# Endangered and Threatened Wildlife and Plants; Revised Designation of Critical Habitat for the Coastal California Gnatcatcher (Polioptila californica californica)

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URL: https://www.frixlaw.com/law-library/documents/fr%3A07-6003

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** December 19, 2007
- **Citation:** 72 FR 72010

## Text

DEPARTMENT OF THE INTERIOR
Fish and Wildlife Service
50 CFR Part 17
RIN 1018-AV38
Endangered and Threatened Wildlife and Plants; Revised Designation of Critical Habitat for the Coastal California Gnatcatcher (Polioptila californica californica)

AGENCY:

Fish and Wildlife Service, Interior.

ACTION:

Final rule.

SUMMARY:

We, the U.S. Fish and Wildlife Service (Service), are designating revised final critical habitat for the coastal California gnatcatcher (
Polioptila californica californica
) under the Endangered Species Act of 1973, as amended (Act). In total, approximately 197,303 acres (ac) (79,846 hectares (ha)) of habitat in San Diego, Orange, Riverside, San Bernardino, Los Angeles, and Ventura Counties, California, are being designated as critical habitat for the coastal California gnatcatcher. This revised final designation constitutes a reduction of 298,492 ac (120,795 ha) from the 2003 revised proposed rule. We are continuing our review of whether the current listing of the coastal California gnatcatcher as a subspecies should be retained or changed, as discussed in the 2003 proposed rule to revise critical habitat, and we will publish our determination separately at a later date.

DATES:

This final rule is effective January 18, 2008.

ADDRESSES:

Comments and materials received, as well as supporting documentation used in the preparation of this final rule, will be available for public inspection, by appointment, during normal business hours, at the Carlsbad Fish and Wildlife Office, U.S. Fish and Wildlife Service, 6010 Hidden Valley Road, Carlsbad, CA 92011 (telephone: 760/431-9440). The final rule, draft economic analysis and associated addendum (dated September 14, 2007), and maps are available on our Web site at
http://www.fws.gov/Carlsbad.

FOR FURTHER INFORMATION CONTACT:

Field Supervisor, Carlsbad Fish and Wildlife Office, at the above address (telephone: 760/431-9440; facsimile 760/431-5901). For information about Ventura and northwestern Los Angeles Counties, contact Field Supervisor, Ventura Fish and Wildlife Office, U.S. Fish and Wildlife Service, 2493 Portola Road, Suite B, Ventura, CA 93003 (telephone: 805/644-1766; facsimile 805/644-3958). If you use a telecommunications device for the deaf (TDD), call the Federal Information Relay Service (FIRS) at 800-877-8339.

SUPPLEMENTARY INFORMATION:

Background

It is our intent to discuss only those topics directly relevant to the revised designation of critical habitat for the coastal California gnatcatcher (
Polioptila californica californica
) in this final rule. For more information on the taxonomy, biology, and ecology of the coastal California gnatcatcher, refer to the final rule listing this species as threatened published in the
Federal Register
on March 30, 1993 (58 FR 16742), the original proposed and final critical habitat rules published in the
Federal Register
on February 7, 2000 (65 FR 5946) and October 24, 2000 (65 FR 63680), respectively, and the revised proposed rule published in the
Federal Register
on April 24, 2003 (68 FR 20228).

Species Distribution

The coastal California gnatcatcher (
Polioptila californica californica
) is a member of the old-world warbler and gnatcatcher family Sylviidae (AOU 1998. p. 3). This species occurs primarily in or near vegetation categorized as sage scrub. Within the United States, this species is restricted to coastal southern California from Ventura and San Bernardino Counties, south to the Mexican border (AOU 1957, p. 451; Atwood 1991, pp. 130-131; Garrett and Dunn 1981, p. 292). An evaluation of the historic range of the coastal California gnatcatcher indicates that about 41 percent of its latitudinal distribution is within the United States and about 59 percent is within Baja California, Mexico (Atwood 1990, p. 6). An analysis based on elevational limits associated with coastal California gnatcatcher locality records found that a significant portion (65 to 70 percent) of the species' historic range may have been located in southern California rather than Baja California, Mexico (Atwood and Bolsinger 1992, p. 159). Please see “Primary Constituent Elements” section below for a detailed discussion of the habitat requirements of the coastal California gnatcatcher.

The species was listed as threatened on March 30, 1993, because of habitat loss and fragmentation resulting from urban and agricultural development (58 FR 16742). Aside from habitat loss and fragmentation, other management issues concern fire, nonnative plants, and predation (Mock 2004, pp. 7-8).

Previous Federal Actions

On October 24, 2000, we published a final rule designating approximately 513,650 ac (207,890 ha) of land in portions of Los Angeles, Orange, Riverside, San Bernardino, and San Diego Counties as critical habitat for the coastal California gnatcatcher (65 FR 63680). Following the publication of the final rule, several lawsuits were filed against the Service by multiple parties (collectively referred to as Plaintiffs), including the Natural Resources Defense Council (NRDC); Building Industry Association of Southern California; National Association of Home Builders; Foothill/Eastern Transportation Corridor; and Rancho Mission Viejo, L.L.C. (
NRDC
v.
U.S. Dept. of Interior,
CV-99-2496 (C.D.Cal., filed 12/20/00);
Building Industry Association of Southern California et al.
v.
Norton
, CV 01-7028 (D.C.C., filed 1/17/01), and
Rancho Mission Viejo L.L.C.
v.
Babbitt,
CV 01-8412 (D.D.C. filed 12/28/00)), challenging the critical habitat designation for the coastal California gnatcatcher. On June 11, 2002, the U.S. District Court for the Central District of California granted our request for a remand of the coastal California gnatcatcher critical habitat designation so that we could reconsider the economic impact of designating any particular area as critical habitat. The Court ordered us to submit a new proposed rule to the
Federal Register
by April 11, 2003.

We published a proposed rule to revise critical habitat for the coastal California gnatcatcher in the
Federal Register
on April 24, 2003, that included approximately 495,795 ac (200,595 ha) of land in Ventura, Los Angeles, Orange, Riverside, San Bernardino, and San Diego Counties (68 FR 20228). As part of the April 24, 2003 proposed rule, we also announced and sought comment on our review of the current listing classification of the coastal California gnatcatcher as a subspecies under the Act and its potential reclassification as a distinct population segment (DPS). We accepted public comments on the proposed revision of critical habitat and the listing classification until June 23, 2003.

On April 8, 2004 (69 FR 18516), we published a notice in the
Federal Register
announcing: (1) The availability of the draft economic analysis (DEA) of the proposed revised designation for public review (dated February 24, 2004); (2) the reopening of the public comment period on the revised proposed rule; and (3) the scheduling of public hearings on the proposed revised critical habitat

designation and DEA for the coastal California gnatcatcher. We held public hearings on April 29, 2004, from 1 p.m. to 3 p.m. and from 6 p.m. to 8 p.m. in Carlsbad, California. The second public comment period closed on May 10, 2004. During the reopened comment period and the public hearings announced in the April 8, 2004,
Federal Register
, we requested comments and information applicable only to proposed revised critical habitat designation and the associated DEA. We did not ask for additional public comment on the listing classification notice.

The Service initiated work on the final revised critical habitat rule and listing classification review for the coastal California gnatcatcher, but because of other court-ordered priorities we did not complete these tasks. On February 8, 2007, a motion was filed by the Plaintiffs requesting the Court to direct us to finalize a revised critical habitat designation for the coastal California gnatcatcher. We reached an agreement with the Plaintiffs to complete a final designation on or before November 1, 2007. We sought and were granted an extension from plaintiffs of the November 1, 2007, deadline to December 3, 2007. On April 3, 2007, we published a notice in the
Federal Register
announcing the reopening of the public comment period for the April 24, 2003, proposed rule (68 FR 20228), and we accepted comments and information until May 3, 2007 (72 FR 15857). As with the April 8, 2004, notice, this April 3, 2007, notice specifically requested information only on critical habitat and the associated February 24, 2004, DEA, not the listing classification. We stated in the April 3, 2007, notice our intent to publish a listing classification determination for the coastal California gnatcatcher at a later date, separate from the critical habitat designation.

Summary of Comments and Recommendations

As discussed in the “Previous Federal Actions” section above, we have opened three public comment periods associated with the 2003 proposed rule to revise critical habitat for the coastal California gnatcatcher, the second and third comment periods of which also sought public comment on the associated DEA: April 24, to June 23, 2003 (68 FR 20228); April 8 to May 10, 2004 (69 FR 18516); and April 3 to May 3, 2007 (72 FR 15857). During these comment periods, we requested all interested parties to submit comments or information related to the proposed revised critical habitat designation, unit boundaries, species occurrence information and distribution, land use designations that may affect critical habitat, potential economic effects of the revised proposed designation, benefits associated with critical habitat designation, areas considered but not proposed for designation, and the associated rationale for the non-inclusion/exclusion of these areas, and methods used to designate critical habitat.

We informed all appropriate entities of the opening of these comment periods, including State and Federal agencies, County governments, elected officials, and other interested parties through telephone calls, letters, and news releases sent by facsimile, by U.S. mail, and/or by electronic mail. During the April 24 to June 23, 2003, comment period, we also invited public comment through the publication of notices in the following newspapers: Los Angeles Times, Orange County Register, The Press-Enterprise, San Bernardino Sun, and the San Diego Union-Tribune. During the April 8 to May 10, 2004, comment period, we announced the date and times of two public hearings that were to be held on the April 24, 2003, proposed revised critical habitat designation and DEA. Hearings were held on April 29, 2004, from 1 p.m. to 3 p.m. and from 6 p.m. to 8 p.m. in Carlsbad, California. Transcripts of these hearings are available for inspection (see
FOR FURTHER INFORMATION CONTACT
section above).

We received a total of 117 comment letters from Federal, State, and local agencies, private organizations, and individuals during the three comment periods. We reviewed all comments for substantive issues and new information regarding critical habitat or the coastal California gnatcatcher. We grouped similar comments into general issue categories relating to the proposed revised critical habitat designation and the associated DEA, and we identify them below. Substantive comments and issues raised in the public comment letters or at the hearings have either been incorporated directly into this final rule or are addressed below.

Peer Review Comments

In accordance with our policy published on July 1, 1994 (59 FR 34270), during the April 24 to June 23, 2003, comment period, we requested scientific review of the proposed revised critical habitat designation and our review of the listing classification of the coastal California gnatcatcher from 16 biologists with knowledge of the species, avian systematics, or conservation genetics. Nine of the 16 reviewers submitted comments on the listing classification review. All of these reviewers restricted their comments to the DPS and related taxonomic issues, except for technical corrections related to the proposed revised critical habitat designation. The technical corrections have been incorporated into this final rule. However, we will address the listing classification and related taxonomic issues in the final DPS determination to be published in the
Federal Register
separately at a later date.

Public Comments and Comments From Other Federal Agencies

Issue 1: Biological Issues

Comment 1:
Some commenters suggest that we did not use the “best available science” or that the information we used is outdated or flawed. These commenters believe that use of flawed data incorrectly influenced where we identify proposed critical habitat, resulting in either the inclusion of too much land in proposed critical habitat or the omission of areas that we should have included in the proposed critical habitat designation. Other commenters believe that we did not describe the analytical process used to identify critical habitat with enough detail to allow the public to review the rationale for inclusion of specific parcels of land.

Our Response:
Section 4(b) of the Act; our Policy on Information Standards Under the Endangered Species Act, published in the
Federal Register
on July 1, 1994 (59 FR 34271); and Section 515 of the Treasury and General Government Appropriations Act for Fiscal Year 2001 (Pub. L. 106-554; H.R. 5658) and the associated Information Quality Guidelines issued by us, provide criteria, establish procedures, and provide guidance to ensure that decisions made by us represent the best scientific and commercial data available. They require our biologists, to the extent consistent with the Act and with the use of the best scientific and commercial data available, to use primary and original sources of information as the basis for recommendations to designate critical habitat. As such, we based the proposed revised critical habitat designation for the coastal California gnatcatcher on the best available peer-reviewed published literature, gray literature (non-published or non-peer-reviewed survey or research reports), survey information, and vegetation data. We incorporated site specific survey information and vegetation data into our Geographic Information System (GIS) layers and used that as the basis for the revised

critical habitat proposal. Given the scale of the designation and resource limitations, it was not possible to provide a parcel-by-parcel justification of lands included in the proposed revised designation. However, we have attempted to clarify our justification for and methodology used in the delineation of the critical habitat boundaries in this revised final rule.

Comment 2:
Some commenters suggested that we should not identify the entire range of the coastal California gnatcatcher as critical habitat. Other commenters suggested that we did not adequately distinguish between occupied, unoccupied, and linkage areas when delineating critical habitat.

Our Response:
Critical habitat is defined in section 3 of the Act as (i) the specific areas within the geographical area occupied by a species, at the time it is listed in accordance with the Act, on which are found those physical or biological features (I) essential to the conservation of the species and (II) that may require special management considerations or protection; and (ii) specific areas outside the geographic area occupied by a species at the time it is listed, upon a determination that such areas are essential for the conservation of the species. In developing the revised proposed rule, we considered the geographical area occupied by the species at the time of listing, and within that broad geographical area, we identified those areas that, based on the best scientific and commercial data available, contain physical and biological features essential to the species' conservation (primary constituent elements (PCEs)). We did not include all locations within the geographical area occupied by the species where individuals have been observed, nor did we include areas outside of the geographical area occupied by the species at the time of listing as we do not consider such areas to be essential to the conservation of the species. In developing this final rule, we reviewed each critical habitat unit and, where appropriate, further refined the unit boundaries to ensure that we include only the specific areas containing the PCEs for the coastal California gnatcatcher. We identified the essential physical and biological features (PCEs) contained in each critical habitat unit. All critical habitat designated for the coastal California gnatcatcher is within the geographical area occupied by the species and is likely used by them for breeding, feeding, sheltering, or dispersing at some point in time. Please see the “Criteria Used To Identify Critical Habitat” section below for a detailed discussion. Thus, under the broad statutory definition of critical habitat quoted above, all critical habitat designated in this final rule is within the geographical area occupied by the species. This differs from the common perception that occupancy means the detectable presence of a species at all times throughout the breeding and non-breeding seasons.

Comment 3:
Several commenters suggested that the justification for the inclusion of linkage areas was inadequate.

Our Response:
As discussed in greater detail in the “Background” section of the April 24, 2003, revised proposed rule and in the “Primary Constituent Elements” section of this final rule, available information indicates that dispersal of juvenile coastal California gnatcatchers generally requires a corridor of native vegetation (
i.e.
, linkage) to facilitate the exchange of genetic material and provide a path for recolonization of areas from which the species has been extirpated. Therefore, natal dispersal, through corridors, is an important aspect of the biology of a non-migratory, territorial bird such as the coastal California gnatcatcher. We identified these linkages based on survey information, vegetation maps, and the known dispersal capabilities of juvenile gnatcatchers. We are not designating as critical habitat areas that are suspected to provide a linkage between populations, but for which upon a reevaluation we have determined that we have inadequate information (
e.g.
, some lands in Unit 8 and all lands in Unit 11).

Comment 4:
Some commenters questioned how lands in San Bernardino County could be considered essential when, according to the listing rule (58 FR 16742), the species was considered extirpated from that County.

Our Response:
As discussed in the “Criteria Used To Identify Critical Habitat” section of the April 24, 2003, proposed rule and in the same section below, at the time of listing in 1993, coastal California gnatcatchers were not known to occur in San Bernardino County except from historic museum records. However, subsequent to the publication of the final listing rule, Davis
et al.
(1998, pp. 362-364) summarized survey efforts in San Bernardino County, documenting species occurrences, including some breed pairs, from several different locations in 1990, 1993, 1994, and 1995. Therefore, based on pre-listing occupancy data and museum records, we consider San Bernardino County to have been occupied at the time of listing. As stated in the April 24, 2003, proposed rule, populations of coastal California gnatcatchers in San Bernardino County are at the northern extent of the species' inland distribution, and the elevation and vegetation in which they occur may be unique within the species' range. However, we have reevaluated the importance of lands in San Bernardino in Unit 11 and have determined that lands in Unit 11 are not essential to the conservation of the species. Therefore, we have removed lands in Unit 11 from this final designation (see “Summary of Changes From the 2003 Proposed Rule To Revise Critical Habitat” section below for a detailed discussion of the removal of these lands). However, we are designating as critical habitat lands in southern San Bernardino County in Unit 10 (see “Critical Habitat Designation” section below).

Comment 5:
The U.S. Forest Service (USFS) commented that most areas of the Cleveland National Forest proposed for inclusion in critical habitat are chaparral, and do not support the PCEs of coastal California gnatcatcher habitat according to the model cited on pages 20239 through 20249 of the April 24, 2003, proposed rule. They further commented that most of the National Forest System lands proposed for designation are located at considerable distances from any coastal sage scrub.

Our Response:
As discussed in the “Background” section of the April 24, 2003, revised proposed rule and in the “Primary Constituent Elements” section of this final rule, though the majority of coastal California gnatcatchers are likely restricted to sage scrub vegetation, availability of these non-sage scrub areas (including chaparral) is essential during certain times of the year, particularly during drought conditions, for dispersal, foraging, or nesting. Also, as discussed in the “Proposed Critical Habitat Designation” section of the April 24, 2003, revised proposed rule, Cleveland National Forest (identified in Unit 2) is occupied by a core population of the species and contains canyons and corridors that provide linkages to preserve lands adjacent to this unit. Therefore, this area on the Cleveland National Forest is included in this final designation.

Comment 6:
One commenter stated that since 2003, development proposals and fires have continued to imperil the coastal California gnatcatcher and its habitat. Projects such as the South Orange County Transportation Infrastructure Improvement Project and wildfires will impact coastal sage scrub that the species depends on for survival. The commenter stated that the occurrence of such events [projects and

wildfires] underscores the necessity of designating sufficient habitat, beyond what is presently proposed, to comply with the mandate of the Act, requiring that the Service conserve and recover the species.

Our Response:
Critical habitat is defined in section 3 of the Act as (i) the specific areas within the geographic area occupied by a species, at the time it is listed in accordance with the Act, on which are found those physical or biological features (I) essential to the conservation of the species and (II) that may require special management considerations or protection; and (ii) specific areas outside the geographic area occupied by a species at the time it is listed, upon a determination that such areas are essential for the conservation of the species. We have identified areas within the geographical area occupied by the species at the time of listing that contain features in sufficient quantity and spatial arrangement we have determined to be essential to the conservation of the species and that may require special management considerations or protection. Based on current knowledge, we do not believe that areas beyond those (1) included in this final designation, (2) exempt from critical habitat designation under section 4(a)(3) of the Act (see “Application of Section 4(a)(3) of the Act” section below), or (3) excluded from critical habitat designation under section 4(b)(2) of the Act (see “Exclusions under Section 4(b)(2) of the Act” section below), are essential for the conservation of the coastal California gnatcatcher. However, we recognize that designation of critical habitat may not include all of the habitat areas that may eventually be determined to be necessary for the recovery of the species. For these reasons, critical habitat designations do not signal that habitat outside the designation is unimportant or may not be required for recovery.

Comment 7:
The County of San Diego commented that based on the observations of local biologists, they believe that coastal sage scrub that burned during the 2003 fires is generally recovering and reiterated that fire is a natural component of sage scrub and chaparral ecosystems. The County further stated that, although the 2003 fires were extensive, they believe that the general distribution of coastal sage scrub and coastal California gnatcatchers will soon return to pre-fire conditions. Based upon this, they do not believe that we should adjust proposed revised critical habitat due to the 2003 fires. Another commenter stated that any lands that we proposed for designation before the wildfires should remain as critical habitat in the final rule, regardless of whether such land is presently occupied or unoccupied since these lands are essential to the conservation of the species and require special management considerations or protection. This commenter further stated that the fires have only increased pressure on the survival of the coastal California gnatcatcher, and lands that were previously occupied are likely to be occupied again.

Our Response:
We agree that although the 2003 fires were extensive, the general distribution of coastal sage scrub and coastal California gnatcatchers is likely to return to pre-fire conditions. As discussed below in the “Primary Constituent Elements” section of this final rule, fire is a natural component of the southern California landscape and plays an important role in regulating coastal sage scrub distribution, density, and species composition. Our determination of areas containing the PCEs essential for the conservation of the coastal California gnatcatcher takes into account temporal variations in coastal sage scrub habitat resulting from periodic fires, which are a normal component of this dynamic, fire-adapted landscape. Based on this, we did not remove areas from this final designation that were included in the April 24, 2003, proposed revised designation that burned in the 2003 fires or the recent 2007 fires.

Comment 8:
One commenter objected to the inclusion of large areas of their property (Newhall Land and Farming Company lands) in the Santa Clarita Valley in proposed critical habitat Unit 13. The objection is based on negative coastal California gnatcatcher survey data over multiple years, the loss of habitat due to wildfires in 2003, and judgment of consultants who say that the Service's contention that Unit 13 serves as a linkage between populations in the San Gabriel and Santa Susana Mountains is incorrect.

Our Response:
After a re-evaluation of lands within Unit 13 included in the April 24, 2003, revised proposed rule, we have determined that portions of the Santa Clarita Valley included in the proposed revised designation are not essential to the conservation of the coastal California gnatcatcher. Numerous surveys have been conducted in the Santa Clarita Valley (including Newhall Land and Farming Company lands) but no breeding pairs have been observed. In August 2007, an individual bird was observed on Newhall Land and Farming Company (Crawford 2007, unpaginated). However, breeding on the site has not been confirmed. While the occurrence of this individual may indicate that the use of this area for dispersal, we have determined that this area does not currently have the spatial configuration and quantity of PCEs essential to the conservation of the species. Therefore, we have removed these areas, including the majority of the lands owned by the Newhall Land and Farming Company, from this final designation (see “Summary of Changes From the 2003 Proposed Rule To Revise Critical Habitat” section below for a detailed discussion).

However, we still consider the remaining lands in Unit 13 to be within the geographical area occupied by the coastal California gnatcatcher at the time of listing and, as explained in our response to Comment 7 above, to contain physical and biological features in spatial arrangement and quantity (i.e., PCEs) essential for the conservation of the species, although such features have been temporally affected by the 2003 fire. We believe that habitat burned by the 2003 Simi wildfire will support breeding pairs of coastal California gnatcatchers as the area recovers. The commenter stated that this habitat is likely to burn prior to its recovery, which could potentially change the vegetative community type to weedy species, rendering it unsuitable for coastal California gnatcatcher colonization. This comment is based on speculation and not supported by the fire history of the area (the area had not burned for several years prior to 2003 and supported large areas of habitat suitable for the coastal California gnatcatcher). Also, based on currently available data, none of the areas included in the 2003 proposed revised critical habitat designation that burned in the 2003 fires burned in the 2007 fires. However, the full extent of the 2007 fires is still being assessed. Furthermore, the commenter stated that the likelihood of an area being colonized by coastal California gnatcatchers after it has recovered from a burn is probably dependent on the proximity of founder populations that can disperse to the site rather than the structure of its habitat. Habitat in Unit 13 currently contains populations of coastal California gnatcatchers in areas that did not burn in 2003 or 2007, which given the opportunity and time, should colonize recovered habitat (see “Primary Constituent Elements” section below for a detailed discussion).

The area within Unit 13 included in this revised final designation that connects the San Gabriel and Santa Susana Mountains contains the physical and biological features in spatial arrangement and quantity (i.e., PCEs)

essential for the conservation of the species and serves as an essential linkage between the two isolated populations: a core population in the Moorpark area in Ventura County and the pairs documented in the foothills of the San Gabriel Mountains in Los Angeles County. Without this linkage, the population located in Ventura County has no other natural area connecting them with populations located east and south of Ventura County. Also, without the natural areas and habitat located on the south-facing slopes of the Santa Susana and San Gabriel Mountains, these two populations of coastal California gnatcatchers (in Moorpark area and in foothills of San Gabriel Mountains) would be completely isolated and prone to extirpation. Therefore, as part of Unit 13, we have designated critical habitat along the south-facing slopes of the Santa Susana and San Gabriel Mountains (see “Critical Habitat Designation” section below for more details).

Issue 2: Mapping and Methodology

Comment 9:
Several commenters suggested that the proposed rule to revise critical habitat is overly broad and contains significantly more acreage than the acreage estimated as habitat in the original listing rule. Other commenters objected to the fact that the mapping scale of the proposed critical habitat includes areas that do not contain the PCEs for the coastal California gnatcatcher.

Our Response:
Since the listing of the coastal California gnatcatcher as threatened in 1993 (58 FR 16742), a significant amount of survey information has become available that provides a much more complete dataset delimiting the range of the species within the United States. We used this new survey information in mapping areas containing the PCEs required by the species throughout its range.

We are required to describe critical habitat with specific limits using reference points and lines as found on standard topographic maps of the area (50 CFR 424.12(c)). In the April 24, 2003, proposed revised designation, we delineated critical habitat based on Universal Transverse Mercator (UTM) gridlines set every 328 feet (ft) (100 meters (m)). We overlaid these 100 meter square grids on areas determined to contain the PCEs required by the species. While we removed entire grid squares that did not contain the PCEs for the coastal California gnatcatcher, portions of grid squares that did not contain PCEs were inadvertently included within the boundaries of our proposed revision of critical habitat due to mapping limitations. However, in this final designation, we revised the methodology used to delineate critical habitat unit boundaries (see “Criteria Used To Identify Critical Habitat” section below for a detailed discussion). Using this revised methodology allowed us to describe more precisely boundaries associated with areas that we have determined to contain the PCEs and to eliminate additional areas that do not contain the PCEs for the species.

Comment 10:
Several commenters suggested that the PCEs defined as being essential for the coastal California gnatcatcher are not specific and appear to encompass most natural plant communities in southern California. Furthermore, the commenters assert that the proposed rule to revise critical habitat does not explain why the PCEs are essential.

Our Response:
The PCEs for the coastal California gnatcatcher are based on data from peer-reviewed published literature, gray literature (non-published or non-peer-reviewed survey or research reports), and biologists knowledgeable about the species and its habitat requirements. The PCEs, as described, represent the specific physical and biological features essential for the conservation of the coastal California gnatcatcher, such as habitat for breeding, foraging, and dispersal. The coastal California gnatcatcher, while considered an obligate (requires a specific habitat type to survive) of sage scrub plant communities, utilizes other plant communities and associations such as chaparral, grassland, and riparian (areas near a source of water) habitats where they occur in proximity to sage scrub. These non-sage scrub habitats are used for dispersal and foraging. Though the majority of coastal California gnatcatchers are likely restricted to sage scrub, availability of these non-sage scrub areas is essential during certain times of the year, particularly during drought conditions, for dispersal, foraging, or nesting (see the “Primary Constituent Elements” section below for a detail discussion of this species' habitat requirements).

These additional plant communities and associations have become more important to the conservation of the coastal California gnatcatcher with the continued loss of coastal sage scrub habitat due to urban and agricultural development. For this reason, we categorize the PCEs in spatial arrangement and structure and function to capture the plant communities, associations, and corridors of vegetation (i.e., linkages) that are essential for conservation of coastal California gnatcatcher and that provide connectivity between populations. In this final rule, we have clarified and refined the PCEs to enable landowners and managers to more clearly identify habitat containing features essential to the conservation of the species. We have also provided a clearer connection between the PCEs and the basic components of the life history of the coastal California gnatcatcher to show why these elements are essential.

Comment 11:
Several commenters stated that the model used to assist in identifying PCEs is flawed and should not have been used.

Our Response:
The model is one of many tools used to define the specific areas containing the PCEs for the coastal California gnatcatcher and, therefore, to define the areas proposed as revised critical habitat as explained in the Methods section, we used many other categories of information, including coastal California gnatcatcher presence and absence survey data, vegetation data, land use data, and aerial photography to delineate areas containing features in a spatial arrangement that provides the structure and function essential to the conservation of the species. Most coastal sage scrub patches in Orange and San Diego counties, the Counties covered by the model, have been surveyed for the species at least once. These survey data were the primary information used, in conjunction with aerial photography, in those Counties. We verified the accuracy of the model using survey data, and then we used the model primarily to help identify high quality breeding habitat in Orange and San Diego counties in locations where no survey information was available.

The model used in the proposed rule to revise critical habitat was developed during the planning process for the North San Diego County Multiple Habitat Conservation Plan. Though many potential parameters could be used in a model, we selected four parameters for our model: habitat patch size, slope, temperature, and precipitation. The predictive power of the model beyond the specific geographical area for which it was developed was tested with a large coastal California gnatcatcher data set of abundance information from surveys conducted in 2002 during the breeding season. This data set was collected to provide an estimate of current population levels in Orange and San Diego counties, and it provided a useful and appropriate test of the predictive power of the model. Forty-eight percent of the points located in habitat modeled as very-high quality were occupied, 28

percent of the points located in high-quality habitat were occupied, 8 percent of the points in medium-quality habitat were occupied, and none of the points in low-quality habitat were occupied (see “Criteria Used To Identify Critical Habitat” section below for more detailed discussion). We used this model to assist us in identifying breeding habitat quality because of the predictive power of the model.

Comment 12:
Several commenters identified specific areas that they thought should not be designated as critical habitat. The CDFG requested that CDFG-owned conservation lands be removed from critical habitat since these lands are already protected and managed for the coastal California gnatcatcher as well as other listed and sensitive species. They further commented that designating critical habitat on State lands within the CDFG's jurisdiction would provide no added conservation benefit and would be detrimental to State conservation efforts, as critical resources would be diverted from substantive resource protection to procedural regulatory efforts.

Our Response:
When commenters provided us site-specific documentation that explained why an area should not be designated critical habitat, we evaluated that information in accordance with the definition of critical habitat in section 3(5)(A) of the Act and the provisions of section 4(b)(2) of the Act. Following our evaluation of the new information, we made a determination as to whether modifications to the critical habitat boundaries were warranted. In the preparation of this final rule, we reexamined and refined the critical habitat boundaries to remove those areas that do not, or are not likely to, contain the physical and biological features in spatial arrangement and quantity (i.e., PCEs) essential for the conservation of the coastal California gnatcatcher or areas that may have one or more of the PCEs but are no longer essential to the conservation of the species (e.g., area does not contain a core population or provide important linkage habitat). We also exempted and excluded additional areas from this revised final designation under sections 4(a)(3)(B) or 4(b)(2) of the Act. Please refer to the “Summary of Changes From the 2003 Proposed Rule To Revise Critical Habitat” section below for a detailed discussion of changes from the revised proposed rule and the “Application of Section 4(a)(3) of the Act” and “Exclusions under Section 4(b)(2) of the Act” sections for a discussion of our exemption or exclusion of additional lands in this revised final rule.

Regarding the CDFG's request that CDFG-owned conservation lands be removed from critical habitat, we excluded from this final designation, under section 4(b)(2) of the Act, three ecological reserves (McGinty Mountain, Otay Mountain and Rancho Jamul) in Unit 1 and five ecological reserves (Pilgrim Creek, Carlsbad Highland, Agua Hedionda Lagoon, Batiquitos Lagoon, and San Elijo Lagoon) in Unit 3 based on management actions that are or will be conducted under the San Diego Multiple Species Conservation Program (MSCP) and the San Diego Multiple Habitat Conservation Plan (MHCP), respectively. While CDFG is not a permittee to these regional HCPs, they have committed to manage their lands consistent with the MSCP and MHCP regional conservation plans (see
“Other Conservation Partnerships—Exclusions Under Section 4(b)(2) of the Act”
section below for a detailed discussion). The only CDFG lands included in this final revised designation are approximately 9 ac (4 ha) of the San Luis Rey River Ecological Reserve in Unit 5 (see “Table 3” below). Since this 9 ac (4 ha) is not within an area covered by an approved HCP or other management plan and the PCEs may require special management protections or considerations, this area was not excluded from this final designation.

Issue 3: Regulatory Impacts and Exclusions

Comment 13:
Several commenters requested that their individual properties be excluded from critical habitat because they have completed a section 7 consultation for the coastal California gnatcatcher.

Our Response:
We disagree that all lands addressed by a section 7(a)(2) consultation should be excluded from critical habitat. However, we agree that lands that no longer contain PCEs as a result of a section 7 consultation should be removed from the revised designation. As discussed in the “Summary of Changes from the 2003 Proposed Rule To Revise Critical Habitat” section below, we used recent aerial imagery to re-evaluate and subsequently remove lands that do not contain the physical and biological features essential to the conservation of the species.

Comment 14:
Some commenters stated that the protections provided to the coastal California gnatcatcher by the 4(d) special rule for the species at 50 CFR 17.41(b) are more comprehensive than those provided by critical habitat. Therefore, lands within jurisdictions enrolled in the Natural Community Conservation Planning (NCCP) process and that are subject to a coastal California gnatcatcher habitat loss permit under the 4(d) special rule should be excluded from the final critical habitat designation.

Our Response:
The Special Rule under section 4(d) of the Act at 50 CFR 17.41(b) allows for a limited amount of incidental take of coastal California gnatcatchers (associated with the loss of up to five percent of sage scrub, i.e., coastal California gnatcatcher habitat) for an interim period of time while enrolled jurisdictions are actively engaged in preparing an NCCP plan, provided the activities resulting in such take are conducted in accordance with the NCCP Conservation and Process Guidelines finalized by the California Department of Fish and Game (CDFG) updated in January 1998. These guidelines rely on the voluntary commitment of jurisdictions to engage in the subregional conservation planning process and complete a Habitat Conservation Plan (HCP) or NCCP. While we trust that jurisdictions will fulfill their commitment to complete conservation plans, this voluntary enrollment does not assure that such plans will be completed. As such, the 4(d) special rule protections for coastal California gnatcatcher habitat provided through a participating jurisdiction's enrollment in the NCCP process are temporary and are not assured; such protections are lost if the enrolled jurisdiction elects to withdraw from the NCCP program. Given the temporary nature of the habitat protections afforded by the special 4(d) rule for the coastal California gnatcatcher, lands containing PCEs essential for the conservation of this species that are covered by the 4(d) rule do not warrant exclusion from critical habitat.

Comment 15:
Naval Weapons Station Seal Beach, Detachment Fallbrook (Detachment Fallbrook), Marine Corps Base Camp Pendleton (MCB Camp Pendleton), and Marine Corps Air Station Miramar (MCAS Miramar) suggested that they should be exempt or excluded from critical habitat under sections 3(5)(A), 4(b)(2), or 4(a)(3)(B) of the Act based on their approved Integrated Natural Resource Management Plans (INRMPs) and adverse effects to military training and readiness.

Our Response:
We have re-examined the inclusion of lands on these three military installations in light of the National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 108-136), which amended the Act. Specifically,

section 4(a)(3)(B) of the Act (16 U.S.C. 1533(a)(3)(B)(i)) states that the Secretary shall not designate as critical habitat any lands or other geographical areas owned or controlled by the Department of Defense, or designated for its use, that are subject to an INRMP prepared under section 101 of the Sikes Act (16 U.S.C. 670a), if the Secretary determines in writing that such plan provides a benefit to the species for which critical habitat is proposed for designation. Following a review of the INRMPs prepared for each of these three installations, we have determined that the approved INRMPs for each provides a benefit the coastal California gnatcatcher, its habitat, and its PCEs on the subject lands, and we have exempted these lands from this final designation under section 4(a)(3)(B) of the Act (see “Application of Section 4(a)(3) of the Act” below for a detailed discussion).

Comment 16:
The Pala Band of Mission Indians and the Rincon Band of Luiseño Indians (on behalf of the Capitan Grande Reservation) expressed support for and concurred with the exclusion of those Tribal lands from critical habitat designation, stating that failure to designate these lands as critical habitat will not result in the extinction of the coastal California gnatcatcher. The Bureau of Indian Affairs opposed the inclusion of Capitan Grande and Pala Tribal lands in the designation of critical habitat for the coastal California gnatcatcher. They note that Tribal lands have not been subjected to the same development philosophies and pressures that have occurred on non-Indian lands and that Tribal conservation practices and Tribal resource management programs should be rewarded when we are considering designation of critical habitat.

Our Response:
As stated in the revised proposed rule, physical and biological features essential to the conservation of the coastal California gnatcatcher exist on Pala Reservation lands. We considered but did not propose lands on the Pala Reservation in the April 24, 2003, proposed rule and we affirm our exclusion of these areas in this final rule (see “Exclusion of Pala Band of Mission Indians Tribal Lands Under Section 4(b)(2) of the Act—American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act” section below for a detailed discussion). We do not consider the physical and biological features on lands within the Capitan Grande Reservation to be essential to the conservation of the coastal California gnatcatcher. Therefore, the lands containing these features were not included in the April 24, 2003, revised proposed rule and are not included in this final designation of critical habitat for the coastal California gnatcatcher.

Comment 17:
One commenter stated that our analysis under section 4(b)(2) of the Act for excluding lands from the Pala Band of Mission Indians Reservation from proposed critical habitat for the coastal California gnatcatcher on the basis of our efforts to preserve partnerships should also extend to private landowners.

Our Response:
As discussed in the “Exclusion of Pala Band of Mission Indians Tribal Lands Under Section 4(b)(2) of the Act—American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act” section below, we are working with the Pala Band of Mission Indians and other Tribes under Secretarial Order 3206, “American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act” (June 5, 1997); the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951); Executive Order 13175; and the relevant provision of the Departmental Manual of the Department of the Interior (512 DM 2) to preserve our partnership. We readily acknowledge our responsibilities to work directly with Tribes in developing programs for healthy ecosystems, make information regarding federally listed species available to Tribes, and remain sensitive to Indian sovereignty and culture. We further acknowledge that special considerations flow from our government-to-government relationship with Indian Tribes, the U.S. trust responsibility for Tribal natural resources it holds in trust, and the fact that Tribal lands are not subject to the same controls as Federal public lands. The special considerations inherent in our trust responsibilities to Indian tribes do not apply to private landowners. However, we are continuing to work to develop positive partnerships with private landowners that result in benefits to the coastal California gnatcatcher, through conservation tools such as HCPs and Safe Harbor Agreements. We recognize that private landowners play a significant role in helping to recover listed species, including the coastal California gnatcatcher, and therefore we continue to seek opportunities to work cooperatively with landowners to conserve the coastal California gnatcatcher and its habitat.

Comment 18:
Several commenters, including the CDFG, were supportive of our proposal that lands covered by approved HCPs that provide take authorization for the coastal California gnatcatcher be excluded from critical habitat because they do not meet the definition of critical habitat or because the benefits of exclusion outweigh the benefits of designating such lands as critical habitat. These commenters stated that exclusion of lands covered by approved HCPs benefits partnerships, benefits future planning, prevents additional regulation, avoids legal challenges that HCPs will result in “adverse modification” of critical habitat, and supports implementation agreements. They also stated that without the exclusion of HCPs from critical habitat, ongoing and future HCP planning efforts would be jeopardized. Several commenters stated that HCPs protect habitat on a larger scale, rather than a piece-meal “project-by-project” approach that is achieved through the section 7 consultation process. Commenters further stated that HCPs provide a much greater conservation benefit than critical habitat designation to private land areas because HCPs incorporate management measures and protections for conservation lands designed to preserve, restore, and enhance the lands' value as habitat for covered species.

Our Response:
We recognize that critical habitat is one of many tools available to help conserve federally listed species and agree that approved HCPs are one of the most important tools for reconciling land use with the conservation of listed species on non-Federal lands. Section 4(b)(2) of the Act allows us to exclude from critical habitat areas where the benefits of exclusion outweigh the benefits of designation, provided the exclusion will not result in the extinction of the species. We believe that in most instances the benefits of excluding lands covered by approved HCPs from critical habitat designations will outweigh the benefits of including them. For this final designation, we have determined that the benefits of exclusion outweigh the benefits of designation for all approved and legally operative HCPs in which coastal California gnatcatcher is a covered species (see “Exclusions Under Section 4(b)(2) of the Act” section below for a detailed discussion).

Comment 19:
Several commenters, including the CDFG, stated that the benefits of excluding specific lands under section 4(b)(2) of the Act include the development of much needed housing, increased local government funding, decreased litigation burdens, production of new jobs, creation of additional habitat preserves, greater participation in HCPs, and/or promotion of smart growth.

Our Response:
As discussed in the “Effects of Critical Habitat” section of this rule, section 4(b)(2) of the Act and 50 CFR 424.19 require us to consider the economic impact, impact on national security, and any other relevant impact, of designating any particular area as critical habitat. We may exclude an area from critical habitat if we determine that the benefits of exclusion outweigh the benefits of designating the specific areas as critical habitat, unless that exclusion will lead to extinction of the species. We have considered and analyzed the benefits of exclusion described under section 4(b)(2) of the Act and we discuss them in this final rule (see “Exclusions Under Section 4(b)(2) of the Act” section below for a detailed discussion).

Comment 20:
Several commenters requested that exclusions of HCPs under section 4(b)(2) of the Act should also apply to pending HCPs and lands enrolled in the NCCP program because the designation may have a chilling effect on entities pursuing HCP approval and diminish the assurances that are one of the key reasons entities participate in HCPs. Commenters further stated that the net result of designating lands as critical habitat within jurisdictions currently working to develop an HCP/NCCP will result in a diversion of scarce resources to address the uncertainties, probable litigation, and additional section 7 consultations that would be created by such designation and that these diversions of resources amount to a “relevant impact” under section 4(b)(2) and that the Service should not designate lands within pending HCPs for this reason alone.

Our Response:
Protections for coastal California gnatcatcher habitat provided through a participating jurisdiction's enrollment in the NCCP process is temporary, is not legally assured, and would be lost if the jurisdiction elects to withdraw from the NCCP program. In addition, because HCPs/NCCPs under development that propose to cover the coastal California gnatcatcher are not finalized, the Service has not determined whether they are adequate to support the issuance of incidental take permits under section 10 of the Act or the Special Rule for the coastal California gnatcatcher under section 4(d) of the Act at 50 CFR 17.41(b). Also, the conservation measures proposed or under consideration in such plans have not been assured through binding permit conditions. However, we may consider excluding under section 4(b)(2) of the Act habitat covered by a pending HCP if we determine that an applicant has demonstrated a sustained commitment to develop the HCP to comply with section 10(a)(1)(B) of the Act, the California Endangered Species Act, and the State's NCCP program. In the past, we have excluded habitat covered by pending HCPs that have undergone public review as a result of the National Environmental Policy Act (NEPA) (42 U.S.C. 4321
et seq.
) review process. Currently, there are no pending HCPs that have undergone public review as a result of the NEPA review process. Therefore, we are not excluding any pending HCPs from this final revised critical habitat designation.

Comment 21:
Several commenters, including the CDFG, suggested that designated critical habitat be removed concurrently with approval of future HCPs. Commenters recommended the establishment of a set of standards for HCPs/NCCPs that would provide for their automatic removal from critical habitat designated for species covered under such plans upon the issuance of the permit, if these standards are met.

Our Response:
Revisions to critical habitat are governed by section 4 of the Act and require publication of a proposed rule and an opportunity for public comment on the proposed revision prior to removing lands from critical habitat designation. Future revisions to critical habitat based on the approval of HCPs must follow this statutory process. We anticipate that some future HCPs will include the coastal California gnatcatcher as a covered species and provide for its long-term conservation. We expect that HCPs undertaken by local jurisdictions (e.g., counties and cities) and other parties will identify, protect, and provide appropriate management for those specific lands within the boundaries of the plans that are essential for the long-term conservation of the species.

Section 10(a)(1)(B) of the Act states that HCPs must meet issuance criteria, including minimizing and mitigating any take of the listed species covered by the permit to the maximum extent practicable, and that the taking must not appreciably reduce the likelihood of the survival and recovery of the species in the wild. We fully expect that our future analyses under section 7 of the Act of HCPs and section 10(a)(1)(B) permits will show that covered activities carried out in accordance with the provisions of the HCPs and section 10(a)(1)(B) permits will not result in the destruction or adverse modification of critical habitat designated for the coastal California gnatcatcher. The take minimization and mitigation measures provided under these HCPs are expected to adequately protect the lands designated as critical habitat in this rule, such that the value of these lands for the survival and recovery of the coastal California gnatcatcher is not appreciably diminished through direct or indirect alterations. If an HCP that addresses the coastal California gnatcatcher as a covered species is ultimately approved, we may elect to revise the critical habitat boundaries through a subsequent rulemaking if available funding and program priorities allow us to do so.

Comment 22:
Several commenters stated that the critical habitat rule should not distinguish between individual and regional HCPs.

Our Response:
Our evaluation of the benefits provided to listed species and their habitat by HCPs under section 4(b)(2) of the Act is the same regardless of HCP scale (e.g., regional or individual). We distinguished between the two types of HCPs solely to organize our discussion of areas considered but not proposed as critical habitat under section 4(b)(2) of the Act by grouping HCPs of a similar scale. We have continued this grouping of HCPs of similar scale in this final rule (see “Exclusions Under Section 4(b)(2) of the Act” section below).

Comment 23:
One commenter stated that the establishment of HCPs in no way removes the attendant lands from the scope of section 4(a)(3) of the Act, which requires the designation of critical habitat, and states that the Service is legally required to designate critical habitat irrespective of other agencies' management considerations. Therefore, the approval of incidental take permits for completed regional HCPs, including the Southern Orange County Subregion HCP and Western Riverside County MSHCP, and pending HCPs, including the City of Rancho Palos Verdes, should not reduce the Service's proposed designation of critical habitat for the coastal California gnatcatcher.

Our Response:
As discussed in our response to comment 20, we are not excluding any pending HCPs from this critical habitat designation. We are, however, excluding lands covered by the Southern Orange County Subregion HCP and Western Riverside County Multiple Species Habitat Conservation Plan (MSHCP) under section 4(b)(2) of the Act. Section 4(b)(2) of the Act allows us to exclude from critical habitat designation areas where the benefits of exclusion outweigh the benefits of designation, provided the exclusion will not result in the extinction of the species. We believe that in most instances the benefits of excluding essential areas within approved HCPs from critical habitat designations will outweigh the benefits of including them. For this designation, we find that the

benefits of exclusion outweigh the benefits of designation for all approved and legally operative HCPs in which coastal California gnatcatcher is a covered species (see “Exclusions Under Section 4(b)(2) of the Act” section below for a detailed discussion).

Regional Habitat Conservation Plans (HCPs) have been the primary tool for recovering the coastal California gnatcatcher in southern California since the early 1990s. Development of regional HCPs in southern California has enabled the Service to conduct detailed evaluations of habitat for numerous species, including the gnatcatcher, in the context of developing a system of interconnected reserves to provide for the long-term biological needs of the species. This has been a challenging and complex undertaking, in large part due to the mix of Federal and non-Federal landownership patterns throughout the listed species' range. Completion and implementation of these HCPs will provide for the long term recovery and conservation of the coastal California gnatcatcher due to a significant reduction in and management of threats facing the species.

Most of the core populations of the coastal California gnatcatcher are concentrated along the coastal portions of Los Angeles, Orange, and San Diego counties. The eastern boundary of the species' range includes portions of southwestern San Bernardino County, and western Riverside County. Conservation and management of core populations of the coastal California gnatcatcher are addressed in the Orange County Central and Coastal NCCP/HCP, the City and County of San Diego's Multiple Species Conservation Program (MSCP) (including the cities of Poway, La Mesa, and Chula Vista), the Western Riverside County Multiple Species Habitat Conservation Plan (MSHCP), and the City of Carlsbad within the multi-city Multiple Habitat Conservation Program (MHCP). Other HCPs are under development or have recently been completed, such as the Southern Orange County Subregion NCCP/HCP and the Rancho Palos Verdes HCP. Similar management of core gnatcatcher populations in northern San Diego County are being addressed through the proposed North County MSCP.

On Federal lands and other portions of the species' range in southern California, major core populations of the species have been conserved through section 7 consultations or are located on lands controlled by the Department of Defense and managed through their Integrated Natural Resource Management Plans (INRMP).

The combined efforts of regional HCPs, INRMPs, and key consultations under section 7 of the Act have made significant progress in managing the threats to the coastal California gnatcatcher and collectively will provide for the species' long term conservation. We conclude that completion and implementation of these HCPs/NCCPs is usually a more effective conservation approach than is a designation of critical habitat on these lands. Such a designation would provide redundant regulatory oversight and in some cases could hinder effective implementation of the respective HCPs/NCCPs. Thus we believe it is an appropriate use of the Secretary's authority to exclude such areas from critical habitat under section 4(b)(2) of the Act.

Comment 24:
Several commenters stated opposition to the exclusion of pending and approved HCPs from critical habitat for the coastal California gnatcatcher, stating that we have relied on an erroneous interpretation of the phrase “special management considerations” in section 3(5)(A) of the Act.

Our Response:
In this final rule, we are no longer relying on section 3(5)(A) of the Act as a basis to not include lands in the designation. We have reevaluated and reaffirmed our exclusion of areas considered but not proposed as critical habitat in the April 24, 2003, proposed rule under section 4(b)(2) of the Act (see “Exclusions Under Section 4(b)(2) of the Act” section below for a detailed discussion).

Comment 25:
USFS commented that like HCPs, Land Management Plans (LMP) are designed to ensure the long-term survival of covered species in the plan area and their recently revised LMPs for the Cleveland, Angeles, and San Bernardino National Forests incorporate management direction they believe provides sufficient protection and management for coastal California gnatcatchers and their habitat. USFS further commented that the Cleveland National Forest's LMP includes management direction specifically designed to protect, restore, and enhance the value of Forest Lands as habitat for listed species. Standards 11 and 12 (part 3, page 6 of the LMP) stipulate that, “When occupied or suitable habitat for a threatened, endangered, proposed, candidate or sensitive species is present on a project site, consider species guidance documents to develop project specific design criteria.” These standards also stipulate, “when implementing new projects in areas that provide for threatened, endangered, proposed or candidate species, use design criteria so that discretionary uses and facilities promote the conservation and recovery of these species and their habitats.”

Our Response:
We have determined that Forest Service lands meet the definition of critical habitat and are essential to the conservation of coastal California gnatcatcher (see “Criteria Used to Identify Critical Habitat” section below). We acknowledge that the LMP will benefit coastal California gnatcatcher and its habitat. The LMP contains general provisions for species conservation and suggests specific management and conservation actions that will benefit this species and its PCEs. Implementation of the LMP should address known threats to this species on Forest Service lands. As stated above, we appreciate and commend the efforts of USFS to conserve federally listed species on their lands. However, Federal agencies have an independent responsibility under section 7(a)(1) of the Act to use their programs in furtherance of the Act and to utilize their authorities to carry out programs for the conservation of endangered and threatened species. USFS” development and implementation of the LMP is consistent with the agency's statutory obligation under section 7(a)(1) of the Act, and is not an appropriate basis for excluding essential coastal California gnatcatcher habitat on Forest Service lands from critical habitat designation.

The Secretary may exclude an area from critical habitat under section 4(b)(2) of the Act after taking into consideration the economic impact, the impact on national security and any other relevant impact if he determines that the benefits of such exclusion outweigh the benefits of specifying such area, unless he determines that the exclusion would result in the extinction of the species concerned. We have considered the request from USFS that we exclude their lands based on the burden that the critical habitat designation would add to their section 7(a)(2) consultation requirement for actions on their lands and the fact that they completed consultation under section 7(a)(2) of the Act on their LMP. The primary benefit of including an area within a critical habitat designation is the protection provided by section 7(a)(2) of the Act that directs Federal agencies to ensure that their actions do not result in the destruction or adverse modification of critical habitat. This benefit of designating an area as critical habitat is limited if the areas under consideration for designation occur on

private lands for which there may not be a Federal nexus to invoke the protections of section 7(a)(2) of the Act. Federal lands by default have a Federal nexus and the intent of section 7 of the Act is to require Federal Agencies to consult on any action authorized, funded, or carried out by such agency to insure that the action will not jeopardize a listed species or destroy or adversely modify its critical habitat. Therefore, the benefits of inclusion of these areas are greater because they are Federal lands. We do not agree that any additional analysis required under section 7(a)(2) due to this critical habitat designation on Federal lands constitutes an undue burden for USFS such that the benefits of exclusion would outweigh the benefits of inclusion in this circumstance.

Under the Joint Counterpart Endangered Species Act Section 7 Consultation Regulations published in the
Federal Register
on December 8, 2003 (68 FR 68254), projects that support the National Fire Plan that the Forest Service determines are “not likely to adversely affect” any listed species or designated critical habitat do not require any additional consultation under the Act with the Service. Projects within the scope of the National Fire Plan include projects such as, prescribed fire, mechanical fuels treatments (thinning and removal of fuels to prescribed objectives), emergency stabilization, burned area rehabilitation, road maintenance and operation activities, ecosystem restoration, and culvert replacement actions. Therefore, projects such as restoration, revegetation, and removal of nonnative species conducted in support of the National Fire Plan that are not likely to adversely affect federally-listed species should not add to USFS' workload or cost burden by requiring them to conduct a separate analysis and make a determination of effect on critical habitat when consulting under section 7 of the Act.

Also, as part of our Section 7 consultation with the USFS on the LMP, the USFS has already consulted on various activities carried out on national forest lands including: roads and trail management; recreation management; special use permit administration; administrative infrastructure; fire and fuels management; livestock grazing and range management; minerals management; and law enforcement. In our 2005 biological opinion on the LMP, we determined that implementation of the plan was not likely to jeopardize the continued existence of the coastal California gnatcatcher or adversely modify critical habitat designated in 2000 or revised critical habitat proposed in 2003 for this species. Since the USFS has already consulted with us on potential impacts to critical habitat (both currently designated and proposed related to the activities outlined in the LMP, the designation of revised critical habitat should not require additional consultation for those activities.

In conclusion, we are designating Forest Service lands that meet the definition of critical habitat for the coastal California gnatcatcher because we have determined that the exclusion of Forest Service lands is not appropriate in light of the USFS' independent obligation under section 7(a)(1) of the Act to utilize the agency's authorities in furtherance of the purposes of the Act by carrying out programs for the conservation of the coastal California gnatcatcher. Also, because of the agency's statutory obligations, the additional analysis under section 7(a)(2) of the Act as a result of designation of critical habitat on National Forest lands should not be considered a relevant impact under Section 4(b)(2) or constitute an undue burden for USFS.

Comment 26:
USFS commented that they believe that no additional benefit to, or protection for, this species would occur as a result of critical habitat designation and that designation of the critical habitat identified in the revised proposed rule would unnecessarily add to the USFS' workload and cost burden by requiring them to conduct a separate analysis and make a determination of effect on critical habitat when consulting under section 7 of the Act. They stated that this would increase the number of formal consultations required for implementation of the fuels treatment programs and delay management actions yet to be implemented such as restoration, revegetation, and removal of nonnative species. They further stated that the additional time needed to comply with the added regulations under section 7 of the Act resulting from the critical habitat designation could delay some emergency maintenance activities that could compromise public safety.

Our Response:
As explained in our response to comment 25 above, the USFS has an independent statutory obligation under Section 7 of the Act to protect the coastal California gnatcatcher and its essential habitat on Federal lands it administers. We point out that the Act's section 7 consultation regulations specifically address emergency situations and provide an alternative consultation procedure to enable rapid responses to emergencies. The regulations at 50 CFR 402.05 allow for informal consultation where emergency circumstances mandate the need to consult in an expedited manner. The Act does not prohibit any Federal agency from undertaking actions necessary to protect human health and safety during a declared emergency. Formal consultation must be initiated as soon as possible after the emergency is under control. In addition, we have conducted programmatic consultations with Federal Emergency Management Agency (FEMA) and other Federal agencies for future anticipated emergency actions. These consultations can be conducted prior to the emergency and address anticipated response activities.

Regarding potential delays in management actions, any action that “may affect” the species or its designated critical habitat, even if beneficial, is required to undergo consultation under section 7 of the Act if there is a Federal nexus. However, under the Joint Counterpart Endangered Species Act Section 7 Consultation Regulations published in the
Federal Register
on December 8, 2003 (68 FR 68254), projects that support the National Fire Plan that the USFS determines are “not likely to adversely affect” any listed species or designated critical habitat do not require any additional consultation under the Act with the Service. Projects within the scope of the National Fire Plan include projects such as, prescribed fire, mechanical fuels treatments (thinning and removal of fuels to prescribed objectives), emergency stabilization, burned area rehabilitation, road maintenance and operation activities, ecosystem restoration, and culvert replacement actions. Therefore, projects such as restoration, revegetation, and removal of nonnative species being conducted in support of the National Fire Plan should not add to the USFS' workload and cost burden by requiring them to conduct a separate analysis and make a determination of effect on critical habitat when consulting under section 7 of the Act.

Comment 27:
USFS commented that extrapolating costs from recently completed consultations, the estimated cost to USFS for conferencing under section 7 of the Act on proposed critical habitat would exceed $150,000 over the next 3 to 5 years and includes payment to the Service to work on the consultations, USFS costs to complete biological assessments and surveys, and USFS costs to implement terms and conditions. They state that this estimated cost is not consistent with the statement made on page 20247 of the April 24, 2003, revised proposed rule

that designation of critical habitat will not cause “any increases in costs or prices * * * for Federal agencies.” They further commented that these consultations would be required for critical habitat that is not suitable for the coastal California gnatcatcher, and for which consultation would not otherwise have been required.

Our Response:
As discussed in the April 24, 2003, proposed rule, the statement that designation of critical habitat will not cause “any increases in costs or prices * * * for Federal agencies” was based on a preliminary version of the DEA. We noted our intention to modify our assessment of economic effect based on the development and review of the DEA (see page 20247 of the “Regulatory Flexibility Act” section of the proposed rule). Based on the DEA, costs associated with section 7 consultations and associated project modifications for land management projects on Federal lands are estimated to total approximately $1 million through 2025. However, since completion of the DEA analysis in 2003, two section 7(a)(2) consultations have been completed that should decrease the economic impacts of critical habitat designation on USFS lands: The Joint Counterpart Endangered Species Act Section 7 Consultation Regulations (68 FR 68254; December 8, 2003) and the section 7(a)(2) consultation on the USFS' LMP completed in 2005.

As discussed in our response to comment 25 above, projects conducted under the Joint Counterpart Endangered Species Act Section 7 Consultation Regulations in support of the National Fire Plan that are not likely to adversely affect federally-listed species or their habitat should not add to USFS' workload or cost burden. As also discussed in our response to comment 25 above, the USFS has already consulted with us on potential impacts to critical habitat (both currently designated and proposed) related to various land management activities outlined in the LMP. The designation of revised critical habitat should not require additional consultation for those activities already analyzed in the LMP.

We disagree with the statement that consultations would be required for critical habitat that is not suitable. As discussed in the April 24, 2003, proposed revised rule, the areas we are designating as critical habitat are within the geographical area occupied by the species at the time of listing and currently occupied and contain PCEs in sufficient quantity and spatial arrangement such that these areas are essential to the conservation of the species (see “Criteria Used To Identify Critical Habitat” section below for a detailed discussion).

Comment 28:
One commenter stated that critical habitat designated in areas containing species with different habitat needs creates needless confusion for land managers.

Our Response:
Many lands are managed for multiple species at different temporal and spatial scales. A matrix of lands with different vegetation characteristics is consistent with historic conditions that supported coastal California gnatcatchers. Management plans to conserve coastal California gnatcatchers and other listed species already address the varying needs of these species and their habitats, as do the section 7 consultations conducted on these plans. We believe the addition of a critical habitat consideration to these management plans and consultations should not result in significantly different conservation requirements or create confusion for land managers.

Issue 4: Notification and Public Comments

Comment 29:
Several commenters requested that the complete administrative record be made available for review with additional time granted for the public to respond.

Our Response:
Until a final critical habitat determination is made, a complete record for this action does not exist. However, we have made documents used to prepare the April 24, 2003, revised proposed rule, including the model used to assist in defining specific areas containing the PCEs for the coastal California gnatcatcher, available to all who requested it. Files concerning the listing of the coastal California gnatcatcher and the primary supporting files for the designation of critical habitat are currently available for review, upon request, at the Carlsbad Fish and Wildlife Office (see
ADDRESSES
section above).

Comment 30:
Several commenters requested that we extend the comment period on the proposed revised designation and DEA.

Our Response:
We have opened three public comment periods associated with the April 24, 2003, proposed rule to revise critical habitat, of which the second and third comment periods also sought public comment on the associated 2004 DEA. The public comment periods were as follows: April 24 to June 23, 2003 (68 FR 20228); April 8 to May 10, 2004 (69 FR 18516); and April 3 to May 3, 2007 (72 FR 15857). During these open comment periods, we conducted outreach notifying affected elected officials, local jurisdictions, interest groups and property owners. We notified interested parties through the publication of legal notices in regional newspapers, telephone calls, letters and news releases sent by facsimile and/or mailed to affected elected officials, local jurisdictions, and interest groups. We also posted information and materials related to the proposed revised designation on the Carlsbad Fish and Wildlife Office's public Web site
(http://www.fws.gov/Carlsbad/).

During the second comment period (April 8 to May 10, 2004), we made the 2004 DEA of the April 24, 2003, proposed revised critical habitat designation available to the public for review. During this comment period, we also held two public hearings on April 29, 2004, from 1 p.m. to 3 p.m. and from 6 p.m. to 8 p.m. in Carlsbad, California. We provided notification of the DEA through telephone calls and letters and news releases faxed and/or mailed to affected elected officials, local jurisdictions, and interest groups. We also published the DEA and associated material on our Web site following the draft's release on April 8, 2004. In addition, several public comment periods were held on our 2000 proposed and final critical habitat rules, which are similar in many respects to the 2003 proposed revised and this final rule.

In light of these actions, we have met the statutory and regulatory requirements to notify the public and seek public comment on our proposed designation. Also, as stated in the April 3, 2007,
Federal Register
notice announcing the reopening of the comment period for the proposed critical habitat for the coastal California gnatcatcher, we are under a court order to finalize the critical habitat designation for the coastal California gnatcatcher on or before November 2, 2007. Given the relatively short timeframe in which we have to finalize this proposed action, we are unable to open any additional comment periods or hold additional public hearings for the proposed designation and still meet our court-mandated deadline.

Issue 5: Economic Analysis

Comment 31:
Several commenters stated that the DEA should have incorporated the approach and findings from a study released by the California Resource Management Institute (CRMI) (dated August 15, 2003) entitled “Economic Impacts of Critical Habitat Designation for the Coastal California Gnatcatcher” (Sunding 2003). Several commenters stated that the economic impacts estimated in the DEA are

incorrect because they are significantly lower than those contained in the CRMI study.

Our Response:
We released the DEA for public comment on April 8, 2004 (69 FR 18516), but we completed the analysis prior to the public release of the CRMI study. However, we subsequently reviewed the CRMI study and its results in detail. The CRMI study relies on an economic model developed to assess the impacts of reductions in real estate product (e.g., residential and commercial buildings) in areas of the proposed revised designation. In order to respond to public comments regarding comparisons between the CRMI study and the DEA, our discussion below of the DEA and costs outlined in Table 1 are based on the total economic impact estimated in the DEA ($915 million) minus the costs borne by the Transportation Corridor Agency (TCA) ($35 million) since the CRMI study did not include TCA costs.

The CRMI study calculates a total economic impact due to the critical habitat designation of $4.6 billion, compared to $880 million in the DEA, a difference of approximately $3.7 billion. Differences in the magnitude of these estimates of total impact are primarily due to differences in the scope of the impacts measured. Despite the use of different economic models of regulatory impact, when CRMI's analysis is adjusted to address the same question as the DEA (i.e., the economic impact of section 7 of the Act), the estimated total economic impacts and ranking of proposed units by cost are relatively comparable, as discussed further below.

The DEA and CRMI study share a number of important analytical and methodological similarities. For example, both studies rely on demographic and land use projections provided by the Southern California Association of Governments (SCAG) and the San Diego Association of Governments (SANDAG) as the basis for calculating the economic impacts of the critical habitat designation. In addition, both studies agree that the primary economic impacts will result from: (1) Reduced real estate development; (2) project modification and regulatory compliance costs associated with coastal California gnatcatcher conservation activities; and (3) project delay. The DEA also includes a number of additional economic categories not evaluated in the CRMI study, but these categories represent a relatively small component of the total economic impact (including costs associated with uncertainty as well as those incurred by State and Federal entities).

Much of the difference in the magnitude of the cost estimates reported in the DEA and CRMI study results from the DEA's exclusion from the analysis of real estate development projects that are unlikely to have a Federal nexus, and thus not likely to be regulated under section 7 of the Act. The DEA also excludes “baseline” economic impacts that are attributable to existing regulations other than section 7 of the Act.

Under section 7 of the Act, projects or activities within critical habitat that are authorized, funded, or carried out by a Federal agency, that is, have a Federal nexus, will require consultation with the Service to ensure that they do not jeopardize the continued existence, or adversely modify the habitat, of threatened or endangered species. The DEA assumes that the designation of critical habitat will have no direct impact on projects or activities that do not have a Federal nexus.

As described in Chapter III of the DEA, the issuance of section 404(b) permits by the U.S. Army Corps of Engineers (USACE) is likely to represent the primary Federal nexus for private real estate development activities. The DEA estimates that this Federal nexus will occur in approximately 69 percent of all real estate projects. Consequently, the economic impact estimated in the DEA assumes that approximately 31 percent of future real estate projects will have no Federal nexus and thus will not be directly impacted by the critical habitat designation.

In contrast to the DEA, the CRMI study assumes that all projects will be affected, regardless of the presence of a Federal nexus. This difference accounts for approximately $1.4 billion, or approximately 28 percent of the total difference between the two estimates.

The DEA endeavors to account for the regulatory impacts that are expected to occur in the absence of this rulemaking (a further discussion of the baseline approach is provided elsewhere in this Response to Comments). Existing “baseline” regulations that provide protection to the coastal California gnatcatcher and its habitat, absent section 7 and the proposed designation, include the Orange County Central/Coastal NCCP/HCP, the 4(d) special rule at 50 CFR 17.41(b), and the California Environmental Quality Act (CEQA). (Pertinent baseline laws, regulations, and policies are described in detail in Chapter II of the DEA.)

The CRMI study considers the cost of all future coastal California gnatcatcher conservation activities. In other words, the CRMI does not factor out the impact of the “baseline” regulations noted above. This difference in the scope of impacts estimated in the two studies accounts for $2.3 billion, or approximately 62 percent, of the difference between the DEA and CRMI study results. In certain units (e.g., San Diego) this difference significantly affects estimated costs, whereas in others (e.g., Riverside) there is no effect at all (i.e., the two models yield results of similar magnitude).

An estimate of the cumulative effect of applying the DEA assumptions regarding (1) Federal nexus and (2) baseline regulations to the CRMI study is summarized in Table 1. As shown, making these adjustments to the CRMI study reduces the total economic impact from $4.6 billion to an estimated $1.38 billion (the total or cumulative impact of each of these assumptions when applied to the CRMI study is less than the sum of their separate impacts). This revised $1.38 billion estimate is approximately $497 million more than the $880 million economic impact reported in the DEA (compared to the $3.7 billion difference without these adjustments). Thus, together the Federal nexus and regulatory baseline assumptions used in the DEA account for most of the difference between the two studies.

Table 1.—Comparison of Adjusted CRMI Study Results and DEA Results—California Gnatcatcher Response to Comments

Unit

Adjusted CRMI study results
(1)

Amount
Unit rank

DEA results
(2)

Amount
Unit rank

1
$100,097
10
$4,014,410
10

2
6,342
11
3,533,136
11

3
2,696,488
8
11,009,233
7

4
518
12
2,719,057
12

5
277,649
9
13,806,983
6

6
70,163,377
5
53,968,904
4

7
3,820,191
7
5,306,404
8

8
0
13
449,115
13

9
140,463,276
3
42,671,006
5

10
524,487,037
1
459,907,538
1

11
75,371,628
4
93,364,387
3

12
37,759,521
6
4,029,835
9

13
521,667,076
2
185,457,233
2

Total
1,376,813,200

880,237,241

(1)
Estimates of CRMI study results adjusted to include DEA regulatory baseline and Federal nexus assumptions.

(2)
Differences between the unit costs given in this table and those given in the DEA are due to differences in rounding.

Once the methodological assumptions described above are accounted for, the CRMI study and the DEA generate similar relative cost rankings between units. For example, the DEA and adjusted CRMI study results identify the same five units as generating the greatest costs (units 6, 9, 10, 11, and 13). Conversely, revising the DEA findings to eliminate the regulatory baseline and Federal nexus assumptions produces results comparable to those in the unadjusted CRMI study. That is, despite using different economic models and assumptions, the two reports generally agree in terms of the magnitude and distribution of costs.

The DEA and CRMI study do produce results that differ by $497 million, even after accounting for the key assumptions described above. A variety of other factors contributes to the different economic impact calculations, many of which are difficult to isolate and quantify with precision. For example, the DEA assumes that developers on average will incur a much higher economic burden when compensating for impacts to coastal California gnatcatcher habitat (i.e., the DEA assumes that developers will set aside 1.26 ac (0.51 ha) on site for every acre of developed habitat compared to a ratio of approximately 0.11:1.0 in the CRMI study). However, two key analytical differences that appear to contribute significantly to the higher economic costs calculated in the CRMI study include (1) discounting, and (2) consumer surplus effects, as described below:

(1) Discounting: The two studies apply a different approach to evaluating economic impacts that occur over time. Specifically, the DEA applies a positive real discount rate to costs that occur in the future to account for the effect of the time value of money. In contrast, the CRMI study assumes that the real discount rate will equal real property appreciation, and thus the timing of development has no impact on economic value. (The CRMI study does assume a positive discount rate to calculate the economic impact of delay.)

(2) Consumer Surplus: The DEA concludes that the critical habitat designation will primarily affect individual property owners/developers and not market prices or consumers of real estate. In contrast, the CRMI study concludes the critical habitat designation will lead to an increase in real estate market prices and thus a reduction in consumer surplus. The CRMI study calculates this reduction in consumer surplus and includes it in the total economic impact (our response to Comment 32 below provides a further discussion of this issue).

Comment 32:
David Sunding of Charles River Associates (author of the CRMI study described in Comment 31 above) submitted a comment letter on the DEA criticizing its methodology and findings in a number of areas. Many of these criticisms are similar to those submitted by others and as such are addressed elsewhere in this “Public Comments” section. The primary comment addressed here is that the DEA's estimates of real estate development impacts are low because they are based solely on the cost incurred by individual landowners/developers and do not adequately account for impacts to real estate markets and thus consumers.

Our Response:
Chapter III of the DEA evaluates the potential for the critical habitat designation to reduce consumer surplus by increasing real estate market prices. The analysis concludes that the critical habitat designation will not affect regional real estate markets or prices, and thus consumer surplus, because the total reduction in land supply is expected to represent a very small component of total future market demand in the region. Specifically, the estimated amount of acres that would have been developed but for critical habitat designation represents about 1.7 percent of future market growth in the six counties (San Diego, Orange, Riverside, San Bernardino, Los Angeles, and Ventura) through 2025. Supply adjustments by developers, including increased density and/or project reconfigurations, are likely to further cancel the market impact of the relatively small land supply reduction potentially created by the critical habitat designation.

The comment from Dr. Sunding argues that the DEA analysis is flawed because (1) it assumes that housing prices are determined at the county rather than the census tract level, and (2) it ignores the severely land-constrained nature of the southern California region as a whole. The DEA (as well as the CRMI study) rely on real estate growth projections provided by SCAG and SANDAG, which reflect economic and demographic trends at the county and regional level. The DEA assumes that in this instance county-wide economic and demographic trends are a better determinant of real estate prices than are individual census tracts because aggregate consumer behavior is expected to be more heavily influenced by broader or regional market supply and demand dynamics than by those within the more arbitrary boundaries of an individual census tract.

The DEA also acknowledges that the regional land supply is scarce relative to projected growth in several counties within the critical habitat designation. However, since the reduction in land supply resulting from the critical habitat designation represents such a small

fraction of the total market, the DEA reasonably assumes that it will not alter these regional market dynamics, affect market prices, or result in consumer surplus losses. Although the DEA does not anticipate consumer surplus effects, the DEA's ranking of critical habitat units by cost is similar to that provided in the CRMI study after adjusting for other methodological differences (see our response to Comment 31 above).

Comment 33:
One commenter stated that the Service's DEA fails to account for, and thus fails to quantify the economic impacts of the reduction in, the overall size of development projects and/or the number of housing units constructed. The commenter also stated that the DEA assumes, against all reason with virtually no methodological or evidentiary support, that the designation will have no impact whatsoever on the size or quality of the housing stock in southern California and that all costs of the proposed rule will be borne by landowners, with absolutely no housing price implications. Dr. Sunding estimated reduced project output of 10 percent as a result of the proposed designation of critical habitat for the coastal California gnatcatcher alone. Further restricting the amount of developable land by a vast designation of critical habitat has the potential to impose large economic costs. Taking these and other factors into his analysis of the economic impacts of critical habitat designation for the coastal California gnatcatcher alone, Dr. Sunding has estimated economic impacts in the range of $4.6 to $5.1 billion, roughly five times higher than the Service's estimate.

Our Response:
As noted in the Response to Comment 32, the DEA acknowledges that the regional land supply is scarce relative to projected growth in several counties within the critical habitat designation. However, since the reduction in land supply resulting from the critical habitat designation represents such a small fraction of the total market, the DEA assumes that it will not alter these regional market dynamics, affect market prices, or result in consumer surplus losses.

Comment 34:
One commenter questions why losses to development in locations within the proposed critical habitat designation are not offset by gains to development in locations outside the proposed critical habitat designation. Furthermore, the commenter questions why offsetting economic gains are not estimated. Given the likelihood of offsetting economic gains, the costs to individual property owners estimated in the DEA should be presented as primarily distributional in nature rather than as a reduction in economic efficiency.

Our Response:
As described in our responses to Comments 31 and 32 above, the DEA concludes that the critical habitat designation is unlikely to affect regional real estate prices because the amount of land that would have been developed but for critical habitat designation is small relative to market supply. Consequently, offsetting gains to property owners outside the critical habitat designation after designation are also expected to be minor. The long-term scarcity of land in some of the counties affected by the critical habitat designation will constrain the reallocation of output to other locations. Consequently, the DEA treats the cost to individual landowners resulting from the critical habitat designation as a reduction in economic efficiency rather than a distributional impact.

Comment 35:
Several commenters stated that the coastal sage scrub CEQA baseline assumptions employed by the DEA should not be applied throughout the entire proposed critical habitat designation. Specifically, one comment asserts that “the proposed critical habitat designation for the coastal California gnatcatcher includes a variety of vegetation communities and coastal sage scrub vegetation covers much less than 50 percent of the overall critical habitat acreage under the revised proposed designation.”

Our Response:
Coastal sage scrub is a PCE for coastal California gnatcatcher critical habitat. The DEA found that, in many areas within revised proposed critical habitat, coastal sage scrub mitigation resulting from the California Environmental Quality Act (CEQA) review process provides pre-existing protection for Gnatcatcher habitat. Specifically, the DEA assumes that CEQA serves as a baseline regulation in San Diego and Orange County as well as parts of Los Angeles County. In addition, according to the Service, Federal Agencies active in Southern California routinely consult with the Service for projects that occur in areas with coastal sage scrub. In other words, critical habitat does not provide any new information about the potential presence of the species in areas with coastal sage scrub because the presence of coastal sage scrub would likely already trigger a consultation and regulatory protection under the listing. Therefore, we maintain that in certain areas within the critical habitat determination, coastal sage scrub mitigation resulting from the CEQA review process provides pre-existing protection for coastal California gnatcatcher habitat.

However, we acknowledge that coastal sage scrub may not be present within each acre of the critical habitat designation. To the degree that coastal sage scrub is not present in specific areas within the critical habitat designation, the DEA may have overstated its role in providing baseline protection for coastal California gnatcatcher. The final addendum to the DEA (dated September 14, 2007) found that, based on estimates provided by the Service, about 40 percent of the revised proposed critical habitat for coastal gnatcatcher contains coastal sage scrub (see “Economic Analysis” section for further discussion of the final DEA addendum). If coastal sage scrub is assumed to be present in only 40 percent of the designation, total private development project modification costs increase from $743 million to about $800 million. This increase of $58 million represents approximately 6 percent of the original total DEA cost estimate of $915 million.

The DEA assumes that CEQA is the primary baseline regulation in areas where the 4(d) rule (50 CFR 17.41(b)) has not been adopted. The DEA assumes CEQA is a secondary baseline regulation in areas where the 4(d) rule is the primary baseline regulation. In areas covered by the 4(d) rule, the DEA assumes that mitigation under CEQA applies to the 5 percent of projects that are “exempt” or “ineligible” for 4(d) processing.

Reducing the CEQA baseline by 60 percent causes the number of acres, assumed to be restricted by section 7 consultations, to increase substantially in some areas. In San Diego County, for example, reducing the CEQA baseline by 60 percent increases the amount of foregone development resulting from section 7 consultations for the California gnatcatcher from 34 ac (14 ha) to 372 ac (150 ha). In other areas, the CEQA baseline assumption has little or no effect since the 4(d) rule applies as a pre-existing regulation or lead agencies do not normally mitigate for coastal sage scrub habitat loss (as noted in the DEA, lead agencies in California have different practices regarding the implementation of CEQA).

Comment 36:
Rancho Mission Viejo commented that the pending Orange County Southern Subregion HCP/NCCP would preclude the use of the 4(d) rule on the vast majority of the remaining land in Unit 6.

Our Response:
The DEA assumes that CEQA is the primary baseline regulation in Unit 6 (i.e., the DEA does not consider the 4(d) rule in this unit),

which includes the Rancho Mission Viejo project. A text omission in DEA Table 10, footnote 2, creates confusion regarding the treatment of the units where the 4(d) rule does not apply. In actuality, “Projected Growth Acres Affected by Section 7” in Table 10 are reduced to reflect both areas covered by the 4(d) rule (as stated in footnote 2) and CEQA mitigation resulting in reduced development.

Comment 37:
One commenter stated that the DEA ignores the direct impacts that the critical habitat designation may have on projects that are subject to CEQA.

Our Response:
The DEA treats the potential impact of the critical habitat designation on CEQA as an indirect cost (Chapter V of the DEA). CEQA costs are indirect because there is no statutory link between CEQA and the critical habitat designation. That is, CEQA does not explicitly require consideration of critical habitat in the project review process. Consequently, the DEA considers the potential for the critical habitat designation to provide new information that may indirectly generate CEQA costs. Because coastal sage scrub is well identified, the DEA concludes that the critical habitat designation will not provide new information regarding coastal California gnatcatcher habitat. To the degree that coastal sage scrub is not present in areas of the critical habitat designation, the critical habitat designation may provide new information and trigger additional CEQA costs not accounted for in the DEA, as discussed in our Response to Comment 35 above.

Comment 38:
One commenter stated that the use of CEQA mitigation “requirements” to estimate CEQA baseline protection for the coastal California gnatcatcher and its habitat is incorrect. Similarly, economic impacts resulting from CEQA compliance due to the species being federally listed should be attributed to the designation of critical habitat and should not be included in the baseline.

Our Response:
The DEA assumes that CEQA acts as a baseline regulatory requirement in certain Counties containing revised proposed critical habitat. The DEA utilizes CEQA “mitigation ratios” as a proxy for negotiated environmental impact report (EIR) outcomes. That is, the mitigation ratios used represent the expected outcome of an EIR. The CEQA related mitigation ratios represent an average outcome of the CEQA process, not a requirement of CEQA. These average mitigation ratios are based on information provided by the CDFG. Also, as discussed in our response to comment 37 above, there is no statutory link between CEQA and the critical habitat designation. That is, CEQA does not explicitly require consideration of critical habitat in the project review process. Therefore it is appropriate to include economic impacts resulting from CEQA compliance in the baseline.

Comment 39:
Several commenters addressed the DEA's treatment of section 7 consultation costs associated with HCP approval. In particular, commenters pointed out that third-party costs associated with section 7 consultations on HCPs are not accounted for in the DEA.

Our Response:
The DEA incorrectly states that existing “HCPs would require internal, informal [section 7] consultations and that the costs would be borne by the Service” (DEA p. 20). This is an error in the DEA text and does not reflect the actual calculations of economic costs provided. The administrative cost reported in the DEA assumes that one third-party participant is engaged in each of the 28 consultations. Approximately 27 percent of the $141,000 cost estimate presented in the DEA will be borne by third parties.

Furthermore, it is true that third-party HCP proponents may bear administrative costs associated with section 7 consultations on future HCPs. To address this comment the Service estimates a range of administrative costs associated with future HCPs that reflect potential third-party involvement. The DEA identifies 16 “reasonably foreseeable” future consultations involving HCPs in critical habitat and estimates an associated administrative cost of approximately $37,000 (DEA, pp. 21 and 128-129). If third-party costs are included, these administrative costs are estimated to increase to as much as $104,000.

Comment 40:
One commenter asserted that the DEA should consider potential future HCPs within the Matrix NCCP Subregion of Orange County. Specifically, the commenter stated that five HCPs exist or are in progress in this area currently and that the DEA should consider the related costs.

Our Response:
The DEA only considers costs that are reasonably foreseeable. Plans for HCPs in the Matrix NCCP Subregion of Orange County had stalled and were therefore not considered reasonably foreseeable. Because these HCPs were not reasonably foreseeable at that time, administrative costs associated with section 7 consultations on the HCPs were not included in the DEA.

Comment 41:
One commenter stated that the DEA accounts for regulatory burdens only as they exist at this moment in time, making no attempt to assess whether and how these burdens may change over the study period. This results in an underestimate of the baseline regulations.

Our Response:
While it is possible that Federal, State, or local agencies will promulgate regulations that will affect future land uses, the Service has no reasonable means for predicting future regulatory changes. The Office of Management and Budget (OMB), in its guidance on preparing regulatory analysis, agrees that, “It may be reasonable to forecast that the world absent the regulation will resemble the present” (OMB, Circular A-4, September 17, 2003). Given the lack of reasonably foreseeable changes in the regulatory environment, the Service believes an analysis based on the current regulatory environment provides the best estimate of potential impacts.

Comment 42:
Several commenters argued that impacts to local water providers are not appropriately addressed by the DEA. Specifically, comments pointed out that the DEA does not present information on how the rulemaking will affect individual water districts. Additionally, commenters suggested that the DEA ignores project modification costs, consultation costs, delay costs, potential water replacement costs, potential capital facilities costs, and other costs that may be borne by water providers.

Our Response:
Due to the large number of independent water providers operating within the proposed critical habitat designation, the DEA does not examine specific impacts to each. The DEA focuses on larger water agencies and the regional distribution network. Nonetheless, some of the costs borne by local water providers are captured by the DEA. Estimated costs associated with real estate development project modifications (e.g., land set-asides) include compliance costs associated with development of local water infrastructure (i.e., some water infrastructure is installed within real estate development project sites). Allocating these water infrastructure costs to real estate development is appropriate since local water agencies are likely to pass on compliance costs to consumers, including developers and owners of real estate. In addition, it is important to note that no specific information indicating how or the extent to which particular local water districts will be unduly burdened has been identified.

The DEA estimates that the critical habitat designation delays projects in

the first year after designation (Chapter V of the DEA, p. 131). To the degree that water infrastructure project modifications are captured by the DEA's analysis of real estate development, water infrastructure delay costs are also captured.

The DEA addresses the consultation cost expected to be associated with the HCPs covering water operations. The DEA cost estimate includes the expected cost to the Service of an internal consultation on these HCPs. Furthermore, third-party HCP proponents may bear administrative costs associated with section 7 consultations on HCPs (See our response to Comment 31 above).

The water replacement costs and capital costs cited in some comments are potential costs that the DEA does not address. Additional analysis would be needed to quantify these costs. Specifically, the Service would need to evaluate whether coastal California gnatcatcher conservation efforts are likely to affect specific water systems. In addition, this analysis might require a model of water system operations to quantify changes in water supply in some cases.

Comment 43:
The DEA ignores the economic impacts of critical habitat proposed on important regional transportation facilities. Dr. Sunding's report documents costs of $450 million to the existing Transportation Corridor Agency (TCA) projects (not including the pending Foothill (South) Transportation Corridor) attributable to regulatory delays, including those attributable to the Act.

Our Response:
The DEA discusses potential impacts of revised proposed critical habitat on regional transportation facilities starting on page 110 of Chapter IV. Future transportation projects include road construction by California Department of Transportation (Caltrans) Districts 7, 8, 11, and 12, and the Transportation Corridor Agency (TCA). Total costs for the four Caltrans districts are estimated at approximately $45 million, or roughly 5 percent of total costs. This analysis estimates that all Caltrans districts combined will participate in 191 formal consultations resulting in project modification costs, though construction in Riverside and San Bernardino counties is expected to result in significantly higher section 7 costs than in any other district. The TCA's proposed SR-241 Foothill-South toll road is estimated to result in an estimated section 7 cost of approximately $35 million, based on an average of two potential development scenarios.

Comment 44:
The CRMI study estimates higher critical habitat designation costs associated with local infrastructure (including water infrastructure) than the DEA.

Our Response:
The DEA estimates $63 million in project modification and administrative costs for local infrastructure projects (this figure excludes TCA costs so as to provide a more comparable estimate to the CRMI study which also estimates these costs separately). The CRMI study reports an increase in compliance cost to local public infrastructure from the coastal California gnatcatcher critical habitat designation equal to $1,000 per housing unit constructed, roughly $124 million in total.

The CRMI study relies on an average local infrastructure cost of $33,000 per new housing unit and an incremental impact of the critical habitat designation on local public infrastructure of 3 percent. The DEA applies a cost estimate based on anticipated project modification costs associated with planned or proposed projects identified primarily through interviews with potential public project proponents. The DEA discounts estimates at 7 percent while it appears the CRMI study does not discount public infrastructure costs. The Service believes that applying a positive discount rate to future costs provides a better estimate of the present value of these costs since this methodology accounts for the time value of money.

Comment 45:
One commenter stated that the DEA does not account for additional costs related to review of Federal documents (e.g., review and preparation of comments on the DEA of the critical habitat designation for the coastal California gnatcatcher) and costs related to legal challenges (e.g., whether the MSCP Subarea plans may result in adverse modification). Another commenter stated that the analysis considers permitting cost and land prices only, and ignores factors like reduction in output, delay costs, indirect costs and other real costs that Dr. Sunding analyzed. According to the commenter, when all costs are applied, the costs are profound. For example, the CRMI study states that if a designation reduces a 1,000-unit subdivision by just 200 units, the economic impact is $33 million, and that impact falls most heavily on consumers. The commenter asserts that home and land costs are higher today in southern California than they were in 2004, so that even with the recent downturn, greater economic impact would be expected.

Our Response:
Potentially affected parties likely incurred administrative costs related to review of Federal documents, such as the proposed rule for example, to ensure their activities were appropriately considered in the DEA or to request exemption from the rulemaking. The DEA appropriately considers only the direct and indirect costs associated with compliance with the final designation since the purpose of the economic analysis is to determine what the economic costs resulting from designation would be on a particular area, so that the benefits of including the area in critical habitat can be weighed against the benefits of excluding the area. The DEA does, however, include administrative costs of compliance with the rulemaking where appropriate, for example the administrative costs of section 7 consultation, which may similarly include review of Federal documents. In addition, the DEA focuses on activities that are considered reasonably foreseeable. The number, scope, and timing of potential legal challenges associated with the rulemaking are speculative and impossible to quantify.

Comment 46:
According to one commenter, development areas proposed for designation provide critically needed housing to the region, create new sources of employment, and provide tax revenues for local jurisdictions. The commenter stated that the DEA fails to capture the opportunity cost of lost benefits from real estate development.

Our Response:
The DEA concludes that the reduction in real estate development is unlikely to substantially affect regional housing markets. Therefore, it is unlikely that the coastal California gnatcatcher critical habitat designation will alter job growth. In addition, while it is true that future tax revenue may be lower than projected due to a potentially reduced level of real estate development, corresponding public expenditures on public services and infrastructure related to new development would also be lower. The net affect of these two factors is difficult to determine and the Service considers such an estimate as speculative.

Comment 47:
One commenter stated that the critical habitat designation would create delays in the processing of various proposed development projects. These delays may result in lost employment benefits, lost tax revenue, delayed mitigation measures that may benefit the species, and lost benefits from decreased housing availability.

Our Response:
The DEA estimates that project delay lasts 6 months and occurs only in the first year after the critical habitat designation (Chapter V of the DEA, p. 131). It is possible that in

the first six months, some projects may be so delayed because other entitlement activities (e.g., preparation of an Environmental Impact Report) may have been completed and consideration of critical habitat designation may result in additional administrative effort. As described in the DEA, however, after the first six months any additional administrative or regulatory compliances costs associated with critical habitat is expected to be coordinated simultaneously with other standard entitlement activity and thus not delay project start time. The DEA estimates costs associated with delay using a time value of money equal to 12 percent. While it is true that the DEA does not capture the cost to the species of delayed mitigation, such costs are difficult to quantify monetarily and are best evaluated in biological terms. Substantial impacts to regional housing markets or employment levels are not anticipated to result from the critical habitat designation (See our responses to Comments 31 and 32 above).

Comment 48:
One commenter stated that the DEA does not properly consider the environmental implications of the economic impacts identified in the analysis. The economic impacts identified affect population and its distribution in the study area, along with the location and number of housing units in the region.

Our Response:
It is difficult to predict a-priori how the pattern of development will change due to the critical habitat designation. Limits on development within the critical habitat designation could conceivably induce sprawl, increase density, or a combination of both.

Comment 49:
One commenter stated that the DEA states that it is not able to predict the number of reinitiated section 7 consultations that will be required once revised critical habitat for the coastal California gnatcatcher is designated. This leads to an underestimate of the costs of the critical habitat designation.

Our Response:
The DEA looks at consultations that are reasonably foreseeable. The best publicly available data regarding future consultations were used. The comment does not provide any specific new information about future consultations.

Comment 50:
One commenter stated that the impacts specific to Rancho Mission Viejo ranching operations include costs of new section 7 consultation, loss of income as a result of delays and restrictions to activities, and increased operating costs attributable to regulatory restrictions resulting from implementing the Act. The DEA does not consider these costs.

Our Response:
Impacts to ranching activities are potential costs that are not included in the DEA. However, these costs are likely to be small in magnitude relative to the impacts calculated in the report and are unlikely to res

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A07-6003. Public record. Not legal advice.