[Federal Register Volume 87, Number 139 (Thursday, July 21, 2022)]
[Rules and Regulations]
[Pages 43433-43447]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-15495]


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DEPARTMENT OF THE INTERIOR

Fish and Wildlife Service

50 CFR Part 17

[Docket No. FWS-HQ-ES-2019-0115; FF09E23000 FXES1111090FEDR 223]
RIN 1018-BD84


Endangered and Threatened Wildlife and Plants; Regulations for 
Designating Critical Habitat

AGENCY: U.S. Fish and Wildlife Service, Interior.

ACTION: Final rule.

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SUMMARY: The U.S. Fish and Wildlife Service (``the Service'') is 
rescinding the rule titled ``Endangered and Threatened Wildlife and 
Plants; Regulations for Designating Critical Habitat'' that published 
on December 18, 2020, and became effective January 19, 2021. The rule 
set forth new regulations addressing how we exclude areas of critical 
habitat under section 4(b)(2) of the Endangered Species Act of 1973, as 
amended, outlining when and how the Service will undertake an exclusion 
analysis. This action removes the regulations established by that rule.

DATES: This final rule is effective August 22, 2022.

ADDRESSES: Public comments and materials received, as well as 
supporting documentation used in the preparation of this final 
regulation, are available on the internet at https://www.regulations.gov in Docket No. FWS-HQ-ES-2019-0115.

FOR FURTHER INFORMATION CONTACT: Bridget Fahey, U.S. Fish and Wildlife 
Service, Division of Conservation and Classification, 5275 Leesburg 
Pike, Falls Church, VA 22041-3803, telephone 703/358-2171. Individuals 
in the United States who are deaf, deafblind, hard of hearing, or have 
a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access 
telecommunications relay services. Individuals outside the United 
States should use the relay services offered within their country to 
make international calls to the point-of-contact in the United States.

[[Page 43434]]


SUPPLEMENTARY INFORMATION:

Background

    On January 20, 2021, the President issued Executive Order (E.O.) 
13990, which, in section 2, required all executive departments and 
agencies to review, and to consider revising or rescinding rules 
inconsistent with the policy set forth therein, Federal regulations and 
actions taken between January 20, 2017, and January 20, 2021. In 
support of E.O. 13990, a ``Fact Sheet'' was issued that set forth a 
non-exhaustive list of specific agency actions that agencies are 
required to review to determine consistency with the policy 
considerations articulated in section 1 of the E.O. (See 
www.whitehouse.gov/briefing-room/statements-releases/2021/01/20/fact-sheet-list-of-agency-actions-for-review/). Among the agency actions 
listed on the Fact Sheet was our December 18, 2020, final rule (85 FR 
82376; hereafter referred to as ``the Final Rule'') that established 
new regulations addressing how we implement section 4(b)(2) of the 
Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.; 
hereafter, ``the Act''). On January 14, 2021 (5 days before the Final 
Rule took effect), seven environmental groups challenged it, filing 
suit against the Service in Federal district court in Hawaii. Shortly 
thereafter on January 19, 2021, 19 States similarly filed suit 
challenging the Final Rule in the Northern District of California. 
Parties in both cases have agreed to long-term stipulated stays in the 
litigation as this rulemaking proceeds.
    In our review of the Final Rule pursuant to E.O. 13990, we 
evaluated the benefits and drawbacks of the Final Rule, the necessity 
of the rule, its consistency with applicable case law, and other 
factors. Following our review, we determined that the Final Rule is 
problematic because it unduly constrains the Service's discretion in 
administering the Act, potentially limiting or undermining the 
Service's role as the expert agency and its ability to further the 
conservation of endangered and threatened species through designation 
of their critical habitats. Therefore, on October 27, 2021, we proposed 
to rescind the Final Rule (86 FR 59346). We solicited public comments 
on the proposed rule through November 26, 2021. In response to several 
requests, we extended the deadline for submission of public comments to 
December 13, 2021 (86 FR 67012, November 24, 2021).
    In this final rule, we focus our discussion on the comments we 
received during the comment period and our consideration of the issues 
raised. For background on the statutory and legislative history and 
case law relevant to the Final Rule, we refer the reader to the 
proposed rule to the Final Rule (85 FR 55398, September 8, 2020). For 
our detailed rationale for proposing to rescind the Final Rule, we 
refer the reader to the proposed rule to this final rule (86 FR 59346, 
October 27, 2021).
    After consideration of the information provided through the public 
comment process and for reasons outlined in the proposed rule and this 
document, we are finalizing the proposal to rescind the December 18, 
2020, Final Rule. After the effective date of this rule, the Policy 
Regarding Implementation of Section 4(b)(2) of the Endangered Species 
Act (16 U.S.C. 1533(b)(2)), which we published jointly with the 
National Marine Fisheries Service (NMFS; collectively the Services) on 
February 11, 2016 (81 FR 7226) (hereafter ``the Policy''), and the 
joint regulations at 50 CFR 424.19, which were set forth by a final 
rule that published August 28, 2013 (78 FR 53058) (in this document we 
refer to these regulations either as 50 CFR 424.19 or as the ``2013 
Rule''), will revert to being the governing rules and standards for any 
critical habitat rulemakings that the Service publishes. We note, 
however, as discussed below, that one aspect of the rulemakings for the 
Policy and the 2013 Rule--the language in the preambles indicating that 
decisions not to exclude areas under section 4(b)(2) are committed to 
agency discretion and are judicially unreviewable--will no longer be 
applicable. We have provided clarification to questions and concerns 
below in the responses to public comments.

Rationale for Rescission

    In the preamble to the Final Rule, we explained that, in light of 
the Supreme Court's decision in Weyerhaeuser Co. v. U.S. FWS, 139 S. 
Ct. 361 (2018) (Weyerhaeuser), we needed to revisit certain language in 
the preambles for the 2013 Rule and the Policy that asserted that 
exclusion decisions are committed to agency discretion and are 
therefore judicially unreviewable. For example, in the preamble to the 
2013 Rule, the Services had cited case law that supported their 
conclusion that exclusions are wholly discretionary and that the 
discretion not to exclude an area is judicially unreviewable (78 FR 
53072, August 28, 2013). The Services also stated in the preamble to 
the Policy that then-recent court decisions resoundingly upheld the 
discretionary nature of the Secretaries' consideration of whether to 
exclude areas from critical habitat (81 FR 7226, p. 7233; February 11, 
2016), and that, although the Services will explain their rationale for 
not excluding a particular area, that decision is judicially 
unreviewable because it is committed to agency discretion (id. at 
7234).
    We explained in the Final Rule that the Supreme Court's opinion in 
Weyerhaeuser had rendered inaccurate those prior assertions that 
decisions not to exclude areas from critical habitat designations are 
not judicially reviewable. Although the word ``may'' in the second 
sentence of section 4(b)(2) of the Act indicates discretionary 
authority and thus the Secretary is not required to exclude areas in 
any particular circumstances (16 U.S.C. 1533(b)(2)), it was clear from 
the Court's decision in Weyerhaeuser that courts may review decisions 
not to exclude for abuse of discretion under section 706(2) of the 
Administrative Procedure Act (APA, 5 U.S.C. 706(2)). 139 S. Ct. at 371. 
The Final Rule summarized the effect of the Court's opinion in 
Weyerhaeuser as having underscored how important it is for the Service 
to be deliberate and transparent about how we go about making exclusion 
decisions. The Final Rule further explained that the Service's 
objective in promulgating the rule was to provide that ``transparency, 
clarity, and certainty to the public and other stakeholders'' (85 FR 
82376, p. 82385; December 18, 2020).
    During the comment period for the 2020 proposed rule, we received 
numerous public comments that provided both support and opposition for 
many of the provisions included in that proposed rule (85 FR 55398, 
September 8, 2020). At that time, we considered all of the comments and 
decided that finalization of the Final Rule was a permissible policy 
decision. In issuing the Final Rule, we concluded that the criticisms 
brought forth by commenters were not sufficient to change our approach 
in that rulemaking.
    We acknowledge that we are now persuaded that many of the 
commenters' criticisms regarding the Final Rule are valid, and we are 
including some of those same criticisms as part of our support for 
rescinding the Final Rule. We have reconsidered the Final Rule and 
considered public comments and we have now changed our policy view of 
the best way to strike the appropriate balance between transparency and 
predictability on the one hand, and flexibility and discretion on the 
other. We now find that the Final Rule is problematic for three 
overarching reasons: it limits or undermines the Service's role as the 
expert agency; it constrains the Service's discretion, thus decreasing 
the agency's

[[Page 43435]]

ability to further the conservation of endangered and threatened 
species through designation of their critical habitats; and it does not 
further the goal of providing clarity and transparency and instead 
creates confusion. We provide further explanation below as to why we 
have concluded that implementation of the Policy and the regulations at 
50 CFR part 424.19 is preferable to the Final Rule.
    In the proposed rule we provided rationale for rescinding each of 
the following provisions of the Final Rule: the statement that we will 
always undertake a discretionary exclusion analysis whenever a 
proponent of an exclusion provides credible information supporting the 
exclusion; the generic prescription for weighing impacts; the statement 
that we will always exclude areas from a critical habitat designation 
whenever the benefits of exclusion outweigh the benefits of inclusion; 
the treatment of Federal lands; and the enumeration of factors to 
consider under section 4(b)(2) of the Act. Having reconsidered our 
reasoning for rescinding each of these provisions in light of the 
public comments we received on the proposed rule (86 FR 59346, October 
27, 2021), we reaffirm our conclusions with respect to each of these 
provisions. For the specific reasons set forth below and our detailed 
rationale in our proposed rule, the Service now concludes that 
rescinding the Final Rule and resuming implementation of 50 CFR 424.19 
and the Policy will better enable the Service to ensure conservation of 
endangered and threatened species and the ecosystems on which they 
depend, as mandated by the Act.
    First, the Final Rule potentially limits or undermines the 
Service's role as the expert agency responsible for administering the 
Act because it potentially gives undue weight to outside parties in 
guiding the Secretary's statutory authority to exclude areas from 
critical habitat designations. Through the Secretary, Congress 
delegated the authority to designate critical habitat for listed 
species to the Service. Section 4(b)(2) of the Act sets out some of the 
responsibilities and steps that this authority entails, including 
evaluating information about the economic, national security, and other 
relevant impacts of designating particular areas as critical habitat; 
determining which among competing data on potential impacts is 
reliable; weighing the impacts of designation against the benefits of 
designating those areas and determining the weight that each should 
receive in the analysis; and making exclusion decisions based on the 
best scientific and commercial data available. The Final Rule 
potentially limits the Service from fulfilling aspects of this role by 
giving parties other than the Service, including proponents of 
particular exclusions, an outsized role in determining whether and how 
the Secretary will conduct exclusion analyses. This undue reliance on 
outside, and potentially directly affected parties in certain aspects 
of the process interferes with the Secretary's authority to evaluate 
and weigh the information provided by those parties in the course of 
determining what specific areas to designate as critical habitat for a 
species.
    Second, the rigid ruleset established by the Final Rule, in all 
situations regardless of the specific facts, as to when and how the 
Secretary will exercise the discretion to exclude areas from critical 
habitat designations constrains the Service's discretion, thus 
decreasing the agency's ability to further the conservation of 
endangered and threatened species through designation of their critical 
habitats. Although the preamble and response to comments in the Final 
Rule refer to using the best available information and factoring in the 
case-specific information to support exclusion analyses, the regulatory 
text mandates a rigid process for when the Secretary will enter into an 
exclusion analysis, how weights are assigned to impacts, and when an 
area is excluded. Therefore, implementing the Final Rule undermines the 
Service's ability to further the conservation of the species because 
the ruleset applies in all situations regardless of the specific facts 
at issue or the conservation outcomes. We now recognize that 
implementing the Final Rule would result in competing and potentially 
conflicting legal requirements when we undertake an exclusion analysis. 
In section 4(b)(2) of the Act, Congress vested in the Secretary the 
authority and responsibility to assign weights to the impacts of 
designating particular areas as critical habitat. Automatically 
assigning weights based on information from parties other than the 
Secretary or their chain of command, including from parties that may 
have direct economic or other interests in the outcome of the exclusion 
analysis, regardless of whether those parties have expert or firsthand 
information, is in tension with Congress's decision to place that 
authority with the Secretary. Furthermore, the requirement that, unless 
we have rebutting information, the Secretary must assign weights to 
non-biological impacts based strictly on information from those 
entities constrains the Secretary's discretion to use their expert 
judgment and mandate to base designations on the best scientific data 
available. Prior to the Final Rule, we implemented the Policy and 
regulations at 50 CFR 424.19--neither of which set forth a rigid 
ruleset regarding the level of information needed for us to consider 
excluding areas, the weight we would assign to the information about 
impacts of designation, or any requirement to exclude areas under 
certain circumstances. The Service now recognizes that this approach 
achieved the balance that Congress sought when it enacted section 
4(b)(2), furthering the conservation of the species while still 
allowing for exclusions of particular areas when the benefits of 
exclusion outweighed the benefits of inclusion.
    Finally, we find that the Final Rule does not accomplish the goal 
of providing clarity and transparency. Section 4(b)(2) of the Act 
requires the Service to consider the economic, national security, and 
other relevant impacts of critical habitat designations. This 
responsibility makes it particularly important that potentially 
affected entities, including Federal agencies, Tribes, States, and 
other relevant stakeholders have a clear understanding of what 
information is relevant to the Secretary's evaluation of impacts of 
critical habitat designations and of how that information fits into the 
exclusion process. Having different 4(b)(2) regulations from those that 
NMFS applies (i.e., 50 CFR 424.19) could result in different outcomes 
in analogous circumstances between the two agencies or multiple 
possible analyses for species over which the Services share 
jurisdiction (e.g., sea turtle species, Atlantic salmon). This 
difference poses a significant risk of confusing other Federal 
agencies, Tribes, States, other potentially affected stakeholders and 
members of the public, and agency staff responsible for drafting 
critical habitat designations. We have not identified a science- or 
mission-based reason for separate regulations for exclusions from 
critical habitat that would outweigh that risk. Thus, it is preferable 
for the Service's section 4(b)(2) processes and standards to be 
consistent with those of NMFS, and it would not make sense for the 
Service to suggest that NMFS should adopt a framework that we are 
finding in this rulemaking to be at odds with the purposes, mandates, 
and structure of the Act. Therefore, we find that the previous 
approach--in which both agencies follow the joint implementing 
regulations at 50 CFR 424.19 and the

[[Page 43436]]

Policy--provides greater clarity for the public and Service staff.
    We also considered whether to retain any portions of the 
regulation. However, the three reasons we identified for rescinding the 
Final Rule apply to all portions of the regulation. The three reasons 
are because the Final Rule undermines the Service's role as the expert 
agency; constrains the Service's discretion and decreases the agency's 
ability to further the conservation purposes of the Act; and fails to 
add clarity or transparency. As discussed in detail in the proposed 
rule, these reasons apply to all four of the key elements of the 
regulation--the requirement to undertake an exclusion analysis whenever 
a proponent of an exclusion provides credible information; the 
prescription for weighing the impacts; the treatment of Federal lands; 
and the requirement to exclude any area for which the benefits of 
exclusion outweigh the benefits of inclusion (86 FR 59346, 59346-51; 
October 27, 2021). Therefore, removing some combination of these 
elements and retaining the rest would still constrain the Secretary's 
discretion and thereby undermine the Service's role as the expert 
agency, decrease the agency's ability to further the conservation 
purposes of the Act, and fail to add clarity or transparency.
    Even if we revised the standards within any of these elements, the 
crux of each element would still be to put in place requirements that 
constrain the Secretary's discretion and reduce the Service's ability 
to further the conservation purposes of the Act. For example, revising 
the ``credible information'' standard for triggering the requirement to 
undertake an exclusion analysis would still require the Service to 
undertake exclusion analyses in certain circumstances and thus 
constrain the agency's discretion to determine whether, based on the 
facts specific to each species and each potential exclusion, 
undertaking an exclusion analysis does further the conservation 
purposes of the Act. Also, replacing the ``credible information'' 
standard could merely serve to introduce a different new standard that 
may decrease clarity like the ``credible information'' standard does.
    Additionally, the only other elements of the Final Rule are already 
directly addressed even without the regulations--through the Policy and 
in some cases the requirements of the Act. For example, paragraphs 
(d)(3) and (d)(4) of the Final Rule are almost entirely identical to 
sections 3 and 2, respectively, of the Policy. Therefore, if we were to 
remove all other parts of the Final Rule and retain paragraphs (d)(3) 
and (d)(4), that new regulation would not add any additional clarity; 
would be duplicative of, and potentially inconsistent with, those 
elements in the Policy; and would be confusing for the public as to 
which standards apply to each aspect of the Service's exclusion 
analyses. Furthermore, paragraph (a) of the Final Rule includes non-
exhaustive lists of economic impacts and other relevant impacts. 
Regardless of whether these lists are in regulation, we are required by 
the Act to consider impacts in these categories. Including these 
elements in a revised regulation in part or in whole would not change 
the Service's consideration of impacts under section 4(b)(2) of the 
Act.
    The Final Rule was unnecessary for achieving its intended purpose 
of increasing clarity and transparency to the public regarding when and 
how we will exclude areas. The Weyerhaeuser decision made clear that we 
need to explain decisions not to exclude areas from critical habitat, 
and even before that decision, we acknowledged in the preamble to the 
Policy that we would do so (81 FR 7234; February 11, 2016) (``If the 
Services do not exclude an area that has been requested to be excluded 
through public comment, the Services will respond to this request. 
However, although the Services will explain their rationale for not 
excluding a particular area, that decision is committed to agency 
discretion.''). Therefore, we will always explain our decisions not to 
exclude particular areas for which exclusion has been requested. Our 
explanation will take into account the best scientific data available, 
including the strength of the information provided by the proponent in 
support of the exclusion. Although we stated in the Final Rule that 
Weyerhaeuser (and the accompanying need for clarity and transparency 
about the analyses underlying our exclusion and non-exclusion 
decisions) was, in part, its impetus, we will always explain our 
decisions not to exclude particular areas for which exclusion has been 
requested, even without the Final Rule in place. The Policy and the 
regulations at 50 CFR 424.19 already provided sufficient detail 
regarding the analyses we undertake when considering and conducting 
exclusions, and we have now concluded that the Final Rule was 
unnecessary and that it increased confusion and decreased clarity by 
articulating an approach that differed from both NMFS's approach and 
the jointly promulgated Policy.
    Because we have made the decision to rescind the Final Rule, the 
Policy and joint regulations are no longer superseded, and the 
Service's critical habitat and exclusions decisions will follow the 
Policy and comply with the regulations at 50 CFR 424.19. In adopting 
the specific changes to the regulations in this document and setting 
out the accompanying clarifying discussion in this preamble, the 
Service is adopting prospective standards only. Nothing in this 
rescission is intended to require that any previously finalized 
critical habitat designations or exclusion decisions be reevaluated on 
the basis of this final decision.

Summary of Comments and Responses

    In our proposed rule published on October 27, 2021 (86 FR 59346), 
we requested public comments on the provisions of the proposed rule. 
After considering several requests for extensions of the public comment 
period beyond the original 30 days, we decided to extend the comment 
period an additional 15 days to December 13, 2021. During the public 
comment period, we received a request for public hearings. However, 
public hearings are not required for regulation revisions of this type, 
and we elected not to hold public hearings.
    By the close of the public comment period on December 13, 2021, we 
had received approximately 29,000 public submissions. We received 
comments from a range of entities, including individual members of the 
public, States, Tribes, industry organizations, legal foundations and 
firms, and environmental organizations. The vast majority of the 
comments (~28,800) were similar statements from individuals indicating 
their general support for rescission of the rule.
    We reviewed and considered all public comments prior to developing 
this final rule. We provide summaries of substantive comments and our 
responses below; we combined similar comments where appropriate. We did 
not, however, consider or respond to comments that are not relevant and 
are beyond the scope of this particular rulemaking. For example, we did 
not discuss and respond to comments regarding our joint proposed rule 
with NMFS to rescind the regulatory definition of ``habitat'' (see 86 
FR 59353, October 27, 2021). We also received comments that we should 
revise certain parts of 50 CFR 424.19 (e.g., revisiting the incremental 
approach to considering economic impacts of a critical habitat 
designation; defining economic impact), and certain portions of the 
Policy (including the treatment of conservation agreements and habitat 
conservation plans; revising the approach to treatment of Federal 
lands; requiring

[[Page 43437]]

formal documentation of exclusion analyses for each designation; and 
formalizing coordination with relevant State wildlife management 
agencies, Tribes, and local governments when undertaking a designation 
of critical habitat). Revising the joint implementing regulations at 50 
CFR 424.19 or the Policy is outside the scope of this specific Service-
only action.
    Comment 1: Commenters stated that the proposed rule is arbitrary 
and capricious because the Service did not provide a substantive, 
reasoned explanation for the change of position from the Final Rule.
    Response: We acknowledge the well-established principle that 
agencies must provide a reasoned explanation for its changes in 
position. E.g., Coalition, 2022 WL 1073346, at 12 (citing Encino 
Motorcars, LLC v. Navarro, 136 S. Ct. 2117 (2016)). We have satisfied 
that requirement in this final rule and in the proposed rule. We refer 
the commenters to the proposed rule section ``Rationale for 
Rescission'' and the summary in this final rule, both of which set 
forth our detailed explanation for rescinding the Final Rule. To 
summarize, we now find three ways in which the Final Rule is 
problematic. First, it potentially limits or undermines the Service's 
role as the expert agency responsible for administering the Act because 
it potentially gives undue weight to outside parties in guiding the 
Secretary's statutory authority to exclude areas from critical habitat 
designations. Second, it constrains the Service's discretion because it 
employs a rigid ruleset in all situations regardless of the specific 
facts as to when and how the Secretary will exercise the discretion to 
exclude areas from critical habitat designations. Finally, it does not 
accomplish our previously stated goal of providing clarity and 
transparency.
    Comment 2: Commenters stated that rescinding the Final Rule will 
negatively affect those who might make decisions in reliance on 
application of the Final Rule now (e.g., third parties having reliance 
interests).
    Response: The Final Rule became effective on January 19, 2021. On 
January 20, 2021, the President issued E.O. 13990 and an associated 
Fact Sheet with a non-exhaustive list of agency actions, directing the 
Services to review the Final Rule and other regulations. The Service 
publicly announced on June 4, 2021, that they would propose to rescind 
the Final Rule. In the proposal to rescind the rule, we did not 
identify any affected reliance interests because we were unaware that 
any existed, especially due to the rule's limited practical 
applicability and the limited time it has been in effect.
    Although several commenters expressed the possibility that there 
may have been reliance on the Final Rule, none provided any specific 
examples of actual reliance, nor did any articulate why such reliance 
would have been reasonable given the limited time that elapsed between 
the Final Rule's effective date and when it was identified for 
reconsideration. The Final Rule has been in place for a relatively 
short time and has a potential applicability on a small number of 
critical habitat designations. We did not identify any instances of a 
third party making a decision relying on application of the Final Rule 
with outcomes anticipated to be different than if we relied on the 
regulations at 50 CFR 424.19. Even if there has been reliance on the 
Final Rule, any information gathered by proponents of an exclusion and 
submitted to the Service after the Final Rule is rescinded would be 
fully considered under 424.19 regulations and the Policy. Therefore, we 
conclude that rescinding the Final Rule and resuming implementation of 
the regulations at 424.19 and the Policy will not affect any reliance 
interests.
    Comment 3: Commenters suggested that in proposing the rescission, 
the Service did not allow sufficient time for implementation and 
evaluation of the effects of the regulation. The Service did not 
provide examples of how the Final Rule has constrained the agency 
discretion or led to decisions that are contrary to the Act or other 
Federal policy. Furthermore, the Service's rationale for rescission is 
largely unsupported, inconsistent with the Act, and is not capable of 
being ``ascribed to a difference in view or the product of agency 
expertise.''
    Response: We acknowledge that the Final Rule has been in place for 
a relatively short time and only has a potential bearing on the 
potentially limited set of designations where there is a factual basis 
to support exclusions of particular areas. Nevertheless, although there 
has been limited opportunity for the Service to provide tangible 
examples of how this regulation has affected a particular designation, 
we do not need to wait until we have evidence of such effects in order 
to rescind the Final Rule that we now conclude was ill-advised. The 
Federal Government does not require that regulations must have been in 
place for a period of time for an agency to have the authority to 
rescind them, nor must an agency provide examples of when a regulation 
caused confusion. Rather, the standard for rescinding previous 
regulations is the same standard as for promulgating new regulations, 
and we have met that standard--making a reasonable decision and 
providing an explanation for the decision that draws a rational 
connection between the facts found and the decision made.
    Executive Order 13990, issued on January 20, 2021, provided the 
impetus for our review of the Final Rule. We are rescinding the Final 
Rule on the basis of our legal authority under the Act (16 U.S.C. 1531 
et seq.). We have provided a rational explanation in the proposed rule 
and in this document detailing the multiple reasons why we are 
rescinding the Final Rule. After reviewing the regulation and its 
preamble, we find the Final Rule to be problematic because it unduly 
constrains the Service's discretion in administering the Act, 
potentially limiting or undermining the Service's role as the expert 
agency. We also found that the rigid rule sets in the Final Rule 
constrain the Service's ability to further the conservation of 
endangered and threatened species through designation of their critical 
habitats. Moreover, rather than providing clarity and transparency, the 
Final Rule introduces additional confusion. Because these shortcomings 
cannot be addressed by putting further effort into revising the Final 
Rule, we have determined that it is in the best interests of 
stakeholders and for the conservation purposes of the Act to minimize 
the time that the Final Rule is in effect by swiftly rescinding it.
    Comment 4: Commenters noted that, in their opinion, the Final Rule 
greatly increased transparency of the exclusion process because it gave 
substance to the Service's decisionmaking process and allowed Federal 
agencies, Tribes, States, and other stakeholders to know how the 
Service will weigh factors when considering exclusion from critical 
habitat. Further, commenters stated that one benefit of the Final Rule 
was helping to ensure that the Service provides sufficient 
justification for exclusion decisions, and the Service has not 
explained how making the process more difficult to follow by returning 
to the Policy would address the Service's concerns about needing to be 
more ``deliberate and transparent'' in decisionmaking regarding 
exclusions from critical habitat. Additionally, commenters stated that, 
if the Final Rule is rescinded, regulatory transparency will be 
reduced, and this situation would be inconsistent with the Supreme 
Court ruling in Weyerhaeuser because decisions regarding exclusion 
would be shrouded by agency discretion until and unless a party seeks 
judicial review. Additionally, counter to the Supreme

[[Page 43438]]

Court ruling, the Policy specifically states that decisions not to 
exclude particular areas from critical habitat are committed to agency 
discretion and therefore not subject to judicial review.
    Response: As described above, we will resume implementation of the 
Policy and 50 CFR 424.19, which set forth a stepwise approach to 
conducting the mandatory considerations of the economic impact, the 
impact on national and homeland security, and other relevant impacts of 
the designation of critical habitat without unduly constraining the 
Service's discretion as to when to exclude areas under section 4(b)(2) 
of the Act. The primary focus of the Policy describes how we consider 
``other relevant impacts,'' including conservation plans and 
partnerships, when designating critical habitat, which is similar to 
how the Final Rule addressed these issues. Because the Policy does not 
limit our consideration of information in an exclusion analysis, it 
allows us to consider any fact pattern for exclusion that may be raised 
by commenters, including the categories of ``other relevant impacts'' 
defined by the Final Rule. By removing the Final Rule, we are not 
removing our responsibility to evaluate information and make a rational 
decision regarding exclusion of particular areas. Nor will rescission 
of the Final Rule result in less transparency or inconsistency with 
Weyerhaeuser, as the commenter asserts. Rather, we will continue to 
critically evaluate information presented by proponents of exclusion 
and will decide whether to enter into a discretionary exclusion 
analysis based on reasonable and reliable information regarding 
potential impacts of designating critical habitat. Finally, even though 
the Policy states that decisions not to exclude are not reviewable, we 
recognize the Supreme Court's ruling in Weyerhaeuser, and we will 
continue to explain our decisions not to exclude particular areas from 
designations of critical habitat for which exclusion has been 
requested.
    Comment 5: Commenters noted that if, as the Service claims, the 
phrase ``credible information'' is vague, then in comparison the phrase 
``best available information'' is no clearer. Additionally, contrary to 
the rationale in our proposal to rescind the Final Rule, there is 
nothing vague about commonly understood terms. Commenters also noted 
that there was no discussion of the ``confusion'' noted in the proposed 
rule, but there should be, including who was confused, whether the 
confusion was resolved, and whether it was well-founded.
    Response: The phrase ``credible information'' is only part of the 
regulatory language included in Sec.  17.90(c)(2)(i) of the Final Rule, 
and the entirety of what we refer to as the ``credible information 
standard'' is: ``credible information regarding the existence of a 
meaningful economic or other relevant impact supporting a benefit of 
exclusion for that particular area.'' We find multiple parts of this 
standard to be vague. For instance, ``a benefit of exclusion'' could be 
interpreted to mean almost anything to a proponent of an exclusion, 
which we find to be unhelpful and vague as the basis for the standard 
to judge whether the Service should enter into the discretionary 
exclusion analysis. In addition, the word ``meaningful'' is subjective 
and open-ended in this context.
    We do not mean to suggest that any degree of vagueness is 
disqualifying for regulatory language. But when the stated goals of a 
regulation include clarity and transparency, the degree of vagueness is 
at least relevant to considering the efficacy of the regulation. We do 
not agree that the phrase ``best scientific data available'' is as 
vague as the phrase ``credible information regarding the existence of a 
meaningful economic or other relevant impact supporting a benefit of 
exclusion for that particular area.'' The phrase ``best scientific data 
available'' is the standard in the Act that applies to the designation 
of critical habitat, and numerous court decisions have clarified what 
constitutes the best scientific data available. The courts have made 
clear, for example, that the phrase ``on the basis of the best 
scientific data available'' establishes a standard that ``prohibits 
[the Service] from disregarding available scientific data that is in 
some way better than the evidence it relies upon''; the standard also 
allows the Service to rely on data that qualifies as the best 
scientific data available even if that data is quite inconclusive. 
E.g., Kern County Farm Bureau v. Allen, 450 F.3d 1072, 1080-81 (9th 
Cir. 2006); City of Las Vegas v. Lujan, 891 F.2d 927, 933 (D.C. Cir. 
1989); Southwest Center for Biological Diversity v. Babbitt, 215 F.3d 
58, 60 (D.C. Cir. 2000).
    Upon our review of the Final Rule, we determined that establishing 
a new information standard that could be interpreted differently from 
the standard in the Act does not meet our stated goal of transparency 
and clarity. The Service has a long-standing track record of basing our 
classification decisions and critical habitat designations on the best 
scientific and commercial data available, and we find that it is 
unnecessary and confusing to define a separate information standard for 
the purposes of section 4(b)(2) exclusion analyses.
    Comment 6: Commenters stated that the ``credible information'' 
standard appropriately placed the burden on the Service for evaluation 
of information used in exclusion analyses and that the Final Rule 
properly ensures evaluation of exclusions where credible information is 
presented. Furthermore, commenters noted that if, as the Service 
claims, even without the Final Rule the Service is already required to 
consider reasonable information presented by a proponent of an 
exclusion, there would be no additional burden of considering that 
information under the ``credible information'' standard. The Service 
appears to misread both the Act's data standard as well as the Final 
Rule's ``credible evidence standard'' when asserting that the credible 
information standard is in conflict with the Act's best scientific and 
commercial data available standard.
    Response: We agree with the commenter that we must assess 
information submitted in support of a potential exclusion regardless of 
whether the Final Rule is rescinded. While the Policy does not contain 
a requirement to consider and evaluate information submitted in support 
of exclusions, we will always evaluate information submitted by 
proponents of exclusions as mandated by section 4(b)(2) of the Act to 
consider ``other relevant impacts.'' Additionally, the Policy sets 
forth general guidelines for considering certain types of information 
and establishes a preference for assigning ``great weight'' to certain 
types of fact patterns, including demonstrated partnerships, including 
those with Tribes; the existence of operative conservation plans 
permitted under section 10 of the Act; and national-security and 
homeland-security impacts. The Policy also allows consideration of 
other fact patterns that may provide a rational basis by which we may 
exclude particular areas of critical habitat.
    Furthermore, we are aware that, under the Weyerhaeuser ruling, any 
time that we make a decision not to exclude a particular area, that 
decision will be judicially reviewable for abuse of discretion. 
Therefore, in the final rule for any particular critical habitat 
designation, we will clearly explain the basis for our decision not to 
exclude any particular area for which exclusion has been requested. The 
commenter asserts that we misread the Act's data standard, as well as 
the Final Rule's ``credible

[[Page 43439]]

evidence'' standard; however, we did not use the phrase ``credible 
evidence'' (the term in the regulation is ``credible information'') and 
have only described the ``best scientific data available'' standard as 
the one that applies to the process of designations of critical 
habitat. We did not state that the ``credible information'' standard 
conflicts with the ``best scientific data available''; rather, we 
stated that having a different, and vague, standard is not helpful, nor 
does it increase transparency.
    Comment 7: Commenters stated that, even with the provision of the 
Final Rule giving weight to economic and other non-scientific analyses 
consistent with the weights described by exclusion proponents, there 
would be no impact on the Service's evaluation of scientific or 
biological information. They asserted that, contrary to the position of 
the proposed rescission rule, the Final Rule protects the Service's 
discretion as to when an exclusion analysis would be undertaken and 
what information would be considered in that analysis. Taken together, 
the Final Rule makes clear that the Service is the ultimate arbiter of 
whether a particular area should be excluded and retains the Service's 
ability to rely on the best scientific data available and even to rebut 
non-biological data submitted by outside parties.
    Response: The Final Rule provides that the weight given to non-
biological impacts will be consistent with purported expert or 
firsthand knowledge unless the Secretary has information to rebut that 
weight. We do not agree that the Final Rule protected the Secretary's 
discretion as to when an analysis would be undertaken. Because the 
credible-information standard in the Final Rule is a low bar, in cases 
where a proponent presents any benefit of exclusion, regardless of the 
level of impact, the Service would be committing to enter into a 
discretionary exclusion analysis absent any information to rebut. And 
further, once in the discretionary exclusion analysis, if the analysis 
concluded that the benefits of exclusion outweigh benefits of 
inclusion, the Service would be committing to exclude that area, unless 
the exclusion would result in the extinction of the species. Thus, we 
also disagree with the commenters that the regulations taken together 
protected discretion as to when we would exclude. We would be required 
to weight impacts based on information that outside proponents provide 
and then required to exclude any area for which the weight of the 
impact is greater, or merely appears greater based solely on the expert 
or first-hand information that the proponents provide, than the weight 
of the benefits of inclusion. Therefore, it does not logically follow 
that the Service would be the ``ultimate arbiter'' of whether a 
particular area should be excluded.
    Comment 8: Commenters stated that the Service has expertise in a 
wide array of biological science disciplines but that the agency does 
not have a similar expertise in areas such as economics, finance, 
employment, or community planning. This lack of expertise is 
demonstrated by the fact that the Service routinely uses outside 
contractors to assess the potential economic impact of critical habitat 
designations. Commenters also stated that, by rescinding the Final 
Rule, the Service is assuming that other entities do not have more 
expertise in certain subjects and that the agency is implying that it 
alone has the requisite conservation expertise and knowledge of the Act 
to support critical habitat exclusions. Similarly, commenters stated 
that the Final Rule does not give undue weight to outside parties, 
citing the review of information submitted in the petition process as 
an example of where the Service already reviews and evaluates 
information from outside parties. A commenter stated that Congress 
recognized the need for outside coordination with State, Tribal, and 
local governments, in particular in section 6 and other provisions, 
when drafting the Act.
    Response: We acknowledge that we regularly use outside entities to 
develop economic analyses of critical habitat designations. We also 
routinely seek out expertise from community planners to get the best 
available information as it pertains to development projects within 
areas that support the conservation of the species. As part of our 
normal process, we incorporate all of this information into our draft 
economic analysis, and we make it available with the proposed critical 
habitat designation for public comment; we further consider any 
additional comment and information related to the economic analysis 
when we finalize critical habitat rules. When we receive comments and 
information from proponents of an exclusion, we always consider their 
comments regarding potential impacts from the designation of critical 
habitat to their activities or operations. It is our responsibility to 
evaluate the information, assign appropriate weights to any impacts in 
light of the information we have received, and weigh those impacts 
against the benefits of designating any areas as critical habitat so 
that we can ensure that critical habitat designations contribute to the 
conservation of species and further the conservation purposes of the 
Act. We agree with the commenter that Congress recognized the 
importance of coordination with State, Tribal, and local governments; 
therefore, we make it part of our process to coordinate with 
stakeholders throughout the process of designating critical habitat. 
Rescinding the Final Rule and resuming implementation of the Policy and 
50 CFR 424.19 will not change this important aspect of our process to 
designate critical habitat.
    Comment 9: Commenters stated that reverting to the Policy does not 
remove issues with weighting of impacts because the Policy states the 
Service will ``give great weight'' to certain types or categories of 
impacts.
    Response: The phrasing in the Policy noted by the commenter, ``give 
great weight,'' is an indication of how we intend to weight impacts in 
those instances. The Policy includes categories of impacts where we 
intend to ``give great weight'' to the benefits of exclusion for 
situations where we have a general knowledge and experience that the 
benefits of exclusion may outweigh the benefits of inclusion. This 
phrase intends to be transparent, without being predecisional, about 
how we will weight information in the discretionary exclusion analysis. 
It also preserves discretion because it specifies that the Secretary 
will ``give great weight'' to particular concerns ``in analyzing the 
benefits of exclusion.'' In contrast, the Final Rule requires the 
Secretary to give a weight that is consistent with purported expert or 
firsthand information received from outside parties, which has the 
effect of delegating to those outside parties the Service's authority 
to weight the specified categories of impacts when we analyze the 
benefits of inclusion.
    Comment 10: A commenter suggested that by instituting a process for 
soliciting and considering outside expertise, the Final Rule 
facilitated the requirement in the Act to use the best scientific and 
commercial data available in making decisions regarding critical 
habitat designations. If the Service rescinds the Final Rule, it would 
undercut the statutory mandate to use the best scientific and 
commercial data available.
    Response: As part of our routine process in designating critical 
habitat, regardless of the status of the Final Rule, we consider all 
comments and information submitted by proponents of exclusions of 
specific areas from critical habitat designations. Rescinding the Final 
Rule will not undercut our

[[Page 43440]]

requirement to base our designations on the best scientific data 
available (considering the economic, national security, and other 
relevant impacts) when making determinations for critical habitat 
because we have always solicited information regarding the impacts of 
critical habitat designations from stakeholders through the rulemaking 
process and will continue to do so in the future.
    Comment 11: Some commenters expressed concern that the commitment 
to consider non-biological impacts identified by State or local 
governments in the Final Rule would no longer be in place if the Final 
Rule is rescinded. This outcome would potentially be in tension with 
the Act, which states the Secretary is required to ``cooperate to the 
maximum extent practicable with the States'' and would discount local 
knowledge about impacts. Specifically, a commenter noted that the 
current administration's commitment to including traditional ecological 
knowledge in Federal decisionmaking is a marked contrast to the 
proposed rule's criticism of giving local communities an outsized role 
in critical habitat designations.
    Response: With the rescission of the Final Rule, we will continue 
to consider non-biological impacts identified by State or local 
governments or Tribal entities just as we did before the Final Rule was 
in place. Section 4(b)(2) of the Act mandates that we consider the 
economic and other relevant impacts of designating critical habitat. 
Our regulations at 50 CFR 424.19 and the Policy (e.g., provisions 4 and 
7) allow us to consider the potential impacts to these entities. To 
comply with this mandate, we always conduct an economic analysis of the 
proposed designation, which includes, if appropriate, the incremental 
impact of a designation of critical habitat to State or local 
governments or Tribal entities. In addition, we make our economic 
analysis available with the proposed designation of critical habitat 
and solicit public comments on both. Through this public notice-and-
comment process, we address all comments received and ensure that we 
have considered all relevant impacts, including any impacts to State or 
local governments or Tribal entities.
    Secretarial Order 3206, ``American Indian Tribal Rights, Federal-
Tribal Trust Responsibilities, and the Endangered Species Act'' (June 
5, 1997) acknowledges that we consider traditional knowledge (TK) in 
Federal land management decisionmaking. Since the issuance of S.O. 
3206, we have routinely considered TK in the process of designating 
critical habitat. Our use of TK is a matter of using the best available 
information to inform our decisionmaking. Rescinding the Final Rule 
does not change our commitment to considering impacts identified by 
State or local governments or Tribal entities or to following the 
guidelines in S.O. 3206.
    Comment 12: Multiple commenters disagreed with our proposal to 
return to the Policy's approach to treatment of Federal lands in 
designations of critical habitat. They further stated that we should 
retain the same treatment of lands regardless of ownership, in part 
because the Act's requirement to consider economic impacts, the impact 
on national security, and other relevant impacts is not limited to 
specific land ownership. At least one commenter expressed concern that 
the Policy does not provide for non-Federal permittees, lessees, or 
contractors to request exclusions based on economic impacts. Some 
stated that the Act, other regulations, or courts do not require 
Federal land to be designated as critical habitat. Others stated that 
we did not provide adequate rationale for the change from the Final 
Rule to proposing to adopt the Policy's approach on Federal lands. 
Other commenters noted that prioritizing inclusion of Federal lands in 
critical habitat was reasonable. Some said that because Federal land 
management decisions necessarily have the Federal nexus required to 
trigger consultation, a designation on Federal lands is more likely to 
result in some benefit to the species. At least one commenter found 
this to be reasonable based upon the affirmative duties of Federal land 
managers under section 7(a)(1) of the Act.
    Response: Upon returning to implementing the Policy, we will 
continue to consider the economic impacts, the impacts on national 
security, and any other relevant impacts regardless of landownership as 
required in the Act. The Policy does not limit what exclusions 
proponents may request, nor does it prohibit the Service from excluding 
particular areas on the basis of fact patterns not enumerated in the 
Policy. Rather, the Policy sets out general principles and 
considerations that guide the Service's exclusion analyses. The Policy 
states that Federal lands should be prioritized to support the recovery 
of species, because there is always a nexus for section 7 consultation 
on Federal lands; in addition, by generally not excluding Federal 
lands, any real or perceived regulatory burdens on non-Federal lands 
can be minimized. However, nothing in the Policy requires that Federal 
lands be categorically designated as critical habitat, and the Policy 
does not prohibit exclusion of Federal lands. Therefore, depending on 
the species-specific and situation-specific facts, we may exclude areas 
of critical habitat from designations on Federal lands, but the Policy 
indicates that in most cases we would expect that the benefits of 
inclusion of Federal lands would be greater than the benefits of 
exclusion.
    As stated in the proposed rule, the Secretary would retain the 
discretion to exclude Federal lands when the factual circumstances 
merit it. We find that the approach in the Policy better equips the 
Service with the flexibility necessary to account for the wide 
variability of circumstances in which the Secretary makes exclusion 
decisions--variability in the needs of the species, in the geography 
and quality of critical habitat areas, and of land-ownership 
arrangements. For example, while the transactional costs of 
consultation with Federal agencies tend to be a relatively minor cost 
in most situations, and while activities on Federal lands automatically 
have a Federal nexus (which usually would require consultation and thus 
increase the potential for conservation benefits if those lands are 
designated), we have found that in some instances the benefits of 
exclusion nevertheless outweigh the benefits of designating those 
areas. In those situations when the benefits of excluding Federal lands 
outweigh the benefits of designating them as critical habitat, the 
Policy provides sufficient discretion for the Secretary to exclude 
Federal lands. The rescission of the Final Rule will not change our 
mandatory consideration of those impacts on Federal lands. Further, 
consistent with Weyerhaeuser, in those situations where we consider 
exclusion but do not exclude particular areas, we will explain our 
rationale for not excluding particular areas for which exclusion has 
been requested. We refer the commenter to the rationale in the proposed 
rule and in this final rule, both of which set forth our detailed 
explanation for rescinding the Final Rule.
    Comment 13: Commenters stated that, prior to the Final Rule, the 
Service implemented the Act in a manner that effectively removed the 
requirement that the Service consider economic and other impacts of 
critical habitat designations. Other commenters disagreed that the 
Service's consideration of economic and other factors is at all 
discretionary under section 4(b)(2) of the Act. They suggested that, 
after conducting a balancing analysis, if the Service

[[Page 43441]]

concludes that the benefits of exclusion outweigh those of inclusion, 
then the reasonable conclusion is that the area should be excluded so 
long as the exclusions will not result in the extinction of the 
species. These commenters stated that if the Service is seeking to 
retain discretion not to exclude an area when the benefits of exclusion 
outweigh those of inclusion, this justification is incompatible with 
the Act, and unsupportable under the APA.
    Response: The Act does not require us to undertake an exclusion 
analysis; however, section 4(b)(2) of the Act requires that we consider 
the economic impact, the impact on national security, and any other 
relevant impacts. We have and will continue to comply with this 
mandatory consideration prior to finalizing any designation of critical 
habitat. The implementing regulations at 50 CFR 424.19 also require 
that we make available the draft economic analysis concurrent with each 
proposed critical habitat designation. We have, and always will, 
consider the economic impact of designating critical habitat, and we do 
that through completing an economic analysis of each designation of 
critical habitat, and then considering that economic analysis in 
deciding whether to engage in an exclusion analysis under the second 
sentence of section 4(b)(2).
    By the express language in section 4(b)(2) in the Act, other 
aspects of exclusion decisions are discretionary. For example, the 
Secretary has discretion on when to undertake an exclusion analysis, 
the assignments of weights, and making the final exclusion decision. 
Simply weighting every non-biological impact according to outside 
parties could constrain the Secretary's discretion and could conflict 
with the conservation purposes of the Act and our responsibility to 
implement the Act. Therefore, we do not intend to delegate to outside 
parties our authority to assign weights to non-biological impacts. If, 
after weighting and weighing the benefits of inclusion and the benefits 
of exclusion, we determine that the benefits of exclusion outweigh 
those of inclusion and that exclusion would not result in the 
extinction of the species, we agree that exclusion is generally 
appropriate.
    However, determining the benefits of exclusion and the benefits of 
inclusion is not always straightforward. Benefits of exclusion are 
primarily the avoidance of economic costs (e.g., the incremental costs 
associated with consultations related to impacts to critical habitat 
and potentially implementing reasonable and prudent alternatives). 
Benefits of inclusion are generally the support of conservation and 
recovery of species (e.g., the requirement of Federal agencies to 
ensure that actions that they fund, authorize, or carry out are not 
likely to result in the destruction or adverse modification of any 
designated critical habitat). Including a particular area within 
critical habitat may also have one or more other benefits, potentially 
including indirect benefits. While some of these benefits of inclusion 
can be quantified and monetized, others may be hard to quantify or 
monetize but may nevertheless be significant. Often, the weighing 
analysis requires a comparison of the benefits of avoiding quantified 
economic costs against the benefits of maintaining qualitative value 
for conservation and recovery. Comparisons such as these are not 
precise, and it may not be obvious that the benefits of inclusion 
outweigh those of exclusion. But we do not take this relative 
imprecision to suggest that conservation benefits are any less 
important or worthy of inclusion and consideration when weighing costs 
and benefits. Indeed, insofar as we may not be able to quantify 
precisely the incremental benefits of a designation of critical 
habitat, retaining the discretion not to exclude an area even if the 
quantified benefits of exclusion appear to outweigh the quantified 
benefits of inclusion allows the Service to account for those kinds of 
imprecisions.
    Further, the statute specifically states that the decision to 
exclude is discretionary: ``The Secretary may exclude any area from 
critical habitat . . ..'' (emphasis added). Finally, the decision in 
Weyerhaeuser acknowledged that the Service has discretion to exclude so 
long as the exclusion is reasonably applied and supported by the 
decisional record. Additionally, the decision in Weyerhaeuser made 
clear that a decision not to undertake an exclusion analysis is 
reviewable for abuse of agency discretion. Therefore, if we do not 
undertake an exclusion analysis despite a request for exclusion or 
supporting information having been submitted, we will explain our 
rationale, and any reviewing court could review our decision and 
determine whether we abused our discretion. For any exclusion 
decisions, we will fully explain our rationale and provide a detailed 
explanation of our analysis consistent with the requirements of the 
APA.
    Comment 14: Some commenters stated that the Final Rule does not 
limit the Service's ability to conserve listed species in any areas 
that would be excluded from a designation of critical habitat if the 
``shall'' exclude language is retained in regulation. The Service would 
retain the flexibility to consider the specific facts at issue or the 
conservation outcomes on a fact-specific basis with the Final Rule in 
place.
    Response: As described in the preamble to both the proposed and 
this final rule, we find that the ``shall exclude'' language of the 
Final Rule constrains the Secretary's discretion once we make a 
determination that the benefits of exclusion outweigh, or appear to 
outweigh based on the expert or first-hand information that proponents 
provide, the benefits of inclusion. Congress clearly did not intend to 
constrain the Secretary's discretion in this manner, or the Act would 
not contain the provision that the Secretary ``may exclude.'' 
Furthermore, the Solicitor's Memorandum Opinion M-37016, ``The 
Secretary's Authority to Exclude Areas from a Critical Habitat 
Designation under Section 4(b)(2) of the Endangered Species Act'' (the 
Solicitor's M-Opinion; October 3, 2008), underscores the Secretary's 
discretion to exclude areas as a result of the statute's inclusion of 
the phrase ``may exclude'' (pp. 6-9). We also find that the ``shall 
exclude'' language, combined with the allowance of weights of impacts 
to be determined by outside parties, is likely to further constrain the 
Secretary's discretion in certain cases. We recognize regulations are 
intended to interpret statutory language that they implement. The Final 
Rule stated that the ``shall exclude'' language was an exercise of 
Secretarial discretion. However, in this instance, we find that the way 
in which the Final Rule constrains the Secretary's discretion is 
potentially in conflict with our responsibilities to administer the Act 
and fails to take into account the species-specific and situation-
specific facts that are necessary to ensure that critical habitat 
designations contribute to the conservation of listed species.
    Comment 15: Some commenters stated that the Service's approach to 
critical habitat designations must reflect the requirements of section 
4(b)(2) of the Act in consideration of the economic impact and relative 
benefits before deciding whether to exclude an area from critical 
habitat.
    Response: The Act in section 4(b)(2) and our implementing 
regulations at 50 CFR 424.19 set forth clear requirements for 
considering the economic impact, the impact on national security, and 
any other relevant impacts of including particular areas within 
designated critical habitat. We always comply with this mandatory 
obligation to consider these impacts prior to finalizing any

[[Page 43442]]

designation of critical habitat. Rescinding the Final Rule will not 
change our practice of considering these impacts or eliminate the 
statutory requirement to consider these impacts. We find that 
rescinding the Final Rule better reflects the requirements of section 
4(b)(2) of the Act because applying 50 CFR 424.19 and the Policy will 
retain the requirement to consider the mandatory impacts and preserve 
the Secretary's discretion to exclude particular areas if the benefits 
of exclusion outweigh the benefits of inclusion, so long as exclusion 
will not result in extinction of the species.
    Comment 16: Commenters stated that the economic impact of a 
designation of critical habitat is an important consideration, but by 
itself the economic impact can fail to capture the broader impact of a 
critical habitat designation on a community. Commenters contend that a 
flaw with the proposed rescission is that removing the discussion of 
what ``other relevant impacts'' includes may cause impacts to 
communities to take a back seat in exclusion analyses.
    Response: Under section 4(b)(2) of the Act, ``other relevant 
impact'' is a separate entity in the text and has equal importance with 
``economic impact'' and the ``impact on national security.'' We always 
consider these categories of impacts, and rescinding the Final Rule 
will not change that approach. The Policy describes the types of 
categories of impacts that we may consider when evaluating the impacts 
of a critical habitat designation. The Policy provides examples such as 
plans and partnerships, but in no way excludes considerations of 
impacts to communities. Furthermore, the Solicitor's M-Opinion 
thoroughly describes the Secretary's broad discretion to determine what 
other relevant impacts might be relevant (p. 12). If we receive 
requests for exclusion of particular areas from a designation of 
critical habitat based on impacts to communities, we will fully 
consider that information and provide a rational basis to support our 
decision to exclude or not exclude based on this or other available 
information.
    Comment 17: Some commenters stated that the Service must consider 
how imposition of costs on private landowners will affect their 
incentive to conserve, maintain, or restore habitat for species. 
Conversely, the Service must also consider the conservation costs of 
critical habitat--that is, whether landowners may preemptively destroy 
habitat or forgo restoration to prevent habitat features from 
developing or to avoid perceived stigma effects of a designation. 
Conservation benefits also need to be considered, but the Service often 
concludes designations of critical habitat will have little benefit.
    Response: The designation of particular areas as critical habitat 
does not impose obligations to conserve, preserve, or restore any area 
designated as critical habitat for a species. Where there is a Federal 
nexus, the Federal agency must ensure their actions do not destroy or 
adversely modify designated critical habitat. We are aware that there 
may be perceptional effects that result in economic impacts. For 
example, people may be reluctant to purchase lands that are identified 
as critical habitat, or landowners may change their land use or 
planning as a result of the area being designated as critical habitat. 
Our economic analysis evaluates the potential for those effects, and we 
describe the perceptional effects in our analysis. Actions taken to 
preemptively destroy habitat or to prevent habitat features from 
developing to prevent an area from being considered as critical habitat 
could result in a violation of section 9 of the Act even if an area is 
not designated as critical habitat.
    We also recognize that there can be some risk to species or their 
habitat associated with drawing lines on a map to define areas of 
critical habitat but acknowledge that the effects from section 7 
consultation provide a conservation benefit. In some instances, we will 
determine that a designation of critical habitat is not prudent because 
there is evidence of a threat of collection of the species or other 
threats would be exacerbated due to the publication of maps detailing 
the location of the species.
    In instances where critical habitat is proposed, we look for the 
existence of partnerships, plans, or agreements that may provide a 
conservation benefit for the species. If appropriate, and after 
conducting an exclusion analysis, we may find that the benefits of 
exclusion outweigh the benefits of inclusion. So long as the exclusion 
will not result in the extinction of the species concerned, we have 
always excluded such areas. These conservation mechanisms incentivize 
landowners to enter into these types of agreements to further the 
conservation of species. Additionally, our economic analysis includes 
an assessment of the benefits of the designation of critical habitat, 
and where possible we quantify those benefits; however, in most cases 
we qualitatively describe the benefits in terms of conservation value 
of the designation of the particular areas of critical habitat.
    Comment 18: Several commenters found our argument that having 
different regulations than NMFS created confusion to be unpersuasive. 
Some stated that the Final Rule would result in the Service being more 
similar to NMFS in terms of actually conducting exclusion analyses and 
that absent the regulations there would be no binding guidance or 
requirement for the Service to comply with section 4(b)(2) of the Act. 
Commenters stated that wanting to be consistent with NMFS is not a 
compelling rationale and cited the Service's June 4, 2021, intention to 
return to using blanket 4(d) rules, which would then be inconsistent 
with NMFS' approach.
    Response: As discussed above, differences with NMFS poses a 
significant risk of confusing other Federal agencies, Tribes, States, 
other potentially affected stakeholders and members of the public, and 
agency staff responsible for drafting critical habitat designations. We 
have not identified a science- or mission-based reason for separate 
regulations for exclusions from critical habitat that would outweigh 
that risk.
    Whether it is confusing to the public if the Service applies 
different regulations than NMFS depends on the standards and processes 
contained in each particular regulation. In some situations, the 
regulated community is best served if the agencies have the same 
regulations and policy; this scenario applies to the regulations that 
make clear to proponents of exclusions how the information they submit 
will be considered, because consistency makes it easier for proponents 
of exclusions or other members of the public to know what information 
to submit. However, in other situations it may make sense for the 
Service and NMFS to apply their own regulations; this approach applies 
to regulations under section 4(d) of the Act, because the protection 
needs vary between species, and the nature, scope, and scale of the 
protective regulations that are needed for marine species subject to 
NMFS' jurisdiction may differ considerably from the needs of species 
subject to the Service's jurisdiction. In addition, regardless of 
whether the Service reinstates ``blanket'' 4(d) rules, we will 
undertake a species-specific analysis to determine what protections are 
necessary and advisable for the species at hand as described in section 
4(d) of the Act, resulting in a similar process as NMFS uses.
    After rescinding this regulation, both Services will apply the 
implementing regulations at 50 CFR 424.19 and the Policy. This will 
avoid the potential for different implementation of section

[[Page 43443]]

4(b)(2) of the Act between the agencies and for confusion on the part 
of proponents of exclusions regarding what information to submit and 
what to expect from the exclusion process.
    With the rescission of the Final Rule, the Service will continue to 
comply with section 4(b)(2) of the Act when designating critical 
habitat. The Service routinely conducts exclusion analyses: more than 
40 percent of our final critical habitat rules have exclusion analyses. 
Regardless of any regulation, we must document our rationale for 
decisions not to exclude areas from critical habitat in the face of 
requests for exclusions because the Weyerhaeuser decision held that 
decisions not to exclude are judicially reviewable.
    Comment 19: Commenters stated that the Service should affirm that 
we will give meaningful consideration to information provided by Alaska 
Native Corporations (ANCs) and will address impacts on lands owned by 
Alaska Natives, including lands covered by the Alaska Native Claims 
Settlement Act, when designating critical habitat.
    Response: We value information provided by ANCs and will always 
consider comments and information provided by ANCs when we are 
proposing and finalizing designations of critical habitat. We consider 
impacts on all native-owned lands, including on lands owned by Alaska 
Natives, to categorically fall within the other relevant impacts that 
section 4(b)(2) of the Act requires that we consider when designating 
critical habitat. We will always consider requests for exclusion from 
ANCs, and any decision not to exclude will be fully explained in our 
final rule consistent with the Weyerhaeuser ruling.
    Comment 20: Numerous commenters stated that the Service should 
revise the Final Rule rather than rescind it in its entirety, 
consistent with Supreme Court rulings (e.g., in Dep't of Homeland 
Security v. Regents of the Univ. of California, 140 S. Ct. 1891 (2020) 
(Regents) and FCC v. Fox Television. 129 S. Ct. 1800 (2009) (Fox 
Television)). In some instances, commenters included specific 
suggestions to keep existing regulatory language, add new regulatory 
language, and revise or clarify particular provisions of the 
regulations. For example, some commenters suggested that we add 
additional examples of categories that could be considered as bases for 
exclusions, requested that we clarify when the rigid ruleset would not 
be appropriate to use, or asked that we further define terms such as 
``national security.'' In other cases, the commenters did not provide 
detailed recommendations. Others noted that the Service should retain 
the Final Rule and that NMFS should adopt corresponding regulations.
    Response: We reviewed and considered all suggestions of how to 
revise the regulations instead of rescinding them. We find that the 
suggestions of specific possible revisions or clarifications support 
our conclusion that the Final Rule did not provide the clarity or 
transparency that was intended. For example, there would be no need to 
identify additional bases for exclusions, eliminate the rigid rulesets 
in the Final Rule, or define additional terms if we rescind the Final 
Rule and instead implement the Policy and 50 CFR 424.19 because those 
authorities properly balance the goals of transparency and 
predictability of process with the benefit of preserving the 
Secretarial flexibility and discretion to exclude areas from 
designations of critical habitat for listed species. With respect to 
the comments seeking revision instead of rescission without providing 
specific recommendations on how to revise the Final Rule, we did not 
further address those commenters because there was not enough 
specificity to evaluate.
    As explained earlier, we have considered whether to retain any 
portions of the regulation. However, the three reasons we identified 
for rescinding the Final Rule apply to all four of the key elements of 
the regulation: (1) the requirement to undertake an exclusion analysis 
whenever a proponent of an exclusion provides credible information; (2) 
the prescription for weighting the impacts; (3) the treatment of 
Federal lands; and (4) the requirement to exclude any area for which 
the benefits of exclusion outweigh the benefits of inclusion. Revising 
any of the standards in these elements, or even removing some 
combination of these elements and retaining the rest, would still 
result in constraining the Secretary's discretion and decreasing the 
agency's ability to further the conservation purposes of the Act, and 
would be unlikely to increase clarity or transparency. Additionally, 
the other elements of the Final Rule are already directly addressed 
even without the regulations--through the Policy and in some cases the 
requirements of the Act. Including these elements in a revised 
regulation in part or in whole would serve only to create additional 
confusion without changing or clarifying the Service's consideration of 
impacts under section 4(b)(2) of the Act.
    We note also that this rescission is different from the rescissions 
addressed in the court decisions that commenters referenced. For 
example, unlike the rescission in Regents, this rescission will not 
``eliminate the centerpiece of'' the critical habitat program or the 
consideration of exclusions from critical habitat designations. See 
Regents, 140 S. Ct. at 1913 (where DHS rescission had entirely 
eliminated both the forbearance and the benefits aspects of the DACA 
program but had only analyzed the benefits aspects). Rather, the 
Service would be required to continue to consider the impacts of 
critical habitat designations and would simply return to applying the 
2016 Policy in considering exclusions from critical habitat. In 
addition, this rescission does not affect a right under the First 
Amendment. See Fox Television, 129 S. Ct. at 1805-06 (requiring that, 
in regulation of speech, FCC put in place the ``least restrictive 
alternative'').
    After thoughtful consideration of the specific revisions commenters 
have suggested, as well as of the possibility of rescinding only parts 
of the Final Rule or revising instead of rescinding the Final Rule in 
its entirety, we conclude that the conservation purposes of the Act are 
best served by promptly rescinding the Final Rule and resuming 
implementation of 50 CFR 424.19 and the Policy.
    Regarding commenters' suggestions that NMFS adopt regulations 
corresponding to the regulations the Service adopted, we are not in a 
position to compel NMFS to adopt regulations similar to the ones we are 
rescinding with this final rule; nor would it further the policies of 
the Act for the Service to urge NMFS to adopt a framework at odds with 
the purposes, mandates, and structure of the Act.
    Comment 21: A commenter contends that we have violated Executive 
Orders 12866 and 13563 because the public participation effort simply 
consisted of an abbreviated public comment period, no public hearings, 
and no focused stakeholder outreach.
    Response: Section 6(a)(1) of E.O. 12866 states that in most cases 
rules should include a comment period of not less than 60-days. Due to 
the agreement for a long-term stay in litigation on this rulemaking, 
development and review of this final rule was completed on an expedited 
timeframe which included shortening the public comment period to a 
total of 45 days. In addition to holding a 45-day public comment period 
and responding to all of the comments received, the Service, pursuant 
to E.O. 12866, submitted the proposed rule and this final rule to the 
Office of Management and Budget's Office of Information and Regulatory 
Affairs (OIRA) for review. Under E.O.

[[Page 43444]]

12866, OIRA and the issuing agency meet with any interested party to 
discuss issues related to a rule under review, and during the proposed 
and final rule reviews, we participated in several such meetings. In 
addition, we held three separate webinars for Tribes and Tribal 
organizations to provide an overview of, and information on how to 
provide input on, a series of rulemakings related to implementation of 
the Act that the Services were developing, including the proposed rule 
to rescind the Final Rule. We note that public hearings are not 
required for implementing regulations, and we declined to hold optional 
public hearings that were requested for this rulemaking.
    Comment 22: A commenter stated that we should have conducted an 
analysis under the Regulatory Flexibility Act (RFA) because the vast 
majority of business concerns involved in the forestry industry in 
Alabama are small businesses that could be economically affected by 
critical habitat designations.
    Response: We complied with the requirements of the RFA. No 
regulatory flexibility analysis is required if the head of an agency, 
or their designee, certifies that the rule will not have a significant 
economic impact on a substantial number of small entities. The Small 
Business Regulatory Enforcement Fairness Act of 1996 amended the RFA to 
require Federal agencies to provide a statement of the factual basis 
for certifying that a rule will not have a significant economic impact 
on a substantial number of small entities. In the proposed and this 
final rule, we certify that the rescission of the Final Rule would not 
have a significant economic effect on a substantial number of small 
entities. The Service is the only entity directly affected by the 
rulemaking and by definition is not a small entity, and the rulemaking 
therefore will not have a significant effect on any small entities. In 
species-specific designations of critical habitat, we always evaluate 
whether a designation of critical habitat may directly affect small 
businesses. Therefore, the commenter's concern regarding potential 
impacts to forestry operations in Alabama would be evaluated in the 
regulatory flexibility analysis in any future species-specific critical 
habitat designation.
    Comment 23: A commenter stated that an analysis under the Unfunded 
Mandates Reform Act (UMRA) should have been conducted because the facts 
presented in the Weyerhaeuser case when extrapolated across the United 
States would have certainly exceeded the $100 million threshold for 
that statute.
    Response: The requirement to undertake an analysis under the UMRA 
applies only to regulations containing ``federal mandates'' that meet 
the threshold levels under the Act. 2 U.S.C. 1532-1535. The UMRA 
defines ``federal mandate'' as a regulation that would impose either 
``an enforceable duty upon State, local, or tribal governments'' 
(federal intergovernmental mandate'') or ``an enforceable duty upon the 
private sector'' (``federal private sector mandate''). 2 U.S.C. 658(5)-
(7). The rescission of the Final Rule does not impose an enforceable 
duty on State, local, or Tribal governments, or the private sector. The 
only direct impact of this final rule is upon the Service because this 
rulemaking action pertains to how the Service evaluates potential 
exclusions from critical habitat designations.
    Comment 24: A commenter stated that our determinations with respect 
to Takings and E.O. 13132 warrant additional explanation given the 
facts in the Weyerhaeuser case, where the designation of critical 
habitat ``threatened to impose a $33 million cost'' based on one unit 
of critical habitat alone.
    Response: The rescission of the Final Rule will not allow for any 
unlawful takings. The facts in the Weyerhaeuser case are not directly 
applicable because they related to a specific designation of critical 
habitat for a species, not an overarching regulation outlining the 
designation process. Furthermore, the rescission of the Final Rule does 
not directly affect private property, nor does it cause a physical or 
regulatory taking. It does not result in a physical taking because it 
does not effectively compel a property owner to suffer a physical 
invasion of property. Further, the rule does not result in a regulatory 
taking because it does not deny all economically beneficial or 
productive uses of the land or aquatic resources, it does substantially 
advance a legitimate government interest (conservation and recovery of 
endangered species and threatened species), and it does not present a 
barrier to all reasonable and expected beneficial uses of private 
property.
    The requirement to avoid the destruction or adverse modification of 
critical habitat applies to actions on private land only when they 
involve Federal actions such as authorization or Federal funding. Where 
an action does implicate authorization or funding by a Federal agency, 
or the Federal agency directly carries out an activity on private 
lands, any resulting section 7 consultation under the Act on the 
designated critical habitat would then consider the effects of the 
particular proposed action (e.g., issuance of a land-use-related 
permit) to ensure the critical habitat is not likely to be destroyed or 
adversely modified by the action. And even a finding that the action 
was likely to destroy or adversely modify the critical habitat would 
not result in an unlawful taking, because that finding would not 
require the Federal action agency or the landowner to restore the 
critical habitat or recover the species, but rather to implement 
reasonable and prudent alternatives to avoid destruction or adverse 
modification of critical habitat. Rather than imposing an affirmative 
requirement that Federal actions improve critical habitat, section 
7(a)(2) of the Act prohibits Federal actions from reducing the critical 
habitat's existing capacity to conserve the species. (Final Rule 
Establishing Definition of ``Destruction or Adverse Modification'' of 
Critical Habitat, 81 FR 7214, p. 7224, February 11, 2016; extending to 
the adverse-modification analysis the conclusion in Nat'l Wildlife 
Fed'n v. National Marine Fisheries Service, 524 F.3d 917, 930 (9th Cir. 
2007), that agency action can only violate section 7(a)(2) of the Act 
``if that agency action causes some deterioration in the species' pre-
action condition''). In other words, the requirement for Federal 
agencies to ensure their actions are not likely to result in 
destruction or adverse modification of critical habitat is a 
prohibitory standard only; it does not mandate or prohibit any action 
by any private landowner.
    Comment 25: A commenter stated that a better analysis or 
explanation is needed as to why the rulemaking does ``not directly 
affect . . . Tribal lands'' and only directly affects the Service.
    Response: The rescission of the Final Rule does not directly affect 
any lands; the only direct effect is to guide the Service's analysis 
when it designates critical habitat. To the extent that Tribal or other 
lands may be affected by critical habitat designations, we would 
consider those cases in future species-specific designations that may 
affect those lands and where an action had a Federal nexus. Further, as 
explained above, even in the cases where an action has a Federal nexus, 
the Federal agency only has a duty to avoid destruction or adverse 
modification of the critical habitat.
    Comment 26: A commenter disagrees with the Service's determination 
that the rule is procedural in nature and qualifies for a categorical 
exclusion under the National Environmental Policy Act (NEPA). They 
contend that

[[Page 43445]]

designation of critical habitat or exclusion from critical habitat has 
an impact on the human environment and that impact should not be 
dismissed.
    Response: As discussed below, this rule sets out the overarching 
process and considerations that the Service undertakes when it 
designates critical habitat, and this rulemaking action has no 
significant impacts on the human environment.
    Comment 27: A commenter noted that our determination for federalism 
and E.O. 13132 may achieve the opposite intent of those requirements, 
resulting in unclear legal standards and leading to an increase in 
litigation.
    Response: For the reasons outlined in the proposed and in this 
final rule, we have determined that the Final Rule is problematic 
because it unduly constrained the Service's discretion in administering 
the Act, potentially limiting or undermining the Service's role as the 
expert agency and its ability to further the conservation of endangered 
and threatened species through designation of their critical habitats. 
We note that the legal standards will still be clear absent the Final 
Rule because the Policy and 50 CFR 424.19 will apply. We acknowledge 
that there may be differing views on the best way to achieve species 
conservation and implementation of the Act. When implementing the Act, 
we strive to strike a balance between establishing clear legal 
standards and retaining the discretion necessary for making the best 
possible decisions based on the specific facts at issue.
    Comment 28: A commenter stated that the proposed rescission does 
not achieve the goals of the Civil Justice Reform Act to write 
regulations that minimize litigation and provide a clear legal 
standard.
    Response: As we articulated in the proposed rule and this final 
rule, we find that the Final Rule's language in part is vague, thereby 
setting an unclear legal standard that was unlikely to minimize future 
litigation on individual critical habitat designations and any decision 
to exclude or not. As mentioned above, on January 14, 2021, which was 5 
days before the Final Rule took effect, seven environmental groups 
challenged it, filing suit against the Service in Federal district 
court in Hawaii. Based on this legal challenge, we also find that the 
Final Rule did not ``minimize litigation.'' By rescinding the Final 
Rule, we will return to implementing the regulations at 50 CFR 424.19 
and the Policy. Nothing in this action unduly burdens the judicial 
system, and the rule meets the applicable standards provided in 
sections 3(a) and 3(b)(2) of E.O. 12988.
    Comment 29: A commenter stated that our determination that the 
rescission of the Final Rule would not have effects under E.O. 13211, 
Actions Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use, was conclusory in nature.
    Response: In order for a regulation to be deemed significant under 
E.O. 13211, the regulation must be (1)(i) a significant regulatory 
action under E.O. 12866 or any successor order, and (ii) likely to have 
a significant adverse effect on the supply, distribution, or use of 
energy; or (2) one that is designated by OIRA as a significant energy 
action. While OIRA deemed this rule as significant under E.O. 12866, 
OIRA did not identify the proposed rule as having a significant adverse 
effect on the supply, distribution, or use of energy, nor did the 
Administrator of OIRA conclude this is a significant energy action. The 
rescission of an overarching regulation outlining the process and 
considerations of exclusions from critical habitat is not expected to 
have a significant adverse effect on the supply, distribution, or use 
of energy. Any effect on these issues that may result from future final 
designations of critical habitat has been, and will continue to be, 
documented and analyzed in those species-specific designations of 
critical habitat.

Required Determinations

Regulatory Planning and Review (E.O.s 12866 and 13563)

    Executive Order 12866 (``E.O. 12866'') provides that OIRA will 
review all significant rules. OIRA has determined that this rule is 
significant. ``Effects of Rescinding the FWS Regulation Exclusions of 
Critical Habitat Under Section 4(b)(2) of the ESA RIN 1018-BD84 August 
2021,'' which was prepared for the proposed rule (86 FR 59346), 
provides an assessment of potential costs and benefits of this 
regulatory action pursuant to E.O. 12866 and is available at https://www.regulations.gov in Docket No. FWS-HQ-ES-2019-0115. We decided not 
to make any changes to the effects analysis after consideration of the 
information provided through the public comment process. As noted in 
the effects analysis, there is uncertainty regarding the conservation 
needs of species, the specific locations where the species occur, the 
nature of areas proposed for designation, existing conservation efforts 
on the ground, and the land uses that are occurring or planned for the 
relevant areas. The Final Rule's economic analysis made assumptions 
based on Service staff experience and provided ranges of potential 
benefits for illustrative purposes only, not because we thought that 
any of the outcomes was more or less likely. Rescinding the Final Rule 
does not automatically result in an economic change, and the magnitude 
of the net economic impact from this final rule is uncertain.
    Executive Order 13563 (``E.O. 13563'') reaffirms the principles of 
E.O. 12866 while calling for improvements in the Nation's regulatory 
system to promote predictability, to reduce uncertainty, and to use the 
best, most innovative, and least burdensome tools for achieving 
regulatory ends. E.O. 13563 directs agencies to consider regulatory 
approaches that reduce burdens and maintain flexibility and freedom of 
choice for the public where these approaches are relevant, feasible, 
and consistent with regulatory objectives and further emphasizes that 
regulations must be based on the best available science and that the 
rulemaking process must allow for public participation and an open 
exchange of ideas. We have developed this final rule in a manner 
consistent with these requirements. This final rule is consistent with 
E.O. 13563, and in particular with the requirement of retrospective 
analysis of existing rules designed ``to make the agency's regulatory 
program more effective or less burdensome in achieving the regulatory 
objectives.''

Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (as amended by the Small 
Business Regulatory Enforcement Fairness Act (SBREFA) of 1996; 5 U.S.C. 
601 et seq.), whenever a Federal agency is required to publish a notice 
of rulemaking for any proposed or final rule, it must prepare, and make 
available for public comment, a regulatory flexibility analysis that 
describes the effect of the rule on small entities (i.e., small 
businesses, small organizations, and small government jurisdictions). 
However, no regulatory flexibility analysis is required if the head of 
an agency, or their designee, certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
SBREFA amended the Regulatory Flexibility Act to require Federal 
agencies to provide a statement of the factual basis for certifying 
that a rule will not have a significant economic impact on a 
substantial number of small entities.
    This rulemaking rescinds a rule that outlines Service procedures 
regarding exclusion of areas from designations of critical habitat 
under the Act. When

[[Page 43446]]

effective, the Service will resume the implementation of the 2013 Rule 
and the Policy jointly with NMFS. As discussed in our proposed rule, to 
the extent that the Final Rule differs from the Policy, it is limited 
to identifying specific factors for consideration that the Policy 
already enumerates for the Service to consider in weighing the benefits 
of excluding areas against the benefits of including them, but in a 
more general sense. Moreover, the Service is the only entity that would 
be directly affected by this final rule because the Service is the only 
entity that was implementing the final regulations under 50 CFR 17.90. 
No external entities, including any small businesses, small 
organizations, or small governments, will experience any economic 
impacts directly from this rule because the Service will continue to 
take into consideration the relevant impacts of designating specific 
areas as critical habitat and retain the ability to apply the factors 
identified in the Final Rule.
    The regulatory protections that stem from designating critical 
habitat occur through section 7 of the Act, which requires Federal 
agencies, in consultation with the Service, to ensure that any action 
authorized, funded, or carried out by the agency is not likely to 
destroy or adversely modify critical habitat. Therefore, under section 
7, only Federal action agencies are directly subject to the specific 
regulatory requirement (avoiding destruction and adverse modification) 
imposed by critical habitat designation. Consequently, it is our 
position that only Federal action agencies are directly regulated by 
designations of critical habitat. There is no requirement under the 
Regulatory Flexibility Act to evaluate the potential impacts to 
entities not directly regulated. Moreover, Federal agencies are not 
small entities. Therefore, even if this rule affects the scope or scale 
of future critical habitat designations, no small entities will be 
directly regulated by this rulemaking.
    In addition, our decisions to exclude or not exclude areas (where a 
specific request has been made) based on this consideration of impacts 
will continue to be judicially reviewable in accordance with the 
Supreme Court's opinion in Weyerhaeuser. At the proposed rule stage, we 
certified that this rule would not have a significant economic effect 
on a substantial number of small entities and a regulatory flexibility 
analysis is not required. Nothing in this final rule changes that 
conclusion.

Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.)

    In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501 
et seq.):
    (a) On the basis of information contained in the Regulatory 
Flexibility Act section above, this final rule would not 
``significantly or uniquely'' affect small governments. We have 
determined and certify pursuant to the Unfunded Mandates Reform Act, 2 
U.S.C. 1502, that this final rule would not impose a cost of $100 
million or more in any given year on local or State governments or 
private entities. A small government agency plan is not required. As 
explained above, small governments would not be affected because this 
final rule would not place additional requirements on any city, county, 
or other local municipalities.
    (b) This final rule would not produce a Federal mandate on State, 
local, or Tribal governments or the private sector of $100 million or 
greater in any year; that is, this final rule is not a ``significant 
regulatory action''' under the Unfunded Mandates Reform Act. This final 
rule would impose no obligations on State, local, or Tribal 
governments.

Takings (E.O. 12630)

    In accordance with E.O. 12630, this final rule would not have 
significant takings implications. This final rule would not directly 
affect private property, nor would it cause a physical or regulatory 
taking. It would not result in a physical taking because it would not 
effectively compel a property owner to suffer a physical invasion of 
property. Further, this final rule would not result in a regulatory 
taking because it would not deny all economically beneficial or 
productive use of the land or aquatic resources and it would 
substantially advance a legitimate government interest (conservation 
and recovery of endangered species and threatened species) and would 
not present a barrier to all reasonable and expected beneficial use of 
private property.

Federalism (E.O. 13132)

    In accordance with E.O. 13132, we have considered whether this 
final rule would have significant federalism effects and have 
determined that a federalism summary impact statement is not required. 
This final rule pertains only to factors for designation of critical 
habitat under the Act and would not have substantial direct effects on 
the States, on the relationship between the Federal Government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government.

Civil Justice Reform (E.O. 12988)

    This final rule does not unduly burden the judicial system and 
meets the applicable standards provided in sections 3(a) and 3(b)(2) of 
E.O. 12988. This final rule would rescind a rule that was solely 
focused on exclusions from critical habitat under the Act.

Government-to-Government Relationship With Tribes

    In accordance with E.O. 13175, ``Consultation and Coordination with 
Indian Tribal Governments,'' and the Department of the Interior's 
manual at 512 DM 2, we considered possible effects of this final rule 
on federally recognized Indian Tribes. The Service has concluded that 
rescinding the Final Rule would not directly affect specific species or 
Tribal lands. With the rescission of the Final Rule, we will resume the 
implementation of the 2013 Rule and the Policy jointly with NMFS, which 
are almost identical to the treatment of Tribal lands under the Final 
Rule.
    During July 2021, we held three separate webinars for Tribes and 
Tribal organizations to provide an overview of, and information on how 
to provide input on, a series of rulemakings related to implementation 
of the Act that the Services were developing, including the proposed 
rule to rescind the section 4(b)(2) exclusions regulations. We received 
written comments from Tribal organizations; however, we did not receive 
any requests for consultation regarding this action.
    This regulatory rescission directly affects only the Service, and 
with or without this rescission the Service would be obligated to 
continue to designate critical habitat based on the best available 
data. Therefore, we conclude that this final rule to rescind the Final 
Rule does not have ``tribal implications'' under section 1(a) of E.O. 
13175, and therefore formal government-to-government consultation is 
not required by E.O. 13175 and related policies of the Department of 
the Interior. We will continue to collaborate with Tribes on issues 
related to federally listed species and their habitats and work with 
them as we implement the provisions of the Act. See Secretarial Order 
3206, ``American Indian Tribal Rights, Federal-Tribal Trust 
Responsibilities, and the Endangered Species Act'' (June 5, 1997).

Paperwork Reduction Act

    This final rule does not contain any new collections of information 
that

[[Page 43447]]

require approval by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act of 1995 (45 U.S.C. 3501 et seq.). We may not 
conduct or sponsor, and you are not required to respond to, a 
collection of information unless it displays a currently valid OMB 
control number.

National Environmental Policy Act

    We analyzed this final rule in accordance with the criteria of the 
National Environmental Policy Act (NEPA), the Department of the 
Interior regulations on Implementation of the National Environmental 
Policy Act (43 CFR 46.10-46.450), and the Department of the Interior 
Manual (516 DM 8). We have determined that a detailed statement under 
NEPA is not required because the rule is covered by a categorical 
exclusion. The Department of the Interior has found that the following 
categories of actions would not individually or cumulatively have a 
significant effect on the human environment and are, therefore, 
categorically excluded from the requirement for completion of an 
environmental assessment or environmental impact statement: ``Policies, 
directives, regulations, and guidelines: that are of an administrative, 
financial, legal, technical, or procedural nature; or whose 
environmental effects are too broad, speculative, or conjectural to 
lend themselves to meaningful analysis and will later be subject to the 
NEPA process, either collectively or case-by-case.'' 43 CFR 46.210(i)
    The effect of this rulemaking is to rescind the Service-only 
procedures for considering exclusion of areas from a designation of 
critical habitat under the Act and return to implementing the 
regulations at 50 CFR 424.19 and the Policy that was issued jointly 
with NMFS. As a result, we conclude that the categorical exclusion 
found at 43 CFR 46.210(i) applies to this regulation. We also 
considered whether any ``extraordinary circumstances'' apply to this 
situation, such that the DOI categorical exclusion would not apply. See 
43 CFR 46.215 (``Categorical Exclusions: Extraordinary 
Circumstances''). We determined that no extraordinary circumstances 
apply.
    Therefore, having considered the extent to which this rule has a 
significant impact on the human environment, we have determined it 
falls within one of the categorical exclusions for actions that have no 
effect on the quality of the human environment. As a result, we find 
that the categorical exclusion found at 43 CFR 46.210(i) applies to 
this regulation rescission, and the Service has not identified any 
extraordinary circumstances that would preclude this categorical 
exclusion. We did not receive any public comments regarding our stated 
intention of invoking a categorical exclusion, with the exception of 
comments asserting that the initial use of a categorical exclusion when 
the Final Rule was codified (i.e., the rule we are now rescinding) was 
incorrect. These comments do not conflict with or undermine our 
analysis here or compliance with applicable NEPA regulations for this 
rule.

Energy Supply, Distribution or Use (E.O. 13211)

    Executive Order 13211 requires agencies to prepare Statements of 
Energy Effects when undertaking certain actions. The rescission of the 
Final Rule only effects the Service and is not expected to have a 
significant adverse effect on the supply, distribution, or use of 
energy, and it has not been otherwise designated by the Administrator 
of OIRA as a significant energy action. Therefore, this action is a not 
a significant energy action, and no Statement of Energy Effects is 
required.

Authority

    We issue this final rule under the authority of the Endangered 
Species Act, as amended (16 U.S.C. 1531 et seq.).

List of Subjects in 50 CFR Part 17

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

Regulation Promulgation

    For the reasons discussed in the preamble, the U.S. Fish and 
Wildlife Service amends part 17 of chapter I, title 50 of the Code of 
Federal Regulations as set forth below:

PART 17--ENDANGERED AND THREATENED WILDLIFE AND PLANTS

0
1. The authority citation for part 17 continues to read as follows:

    Authority:  16 U.S.C. 1361-1407, 1531-1544, and 4201-4245, 
unless otherwise noted.

Subpart I [Removed]

0
2. Remove subpart I, consisting of Sec.  17.90.

Subpart J [Redesignated as Subpart I]

0
3. Redesignate subpart J, consisting of Sec. Sec.  17.94 through 17.99, 
as subpart I.

Subpart K [Redesignated as Subpart J]

0
4. Redesignate subpart K, consisting of Sec. Sec.  17.100 through 
17.199, as subpart J.

Shannon A. Estenoz,
Assistant Secretary for Fish and Wildlife and Parks.
[FR Doc. 2022-15495 Filed 7-20-22; 8:45 am]
BILLING CODE 4333-15-P