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CHAPTER 3

PRE-APPLICATION COORDINATION AND HCP DEVELOPMENT

Congress intended the HCP process to be used to reduce conflicts between federally listed

species and non-Federal development and land use, and to provide a framework for "creative

partnerships" between the public and private sectors in endangered species conservation. 

Congress also intended the FWS and NMFS to be not just regulators of the HCP program,

but active participants in providing technical assistance, and that "comprehensive" HCPs

could be developed jointly by the FWS, NMFS, the private sector, and local, state, and

Federal agencies, with the Services as a technical advisor (H.R. Rep. No. 97-835, 97th

Congress, Second Session).

This chapter discusses the Services' roles in the HCP process during the pre-application and

HCP development phase. From a technical standpoint, this involves advising the permit

applicant on the biological needs of the species involved, statutory HCP requirements and

permit issuance criteria, NEPA requirements, and other technical issues.

The Services also have an important "leadership" role to play in the HCP program, which

involves not only technical expertise but attitude and philosophy. Although FWS or NMFS

typically do not initiate HCP efforts, they can and should encourage them and once initiated

support them to the maximum extent possible. This means being actively involved during

HCP development; providing advice on mitigation programs, monitoring measures, and

reserve designs; providing timely review of draft documents; helping find solutions to

contentious issues; and generally helping bring the HCP together. 

A. Getting Started

Once a private or non-Federal entity (or entities) has decided to obtain a section 10(a)(1)(B)

permit the first task that it needs to undertake are determining the appropriate applicant,

deciding whether or not to establish a steering committee, and preparing a list of species to

be addressed in the HCP.

1. Who Can Apply For a Section 10 Permit? 

Section 10 permits can be issued to state, municipal, or tribal governments, corporations or 

businesses, associations, and private individuals. They can also be issued to entities that are

a combination of these, such as joint power authorities, watershed councils, and other

planning authorities. 

The standard method of authorizing take for Federal agencies is through the section 7

consultation process. Actions authorized, funded, or carried out by Federal Agencies must

go through the section 7(a)(2) consultation process. There are cases where a Federal agency
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is a partner in an HCP, and has a minor, but integral role in the HCP. Examples of these

types of HCPs would include HCPs where a Federal agency is involved in a cooperative

planning effort in which both Federal and private lands are addressed under a single HCP but

the Federal agency is not the applicant or the primary partner in the plan. In these cases, the

specific identified actions to be conducted by the Federal agency during the implementation

of the HCP should be consulted on as part of the section 7 consultation conducted for the

HCP. This allows the Services to conduct one formal consultation that incorporates the

actions for the HCP and any specified or identified cooperative Federal action into one

biological opinion. The biological opinion developed for the HCP should also incorporate

the necessary biological analysis on the Federal action as well as the actions in the HCP to

help eliminate duplication. Thus, the single biological opinion issued by the Services would

address both the Federal action and the non-Federal action, and it would include an

incidental take statement that authorizes any incidental take by the Federal agency and an

incidental take permit that authorizes any incidental take by the section 10 permittee. 

Before processing a section 10 permit application involving a Federal agency, Service staff

should consult with the appropriate Regional Director's or Solicitor's Office (FWS), or the

Regional Director's Office or Washington, D.C. Office of Protected Resources Office

(NMFS). 

2. Determining the Appropriate Applicant.

The first step is to determine who the applicant is who ultimately will hold the permit. In

many cases this is relatively straightforward--the applicant is the land or other natural

resource owner who proposes the project or activity and is responsible for implementing the

HCP.

In regional HCPs, the plan often relies upon local or regional authorities to implement the

plan and regulate the taking of listed species addressed in the plan. The permittee must

therefore be capable of overseeing HCP implementation and have the authority to regulate

the activities covered by the permit. For large-scale planning efforts involving only one or

two landowners or types of activities, the landowners themselves are usually the appropriate

permittee. For planning efforts involving numerous property owners and activities, the

permittee is usually a local public agency--e.g., a city or county government or several local

agencies acting jointly. In other cases, a state agency may obtain and hold a section 10

permit for certain types of state-regulated private activities (e.g., forestry activities).

When no government agency is available or interested in assuming the responsibility for an

HCP, private groups wishing to obtain a permit for large-scale or multi-faceted projects may

initiate an HCP without government involvement. They may, for example, form a

consortium to develop the HCP, in which case the consortium would be the permittee. Or,

they may jointly fund development of the HCP but maintain their individual identities by

applying for separate permits, using the same HCP or individual HCPs modified from a
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jointly-developed "template." Either approach is acceptable so long as the permittees have

the authority to regulate or control all or applicable parts of the HCP program and the

conditions of the HCP are enforceable.

3. Steering Committees.

An HCP "steering committee" is a group of persons who represent affected interests in a

broad-scale HCP planning area and generally oversee HCP progress and development. 

Steering committees are not required by law and the Services do not require them, although

they have proven useful to applicants in a variety of HCP settings. However, the Services

cannot be the entities which establish them without compliance with the Federal Advisory

Committee Act. It is important to remember that a steering committee’s purpose is to advise

the applicant in the development of the HCP, not to advise the Service on permit issuance.

The steering committee approach may not be appropriate for all situations. For some

applicants, it may be too formal or complicated, or they may view it as giving "outside

interests" too much access to proprietary data involving private lands. If this is the case

during the pre-application phase, the Services should encourage the applicant to provide

opportunities to brief or inform representatives of interested parties of key elements or issues

to be addressed in the proposed HCP. This can be accomplished in several ways, such as

formal or informal meetings, newsletters, etc. 

When used in the HCP process, steering committees are usually appointed by the permit

applicant and can fulfill several roles--they can assist the applicant in determining the scope

of the HCP (size of the planning area, activities to include, etc.), help develop the mitigation

program and other HCP conditions, provide a forum for public discourse and reconciling

conflicts, and help meet public disclosure requirements. Steering committees are particularly

useful in regional HCPs, especially those in which the prospective permittee is a state or local

government agency, and are recommended for these types of HCP efforts. However, they

are generally not utilized for low-effect HCPs or most single landowner projects. 

 

Ideally, a steering committee should include representatives from the applicant; state 

agencies with statutory authority for endangered species; state or Federal agencies with

responsibility for managing public lands within or near the HCP area (including other Service

program areas such as the FWS's Refuges Division); tribal interests where applicable;

affected industries and landowners (especially those with known or possible endangered

species habitats); and other civic or non-profit groups or conservation organizations with an

interest in the outcome of the HCP process.

For regional HCPs it is not practical to include every affected landowner or interest group on

the steering committee. Instead, industry groups should be encouraged to assign a

professional or trade organization to the committee to represent them--e.g., a farm bureau,

cattlemen's association, or building industry association--though corporations with extensive
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land holdings in the plan area may want to represent themselves. The steering committee

needs to be representative, but its size must be manageable.

Another way to control numbers of participants in the HCP process is by using subcommittees. Sub-committees act as small working groups on behalf of the main committee

and are an excellent means of addressing specific issues and developing specific components

of the HCP. Sub-committees are more efficient than the larger steering committee for

conducting certain tasks and generally help move the HCP process forward.

Prior to initiating an HCP effort, the newly-appointed steering committee may elect to

develop a Memorandum of Understanding (MOU) or similar document to record "up front"

the goals of the HCP, the composition of the committee, expectations of HCP participants,

and other information unique to the locality or defined by the committee. Appendix 3 shows

the MOU developed by participants of the Kern County, California HCP.

The question of whether to establish a steering committee may be difficult for nongovernmental applicants. State or local governments typically embrace the steering

committee idea early in the process because of their desire to obtain consensus from the

community. On the other hand, private landowner applicants may feel that creation of a

steering committee will lead to confrontation or the intrusion of outside interests into

proprietary or sensitive economic matters. However, applicants should be aware of the

potential benefits of a steering committee. These include identification and resolution of

issues before they cause delays later in the process, development of an HCP that enjoys

greater support in the community, and the cooperation of agencies or private conservation

organizations that may be needed to help implement the conservation program. Permit

applicants ultimately must weigh the risks of establishing or not establishing a steering

committee with the expected benefits.

For large-scale or regional HCPs, one of the main functions of the steering committee is to

build consensus among diverse organizations and interests, so it is important to promote

good working relationships among committee participants. This does not mean that reaching

agreement in complex HCP efforts will be easy! Often it is not. However, development of

the HCP will be most effective when all interests in the community are represented in

steering committee activities and their views and needs are given a fair hearing. A few

suggestions:

o Steering committee meetings should be open to the public. This allows interested

persons who do not actually sit on the committee to attend meetings, monitor

progress, and generally feel they are part of the process.

o HCP participants should avoid creating an impression that they are pursuing

unstated agendas or negotiating in bad faith. The trust developed between

diverse and sometimes antagonistic HCP participants can be fragile, and this
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impression can be damaging to a productive HCP even if untrue. Participants

need to be sensitive to perception and avoid the impression of bad faith.

o The FWS and NMFS should not assign inexperienced staff to provide technical

assistance to large-scale or regional HCP steering committees. This can result in

mistakes, lost opportunities, and suggests to the applicants that the agencies are

disinterested in the planning process. Inexperienced staff should learn the HCP

process by working on small HCPs and by assisting other staff on larger efforts. 

If no staff have specific HCP experience, then individuals who are otherwise

seasoned FWS or NMFS professionals should be assigned. If such individuals are

not available, other staff should be sent to monitor HCP progress but not to

actively participate. In such cases, staff sent to monitor the HCP should make

clear to the applicants the limitations of their participation and resist rendering

advice on important issues. However, they can and should act as liaisons to more

experienced staff in the Field Office in answering questions or obtaining advice.

o The composition of the steering committee will depend on the type of HCP

involved. Regional HCPs involving numerous activities and in which the

applicant is a government entity ideally should include representatives from all

affected interests. Steering committees for non-government HCPs can be

organized according to the specific needs of the applicant, but at the least should

include representatives from each permit applicant.

o A good facilitator or consultant who is skilled at moderating committee meetings,

building consensus, and handling uncooperative parties can help significantly to

move the HCP process forward.

4. The Services' Roles on Steering Committees & HCP Efforts. 

Neither the FWS nor NMFS is required by statute or regulation to serve on HCP steering

committees. Nevertheless, it is strongly advised that section 10 applicants invite the Services

to participate as technical advisors on their steering committees. This will help ensure that

adequate biological standards are incorporated into the HCP and that the HCP and

associated documents meet procedural requirements when the permit application is 
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submitted. An HCP prepared in the absence of Service technical participation could be

judged inadequate late in the process and unnecessary delays could result. The same caveat

applies to all HCPs, regardless of size or whether a steering committee is established.

However, a careful balance needs to be drawn between constructive Service involvement in

HCP efforts and overly aggressive involvement. Too little involvement can leave the

impression that FWS or NMFS are disinterested or unhelpful, while too much can create the

perception that the Services are inflexible in their approach to the HCP process, rigidly

dictating the mitigation program.

To avoid either impression, Service HCP representatives need to understand their role and

make that role clear to the applicant and the steering committee. Their function as agency

representatives is to provide guidance about statutory and policy standards and to help

facilitate development of a suitable mitigation program that satisfies the requirements of

section 10; it is not to dictate every element in the HCP. The option to ignore or modify

Service recommendations remains with the applicant; of course, doing so might result in

subsequent difficulties during the permit application processing phase and the disapproval of

an inadequate HCP. Service representatives at the Field Office level cannot pre-approve an

HCP because section 10 permits are issued by the Regional Office (or, for NMFS, the

Washington, D.C. Office), and, although advance coordination between the Field and

Regional Offices should ensure their agreement on the HCP's adequacy, the permit

application must still be evaluated fully during the public comment period.

The Services' steering committee members should also abstain from formal voting

procedures on HCP issues if the committee conducts such votes. This will prevent confusion

and reinforce the Services' proper role as advisor. Until the HCP is completed and submitted

for approval, specific HCP development decisions are up to the steering committee and the

applicant.

During the HCP development phase, the Services should be prepared to advise section 10

applicants on the following (regardless of whether there is a steering committee): 

o Preparing the species list and identifying project scope and impacts.

o Biological studies and data needed to assess project impacts;

o NEPA requirements and the applicant's potential role in developing the NEPA

analysis. 

o Applicability of state endangered species law and requirements, and any other

Federal laws that may be applicable, if any.
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o Project modifications that would minimize take and reduce impacts, or, ideally,

and with concurrence of the applicant, would generate an overall measurable net

benefit to the affected species;

o Design of mitigation, habitat enhancement, or mitigation programs;

o Reserve design criteria and assistance in population viability assessments, if

desired.

o Methods for monitoring HCP progress and project impacts on affected species;

o Biologically acceptable take limits and how to define them;

o Criteria to track or determine success of the HCP; and,

o Procedural and other HCP issues as requested by the committee.

5. Preparing the HCP Species List.

In many HCPs, there are one or two primary species that "trigger" the need for an incidental

take permit (e.g., the northern spotted owl or salmon in the Pacific Northwest, desert

tortoise in southwestern deserts, or red-cockaded woodpecker in the southeast), though

other listed species may occur in the same planning areas. After the decision has been made

to obtain a permit, one of the first decisions an HCP applicant must make is what species to

address in the plan. Generally, permit applicants should be advised to include all federally

listed wildlife species likely to be incidentally taken during the life of the project or permit. If

the applicant does not address such species, it may not be possible to issue the permit (if the

issuance of a more limited permit would violate section 7(a)(2) for the listed species not

covered) or the project activities could be stopped or delayed after the permit has been

issued if a listed species that was not addressed in the HCP is likely to be taken during

project activities.

There are also advantages in addressing unlisted species in the HCP (proposed and candidate

species as a minimum), particularly those that are likely to be listed within the foreseeable

future or within the life of the permit. Doing so can protect the permittee from further

delays--e.g., having to revise the HCP and amend the permit--should species that were not

listed at the time the original HCP was approved subsequently become listed. In addition,

the "No Surprises" policy (see below, Section B.5(a)), applies to listed as well as unlisted

species if they are adequately addressed in the HCP.

The more species addressed in the HCP, the more potentially complicated the HCP may

become. For example, in most state systems, primary jurisdiction over candidate species

rests with the affected State fish and wildlife agency, thereby increasing the advisability of
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that agency’s participation in the HCP process. Thus, selecting the species list can become

an exercise in balancing the need to obtain maximum regulatory certainty, with practical

considerations such as manageability, availability of biological information, and cost. The

Services should be prepared to advise the applicant about which listed species should be

highest priority in the HCP, which unlisted species are most likely to be listed in the future,

and which species, listed or unlisted, can otherwise be advantageously addressed in the HCP. 

Ultimately, the decision about what species to address in the HCP lies with the applicant. In

any case, the species list should be developed and agreed upon early in the HCP process,

since it forms much of the basis for future plan development.

When preparing the species list the applicant should be informed that the ESA generally does

not prohibit the incidental take of federally listed plants. Nevertheless, the Services should

encourage the applicants to consider including listed plants in HCPs because, although

incidental take of plants may not be prohibited by section 9, the section 7(a)(2) prohibition

against jeopardy does apply to plants. If the section 7 consultation on a section 10 permit

application concludes that issuance of the HCP permit for wildlife species would jeopardize

the existence of a listed plant species, the permit could not be issued. To avoid this outcome,

the applicant should ensure that actions proposed in the HCP are not likely to jeopardize any

federally listed plant species. In addition, not all species under the jurisdiction of NMFS

listed as threatened are subject to the section 9 take prohibitions. Such prohibitions are

applied through regulation, on a case-by-case basis. Therefore, an incidental take permit

may not be required for these species. Specific regulations are provided at 50 CFR Part 227. 

6. Involving Other Federal and State Agencies.

During the development stage of an HCP, the Services will provide technical assistance and

information concerning regulatory and statutory requirements to the applicants to ensure

completeness of the application. Throughout this developmental process, the Services will

encourage applicants to invite and include other Federal and State agencies who can utilize

their existing authorities, expertise, or lands, in support of the HCP development and

implementation process. It is particularly important to encourage participation of other

Federal and State agencies that manage nearby lands into the HCP development process, if

the applicant is willing to do so. However, the Service must ensure that activities are not

identified in the HCP that obligate other agencies to conduct mitigation or minimization

activities for species covered by the HCP, unless specifically negotiated with the agency, and

the agency was a partner in the development and implementation of the HCP.

The “No Surprises” policy, which provides the applicant with regulatory certainty, calls for

the Services to assist with correcting any unforeseen circumstance that may arise. This means

that in the face of unforeseen circumstances the FWS and NMFS will not require additional

mitigation in the form of additional lands or funds from any permittee who is adequately

implementing or has implemented an approved HCP. Once the permit is issued and its terms
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are being complied with, the applicant will not be required to accept additional obligations of

this type. The policy also protects the permittee from other forms of additional mitigation

except in cases where "extraordinary circumstances" exist. 

The Services can, however, encourage other Federal or State agencies to assist with any

unforeseen circumstances. Other agencies will be better able to assist if they have been

involved throughout the entire HCP development. Any Federal or State agency that could

ultimately be affected by the implementation of an HCP will be notified during the

developmental process, and once the HCPs are completed and the incidental take permit is

issued the Services will provide copies to the affected agencies. This will help these agencies

effectively manage their lands in a way that could support the HCP and promote the

conservation and recovery of listed and unlisted species.

7. Treaty Rights and Trust Responsibilities.

A unique and distinctive relationship exists between the United States and Native American

Tribes, as defined by treaties, executive orders, statutes, court decisions, and the United

States Constitution. This relationship differentiates tribes from other entities that deal with,

or are affected by, the Federal government.

Indian tribes are recognized under Federal law as separate sovereigns with governmental

rights over their lands and people. These governmental rights and authorities extend to

natural resources that are reserved by or protected in treaties, executive orders, and Federal

statutes. Such reserved rights may include off-reservation rights to hunt, fish, or gather trust

resources.

The United States has a Federal trust obligation towards Indian tribes to preserve and

protect these rights and authorities. The Federal Indian trust responsibility is a legal

enforceable fiduciary obligation, on the part of the United States, to protect tribal lands,

assets, resources, and treaty rights, as well as a duty to carry out the mandates of Federal law

with respect to American Indian tribes and Alaskan Natives.

During habitat conservation planning negotiations with non-Federal landowners, the Services

must consider whether proposed plans might affect tribal rights to trust resources. 

Whenever the Services have a reasonable basis for concluding that such effects might occur,

they must notify the affected tribes and consult government to government in a meaningful

way. Consultation with the affected tribe shall be completed within a timely manner. After

careful consideration of the tribe’s concerns, the Services must clearly state the rationale for

the recommended final decision and explain how the decision relates to the government’s

trust responsibilities. In light of this obligation, it is important that the Services identify and

evaluate during the planning process, any anticipated effects of a proposed HCP upon Indian

trust resources. 
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B. Developing the HCP

1. Mandatory Elements of an HCP.

Under the Endangered Species Act [Section 10(a)(2)(A)] and Federal regulation [50 CFR

17.22(b)(1), 17.32(b)(1), and 222.22], a conservation plan submitted in support of an

incidental take permit application must detail the following information.

o Impacts likely to result from the proposed taking of the species for which permit

coverage is requested;

o Measures the applicant will undertake to monitor, minimize, and mitigate such

impacts; the funding that will be made available to undertake such measures; and

the procedures to deal with unforeseen circumstances;

o Alternative actions the applicant considered that would not result in take, and the

reasons why such alternatives are not being utilized; and,

o Additional measures FWS or NMFS may require as necessary or appropriate for

purposes of the plan.

Each of these conservation plan elements are discussed in detail in the sections below. 

NMFS regulations (50 CFR 222.22) also require a list of all sources of data used in

preparation of the plan.

Section 10 HCP requirements and permit issuance criteria must be clearly explained to any

prospective permit applicant at the outset of an HCP effort. This is essential to ensure that

the applicant understands the HCP process and that the HCP is developed within required

legal parameters.

2. Identifying Project Impacts.

Four subtasks must be completed to determine the likely effects of a project or activity on

federally listed or candidate species: (a) delineation of the HCP boundaries or plan area; (b)

collection and synthesis of biological data for species to be covered by the HCP; 

(c) identifying activities proposed in the plan area that are likely to result in incidental take;

and (d) quantifying anticipated take levels. To help expedite the section 7 process, the HCP

should also assist the Services in: (e) satisfying the requirements of section 7 of the ESA; (f)

addressing significant indirect effects of the project on federally listed species, if any; (g)

addressing jeopardy to federally listed plants, if anticipated; and (h) addressing effects on

critical habitat, if any. Section 7 should be addressed as early as is practicable in the HCP

development process.
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a. Delineation of HCP Boundaries. HCP boundaries should encompass all areas within the

applicant's project, land use area, or jurisdiction within which any permit or planned activities

likely to result in incidental take are expected to occur. HCP boundaries should also be as

exact as possible to avoid later uncertainty about where the permit applies or where

permittees have responsibilities under the HCP. For low-effect and many other HCPs, the

plan area is usually synonymous with the project or land use site or the landowner's property. 

For regional HCPs, the size and configuration of the plan area will depend on various

factors. Sometimes a regional HCP boundary will simply be a county line because a county

government is the applicant. In other cases, it will be drawn to deliberately include or

exclude certain areas or activities, depending on the participants' objectives [see Section

B.2(c) below].

 

Generally, HCP applicants should be encouraged to consider as large and comprehensive a

plan area as is feasible and consistent with their land or natural resource use authorities. 

Regional and other large-scale HCPs allow the permittee to address a broad range of

activities and to bring them under the "umbrella" of the permit's legal protection. They also

allow analysis of a wider range of factors affecting listed species, maximize flexibility needed

to develop innovative mitigation programs, and minimize the burden of ESA compliance by

replacing individual project review with comprehensive, area-wide review.

On the other hand, considering a large and complicated planning area has its own potential

difficulties. Attempts to satisfy too many land use or endangered species issues in one effort

can be frustrated by excessive complexity, shortages of biological information, and

difficulties in securing the consensus of HCP participants. However, these are judgment

calls, and the final size and configuration of an HCP planning area will often be a

compromise between the need to be as comprehensive as possible and the inherent risks of

an over-extended, protracted HCP effort.

Regional HCPs sometimes can be simplified by dividing the planning area into separate

planning units with different conditions and requirements for each area. This approach was

adopted in the San Bruno Mountain HCP. Coordination with individual landowners and

local land use authorities will help determine when subdivision of a plan area will yield

substantial advantages.

In any case, neither the ESA nor its implementing regulations limits the size of an HCP

planning area. No matter how large or small, HCP areas are acceptable so long as the HCP

is statutorily complete and meets the section 10 issuance criteria. With respect to small

projects, the FWS section 10 regulations state that, "The Service believes that Congress did

not intend to exclude projects from the incidental take provisions of section 10(a) merely

because the projects were of more limited duration or geographical scope [than the San

Bruno Mountain HCP]" (50 FR 39681-39691).
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The HCP plan area might also include areas necessary for the mitigation. The exception to

this general rule may be where the mitigation consists of reserves apart from the area in

which incidental take is authorized. This will entail various considerations--e.g., the distance

from permitted activities to reserve areas (see below, Section B.2(c)) and the ability of the

permit applicant or its designee to regulate activities inside the reserve. Private, state, or

locally-owned lands should never be considered for inclusion in HCPs as reserves without

the concurrence of the landowners or their representatives.

b. Collection and Synthesis of Biological Data. Preparing an acceptable HCP requires the

availability of up-to-date biological information on the species being considered within the

plan area. First, the applicant should collate and review existing information about species

distribution, occurrence, and ecology. FWS or NMFS can assist in this process by directing

the applicant to available information. Second, the applicant should determine whether the

available information is adequate to proceed with the planning process. If not, FWS or

NMFS should recommend the type, scope, and design of biological studies that can

reasonably be developed to support the HCP. However, research efforts on behalf of an

HCP should be confined to distribution studies or other studies with a direct bearing on the

needs of the HCP. Permit applicants should not be expected to undertake studies that do not

directly affect the outcome of the HCP. Determining the availability of existing information

is especially important for regional HCPs, since they may involve species whose biology is

not well known. Low-effect HCPs typically will not require additional studies beyond

surveys needed to determine the distribution of the species within the plan area. 

Another approach to consider for HCPs is habitat-based HCPs (see Chapter 3, Section C.1) 

in which the presence of a particular species can be assumed based on the presence of its

habitat type; if that habitat type is then addressed in the HCP and included in the mitigation

program, additional distribution studies may not be necessary.

c. Determination of Proposed Activities. The applicant should be encouraged to include in

the HCP a description of all actions within the planning area that: (1) are likely to result in

incidental take; (2) are reasonably certain to occur over the life of the permit; and (3) for

which the applicant or landowner has some form of control. For many HCPs, this will

usually involve a specific well-defined project (e.g., home construction; water use

development) or land use activity (e.g., forestry). For regional and other large-scale planning

efforts, the applicants will need to determine what activities they wish to include in the HCP

and, if necessary, which ones they wish to exclude. Generally, applicants should be

encouraged to include as comprehensive a set of activities in the HCP as is practicable. This

will maximize the permittee's long-term planning assurances, broaden legal coverage, and

minimize the possibility that some future activity will not be covered by an issued permit.

What is being authorized in a section 10 permit is incidental take, not the activities that result

in the take. Similarly, a violation of the permit occurs only if the amount or extent of

authorized take is exceeded or if the terms and conditions of the HCP or the permit are not
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implemented, not necessarily because some unspecified activity has occurred. The legality of

an incidental take occurring during a specific activity will depend on how the HCP is

structured. In some regional HCPs, the permit may specify that a certain number of habitat

acres may be modified during construction activities, but the specific types of construction

are unspecified--in which case the construction type per se would not affect the legality of

any resulting incidental take. However, other HCPs may analyze incidental take in the

context of a specified activity to be conducted across the HCP area, such as forest

management. In such cases, incidental take is only authorized in association with specifically

analyzed activities.

Even in the former case, an activity type that is not implicitly or explicitly covered by an HCP

should not be allowed to "use" portions of the incidental take authorization at the expense of

activities that are described. Unless broadly defined types of activities are described in the

HCP (e.g., timber harvest, agriculture, or construction activities), then incidental take

occurring during such activities within the plan area generally would not be authorized. In

any case, the specificity with which activities are described in the HCP will depend on the

applicant's objectives. They should be sufficiently described (as included or excluded) that

the permittee or landowners subject to the permit can determine the applicability of the

incidental take authorization to the activities they undertake. 

Determining appropriate activities to include in the HCP can involve the same considerations

as those described in Section B.2(a) concerning the HCP boundary. Here again the desire

for a comprehensive HCP must be balanced against the risk of over-complicating the plan. 

Also a factor is the willingness of any particular group to participate in the HCP process. No

group can be forced to participate. Of course, not participating in the responsibilities of the

HCP also means not enjoying the benefits of protection from the incidental take prohibition

and regulatory streamlining.

In some cases, specific landowners or industries may be reluctant to become involved in the

HCP process. In such cases, Service representatives should assist the remaining participants

in good faith, while encouraging "sideliners" to observe the benefits of the program. Of

course, "non-participants" should understand that if their activities are not addressed in the

HCP, either specifically or generically, they will not be covered by the incidental take permit. 

Moreover, if the permit applicant is a state, regional, or local governmental agency, "nonparticipants" may ultimately be affected by the terms and conditions of an HCP once the

permittee begins to implement the HCP through the exercise of its regulatory powers. In

other cases, a landowner may elect not to participate in an HCP for other reasons--for

example, if they are negotiating a separate agreement or are operating under an existing

permit.

These factors can result in HCPs with unusual inclusions and exclusions. For example, in the

Metropolitan Bakersfield HCP in California, oil development activities are specifically

excluded from the planning area but are proposed for inclusion in the Kern County HCP,
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which overlays the Bakersfield HCP (see Appendix 3). Sometimes a new HCP will overlay

multiple existing HCPs, or some applicants may elect to pursue an HCP on their own even

though a regional HCP is being developed in the same area. Also, more than one regional

HCP may occur near each other within the same bio-regional province, or two such HCPs

may occur within the range(s) of the same species. Such inclusions and exclusions are

perfectly acceptable. Nevertheless, participants should be aware of coordination problems

that can develop between HCPs in these types of cases. For example, it is important to

ensure that mitigation programs for the same species are identical in adjacent HCPs. Also,

the Services should not issue more than one permit for identical activities in the same area at

the same time, since this could result in two differing sets of conditions for the same

activities. In cases where a new HCP overlays an existing one, neither the Services nor the

new permit-holder can force existing permittees to adopt conditions of the new permit

without their consent--(however, there may be exceptions, such as when the new permittee is

a state or local government with its own regulatory authority). Generally, however, the

Services will not seek additional mitigation from existing HCP permit holders for the same

activities affecting the same species under a broad regional plan.

d. Determining Anticipated Incidental Take Levels. In determining the amount of incidental

take that will be authorized during the life of the permit, three things must be determined: (1)

how incidental take will be calculated; (2) the level of incidental take and related impacts

expected to result from proposed project activities; and (3) the level of incidental take that

the section 10 permit will actually authorize.

The first depends on the ability of HCP participants to determine, to the extent possible, the

number of individual animals of a covered species occupying the project or land use area or

the number of habitat acres to be affected. Depending on this information, proposed

incidental take levels can be expressed in the HCP in one of two ways: (1) in terms of the

number of animals to be "killed, harmed, or harassed" if those numbers are known or can be

determined; or (2) in terms of habitat acres or other appropriate habitat units (e.g., acre-feet

of water) to be affected generally or because of a specified activity, in cases where the

specific number of individuals is unknown or indeterminable. The latter is typically

expressed as all individuals occupying a given area of habitat, in whatever habitat unit is

being used.

The next aspect depends on the number of animals or habitat units that occur in the project

or planning area, and the likelihood that any given activity will result in take. This can be

determined by first "overlaying" data on proposed activities--often in the form of maps--with

biological data compiled from existing sources and collected in the field by the applicant. 

When this is completed, the effects of particular activities on species occupying project areas

can be analyzed.

Under Federal regulation (50 CFR 17.3), "harm" in the definition of take can include

"significant habitat modification or degradation where it actually kills or injures wildlife by
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significantly impairing essential behavioral patterns, including breeding, feeding, or

sheltering." Therefore, habitat modification or destruction, to the extent the above effects

occur, can constitute take and must be detailed in the HCP and authorized by the permit.

"Harassment" is defined by regulation as "an intentional or negligent act or omission which

creates the likelihood of injury to wildlife by annoying it to such an extent as to significantly

disrupt normal behavioral patterns which include, but are not limited to, breeding, feeding, or

sheltering." As with "harm," any action qualifying as harassment under this definition must

be described in the HCP and authorized by the permit (see Chapter 7, Section B.1).

After expected take levels have been estimated based on a comparison of proposed activities

with species distribution in the plan area, the applicant and the Services can begin to

determine the final outcome of the HCP. In general terms, this is done by determining what

incidental take levels can be authorized that are consistent with the section 10 issuance

criteria (i.e, that will not "appreciably reduce the likelihood of the survival and recovery of

the species in the wild"), and developing a mitigation program that is also consistent with the

issuance criteria (i.e., that will minimize and mitigate "to the maximum extent practicable"). 

If, in the Services' judgment, initially anticipated incidental take levels exceed what can be

permitted under the section 10 issuance criteria, additional take avoidance and other

mitigation measures must be developed.

These processes--determining anticipated incidental take, development of the mitigation

program, and establishing authorized incidental take levels--are dynamic and do not

necessarily occur in consecutive order as the above description might infer.

e. Coordinating the HCP With Section 7 of the ESA. Section 7(a)(2) of the ESA requires

all Federal agencies "in consultation with and with the assistance of the Secretary" to ensure

that "any action authorized, funded, or carried out by such agency is not likely to jeopardize

the continued existence of any endangered species or threatened species or result in the

destruction or adverse modification" of designated critical habitat. The section 7

implementing regulations (50 CFR Part 402) require, among other things, analysis of the

direct and indirect effects of a proposed action, the cumulative effects of other activities on

listed species, and effects of the action on critical habitat, if applicable.

Consultation under section 7 of the ESA is the Federal agency's responsibility, not the

applicant's. In the case of issuance of a section 10(a)(1)(B) permit, FWS or NMFS must

conduct an intra-Service (or internal) consultation to ensure compliance of permit issuance

with the provisions of section 7. However, although the consultation responsibilities is not

the permit applicants, the applicant should help ensure that those considerations required of

the Services by section 7 have been addressed in the HCP. Otherwise, the Services' section 7

consultation on proposed permit issuance might result in a jeopardy or adverse modification

finding with respect to indirect or cumulative effects, listed plants, or critical habitat if the

HCP has inadequately considered these issues.
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However, despite these additional considerations, in most cases the applicant will not

actually experience a significant increase in responsibilities under the HCP because of the

Services' associated section 7 responsibilities. This is because there are relatively high

thresholds under section 7 (i.e., jeopardy), and many of the same relevant biological

considerations are already integrated into the HCP process [see Sections B.2(f)-(h) below].

In many cases, the procedural aspects of the section 7 consultation are more important to the

applicant's interests than its substantive outcome. In the past, some have viewed the section

7 consultation for a section 10(a)(1)(B) permit as an independent review process that occurs

after the HCP has been prepared and during the permit application processing phase. 

However, this approach left the permit applicant with no guarantee that the process of

meeting the requirements of section 10(a)(1)(B) would result in issuance of the permit, since

a section 7 consultation conducted late in the process could result in the discovery of

unresolved issues, the return of an inadequate HCP to the applicant, or a jeopardy biological

opinion.

To avoid this, it is now Service policy to begin integrating the section 7 and section 10

processes from the beginning of the HCP development phase, and to regard them as

concurrent and related, not independent and sequential, processes.

In procedural terms, this means that considerations of section 7 consultation requirements

should start at the beginning of the HCP development phase, not during the permit

processing phase. It also means that if the Services and the applicant work together to

develop an adequate HCP--one that meets the section 10 issuance criteria as well as the

Services' applicable section 7 standards--then a "no jeopardy" biological opinion at the close

of the section 7 consultation should be virtually assured. Service representatives should

explain to HCP applicants at the outset of any HCP effort the Services' section 7 obligations,

how those obligations affect the applicant, and how the two processes (sections 7 and 10)

will be integrated.

f. Addressing Indirect Project Effects. In some cases, it may be determined that activities

being considered in an HCP would be likely to result in indirect effects to listed species. The

implementing regulations of section 7 of the ESA define indirect effects as "those that are

caused by the proposed action and are later in time, but still are reasonably certain to occur." 

In the HCP context, this would typically mean that activities under the HCP are expected to

affect species outside the HCP plan area, or species that are inside the plan area but are not

otherwise directly covered by the terms of the HCP. If expected indirect effects are serious

enough to result in jeopardy or result in adverse modifications to critical habitat, and they

have not been adequately treated in the HCP, the Services would have to deny the permit. 

Thus, indirect effects issues must be treated carefully during any HCP negotiation process.

From a practical standpoint, one problem is that large-scale projects of the type addressed in

many HCPs can have "ripple" effects that continue long past their point of origin. Following
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a causation chain of indirect effects from their point of origin to some specific effect, or vice

versa, can be difficult, and assigning responsibility for all potential subsequent effects to the

originator of a particular action may not be justified or practical. 

For example, some species addressed in HCPs occupy small habitat areas or have narrow

habitat requirements and are therefore unusually vulnerable to biotic and abiotic factors such

as fire, vegetation succession, predation, and interspecific competition. In these cases,

human alteration of the landscape in and around such habitats can have heightened adverse

effects or specific indirect effects that must be addressed if the habitats are to be considered

viable and affected populations are to persist. A good example is development in

endangered beach mice habitat, which results in increased pet populations and then increased

predation on beach mice. The HCP in such cases must address these types of effects. In the

southeast, for example, some approved HCPs have been predicated on the successful control

of post-project, human-induced effects on endangered species populations that remain or are

protected after development of adjacent areas. Permittees have agreed to provide funding to

control predators and competitors of listed species, nuisance or exotic vegetation, or

pollution, and to meet education and information needs in the local community.

With these considerations in mind, the following guidance is provided about how to address

indirect effects issues in HCPs. If a species is likely to be jeopardized as a result of the

indirect effects of activities proposed in an HCP, the Services may not issue the permit unless

these effects are adequately addressed. However, before an HCP is required to contain

additional requirements to adequately address indirect effects under section 7: (1) the risk of

jeopardy should be clear and reasonably certain to occur; and (2) the indirect effects in

question must be reasonably foreseeable and a proximate consequence of the activities

proposed under the HCP. The standard for imposing additional requirements on an HCP is

the likelihood of jeopardy, not just the existence of indirect effects.

g. Consideration of Plants in the HCP and Permit. The take prohibition for federally listed

plants under the ESA is more limited than for listed animals. Section 9(a)(2)(B) prohibits the

removal of listed plants or the malicious damage of such plants on areas under Federal

jurisdiction, or the destruction of listed plants on non-Federal areas in violation of state law

or regulation. Thus, the ESA does not prohibit the incidental take of federally listed plants

on private lands unless the take or the action resulting in the take is a violation of state law

(which in most cases eliminates the need for an incidental take permit for plants).

Nevertheless, the Services recommend that permit applicants consider listed plants in HCPs. 

This is because the section 7(a)(2) prohibition against jeopardy applies to plant as well as

wildlife species; and if the section 7 consultation on a section 10 permit application

concludes that issuance of the permit for wildlife species would jeopardize the existence of a

listed plant species, the permit could not be issued. To avoid this outcome, the applicant

should ensure that actions proposed in the HCP are not likely to jeopardize any federally

listed plant species. 
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However, if it is determined that the proposed HCP is not likely to jeopardize the continued

existence of any federally listed plant species, then any such plants present within the HCP

area that are on private or other non-Federal lands are protected against incidental take only

to the extent that state law applies. Beyond that the applicant has no further responsibility

with respect to listed plants. In the spirit of the conservation planning process, however, the

Services will encourage applicants to address endangered or threatened plants in their HCPs.

Although take of listed plants does not require a section 10 permit in most cases, the names

of any plants addressed in the HCP can be placed on the permit at the request of the

applicant when it is issued. This might be done: (1) because a particular plant is protected by

state law and is subject to the section 9 take prohibition; or (2) to protect the permittee's

interests should the legal status of any plant change during the life of the permit as a result of

changes to the ESA. This approach is acceptable and is encouraged if the permit applicant

requests it or it otherwise increases the applicant's confidence in the long-term assurances

under the permit. It is also consistent with the treatment of unlisted wildlife species in

section 10 permits as described in Chapter 4. 

h. Addressing Effects on Critical Habitat. Section 7(a)(2) prohibits the "destruction or

adverse modification" of designated critical habitat by any action authorized, funded, or

carried out by a Federal agency. The section 7 regulations define "destruction or adverse

modification" as "a direct or indirect alteration that appreciably diminishes the value of

critical habitat for both the survival and recovery of a listed species." The regulations for

section 4 of the ESA (50 CFR 424.12) describe the "constituent elements" of critical habitat

as "those that are essential to the conservation of the species" including, but not limited to,

"roost sites, nesting grounds, spawning sites, feeding sites, seasonal wetland or dryland,

water quality or quantity, host species or plant pollinator, geological formation, vegetation

type, tide, and specific soil types." 

Thus, in issuing section 10 permits, the Services must ensure that the constituent elements of

critical habitat will not be altered or destroyed by proposed activities to the extent that the

survival and recovery of affected species would be appreciably reduced. However, these

section 7 obligations typically impose few restrictions on the HCP applicant in addition to

those required by section 10, because the section 10 issuance criteria also prohibit

appreciably reducing the "likelihood of the survival and recovery of the species in the wild"

[section 10(a)(2)(B)]. In other words, the inherent biological value of areas designated as

critical habitat typically would prevent significantly greater alteration of their constituent

habitat elements under section 10 than would be permissible under section 7. Nevertheless,

to the extent that a proposed HCP might result in impacts to critical habitat, such impacts

should be described and evaluated in the biological opinion concluding section 7 consultation

on the permit application.

Some HCPs encompass areas that have been or have the potential to be designated as critical

habitat. To fulfill the Service’s section 7 compliance responsibilities, all HCPs must be
3-19

reviewed to determine whether they are likely to jeopardize the continued existence of the

species or cause adverse modification to designated critical habitat. The Services will

provide technical assistance and work closely with the applicant throughout the development

of the HCP to reduce the probability of developing an HCP that would not meet these

criteria. 

It is possible to approve an HCP that authorizes land use or development activities within an

area designated as critical habitat. The activities approved under an HCP could include a

variety of land or natural resource use activities that modify critical habitat on a large scale

without the activities being deemed an adverse modification contrary to the requirements of

section 7(a)(2). The authorization of activities in critical habitat through the HCP process is

possible because the adverse modification of critical habitat is analyzed by determining the

effects on the entire area designated as critical habitat or an administrative part or unit of the

critical habitat, not on a smaller scale of particular individual acres. In addition, the HCP

permittee must minimize and mitigate for any effects caused by the authorized activity, which

would offset or reduce the significance of adverse effects to the critical habitat. Thus, the

overall net affect of authorized land use activities for a particular HCP can be brought within

the range of effects which is allowable under section 7.

3. Mitigation Programs & Standards.

Mitigation programs under HCPs and section 10 permits are as varied as the projects they

address. Consequently, this handbook does not establish specific "rules" for developing

mitigation programs that would limit the creative potential inherent in any good HCP effort. 

On the other hand, the standards used in developing HCPs must be adequate and consistent

regardless of which Service office happens to work with a permit applicant. Mitigation

programs should be based on sound biological rationale; they should also be practicable and

commensurate with the impacts they address. This section sets forth some fundamental

standards for mitigation programs and suggests some broad mitigation strategies, but leaves

the development of specific programs to individual applicants and Service personnel.

Mitigation actions under HCPs usually take one of the following forms: (1) avoiding the

impact (to the extent practicable); (2) minimizing the impact; (3) rectifying the impact; (4)

reducing or eliminating the impact over time; or (5) compensating for the impact. For

example, project effects can be (1) avoided by relocating project facilities within the project

area; (2) minimized through timing restrictions and buffer zones; (3) rectified by restoration

and revegetation of disturbed project areas; (4) reduced or eliminated over time by proper

management, monitoring, and adaptive management; and (5) compensated by habitat

restoration or protection at an onsite or offsite location. In practice, HCPs often use several

of these strategies simultaneously or consecutively. Other types of mitigation not mentioned

may also be used.

a. Regulatory Standards & Relationship to Recovery.
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Issuance criteria under section 10 of the ESA require that the HCP applicant "minimize and

mitigate" the impacts of any incidental taking authorized by a section 10 permit, and that

issuance of the permit not "appreciably reduce the likelihood of the survival and recovery of

the species in the wild" (see Chapter 7). Section 7(a)(2) of the ESA requires that issuance of

a permit does not "jeopardize the continued existence of" any federally listed species, or

result in "destruction or adverse modification" of designated critical habitat. The

implementing regulations of section 7 define "jeopardize" as "to engage in an action that

reasonably would be expected, directly or indirectly, to reduce appreciably the likelihood of

both the survival and recovery of the species in the wild by reducing the reproduction,

numbers, or distribution of that species"--this is essentially identical to the section 10

issuance criterion cited above. Section 7(a)(2) also requires use of "the best scientific and

commercial data available" in fulfilling its provisions. No other specific mitigation standards

for HCPs are specified under the ESA.

Issuance of a section 10 permit must not "appreciably reduce" the likelihood of the survival

and recovery of the species in the wild. Note that this does not explicitly require an HCP to

recover listed species, or contribute to their recovery objectives outlined in a recovery plan. 

This reflects the fact that HCPs were designed by Congress to authorize incidental take, not

to be mandatory recovery tools.

However, recovery is nevertheless an important consideration in any HCP effort. This is

because, some HCPs may encompass all or much of a species' range and address crucial

biological issues; because of the inherent biological significance of such planning areas, a

poorly designed HCP could readily trigger the "appreciably reduce" or "jeopardize" standard. 

Second, many HCPs, even smaller ones, can be said to contribute to recovery to the extent

that individually or collectively they provide for dependable conservation actions and longterm biological protections. Thus, contribution to recovery is often an integral product of an

HCP, but it is not an explicit statutory requirement.

To put this in practical terms, applicants should be encouraged to develop HCPs that

produce a net positive effect for the species or contribute to recovery plan objectives. The

Services should also assess the extent to which an HCP’s mitigation program is consistent

with recovery plans. In general, conservation plans that are not consistent with recovery

plan objectives should be discouraged. 

Similarly, HCPs that might preclude a significant recovery option, unless they otherwise

contribute substantially to the goal of recovery should also be discouraged. In cases where a

recovery plan is not available, the Services must use other available biological information

and its best judgement to encourage the development of HCPs that would aid in a species’

recovery.

b. Must An HCP Benefit the Species?
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Whether or not an HCP must benefit a species is similar to its relationship to recovery

objectives. No explicit provision of the ESA or its implementing regulations requires that an

HCP must result in a net benefit to affected species. However, just as they can contribute to

recovery, HCPs can also benefit the species they address because of the conservation

programs they establish and the long-term assurances they provide. This is especially true of

regional and other large-scale HCPs that address all or much of a species' range. Wherever

feasible, the FWS and NMFS should encourage HCPs that result in a "net benefit" to the

species. 

c. Mitigation for Habitat Loss.

Activities conducted under HCPs frequently involve permanent habitat losses (or temporary

habitat disturbances), for which the permittee mitigates by acquiring or otherwise protecting

replacement habitat at an onsite or offsite location. Commonly referred to as "habitat

mitigation," this strategy is acceptable under the HCP process so long as such mitigated

habitat losses are consistent with the section 10 issuance criteria.

One form of habitat mitigation is the "habitat bank" approach, in which habitats are "banked"

(protected through conservation easement or other means) prior to a project. These lands

are then utilized as needed for mitigation purposes. A variation on this scheme is the

"mitigation credit" system--in which "banked" habitats are established as "credits" (usually on

a per-acre basis), and the habitat banker then uses the credits as needed or sells them to other

parties requiring mitigation lands at a fair market price. The latter system has considerable

promise as a mitigation strategy because: (1) it allows owners of endangered species habitat

to derive economic value from their land as habitat; (2) it allows parties with mitigation

obligations to meet their obligations rapidly (mitigation lands are simply purchased as

credits); and (3) the mitigation lands are provided prior to the impact (eliminating uncertainty

about whether a permittee might fail to fulfill the HCP's obligations after the impact has

occurred). Still another approach is the "mitigation fund," in which a permittee pays a cash

amount as determined by the HCP into an account administered by a suitable entity, and

where other such contributions are pooled into a habitat acquisition fund.

The type of mitigation habitat and its proximity to the area of impact will need to be

considered. Generally, the location of replacement habitats should be as close as possible to

the area of impact; it must also include similar habitat types and support the same species

affected by the HCP. However, there may be good reason to accept mitigation lands that are

distant from the impact area--e.g., if a large habitat block as opposed to fragmented blocks

can be protected or if the mitigation lands are obtained through a mitigation fund. 

Ultimately, the location of mitigation habitat must be based on individual circumstances and

good judgement.

Potential types of habitat mitigation include, but are not limited to: (1) acquisition 
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of existing habitat; (2) protection of existing habitat through conservation easements or other

legal instruments; (3) enhancement or restoration of disturbed or former habitats; (4)

prescriptive management of habitats to achieve specific biological characteristics; and (5)

creation of new habitats. Here again, the specific strategy or combination of strategies used

will depend on the species and type of habitat involved. In some cases, acquisition of highquality existing habitat will be the best approach--for example, where the habitat type takes

years to develop (e.g., old-growth forest). However, if such habitat is continually being lost,

a strategy based on this method alone could result in net loss of habitat value. In other cases,

restoring degraded habitat or creating new ones is the best strategy--for example, where the

habitat type is relatively easy to manipulate (e.g., grasslands). Where affected species

depend on natural disturbance regimes that can be replicated through management regimes

(e.g., prescribed fire or flooding), prescriptive management may be preferable to habitat

acquisition or protection alone.

 

Certain caveats may apply to these strategies, however. For example, when a mitigation

program involves creation of new habitat or restoration of degraded habitats, HCP

participants should ensure that techniques used are proven and reliable or, if relatively new,

that contingency measures or adaptive management procedures are included to correct for

failures.

Sometimes, the HCP applicant may need to conduct activities prior to the time when

replacement habitats can be provided. This is acceptable so long as the HCP provides legal

or financial assurances that the permittee will fulfill the HCP's obligations. One way to

accomplish this is through Letters of Credit controlled by the government until the mitigation

lands have been provided. Another method is requiring a specified cash payment into a

mitigation fund prior to commencement of HCP activities. However, such payments alone

are not regarded as acceptable mitigation. Unless the fund is ultimately used and habitat is

otherwise acquired. Mitigation funds have often been used in regional HCPs in which the

responsible party for habitat mitigation under the HCP is a state or local government agency. 

Other examples are mitigation funds or other well-established mitigation programs utilized by

small-landowners [see below, Section B.3(d)]. In such cases, the responsibilities of

individual contributors may end with the payment, and any additional performance

requirement would either be waived or would belong to the permitted agency.

One common issue raised during HCP negotiations is how long mitigation lands must be

conserved. When habitat losses permitted under an HCP are permanent, protection of

mitigation lands normally should also be permanent (i.e., "in perpetuity"). Mitigation for

temporary habitat disturbances can be treated more flexibly; however, management logistics

and other considerations may still dictate permanent mitigation for temporary impacts,

though typically at a lesser rate than for permanent ones. 

d. Funding Recovery Measures as Mitigation.
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Another issue in cases where habitat is lost during HCP activities is whether funds

contributed for purposes other than habitat acquisition or protection--e.g., species research--

can serve as habitat mitigation. First and foremost, mitigation should address compensate

for habitat lost through the permitted activities of the HCP by establishing suitable habitat for

the species that will be held in perpetuity, if possible. For example, the mitigation

requirement for low-effect HCPs that have a negligible effect on habitat could be to enhance

existing habitat so that it meets the species’ requirements. Generally, research is not

considered a preferred mitigation strategy, since the type of mitigation is usually related

directly to the type of effect. 

It is acceptable in some cases for funding to be provided to State or Federal agencies to

implement recovery actions within critical habitat, to restore degraded habitat, to address

anthropogenic influences, and for conservation actions on larger, more secure populations of

the affected species on public lands. In some cases, matching Federal/private funding has

been developed under HCPs for such purposes.

e. Mitigation for Small-Scale, Low-Effect Projects.

It is important that methods be established by state and Federal wildlife agencies and other

organizations that allow proponents of small projects or small-scale land use proposals to

participate in larger HCPs, or that make convenient mitigation strategies accessible to loweffect HCPs. For example, it is often difficult for an individual to locate and acquire a few

acres of mitigation habitat, since lands are usually sold by the lot or in large segments. A

good way to accommodate this problem is to establish mitigation fund accounts that

accumulate funds until relatively large-scale acquisitions can be effected [see above, Section

B.3(c)]. Habitat banks are another good way to handle this situation. Avoid requiring

permittees to meet habitat mitigation requirements without a practical, accessible means of

meeting that requirement. In general, flexibility is needed in addressing the unique

circumstances often associated with small landowners and small-scale, low-effect HCPs.

f. Consistency in Mitigation Standards. 

Mitigation measures required by individual FWS or NMFS offices should be as consistent as

possible for the same species. This can be challenging when a species encompasses multiple

offices or regions, but is essential. The first step is good communication between offices. 

The next is establishment of specific standards--e.g., for survey methods, buffer zones, or

mitigation methods--and consistent implementation of those standards. Field Offices should

coordinate these standards between biologists in the same office; Regional Offices should

ensure consistency among Field Offices. Mitigation standards should also be developed in

coordination with state wildlife agencies. The Service should not apply inconsistent

mitigation policies for the same species, unless differences are based on biological or other

good reasons and are clearly explained. Consistent mitigation strategies help streamline the
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HCP development process--especially for smaller HCPs--by providing readily available

standards which applicants can adopt in their HCPs.

g. Adaptive Management.

The Services often incorporate adaptive management concepts into the HCP process to

minimize the uncertainty associated with listed or unlisted species where there are gaps in the

scientific information or their biological requirements. Over the years, there has been an

increase in the diversity and geographical size of HCPs. As of late 1995, most HCPs

approved were for planning areas of less than 1,000 acres. However, of the 200 HCPs being

developed as of early 1996, approximately 25 exceed 10,000 acres, 25 exceed 100,000 acres,

and 18 exceed 500,000 acres. This suggests that HCPs are evolving from a process

developed primarily to address single developments to broad-based, landscape level planning

tools utilized to achieve long-term conservation goals for listed and unlisted species, while

allowing applicants to proceed with their land use and development. 

For some species, not all of the scientific information needed to develop comprehensive

long-term conservation strategies to conserve species may be available at the time of HCP

development. Where these data gaps occur, not all of the questions regarding the long-term

effects of implementing these HCPs can be answered. When significant uncertainty exists, it

can be addressed through the incorporation and implementation of adaptive management

measures into HCPs. For those HCPs with significant uncertainty, incorporating adaptive

management provisions into the HCP becomes important to the planning process and the

long-term interest of affected species. For example, an applicant's commitment to conduct

watershed analyses (scientifically examining the conditions within watersheds and making

site-specific recommendations) and then adjusting management strategies based on the

results of the analyses for part or all of their lands is one form of adaptive management that

has been applied to HCPs in the Pacific Northwest. 

Through adaptive management, the biological objectives (or goals) of a conservation

strategy are defined using techniques, such as models of the ecological system that includes

its components, interactions, and natural fluctuations. If existing data makes it difficult to

predict exactly what mitigation is needed to achieve a biological objective, then an adaptive

management approach can be used in the HCP. The primary reason for using adaptive

management in HCPs is to allow for changes in the mitigation strategies that may be

necessary to reach the long-term goals (or biological objectives) of the HCP, and to ensure

the likelihood of survival and recovery of the species in the wild. Under adaptive

management, the mitigation activities of the HCP could be monitored and analyzed to

determine if they are producing the required results (e.g., properly functioning riparian

habitats). If the desired results were not being achieved, then adjustments in the mitigation

strategy could be considered through an adaptive management clause of the HCP.
3-25

Research can fill data gaps and/or test the effectiveness of management and mitigation

strategies, which can then be modified as new information is obtained. Adaptive

management, if used, can provide a reliable means for assessing the mitigation and

minimizing strategies outlined in HCPs, producing better ecological knowledge, and

developing appropriate modifications that would improve the mitigation strategy for a

species. 

The base mitigation strategy or initial minimization and mitigation measures which are

implemented must be sufficiently vigorous so that the Service may reasonably believe that

they will be successful. An adaptive management approach is particularly useful when

significant questions remain regarding an HCP’s initial mitigation strategy. The Services

should not approve an HCP using conservation strategies that have a low likelihood of

success.

Monitoring is an important tool in an adaptive management approach and should be designed

in a way that ensures data will be properly collected, analyzed, and used to adjust mitigation

strategies, as appropriate. A key element of adaptive management is the establishment of

testable hypotheses linked to the conservation strategies and their biological objectives. If

monitoring determines that biological conditions are outside specific parameters or

thresholds, which are defined in the HCP, the conservation strategies should be reviewed. 

The "thresholds" for review should be linked to key elements of the HCP and should be

obtainable through monitoring data collected during the implementation of the HCP. These

"threshold" levels should be clearly defined in the HCP and should be based upon measurable

criteria, and monitoring should be clearly linked to those measurable criteria. The

establishment of measurable criteria would dictate the type of monitoring including the

number of samples, distribution of samples, and use of controls.

Prior to the issuance of a permit, there should be a clear understanding and agreement

between the Services and the permittee as to the mitigation range of adjustments which

might be required as a result of any adaptive management provisions. A mechanism for

determining the magnitude of strategy change to be employed, based upon the results of the

monitoring and the level of deviation significance from the desired condition, should be

developed in advance so all parties are clear in this regard and can react at the appropriate

time. 

Corrective actions to any of the conservation strategies in the HCP should be based on

significant "non-achievement" of the HCP’s base mitigation. This does not preclude the

Services from working with the applicant to develop a strategy to compensate for external

factors (e.g., catastrophic fires) or requesting the applicant to voluntarily increase the base

mitigation strategy because of these external factors.

4. Monitoring Measures.
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The section 10 regulations require that an HCP specify the measures the applicant will take

to "monitor" the impacts of the taking resulting from project actions [50 CFR

17.22(b)(1)(iii)(B) and 50 CFR 222.22(b)(5)(iii)]. Monitoring measures described in the

HCP should be as specific as possible and be commensurate with the project's scope and the

severity of its effects.

For regional and other large-scale HCPs, monitoring programs should include periodic

accountings of take, surveys to determine species status in project areas or mitigation

habitats, and progress reports on fulfillment of mitigation requirements (e.g., habitat acres

acquired). Monitoring plans for HCPs should establish target milestones, to the extent

practicable, or requirements throughout the life of the HCP, and where appropriate, adaptive

management options (see Chapter 3, Section B.3(g)). 

The following steps are logical elements for consideration in developing HCP monitoring

programs for regional or other large-scale HCPs:

o Develop objectives for the monitoring program. Any monitoring program

associated with HCPs should answer specific questions or lead to specific

conclusions. If the objectives are well-developed, they will help shape a complete

monitoring program.

o Describe the subject of the monitoring program--e.g., effects on populations of

affected species, effects on the habitat of the species, or effects on both.

o Describe variables to be measured and how the data will be collected. Make sure

these are consistent with the objectives of the monitoring program.

o Detail the frequency, timing, and duration of sampling for the variables. 

Determining how frequently and how long to collect data is important to the

success or failure of the monitoring program. If the interval between samples is

too long or too short, the monitoring program may not detect an effect. The

frequency, timing, and duration of the sampling regimen should also relate to the

type of action being evaluated, the species affected by the action, and the

response of the species to the effects produced by the action.

o Describe how data are to be analyzed and who will conduct the analyses. A

monitoring program is more effective when analytical methods are integrated into

the design. For example, parametric and non-parametric statistical analyses

require different sample sizes, which affect the frequency, timing, and duration of

sampling.
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o Monitoring must be sufficient to detect trends in species populations in the plan

area but should be as economical as possible. Avoid costly monitoring schemes

that divert funds away from other important HCP programs, such as mitigation.

o Monitoring programs can be carried out by a mutually-identified party other than

the permittee, so long as this is specified in the HCP, funding is provided, and the

party is qualified. 

The FWS and NMFS also have a responsibility to monitor the implementation and success of

HCPs. The Services may agree to specific monitoring responsibilities under the HCP,

Implementing Agreement, or as part of the incidental take statement issued in conjunction

with the section 7 biological opinion. Even if not specified in this manner, the agency still

has the responsibility to monitor compliance with the terms of particular HCPs, including any

adaptive management commitments incorporated into the HCP, and the section 10 program

generally. One way to achieve this is to ensure that requirements for monitoring and status

reports are included in HCPs where needed and by ensuring that such reports are submitted

by permittees and reviewed by FWS or NMFS staff.

For regional HCPs, another way is to establish technical review teams to periodically

evaluate HCP compliance and the success of adaptive management programs. Such teams

could include species experts and representatives of the permittee, FWS, NMFS, and other

affected public agencies. To maintain the credibility of the HCP, it may be beneficial to

submit the technical team's findings to occasional review by recognized experts in pertinent

fields (e.g., conservation biologists, re-vegetation specialists, etc.).

Not all of the above steps are necessary for small-scale, low-effect HCPs, and should only be

used as appropriate.

5. Unforeseen Circumstances/Extraordinary Circumstances.

Congress recognized in the section 10 amendments that "...circumstances and information

may change over time and that the original plan might need to be revised. To address this

situation the Committee expects that any plan approved for a long-term permit will contain a

procedure by which the parties will deal with unforeseen circumstances." (H.R. Rep. No. 97-

835, 97th Congress, Second Session). Accordingly, Federal regulation requires such

procedures to be detailed in the HCP [50 CFR 17.22(b)(1)(iii)(C)]. At the same time the

legislative history states that:

 The Committee intends that the Secretary may utilize this provision to 

approve conservation plans which provide long-term commitments regarding the

conservation of listed as well as unlisted species and long-term assurances 

to the proponent of the conservation plan that the terms of the plan will be 
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adhered to and that further mitigation requirements will only be imposed in accordance

with the terms of the plan. In the event that an unlisted species addressed in the

approved conservation plan is subsequently listed pursuant to 

the Act, no further mitigation requirements should be imposed if the conservation plan

addressed the conservation of the species and its habitat as if the species were listed

pursuant to the Act." (H.R. Report No. 97-835, 97th Congress, Second Session, and

50 FR 39681-39691.)

This Congressional history illustrates the potential tension between two primary goals of the

HCP program: (1) adequately minimizing and mitigating for the incidental take of listed

species, and (2) providing regulatory assurances to section 10 permittees that the terms of an

approved HCP will not change over time, or that necessary changes will be minimized to the

extent possible, and will be agreed to by the applicant. How to reconcile these objectives

remains one of the central challenges of the HCP program.

"Unforeseen circumstances," also referred to as "extraordinary circumstances," in the past

have been broadly defined to include a variety of changing circumstances that may occur

over the life of an ongoing HCP. However, it is important to distinguish between the terms

"unforeseen circumstances," or "extraordinary circumstances," versus "changed

circumstances." "Changed circumstances" are not uncommon during the course of an HCP

and can reasonably be anticipated and planned for (e.g., the listing of new species,

modifications in the project or activity as described in the original HCP, or modifications in

the HCP's monitoring program). "Unforeseen circumstances" or "extraordinary

circumstances" however, means changes in circumstances surrounding an HCP that were not

or could not be anticipated by HCP participants and the Services, that result in a substantial

and adverse change in the status of a covered species. 

With respect to anticipated and possible changed circumstances, the HCP should discuss

measures developed by the applicant and the Services to meet such changes over time,

possibly by incorporating adaptive management measures for covered species in the HCP. 

HCP planners should identify potential problems in advance and identify specific strategies or

protocols in the HCP for dealing with them, so that adjustments can be made as necessary

without having to amend the HCP.

The "Unforeseen/Extraordinary Circumstances" section of the HCP should be more limited. 

It should discuss how those changes in the circumstances surrounding the HCP that cannot

effectively be anticipated by HCP negotiators will be dealt with in the future. It must also be

consistent with the Department of Interior's and Department of Commerce's "No Surprises"

policy. 

a. The "No Surprises" Policy.
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To address the problem of maintaining regulatory assurances and providing regulatory

certainty in exchange for conservation commitments, the Department of the Interior (DOI)

and Department of Commerce (DOC) have jointly established a "No Surprises" policy for

HCPs.

The "No Surprises" policy sets forth a clear commitment by the FWS, NMFS, DOI, and

DOC that, to the extent consistent with the requirements of the Endangered Species Act and

other Federal laws, the government will honor its agreements under an approved HCP for

which the permittee is in good faith implementing the HCP's terms and conditions. The

specific nature of these provisions will vary among HCPs depending upon individual habitat

and species needs. 

The "No Surprises" policy provides certainty for private landowners in ESA Habitat

Conservation Planning through the following assurances:

o In negotiating "unforeseen circumstances" provisions for HCPs, the Fish and

Wildlife Service and National Marine Fisheries Service shall not require the

commitment of additional land or financial compensation beyond the level of

mitigation which was otherwise adequately provided for a species under the terms

of a properly functioning HCP. Moreover, FWS and NMFS shall not seek any

other form of additional mitigation from an HCP permittee except under

extraordinary circumstances.

This means that if unforeseen circumstances occur during the life of an HCP, the FWS and

NMFS will not require additional lands, additional funds, or additional restrictions on lands

or other natural resources released for development or use, from any permittee, who in good

faith, is adequately implementing or has implemented an approved HCP. Once a permit has

been issued and its terms are being complied with, the permittee may remain secure

regarding the agreed upon cost of mitigation, because no additional mitigation land, funding,

or land use restrictions will be requested by the Services. The policy also protects the

permittee from any other forms of additional mitigation, except where extraordinary

circumstance exist.

Other methods of responding to the needs of the affected species, such as government action

and voluntary conservation measures by the permittee, remain available to assure the

requirements of the ESA are satisfied. 

Consequently, the "No Surprises" policy also provides that:

o If additional mitigation measures are subsequently deemed necessary to provide

for the conservation of a species that was otherwise adequately covered under the

terms of a properly functioning HCP, the obligation for such measures shall not

rest with the HCP permittee.
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This means that in cases where the status of a species addressed under an HCP worsens, the

primary obligation for implementing additional conservation measures would be borne by the

Federal government, other governmental agencies, private conservation organizations, or

other private landowners who have not yet developed an HCP.

"Adequately covered" for listed species refers to any species addressed in an HCP which has

satisfied the permit issuance criteria under section 10(a)(2)(B) of the ESA. For unlisted

species, the term refers to any species which is addressed in an HCP as if it were listed

pursuant to section 4 of the ESA, and in which HCP conditions for that species would satisfy

permit issuance criteria under section 10(a)(2)(B) of the ESA if the species were listed. "No

Surprises" assurances apply only to species that are adequately covered in the HCP. Species

should not be included in the HCP permit if data gaps or insufficient information makes it

impossible to craft conservation/mitigation measures for them. Such data gaps can be

overcome, however, through the inclusion of adaptive management clauses in the HCP (See

Chapter 3, Section 3.B(g)).

o If extraordinary circumstances warrant the requirement of additional mitigation

from an HCP permittee who is in compliance with the HCP's obligations, such

mitigation shall maintain the original terms of the HCP to the maximum extent

possible. Further, any such changes shall be limited to modifications within

Conserved Habitat areas or to the HCP's operating conservation program for the

affected species. Additional mitigation requirements shall not involve the

payment of additional compensation or apply to parcels of land available for

development or land management under the original terms of the HCP without

the consent of the HCP permittee.

This means that if extraordinary circumstances are found to exist, the Services will consider

additional mitigation measures; however, such measures must be as close as possible to the

terms of the original HCP and must be limited to modifications within Conserved Habitat

areas or the HCP's operating conservation program or to lands that are already protected by

the HCP. New mitigation measures should not include requirements for additional land

protection, payment of funds, or apply to lands available for development or use under the

HCP, unless the permittee consents to such additional measures. "Modifications within

Conserved Habitat areas or to the HCP's operating conservation program" means limiting

such changes to plan areas explicitly designated for habitat protection or other conservation

uses, or redirecting or increasing the intensity, range, or effectiveness of conservation efforts

in such areas, provided that any such changes do not impose new restrictions or financial

compensation on the permittee's activities. For example, if a developer had agreed to

dedicate a certain amount of funding annually in support of a particular conservation

program (e.g., habitat restoration) but subsequent research demonstrated that greater

conservation benefits could be achieved by redirecting funding into depredation control, and

extraordinary circumstances warranted such a shift, the No Surprises policy would allow the

modification since it would impose no new funding burden on the permittee. 
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The policy also sets out criteria for determining whether and when extraordinary

circumstances arise where the government could request review of certain aspects of the

HCP's conservation program. 

o The FWS and NMFS shall have the burden of demonstrating that such

extraordinary circumstances exist, using the best scientific and commercial data

available. Their findings must be clearly documented and based upon reliable

technical information regarding the status and habitat requirements of the affected

species.

o In deciding whether any extraordinary circumstances exist which might warrant

requiring additional mitigation from an HCP permittee, FWS and NMFS shall

consider, but not be limited to, the following factors: (a) size of the current range

of affected species; (b) percentage of range adversely affected by the HCP; (c)

percentage of range conserved by the HCP; (d) ecological significance of that

portion of the range affected by the HCP; (e) level of knowledge about the

affected species and the degree of specificity of the species' conservation program

under the HCP; (f) whether the HCP was originally designed to provide an overall

net benefit to the affected species and contained measurable criteria for assessing

the biological success of the HCP; and (g) whether failure to adopt additional

conservation measures would appreciably reduce the likelihood of survival and

recovery of the affected species in the wild.

The first of these two measures, on the burden of proof, is self-explanatory. The second

identifies some factors to be considered by the Services in determining whether extraordinary

circumstances exist. Generally, the primary focus of inquiry would be level of biological

peril to species covered by the HCP in question, and the degree to which the welfare of those

species is tied to a particular HCP. For example, if the species is declining rapidly, and the

HCP in question encompasses an ecologically insignificant portion of the species' range, then

extraordinary circumstances typically would not exist. Conversely, if the HCP in such

circumstances encompasses a majority of the species' range, then extraordinary

circumstances justifiably could be said to exist.

o The FWS and NMFS shall not seek additional mitigation for a species from an

HCP permittee where the terms of a properly functioning HCP agreement were

designed to provide an overall net benefit for that species and contained

measurable criteria for the biological success of the HCP which have been or are

being met.

This provision means that the Services will not attempt to impose additional mitigation

measures of any type where and HCP was intentionally designed to have a net positive

impact upon a species. It is intended to encourage HCP applicants to develop HCPs that

provide an overall net benefit to affected species. It does not mean that any HCP must in
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fact have already achieved a net benefit before the "No Surprises" policy applies. Rather, the

achievement of such benefits should be measured through a clearly articulated set of

biological goals and an adequate monitoring program for measuring progress for achieving

those goals. 

"Properly functioning HCP" means any HCP whose provisions have been or are being fully

implemented by the permittee and in which the permittee is in full compliance with the terms

and conditions of the permit.

o Nothing in this policy shall be construed to limit or constrain the Services or any

other governmental agency from taking additional actions at its own expense to

protect or conserve a species included in an HCP. 

This means the Services can intercede on behalf of a species at their own expense at any time

and be consistent with the assurances provided the permittee under this policy and the

permit. Neither is there anything in the "No Surprises" policy that prevents the Services

from requesting a permittee to voluntarily undertake additional mitigation on behalf of

affected species, though of course the permittee is under no obligation to comply.

FWS and NMFS have a wide array of authorities and resources that can be utilized to

provide additional protection for threatened or endangered species included in an HCP. 

Therefore, in meeting their commitment under the "No Surprises" policy (consistent with

their obligations under the ESA), it is extremely unlikely that the Services would have to

resort to protective or conservation action requiring new appropriations of funds by

Congress. In such an unlikely event, such actions would necessarily be subject to the

requirements of the Anti-Deficiency Act and the availability of funds appropriated by the

Congress. 

Sample language for including "No Surprises" assurances in the HCP or Implementing

Agreements is provided in Sections 8.4 and 13.3(a) of the "template" Implementing

Agreement in Appendix 4.

b. HCP Amendments.

Amendment of a section 10(a)(1)(B) permit is required when the permittee wishes to

significantly modify the project, activity, or conservation program as described in the original

HCP. Such modifications might include significant boundary revisions, alterations in funding

or schedule, addition of a species to the permit that was not addressed in the original HCP,

or adjustments to the HCP necessitated by unforeseen circumstances. A permit amendment

consists of the same process as the original permit application, requiring an amendment to

the HCP addressing the new circumstance(s), a Federal Register notice, NEPA compliance,

and an intra-Service section 7 consultation.
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Some amendments to an HCP commonly needed over the life of a permit are minor and can

be incorporated in a more expedited fashion. These types of amendments include corrections

in land ownership; minor revisions to survey, monitoring, or reporting protocols; and minor

changes in reserve boundaries that result in no net loss of reserve land or do not otherwise

alter the effectiveness of the HCP. They can be incorporated into the HCP in one of two

ways.

First, the HCP and permit can be formally amended just as with more significant changes. 

However, documentation requirements are often less for a permit amendment than for the

original permit application. For example, the NEPA analysis for the amendment can be

tiered off the NEPA analysis for the original permit (40 CFR 1502.20), or the original NEPA

analysis can be incorporated by reference into the amendment's supporting documents (50

CFR 1502.21). Also, where an original permit application required an EIS, the amendment

application might require an EA only. Where appropriate, a permit amendment can also be

treated as a low-effect HCP, which is categorically excluded from NEPA [see Chapter 1,

Section F.2].

The HCP can also be amended administratively without formal amendment of the permit

itself. This type of expedited amendment procedure is encouraged, but only when: (1) the

amendment has the unanimous consent of the permittee and FWS or NMFS; (2) the original

HCP established specific procedures for incorporating minor amendments so that the public

had an opportunity to comment on the process, and such amendments are consistent with

those procedures; (3) the HCP defines what types of amendments are considered minor; (4) a

written record of any such amendments is prepared; and (5) the net effect on the species

involved and level of take resulting from the amendment is not significantly different than

analyzed under the original HCP and the Service’s decision documents.

It is important to distinguish between amendments to the HCP and amendments to the permit

itself. Changed circumstances might require an amendment to both, but an amendment to

either the HCP or the permit without an associated amendment to the other is possible. 

Minor changes in the HCP can be completed administratively without amending the permit. 

Similarly, amendment to the permit without a change in the HCP can also occur--for

example, when an unlisted species that was addressed in the HCP is subsequently listed and

is added to the permit, though permit amendments in such cases are not always necessary. 

Chapter 4 describes the procedures for addressing unlisted species in section 10 permits. 

Chapter 6, Section G contains further discussion about permit amendments generally.

6. Funding.

The ESA requires that the HCP detail the funding that will be made available to implement

the proposed mitigation program. Measures requiring funding in an HCP typically include

onsite measures during project implementation or construction (e.g., pre-construction

surveys, biological monitors, exclusion fences, etc.), as well as onsite and offsite measures
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required after completion of the project or activity (e.g., revegetation of disturbed areas and

acquisition of mitigation lands). Large-scale, regional HCPs should require funds for longterm needs such as biological monitoring and habitat acquisition programs. Some will even

require perpetual funding mechanisms to support long-term management of mitigation lands

or for monitoring. For low-effect HCPs with minor impacts, funding needs may be limited to

activities such as pre-construction, post-construction, habitat restoration, or surveys and

payment into a mitigation fund; longer-term funding measures typically are not needed.

For relatively small- to medium-sized projects involving only one or two applicants, 

the funding source is usually the permittee and funding is provided immediately before

project activities commence, immediately after, or in stages. However, when habitat

modification or other take occurs before mitigation measures (e.g., acquisition of mitigation

lands) are implemented, completion of the mitigation requirements should be ensured

through a Letter of Credit or other means [see above, Section B.3].

Funding of regional HCPs can be more complicated because they generally cover large areas,

many activities, and require significant budgets. Consequently, regional HCPs usually are

funded jointly rather than by any single contributor. Funding strategies for regional HCPs

can include: (1) development fees paid on a per-acre (or other) basis; 

(2) other types of mitigation fees (e.g., water surcharges, fees targeted to specific activities

or industries); (3) funds contributed by non-profit or private interests; (4) state or Federal

funds; (5) assessment districts under state law or county ordinance; and (6) tax check-off

programs.

Because of their size and scope, regional HCPs often face two funding challenges--the costs

of developing and implementing the HCP. Funding problems for these HCPs can be

especially difficult during the HCP development phase, which typically occurs before funding

mechanisms for the completed HCP are in place. Where appropriate, FWS and NMFS

personnel should assist local governments in seeking out HCP funding assistance. However,

the demand for such funds is likely to grow and the availability of funds to be limited;

consequently, guarantees cannot be provided to any particular HCP applicant that funding

would be available. Consistent with the requirements of the Anti-Deficiency Act, any

commitment of Federal funding is always subject to the availability of appropriated funds.

When perpetual funding is needed, the HCP must establish programs or mechanisms to

generate such funds. One way of achieving this is through payment of development fees by

the applicant or other affected parties into an interest-bearing bank account, from which the

interest, not the principal, is used to fund the program. The HCP should detail fund

collection and management mechanisms for this purpose, as well as remedies for failure to

meet funding obligations by signatory members. The IA must always contain a provision

stating that any Federal funding is subject to the requirements of the Anti-Deficiency Act and

the availability of appropriated funds.
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Whatever the proposed funding mechanism is, failure to demonstrate the requisite level of

funding prior to permit approval or to meet funding obligations after the permit is issued are

grounds for denying a permit application or revoking or suspending an existing permit,

respectively.

In some cases, conservation funds may be transferred to a government agency to be utilized

in furthering the purposes of the HCP. FWS or NMFS can accept contributed funds for

mitigation purposes, monitoring, research, permit administration, and other activities. 

However, because of Federal procedural requirements in administering such funds and the

potential for an appearance of a conflict of interests, the FWS Administrative Services

Division and Department of the Interior Solicitor's Office (or equivalent office for NMFS)

should be consulted before agreeing to any such mechanism.

7. Alternatives Analyzed.

Some applicants find this a difficult element of the HCP because they are uncertain about

which or how many alternatives to consider. In some cases, the HCP process may not be

initiated until the applicant has planned the project, only to discover that endangered species

are present on the project site and an incidental take permit is needed.

The Act requires a description of "alternative actions to such taking." Thus two alternatives

commonly included in the "Alternatives Analyzed" section of the HCP are: (1) any specific

alternative, whether considered before or after the HCP process was begun, that would

reduce such take below levels anticipated for the project proposal; and (2) a "no action"

alternative, which means that no permit would be issued and take would be avoided or that

the project would not be constructed or implemented. For low-effect HCPs in which the

project or impact on endangered or threatened species is minor or negligible, a "no action"

alternative alone may suffice. 

For some HCPs, several alternatives may have been considered during project development. 

Each should be discussed in the "Alternatives Analyzed" section; or, where they are too

numerous, the principal ones should be discussed. The applicant also must explain in this

section why these alternatives were not adopted. If the applicant ultimately selects an

alternative that the FWS or NMFS agrees will not result in take, no section 10 permit or

NEPA compliance is needed. Chapter 3, Section B.7 explains how the alternatives analysis

requirements under section 10 and NEPA compare.

Permit applicants commonly ask whether economic considerations can be cited as a reason

for rejecting project alternatives. Such considerations are permissible, especially when the

effects on the applicant would be significantly adverse or economically infeasible. However,

if economic considerations are the basis for rejecting alternatives, data supporting this

decision must be provided to the extent that it is reasonably available and non-proprietary. 

While applicants may be hesitant to provide such information, it can be important in making
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the required finding that the HCP represent minimization and mitigation to the maximum

extent practicable. 

Neither the FWS nor NMFS have the authority to impose a choice among the alternatives

analyzed in the HCP. The Services' role during the HCP development phase is to advise the

applicant in developing an acceptable HCP, and, when necessary to try to dissuade the

applicant from selecting alternatives not consistent with permit issuance criteria. 

Nevertheless, if the applicant proceeds with such an alternative, recognizing the increased

chance of denial of the permit, the Services must process the application and provide an

opportunity for Federal Register notice and public comment (see Chapter 6, Section D).

8. Additional Measures - Implementing Agreements.

Whether or not an Implementing Agreement should be prepared for a given HCP will depend

on the size and scope of the HCP and the wishes of either the Services or the applicant. 

Implementing agreements are not required for low-effect HCPs, and should be done only

when one is requested by the permit applicant. In other HCPs, the development of the IA is

left to the discretion of the Regional Director. Implementing Agreements are recommended

for regional or other large-scale HCPs that address significant portions of a species range or

involve numerous activities or landowners, for HCPs with long-term mitigation and

monitoring programs, or where habitat protection programs are complicated or have other

special features.

Section 10(a)(2)(B) of the ESA--which describes issuance criteria for incidental take

permits--authorizes the Services to obtain "such other assurances as [they] may require that

the plan will be implemented." This provision allows the Services broad latitude to require

measures as necessary to accommodate the wide variety of circumstances often encountered

in HCPs.

 

Implementing Agreements can help assure the government that the applicant will implement

the mitigation program and other conditions of the HCP, while assuring the applicant that

agreed upon procedures will be followed for any changes in the conditions of the permit or

the conservation measures for species addressed in the HCP. Although the Services and

permit applicant possess these rights and responsibilities under the permit, both sides may

prefer the additional specificity of an Implementing Agreement because the Agreement is

tailored for the HCP in question, can be more detailed than the permit conditions, and is

signed by all parties, thus providing the explicit consent of each party to abide by the terms

of the HCP. 

Implementing Agreements can also strengthen a Finding of No Significant Impact under

NEPA by ensuring implementation of the mitigation program. This can be especially

important for "mitigated EAs" [see Chapter 5, Section A.3(a)]. They can also extend

responsibilities under an HCP beyond the life of the permit itself (e.g., by requiring perpetual
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protection of mitigation lands) and can set out a process for implementing the assurances

under the "No Surprises" policy [see above, Section B.5(a)].

Typically, an Implementing Agreement includes one or more of the following elements: (1)

defines the obligations, benefits, rights, authorities, liabilities, and privileges of all signatories

and other parties to the HCP; (2) assigns responsibility for planning, approving, and

implementing specific HCP measures; (3) specifies the responsibilities of the FWS, NMFS,

or other state and Federal agencies in implementing or monitoring the HCP's conservation

program; (4) provides for specific measures when habitat acquisition, transfer, or other

protections are part of the HCP's mitigation program; (5) establishes a process for

amendment of the HCP, where necessary; and (6) provides for enforcement of HCP

measures and for remedies should any party fail to perform on its obligations under the HCP.

The handbook delegates to the Regional Directors (or, where appropriate, the NMFS

Director, Office of Protected Resources in Washington, D.C.) the discretion to decide if 

HCP Implementing Agreements are beneficial on a case-by-case basis. IAs are not done for

low-effect HCPs unless requested by the applicant. Each Regional Director or the NMFS

Office of Protected Resources Director shall determine the circumstances under which

Implementing Agreements may be required for HCPs under his or her respective jurisdiction.

Chapter 6, Section B.2(g) provides further information about developing and processing

Implementing Agreements. Appendix 4 contains a "template" Implementing Agreement that

can be used to develop Agreements for individual projects. The template is intended to

expedite development of Implementing Agreements for HCPs, because it identifies the basics

needed for developing Agreements. The template has all necessary legal elements for

Agreements for HCPs except project-specific information, which can be filled in as indicated.

C. Alternative HCPs 

1. Addressing Species Through Habitat-Based HCPs.

Most of the HCPs that are being developed address the requirements of section 10(a)(2) on a

species-by-species basis. A smaller number of HCPs, however, have focused on specific

types of habitat rather than on a particular listed species. The rationale for a habitat-based

approach is that if certain habitat-types are scientifically selected and assessed, and

adequately protected under the terms of the HCP, the HCP could protect a broader range of

species than the few "target" species that might otherwise be addressed by a conventional

HCP. This approach may address all species within habitat-types within the plan area, or

habitat-types in conjunction with a specific list of species that will be covered by the permit. 

HCPs developed in conjunction with the Natural Communities Conservation Program in

Southern California are examples of habitat-based HCPs. The State of California, under the

Natural Community Conservation Planning Act of 1991 (NCCP), has initiated a program to
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conserve populations of California native animal and plant species and their habitats in areas

large enough to ensure their long-term viability. The initial NCCP effort is focusing on the

coastal sage scrub community in southern California for the development of subregional

HCPs.

In the habitat-based approach, a particular habitat type within a planning area is selected and

then adequately addressed in the HCP, based on criteria agreed to by the Services and the

applicant. The Service and the applicant generally use indicator species to set management

parameters for the covered habitat in the HCP. A further test must be completed to ensure

that the needs of all endemic and sensitive species (listed, proposed, candidate, or species of

concern) associated with the covered habitat types are adequately addressed in the HCPs.

An entire list of known covered species (listed and unlisted) adequately addressed in the

habitat-based HCP could also be included on a permit. This list may include proposed and

candidate species; however, since such species are only subject to State--as opposed to

Federal--jurisdiction, there should be a delayed effective date for the permit for such species. 

That delayed effective date should be the date the affected species is subsequently listed. 

Including an unlisted species on the permit in this way requires that the Services analyze the

effects of the proposed HCP on that species under sections 7 and 10 of the ESA, just as if

that species were listed. Under this method, the assurances of the "No Surprises" policy

would apply to all covered species associated with the habitat-type as described in the list of

species that are adequately covered in the HCP. If an unlisted species, which was adequately

covered by the HCP and listed on the permit, is subsequently listed after permit issuance, the

HCP permit would not have to be formally amended because all procedural permit

requirements for these species were met when the permit was originally issued and the

species was included on the permit with the delayed effective date (the subsequent date of

listing). However, if an unlisted species associated with a habitat-type adequately covered in

the HCP is subsequently listed, and it was not originally included on the permit, the Services

would have to formally amend the permit and satisfy all procedural permit amendment

requirements before it could authorize incidental take. 

Prior to amending the permit, the applicant would have to make sure the species was

adequately addressed in the HCP, and the Services would have to conduct independent

assessments of the proposed actions under section 7 of the Act, make findings under section

10 of the ESA, and also ensure that the HCP complies with NEPA. Including covered

species (listed and unlisted) in the original permit will help eliminate additional work

associated with amending the permit, minimize duplication of effort, and minimize the cost

associated with developing an HCP. 

Habitat-based HCPs are new to the section 10 program and the Service is exploring this

approach carefully. Adaptive management clauses (see Chapter 3, Section B.3(g)) may be

helpful in defining where data gaps or uncertainty exists and, thus, areas where the Service

and the applicant agree future modifications to the HCP may be needed. For further
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information about habitat-based HCPs, contact the Washington, D.C. Division of

Endangered Species Section 10 Coordinator (FWS) or the Washington, D.C. Office of

Protected Resources (NMFS).

2. Programmatic HCPs.

The programmatic HCP is a relatively new concept that has begun to emerge recently in

HCPs developed with the FWS. The FWS has begun to develop programmatic HCPs for

County and State governments, such as the "state-wide" HCP being developed with the State

of Georgia for the red-cockaded woodpecker. The programmatic HCP allows numerous

entities to be involved in the HCP through "Certificates of Inclusion" or "Participation

Certificates," which convey the take authorization of the official section 10(a)(1)(B) permit

to the certificate recipient. A programmatic HCP can be used to address a group of actions

as a whole, rather than one at a time in separate HCPs. For example, a programmatic HCP

might address a single related action occurring in many different places (e.g., the

development of single family houses in the same vicinity or the harvesting of trees in the

presence of red-cockaded woodpeckers), or address a group of different actions occurring in

the same place. Programmatic HCPs can reduce staff and preparation time, but are

appropriate only in certain types of situations. 

The central problem in preparing a programmatic HCP is having sufficient information to

determine and evaluate effects when the exact number and scope of actions taking place may

be uncertain. As a result, programmatic HCPs will be successful only when the activities

being addressed are well-defined, similar in nature, and occur within a described

geographical area or at similar points in time. 

Because this is a relatively new concept, the Service strongly encourages that programmatic

HCPs be developed in conjunction with the Regional and Washington Office. In addition,

this type of a section 10(a)(1)(B) permit should not be issued to representatives of Federal

agencies since section 7 is the correct avenue for dealing with "may effect" situations and

possible incidental take by Federal agencies. 

NMFS provides for "Certificates of Inclusion" in its regulations (50 CFR 222.22(f)). 

Certificates are issued by NMFS to any individual who wishes to conduct an activity covered

by a general incidental take permit. The general permit can be applied for by any group or

organization whose members conduct the same or similar activity and have the same or

similar impacts on endangered marine species. For example, a fisheries organization or a

state regulatory agency may apply for a general incidental take permit so that "Certificates of

Inclusion" would then be required by its members or regulated entities. These groups also

may apply for a standard permit. Applicants should discuss the alternatives with NMFS to

determine which is the most appropriate. 

D. Addressing Migratory Birds and Eagles (FWS Only)
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In the past, section 10 applicants faced an additional issue when listed migratory birds or bald

eagles occurred in an HCP planning area. The Migratory Bird Treaty Act (MBTA) and Bald

and Golden Eagle Protection Act (BGEPA) prohibit the take of migratory birds and bald

eagles, respectively. Consequently, questions have arisen as to whether a section 10

permittee remained legally liable for the incidental take of listed species protected by the

MBTA and BGEPA, if take of the same species was authorized by an ESA section 10

permit.

This situation has now been clarified. The FWS has concluded that under certain conditions,

a section 10 permit for listed migratory birds is sufficient to relieve an HCP permittee from

liability under the MBTA and BGEPA for those species covered by the HCP permit. For the

MBTA, this is accomplished by having the HCP permit double as a Special Purpose Permit

authorized under 50 CFR § 21.27. For BGEPA, it is accomplished by utilizing the FWS's

prosecutorial discretion to state that FWS would not prosecute an incidental take under the

BGEPA if such take is in compliance with an ESA section 10 permit. However, the

following conditions must be satisfied before either of these protections apply: (1) any

species to be so treated with respect to the MBTA and BGEPA must also be listed under the

ESA; and (2) the incidental take of any such species must be authorized, subject to applicable

terms and conditions, under section 10(a)(1)(B) of the ESA (see Appendix 5). The Service

believes that this approach is warranted because the permittee already would have agreed to

a package of mitigation measures designed to minimize and mitigate the take of the listed

species of migratory birds to the maximum extent practicable. 

In qualifying cases, the following language concerning MBTA- and BGEPA-protected

species shall be included in the terms and conditions of a section 10 permit when the above

conditions have been satisfied:

[For listed species other than the bald eagle] This permit also constitutes a Special

Purpose Permit under 50 CFR § 21.27 for the take of [provide species' common and

scientific names; species must be ESA-listed and may not include the bald eagle] in

the amount and/or number and subject to the terms and conditions specified herein. 

Any such take will not be in violation of the Migratory Bird Treaty Act of 1918, as

amended (16 U.S.C. §§ 703-712).

[For the bald eagle] The Service will not refer the incidental take of any bald eagle,

Haliaeetus leucocephalus, for prosecution under the Migratory Bird Treaty Act of

1918, as amended (16 U.S.C. §§ 703-712), or the Bald and Golden Eagle Protection

Act of 1940, as amended (16 U.S.C. §§ 668-668d), if such take is in compliance with

the terms and conditions (including amount and/or number) specified herein.

E. Coordinating HCPs With National Wildlife Refuges (FWS Only)
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National Wildlife Refuges (NWRs) occur nationwide, and HCPs are now being developed in

most areas of the country. When planning efforts under these two programs occur in the

same geographic vicinity, it creates significant opportunities for joint NWR/HCP habitat

protection programs in which the two programs can support and complement each other. 

However, it also raises important questions regarding the relationship between the two

programs--e.g., what are the government's and permittee's respective roles and

responsibilities in such joint NWR/HCP efforts, and how should such programs be jointly

managed? 

The FWS has developed a policy to assist its offices and staff in integrating the NWR and

HCP programs. In brief, the policy states that the primary objective of integrating any NWR

with an HCP is to increase benefits to the species involved, and that a NWR is not to be

established or integrated with an HCP merely to substitute for the mitigation responsibilities

of the section 10 permittee. This policy and additional guidance about integrating HCPs with

National Wildlife Refuges is provided in Appendix 6.

F. "Safe Harbor" Policy: Linking Safe Harbor Assurances to Habitat Conservation

Plans 

The "Safe Harbor" approach is a strategy that provides private landowners, who undertake

voluntary conservation actions on their lands, assurances that their future land-use activities

will not be restricted further as a result of these proactive conservation efforts. If a

landowner voluntarily enters into an agreement to manage his or her lands in a manner that

attracts endangered or threatened species or otherwise increases their presence, the "Safe

Harbor assurances" guarantee no additional regulatory requirements for those lands will be

imposed on the landowners as a result of the proactive conservation measures. The purpose

of the "Safe Harbor" approach is to reduce the disincentives (e.g., fear of regulatory

restrictions) that often cause landowners to avoid or prevent land use practices that would

otherwise benefit endangered species. 

If it is determined that it is appropriate to link Safe Harbor assurances with HCPs, specific

directions for incorporating will be described in a forthcoming final Safe Harbor policy (see

Appendix 7). [Note: If the draft Safe Harbor policy has not been published in the Federal

Register by the time this guidance is published, Appendix 7 will be reserved for this policy.]

The Services are currently considering whether, and if so, under what circumstances, it may

be appropriate to allow a landowner to link a Safe Harbor Agreement to an HCP. The

Services intend to submit this issue for further public analysis and comment.