Senate Environment and Public Works Subcommittee on Fisheries, Wildlife and Water Holds Hearing on Endangered Species Critical Habitat

CRAPO:

Good morning. The subcommittee on Fisheries Wildlife and Water will come to order. Today, we are going to be receiving testimony on the designation of Critical Habitat under the Endangered Species Act.

And it's been quite some time since the subcommittee has been focused on the Endangered Species Act related and related issues. And it's been almost four years since we have taken up the issue of Critical Habitat designation.

In the spring of 1999, the late Senator John Chafee, who was the chairman of the Environment and Public Works Committee, and really a true leader on environmental issues, along with then Secretary Bruce Babbitt.

CRAPO:

Senator D'Aminici and myself, we got together and worked out a bill to reform the Critical Habitat provisions and the Endangered Species Act. That bill, S-1100, improved the efficiency and effectiveness of Critical Habitat designation while also protecting habitat for listed species.

We reported S-1100 out of committee with no opposition. And unfortunately, the bill encountered difficulties before the full Senate, and no companion bill was ever introduced in the House.

The reason I mention S-1100 is that issues around the Endangered Species Act have become so polarized and intransigent, that I suspect there's not a whole lot of confidence among stakeholders that Congress has the political will to fix problems.

I don't believe that's the case with the issue of Critical Habitat designation. A strong, bipartisan record has been built over the last several years. Former Fish and Wildlife service director Jamie Clark testified before this committee in May of 1999 as follows.

"We firmly believe that attention to and protection of Habitat is paramount to successful conservation actions and to the ultimate recovery and delisting of listed species." However in 25 years of implementing the ESA, we have found that designation of official Critical Habitat provides little additional protection to most listed species, while it consumes significant amounts of scarce conservation resources.

In addition, former Secretary Bruce Babbitt authored an op-ed for "The New York Times" in April 2001, in which he defended the Bush administration for the manner in which it was trying to address the significant number of court orders for designating Critical Habitat in the face of too few financial resources and biological priorities far more important than the designation of Critical Habitat.

CRAPO:

Mr. Babbitt wrote, "These uncertainties undermine public confidence in one of our most important and successful environmental laws. That's why during my tenure as Secretary of the Interior, I repeatedly asked congressional leaders to write budget restrictions that would prevent money from important and endangered species programs from being siphoned off into premature, Critical Habitat map- making.

This request was denied every year. The Bush administration now proposes something similar. Mr. Babbitt went on to say that legislative reform by Congress, rather than putting restrictive language in the budget, was the way to fix the problem.

I couldn't agree more. My point is that problems with the Endangered Species Act have not been limited to a Democratic administration or a Republican administration. Clearly, significant difficulties in implementing the Endangered Species Act have confronted the agencies responsible, carrying out one of our nation's most powerful environmental laws, irrespective of who's in charge.

And the problems continue to worsen. Just a few weeks ago, Fish and Wildlife Service director Steve Williams testified before this subcommittee with respect to the service's fiscal 2004 budget request. Before their budget request was even printed, the service became subject to additional court orders and other—and unanticipated judicially enforceable deadlines, rendering the budget request inadequate.

Congress is failing its responsibility to conserve and recover listed species by allowing court ordered Critical Habitat designations that admittedly have very few conversation benefits to devour more than half of the budget for listing new species every year.

I sincerely hope that this subcommittee and the full Environment and Public Works Committee has the will to work together to address this, and some of the other very serious problems with the Endangered Species Act.

At this point, I would like to recognize our chairman of the full Committee, Senator Inhofe. I welcome you here, Mr. Chairman.

CRAPO:

Well, thank you very much, Mr. Chairman. And I just want to say here on the record while we have the opportunity that it's a privilege to serve with you as the chairman. And I have appreciated working with you ever since we served in the House together, and looked forward to doing the same at this point.

INHOFE:

Let me also mention something I mentioned to Mr. Manson, that I always thought if the Republicans got in charge, we'd run things better. And so, we wouldn't have the conflicting committee hearings. Since John Warner is one of the senior members of this committee, and I'm one of the senior members of the Senate Armed Services Committee, in spite of that, we still have coinciding times for our meeting. So I have to be up there at 10:00 for an Armed Services hearing.

CRAPO:

We understand that. In fact, we were talking before the hearing about the fact that it seems like, maybe it's just because of the war and some of the other things, but the pace up here has gotten to where we're running between hearings left and right.

INHOFE:

True.

CRAPO:

And in that context, Senator Murkowski, who wanted to be here, has provided us a statement that she wants to have inserted into the record, which we will do without objection. And as other members may be able to find the opportunity to slip in, we will give them an opportunity to make an opening statement when they arrive, but at this point, I believe, we will just proceed with the witnesses.

Our first panel is the honorable Craig Manson, who is the assistant Secretary of—for Fish and Wildlife and Parks of the U.S. Department of Interior. Mr. Manson, you may proceed with your testimony.

CRAPO:

We already had a discussion about that. Mr. Madsen, would you tell me how many court cases have been brought dealing with Critical Habitat since 1998? Do you have any information on that?

MANSON:

I don't have information since 1998. I can get that for you. I can tell you what the current spate is.

CRAPO:

If you would, please.

MANSON:

As of today. As of today, we have about 31 pending lawsuits. And we have a number of notices of intent to sue. The exact number since 1998, we will research and we'll be able to provide that to you.

Currently, the notices of intent to sue as of the end of last month amount to 26 intent to sue. But in addition to that, we've got 158 backlogged Critical Habitat actions as well.

CRAPO:

Now what does that—what is a backlogged Critical Habitat action? That's where there isn't yet litigation?

MANSON:

No, that's an action that—where there's been litigation, and we are—it's in the pipelines to have a designation made pursuant to an order.

CRAPO:

That's 158.

MANSON:

Yeah.

CRAPO:

So basically, you have 158 cases where you are now through the litigation...

MANSON:

Right.

CRAPO:

...but working on the backlog. You have 31 pending suits. And then what—did you give me a number of notices?

MANSON:

26 notices.

CRAPO:

26 notices. Do you have any information about how much in attorney fees and to whom the department has paid money with regard to this litigation?

MANSON:

I don't have an exact figure for you. I can provide that to the committee.

CRAPO:

If you would, I'd appreciate it. Can you give me a feel for the budget impact of this litigation? And I'm—if you have actual numbers, I'd appreciate that, or if you have percentages of portions of the budget that have had to be diverted into this, or what portion of your budget you utilized to spend on this litigation, that kind of analysis?

MANSON:

Right.

CRAPO:

Could you share that with me?

MANSON:

Well, I can tell you this. And we can certainly provide you a more complete analysis. I can tell you this that in the listing program for FY '03, we had about $9 million in the—in that listing program.

Almost all of that is devoted to responding to Critical Habitat or other listing litigation.

At the current rate, we will probably use all of that up before the end of the fiscal year. Sometime in the early summer, we will have exhausted that amount of money.

CRAPO:

And if that money were not being used in litigation, where would it be utilized? Where would you put it?

MANSON:

It would be utilized for looking at higher priority listing actions. We'd be determining on a biological basis, not on a litigation basis, which actions ought to have priority.

CRAPO:

Would that involve additional resources for development of recovery plans and the like?

MANSON:

Well, recovery—the recovery budget is a different line item, but surely, we could certainly use the personnel that are devoted to these activities and make better use of their time towards recovery. And if we—and certainly if we didn't have as many of these actions, and if we weren't using all of the listing budget, we certainly could find ways to use that money and in the recovery process.

CRAPO:

In terms of the personnel under your supervision, can you give me a feel for what percentage of them spend their time on litigation, as opposed to what percentage spend their time on other aspects of the administration of the act?

MANSON:

Have not considered that on a percentage basis, but I can certainly find that out for you.

CRAPO:

Would it be a pretty sizeable percentage?

MANSON:

It's a sizeable percentage of the folks in the Endangered Species Program, yes.

CRAPO:

I know that one question, which we probably ought to talk about is there may be—I haven't heard this yet, but I'm guessing that one response to this might be we'll just put more money and you know, have Congress put more money in the budget. So that we can have all the people we need for recovery actions and all the people in process that we need for other aspects of implementation of the act, and still have lots of people for litigating.

If we had an unlimited budget, and we had an agreement from all parties that we could just pick the right time and place to designate Critical Habitat. So that litigation wasn't a concern. Or money for litigation wasn't a concern. And impact on other administrative actions with regard to the Act weren't a concern.

Where should we put in the process for the best recovery effort for species? Where should the timing of the designation of Critical Habitat occur?

MANSON:

Well, there are a number of possibilities. In S-1100, for example, it was placed in the recovery arena. And that seems to make a lot of sense, because after all, we are talking about statutorily, the languages essential to the conservation of the species. And we think of conservation in terms of recovery.

And as Senator Thomas was saying, recovery is where our focus ought to be. That is the real purpose of the act. The act is not intended to be perpetual hospice care for species.

CRAPO:

So if you had your way, and you could in the interest of the species, place the timing of the designation of Critical Habitat, you'd put it at the recovery process?

MANSON:

I certainly would—that would be very high on the list. That would probably be the top choice for a place to put it.

CRAPO:

All right, thank you. I'll withhold for a moment. And Senator Thomas, if you have any questions at this point, I'd be glad to turn to you.

CRAPO:

Thank you, Senator Thomas.

Mr. Madsen, I want to go back to a couple of other areas. And one area that I'd like to get into is the impact or what benefit designation of Critical Habitat brings, and at what point that benefit is best utilized.

Does the inclusion of impacts on the Critical Habitat in the consultation process under Section 7A-2 provide protection for a listed species over and above the jeopardy standard that is already being applied?

MANSON:

Well in my view, if it is—it's largely duplicative of the existing protections under the act, there is one circumstance in which it may have some marginal additional benefit. And that has to do with the adverse modification of Critical Habitat.

Now that situation is in a little bit of flux right now, because the Fifth Circuit in a case a few years ago ruled that the service was using the wrong standard with respect to adverse modification of Critical Habitat. And the service is working to adopt a new definition of that first modification of Critical Habitat.

Now that only becomes important where there is unoccupied habitat designated. And it is the rather unusual case that unoccupied habitat is designated as Critical Habitat. So that's why I say it's only a marginal benefit in most cases.

So for the most part, the designation of Critical Habitat is largely duplicative of other protections under the act.

CRAPO:

All right, and to this point in the questioning, I've focused on where we should do the Critical Habitat designation. But I think that at least in terms of getting the issue flushed out, we ought to talk about what some have proposed, which is to—is whether the designation of Critical Habitat itself is justified, or whether it causes so much litigation and contention that it actually is something that should be taken out of the act and let others standards like the jeopardy standard and the like be those that guide in the recovery of species.

Should Critical Habitat concepts be removed from the ESA because of these factors? Or do you believe that there is a place and a point in the Endangered Species Act where they do provide sufficient benefit to justify the disruption and difficulty that we now experience with them?

MANSON:

Well, the one thing that should be understood is what is meant by Critical Habitat designation, first of all. Critical Habitat designation does not result in the protection of habitat. That's done through other means under the act, or outside the act, through means other than the designation of Critical Habitat.

As I was talking about other state Endangered Species Acts, which don't have definitions of Critical Habitat, it seems apparent that it's possible to have an Endangered Species Act that protects habitat, which recovers species, which protects the conservation of those species without designating Critical Habitat.

The act describes Critical Habitat as those areas which are essential to the conservation of the species. And it's possible to know and understand what those areas are without the process of designating them.

For example, there are about 1260 listed species on the federal list right now. Only about a third of them or less have designated Critical Habitat. Yet the other two-thirds are being protected, are being conserved. Habitat is being conserved for them, even without the designation of a Critical Habitat.

So the answer to me is that where we have a process that is costly, that causes a great deal of social and economic upheaval on the one hand, that results in litigation and practically puts a program of the Fish and Wildlife Service into receivership, and on the other hand, seems to have little benefit. And then it seems to me that there's a rational public policy answer to all of that.

And certainly if the Congress decided that we could do without it, the service could carry out its mandate under the act without it.

CRAPO:

Thank you. If the—to back up to the line of questioning I was following a few moments ago, if instead, Congress were to change the time at which Critical Habitat was designated to the recovery process, would that significantly assist in removing the litigation and resolving a lot of the problems that now cause these difficulties within your budget?

MANSON:

I think it would. For one thing, a lot of the litigation is driven by the deadline pressures in the act. And that would change that factor quite significantly.

CRAPO:

I know that from what I've seen, and I was aware of the Fifth Circuit case you talked about and several of the other cases that have come down on this issue, but one thing that seems to stick out to me is that there is a little bit of confusion as to just what Critical Habitat is under the act.

And a moment ago, you gave a brief definition of what it was, but if I recall correctly, there is some disagreement, at least in the court system or in other areas as to whether we actually know what the act requires in terms of designating Critical Habitat, what it is that the act is asking us to do.

Do you think in the process of addressing this issue that Congress should clarify what it—if Congress were to keep the process of Critical Habitat in the act, if the designation of Critical Habitat in the act, regardless of where the timing was, do you think it would help if Congress addressed the issue of the definition of Critical Habitat? Or do you think that we have a sufficient clarification there that we should leave that alone?

MANSON:

No, I think if—that if it would be useful. I gave half of a definition, when I was talking about earlier. The act says that it is areas on which are essential to the conservation of the species and which may be in need of special management considerations or protection.

And those terms are not defined in the statute. And it would be of use, I think, for Congress to define what is meant by essential to the conservation of the species.

There's a case decided in the district court in Arizona that addresses the issue of being in need of special management considerations or protection, that has clouded the definition, and has made it difficult for us to definitionally decide what is in and what is out in terms of Critical Habitat.

If that case becomes a precedent by an appellate court decision, then—which it might, then it would become all the more important for Congress to address what is meant by special management considerations, and which lands are in fact in need of special management considerations and protections.

CRAPO:

Thank you. There are a couple of questions from some of my colleagues, who aren't able to get there, wanted me to ask. And so I'm going to divert from my line of questioning for a moment and ask a couple of these questions, so they can get them on the record.

The first one is when the Fish and Wildlife Service delays designating Critical Habitat, how much of it is due to the fact that the agency doesn't have enough quality information about the population size, distribution or biology of a species to figure what specific areas should be included?

MANSON:

Well, certainly, that has sometimes been the case. I couldn't tell you how often that's been the case. There are two—in the statute, two threshold issues. One is whether or not Critical Habitat is prudent. And the other, whether it is determinable.

Most of the time, in the past, when the service delayed designating, it was because they felt it was not prudent. Sometimes it's been because they felt it was not determinable. And the exact—far more because it was not prudent.

The exact percentages, I'd have to research that.

CRAPO:

All right, thank you. Another of the questions is, in terms of designating Critical Habitat, the language in the Endangered Species Act suggests that one of the goals of Critical Habitat to ensure that there is enough habitat protected to ensure that species don't go extinct before the Fish and Wildlife Service can begin the recovery process, the habitat that species needs to have to hang on to survival, does the Fish and Wildlife Service typically have enough quality information about the base survival needs to designate Critical Habitat, to fulfill that need?

MANSON:

Well, first, I'm not sure I completely agree with the premise of the question. But second, at the time that a species is listed, and at the time that we would ordinarily start looking at Critical Habitat, sometimes we—the service in fact does not know enough about habitat issues to understand fully what habitat is essential to the conservation of the species.

They know enough about habitat to know what the threats are, which is one thing, but it's a different thing to understand what is essential to the conservation of the species.

CRAPO:

All right, thank you.

One of the other cases that I want to talk to you about for a minute is the New Mexico Cattle Growers Association case in the 10th Circuit, which as you know, founded the Fish and Wildlife Service's analysis of only incremental economic impacts of Critical Habitat designation, above the impacts already created by the Endangered Act and Section 7 jeopardy constraint, where unlawful.

This decision is now almost two years old. And I'm interested in what the service has done to change the manner in which it conducts its economic analysis under the Endangered Species Act for Critical Habitat purposes?

MANSON:

The service is applying the New Mexico Cattle Growers case. And we, from a policy perspective, are constantly refining the guidance that we give the service in terms of applying New Mexico Cattle Growers.

It's a learning process, quite frankly, because it's a different way of doing business. And I—every Critical Habitat designation that comes through, I think the service learns a little bit more about how to do economic analysis. So it's an educational process. It's a process of refinement and honing. And I think we're getting there.

CRAPO:

Is the guidance that you talked about going to be published?

MANSON:

At some point, there will be published guidance on that, yes.

CRAPO:

Currently the Fish and Wildlife Services required to prepare the appropriate analysis under NIPA (?) for designations of Critical Habitat in areas under the jurisdiction of the court of appeals for the 10th Circuit, is the Fish and Wildlife Service considering how to merge this with the economic analysis?

MANSON:

That is—that's something that we have—we've talked about. I don't have any specific proposals or news about that. It is—it's something that is in the think tank stage right now.

CRAPO:

Thank you. Hold, if you just wait for one moment.

All right, well, Mr. Madsen, in the interest of time, I'm going to submit some other questions that I had to you in writing. And I just wanted to thank you for coming here. We've had great support from the Fish and Wildlife Service, both under the Clinton administration and the Bush administration in terms of dealing with this issue.

As you said, and as I indicated in my opening remarks, there has been a tremendous amount of agreement between the administrations and people from different perspectives on this issue, that we have a problem that we need to deal with.
And that—and I'm hopeful that with your help and the help of the witnesses we're going to have here today and other interested parties, we can come together and build a path forward, where we can all agree that we're going to make an improvement for the species, which is the objection of our management of this act.

So I thank you for your time in coming here today.

MANSON:

Thank you, sir. We're looking forward to further working with the committee on this matter.

CRAPO:

Thanks very much.

I'd like to now call up panel number 2. And while they're coming up, I'll announce who they are.

CRAPO:

All right on this panel, first we have Mr. Jeffrey Kightlinger, the general counsel for the Metropolitan Water District of Southern California, Mr. John Kostyack, senior counsel for the National Wildlife Federation, Professor David Sunding, associate professor of agriculture and resource economics at the University of California at Berkeley, Mr. Craig Douglas, who is with Smith, Robertson, Elliott and Glenn, and Mr. William Snape, the vice president and general counsel of the Defenders of Wildlife.

Gentlemen, we welcome you all here. I did not indicate at the outset which I should have done before the first panel, but we always run into a situation on timing here, where you've got to more say than the time allows. And we would like to have you have the opportunity to say that, but we also want to have the opportunity for the give and take among the panel and with questioning.

And so, we do have a clock going. I can assure you that I and the other senators and our staff will read your written testimony. So you don't have to feel that you read every word of it. We'd like to ask you to summarize your statements in a—in five minutes. And there's a clock in front of you that will give that indication.

And then, I'd hope to have a good—longer time period for us to get into some give and take and discussion of some of the issues that I'm sure you will bring up.

So with that, Mr. Kightlinger, why don't you begin?

CRAPO:

Well, thank you, Mr. Snate (?). I'm sure you saw me smiling when you brought up the Softwood lumber agreement. I've just been appointed by the majority leader to be the co-chairman on the Senate side of the Canada U.S. interparliamentary group or whatever it is, which will be meeting this week to—or this year to deal with a number of issues, not the least of which will be the Canadian Softwood lumber agreement.

And if your suggestion can help us resolve that issue, I'm going to look at it very hard.

CRAPO:

Let me just toss—I want to try to get into a couple of specific questions with each of you, but I also would like to get some interplay between the members of the panel on the overall issue here.

But let me throw out a question at the outset, to see whether we have some consensus building here. There's a lot of issues, obviously, but the core issue for the timing question of the designation of Critical Habitat, it seems to me, is one—from what I've heard, may not be one in which there's a lot of conflict.

Is there any disagreement among the panelists as to whether it would beneficial to allow the service discretion in the timing of the designation of Critical Habitat? Would anyone disagree with a statutory changing allow that, Mr. Snape?

SNAPE:

Mr. Chairman, like some of the groups that have already spoken, we also supported S-1100 at the time it was introduced and discussed by this committee. The only point I would make about that particular bill, and on the issue of timing is that the sort of "deal" that we struck there was very closely negotiated.

And so, if we were indeed going to go back to that, every word sort of in semi colon sort of mattered. But with that caveat, no, I think that that would be rational and helpful change.

CRAPO:

All right, thank you. Mr. Kostyack?

KOSTYACK:

Two comments. One is part of it, deal of the package, was to deal with the backlog because one thing you don't want is to create a set of deadlines for the Critical Habitat where the newly listed species actually leapfrog ahead of all these other species that have been awaiting attention. So that's a subtlety that will need to be dealt with.

And the other comment I would make is we certainly just—to support pushing back the deadline, giving the service complete discretion on when to designate, it would be problematic. In fact, the deadlines were put in the act in 1978, five years after the initial enactment of the Endangered Species Act because the first five years, there were no deadlines and no Critical Habitat was being designated.

I think what we know—we know what happens when then are no deadlines whatsoever. We just need to adjust it, to give the service a little bit more time to get the science together.

CRAPO:

All right, thank you. Anybody else want to pitch in on that?

Okay, thank you.

Now I don't want to complicate matters, but I do want to—maybe it's just my curiosity, wants to explore something that Mr. Kostyack, you actually brought up in the hearing we had three or four years ago.

And you may recall in your testimony back in May of 1999 that you referenced the concept of the survival habitat, which was a notion that had come up. I don't know whether it originated with it, but I associated with the National Academy of Sciences National Research Council, which had studied this issue and come up with the notion that I'm probably going to do a bad job of characterizing the issue, but if I understand what they were saying, it was that there were some benefits to Critical Habitat designation. There were also some serious problems with the timing and the way it was being done, and that perhaps we could create another concept called Survival Habitat, which would be more narrowly defined at an earlier stage, and would identify sort of the core areas protected for survival, as opposed to what we are dealing with now in the Critical Habitat arena.

I know at that time you were kind of positive about that concept, Mr. Kostyack. Would you like to discuss that today and...

KOSTYACK:

Sure.

CRAPO:

...tell us whether we should just leave that alone and go with what we've got or the consensus we're building, or whether that's something we ought to look at?

KOSTYACK:

No, I think it is something we ought to look at, if we can build consensus around it. The notion of Survival Habitat is it does several years after the listing of a species, which by the way, is really not—a listing is not focused on recovery. A listing is focused on threats. How threatened is the species? Do we need to give it immediate attention?

So there's a lot scientific work that needs to be done after the listing of the species. And I would argue two or three years during the process of preparing the recovery plans is often the time to figuring out what habitats are going to be needed for recovery.

Now in that interim period, what we don't want is to have is major setbacks for the species. So we basically are boxing ourselves into a corner and limiting our options.

So what can we do about protecting the habitat where there is broad scientific incentives, that—just to keep the species at a status quo, to prevent further slippage.

Can we at least all get a consensus around the sort of corp basic habitat that there is no dispute about? And then the tougher question, the scientific resolve over that say three year period is all right, to achieve true recovery, which for many species means restoring into habitat where they're not found today. They're in a severely depleted state, oftentimes, by the time they're listed. The tougher question the scientists will have to wrestle with over the three year period is what are going to be the recovery habitat?

The Survival Habitat's a narrow concept I think you can get more immediate scientific consensus around.

CRAPO:

Anybody else want to jump in on this? Mr. Kightlinger?

KIGHTLINGER:

Yes, Mr. Chairman. Our testimony had been about prioritizing habitat. And we think that's a way of reconciling the Survival Habitat concept with what had—occurred in the New Mexico Cattle Growers Association case, where you can look at an economic analysis, try to do that cost benefit, and try to pick what's that essential habitat that we should look at first?

And it's the same kind of concept. And we'd like to see some developments there.

CRAPO:

Mr. Douglas?

DOUGLAS:

I tend to agree with Mr. Kostyack on some level. I think we may have some disagreements about the scope of the Habitat that may be necessary, but I do think that the concept of Survival Habitat is more appropriate for the regulatory context of listing intake, which is really based on threats, as you said, where the current notions of habitat preservation probably are more appropriately resolved in the recovery phase.

CRAPO:

Mr. Snape?

SNAPE:

Mr. Chairman, I have two comments, just sort of contextual. One is that if you did have a Survival Habitat process and a recovery or a Critical Habitat process, you are creating two processes on habitat, which I'm not—you could argue is not a good idea.

CRAPO:

Believe me, I understand that.

SNAPE:

But the ultimate point, substantive point I want to make is that the reason I like thinking this way, however it is you decide to deal with it from a legislative, regulatory point of view, is that it does focus on what I think is attention in administrating the act right now, which is survival, first is recovery.

Senator Thomas we talking about this. And the Yellowstone really bears a good example. Is that a species that we—or a population that we are just letting hang on and surviving? Or is it actually recovering?

Well, scientists are disagreeing right now about that. So I think—and we've already talked about how that tension plays out in the Section 7 context.

So if we could actually more rationally talk about the concepts of survival and recovery in the act, I think everyone's expectations would at least be a little bit more explicit. I think some of the conflicts under the act occur because some people are talking about recovery, and some people are talking about survival. And there's a little talking past each other. And I think that happens in the Critical Habitat provision.

CRAPO:

Well, thank you. And you have pointed out that, you know I was almost reluctant to bring it up, because to bring up another concept to put into the Endangered Species Act, I'm sure brings shivers down the spines of some of the people who are concerned about its complexity at this point.

On the other hand, there is—there's a clear issue there, as to whether we can gain some benefit from some focusing of what we are trying to achieve at the respective stages of the implementation of the act.

And so I think it—at least deserves some discussion. But we certainly do not want to create more complexity that would not help us facilitate and eliminate some of the problems that we are dealing with.

Mr. Kightlinger, you mentioned in your testimony the cost effectiveness framework for economic analysis of Critical Habitat. Could you explain a little bit more on how that cost effectiveness framework would work, in your opinion?

KIGHTLINGER:

Well, we think what there probably should be is a public comment rule-making process, so that people could get in and really get a methodology and a framework for how we analyze the economic impacts of this.

That isn't really available today. That would hopefully then leads towards, we think, something along the lines of, and maybe we kind of agree, introducing new concepts is going to be difficult at this stage, but something where you can start prioritizing habitat, prioritizing—just setting priorities for the agencies.

And doing that on an established process, where you really do a cost benefit analysis. You really look at the impacts in an orderly way of what the impacts of designating habitat are. We think that lead to a more cost effective approach.

CRAPO:

And as I—if I understand what you're saying correctly, that would not require legislation? That could be something that the agency implements...

KIGHTLINGER:

Right.

CRAPO:

...rule-making or otherwise?

KIGHTLINGER:

We think, either the administration could do that on its own, or certainly be directed by the legislature to do so.

CRAPO:

Mr. Snape, you want to comment on that?

SNAPE:

I want to follow up no that, because I think I largely agree. And in fact, there's been some recent research lately, I'm not the primary one who has looked at this, a professor of Temple University actually sort of put me on to it, is that it's arguable that the economic analysis we're now doing, we being the U.S. government, Americans under the U.S. Endangered Species Act, is more onerous, and more complex than what Congress intended in 1978.

And what she did, this professor, she looked at the economic analysis that were required of other environmental statutes in the mid to late '70s, when these amendments were being drafted. And that was well before the sort of formalized cost benefit analysis had come into fashion the way it is now.

And one argue quite seriously that we have indeed gone overboard with our economic analysis, not in terms of getting accurate information. I think we all want that, but in terms of spending a lot of time and money creating, you know, telephone book analyses that no one reads, and everyone fights about. It may be that we need to ask more fundamental questions about what we want the economic analysis to answer, and be less focused on the sort of volume and formality that we seemed to have inserted into the process.

I'd be curious what Mr. Sunding thought about that?

CRAPO:

Mr. Sunding?

SUNDING:

Yeah, thank you. I think I actually largely agree with that comment. The economic analysis that the service or more accurate, the services consultants tend to produce on these Critical Habitat designations are voluminous. They're quite large and quite detailed.

But to some extent, I think they miss the point, methodological problems aside. They're aggregate analyses of the entire Critical Habitat, and the entire set of economic impacts that result.

They missed this point that the purpose of the economic analysis, as least as I understand it, is to help with prioritize.

This land should be in. This land should be out because the economic impacts are just too onerous and the benefit to the species doesn't rise to the level that that land should be included.

So yes, I think there is a lot of scope to change the way we do the economic analysis.

CRAPO:

Mr. Sunding, could you tell me what you think the Fish and Wildlife Services guidance on the economic impact analysis ought to look like?

SUNDING:

Well, actually, I don't know if you know this or not, but I've actually worked with the service to help them.

CRAPO:

I didn't know that, but that's good. That's helpful.

SUNDING:

Yes, right. And I guess we'll see what the outcome of that process is. But I was engaged as one of I believe two peer reviewers on a draft protocol for economic analysis.

I'm sorry, your question was?

CRAPO:

The question is, what would you think that their guidance ought to look like. How—what should it be?

SUNDING:

Right. Well, you know, I've outlined in my oral and my written testimony a number of types of economic impacts that can result from Critical Habitat designation. And I suppose as a threshold matter, I'd like to see a comprehensive analysis of those different types of impacts.

The service right now tends to focus on what I would characterize as being the most obvious or direct out of pocket impacts, just the cost of going through the Section 7 consultation process.

What they tend to miss in general is the outcome of the Section 7 consultation process, the reduction in the size of the project, and the attendant market impacts, and regional impacts.

The service also, I think, recognizes that it hasn't yet come to grips with the concept of delay. If you talk to people in the field, and I'm sure Mr. Kightlinger can verify this, if you talk to people in the field who have to deal with Critical Habitat designation, I think they'll tell you that one of the real problems with it, is that it delays completion of the project. And that can impose very large costs on public agencies and private developers who are doing projects.

But also on consumers. You know, it may be the case that you have a 1,000 unit housing project that gets cut down to 900 units as a result of the Section 7 consultation process. That imposes one kind of cost.

But the other kind of cost is that all the 900 units that do get billed—get delayed by some period of time, and what we found in our theoretical and our empirical work is that those delay costs can be very large. In many cases, they're the major component of all the economic costs from Critical Habitat designations.

CRAPO:

All right. And you know, I wanted to shift back. I'm looking at some of my notes here, but Mr. Douglas, I noticed in your testimony, the strong focus on trying to identify the essential habitat that we're dealing with. And in the context of the—what are we calling it, the Survival Habitat, do you think that that concept fits in the same vein as to what you were trying to get at?

DOUGLAS:

I do. I think that the point I was trying to make, it maybe didn't do so quite clearly, was that the balancing test that's currently in the statute can be used as sort of an interim solution to get some control over the current litigation crisis. In that, if the service uses that test to really focus on only what is essential to the conservation of the species, it can narrow the scope of Critical Habitat designations, and maybe reduce the field of things that we're fighting about.

What we—a lot of these lawsuits or responsive lawsuits by the regulating community that I represent are filed because, you know, the services kind of got in this do loop. They have a short among of time to designate Critical Habitat. So you get the shotgun designation that covers hundreds of thousands of acres. It's not very focused. They don't have the time to look at the science correctly. They don't have time to consider the economic impacts adequately.

And if that balancing test is faithfully employed, and the service has the time to really go through the steps of the process, and do it right, then what you see is perhaps what happened with the Bear County cave bucks earlier this week.

DOUGLAS:

There were a couple of extensions to the comment period that were necessary, that were agreed to. But ultimately, they were able to perform those tasks in a manner that allowed them to consider the problem more deliberately than they're able to, when they're forced to do it by litigation. And I think that that getting toward—getting down the essentials, whether it's in the context of Critical Habitat now or Survival Habitat as you say, is—would be very important tool and process for them to follow.

Mr.—if I could pick up on this. Both the previous witnesses have indicated that the solution, potentially is simply to go through the 4 B-2 economic analysis process, and address sort of the substantive impact of Critical Habitat.

And as long as—I lay out on the table what would be the impacts of Critical Habitat, and then exclude Habitat based upon sort of the practical economic effect of that, then potentially add a solution.

I've got a hitch in that, which is we have this Sierra Club versus Fish and Wildlife Service case out there. And until the service responds to that ruling, and tells the world what adverse modification of Critical Habitat means, none of these economic impact analysis are going to—all of them are going to continue to be subject to litigation, because we have this confusion out there. The services are actually saying two different things at once.

It says on the one hand, we're going to expand economic impact analysis, talk about the impact of Critical Habitat. At the same time, it's making this argument that, well, Critical Habitat really doesn't mean anything. It's duplicative.

You can't have it both ways. The Sierra Club versus Fish and Wildlife Service case makes, I think, abundantly clear adverse modification Critical Habitat is the standard that means something more than jeopardy.

And until the service responds to that ruling and says well, the ruling's either right or wrong, and here's our analysis, to go through the economic impact analysis and talk about Critical Habitat does is kind of a waste of time. Or at least it's going to create more confusion than it solves.

So I think the first step a service needs to do is tell us what adverse modification of Critical Habitat means in their view.

CRAPO:

And is this something that could be resolved by agency action? Or does Congress need to step in and define this?

DOUGLAS:

Well, it all depends what the service says. I think it can be solved at agency action, that service needs to engage in rule- making right now. They have right now potentially two different rules.

Here in the Fifth Circuit, they cannot apply the existing regulations of adverse modification. If you're outside the Fifth Circuit, they have discretion to do one or the other.

But what would make perfect sense would be to initiate rule- making at this point.

SNAPE:

Okay. Senator, I would agree with John and raise the additional point that it really does depend on the species what these economic analyses and what this adverse modification standard's going to look like.

And I think that's why—I'm not saying Congress should or should not, but Congress would find it difficult to adequately deal with an issue that at this point in time really does look different in every instance.

And by way of example, and I just want to slightly disagree with my colleague to my immediate right, Mr. Douglas, but just to give on how this plays out in real world, there are about 18 pygmy owls left in southern Arizona right now. Maybe a couple hundred in Mexico. 18 adult pygmy owls in Arizona right now. About half of those owls are in northwest Tucson, which Mr. Douglas has said in his testimony today is not a big pygmy owl—important pygmy owl place.

Well, he and and I obviously disagree as to how essential northwest Tucson is for the pygmy owl. Where I think—but I think what's truly when we disagree is, is that in the back of his mind, in the back of a lot of people's mind, we're saying well that land's very expensive. It's worth a lot. We could make a lot of money developing that land. And that's really where the tension is right now. And it's not a tension over the Endangered Species Act, although that's how it's playing itself out.

It's attention in southern Arizona between the homebuilders, who obviously have a stake in this battle versus the planners who were trying to make some sense over, you know, Tucson not becoming another Phoenix.

And that's how these fights take place with not a lot of individuals left, and with us fighting over last scraps of—that—by that point in time, almost by definition are essential to the conservation of that species.

And again, may be reasonable people could agree to disagree, but I just want to point out that this is an example of how these are not easy questions sometimes. And they do not lend themselves to even clear economic analysis as to what's even really best for the people of that state.

CRAPO:

Mr. Douglas, you want to defend yourself there?

DOUGLAS:

Absolutely. It's not just—I think Mr. Snape is missing is one point. And true, my clients are sitting there and they're affected by the designation of Critical Habitat. And they're looking at a bottom line. That's their perspective.

What other perspective would anybody expect them to have? But it's a lot more complex than just economics. And I think that we make a mistake when we starting talking about the economic analysis as the separate side car component of the designation process.

It is an essential component of the process. It's supposed to inform the service when they make these decisions. It goes with that other—what I call a catch-all category, all other relevant factors.

And the decisions that are being made in northwest Tucson are not just about economics. They're about these other relevant factors. That is a highly urbanized area. I think it's not ultimately valuable for the long term recovery of the owl, because there's—the number of owls there, there's one female, one adult female, maybe four or five adult males, maybe fewer than that.

And there's no opportunity for that area ever to become the kind of place where the owl can recover, that would significantly contribute to its recovery. And that's where were disagree.

It's not just about economics. It's about other things, too. And one final point in the vein that Mr. Snape was discussing. He talks about how, you know, it plays into the decisions of local planners and what they're trying to do, and how the informational value of Critical Habitat includes perhaps the protection of other species, and what it's led to in southern Arizona with the Sinoran (?) plan.

That's where we get into a fundamental disagreement about the purpose of the Endangered Species Act. This is not an uber zoning law. The Fish and Wildlife Service is not responsible for regulating land use. They're responsible for regulating Endangered Species. And I think it's inappropriate and unlawful to use the Endangered Species Act as a land use control tool.

CRAPO:

Do you want to take a shot now?

SNAPE:

I will only say succinctly that the leading purpose, the first stated purpose of the Endangered Species Act, is to protect the eco systems upon which listed species depend. And I could say other things, but I'll just leave it at that.

CRAPO:

Well, we don't want to start a boxing match here, because we have so much common ground we've identified already. And we want to keep focused on that.

At the risk of—well does anybody else want to comment on anything we've talked about so far? I've got another area I want to jump into.

And this one, you know, I guess just want to get into this one not necessarily because it's something that we'll be focusing on in the legislation, but I guess we could.

But obviously, the amount of litigation is one of the issues that has raised significant concerns about whether we're best utilizing our resources for the administration of the act.

And in that context, the issue of the citizen suit provisions of the Endangered Species Act have been brought up. Section 11-G provides—I guess that 16 U.S.C. 1540 G for that reference, creates a private cause of action to enjoin violations of the Critical Habitat provisions and other provisions of the Endangered Species Act, and allows attorney fees in successful suits.

And there has been the observation made that these citizen suit provisions are being utilized by groups that want to bring Critical Habitat lawsuits, not so much because of the effort to protect the species, or to further the best administration of the act, but because there's a very high likelihood of prevailing and obtaining attorney fees.

And so, I guess it's a hard question to be asked is do we need to do something about the high prevalence of litigation by addressing the citizens suit provision. These are the attorney fee provisions or the availability of these easy lawsuits to file with regard to the Endangered Species Act.

Mr. Snape? I saw hands go up on the whole panel here.

SNAPE:

I don't think so. And let me give you three reasons and perspectives why that is. And I'll do so briefly.

First, S-1100 would deal with what I think the ultimately problem here, which is setting a rational timeline for the backlog. I mean, ultimately, that's what S-1100 sought to do, and probably would have done. And I think what you're seeing with the litigation is that a lot of species are deserving of Critical Habitat. And because of the resource crunch, aren't getting it.

And the way you deal with that is to cut a deal. A deal, I might add, similar to what Secretary Norton cut with the Center for Biological Diversity, hardly an inside the beltway group on multiple listings about a year and a half ago.

It can be done if we put our attention to it. So that was—I'd say that about the backlog.

The second thing I'd say is I know I'm personally involved in four lawsuits right now where I'm on Mr. Manson's side. I've become a defendant intervener in cases where industry is suing against Critical Habitat.

So I don't know how many of his numbers included industry suits, but they are growing and have done so since the Bush administration took office. So it is not just environmental groups bringing these suits.

And then the third thing, and it sort of ties everything together is we would very much appreciate having a discussion with Mr. Madsen and Steve Williams and the whole team over there. And at Commerce as well for the Marine species on what their priorities are under the act.

I mean, I talked to you about the Woodland Caribou, which has less than 20 individuals on the U.S. side of the border. As far as I can, that is not yet a super high priority of the Department of Interior. I would take their lecture on prioritization a little bit more seriously, if indeed it was accompanied with their own prioritization scheme. And I—and ultimately, though, I agree with Mr. Madsen. We have to agree on how to spend scarce resources. We can't spend resources fighting about that. And I think ultimately I think that's what's you're getting at.

But I'm sure there's other perspectives here.

CRAPO:

Why don't we just go from right to left. Anybody who wants to pitch on this, Mr. Douglas?

DOUGLAS:

Okay, I don't question the motives of interest groups that file these suits under the Endangered Species Act. I think their motives are pure. I certainly never have been involved in any case where I thought that there was a profit motive for filing a case, if you could recover your fees.

That having been said, I think it is ironic in that the Fish and Wildlife Service is currently at least partially crippled by litigation. And the federal government's funding a lot of these lawsuits.

If you want to at least make a process a little—I don't want to say harder, but at least make it such that before you file a lawsuit, you better be real thoughtful about it. And in the event that the ability to recover fees might be more of an enticement to go ahead or less of a barrier to go ahead, then you might make it—making it a little harder recovery fees might slow it down just a little bit.

If that can't occur, then I think it ought to be a little more equitable. I know that the perception is that industry groups are better funded or well funded. And they have a harder time recovering their fees. And so, at the risk of spitting in the trough, I don't want to make it to hard for some of my clients to be able to able to recover as well.

And I agree with Mr. Snape wholeheartedly for a change, that we should not alter the provisions that allow private parties access to the courts under the ESA. I, too, within the last 12 months, have been an intervenor on the side of the Fish and Wildlife Service in a lawsuit. And I would not have had the opportunity to do that and help them defend an agency action. Actually we've done this twice in the last year.

But for that provision of the ESA. And so, I don't think that that needs to be altered.

CRAPO:

Okay, Mr. Kostyack?

KOSTYACK:

Well, I'll just try to think of a point that have not yet been made, because I agree with most of the comments that have been made on this question.

First of all, I think it's important, senator, to understand that there are two different types of Endangered Species Act lawsuits. Only some of these lawsuits are brought pursuant to the ESA citizen suit provision. And those are the deadline cases.

A high percentage of the cases, and I think an increasing number of the cases, are brought pursuant to the Administrative Procedure Act, which has no attorney fee provision, by the way.

CRAPO:

Right.

KOSTYACK:

And so, I mean, maybe you understood already. I didn't mean to suggest you didn't, but the point that ought to be understood is if you're looking at citizen supervision, that you're really talking about deadline cases.

And I think that that really is where the heart of the problem is. I don't think Congress wants to even contemplate going down the road of limiting ability to sue over arbitrary and capricious government action, because obviously, both sides of this debate use that quite a lot.

On the citizen suit deadline provisions, obviously, there has been a problem. We've had a lot of litigation. And it's created a backlog. And it has affected the service's ability to set its own priorities.

Now how do we solve that problem? Does it require Congress to intervene? Or does—it's going to be solved by the administration?

I would argue that the administration has easily within its authority to solve this problem today or within a matter of weeks. And we've talked about this over a number of years. I really think we could make this happen, which is simply a matter of sitting down with the various groups, interest groups on both sides, laying out its own prioritization schedule. And my guess is the interest groups would defer to the services and their expertise on that issue.

If they were able to do that, and lay down all these Critical Habitat designations that are in the pipeline, come up with their prioritization schedule, get everybody to sign on the bottom line and simply say we will abide by this prioritization schedule, and we will all support you, the administration, if you go to Congress to get the funding, to get this Critical Habitat designation process completed, this problem would be over.

We have devoted enormous resources from the government, not just paying attorney's fees, but the government's own resources in terms of its own lawyers, the staff biologists, agency directors preparing affidavits. It is really absurd.

But it's not a problem that are unsolvable. In fact, the solution's been staring at us for years. And it really just requires a few individuals willing rolling up their sleeves and make it happen.

CRAPO:

Mr. Kightlinger?

KIGHTLINGER:

Yes, Mr. Chairman. Most of the points have already been made. Our view at least in the Endangered Species Act field is that most of this litigation is driven less by fees than more on this prioritization issue, which is a point others have made.

It's different than we have a law in California, Proposition 65, we call it, which requires warning labels about cancer causing substances to be slapped on virtually everything. And that has generated a response a whole spate of lawsuits. That is really all about attorneys fees primarily, more than it is about getting labels on glasses of water.

KIGHTLINGER:

But I don't see that so much in the Endangered Species that field. It's been the prioritization and the timing issues. We think if those addressed, you'll see a ratcheting down of the lawsuits.

CRAPO:

All right, thank you. All right, gentlemen, I'm through my questions. I have more questions, but I also have run out of time. And actually, I like it when not a lot of the other members show up, because then I get to ask more questions.;

I would appreciate it if, as we cull through some of our paperwork here, if we find things we wish we had asked, that if you would respond in writing, if we can submit some information to you.

And I want to just say thank you to all of you for your testimony and your interest in, and support of our efforts to find a path forward here. And I'm very pleased that we have been able to find what seems to be some common ground on which we can hopefully build another path forward, and get past the roadblock we ran into the Senate last time, and get this done.

As you know, I'm planning to go beyond the hearing stage and develop legislation on this. We want this to be bipartisan.

And we want it to be supported broadly. And one of the reasons that we have focused on this issue first is not only because it's one of the more significant issues that we are dealing with in the Endangered Species Act, but it's one of those where we have the ability to find some common ground and build the support to get something done.

So I most importantly appreciate your willingness to help us achieve that objective. And with that, this hearing is concluded.