[Federal Register Volume 73, Number 148 (Thursday, July 31, 2008)]
[Notices]
[Pages 44761-44772]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-17579]


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DEPARTMENT OF THE INTERIOR

Fish and Wildlife Service

[FWS-R9-ES-2008-N00166; 92220-1112-0000-FY08-EA]


Endangered and Threatened Wildlife and Plants; Recovery Crediting 
Guidance

AGENCY: Fish and Wildlife Service, Interior.

ACTION: Notice of availability.

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SUMMARY: We, the U.S. Fish and Wildlife Service (Service), announce the 
availability of guidance to promote implementation of the Endangered 
Species Act. The guidance describes a crediting framework for Federal 
agencies in carrying out recovery measures for threatened and 
endangered species. The text of the guidance is included in this 
notice. Under the guidance, Federal agencies may show how adverse 
effects of agency activities to a listed species are offset by 
beneficial effects of actions taken elsewhere for that species. The 
combined effects of the adverse and beneficial actions must provide a 
net benefit to the recovery of the species.

ADDRESSES: The guidance may be downloaded from our Web site at http://www.fws.gov/endangered/policy/june.2008.html. To request a copy of the 
guidance, write to U.S. Fish and Wildlife Service, 420 ARLSQ, 
Washington, DC 20240, Attention: Recovery Crediting; or call 703-358-
2171. You may also send an e-mail request to 
[email protected]. Specify whether you wish to receive a hard copy by 
U.S. mail or an electronic copy by e-mail.

FOR FURTHER INFORMATION CONTACT: Direct all questions or requests for 
additional information about the guidance to Dr. Richard Sayers, 
Division

[[Page 44762]]

of Consultation, Habitat Conservation Planning, Recovery, and State 
Grants, U.S. Fish and Wildlife Service, 420 ARLSQ, Washington, DC 20240 
(703-358-2171). Individuals who are hearing-impaired or speech-impaired 
may call the Federal Relay Service at 1-800-877-8337 for TTY 
assistance, 24 hours a day, 7 days a week.

SUPPLEMENTARY INFORMATION: 

Background

    The ultimate goal of the Endangered Species Act of 1973, as amended 
(ESA) (16 U.S.C. 1531 et seq.), is the recovery of endangered and 
threatened species and the ecosystems on which they depend. In 
administering the recovery provisions of the Act, the Service 
collaborates with many partners, including Federal, State, and local 
agencies, Tribal governments, conservation organizations, the business 
community, and private landowners.
    Effective recovery planning and implementation depend in part on 
creative processes and agreements with Federal partners as well as 
other non-Federal partners in community-based recovery efforts. 
Examples of innovative conservation tools under the ESA include safe 
harbor agreements, habitat conservation plans, recovery permits, and 
conservation banks. The ultimate success of conservation and recovery 
of endangered and threatened species depends on a variety of 
innovations, such as these, that may be used in concert with one 
another or alone. We expect recovery credit systems (RCS) to complement 
them further. Additional information concerning these tools is 
available through the sources listed above under ADDRESSES.
    The recovery credit approach provides Federal agencies with an 
additional recovery tool developed using existing authorities. As 
described below, this tool was initially established in Texas to allow 
Fort Hood Military Reservation to accrue credits for recovery measures 
that it arranged by contract with neighboring landowners. The type of 
arrangement we developed with Fort Hood can be applied by other Federal 
agencies that may obtain credit for advancing the recovery of a listed 
species, and this credit may be expended, or debited, to offset 
potential adverse effects of future actions. A recovery crediting 
system can allow a Federal agency to accrue credit for recovery actions 
in advance of effects resulting from any specific action that causes 
adverse effects. We expect this process to increase incentives for 
Federal agencies to use their authorities to further the purposes of 
the ESA.
    Under section 7 of the ESA, the Fish and Wildlife Service conducts 
consultations with Federal agencies to advise them whether their 
actions are likely to jeopardize listed species or adversely modify 
critical habitat. Each Federal agency has a duty under section 7(a)(1) 
to use its authorities to further the purposes of the ESA by carrying 
out programs for the conservation of listed species. The Service and 
cooperating agencies can employ the consultation process to review 
agency programs and verify that they promote the recovery of one or 
more listed species. These consultations may establish a basis for 
adoption of RCS. In the discussion of procedures for consultation on an 
RCS, additional language has been inserted to note that action agencies 
should expressly state what the net benefit to recovery will be for the 
relevant species and how the proposed RCS will satisfy that standard 
(see section III.C.).
    The Service recognizes that recovery crediting is a particular 
mechanism within the broad concept of habitat credit trading. The 
Service may expand other types of crediting to entities other than 
Federal agencies or employ additional methods for Federal agencies. 
That is, we may be able to use credits as a measure of the benefit of 
recovery actions taken on Federal lands, and we may consider other 
credit trading systems, including conservation banks, for landowners 
who take recovery actions on their own land or other private lands. 
However, the guidance being adopted herein applies only for Federal 
agencies to accrue credits on non-Federal lands.

Viewing Documents

    On November 2, 2007, we published in the Federal Register (72 FR 
62258) a notice of availability and the complete text of draft guidance 
on RCS. An initial 30-day public comment period was opened at that time 
and subsequently re-opened for an additional 60 days, until February 
25, 2008 (72 FR 73351, December 27, 2007).
    The complete file for the recovery crediting guidance as well as 
the comments and materials we received are available for inspection, by 
appointment, during normal business hours at the Division of 
Consultation, Habitat Conservation Planning, Recovery, and State 
Grants, Room 420, 4401 North Fairfax Drive, Arlington, VA 22203-1601.

Summary of Comments and Recommendations

    State and Federal government agencies, nongovernmental 
organizations, and private individuals responded to our notice. In all, 
we received comments from more than 60 respondents. Some simply 
expressed support for or opposition to the concept of recovery 
crediting; others made more specific observations and recommendations. 
The latter were grouped thematically and are organized by category 
below with our responses.

Category 1--Level of Specificity

    Issue 1. While some respondents supported the avoidance of 
specificity in the guidance, others recommended providing greater 
detail, particularly with respect to determining net conservation 
benefit, the valuation of credits, eligibility of species, and 
crediting and debiting standards and procedures. One respondent 
recommending greater detail in the guidance also recommended that we 
undertake a series of pilot projects to test the RCS concept and 
consider carrying out the guidance through adoption of a regulation. 
Some pointed to climate change as a specific widespread threat to 
species that should be accounted for in developing RCS.
    Response 1. Our responses to suggestions for greater specificity on 
particular issues are presented under the discussion of those issues. 
Generally, we believe that it is necessary, particularly at this stage 
in the development of RCS, to strike a balance between clearly 
expressing the principles governing the mechanism and allowing 
individual RCS to adapt to local conditions and needs. A series of 
carefully monitored pilot projects may provide a basis for 
incorporating greater detail in a future iteration of this guidance or 
replacing it with a regulation.
    With respect to the valuation of credits, we anticipate that a 
variety of quantitative measures may be employed under the guidance in 
different situations, such as number of individuals of a species, 
density of individuals over some measurable area, quantity of habitat 
displaying given characteristics, volume of flow in a given aquatic 
system, etc. In some cases it may also be possible to establish 
equivalencies between different measures. For example, habitat that is 
relatively abundant could be debited against scarce habitat of 
different character that requires restoration to promote recovery.
    Climate change is one of the widespread effects (such as invasive 
species) that may be appropriate to consider on a case by case basis.

[[Page 44763]]

Category 2--Adequacy of/Appropriateness of the Net-Benefit Standard vs. 
Contribution To Recovery

    Issue 2a. Many respondents were concerned about the application of 
the net-benefit standard. Following is a summary of those concerns and 
our responses:
    ``Net conservation benefit'' should be clearly and consistently 
defined in the guidance. This terminology should be consistently used 
throughout the guidance to avoid confusion and misapplication.
    Response 2a. We agree and have revised our terminology. Because 
``net conservation benefit'' has been applied with respect to other 
policies, such as the Safe Harbor policy, and the RCS process applies a 
different standard to Federal agencies through the ESA section 7 
process, we have revised our language to refer consistently to the term 
``net benefit to recovery,'' which is now defined in section I. C. of 
the final guidance.
    Issue 2b. Some respondents contended that the draft guidance fails 
to set firm guidelines for ensuring a net conservation benefit; that 
the standard is too weak, and should be replaced by a stronger recovery 
standard; that the focus of the document is enabling Federal agencies 
to find new ways to mitigate the habitat destruction resulting from 
their activities; or that the practice of merely agreeing to avoid 
destruction of existing habitat should be discouraged as there would be 
no net gain.
    Response 2b. Our intent for this guidance is that its 
implementation will provide greater flexibility and increased 
opportunities for Federal agencies to implement their responsibilities 
under section 7(a)(1) of the ESA, to enhance the recovery of listed 
species. We have attempted to clarify this intent by revising our 
terminology in the guidance by defining ``net benefit to recovery'' and 
consistently refer to a ``net benefit to recovery'' rather than a ``net 
conservation benefit''.
    Issue 2c. An RCS should generally be available over the full range 
of the species to provide maximum flexibility--differences in habitat 
quality should be reflected in the definition of the credit for that 
species.
    Response 2c. We agree that in most cases where it is appropriate to 
develop an RCS, credits should be available throughout the species' 
range, and habitat credits valued appropriate to the relative 
importance of the habitat to recovery. It is important to note that 
recovery credits may be accrued for recovery actions other than habitat 
protection--they could be applied to needed research, management, or 
outreach actions, for example.
    Issue 2d. Placement of an RCS should be focused on the benefit to 
species recovery and not proximity to public land. Listed species are 
more prevalent on private land.
    Response 2d. The focus of recovery credits is on benefits to the 
species. In terms of habitat credits, proximity to public lands may 
well be important for some species because public lands often take the 
form of large tracts of land that will be protected from fragmentation 
and development in perpetuity. Because habitat connectivity is often of 
critical importance, private lands near large tracts of public lands 
may contribute more to connectivity than isolated tracts of private 
lands. This does not in any way discount the importance of private 
lands to the conservation and recovery of endangered species.
    Issue 2e. Actions qualifying for a recovery credit should be 
measurable and outcome-based. A demonstrated positive response by the 
population of the target species in the area affected by the action 
should be the litmus test for evaluating the effectiveness or assigning 
a value to a recovery credit.
    Response 2e. We agree. The standard of using current recovery plans 
or an equivalent, Service-approved document, which must tie the 
recovery criteria and recovery actions directly to addressing the 
threats to the species, should assure that recovery credits are based 
upon measurable, outcome-based actions.

Category 3--Expanding Scope

    Issue 3a. Who can participate in Recovery Crediting Systems?
    Response 3a. Under this guidance, recovery credits can only be 
established through an ESA section 7 consultation. The use of recovery 
credits is therefore limited to Federal action agencies, and only 
Federal action agencies may accrue, hold (bank), and use (debit) 
recovery credits. That does not mean that non-Federal entities cannot 
participate in the RCS process where appropriate. It is also important 
to note that other entities may be involved in consultation or acting 
on behalf of a Federal action agency and they may engage and 
participate in the recovery credit process and the consultation process 
as appropriate. Consultation is a responsibility of all Federal 
agencies, and the Federal action agency (a single Federal entity) is 
ultimately responsible for the accrual, use (debiting), and accounting 
of recovery credits. Other entities, Federal or non-Federal, may 
participate in RCS as appropriate, but a non-Federal entity cannot 
accrue, hold (bank), or use (debit) recovery credits.
    Issue 3b. Is the recovery credit process limited to federally 
listed species only?
    Response 3b. Yes, RCS are limited to federally listed species 
because the authority for establishing and using an RCS is the ESA's 
section 4(f) and section 7(a)(1), both of which apply only for listed 
species. The draft guidance clearly stated that recovery crediting is 
an optional process for a Federal agency to use its authorities to 
promote the conservation of listed species.

Category 4--Comments on the Use of Federal Lands

    Issue 4a. Are recovery credits limited to actions on non-Federal 
lands or can credits be accrued from recovery activities on Federal 
lands? Several respondents noted that RCS should place a priority to 
carry out recovery actions and thus accrue recovery credits on Federal 
lands and, since the impacts are occurring on Federal lands, the 
impacts must be mitigated on Federal lands. One commenter noted that 
State or private lands should be used only as a last resort to mitigate 
for impacts on Federal lands.
    Response 4a. The draft guidance stated that ``a recovery credit 
system is a specific program established to provide recovery actions on 
non-Federal lands for specific species while creating a bank of credits 
that a Federal agency may use to offset the effects of its actions.'' 
Only conservation that occurs on non-Federal lands can be counted as 
recovery credits.
    The Service supports the mitigation of impacts using either Federal 
or non-Federal lands. As noted above, recovery credits were intended to 
promote the recovery of listed species on non-Federal land and to 
offset adverse effects to listed species from proposed Federal actions.
    Issue 4b. There was concern that the program could ultimately lead 
to the long-term degradation of Federal lands and a transfer of 
valuable fish and wildlife resources from lands held in public trust to 
private reserves. Respondents also recommended that Federal agencies 
strive to seek additional incentives to minimize loss of threatened and 
endangered species and their habitats on Federal lands. It was also 
noted that the full force of the Endangered Species Act does not apply 
on private lands, and that Federal activities on public lands should 
rarely, if ever, result in the net loss of habitat for listed species.
    Response 4b. Federal agencies are mandated under section 7(a)(1) of 
the ESA to use their authorities to further

[[Page 44764]]

the conservation of listed species. Recovery crediting is simply one 
tool that agencies may use in order to do so, and will not be 
appropriate in all situations. Because public lands often provide 
extremely valuable large tracts of protected habitat, it will be 
incumbent upon the Service and an action agency to assure in each RCS 
established that any debiting action on Federal lands does not lead to 
long-term degradation of habitat for listed species, but in fact 
enhances the recovery of the species through additional private 
partnerships and other recovery actions. Credits could potentially be 
applied to actions on other public lands, as well as State or private 
lands. Recovery debits on Federal lands must be valued against a net 
benefit to recovery standard for any credit on private lands. This must 
include assurance of equivalent protections for the species on private 
lands and a net benefit, not an even trade of debits for credits. 
Issues of habitat size, quality, and connectivity must be considered, 
and Federal lands will continue to play a major role for most species.

Category 5--Temporary vs. Permanent Credits

    Issue 5. Several respondents expressed concern over the concept of 
temporary credits, while others supported the exchange of temporary 
credits for temporary impacts. Some respondents did not believe the 
guidance provided enough information concerning the use and/or 
determination of temporary versus permanent credits. Concerns included 
the inadequacy of achieving species needs in the short term, lack of 
specific standards for in-perpetuity protection, and the use of 
temporary credits for outreach and research that could be traded for 
habitat impacts. A few comments recommended that only permanent credits 
be allowed, much like the situation in conservation banking, with even 
temporary impacts offset through a permanent credit system. One 
respondent questioned the manner in which temporary effects were 
quantified for the Fort Hood pilot project and how it could be applied 
to a national model.
    Response 5. The Service has not attempted to outline specific 
details on what may constitute a ``temporary'' or ``permanent'' impact 
because of the multitude and range of direct and indirect effects that 
may occur from a variety of Federal actions. Such an attempt would 
ultimately fall short of capturing the concept of temporary or 
permanent credits. Instead, we believe the nature of effects are best 
described during formal consultation, which requires a detailed effects 
analysis of the specific Federal action on listed species. We agree 
that, in most cases, the impact must be commensurate with the credit 
(while providing a net benefit to recovery), which is how the pilot 
project at Fort Hood is modeled. However, we do not want to preclude 
the inclusion of any recovery tasks (e.g., research, public outreach) 
that are necessary for delisting or downlisting of the target species 
in the development of RCS. The decision on the appropriate credit 
exchange, as well as the value of credits, would be made through the 
development of specific RCS. Thus, the guidance is intentionally 
general in outlining the concept of recovery crediting and does not 
rely on specific aspects from the pilot project at Fort Hood, which is 
still in the development phase.
    Both temporary and permanent credits may be necessary components of 
an RCS. Using permanent credits to offset both temporary and permanent 
impacts is not precluded under this guidance, but developing 
appropriate temporary credits adds incentives for furthering the 
recovery of listed species. Because of the net benefit to recovery 
standard for crediting, temporary credits must provide a measurable 
contribution to the recovery of the target species.

Category 6--Role of the States

    Issue 6. The Service received several comments from State natural 
resources agencies and other interested parties on the importance of 
and status of the States in working with the Service on recovery of 
listed species under the ESA. In addition, the comments stressed three 
elements in creating a functional RCS. First, that States, given their 
status under section 6 of the ESA, have a direct need to work in a 
collaborative partnership with the Service to develop an RCS and share 
the responsibility to ensure that an RCS works in partnership with 
Federal agencies, States, private landowners, Tribes, land trust 
organizations and other partners and stakeholders. Second, several 
State interest comments advocated that the Service create a science 
team to further develop this guidance, review other recovery or 
conservation tools, such as conservation banking, and then develop more 
detailed guidance for the Service to review in public comment. Third, 
several respondents recommended that the Service, in partnership with 
the States and other national partners, monitor a few pilot recovery 
credit projects first, review these with a national team, and then 
develop more credible RCS guidance.
    Response 6. The Service agrees that the States play an important 
role as our conservation partners under section 6 of the ESA and other 
Federal fish and wildlife conservation laws. Each State was required to 
develop a State Wildlife Action Plan by October 2005 and implement its 
plan, with Service approval, by January 2007. These plans are now in 
place. Several Memoranda of Understanding (MOU) between the Service and 
the States and other partners reflect the importance of the States' 
role in conservation of listed species and other species at risk.
    The Service expects that appropriate scientific advisory groups 
will be formed to assist in the development of individual RCS, and will 
be capable of evaluating these systems as they are carried out. We 
decline to establish a national science team at this time, but may do 
so in the future if we determine that it is warranted, and may provide 
more informed detailed guidance at that time.

Category 7--Scope and Transfer or Interstate Trading

    Issue 7a. One respondent asked whether recovery credits be accrued 
in one portion of a species' range and used in another portion of a 
species' range that may be some distance away.
    Response 7a. Appropriate credits may be accrued and used anywhere 
within a species' range. However, as discussed in the draft guidance, 
recovery plans, State plans and other guiding documents or groups, such 
as a recovery team, science or biology workgroup, etc., may prioritize 
particular areas for credit accrual and/or use based on the needs of 
the species.
    Issue 7b. One respondent inquired whether credits should be 
transferable or traded among entities.
    Response 7b. The draft guidance clearly stated, ``Circumstances may 
arise in which a Federal agency may opt to sell or transfer banked 
credits to another agency.'' Federal agencies may trade, transfer, or 
sell recovery credits to another Federal agency in accordance to the 
agencies' scopes of authority. The Service does not usually participate 
in how a Federal action agency implements aspects of a consultation, 
such as carrying out activities described in a biological assessment or 
a biological opinion. If a Federal action agency contracts with a non-
Federal entity or with another Federal entity to accomplish 
conservation actions for listed species, the Service may not be aware 
of or involved in that process. The Service's role is work with the 
action agency and the action as it is presented to us in the 
consultation

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process. The Service will examine credits and their availability for 
use during the consultation process and issue a biological opinion. The 
origin of the credits is not a concern for the Service. Put simply, the 
transfer or trading of credits among Federal agencies is acceptable, 
however, the Service will not engage in negotiation or trading 
activities among Federal agencies or their surrogates. The Federal 
action agency must accurately account for all credits and debits it 
offers to use during the consultation process, and the Federal action 
agency is ultimately responsible for all subsequent accounting and 
tracking of recovery credits.
    Since State agencies and private entities do not have a 
consultation responsibility, there is no basis for them to design or 
implement an RCS without the involvement of a Federal action agency. 
Under this guidance, only RCS involving Federal agencies will be 
recognized by the Service during the consultation process.

Category 8--RCS and Other Recovery Mechanisms (e.g., Conservation 
Banks)

    Issue 8. Several respondents noted similarities or differences 
between this guidance and the Service's conservation banking guidance 
issued in 2003 (68 FR 24753, May 8, 2003). Some considered conservation 
banking to be a superior method of protecting habitat with an 
established record of success, and recommended that RCS be abandoned in 
favor of conservation banking. Others recommended that a clear 
distinction be drawn between the two mechanisms, or that RCS be held to 
the same standards that apply for conservation banking, such as in-
perpetuity protection, legally binding commitments, non-wasting 
endowments, and conservation easements. One respondent characterized 
RCS as potentially providing the functional equivalent of conservation 
banking. One respondent recommended that the Service examine the 
economic effects that establishment of RCS would have on the 
conservation banking industry. One submittal included a cost-benefit 
analysis supporting lower costs associated with recovery crediting in 
the Fort Hood area as compared to habitat protection through easement 
or acquisition.
    Response 8. We appreciate the conservation value provided by 
existing conservation banking arrangements, and in fact described RCS 
as a complement to conservation banking in our November 2, 2007, 
notice. We do not intend to establish recovery crediting as an 
alternative to other conservation measures that are already playing a 
role in conserving species, but rather to serve in situations that lend 
themselves to the particular features of recovery crediting. The most 
apparent distinguishing characteristics of recovery crediting are the 
possibility of encumbering property on a less than permanent basis and 
of protecting habitat in a dispersed array over a landscape. Some 
landowners may find non-permanent arrangements more attractive than 
conventional banks, and thus be induced to participate where they might 
not otherwise. The potentially dispersed nature of habitat covered by 
an RCS will demand vigilance on the part of the Service and its 
cooperators to avoid excessive habitat fragmentation. We do not plan to 
examine the economic effects of recovery crediting on conventional 
conservation banks, as we believe that doing so at this time would be 
excessively speculative. In a similar vein, it may not be valid to 
compare conservation measures through cost-benefit analyses because of 
the differing nature of the benefits provided by the various measures. 
In this context, we note that the Army has contracted for a study 
examining return on investment for the Fort Hood crediting system.

Category 9--Adequacy of RCS Based on Documents Other Than Recovery 
Plans

    Several respondents were concerned about whether documents other 
than recovery plans should be used as the basis for an RCS. Following 
is a summary of those concerns and our responses:
    Issue 9a. Acceptable documents should be more completely described.
    Response 9a. We agree that what constitutes an acceptable document 
should be well defined. We have added language under section III.B., 
``planning and development phase'' that more clearly defines acceptable 
documents.
    Issue 9b. Documents should not be limited to those that are 
approved by the Service, even when recovery plans are available.
    Response 9b. Section 4(f) of the ESA requires the Service to 
develop and implement recovery plans for listed species. Because an RCS 
must be based upon clearly identified actions that will address threats 
to the species, and that will contribute to its recovery, these actions 
should be part of a Service-approved document. However, that Service-
approved document may be a conservation plan or framework, or include 
recommendations within a 5-year review that meet the standard of 
addressing threats and contributing to recovery of the species. Actions 
so identified in an RCS would be treated on the same basis as those in 
a current recovery plan.
    Issue 9c. Recovery credits should be based only upon approved and 
current recovery plans, and the Service should prioritize developing or 
updating plans before implementing an RCS. Documents other than 
recovery plans referenced in the draft guidance may be insufficient to 
provide the necessary recovery tasks and measures to ensure a net 
benefit to recovery, or may be inadequate in their public 
participation. The guidance should include language that requires the 
recovery plan or equivalent conservation plan for a target species to 
be up-to-date and contain the best scientific data available.
    Response 9c. We agree that a current recovery plan would generally 
be the best source for developing an RCS, and that it should be the 
generally applicable standard. The Service is working to streamline its 
processes for revising and updating recovery plans, and will consider 
the need for prioritizing those species for which an RCS might be 
beneficial. However, in some instances, it may be appropriate to 
utilize information from a Service-approved conservation plan or a 
recent 5-year review to develop an RCS with the best available 
scientific information on the needs of the species. We have added 
language under section III.B., ``planning and development phase'', that 
more clearly defines acceptable documents and how they should be used.
    Issue 9d. Recovery plans are flawed and will not likely lead to 
recovery, so recovery credits should not be based upon them.
    Response 9d. Recovery plans are developed with the participation of 
our partners in the scientific community as well as our partners in 
implementation and represent the best available science as applied to 
addressing the threats to species and their ultimate recovery. Recovery 
plans are one of the most important tools we have to ensure sound 
decisionmaking in the implementation and tracking of species recovery.

Category 10--The Role of Monitoring

    Issue 10. We received numerous comments concerning responsibility 
and accountability for monitoring of RCS. Some believed the Service 
should oversee all monitoring plans and accounting of credits and 
debits. Some suggested that monitoring data should be equally shared 
among all stakeholders, while others recommended that an independent 
third party conduct monitoring to provide confidentiality assurances to 
private

[[Page 44766]]

entities participating in the system. Other comments suggested the 
Service's 5-year review process was inadequate to monitor the 
contribution of RCS to the status of target species. One respondent 
believed Federal agencies should not monitor their own systems due to 
the potential overlap of credits between two or more agencies. Several 
expressed concerns about funding shortfalls, including the ability for 
the Service to allocate funding and the costs to private entities for 
monitoring. Two comments believed the guidance should outline a 
remedial process for problems identified through monitoring (e.g., 
failure of credit to produce benefits).
    Response 10. The Service intends to play an active role in all 
aspects of RCS development and implementation. The draft guidance may 
not have stated the Service's role as plainly as possible, but it was 
our intent that an oversight function would occur under credit accrual 
through ``sanctioning'' the credit, and under the debit process through 
a biological opinion. We have revised those sections to clarify the 
Service's role. We also believe that monitoring should be coordinated 
among our Federal and non-Federal partners in order to ensure a 
rigorous and transparent monitoring and reporting process. We agree 
that all stakeholders committed to participation under an RCS should be 
full partners and share equally in the information generated from 
monitoring. We also agree that an independent third party is acceptable 
for implementation of a monitoring plan. However, the prospect of 
granting assurances for some participants to remain anonymous is not 
within the Service's authority. Further, the Service believes that a 
monitoring plan that conceals certain information from certain 
participants would not adequately provide checks and balances in the 
system and would undermine the concept of Cooperative Conservation. The 
Service has experienced this situation through the pilot project at 
Fort Hood. Certain confidentiality assurances developed in the pilot 
have created challenges to the effectiveness monitoring process, which 
resulted in an individual funded project failing to produce credits.
    The Service agrees that funding for monitoring and reporting is an 
important issue for a properly functioning RCS. In the guidance, we 
acknowledge the lack of resources within our agency to implement many 
recovery actions for listed species. For these reasons, the guidance 
invites participation from all potential stakeholders--Federal, State, 
private and nongovernmental--to produce a more effective system and 
pool resources to ensure success. In this way monitoring plans can be 
developed and collaborated among participants, as expertise and 
resources allow, to meet the goals and objectives of each particular 
system.
    The Service agrees that a process for corrective action or 
remediation based on feedback from monitoring should be developed 
within an RCS. However, it would be ineffective to generalize such a 
process in the guidance. Rather, those processes are best developed on 
a system-specific basis.

Category 11--Military Related Comments

    Issue 11. The Service received a few comments from within the 
Department of Defense (DoD) and from other respondents on the role of 
the military working in partnership with the Service, States, private 
landowners, and other partners in developing potential RCS. Comments 
stressed four elements in creating a functional RCS:
    First, that any credit-debit system must support a military 
installation in protecting its military mission and must allow 
flexibility for the target species' conservation with partners.
    Second, the guidance should refer to Integrated Natural Resources 
Management Plans (INRMPs) as examples of Service-approved documents 
that could serve as the basis for developing an RCS on a military 
installation.
    Third, given the unique nature of the DoD and challenges it engages 
in carrying out its core military missions and in meeting its 
obligations under the ESA, that there are unique opportunities to 
conduct initial pilot projects combined with the DoD's Range and 
Environmental Protection Initiative (REPI).
    Fourth, DoD manages some 25 million acres of land on military 
installations that support multiple training needs across a wide 
geographical area, while maintaining a diversity of ecosystems and 
endangered species, creating a need for further collaborative conflict 
resolution over land use and endangered species conservation and 
recovery across those landscapes with private landowners, and other 
Federal, State, Tribal, and local government and other nongovernmental 
partners.
    Response 11. Some of the best examples today of endangered species 
conservation partnerships involve military installations around the 
nation. The Fort Hood pilot project is an example of two themes 
expressed in many of the comments. First, that the Service, the States, 
and other conservation partners should focus on the lessons learned 
from this pilot in applying it elsewhere and that it is only one 
example of a system we expect to help shape the guidance in the future. 
Second, that there are other potential pilot projects that may involve 
military installations, depending on the endangered species and 
potential applicability of an RCS that benefits the species, the 
military, and other partners.
    The Service agrees that there is potential that some INRMPs being 
implemented at military installations can serve as recovery tools for 
certain endangered species, in tandem with recovery plans, State 
Wildlife Action Plans, and other conservation plans that target the 
species. The Sikes Act mandates that each military installation 
develop, implement, and revise an INRMP where significant natural 
resources occur on military lands with the mutual agreement by its two 
primary conservation partners, the Service and the appropriate State 
fish and wildlife agency. The Service acknowledges that the tri-partite 
MOU between DoD, the Service, and the Association of Fish and Wildlife 
Agencies (AFWA) for a Cooperative Integrated Natural Resources 
Management Program on Military Installations is a key agreement for 
cooperative conservation on military lands. INRMPs that include active 
conservation and management initiatives for endangered species can 
contribute to the recovery of a species. Supporting military 
installations' conservation efforts is a concerted effort by the DoD, 
the four Military Services, the DoD Legacy Management Program, the DoD 
REPI Program, the DoD Partners in Flight Program, the National Military 
Fish and Wildlife Association, and the Association of Fish and Wildlife 
Agencies. Other supporting MOUs are key to potential military 
installation--private landowner--State agency lands--other Federal 
lands conservation partnerships. These include the 2006 MOU between 
USDA, Natural Resources Conservation Service, the Service, and the AFWA 
to strengthen cooperation among the parties to proactively conserve 
plant and animal species-at-risk and their habitats, to foster the 
recovery of listed species, and address similar needs for State species 
of concern. A similar 2007 MOU exists between the DoD and the Service 
for bat conservation.
    The Service agrees with the comment about the unique nature of 
DoD's military mission and the challenges it faces in carrying out its 
core mission while meeting its obligations under the ESA, and that 
there are various

[[Page 44767]]

opportunities to conduct initial pilot projects elsewhere in the nation 
combined with certain DoD conservation programs. As noted above, 
military installations, the Service, and the States work as 
collaborative partners under the Sikes Act and the tri-partite MOU at 
several installations and are promoting further collaborative 
partnerships with private landowners, State lands, other Federal 
agencies, Tribes, nongovernmental organizations, and other partners in 
the recovery of endangered species found on military lands and adjacent 
lands. The DoD conservation programs such as the DoD Legacy Program, 
the DoD REPI, and the DoD Partners in Flight Program are conservation 
tools that DoD uses effectively with conservation partners on 
endangered species, fish and wildlife, and other natural resources. As 
noted in the Service's response to comments under the Role of States, 
carrying out an effective RCS may lead to establishment of national and 
project-level science teams that can guide and target endangered 
species recovery actions. The Service recognizes a need to invite the 
DoD and military services to be represented on any future national 
science team. In any case where the military installation may be part 
of a potential pilot RCS, it is key that the military installation 
natural resources staff represent the military on a local science team 
to steer a pilot project with the Service, State, and other partners.
    The Service also acknowledges that DoD and the four military 
services have balanced sustaining the military readiness mission with 
stewardship of natural resources including endangered species over a 
diverse range of ecosystems in the nation. DoD, the Service, and the 
States work on several conservation partnership teams to bring 
conservation resolution out of potential conflicts

Category 12--Critical Habitat

    Issue 12. A variety of opinions were offered in response to our 
solicitation of comment on the relationship of RCS to critical habitat. 
One respondent recommended that there be no specific link between the 
two. Others suggested that areas covered by an RCS should not be 
designated as critical habitat, that existing designations be removed 
for areas covered by an RCS, that existing critical habitat be accorded 
high value for RCS coverage, or that RCS coverage be given explicit 
preference over critical habitat designation as a means of promoting 
conservation.
    Response 12. We have declined to attempt articulating any explicit 
relationship between RCS and critical habitat at this time. Given the 
wide range of opinion expressed and the relatively broad discretion we 
are afforded by the ESA in designating critical habitat, we believe 
that a relation between the two, if any, is most likely to arise in the 
context of future RCS applications and specific designations.

Category 13--Legal Issues

    Issue 13a. Several respondents asserted that RCS would allow 
agencies to exceed their existing Congressional mandates under the ESA 
and other statutes.
    Response 13a. RCS do not expand the authorities of the Service or 
the cooperating agencies.
    Issue 13b. One respondent asserted that the Service is ``literally 
authorizing increased endangered and threatened species take and 
habitat destruction/degradation'' with RCS.
    Response 13b. This guidance does not authorize any take or habitat 
destruction. As plainly set out in the guidance, any actions taken 
under the guidance would be subject to section 7 consultation. It is 
the issuance of a future biological opinion with an incidental take 
statement that authorizes any take. Further, any action that may affect 
critical habitat would be subject to consultation as well.
    Issue 13c. One respondent ``reject[ed]'' the authority of the 
Service to ``weaken the section 7'' consultation process by creating 
RCS that promote the take of species or the degradation of their 
habitat.
    Response 13c. The respondent misunderstands the premise of section 
7(a)(2). The ESA allows action agencies to take species and impact 
critical habitat if, after consultation with the Service, it is 
determined that those actions are not likely to jeopardize listed 
species or adversely modify or destroy critical habitat. Actions taken 
under an RCS will be subject to section 7 consultation. Further, 
because RCS require a net benefit to the recovery of the species 
concerned, there is no weakening of their section 7(a)(1) 
responsibilities.
    Issue 13d. One respondent questioned what would happen if a 
landowner were not in compliance with an agreement.
    Response 13d. As with any Federal agency action subject to 
consultation under section 7, an action taken under an RCS would be 
governed by the reinitiation clause of the section 7 regulations (50 
CFR 402.16). That is, the Federal action agency would be required to 
reinitiate consultation if the action being implemented causes effects 
to the species that were not considered during the consultation.
    Issue 13e. One respondent asserted that Federal agencies cannot 
take actions that are likely to jeopardize listed species even if they 
have taken ``previous actions that have been demonstrably effective in 
promoting that species' recovery.''
    Response 13e. We agree that action agencies cannot lawfully take 
actions that are likely to jeopardize listed species. Under an RCS, 
however, an action could not lead to jeopardy because the RCS must 
demonstrate a net benefit to recovery. Furthermore, the regulations 
implementing section 7 specifically speak to this point (see 50 CFR 
402.14(g)(8)).

Guidance

    The text of the guidance follows:

Guidance on Recovery Crediting for the Conservation of Threatened and 
Endangered Species

I. Introduction

A. Purpose and Scope of Guidance

    This document is intended to provide guidance on the development, 
management, and use of recovery credits as a measure for mitigating 
adverse effects to and contributing to the recovery of species listed 
as threatened or endangered under the Endangered Species Act of 1973, 
as amended (ESA). The guidance should assist Service personnel in 
determining the applicability of recovery credits for the recovery 
needs of a species, fulfill the purposes of the ESA, and provide 
consistency in the establishment, management, and use of recovery 
credits. For more detailed guidance and information on various other 
recovery programs, we include a list of helpful documents in section VI 
of this guidance. These documents will help the reader have a more 
complete understanding of recovery programs as a whole.
    Recovery crediting is an optional process for Federal agencies to 
use their authorities to further the conservation of listed species. 
Recovery credits can provide an additional means of implementing 
``conservation measures,'' commonly offered by Federal agencies to 
offset effects to listed species resulting from Federal actions. As 
noted in the Service's Consultation Handbook, ``When used in the 
context of the Act, `conservation measures' represent actions pledged 
in the project description that the action agency or applicant will 
implement to further the recovery of the species under review.'' For 
further discussion of conservation

[[Page 44768]]

measures, see Endangered Species Consultation Handbook, pp. 4-8. In a 
recovery crediting system (RCS), the action agency would present 
credits as part of its project description. A pledge represented by a 
credit must be a legally binding commitment such as a contract with a 
private landowner.
    Some potential benefits of an RCS include (1) better and more cost-
effective contributions to recovery through agency activities; (2) more 
exact analysis; and (3) increased predictability for all parties. The 
Service and its cooperators should closely evaluate the use of recovery 
credits as a conservation tool for each species or group of species; 
recovery credits may not be appropriate in some situations. In other 
cases, recovery credits may be a valuable tool in advancing the 
recovery of a species.
    This guidance is general in nature, as each process developed for 
using recovery credits will differ based on a variety of circumstances. 
An RCS should be tailored to the specific circumstances under which it 
would be applied; ideally it should be based on the relevant recovery 
plans and, when recovery plans are lacking or inadequate for the design 
of an RCS, should rely on other Service-approved documents (see ``III. 
B. Planning and Development Phase'' below for examples). RCS may 
complement mitigation tools and conservation programs currently 
available, such as conservation banking. This guidance also does not 
attempt to closely define or assign roles to the agencies and other 
participants in an RCS; we anticipate that these roles will vary to 
some degree in response to the circumstances surrounding particular 
systems.

B. Background

    We have long recognized that effective recovery planning and 
implementation for listed species require cooperative processes, 
including recovery actions by Federal land managing agencies with 
adjacent landowners, local communities, Tribes, States, and other 
Federal agencies.
    The concept of recovery credits was developed in Texas to allow the 
Department of Defense (DoD) to receive credit for recovery measures 
being implemented by Fort Hood Military Reservation. Fort Hood, which 
is home to the largest known population of the endangered golden-
cheeked warbler within its breeding range, carries out recovery 
measures with neighboring landowners in an effort to offset adverse 
effects that may result from future on-base military readiness 
activities. In exchange for implementing recovery actions, DoD 
requested that these actions be considered for ``banking'' to offset 
effects attributable to training activities.
    Although the Fort Hood example is very specific and limited in 
scope, the general concept can be applied more broadly. Federal 
agencies may obtain credit for actions undertaken on non-Federal lands 
to advance the recovery of listed species, and this credit may be 
expended, or debited, to offset potential adverse effects of future 
actions. In other words, Federal agencies may ``bank'' recovery credits 
in advance in a particular RCS, and apply those credits at a later time 
to the analysis of an agency action. This process can add an incentive 
for Federal agencies to use their authorities to further the purposes 
of the ESA.

C. What Is a Recovery Credit?

    A recovery credit is a quantifiable unit of measure recognized by 
the Service representing a contribution to the recovery of a species 
listed under the ESA. For example, in its simplest form, one credit 
could equal a specified number of acres of habitat, the acreage 
necessary to support one nest of the target species, or a specified 
number of acre-feet of water secured. Recovery credits should be based 
on a commitment to implement recovery actions outlined in a particular 
species' recovery plan or alternative Service-approved document. Each 
recovery credit, therefore, may be considered to be part of recovery 
implementation leading towards the downlisting or delisting goals of a 
threatened or endangered species, taking into account the debits that 
have occurred.
    An RCS is a specific program established to implement recovery 
actions on non-Federal lands for specific species while creating a 
``bank'' of credits that a Federal agency may use to offset the effects 
of its actions. That is, the Federal agency may develop and store 
credits to be used at a later time to offset particular adverse effects 
of its actions. The overall system must provide a net benefit to 
recovery for covered species. ``Net benefit to recovery'' is defined as 
follows: Enhancement of a species' current status by addressing the 
threats identified at the time of listing or in a current status 
review. Net benefit to recovery represents the cumulative benefits of 
the recovery actions for a species identified in an RCS that contribute 
to the goal of downlisting or delisting the species, as specified in a 
current recovery plan or equivalent Service-approved document, after 
consideration of the debits applied to any adverse effects of a Federal 
agency action. A net benefit to recovery will generally be found when 
an action directly or indirectly provides a material increase in a 
species' population and/or a material enhancement, restoration, or 
protection of that species' habitat.
    Under this policy, only Federal agencies may apply recovery credits 
to the effects of their proposed actions, but the system is similar in 
principle to conservation banking and habitat conservation plans. 
Recovery credits must be realized to create a ``bank'' of credits 
before they can be used to compensate for adverse effects to listed 
species. Unlike the situation with conservation banks, the RCS may be 
used for either permanent or temporary effects. However, the positive 
effects of the credits may be temporary (e.g., secured by a term 
contract) only if the negative effects to be offset are also temporary 
and, further, if the accounting function of the recovery credit system 
ensures that benefits of the credits are achieved in a way so that 
there is a net benefit to recovery. The recovery actions represented by 
credits must take place within a geographic area that is biologically 
appropriate to offset the adverse effects, such as a recovery unit.

II. Guidance Considerations

A. Authorities

    The ESA provides the basis and framework for this guidance. The 
ESA's stated purposes include providing ``a means whereby the 
ecosystems upon which [listed] species depend may be conserved'' and 
``a program for the conservation of such [listed] species.'' Under 
section 3 of the ESA, conservation is defined as ``using all methods 
and procedures which are necessary to bring any [listed] species to the 
point at which the measures provided pursuant to [the ESA] are no 
longer necessary.'' Within the context of this guidance, these 
definitions help determine and evaluate appropriate conservation 
measures and benefits. Further, recovery planning is addressed under 
section 4(f) of the ESA, where provisions for the development of 
recovery plans for the ``conservation and survival of [listed] 
species'' are provided. A recovery plan is one of the most important 
tools to ensure sound decisionmaking throughout the recovery process.
    Section 7(a)(1) of the ESA requires that all Federal agencies ``in 
consultation with and with the assistance of the [Service], utilize 
their authorities in furtherance of the purposes of [the ESA] by 
carrying out programs for the conservation of [listed species].'' The 
ESA gives broad

[[Page 44769]]

discretion to Federal agencies to determine the appropriate methods for 
implementation of section 7(a)(1). One possible method for agencies to 
utilize their authorities for the conservation of the species is 
through an RCS.
    Establishing an RCS should result in a net benefit to the recovery 
of a listed species. That is, the status of the target species will 
improve because, overall, the crediting system must contribute to the 
recovery of that species. Of course, each Federal agency will have to 
balance its authorities, statutory obligations, and missions to 
determine if this policy is appropriate or viable for the agency's 
purposes. For example, a Federal agency will have to determine if it 
has authority to acquire interests in non-Federal lands.

B. Goals and Objectives

    The goal of an RCS is to enhance the ability of Federal agencies to 
promote the recovery of listed species on non-Federal land and offset 
adverse effects to listed species from proposed actions. Objectives are 
(1) to produce a net benefit to recovery of the target species, (2) to 
increase the flexibility of Federal agencies to accomplish their 
missions while meeting their requirements under the ESA, and (3) to 
promote effective Federal/non-Federal partnerships for species 
recovery.
    In order to meet the first objective, the standard for establishing 
recovery credits should be implementing actions within an approved 
recovery plan that has been identified as current by the Service office 
with lead for the species. The Service should prioritize updating or 
supplementing recovery plans that are not current for species for which 
an RCS is being considered, so that any new actions being considered 
are integrated with the recovery criteria and plan for the species. In 
some instances, a recovery plan may not be available for a species 
being considered for an RCS. If so, an alternative document such as a 
Service-approved conservation plan, strategy, or framework that has 
identified specific actions to address the threats to the species may 
be used. Examples of documents that can contribute to establishing an 
RCS include military Integrated Natural Resource Management Plans, 
State Wildlife Action Plans, 5-year status reviews, and biological 
opinions. However, those can be utilized in tandem with a recovery plan 
and any specific actions within alternative documents must be 
consistent with the goals, objectives, and recovery strategy identified 
in the species' recovery plan to address threats and promote recovery 
of the species. Providing credits for recovery tasks allows Federal 
agencies to work together with other entities to more effectively use 
measures in achieving net benefits that contribute to recovery, rather 
than simply addressing on-site effects of particular projects. When it 
is possible to foresee the utility of an RCS during the preparation of 
a recovery plan, authors of a plan may incorporate elements of the 
system explicitly in the plan.

C. Principles of Recovery Crediting

    Simply put, the recovery credit system is: (1) The development and 
accrual of credits, which would accomplish recovery tasks and have a 
net benefit to recovery for the target species; and (2) a subsequent 
Federal action, which uses (debits) some portion of the credits, as 
part of the Federal action to offset adverse effects.
    Federal agencies can employ an RCS to accomplish recovery tasks as 
well as offset the adverse effects of their actions. Although Federal 
agencies with appropriate authorities may also purchase credits in a 
conservation bank or employ other mitigation or recovery measures, a 
Federal agency may want to establish a system specific to its needs. 
Recovery crediting works within the existing framework of the ESA and 
its implementing regulations. This guidance is intended to assist in 
the early stages of planning and development of a proposed RCS. While 
no two crediting systems are likely to be identical, this guidance 
addresses fundamental principles that would apply to all situations.
    The general principles of establishing an RCS include--
The Recovery Crediting Process
     Information gathering and analysis;
     Planning and credit development phase; and
     Consultation on the credit accrual process (ordinarily 
combined with the consultation on the debiting process)
The Recovery Debiting Process
     Debit development phase;
     Programmatic debiting consultation; and
Project-Specific Application
     Project-specific consultation under programmatic 
consultation; and
     Actual debits of the credits.

    While these principles are based on our experiences from multiple 
consultations, the Service believes that consultation can be achieved 
in many cases through a two-step consultation process: (1) A 
programmatic consultation to establish the recovery credit and debiting 
process and (2) a project-specific consultation.

D. Coordination Process

    The Service lacks the resources to implement many, if not most, 
recovery actions. Collaboration with a wide variety of potential 
stakeholders is essential for the implementation of recovery plans. An 
appropriate RCS can assist the Service, other Federal agencies, and 
their partners to achieve more effective implementation of recovery 
plans.
    The Service and the Federal action agency will coordinate to ensure 
that the crediting system complies with all applicable laws. In 
particular, action agencies and the Service may need to review laws 
relating to privacy such as the Freedom of Information Act (FOIA) and 
the Privacy Act. Further, depending on the system used to create the 
recovery credits, action agencies and the Service may need to review 
the Federal Advisory Committee Act (FACA). The National Environmental 
Policy Act (NEPA) may be a relevant consideration as well. Service 
employees should consult with their appropriate solicitor's office for 
more specific advice with regard to these laws.
    The Service will coordinate with appropriate Federal and State 
partners, and we will encourage State and local entities, both 
governmental and nongovernmental, to participate on the various 
workgroups and committees formed under the RCS that will be central to 
each process involved. For example, a local scientific committee may be 
established to assist the Service in defining recovery credits. While 
accrued recovery credits are used only by the Federal agency, the 
accrual process (as described below) is the key to success and should 
include participation by whatever non-Federal entities are appropriate.

III. Recovery Crediting Process

A. Information Gathering and Analysis Phase

    This phase involves the identification of threats and the actions 
needed to address those threats. Generally, the species' recovery plan, 
or other Service-approved document, will provide a framework for 
analysis. This analysis also establishes the means by which a credit in 
a recovery crediting system will be measured and accounted for. 
Information gathering and analysis involves the compiling of available 
information sources, identifying data gaps, and evaluation of target 
species. As stated above, a central element to defining an RCS is 
coordination with

[[Page 44770]]

appropriate Federal and State partners, as well as interested local and 
nongovernmental entities.
    Within this phase, two important issues should be addressed: (1) 
Evaluation of the recovery needs of the target species, and (2) 
determination whether an RCS is feasible based on the recovery needs of 
the listed species. Critical to both issues is the ability to evaluate 
measurable recovery benefits to the target species. RCS will vary in 
details, and some listed species may not be appropriate for inclusion 
in a credit system based on their recovery needs. Examples may 
include--
     Species with poorly understood threats,
     Species for which even minimal incidental take is likely 
to result in a jeopardy determination,
     Species with recovery plans that provide only interim 
objectives due to a lack of information necessary for recovery such 
that a net benefit to recovery cannot be determined, or
     Species for which credits cannot easily be valued due to 
the nature of threats (e.g., a local endemic threatened by impoundment 
of a river).

B. Planning and Development Phase

    This phase uses the results of the information gathering and 
analysis to establish in detail what constitutes a credit. As in other 
recovery programs, the planning and development phase is likely to be 
the most important and time-consuming part of the process. Although 
debiting of credits will not come into play until after the credits are 
established (e.g., after restoration or management actions have 
achieved their goals), the debiting must be considered in the credit 
development phase in order to meet the standard of a net benefit to 
recovery of the species. As part of the planning process, Federal 
agencies may identify future needs, locations of future projects, types 
of future projects, and associated project activities. Values may be 
assigned to different tasks within a recovery plan or alternative 
Service-approved planning document based on priority, and the use of 
debits may be limited depending on the needs of the species' recovery. 
In addition, the RCS must integrate monitoring and reporting of both 
accrual and debiting of credits.
    Any RCS should address the threats that caused the species to be 
listed, advance the recovery goals of the species, and must be based on 
sound scientific principles. That is, the system must demonstrate the 
relationship between the conservation value of the recovery measure as 
it applies to the credit.
    As stated above, in instances where a recovery plan is not 
specific, is not available, or is outdated, the Service may consider 
other documents to establish recovery crediting. We will use 
information that we determine represents the best available scientific 
information on the needs of the species. The Service should prioritize 
updating or supplementing recovery plans that are not current for 
species for which an RCS is being considered, so that any new actions 
being considered are integrated with the recovery criteria and plan for 
the species. An alternative document such as a Service-approved 
conservation plan, strategy, or framework that has identified specific 
actions to address the threats to the species may be appropriate in 
some instances. Examples of documents that can contribute to 
establishing an RCS include military Integrated Natural Resource 
Management Plans, State Wildlife Action Plans, 5-year status reviews, 
and biological opinions. However, these can be utilized in tandem with 
a recovery plan, and any specific actions within alternative documents 
must be consistent with the goals, objectives, and recovery strategy 
identified in the species' recovery plan to address threats and promote 
recovery of the species.
    Credits should be valued based on recovery tasks, or analogous 
measures, available to a Federal agency. This phase will develop values 
to be assigned to recovery tasks, ensuring that a net benefit to 
recovery is realized for the target species. Credit values are based 
upon achieving measurable objectives, and higher priority recovery 
tasks would generally receive more credit than lower priority ones. 
Ranking threats may be accomplished among or within tasks in a recovery 
plan. For example, various Federal conservation programs use a project 
selection process based on several considerations. Higher value (i.e., 
more credit) is typically placed on potential projects that--
     Preserve long-term habitat.
     Address high-priority recovery needs.
     Are larger in size (i.e., habitat size or quality).
     Are adjacent or in proximity to public lands or other 
permanently protected areas.
     Target a specific geographic focus area (e.g., recovery 
unit).
     Benefit multiple species.
     Establish corridors to accommodate migration or connect 
fragmented habitat.
    In this phase, the temporal nature of potential effects on or needs 
of the species would be analyzed. Many species require active 
management (e.g., invasive species control, prescribed fire, etc.) or 
public outreach to contribute to recovery or research to support 
recovery. Thus, some credits may be temporary in nature, provided the 
action meets the recovery needs of the species. Temporary credits could 
be used to offset temporary adverse effects in appropriate situations 
that still allow a net benefit to recovery. For example, many 
transportation and linear utility projects require temporary workspace 
for construction, which is later returned to pre-construction 
conditions. An agency could accrue credits for the restoration and 
temporary protection of degraded habitat to mitigate for habitat that 
has temporary adverse effect, with the duration of credit based on 
benefits achieved at the restored site and eventual restoration of the 
affected site.
    In its simplest form, a single Federal agency would identify a 
recovery action(s) for establishment of an RCS. For example, a recovery 
plan may call for the permanent preservation of a viable population in 
a particular recovery unit. A Federal agency may identify that need, 
and develop a process for accruing credits through conservation 
easements that would meet that objective of the recovery plan 
(preserving the viable population). Credits reflecting habitat 
protection or restoration would be considered to be banked when 
conditions on the ground indicate completion of the recovery task. More 
complex crediting systems may involve multiple Federal agencies and may 
assign credits to several or all tasks within a recovery plan. In 
either case, a single Federal agency would be the holder of credits. 
Whenever possible, other partners should be included in the development 
process (e.g., State agencies, nongovernmental organizations, etc.), 
and they may play a major role in implementing the credit accrual 
process.
    Finally, in the development phase, it is important to address the 
transferability of accrued credits. Circumstances may arise in which a 
Federal agency may opt to sell or transfer banked credits to another 
agency. These situations should be considered early and be included in 
the crediting process, but may be defined in greater detail within the 
debiting process.

C. Consultation on Credit Accrual Phase

    Upon completing the development of a proposed crediting process the 
Federal action agency will consult on the process under section 7 of 
the ESA. Ordinarily, a programmatic consultation will address both the 
crediting and

[[Page 44771]]

debiting processes; in rare cases separate consultations may address 
the two processes. The use of a proposed crediting system is a 
discretionary Federal action that ``may affect'' a listed species, and 
therefore requires section 7 consultation. This consultation determines 
whether a proposed agency action is likely to jeopardize the continued 
existence of a listed species or destroy or adversely modify critical 
habitat. For the process developed to accrue credits, the net effect on 
the target species should be beneficial. In some instances, temporary 
adverse effects may be necessary to achieve the maximum recovery 
benefit to the target species. For example, a survey may involve some 
level of taking of a listed species. In these cases, it may be 
necessary to consult formally on the credit accrual process, if it is 
anticipated that incidental take may occur as a result of credit 
acquisition. An agency requesting initiation of consultation on an RCS 
must include in its initiation package an adequate explanation of the 
net benefit to recovery that the RCS will provide to the relevant 
species and the specific means by which it will be provided.
    As discussed above, although a Federal agency needs to consider how 
credits will be debited while determining how they will be accrued, 
once it establishes an RCS through the section 7 consultation process, 
a Federal agency may begin accruing credits through the procedures 
outlined in the plan.

IV. Recovery Debiting Process

A. Debit Development Phase

    This phase establishes the standards according to which credits 
will be used. This phase may be conducted separately or concurrently 
with the credit accrual planning and development. An advantage of 
considering crediting and debiting at the same time is that a better 
match may be achieved between the credits accrued and the debiting 
needs. Establishing the guidelines for debit use and other factors, 
limitations, accounting, and monitoring and reporting may be created as 
a stand-alone document, but will eventually become the ``Project 
Description'' within a biological assessment or evaluation, and 
subsequent biological opinion. In addition, the debit process could 
consider the possibility of Federal agencies other than the Federal 
agency that established the RCS being able to use credits.
    Consideration of debits includes ensuring that agencies maintain a 
net benefit to recovery gained by credit accrual. In general, credits 
that accomplish tasks in a species' recovery plan would normally meet a 
net benefit to recovery standard. However, because credits would be 
used for mitigation, it is important to ensure the debit process does 
not limit, counter, or preclude necessary recovery objectives and is 
developed in reliance on a recovery plan or analogous document. 
Examples of using a debiting process to ensure a benefit to recovery 
include--
     Using biologically appropriate mitigation ratios in 
habitat-based crediting (e.g., more than one credit for each debit 
necessary to fully offset adverse effects).
     Maintaining a credit balance that ensures an incremental 
increase in the species' recovery status.
     Restricting use of debits to areas not deemed essential in 
recovery plans or a Service approved conservation plan, strategy, or 
framework that has identified specific actions to address the threats 
to the species.
     Limiting the types of activities available for debiting.
    Similar to planning the crediting phase, it is essential that an 
activity or action's potential effects to the target species be 
sufficiently understood in order for it to be included in the debiting 
process. In some instances, the effects of even well-understood actions 
may possess some level of uncertainty. The debiting process should be 
designed to accommodate uncertainty that is evaluated based on a 
clearly stated and explained set of assumptions.

B. Programmatic Debiting Consultation

    The debiting process as part of an RCS is subject to consultation 
under section 7(a)(2) of the ESA. Programmatic consultation addresses 
programs or groups of similar actions implemented by a Federal agency. 
A non-jeopardy biological opinion also determines the amount or extent 
of anticipated incidental take, if any.
    In implementing an RCS, the programmatic approach will be necessary 
due to the nature of credit and debit concepts, and to ensure a net 
benefit to recovery of the species. The Federal action subject to 
consultation is the establishment of the debiting process and actions 
included therein. Under programmatic consultation, much of the effects 
analysis is completed upfront, rather than repeatedly for each 
individual action. By completing this analysis beforehand in a 
programmatic biological opinion, the anticipated effects of the action 
agency's future projects can be added into the environmental baseline 
prior to their actual completion. When both accrual and debiting 
processes are considered together in consultation, a more accurate 
analysis of the benefits of the RCS is possible than would be the case 
were they to be addressed separately. The appended and tiered methods 
of programmatic consultation involve a two-stage consultation process 
that would be appropriate here. The first stage is programmatic and 
analyzes the potential landscape-level effects that may result from the 
debiting process. The second stage addresses project-specific effects 
of each individual project under the action agency's program and 
previously included in the programmatic biological opinion. The prior 
consultation at a programmatic level is intended to expedite this 
second stage; to the extent that it is possible to anticipate project-
specific effects at a programmatic level, they need not be revisited in 
any detail later on.
    A Federal agency may include recovery measures in a proposed action 
as mandatory, non-discretionary actions or activities that will 
minimize adverse effects to listed species. An RCS would formalize that 
process and mitigate adverse effects to listed species by taking 
measures (accruing recovery credits) that may be included as 
conservation measures for a specific project in a specific geographic 
location. The Service would consider the use of recovery credits when 
it analyzes potential jeopardy to the species and destruction or 
adverse modification of any critical habitat in a biological opinion. 
The ESA requires the Service to specify any necessary or appropriate 
minimization of the effects of incidental take exempted in a biological 
opinion. Because recovery credits would be acquired in advance of a 
specific Federal action and may not be associated with incidental take 
resulting from the proposed action itself, they would normally offset 
the effects of incidental take with respect to the RCS standard of net 
benefit to recovery, but would not necessarily minimize the effects on 
individuals affected by the proposed action as required by section 
7(b)(4)(C) of the ESA. Therefore, the biological opinion may still 
require reasonable and prudent measures and terms and conditions that 
address the incidental take resulting at the project-specific level. 
These must fit within the context of ``minor changes'' as described at 
50 CFR 402.14(i)(2).
    The end product of programmatic consultation will be a 
comprehensive biological opinion issued to the Federal action agency 
that describes in detail or incorporates by reference the crediting and 
debiting processes and all actions and activities involved. It will 
evaluate

[[Page 44772]]

all potential effects of the actions (debits) as well as the credits 
accrued and used to offset the effects and provide a jeopardy analysis 
for listed species and destruction/adverse modification analysis for 
designated critical habitat if applicable. The consultation would 
consider all listed species that may be affected, not just the target 
species, and any designated critical habitat occurring in the action 
area for the jeopardy/adverse modification analysis.
    The programmatic biological opinion may not be able to describe 
take at the programmatic level. In this case, the specific take 
authorization and associated reasonable and prudent measures and terms 
and conditions would be described in site-specific biological opinions. 
If the overarching biological opinion can describe, with appropriate 
documentation from the action agency, the project-specific actions, 
then a list of reasonable and prudent measures and terms and conditions 
can be included, and no additional opinion is needed for those actions. 
The Service must develop reasonable and prudent measures and terms and 
conditions in close coordination with the action agency. This 
coordination may identify specific measures the action agency will 
incorporate at the project-specific level.

C. Project-Specific Consultation

    As individual projects are proposed, the action agency provides 
project-specific information as described in the programmatic 
biological opinion. This information should include, but not be limited 
to, the specific areas to be affected, the species and critical habitat 
that may be affected, a description of anticipated effects (in 
reference to those already analyzed in the programmatic biological 
opinion), a description of any additional effects not considered in the 
programmatic consultation, appropriate reasonable and prudent measures 
and terms and conditions, the resulting debits as ranked in the 
programmatic opinion, and the credit balance resulting from the action. 
The project-level consultation should be an expedited process because 
most of the needed analysis will have occurred at the programmatic 
level. This is an added incentive for Federal agencies to use 
programmatic consultation and recovery crediting.

V. Monitoring

    A monitoring program is essential to the success and the 
credibility of an RCS, both for the crediting and debiting aspects of 
the process. The scope of the monitoring plan should be commensurate 
with the crediting system's recovery framework, based on the goals and 
objectives of the species' recovery plan; the monitoring should measure 
the objectives as implemented by the crediting system. Ultimately, the 
Federal action agency is responsible for accounting for credits and 
compliance with the debiting process as determined through the 
programmatic biological opinion. However, the Service will provide 
technical assistance in the monitoring plan and contribute to the 
monitoring process through the development of terms and conditions 
within biological opinions, as well as reviewing and providing 
concurrence, if warranted, under project-specific consultations. 
Additionally, the Service will be responsible for periodic review of 
the species' environmental status, either through an established 
protocol or more conventional methods (e.g., 5-year review, 
programmatic biological opinions, etc.).
    In general, monitoring may comprise two elements: effectiveness 
monitoring and compliance monitoring. Effectiveness monitoring will 
evaluate the credit valuation and accrual process in achieving the 
goals and objectives of recovery actions. This monitoring focuses on 
the crediting process, involves principles of adaptive management, and 
includes all implementation partners. The responsibility of 
effectiveness monitoring belongs to the Federal agency that accrues and 
holds credits, although other entities would be involved. When the 
credit accrual process results in a biological opinion from the 
Service, effectiveness monitoring provisions are part of the project 
description. Any coverage under the incidental take statement, 
therefore, is dependent on the action agency carrying out the action as 
described in the project description.
    Compliance monitoring audits and accounts for credits and debits 
and ensures proper implementation of the agency action. Any monitoring 
and reporting must be incorporated into the project description as an 
integral part of implementing the RCS.
    Although an RCS is a focused tool for Federal agencies to make a 
positive contribution towards the recovery of listed species while 
creating flexibility for offsetting effects of their other actions, the 
Service encourages the development and use of other types of crediting 
systems to meet other needs and circumstances. In addition, this 
guidance by no means restricts Federal agencies from developing or 
using other crediting systems such as conservation banks. An RCS is one 
method by which a Federal agency may contribute towards its section 
7(a)(1) responsibilities. The Service encourages Federal agencies to 
develop other programs that would also contribute to the recovery of 
listed species on Federal and non-Federal lands.

VI. References

    The following is a list of documents that would be useful for 
establishing an RCS. Some are in draft form, but are readily available 
to Service personnel through Regional Offices or the Washington Office.

U.S. Fish and Wildlife Service. 1990. Policies and guidelines for 
planning and coordinating recovery of endangered and threatened 
species. Washington, DC. 14pp. + appendices.
U.S. Fish and Wildlife Service. 1999. Final Safe Harbor Policy. 64 
FR 32717, June 17, 1999.
U.S. Fish and Wildlife Service. 2003. Guidance for the 
Establishment, Use, and Operation of Conservation Banks.
U.S. Fish and Wildlife Service and National Marine Fisheries 
Service. 1998. Endangered Species Act Consultation Handbook: 
Procedures for Conducting Section 7 Consultations and Conferences. 
Washington, DC.
U.S. Fish and Wildlife Service and National Marine Fisheries 
Service. 2004 (updated 2006). Draft Endangered and Threatened 
Species Recovery Planning Guidance.
Williams, B.K., R.C. Szaro, and C.D. Shapiro. 2007. Adaptive 
Management: The U.S. Department of the Interior Technical Guide. 
Adaptive Management Working Group, U.S. Department of the Interior, 
Washington, DC.

    Authority The authority for this action is the Endangered 
Species Act of 1973 (16 U.S.C. 1531 et seq.).

    Dated: July 25, 2008.
H. Dale Hall,
Director, Fish and Wildlife Service.
[FR Doc. E8-17579 Filed 7-30-08; 8:45 am]
BILLING CODE 4310-55-P