On October 26, the Fish and Wildlife Service (FWS) and National Marine Fisheries Service (the Services) proposed to rescind two Trump-era final rules: the Habitat Definition Rule and the Designating Critical Habitat Rule. Both rules deal with the designation of critical habitat — a Service-designated area determined to be essential to an endangered species’ conservation and recovery, which may be occupied by a species when designated or unoccupied. Both rules are also a direct result of the U.S. Supreme Court’s 2018 decision in Weyerhaeuser Co. v. U.S. FWS, 139 S. Ct. 361, which remanded a critical habitat decision to the U.S. Court of Appeals for the Fifth Circuit, noting, among other things, that a determination of habitat is needed before FWS can determine what is considered critical habitat.

Habitat Definition Rule Proposed Rescission

The Habitat Definition Rule (the rule) was adopted for the purpose of designating critical habitat only and became effective on January 15, 2021. The Services’ promulgation of the rule resulted from Weyerhaeuser, in which the court held that an area must be shown to be a “habitat” before it can be designated as a “critical habitat.” Prior to this rulemaking, “critical habitat” was defined by the Endangered Species Act (ESA), but “habitat” was not. Now, with this latest proposal by the Services, there again would be no regulatory definition for “habitat.”

With the rule in place, the Services sought to clarify that habitat included both occupied and unoccupied areas; they also explained that the definition excluded “areas that do not currently or periodically contain the requisite resources and conditions, even if such areas could meet this requirement in the future after restoration activities or other changes occur.”

The Services are now proposing to rescind this language, removing the regulatory definition of “habitat.” The rationale provided by the Services is that the definition is not needed to comply with the court’s ruling, and that the regulatory language is constraining on the Services’ ability to designate critical habitat and is contrary to the ESA’s conservation purpose. The Services state that the destruction or loss of habitat is a key factor in the decline of listed species, indicating that areas not currently in an optimal state to support the species could nonetheless be considered “habitat” and “critical habitat.” Further, the Services explain that the habitat definition uses vague terminology that neither stems from science nor has a clear relationship with the statutory definition of critical habitat. The overall result, according to the Services, was increased confusion and a lack of clarity. With the rescission proposal, the Services have reported that their analysis of habitat will return to their previous methods of review prior to the rule.

Designating Critical Habitat Rule Proposed Rescission

The Trump administration also promulgated a regulation outlining the process that the Services will use to determine whether certain areas of critical habitat should be excluded from designation. Section 4(b)(2) of the ESA requires that when designating critical habitat, the Services take into account several considerations, including the economic impact, the impact on national security, and any other relevant impacts. This provision also permits the Services to exclude areas from critical habitat designation if the benefits of exclusion outweigh the benefits of inclusion for that area (as long as excluding it will not result in the extinction of the species). This regulation was intended to provide guidelines and clarity when making these determinations.

Under the Designating Critical Habitat Rule, every proposal for designating critical habitat would be accompanied by a draft economic analysis where the Service would identify areas that may be excluded from the designation. The final rule provided a nonexhaustive list of impacts that can be considered economic: the economy of a particular area, productivity, jobs, opportunity costs arising from critical habitat designation, or possible benefits and transfers such as outdoor recreation and ecosystem services. In addition, the rule also provided a nonexhaustive list of “other relevant impacts,” and these included impacts to national security, tribes, states, and local governments, public health and safety, community interests, the environment (increased risk of wildfire, pest, and invasive species management, etc.), federal lands, and conservation plans, agreements, or partnerships.

The Services explained that they are now proposing to rescind the regulation because it unduly constrains the Service’s discretion in administering the ESA, potentially limiting or undermining the Service’s role as the expert agency. The regulation as promulgated is too rigid, applying the same rules in all situations regardless of the specific facts to weigh assigned impacts. If the proposed rescission is finalized, the exclusion analysis will revert to the prior 2016 policy as well as the 2013 rule regarding economic analysis.

Biden Administration Priorities

The rescission of the Habitat Definition Rule and Designating Critical Habitat Rule were expected since the Services previously announced their intention to take these actions. Whether and when unoccupied habitat should be designated as critical habitat has been a longstanding issue that is likely to remain unresolved until additional court decisions are issued. The proposed rescission also signals that the Biden administration is likely to resist any economic impact assessment associated with ESA-related decisions.