[Senate Hearing 109-914]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 109-914

    THE ENDANGERED SPECIES ACT AND INCENTIVES FOR PRIVATE LANDOWNERS

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                     FISHERIES, WILDLIFE, AND WATER

                                 of the

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 13, 2005

                               __________

  Printed for the use of the Committee on Environment and Public Works


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                            congress.senate






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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                  JAMES M. INHOFE, Oklahoma, Chairman
JOHN W. WARNER, Virginia             JAMES M. JEFFORDS, Vermont
CHRISTOPHER S. BOND, Missouri        MAX BAUCUS, Montana
GEORGE V. VOINOVICH, Ohio            JOSEPH I. LIEBERMAN, Connecticut
LINCOLN CHAFEE, Rhode Island         BARBARA BOXER, California
LISA MURKOWSKI, Alaska               THOMAS R. CARPER, Delaware
JOHN THUNE, South Dakota             HILLARY RODHAM CLINTON, New York
JIM DeMINT, South Carolina           FRANK R. LAUTENBERG, New Jersey
JOHNNY ISAKSON, Georgia              BARACK OBAMA, Illinois
DAVID VITTER, Louisiana
                Andrew Wheeler, Majority Staff Director
                 Ken Connolly, Minority Staff Director
                                 ------                                

             Subcommittee on Fisheries, Wildlife, and Water

                 LINCOLN CHAFEE, Rhode Island Chairman

JOHN W. WARNER, Virginia             HILLARY RODHAM CLINTON, New York
LISA MURKOWSKI, Alaska               JOSEPH I. LIEBERMAN, Connecticut
JIM DeMINT, South Carolina           FRANK R. LAUTENBERG, New Jersey
DAVID VITTER, Louisiana              BARACK OBAMA, Illinois























                            C O N T E N T S

                              ----------                              
                                                                   Page

                             JULY 13, 2005
                           OPENING STATEMENTS

Chafee, Hon. Lincoln, U.S. Senator from the State of Rhode Island     4
Clinton, Hon. Hillary Rodham, U.S. Senator from the State of New 
  York...........................................................     7
DeMint, Hon. Jim, U.S. Senator from the State of South Carolina..    13
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     1
Jeffords, Hon. James M., U.S. Senator from the State of Vermont..    10
Murkowski, Hon. Lisa, U.S. Senator from the State of Alaska......    11
Vitter, Hon. David, U.S. Senator from the State of Louisiana.....     8

                               WITNESSES

Bean, Michael, Senior Attorney, Wildlife Division, Environmental 
  Defense........................................................    22
    Prepared statement...........................................    45
    Responses to additional questions from:
        Senator Inhofe...........................................    65
        Senator Jeffords.........................................    66
        Senator Chafee...........................................    67
        Senator Clinton..........................................    68
        Senator Lautenberg.......................................    68
        Senator Murkowski........................................    69
Braasch, Sara, Regional Assistant Chief for the West, Natural 
  Resources Conservation Service, USDA...........................    14
    Prepared statement...........................................    37
    Responses to additional questions from:
        Senator Inhofe...........................................    69
        Senator Jeffords.........................................    70
        Senator Chafee...........................................    71
        Senator Clinton..........................................    72
        Senator Murkowski........................................    73
Campos, Paul, Vice President, Governmental Affairs and General 
  Counsel, Home Builders Association of Northern California, 
  National Association of Homebuilders...........................    24
    Prepared statement...........................................    52
    Responses to additional questions from:
        Senator Inhofe...........................................    74
        Senator Jeffords.........................................    76
        Senator Chafee...........................................    78
        Senator Murkowski........................................    79
Foutz, Alan, President, Colorado Farm Bureau.....................    26
    Prepared statement...........................................    58
    Responses to additional questions from:
        Senator Inhofe...........................................    81
        Senator Jeffords.........................................    83
        Senator Chafee...........................................    84
        Senator Murkowski........................................    86
Jones, Marshall P. Jr., Deputy Director, U.S. Fish and Wildlife 
  Service........................................................    16
    Prepared statement...........................................    39
    Responses to additional questions from:
        Senator Inhofe...........................................    90
        Senator Jeffords.........................................    91
        Senator Chafee...........................................    91
        Senator Clinton..........................................    93
        Senator Lautenberg.......................................    93
        Senator Murkowski........................................    94
Olszewski, Robert J., Vice President, Environmental Affairs, Plum 
  Creek Timber Company...........................................    28
    Prepared statement...........................................    60
    Responses to additional questions from:
        Senator Inhofe...........................................    94
        Senator Jeffords.........................................    95
        Senator Chafee...........................................    95
        Senator Murkowski........................................    96
Wiseman, Laurence D., President and CEO, American Forest 
  Foundation.....................................................    30
    Prepared statement...........................................    62
    Responses to additional questions from Senator Chafee........    97

                          ADDITIONAL MATERIAL

Lautenberg, Hon. Frank R., U.S. Senator from the State of New 
  Jersey, prepared statement.....................................    37
Statement of The National Association of Realtors................    64


























 
       HEARING ON THE ENDANGERED SPECIES ACT AND INCENTIVES FOR 
                           PRIVATE LANDOWNERS

                              ----------                              


                        WEDNESDAY, JULY 13, 2005

                               U.S. Senate,
         Committee on Environment and Public Works,
             Subcommittee on Fisheries, Wildlife, and Water
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:30 a.m. in 
room 406, Senate Dirksen Building, Hon. Lincoln Chafee 
(chairman of the subcommittee) presiding.
    Present: Senators Chafee, Clinton, Inhofe, Jeffords, 
Murkowski, DeMint, and Vitter.
    Senator Chafee. Good morning.
    We will open the Senate Subcommittee on Fisheries, Wildlife 
and Water of the Senate Committee on Environment and Public 
Works.
    I will turn to Chairman Inhofe for an opening statement.

 OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM 
                     THE STATE OF OKLAHOMA

    Senator Inhofe. I appreciate that very much.
    We have a conflict in the Armed Services Committee that has 
required attendance attached to it, so I first of all just 
thank you for holding this important hearing on updating the 
Endangered Species Act. I look forward to hearing from the 
witnesses regarding the involvement of voluntary species 
conservation and recovery program.
    As Chairman of the Environment and Public Works Committee, 
what the ESA has implemented is of keen interest to me as I 
consistently hear from people in my State of Oklahoma and how 
they struggle to balance the presence of species on their land 
with their need to make a living. Sometimes we in Washington 
forget people need to make a living to pay for all this fun we 
are having here.
    According to the Fish and Wildlife Service, nearly two-
thirds of the listed species reside on private lands. It is 
clear then that the Government must work with landowners not in 
spite of them if we want to make any meaningful strides at 
species recovery, the primary goal of the Act.
    President Bush recognized this issue in 2004 when he signed 
Executive Order No. 13352 ensuring that Federal Agencies pursue 
new cooperative conservation actions designed to involve 
private landowners rather than make mandates they must fulfill.
    The Fish and Wildlife Service has created some programs to 
encourage landowner participation and provide them with 
guarantees that their good deed will not be undone. The 
Partners of Fish and Wildlife programs is an excellent example. 
I had a hearing in my State of Oklahoma on this and we had 
testimony from our landowners on how great it was to be working 
with Fish and Wildlife, with the bureaucracy and accomplishing 
things and this is something they were not doing for Federal 
dollars because the match is very small; they were doing it to 
be cooperative. That program needs to be enhanced and I think 
we are planning to do that with other legislation.
    As we begin considering legislative changes to the Act, I 
will be seeking ways to address the perverse incentives for 
landowners who find endangered and threatened species on their 
land. The Endangered Species Act contains numerous prohibitions 
but contains pitifully few incentives to actively create and 
preserve habitat on private lands. As an unintended result, 
landowners are encouraged to make their land as inhospitable as 
possible in order to avoid overly burdensome and often 
economically devastating regulation.
    I am looking forward to recommendations from the witnesses 
as to how to create a comprehensive incentive strategy that 
addresses the needs of all kinds of private landowners. We must 
be careful not to craft a one size fits all strategy. For 
example, some of the current incentive programs work for one 
time events like timber cutting and land development but not 
for ongoing operations like ranching and farming. In addition, 
many incentives programs are too expensive and time consuming 
for the small landowner. I would want to ensure that we create 
a full complement of landowner incentives to address site 
specific needs.
    Another critical component to meaningful landowner 
incentives is the inclusion of assurances for landowners who 
take action to conserve and recover species on his or her land. 
They need to know a deal is a deal. When a private landowner 
enters an agreement to actively manage their land for a 
species, they should receive guarantees that the Government 
cannot continually ask them to do more.
    Finally, landowner incentive programs need to contain real 
incentives and not simply be a way to avoid regulation. We need 
to ensure a true benefit to the landowner.
    There will be other priorities for me as we begin looking 
at the legislation to update the Act. For example, the Fish and 
Wildlife Service is currently being inundated with lawsuits. I 
am concerned that resources that could be used in on-the-ground 
conservation are being diverted to defend lawsuits. When I 
began my tenure as Chairman of the Environment and Public Works 
Committee, I stated that I believe we should base regulatory 
and legislative decisions on sound science, so I will be 
interested in incorporating the use of independent science in 
decision-making.
    Additionally, I have never believed that it makes sense 
that the Service should be precluded from considering economic 
costs when deciding whether or not to list a species as 
endangered or threatened. The Service can and must consider 
that when designating critical habitat, this requirement should 
be extended to other decisions being made. This analysis should 
also consider the impacts to landowners who would be directly 
affected. The example I have often used is in my State of 
Oklahoma is the Arkansas Shiner. We had testimony about two 
years ago that the cost to landowners in that particular water 
area was something like $700 per farm. These things that have 
to be considered.Finally, I also believe that those affected 
most by the Service's decisions should be directly involved in 
making them. This includes States and local entities as they 
have the closest knowledge of the species, its habitat and 
local conditions.
    I look forward to working with the members of the Committee 
on legislation to update the Endangered Species Act so that it 
creates positive incentives to protect and recover species 
while at the same time safeguarding property rights and giving 
landowners meaningful and lasting assurances.
    Mr. Chairman, you have a tough job. We went through this 
before, and there will be a lot of people pulling in all 
directions. We want to get something constructive done that 
will protect species and will protect homeowners' rights.
    [The prepared statement of Senator Inhofe follows:]
         Statement of Hon. James M. Inhofe, U.S. Senator from 
                         the State of Oklahoma
    Mr. Chairman, thank you for holding this important hearing on 
updating the Endangered Species Act (ESA). I look forward to hearing 
from the witnesses regarding their involvement in voluntary species 
conservation and recovery programs. As Chairman of the Environment and 
Public Works Committee, the way the ESA has been implemented is of keen 
interest to me as I consistently hear from people in Oklahoma and how 
they struggle to balance the presence of species on their land with 
their need to make a living.
    According to the Fish and Wildlife Service, nearly two-thirds of 
listed species reside on private lands. It is clear, then, that the 
government must work with landowners, not in spite of them, if we want 
to make any meaningful strides at species recovery, the primary goal of 
the Act. President Bush recognized this issue in 2004 when he signed 
Executive Order 13352 ensuring that Federal agencies pursue new 
cooperative conservation actions designed to involve private landowners 
rather than make mandates that they must fulfill. The Fish and Wildlife 
Service has created some programs to encourage landowner participation 
and provide them with guarantees that their good deeds will not be 
undone. The Partners for Fish and Wildlife program is an excellent 
example of this and why I was pleased to author the program's 
authorizing legislation, which passed the Senate unanimously last 
month. At a recent field hearing in Oklahoma on this program, 
landowners, government and environmental groups all expressed 
incredible enthusiasm for it. It is clear that, when done properly, 
voluntary conservation agreements really can work.
    As we begin considering legislative changes to the act, I will be 
seeking ways to address the perverse incentives for landowners who find 
endangered or threatened species on their land. The Endangered Species 
Act contains numerous prohibitions but contains pitifully few 
incentives to actively create and preserve habitat on private lands. As 
an unintended result, landowners are encouraged to make their land as 
inhospitable as possible in order to avoid overly burdensome and often 
economically devastating regulation.
    I am looking forward to recommendations from the witnesses as to 
how to create a comprehensive incentive strategy that addresses the 
needs of all kinds of private landowners. We must be careful not to 
craft a one-size-fits all strategy. For example, some of the current 
incentive programs work for one-time events, like timber cutting or 
land development, but not for ongoing operations, like ranching and 
farming. In addition, many incentive programs are too expensive and 
time-consuming for the small landowner. I will want to ensure that we 
create a full complement of landowner incentives to address site-
specific needs.
    Another critical component to meaningful landowner incentives is 
the inclusion of assurances for landowners who take action to conserve 
and recover species on his or her land. They need to know that a ``deal 
is a deal.'' When a private landowner enters into an agreement to 
actively manage their land for species, they should receive guarantees 
that the government cannot continually ask them to do more. Finally, 
landowner incentive programs need to contain real incentives and not 
simply be a way to avoid regulation. We need to ensure a true benefit 
to the landowner.
    There will be other priorities for me as we begin looking at 
legislation to update the Act. For example, the Fish and Wildlife 
Service is currently being inundated with lawsuits. I am concerned that 
resources that could be used in on-the-ground conservation are being 
diverted to defend lawsuits. When I began my tenure as Chair of the 
Environment and Public Works Committee, I stated that I believe we 
should base regulatory and legislative decisions on sound science so I 
will be interested in incorporating the use of independent science in 
decision-making.
    Additionally, I have never believed that it makes sense that the 
Services should be precluded from considering economic costs when 
deciding whether or not to list a species as endangered or threatened. 
The service can and must consider them when designating critical 
habitat and this requirement should be extended to other decisions made 
by the Services. This analysis should also consider the impacts to 
landowners who may be indirectly affected. For example, when the Fish 
and Wildlife Service first attempted to designate critical habitat for 
the Arkansas Shiner, the U.S. District Court threw out their economic 
assessment because they only considered the impact on the agencies 
involved and did not consider the effects on downstream farmers and 
ranchers, like the ones in Oklahoma.
    Finally, I also believe that those affected most by the Services' 
decisions should be directly involved in making them. This includes 
States and local entities, as they have the closest knowledge of the 
species, its habitat and local conditions.
    I look forward to working with the members of the committee on 
legislation to update the Endangered Species Act so that it creates 
positive incentives to protect and recover species while at the same 
time safeguarding property rights and giving landowners meaningful and 
lasting assurances.
    Thank you, Mr. Chairman, for holding this important hearing and I 
look forward to hearing the testimony.

    Senator Chafee. That is the goal. Thank you, Mr. Chairman.

OPENING STATEMENT OF HON. LINCOLN CHAFEE, U.S. SENATOR FROM THE 
                     STATE OF RHODE ISLAND

    I welcome you today to the Subcommittee's second hearing on 
the Endangered Species Act. In the 105th Congress, Senators 
Dirk Kempthorn and John Chafee initiated a process to take a 
hard look at improving the Endangered Species Act which 
culminated in the introduction and Committee passage of S. 
1180, the Endangered Species Recovery Act of 1997. One of the 
consensus items included in this bipartisan bill was a package 
of voluntary incentives for private landowners to protect 
threatened and endangered species and their habitats.
    As this Subcommittee gears up to review the Act nearly 8 
years later, we are once again hearing a great deal of interest 
from a variety of interested parties about the importance of 
incentives for landowners to protect species on private lands. 
According to the U.S. Fish and Wildlife Service, over 70 
percent of the Nation's landscape is in private ownership and 
nearly two-thirds of federally listed species are found on 
private lands.
    With many threatened and endangered species solely 
dependent upon private lands for their survival, the goals of 
the Endangered Species Act cannot be attained unless Federal 
incentives are available for voluntary participation of the 
private sector in species protection.
    We have invited a range of witnesses to appear before us 
today to discuss existing Federal programs to protect federally 
listed species on private lands. In addition, we will also hear 
from a number of witnesses on new and innovative partnerships 
underway at the Federal, State and local levels to encourage 
private landowners to provide needed habitat for species.
    The U.S. Fish and Wildlife Service and the Natural 
Resources Conservation Service both have hands-on experience 
working with private landowners. Programs such as the Safe 
Harbor agreements, habitat conservation plans, Partners for 
Fish and Wildlife and the Wildlife Habitat Incentives Program 
are just a few of the tools used by these Federal agencies.
    Through these programs positive incentives are created to 
reward landowners for protecting and conserving threatened and 
endangered species and their habitats. Further, several of the 
Fish and Wildlife Service's voluntary programs provide the 
needed certainty, as Senator Inhofe mentioned, to landowners 
that their day-to-day permitted activities will not result in 
enforcement as long as the terms of their agreements are met.
    One example of a successful voluntary program is an effort 
by the Fish and Wildlife Service and Environmental Defense to 
work with private landowners in North Carolina Sand Hills to 
protect the Red Cockaded Woodpecker ranging in size from 8 to 9 
inches, from beak to tail tip. The Red Cockaded Woodpeckers 
were designated as endangered in 1970 throughout its entire 
ranch which extends from Texas east to Florida and north into 
Virginia. The species require a mature, pine forest with some 
trees at least 60-80 years old. Once common throughout the 
southeast, the bird declined precipitously along with its 
habitat of approximately 60-90 million acres. Representing the 
Nation's first Safe Harbor Agreement, landowners in North 
Carolina agreed to manage long leaf pine forests to benefit the 
Red Cockaded Woodpecker. We will hear more about this effort 
from witnesses on our second panel.
    Other species have been protected in similar fashion 
including the California Red-Legged Frog known as Mark Twain's 
legendary jumping frog of Calaveras County which was once found 
throughout California from the State's coastal streams to the 
Sierra foothills. The species now has disappeared from 70 
percent of its historic range.
    The Swallow Tail Butterfly, 1 of the first insects 
protected under the Endangered Species Act and found only in 
the hardwood hammocks of the Florida Keys is being focused on 
by the Fish and Wildlife Service and the University of Florida 
for development of agreements with private landowners to 
promote conservation efforts.
    The Klamath Basin in California and Oregon is another area 
where private lands and species protection have clashed in 
recent years, but renewed focus has been placed on incentives 
for landowners. In 2001, the concern in the Klamath Basin was 
over water for farmers versus endangered sucker fish. Today a 
new problem has arisen with record low numbers of salmon 
reaching the salmon fisheries along the coastline between Point 
Sur in Central California and Cape Falcon in Oregon.
    Efforts are underway in the Basin to resolve this problem 
by providing incentives to the area landowners through a 
Federal Government buy out of interests in water and farmlands 
from willing sellers. Both the Fish and Wildlife Service and 
RCS are involved in these efforts.
    We will also hear from landowners themselves today and 
environmental organizations that are on the ground providing 
technical assistance and educational opportunities to 
landowners about voluntary incentives for species protection. 
The Colorado Farm Bureau, American Forest Foundation, 
Environmental Defense, Plum Creek Timber Company and the 
National Association of Homebuilders will touch on a wide range 
of incentives for private landowners being utilized for species 
conservation.
    I also look forward to the recommendations these witnesses 
might have for additional Federal programs and other Federal 
incentives that deserve more careful consideration in the 
months ahead. As this Subcommittee begins to look at 
reauthorizing the Endangered Species Act, I appreciate the 
willingness of today's witnesses to come before us and speak on 
the subject of incentives for private landowners. This is a 
topic that deserves special attention and an area where I 
believe we may be able to find a great deal of consensus.
    [The prepared statement of Senator Chafee follows:]
            Statement of Hon. Lincoln Chafee, Senator from 
                       the State of Rhode Island
    The hearing will come to order. Good morning.
    As Chairman of the Subcommittee on Fisheries, Wildlife, and Water, 
I welcome you today to the Subcommittee's second hearing on the 
Endangered Species Act.
    In the 105th Congress, Senators Dirk Kempthorne and John Chafee 
initiated a process to take a hard look at improving the Endangered 
Species Act, which culminated in the introduction and Committee passage 
of S. 1180, the Endangered Species Recovery Act of 1997. One of the 
consensus items included in this bipartisan bill was a package of 
voluntary incentives for private landowners to protect threatened and 
endangered species and their habitats.
    As this Subcommittee gears up to review the Act nearly 8 years 
later, we are once again hearing a great deal of interest from a 
variety of interested parties about the importance of incentives for 
landowners to protect species on private lands.
    According to the U.S. Fish and Wildlife Service, over 70 percent of 
the nation's landscape is in private ownership and nearly two-thirds of 
federally-listed species are found on private lands.
    With many threatened and endangered species solely dependent upon 
private lands for their survival, the goals of the Endangered Species 
Act cannot be attained unless Federal incentives are available for 
voluntary participation of the private sector in species protection.
    We have invited a range of witnesses to appear before us today to 
discuss existing Federal programs to protect federally-listed species 
on private lands. In addition, we will also hear from a number of 
witnesses on new and innovative partnerships underway at the Federal, 
State and local levels to encourage private landowners to provide 
needed habitat for species.
    The U.S. Fish and Wildlife Service and Natural Resources 
Conservation Service both have hands on experience working with private 
landowners. Programs such as Safe Harbor Agreements, Habitat 
Conservation Plans, Partners for Fish and Wildlife, and the Wildlife 
Habitat Incentives Program are just a few of the tools used by these 
Federal agencies.
    Through these programs, positive incentives are created to reward 
landowners for protecting and conserving threatened and endangered 
species and their habitats. Further, several of the Fish and Wildlife 
Service's voluntary programs provide the needed certainty to landowners 
that their day-to-day permitted activities will not result in 
enforcement as long as the terms of their agreements are met.
    One example of a successful voluntary program is an effort by the 
Fish and Wildlife Service and Environmental Defense to work with 
private landowners in the North Carolina Sandhills to protect the Red-
cockaded Woodpecker. Ranging in size from about 8 to 9 inches from beak 
to tail tip, the Red-cockaded Woodpecker were designated as endangered 
in 1970 throughout its entire range which extends from Texas east to 
Florida and north into Virginia. The species requires a mature pine 
forest, with some trees at least 60 to 80 years old. Once common 
throughout the Southeast, the bird declined precipitously along with 
its habitat of approximately 60 to 90 million acres.
    Representing the nation's first Safe Harbor Agreement, landowners 
in North Carolina agreed to manage long-leaf pine forest lands to 
benefit the Red-cockaded Woodpecker. We will hear more about this 
effort from witnesses on our second panel.
    Other species have been protected in a similar fashion, including 
the California red-legged frog known as Mark Twain's Legendary Jumping 
Frog of Calaveras County which was once found throughout California 
from the State's coastal streams to the Sierra Nevada foothills. The 
species has now disappeared from 70% of its historic range.
    The Schaus Swallowtail Butterfly 1 of the first insects protected 
under the Endangered Species Act and found only in the hardwood 
hammocks of the Florida Keys is being focused on by the Fish and 
Wildlife Service and University of Florida for the development of 
agreements with private landowners to promote conservation efforts.
    The Klamath Basin in California and Oregon is another area where 
private lands and species protection have clashed in recent years, but 
renewed focus has been placed on incentives for landowners. In 2001, 
the concern in the Klamath Basin was over water for farmers versus the 
endangered suckerfish. Today, a new problem has arisen with record low 
numbers of salmon reaching the salmon fisheries along the coastline 
between Point Sur in central California and Cape Falcon in northern 
Oregon.
    Efforts are underway in the Basin to resolve this problem by 
providing incentives to area landowners through Federal government 
buyouts of interests in water and farmlands from willing sellers. Both 
the Fish and Wildlife Service and NRCS are involved in these efforts.
    We will also hear from the landowners themselves today, and 
environmental organizations that are on the ground providing technical 
assistance and educational opportunities to landowners about voluntary 
incentives for species protection.
    The Colorado Farm Bureau, American Forest Foundation, Environmental 
Defense, Plum Creek Timber Company, and the National Association of 
Homebuilders will touch on a wide range of incentives for private 
landowners that are being utilized for species conservation. I also 
look forward to the recommendations these witnesses might have for 
additional Federal programs and other financial incentives that deserve 
more careful consideration in the months ahead.
    As this Subcommittee begins to take a look at reauthorizing the 
Endangered Species Act, I appreciate the willingness of today's 
witnesses to come before us and speak on the subject of incentives for 
private landowners. This is a topic that deserves special attention, 
and an area where I believe we may be able to find a great deal of 
consensus.
    Thank you.

    Thank you, and welcome, Ranking Member Senator Clinton. 
Would you like to go next?

OPENING STATEMENT OF HON. HILLARY RODHAM CLINTON, U.S. SENATOR 
                   FROM THE STATE OF NEW YORK

    Senator Clinton. Thank you, Mr. Chairman. Thank you for 
holding this hearing. It is a pleasure to have your leadership 
as we hold our second Subcommittee hearing on the Endangered 
Species Act.
    Our first hearing was a general look at the Act and I took 
that opportunity to explain my basic views about the issue and 
about the Act which I want to briefly reiterate.
    First, I believe the goal of preserving our plant and 
animal heritage is important for both practical and moral 
reasons. Second, I think it is clear that the Act has been 
successful in achieving its primary goal which is to prevent 
the extinction of species that are in danger of disappearing 
forever. Third, and this leads to our hearing today, this Act, 
like anything in human activity, can be improved to better 
achieve the goal of species recovery.
    Like Senator Chafee, I am working hard to understand the 
potential opportunities for improvement but it is clear to me 
that 1 of the areas about which there is consensus is that we 
need to provide additional incentives for private landowners to 
take an active role in conserving rare plants and animals, both 
those already listed as threatened and endangered and those on 
their way towards being listed.
    The reasons are clear. First, more than 70 percent of U.S. 
land is in private hands and nearly two-thirds of our 
threatened and endangered species are found on private lands. 
Unless we can help species recover on private lands, we simply 
are not going to be able to fully meet the goals of the 
Endangered Species Act.
    As Mr. Bean points out in his testimony, species recovery 
often requires active habitat management which is neither 
required by the Endangered Species Act nor free of charge. So 
if we are going to get private landowners more involved, we do 
need better incentives. There is nearly universal agreement on 
the need to provide additional financial incentives to conserve 
threatened and endangered species. I think all of our witnesses 
in their prepared testimony have touched on this issue and I 
think there are a range of things we should consider from tax 
incentives to new grant programs to making better use of USDA 
and other existing conservation funding programs to better 
target Endangered Species Act goals. I look forward to 
exploring what is the best mix of these potential financial 
incentives.
    In addition, I think there is general agreement that there 
ought to be appropriate regulatory incentives to help 
landowners promote conservation for both listed and candidate 
species, but there is some controversy about what that means. I 
think that is reflected in the testimony that will be presented 
today.
    As a general matter, I think it is important that any 
regulatory incentives take into account and provide for the 
uncertainty that is a fact of life when it comes to dealing 
with life or with endangered species.
    Mr. Chairman, I look forward to our witness testimony and 
the work of the Subcommittee on this important issue.
    Senator Chafee. Thank you, Senator Clinton.
    Senator Vitter.

 OPENING STATEMENT OF HON. DAVID VITTER, U.S. SENATOR FROM THE 
                       STATE OF LOUISIANA

    Senator Vitter. Thank you, Mr. Chairman.
    I want to thank you for calling this very important 
hearing. I also thank the witnesses for being here and 
participating.
    Certainly in Louisiana, as elsewhere, landowners play a 
vital role in the conservation of endangered and threatened 
species because, as noted, so much of the habitat, so many of 
the species are found on private land. I think that providing 
landowners with clear and compelling incentives to conserve 
species is a much better way to encourage conservation rather 
than discourage landowners with penalties and burdensome 
regulations disrupting an endangered species residing on their 
land.
    Clearly, there is much room for improvement. Only 10 of the 
1,264 species listed in North America have been recovered in 
the 30 years since the Endangered Species Act was enacted. That 
is a recovery rate of less than 1 percent. Clearly, the time 
has come to strengthen and improve this Act to do a better job 
of proactively recovering endangered species.
    I want to touch on a few species important to Louisiana and 
a few ongoing concerns important to Louisiana. Louisiana is 
home to a threatened species, the Louisiana Black Bear, and the 
Black Bear Conservation Committee is a really good example of a 
landowner incentive assistance program. The Louisiana Black 
Bear relies on the bottom land forest for its habitat and 90 
percent of such forests are on private land. Therefore it is 
clearly necessary to proactively involve and incentivize 
private landowners in the recovery efforts.
    Another concern is the Red Cockaded Woodpecker, something 
that has been mentioned. There is a Safe Harbor Agreement 
between the Louisiana Department of Wildlife and the U.S. Fish 
and Wildlife Service. The agreement gives both agencies 
flexibility to provide landowners protection when they agree to 
voluntarily manage their property for the conservation of that 
woodpecker. That is another good model we can build on.
    Another important concern is the Ivory Bill Woodpecker. 
There has been recent reappearance in Arkansas of the Ivory 
Bill Woodpecker. Until that recent rediscovery, the River 
National Wildlife Refuge in Louisiana was the last documented 
home of that species which was thought to be extinct. I look 
forward to working on this recovery toward the goal of full 
recovery.
    Finally, I would be remiss if I didn't touch on the Eastern 
Oyster and this is a very different concern in terms of 
endangered species. In January 2005, a petition was filed as 
part of an effort to place the Eastern Oyster, native to the 
Gulf of Mexico and the Chesapeake Bay, on the Endangered 
Species List. While the supply of the Eastern Oyster may be 
dwindling in the Chesapeake Bay, nothing could be further from 
the truth in the Gulf of Mexico. That oyster is plentiful, 
abundant and flourishing in the Gulf of Mexico. The problem is 
that if the Eastern Oyster is put on the Endangered Species 
List for all geographic locations including the Gulf, it is a 
huge threat to our vibrant oyster industry. This is an economic 
impact of $286 million, the State harvests 250 million pounds 
of the 750 million pounds of oysters harvested nationally. In 
2003, Louisiana ranked number one in the Nation according to 
the National Marine Fisheries Service. It is a very specific 
concern I have with regard to this issue.
    I am not sure there is proper allowance in the law to 
distinguish between different geographic locations of the same 
species and I am going to be filing a very narrowly tailored 
bill in the Senate on this particular oyster issue, a companion 
bill to a House bill already filed by Bobby Jindal in the 
House.
    I look forward to follow up on all of these issues.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Vitter follows:]
           Statement of Hon. David Vitter, U.S. Senator from 
                         the State of Louisiana
    Mr. Chairman, thank you for holding this hearing today on the 
Endangered Species Act and landowner incentive-based approaches for 
protecting listed species. I also want to thank our witnesses for 
coming to testify about this very important issue. I am interested in 
hearing what the witnesses have to say about improving the use of 
incentives to recover endangered species.
    In Louisiana, landowners play a vital role in the conservation of 
endangered and threatened species because much of the habitat is found 
on private land. Landowners should not have to pay all the expenses of 
species recovery. Most landowners who are willing can not always afford 
to pay the costs associated with managing their land to improve 
protection of endangered species. Providing landowners with incentives 
is a better way to encourage conservation rather than discourage 
landowners with penalties and burdensome regulations for disrupting an 
endangered species residing on their land.
    Only 10 of the 1,264 species listed in North America have been 
recovered in the 30 years since the Endangered Species Act was enacted. 
That is a recovery rate of less than 1%. The time has come to 
strengthen and improve the Endangered Species Act to do a better job of 
recovering endangered species.
    Louisiana is home to the threatened Louisiana black bear and the 
endangered red-cockaded woodpecker. The Black Bear Conservation 
Committee is a good example of a Landowner Incentive Assistance 
Program. The Louisiana Black Bear relies on the bottomland forests for 
its habitat. Ninety percent of bottomland forests are on private lands. 
Therefore, it is necessary to involve private landowners in recovery 
efforts.
    Another good example of a landowner incentive program working in 
Louisiana to conserve the endangered red-cockaded woodpecker is a Safe 
Harbor agreement between the Louisiana Department of Wildlife and U.S. 
Fish and Wildlife Service. The agreement gives both agencies 
flexibility to provide landowners protection when they agree to 
voluntarily manage their property to conserve red-cockaded woodpecker.
    I am excited by the recent reappearance in Arkansas of the Ivory-
billed woodpecker. Until the recent rediscovery, the Tensas River 
National Wildlife Refuge in Louisiana was the last documented home of 
the ivory-billed woodpecker that was thought to be extinct. I look 
forward to its full recovery.
    The key to achieving success in recovering endangered and 
threatened species is through incentive-based programs and building 
partnerships. We should continue to examine ways to improve incentives 
for species recovery at the local and private landholder levels. 
Landowners need the encouragement, financing and support of the 
government to work to restore endangered species.
    Another concern I have about the Endangered Species Act is species 
can be listed based solely on a single petition if it is deemed to be 
the best scientific data available. In January 2005, a petition was 
filed as an effort to place the Eastern Oyster, native to the Gulf of 
Mexico and the Chesapeake Bay, on the endangered species list. While 
supplies of the Eastern Oyster may be dwindling in the Chesapeake Bay, 
those in the Gulf of Mexico are plentiful. If listed as endangered, it 
could halt oyster harvesting and cause great harm to Louisiana's oyster 
industry, fishermen and Louisiana's economy. The listing of endangered 
or threatened species needs to be based on real science.
    The Louisiana oyster industry has an economic impact of $286 
million, according to the Louisiana Department of Wildlife and 
Fisheries. The State harvests 250 million pounds of the 750 million 
pounds of oysters harvested nationally each year. In 2003, Louisiana 
ranked number 1 in the nation, according to the National Marine 
Fisheries Service.
    I look forward to hearing from our witnesses about the use of 
landowner incentive programs to protect and prevent the extinction of 
species. Once again, thank you, Mr. Chairman for your efforts to 
organize this hearing.

    Senator Chafee. Thank you, Senator Vitter.
    I don't believe you are supposed to eat oysters within a 
month without an ``R,'' is that right? We will have to wait 
until September.
    Senator Jeffords.

OPENING STATEMENT OF HON. JAMES M. JEFFORDS, U.S. SENATOR FROM 
                      THE STATE OF VERMONT

    Senator Jeffords. With the help of the Fish and Wildlife 
Service, my State of Vermont is currently developing a 
landowners incentive program to provide technical and financial 
assistance to private landowners on 115 at risk species of 
plants and animals in Vermont.
    The incentives program developed by the Fish and Wildlife 
Service and the Natural Resources Conservation Service provide 
both financial and legal incentives to private landowners and 
valuable conservation tools. The success of the Partners for 
Fish and Wildlife Program promoted this Subcommittee to pass S. 
260 authorizing the program.
    The Lake Champlain Fish and Wildlife Resources Office, 
Partners for Fish and Wildlife Program, has completed 30 
projects that restore or enhance the streams, wetlands, upland 
forest habitats in Vermont and the Lake Champlain Watershed of 
New York.
    I look forward to hearing more about safe harbor 
agreements, habitat conservation plans and the other landowner 
incentive programs and their successes and your views on the 
innovative partnership that can provide additional species 
protections while giving private landowners needed assurances.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Jeffords follows:]
        Statement of Hon. James M. Jeffords, U.S. Senator from 
                          the State of Vermont
    Thank you, Mr. Chairman, for holding this second in a series of 
hearings on the Endangered Species Act.
    I also want to thank all of the witnesses for taking the time to 
share their views with the Subcommittee today.
    Because almost three-quarters of federally listed threatened and 
endangered species are found on private lands, providing incentives to 
private landowners to protect species from extinction is extremely 
important.
    With help from the Fish and Wildlife Service, my State of Vermont 
is currently developing a landowners incentive program to provide 
technical and financial assistance to private landowners directed at 
115 at-risk species of plants and animals in Vermont.
    The incentives programs developed by the Fish and Wildlife Service 
and the Natural Resources Conservation Service provide both financial 
and legal incentives to private landowners and are a valuable 
conservation tool.
    The success of the Partners for Fish and Wildlife program, prompted 
this Committee to pass S. 260, authorizing the program.
    The Lake Champlain Fish and Wildlife Resources Office's Partners 
for Fish and Wildlife Program has completed 30 projects that restored 
or enhanced streams, wetlands upland forest habitats in Vermont and the 
Lake Champlain watershed of New York.
    I look forward to hearing more about safe harbor agreements, 
habitat conservation plans, and the other landowner incentive programs, 
their successes, and your views on other innovative partnerships that 
can provide additional species protections, while giving private 
landowners needed assurances.
    Thank you, Mr. Chairman.

    Senator Chafee. Thank you, Senator Jeffords.
    Senator Murkowski.

OPENING STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR FROM THE 
                        STATE OF ALASKA

    Senator Murkowski. Thank you for the hearing this morning 
and for your effort in pursuing the issue of the Endangered 
Species Act reauthorization and reform. It is critical that we 
find ways to make the Act function more effectively by building 
on its strengths rather than compounding its weaknesses.
    With the majority of lands in the United States in private 
hands, as you mentioned in your opening remarks, and with those 
lands holding significant numbers of the species currently 
listed as threatened or endangered, it is timely to address the 
issues of incentives. It is difficult to understand the reasons 
that incentives are so important without also reviewing some of 
the serious shortcomings of the current laws.
    There are 2 aspects of the law that have very serious 
implications for property owners. First is the definition of 
taking as an activity that may occur on private land. It is 
extremely broad and the punishment for a taking is extremely 
serious. Not every interaction with a species or its habitat is 
detrimental, yet there are some advocacy groups that appear to 
take the view that any change from status quo, no matter how 
slight or accidental, does indeed constitute a punishable 
offense. This creates a situation in which private owners are 
under constant threat where even everyday activities may be 
viewed with alarm by 1 group or another, with dire consequences 
for the landowner.
    Second, there is the judicial issue. Any private party, 
including the most radical environmental rights advocacy 
groups, can force a landowner into a position of having to 
defend himself or herself in court against charges that the 
landowner's activities lead to a taking, potentially at great 
cost even if the landowner is eventually exonerated.
    I believe we must come to grips with these 2 issues before 
any incentives for species-conscious land management can truly 
be successful. As our witnesses will speak to this morning, 
there have been a number of efforts to craft the equivalent of 
``hold harmless'' provisions conditioned on landowners taking 
certain pre-approved steps. While these efforts are laudable, 
we recognize the problems I just mentioned continue to exist, 
providing evidence that those efforts appear to be less than 
fully successful. If they were enough by themselves, perhaps we 
wouldn't have to be here this morning discussing how we might 
be looking to reform or make better the Endangered Species Act.
    In my State of Alaska, we are fortunate to be 1 of those 
States that has relatively few of the species listed under the 
Endangered Species Act. We work hard to keep it that way by 
being good stewards of our resources. However, we also have the 
lowest percentage of private lands of any State in the Nation, 
I believe. We have just 10 percent of our State that is private 
land, so we are in a different situation than many of the other 
States represented here today.
    Despite that, even in Alaska landowners have reason to fear 
lawsuits alleging an ESA taking. The concern is real. So I look 
forward to hearing the remarks from the witnesses this morning 
about the incentives and how they might work to better enhance 
the Endangered Species Act by building on the strengths of the 
Act rather than focusing on the weaknesses.
    Thank you.
    [The prepared statement of Senator Murkowski follows:]
          Statement of Hon. Lisa Murkowski, U.S. Senator from 
                          the State of Alaska
    Mr. Chairman, I want to thank you for continuing to pursue the 
issue of Endangered Species Act reauthorization and reform. It is 
critical that we find ways to make the Act function more effectively by 
building on its strengths rather than compounding its weaknesses.
    With the majority of the lands in the United States in private 
hands, and those lands holding significant numbers of the species 
currently listed as threatened or endangered, it is timely to address 
the issue of incentives.
    However, I think it is difficult to understand the reasons that 
incentives are so important without also reviewing some of the current 
law's serious shortcomings.
    There are 2 aspects of the law that have very serious implications 
for property owners. First, the definition of ``taking'' as an activity 
that may occur on private lands under is extremely broad and the 
punishment for a taking is extremely serious. Not every interaction 
with a species or its habitat is detrimental, yet there are some 
advocacy groups that appear to take the view that any change from 
status quo, no matter how slight or accidental, does indeed constitute 
a punishable offense. This creates a situation in which private 
landowners are under constant threat that even everyday activities may 
be viewed with alarm by 1 group or another, with dire consequences for 
the landowner.
    Second, there is the judicial issue. Any private ``citizen'' 
including the most radical animal rights advocacy groups can force a 
private landowner into a position of having to defend himself in court 
against charges that the landowner's activities lead to a ``taking'' 
potentially at great cost even if the landowner eventually is 
exonerated.
    Mr. Chairman, I believe we must come to grips with these 2 issues 
before any incentives for species-conscious land management can be 
truly successful. As our witnesses will attest, there have been a 
number of efforts to craft the equivalent of ``hold-harmless'' 
provisions conditioned on landowners taking certain pre-approved steps.
    Those efforts are laudable, but since the problems I cited a moment 
ago continue to exist, those same efforts appear to be less than fully 
successful. If they were enough by themselves, we would not be here 
today.
    At just 10% private land, my home State of Alaska has, I believe, 
the very lowest percentage of private land of any State in the nation. 
My State of Alaska is home to relatively few of the species listed 
under the ESA. We consider that a blessing. We also have very little 
private land--just 10 percent of our State. (We do NOT consider that to 
be a blessing.)
    But even in Alaska, private landowners that tomorrow any tomorrow 
could bring disaster in the form of a lawsuit alleging an ESA taking. 
That is just flat wrong.
    Innocent parties engaged in their day to day business, with no 
intent to harm listed species, should be treated as innocent unless 
there is conclusive scientific evidence to the contrary. Under American 
standards, no innocent party should have to go in fear, as the saying 
goes, that ``something might be gaining on him.''
    An Endangered Species Act that sets up the latter situation is 
doomed to failure. We need an Act that focuses on the positive, not on 
the negative.
    That, Mr. Chairman, is precisely why this hearing is important and 
why I thank you for calling it.

    Senator Chafee. Thank you, Senator Murkowski.
    Senator DeMint.

  OPENING STATEMENT OF HON. JIM DEMINT, U.S. SENATOR FROM THE 
                    STATE OF SOUTH CAROLINA

    Senator DeMint. Thank you and I appreciate the witnesses 
being here as well.
    I am very supportive of your effort to take a hard look at 
the Endangered Species Act and try to determine what is 
working, what is not and try to come up with some creative 
solutions to make this law work better.
    I am glad to hear this morning that I think everyone has 
mentioned the importance of incentives for landowners as 
opposed to hitting them with negative regulatory sanctions or 
making it more difficult for them to develop their property in 
a way that would be good for the environment.
    In my home State of South Carolina where tourism is the no. 
1 industry, I was told of a situation where some folks had a 
terrible time trying to get permits to build a golf course. 
They had problems getting permits to build a golf course 
because of an apparently very popular Red Cockaded Woodpecker. 
From what I understand about the Red Cockaded Woodpecker, they 
like to have their young in mature pine trees, they don't fly 
real well and need a clear under story to thrive and expand. In 
fact, golf courses with their wide open spaces are the perfect 
habitat for them.
    Once the permits were obtained for this golf course and it 
was built, the 7 colonies of woodpeckers that were there prior 
to construction more than doubled to 20 colonies and the golf 
course has since been recognized by the Audubon Society as a 
model for environmentally sound development.
    This is a perfect example of how development can coexist 
and even enhance our endangered species. We need to think 
outside the box and be creative and not be so rigid in how we 
enforce regulations and not cut off our noses to spite our 
faces when we are trying to really help endangered species. We 
should make it easier for people to do the right thing, not 
more difficult.
    I look forward to the testimony this morning and will work 
together to make this Act work better.
    Senator Chafee. Thank you, Senator DeMint. It is good to 
hear a success story.
    Today we have on our first panel: Mr. Marshall P. Jones, 
Jr., Deputy Director, U.S. Fish and Wildlife Service; and Ms. 
Sara Braasch, Regional Assistant Chief for the West, Natural 
Resources Conservation Service, USDA.
    I would like to remind our witnesses their entire statement 
will be submitted to the record and we have 5 minutes each for 
your testimony. We will start with Ms. Braasch.

  STATEMENT OF SARA BRAASCH, REGIONAL ASSISTANT CHIEF FOR THE 
       WEST, NATURAL RESOURCES CONSERVATION SERVICE, USDA

    Ms. Braasch. Thank you.
    I appreciate the opportunity to be before you today to 
discuss the Department of Agriculture's perspective on private 
land, habitat conservation and restoration. My name is Sara 
Braasch. I am with the Natural Resources Conservation Service 
where I serve as the Regional Assistant Chief for the 13 
western States including Alaska and the Pacific Basin.
    Earlier this week, I celebrated my 1 year anniversary with 
NRCS. It has been an honor for me to serve with an Agency on 
the move that is making such an incredible difference on the 
land. Speaking of service, Mr. Chairman, I would like to 
mention that we hired a new State Conservationist in your home 
State of Rhode Island earlier this week. Her name is Roylene 
Rioes at the Door and I know you will be impressed with her 
impressive credentials that she brings to you.
    The topic of today's hearing gets to the heart of the 
concept of cooperative conservation. As wildlife conservation 
serves as an excellent example of how voluntary conservation 
efforts on private lands can make a difference. I would like to 
take just a moment to highlight the background of NRCS to place 
our involvement into context.
    For the last 70 years, our Agency has assisted owners of 
America's private lands who voluntarily want to conserve their 
natural resources. We deliver technical assistance that is 
economically feasible, based on sound science and is suited to 
a farmer or rancher's site specific needs. In addition, NRCS 
offers voluntary assistance to landowners in the form of 
financial assistance, cost share for projects and conservation 
easements.
    In 2002, President Bush signed into law the most 
conservation oriented farm bill in history providing a $17.1 
billion increase in conservation funding. In addition, 
direction was provided to assist agricultural producers to meet 
the regulatory burdens they face. Conservation programs can and 
do help reduce the burden of regulation. Here are just a few 
examples of actions and assistance the Department of 
Agriculture has recently offered with respect to habitat 
enhancement for targeted species.
    On May 16, 2006, Secretary Johanns announced the 
availability of $4 million in financial assistance for the 
Wetland Reserve Enhancement Program. These partnership 
proposals will restore and protect habitat for migratory birds 
and other wetland dependent wildlife. The new enhancement 
option with in this program allows NRCS to match resources and 
leverage the efforts of States and local governments to provide 
even greater assistance for private landowners. Of this 
funding, a minimum of $500,000 is offered for partnership 
proposals that address Bog Turtle habitat in the eastern United 
States. Also included in our wetland reserve enhancement 
announcement is a minimum of $500,000 to assist with the Ivory 
Bill Woodpecker habitat. We believe that excellent 
opportunities exist for developing bottom land, hard wood, 
wetland habitat projects that will provide long term benefits 
for the species.
    In February, Secretary Johanns announced $2.8 million in 
the Wildlife Habitat Incentives Program for salmon habitat 
restoration. Through this initiative, NRCS helps landowners 
with projects that restore habitat for both Pacific and 
Atlantic salmon. We are pleased with the gains being made to 
improve salmon habitat and believe that we can continue to 
build upon this success in the future.
    Habitat conservation for the Greater Sage Grouse in the 
western United States also serves as a prime illustration of 
the role farm bill programs and conservation planning 
assistance can provide. NRCS estimates that in fiscal year (FY) 
2004, more than 80,000 acres of Sage Grouse habitat befitted 
directly from private lands conservation with an additional 
million acres receiving a secondary benefit. As a result, the 
U.S. Fish and Wildlife Service made a decision not to list the 
Greater Sage Grouse as a threatened or endangered species. 
Partially in response to those gains made on private lands 
habitat for Sage Grouse and in that decision, the Service 
emphasized the importance of ongoing and future conservation 
efforts to the long term health of the species.
    With that in mind, I am pleased to report that earlier this 
morning, Secretary Johanns announced an additional $5 million 
for Sage Grouse special projects in 11 western States. That 
will double USDA's commitment to Sage Grouse compared to fiscal 
year (FY) 2004.
    In other assistance, the Health Forest Restoration Act of 
2003 authorized the Healthy Forest Reserve Program to make 
payments to private forest land owners who agree to protect 
forested acreage to promote the recovery of threatened and 
endangered species. This Act contains innovative provisions 
relating to safe harbor or similar assurances to landowners who 
enroll land in the program and whose conservation activities 
result in a net conservation benefit for listed and candidate 
species. Work is well underway on establishing programmatic 
rules and procedures for the Healthy Forest Program.
    My statement highlights just a few of the many programs 
available to private landowners and provides a sense of the 
species and work that private landowners are accomplishing, but 
there are numerous other species that benefit every day from 
conservation efforts on farms and ranches across the country. 
To provide an idea of the magnitude of that, we will provide 
over $1 billion in funding through the Environmental Quality 
and Incentives Program this year. Couple that with the Farm and 
Ranchlands Protection Program and the Conservation Security 
Program, and it becomes clear that wildlife habitat is 
receiving major benefits.
    Rural America has an excellent story to tell. If we 
continue to provide the technical assistance and financial 
resources, we can achieve a win-win for American agriculture as 
well as wildlife conservation.
    Thank you and I would be happy to entertain questions you 
might have.
    Senator Chafee. Thank you, Ms. Braasch.
    Mr. Jones, welcome.

STATEMENT OF MARSHALL P. JONES, JR., DEPUTY DIRECTOR, U.S. FISH 
                      AND WILDLIFE SERVICE

    Mr. Jones. Thank you.
    I appreciate the opportunity to be here today with my 
colleague from the Natural Resources Conservation Service to 
talk to you about incentives for private landowners to be 
involved in conservation of endangered, threatened candidate 
species.
    As already noted, more than two-thirds of federally listed 
endangered species depend on private land for their 
conservation. However, the Endangered Species Act has no legal 
requirement for private landowners to improve or restore 
habitat or undertake other programs that will benefit the 
listed species that occur in those lands. So incentive-based 
conservation is crucial to our ability to recover those 
species.
    Unfortunately, as also noted, many landowners are fearful 
of the Endangered Species Act and have been reluctant to engage 
in activities that would attract imperiled species for fear of 
increased regulation or restrictions on their use of the land.
    We in the Fish and Wildlife Service are committed to the 
principle that the Federal Government cannot do everything that 
is needed to recover endangered species and even if we had 
unlimited resources, we could not and would not do it as well 
as it would be done if we have a partnership with State 
governments, with non-governmental organizations, with the 
business community and with private landowners. Thus, I am 
pleased that you have initiated this review of what can be done 
to support and improve these programs. I am also pleased that 
you have invited other organizations like the ones on the 
second panel because the organizations that are here, 
Environmental Defense, the Farm Bureau, the Homebuilders 
Association, Plum Creek and other timber companies and the 
American Forest Foundation are all organizations that we want 
and need to work closely with. They help make our programs 
better, they educate us and working together we believe we can 
have a stronger conservation program.
    The Fish and Wildlife Service has a number of cooperative 
conservation tools which are detailed in my written statement. 
Let me briefly highlight a few of these programs and what they 
have done and can do.
    The first Safe Harbor agreement for Endangered Species was 
signed in 1995 and provided a mechanism for landowners to feel 
confident that if they improved their habitat and attract more 
endangered species, they will not later be penalized if they 
have a need to restore that land to the baseline condition. 
Working closely with Environmental Defense, the Fish and 
Wildlife Service recently celebrated the 10th anniversary of 
that first Safe Harbor agreement. Today, there are more than 
325 private and other Federal landowners enrolled in 32 
agreements which conserve 36 endangered and threatened species.
    Another program is the Candidate Conservation Agreement 
with assurances. This addresses species that are not listed 
under the Endangered Species Act but might need to be listed in 
the future and provides a mechanism for landowners to undertake 
voluntary, cooperative conservation measures and then receive 
an assurance that if in spite of those efforts, the species 
must still be listed as endangered or threatened, so that 
landowner will not be asked to do anything more or different 
than what they have already agreed to.
    We have 10 such agreements in place covering 24 candidate 
or declining species and encompassing approximately 300,000 
acres. These programs are relatively new but we are committed 
to improving them because we know that there are always things 
that can be done better. So we have been working with 
Environmental Defense, for example, on training and on ways to 
improve the way we can expedite processing of new Safe Harbor 
and candidate conservation with assurance agreements.
    We also are looking at ways that we can use programmatic or 
umbrella agreements that may be undertaken with the State which 
then enable private landowners to quickly qualify under that 
umbrella agreement.
    Another program is the Private Stewardship Grant Program, a 
relatively new program which provides an opportunity for the 
Fish and Wildlife Service to work directly with private 
landowners to conserve imperiled species through on the ground 
habitat management.
    The Cooperative Endangered Species Fund is another program. 
Through this program we provide grants to States which will 
support State programs and will also support the development of 
habitat conservation plans, the implementation of habitat 
conservation plans and recovery of endangered species through 
land acquisitions.
    The Landowner Incentive Program is another State focused 
program where we provide funds, as Senator Jeffords has 
mentioned, to the State of Vermont for the development of a 
program to work with private landowners and then for 
competitive grants to work with those private landowners to 
restore listed, proposed, candidate or other at risk species on 
private and tribal lands.
    Finally, the Partners for Fish and Wildlife Program, we 
greatly appreciate the efforts of this Committee and the Senate 
to pass S. 260 which authorizes the program we have had for 
many years but now will provide a firm legislative basis for 
that program which provides for technical assistance and 
financial assistance for on the ground projects with private 
landowners. Under that program, I would note that we work very 
closely with the National Resource Conservation Service and try 
to complement the programs that the NRCS is undertaking all 
around the country.
    Over the past 16 years, we have agreements with 35,000 
landowners covering more than 2 million acres under the 
Partners for Fish and Wildlife Program.
    We appreciate your interest in holding this hearing, 
bringing us all together, and we look forward to working with 
you as you consider what else can be done to improve and 
enhance these programs. I am prepared to answer any question 
you may have.
    Senator Chafee. Thank you, Mr. Jones, and I look forward to 
working with you also as we go forward.
    We will have a round of questions of 5 minutes each. I 
would like to start with Ms. Braasch and 1 of the hot issues, 
the Klamath Basin issue in the last few years. I would like to 
know if you can elaborate on what NRCS' role has been in 
resolving the ongoing conflicts between the fish and farmers in 
the Klamath Basin and how has NRCS utilized its range of 
conservation programs to resolve some of the disputes and 
relieve pressure in this tense situation?
    Ms. Braasch. The Klamath Basin happens to be part of my 
region with the region both on the Oregon and California side 
of the border. As part of that responsibility, I knew early on 
I had to spend some time on the ground with the people 
affected. I am pleased to report that the direction you gave us 
in the farm bill and the $50 million of funding for the Klamath 
Basin has been well spent and is making a lot of progress.
    Some examples in the Klamath include converting irrigation 
systems so that agricultural producers are able to stay in 
production on the land but at the same time they reduce their 
water use so there is more water available for the fish flows. 
That is done primarily through our Environmental Quality 
Incentives Program. In addition, we have taken advantage of our 
Grasslands Reserve Program and our Farm and Ranch Lands 
Protection Program to look at these farming and ranching 
operations and how they can stay viable but in the most 
efficient way possible.
    Senator Chafee. Have you worked with the Fish and Wildlife 
for this process?
    Ms. Braasch. We have. In fact, across the region and at 
headquarters we have had strong relationships with Fish and 
Wildlife Service. Specific to the Klamath Basin, there are 
regular meetings between our folks and the Service. We also 
have tremendous examples, in the State of Utah with the recent 
flooding that occurred this winter on consultation in addition 
to a strong relationship at headquarters with the Service's 
Chief and many others.
    Senator Chafee. Thank you.
    Mr. Jones, any comment on your role, the Service's role in 
the Klamath Basin dispute?
    Mr. Jones. We certainly appreciate the efforts that NRCS 
has made and we think that is an invaluable contribution. I 
spent time on the ground in the Klamath Basin in 2001 when 
things were at much more difficult situation than they are 
today. We think we have made a lot of progress because of 
efforts to work with landowners in the Basin. For fiscal year 
(FY) 2006, the President's budget includes a more than $5 
million increase for the Partners of the Fish and Wildlife 
Program specifically directed at the Klamath Basin which builds 
on a base of about $2 million that have been applying to that 
program.
    We think it is essential that we find ways to work with 
landowners and the Klamath Basin, I think we haven't solved all 
the problems but I think we have made a lot of progress and it 
takes this kind of cooperative effort that Ms. Braasch has 
mentioned and that we firmly believe in.
    Senator Chafee. How would these funds be spent as we 
allocate our resources, acquisition of willing sellers? Where 
does the money go?
    Mr. Jones. No, Mr. Chairman, we do have a separate request 
for acquisition of a key tract of land on Klamath Lake but the 
increase in the Partners for Fish and Wildlife Program would be 
designed to work with landowners, for example to work with the 
cattle ranchers in the upper Klamath Basin whose land adjoins 
the river as it flows down into Klamath Lake. We think we can 
work there to help them reduce impacts from cattle ranching on 
the stream, increase both the quantity and quality of water 
which moves down which will benefit the suckers in Klamath Lake 
and we believe the salmon which are spawning farther 
downstream.
    Senator Chafee. Thank you.
    Senator Clinton.
    Senator Clinton. I would like to ask each of you for any 
thoughts you might have on how we could better integrate 
delivery of State, local and various Federal programs to 
provide one stop shopping for landowners who are seeking 
incentives to protect and restore important habitats for 
wildlife?
    Mr. Jones. I think that is a very good question. We are 
thinking about that right now ourselves. The Fish and Wildlife 
Service has a multiplicity of small grant programs, relatively 
small in comparison to some of the very large programs that 
NRCS has. One thing we think we can do is cooperate more 
closely with NRCS, participating on the State technical 
committees, for example, and making sure that every landowner 
who has access to a county extension agent not only has 
information about NRCS programs but also about Fish and 
Wildlife Service programs that may complement those and be 
available to landowners.
    We are also undertaking an internal review right now. I 
have just received in the last couple of days a draft report on 
how we can make our programs better, how can we do a better job 
of expediting the delivery of funds and resources to 
landowners. One of the things we are going to look at is how 
can we make sure all of our materials are clear, user friendly, 
that our website is something anyone can go to and understand. 
I will use myself as 1 of the guinea pigs on that because if I 
can find things on the website probably other people can too. 
We certainly agree there is a need for us to have programs be 
both user friendly and accessible to the public or else we are 
not going to be serving them.
    Senator Clinton. Ms. Braasch.
    Ms. Braasch. In terms of finding that one stop shop which I 
know landowners and producers across the country greatly 
appreciate, I have a couple of ideas. First, finalization of 
the rules we are working on for the Healthy Forest Reserve 
Program and the Safe Harbor provisions that are in that program 
will be beneficial and beyond that, we would like to work with 
the Service when it comes to programmatic consultation rather 
than going practice by practice on projects we want to put in 
place on the ground. We would like to find ways to expedite 
that delivery so that the landowner only has one stop to make 
when it comes to implementing a project that is valuable to all 
wildlife.
    Senator Clinton. As a specific follow up, in Mr. Wiseman's 
testimony, he notes that individuals own more than half of our 
Nation's forest land and about half of our rural land is 
forested. Although I don't know what percentage of endangered 
or threatened species occur on forested land versus other 
landscapes, I imagine it is substantial, in all likelihood 
greater than the small fraction of current conservation funding 
that is targeted and devoted to tree farmers and other owners 
of forested land.
    Could you each give me your opinion about whether you 
believe we need to target more conservation funding to tree 
farmers and their lands to achieve our ESA goals and if so, how 
can we accomplish that?
    Mr. Jones. You are right that a substantial proportion of 
listed and candidate endangered species and other imperiled 
species would occur on forest lands and we have I think some 
very good programs right now as several have mentioned this 
morning, Safe Harbor programs that involve Red Cockaded 
Woodpeckers which occur in mature forests. We want to find ways 
that people can use their land and get a sustainable, economic 
benefit from that land and at the same time, also provide for 
the needs of wildlife that can coexist with them.
    We have in the northeast a number of candidate species that 
use forests and it is very important to us that we have ways of 
working closely with private landowners. I can't give you 
specific statistics this morning on how much of any 1 of our 
grant programs has been devoted to forests but we would be 
pleased to provide you with some information for the record. We 
certainly can give you the commitment that we want to work 
closely with family farmers and with the business community, 
everyone who is involved in forestry to make sure that forests 
can sustain livelihoods for people but also provide for the 
needs of wildlife, especially imperiled species.
    Senator Clinton. Ms. Braasch, do you have anything to add?
    Ms. Braasch. A couple of our programs right now, the 
Environmental Quality Incentives Program, the Wildlife Habitat 
Incentives Program, are doing good work with private forest 
land owners. Our Chief, Bruce Knight, has clearly set a 
national priority that we need to do at risk species work. In 
New York, Rhode Island or Vermont, what happens is we have 
local working groups that best know the conditions in your 
State whether timber or anything else and they recommend 
priorities and ranking criteria under which those applications 
are reviewed and at the advice of the State Technical Committee 
including the Fish and Wildlife Service in many cases, 
decisions are made to fund those projects that will do the most 
good on the ground and in many cases that has included timber 
ground.
    Senator Clinton. Thank you.
    Senator Chafee. Senator Jeffords.
    Senator Jeffords. Mr. Jones, I have a three part question 
for you. First, how is the Administration shifted volunteer 
conservation work?
    Mr. Jones. Let me say I think even in the previous 
Administration, there was a recognition that you cannot recover 
endangered species without the involvement of private 
landowners. Those programs have been growing and in the last 
several years have been very much enhanced. We think those 
programs are working well. We think we still can make 
improvements and make them better.
    Reaching out to States, the non-governmental community, the 
business community and private landowners, especially we think 
is essential because without their cooperation, we just can't 
achieve the goals of the Endangered Species Act to recover 
species already listed and prevent other species from ever 
needing to be listed.
    Senator Jeffords. Second, which species are benefitting 
from the various grant programs?
    Mr. Jones. I can provide you a detailed answer for the 
record but we have had several species that certainly have been 
mentioned this morning that stand out like the Red Cockaded 
Woodpecker in the southeast; we have a number of species in 
California benefitting from conservation banks; we have around 
the country an increasing number of candidate conservation 
agreement with assurances where landowners get the benefit of 
knowing that if they undertake activities now and a species 
gets listed later, they won't be required to do more than they 
are already doing. It is a deal. It is not just a handshake, 
they actually get a permit which covers them for that.
    It is a broad range of species. In some cases, it is States 
which are choosing which species to be addressed through the 
Landowner Incentive Program, which as you mentioned, is active 
in Vermont, it is the State of Vermont choosing which species, 
which landowners they should be working with. Similarly under 
our State Wildlife Grants Program, we now have every State and 
territory working on a State wildlife conservation strategy. 
Those are due to be submitted to the Fish and Wildlife Service 
by the end of this fiscal year. We already have 5 and those 5 
we believe are indicative of an excellent effort by States as a 
whole. So the States will be choosing the species most in 
conservation need to work on. In the meantime, they have been 
getting the benefit of that grant program that provides 
substantial benefits for the States to be working with the 
broad variety of species.
    My point is the Fish and Wildlife Service is not always the 
best 1 to choose what should be done. We want to provide the 
program that also enables private landowners, non-governmental 
organizations, States to choose what they think is most 
important in the State or the local community and then we work 
together to help them.
    Senator Jeffords. I think you may have answered this but 
how can these programs be improved to better integrate with the 
Endangered Species Act?
    Mr. Jones. We certainly believe that one, we need to 
practice adaptive management. That is, we undertake things and 
then we monitor. How well did this work, what are the lessons 
learned so that we can do it better the next time. Whether that 
is specific to the biology of a particular species or whether 
it involves how we can have a more effective program, how we 
can get the word out to landowners, how we can work with 
organizations like those on your second panel as well as with 
NRCS and other Federal agencies and State agencies to make the 
programs more accessible to them. How can we use more broad 
programmatic approaches so we only have to do an environmental 
impact statement 1 time for a whole State that enables 
landowners all the around the State who qualify to participate 
under that umbrella program.
    We also believe these programs are solid but we believe 
they could benefit from being codified in law in some way so 
that everyone could be sure these programs will last, that they 
will be there and they can count on the Federal Government 
giving its word and sticking to it.
    Senator Jeffords. Thank you.
    Senator Chafee. Thank you first panel. I didn't hear any 
super harsh criticism from this panel for the ESA. I am sure 
that will continue on the next panel.
    [Laughter.]
    Senator Chafee. Ms. Braasch, I look forward to meeting Ms. 
Rioes at the Door in Rhode Island. From what I understand, she 
went to Montana State University. I did some schooling there 
myself, so we have something in common.
    Thank you for your testimony.
    We will now proceed to our second panel. We have Mr. 
Michael Bean with Environmental Defense; Mr. Paul Campos with 
the Home Builders Association of Northern California; Mr. Alan 
Foutz with the Colorado Farm Bureau; Mr. Robert Olszewski with 
Plum Creek Timber Company; and Mr. Larry Wiseman with the 
American Forest Foundation. Welcome to all of you here today.
    As mentioned for the previous panel, I want to remind the 
witnesses that their entire statement will be submitted for the 
record and please keep your presentation to 5 minutes.
    We will start with Mr. Bean. Welcome.

STATEMENT OF MICHAEL BEAN, SENIOR ATTORNEY, WILDLIFE DIVISION, 
                     ENVIRONMENTAL DEFENSE

    Mr. Bean. Thank you.
    Let me begin by saying that it was my pleasure for the last 
20 years or more to testify on a number of occasions before 
this Committee about the Endangered Species Act when your 
father was a member and later Chairman of this committee. He 
was, I think, singularly devoted to this issue and interested 
in it. If you will allow me, I will describe 1 little thing 
that made a memorable impression upon me.
    In the early 1990s, the Smithsonian hosted a 2 day 
conference on endangered species conservation and it began with 
a Friday evening dinner followed by a day of presentations on 
Saturday. Your father gave the dinner speech on Friday evening, 
which was a very nice speech, but frankly, it was the last we 
expected to see of him. We didn't expect him to show up at 9:00 
a.m. to sit through the boring part of the conference which was 
a day of technical presentations but he was there at 9:00 a.m. 
with his notebook in hand and he stayed throughout the day. I 
think that was a testament to his very strong interest in this 
issue. I wanted to share that recollection with you.
    May I also say it is a pleasure to be here with Senator 
Clinton as the Ranking Minority Member. As a fellow graduate of 
Yale Law School in 1973, it is a real honor to be here with you 
in this position today.
    I have been working on the Endangered Species Act for most 
of my professional career and for the last decade or more I 
have been singularly focused on the challenge of conserving 
rare species on privately owned land. It is increasingly 
apparent to me that incentives are necessary for that and the 
reasons are pretty straightforward.
    First, many species have most of their habitat on privately 
owned land and some species have all of their habitat on 
privately owned land. As others have commented, there is 
nothing in the existing law that compels landowners to manage 
their lands positively or beneficially for endangered species 
and yet for many endangered species some form of active 
management is clearly necessary.
    I give an example in my testimony from Senator Clinton's 
State of New York of the Bog Turtle which occupies wetlands 
habitats that have been maintained at least in recent years by 
the presence of livestock grazing that reduces the shrubbery or 
woody overstory. As animal agriculture has declined in the 
northeast, many of those early successional wetlands have 
secceeded into forested wetlands of no real value for the Bog 
Turtle. So the only way to maintain those that still exist or 
to restore those that recently existed is to go out there and 
remove some of that hard wood and shrubbery understory.
    There is no particular reason for landowners to do that if 
they are no longer engaged in livestock agriculture. So the 
steps necessary on private land to restore the habitat for that 
species are steps that can only be taken by or with permission 
of landowners and somebody has to pay for that. In the State of 
New York, the Natural Resources Conservation Service has been 
very helpful in providing funding for many of those projects 
but without that sort of incentive funding, that sort of 
habitat restoration is not likely to take place.
    Let me say that there are a number of existing incentive 
programs. By far the most generously funded of those and those 
with the greatest potential to help endangered species are the 
various farm bill conservation programs. However, much of their 
potential to help endangered species has not been realized and 
there are a variety of reasons for that.
    One thing I would urge this Subcommittee to do, perhaps in 
conjunction with Mr. Crapo's subcommittee of the Agriculture 
Committee, is to look at how those existing farm bill programs 
might be tweaked or adapted to achieve their original farm bill 
objectives and simultaneously achieve more endangered species 
conservation benefits. I think there is a wealth of potential 
progress that could be made there.
    Mr. Jones and others have talked about some of the more 
recent Fish and Wildlife Service initiatives like Safe Harbor 
agreements, the Landowner Incentive Program, the Private 
Stewardship Grants Program. These are all good initiatives. 
They all, however, in my opinion, are handicapped by rather 
clumsy administration of these new programs. It seems to me 
there are a number of efficiencies that could be achieved to 
make each of those programs more easily delivered and more 
effective on the ground.
    Certainly in the work we do with private landowners, when 
we find a landowner who is willing to do something on his land 
that is beneficial to an endangered species, that landowner 
often asks can they get started next week. It is very difficult 
to explain no, you really can't because there is a process of 
approval that may take 18 months to complete before we can get 
started. That just doesn't make sense to most landowners.
    I would encourage you in addition to looking at the farm 
bill programs to take a look at the manner in which the Fish 
and Wildlife Service is administering some of the good programs 
it has but programs that are not achieving their potential 
because of unnecessary internal obstacles to efficient 
administration.
    Thank you and I look forward to answering your questions.
    Senator Chafee. Thank you, Mr. Bean, especially for your 
kind words about my dad.
    Mr. Campos.

STATEMENT OF PAUL CAMPOS, VICE PRESIDENT, GOVERNMENTAL AFFAIRS 
  AND GENERAL COUNSEL, HOME BUILDERS ASSOCIATION OF NORTHERN 
        CALIFORNIA, NATIONAL ASSOCIATION OF HOMEBUILDERS

    Mr. Campos. Thank you.
    I am pleased to share with you the views of the 220,000 
members of the National Association of Home Builders on 
landowner incentives under the Endangered Species Act. I thank 
you for the opportunity to appear before the Subcommittee 
today.
    My name is Paul Campos and I am the Vice President and 
General Counsel for the Home Builders Association of Northern 
California. HBANC covers the 9 San Francisco Bay area counties 
as well as Santa Cruz, Monterey and San Benito Counties.
    The San Francisco Bay area has some of the most expensive 
land and housing in the Nation as well as a steadily expanding 
number of listed species and extensive critical habitat 
designations. In California and across the country, the ESA as 
currently written and implemented is often in conflict with the 
goals of housing availability and affordability.
    Job and population growth are creating a tremendous need 
for new housing but because of regulatory restrictions on what 
land can be developed and how, housing availability and 
affordability are growing problems across the country. In the 
Bay area for example, only 42 percent of the approximately 110 
cities and counties in the region have met their fair share 
housing obligations for families of all income levels and only 
12 percent of the region's households can afford the median 
priced home which now exceeds $500,000. Clearly we must find 
improved ways to balance the needs of our growing communities 
with the need to protect and conserve species and their 
habitats.
    One of the most promising mechanisms for balancing 
development and species needs is the Habitat Conservation Plan. 
These voluntary plans often carried out on a regional level 
seek to reconcile community needs for jobs and housing with the 
desire to protect large blocks of contiguous wildlife habitat.
    In my home State of California, currently approved and 
pending HCPs will preserve over 1 million acres of habitat for 
over 100 species and provide necessary funding for active, long 
term management of those species which as Senator Clinton noted 
in her opening statement is a very important part of species 
recovery and conservation but is not mandated by the Act and is 
not funded.
    Importantly, many of the species covered and protected by 
these HCPs in California are currently not listed under ESA. 
This is a significant but often under appreciated aspect of 
many HCPs. Not only do they provide an incentive for landowners 
to go above and beyond the minimum requirements of the ESA, 
they bestow significant regulatory protection on a substantial 
number of unlisted species with the specific aim of preventing 
the need for listing in the first place.
    Unfortunately, HCPs past, present and future are now at 
risk and it is here that Congress can act to great effect with 
respect to landowner incentives. The defining benefit to home 
builders of HCPs is regulatory certainty: The notion, in former 
Secretary Babbitt's words ``that a deal is a deal.'' But 
uncertainty now clouds HCPs and their promise that a deal is a 
deal. The ``No Surprise'' Rule is under continued legal attack 
and areas identified in HCPs as appropriate for housing 
development now face the specter of being designated as 
critical habitat ``no touch'' zones.
    One of the most important incentives that Congress can 
provide home builders for continuing to commit to the 
significant time, resources and energy to develop innovative 
HCPs is statutory certainty. The East Contra County HCP which 
my organization and its members have worked on since 2000 
provides a vivid illustration. Having been negotiated over the 
last 5 years and covering 176,000 acres, this HCP is heavily 
balanced towards species conservation. It will result in the 
creation, permanent protection and active management of a 
30,000 acre preserve while authorizing development of no more 
than 15,000 acres. Home builders will pay an anticipated fee of 
more than $20,000 per acre for habitat acquisition and 
maintenance for the benefit of 28 listed and unlisted species, 
including the California Red Legged Frog made famous by Mark 
Twain.
    My members' support for this very aggressive and expensive 
conservation plan is directly tied to the HCPs promise of 
regulatory certainty. Builders are being told where to build 
and where not to build. They are being informed of their 
obligations up front and are being offered the hope of permit 
streamlining. Yet this certainty is now being undermined. With 
good reason, home builders fear the legal uncertainty 
surrounding the ``No Surprises'' Rule and the relationship of 
critical habitat designation to HCPs calls into serious 
question the ability of the Federal Government to deliver on 
the principle that a deal is a deal. Congress can and should 
address these clouds of uncertainty by statutorily codifying 
the ``No Surprises'' Rule, thereby giving private property 
owners, State and local governments, tribes and community and 
environmental organizations the necessary certainty to rely on 
HCPs.
    Congress can further promote voluntary incentives by 
exempting HCPs from critical habitat designations. The 
incentive to develop and fund an HCP is significantly 
diminished if a critical habitat designation is superimposed 
over the plan area, thereby resulting in duplicative and 
unnecessary regulation and red tape. The exemption of HCPs from 
critical habitat is more important than ever in light of the 
9th Circuit's recent Gifford-Pinchot decision.
    While NHAB applauds the recent efforts by the Federal 
wildlife agencies to exclude existing and proposed HCPs from 
specific critical habitat designations, these exclusions are 
subject to legal challenge. It is imperative that Congress 
provide a clear statutory exclusion of HCPs from critical 
habitat if it wants to maintain and further promote this 
important incentive for landowners.
    I thank you for your consideration of NHB's views on this 
matter and hope that endangered species conservation continues 
to develop in the direction of incentive based partnerships 
such as HCPs rather than further litigation gridlock. Congress 
can go a long way toward ensuring that goal by providing 
certainty and further incentives to landowners.
    Thank you.
    Senator Chafee. Thank you, Mr. Campos.
    Mr. Foutz, welcome.

         STATEMENT OF ALAN FOUTZ, PRESIDENT, COLORADO 
                          FARM BUREAU

    Mr. Foutz. Thank you.
    My name is Alan Foutz. I am a farmer from Akron, CO on the 
northeast corner of the State. I serve as President of the 
Colorado Farm Bureau and serve on the board of directors of the 
American Farm Bureau Federation and I came here today to 
testify on behalf of both of those organizations.
    Farmers and ranchers have been adversely impacted by the 
Endangered Species Act for a number of years. We have 33 
species listed in Colorado ranging from two distinct 
populations of the Grey Wolf and the Canadian Lynx to the Boney 
Tailed Chub. I won't dwell on the problems however but instead 
will try to focus on a process that has worked for us and one 
that I think we should consider as part of the solution to the 
Endangered Species Act.
    The Mountain Plover is a small bird found on the western 
Great Plains. It was proposed for listing by ESA in 1999. As 
with many of such species, little was known scientifically 
about the bird and about its habitat and it was believed the 
conversion from short grass prairie to agricultural land was 
destroying the habitat for the bird and the listing would have 
created a considerable issue for many of us in the farming 
operations in that particular part of the State.
    Scientists didn't know a lot about the bird because it was 
believed to be living on private range and therefore private 
landowners were very reluctant to allow State and Federal 
officers onto their land to look for the bird, but private 
landowners also did not want to see the Plover listed without 
scientific justification for listing.
    The Colorado Farm Bureau Board of Directors determined that 
it was important to find out the status of this bird and that 
meant identifying and studying Plovers on private lands. We had 
to convince our members to open their lands to researchers so 
we could study the bird and I have to tell you quite frankly 
that was an extremely difficult sell to do. It wasn't because 
our members weren't interested in trying to protect the bird on 
their lands but it was because of the restrictions they knew 
would be placed on the lands if that species were found and 
listed and we would have to provide critical habitat.
    To our members' credit they recognized the need for good 
scientific information, therefore, Colorado Farm Bureau entered 
an agreement with the Colorado Division of Wildlife, with the 
U.S. Fish and Wildlife Service, Rocky Mountain Bird 
Observatory, Nature Conservancy and Colorado State University 
and we agreed to open our lands so we could inventory this bird 
and study the ecology of the Mountain Plover.
    The result of that was a 3 year study of the movements, 
locations, and nesting behavior of the Mountain Plovers on 
agricultural lands. Colorado Farm Bureau members provided 
access to over 300,000 acres of their private land for this 
study. Participation was strictly voluntary and Farm Bureau 
members then donated access to the land as well as time. There 
was a lot of time put in by individuals as field volunteers 
went onto their property to search for these birds.
    Some of the results that were found were very surprising to 
the scientists. Researchers found that the agricultural lands 
rather than destroying habitat were actually providing habitat 
for these nesting birds during their prime nesting time and 
many of the agricultural practices we were employing was 
providing the habitat already for that bird. If we had 
restricted some of those activities, we may have in fact 
created a greater problem than we were trying to solve.
    One of the aspects of the study found that in our 
cultivated grounds, there was a higher success of nesting than 
there was actually under what was considered to be their 
principal habitat, short grass prairie. Mountain Plovers were 
still at risk from farm machinery, plowing in the fields where 
they were. Farmers were more than willing to avoid those nests 
if they could see them, they are very difficult to see. So part 
of the remedy was that the Farm Bureau and the Rocky Mountain 
Bird Observatory developed a unique program which allows our 
members, whoever wants, to call a toll free number 72 hours in 
advance of working in those fields, having the Rocky Mountain 
Bird Observatory send someone to that location. They will then 
locate and mark those nests and our members and farmers then 
simply work around those nesting sites and help protect that 
bird.
    As a result of these and other conservation efforts, the 
Fish and Wildlife Service determined that listing of the 
Mountain Plover was not going to be warranted and they withdrew 
the proposal. The farmers benefitted, the bird benefitted, 
society benefitted. Colorado farmers and ranchers and the 
Colorado Farm Bureau learned some valuable lessons from this 
positive experience. First, we demonstrated that farmers and 
ranchers will work to protect species and that they were 
willing to meet government half way in that if allowed to do 
so.
    There was a lot of flexibility in this particular program 
between the landowners and the various services involved. That 
made this particular program work. The solution to this program 
would not have been available to us if the Mountain Plover had 
been listed. Under the ESA, once that species had been listed, 
Section 9, the takings prohibition and Section 7, all of the 
consultation requirements, simply would have imposed 
restrictions that would have been insurmountable for us to ever 
have gotten together and solved this problem.
    The Endangered Species Act needs to be amended to provide a 
tremendous amount of flexibility for farmers and ranchers, 
those on private lands and government to work together so we 
can come together and come up with voluntary agreements that do 
protect the species and still allow me to provide for my family 
in a farming operation and provide food and fiber for the 
world.
    Those incentives may be direct payments, may be tax 
incentives or simply removing the disincentives that come under 
the restrictions right now that we see in ESA. We do know that 
our members want to protect these species, we want to work with 
government agencies, and so if we can do something to provide a 
wide range of incentives, be very flexible so that we can work 
through the programs we have and the different species, I think 
we can do what we need to do in this area.
    I thank you for your time.
    Senator Chafee. Mr. Olszewski, welcome.

STATEMENT OF ROBERT J. OLSZEWSKI, VICE PRESIDENT, ENVIRONMENTAL 
               AFFAIRS, PLUM CREEK TIMBER COMPANY

    Mr. Olszewski. Good morning.
    Plum Creek Timber is the largest private land owner in the 
United States with nearly 8 million acres of property in 19 
States. I have personally worked with State government, 
industry and trade associations and private industry on 
forestry and environmental issues over the last 25 years.
    Today, I would like to talk to you about Plum Creek's 
experiences working with the Endangered Species Act to develop 
a variety of conservation agreements and plans to address both 
biology and the business of managing forest habitat for 
endangered species. Habitat for more than a dozen species 
currently protected under the ESA can be found on Plum Creek's 
lands including Northern Spotted Owls, Marbled Murrelets, 
Grizzly Bears, Gray Wolves, Red Cockaded Woodpeckers and a 
number of others.
    Plum Creek is no stranger to conservation planning under 
the ESA. Over 2 million acres, nearly a quarter of our 
corporate ownership nationwide, is under 4 habitat conservation 
plans and a conservation agreement for grizzly bears in 
Montana. Plum Creek's Central Cascades HCP, a 50 year plan 
covering 315 species on 121,000 acres in Washington State was 
approved in 1996 and is now in its ninth year of 
implementation.
    Our Native Fish HCP in the northwest covers 1.4 million 
acres of property. We are the largest private timberland owner 
in a very unique Wisconsin statewide HCP for the protection of 
the Karner Blue Butterfly. In 2001, we completed a 30-year HCP 
for the Red Cockaded Woodpecker in Arkansas covering 261,000 
acres. Plum Creek manages 75,000 acres of land in Montana's 
Swan Valley under a very unique grizzly bear conservation 
agreement under Section 7 with the Service.
    These agreements are not easy to complete. The commitment 
is expensive, time consuming and requires us to open our 
operations to public scrutiny in an unprecedented fashion. They 
worked successfully for Plum Creek because of our location and 
characteristics of our land ownership and unique circumstances 
to each of the species. We don't have a habitat conservation 
agreement around each of our species. These foster a logical 
approach.
    These voluntary conservation agreements under the ESA have 
indeed solved problems. The listing of the Northern Spotted Owl 
alone in 1990 and subsequent Federal guidelines trapped over 77 
percent of Plum Creek's Cascades regional ownership and 108 owl 
circles. Indeed with every new listing, Plum Creek was getting 
closer to becoming a poster child for the taking of private 
lands. For us, the answer was the advent of HCPs and other 
agreement tools combined with incentives such as the no 
surprises policy.
    Plum Creek and the Federal Government have accomplished 
concrete contributions to the conservation of endangered 
species. With the assistance of Federal funds from the 
Cooperative Endangered Conservation Fund, under Section 6 of 
the ESA, the State of Montana has purchased the largest 
conservation easement west of the Mississippi River on 142,000 
acres of Plum Creek's property. Fisher and Thompson Rivers are 
within our Native Fish HCP. These Section 6 funds which are 
granted for land acquisition within HCPs have also been 
instrumental in the recent purchase of another 1,100 acres of 
Plum Creek's property in northwestern Montana.
    In the Ouchita River of Arkansas and Louisiana, Plum Creek 
and the U.S. Fish and Wildlife Service are currently engaging 
in the development of a Safe Harbor agreement or some variation 
thereof for Red Cockaded Woodpeckers on property adjacent to 
our HCP. The planning and habitat work now occurring on this 
12,000 acre important area could take the populations of Red 
Cockaded Woodpeckers from over 20 to 50 territories.
    The potential acquisition of this area by the adjacent 
Upper Ouchita Wildlife Refuge is really the greatest incentive 
driving this ESA conservation project forward. There is 
tremendous science that goes into development and tremendous 
work. A lot of people are critical that these things don't 
involve much science but let me assure you that you do. Our 
Cascades project alone, we authored 13 technical reports, we 
sought peer reviews from 47 outside scientists, conducted over 
50 briefings with outside groups and agencies for additional 
advice and input. All this material is available for other 
landowners and agencies developing their own conservation 
plans.
    We do have some recommendations. First and foremost, we do 
believe as another speaker has recommended, that the no 
surprise policy be codified. These are major long term 
commitments of landowners and their properties and they really 
need the security and assurance of having the knowledge of what 
kind of agreements they are entering.
    The kinds of incentive that I have mentioned with regard to 
Section 6, other types of incentives that other panelists have 
mentioned are very critical to enabling these programs to move 
forward.
    There are some roadblocks to entering into these 
conservation agreements. As an example, I give you the fact 
that the National Historic Preservation Act gets triggered when 
you enter into some of these conservation agreements. These can 
result in some very lengthy and detailed processes of looking 
for historic sites or endangered species often where there is 
nothing to be found. It is very bureaucratic and really takes a 
long time. All these things add up to being a very awkward 
situation for private landowners with these conservation 
agreements.
    There are some provisions that are triggered under NEPA 
that also result in some issues and some difficulties probably 
too detailed to get into but they are included in my testimony.
    I want to thank you for the opportunity to testify before 
you today. The testimony you hear today should provide the 
Committee with a better understanding of a variety of ESA 
voluntary agreements and how they have been applied on our 
properties. I hope it gives you an appreciation of the 
strategic value that these voluntary agreements can have, both 
for the conservation of species and the protection of resource 
economies.
    Senator Chafee. Thank you.
    Welcome, Mr. Wiseman.

STATEMENT OF LARRY WISEMAN, PRESIDENT AND CEO, AMERICAN FOREST 
                           FOUNDATION

    Mr. Wiseman. Thank you, Mr. Chairman and Senator Clinton, 
especially for pointing out 1 inescapable fact and that is that 
most of the forest land in this country is not owned by 
companies, it is not owned by the Federal Government but is 
owned by 10 million individuals and families, most in small 
tracts of less than 100 acres. Imagine someone who owns 100 
acres of land dealing with the kinds of regulatory issues, the 
kinds of processes, practices and procedures that a 7-million 
acre owner deals with their staff of lawyers, biologists and 
accountants--and you get some sense of the dimensions of the 
problem that our members face when they deal with the 
Endangered Species Act.
    Our 51,000 members are very diverse. Many have owned their 
land for generations, some have owned their land since before 
this Nation was founded and have remained on the land and 
remained as good stewards. They almost all recognize that the 
decisions you make in these rooms in Washington are going to 
have a heck of a lot more impact on their properties than the 
decisions they make around their kitchen table.
    As you can imagine, representing 51,000 members who in turn 
represent 10 million forest owners is quite a responsibility. I 
am both honored and humbled to have the opportunity to share 
what you might hear if you had the privilege, as I have had, of 
sitting around some of those kitchen tables.
    First, 1 of the things that would emerge is most of those 
folks are not farmers. Most of the forest land that they own is 
not connected to an agricultural operation. That is important 
to note because many of the programs that exist for endangered 
species protection in the farm bill for a variety of reasons--
some cultural, some historic, some institutional--are tilted 
toward farmers.
    The second thing you might find is that these folks are 
volunteers. They choose to be good stewards, they choose to own 
forest land. There is absolutely no way in the world that you 
could construct an incentive program that would fully 
compensate them for all of the tribulations, for all the 
difficulties that they encounter in managing their land. They 
want to do it.
    Some would perhaps, because of family circumstance or 
community circumstance, choose to sell their property as 
development pressures increase, but many others would prefer to 
stay on the land and continue their heritage of stewardship 
through multiple generations. An overarching goal for them is 
policy that makes it easier, not harder for these families to 
stay on the land and to exercise an almost innate compulsion to 
conserve property, species and provide environmental services.
    In the end, it has to make economic sense. If owning land 
doesn't make economic sense, the fact is many might find it 
difficult to say no when those developers come calling, and 
they come calling very often. The Forest Service estimates we 
are losing 2,000 acres a day to development. You wouldn't learn 
about this on television. Every July and August, you get the 
media reports about fires, the wild fire stories, sort of the 
ecological equivalent of summer reruns. The crisis we see on 
these family owned forest lands is in the main an invisible 
forest health crisis and we urge you to take a close look at 
that.
    Incentive programs are indeed one way to compensate owners 
for the environmental services they provide but it is 
important, as Senator Clinton indicated, to consider just how 
those incentive programs deal with individual owners. Some $4 
billion in applications for all conservation programs in 2004 
were unfunded, all NRCS programs. Those that were funded, under 
EQUIP, for example, the largest one, less than 2 percent of 
expenditures nationwide were directed at forest practices, a 
big mismatch here, half the rural landscape, 2 percent of 
expenditures. As you consider incentive programs, consider ways 
they can be made more accessible to family forest owners.
    Three final points: No. 1, consistency. Politically fragile 
programs can actually de-motivate owners. The brief and sad 
history of the Forest land Enhancement Program illustrates the 
point very well. It was the first substantial incentive program 
in the Farm Bill aimed solely at family forest owners. It 
wasn't 18 months after enactment that the President zeroed out 
funding for FLEP in his budget. Frankly, that doesn't leave 
people with confidence that Federal programs will provide a 
stable platform for their investments in stewardship.
    No. 2, regulatory certainty. All of the folks here have 
talked about it. Understand from the family forest perspective 
that these folks are making decisions for generations to come, 
for their grandchildren and their grandchildren's 
grandchildren. They are hesitant to make those decisions if 
they can't have some certainty that the rules of the game 
aren't going to change a few years later.
    No. 3, program simplicity. One close friend, a man who owns 
some land in Georgia pointed out to me that he owns land for 
three reasons: pride, pleasure and profit. He went on to say, 
if the profit isn't there, he can go on but when the pride and 
pleasure disappear, when there are too many hoops to jump 
through, he will disappear too.
    I urge you to keep that in mind as you consider changes to 
the Endangered Species Act.
    Senator Chafee. Thank you, sir. Thank all of you gentlemen.
    We try and solicit criticism as we have these hearings to 
have testimony come in that is going to give an adverse point 
of view, if you will. From what I have heard from the 5 of you, 
the ESA is doing fairly well. Mr. Foutz, you talked about the 
Mountain Plover and working with the landowners. Am I correct 
in the assumption that as we look at reauthorizing ESA, maybe 
looking at the certainty issue many of you have raised, the no 
surprises, a deal is a deal, but other than that, the ESA is 
working.
    Mr. Bean, I will start with you. Am I correct in that 
assumption?
    Mr. Bean. I think the Endangered Species Act is doing well 
for many species. I think it needs to do better for others. In 
particular, it needs to offer greater incentives than it 
currently does. I have talked about the various incentive 
programs and others have as well. They are often not being well 
targeted and well delivered for the benefits they could 
potentially provide.
    My suggestion would be to give a careful focus on 
opportunities to improve the targeting and delivery of those 
existing programs and to investigate new programs. For example, 
the S. 1180, I believe, in 1997 that the Senate worked on had a 
provision in it to establish what was known as a habitat 
reserve program, a voluntary program whereby landowners could 
enroll land that was useful for endangered species 
conservation, agree to manage it in ways beneficial to 
endangered species and receive payment for doing so. These sort 
of ideas and others like it are worthy of investigation.
    Senator Chafee. Mr. Wiseman.
    Mr. Wiseman. As Mr. Bean has pointed out, the concept of 
endangered species protection is embedded in many different 
pieces of legislation. Understanding the guts of the ESA is one 
important step in reforming our public policy toward endangered 
species, but there are a variety of other steps that must be 
considered, including, as Michael pointed out, funding for 
incentive programs that support species conservation. I would 
add, from the perspective of the voluntary stewards who own 
most of our forest land, we need a great deal of attention paid 
to information and education. Accountability is important and I 
know there is a big drive in the Congress on the agencies and 
from the White House to demonstrate concrete results. This can 
have some perverse effects.
    For example, the Private Stewardship Grants Program that 
the Fish and Wildlife Service discussed today is only accepting 
applications in this current round for on the ground 
activities--that is, some specific management change that would 
benefit species. In the past, they have also funded outreach 
and education programs, programs that can have the multiple 
impact that one single construction project would have.
    We recently, with Environmental Defense, undertook a 
partnership where we had a demonstration day and a field day 
and dozens of landowners, including President Jimmy Carter, 
signed up based on that information to manage for bird habitat, 
11,000 acres for the price of management, for the price of a 
field day, and some educational materials. So as you look 
forward, you have to consider not just ESA but extension, the 
NGO work that is being done in outreach and education, the 
whole panoply of policies.
    Senator Chafee. Mr. Foutz.
    Mr. Foutz. You made a comment that referenced me in 
particular. Don't let me confuse the Committee by assuming the 
positive outcome we had with this one species is characteristic 
of all the issues in ESA. We can look at many endangered 
species issues in Colorado and find all kinds of problems.
    The wolf issue is a huge issue in Colorado. We have not 
come to any conclusion or resolution of that issue. We are 
working on the Western Sage Grouse issue. We think we may have 
come to some resolution on how we will deal with that as 
individuals on private property. That is still out there a 
little bit but certainly there is a whole number of those 
issues and those species that are listed out there that are 
simply not workable under the present guidelines and present 
constrictions that are placed under endangered species.
    So there has to be some significant changes in the 
Endangered Species Act, I think, if private landowners are 
going to be a part of saving our Nation's species, that has to 
be more workable, there has to be some ideas of how it may 
impact economically those of us on private lands.
    I can go back to the Mountain Plover issue, there is only 
one reason I got involved. This is a real personal issue for me 
because I was one of the farms that had to go out of business 
under the listing language that was there for the listing of 
this bird. I literally would have to have gone out of business 
and my farm would have been set up for nothing but raising 
Mountain Plover had that listing language gone through.
    That may sound pretty drastic but that is what the language 
said. The language said, you will do nothing in your fields 
from March 15 until July 15. If you live in eastern Colorado, 
every activity on my farming operation takes place between 
March 15 and July 15. I would have quit. So would have everyone 
else in eastern Colorado.
    We were forced because of the threat of that listing to do 
something, so we did do something and it worked. I don't want 
you to misconstrue the fact that this one thing worked here, 
that all of the Endangered Species Act is working for everyone. 
It is not.
    Senator Chafee. Do you have personal experience with the 
wolf issue?
    Mr. Foutz. I haven't found it personally on my place. I 
shouldn't say it that way. I have seen wolves on my place but 
it is more of an issue on the western slope right now than it 
is on the eastern side of Colorado. It is an issue for our 
members who have private property on the western slope who are 
trying to raise cattle and sheep. It is a big issue.
    Senator Chafee. Senator Clinton.
    Senator Clinton. I don't have any specific questions. I 
want to thank all of the witnesses. I think as you pointed out 
they have been very productive. We understand there are issues 
and problems. That is why we are holding these hearings so that 
we can hear from various stakeholders about what they believe 
would help us to achieve the goals of the ESA in a more 
creative, flexible way that really brings private landowners to 
the table and has them involved in the process.
    I am going to have to excuse myself to go to an Armed 
Services Committee hearing but I really want to commend you, 
Mr. Chairman, for this kind of hearing. It was very productive 
and useful.
    Senator Chafee. Thank you, Senator Clinton. I imagine we 
have a hearing so we can actually listen.
    Senator Jeffords.
    Senator Jeffords. Mr. Bean, could you elaborate on your 
concern that the existing regulatory policies not interfere 
with economic incentives for landowners?
    Mr. Bean. The Act has a number of regulatory requirements 
that I believe are important and really quite essential to deal 
with certain types of threats to the well being of endangered 
species. Development activities represent a stark choice 
typically between sacrificing all habitat value to development 
or salvaging some habitat value and allowing some development 
in some localities.
    Those same regulatory requirements that try to secure some 
conservation concessions from development interests when they 
are developing habitat I think are necessary but when those 
same regulatory restrictions are applied in the working 
landscape context of farmers, ranchers, forest land owners, 
they don't really serve quite the same purpose. Further, some 
of the incentive programs that the Fish and Wildlife Service 
and NRCS developed are programs that have to jump through the 
same procedural hoops as development projects even though the 
purpose of those programs is to promote conservation on the 
ground.
    That, I think tends to slow and reduce and ultimately 
frustrate the ability of those incentive programs to deliver as 
much as possible. Let me give you a concrete example. You 
mentioned the Landowner Incentive Program in your State. In the 
State of New Jersey, the State originally proposed with its 
landowner incentive program to do a number of projects, some of 
which were for the Bog Turtle which is a listed species, others 
of which were for unlisted species. Some of the paperwork 
requirements for doing those projects for the Bog Turtle, 
however, were sufficiently onerous for the State that the State 
decided to abandon the Bog Turtle projects and just do the non-
endangered species projects with its Landowner Incentive 
Program money.
    That is unfortunate because it means that a program, the 
Landowner Incentive Program, that could have had major benefits 
for endangered species conservation was in that example 
redirected towards species not endangered because of regulatory 
requirements that made it more complex for the State to develop 
projects that affected endangered species. That is the concern 
I have about the need for the agencies to tailor or adjust the 
regulatory requirements so those don't get in the way of 
delivering incentives to landowners for on the ground 
conservation.
    Senator Jeffords. Mr. Bean, could you elaborate on your 
statement that many landowners would rather see the removal of 
land use restrictions from the Endangered Species Act than any 
other economic incentives?
    Mr. Bean. I think what I was referring to there was there 
has been some reference to Safe Harbor agreements. These are 
agreements by which landowners can voluntarily enhance habitat 
on their land. These got started a decade ago as a result of 
work that I and colleagues did in North Carolina for the Red 
Cockaded Woodpecker. At that time, we were exploring with 
landowners what it would take to get them to begin managing 
their forest land in order to produce greater benefits for that 
endangered bird.
    Our expectation was that the landowners would tell us that 
they wanted economic incentives, that they wanted to be paid, 
they wanted tax incentives or some other tangible economic 
incentive but to our surprise, many of the landowners we talked 
to said to us that they would be willing to manage their land 
differently, manage it in ways that would benefit that species 
if only the threat of additional regulation were removed from 
them through an agreement that made it possible for them to 
manage without incurring new regulatory liabilities.
    In that example, it was more important to those landowners 
to have the certainty, if you will, that beneficial management 
would not translate into additional regulatory restrictions 
than it was to be paid for doing what we would like them to do. 
That isn't always going to be the case, I am sure, but there 
are many examples like that where if you can just address 
landowner anxieties about the regulatory consequences of good 
stewardship, they will gladly be good stewards without economic 
incentives, though I would hasten to add if we can provide 
economic incentives too, we will get even more out of the 
landowners.
    Senator Jeffords. Mr. Wiseman, could you elaborate on why 
you think State or regional HCPs would be more productive than 
individual HCPs?
    Mr. Wiseman. I know of a couple of cases where our members 
have attempted to secure individual HCPs. In 1 case, it is 
still pending and in another case, after 7 years and an 
expenditure of $28,000 in professional and legal fees, that 
individual has received the HCP.
    The kind of certainty that Michael is talking about can be 
achieved in other ways. We have found in working with 
Environmental Defense that schemes that aggregate landowners 
and give them an opportunity to subscribe to a set of 
management practices that can be set down, once they are 
informed, once they are given the assistance and the knowledge 
they need to implement those practices, they will do it. The 
key is to do it en bloc with a number of owners. That is the 
model that we have been helping to develop with Environmental 
Defense. It is a model I think bears considerable study.
    Regulatory certainty for someone who has to sit at his 
kitchen table and make a decision that is going to have effects 
for 100 to 200 years is important, it is vital to the 
confidence they need to commit themselves and their 
grandchildren's grandchildren to a course of action.
    Senator Jeffords. Mr. Foutz, could you elaborate on your 
statement that many landowners would rather see the removal of 
land use restrictions from the Endangered Species Act than any 
economic incentives?
    Mr. Foutz. I kind of go back to what was said a few minutes 
ago. I think many of our landowners are more concerned with the 
restrictions and the governmental regulations that are 
associated with the Endangered Species Act than they are in 
terms of any kind of economic incentive. What we find in most 
cases, at least in my part of the country, is that the things 
we are already doing on our agricultural lands are generally 
conducive to the species.
    If we find that species there, then the only recourse we 
have to try to survive in a farming operation is not to let 
anybody know it is there or to do whatever you need to do to 
take care of the issue so you don't have to deal with the 
regulatory issues. They are costly. This Mountain Plover issue 
not only did it cost individuals like me and the other members 
who provided the 300,000 acres, it cost a lot of money to be 
involved in that study. It cost Colorado Farm Bureau a 
considerable sum to provide funds to do that kind of study and 
that goes with each of the species. If you find them or they 
are there, the regulatory overhead is just too prohibitive to 
deal with.
    If we can get away from that, I am not sure most of our 
members would worry about the economic incentives as long as 
they can do some farming on their place. The economics are 
always important but if all you want is a bird or prairie dog 
or a sage grouse and you ask me to provide that, obviously I am 
going to have some incentive but if you allow me to do the 
business I know how to do, the economic incentive is not nearly 
as great and not nearly the issue as the regulatory environment 
we typically are placed under when a species is found and 
listed.
    Senator Jeffords. Thank you.
    Senator Chafee. Thank you, Senator Jeffords and thank you, 
gentlemen for good testimony. Some of you came a long way, 
California, Colorado, Plum Creek. Where is Plum Creek?
    Mr. Olszewski. Actually, I came from Georgia.
    Senator Chafee. Georgia, still a long distance. Thank you 
very much.
    If there are further questions, we will submit them in 
writing and hopefully you can respond in writing as we go 
forward with reauthorization of the Endangered Species Act.
    The hearing is adjourned.
    [Whereupon, at 4:45 p.m., the subcommittee was adjourned.]
    [Additional statements submitted for the record follow:]

        Statement of the Hon. Frank R. Lautenberg Senator from 
                          the State New Jersey
    Mr. Chairman, thank you for giving our committee an opportunity to 
discuss this landmark piece of legislation--the Endangered Species Act. 
I believe it is our duty to future generations--our children and 
grandchildren to not only protect the environment, but prevent species 
of animals from extinction. The Endangered Species Act has done that.
    The bald eagle--the symbol of our nation--is 1 of the 17 animals on 
the endangered species list that are found in my State on New Jersey. 
We also have a bird in New Jersey called the Red Knot. This bird stops 
in New Jersey for a few weeks every year, on its way to Canada from 
South America. It used to be that 100 thousand Red Knots would stop in 
the Delaware Bay--and bird watchers would spend millions of dollars 
coming to witness the spectacle. Today, only about 13,000 Red Knots 
visit our State.
    Mr. Chairman, I have 10 grandchildren. I can't imagine how I would 
feel if I knew that they were growing up in a world where the bald 
eagle had become extinct--or the Red Knot no longer visited the 
Delaware Bay. One of the main purposes of the Endangered Species Act is 
to protect the remaining individuals of these species and their 
habitats.
    Today we are talking about habitat--specifically, the private lands 
that are crucial to the survival of these species. More than 70 percent 
of the land in our country is privately owned. So it is no surprise 
that 80 percent of endangered species rely on private lands for all or 
part of their habitat.
    I believe strongly in the rights of landowners to use their 
property as they see fit. I also believe that when a specific habitat 
holds the key to survival for an entire species, we all have a 
responsibility to future generations. I fully support the concept of 
providing incentives for private landowners to protect the habitat of 
endangered species.
    This is an area of general agreement, and I hope we can build upon 
this consensus and will always be able to appreciate the majesty of the 
bald eagle and other endangered species. Thank you Mr. Chairman.
                               __________
 Statement of Sara Braasch Regional Assistant Chief, Natural Resources 
      Conservation Service United States Department of Agriculture
    Mr. Chairman and Members of the Subcommittee, I am pleased to 
appear before you today to present the U.S. Department of Agriculture's 
(USDA) perspective on habitat restoration and preservation on America's 
private lands. My name is Sara Braasch, and I serve as the Regional 
Assistant Chief of the Natural Resources Conservation Service (NRCS) 
for 13 western States, as well as the Pacific Basin. I thank the 
Members of the Subcommittee for the opportunity to appear, and I 
express gratitude to the Chairman and members for your interest in 
USDA's roles in helping farmers, ranchers, and other private landowners 
improve wildlife habitat. The topic of today's hearing gets to the 
heart of the concept of Cooperative Conservation, as wildlife 
conservation serves as an excellent example of how voluntary 
conservation efforts on private lands can make a difference.
    I would like to take a moment to highlight the background of the 
NRCS to place our involvement into context. NRCS assists owners of 
America's private land to conserve their soil, water, and related 
natural resources. Local, State and Federal agencies and policymakers 
also rely on our expertise. We deliver technical assistance based on 
sound science, that is suited to a farmer's or rancher's specific 
needs. In addition, NRCS also offers voluntary assistance to landowners 
in the form of financial incentives, cost share projects, and 
conservation easements. In 2002, President Bush signed into law the 
most conservation oriented Farm Bill in history, which reauthorized and 
greatly enhanced conservation programs. In total, the new Farm Bill 
enacted by the President provided a $17.1 billion increase in 
conservation funding over a ten-year period. In addition, direction was 
provided to assist agricultural producers meet regulatory challenges 
that they face.
    Conservation programs can and do help reduce the burden of 
regulation. In the case of the Endangered Species Act (ESA), USDA is 
working proactively to help producers address the habitat needs of 
species protected under the ESA, and at-risk species. Conservation 
programs such as the Wetlands Reserve Program (WRP), the Wetlands 
Reserve Enhancement Program (WREP), the Wildlife Habitat Incentives 
Program (WHIP), the Grassland Reserve Program (GRP), and the 
Conservation Reserve Program (CRP) addresses the needs of these 
species.
    The Environmental Quality Incentives Program (EQIP) rule includes 
the requirement for NRCS State offices to include in their Ranking 
Criteria, ``Compliance with Federal, State, local or tribal regulatory 
requirements concerning soil, water and air quality; wildlife habitat; 
and ground and surface water conservation.'' In addition, 1 of the 4 
national conservation priorities for EQIP addresses wildlife by seeking 
the ``promotion of at-risk species habitat recovery.'' This national 
conservation priority provides additional emphasis in allocation of 
program funding; direction is also provided to States to include 
national priorities in ranking individual applications.
    NRCS has worked to ensure that our programs are helping landowners 
address species concerns and providing incentives to not only protect 
Threatened and Endangered Species habitat, but also to develop and 
enhance new habitat for the future. Here are just a few examples of 
actions and assistance that USDA recently has offered with respect to 
habitat enhancement for targeted species.
                the wetlands reserve enhancement program

    On May 16, 2005, Secretary Johanns announced the availability of $4 
million in financial assistance for the Wetlands Reserve Enhancement 
Program (WREP) partnership proposals that restore and protect habitat 
for migratory birds and other wetland dependent wildlife. The Wetlands 
Reserve Program (WRP) provides restoration assistance and easements of 
30 years or permanent in duration to protect wetlands. Through WRP, 
USDA's goal is to restore and protect more than 2 million acres of 
wetlands. The new enhancement option within WRP allows NRCS to match 
resources and leverage the efforts of State and local governments to 
provide even greater assistance to landowners.
             eastern bog turtle and ivory billed woodpecker

    Of the $4 million recently made available for WREP, a minimum of 
$500,000 is offered for partnership proposals that address Bog Turtle 
Habitat in the eastern United States. The Bog Turtle is a threatened 
species that has a potential range from New York and Massachusetts 
south to Tennessee and Georgia. Population declines are due mainly to 
loss of habitat, which consists of wet meadows and other shallow sunny 
wetlands, and encroachment of vegetation. Bog Turtle-related proposals 
will compete only with other Bog Turtle proposals under our recent 
announcement.
    Also included in our WREP announcement is a minimum of $500,000 to 
assist with Ivory-billed woodpecker habitat in Arkansas. We believe 
that excellent opportunities exist for developing bottomland hardwood 
wetland habitat projects that will provide long-term benefits. In 
addition to WREP, NRCS is providing an additional $1 million in WRP 
funds, and $1 million in Wildlife Habitat Incentives Program (WHIP) 
cost-share funds, to private landowners for practices that improve and 
restore native Ivory-billed woodpecker habitat. This includes restoring 
previously logged areas near deciduous forest swamps to improve and 
protect critical habitat. We will be announcing successful recipients 
of funding under this program soon, and feel that the excellent 
response and applications that have been submitted underscore the 
opportunities for increased private lands conservation of wildlife 
habitat. In addition, the Farm Service Agency through the Conservation 
Reserve Program will provide $2.7 million for Ivory-billed woodpecker 
habitat.
                                 salmon

    In February, Secretary Johanns announced $2.8 million in the WHIP 
to help restore and conserve salmon habitat in Alaska, California, 
Idaho, Maine, Oregon, and Washington. These funds are part of the WHIP 
Salmon Habitat Restoration Initiative, which NRCS initiated in March of 
2004. Through the initiative, NRCS helps landowners with projects that 
restore habitat for Pacific and Atlantic salmon and include increasing 
vegetative shade along streams, restoring gravel spawning beds, 
removing barriers to fish passages and reducing nutrient runoff from 
farming and ranching operations. In addition to this year's funding, 
NRCS signed 47 contracts and agreements with landowners, tribes, and 
municipalities in fiscal year (FY) 2004. These projects totaled more 
than $3.3 million and improved nearly 900 acres of riparian habitat and 
opened hundreds of miles of streams for fish passage. We are pleased 
with the gains being made to improve salmon habitat, and believe that 
NRCS can continue to build upon this success for the future.
                              sage grouse

    Habitat conservation for the Greater sage grouse in the western 
United States serves as a prime illustration of the role of Farm Bill 
programs and conservation planning assistance. Accelerated assistance 
provided through NRCS had a positive impact on improving sage grouse 
habitat. NRCS has provided more than $2.5 million in incentives for 
sage grouse habitat conservation, primarily through the Grassland 
Reserve Program (GRP) and WHIP in fiscal year (FY) 2004. NRCS estimates 
that in fiscal year (FY) 2004 more than 80,000 acres of sage grouse 
habitat benefited directly from private lands conservation efforts, 
with more than 1 million acres experiencing a secondary benefit. For 
fiscal year (FY) 2005, we estimate that roughly 1.5 million acres of 
sage grouse habitat will benefit from primary and secondary effects 
combined. As a result, the U.S. Fish and Wildlife Service made a 
decision not to list the Greater sage grouse as Threatened and 
Endangered under the ESA. In that decision, they emphasized the 
importance of ongoing and future conservation efforts to the long-term 
health of this species.
                            other assistance

    The Healthy Forests Restoration Act of 2003 authorized the Healthy 
Forests Reserve Program (HFRP). The Act authorizes HFRP to make 
payments for private forest landowners who agree to protect forested 
acreage to promote the recovery of threatened and endangered species. 
This program has an authorization of appropriations of $5 million from 
fiscal year (FY) 2004 through fiscal year (FY) 2008, and can enroll up 
to 2 million acres. Program contracts can take the form of 10-year 
cost-share agreements and easements of 30-years or up to 99-years in 
duration. The Healthy Forests Restoration Act also contains innovative 
provisions relating to safe harbor or similar assurances to landowners 
who enroll land in HFRP and whose conservation activities result in a 
net conservation benefit for listed, candidate, or other species. USDA 
is working collaboratively with the Department of Interior U.S. Fish 
and Wildlife Service on establishing these procedures for HFRP.
                                summary

    In a broad sense, the Administration's commitment toward 
Cooperative Conservation will mean greater emphasis on assisting 
producers to identify opportunities for improved and increased fish and 
wildlife habitat. Mr. Chairman, my statement has highlighted just a few 
of the programs and provided a general sense of the kinds of species 
targeted and work that private lands conservation is accomplishing. 
There are numerous other species that are benefiting everyday from 
conservation efforts on farms and ranches across America. To provide an 
idea of the scope and magnitude of our efforts, NRCS will provide over 
$1 billion in funding through the EQIP program this year. Couple these 
funds with the additional half billion dollars dedicated through our 
other conservation programs including the Farm and Ranch Lands 
Protection Program (FRPP) and Conservation Security Program (CSP) this 
year, and it becomes clear that wildlife habitat is receiving major 
benefits. I note that under the CSP, wildlife habitat plays a major 
part in that program, as any farmer or rancher with wildlife habitat 
issues on their property must fully address those needs in order to 
qualify for participation at the highest levels.
    We will continue to seek innovative means of protecting and 
restoring fish and wildlife habitat by offering farmers and ranchers 
incentive-based programs and planning assistance. We also will continue 
to seek out opportunities to best target our resources and assistance 
when special opportunities or circumstances necessitate. Rural America 
has an excellent story to tell. If we provide solid information, 
financial resources, and technical assistance, we can achieve a win-win 
for American agriculture as well as for wildlife conservation.
    I would be happy to respond to any questions that Members of the 
Subcommittee might have.
  Statement of Marshall P. Jones Jr., Deputy Director, U.S. Fish and 
           Wildlife Service, U.S. Department of the Interior
    Mr. Chairman and Members of the Subcommittee, I appreciate the 
opportunity to testify today regarding the Endangered Species Act (ESA) 
and incentives for private landowners.
    Passed in 1973, the ESA is intended to conserve plant and animal 
species that, despite other conservation laws, are in danger of 
extinction. Two key purposes of the ESA are to provide a program for 
the conservation of endangered and threatened species to bring them to 
the point at which measures under the Act are no longer necessary and 
to provide a means whereby threatened and endangered species ecosystems 
may be conserved. The ESA provides significant policy direction and 
tools to accomplish species conservation and protection. In the past, 
the way the ESA was implemented placed legal and regulatory burdens on 
landowners and other members of the regulated community. As a result, 
many landowners do not want listed species on their property and have 
been unwilling to engage in activities that would attract species that 
are or could be listed in the future for fear of increased regulation 
and negative impacts on their property.
    Because more than 70 percent of federally-listed species depend on 
private lands, our ability to recover species requires the assistance 
of private landowners and the regulated community. With no legal 
requirements for private landowners to improve or restore habitat and 
conditions on their land for the benefit of listed species, incentive-
based conservation is crucial to our ability to recover these species. 
Incentive-based conservation efforts are also important if we are to 
encourage reluctant landowners to work with the Federal Government in 
the future.
    At the Department of the Interior, the ESA is administered by the 
U.S. Fish and Wildlife Service (Service). The Service is the lead 
Federal Agency responsible for conserving and protecting the Nation's 
fish and wildlife resources. Throughout the United States, the Service 
strives to fulfill this responsibility through the establishment of 
innovative programs that implement the Secretary of the Interior's four 
C's initiative--Conservation through communication, consultation, and 
cooperation.
                 cooperative approaches to conservation
    The Administration has long recognized that successful protection 
of many fish and wildlife species depends significantly on the 
protection and management of habitat, much of which is in private 
ownership. One of the most promising developments for habitat 
protection is the advance of cooperative conservation. This fosters 
innovative approaches to land use and involves local citizens, whose 
first hand understanding of the challenges facing specific places 
provides added benefits to conservation efforts. Cooperative 
conservation also promotes a more broad-based and integrated approach 
to addressing environmental concerns.
    Such an approach is already yielding tangible results. Over the 
past 5 years, the Federal Government has provided over $1.7 billion in 
grants to States, tribes, local governments, and private landowners 
through programs that preserve open space, restore habitat for 
wildlife, and protect endangered species. These partnerships are 
achieving substantial conservation benefits. Through partnerships the 
government has restored millions of acres of habitat; removed invasive 
exotic species; replanted native grasses; improved riparian habitat 
along thousands of miles of streams; conserved limited water resources; 
and developed conservation plans for endangered species and their 
habitat. In part as a result of these accomplishments, in August 2004, 
President Bush signed an Executive Order on Cooperative Conservation, 
asking all agencies to strengthen their efforts to work together and 
with States, tribes, local governments, and landowners to achieve 
conservation goals.
    The Service firmly supports the philosophy that, by working 
together, the Federal Government and private landowners can achieve 
tremendous success in habitat conservation. As such, it is imperative 
that the Service looks for opportunities to partner with private 
landowners to protect species and enhance their habitat on private 
lands. Such cooperative conservation provides opportunities to enhance 
habitat while maintaining private property rights; it also engages the 
public in private stewardship. Because restored habitats provide 
important food, cover, and water, this strategy can contribute to the 
Service's mission to conserve trust species--such as migratory birds, 
inter-jurisdictional native fish, and threatened and endangered 
species--and to control and reduce the spread of invasive species.
    We are committed to implementing a cooperative approach through the 
development of partnerships with others and we are focused on 
identifying new and better means of encouraging voluntary conservation 
initiatives. Indeed, many conservation tools are available to 
facilitate species conservation, including Candidate Conservation 
Agreements, Candidate Conservation Agreements with Assurances, Safe 
Harbor Agreements, Habitat Conservation Plans, Conservation Banking, 
the Partners for Fish and Wildlife Program, and grants through the 
Landowner Incentive Program, Private Stewardship Grants, and the 
Cooperative Endangered Species Conservation fund. Each of these tools 
is described below in more detail with examples of their on-the-ground 
implementation.
   safe harbor agreements and candidate conservation agreements with 
                               assurances
    Safe Harbor Agreements and Candidate Conservation Agreements with 
Assurances are 2 of many landowner tools coordinated and administered 
by the Service's Endangered Species Program. Under Safe Harbor 
Agreements, the focus is on species already listed as threatened or 
endangered. Under these agreements, non-federal property owners 
voluntarily commit to implement conservation measures that will result 
in a net conservation benefit that contributes to the recovery of a 
listed species, and in return receive assurances from the Service that, 
at the end of the agreement period, the landowner can return the 
enrolled property to the baseline conditions that existed at the 
beginning of the agreement. The first Safe Harbor agreement was signed 
in 1995 and the Service issued a Safe Harbor Policy and regulations in 
1999.
    For example, under the programmatic Safe Harbor Agreement between 
the Service and the South Carolina Department of Natural Resources, 104 
non-federal landowners have signed up through certificates of 
inclusion. The total property enrolled in this agreement to date is 
almost 400,000 acres with 278 groups of the endangered red-cockaded 
woodpecker covered under the baseline conditions. Through the 
management of the enrolled lands, the number of woodpecker groups has 
been increasing above the baseline, and we expect continued expansion 
of the species in South Carolina.
    Together with Environmental Defense, an organization that was 
instrumental in launching the Safe Harbor concept, the Service recently 
celebrated the 10th anniversary of the first Safe Harbor Agreement, at 
Pinehurst, NC. Today, thanks largely to the continuing support of 
Environmental Defense and numerous State agencies across the country, 
more than 325 private and other non-federal landowners have signed up 
under 32 Safe Harbor Agreements to conserve 36 endangered and 
threatened species, with more than 3.6 million acres of non-federal 
land and 16 linear miles of stream enrolled. Work on new Safe Harbor 
Agreements is underway in many areas, and the Service, Environmental 
Defense, and the involved States continue to encourage additional 
landowners to sign up under the existing programmatic agreements.
    Similar to Safe Harbor Agreements, Candidate Conservation 
Agreements with Assurances (CCAAs) are designed to provide incentives 
to landowners willing to make a voluntary commitment to aid imperiled 
species. CCAAs are available to any non-federal landowner, such as a 
private landowner, a local or State Agency, a tribal government or a 
non-governmental organization. These agreements target species that the 
Service has identified as candidates for listing or species likely to 
become candidates. The CCAA policy and associated regulations were 
issued in 1999. To date, we have 10 CCAAs in place covering 24 
candidate or declining species, and encompassing approximately 300,000 
acres. Several CCAAs are under preparation with individual landowners, 
as well as programmatic agreements with States under which multiple 
landowners can voluntarily participate through certificates of 
inclusion. For many candidate and declining species, we believe that 
more widespread use of CCAAs can substantially reduce the need for 
listing.
    For example, in 2002, Soulen Livestock, a family-owned sheep and 
cattle operation in western Idaho and the Service signed a Candidate 
Conservation Agreement with Assurances for the southern Idaho ground 
squirrel, a species identified by the Service as a candidate for 
listing. In return for allowing nearly 200 squirrels to be relocated to 
their property from nearby sites where habitat and the squirrels were 
not protected, and maintaining suitable habitat for them, the agreement 
specifies that Soulen Livestock will not be required to take additional 
measures beyond those in the agreement if it is necessary to list the 
species under the ESA in the future. Earlier this year, due largely to 
the example set by Soulen Livestock, a ``programmatic'' Candidate 
Conservation Agreement with Assurances was signed with the Idaho 
Department of Fish and Game and the Governor's Office of Species 
Conservation covering the 4 counties thought to be the historic range 
of this endemic ground squirrel. We refer to this type of 
``programmatic'' CCAA as an ``umbrella'' agreement because it can cover 
multiple landowners. Landowners who have ground squirrels or are 
willing to allow them to be relocated to their property will be 
enrolled in this CCAA through certificates of inclusion and thus will 
receive regulatory assurance that no ESA restrictions will be required 
beyond those in the agreement if listing is necessary.
    Although the CCAA and Safe Harbor programs are still relatively new 
and growing, we are committed to updating and improving them based on 
the lessons learned from private landowners and partners participating 
in them. For instance, the Service is encouraging greater use of 
programmatic agreements to cover a species across all or a relatively 
large segment of its range. Under such agreements, the State wildlife 
Agency, local governmental entity, or a non-governmental organization 
signs the agreement and holds the associated permit, and individual 
landowners can voluntary enroll in a CCAA or Safe Harbor through 
certificates of inclusion and thus receive the regulatory assurances 
they seek.
                       habitat conservation plans
    In 1982, Congress amended the ESA to allow incidental take permits 
for landowners who establish ``conservation plans.'' Since that time, 
the Service has approved more than 400 HCPs nationwide. The Habitat 
Conservation Planning Program provides a flexible process for 
permitting the incidental take of threatened and endangered species 
during the course of implementing otherwise-lawful activities. The 
program encourages applicants to explore different methods to achieve 
compliance with the ESA and to choose the approach that best meets 
their needs.
    Perhaps the program's greatest strength is that it encourages 
locally developed solutions to listed species conservation, while 
providing certainty to permit holders. Through this process of 
consultation and cooperation with our partners, the program helps 
provide for the conservation of listed species on non-Federal land 
throughout the country.
    In April 2005, the Service approved an incidental take permit based 
on a Habitat Conservation Plan for the lower Colorado River. In all, 
the plan covers 6 listed species, 2 candidate species, and 18 unlisted 
species that may become listed in the future. The permit covers the 
current and future activities of non-federal entities within the States 
of Arizona, California, and Nevada that involve the consumption of 
water and power resources. The plan includes the development of 8,132 
acres of native riparian, marsh, and aquatic habitats; extensive 
stocking and monitoring of native fishes; a monitoring and research 
effort for the species, their habitats, and how best to restore native 
habitats; and an adaptive management program to take the results of 
research and monitoring and adjust the conservation actions to best 
meet the needs of the covered species for the next 50 years.
                           conservation banks
    Conservation banks are lands already owned or acquired by third 
parties, managed for specific threatened or endangered species, and 
protected permanently by conservation easements. Banks may sell a fixed 
number of mitigation credits to developers to offset adverse effects on 
a species elsewhere. Targeting conservation bank sites and other large 
mitigation sites to include needed habitat for listed species may 
reduce the amount of designated critical habitat required for those 
species. On May 8, 2003, the Service announced new conservation banking 
guidance to help reduce piecemeal approaches to conservation by 
establishing larger reserves and enhancing habitat connectivity, while 
saving time and money for landowners. This guidance details how, when, 
and where the Service will use this collaborative, incentive-based 
approach to species conservation.
    In December 2003, the Dove Ridge Conservation Bank, a privately-
owned, 2,400-acre site located in Butte County, CA, was approved to 
sell vernal pool preservation credits for the vernal pool fairy shrimp, 
tadpole shrimp, and Butte County meadowfoam (a plant). It is one of the 
largest conservation banks for vernal pool species in the State of 
California. Other resources on the bank site include a stream with 
wetland banking potential. Establishment of the Dove Ridge Conservation 
Bank has spurred more interest in preserving habitat within the county, 
and it is likely that more habitat within this watershed will be 
acquired for similar conservation purposes.
     cooperative endangered species conservation fund and private 
                           stewardship grants
    The Cooperative Endangered Species Conservation Fund (CESCF) 
provides grant funding to States and territories for species and 
habitat conservation actions on non-federal lands and can include 
habitat acquisition, conservation planning, habitat restoration, status 
surveys, captive propagation and reintroduction, research and 
education. Grants from the Cooperative Endangered Species Conservation 
Fund allow us to support our State Agency partners in conserving 
endangered species through wildlife and habitat management, land 
acquisition, and the development of Habitat Conservation Plans. In 
addition, these grants have assisted States and territories in building 
partnerships with private landowners.
    In May 2005, nearly 1,800 acres, including wetlands, grasslands, 
and forests, were dedicated in Northwestern Montana as the Bull River 
Wildlife Management Area, in part through a Cooperative Endangered 
Species Conservation Fund Grant to the Montana Department of Fish, 
Wildlife, and Parks. Montana's newest public lands are home to bull 
trout, grizzly bears, and bald eagles. They provide spawning and 
rearing habitat for bull trout and an important migratory corridor for 
many wildlife species.
    A $1 million Endangered Species Act Recovery Land Acquisition Grant 
to the State of Hawaii helped the Maui Coastal Land Trust buy 277 acres 
of the largest undeveloped coastal dunes on the island. The property 
features 7,000 feet of shoreline paralleled by the Waihe's Reef, a 
noted traditional fishing and scuba-diving site. The habitat will 
benefit the endangered Hawaiian stilt, Hawaiian coot, Hawaiian duck, 
Hawaiian gallinule, Blackburn's sphinx moth, a damselfly, and native 
plant species such as creeping naupaka, Carter's panic grass, ohai, and 
awiwi.
                       private stewardship grants
    The Private Stewardship Grant program works directly with 
landowners to fund conservation actions for listed species, proposed 
and candidate species and at risk species on private lands. The program 
provides grants on a competitive basis to individuals and groups 
involved in voluntary conservation efforts. To complement the CESCF 
grant to the State of Hawaii, a $107,000 Private Stewardship Grant was 
awarded to the Maui Coastal Land Trust to improve habitat. Volunteers 
are removing invasive plants from coastal spring-fed wetlands and 
restoring the dunes with native plants such as Hawaiian bulrush, bacopa 
(`ae`ae), cyperus (makaloa), the ``fish-poison plant'' (a`kia), and 
pandanus to provide sites for water birds to forage, breed, and rest. 
``The goal,'' says Dale Bonar, Executive Director of the Maui Coastal 
Land Trust, ``is to restore as much native vegetation as we can for 
endangered species.'' Hawaiian stilts are already nesting in the 
wetlands. The Private Stewardship Grants Program provides a unique 
opportunity for the Service to work directly with private landowners to 
conserve imperiled species through on-the-ground habitat management on 
their lands.
                     partners for fish and wildlife
    In 1987, the Service established the Partners for Fish and Wildlife 
Program under the broad authority of the Fish and Wildlife Coordination 
Act and the Fish and Wildlife Act of 1956. The Partners Program is a 
voluntary habitat restoration program that recognizes the long-standing 
and strong natural resources stewardship ethic present in many private 
landowners. The Partners Program helps landowners restore wetlands, 
native grasslands, streams and other important habitat on their lands. 
Through the program, the Service is able to provide landowners with 
one-on-one customer service and funding assistance for on-the-ground 
projects that enhance or restore priority fish and wildlife habitat. 
The Program is conducting hundreds of voluntary habitat restoration 
projects, specifically focused on restoring habitat for threatened and 
endangered species and candidate species, including the lesser prairie-
chicken, Arkansas River shiner, swift fox, mountain plover, and the 
Interior least tern.
    The program also leverages funds, working to maximize the benefits 
and minimize the costs for projects. On average, the Service succeeds 
in leveraging Service resources against non-Service resources by a 2-
to-1 match ratio. Over the past 16 years, almost 35,000 agreements with 
landowners have been completed. The resulting partnerships between the 
Service and private landowners have resulted in the protection, 
restoration, and enhancement of nearly 2.5 million acres of private and 
tribal habitat nationwide.
    In Oklahoma, the Partners Program has experienced tremendous 
success. Since 1990, the Service has initiated 684 projects on over 
128,000 acres of private land. This includes 14,400 wetland acres, 
82,600 grassland acres, 1,300 woodland and shrubland acres, 25,100 
acres of other habitat, and 236 riparian stream miles. Furthermore, 
Partners Program funds have created over 100 outdoor education 
classrooms on school campuses that will provide future generations of 
Americans with hands-on experience working with the land and wildlife.
    The Senate recently passed S. 260, the Partners for Fish and 
Wildlife Act, that would codify the Partners for Fish and Wildlife 
Program. Because of the tremendous success of the program in working 
with private landowners to conduct cost-effective habitat projects for 
the benefit of fish and wildlife resources in the United States, the 
Administration supports this legislation and appreciates this 
Committee's support for the program.
                      landowner incentive program
    Begun in fiscal year (FY) 2002, the Landowner Incentive Program is 
funded from the Land and Water Conservation Fund. This program provides 
grants to State and tribal conservation agencies to help landowners 
restore habitat for listed, proposed, candidate, or other at-risk 
species on private and tribal lands. The competitively-awarded grants 
leverage Federal funds through cost-sharing provisions with State, 
territorial, and tribal fish and wildlife agencies. The Service 
requires a 25-percent non-federal share of project costs for this 
program.
    In fiscal year (FY) 2004, the New Jersey Division of Fish and 
Wildlife was awarded $1.12 million from the Landowner Incentive 
Program. With these Federal funds and more than $360,000 in private 
matching funds, the State is implementing approximately 25 projects on 
private lands throughout its jurisdiction. These projects will result 
in the conservation and restoration of forests, grasslands, and wetland 
habitats and protection of endangered bog turtles, declining grassland 
bird species, rare plant communities and other at-risk species in New 
Jersey. The State is partnering with private landowners, farmers, and 
non-governmental organizations including The Nature Conservancy to 
implement these projects. In addition, New Jersey has developed strong 
partnerships with other agencies and organizations administering 
incentive programs, including the Natural Resource Conservation 
Service, the Service's Partners Program, and Environmental Defense, to 
ensure that these conservation efforts are coordinated and to share 
administrative oversight and monitoring of projects.
                         state wildlife grants
    The State Wildlife Grant (SWG) program is designed to assist States 
by providing Federal funds for the development and implementation of 
programs that benefit wildlife in greatest conservation need and their 
habitat. Since many issues related to wildlife conservation are not 
contained by jurisdictional borders, the Service and States are working 
together to coordinate efforts to conserve endangered and threatened 
species, manage migratory birds, and lay foundation for good wildlife 
management.
    To establish eligibility for these funds, States and territories 
had to commit to develop by October 1, 2005, a Comprehensive Wildlife 
Conservation Strategy or Plan (CWCS). The goal of the State Wildlife 
Conservation Strategies is to provide a foundation for the future of 
wildlife conservation and an opportunity for the States, Federal 
Agencies, and other conservation partners to think strategically about 
their individual and coordinated roles in conservation efforts across 
the Nation. As of June 30, the Service had received official 
submissions from North Carolina, U.S. Virgin Islands, Michigan, Utah, 
and Arizona. Most other States and territories have put draft 
strategies out for public review and input. Based on a preliminary 
review of the strategies submitted, the Service remains confident that 
high-quality strategies are going to be the ``norm.''
    Congress began appropriating funds for SWGs in fiscal year (FY) 
2002. The initial funding provided by the State and Tribal Wildlife 
Grants Program has already allowed many States and territories to begin 
implementing conservation actions. For example, in Illinois, the 
Illinois Department of Natural Resources is partnering with the City of 
Chicago to purchase 102 acres at Hegewisch marsh. The new acquisition 
provides optimum nesting habitat for the State-listed little blue 
heron, yellow-headed blackbird, pied-billed grebe and common moorhen.
                               conclusion
    We appreciate the Subcommittee's interest in incentives for private 
landowners to conserve and protect species, and we recognize that our 
ability to make progress is tied to our ability to work with others, 
including private landowners. As previously stated, with such a high 
percentage of federally-listed species dependent on private lands, our 
ability to recover species requires the assistance of private 
landowners and the regulated community The Service's emphasis on 
incentive programs like the Land Owner Incentive Program and programs 
that provide certainty and assurances to private land owners such as 
Safe Harbor agreements demonstrate how Cooperative Conservation can 
help more fully achieve the purposes of the ESA. We realize that local 
involvement will be critical to ensuring the successful, effective, and 
long-lasting conservation of these species.
    I would like to reiterate the Department's interest in working with 
Congress to improve the Endangered Species Act. We must work together 
on a bipartisan basis to determine how to get the most value for 
species conservation out of the Federal resources devoted to the 
endangered species program. I would be happy to answer any questions 
that Members may have.
   Statement of Michael J. Bean Environmental Defense Washington, DC
    The goals of the Endangered Species Act are among the Nation's most 
noble and most important. If we attain them, we will leave our children 
and succeeding generations a rich legacy of diverse and abundant 
wildlife and the habitats that sustain it. As one who has devoted most 
of his professional life since graduating from Yale Law School in 1973 
to the pursuit of these goals, I firmly believe that they are 
attainable. Yet, I must acknowledge that they will not be attained--
indeed, almost certainly cannot be attained--without offering 
meaningful incentives to private landowners and others to enlist them 
more effectively in the task of conservation. In the testimony that 
follows, I will explain why incentives are essential, examine some of 
the experience to date with incentive mechanisms, and finally offer 
some recommendations for this subcommittee to consider.
     why incentives for conserving endangered species are essential
    Four unavoidable facts underscore the conclusion that incentives to 
private landowners are essential to achieving the goals of the 
Endangered Species Act. The first of these is that much of the 
remaining habitat, and much of the potentially restorable habitat, for 
endangered species is found on private land. Indeed, many endangered 
species have most of their habitat on private land, and some have all 
of it there. Take, for example, North America's smallest turtle, the 
bog turtle, a threatened species that occurs in at least 3 of the 
States represented on this subcommittee: Mrs. Clinton's State of New 
York, Mr. Lautenberg's State of New Jersey, and Mr. Lieberman's State 
of Connecticut. Almost all the sites where this species occurs are on 
private land; virtually none are on public land, particularly Federal 
land. Thus, if we are to conserve this species (and many others like 
it), we will need to do so on land that is largely in private 
ownership.
    The second unavoidable fact is that many endangered species cannot 
be conserved simply by putting a fence around their habitats and 
declaring them off limits to disturbance. Instead, those species--and 
their habitats--need to be actively managed to sustain them over time. 
The example of the bog turtle illustrates this point as well. It occurs 
in early successional, grass- and sedge-dominated wet meadow habitats 
that are generally sunny and have few trees or other tall vegetation. 
Historically, these were likely created and sustained by the herds of 
large native grazing animals that formerly occurred in the Northeast, 
including elk and bison. More recently, grazing by cows and other 
domestic livestock has kept many of these sites in the open, sunny 
condition needed by the bog turtle. Remove the grazing animals, 
however, and these sites are quickly invaded by red maples and by 
aggressive exotic species such as purple loosestrife and multiflora 
rose. These invaders transform sunny grass- and sedge-dominated wet 
meadow habitats hospitable to bog turtles into heavily shaded wetlands 
that are inhospitable to bog turtles. Thus, without purposeful 
management to control invasive plants, the habitats that support bog 
turtles today will soon cease to do so, as many have done in recent 
decades--not due to development, but to lack of management.
    Let me offer as another example the red-cockaded woodpecker, which 
also occurs in at least 3 of the States represented on this 
subcommittee: Mr. DeMint's State of South Carolina, Mr. Vitter's State 
of Louisiana, and Mr. Warner's State of Virginia. Its habitat is 
characterized by older pine forests of the Southeast with little or no 
hardwood understory. Historically, the hardwood understory in these 
forests was kept to a minimum by frequent lightening-caused fires that 
would burn quickly through the grassy understory. Those fires would 
kill most of the hardwoods, but were actually good for the fire-
tolerant longleaf pine trees, which not only typically survived the 
fires, but actually needed fire to aid the germination of their seeds. 
This natural cycle of frequent low-intensity fires has been 
dramatically altered as a result of the network of roads and other 
developments that act as barriers to the movement of fire across the 
landscape. Now, without prescribed burning or other purposeful 
management to control the hardwood understory, the relatively open and 
savanna-like pine forests that support red-cockaded woodpeckers 
inevitably become dense, mixed pine and hardwood forests inhospitable 
to red-cockaded woodpeckers. Thus, without prescribed fire or other 
purposeful management, the forest habitats that support this emblematic 
species of the Southeast will cease to do so, as many have done in 
recent decades--not due to development, but to lack of management.
    The third unavoidable fact is that although purposeful management 
is clearly needed to maintain and improve the status of not just the 
bog turtle and the red-cockaded woodpecker, but of a great many other 
endangered or threatened species, there is nothing in the Endangered 
Species Act that compels it. The focus of the Act is on prohibiting 
harmful activities, backed up by the threat of severe penalties, not on 
eliciting beneficial activities that could improve upon the status quo. 
Thus, the developer in New York or New Jersey who fills a wetland 
occupied by bog turtles potentially faces a large fine and a jail 
sentence for doing so. The landowner who stands passively by while the 
bog turtle wetland on his property is overtaken by invasive trees and 
shrubs does nothing that the law prohibits. Yet, in both cases, the end 
result is the same--bog turtles will cease to occupy the site. Thus, to 
secure the needed active management, not only is the carrot better than 
the stick, but in reality there is no stick.
    The final unavoidable fact is quite simple: the purposeful 
management needed to sustain and improve species like the bog turtle 
and the red-cockaded woodpecker is virtually never free. Controlling 
hardwood understory in Southeastern pine forests through prescribed 
burning is the least costly method of doing so. However, in many 
formerly rural areas that are now part of the rural-urban interface, 
the proximity of development precludes the use of fire. The 
alternatives of mechanical or chemical control of hardwoods are much 
more expensive. In the Northeast, as a result of the decline of animal 
agriculture, people with chain saws, shears, and herbicides often have 
to do the job that cows or goats formerly did. Further, there is often 
no reason for landowners to engage in such management practices other 
than to create or maintain habitat for rare species. Thus, unless one 
expects that landowners will incur costs to carry out management 
activities that are neither compelled by law nor necessitated by other 
land use objectives, there is no reason to believe that the goal of 
recovering rare species that occur largely on private land and require 
active management will ever be achieved without incentives to do so.
    I said earlier that there were 4 unavoidable facts that underlie 
the need for incentives. There is a fifth fact that needs discussion as 
well, though it is no longer an unavoidable one. It is simply this. The 
landowner who, despite the cost and despite the lack of any legal 
compulsion to do so, voluntarily restores or improves habitat for 
endangered species on his land once faced an unfortunate dilemma. The 
landowner who undertook such voluntary measures was likely to incur 
additional regulatory restrictions on the use of his land once 
endangered species began to use the restored or improved habitat. That 
dilemma can now be avoided through the use of Safe Harbor Agreements, 
under which landowners undertake voluntary restoration actions without 
incurring added regulatory liabilities. These agreements were an 
innovation begun during the tenure of Bruce Babbitt at the Interior 
Department, and they have embraced by his successor, Gale Norton, as 
well. In Mr. DeMint's State of South Carolina, over a hundred 
landowners who together own some 400,000 acres of forest land are 
participating in Safe Harbor Agreements for the red-cockaded 
woodpecker. There are also Safe Harbor Agreements for this species in 
several other States, including Virginia and Louisiana. In New York, 
The Nature Conservancy has been working to develop a Safe Harbor 
Agreement for private landowners in the Albany area for an endangered 
butterfly, the Karner blue butterfly. In the ten years since the first 
Safe Harbor Agreement was developed, these agreements have shown 
themselves to be an effective way of overcoming an unintended 
regulatory disincentive to conservation, one that many landowners have 
embraced and one that has produced clear benefits for species. As I 
will note in the recommendations appended to this testimony, however, 
much more needs to be done to realize the full potential of this 
promising new conservation tool.
how to improve the use of incentives in the federal endangered species 
                                program
    What the Endangered Species Act says about incentives is 
practically nothing. It uses the word only once, and then only in the 
statement of congressional findings in Section 2. There Congress finds 
that ``a system of incentives'' is ``key to meeting the Nation's 
international commitments'' and safeguarding its living natural 
heritage. That is the only mention of incentives anywhere in the Act, 
and its meaning is decidedly opaque. Unfortunately, after finding that 
incentives were important, Congress did almost nothing in the Act to 
create them. Thus, the incentives for conserving endangered species 
that currently exist are either administratively created (such as Safe 
Harbor Agreements, the Private Stewardship Grants Program, and the 
Landowner Incentives Program), or have their basis in other laws that 
serve broader environmental purposes.
    In thinking about how to improve the use of incentives in the 
Federal endangered species program, there are at least 3 questions that 
are worth asking. First, can existing, broad purpose landowner 
incentive programs be administered to produce greater benefits for 
imperiled species? Second, are new incentive programs needed 
specifically for endangered species purposes? Finally, what needs to be 
done to ensure that regulatory policies do not undermine economic 
incentive policies?
    The good news is that there already exist a number of programs that 
offer economic incentives to landowners for land stewardship purposes 
broad enough to encompass endangered species conservation. Most of 
those programs--and the most generously funded of these programs--are 
administered by the Department of Agriculture, however, rather than the 
Department of Interior, and the potential of these programs to be 
administered so as to achieve endangered species benefits has been 
largely unrealized. There is clear need for the USDA agencies that 
administer these Farm Bill programs and for the Interior and Commerce 
Department agencies that administer the endangered species program to 
work together much more closely. By doing so, it should be possible to 
accomplish the broad environmental goals of the Farm Bill programs 
while simultaneously furthering the more specific goals of the 
endangered species program.
    Let me illustrate the need for greater coordination with an example 
from Committee Chairman Inhofe's State of Oklahoma. The Conservation 
Reserve Program pays farmers to take cropland out of annual crop 
production and to plant it with perennial grass or tree cover so as to 
reduce soil erosion and achieve other environmental benefits. In 
Oklahoma, thousands of acres of former cropland have been planted in 
grasses under this program. The soil erosion benefits have been 
substantial. However, most of the initial plantings were of non-native 
grasses, which are of little or no habitat value for the lesser prairie 
chicken, a species that is now a candidate for addition to the 
endangered species list. Had the same acres been planted in native 
grasses, the same soil erosion benefits would have been achieved, and 
the lesser prairie chicken would have benefited as well, possibly to 
the extent that it would no longer be a candidate for endangered 
listing.
    Missed conservation opportunities like the prairie chicken example 
are all too common. There are also occasional examples of Farm Bill 
conservation programs working at cross purposes with the endangered 
species program. In Pennsylvania, for example, Farm Bill dollars have 
gone to encourage tree planting in riparian corridors. That is 
generally a good thing, but some of the areas planted have been 
potential bog turtle habitat. As discussed earlier, trees should not be 
planted in bog turtle habitat, but instead need to be removed from it. 
Better coordination among the agencies is clearly needed, both to 
ensure that important conservation opportunities are not missed, and to 
ensure that Agency efforts are not working at cross purposes.
    There are also some very encouraging examples of what can happen 
when efforts are made to align Farm Bill and endangered species program 
objectives. This is particularly true where Natural Resource 
Conservation Service State biologists have taken the initiative and 
focused resources on rare species. In New York, for example, the NRCS 
has provided critical funding for a number of bog turtle restoration 
efforts. NRCS State Biologist Mike Townsend deserves recognition for 
his enthusiastic support of this initiative. In neighboring New Jersey, 
NRCS's Tim Dunne has provided cost-share assistance for many bog turtle 
restoration projects through the Wildlife Habitat Incentives Program. 
Recently, NRCS announced the availability of a half million dollars 
each of Wetlands Reserve Enhancement Program funds for restoration 
efforts targeting habitat of the bog turtle and the recently 
rediscovered ivory billed woodpecker. These examples illustrate the 
potential for real synergy between Farm Bill conservation programs and 
the endangered species program--if only the responsible agencies will 
make a concerted effort to find these opportunities.
    This subcommittee can, I think, play a very useful role in bringing 
that about. Working in concert with the Forestry, Conservation and 
Rural Revitalization Subcommittee of the Senate Agriculture Committee, 
whose Chairman, Senator Crapo, has a strong interest in improving the 
performance of the endangered species program, you can ask the agencies 
involved to provide you with what they see as the best opportunities to 
work together to further the conservation of endangered and other 
imperiled species--what species, in what locations, using what 
programs? Their answer will go a long way toward answering the first 
question posed above: can existing, broad purpose landowner incentive 
programs be administered to produce greater benefits for imperiled 
species?
    Only with a clear answer to that question can one begin to assess 
the second question, whether new incentive programs are needed 
specifically for endangered species. Even if one could fully harness 
the potential of existing broader-purpose incentive programs to serve 
endangered species objectives, it is likely that new authority will be 
desirable. This is in part because existing programs have eligibility 
requirements that limit their applicability but especially because most 
existing incentive programs are simply cost-sharing programs, in which 
the program pays for a portion of the cost of implementing a 
conservation practice, and the landowner pays the remaining portion. 
The rationale behind such cost-sharing programs is that there are 
certain conservation practices that produce both public and private 
benefits, but the private benefits to the landowner are frequently too 
small to justify the full expense of implementing the practice. By 
sharing the cost of implementing these practices, these programs make 
possible practices, the expense of which would not otherwise be 
justifiable to the landowner. However, as noted earlier, often the 
conservation practices needed for endangered species have no 
independent value to the landowner; they do not increase production, 
reduce the costs of production, or otherwise further landowner 
objectives. In such cases, payments that equal the costs of 
implementing the conservation practice are likely to be needed, not 
partial cost-share. Real incentive payments that go above and beyond 
restoration costs are needed as well, at least if the goal is to engage 
more than the most ardent conservationists among landowners.
    There is at least one existing program that offers incentive 
payments above and beyond cost-sharing assistance, USDA's Environmental 
Quality Incentives Program (EQIP). Moreover, 1 of the 4 National 
priorities for EQIP is the conservation of at-risk species. To date, 
however, EQIP has done little to address this National priority, for at 
least 3 reasons. First, in most States the criteria for ranking 
competing projects give a higher priority to run-of-the-mill wildlife 
conservation projects that are appended to large projects with other 
purposes, such as construction of waste storage facilities, than to 
truly ambitious--but freestanding--conservation projects for imperiled 
species. In a few States, including North Carolina and Utah, a portion 
of EQIP funds have been allocated specifically for conservation 
projects for at-risk species. This approach ensures that the merits of 
wildlife conservation projects are compared directly with those of 
other wildlife conservation projects, regardless of whether they are 
appended to a waste storage facility or not.
    The second reason that EQIP has thus far done little to address its 
stated National priority of conserving at-risk species is that little 
use has been made of the authority to provide incentive payments, above 
and beyond cost-share assistance. Finally, there has thus far been no 
real effort to integrate Safe Harbor assurances into EQIP (or, for that 
matter, other conservation assistance programs). Without that 
integration of assurances, landowner demand for conservation assistance 
dollars to carry out projects benefiting endangered species will be 
modest.
    The failure to integrate landowner assurances into EQIP and other 
conservation assistance programs illustrates how regulatory policies 
can undermine economic incentive policies. The problem, however, is 
broader than simply the failure to integrate regulatory assurances into 
conservation assistance programs. Two years ago, I wrote a highly 
critical paper in which, after acknowledging some encouraging results 
from initial implementation of a new set of incentive-based 
conservation tools, I said the following:
    ``Despite these impressive initial indications, it is hard to avoid 
the conclusion that the record of accomplishment with these new 
conservation tools may be no more inspiring than the record with the 
old tools unless a number of self-imposed obstacles to success are 
removed. Those obstacles are self-imposed because they do not inhere in 
the law itself, but are instead the product of an unimaginative, 
process-preoccupied, and ultimately self-defeating implementation that 
discourages and deters opportunities for tangible, on-the-ground 
improvement. These debilitating constraints have no partisan or 
ideological provenance; they have stifled effective conservation 
efforts for endangered species in both Democratic and Republican 
administrations, and will continue to do so until they are overcome.''
    That paper attracted the attention of many in the Fish and Wildlife 
Service, and led to a series of efforts within that Agency to explore 
these problems and their potential solutions. It has not, however, 
produced any significant changes. While I would enthusiastically 
support any new measure this subcommittee might propose to create 
incentives for conserving endangered species, I would also urge the 
subcommittee to put its influence behind efforts to prod the Service 
and NOAA Fisheries to make a series of administrative changes that 
would remove some of the self-imposed obstacles to success that hinder 
the incentive-based tools that already exist. Appended to this 
testimony is a list of some of the problems that can be overcome 
administratively, and some suggestions for how to overcome them. The 
subcommittee could perform a very useful service by pressing the 
agencies either to implement these suggestions or to devise better 
solutions to the problems identified.
                               conclusion
    In conclusion, incentives work. They help rare species and they 
appeal to landowners. By utilizing them, we can make more conservation 
progress more quickly and with less conflict than we can without them. 
They are not a substitute for regulatory controls, which remain 
essential in some situations, particularly where strong development 
pressures threaten to eliminate all habitat values. In the working 
landscape of farms, ranches, and forest lands, however, incentives 
offer a highly useful means of engaging landowners as allies of 
conservation rather than its adversaries. Congress can and should 
expand the toolbox of incentive programs to further the recovery of 
endangered species. No less important, however, it should make every 
effort to ensure that existing incentive programs are used as 
effectively as possible to achieve that goal.
                                Appendix
 Recommended Administrative Action to Improve the Effectiveness of the 
                   Federal Endangered Species Program
    integrate safe harbor assurances into the partners for fish and 
                            wildlife program
    The Problem.--On June 17, 1999, FWS announced its Safe Harbor 
Policy. When it did so, it stated that it was ``developing an 
appropriate process to provide assurances on a programmatic basis to 
the landowners'' who participate in the Partners for Fish and Wildlife 
Program. A programmatic approach was desirable because it would avoid 
the complexity and delay of issuing permits for individual landowners. 
Six years later, the promised action has not yet happened. As a result, 
the Partners Program has contributed far less to the conservation of 
endangered species than it could. Without a quick and easy way for 
participating landowners to gain the assurance that they will not be 
burdened with new ESA responsibilities at the end of their Partners 
contract terms, many landowners are reluctant to undertake projects 
that could benefit these species.
    The Solution.--In response to letters from Environmental Defense, 
then FWS Director Steve Williams stated in a letter dated August 14, 
2002, that he would be ``recommending intra-Service consultation 
[pursuant to Section 7 of the ESA] as the primary process for the Act's 
compliance with the Partners program.'' Director Williams made clear 
that he envisioned proceeding in this manner at the State or other sub-
national level through several different consultations. He promised 
that there would be forthcoming ``new guidance to help prepare in-house 
training through Partners program workshops and other avenues to 
implement that guidance.'' Director Williams' letter outlined a quite 
satisfactory solution to the problem. However, nothing has been done to 
implement it.
 facilitate farm bill conservation program contributions to endangered 
                            species recovery
    The Problem.--Farm Bill Conservation Programs have significant 
untapped potential to contribute to the recovery of endangered species. 
These programs are comparatively well funded, their delivery mechanisms 
are in place, and landowner interest in them is high. They have not, 
however, often been used to advance the conservation of endangered 
species, even though all of them could do so, and one--the 
Environmental Quality Incentives Program--has as one of its four 
national priorities the conservation of at-risk species. Landowner 
reluctance to utilize these programs for endangered species 
conservation purposes is owning to at least two reasons: (1) concerns 
about potential future land use restrictions if endangered species are 
attracted to the property; and (2) cost-share requirements discourage 
participation when the activity undertaken does not have independent 
value to the landowner.
    The Solution.--A much closer working relationship needs to be 
developed between FWS and the USDA agencies that administer Farm Bill 
conservation programs. As part of this relationship, FWS needs to 
provide programmatic assurances that address landowner concerns that 
their participation will result in new land use restrictions after 
their contract terms expire. These assurances could be provided in the 
same manner as discussed above for the Partners Program (i.e.,  through 
programmatic Section 7 consultations at the State or other appropriate 
geographic scale). Greater flexibility with regard to landowner cost-
share requirements, or use of incentive payments in programs that allow 
them (e.g.,  EQIP) could facilitate projects that do not otherwise 
contribute to landowner income.
   get the framework for the healthy forest reserve program in place
    The Problem.--The Healthy Forest Reserve Program was authorized as 
part of the Healthy Forest Restoration Act. It contemplates the 
enrollment of privately owned forest land on which landowners agree to 
implement restoration plans that will benefit federally listed and 
certain other at-risk species. The legislation specifies that the 
Secretary of Agriculture is to make available to participating 
landowners Safe Harbor or similar assurances under either Section 7 or 
Section 10 of the ESA. To do this, however, the Secretary of 
Agriculture needs the cooperation of the FWS, which issues permits 
under Section 10 and biological opinions under Section 7. This is the 
only Federal legislation that specifically calls for Safe Harbor 
assurances for landowners and the only legislation to offer incentives 
for managing forests to help endangered species. To date, however, FWS 
and USDA have been unable to agree on how the statutorily promised 
assurances are to be provided, and the program has yet to get off the 
ground. Once launched, the program could contribute to the conservation 
of forest-dwelling endangered species, such as the ivory-billed 
woodpecker, red-cockaded woodpecker, Delmarva fox squirrel, and others.
    The Solution.--Programmatic section 7 consultations, either for 
particular forest ecosystems (e.g.,  longleaf pine forests of the 
Southeast, bottomland hardwood forests of the lower Mississippi River 
valley, etc.) or particular States offer a relatively easy and 
straightforward way of providing the statutory assurances specified. It 
may be advisable to develop these assurances for 1 such forest system 
or State on a pilot basis.
               streamline safe harbor review and approval
    The Problem.--Since the first Safe Harbor Agreement was completed a 
decade ago, more than 300 landowners with over 3 million acres of land 
have enrolled in Safe Harbor Agreements. While significant, these 
figures represent only a tiny fraction of the potential to use this 
tool for conserving many different types of rare species. The full 
potential to use this conservation tool has not been realized because 
the process of developing, reviewing and approving agreements is 
unnecessarily slow, cumbersome, and complex.
    The Solution.--Safe Harbor Agreements could be made simpler and 
speedier with a few procedural changes. These include eliminating 
multiple layers of review by delegating approval of most such 
agreements to the field office level, eliminating the need to prepare 
biological opinions in most instances, and clarifying what information 
needs to be included in an agreement.
   revise the consultation handbook to eliminate the need for formal 
    consultation on projects having predominantly beneficial effects
    The Problem.--Under the FWS's consultation handbook, a full scale, 
formal consultation is required for any Federal action that causes any 
amount of incidental taking of a listed species. Thus, even projects 
whose effects are predominantly beneficial (such as projects to restore 
habitat for, or otherwise improve the well being of, a listed species) 
must undergo formal Section 7 consultation. The results of such 
consultations are foreordained, particularly for projects (such as Safe 
Harbor Agreements) that are required to meet a net conservation benefit 
or enhancement of survival test. Yet, FWS routinely prepares biological 
opinions for such projects, diverting Agency resources from other, 
truly necessary activities.
    The Solution.--Relatively minor changes in the language of the 
consultation handbook would clarify that formal biological opinions are 
not needed for Federal actions having predominantly beneficial effects, 
particularly those that are already determined to meet a ``net 
conservation benefit'' or similar standard.
       streamline procedures for the landowner incentive program
    The Problem.--The Landowner Incentive Program competes most closely 
in function with FWS's Partners for Fish and Wildlife and Private 
Stewardship Grant Program, and with USDA's Wildlife Habitat Incentive 
Program. However, it fills two unique roles. First, despite the mantra 
that State wildlife agencies have the ``boots on the ground,'' many 
States actually have few field biologists to work with private 
landowners and limited ability to fund work on private land. LIP is 
creating that capacity all around the country. Second, unlike WHIP and 
Partners, LIP is uniquely focused on very rare species and this allows 
State agencies to focus on small acreage projects that have a big 
impact for species. However, the program has been slow to achieve on 
the ground benefits because ESA and National Historic Preservation Act 
compliance processes have slowed projects by 6 to 18 months and 
provided perverse incentives for States to work with unlisted species 
and to duplicate what USDA programs can do, rather than work in more 
sensitive habitats.
    The Solution.--Some States have developed programmatic Section 7 
consultation documents that cover broad sets of habitat improvement 
practices and describe a set of best management practices that ensure 
States can avoid any take of listed species. This approach allows 
States to initiate any project covered by a programmatic consultation 
without the project-by-project review that continues to plague many 
States. Proposed changes to the consultation handbook (above) or new 
solutions using Section 6 cooperative agreements are also needed to 
cover LIP practices that have a predominantly beneficial effect on the 
species, but for which some taking of species cannot be avoided.
 complete the rulemaking to expand the use of enhancement of survival 
                                permits
    The Problem.--On September 10, 2003, FWS published proposed 
revisions to its regulations pertaining to ``enhancement of survival'' 
permits. These revisions were proposed, in large part, to make clear 
the availability of enhancement of survival permits for privately 
undertaken habitat enhancement projects that may cause some short term 
incidental taking of listed species. Without this clarification, 
proponents of such projects are sometimes made to seek incidental take 
permits under Section 10(a)(1)(B) of the ESA, which have proven to be 
more costly, time-consuming, and complex than necessary.
    The Solution.--Complete the outstanding rulemaking. Controversy 
arose over this rulemaking because it was proposed concurrently with 
the proposal of a policy to allow the importation of endangered species 
from foreign nations as sport hunting trophies. Many reviewers saw the 
proposed rulemaking as the vehicle for implementing that highly 
controversial policy. The result was a flood of adverse comments and 
the suspension of any forward progress on the rulemaking. The proposed 
rulemaking serves an important purpose unrelated to the importation 
policy. Preferably, the 2 ought to be clearly separated, and the 
rulemaking completed.
  expand the use of priority rankings in funding allocation to ensure 
               funding for species likely to benefit most
    The Problem.--The resources needed to recover endangered and 
threatened species far exceed available recovery funding. To maximize 
the return on available funding, it makes sense to prioritize species 
and actions for which funding will make the biggest difference in 
reducing the likelihood of extinction or achieving recovery. The 
Endangered Species Act directs the USFWS and NOAA to ``give priority to 
those endangered species or threatened species, without regard to 
taxonomic classification, that are most likely to benefit from 
[recovery] plans, particularly those species that are, or may be, in 
conflict with construction or other development projects or other forms 
of economic activity.'' However, numerous GAO reports and scientific 
studies provide little evidence that agencies are allocating resources 
to maximize species benefits.
    The Solution.--1982 Recovery Priority Ranking Guidelines should be 
revised to allow agencies to more easily distinguish which species are 
priorities by creating more threat and recovery potential ranks. 
Further, the existing system combines extinction prevention and 
recovery priorities, automatically giving high recovery potential but 
low threat species a low ranking. Setting up separate ranking systems 
and giving each species 2 ranks--1 that identifies extinction 
prevention priority and 1 to identify its recovery potential would fix 
this problem. However, the revised ranking systems are meaningless 
unless they are used to guide resource allocation. The FWS should 
incorporate its rankings into funding allocation among regions, within 
regions, and through competitive grant programs. To minimize disruption 
to existing program functions it may be advisable to implement this 
through a pilot such as significant expansion of the FWS's ``Preventing 
Extinction, Showing Success'' initiative.
 create greater incentives for states to work toward recovery by using 
            the esa's authority to reward successful states
    The Problem.--At present, a State that works hard and successfully 
to achieve its share of the recovery goals for a species that occurs in 
several States gets no reward for that effort. Nothing changes until 
all the other States accomplish their share of recovery goals. As a 
result, States have less incentive to work toward recovery than they 
could have.
    The Solution.--States need clear incentives to work toward 
endangered species down-listing to threatened status and to prevent 
increased endangerment of already threatened species. These incentives 
should be provided through the creative use of the flexibility in 
Section 4(d) of the ESA (pertaining to threatened species) to relax 
Section 9 take prohibitions within a State (or some portion thereof) 
when recovery objectives for that area have been achieved. By 
consulting with States over what take prohibitions will continue to 
apply in which areas, States would also play a greater role in ESA 
implementation. FWS could signal its intention to this by promulgating 
a clear policy of using its authority under Section 4(d) in this 
manner.
rejuvenate the section 6 state cooperative agreement mechanism and give 
substance to the ``adequate and active'' standard for approval of state 
                                programs
    The Problem.--When the ESA was enacted, Congress envisioned a close 
cooperative partnership between the States and the Federal Government 
through the mechanism of Section 6. In practice, Section 6 has not 
worked as intended. Review of State programs to determine if they 
qualify for Federal financial assistance (which has generally been both 
inadequate and unpredictable) has been perfunctory. Cooperative 
agreements under Section 6 are boilerplate agreements that contain 
nothing pertaining to strategies or actions to be carried out. As a 
result, there has been no use of the authority of Section 6 to develop 
a conservation strategy that integrates State resources and 
competencies with Federal resources and competencies.
    The Solution.--Rethink the whole approach to Section 6, starting 
with the development of rules and policies that ask interested States 
to articulate clear conservation strategies and actions to carry them 
out. The Federal review of State programs that carry out those 
strategies should be searching, not perfunctory. The consequence of 
approval of State programs should be a shared commitment by the 2 
levels of government to work cooperatively toward agreed upon goals.
                               __________
Statement Paul Campos General Counsel and Vice President of Government 
  Affairs for the Home Builders Association of Northern California On 
          Behalf of the National Association of Home Builders
    Chairman Chafee, Ranking Member Clinton, and members of the 
subcommittee, the National Association of Home Builders (NAHB) 
appreciates the opportunity to share our views with the Senate 
Environment and Public Works Committee, Subcommittee on Fisheries, 
Wildlife, and Water, on Incentives for Private Landowners under the 
Endangered Species Act (ESA).
    NAHB represents over 220,000 member firms involved in home 
building, remodeling, multifamily construction, property management, 
housing finance, building product manufacturing and other aspects of 
residential and light commercial construction. Nationwide, our members 
are committed to environmental protection and species conservation, 
however, oftentimes well-intentioned policies and actions by regulatory 
agencies result in plans and programs that fail to strike a proper 
balance between conservation goals and needed economic growth. In these 
instances, our members are faced with significantly increased costs 
attributed to project mitigation, delay, modification, or even 
termination.
    Importantly, NAHB's members are citizens of the communities in 
which they build. They seek to support the economy while providing 
shelter and jobs, partner to preserve important historical, cultural 
and natural resources, and protect the environment, all while creating 
and developing our nation's communities. As such, home builders support 
the U.S. Fish and Wildlife Service's and NOAA Fisheries' (collectively, 
the Services) efforts to protect and conserve species that are truly in 
need of protection. A vital component of any conservation effort, 
however, is to ensure the proper balance of each species' needs with 
the needs of the States and communities in which it is located. One 
element necessary to consider in evaluating this balance is whether or 
not the ESA is meeting its goal of species restoration and recovery. 
What's more, has it worked well? Has it been an efficient and effective 
means by which to address the myriad of threats that endangered and 
threatened species face?
    As of July 6, 2005, there were 1,264 U.S. species listed as 
endangered or threatened under the ESA. Since the Act's inception in 
1973, a total of 40 species or subpopulations have been removed from 
the list. Of those 40, only 10 are U.S. species that have been 
sufficiently nursed back to health to qualify as ``recovered.'' 9 have 
gone extinct. The rest of the species are a mixture of U.S. and 
international creatures that for one reason or another, be it the 
availability of new information or an amendment to the Act itself, no 
longer qualify for listing under the ESA. Unfortunately, species are 
added to the list much, much easier than they are removed.
    NAHB believes that unfortunately, even after all these years, the 
mechanisms employed by the ESA to protect endangered and threatened 
species are oftentimes awkward and rudimentary. For private landowners 
and developers, they involve a certain set of prohibited acts and 
regulated actions that are disproportionately burdensome and onerous. 
Further, individual landowners often lack the funding and relevant 
expertise to best protect the species under their particular care. For 
the majority of the ESA's history, however, there was little if 
anything under the Act to actively encourage landowner cooperation, 
those proactive steps needed to aid the recovery of listed species or 
pre-empt a species from being listed in the first place. These glaring 
shortfalls threaten to hamstring the ESA in the coming years. NAHB 
believes that only by addressing these concerns now, proactively, will 
species conservation efforts be successful.
    In evaluating strategies to update and strengthen the ESA, NAHB 
believes that 2 key components or strategies within the Act warrant 
particular attention, the awkwardness of outdated regulatory provisions 
and the success of conservation incentives. While the ESA harbors 
several unnecessarily burdensome and duplicative regulatory provisions 
badly in need of modernization, such as the designation of critical 
habitat, it has also given rise to resounding conservation success 
through the use of incentives like Habitat Conservation Plans (HCP). 
Only by taking stock of the ESA's successes and failures, those 
provisions that should be updated or revised and those that should be 
retained as well as expanded, can implementation of the Act be made 
more effective.
         i. regulatory provisions under the esa must be updated
    In the regulatory arena, the ESA continues to remain much more of a 
proverbial stick than a carrot. Despite its disproportionate reliance 
on a relative few private landowners to maintain the extraordinary 
public good that is biodiversity conservation in this country, there 
remain very few incentives to encourage active landowner cooperation. 
Especially in areas where land costs and land values are high and where 
species conservation and economic growth and development are 
intertwined, there is a virtual dearth of programs that allow 
landowners and businesses to even begin to recoup or recapture the 
costs of voluntary conservation actions. Complicating issues further is 
the unfortunate reality that the ESA is burdened by a number of 
disincentives that actively discourage landowner cooperation. Such is 
plainly not a recipe for continued success. Although many aspects of 
the ESA warrant reexamination, the provisions below are of particular 
concern to the nation's home builders.
A. The designation and regulation of critical habitat
    Of all programs implemented under the ESA, critical habitat has 
emerged as 1 of the most controversial and litigation-prone. While NAHB 
believes that habitat conservation is an important component of species 
conservation, the question remains as to whether the regulatory 
provisions outlined in the critical habitat designation process can 
effectively manage the lands and waters on and in which listed species 
reside. The Services have stated that the critical habitat designation 
process is broken, and that the designation of critical habitat 
consumes precious Agency resources while providing limited benefits to 
listed species.\1\ NAHB agrees.
---------------------------------------------------------------------------
    \1\ ``In 30 years of implementing the ESA, the Service has found 
that the designation of statutory critical habitat provides little 
additional protection to most listed species, while consuming 
significant amounts of conservation resources. The Service's present 
system for designating critical habitat is driven by litigation rather 
than biology, limits our ability to fully evaluate the science 
involved, consumes enormous Agency resources, and imposes huge social 
and economic costs. The Service believes that additional Agency 
discretion would allow our focus to return to those actions that 
provide the greatest benefits to the species most in need of 
protection.'' (Final Designation of Critical Habitat for 4 Vernal Pool 
Crustaceans and 11 Vernal Pool Plants in California and Southern 
Oregon. 68 Fed. Reg. 46684 (August 6, 2003)).
---------------------------------------------------------------------------
    Furthermore, litigation has skewed the Service's long-held 
interpretation for evaluating the impact of activities occurring within 
designated critical habitat. Lawsuits in the 5th and 9th Circuits\2\ 
have challenged the regulatory definition of adverse modification, the 
standard by which the Services review activities taking place in 
critical habitat. In the absence of a clear definition of this term, 
the true role of critical habitat, and indeed the true impact of 
critical habitat on private landowners, is unclear. Congress should 
consider whether legislation is required to fully remove any and all 
confusion.
---------------------------------------------------------------------------
    \2\ See Sierra Club v. U.S. Fish and Wildlife Service, 245 F.3d 434 
(5th Cir. 2001), Gifford Pinchot Task Force v. U.S. Fish and Wildlife 
Service, 378 F. 3d 1059 (9th Cir. 2004).
---------------------------------------------------------------------------
    Several other elements of critical habitat likewise warrant 
attention and review. One particularly troublesome aspect is the 
potential duplicative overlay of critical habitat over Habitat 
Conservation Plans (HCPs) and other voluntary management agreements. If 
an approved HCP falls within critical habitat, it may be subject to 
additional regulatory requirements and red tape (or ``overlay'') of 
critical habitat that have little or no benefit to listed species. Any 
incentive to enter into an HCP is lost if the area at issue is also 
subject to regulation under the critical habitat provisions of the ESA. 
While NAHB applauds the recent efforts by the Servicesto exclude 
existing HCPs from specific critical habitat designations, critical 
habitat ``overlay'' must be consistently and continually eliminated 
from land areas already subject to government--approved or pending 
plans in order to further encourage stewardship through the HCP 
process. Provisions to achieve this goal have been included in H.R. 
1299, the Critical Habitat Enhancement Act, sponsored by Congressman 
Dennis Cardoza (D-CA). NAHB fully supports this important legislation.
    NAHB also believes that the common sense designation of critical 
habitat depends on the availability of full and complete economic 
analyses, as well as the full involvement of local landowners and 
stakeholders. In the past, the Services have incorrectly assumed that 
critical habitat added no additional costs over species listing, and 
dismissed the statutory requirement under Section 4(b)(2) of the ESA to 
conduct an economic analysis of designating lands as critical 
habitat.\3\ The failure of the Services to document the impact of their 
regulatory actions, as required by the ESA, represents a crucial 
shortfall in the implementation of the Act. While the last few years 
have seen an improvement in the process by which the Services conduct 
these required economic analyses, H.R. 1299 includes specific language 
which would ensure that economic analyses are sound and complete by 
requiring that the direct, indirect, and cumulative economic effects of 
critical habitat designations are considered.
---------------------------------------------------------------------------
    \3\ See, e.g., New Mexico Cattle Growers Ass'n v. U.S. Fish & 
Wildlife Serv., 248 F.3d 1277 (10th Cir. 2001), National Ass'n of Home 
Builders v. Evans, No. 00-CV-279, 2002 WL 1205743 (D. D.C.).
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B. Use of sound science
    Private landowners, who have been burdened with carrying out many 
of the responsibilities of the ESA, have repeatedly questioned the 
science behind the decisions made by the Federal agencies implementing 
the Act. The aggregate results of erroneous ESA decisions are broad, 
negatively affect the housing market and the national economy, and at 
times damage the very species we are trying to protect.
    Listing a species and designating critical habitat under the ESA 
requires the use of the ``best scientific and commercial data 
available.'' However, there is no definition for this phrase in the 
ESA, or in the regulations implementing the Act. Consequently, species 
can be listed based solely on a single petition if it is deemed to be 
the best scientific data available. Critical habitat can likewise be 
designated without truly knowing which areas are essential to 
conservation and with incomplete datasets somehow qualifying for best 
available data. Additionally, once a species is listed, the Services 
often ignore additional or new science that supports the de-listing of 
species. For example, the Bald Eagle, at home across the entire lower 
48, is widely viewed as being recovered. Still, it remains on the ESA, 
some 6 years after initially being proposed for delisting.\4\
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    \4\ 64 Fed. Reg. 36453 (July 5, 1999).
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    The listing of species under the ESA and the subsequent designation 
of critical habitat for those species must be based on reliable, 
accurate and solid biological and scientific data. For these reasons 
and more, NAHB support the passage of legislation that would ensure 
that sound science is used in ESA decisions.
      ii. incentive-based programs under the esa must be preserved
    The most important incentive that Congress can give home builders 
is regulatory certainty. At some point in the regulatory process, 
builders need to know that there will be no more ``bites at the apple'' 
from either the Services or, just as importantly, private litigants. 
Indeed, the concept of certainty is a virtual prerequisite to encourage 
the cooperation of home builders, developers, and other private 
landowners in conservation activities under the ESA.
    It goes without saying that private landowners and developers 
represent a vital component to ensuring species conservation--over 70% 
of the land in this country, excluding Alaska, is privately owned. 
Compound this fact with the simple observation that 95% of all ESA-
listed species have at least a portion of their habitat occurring on 
non-federal lands, with 19% occurring only on non-federal lands, and 
the role of the private landowner in species conservation becomes all 
the more apparent.\5\ In 1982, Congress recognized that private 
property owners were instrumental to long-term species conservation 
efforts, but that many regulatory uncertainties posed challenges to 
their participation. Congress also recognized that the level of 
certainty regarding the costs and terms of an HCP should be honored by 
the Federal Government throughout the HCPs implementation. More than a 
decade later, the ``No Surprises'' policy was implemented. However, 
HCPs remain the subject of litigation by groups seeking to overturn the 
policy. To ensure that the courts do not undermine ``No Surprises'', 
Congress should confirm its original intent and codify the existing 
policy as part of the ESA to give private property owners, State and 
local governments, and community organizations the necessary certainty 
to continue their species conservation efforts.
---------------------------------------------------------------------------
    \5\ Wilcox, D., M. Bean, R. Bonnie, and M. McMillian. 1996. 
Rebuilding the ark: toward a more effective Endangered Species Act for 
private land. Environmental Defense Fund, Washington, D.C. cited in 
Hitly, J and A.M. Merenlender. 2003. Studying biodiversity on private 
lands. Condervstion Biology  17: 132-137.
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    HCPs can help to bridge the gap between two often competing public 
policy objectives--housing and community growth and protecting and 
conserving habitat. Indeed, a NAHB analysis of the U.S. Fish and 
Wildlife Service HCP database indicates that, as of 2003, the three 
fastest growing regions in the country, the Southeast, the Southwest, 
and the Pacific regions, combined have over 61% of the nation's housing 
starts and nearly 94% of the nation's HCPs.\6\ While the following 
examples provide tangible, specific insights into the conservation 
benefits of several HCPs in the State of California, they are but a 
snapshot of the substantial environmental benefits of the hundreds of 
HCP planning efforts found across the country:
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    \6\ http://www.nahb.org/hcp

        East Contra Costa County Habitat Conservation Plan (Contra 
        Costa County, California). Although it has yet to be finalized, 
        the 175,804 acre East Contra Costa County Habitat Conservation 
        Plan has been in development since 2000, and is slated to cover 
        28 listed and unlisted species. The Home Builders Association 
        of Northern California (HBANC) has been actively involved 
        throughout the planning process, despite an anticipated $20,000 
        or higher per acre habitat acquisition and maintenance fee 
        (levied in addition to other impact fees that exceed $75,000 
        per house). The builders' support, despite such a hefty fee, is 
        directly tied to the HCP's promise of regulatory certainty--
        builders are being told where to build and where not to build, 
        are being informed of their obligations up front, and are even 
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        being offered the hope of permit streamlining.

        Central/Coastal Natural Community Conservation Plan (Orange 
        County, CA). This plan, approved in July 1996, establishes a 
        37,000-acre habitat reserve system encompassing a large 
        percentage of the coastal sage scrub system in a portion of 
        Orange County, thus providing for the protection of California 
        gnatcatcher and other sage scrub -dependent species. This HCP 
        also created a ten million dollar endowment for the purposes of 
        ongoing management of the reserve area. This HCP illustrates 
        the unique ability of HCPs to protect and conserve habitat that 
        would otherwise remain unregulated under the taking 
        prohibitions as many thousands of acres preserved in the 
        Central/Coastal Natural Community Conservation Planning Program 
        (NCCP) reserve system are beyond the regulatory reach of 
        Section 9 of the ESA.\7\ A similar plan is in development for 
        the southern portion of the County.
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    \7\ For a more comprehensive discussion of the NCCP effort in 
southern California, see Committee on Scientific Issues in the 
Endangered Species Act, Science and the Endangered Species Act,  
(NATIONAL ACADAMY OF SCIENCES 1995), at 84-89.

        San Diego County Multi-Species Conservation Plan (San Diego, 
        CA). This plan was approved by the Service in June 1997. It 
        establishes a 165,000 acre reserve system in southern San Diego 
        County. The reserve is established and funded principally 
        through contributions by the development community. The plan is 
        implemented through detailed ``sub-area'' plans within the 
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        various land-use jurisdictions in San Diego County.

        Western Riverside Multi Species Habitat Conservation Plan 
        (Riverside County, CA). The Western Riverside Multi Species 
        Habitat Conservation Plan is a multi-jurisdictional planning 
        program that includes the County of Riverside and 14 local 
        jurisdictions. The plan covers 146 species. State and Federal 
        funds, as well as development impact fees, will help purchase 
        153,000 acres to supplement 350,000 acres already publicly 
        owned or protected. The resulting 500,000 acre reserve will 
        provide habitat areas, as well as corridors allowing animals to 
        travel throughout their ranges.

    Importantly, all of the above HCPs include voluntary commitments by 
private landowners to accept significant restrictions on the use of 
their land and to make other contributions to habitat conservation. In 
the Central/Coastal NCCP, for example, the major landowner agreed to 
dedicate for permanent protection 21,000 acres of land to habitat 
conservation purposes. These dedications are occurring well in advance 
of the development that is authorized under the NCCP. Thus, the 
conservation benefits of the plan will be realized in advance of the 
impacts of the development authorized by the plan.
      iii. incentives must be broadened in scope and availability
    Recent realization of the vital role that private landowners play 
in endangered species conservation has led to an associated increase in 
the number of tools available to encourage their cooperation. 
Unfortunately, the availability of these few tools barely scratch the 
surface of what is truly needed to both fully encourage private 
landowner cooperation and sufficiently protect species under the care 
of the ESA.
A. Increase the Availability of Incentives
    Proactive, incentive-based conservation tools help to integrate 
species needs into long-range individual and community development 
plans, a process that lends itself to more flexible, efficient, and 
effective conservation strategies than the traditional species-by-
species approach. In particular, HCPs, Safe Harbor Agreements, and 
Conservation Banking initiatives have all emerged as possible avenues 
by which to conserve endangered and threatened species while working 
with or alongside private landowners. From the home builders' 
perspective, HCPs have become integral components of species 
conservation efforts nationwide, and despite ongoing legal challenges 
to components of the HCP program, are one of the few regulatory 
mechanisms under the ESA that are supported by a wide-variety of 
environmental and industrial interests. Conservation Banking has 
likewise gained in popularity over the last few years and, with it, the 
presence of endangered species in some areas has been transformed from 
a liability into an asset. Across the country, interested parties have 
set up conservation banks to protect the red-cockaded woodpecker, the 
gopher tortoise, and several species of vernal pool plants and animals, 
just to name a few.
    Unfortunately, participation in these programs is by no means an 
inexpensive undertaking, especially when dealing with regional, multi-
species plans. Because the benefits of species protection accrue to the 
public at large as well as the property owner, there is no reason why 
the costs of conservation should not be shared. Recognizing this, there 
are currently funding opportunities for States and territories under 
the Habitat Conservation Planning Assistance and HCP Land Acquisition 
Grant programs. Unfortunately, very few options exist to provide 
funding assistance for small property owners. To encourage private 
landowner participation in the HCP program, as well as other voluntary 
programs and agreements, and garner the greatest possible benefits, 
financial options must be considerably improved and expanded.
    While providing extensive conservation benefits, other incentive-
based programs such as Safe Harbors and Candidate Conservation 
Agreements remain difficult or unwieldy undertakings for builders and 
developers. Although their use by other industries and interests 
provide very real and tangible success stories, efforts need to be made 
toward creating and implementing additional tools and programs that can 
be used by the development community. Oftentimes working in areas of 
high land values and with smaller parcels under a patchwork of 
ownerships, home builders face different ``real-world'' requirements 
and pressures than other private landowners or industries. Crafting 
policies to meet these unique needs, emphasizing flexibility in 
development and certainty in implementation, can only further 
conservation efforts under the ESA.
    The few aforementioned programs offer some avenues for cooperation 
under the ESA, but there remains a critical need for expanded 
incentive-based species conservation policies and programs. Streamlined 
permitting processes, regulatory certainty, and financial incentives 
all deserve serious consideration if the ESA is ever to be truly 
successful in meeting its goals of protecting this nation's biological 
heritage. Under the onerous weight of inflexible outdated command-and-
control regulations and requirements, the ESA will continue to be more 
about controversy than conservation from the private landowner 
perspective.
B. Decrease the Number of Disincentives
    The availability of incentives under the ESA is but 1 component 
needed to promote increased cooperation amongst private landowners and 
developers. The removal of disincentives under the Act remains an 
equally important aspect of commonsense conservation policy. By 
minimizing the threat of litigation, streamlining the permitting 
process, and decreasing the risk of increased future liability for 
proactive conservation efforts, incredible headway can be made into 
lowering the ``cost of doing business'' under the ESA.
    First and foremost, the specter of critical habitat threatens the 
viability of individual HCP efforts and endangers the larger program as 
a whole. Using the East Contra Costa County HCP as an example, the HCP 
planning area overlaps with proposed critical habitat for the 
California red-legged frog, the California tiger salamander, the 
Alameda whipsnake, and already designated fairy shrimp habitat. 
Although several environmental groups have taken an active role as 
stakeholders in the HCP development process, other, litigation-driven 
organizations have not. Following the aforementioned Gifford Pinchot 
case that called the conservation obligation of critical habitat into 
question, home builders are loathe to commit to the HCP process knowing 
that a lawsuit will almost certainly be filed over the regulatory 
review and protection requirements of critical habitat by non-
participants to the plan.
    To compound matters even otherwise-interested landowners and 
developers are at times discouraged from participating in species 
conservation programs when faced with uncertain permit approval 
timelines, unacceptable associated permitting costs, or inflexible 
regulations. For example, analysis of the FWS database indicates that, 
on average, the HCP approval process takes nearly 2 years (642 days or 
1.76 years) from HCP development to FWS permit issuance. More than half 
of this time (399 days) occurs during the informal review and 
discussion stages surrounding development of the HCP prior to its 
submittal. In fact, for some NAHB members in Alabama, approval times 
for half-acre HCPs extended well beyond 3 years. For small builders, 
such delays are not just costly, but can be crippling to a business. 
The development of an HCP is clearly a significant undertaking. Without 
certainty or predictability in the approval process, or enforceable 
review deadlines, costs can be driven so high as to discourage their 
widespread use.
    One possible solution to reduce the number of disincentives is to 
ensure that recovery obligations are not transferred to private 
landowners. H.R. 1299 takes a step in this direction by clearly stating 
that recovery plans are non-binding guidance. Serious consideration 
should also be given to reforming and revising programs such that 
interested parties are not flat-out penalized for their proactive 
conservation efforts. Although a mere beginning, exempting voluntary 
conservation actions, including HCPs and Safe Harbor Agreements, from 
the onerous restrictions of critical habitat is one such reform that 
would do well to quell remnant fears of future regulation and encourage 
further enrollment in these important programs. Again, H.R. 1299 takes 
great strides in this direction, and NAHB strongly reiterates its 
support of the bill. With specific regard to the HCP program, including 
hard and fast deadlines would help to encourage landowner 
participation. Such mandated time frames would provide property owners 
with predictability and a greater understanding of the time and 
expenses required under the HCP permitting process, thereby encouraging 
further participation in the program.
C. Adopt a Cost-Effective Approach to Regulation
    Beyond increasing the number of incentives available to private 
landowners and decreasing the number of disincentives, enforcement of 
ESA regulations and provisions should fully incorporate a cost-
effectiveness approach. By weighing the economic costs and biological 
benefits of ESA actions and their alternatives, least-cost solutions 
can be reached. This will minimize costs and distribute burdens most 
fairly across the spectrum of affected communities, industries, firms, 
and landowners, all the while meeting species conservation goals. 
Whether pertaining to critical habitat designation, mitigation 
requirements, or recovery planning, determining the least-cost approach 
would conserve precious human and financial resources while reducing 
the impact to both the regulated community and the Services alike.
    One clear mechanism to reduce redundancies and increase 
efficiencies is to increase coordination and consolidate the various 
non-ESA programs that both regulate land use and help to promote and 
fund proactive species conservation programs. Incorporating other 
regulatory programs into the HCP planning process, upfront, such as 
U.S. Army Corps of Engineers Section 404 wetlands permits, would 
streamline the permitting process and vastly increase the tangible 
incentives available to participating landowners and developers. 
Furthermore, although there is a universal body of work to benefit and 
conserve endangered and threatened species being done under the rubric 
of other State and Federal laws, plans, and programs, tying these 
actions back to the day-to-day regulatory requirements of the ESA 
remains a murky undertaking. To use the U.S. Fish and Wildlife 
Service's Partners program as an example, coordinating Partners-funded 
restoration projects with individual Section 7 consultations or HCPs 
could expand the reach and scope of any mitigation undertaken as a 
result of the ESA's regulatory requirements. As a result of such 
coordination, an increased availability of Agency expertise and funding 
could allow the landowner to make increased contributions to species 
conservation over minimum requirements.
                               conclusion
    Mr. Chairman, in conclusion, NAHB believes the time is right to 
update and modernize the ESA so that it can work better for species and 
landowners. Landowner incentives can, and should, be a vital component 
of any legislation to improve the Act. For the majority of the ESA's 
history there has been little if anything under the Act to actively 
encourage landowner cooperation. These glaring shortfalls threaten to 
hamstring the ESA in the coming years. NAHB accordingly believes that 
only by addressing these concerns now, proactively, will species 
conservation efforts be successful.
    Chairman Chafee, and members of the Committee, I thank you for your 
consideration of NAHB's views on this matter, and hope that as a result 
of your efforts, and that of this Congress, endangered species 
conservation in this country becomes less about litigation and gridlock 
and more about common-sense conservation policies and programs.
                               __________
        Statement of Alan Foutz, President, Colorado Farm Bureau
    My name is Alan Foutz. I am a farmer from Akron, CO. I serve as 
President of the Colorado Farm Bureau and serve on the Board of 
Directors of the American Farm Bureau Federation. I am here today to 
testify on behalf of both organizations.
    Farmers and ranchers have been adversely impacted by the Endangered 
Species Act (ESA) for a number of years. We have 33 listed species in 
Colorado, ranging from 2 distinct population segments of gray wolves 
and the Canadian lynx to the boneytail chub. I won't dwell on the 
problems, however, but will focus instead on a process that has worked 
for us and that we consider a possible solution to Endangered Species 
Act issues.
    The mountain plover is a small shorebird found in the western Great 
Plains. It was proposed for listing under the ESA in 1999. As with many 
such species, little was known scientifically about the bird. It was 
believed that conversion to agricultural lands destroyed plover 
habitat, and it was feared that a listing would have severe impacts on 
agriculture. Scientists really didn't know much about the bird, 
however, because it was believed that many lived on private lands and 
private landowners were reluctant to let State or Federal officers onto 
their land.
    But private landowners also did not want to see the plover listed 
without scientific justification for listing. The Colorado Farm Bureau 
Board of Directors determined that it was important to find out the 
status of the bird, and that meant identifying and studying plovers on 
private lands.
    Convincing our members to open their lands to researchers to study 
plovers was a tough sell. Not because our members did not want to 
protect and enjoy plovers on their lands, but because of the 
restrictions that would be placed on their lands if the species were 
listed and their land identified as habitat. To our members' credit, 
they recognized the need for good scientific information. Colorado Farm 
Bureau entered into an agreement with the Colorado Division of 
Wildlife, the Fish & Wildlife Service, the Rocky Mountain Bird 
Observatory and the Nature Conservancy to open their lands to the 
inventory and study of mountain plovers.
    The result was a three-year study of movements, locations and 
nesting behavior of mountain plovers on agricultural lands. Colorado 
Farm Bureau members provided access to over 300,000 acres of their 
private lands for the study. Participation was strictly voluntary. Farm 
Bureau members donated access to their land as well as their time as 
field volunteers to the research effort.
    Some of the results were surprising. Researchers found that rather 
than agricultural lands destroying habitat, they actually provided 
important nesting habitat for the species, and that many of the 
agricultural practices that would have been restricted under a listing 
were actually beneficial for the plovers. One aspect of the study found 
higher nesting success on cultivated agricultural lands than on native 
rangelands.
    Mountain plovers were still at risk from farm machinery plowing 
inhabited fields. Farmers are more than willing to avoid nests, but 
they often cannot see nests while operating large machinery. To remedy 
that situation, the Farm Bureau and the Rocky Mountain Bird Observatory 
developed a unique program to allow farmers to call a toll-free number 
72 hours before plowing. The Observatory would send someone to survey 
the field and flag plover nests, allowing farmers to avoid flagged 
nests.
    As a result of these and other conservation efforts, the Fish & 
Wildlife Service determined that listing the mountain plover was not 
warranted, and they withdrew the proposal. Farmers benefit because they 
can continue their operations. The mountain plover benefits because its 
nesting habitat is enhanced by certain agricultural practices.
    Colorado farmers and the Colorado Farm Bureau learned some valuable 
lessons from this positive experience. First, we demonstrated that 
farmers and ranchers will work to protect species and are willing to 
meet halfway if government officials are also willing to meet halfway. 
Second, flexible cooperation between landowners and the services is the 
best way to make the ESA work for landowners and promote species 
recovery. Third, we all learned that practical solutions to potential 
conflicts do not need to cost a fortune, but might be as simple as a 
toll-free phone call. Lastly, we all learned the value of obtaining 
good scientific data to combat real problems, not hypothetical ones.
    Based on our experience with the mountain plover, Colorado farmers 
who were once reluctant to open their lands are now enthusiastically 
participating in local working groups to help conserve the greater sage 
grouse.
    This solution would not have been available to us if the mountain 
plover had already been listed. Under the ESA, once a species is 
listed, Section 9--taking prohibitions--and Section 7--consultation 
requirements--impose restrictions that stifle the kind of creative 
solutions that we employed to assist the mountain plover. Furthermore, 
had the mountain plover already been listed, we would not have been 
able to develop the scientific knowledge about the plover that could 
guide in its recovery. The same stereotype about agricultural lands 
encroaching on plover habitat would have been perpetuated upon listing, 
to the detriment of farmers and plovers alike.
    The ESA needs to be amended to provide flexibility to farmers, 
ranchers and the government to enter into voluntary agreements to 
protect and enhance already listed species on private lands in return 
for some incentive for the landowner. That incentive might be direct 
payments, tax credits, or simply the removal of disincentives and 
restrictions under the ESA. Our experience in Colorado has shown that 
farmers and ranchers want to protect species.
    Almost 80 percent of all listed species occur to some extent on 
privately-owned lands. Nearly 35 percent of listed species occur 
exclusively on privately-owned lands. This indicates that farmers and 
ranchers are doing a good job in protecting species on their lands. 
They need the tools to be able to do it better.
    Farm Bureau has long supported the use of cooperative conservation 
as a way to implement the Endangered Species Act. We are convinced that 
cooperative conservation is the way to make ESA work for both 
landowners and for species, producing a ``win-win'' situation for both. 
It has certainly worked for us in Colorado with the mountain plover 
and, we hope, with the greater sage grouse.
             in general, any esa cooperative program should
     Be voluntary with the landowner.
     Focus on providing active species management. Projects 
should emphasize innovative active improvements or active management 
activities, instead of just passive management through restrictions on 
land use.
     Not focus on sales of lands or purchases of easements.
     Incorporate removal of existing regulatory disincentives, 
such as land use restrictions. Many landowners would more readily 
accept removal of ESA restrictions instead of incentive payments. 
``Safe Harbor'' and ``No Surprises'' agreements and incidental take 
agreements should be explored whenever appropriate.
     Recognize plans that are locally developed. People at the 
local level have better knowledge of the landscape, needs of species 
that inhabit the landscape and needs of landowners. They are also more 
focused on developing practical solutions to ESA problems.
     Be flexible with the landowner and the Agency. Landowners 
can develop creative solutions for ESA situations that should be 
recognized. In addition, different landowners have different needs that 
could be addressed through different types of incentives. The landowner 
should have a wide array of incentives from which to choose.
     Be exempt from critical habitat designation. Critical 
habitat is designed to encompass lands ``that may need special 
management'' protections, such as provided by cooperative conservation 
agreements. To include land covered under cooperative conservation 
agreements in critical habitat would be redundant and 
counterproductive.
     Provide certainty to the landowner that once an agreement 
is in place, no further management obligations or restrictions will be 
imposed. The same ``No Surprises'' policy that applies to habitat 
conservation plans should be applied as well to all cooperative 
conservation agreements.
    We have some specific ideas for possible legislation that we would 
be happy to discuss further with the committee. Thank you for inviting 
me to testify before the subcommittee on this important topic.
 Statement of Robert J. Olszewski, Vice-President Environmental Affairs
    Good morning Mr. Chairman and members of the Committee.
    I am Robert Olszewski, Vice-President of Environmental Affairs for 
Plum Creek Timber Company, Inc. Plum Creek is the largest private 
timberland owner in the United States with nearly 8 million acres in 19 
States. Owning this vast resource base of some of the world's most 
productive timberlands allows our 2,000 employees to produce and sell 
forest products for a variety of markets. I have worked for State 
Government, industry trade associations and private industry on 
forestry and environmental issues for the last 25 years.
    I am here today to talk about Plum Creek's experiences working 
within the Endangered Species Act to develop a variety of conservation 
agreements and plans to address both the biology and business of 
managing forest habitat for endangered species. The Nature Conservancy 
estimates that half of the country's 1,263 federally listed species 
have at least 80 percent of their habitat on private lands. Habitat for 
more than a dozen species currently protected under the Endangered 
Species Act can be found on Plum Creek lands including northern spotted 
owls, marbled murrelets, grizzly bears, gray wolves, bald eagles, red-
cockaded woodpeckers, bull trout and pacific salmon.
    Plum Creek is no stranger to conservation planning under the 
Endangered Species Act. Over 2 million acres, nearly a quarter of our 
corporate ownership nationwide, is under four Habitat Conservation 
Plans and a conservation agreement for grizzly bears in Montana.
    Plum Creek's Central Cascades HCP, a 50-year plan covering 315 
species on 121,000 acres in Washington State, was approved in 1996 and 
is now in its 9th year of implementation.
    The Native Fish HCP, covering 1.4 million acres in 2 northwestern 
States, is a 30-year plan that addresses the needs of 8 species of 
native trout and salmon and is now in its 5th year of operation. This 
HCP was the first one in the country to incorporate the Services' 
``Five Points Policy''.
    Plum Creek is the largest private landowner in the Wisconsin 
statewide HCP for the karner blue butterfly.
    In 2001, the company completed a 30-year HCP for the red-cockaded 
woodpecker in Arkansas covering 261,000 acres.
    Plum Creek manages 75,000 acres of our land in Montana's Swan 
Valley under a grizzly bear conservation agreement with the U.S. Fish 
and Wildlife Service, the U.S. Forest Service and Montana Dept. of 
State Lands. This agreement was completed under Section 7 of the ESA 
and has been in place since 1995.
    These agreements were not easy to complete. The commitment is 
expensive, time-consuming and requires us to open our operations to 
public scrutiny in an unprecedented fashion. They have worked 
successfully for Plum Creek because of the location and characteristics 
of our land ownership.
    But these voluntary conservation agreements under the ESA have 
indeed solved problems. The listing of the northern spotted owl in 1990 
and subsequent Federal ``guidelines'' trapped over 77% of Plum Creek's 
Cascade Region in 108 owl ``circles.'' Indeed, with every new listing, 
Plum Creek was skidding closer to becoming the ``poster child'' for the 
taking of private lands. For us, the answer was the advent of HCPs and 
other agreement tools combined with incentives such as the ``No 
Surprises'' Policy. Plum Creek and the Federal Government have 
accomplished concrete contributions to the conservation of endangered 
species.
    Our HCP's and conservation agreements have been in place long 
enough to see the progress made on the ground. In our Native Fish HCP, 
over 5600 miles of logging roads have been ``reconditioned'' with 
surfacing and drainage to reduce sediment leading to fish-bearing 
streams and improved fish passage with use of ``fish-friendly'' 
culverts and bridges. Conservation commitments in the Arkansas red-
cockaded woodpecker plan have been completed years ahead of schedule 
and breeding pairs have been increased from 9 to 17 in Plum Creek's 
3,000 acre RCW conservation area.
    Mr. Chairman, with proper incentives, these voluntary agreements 
can lead to even greater conservation outcomes. The Central Cascades 
HCP provided the stimulus to complete the largest land exchange in 
Washington since the 1940's, with 39,000 acres transferred between Plum 
Creek and the U.S. Forest Service. This exchange allowed the Federal 
Government to acquire more property for backcountry recreation while 
Plum Creek achieved more efficient operations by consolidating our 
ownership. The HCP allowed Plum Creek to fully value its land for the 
exchange without the uncertainty related to the presence and future 
regulation of endangered species on our property.
    With the assistance of Federal funds from the Cooperative 
Endangered Species Conservation Fund authorized under Section 6 of the 
ESA, the State of Montana has purchased the largest conservation 
easement west of the Mississippi River on 142,000 acres of Plum Creek 
property in the Fisher and Thompson Rivers within the Native Fish HCP. 
These Section 6 funds, which are granted for land acquisition within 
HCPs, have also been instrumental in the recent purchase of 1,100 acres 
of Plum Creek property in northwestern Montana by the Montana 
Department of Fish, Wildlife and Parks. In the Ouchita River of 
Arkansas, Plum Creek and the U.S. Fish and Wildlife Service are 
engaging in the development of a Safe Harbor Agreement for the red-
cockaded woodpecker on property adjacent to our HCP. The planning and 
habitat improvement work now occurring on this 12,000-acre ecologically 
important area of mixed pine savanna and intermingled bottom land 
hardwood has the potential to more than double the red-cockaded 
woodpecker population from 20 to over 50 territories. The potential 
acquisition of the area by the Upper Ouchita Wildlife Refuge is the 
greatest incentive driving this ESA conservation project.
    Some academics and conservation organizations have been critical of 
HCPs, citing the lack of ``good science'' and public involvement in 
their development. We would like to dispel this myth and offer this 
example. When Plum Creek created its first HCP in the Washington 
Cascades, we assembled a team of scientists representing company staff, 
independent consultants and academic experts. We authored 13 technical 
reports covering every scientific aspect from spotted owl biology to 
watershed analysis. We sought the peer reviews of 47 outside scientists 
as well as State and Federal Agency inputs. We conducted over 50 
briefings with outside groups and agencies to discuss our findings and 
obtain additional advice and input. During the public comment period, 
all HCP documents and scientific reports were placed in 8 public 
libraries across the planning area. It is important to note, Mr. 
Chairman, that all of the science and planning completed in our HCPs 
and conservation agreements has been made available to other landowners 
and agencies developing their own conservation plans.
                            recommendations
    As confident as we are in the value and success of voluntary 
agreements under the ESA, there are several recommendations we think 
would make the ESA conservation planning process more ``user-friendly'' 
and effective.
    First and foremost, more incentives are needed because they fuel 
the innovation and commitment for private landowner participation. We 
believe the ``No Surprises Policy'' should be codified in law. This 
policy was an important incentive for Plum Creek to embark on the 
development of its first HCP. These agreements provide more predictable 
outcomes for the government and the ``No Surprises'' policy balances 
the bargain by making it a more secure deal for the landowner. 
Codifying the ``No Surprises Policy'' will induce more landowners to 
work with the Services to develop more voluntary agreements.
    Congress must authorize appropriate funding of the Department of 
Interior's HCP program to continue the important work discussed here. 
We recommend increased support for Section 6 of the ESA, which includes 
the Cooperative Endangered Species Conservation Fund to support 
development of HCPs and land acquisition within functioning HCPs and 
other conservation agreements. The support of Congress for voluntary 
endangered species conservation also includes support for the U.S. Fish 
and Wildlife Service and National Marine Fisheries Service to acquire, 
train and retain the skilled and seasoned personnel needed to craft and 
monitor these agreements with private landowners. Mr. Chairman, HCPs 
and other ESA conservation agreements are not only science plans but 
also business plans, which commit millions of dollars of a company's 
assets in a binding agreement with the Federal Government. The stakes 
are high for both conservation and shareholder value in private 
timberlands. The substantial commitment made by private landowners to 
develop and implement these voluntary agreements must be matched by a 
commensurate investment from the Federal Government.
    With regards to regulatory and policy issues, we would like to make 
the committee aware of two areas of conflicting regulation that 
significantly complicate and delay the completion of conservation 
agreements under the ESA. The first is the National Historic 
Preservation Act, which requires the Federal Government to ``authorize 
and permit'' any activity which may adversely affect existing or 
potential historic sites. When permitting the incidental ``take'' of 
habitat under the ESA, the Federal Government believes it is compelled 
to evaluate the potential of ESA-permitted activities to conflict with 
NHPA. This sets in motion a process, which can require private 
landowners to commission expensive surveys of potential cultural and 
archeological resources on their land, often with extensive delay and 
no benefit to the conservation of either historic sites or endangered 
species. Congress should pass statutory language, or include in the 
legislative history to make clear Congress' intent to exempt ESA 
conservation agreements from NHPA review.
    Moreover, the National Environmental Policy Act is triggered by the 
development of Habitat Conservation Plans, Safe Harbor Agreements and 
other ESA agreements. We have found the generation of environmental 
impact statements and assessments under NEPA to be an expensive and 
redundant process, since the ``preferred alternative'' is the HCP or 
other agreement that is already well documented and described as a 
result of work with the Services. Combined with the complexities of 
working with 2 Federal agencies like the U.S. Fish and Wildlife Service 
and National Marine Fisheries Service, NEPA compliance becomes an 
unnecessary and powerful disincentive for large and small landowners to 
engage in the ESA voluntary agreement process. Regulatory language 
should be developed which can require adequate public review and input 
to ESA voluntary agreements without engaging the landowner and agencies 
in the parallel and redundant NEPA process.
    Mr. Chairman, I thank you for the opportunity to testify before you 
today. The testimony you will hear today should provide the committee 
with a better understanding of the variety of ESA voluntary agreements 
and how they have been applied on our property. I hope my testimony has 
given you an appreciation of the strategic value of these voluntary 
agreements for both the conservation of species and protection of 
resource economies.
                               __________
 Statement of Mr. Laurence D. Wiseman on behalf of American Tree Farm 
            System, a program of American Forest Foundation
    I am testifying on behalf of the American Forest Foundation, and 
our American Tree Farm System. The Tree Farm System, founded in 1941, 
is the nation's oldest and largest community of forest landowners who 
have each pledged to practice environmentally-sound, sustainable and 
productive forestry.
    Together the 51,000 members of the Tree Farm System own more than 
33 million acres of some of the finest, richest forested habitats in 
the U.S. They are showplaces for what can be accomplished by willing, 
committed and enthusiastic stewards. For that reason, we welcome the 
opportunity to appear before this Committee.
    In an era when most media attention is focused on National Forests, 
it is vital that Congress consider both the challenges and 
opportunities that confront the ``majority owners'' of America's 
forests the 10 million individuals and families who own half of our 
forests, most in small plots of less than 100 acres. While recurrent 
wildfire on National Forests is a media staple the ecological 
equivalent of summer reruns few people grasp the ominous consequences 
of another, much less visible forest health crisis that spreads under 
the media radar. I refer to the loss of some 2,000 acres of forestland 
a day to development. That's every day with no time off for weekends.
    These forests are critical to our environment, our economy, and our 
communities. Some 70 percent of our Eastern watersheds flow through 
these family-owned forests. Two-thirds of the fiber grown for wood and 
paper products are harvested by these families. Some 90 percent of 
endangered species find some or all of their habitat on their forests.
    All the family forest owners I know recognize that decisions you 
make in Washington will affect their lands as much or more as the 
decisions they make around the kitchen table. Let me share some of what 
we've heard ``around the kitchen table'' as family forest owners 
consider endangered species and the laws that protect them.
        policy should respect the power of private stewardship.
    Most family owners rank wildlife, recreation and aesthetics as the 
primary reason for owning land; most will take steps to leave their 
land better than they found it. Many would welcome the chance to manage 
for endangered species. What's lacking, too often, are the knowledge, 
technical skills and the means to implement practices.
    Where knowledge and assistance are provided, and clear pathways for 
protection marked, owners will respond. Voluntary efforts for the red-
cockaded woodpecker have protected 509 groups on 347,000 acres some 40 
percent of the known groups on private lands.
 public officials should recognize family forest owners are volunteers.
    They choose to own forestland; they choose to be good stewards. Our 
first--and biggest--challenge is keeping them on the land. Some, of 
course, will choose to sell their property as their family and 
community circumstances dictate. Many others would prefer to stay on 
the land, and continue to pass on their family's heritage of 
stewardship. The key fact to remember is that it's their choice. Not 
ours. Not yours. The goal of endangered species policy, therefore, 
should be to make it easier not harder for families to stay on the 
land, and to exercise their innate impulse for conservation. Family 
forest owners give back to their communities. Without cash, there's 
little opportunity for conservation.
    Whatever their motives for owning forests, owners need income for 
taxes and insurance, and to invest in their land. To the extent they 
believe endangered species conservation may constitute a potential 
drain on their expected future income, some owners may choose another 
land use. It's important, therefore, to view species conservation not 
just as a stewardship responsibility owners willingly accept, but also 
as an environmental service they provide to their communities a service 
worthy of public support.
    Sadly, incentive programs for forest and species conservation are 
so meager that many families don't even bother to apply. Last year, 
more than $4 billion in applications for all conservation incentives 
went unfunded. Of those that were funded, a tiny fraction supported 
forest protection. Under EQIP, for example, the largest Federal 
incentive program, less than 2 percent of expenditures nationwide in 
2004 were directed at forest conservation practices. Given that about 
half the rural land in the U.S. is forested [and not connected to a 
working farm or ranch], the nation's needs are nowhere near being met.
    At the same time, Federal incentive programs are just one tool 
available to policymakers. As part of a comprehensive endangered 
species policy, other avenues for compensating owners for environmental 
services should be explored, including tax policy, extending the 
Conservation Security Program to forest owners, and the creation of 
private markets. We should reward family owners for species 
conservation, not punish them for creating the habitat where these 
species can thrive. Consistency and certainty breed confidence.
    Family forest owners must make decisions that will affect their 
forests and their families for decades, even generations. Consistent 
policies and regulatory certainty make it easier for owners to choose 
conservation. In fact, enacting short-term fixes, or politically-
fragile programs may actually de-motivate owners, rather than encourage 
their commitment to long-term stewardship. The brief, sad history of 
the Forest Land Enhancement Program the nation's first substantial 
incentive program aimed solely at family forest owners left many with 
little confidence that Federal policy would provide a stable foundation 
for their investments in stewardship.
    Likewise, exposing owners to regulatory uncertainty the fear that 
steps taken to protect species today might not suffice in the future 
magnifies risk and leaves many owners wary of agreements that might 
further limit management choices open to their heirs.
    Several attempts have been made to remove these uncertainties. 
Early efforts to set individual Habitat Conservation Plans for small 
owners have stalled. Few have been accepted, and some owners have spent 
tens of thousands of dollars and the better part of a decade 
negotiating their plans an unappetizing prospect for their peers.
    More promising [and more appealing to owners] is the emergence of 
statewide or region-and species-specific HCPs, and Safe Harbor 
Agreements which ease entry, set clear goals and landowner 
responsibilities, as well as mutually-agreed to limits on restriction 
of future use.
                    Program simplicity is a virtue.
    As one Tree Farmer put, ``We own this land for three reasons: 
pride, pleasure and profit. Often, the profit isn't there, but we've 
gone on. When the pride and pleasure disappear when there's one too 
many hoops to jump through we'll disappear too.''
    Right now, funded Federal incentive programs accessible to forest 
owners for species conservation number about half-a-dozen spread over 
at least three different agencies. Some are administered through State 
agencies; others through Federal offices. Most require separate 
application and operate under different rules.
    Simply knowing on which door to knock is a challenge for the vast 
majority of forest owners. Even more vexing, once you're inside, is the 
maze of committees, requirements, priorities and application 
procedures. Alongside well-funded incentive programs, we need simpler 
procedures and transparent processes perhaps even harmonized programs 
so that family forest owners can readily find the programs that work 
for them.
     lack of funds isn't the only barrier to species conservation.
    Very often, family owners will implement management practices that 
protect species simply because they want to because it feeds the pride 
and pleasure they take in caring for their forests. For them, a primary 
barrier to action is lack of knowledge about a particular species, its 
range, and the practices they might implement to support its 
conservation.
    For that reason, we have urged both agencies and the Congress not 
to shortchange outreach and education programs by counting success only 
in acres treated through cost-share grants. We understand and support 
the push for programs that produce real results on the ground. The 
drive toward easily-measured outcomes as we've seen with the Fish & 
Wildlife Service's Private Stewardship Grants program may actually 
reduce the return we can earn on Federal investment in species 
protection.
    Our 6 decades of experience--affirmed by our recent work with 
Environmental Defense and the Nature Conservancy--leave no doubt that 
well-informed, well-motivated family forest owners will implement new 
practices, once they learn how.
    Two projects supported in part through recent Private Stewardship 
Grants demonstrate the power of outreach and education. In Mississippi, 
Alabama and Louisiana, forest owners who attended field days and 
received publications now manage more than 10,000 acres to conserve 
gopher tortoise habitat, while maintaining the productivity of their 
forests. On average, they plan to share what they have learned with an 
average of 14 of their neighbors. After a single field day in South 
Carolina, owners reported using prescribed fire and other practices to 
conserve at-risk species on 15,210 acres.
                               In Summary
    Incentives are a vital component of a comprehensive endangered 
species policy because they recognize and respect the power of private 
stewardship. They provide one avenue--but not the only one--for 
achieving some level of public support for environmental services 
provided by family owners.
    Owners in general want to be good stewards, within the boundaries 
of economic reality. Without adequate cash flow from either forest 
products or environmental services, it becomes increasingly difficult 
to sustain forests in the face of burgeoning development.
    Current incentive programs, as now organized and administered, are 
not well-designed for family forest owners. Access is difficult, and 
funds available for forest conservation are dwarfed by the potential 
need. Without solid evidence that programs will remain adequately 
funded--and that rules won't change over time--many owners lack the 
confidence needed to make decisions that will affect their families, 
and their forests for generations.
    Tying Federal investment to on-the-ground outcomes is vital. The 
most effective policy will combine incentives with a broad range of 
information, outreach, education and technical assistance programs.
                               __________
           Statment of the NATIONAL ASSOCIATION OF REALTORS
    Thank you for the opportunity to submit the comments of THE 
NATIONAL ASSOCIATION OF REALTORS for the record of the Senate 
Fisheries, Wildlife and Water Subcommittee oversight hearing on the 
Federal Endangered Species Act and incentives for private landowners. 
THE NATIONAL ASSOCIATION OF REALTORS, ``The Voice for Real Estate,'' 
is America's largest trade association, representing 1.2 million 
members involved in all aspects of the residential and commercial real 
estate industries.
    REALTORS, are concerned and active members of their communities. 
They care about a healthy quality of life as well as a vibrant economy, 
and they are willing to do their part to maintain that important 
balance. They understand that species protection is a critical element 
in a community's quality of life.
    REALTORS also understand the importance of a strong economy and 
the critical role played by the estate industry. A healthy real estate 
market increases the tax base, creates jobs and provides new housing. 
In 2005, real estate continues to be on of the bright spots in our 
nation's economy.
    Consequently, NRA supports a balanced Endangered Species Act that 
accommodates both species protection and economic vitality. The current 
imbalance in species protection is highlighted by a recent NAR study.
    Our study of three counties in the western part of the State of 
Washington found that the location of properties in areas subject to 
significant ESA regulation typically results in lower sales prices to 
significant ESA regulation typically results in lower sales prices for 
those properties. The study found these lower prices to be 
statistically significant and observed in virtually all property types 
in rural, suburban and urban communities. Of other importance, the 
study also found a significant negative impact on government revenue 
from taxes.
    NAR policy supports the following amendments to the ESA:
     Use of incentives to private property owners for species 
protection rather than relying solely on restrictions and penalties.
     Listing of threatened or endangered species and the 
designation of critical habitat based on verifiable, scientific 
evidence.
     Notification to private property owners of potential 
listings, and the proposed designation of critical habitat, which 
impact their property.
     Increased local involvement in creating and implementing 
recovery plans.
     Independent peer review of both the scientific evidence 
and economic impacts of all proposed listings and critical habitat 
designations.
     Periodic review and expedited delisting of species, and 
removal of land from critical habitat designation, when supported by 
verifiable scientific evidence.
    Since its enactment in 1973, the Endangered Species Act's list of 
species in need of protection has continued to grow. However, very 
little progress in recovering species has been achieved. Only a few 
species have actually been recovered.
    In order to maximize the ESA's potential to protect and recover 
threatened and endangered species, the focus of the Act must shift to 
create a partnership between government and its citizens. To that end, 
the ESA must partner with State and local governments and focus less on 
top-down regulation and more on bottom-up incentives to property 
owners. The Act should consider whether private landowner voluntary 
programs, State/local conservation efforts, and other Federal Agency 
programs already provide sufficient protections before deciding that a 
listing is war rented. It should strengthen the authorization for 
Habitat Conservation Plans (HCPs) by providing a greater level of 
regulatory certainty, streamlining HCP approvals, and codifying the 
``No Surprises'' policy. Finally, the ESA should encourage State/local 
government facilitation of voluntary species conservation efforts 
through new authorization and funding.
    Thank you for allowing THE NATIONAL ASSOCIATION OF REALTORS the 
opportunity to share our views on the Endangered Species Act. We urge 
the Subcommittee to undertake a bi-partisam effort and pursue 
improvements to the ESA that will achieve protection and recovery of 
threatened and endangered species through a cooperative effort between 
government and its citizens. We look forward to working with you in 
support of this effort.
                               __________
         Responses by Michael J. Bean to additional Questions 
                          from Senator Inhofe
    Question 1. In your testimony, you mention that nothing in the ESA 
compels active land management versus passive ``natural state'' land 
use restriction. Would it not be a disincentive to compel private 
landowners to undertake active land management and also compel them to 
restrict the use of their property. Would you support removing 
landowner restrictions on private property if active land management 
were occurring?
    Response. Often the active management needed to sustain or enhance 
habitats for the long-term benefit of a rare species can have short-
term negative impacts on individual members of that species. An example 
would be the prescribed fires useful in maintaining or enhancing 
habitats for species such as scrub-associated rare species of Florida 
or the Karner blue butterfly in New York. Such fires, though 
practically indispensable to the long-term well-being of these species, 
may nevertheless injure or kill some individuals of those species. I 
believe the Fish and Wildlife Service can and should facilitate these 
sorts of management actions by exercising the authority it already has 
to relax the regulatory impediments that have discouraged or slowed 
needed active management. Further, needed active management should be 
encouraged through positive incentives. The alternative of compelling 
it through regulatory commands is unlikely to work.

    Question 2. In your testimony, you express support for voluntary 
conservation agreements and landowner agreements with assurances. What 
about critical habitat designation, would you support excluding land 
included under an incentive program from critical habitat designations?
    Response. I think that greater flexibility in the designation of 
critical habitat is desirable. The goal should be to ensure that those 
areas of special significance to the conservation of an imperiled 
species will be appropriately managed to meet the needs of the species. 
If there are adequate mechanisms in place, including those that might 
be provided by well-designed incentive program to encourage and reward 
long-term beneficial management, that is likely to be ultimately more 
important than whether any particular area is designated as critical 
habitat or not.

    Question 3. In your testimony you discuss the need for more inter-
Agency coordination of efforts to recover species. How would you 
suggest Congress act in order to facilitate increased coordination?
    Response. I think Congress--and specifically this Committee--needs 
to demonstrate clearly to the Federal agencies whose actions most 
frequently or most significantly affect imperiled species that it wants 
and expects increased coordination and cooperation in the conservation 
of those species. It can do that most effectively, I believe, by 
beginning with a series of briefings or hearings focused quite 
intensively on what is being done well or poorly at present. A result 
of those briefings or hearings should be a set of specific commitments 
that the agencies involved agree to undertake within specified time 
periods. This Committee should then bring the agencies back before it 
periodically to assess the progress--or lack of it--in meeting those 
commitments. Failure to meet those commitments should not be 
disregarded; Agency leaders and Agency budgets should be held 
accountable.

    Question 4. Mr. Bean, in your testimony you refer to the efforts of 
Oklahoma farmers in planning non-native grasses to control soil 
erosion. This was certainly a noble goal as cities like Magnum, OK were 
having dust storms so severe that street lamps came on during the day. 
You suggest it was a mistake for the farmers to plant non-native 
grasses in 1985, even though they spread more quickly than native 
grasses and the cities were in a crisis over soil erosion. Were you 
aware that, since 1996, farmer in Oklahoma have been planting native 
grasses as the focus has shifted from the crisis of soil erosion to 
wildlife conservation?
    Response. The planting of native grasses offers both soil erosion 
and wildlife habitat benefits, whereas the planting of non-native 
grasses offers soil erosion, but no significant wildlife habitat 
benefits. The extensive planting of non-native grasses in the initial 
implementation of the CRP program in Oklahoma represented a missed 
opportunity to achieve both important soil conservation and wildlife 
habitat benefits. It is my understanding that native grasses are being 
more commonly planted today, though non-native grasses are also still 
being planted. Greater attention to the opportunities to use CRP and 
other Farm Bill conservation programs so as to achieve both broad 
environmental purposes and more targeted endangered species 
conservation purposes is one of the most promising strategies for 
avoiding conflicts over endangered species conservation efforts.

    Question 5. If multiple grants and agencies were to be involved at 
a single property (i.e.,  applying for a USDA CRP and FWS Partners 
grant at the same site for different activities) would you suggest a 
single streamlined process for both grants?
    Response. Yes, I believe that is an idea that should be seriously 
explored. The agencies certainly have the authority to do that now and 
should be encouraged to experiment with a variety of ways of 
accomplishing this objective.
                               __________
         Responses by Michael J. Bean to additional Questions 
                         from Senator Jeffords
    Question 1. You express a need for greater coordination amongst 
Federal agencies in implementing land stewardship programs that could 
assist in protecting listed species and you provided recommendations on 
how to incorporate species protection into existing programs. In your 
opinion, which land stewardship programs have the greatest impact 
conservation of listed species?
    Response. The programs that currently have the greatest potential 
for beneficial impact on the conservation of listed species are 
probably the Farm Bill conservation programs, simply because they have, 
by far, the most resources and can reach the most landowners.

    Question 2. Would you support revising any Department of the 
Interior or Department of Agriculture grant programs to give priority 
for conservation actions carried out pursuant to recovery plans 
approved under the Endangered Species Act?
    Response. Yes.

    Question 3. Do you think the Administration could do more to 
encourage private landowner incentives for conservation of listed 
species, without legislative changes to the Endangered Species Act. If 
so, what would you propose?
    Response. Absolutely. For some species, see the answer to question 
no. 5 from Senator Chafee, as well as the recommendations of my 
colleague, Robert Bonnie, in his paper, ``Building on Success: 
Improving the Endangered Species Act,'' which can be found at http://
www.environmentaldefense.org/documents /3366--Building%20on
%20Success.pdf.
         Responses by Michael J. Bean to additional Questions 
                          from Senator Chafee
    Question 1. In your testimony, you mention the untapped or under-
utilized resources contain within the Farm Bill for conserving at-risk 
species. What are some of the changed that could be made to the 
existing Farm Bill conservation to provide the necessary incentives for 
agricultural landowners to protect species on their properties?
    Response. Changes that could be made to existing Farm Bill 
conservation programs to improve the conservation of at-risk species on 
agricultural and other private lands were described at length in 
testimony given by my colleague Timothy D. Searchinger in testimony to 
the Subcommittee on Forestry, Conservation, and Forestry, Conservation, 
and Rural Revitalization of the Senate Committee on Agriculture, 
Nutrition, and Forestry on July 26, 2005. I refer the subcommittee to 
that testimony for a detailed answer to this question.

    Question 2. To what extent is Environmental Defense focusing on 
preventive measures to ensure that species are not placed on the ESA 
list in the first places opposed to directing limited funding and 
resources toward recovery of species currently on the list?
    Response. We are focused on both of these issues. However, before a 
species is placed on the ESA list, the responsibility for its 
consecration and management rests with the States (except in the case 
of migratory birds and marine mammals). As a result, there are 
relatively few opportunities available under Federal law to address 
directly the conservation needs of unlisted species. One thing Congress 
can do to encourage more attention to this issue on the part of States 
is to fund adequately the development and implementation by the States 
of State comprehensive wildlife conservation plans.

    Question 3. Why is the recovery of species so difficult? What are 
the ongoing hurdles to recovery?
    Response. Most species are not added to the ESA list until they 
have been reduced to extremely low numbers and very limited 
distribution. Often, most of their habitat has been eliminated or 
severely degraded. Reversing these processes, which have often been 
ongoing for many decades, cannot be done easily or quickly. For many of 
these species, basic information about how to effectively manage them 
is sorely lacking, which may require years of research to elucidate. 
For a more extended discussion of this issue, see the Environmental 
Defense paper, The Endangered Species Act: Success or Failure, posted 
on our web site at www.environmentaldefense.org/documents/4465--ESA-- 
Success%20or%20Failure.
pdf.

    Question 4. What are your thoughts on ensuring that Habitat 
Conservation Plans benefit listed species?
    Response The single most helpful measure would be to ensure that 
the duty now found in the ESA that requires agencies to ensure that 
their actions not jeapordize the continued existence of listed species 
be clearly understood to bar approval of any habitat conservation plan 
that would make recovery of the species significantly less likely.

    Question 5. In your opinion, is there more that the Administration 
could be doing right now on private landowner incentives for 
conservation of listed species without waiting for Congress to make 
changes to the Endangered Species Act?
    Response. Yes, there is much more. Some of the actions it could 
undertake are described in the testimony referenced in my answer to the 
first question above. Other ideas are set forth in my 2003 paper, The 
ESA--Second Generation Approaches to Species Conservation:
    Challenges to Making Second Generation Approaches Work, which is 
available upon request.

    Question 6. Would Environmental Defense support the concept of 
creating a fund to pay for adaptive management to save a species from 
extinction in the case of an HCP failure to mitigate habitat loss? 
Let's assume that revocation of the incidental take permit would not be 
enough to prevent the species extinction, and the no surprises policy 
would prevent securing funds from the developer. Further, how would a 
fund of this nature be generated?
    Response. In general, we would support that concept, and suggest 
that the source of the funds be appropriated dollars. One could put the 
burden of underwriting the fund on HCP applicants, but the disadvantage 
of doing that is that dollars spent on a fund of this sort are likely 
to be dollars not spent on up--front conservation efforts in HCPs.
                               __________
         Responses by Michael J. Bean to additional Questions 
                          from Senator Clinton
    Question 1. Would you support revising any DOI and USDA grant 
programs to give priority to conservation actions carried out pursuant 
to recovery plans approved under the ESA?
    Response. Yes.

    Question 2. Is there more that the Administration could be doing 
right now on private landowner incentives for conservation of listed 
species, without waiting for Congress to change the ESA?
    Response. Yes. For some specifics, see the answer to question no. 5 
from Senator Chafee, as well as the recommendations of my colleague, 
Robert Bonnie, in his paper, ``Building on Success: Improving the 
Endangered Species Act,'' which can be found at http://
www.environmentaldefense.org/documents /3366--Building%20on
%20Success.pdf.

    Question 3. How is the Administration's shift to voluntary 
conservation working? Which species are benefiting from the various 
grant programs? How can these programs be improved and better 
integrated with the ESA?
    Reponse. The Administration's creation of new voluntary 
conservation programs, such as the Private Stewardship Grants Program 
and the Landowner Incentives Program, is a commendable, though still 
quite small, step. Also welcome is its continued support for the use of 
safe harbor agreements as an inducement for voluntary conservation 
efforts. Safe harbor programs are clearly helping the red-cocked 
woodpecker, northern aplomado falcon, Hawaiian goose, black-capped 
vireo, and other species. These programs can be improved and better 
integrated with the ESA by expanding them, Streamlining their 
successful implementation a higher priority. The Administration could 
make significant advances in voluntary conservation efforts for rare 
species conservation while simultaneously advancing other goals such as 
reducing soil erosion, improving water quality. etc.
                               __________
         Responses by Michael J. Bean to additional Questions 
                        from Senator Lautneberg
    Question 1. Some complain that the private sector is bearing too 
much of the burden for implementing the ESA. Does that burden compare 
to the burden on society when we lose a species of animal?
    Response. The loss of species deprives society--and future 
generations--of myriad benefits, potentially including new discoveries 
useful to medicine, science, or industry, the free ``services'' 
provided by healthy, intact ecosystems, as well as aesthetic, 
recreational, and other values. The loss of species forecloses 
opportunities to benefit from interstate commerce in as-yet-
undiscovered products derived directly from wild species or indirectly 
from insights gained through the study of such species. Inasmuch as 
possible, Environmental Defense believes that we ought to try to 
achieve these myriad benefits to society without unduly burdening the 
private sector. Accordingly, the principles that have guided our 
efforts are that we seek to make the Endangered Species Act both more 
effective in conserving species, and less burdensome for those whom it 
affects. We encourage Congress to apply the same principles in 
evaluating proposals for change to the ESA.

    Question 2. You mention the endangered bog turtle from my home 
State of New Jersey, and point out the importance of links between 
species. How much of our endangered species problem in this country is 
due to a similar loss of species up the chain?
    Response. The bog turtle, like virtually every other imperiled 
species, is at risk primarily because of one reason: the loss or 
degradation of its habitat. The only strategies that will successfully 
conserve imperiled species are to maintain and appropriately manage 
sufficient habitat to support them into the future.
         Responses by Michael J. Bean to additional Questions 
                         from Senator Murkowski
    Question 1. Mr. Bean, you have a commendable history of working 
with private landowners to develop voluntary conservation measures for 
endangered species. Would you agree that one of the key elements in 
making voluntary conservation efforts work is that, in the end, the 
deal that is struck must make good business sense? How could the Act be 
improved to understand and accommodate the economics associated with 
voluntary conservation commitments by private landowners?
    Response. Certainly for much privately owned land (e.g., corporate 
timber land), business considerations are likely to predominate in the 
determination of whether to enter into a voluntary conservation 
agreement. For many, if not most, individual or family landowners, 
however, the reason for owning a parcel of land are often many. They 
commonly include motivations (such as recreation, aesthetics, family 
tradition, conservation, etc.) having little or nothing to do with 
economic return, though few landowners can be indifferent to economic 
return. In the end, therefore, key to making voluntary conservation 
efforts work is that they be consistent with the landowner's objectives 
for the land, which may or may not be primarily economic. That said, 
however, even for those landowners for which economic considerations 
are not the overriding concerns, it will almost always be useful to 
assist the landowner with meeting the costs of management for 
conservation purposes. Doing so makes more conservation effort possible 
and demonstrates that the landowner's contribution is recognized as 
important. The Act could be improved by expanding the range of 
incentive-based mechanisms it offers, without foregoing regulatory 
controls where are needed.
                               __________
           Responses by Sara Braasch to additional Questions 
                          from Senator Inhofe
    Question 1.  I have heard from some farmers and ranchers that on 
some occasions their request for technical assistance from your service 
triggers the evaluation of a possible section 7 consultation because 
you are part of a Federal Agency/department. What effect does this have 
on voluntary conservation efforts, as section 7 consultations, even 
informal consultation, are notoriously lengthy and contentious 
processes? Is there a way to avoid this trigger?
    Response. NRCS is not required to consult with the FWS or NMFS when 
NRCS provides technical assistance only, but if that technical 
assistance is provided so the farmer or rancher can obtain Federal 
financial assistance, consultation is required if the funded action may 
affect an endangered or threatened species. If technical assistance 
alone is provided, NRCS conducts an environmental evaluation to ensure 
we are providing advice that does not result in unintended adverse 
effects on any resource. In the case of ESA-protected species, the 
Agency ensures that when a farmer or rancher carries out the 
recommendations provided, they will not inadvertently take a listed 
species or destroy or adversely modify designated critical habitat in 
violation of the ESA. There may be some instances in which an NRCS 
State Conservationist may want to seek assistance from FWS or NMFS to 
better understand the potential impacts of a recommendation, but it is 
not required.

    Question 2.  USDA programs appear to be very effective. Are there 
any regulatory hurdles in using USDA money to conserve species under an 
act implemented by the DOI?
    Response. Many conservation programs that are administered by NRCS 
have a beneficial impact upon the conservation of endangered species. 
This beneficial impact is often considered a may affect determination 
under the ESA consultation regulations found at 50 CFR part 402. 
Pursuant to 50 CFR 402.14 of the ESA consultation regulations, NRCS 
must enter into informal consultation on activities that may affect 
listed species and obtain FWS or NMFS concurrence that the funded 
activity is not likely to adversely affect any listed species or 
designated critical habitat. In some circumstances, the requirement to 
obtain FWS or NMFS concurrence on these activities causes delays in 
their implementation.
    Additionally, because NRCS conservation programs encourage the 
voluntary adoption of conservation measures that benefit listed 
species, some landowners have expressed concern that their voluntarily-
adopted practices will result in future restrictions on the property's 
use under ESA. While these landowners can obtain safe harbor assurances 
from FWS through a Safe Harbor Agreement and associated permit, these 
assurances involve a lengthy process and do not always correspond well 
with the program time frames for obligating funds.

    Question 3.  In your testimony you stated that wildlife is one of 
the four national priorities in the Environmental Quality Incentives 
Program? How high is wildlife in the priorities and how much is 
annually distributed for wildlife conservation?
    Response. Natural resource issues relating to wildlife are 1 of the 
4 national priorities for EQIP and are addressed primarily under the 
priority for the promotion of at-risk species habitat conservation. The 
term at-risk species means any plant or animal species as determined by 
the State Technical Committee to need direct intervention to halt its 
population decline. The priority of wildlife among other resource 
concerns is largely determined by the flexibility afforded to States 
and local decision makers to utilize EQIP resources to address locally 
identified priorities and optimize environmental benefits. In fiscal 
year (FY) 2004, $26,404,293 in cost share assistance was approved to 
help address wildlife-related resource concerns. Wildlife also benefits 
from technical and financial assistance that addresses other EQIP 
national priorities such as water quality and water conservation.

    Question 4.  I know that the Conservation Reserve Program and the 
Conservation Reserve Enhancement Program are under the Farm Service 
Agency but you mentioned them in your testimony. A lot of land is 
coming out of agricultural production due to these two programs and 
seemingly lying fallow for periods of 10-15 years. Is this land that 
could be converted to habitat for the benefit of species?
    Response. The Conservation Reserve Program (CRP) requires that land 
enrolled in the program be protected with vegetative cover. The CRP has 
enrolled over 35 million acres of land. The program has restored over 
1.9 million acres of wetlands, planted over 500,000 acres of hardwoods, 
and protected over 1.7 million acres of floodplains. These lands 
provide substantial benefits to many game and non-game species. The 
U.S. Fish and Wildlife Service estimates that an additional 2.3 million 
ducks per year are produced from CRP land. CRP acreage is being used to 
restore Salmon habitat, protect the Lesser Prairie Chicken, enhance 
Northern Bobwhite Quail and restore the habitat for many other species 
of wildlife. Wildlife groups and State Fish and Wildlife Agencies have 
commented that CRP is the most important conservation program for the 
restoration of wildlife on private lands.
                               __________
           Responses by Sara Braasch to additional Questions 
                         from Senator Jeffords
    Question 1.  NRCS is doing quite a bit to help preserve habitat 
through incentives provided in the Farm Bill. How does the NRCS manage 
these programs in order not to duplicate incentives provided by the 
Fish and Wildlife Service?
    Response. NRCS fully supports the President's initiatives on 
cooperative conservation, and therefore works closely with the FWS, 
NMFS, and State, Tribal and local agencies to coordinate delivery of 
its conservation programs. NRCS invites each of these agencies to 
participate with it on the NRCS State Technical Committee. This 
Committee provides a forum for development of cooperative efforts to 
foster the conservation of our Nation's resources, and is a mechanism 
to ensure the NRCS State Conservationist receives advice that will 
allow NRCS programs to complement, but not to duplicate, other 
agencies' efforts.
    There are several other mechanisms NRCS uses to ensure that the 
programs the Agency administers, such as the Farm and Ranch Lands 
Protection Program (FRPP), GRP, WRP and WHIP, do not duplicate efforts 
and incentives provided by the FWS, as well. For FRPP, lands enrolled 
in FWS easements are not eligible to be enrolled in FRPP. Likewise, in 
the case of GRP, lands enrolled in FWS contracts are not eligible for 
GRP.
    For WRP, the authorizing language contains provisions that require 
the Secretary of Agriculture to work with the Department of the 
Interior in implementing the program. In addition, NRCS and the FWS 
leverage resources to implement projects that are considered high 
priority by both agencies. Under WRP easement projects, NRCS is 
considered the landowner for the restoration portion of the project. 
Therefore, contributions from both agencies may be used to benefit the 
Federal governments' restoration efforts. However, under no 
circumstances will the restoration funds expended exceed the cost of 
the project. In addition, the agencies leverage resources in the 
management aspects of the program. For example, the Secretary of 
Agriculture and the Secretary of Interior may agree to the transfer of 
administrative jurisdiction on certain easement projects around the 
country. For example, earlier this year, Secretary Johanns and 
Secretary Norton agreed to transfer administrative jurisdiction of the 
Glacial Ridge project in Minnesota from NRCS over to the FWS. FWS will 
now be responsible for managing easement lands as part of the Glacial 
Ridge National Wildlife Refuge.
    WHIP generally caps cost-share at 75 percent. However, in order to 
capitalize on cooperative efforts, current WHIP policy allows State 
Conservationists to waive this cost-share limit on a case-by-case 
basis, where circumstances merit additional cost-share assistance to 
achieve the intended goals of the project. In these cases, direct 
Federal sources may contribute to the cost of the practice above the 75 
percent cost-share level, up to 100 percent.
                               __________
           Responses by Sara Braasch to additional Questions 
                          from Senator Chafee
    Question 1. In your opinion, where are Natural Resources 
Conservation Service (NRCS) funds better spent--to prevent species from 
being listed as threatened or endangered in the first place, such as 
the case of the Greater Sage Frouse in the western United States where 
Federal funds were used to improve sage frouse habitat and prevent an 
ESA-listing, or does NRCS prefer funds to go directly toward the 
recovery of already listed species, such as salmon in the Northwest?
    Response. As the saying goes, ``An ounce of prevention is worth a 
pound of cure.'' That is true for declining species, as well. 
Substantial Federal resources are expended during the listing process 
and to comply with the Endangered Species Act (ESA) after species are 
listed. Less resources are required to protect and restore habitat 
before species decline to the level at which their continued existence 
is in jeopardy. Of course, we cannot ignore the species that are 
already listed, but both goals are important to address, and NRCS is 
committed to contributing to the achievement of both goals. Here are 
some examples of how NRCS does this.
    While the Wetlands Reserve Program (WRP) does not have statutory 
language that requires a focus on ESA-listed species, NRCS considers 
habitat for threatened and endangered species a priority in the 
application ranking process. In addition to this focus at the field 
level, NRCS nationally also focused for the first time in fiscal year 
(FY) 2005 on enhancement of protected species' habitat. For Example, 
$500,000 of WRP funding, made available through the Wetlands Reserve 
Enhancement Program, was specifically provided to enhance Bog Turtle 
habitat in the Northwestern States, while an additional $500,000 of WRP 
finding was woodpecker population. The WRP focus on ESA-protected 
species complements the statutory requirement to focus on migratory 
birds and other wildlife, which includes declining species.
    The Grassland Reserve Program (GRP) emphasized habitat protection 
to prevent species from being listed as threatened and endangered. As a 
matter of policy, NRCS considers habitat for ``declining populations'' 
of grassland-dependent birds and animals a priority in the application 
ranking process at the State level, as well as targeting species 
directly at the national level. For example, in fiscal year (FY) 2004 
and 2005, over $5.1 million of GRP financial and technical assistance 
funds were awarded to seven Western States to acquire easements for the 
purpose of restoring and protecting Sage Grouse habitat.

    Question 2. How closely does the NRCS coordinate with the Fish and 
Wildlife Service in resolving species conflicts on privately-owned 
agricultural lands?
    Response. NRCS has a positive working relationship with the Fish 
and Wildlife Service (FWS). The Agency coordinates with the FWS in 
resolving species conflicts on privately-owned agricultural lands when 
the landowner has applied for NRCS financial assistance and NRCS has 
determined there may be an effect on federally-protected species or 
habitat. In these cases, consultation with FWS is required. Because 
NRCS programs address private land conservation needs, and because NRCS 
policy is to avoid or minimize effects on endangered, threatened, or 
declining species, conflicts arising from NRCS programs often do not 
occur. NRCS is also sensitive to landowners' interests in maintaining 
their privacy and the confidentiality provisions of the Farm Bill. NRCS 
is respectful of landowners' responsibilities to work with FWS or 
National Marine Fisheries Service (NMFS), as appropriate, on the 
decisions they make regarding the use of their land as it relates to 
ESA-listed species.

    Question 3. Do any of the NRCS conservation programs authorized by 
the 2002 Farm Bill or other similar statutes specifically require that 
the NRCS focus on ESA-listed species?
    Respose. The Wildlife Habitat Incentives Program (WHIP) (16 USC 
3836a) requires NRCS to focus on ESA-listed species. In addition, the 
Healthy Forests Reserve Program (HFRP) (16 USC Sec. Sec. 6571-6578), 
authorized by Title V of the Healthy Forests Reserve Act of 2003, 
Public Law 108-148, also focuses potential conservation efforts on ESA-
listed species. However, the Administration has not requested, and 
Congress has not provided, funding for HFRP. The HFRP's statutory 
purpose is to assist landowners in restoring and enhancing forest 
ecosystems to 1) promote the recovery of threatened and endangered 
species; 2) improve biodiversity; and 3) enhance carbon sequestration. 
The WHIP statute specifically requires that NRCS focus on endangered 
species. Excerpts from the WHIP statutes under cost-share payments 
state:
    (1) In General.-Under the program, the Secretary shall make cost-
share payments to landowners to develop:
    (A) upland wildlife habitat;
    (B) wetland wildlife habitat;
    (C) habitat for threatened and endangered species;
    (D) fish habitat; and
    (E) other types of wildlife habitat approved by the Secretary.
    While the Conservation Security Program (CSP), Environmental 
Quality Incentives Program (EQIP), GRP, and WRP authorizing statutes do 
not directly require NRCS to focus on ESA-listed species, all programs, 
as a matter of policy, consider habitat for threatened or endangered 
species or any declining species a priority in the application ranking 
and conservation planning processes consistent with Section 7(a)(1) of 
the ESA. Specifically, WRP legislation requires NRCS to focus on 
migratory birds and other wildlife, whereas GRP's authorizing 
legislation emphasizes support for plant and animal biodiversity and 
makes eligible for GRP lands which have potential to serve as habitat 
for animal or plant populations of significant ecological value--'' (16 
USC Sec. 3838n)
                               __________
           Responses by Sara Braasch to additional Questions 
                          from Senator Clinton
    Question 1.  Incentive programs at the State and local level, and 
also national programs like the Farm Bill conservation title programs, 
can take some of the pressure off the Endangered Species Act, both in a 
targeted way by providing funds to landowners to protect and restore 
habitat for listed species on private lands, and more broadly, by 
helping to keep species from declining to the point where they need to 
be listed. As the States complete their comprehensive wildlife 
conservation strategies required under the State Wildlife Grants 
Program that was established in the fiscal year (FY) 2001 Interior 
Appropriations bill, wildlife managers should have a better idea of how 
to target incentives to habitats with listed species, and also to help 
species avoid being listed. How will you integrate existing incentive 
programs to accomplish these aims?
    Response. The FWS, NMFS, and State Fish and Wildlife Agencies all 
serve on the NRCS State Technical Committee, where advice is provided 
to the State Conservationist on how NRCS conservation programs will be 
delivered within the State and what priorities will be addressed. State 
Technical Committees: serve as a forum to educate members about NRCS 
programs; identify ways in which NRCS programs can be implemented to 
help achieve the goals set forth in States' comprehensive wildlife 
conservation strategies; and are a place where partnerships can be 
formed.

    Question 2.  The demand for conservation incentives is so great 
that virtually every one of the conservation title programs from the 
2002 Farm Bill has a backlog of qualified applicants whose projects 
cannot be funded in a given year. In 2004, funding constraints 
prevented the protection of 6.2 million acres of grasslands, 
restoration of over 530,000 acres of wetlands, and over $10 million 
worth of projects to improve wildlife habitats. Yet budget proposals 
continue to fund these important incentive programs at less than was 
authorized by the Farm Bill. How can this situation be remedied?
    Response. Private landowners have been increasingly drawn to the 
voluntary, locally-led, site-specific conservation assistance delivered 
by NRCS and its partners. The demand for cost-share, easement and 
incentive funds provided through NRCS conservation programs currently 
exceeds available funding. NRCS works to address this high demand for 
assistance in a number of ways, including, but not limited to, 
increased leveraging of partnership dollars where authorized, increased 
technical assistance to landowners, and streamlining measures to reduce 
technical assistance costs.
    Increased leveraging of Federal dollars and lowering the Federal 
cost-share percentage for conservation practices installed with NRCS 
assistance allow Federal funds to reach additional landowners and 
achieve greater conservation benefits per Federal dollar. In addition 
to increased leveraging of non-Federal dollars, ensuring that 
landowners whose contracts are not accepted receive sufficient 
technical assistance is another technique that is critical to improving 
landowners' chances of receiving funding in the future. Finally, 
streamlining and efficiency measures identified and undertaken by the 
Agency will reduce technical assistance costs. Through improved funding 
allocation and application ranking procedures, NRCS is committed to 
funding the highest quality contracts and ensuring that Federal dollars 
are invested wisely and effectively.

    Question 3.  How best can we integrate delivery of State, local and 
the various Federal programs to provide one-stop shopping for 
landowners who are seeking incentives to protect or restore important 
habitats for wildlife?
    Response. As a full participant in the President's Cooperative 
Conservation Initiative, USDA works in partnership with States, Tribes, 
local governments, and individuals to promote conservation efforts. 
USDA Service Centers, through which NRCS operates in partnership with 
the Farm Service Agency, Rural Development, Conservation Districts, and 
often Resource Conservation and Development Councils, are the one-stop-
shop for landowners who are seeking program information and assistance 
to restore wildlife habitat. The locally led process and NRCS State 
Technical Committees are two mechanisms through which Federal Tribal, 
State, and local agencies learn about the programs each organization 
has that contribute to the achievement of wildlife goals. This 
information can then be shared through pamphlets and brochures, 
available at USDA Service Centers.
    Local work groups, made up of local, State and Federal governmental 
representatives, assist NRCS in identifying natural resource 
priorities, leveraging other programs, and recommending ranking and 
evaluation criteria for applications. This locally led process enables 
NRCS and its partners to achieve the desired environmental benefits and 
ensure consistent program delivery to the customer.
    The State Technical Committee is a technical advisory committee 
made up of representatives from other Federal agencies, Tribal and 
State governments, agricultural, natural resource and environmental 
organizations. The Committee provides technical advice to NRCS on 
wildlife protection strategies, and input on streamlined program 
delivery and effectiveness at the field level.
    NRCS's use of Technical Service Providers (TSP) also affords 
opportunities to integrate delivery and leverage other programs to more 
effectively and efficiently provide assistance to landowners. To 
maximize landowners' incentives to hire them, a TSP must be able to 
provide landowners with information about both public and private 
sector programs that will assist them in accomplishing their 
conservation goals, regardless of the source.
    In addition to these mechanisms, landowners and other customers can 
also obtain information and assistance from NRCS' national Web site at: 
http://www.nrcs.usda.gov. This Web site includes information on program 
assistance with links to NRCS State Office Web sites and Web sites of 
NRCS' conservation partners.
                               __________
           Responses by Sara Braasch to additional Questions 
                         from Senator Murkowski
    Question 1. Section 9 of the ESA, along with implementing 
regulations promulgated by the Agency, use an expansive definition of a 
taking of a listed species to include harm, harassment, and activities 
that change essential behavior or disrupt behavior. If a landowner 
discovers a listed species on his property, what assurances can the 
Federal agencies provide the landowner that he or she is free to engage 
in ordinary uses of the land without being exposed to taking claims and 
possible prosecution?
    Response. When NRCS formally consults with the FWS or National 
Marine Fisheries Service (NMFS), as required by Section 7 of the ESA, 
NRCS receives a biological opinion and incidental take statement. Any 
incidental take of listed wildlife that is in compliance with the terms 
and conditions of a section 7 incidental take statement is exempt from 
the section 9 or regulatory prohibitions on take (16 U.S.C. 1536(o)(2)) 
and would be an important component of any legal defense should third 
parties seek enforcement of the ESA's take prohibitions. Safe Harbor 
Agreements with Assurances and Candidate Conservation Agreements 
(Agreements) are 2 other tools FWS uses to provide assurances to NRCS 
program participants that they will be free to continue to use their 
land for farming and ranching. Under these agreements, the Fish and 
Wildlife Service provides participants with regulatory assurances that 
they will not be required to provide any additional commitments of 
money or natural resources if they conduct their activities in 
accordance with the terms of the agreement. However, these Agreements 
do not apply retroactively to cover the actions farmers and ranchers 
have already taken to benefit ESA-protected and declining species. For 
example, if a listed species were attracted to a farmer's or rancher's 
land, and that land turned into part of that listed species habitat, 
there is a greater chance that restrictions are already imposed on the 
farmer's or rancher's land use.

    Question 2.  It is my understanding that efforts to provide 
administrative mechanisms designed to offer such assurances have been 
struck down by Federal courts as being inconsistent with the ESA what 
changes are needed in the statute so that needed landowner assurances 
can be provided?
    Response. As the Federal agencies charged with implementing the 
ESA, NRCS respectfully defers to the FWS and NMFS to respond to this 
question.

    Question 3.  The NRCS has been a key resource for resources 
conservation activities on private lands. What are the biggest 
obstacles that the NRCS and Department of Agriculture face in bringing 
private landowners into resource conservation programs?
    Response. NRCS believes there would be positive benefits for 
incentive-based wildlife conservation from development of programmatic 
ESA consultation for all Farm Bill conservation programs. Currently, 
NRCS field staff performs ESA consultation on many activities at the 
local level, including individual conservation practices. This occurs 
even in circumstances where there is virtually no potential for adverse 
effect determination. Consultation requirements greatly increase the 
amount of time needed to implement even basic conservation practices on 
farms and ranches, and result in escalated technical assistance costs. 
Programmatic consultation has the potential to generate significant 
cost savings for NRCS, as well as other agencies, because of the 
reduced workload relative to site-by-site consultation. We believe 
opportunities exist to provide more broadly applicable consultation and 
look forward to working with our colleagues with the FWS and NMFS on 
this issue.

    Question 4.  In your experience, when endangered and threatened 
species are found on private property, do the take prohibitions of the 
ESA and potential requirement for Section 7 consultations for Federal 
Agency actions hinder the ability or willingness of farmers to enter 
into resources conservation programs?
    Response. Sometimes the take prohibitions of the ESA and potential 
requirement for Section 7 consultations do hinder farmers' willingness 
to apply for financial assistance through NRCS conservation programs. 
It is our experience that many landowners are concerned about the 
possibility they will be restricted in how they can use their land if 
it becomes known that endangered or threatened species are on their 
property. They don't want to take the chance, even if the conservation 
practice they currently intend to install will benefit those species. 
The concern is that if they want to take some other action in the 
future, the Federal agencies will know about the presence of the 
species, and they will be prohibited from doing what they want to do.
                               __________
              Responses by Campos to additional Questions 
                          from Senator Inhofe
    Question 1.  In your testimony, you mention that the ``most 
important incentive that Congress can give home builders is regulatory 
certainty'' and you go on to express concern about third party lawsuits 
undermining the administrative practice of ``no surprises.'' What 
specific steps can we take to ensure that assurances given to 
landowners are meaningful and concrete so that there are not multiple 
bites at the apple?
    Response. I would suggest three specific steps Congress can take to 
provide certainty to the regulated community.
    First, quite simply, Congress can codify the bipartisan ``No 
Surprises'' policy which would help ensure that a deal is a deal. When 
you negotiate an agreed upon plan for species or habitat management and 
protection, you need to know that deal is final. Property owners 
implementing an approved Habitat Conservation Plan (HCP) need to know 
that they will incur no additional costs or responsibilities in the 
event that something that is unforeseen occurs. With this degree of 
regulatory certainty, property owners, builders and developers can 
undertake long-range planning and development operations confident that 
the time, money, and effort devoted to creating and implementing HCPs 
will not be lost because a Federal Agency changes its mind about what a 
species may need for recovery. Of course, nothing in this policy 
prevents the Federal Government from addressing the changing needs of a 
species with its own resources.
    Second, Congress can exclude HCPs and other species management and 
conservation plans from critical habitat designations and thereby 
provide powerful incentives to private landowners to continue entering 
into such agreements.
    Under the ESA, the Services are obligated to consider whether 
``special management considerations'' in the form of critical habitat 
are warranted for these specific areas. To demonstrate compliance with 
this mandate and determine whether any such additional management 
considerations are needed, NAHB believes that the Services are 
obligated to consider and review all private, local, State, regional, 
and Federal protections, including all applicable management plans and 
conservation agreements to assess the conservation benefits they 
provide. If a specific area is already managed for the conservation of 
a particular species, that area is clearly not in need of additional 
protections or management considerations, and therefore fails to meet 
the very definition of critical habitat and must be excluded from the 
designation.
    Unfortunately, recent litigation has challenged this logical 
progression, and threatens to undercut the attractiveness and 
usefulness of the full range of conservation tools and management 
options available to land managers, private landowners, and developers, 
resulting in a far-more onerous and far-less effective ESA.
    Ultimately, in areas covered by HCPs, Safe Harbor Agreements, and 
other management plans and conservation programs, the designation of 
critical habitat only serves to add another layer of review and 
bureaucracy while failing to afford any additional protections for 
listed species. It also serves as a disincentive in those instances 
where voluntary measures are underway. Needless red tape is not a 
substitute for common sense conservation policy, and may even result in 
detrimental impacts to threatened and endangered species.
    Accordingly, NAHB appreciates the Services recognition of landowner 
contributions in this regard, and I would note as a matter of reference 
that the Fish and Wildlife Service for one has exempted approved HCPs 
from critical habitat designations. In conjunction with Sec. 49(b)(2) 
of the Act, the Fish and Wildlife Service has cited this very logic in 
its exclusion of HCPs and other properly managed lands in, amongst 
others, the proposed designation of critical habitat in Arizona for the 
Cactus Ferruginous Pygmy-Owl. In that proposal, the Service even went 
so far as to ``encourage landowners to develop and submit management 
plans and actions that are consistent with pygmy-owl conservation that 
[the Fish and Wildlife Service] can evaluate and that may remove the 
necessity of critical habitat regulation.''
    As these exemptions are more a matter of administration policy and 
interpretation, and therefore subject to change, NAHB supports the 
codification of HCP exemptions from critical habitat.
    Finally, as I mention in my testimony, a third important reform 
would be for Congress to reduce redundancies and increase efficiencies 
by increasing coordination, and consolidating the various non-ESA 
programs that regulate land use and help to promote species 
conservation and habitat protection. Incorporating other regulatory 
programs into the HCP planning process, upfront, such as U.S. Army 
Corps of Engineers Section 404 wetlands permits, would streamline the 
permitting process and vastly increase the tangible incentives 
available to participating landowners and developers. This point--
integrating Section 404 permits into the HCP process--is worth 
repeating: providing for ``one stop permitting'' in the ESA and Clean 
Water Act context would be of tremendous benefit for builders. By 
encouraging advance planning and an ecosystem approach to resource 
conservation, it would be equally beneficial for species and aquatic 
resources.

    Question 2.  In your testimony, you discuss the expense and time 
consuming nature of participating in voluntary conservation efforts, 
particularly for small landowners? What suggestions do you have for 
changes Congress can make that would speed up the process and lower the 
cost to allow more individuals to participate?
    In my response to an earlier question from Senator Chafee, I 
mentioned that smaller-scale HCPs are underutilized because there is no 
firm timeline; for their approval and completion. A vast improvement 
could be made by ensuring a stricter timeline; similar to the Section 7 
timeline. This would provide additional certainty for builders and make 
these HCPs more attractive to smaller builders and landowners.

    Question 3.  In several places of your testimony, you mention the 
need for a flexible ESA? Is the current structure a one-size-fits-all 
construction and what changes can Congress make to allow the tailoring 
of ESA to site specific concerns?
    Response. Flexibility is a somewhat difficult issue to address. As 
I mentioned in my testimony, builders and developers require certainty. 
Furthermore, knowing the ``rules of the game,'' the kind of mitigation 
requirements generally required, etc., can help private landowners plan 
for future activities. Unfortunately, these guidelines can also pigeon-
hole both the landowners and the Services into pre-set courses of 
action that may or may not be compatible with the on-the-ground 
requirements at hand. On the flip side, however, broad and unending 
Agency discretion leaves landowners with little or no idea of the ESA's 
requirements and can facilitate abuse by agenda-driven staffers. What 
is necessary is an approach that allows for long-term regulatory 
certainty combined with the flexibility to create projects and programs 
that meet the needs of all involved stakeholders. While this approach 
has been utilized in the past, most notably in a few large regional 
HCPs in my home State of California, the process is still more of the 
exception than the rule.
                               __________
           Responses by Paul Campos to additional Questions 
                         from Senator Jeffords
    Question 1.  In your testimony, you state that the existing 
Endangered Species Act is burdened by a number of disincentives that 
discourage landowner cooperation. Could you elaborate on these 
disincentives and how you would recommend addressing them?
    Response. In essence, the disincentives center on two key problems: 
First, the time and expense required to not only cooperate with the 
ESA, but especially to voluntarily conserve and protect species. 
Second, the regulatory uncertainty which burdens the ESA discourages 
landowner cooperation.
    Especially in areas where land costs and land values are high and 
where species conservation and economic growth and development are 
intertwined, there is a virtual dearth of programs that allow 
landowners and businesses to even begin to recoup or recapture the 
costs of voluntary conservation actions. Complicating issues further is 
the unfortunate reality that the ESA is burdened by a number of 
disincentives that actively discourage landowner cooperation. All this 
lies in the simple fact that, for most private landowners, the presence 
of an endangered or threatened species on their land is still much more 
of a liability than anything else. Even well-intentioned actions to 
help protect the species or its habitat may take months or years in 
Agency review and limit future management activities or land-use 
options. From the builder's perspective, site surveys are often a large 
source of the Services' information on species distributions. This 
often creates a sort of self-fulfilling prophecy, whereby species 
appear to be focused in areas where growth is occurring simply because 
this where people are actually looking for the species. Consequently, 
projects in these areas become disproportionately burdened with species 
protection requirements.
    To address these concerns, Congress should consider acknowledging 
that every interaction with the ESA is not created equal. Some 
activities, small project-specific HCPs for example, should require 
less intensive review than larger programs. Also, landowners willing to 
undertake voluntary conservation actions should be spared form long 
permitting delays and project uncertainty. While these are not new 
concepts, as I suggested in my response to question posed by Chairman 
Inhofe, they are still more of the exception than the rule.

    Question 2.  Can you provide a total number of housing developments 
that have been stopped by restrictions under the Endangered Species Act 
in Northern California?
    Response. I can't provide you with a number of housing developments 
that have been stopped, if by ``stopped'' you mean regulated out of 
existence. I would point out that it is not just developments being 
stopped that should be of concern to all of us. Just as important are 
the number of projects that have been delayed and the increased costs 
associated with those delays--including the substantial delays caused 
by litigation brought by project opponents that allege impact to 
species or habitat. Also, I would raise the point that the significant 
mitigation costs that builder and developers face can significantly 
reduce the number of housing units available, while also driving up 
costs. All of these factors not only reduce the number of available 
units, but also significantly impact affordable housing in this 
country.
    Congress needs to set policies and support programs that increase 
affordable housing in this country, not raise price for the most 
vulnerable first time home buyers. With respect to these points, I 
would urge the Subcommittee to review the recent economic impact 
analysis released by the Service in connection with its designation of 
over 800,000 acres of critical habitat for 15 vernal pool species in 
California. The Service's analysis demonstrates that California's 
housing market is in severe disequilibrium--demand for housing far 
outstrips supply--and that the regulatory impact of the ESA is very 
substantial in terms of causing delays in housing projects, causing 
housing units to be removed from proposed projects as a direct result 
of species' habitat needs, and imposing substantial mitigation costs 
that are passed on to consumers in the form of higher house prices.

    Question 3.  In your testimony, you cite a need under the 
Endangered Species Act for monetary assistance to small private 
landowners to encourage their voluntary participation in the protection 
of listed species. Are there any specific proposals that you would like 
the Congress to consider to address this need?
    Response. Monetary incentives would certainly help to offset the 
costs associated with voluntary conservation efforts that landowners 
undertake, and would encourage further participation. As I mention in 
my written testimony, proactive, incentive-based conservation tools 
help to integrate species needs into long-range individual and 
community development plans, a process that lends itself to more 
flexible, efficient, and effective conservation strategies than the 
traditional species-by-species approach. Unfortunately, coordination 
between ESA and non-ESA conservation programs is lacking, as are 
approaches specifically tailored to address the needs of small builders 
and developers. Furthermore, there remains a critical need for expanded 
non-monetary, incentive-based species conservation policies and 
programs. Streamlined permitting processes, regulatory certainty, and 
financial incentives all deserve serious consideration if the ESA is 
ever to be truly successful in meeting its goals of protecting this 
nation's biological heritage.

    Question 4.  In your testimony, you state that Endangered Species 
Act decisions should be based on ``sound science.'' Given the permanent 
nature of extinction, do you think that damaging activity on a piece of 
potentially critical habitat should be deferred until scientifically 
valid, peer reviewed studies are available, even if this takes many 
years? If not, should decisions be made on the best available science?
    Response. Not knowing what ``damaging activity'' you are referring 
to on potentially critically habitat, it is difficult to comment on 
your hypothetical. With regard to the important issue of sound science 
however, as you know, the ESA calls for the use of the ``best 
scientific data available'', however there is no definition of this 
phrase within the Act or in implementing regulations. Therefore, NAHB 
believes that reforms are necessary to define what constitutes the 
phrase ``best scientific data'' and to ensure that ESA decisions are 
made stronger and more defensible, while providing protection to our 
threatened and endangered species.
    Currently under the ESA, a species can be listed as endangered or 
threatened based on one letter from a landowner claiming that ``there 
are less of the species than there used to be.'' The golden-checked 
warbler was listed on the basis of one letter from a private 
individual. This is unacceptable. Although this type of information may 
constitute ``best science available'' under the current ESA, the 
agencies should not be allowed to continue to make such fundamental and 
important decisions based upon such a blatant lack of information about 
the species. Petitions to list a species should be founded on clear and 
convincing evidence that a listing is warranted.
    There are other important decisions made by the Federal agencies 
that are based on flawed or absent data. For example, as a result of a 
lawsuit brought by NAHB and 17 other organizations and municipalities, 
the National Marine Fisheries Service agreed to rescind its critical 
habitat designations for 19 salmon and steelhead species in the Pacific 
Northwest due to the lack of science and proper economic 
considerations. In 2000, NMFS designated critical habitat for these 
populations covering 150 watersheds over the States of Washington, 
Oregon, Idaho, and California. Thousands of our members within this 
four-state area were encompassed by this over-broad and expansive 
designation. Many of their projects were prevented or were subjected to 
expensive mitigation requirements.
    NAHB strongly believes that sound science reform is overdue and 
that Congress should act now to prevent these grievous errors from 
happening again. ESA decisions have far-reaching consequences for the 
public. Therefore, the Federal agencies must be able to support these 
decisions with sound and defensible science to justify that the 
hardships inflicted on the public are absolutely necessary to protect 
and conserve these species.
    Furthermore, it is extremely important that peer review of science 
take place outside and independent from the Agency making the policy 
decision. Additionally, it is vital that the review encompasses the 
materials used to support the decision. For example, review of an ESA 
jeopardy determination will not reveal the fundamental problems with 
the science unless all documentation used to reach that jeopardy 
determination can also be examined and reviewed. Likewise, not only 
should a proposal to list a species be reviewed, but also the 
underlying biological data, including any species counts, population 
models, and other relevant information used in that listing decision.
           Responses by Paul Campos to additional Questions 
                          from Senator Chafee
    Question 1.  One of the concerns you expressed was the overlaying 
of critical habitat designations with Habitat Conservation Plans? Would 
you go into more detail as to your concerns in relation to the overlay 
problem and how this is impacting housing development on the ground?
    Response. Yes, Mr. Chairman, this issue is of significant concern 
for our industry, especially in light of the substantial uncertainty 
caused by the Gifford Pinchot decision in the 9th Circuit. If an 
approved or pending HCP falls within existing critical habitat, or 
subsequently has critical habitat overlaid over the area it covers, it 
will be subject to the additional regulatory requirements and red tape 
of critical habitat that have little or no benefit to listed species. 
Any incentive to enter into an HCP is lost if the area at issue is also 
subject to regulation under the critical habitat provisions of the ESA. 
In the wake of the Gifford Pinchot decision, many developers and 
builders are now asking themselves if the significant time and expense 
that is required to undertake an HCP is worth it given the considerable 
uncertainty the decision has caused.
    For instance, as I stated in my testimony, using the East Contra 
Costa County HCP as an example, the HCP planning area overlaps with 
proposed critical habitat for the California red-legged frog, the 
California tiger salamander, the Alameda whipsnake, and already 
designated fairy shrimp habitat. Although several environmental groups 
have taken an active role as stakeholders in the HCP development 
process, other, litigation-driven organizations have not. Following the 
aforementioned Gifford Pinchot case that called the conservation 
obligation of critical habitat into question, home builders are loathe 
to commit to the HCP process knowing that a lawsuit will almost 
certainly be filed over the regulatory review and protection 
requirements of critical habitat by non-participants to the plan.
    It is thus imperative for Congress to authorize explicitly in 
statute the Service's practice of excluding pending and approved HCP's 
from critical habitat. That practice is now being challenged head on by 
the Center for Biological Diversity, which has filed a 60-day notice of 
intent to sue over the Service's exclusion of HCPs from critical 
habitat.

    Question 2.  You mentioned that the timing of the HCP permit 
process is a disincentive for builders and developers to participate in 
conservation programs. In light of this, are there changes that could 
be made to the permit process to make it easier for developers to work 
within their unique timelines?
    Response. Yes, especially for project specific HCPs. These smaller-
scale HCPs are underutilized because there is no firm timeline for 
their approval and completion. A vast improvement could be made by 
ensuring a stricter timeline; similar to the Section 7 timeline. This 
would provide additional certainty for builders and make these HCPs 
more attractive to builders.

    Question 3.  You cited Safe Harbor and Candidate Conservation 
Agreements as programs where there is room for improvement in relation 
to encouraging builders and developers to buy into the process. Would 
you speak further about the types of additional tools that could 
facilitate their participation, particularly in areas where high land 
values pose additional challenges?
    Response. Safe Harbor Agreements are testaments to the common-sense 
conservation approaches that the ESA is capable of generating. However, 
given the specific nature of the home building industry, the particular 
approach, requiring sustained on-going management, is oftentimes 
unworkable to builders and developers. Furthermore, non-ESA programs 
such as the USDA's Conservation Reserve Program provide interesting 
models on how to encourage private landowner conservation, but do not 
possess sufficient funding levels to offset the costs of voluntary set 
asides in competitive housing markets like those found in Northern 
California.
    In order to be useful to builders and developers, any additional 
tools or incentives under the ESA would need to help to recoup the 
costs of doing business under the Act. Given high land values in 
competitive and growing areas around the country, however, this need 
not always be through direct compensation. Thought should be given to 
providing incentives through certainty and streamlined permit approval 
processes.
    That said, I would also like to reiterate the point I made in my 
testimony that most regional HCPs act as a sort of candidate 
conservation agreement because they treat covered but unlisted species 
as if they were listed and thus provide all of the regulatory 
protections of the act and resources for long term active management.
              Responses by Campos to additional Questions 
                         from Senator Murkowski
    Question 1.  The prohibitions on taking and the related threat of 
criminal or civil prosecution are the big sticks'' in the ESA with 
respect to the treatment of issues that occur on private lands. Many 
property owners view them with understandable apprehension. Do you see 
a need or benefit to amending the law to better define the situations 
in which these sticks should actually be used?
    Response. Definitely. The ESA is a powerful and far-reaching 
statute. Unfortunately, all-to-often, builders and developers have 
witnessed what can only be called abuse of power by individual staff 
members and offices. Often coming in the form of presumed take letters, 
builders, developers, and even local and county governments have 
received general notices that they are in danger of taking a species. 
These letters imply an air of guilty until proven innocent, and seem 
plainly intended to intimidate landowners and local officials into 
conceding to the Services' demands. In order to help reduce the 
flaunting of the ESA's big sticks, one suggestion would to be a formal 
system for vetting such letters and notices through the Services' chain 
of command, so that individual staffers or offices do not improperly 
wield the Act.

    Question 2.  In your view, would it improve the ESA to include 
incentives for landowners to manage their lands and activities in ways 
that are more hospitable to listed species? If so, what kind of 
incentives do you think might be appropriate?
    Response. As mentioned above in my response to a similar question 
from Senator Chafee, thought should be given to other, non-financial 
incentives such as permit streamlining and regulatory certainty. In 
competitive housing markets, these can be powerful incentives, and 
potentially more practical than direct funding.

    Question 3.  Current law allows anyone, even the most radical 
animal rights or environmental group, to take individual citizens to 
court for alleged ``taking'' even where the rationale is extremely 
flimsy. In your view, has this practice been abused?
    Response. I do see litigation abuses in under the ESA. The Services 
do not have the resources, both in terms of time or dollars, to do 
everything they must under the Act exactly when they are supposed to 
it. There are many groups that take advantage of this by litigating 
simply for attorney's fees. Oftentimes, these are slam-dunk lawsuits 
the ESA says do X, the Services did not do X by an arbitrary date, 
court order issued and attorney's fees awarded. Unfortunately, the 
Services do not have adequate resources to complete all of these 
statutorily-required obligations, so the litigation mill continues. 
While there are differences between this type of litigation and those 
brought by private citizens in cases where the Services have gone 
through the motions of meeting their ESA responsibilities but failed in 
substance (i.e.,  the conducting of proper economic analyses), Congress 
must at least be sure that the Services have the necessary resources to 
meet their responsibilities lest the downward spiral of litigation 
continue.

    Question 4.  What suggestions do you have for providing landowners 
with an assurance that they are not going to become a victim of this 
practice sometime in the future?
    Response. I'm not sure I have any specific suggestions at this 
time, although so-called Loser Pays provisions have been somewhat 
effective at discouraging frivolous lawsuits in other areas.

    Question 5.  Some outside parties have suggested that we don't need 
to update or improve the ESA but just need to comply with the existing 
law and fully fund ESA programs. As representatives of landowners and 
companies who have to comply with the ESA on a day to day basis, do you 
agree that the ESA, in its present form, is sufficient?
    Response. No, the ESA in its present form is not sufficient. Less 
that 1 percent of species listed for protection under the Act have 
actually been recovered. In the mean time, landowners and others who 
are responsible for complying with the Act face significant economic 
and other hardships, many of which transfer throughout the economy. 
Clearly the Act is not working for species or landowners. The Act must 
be updated and improved to better balance the needs of species and the 
communities in which we live and work.
    Updating and improving the Act's critical habitat provisions would 
go a long way toward improving the situation for both species and 
landowners. Under the ESA, at the time a species is listed, the FWS or 
the NMFS is required to designate critical habitat for the species in 
an effort to protect habitat essential for conservation. Critical 
habitat designations subsequently place a variety of regulatory 
requirements on landowners, and result in project prohibitions, delays 
or mitigation constraints. Ironically, the FWS has conceded that the 
system governing the implementation of critical habitat under the ESA 
has forced it to expend significant resources and resulted in little or 
no conservation benefits to listed species.
    NAHB supports the passage of legislation that would update and 
modernize the ESA by improving critical habitat designations and other 
decisions made under the Act. H.R. 1299, the Critical Habitat 
Enhancement Act of 2005, was introduced in the House on March 15, 2005 
by Rep. Dennis Cardoza (D-CA) and 16 bipartisan cosponsors. The bill 
would make significant improvements to the critical habitat designation 
process and has received the strong backing of NAHB. This common-sense 
legislation passed the House Resources Committee during the 108th 
Congress with bipartisan support, and would benefit species, landowners 
and the Federal agencies charged with enforcing the ESA.

    Question 6.  Last year, the 9th Circuit issued the so-called 
Gifford Pinchot decision that invalidated the current definition of 
destruction or adverse modification under Interior's implementing 
regulations for the ESA. What impact has the 9th Circuit's Gifford 
Pinchot decision had on the ability or willingness of private 
landowners to take voluntary actions to protect species such as 
developing HCPs?
    Response. Simply put, the impact of this decision has been that 
private landowners are much more wary of investing the time and expense 
of developing and moving forward with HCPs given the uncertainty 
developers now face. Let me briefly go into more detail about why this 
decision is resulting in more uncertainty.
    This uncertainty is a result of the fact that Gifford Pinchot 
wrongly equated ``conservation'' with ``recovery.'' In Gifford Pinchot, 
the 9th Circuit equated the term ``conservation'' in the definition of 
critical habitat with the goal of achieving recovery. ``Conservation'' 
however, is defined in the ESA to mean ``all methods and procedures 
which are necessary to bring any [listed species] to the point at which 
[the Act's protections] are no longer necessary.''
    Thus, Congress clearly did not limit ``conservation'' to 
``recovery.'' Rather, Congress intended ``conservation'' to reference 
all levels of protection in the Act--ranging from the most narrow, such 
as ``take'' (Section 9) and ``jeopardy'' (Section 7), up to and 
including full-blown ``recovery.'' ``Adverse modification of critical 
habitat'' falls somewhere along this continuum of ESA protection but it 
is not synonymous with ``recovery.''
    It is appropriate to protect critical habitat to maintain stable 
species populations to ensure that a species survives which, in turn, 
is an ``essential'' component of ``recovery.'' However, it is a far 
different matter to do what the 9th Circuit did in Gifford Pinchot, and 
rule that Congress intended sweep into ``critical habitat'' a vast land 
mass that could, potentially, be used to allow the species to multiply 
and ``recover.''
    Congress did not intend to accomplish recovery in the ESA through 
critical habitat. This is not to say that Congress made no provision 
for the recovery of species. Section 4 prescribes the requirements for 
``recovery plans'' that FWS must develop and implement (after a 
species' listing) for the conservation and survival of endangered and 
threatened species. Recovery plans assist FWS in achieving its 
``principal goal,'' which is to ``return listed species to a point at 
which protection under the Act is no longer required.''
    Recovery plans are not regulatory in nature, i.e., they do not 
impose new restrictions on private parties. Rather, they establish 
criteria that are used to define ``recovery'' for a particular species, 
and use a variety of mechanisms, such as propagation, land acquisition, 
research, and agreements with Federal agencies or States, to achieve 
their recovery goal.
    Recovery plans place the financial and management burdens of 
recovery on society as a whole, as opposed to the regulatory burdens of 
species survival which are placed on landowners through critical 
habitat designations and the prohibitions of Sections 7 and 9 of the 
Act. Thus, ``a species [sic] long-term protection is properly addressed 
by a `recovery plan' developed for the `conservation and survival' of 
the species listed as endangered.'' However, it is clear from the 
structure of the ESA that recovery plans were never intended to have 
regulatory effect.
    If the terms ``adverse modification of critical habitat'' or 
``essential to conservation'' are the same as ``recovery,'' then 
recovery planning will have been transformed into a regulatory program 
``with the force of law''--in clear contravention of the ESA. So, 
following this decision, which has called the conservation obligation 
of critical habitat into question, home builders are loathe to commit 
to the HCP process knowing that a lawsuit will almost certainly be 
filed over the regulatory review and protection requirements of 
critical habitat.

    Question 7.  What impact, as a whole, has the Gifford Pinchot 
decision had on private property owners and their ability to complete 
Section 7 consultations on pending Federal permit or license 
applications?
    Response. One problem here has been that projects that have already 
undergone a rigorous approval process and subsequently received project 
approval are now being subject to separate lawsuits that threaten to 
undue the already agreed upon and approved plan. As I have mentioned 
previously, there is now tremendous uncertainty regarding pending 
permits, and their subsequent approval and validity.
                               __________
            Responses by Alan Foutz to additional Questions 
                              from Inhofe
    Question 1. In your testimony you mention that getting your members 
to participate in the program was a ``tough sell.'' What was the main 
impediment to having your members participate, and how did you get them 
to buy into the program? What can we in Congress do to provide willing 
farmers and ranchers the tools to help listed species recover on 
private lands?
    Response. If the mountain plover had been listed, producers would 
have been required to maintain critical habitat and drastically change 
farming practices. With this type of approach, producers would not be 
willing volunteers. One of the major impediments when it comes to 
endangered species is that producers do not trust the agencies for a 
fear of the ``big sticks.''
    The primary need for farmers and ranchers and other small 
landowners is greater flexibility to be able to help species recover on 
private lands.
    There is no viable program in the ESA for farmers and ranchers to 
engage in actions that help species or habitat. The only statutory 
``incentive'' program is habitat conservation planning, which is too 
costly and time consuming for farmers and ranchers, and is designed for 
one-time development projects rather than ongoing activities like 
farming and ranching.
    Statutory authorization for cooperative conservation programs is 
important to us, because it provides a shield against citizen suits. 
Administrative programs such as safe harbors are popular with many of 
our members, but because they are not authorized by law they are 
vulnerable to citizen lawsuits.
    An effective cooperative conservation program should provide a 
broad array of incentives for farmers, ranchers and other landowners to 
choose from. In the case of farmers and ranchers, there are many 
different types of concerns that they have with respect to their 
operations. Some are concerned about having to sell the farm or ranch 
to pay estate taxes: an estate tax credit for having a cooperative 
conservation agreement in place would be attractive to them. Some have 
cash flow problems; a cash payment or cost sharing would be attractive. 
Many others would be satisfied with removal of some ESA restrictions or 
streamlining ESA procedures. The broader array, the less the aggregate 
financial cost it is likely to be. One size program does not fit all.
    ``Jeopardy'' standards must also be adjusted for cooperative 
conservation programs. Currently they focus on short-term ``jeopardy,'' 
where landowners taking actions to improve habitat may create ``harm'' 
in the short term, so that there will be benefits in the long term. 
Consultations need to see past any short term harm and focus on long 
term benefits.
    Cooperative conservation programs need to be voluntary, provide for 
``incidental take'' like HCPs, provide assurances to the landowners 
that they will not be required to do more than they agreed to (no 
surprises), and they also need to insulate landowners from citizen 
lawsuits when they are acting in accordance with their agreement. Land 
that is part of an approved cooperative conservation agreement should 
also be excluded from critical habitat designation, because the 
``special management'' required for critical habitat is being provided 
by the conservation agreement.

    Question 2. Mr. Bean spoke about the need for closer coordination 
between Department of Agriculture Farm bill programs and endangered 
species programs in Commerce and Interior. Since you represent the 
farmers, could you provide some feedback on the idea of using 
agricultural-related financial incentives specifically to recover and 
conserve species?
    Response. Farm Bureau believes there are a multitude of current 
working lands programs within USDA that are already supporting species 
conservation. These programs include the: Environmental Quality 
Incentives Program (EQIP), Conservation Security Program (CSP), 
Grasslands Reserve Program (GRP), Farm and Ranch Land Protection 
Program (FRPP), Wildlife Habitat Incentive Program (WHIP) and Technical 
Assistance (TA).
    In fact, all of these programs have specific eligibility criteria 
included in the application process aimed at addressing wildlife 
related concerns.
    These programs are benefiting a variety of wildlife species by 
primarily incorporating the best conservation and management practices 
on lands under production, while improving water quality and creating 
or maintaining habitat in or around productive agricultural lands.
    While Farm Bureau is more focused on developing working lands 
programs, we also believe there is an important and integral role for 
targeted land retirement programs, such as the: Conservation Reserve 
Program (CRP), Continuous Conservation Reserve Program (CCRP), 
Conservation Reserve Enhancement Program (CREP), Farmable Wetlands 
Program (FWP) and Wetlands Reserve Program (WRP).
    We believe the current land retirement programs are creating, 
restoring and protecting several species; however, we believe with 
additional refinement the programs could do even better and produce 
even greater environmental benefits. Farm Bureau believes the first 
goal of Congress, the Department of the Interior and USDA should be to 
encourage the adoption of best management and conservation practices 
(e.g.,  residue management, riparian areas, terraces, etc.) to address 
the specific and identified resource concern(s). Only when those 
practices are deemed inadequate in addressing the identified concern(s) 
should lands be targeted for retirement.
    In looking at the CRP and wildlife habitat, we would urge the 
committee to consider the following:
    1) Targeting lands for enrollment where there is wildlife of 
critical local concern, particularly in circumstances that could lead 
to regulatory pressures. Landowners should also have assurances that 
temporary CRP enrollments will not lead to enhanced risk of regulation.
    2) A renewed focus on CCRP, which targets smaller parcels of lands, 
primarily adjacent to waterways.
    3) Encouraging and rewarding good management of lands once under 
enrollment. USDA should work with contract holders on ``maintenance 
management strategies'' that collaboratively benefit wildlife and the 
agricultural community, such as controlled burns, haying and grazing, 
noxious weed control and establishing adequate food plots. We must 
reinforce that ``enroll and abandon'' strategies are unacceptable.
    The question should be what financial investment Congress is 
willing to make in the future and how a focused, reasonable and 
performance-based strategy should be developed to address specific 
species concerns on a local and regional basis.
    In these times of tight budgets, we all must strive to narrow our 
focus and direct limited dollars to our highest priorities for 
wildlife. We would encourage the committee to further discuss:
    1) What the proper balance of funding should be for areas 
addressing endangered/rare/declining species issues versus areas 
wishing to establish general wildlife habitat?
    2) How will USDA better engage local and regional partners in 
identifying the greatest concerns and priorities, and getting ``the 
biggest environmental bang for the buck?''
    3) How can USDA conservation programs and DOI-imperiled species 
programs better coordinate with each other to achieve common wildlife 
objectives?

    Question 3. It is great to see farmers and others taking steps on 
their own, outside of financial incentives, to conserve a species, 
succeed in preventing its listing, and maintain free use of their land. 
That is a great success story. What would be some legislative steps we 
could take in reviewing this law that would encourage more proactive 
conservation practices such as these?
    Response. As stated above in response to question no. 1, farmers 
and ranchers need to have greater flexibility to be able to address 
species needs through conservation agreements. As currently written, 
the ESA is too rigid to allow private landowners to take actions to 
disturb species habitat that are necessary to enhance that habitat. The 
ESA provides flexibility to address needs of candidate species, like 
the mountain plover, but once a species is listed, the flexibility is 
lost.
    We believe that a broad array of incentives should be available 
that allow landowners to choose the one that best fits their need and 
goals. Such incentives might include direct payments, tax credits or 
other tax incentives, or the removal of disincentives and restrictions. 
Incentives might include working landscapes programs that allow a 
producer to provide habitat enhancements while continuing to conduct 
agricultural operations, or they might also include a set aside program 
similar to the Conservation Reserve Program.
    That does not mean that Congress would have to enact a lot of new 
programs. The landowner agreement program could be crafted broadly to 
provide the flexibility and innovation necessary to allow private 
landowners to recover species on their lands. We believe two basic 
types of programs could be legislated:
    Voluntary Landowner Recovery Agreements: This would be a program 
for listed species similar to the current EQIP or WHIP programs. Rather 
than legislating a number of new programs, we believe that a simple, 
broad authorization that provides flexibility to the Secretary and the 
landowner would be the least complicated way to proceed.
    Agreements would be voluntary with landowners and would have to 
benefit species. The program and agreements would be flexible for both 
Agency and landowner to allow both to accomplish recovery goals for the 
species and land management goals for the landowner. Landowners could 
receive cost share money for habitat improvements, and might also be 
given assurances that if their actions in furtherance of the program 
might accidentally harm a listed species, there would be no liability 
(``incidental take''). ``Incentives'' could either be direct payments, 
cost share, tax or other incentives, or the removal of disincentives, 
such as providing incidental take protection or limiting consultation 
for actions in furtherance of an agreement. There is a current Interior 
program for Candidate Conservation Agreements with Assurances that 
could be extended to cover listed species as well.
    Voluntary Critical Habitat Reserve Program: The Critical Habitat 
Reserve Program would be a voluntary program, similar to the current 
Conservation Reserve Program. It would establish partnerships with 
willing landowners or operators either to set aside land (similar to 
CRP) for species habitat, or to actually manage enrolled lands for 
species habitat. The latter would be better, because it would benefit 
the species more as well as allow the landowner to achieve operational 
goals. There would be annual payments, other incentives such as removal 
of red tape or lessening restrictions, or possibly cost share for 
habitat improvements. The legislation would describe contract terms and 
conditions, provide length of contracts, etc. The program would be 
limited to privately owned lands designated as critical habitat, simply 
in order to draw some boundaries and limits on the program. The program 
would be administered by the Secretary of Interior.

    Question 4. Cooperative conservation certainly produces great 
results and Congress should encourage this type of behavior. In your 
opinion, does the ESA need an entirely new conservation mechanism or 
should the administrative programs put in place over the years simply 
be codified?
    Response. We believe that the administrative programs that have 
been put in place during the past several years deserve to be continued 
and should be codified. Safe Harbor agreements, Candidate Conservation 
agreements with Assurances and No Surprises are all very innovative 
programs. If for no other reason, they should be continued to provide 
certainty for the people who already use them. They should be codified 
to give them the explicit authorization and approval to insulate them 
from lawsuits.
    But we also believe that additional authorization is necessary. As 
innovative as these administrative programs are, they were still 
cobbled together to fit within the strictures of the current ESA.
    Congress should not be bound by the current law in fashioning 
conservation mechanisms. The law should be changed to fit the programs, 
not the other way around.
    As mentioned above, Congress should explicitly authorize a broad 
array of landowner incentives that include payments, tax credits and 
incentives, and removal of disincentives and red tape. It should then 
authorize a simple program of allowing for voluntary recovery contracts 
with the Fish & Wildlife Service and National Marine Fisheries Service 
to accomplish recovery goals and objectives for the different species, 
using any or all of the incentives that have been authorized.
                               __________
            Responses by Alan Foutz to additional Questions 
                         from Senator Jeffords
    Question 1. Given your support for short-term voluntary agreements 
to protect critical habitat, can you explain how such agreements would 
ensure the long-term survival of an endangered species?
    Response. The Endangered Species Act now requires that the status 
of listed species be reviewed every 5 years to determine whether the 
species should be re-classified or de-listed. The 5 year term we 
suggest for recovery agreements is consistent with that five year 
status requirement.
    One of the problems with the current Act is that once listed, 
species rarely are de-listed, even if they have met recovery goals. 
Bald eagles were declared by President Clinton to have been recovered 
in the late 1990's, but the species has not yet been de-listed.

    Question 2. Are there any specific incentives for private 
landowners that you would like to see included in the Endangered 
Species Act?
    Response. We believe that a broad array of incentives should be 
available that allow landowners to choose the one that best fits their 
need and goals. Such incentives might include direct payments, tax 
credits or other tax incentives, or the removal of disincentives and 
restrictions. Incentives might include working landscapes programs that 
allow a producer to provide habitat enhancements while continuing to 
conduct agricultural operations, or they might also include a set aside 
program similar to the Conservation Reserve Program.
    That does not mean that Congress would have to enact a lot of new 
programs. The landowner agreement program could be crafted broadly to 
provide the flexibility and innovation necessary to allow private 
landowners to recover species on their lands. We believe two basic 
types of programs could be legislated:
    Voluntary Landowner Recovery Agreements: This would be a program 
for listed species similar to the current EQIP or WHIP programs. Rather 
than legislating a number of new programs, we believe that a simple, 
broad authorization that provides flexibility to the Secretary and the 
landowner would be the least complicated way to proceed.
    Agreements would be voluntary with landowners and would have to 
benefit species. The program and agreements would be flexible for both 
Agency and landowner to allow both to accomplish recovery goals for the 
species and land management goals for the landowner. Landowners could 
receive cost share money for habitat improvements, and might also be 
given assurances that if their actions in furtherance of the program 
might accidentally harm a listed species, there would be no liability 
(``incidental take''). ``Incentives'' could either be direct payments, 
cost share, tax or other incentives, or the removal of disincentives, 
such as providing incidental take protection or limiting consultation 
for actions in furtherance of an agreement. There is a current Interior 
program for Candidate Conservation Agreements with Assurances that 
could be extended to cover listed species as well.
    Voluntary Critical Habitat Reserve Program: The Critical Habitat 
Reserve Program would be a voluntary program, similar to the current 
Conservation Reserve Program. It would establish partnerships with 
willing landowners or operators either to set aside land (similar to 
CRP) for species habitat, or to actually manage enrolled lands for 
species habitat. The latter would be better, because it would benefit 
the species more as well as allow the landowner to achieve operational 
goals. There would be annual payments, other incentives such as removal 
of red tape or lessening restrictions, or possibly cost share for 
habitat improvements. The legislation would describe contract terms and 
conditions, provide length of contracts, etc. The program would be 
limited to privately owned lands designated as critical habitat, simply 
in order to draw some boundaries and limits on the program. The program 
would be administered by the Secretary of Interior.
                               __________
            Responses by Alan Foutz to additional Questions 
                          from Senator Chafee
    Question 1. I understand that Habitat Conservation Plans (HCPs) are 
difficult for farmers, ranchers, and other small landowners to utilize 
for a number of reasons including cost, length of time to complete, and 
rigidity in terms of being more ideal for one time development or tree-
cutting as opposed to ongoing activities such as ranching and farming. 
In your experience, have any farmers attempted to utilize the HCP 
concept for their lands?
    Response. I am not personally aware of any farmers that have used 
HCPs on their private lands, but I am told that there are a handful of 
individual farm HCPs in California and Florida. In some cases, these 
individual HCPs may have been used because there were no other tools 
available, or other tools such as Safe Harbor were not known to the 
farmer.
    There is a group of landowners in southern Colorado that has been 
working on a HCP for the willow flycatcher, but I do not know where 
their effort stands.

    Question 2. What could be done to ensure that HCPs are more 
accessible to farmers?
    Response. You correctly state the main problems with individual 
farmer HCPs in question no. 1. They are expensive, time consuming, and 
better suited for one-time development. In addition, with the lawsuits 
and uncertainty over the effectiveness of the No Surprises policy, 
farmers cannot be assured that they will not be required to do more 
than they agreed to in the HCP. Other issues for farmers and ranchers 
include the HCP focus on mitigation as the appropriate conservation 
tool, and the requirement that there be sufficient funding available 
for implementation of the HCP.
    Some thoughts on improving the HCP process to make it more 
accessible to farmers and ranchers:
    a. Current law is fairly rigid in the requirements for an HCP and 
is very traditional in its implementation of those requirements. The 
law needs to become more flexible to allow the process to work for 
farmers and ranchers and small landowners. ``Mitigation'' and 
``funding'' requirements especially need to be addressed.
    b. Change the focus and meaning of the ``mitigation'' requirement 
from set-aside to working landscapes. In other words, ``mitigation'' 
should be defined in terms of ongoing habitat enhancements instead of 
set-asides. For one time development, habitat set-asides might be more 
appropriate because the development is less likely to be able to co-
exist with the species and habitat than ongoing farm and ranch 
activities. Also, one-time development can more effectively set-aside 
land for mitigation than farmers and ranchers. Farmers and ranchers 
cannot afford to set aside their land for mitigation, because without 
their land they cannot operate. The law might emphasize, for example, 
that Best Management Practices designed to enhance habitat should be 
deemed sufficient ``mitigation.''
    c. ``Low effect'' HCPs are provided in regulatory guidance, and the 
concept should be expanded and applied to farmers and ranchers. Because 
they involve ongoing activities that have less habitat impact generally 
than homebuilding or tree cutting, farm and ranch operations should not 
be subject to the same scientific demands as one-time development 
projects. In addition, the application and approval process for low-
effect HCPs should be streamlined to achieve quicker approval.
    d. In order to ease some of the data requirements that are often 
burdensome to farmers and ranchers and other individual landowners, 
scientific data from HCPs and other sources should be available to HCP 
applicants to reduce the likelihood of expensive duplication of effort. 
Such a requirement (while maintaining appropriate confidentiality) 
would help make HCPs more affordable for farmers and ranchers.
    e. Funding issues--Current law requires assurance of sufficient 
funding for implementation of an HCP as a condition of approval. The 
law would have to provide that ``funding'' could be waived for ongoing 
habitat enhancement using a working landscapes approach. Another 
approach would be to provide a grant program to farmers, ranchers and 
other small landowners for HCP planning and implementation.
    f. Land that is enrolled in an HCP should be exempt from critical 
habitat designation. Critical habitat is defined in terms of land 
``which may require special management considerations or protection.'' 
It is our belief that an HCP already provides that ``special management 
and protection'' and should not be included in critical habitat. The 
same should apply to all cooperative conservation programs.
    g. The ``No Surprises'' policy must be codified to provide 
landowners with adequate assurances that they will not be required to 
do more than they originally agreed to do under the HCP. A big concern 
of farmers and ranchers is that once they enter into an agreement, the 
government will come back at a later time and tell them they have to do 
more. An effective ``No Surprises'' policy is a key for all cooperative 
incentive programs.
    h. To streamline the HCP process, we suggest establishing a one-
stop consultation for all a farmer's and rancher's programs that are 
affected by an HCP. Once this consultation is completed, there should 
not be any further consultation for any actions taken in furtherance of 
the HCP.

    Question 3. Based on your experience with the mountain plover 
program in Colorado, are there any other species conservation efforts 
that you are participating in that have proved beneficial to species in 
your State or region?
    Response. The mountain plover project was the first project of its 
kind the Colorado Farm Bureau and its members initiated and 
participated in. Individual farmers and ranchers are the original 
stewards of the land. Agricultural producers are maintaining and 
improving habitat to conserve species through normal farming and 
ranching practices every day.
    Perhaps due to the experience with the mountain plover, our members 
are more willing to enter into other organized conservation programs as 
well, such as the conservation effort to conserve the greater sage 
grouse that is currently underway across the West.

    Question 4. What types of incentives do you believe need to be 
provided to farmers in order to ensure habitat for listed species is 
enhanced on privately owned lands?
    Response. We believe that a truly effective incentive program must 
contain a broad array of incentives for farmers, ranchers and other 
small landowners to choose from. Farmers and ranchers have different 
concerns regarding their operations--some are concerned about passing 
their farm to heirs and payment of high estate taxes, some have cash 
flow problems, while others are concerned about restrictions placed on 
their continuing ability to operate.
    For that reason, an effective cooperative conservation program 
should contain: direct payments or cost sharing, tax credits or other 
tax incentives, and the removal of disincentives or restrictions. One 
size should not fit all.
    But all such programs should have the same core elements. Any 
incentive program should provide: (1) an effective ``No Surprises'' 
policy, (2) incidental take protection, (3) exemption from critical 
habitat designation, (4) be voluntary with the landowner and (5) 
flexibility for the landowner.
    We believe two basic types of programs could be legislated:
    Voluntary Landowner Recovery Agreements: This would be a program 
for listed species similar to the current EQIP or WHIP programs. Rather 
than legislating a number of new programs, we believe that a simple, 
broad authorization that provides flexibility to the Secretary and the 
landowner would be the least complicated way to proceed.
    Agreements would be voluntary with landowners and would have to 
benefit species. The program and agreements would be flexible for both 
Agency and landowner to allow both to accomplish recovery goals for the 
species and land management goals for the landowner. Landowners could 
receive cost share money for habitat improvements, and might also be 
given assurances that if their actions in furtherance of the program 
might accidentally harm a listed species, there would be no liability 
(``incidental take''). ``Incentives'' could either be direct payments, 
cost share, tax or other incentives, or the removal of disincentives, 
such as providing incidental take protection or limiting consultation 
for actions in furtherance of an agreement. There is a current Interior 
program for Candidate Conservation Agreements with Assurances that 
could be extended to cover listed species as well.
    Voluntary Critical Habitat Reserve Program: The Critical Habitat 
Reserve Program would be a voluntary program, similar to the current 
Conservation Reserve Program. It would establish partnerships with 
willing landowners or operators either to set aside land (similar to 
CRP) for species habitat, or to actually manage enrolled lands for 
species habitat. The latter would be better, because it would benefit 
the species more as well as allow the landowner to achieve operational 
goals. There would be annual payments, other incentives such as removal 
of red tape or lessening restrictions, or possibly cost share for 
habitat improvements. The legislation would describe contract terms and 
conditions, provide length of contracts, etc. The program would be 
limited to privately owned lands designated as critical habitat, simply 
in order to draw some boundaries and limits on the program. The program 
would be administered by the Secretary of Interior.
    In developing landowner incentives, the key is to provide 
flexibility to allow the Department and the landowner to both achieve 
their goals.
                               __________
            Responses by Alan Foutz to additional Questions 
                         from Senator Murkowski
    Question 1.  The prohibitions on taking and the related threat of 
criminal or civil prosecution are the ``big sticks'' in the ESA with 
respect to the treatment of issues that occur on private lands. Many 
property owners view them with understandable apprehension. Do you see 
a need or benefit to amending the law to better define the situations 
in which these ``sticks'' should actually be used?
    Response. Yes. Enforcement activities should be better defined in 
the Endangered Species Act. Producers' livelihoods are at stake in 
situations including predation, and while takings are sometimes 
permitted, the rules and regulations aren't made clear. For this 
reason, producers are fearful of protecting their livestock from 
predation and they suffer significant losses as a result.
    We request that in cases where species are reintroduced, livestock 
producers must be held ``harmless'' for any actions taken by them to 
protect their private property if it is preyed upon by the introduced 
predator species.
    In addition, the designation of critical habitat could create 
issues for farms. For instance, the designation could cause farmers to 
have to drastically change their farming practices rather than 
participating in a cooperative effort to enhance species habitat.
    There are four different areas where ``take'' and its meaning might 
be clarified.
    a. The definition of ``take'' is too broad and uncertain. ``Take'' 
not includes killing or injuring a species, but also ``harming'' or 
``harassing'' a species. The meaning of those terms is almost without 
limit. For example, the legislative history says that bird watching 
could constitute a ``take'' in some circumstances. The uncertainty in 
the definition invites lawsuits against innocent landowners. The 
definition of what is an illegal ``take'' needs to be narrowed to 
activities that actually kill or injure a species, or cause it to be 
killed or injured.
    b. The definition of ``take'' needs to exclude habitat 
modification. The Act was never intended to prohibit activities 
modifying habitat not designated as critical as a ``take'' absent the 
death or injury of a member of the species, yet it has been interpreted 
as such. The administrative definition of ``harm'' walks a fine line by 
including actions that affect the breeding, feeding or sheltering of a 
species, but all it does is create more uncertainty. The civil and 
criminal penalties are so severe that any uncertainty in the definition 
of ``take'' unfairly limits landowners and inhibits otherwise lawful 
behavior for fear of violating the ESA. The Act should be amended to 
exclude from the definition of ``take'' habitat modification where 
there is no evidence of killing or injuring a member of a listed 
species.
    c. Penalties can be imposed on a person who ``takes'' a listed 
species regardless of whether it was intended or not. Interestingly, 
intent is a requirement for an action against humans, but not for 
actions against listed species. Intent should be added as a requirement 
for imposition of penalties for ``taking'' a listed species. Accidental 
``taking'' of a species in the course of otherwise lawful activities 
should not result in civil or criminal penalties.
    d. Currently, the ``taking'' of one member of a species constitutes 
an actionable ``take'' that can lead to civil or criminal penalties. 
Granted that in some cases there are only a few remaining members so 
that taking one would jeopardize the species, but that is not true in 
the vast number of cases. We suggest that the threshold for ``take'' 
violations be amended, or that ``incidental take'' be permitted for 
listed species.

    Question 2. In your view, would it improve the ESA to include 
incentives for landowners to manage their lands and activities in ways 
that are more hospitable to listed species? If so, what kind of 
incentives do you think might be appropriate?
    Response. Over 70 percent of listed species occur to some extent on 
private lands. About 35 percent of listed species--over 400--live 
exclusively on private lands. Private landowner cooperation, therefore, 
is critical to the success of the Endangered Species Act.
    The Act is currently enforced through a series of prohibitions and 
restrictions--negative enforcement that does not help species recovery. 
A cooperative conservation program where landowners agree to enhance 
species habitat on their lands provides positive, active management for 
the species that is much better for the species than the current 
system. Species benefit more from landowners taking action because they 
want to, not because they have to. Incentive type programs allow the 
landowner to deal with the ESA on his/her own terms. Properly 
implemented incentive programs help Agency and landowner find the 
middle ground that benefits both species and landowner, providing a 
``win-win'' situation for all.
    The ESA would be improved if it included incentives for landowners 
to manage their lands and activities as related to listed species. 
However, incentives aren't the Response. alone. Regulations need to be 
relaxed in order to provide flexibility to producers to enhance 
habitat. We recommend guaranteed ``safe harbor'' be offered to private 
landowners who voluntarily provide habitat for declining, threatened or 
endangered species, including situations when the landowner wishes to 
put the land in habitat back under agricultural production.
    We support the voluntary participation of agricultural producers in 
any species recovery program. Any such voluntary effort should be 
protected by legislation to hold the participant harmless in case of 
disease, natural predation, or natural disaster which negatively 
impacts the species in question.
    We believe that the goal of any species recovery program should be 
species recovery, not interference with normal agricultural operations. 
Each individual operator should be allowed maximum flexibility in 
adjusting his operation to aid species recovery.
    We support incentive payments for conservation of endangered 
species. We support incentive payments for wildlife conservation only 
in those areas designated as critical habitat for species survival. 
Critical habitat areas should be first designated on public lands.
    We believe that a truly effective incentive program must contain a 
broad array of incentives for farmers, ranchers and other small 
landowners to choose from. Farmers and ranchers have different concerns 
regarding their operations--some are concerned about passing their farm 
to heirs and payment of high estate taxes, some have cash flow 
problems, while others are concerned about restrictions placed on their 
continuing ability to operate.
    For that reason, an effective cooperative conservation program 
should contain: direct payments or cost sharing, tax credits or other 
tax incentives, and the removal of disincentives or restrictions. One 
size should not fit all.
    But all such programs should have the same core elements. Any 
incentive program should provide: (1) an effective ``No Surprises'' 
policy, (2) incidental take protection, (3) exemption from critical 
habitat designation, (4) be voluntary with the landowner and (5) 
flexibility for the landowner.
    We believe two basic types of programs could be legislated:
    Voluntary Landowner Recovery Agreements: This would be a program 
for listed species similar to the current EQIP or WHIP programs. Rather 
than legislating a number of new programs, we believe that a simple, 
broad authorization that provides flexibility to the Secretary and the 
landowner would be the least complicated way to proceed.
    Agreements would be voluntary with landowners and would have to 
benefit species. The program and agreements would be flexible for both 
Agency and landowner to allow both to accomplish recovery goals for the 
species and land management goals for the landowner. Landowners could 
receive cost share money for habitat improvements, and might also be 
given assurances that if their actions in furtherance of the program 
might accidentally harm a listed species, there would be no liability 
(``incidental take''). ``Incentives'' could either be direct payments, 
cost share, tax or other incentives, or the removal of disincentives, 
such as providing incidental take protection or limiting consultation 
for actions in furtherance of an agreement. There is a current Interior 
program for Candidate Conservation Agreements with Assurances that 
could be extended to cover listed species as well.
    Voluntary Critical Habitat Reserve Program: The Critical Habitat 
Reserve Program would be a voluntary program, similar to the current 
Conservation Reserve Program. It would establish partnerships with 
willing landowners or operators either to set aside land (similar to 
CRP) for species habitat, or to actually manage enrolled lands for 
species habitat. The latter would be better, because it would benefit 
the species more as well as allow the landowner to achieve operational 
goals. There would be annual payments, other incentives such as removal 
of red tape or lessening restrictions, or possibly cost share for 
habitat improvements. The legislation would describe contract terms and 
conditions, provide length of contracts, etc. The program would be 
limited to privately owned lands designated as critical habitat, simply 
in order to draw some boundaries and limits on the program. The program 
would be administered by the Secretary of Interior.

    Question 3. Current law allows anyone, even the most radical animal 
rights or environmental group, to take individual citizens to court for 
alleged ``taking'' even where the rationale is extremely flimsy. In 
your view, has this practice been abused?
    Response. We are aware of instances where we believe that it has 
been abused. In some cases, the ESA has been used to try to achieve 
other objectives. We have also heard of situations where suit has been 
threatened and concessions extorted in exchange for dismissing or not 
filing the lawsuit.
    The excessive amount of ESA litigation is one of the biggest 
challenges facing effective implementation. Too much time and money is 
spent defending legal challenges, taking away from efforts that could 
be helping species recovery.

    Question 4. What suggestions do you have for providing landowners 
with an assurance that they are not going to become a victim of this 
practice sometime in the future?
    Response. There are two different aspects to the problem that 
litigation poses for farmers and ranchers. The first is the issue of 
direct litigation against them through citizen suits. This can be 
remedied by requiring that only the Agency can take enforcement actions 
against private parties. Citizen suits would be limited to suits 
against the Agency for enforcement, not against the individual.
    The second problem arises in the case where suit is filed against 
an Agency only, but an individual farmer or rancher is the ``real party 
in interest'' who will be affected by the outcome. An example might be 
where the Forest Service is sued for failure to consult before issuing 
grazing permits in a particular area. The ranchers receive no notice of 
the suit, and are suddenly notified that they must remove their 
livestock. This situation can be remedied by requiring that the 60 
notice of intent to sue that must be filed prior to suing be noticed to 
the private parties as well. This requirement might be satisfied by the 
Department of the Interior posting all such notices on their website in 
a timely manner.

    Question 5. Some outside parties have suggested that we don't need 
to update or improve the ESA but just need to comply with the existing 
law and fully fund ESA programs. As representatives of landowners and 
companies who have to comply with the ESA on a day to day basis, do you 
agree that the ESA, in its present form, is sufficient?
    Response. The experience of farmers and ranchers with the 
Endangered Species Act strongly suggests that changes in the law are 
necessary. Of the more than 1300 total species listed under the Act, 
less than 20 have been recovered and de-listed. For a law that has 
imposed so many restrictions on farmers, ranchers and other private 
property owners, and been the subject of so many lawsuits to save and 
protect species, this result is completely unsatisfactory. The farmers 
and ranchers who have had to endure these restrictions deserve more for 
their forbearance.
    The ESA has done a good job in putting species on the list. It now 
needs to also focus on getting species off the list. For this, a new 
approach is needed. Command and control regulation and land use 
restrictions are not working. Moreover, they do nothing to actively 
manage or improve habitat. Focus on land use restrictions as the way to 
help species ignores the habitat improvement that is necessary for a 
species to recover, and fails to address the real reasons for a species 
decline. For example, for all of the land use restrictions against 
cutting old growth timber in the Pacific Northwest, research finds that 
the northern spotted owl is still declining. The issue is competition 
from the barred owl, not habitat loss.
    With over 70 percent of listed species on private lands, we believe 
that the cooperation of private landowners is the key to ESA success. 
The ESA must turn from a statute of regulation to one of cooperation. 
With appropriate assistance and incentives, landowners can recover 
species on their lands.
    Another significant problem with the ESA is that it is too 
inflexible. It contains specific detailed procedures with specific 
timeframes. It also contains very specific and complete prohibitions 
against taking, and very narrow exceptions. The only exception is 
Habitat Conservation Planning, which was designed for one time 
development of land and not to address ongoing activities such as 
farming or ranching. Additional flexibility must be built into the Act 
to allow more cooperative conservation opportunities and also the 
flexibility needed to make those opportunities available to different 
private landowners.
    Many of the procedures and timelines have not stood the test of 
time. Court decisions have rendered many procedures obsolete or 
duplicative. For example, critical habitat was enacted in 1982 as a 
means of protecting habitat necessary for a species to survive until 
such time as it could recover. It provided certain Agency discretion as 
well as specific time deadlines for designation. Subsequent court 
decisions have interpreted the ESA to protect nearly all habitat as if 
it were critical, rendering the designation of critical habitat as 
redundant. Time deadlines have proven unrealistic, and numerous 
lawsuits have been filed over missed deadlines and failure to 
designate.
    Consultation requirements are another continuing source of 
litigation. Procedures and time deadlines need to be adjusted to make 
the process more workable and more meaningful.
    Listing is another area where there are problems. The Fish & 
Wildlife Service has virtually lost any discretion to determine whether 
a species should be listed. A ``not warranted'' determination is 
challenged in court, and if that fails, another suit is filed. The 
Canadian lynx was not listed until after the third lawsuit. Changes to 
this procedure need to be made.
    Congress also needs to re-think the listing of ``distinct 
population segments'' of a species. Using this designation, the Agency 
can list specific populations of an otherwise healthy species simply on 
the basis that the specific population might not be healthy. This has 
led to listing of salmon and steelhead populations in each individual 
river or tributary on the basis that the population in each river is 
different. Most salmon are listed under the Act, yet it continues to be 
served in restaurants. It also leads to listing of marginal populations 
on the fringes of otherwise healthy populations in other countries. For 
example, the pygmy owl is plentiful in Mexico, but the northern fringe 
in Arizona was listed. Gray wolves are plentiful in Canada and Alaska, 
yet endangered in the lower 48.
    There are several other areas that need to be addressed in 
amendments to the Act. Additional funding will not solve the problems--
it will only exacerbate the problems resulting from flawed procedures. 
More money will perpetuate the problems with critical habitat, 
consultation, listing and landowner restrictions without solving them.

    Question 6. In your testimony you mention that the Colorado program 
never would have happened if the mountain plover had already been 
listed. What did you mean by that, and what, in your opinion, has to be 
changed in the Endangered Species Act in order to have the same type of 
program for listed species?
    Response. If the mountain plover had already been listed, producers 
would have been required to maintain critical habitat and drastically 
change farming practices. The rigid prohibitions against ``take'' and 
the consultation requirements would have made it virtually impossible 
to devise a program as flexible as the one that we did.
    In addition, with this type of rigidity, producers would not be 
willing volunteers. One of the major impediments when it comes to 
endangered species is that producers do not trust the agencies for a 
fear of the ``big sticks.'' The ESA needs to provide additional 
flexibility to allow the same type of approach for listed species as 
Colorado Farm Bureau and its partners were able to use for the not-yet-
listed mountain plover.

    Question 7. How has the Colorado program benefited the mountain 
plover?
    Response. The resulting cooperative effort allowed for the 
successful study of the mountain plover. More than 300,000 acres of 
private land were allowed to be studied by Colorado Farm Bureau 
members. The Colorado Natural Heritage Program, a non-profit, non-
regulatory organization, and CSU conducted the research in cooperation 
with the U.S. Geological Survey and the U.S. Fish and Wildlife Service.
    The results were very different than the assumptions that had been 
made about the mountain plover. Rather than cultivated land being 
harmful to the species and encroaching on the plover's habitat, 
research indicated that Mountain Plovers do in fact occupy and nest on 
cultivated fields and often prefer cultivated fields to short grass 
prairie. Some tillage and planting activities do disturb nests, while 
other activities do not. However, the research also found that fledging 
success rates are roughly the same on cultivated fields as on native 
short grass prairie. Had the land use restrictions proposed at the time 
of the listing proposal gone into effect, the effects would have been 
to decrease plover habitat and fledging rather than helping it recover.
    Due to the cooperative efforts by the U.S. Fish and Wildlife 
Service, State of Colorado and landowners, the Mountain Plover was not 
added to the Endangered Species list.
    Landowners are continuing to allow non-governmental biologists to 
flag nests on fields prior to cultivation and are taking it upon 
themselves to avoid destroying nests by driving around them. Research 
on the plover continues as well as a very aggressive landowner 
education and outreach effort.
                               __________
      Responses by Marshall P. Jones Jr. to additional Questions 
                          from Senator Inhofe
    Question 1. Your testimony included lots of examples of how the 
current incentive structure has experienced tremendous success. You 
specifically cite Oklahoma as one of those successes. At our previous 
hearing, Judge Manson discussed how litigation is a burden on the 
Service. Has litigation had an adverse impact on the Service's efforts 
to promote voluntary incentive programs? Have judicial decisions 
undermined or called into question the existence of some of your 
practices? Are resources being diverted from these programs to help pay 
for litigation?
    Response. A Congressionally-set ceiling on spending related to 
listing and critical habitat actions limits the impact of the listing 
and critical habitat litigation workload on other programs that promote 
voluntary conservation actions such as Endangered Species Grants, 
Recovery, and Candidate Conservation. However, judicial decisions can 
continually change our priorities within the listing program and some 
decisions result in the use of program funds to pay attorney fees. 
Attorney fees may be available to successful litigants under either the 
ESA citizen suit provision or the Equal Access to Justice Act, 
depending on the cause of action underlying the lawsuit. Awards payable 
under the Equal Access to Justice Act may result in the payment of fees 
from program funds.

    Question 2. Absent specific statutory language to do so, the Fish 
and Wildlife Service has put into place several programs to try to 
encourage private landowners to conserve and recover endangered and 
threatened species on their lands. In the experience of the Service, 
what have been some of the reasons for non-participation on the part of 
private landowners? What tools can Congress provide to ensure that 
these programs thrive and are successful?
    Response. Most of these volunteer programs are relatively new and 
many landowners appear to be unaware of their existence. Continued 
Congressional support for tools identified in the President's annual 
budget that assist the Service to work with other Federal agencies, 
State and local government agencies, non-governmental organizations, 
trade organizations and other partners to inform the public of these 
programs and their benefits, and assist landowners who are interested 
in participating, will go a long way to ensure these programs are 
effective and are more widely used.

    Question 3. Clearly the voluntary conservation programs, such as 
the Partners for Fish and Wildlife program, have been hugely successful 
in establishing habitat for all kinds of species, endangered and non-
endangered alike. In the Service's experience, are programs like this 
superior to the designation of critical habitat and does the 
establishment of critical habitat interfere with the success of these 
programs? Is it the practice of the service to exclude lands covered by 
an incentive program from critical habitat designation?
    Response. In 30 years of implementing the ESA, the Service has 
found that the designation of statutory critical habitat provides 
little additional protection to most listed species. The Service 
addresses the habitat needs of listed species through other 
conservation partnerships and programs, such as the Landowner Incentive 
Program. We have had numerous instances of landowners with ongoing 
cooperative efforts who have threatened to cease cooperation and their 
conservation efforts if their lands were designated as critical 
habitat. The Service regularly excludes lands from critical habitat 
designations pursuant to section 4(b)(2) of the ESA if they are covered 
by a conservation program in which the benefits of excluding the lands 
outweigh the benefits of including the lands in the designation.
                               __________
      Responses by Marshall P. Jones Jr. to additional Questions 
                         from Senator Jeffords
    Question 1. In addition to protecting habitat for endangered 
species, in your testimony you state that the Fish and Wildlife Service 
has incentive programs for invasive species. You cited the Private 
Stewardship Grants and gave the example of a project in Hawaii that is 
removing invasive species and restoring native plants. Are a large 
percentage of those grants used for invasive and native species 
control? What other incentives does the Fish and Wildlife Service have 
for controlling invasive species and restoring native species?
    Response. Approximately one-third of the fiscal year (FY) 2004 
Private Stewardship Grant Program awards were provided for projects 
that specifically addressed exotic and invasive species control or 
removal. Many of the financial assistance programs offered through the 
Service, such as Partners for Fish and Wildlife, provide funding to 
address exotic and invasive species control. In addition, the Service 
has staff located in the Aquatic Invasive Species Branch in Washington, 
as well as invasive species coordinators for National Wildlife Refuge 
lands, dedicated to addressing exotic species concerns and the control 
of invasive species.

    Question 2. Is there more that the Administration could do to 
encourage private landowner incentives for conservation of listed 
species, without legislative changes to the Endangered Species Act? If 
so, what would they be?
    Response. The Administration fully supports conservation incentives 
for private landowners through the Cooperative Conservation Initiative, 
a host of Department of the Interior financial assistance programs, and 
various landowner conservation tools (e.g.,  Habitat Conservation Plan 
(HCP), Safe Harbor Agreement (SHA), Candidate Conservation Agreement 
with Assurances (CCAA), and conservation banking) designed to foster 
citizen stewardship through voluntary conservation activities. These 
incentive programs do not require legislative changes to the Endangered 
Species Act and have proven to be both popular and effective 
conservation tools. To further encourage landowners, we are 
continuously identifying ways to make the public more aware of these 
programs and to streamline the processes involved to make it even 
easier for landowners to use them.
                               __________
      Responses by Marshall P. Jones Jr. to additional Questions 
                          from Senator Chafee
    Question 1. One of the concerns expressed in relation to Federal 
incentives for species protection on private lands is the length of 
time and financial burden placed on landowners in working with the 
Service to develop and implement Habitat Conservation Plans and other 
conservation agreements. How does the Fish and Wildlife Service tackle 
these issues when encouraging private landowners, and particularly 
smaller landowners, to utilize voluntary conservation measures for 
species protection?
    Response. The Service encourages private landowners to work with us 
at an early stage in their project so we can assist them in selecting 
the appropriate program (e.g.,  Habitat Conservation Plan (HCP), Safe 
Harbor Agreement (SHA), Candidate Conservation Agreement with 
Assurances (CCAA), and conservation banking), identifying grant funding 
opportunities for their particular situation, and informing them of the 
processes involved. The Service also provides technical assistance to 
landowners to design conservation activities and obtain grants that 
provide financial assistance for completing the planning process; this 
can be particularly helpful to smaller landowners.

    Question 2. In the development and implementation of Habitat 
Conservation Plans (HCPs) and other conservation agreements on private 
lands, how does the designation of new critical habitat for species 
impact conservation agreements already in place?
    Response. It has been our view that areas not in need of special 
management considerations or protections are outside the definition of 
critical habitat. For that reason, we exclude from critical habitat 
areas that adequately manage for the species concerned. This has 
allowed the Service to exclude from critical habitat lands covered by 
HCPs in effect or in draft form on the date of the final critical 
habitat designation, starting with the final rule designating critical 
habitat for the coastal California gnatcatcher in 2000.

    Question 3. In your testimony, you mention the future potential for 
conservation banks to protect habitat for species on a broader-scale 
and a more consistent basis. Under what current Fish and Wildlife 
Service programs would private landowners purchase mitigation credits 
to go toward a conservation bank? How do conservation banks ensure 
habitat protection for species in a more comprehensive fashion?
    Response. Private landowners seeking incidental take authorization 
for listed species through the Endangered Species Act (ESA) section 7 
consultation or section 10 incidental take permits for HCPs may be 
eligible to purchase mitigation credits in a conservation bank. 
Whenever a conservation bank will achieve equivalent or greater 
benefits for the species, private landowners are encouraged to purchase 
credits in a conservation bank rather than attempt to provide 
mitigation on their own lands. Conservation banks are generally large 
mitigation sites that are well protected, well managed, and well 
funded; thus they provide increased protection for species and cost 
much less per acre to protect and manage than smaller, single project 
mitigation sites.

    Question 4.  Many Habitat Conservation Plans (HCPs) are designed to 
last long time periods, some as long as 50 to 99 years. If during that 
time the science suggests that a species is in decline, how would 
adaptive management be used to ensure that HCPs are reviewed and 
altered to protect species? What happens if an HCP is not working to 
protect species even after changes are made?
    Response. In conjunction with adaptive management, species 
monitoring is an important component of HCPs. Typically, triggers or 
thresholds are established for monitoring that, if reached, would 
result in an appropriate management response to prevent a significant 
decline in species from occurring. However, if a significant decline is 
detected, HCPs allow for additional changes in management through 
changed circumstances. These changes can include those detailed in the 
HCP or additional changes as agreed to by the permittee and the 
Service. In addition, the Service has issued Incidental Take Permit 
Revocation Regulations that describe circumstances when permits may be 
revoked, which are codified at 50 C.F.R. Part 117.

    Question 5.  How does the National Environmental Policy Act or NEPA 
process come into play as the Service develops voluntary conservation 
agreements for private properties?
    Response. Under NEPA and section 10 of the ESA, the development of 
an appropriate NEPA document and the opportunity for public 
participation is a mandatory element of Habitat Conservation Plans, 
Safe Harbor Agreements, and Candidate Conservation Agreements with 
Assurances. For programmatic plans/agreements, there is no need for 
individual landowners, who become participants through certificates of 
inclusion, to prepare a separate NEPA document. At a minimum, plans or 
agreements and associated permits are noticed in the Federal Register 
for public comment for 30 days. Large, complex, or programmatic plans 
or agreements generally are noticed for 60 to 90 days. Also, the 
Service often provides opportunity for public participation through 
public meetings, websites, and other avenues of input throughout the 
planning stages.
      Responses by Marshall P. Jones Jr. to additional Questions 
                          from Senator Clinton
    Question 1. According to a study by the Department of the Interior, 
in 1991, 24 million Americans took trips for the express purpose of 
viewing and photographing wild birds. They spent $2.5 billion on trip-
related expenses, including $1.5 billion on food and lodging. ESA 
listed birds, such as the whooping crane and the condor, are a huge 
tourist draw, as are gray wolves in Yellowstone National Park and red 
wolves in North Carolina. How can the public and private sectors work 
together to increase economic benefits from eco-tourism in communities 
that are home to rare species?
    Response. Outreach and education tasks, listed in nearly every 
recovery plan, are used to publicize efforts to provide viewing and 
enjoyment opportunities, highlight the benefits of viewing 
opportunities to local communities, and inform communities about 
potential partnerships. Using incentive and partnership programs and 
technical assistance, along with effective outreach, the public and 
private sectors can work together to identify and develop viewing or 
enjoyment opportunities for the public that will cause minimal impact 
on rare species and their environments. Examples of successful public 
outreach include festivals celebrating the whooping crane, Karner blue 
butterfly, and Kirtland's warbler.
                               __________
      Responses by Marshall P. Jones Jr. to additional Questions 
                        from Senator Lautenberg
    Question 1. A bird species that migrates through New Jersey, the 
Red Knot, is in serious trouble. We used to have 100,000 of these birds 
stop in the Delaware Bay on their way up from the tip of South America. 
Now we have only about 13,000. Do you think the Red Knot deserves an 
emergency listing under the Endangered Species Act?
    Response. The Service has longstanding concern over the status of 
the Atlantic flyway population of the red knot. From 1999 through 2004, 
we provided funding (including $117,000 in Candidate Conservation funds 
and $230,000 in migratory bird funding) to the State of New Jersey's 
Endangered and Nongame Species Program (NJENSP) to monitor and conduct 
research on red knots, including studies on their arctic breeding 
grounds, their wintering grounds on Tierra del Fuego, as well as the 
important migratory stopover in Delaware Bay. We provided $25,000 to 
NJENSP in fiscal year (FY) 2004 to conduct a comprehensive status 
assessment of the red knot and provide the Service with a written 
document including the data collected over the previous years. This 
document would assist the Service in making a determination on the 
status of the species under the ESA.
    In July 2004, the Service initiated a status review for the 
Atlantic flyway population of the red knot through our internal 
candidate assessment process. In the course of that status review, we 
have been performing a rigorous, critical analysis of the best 
available scientific and commercial information. We will use that 
analysis to make a determination of whether listing the red knot as an 
endangered or threatened species is warranted.
    In August 2004, the Service received a petition to emergency list 
the Atlantic Flyway population of the red knot as endangered under the 
ESA. On September 10, 2004, we sent a letter to the petitioner 
explaining that information presented in the petition and within our 
files did not demonstrate that the red knot was at immediate risk of 
extinction or that potential threats to the Atlantic coast population 
were so severe that the standard listing process would be insufficient 
to prevent extinction. We further notified the petitioner that we would 
consider the petition according to our normal listing process in fiscal 
year (FY) 2005. The Service recently received two additional petitions 
requesting emergency listing for the red knot, and we are currently 
evaluating the information in those petitions to determine if emergency 
listing is warranted.

    Question 2. How does the U.S. Fish and Wildlife Service (FWS) plan 
to address the backlog of endangered species listings and critical 
habitat designations if its budget gets cut?
    Response. The listing budget has increased 31.5 percent, or $3.8 
million, from fiscal year (FY) 2004 to fiscal year (FY) 2005, with an 
increase of over $2.2 million in the fiscal year (FY) 2006 request. The 
fiscal year (FY) 2004-2005 increase includes $1.5 million for listing 
(46 percent), and $2.3 million for critical habitat (26 percent). These 
increases also include salary adjustments, cost-of-living increases, 
and other uncontrollable costs such as litigation support. The Service 
expects to make significant progress in addressing the petition backlog 
in fiscal year (FY) 2005 and is scheduled to initiate or complete 
petition findings for 24 of the 56 outstanding listing petitions.
      Responses by Marshall P. Jones Jr. to additional Questions 
                         from Senator Murkowski
    Question 1. Section 9 of the ESA, along with implementing 
regulations promulgated by the Agency, use an expansive definition of a 
``taking'' of a listed species to include harm, harassment, and 
activities that change ``essential behavior'' or disrupt behavior. If a 
landowner discovers a listed species on his property, what assurances 
can the Federal agencies provide the landowner that he or she is free 
to engage in ordinary uses of the land without being exposed to takings 
claims and possible prosecution?
    Response. The decision to include ``harm'' and ``harass'' in the 
definition of ``take'' was made by Congress, and the Service's 
regulations seek to explain what these terms mean. The assurances 
provided to a landowner depend on the activities he or she proposes to 
engage in on their land and the effects those activities may have on 
listed, proposed, or candidate species. A Habitat Conservation Plan 
(HCP), Safe Harbor Agreement (SHA), Candidate Conservation Agreement 
with Assurances (CCAA), or some combination of these three programs can 
generally cover take of any listed species or species that may be 
listed in the foreseeable future.

    Question 2. It is my understanding that efforts to provide 
administrative mechanisms designed to offer such assurances have been 
struck down by Federal courts as being inconsistent with the ESA--what 
changes are needed in the statute so that needed landowner assurances 
can be provided?
    Response. The Service's No Surprises policy was challenged in 
court, however it was not struck down. The permit revocation 
regulations related to the No Surprises policy were vacated by the 
court on procedural grounds, and the Service was ordered to reconsider 
the permit revocation regulations in relation to the No Surprises 
policy. The Service promulgated new permit revocation regulations as 
instructed by the court. No changes were made to the No Surprises 
policy and these assurances are available to landowners.

    Question 3. Does the FWS have any programs that expedite the 
consideration of HCPs proposed by small landowners?
    Response. Low-effect HCPs are essentially expedited HCPs. Projects 
that qualify as low-effect HCPs are those that have relatively minor or 
negligible impacts on federally listed, proposed, or candidate species, 
and minor or negligible effects on other environmental values or 
resources and can be categorically excluded under NEPA. Programmatic or 
umbrella-type HCPs that allow small landowners to participate through 
certificates of inclusions, such as county-wide or state-wide HCPs, are 
also a form of expedited HCP that small landowners can utilize.

    Question 4. On average, how long does it take FWS to review and 
approve an HCP once it has been submitted for approval.
    Response. The amount of time it takes to develop a HCP varies 
greatly depending on its size, complexity, number of applicants, and 
other factors. Low-effect HCPs generally take a few months. Large, 
regional plans can take years to develop. Once an application is 
submitted to the Service along with a final draft HCP, processing times 
range from about 4 months to a year depending on the size and 
complexity of the plan.
                               __________
       Responses by Robert J. Olszewski to additional Questions 
                           from Senator Ihofe
    Question 1.  In your testimony, you refer to lots of land purchase, 
conservation easements and other Federal land management agreements. Do 
you have any suggestions for ways in which we can include landowner 
incentives without ceding private property to government or other third 
party entities?
    Response. Conservation easements and safe harbor agreements both 
fulfill a strong role without ceding overall property rights to the 
government or some other organization. We also cooperate with third 
parties often before a species is listed to help understand and provide 
habitat needs this should also be encouraged financially.
       Responses by Robert J. Olszewski to additional Questions 
                         from Senator Jeffords
    Question 1.  In your testimony, you cite many examples where your 
company has entered in to Habitat Conservation Plan (HCPs) agreements 
under the Endangered Species Act. There is concern that even when 
adaptive management is incorporated in plans, it is often unclear if 
monitoring and information is affecting management. Do you use adaptive 
management practices in your HCPs? If so, how do you translate adaptive 
management practices into management on the ground? What kind of 
monitoring are you doing of the endangered species under your HCPs?
    Response. Adaptive management should first be defined early in the 
HCP process as clearly as possible. Landowners need as much certainty 
as possible to enter the process and without clearly defining the 
implications of incorporating a reasonable approach to adaptive 
management in the HCP ``up-front'' this will also potentially 
discourage committing to the HCP process. However, if done 
thoughtfully, adaptive management can allow revisiting the science 
behind the HCP as more is learned. It should be a process that allows 
us to confirm, learn and refine our assumptions as the HCP moves 
forward. It is also important to remember that we often are measuring 
the habitat our HCPs provide, just as much or more than the actual 
``count'' of endangered or threatened species.

    Question 2.  What would you do if you found that the HCP is not 
working to protect the species? Many HCPs are designed to last long 
time periods, some as long as fifty years. If during that time the 
science suggests that a species is in decline, would you agree that the 
HCP should be reviewed and changed?
    Response. This has been covered at least partially by the answer to 
the previous question no surprises is critical to the landowner and we 
need to define the limits of the potential realm of where an adaptive 
management program might take us in the future. Certainly, management 
activities might be modified by learnings subsequent to the signing of 
an HCP agreement. We should also recognize that there may be instances 
where an outside impact appears and a landowner may have no real 
control over the situation the spread of the barred owl in the Northern 
Spotted Owl habitat of the Pacific Northwest provides a current day 
example.

    Question 3.  Are there any specific incentives for private 
landowners that you would like to see included in the Endangered 
Species Act?
    Response. Please refer to July 13 testimony and answers in a number 
of questions above.
                               __________
       Responses by Robert J. Olszewski to additional Questions 
                          from Senator Chafee
    Question 1. How have the characteristics of your land ownership 
benefited the formation of Habitat Conservation Plans (HCPs) for 
endangered species on Plum Creek properties?
    Response. Much of Plum Creek's property in the West is situated in 
a ``checkerboard'' ownership pattern intertwined with Federal lands. 
These Federal lands often provide major habitats for endangered and 
threatened species and we are significantly impacted by this unique 
ownership situation. We also have some ownership in large, contiguous 
tracts that allows us to think of areas from the perspective of a large 
``landscape.''

    Question 2.  On average, what has been the length of time and cost 
of HCPs developed for species protection on Plum Creek properties?
    Response. Generally, HCP development takes somewhere around 2-3 
years, and the costs of developing these HCPs are in seven figures. Of 
course, this can vary with the complexity of the specific project.

    Question 3.  Would you elaborate on ways in which the Habitat 
Conservation Planning process could potentially be streamlined to 
encourage their utilization by more private landowners?
    Response. Please refer to July 13 testimony and recommendations 
regarding the National Environmental Policy Act (NEPA) and National 
Historic Preservation Act (NHPA) triggers which considerably slow the 
process. We also add that working with overlapping agencies in the 
USFWS and the NMFS adds major complexity and some inefficiency to the 
program.

    Question 4.  As the nation's largest private timberland owner, Plum 
Creek owns properties in many different regions of the country, all 
with diverse views and geographic challenges in relation to the 
protection of endangered species. How does the process or formulating 
HCPs and other conservation agreements differ based on land management 
practices and views pertaining to the ESA in various regions of the 
U.S.? For example, how would your company go about habitat protection 
of listed-species in the West versus a similar situation in the New 
England region?
    Reponse. Approaches to endangered species management across the 
country vary and that is appropriate based on specific species biology 
and ownership patterns. Different approaches allow landowners and the 
agencies to pull a variety of ``tools from the tool box'' to deal with 
varied situations. We have some Plum Creek HCPs in the West and South, 
yet we have participated jointly in a statewide HCP effort to protect 
the Karner blue butterfly in Wisconsin with many partners. Safe Harbor 
Agreements have allowed many private non-industrial landowners in the 
South to participate appropriately in protecting red-cockaded 
woodpeckers on their properties. These are but a few examples of highly 
varied approaches they should continue to be encouraged and expanded 
rather than constrained by negative thinking.

    Question 5.  Several of Plum Creek's HCPs have met with controversy 
from the beginning. In your opinion, what is driving these concerns?
    Response. Unfortunately, some different parties have different 
goals or motives associated with the HCP program. At least some members 
of the environmental community appear to try to use the process to hold 
up land management activity, rather than blending these activities with 
the protection of endangered and/or threatened species, or often 
actually improving habitat through forestry operations associated with 
an HCP.
                               __________

       Responses by Robert J. Olszewski to additional Questions 
                         from Senator Murkowski
    Question 1.  The prohibitions on taking and the related threat of 
criminal or civil prosecution are the ``big sticks'' in the ESA with 
respect to the treatment of issues that occur on private lands. Many 
property owners view them with understandable apprehension. Do you see 
a need or benefit to amending the law to better define the situations 
in which these ``sticks'' should actually be used?
    Response. We believe ``take'' has been fairly well-defined by a 
variety of legal cases. Take is also appropriately defined by the fact-
specific issues with regard to each listed species.

    Question 2.  In your view, would it improve the ESA to include 
incentives for landowners to manage their lands and activities in ways 
that are more hospitable to listed species? If so, what kind of 
incentives do you think might be appropriate?
    Response. Please refer to specific comments in the July 13 
testimony. Section 6, LWCF, Legacy Program funding could all be helpful 
in this area. Once again, the encouragement of creative approaches 
``outside the box'' such as statewide safe harbor agreements should be 
strongly expanded and encouraged.

    Question 3.  Current law allows anyone, even the most radical 
animal rights or environmental group, to take individual citizens to 
court for alleged ``taking'' even where the rationale is extremely 
flimsy. In your view, has this practice been abused?
    Response. In our view, this is not the major concern or issue with 
ESA Reauthorization and we would not recommend a high priority here.

    Question 4.  What suggestions do you have for providing landowners 
with the assurance that they are not going to become a victim of this 
practice sometime in the future?
    Response. Congress should move to codify the ``no surprises'' 
policy along with safe harbor.

    Question 5.  Some outside parties have suggested that we don't need 
to update or improve the ESA but just need to comply with the existing 
law and fully fund ESA programs. As representatives of landowners and 
companies who have to comply with the ESA on a day to day basis, do you 
agree that the ESA, in its present form, is sufficient?
    Response. Please refer to July 13 testimony and response to (3) in 
the first section above.

    Question 6.  In your testimony, you noted that habitat conservation 
plans (HCPs) are not easy to complete and that ``The commitment is 
expensive, time-consuming and requires us to open our operations to 
public scrutiny in an unprecedented fashion.'' From Plum Creek's 
experience, what changes to the Act should be made to reduce the 
burdensome costs and time-commitments required in developing HCPs?
    Response. Stronger incentives are needed in many instances there is 
simply not enough reason for a landowner to take on the burdens of an 
HCP for it to pay off. Additional Section 6 funding would be helpful, 
along with streamlining of the process from a NEPA and NHPA 
perspective.
          Responses by Larry Wiseman to additional Questions 
                          from Senator Chafee
    Question 1. In your testimony, you mention the importance of 
statewide and region- or species-specific Habitat Conservation Plans? 
Would you elaborate on the benefits of these newly emerging approaches 
for species protection by smaller timber landholders?
    Response. Creating an umbrella agreement that can potentially cover 
all family forest owners in a region provides an opportunity to 
participate. The process is too lengthy and expensive for many forest 
owners to undertake individually.

    Question 2. You mentioned the creation of private markets as a way 
to encourage forest owner conservation. What are some changes that 
could be made to the ESA or other statutes that would most effectively 
facilitate the creation of private markets for species protection?
    Response. Formally recognize the importance and add language for 
conservation banking of T&E species (this was done for wetlands banking 
under section 404 of the Clean Water Act Swamp-Buster provisions).

    Question 3. Regulatory uncertainty seems to be a significant 
barrier to species conservation. To this end, are there specific 
improvements that could be made to existing programs or ESA itself that 
you believe would have the most benefit and should be high priorities 
for the Subcommittee?
    Response. Expand the ESA to formally recognize tools like Safe 
Harbor and Candidate Conservation Agreements with Assurances. Court 
challenges of the HCP ``No Surprises'' policy have shaken landowner 
confidence.
    Streamline the paperwork and process of providing regulatory 
assurances for small forest owners (< 5,000 acres).
    Increase FWS emphasis on species that are recoverable. Create a 
program similar to PSGP to support use of Candidate Conservation 
Agreements with Assurances. It is much cheaper to keep species off the 
ES list than to try and get them de-listed.
  

                                  
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