[Federal Register Volume 62, Number 103 (Thursday, May 29, 1997)]
[Proposed Rules]
[Pages 29091-29098]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14082]


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DEPARTMENT OF THE INTERIOR

Fish and Wildlife Service

50 CFR Part 17

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 222

RIN 1018-AE24


No Surprises Policy

AGENCY: Fish and Wildlife Service, Interior; National Marine Fisheries 
Service, NOAA, Commerce.

ACTION: Proposed rule.

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SUMMARY: This proposed rule will codify the substance of the Endangered 
Species Act (ESA) ``No Surprises'' policy issued by the Fish and 
Wildlife Service (FWS) and the National Marine Fisheries Service (NMFS) 
in 1994 and included in the joint FWS and NMFS Endangered Species 
Habitat Conservation Planning Handbook issued in November 1996 (61 FR 
63854). The No Surprises policy provides regulatory assurances to the 
holder of an incidental take permit issued under section 10(a) of the 
ESA that no additional land use restrictions or financial compensation 
will be required of the permit holder with respect to species 
adequately covered by the permit, even if unforeseen circumstances 
arise after the permit is issued indicating that additional mitigation 
is needed for a given species covered by a permit. The proposed rule 
contains proposed revisions to parts 17 (FWS) and 222 (NMFS) of Title 
50 of the Code of Federal Regulations necessary to implement the 
substance of the No Surprises policy. The proposed rule is published in 
response to the March 21, 1997, settlement agreement in Spirit of the 
Sage v. Babbitt, No. 1:96CV02503 (SS) (D. D.C.).

DATES: Comments on the proposed rule must be received by July 28, 1997.

ADDRESSES: For 50 CFR part 17, send any comments or materials 
concerning the proposed changes to the Chief, Division of Endangered 
Species, U.S. Fish and Wildlife Service, 452 ARLSQ, Washington, D.C., 
20240 (Telephone 703/358-2171, Facsimile 703/358-1735). You may examine 
comments and materials received during normal business hours in room 
452, Arlington Square Building, 4401 North Fairfax Drive, Arlington, 
Virginia. For 50 CFR part 222, send any comments to Nancy Chu, Chief, 
Endangered Species Division, National Marine Fisheries Service, Office 
of Protected Resources, 1315 East-West Highway, Silver Spring, MD, 
20910 (Telephone (301/713-1401). You must make an appointment to 
examine these materials.

FOR FURTHER INFORMATION CONTACT: E. LaVerne Smith, Chief, Division of 
Endangered Species (Telephone (703/358-2171); or Nancy Chu, National 
Marine Fisheries Service, Chief, Endangered Species Division (Telephone 
(301) 713-1401).

SUPPLEMENTARY INFORMATION: The Services firmly believe that they have 
had sufficient authority under the Endangered Species Act (ESA) to 
issue Habitat Conservation Plan (HCP) permits with No Surprises 
assurances and continue to believe in the validity of those permits. 
The Services also believe that the current process and those permits 
issued in the past with the No Surprises assurances are legally 
adequate and continue to assert the Services' authority to issue 
individual HCP permits with the No Surprises assurances. Nevertheless, 
the Services recognize the benefits of permanently codifying the No 
Surprises policy as a rule in 50 CFR, as well as the value of 
soliciting additional comments on the policy itself. Therefore, the 
Services believed it served their purposes to settle the Spirit of the 
Sage Council v. Babbitt, No. 1:96CV02503 (SS) (D. D.C.), lawsuit, which 
challenged the procedures under which the No Surprises policy was 
adopted and under which subsequent HCP permits were issued, by agreeing 
to submit the No Surprises Policy to further public comment and to 
consider public comment in drafting a final No Surprises rule.
    These proposed regulations apply to the FWS and the NMFS 
(collectively referred to as the Services). The background information 
regarding the proposed rule is the same for the Services. The proposed 
rule is, however, presented in two parts because the Services have 
separate regulations for implementing the section 10 permitting

[[Page 29092]]

process. The first part is for the proposed changes in the FWS's 
regulations found at 50 CFR 17.22 and 17.32, and the second part is for 
the proposed changes in NMFS's regulations found at 50 CFR 222.

Background

    Section 9 of the ESA generally prohibits the ``take'' of species 
listed under the ESA as endangered. Pursuant to the broad grant of 
regulatory authority over threatened species in section 4(d) of the 
ESA, FWS and NMFS regulations generally prohibit take of species listed 
as threatened. See, e.g., 50 CFR 17.31 and 17.21 (FWS). Section 3(18) 
of the ESA defines take to mean ``to harass, harm, pursue, hunt, shoot, 
wound, kill, trap, capture, or collect, or to attempt to engage in any 
such conduct.'' FWS regulations (50 CFR 17.3) define ``harm'' to 
include ``significant habitat modification or degradation where it 
actually kills or injures wildlife by significantly impairing essential 
behavioral patterns, including breeding, feeding or sheltering.''
    Section 10 of the ESA as originally enacted contained provisions 
allowing the issuance of permits authorizing the taking of listed 
species under very limited circumstances for non-Federal entities. 
However, both the government and the development community became 
concerned that these permitting provisions were not sufficiently 
flexible to address situations in which a property owner's otherwise 
lawful activities might result in limited incidental take of a listed 
species even if the person were willing to plan their activities 
carefully to be consistent with the conservation of the species. As a 
result, Congress included in the ESA Amendments of 1982 amendments to 
section 10(a) to allow the FWS and NMFS to issue permits authorizing 
the incidental take of listed species in the course of otherwise lawful 
activities, provided activities are conducted according to a 
conservation plan (or habitat conservation plan or HCP) designed to 
further the long-term conservation of the species and to avoid jeopardy 
to the continued existence of the species. In doing so, Congress 
indicated it was acting to ``address the concerns of private landowners 
who are faced with having otherwise lawful actions not requiring 
Federal permits prevented by section 9 prohibitions against taking* * * 
`` H.R. Rep. No. 835, 97th Cong., 2d Sess. 29 (1982) (hereafter ``Conf. 
Report''). Congress modeled the 1982 HCP amendments after the 
conservation plan developed by private landowners and local governments 
to protect the habitat of two listed butterflies on San Bruno Mountain 
in San Mateo County, while allowing development activities to proceed.

    Congress recognized in enacting the section 10 HCP amendments 
that: significant development projects often take many years to 
complete and permits applicants may need long-term permits. In this 
situation, and in order to provide sufficient incentives for the 
private sector to participate in the development of such long-term 
conservation plans, plans which may involve the expenditure of 
hundreds of thousands if not millions of dollars, adequate 
assurances must be made to the financial and development communities 
that a section 10(a) permit can be made available for the life of 
the project. Thus, the Secretary should have the discretion to issue 
section 10(a) permits that run for periods significantly longer than 
are commonly provided [for other types of permits]. (Conf. Report at 
31).

    Congress also recognized that long term HCP permits would present 
unique issues that would have to be addressed if the permits were to 
function properly to protect the interests of both the species involved 
and the development community. For instance, Congress realized that 
``circumstances and information may change over time and that the 
original [habitat conservation] plan might need to be revised. To 
address this situation the Committee expects that any plan approved for 
a long-term permit will contain a procedure by which the parties will 
deal with unforeseen circumstances.'' (Conf. Report at 31). More 
importantly, Congress recognized that non-Federal property owners 
seeking HCP permits would need to have economic and regulatory 
certainty regarding the overall cost of species mitigation over the 
life of the permit. As stated in the Conference Report on the 1982 ESA 
amendments:

    The Committee intends that the Secretary may utilize this 
provision to approve conservation plans which provide long-term 
commitments regarding the conservation of listed as well as unlisted 
species and long-term assurances to the proponent of the 
conservation plan that the terms of the plan will be adhered to and 
that further mitigation requirements will only be imposed in 
accordance with the terms of the plan. In the event that an unlisted 
species addressed in the approved conservation plan is subsequently 
listed pursuant to the Act, no further mitigation requirements 
should be imposed if the conservation plan addressed the 
conservation of the species and its habitat as if the species were 
listed pursuant to the Act. (Conf. Report at 30 and 50 FR 39681-
39691 (Sept. 30, 1985)).

    Congress thus allowed the Federal government to provide assurances 
to non-Federal property owners through the section 10 incidental take 
permit process. Non-Federal property owners would have economic and 
regulatory certainty regarding the overall cost of species mitigation, 
provided that the conservation plan adequately provided for the 
affected species in the first instance, the permittee was complying in 
good faith with the terms and conditions of the permit and the HCP, and 
that the HCP was properly functioning.
    In the proposed rule to implement the ESA's incidental take permit 
provisions, the FWS expressly discussed Congress' statement that the 
section 10 permitting process should be used to address multiple 
species and unlisted species in exchange for regulatory assurances. (48 
FR 31417 (July 8, 1983)). When the final incidental take permit rule 
was published in 1985, the FWS responded to comments on the 
consideration of unlisted species in HCPs by referring to the same 
statement of Congressional intent and by reiterating that HCP 
permittees have the option of addressing unlisted species in exchange 
for long-term assurances, and that additional mitigation would only be 
required in accordance with the terms and conditions of the original 
HCP (58 FR 39681, 39683 (September 30, 1985)). The No Surprises Policy 
issued on August 11, 1994, cites and relies upon the same statement of 
the Congressional intent.
    After the No Surprises policy was issued, it was the subject of a 
public comment process when it was released as a key component of the 
draft 1994 Habitat Conservation Planning Handbook (59 FR 65782, 
December 21, 1994). The No Surprises policy was included in slightly 
revised form in the final 1996 Habitat Conservation Planning Handbook 
(61 FR 63854, December 2, 1996), and currently is being implemented. In 
addition to this opportunity for public comment on the No Surprises 
policy in general, the application of the policy and its assurances has 
been and continues to be subject to an opportunity for public comment 
on each proposed HCP permit under section 10(c) of the ESA. In 
addition, because the act of issuing a HCP permit is a Federal 
authorization subject to section 7(a)(2) of the ESA, the Services must 
consult under section 7 on each proposed HCP permit.
    The regulatory and economic assurances provided to permittees 
through this proposed rule is limited to the HCP permitting process. 
Under the proposed rule, these assurances would continue to be 
incorporated into the section 10 HCP permit the Services issue to a 
permittee.

[[Page 29093]]

    The FWS administers a variety of conservation laws that authorize 
the issuance of certain permits for otherwise prohibited activities. 
Part 13 of Title 50 of the Code of Federal Regulations consolidates the 
administration of various FWS permitting programs. Part 13 provides a 
uniform framework of general administrative conditions and procedures 
that govern the application, processing, and issuance of all FWS 
permits. In addition to Part 13, the FWS has added several more 
specific wildlife regulatory programs to Title 50 of the Code of 
Federal Regulations. For example, the FWS added Part 18 to implement 
the Marine Mammal Protection Act and modified and expanded Part 17 to 
implement the ESA. These parts contained their own specific permitting 
requirements in addition to the general permitting provisions of Part 
13. This proposed rule would permanently codify the No Surprises policy 
through amendments to 50 CFR Part 17 (for FWS) and 50 CFR Part 222 (for 
NMFS).

Description/Overview of Proposed No Surprises Rule

    The information presented below briefly describes the No Surprises 
policy and this proposed rule.
    To address the problem of maintaining regulatory assurances and 
providing regulatory certainty in exchange for conservation 
commitments, the FWS and the NMFS jointly established a ``No 
Surprises'' policy for HCPs on August 11, 1994. The No Surprises policy 
set forth a clear commitment by the FWS and the NMFS that, to the 
extent consistent with the requirements of the ESA and other Federal 
laws, the government will honor its agreements under a negotiated and 
approved HCP for which the permittee is in good faith implementing the 
HCP's terms and conditions. The specific nature of these provisions 
will vary among HCPs depending upon individual habitat and species 
needs.
    The No Surprises policy and this proposed rule provide certainty 
for non-Federal property owners in ESA HCP planning through the 
following assurances:

     In negotiating ``unforeseen circumstances'' provisions 
for HCPs, the Services will not require the commitment of additional 
land or financial compensation beyond the level of mitigation which 
was otherwise adequately provided for a species under the terms of a 
properly functioning HCP. Moreover, the Services will not seek any 
other form of additional mitigation from an HCP permittee except 
under unforeseen circumstances.

    This means that if unforeseen circumstances occur during the life 
of an HCP, the Services will not require additional lands or property 
interests, additional funds, or additional restrictions on lands or 
other natural resources released under an HCP for development or use 
from any permittee who, in good faith, is adequately implementing or 
has fully implemented their commitments under an approved HCP. Once an 
HCP permit has been issued and its terms are being complied with, the 
permittee may remain secure regarding the agreed upon cost of 
mitigation, because no additional mitigation land or property 
interests, funding, or land use restrictions will be requested by the 
issuing Service. The permittee would not be responsible for any other 
forms of additional mitigation, unrelated to the categories noted in 
the previous sentence, except where unforeseen circumstances exist.
    The legislative history of the 1982 ESA amendments noted above in 
the ``Background'' section illustrates the two primary goals of the HCP 
program: (1) adequately minimizing and mitigating for the incidental 
take of listed species; and (2) providing regulatory assurances to 
section 10 permittees that the terms of an approved HCP will not change 
over time, or that necessary changes will be minimized to the maximum 
extent possible, and will be mutually agreed to by the applicant. How 
to reconcile these objectives remains one of the central challenges of 
the HCP program.
    ``Unforeseen circumstances'' has been broadly defined to include a 
variety of changing circumstances that may occur over the life of an 
ongoing HCP. However, it is important to distinguish between 
``unforeseen circumstances'' and ``changed circumstances.'' ``Changed 
circumstances'' are not uncommon during the course of an HCP and can 
reasonably be anticipated and planned for (e.g., the listing of new 
species, modifications in the project or activity as described in the 
original HCP, or modifications in the HCP's monitoring program). 
``Unforeseen circumstances,'' however, means changes in circumstances 
surrounding an HCP that were not, or could not, be anticipated by HCP 
participants and the Services at the time of the HCP's negotiation and 
development and that result in a substantial and adverse change in the 
status of a covered species.
    With respect to anticipated and possible changed circumstances, the 
HCP should discuss measures developed by the applicant and the Services 
to meet such changes over time, possibly by incorporating adaptive 
management measures for covered species in the HCP. HCP planners should 
identify potential problems in advance and identify specific strategies 
or protocols in the HCP for dealing with them, so that adjustments can 
be made as necessary without having to amend the HCP.
    The ``Unforeseen Circumstances'' section of the HCP should be more 
limited. This section should discuss how to deal in the future with 
those changes in the circumstances surrounding the HCP that cannot be 
anticipated by HCP negotiators. While HCP permittees will not be 
responsible for additional mitigation measures if unforeseen 
circumstances arise, other methods of responding to the needs of the 
affected species, such as governmental action and voluntary 
conservation measures by the permittee, remain available to assure the 
requirements of the ESA are satisfied.
    Consequently, the No Surprises policy and this proposed rule also 
provide that:

     If additional mitigation measures are subsequently 
deemed necessary to provide for the conservation of a species that 
was otherwise adequately covered under the terms of a properly 
functioning HCP, the obligation for such measures will not rest with 
the HCP permittee.

    This means that in cases where the status of a species addressed 
under an HCP unexpectedly worsens, the primary obligation for 
implementing additional conservation measures would be borne by the 
Federal government, other government agencies, private conservation 
organizations, or other private landowners who have not yet developed 
an HCP.
    ``Adequately covered'' under an HCP for listed species refers to 
any species addressed in an HCP that has satisfied the permit issuance 
criteria under section 10(a)(2)(B) of the ESA. For unlisted species, 
the term refers to any species that is addressed in an HCP as if it 
were listed pursuant to section 4 of the ESA, and is covered by HCP 
conditions that would satisfy permit issuance criteria under section 
10(a)(2)(B) of the ESA if the species were actually listed. No 
Surprises assurances apply only to species that are ``adequately 
covered'' in the HCP. Species should not be included in the HCP permit 
if data gaps or insufficient information makes it impossible to craft 
conservation/mitigation measures for them. In many cases, however, data 
gaps can be overcome through the inclusion of adaptive management 
clauses in the HCP.


[[Page 29094]]


     If unforeseen circumstances warrant the requirement of 
additional mitigation from an HCP permittee who is in compliance 
with the HCP's obligations, such mitigation will maintain the 
original terms of the HCP to the maximum extent possible. Further, 
any such changes will be limited to modifications within Conserved 
Habitat areas or to the HCP's operating conservation program for the 
affected species. Additional mitigation requirements will not 
involve the payment of additional compensation or apply to parcels 
of land available for development or land management under the 
original terms of the HCP without the consent of the HCP permittee.

    This means that if unforeseen circumstances are found to exist, the 
Services will consider additional mitigation measures. However, such 
measures must be as close as possible to the terms of the original HCP 
and must be limited to modifications within any Conserved Habitat area 
or to adjustments in lands that are already set aside by the HCP in the 
HCP's operating conservation program. Any such adjustments or 
modifications will not include requirements for additional land 
protection, payment of additional funds, or apply to lands otherwise 
available for development or use under the HCP, unless the permittee 
consents to such additional measures. ``Modifications within Conserved 
Habitat areas or to the HCP's operating conservation program'' means 
changes to plan areas explicitly designated for habitat protection or 
other conservation uses under the HCP, or changes that redirect or 
increase the intensity, range, or effectiveness of the HCP's operating 
program, provided that any such changes do not impose new restrictions 
or financial compensation on the permittee's activities. Thus, if an 
HCP conservation program originally included a mixture of predator 
depredation control and captive breeding, but subsequent research or 
information demonstrated that one of these was considerably more 
effective that the other, the Services would be able to request an 
adjustment in the proportionate use of these tools, provided that such 
an adjustment did not increase the overall costs to the HCP permittee.
    The policy and this proposed rule also set out criteria for 
determining whether and when unforeseen circumstances arise.

     The Services will have the burden of demonstrating that 
such unforeseen circumstances exist using the best scientific and 
commercial data available. Their findings must clearly be documented 
and based upon reliable technical information regarding the status 
and habitat requirements of the affected species.
     In deciding whether any unforeseen circumstances exist 
which might warrant requiring additional mitigation from an HCP 
permittee, the Services will consider, but not be limited to, the 
following factors: (a) size of the current range of affected 
species; (b) percentage of range adversely affected by the HCP; (c) 
percentage of range conserved by the HCP; (d) ecological 
significance of that portion of the range affected by the HCP; (e) 
level of knowledge about the affected species and the degree of 
specificity of the species' conservation program under the HCP; (f) 
whether the HCP was originally designed to provide an overall net 
benefit to the affected species and contained measurable criteria 
for assessing the biological success of the HCP; and (g) whether 
failure to adopt additional conservation measures would appreciably 
reduce the likelihood of survival and recovery of the affected 
species in the wild.

    The first of these two criteria, on the burden of proof, is self-
explanatory. The second identifies some factors to be considered by the 
Services in determining whether biologically significant unforeseen 
circumstances exist. Generally, the inquiry would focus on the level of 
biological peril to the affected species covered by the HCP and the 
degree to which the welfare of those species is tied to a particular 
HCP. For example, if a species is declining rapidly, and the HCP 
encompasses an ecologically insignificant portion of the species' 
range, then unforeseen circumstances typically would not exist because 
the overall effect of the HCP upon the species would be negligible or 
insignificant. Conversely, if a species is declining rapidly and if the 
HCP encompasses a majority of the species' range, then unforeseen 
circumstances probably would exist.
    The policy and this proposed rule provide additional assurances 
where an HCP is designed to provide an overall net benefit to the 
covered species.

     The Services will not seek additional mitigation for a 
species from an HCP permittee where the terms of a properly 
functioning HCP agreement were designed to provide an overall net 
benefit for the species and contained measurable criteria for the 
biological success of the HCP which have been or are being met.

    This provision means that the Services will not attempt to impose 
additional mitigation measures of any type where the HCP meets these 
standards. This provision is intended to encourage HCP applicants to 
develop HCPs that provide an overall net benefit to affected species. 
However, it does not mean that an HCP must in fact have achieved a net 
benefit to the affected species in order for the ``no additional 
mitigation'' provision to apply. Rather, it will be sufficient if the 
HCP agreement contains a clearly articulated set of criteria for 
achieving a net benefit and an adequate monitoring program for 
measuring progress toward the net benefit goal, and the HCP has been 
and continues to meet the criteria.
    For listed species, an overall net benefit is defined as the 
cumulative results of the management activities identified in an HCP 
that provide for an increase in a species' population and/or the 
enhancement, restoration or maintenance of covered species' suitable 
habitat within the HCP planning area, taking into account the length of 
the permit and the incidental taking allowed by the permit. In 
addition, the benefit must be sufficient to contribute to the recovery 
of the covered species if undertaken by other property owners similarly 
situated. For unlisted species, overall net benefit is defined as 
management activities identified in an HCP that would remove the 
threats to the species and eliminate the need to list the covered 
species, again, if undertaken on a broader scale by other property 
owners similarly situated.
    A ``properly functioning HCP'' means any HCP whose commitments or 
provisions have been or are being fully implemented by the permittee 
and in which the permittee is in full compliance with the terms and 
conditions of the permit.

     Nothing in this policy/rule will be construed to limit 
or constrain the Services or any other governmental agency from 
taking additional actions at its own expense to protect or conserve 
a species included in an HCP.

    This means the Services can intercede on behalf of a species at 
their own expense at any time and be consistent with the assurances 
provided the permittee under this policy and the permit. Neither is 
there anything in the No Surprises policy or this proposed rule that 
prevents the Services from requesting a permittee to voluntarily 
undertake additional mitigation on behalf of affected species, though 
of course the permittee is under no obligation to comply.
    In fact, FWS and NMFS have a wide array of authorities and 
resources that can be utilized to provide additional protection for 
threatened or endangered species included in an HCP. In meeting their 
commitment under the No Surprises policy and this proposed rule 
(consistent with their obligations under the ESA), it is extremely 
unlikely that the Services would have to resort to protective or 
conservation action requiring new appropriations of funds by Congress. 
In such an unlikely event, such actions would necessarily be

[[Page 29095]]

subject to the requirements of the Anti-Deficiency Act and the 
availability of funds appropriated by the Congress.

Permit-Shield Provision

    In addition to proposing to codify as a rule the substance of the 
existing No Surprises policy, the Services propose to add a new permit-
shield provision. See Secs. 17.22(b)(6), 17.32(b)(6), and 222.22(h). 
The purpose of the permit-shield provision is to create a presumption 
that a holder of an incidental take permit is operating in compliance 
with sections 9 and 10 of the ESA when complying with a valid 
incidental take permit, regardless of changes in circumstances and 
regardless of whether the incidental take permit was approved under 
either the No Surprises policy or this proposed rule. Although the 
permit-shield provision and the No Surprises proposed rule (if it did 
not have a permit-shield component) have the same objective--
reliability as an incentive for habitat conservation--they have 
different emphases and use different methods. No Surprises allows 
applicants and the Services to reach a binding agreement on the amount 
of habitat conservation and mitigation that will be required over the 
life of the permit. The permit-shield provision would act to prevent or 
discourage subsequent enforcement actions where the permit holder is 
acting in compliance with the requirements of the permit.
    The permit-shield rule would limit the Services' prosecutorial 
discretion under section 11(e) of the ESA, 16 U.S.C. 1540(e), so as to 
protect the assurances given in incidental take permits regardless of 
changed circumstances and regardless of whether the assurances were 
approved under a formal No Surprises rule or policy.

Required Determinations

    A major purpose of this proposed rule is to provide section 
10(a)(1)(B) permittees regulatory assurances through the issuance of 
the permit. From the Federal government's perspective, implementation 
of this rule would not result in additional expenditures to the 
permittee that are above and beyond that already required through the 
section 10(a)(1)(B) permitting process. There are, however, benefits 
derived from HCPs for both the non-Federal entities and species covered 
by the HCPs. HCPs are mechanisms that allow non-Federal entities to 
continue with economic development, while conserving those species 
covered by the permit. Benefits to the covered species include 
conserving lands and waters that the species depends on, decreasing 
habitat fragmentation, removing threats to candidate, proposed, or 
other unlisted species, and advancing the recovery of some listed 
species. Non-Federal program participants are then provided regulatory 
assurances as a result of the applying for an incidental take permit 
under section 10(a)(1)(B) of the ESA for those species that are 
adequately covered by the permit, if the HCP is functioning properly. 
The Services have determined that the proposed rule would not result in 
significant costs of implementation to non-Federal program 
participants.

Information Collection/Paperwork Reduction Act

    No significant effects are expected on non-Federal cooperators 
exercising their option to enter into the HCP planning program because 
there is no additional information required during the HCP development 
or processing phase to provide these regulatory assurances.
    The Services have examined this proposed rule under the Paperwork 
Reduction Act of 1995 and found it to contain no requests for 
additional information or increase in the collection requirement 
associated with incidental take permits other than those already 
approved under the Paperwork Reduction Act of 1995 for incidental take 
permits with OMB approval #1018-0022 which expires July 31, 1997. The 
Service requested renewal of the OMB approval and in accordance with 5 
CFR 1320 will not continue to collect the information, if the approval 
has expired, until OMB approval has been obtained.

Economic Analysis

    This proposed rule was not subject to review by the Office of 
Management and Budget under Executive Order 12866. The Services have 
determined that there will be no additional costs placed on the non-
Federal entity associated with this proposed regulation. The No 
Surprises Policy was drafted in 1994, went through a public comment 
period as part of the draft 1994 Habitat Conservation Planning Handbook 
(59 FR 65782, December 21, 1994), was included in the final 1996 
Habitat Conservation Planning Handbook (61 FR 63854, December 2, 1996), 
and currently is being implemented. The assurances provided to 
permittees through these proposed rules apply to the HCP permitting 
process, and the Services have determined that there will be no 
additional information required of non-Federal entities through the HCP 
permitting process to provide these assurances to the permittee.
    The Assistant Secretary for the Department of Interior certified to 
the Chief Counsel for Advocacy of the Small Business that a review 
under the Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) has 
revealed that this rulemaking would not have a significant effect on a 
substantial number of small entities, which includes businesses, 
organizations, or governmental jurisdictions. This proposed rule will 
provide non-Federal program participants regulatory assurances as a 
result of the applying for an incidental take permit under section 
10(a)(1)(B) of the Act. No significant effects are expected on non-
Federal cooperators exercising their option to enter into the HCP 
planning program because there will be no additional information 
required through the HCP process to provide these regulatory 
assurances. Therefore, this rule would have a minimal effect on such 
entities. The National Marine Fisheries Service has also reviewed this 
rule under the Regulatory Flexibility Act of 1980 and concurs with the 
above certification.
    The implementation of the No Surprises policy does not require any 
additional data not already required by the HCP process. Regulatory 
assurances are provided to the permittee if the HCP is functioning 
properly, and if all the terms and conditions of the HCP, permit, or 
Implementing Agreement are all being met. The underlying economic basis 
of comparing the ``with and without'' the proposed rule was used to 
determine if there existed any potential economic effects from 
implementing this policy. Since the rule is being implemented with 
existing data, there are no incremental costs being imposed on non-
federal landowners. The benefits generated by this rule are being 
shared by the Services (i.e., less habitat fragmentation, habitat 
management, and protection for covered species) and by non-federal 
landowners (i.e., assurances that approved HCPs will allow for future 
economic uses of private land without further mitigation).
    There are no data to determine if there are any effects on 
businesses from this rule. If such effects occur they are more likely 
to be benefits to landowners than costs. Until specific HCPs are 
approved it is not possible to determine effects on commodity prices, 
competition or jobs. However, any economic effects are likely to be 
benefits. There is a positive effect expected on the environment as 
species habitat is protected. No effect on public health and safety is 
expected from this rule. Therefore, this rule most likely would not 
have a significant effect on a substantial number of small entities.

[[Page 29096]]

    The Services have determined and certify pursuant to the Unfunded 
Mandates Act, 2 U.S.C. 1502 et. seq., that this rulemaking will not 
impose a cost of $100 million or more in any given year on local or 
State governments or private entities. No additional information will 
be required from a non-Federal entity though the HCP.

Civil Justice Reform

    The Departments have determined that these proposed regulations 
meet the applicable standards provided in sections 3(a) and 3(b)(2) of 
Executive Order 12988.

National Environmental Policy Act

    The Department has determined that the issuance of the proposed 
rule is categorically excluded under the Department of Interior's NEPA 
procedures in 516 DM 2, Appendix 1.10. NMFS concurs with the Department 
of Interior's determination that the issuance of the proposed rule 
qualifies for a categorical exclusion and falls within the categorical 
exclusion criteria in NOAA 216-3 Administrative Order, Environmental 
Review Procedure.

Public Comments Solicited

    The Services submit this proposed rule for public comment. 
Particularly, comments are sought on:
    (1) The applicability of the No Surprises assurance to the HCP 
process in general;
    (2) Alternative means, if any, for providing the No Surprises 
assurances to property owners who apply for an HCP permit;
    (3) The applicability of the No Surprises assurances to species 
adequately covered by a section 10(a)(1)(B) permit;
    (4) The permit-shield provision; and
    (5) The proposed regulatory changes to 50 CFR Parts 17 and 222.
    The Services will take into consideration the comments and any 
additional information received by the Services by July 28, 1997, and 
such will be considered in the development of a final rule.

List of Subjects

50 CFR Part 17

    Endangered and threatened species, Export, Import, Reporting and 
recordkeeping requirements, Transportation.

50 CFR Part 222

    Administrative practices and procedure, Endangered and threatened 
species, Exports, Imports, Reporting and recordkeeping requirements, 
Transportation.

    For the reasons set out in the preamble, the Services propose to 
amend title 50, chapter I, subchapter B; and to amend title 50, chapter 
II, subchapter C of the Code of Federal Regulations, as set forth 
below:

PART 17--[AMENDED]

Subpart C--Endangered Wildlife

    1. The authority citation for part 17 continues to read as follows:

    Authority: 16 U.S.C. 1361-1407; 16 U.S.C. 1531-1544; 16 U.S.C. 
4201-4245; Pub. L. 99-625, 100 Stat. 3500; unless otherwise noted.

    2. New paragraphs (b)(5) and (b)(6) are added to Sec. 17.22 to read 
as follows:


Sec. 17.22  Permits for scientific purposes, enhancement of propagation 
or survival, or for incidental taking.

* * * * *
    (b) * * *
    (5) Permit assurances. (i) Permit assurances will apply to 
incidental take permits that are issued in accordance with paragraph 
(b)(2) of this section for those species that are adequately provided 
for under properly functioning conservation plans. Such assurances will 
apply to those permittees who in good faith have complied with the 
required terms and conditions of the permit and the conservation plan.
    (ii) In negotiating unforeseen circumstances provisions for 
conservation plans, the Director will not require the commitment of 
additional land, property interests, or financial compensation beyond 
the level of mitigation which was otherwise adequately provided for a 
species under the terms of a properly functioning conservation plan. 
Moreover, the Director will not seek any other form of additional 
mitigation from a permittee except under unforeseen circumstances.
    (iii) If additional mitigation measures are subsequently deemed 
necessary to provide for the conservation of a species that was 
otherwise adequately covered under the terms of a properly functioning 
conservation plan, the obligation for such measures will not rest with 
the permittee.
    (iv) If unforeseen circumstances warrant the requirement of 
additional mitigation from a permittee who is in compliance with the 
conservation plan's obligations, such mitigation will maintain the 
original terms of the conservation plan to the maximum extent possible. 
Further, any such changes will be limited to modifications within 
Conserved Habitat areas, if any, or to the conservation plan's 
operating conservation program for the affected species. Additional 
mitigation requirements will not involve the payment of additional 
compensation or apply to parcels of land or property interests 
available for development or land management under the original terms 
of the conservation plan without the consent of the permittee.
    (v) The following criteria must be used for determining whether and 
when unforeseen circumstances arise, where the government could request 
review of certain aspects of the conservation plan's program.
    (A) The Director will have the burden of demonstrating that such 
unforeseen circumstances exist, using the best scientific and 
commercial data available. The Director's findings must be clearly 
documented and based upon reliable technical information regarding the 
status and habitat requirements of the affected species.
    (B) In deciding whether any unforeseen circumstances exist which 
might warrant requiring additional mitigation from a permittee, the 
Director will consider, but not be limited to, the following factors: 
size of the current range of affected species; percentage of range 
adversely affected by the conservation plan; percentage of range 
conserved by the conservation plan; ecological significance of that 
portion of the range affected by the conservation plan; level of 
knowledge about the affected species and the degree of specificity of 
the species' conservation program under the conservation plan; whether 
the conservation plan was originally designed to provide an overall net 
benefit to the affected species and contained measurable criteria for 
assessing the biological success of the conservation plan; and whether 
failure to adopt additional conservation measures would appreciably 
reduce the likelihood of survival and recovery of the affected species 
in the wild.
    (vi) The Director will not seek additional mitigation for a species 
from a permittee where the terms of a properly functioning conservation 
plan agreement were designed to provide an overall net benefit for that 
species and contained measurable criteria for the biological success of 
the conservation plan which have been or are being met.
    (vii) Nothing in this rule will be construed to limit or constrain 
the Director or any other governmental agency from taking additional 
actions at its own expense to protect or conserve a species included in 
a conservation plan.
    (6) Effect of a permit. Compliance with the terms of an incidental 
take permit constitutes compliance with the

[[Page 29097]]

requirements of sections 9 and 10 of the ESA with respect to the 
species covered by the permit regardless of changes in circumstances, 
policy, and regulation, unless a change in statute or court order 
specifically requires that assurances given in the original permit be 
modified or withdrawn.
* * * * *

Subpart D--Threatened Wildlife [Amended]

    3. New paragraphs (b)(5) and (b)(6) are added to Sec. 17.32 to read 
as follows:


Sec. 17.32  Permits--General.

* * * * *
    (b)* * *
    (5) Permit assurances. (i) Permit assurances will apply to 
incidental take permits that are issued in accordance with paragraph 
(b)(2) of this section for those species that are adequately provided 
for under properly functioning conservation plans. Such assurances will 
apply to those permittees who in good faith have complied with the 
required terms and conditions of the permit and the conservation plan.
    (ii) In negotiating unforeseen circumstances provisions for 
conservation plans, the Director will not require the commitment of 
additional land, or financial compensation beyond the level of 
mitigation which was otherwise adequately provided for a species under 
the terms of a properly functioning conservation plan. Moreover, the 
Director will not seek any other form of additional mitigation from a 
permittee except under unforeseen circumstances.
    (iii) If additional mitigation measures are subsequently deemed 
necessary to provide for the conservation of a species that was 
otherwise adequately covered under the terms of a properly functioning 
conservation plan, the obligation for such measures will not rest with 
the permittee.
    (iv) If unforeseen circumstances warrant the requirement of 
additional mitigation from a permittee who is in compliance with the 
conservation plan's obligations, such mitigation will maintain the 
original terms of the conservation plan to the maximum extent possible. 
Further, any such changes will be limited to modifications within 
Conserved Habitat areas, if any, or to the conservation plan's 
operating conservation program for the affected species. Additional 
mitigation requirements will not involve the payment of additional 
compensation or apply to parcels of land, or property interests 
available for development or land management under the original terms 
of the conservation plan without the consent of the permittee.
    (v) The following criteria must be used for determining whether and 
when unforeseen circumstances arise, where the government could request 
review of certain aspects of the conservation plan's program.
    (A) The Director will have the burden of demonstrating that such 
unforeseen circumstances exist, using the best scientific and 
commercial data available. The Director's findings must be clearly 
documented and based upon reliable technical information regarding the 
status and habitat requirements of the affected species.
    (B) In deciding whether any unforeseen circumstances exist which 
might warrant requiring additional mitigation from a permittee, the 
Director will consider, but not be limited to, the following factors: 
size of the current range of affected species; percentage of range 
adversely affected by the conservation plan; percentage of range 
conserved by the conservation plan; ecological significance of that 
portion of the range affected by the conservation plan; level of 
knowledge about the affected species and the degree of specificity of 
the species' conservation program under the conservation plan; whether 
the conservation plan was originally designed to provide an overall net 
benefit to the affected species and contained measurable criteria for 
assessing the biological success of the conservation plan; and whether 
failure to adopt additional conservation measures would appreciably 
reduce the likelihood of survival and recovery of the affected species 
in the wild.
    (vi) The Director will not seek additional mitigation for a species 
from a permittee where the terms of a properly functioning conservation 
plan agreement were designed to provide an overall net benefit for that 
species and contained measurable criteria for the biological success of 
the conservation plan which have been or are being met.
    (vii) Nothing in this rule will be construed to limit or constrain 
the Director or any other governmental agency from taking additional 
actions at its own expense to protect or conserve a species included in 
a conservation plan.
    (6) Effect of a permit. Compliance with the terms of an incidental 
take permit constitutes compliance with the requirements of sections 9 
and 10 of the ESA with respect to the species covered by the permit 
regardless of changes in circumstances, policy, and regulation, unless 
a change in statute or court order specifically requires that 
assurances given in the original permit be modified or withdrawn.
* * * * *

PART 222--[AMENDED]

Subpart C--Endangered Fish or Wildlife Permits

    4. The authority citation for part 222 continues to read as 
follows:

    Authority: 16 U.S.C. 1531 et seq.; subpart D also issued under 
16 U.S.C. 1361 et seq.

    5. New paragraphs (g) and (h) are added to Sec. 222.22 to read as 
follows:


Sec. 222.22  Permits for the incidental taking of endangered species.

* * * * *
    (g) Permit assurances. (1) Permit assurances will only apply to 
permits for Habitat Conservation Plans that are issued in accordance 
with paragraph (c) of this section for those species that are 
adequately provided for under properly functioning conservation plans. 
Such assurances will apply to those permittees who in good faith have 
complied with the required terms and conditions of the permit and the 
conservation plan.
    (2) In negotiating the unforeseen circumstances provisions for 
conservation plans, NMFS will not require the commitment of additional 
land, water, or financial compensation beyond the level of mitigation 
that was otherwise adequately provided for a species under the terms of 
a properly functioning conservation plan. Moreover, NMFS will not seek 
any other form of additional mitigation from a permittee except under 
extraordinary circumstances.
    (3) If additional mitigation measures are subsequently deemed 
necessary to provide for the conservation of a species that was 
otherwise adequately covered under the terms of a properly functioning 
conservation plan, the obligation for such measures will not rest with 
the permittee.
    (4) If extraordinary circumstances warrant the requirement of 
additional mitigation from a permittee who is in compliance with the 
conservation plan's obligations, such mitigation will maintain the 
original terms of the conservation plan to the maximum extent possible. 
Further, any such changes will be limited to modifications within 
Conserved Habitat areas or to the conservation plan's operating 
conservation program for the affected species. Additional mitigation 
requirements will not involve the payment of additional compensation or 
apply to parcels of land available for development or land/water 
management

[[Page 29098]]

under the original terms of the conservation plan without the consent 
of the permittee:
    (5) The following criteria must be used for determining whether and 
when extraordinary circumstances arise, where the government could 
request review of certain aspects of the conservation plan's program.
    (i) NMFS will have the burden of demonstrating that such 
extraordinary circumstances exist, using the best scientific and 
commercial data available. Their findings must be clearly documented 
and based upon reliable technical information regarding the status and 
habitat requirements of the affected species.
    (ii) In deciding whether any extraordinary circumstances exist 
which might warrant requiring additional mitigation from a permittee, 
NMFS will consider, but not be limited to, the following factors:
    (A) Size of the current range of affected species;
    (B) Percentage of range adversely affected by the conservation 
plan;
    (C) Percentage of range conserved by the conservation plan;
    (D) Ecological significance of that portion of the range affected 
by the conservation plan;
    (E) Level of knowledge about the affected species and the degree of 
specificity of the species' conservation program under the conservation 
plan;
    (F) Whether the conservation plan was originally designed to 
provide an overall net benefit to the affected species and contained 
measurable criteria for assessing the biological success of the 
conservation plan; and
    (G) Whether failure to adopt additional conservation measures would 
appreciably reduce the likelihood of survival and recovery of the 
affected species in the wild.
    (6) NMFS will not seek additional mitigation for a species from a 
permittee where the terms of a properly functioning conservation plan 
agreement were designed to provide an overall net benefit for that 
species and contained measurable criteria for the biological success of 
the conservation plan which have been or are being met.
    (7) Nothing in this rule will be construed to limit or constrain 
NMFS or any other governmental agency from taking additional actions at 
its own expense to protect or conserve a species included in a 
conservation plan.
    (h) Effect of a permit. Compliance with the terms of an incidental 
take permit constitutes compliance with the requirements of section 9 
and 10 the ESA with respect to the species covered by the permit 
regardless of changes in circumstances, policy, and regulation, unless 
a change in statute or court order specifically requires that 
assurances given in the original permit be modified or withdrawn.

    Dated: May 21, 1997.
Donald J. Barry,
Acting Assistant Secretary, Fish, Wildlife, and Parks, Department of 
the Interior.

    Dated: May 22, 1997.
Rolland A. Schmitten,
Acting Administrator for Fisheries, National Marine Fisheries Service.
[FR Doc. 97-14082 Filed 5-23-97; 2:23 pm]
BILLING CODE 4310-55-P