taken another 
action required by the Act--the preparation of a draft Recovery 
Plan for the listed species.
    The purpose of a Recovery Plan differs from that of a 
Section 7 consultation. A Recovery Plan prescribes ambitious 
measures that will enable a species' condition to improve 
sufficiently to ``de-list'' the species, while the modest goal 
of a Section 7 consultation is simply to avoid putting a listed 
species in jeopardy of extinction. The constant threat of 
lawsuits from citizens who believe that Fish & Wildlife is not 
sufficiently zealous in enforcing the Act, however, plunges 
that agency into a dilemma that directly threatens El Dorado 
County's economic well-being. Specifically, Fish & Wildlife 
must aggressively perform its legal duty to prepare the 
Recovery Plan, but then the Recovery Plan's ambitious program 
will likely end up being converted into mandatory County 
actions via the Section 7 consultation.
    In other words, the Act itself, coupled with Fish & 
Wildlife's desire to blunt environmental criticism, causes a 
``raising of the regulatory bar'' that would in this case 
impose new and unbearable burdens on the local governments and 
citizenry of El Dorado County. Specifically, the County's 
preservation program will be undone, broken under the weight of 
some $50 million in costs--with the ironic consequence that the 
listed plants will be in greater jeopardy than ever.
    Understanding why this is so requires some sense of what 
the Draft Recovery Plan calls for. Among other things, the plan 
prescribes approximately 1,600 acres of additional preserves, 
above and beyond what any expert has ever deemed appropriate 
and what the County has adopted and funded. Rather than the 
already onerous cost of $12 million, the Recovery Plan 
estimates the price of its program at $50 million. A 
substantial part of that $50 million cost arises from Fish & 
Wildlife's call for additional acreage in the northern 
preserve. If it becomes a mandate through the Section 7 
process, however, this unrealistic feature of the Recovery Plan 
will actually be counterproductive to the goal of plant 
preservation.
    The County's existing plan features an innovative, 
pragmatic acquisition strategy: in exchange for being allowed 
to build on several hundred less sensitive acres in the area, 
two large developers would be required to donate, at no cost, 
more than 1,000 acres of prime rare plant habitat. The 
resulting preserve meets all prior expert recommendations. In 
contrast, the Recovery Plan calls for all of this acreage, 
including the developable portion, to become part of a northern 
preserve much larger than has ever before been proposed. Of 
course, doing so makes the developments infeasible, which means 
that instead of receiving more than 1,000 acres of plant 
preserve for free, the County would have to purchase 
approximately 2,000 acres at full market value--at an estimated 
cost of nearly $11 million.
    The Recovery Plan identifies no funding source for this or 
any other expense it would impose, and quite frankly, none 
exists at the local level. The County's adopted $12 million 
program stretches fiscal and political feasibility to the 
limit, particularly for a rural county whose revenues have been 
hit hard in recent years by declines in timber and other 
resource-based industries, as well as state fiscal policies.
    Without funding, this northern preserve acquisition simply 
will not occur. The paradoxical real-world result is that 
imposing Fish & Wildlife's plan on the County will yield some 
1,000 fewer acres of plant preserves than the County's already-
adopted approach. We respectfully question which approach 
serves the purposes of the Act, and the listed species at issue 
here, better: an infeasible, unfunded $11 million paper 
preserve, or an attainable no-cost preserve that, although 
smaller, meets all prior expert recommendations?
    We have similar concerns about all of the Draft Recovery 
Plan's $38 million in unfunded preserve acquisitions. There is 
simply no way that local sources can provide this level of 
funding. Furthermore, the County's economic burden, whatever 
its size, can only be spread among those who have yet to 
develop. The County's dilemma is that past developments, which 
are largely responsible for causing the listing and creating 
these mandates in the first place, are now beyond the County's 
regulatory power. Future developments are rightfully 
responsible for only part of the problem, but they are saddled 
with funding the entire cost of the solution.
    Hence, the County faces the dilemma that any further 
tightening of the regulatory screws will run the County into 
fiscal realities and political backlash that will doom its 
existing program to failure. Yet, failure to preserve the 
plants will prevent the County from moving forward with the 
economic development it wants. The County's adopted plan is 
reasonable, expert-endorsed, and the product of a good-faith 
effort to meet its legal duties under the Act. The irony is 
that the Act itself, coupled with undue influence from outside 
interests, is poised to obliterate that attainable preservation 
program in favor of an infeasible and extreme ideal that may 
look good on paper, but will only increase the jeopardy to 
these plant species in the real world.
    We all share the goal of providing effective protection to 
endangered species, and the County has gone to the wall, 
fiscally and politically, in pursuit of that goal. In a 
rational world, that effort would be rewarded. Instead, we may 
be on a collision course with ecological failure.
    On behalf of my board, I appreciate this opportunity to 
explain the dilemmas that Fish & Wildlife and the County find 
themselves trapped within, and to illustrate how actions taken 
in the name of endangered species preservation can 
unintentionally produce quite the opposite results.
                                ------                                


 Follow-up Questions for Penelope Dalton, Assistant Administrator for 
  Fisheries, National Marine Fisheries Service, National Oceanic and 
        Atmospheric Administration, U.S. Department of Commerce

On Implementation of the Endangered Species Act
    1. A recent letter from the National Marine Fisheries 
Service (NMFS) to the Washington Department of Ecology suggests 
that the state agency and Okanogan County, Washington could be 
liable under Section 9 of the Endangered Species Act for take 
of listed fish species if immediate action is not taken to 
curtail the exercise of private water rights and increase 
instream flows in the Methow River Basin of Washington State. 
Does NMFS interpret the ESA as requiring state agencies and 
local governments to use the maximum extent of their authority 
to enact regulations and ordinances to prevent potential take 
by third parties?
    The NMFS does not interpret section 9 of the ESA as a 
command to states to regulate, but rather a generally 
applicable prohibition on activities by states and others that 
cause harm to listed species. However, NMFS encourages state 
and local governments to implement laws and regulations to 
prevent the taking of federally-listed species. With respect to 
stream flows, we prefer that states take the lead in developing 
water conservation measures to benefit listed species. In turn, 
we will work with states to develop criteria to measure the 
extent, necessity, and effectiveness of such measures.
    2. Where state agencies or local governments do not have 
sufficient authority under state law to prevent take by third 
parties, does NMFS interpret the ESA to require a change in 
state law?
    NMFS does not interpret the ESA to require states to change 
their laws. As stated above, section 9 of the ESA is not a 
command to states to regulate, but rather a generally 
applicable prohibition on activities by states and others that 
cause harm to listed species. However, NMFS encourages state 
and local governments to implement laws and regulations to 
prevent the taking of federally-listed species.
    3. Section 10 of the ESA provides that the Fish and 
Wildlife Service and NMFS may issue an incidental take permit 
to an applicant who prepares a habitat conservation plan that 
describes, among other requirements, how the applicant will 
minimize and mitigate incidental take to the maximum extent 
practicable. In evaluating incidental take applications from 
public entities, do the Services consider existing authority 
under state law to be the ``maximum extent practicable'' or can 
an applicant be required to obtain a change in state law to 
obtain an incidental take permit?
    NMFS has never required an applicant to obtain a change in 
state law to obtain an incidental take permit. What an 
applicant can do to minimize and mitigate the taking of listed 
species to the ``maximum extent practicable'' is made on a 
case-by-case basis. It may be considered practicable for the 
applicant to seek state or Federal funding to assist in 
implementing a Habitat Conservation Plan (HCP), and this 
funding may require legislation.
    4. Under Section 10 of the ESA, the Services have 
previously granted incidental take permits based on 
programmatic habitat conservation plans where certificates of 
participation are issued to landowners who volunteer to provide 
conservation commitments under the terms of the programmatic 
HCP. Do the Services continue to be willing to grant incidental 
take permits on the basis of programmatic HCPs where 
conservation commitments by participating landowners are made 
voluntarily rather than through a mandatory regulatory process? 
Would the Services prefer to deal individually with landowners 
rather than through a programmatic approach sponsored by state 
or local government with voluntary participation by landowners?
    NMFS supports programmatic approaches sponsored by state or 
local governments with voluntary participation by landowners. 
Specifically, we would have preferred a programmatic approach 
for ESA compliance by the Methow Valley water users. Although a 
plan was drafted, it was not implemented. Without an approved, 
broad-based conservation effort from valley water users and 
state agencies, NMFS had to focus on Federal actions in the 
valley that affect salmon, including Forest Service special use 
permits. That step galvanized state and local officials to 
renew their efforts under the ``Chelan Agreement.'' In fact, 
the agreement we are working toward now should result in a 
programmatic approach to resolving ESA issues in the Methow 
Valley.
    5. What is the NMFS position on the use of a voluntary 
water banking system to resolve conflicts such as those 
testified to by the witness from the Methow Valley? Will the 
NMFS allow the use of a water banking system in the Methow 
Valley as a means of meeting the requirements of the ESA?
    NMFS favors using a water banking system in the Methow 
Valley to meet ESA requirements. However, a common incentive to 
put water in a bank is the ability to sell a percentage of it 
to someone else. This practice usually changes a seasonal 
agricultural water use to a year-round domestic use which may 
result in less water available when needed by species. 
Therefore, to comply with the ESA, measures would have to be 
taken to ensure that water conserved actually stays in the 
river to benefit listed species.
    6. What is being done in Okanogan County, Washington to 
complete theSection 7 consultation begun over a year ago 
regarding the special use permits from the Forest Service to 
water users?
    NMFS will be able to complete the necessary biological 
opinions after the Forest Service completes the required 
biological assessments, provided an agreement can be reached 
with the state and county on preparing an HCP for the Methow 
Valley. A section 7(d) determination is in effect which allows 
all ditches with adequate screens to operate without the 
opinions. The Biological Opinions will be completed in the near 
future. The principle unresolved issue centers on the need for 
the opinions to reference the agreement with the state and the 
county to prepare an HCP. If an agreement is reached, the 
parties, including NMFS, hope to be able to allow ditches to 
operate later this summer, even when in-stream flows drop below 
healthy levels.
    7. Why wasn't a programmatic consultation conducted so that 
you don't have to consult on each and every water withdrawal? 
Wouldn't that save employee time and resources?
    As stated in our response to Question 4, our preference 
would have been to base ESA compliance for the Methow Valley 
water users on a state-approved water allocation and 
conservation plan.
    NMFS spent nine months working with the Forest Service, the 
State of Washington, and local authorities alerting them to the 
need for water conservation measures that would enhance salmon 
protection. Our initial goal was to address Methow water 
withdrawals on a programmatic basis through implementation of 
the Chelan Agreement negotiated between water users, the state 
Department of Ecology, and the state Attorney General in 1994. 
However, provisions of this agreement were never implemented in 
the Methow Valley. In the absence of an approved, broad-based 
conservation effort from valley water users and state agencies, 
we had to focus on Federal actions in the valley that affect 
salmon, including Forest Service special-use permits.
    8. It appears that the Services may, in the context of 
their Section 7 consultation process, be requiring an analysis 
of the indirect and cumulative impacts of a Federal action that 
arise from past, present, and future actions, including those 
over which the Federal action agency has no discretion or 
authority. Is the NMFS requiring such analysis, what is the 
legal basis for doing so, and if the response to this question 
is yes, please provide specific case examples in each of your 
Regional offices where this has been required.
    Federal regulations implementing section 7 of the ESA 
require the Services (NMFS and U.S. Fish and Wildlife Service) 
to consider the direct, indirect and cumulative impacts of 
Federal actions that arise from past, present and future 
actions. CFR Sections 402.14(g) and 402.02 (``effects of the 
action'' definition) require the Services to evaluate the 
direct and indirect effects of actions (including non-Federal 
activities) that are interrelated or interdependent with the 
Federal action.
    We must also consider the past and present impacts of all 
Federal, State or private actions or other human activities in 
the action area. ``Cumulative effects,'' as defined by these 
regulations, include the effects of future non-Federal 
activities that are reasonably certain to occur in the action 
area. This definition is consistent with Federal Appeals Court 
case law, in particular, National Wildlife Federation v. 
Coleman, 529 F.2d 359 (5th Cir. 1976). This analysis is 
required of all Service personnel when writing biological 
opinions.

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