The no surprises policy: Contracts 101 meets the Endangered Species Act.

I. INTRODUCTION

"No Surprises" became part of the Endangered Species Act (ESA)(1) vocabulary when Secretary of the Interior Bruce Babbitt and Secretary of Commerce Ron Brown announced the policy in August 1994.(2) The policy made a big splash, but in actuality it did not establish a new mechanism for applying the ESA to lands. Instead, the new policy held out for full application one of the tools for ESA implementation set forth by Congress twelve years earlier.

As Congress noted when enacting the 1982 amendments to the ESA, the intent was that

the Secretary may utilize [section 10(a)] to approve conservation plans

which provide long-term commitments regarding the conservation of tasted

as well as unlisted species and long-term assurances to the proponent of

the conservation plan that the terms of the plan win be adhered to and

that further mitigation win only be imposed in accordance with the terms

of the plan.(3)

In other words, Congress recognized that a mechanism was needed to enlist nonfederal entities in proactive habitat conservation if the goals of the ESA were to be achieved. However, because habitat conservation plans (HCPs) are voluntary,(4) Congress also recognized that assurances must be provided to pLan participants to encourage them to make commitments to species conservation efforts.

The Clinton Administration's announcement of a policy for providing No Surprises assurances helped usher in the `Era of the HCP.' The No Surprises Policy announcement also inspired a host of new ESA sound bites. No surprises,(5) "a deal is a deal,"(6) and the call for ever-increasing degrees of regulatory "certainty"(7) became the rallying cries of many regulated entities. Environmental groups opposed to the Policy counterattacked with slogans like "nature is full of surprises" and "species need certainty too."

Much of the debate about the Policy has become nothing more than a battle of catchy phrases. This rhetorical gunplay has polarized the issue. Nonetheless, as is true of so many controversies under the ESA, there is a middle ground rooted in the terms of the policy itself. This article describes that middle ground and demonstrates why No Surprises assurances are workable, and necessary for any effort to conserve species on nonfederal lands. However, before this middle ground can be discussed, four fundamental principles must be accepted.

First, long-term, multi-species, large-scale HCPS that include provisions to protect unlisted species must be considered worthwhile. If these plans are considered desirable, a No Surprises Policy is essential. Without the Policy, these plans would not be developed.

Second, the fact that No Surprises assurances are contract terms must be recognized. The precise content of the assurances for a specific HCP will be determined by the negotiating positions of the applicant and the agencies, and through public participation.

Third, even though nature is full of surprises, HCPS can be developed with assurances to a landowner in a manner that benefits species and provides the means to respond to the changes of nature without imposing unfair burdens on the permit holder. Most HCP applicants are willing to agree at the outset to adjustments in their plans to meet new problems that may develop. What applicants will not accept is subsequent unilateral decision making by the federal government which imposes new conditions.

Finally, the No Surprises Policy itself must be understood. Rather than giving away the store on species conservation, the Policy simply promises that the government will abide by the terms of the negotiated deal.

With these principles in mind, this article seeks to sort through much of the rhetoric generated by the No Surprises Policy. Part II of the article traces the history of the section 10(a) HCP provisions of the ESA, from the development of the San Bruno Mountain HCP to the enactment of the HCP amendments and through to the present. The section 10(a) HCP provisions were largely modeled on the San Bruno plan. This history is important to any analysis of the assurances in the No Surprises Policy, primarily because it shows that the idea of providing assurances to property owners entering into long-term conservation plans did not spring to life with the Clinton Administration's announcement of the Policy. Assurances were part of the San Bruno plan, and in enacting the section 10(a) amendments, Congress intended that assurances would also be part of any future plans developed under the amendments.

Part III of the article traces the history of the No Surprises Policy itself and analyzes its provisions in detail Part m also describes the significant impact that the Policy has had on habitat conservation planning on nonfederal lands, setting forth several examples of large-scale plans that likely would not have been negotiated without the assurances provided by the Policy. Finally, Part IV discusses some of the controversy that has surrounded No Surprises assurances and responds to the concerns raised by both the environmental and scientific communities.

II. THE HISTORY OF THE SECTION 10(A) HABITAT CONSERVATION PLANS AND INCIDENTAL TAKE PERMIT PROVISIONS

Congress enacted the Endangered Species Act (ESA) in 1973 to "provide a means whereby the ecosystems upon which endangered species and threatened species depend may be conserved, [and] to provide a program for the conservation of such . . . species. Toward this goal section 9 of the Act generally prohibits the "take" of any endangered or threatened species by "any person."(9) "Take" includes all activities that harass, harm, wound, or kill a protected species.(10) In 1975, the United States Fish and Wildlife Service (USFWS) broadly defined "harm" to include acts which "significantly disrupt essential behavioral patterns"(11) and result in "significant habitat modification or degradation."(12) The courts have upheld this aspect of the take prohibition, beginning in 1979 with an U.S. district court opinion from Hawaii finding that a state program maintaining feral sheep and goats in the critical habitat of the endangered Palila bird and causing destruction of that habitat clearly fell within the agency's definition of harm.(13) The decision was upheld by the Ninth Circuit, which found that the district court s conclusion that the program was harming the species was "consistent with the Act's legislative history showing that Congress was informed that the greatest threat to endangered species is the destruction of their natural habitat."(14) Several years later, the Ninth Circuit again upheld a finding that the State's game management program for a separate species of feral sheep constituted harm to the endangered Palila under the revised USFWS definition of harm.(15) The Service s definition of harm was also recently upheld by the U.S. Supreme Court.(16)

Early in the history of the ESA it became clear that the strict prohibitory language of section 9, particularly in regard to habitat modification, could have harsh results, possibly causing significant limitations on all development or resource use within the habitat of a listed species. The habitat conservation planning amendments to section 10(a) in 1982 largely resulted from the reaction of developers and resource users to the scope of the section 9 prohibitions.

A. The San Bruno Mountain Habitat Conservation Plan

With the potential for an absolute ban on any take, no matter how limited, especially in the context of habitat modification, the development community began to recognize that the ESA was unable to address situations where a property owner's otherwise lawful activities might result in some limited incidental take of a protected species. A landowner would be held liable despite taking careful steps to minimize the impact on protected species.(17) In 1978, one large corporate landowner planning a massive development project on the San Bruno Mountain near San Francisco was confronted with this potential consequence of section 9 head on, and the concept of habitat conservation planning began.

San Bruno Mountain is the primary habitat for two species of butterflies--the mission blue butterfly, a species listed under the ESA in 1976 as endangered,(18) and the callippe silverspot butterfly, which was proposed for listing in 1978.(19) The mountain's grasslands also provide habitat for the garter snake and species of rare insects.(20) In 1980, with the listing of the callippe silverspot butterfly still pending, the USFWS revised its proposal to designate portions of the mountain as critical habitat for the butterfly.(21) The proposed critical habitat substantially overlapped the remaining areas on the mountain designated for development, threatening to eliminate almost all of the developer's planned construction. Faced with several options, environmentalists, developers and local government officials agreed to seek a negotiated solution to conserve the butterflies while allowing some development to proceed. The planning thus began for the first habitat conservation plan (HCP).(22)

The San Bruno Mountain HCP was based on extensive biological studies conducted by the County of San Mateo and funded by private landowners.(23) Encompassing an area of over 3,000 acres, the plan protects in perpetuity approximately 90 percent of the butterflies' habitat.(24)

The plan incorporated many features that are considered by some to be essential to current HCPs. These features include focused biological research, extensive monitoring of the population health of the butterflies, and habitat enhancement activities including gorse removal and habitat restoration.(25), The plan operator has the responsibility for these activities, and to ensure that they are undertaken, conservation efforts must be summarized in annual reports to the USFWS.(26) The plan provided for a permanent source of funding to support the necessary conservation activities on the mountain in the form of a trust fund.(27) The plan also installed the county as the ongoing manager of the habitat.(28) In this capacity, the county monitors the effect of all activities within developable parcels and adjacent conserved habitat and provides advice and direction to the landowner to assist them in complying with the agreement.

One of the most important features of the San Bruno plan was the accompanying agreement to ensure that it would be honored by the participants. An implementing agreement was entered into by USFWS, the California Department of Fish and Game (CDF&G), the California Department of Parks and Recreation (CDP&R), the county, three cities, and four major landowners.(29) Among the most important terms of this agreement were those stating that each developer would only have to mitigate their operation with respect to the conserved habitat, unless a clause in the HCP extended mitigation beyond the plan.(30) This concept, that no additional mitigation could be imposed except as contemplated by the HCP, was essential to the landowners' willingness to resolve the San Bruno Mountain controversy.(31) The developers who negotiated the plan were reluctant to give away land and make other significant commitments in the HCP without assurances from the agencies that they would not later be responsible for additional mitigation requirements in order to protect the species covered under the plan. To state it differently, the parties agreed that there should be some limitation on any later surprises to the landowner participants as a way to induce their participation in the plan.

III. THE SECTION 10(A) AMENDMENTS--MAKING THE SAN BRUNO MODEL AND NO SURPRISES A PART OF THE ESA

Even though the San Bruno Habitat Conservation Plan (HCP) represented a consensus between developers, local governmental entities, and several environmental groups, there was no specific language in the Endangered Species Act (ESA) authorizing this type of agreement. The San Bruno plan provided for some level of incidental take of listed species, and an amendment to the ESA was needed to put it safely into effect.

In 1982, as Congress was debating bills to amend and reauthorize the ESA, the proponents of the San Bruno HCP approached Congress and requested that the Act be amended to authorize the Secretaries of the Interior and Commerce to negotiate with local and state agencies and the private sector to develop HCPs as a means of resolving the growing conflict between development activities and species preservation.(32) In exchange for agreeing to implement these plans, the developers would receive a permit to incidentally take species while performing their allowed activities. The San Bruno HCP was the motivation for the request, and it was agreed that the authorization would be modeled on that plan. Two essential elements of the San Bruno HCP were noted in the debate over the section 10(a) amendments: first, the cooperative development of the habitat conservation plan by the wildlife agencies, local and state agencies, and the private sector and second, the provision of adequate assurances to the private sector and the wildlife agencies that the terms of the plan would be implemented.(33)

The final 1982 amendments to the ESA added language to section 10(a) of the Act to "address the concerns of private landowners who are faced with having otherwise lawful actions not requiring federal permits prevented by section 9 prohibitions against takings.(34) These new section 10 provisions authorized the two Secretaries to issue permits for the incidental take of listed species in the course of otherwise lawful activities, provided that the permit applicant first committed to carrying out a conservation plan designed to provide long-term benefits for the species and avoid jeopardy to the continued existence of the species.(35)

The San Bruno Mountain HCP was the model for the conservation plan set forth in the amendments, and the conference committee devoted some discussion to the contents of the plan.(36) The conference report specifically pointed out several elements of the San Bruno plan that the committee considered important for future conservation plans. These important elements include the plan's long-term focus, the emphasis on preserving habitat throughout the area inhabited by the species, the guarantee of permanent, ongoing funding for management and enhancement activities, and, most significantly for the current No Surprises debate, the implementing agreement ensuring that the elements of the plan would be carried out by all participating parties.(37) The Conference Report states explicitly that plans are to be long-term, and that the availability of long-term assurances to developers participating in the San Bruno plan, and future plans, are an essential part of the success of section 10.(38)

According to the Conference Report:

The Committee intends that the Secretary may utilize this provision to

approve conservation plans which provide long-term commitments regarding the

conservation of listed as well as unlisted species and long-term assurances

to the proponent of the conservation plan that the terms of the plan will

be adhered to and that further mitigation requirements will only be imposed

in accordance with the terms of the plan. In the event that an unlisted

species addressed in an approved conservation plan is subsequently listed

pursuant to the Act, no further mitigation requirements should be imposed

if the conservation plan addressed the conservation of the species and its

habitat as if the species were listed pursuant to the Act.(39)

The idea that assurances were to be provided to parties entering into HCPs was recognized as a part of the section 10(a) ESA amendments when they were added to the Act in 1982.(40) Indeed, once the amendments were enacted, the San Bruno developers received a thirty year permit pursuant to the HCP with the assurances set forth in the implementing agreement.(41)

Following the approval of the San Bruno plan, however, the assurances concept lay dormant for many years. With little incentive to landowners to enter into an HCP, the section 10 HCP provisions were used infrequently throughout the decade following the amendments. Less than ten plans and incidental take permits, including the San Bruno plan, were finalized in the decade following the 1982 amendments. Many other efforts failed in the early stages of negotiation.(42)

IV. THE INTRODUCTION OF THE NO SURPRISES POLICY

On August 11, 1994, with some fanfare, Secretary of the Interior Bruce Babbitt and Secretary of Commerce Ron Brown announced the No Surprises Policy.(43) This was among the first of the Clinton Administration's policies aimed at improving the implementation of the Endangered Species Act (ESA). It has remained among the most controversial and, depending upon one's perspective, successful policies.(44)

With the announcement of the No Surprises Policy, the two Secretaries set out to change the course of ESA implementation and encourage nonfederal participation in habitat conservation plans (HCPs).(45) The intent was to provide certainty for landowners, guaranteeing that the federal government would not "come back ten years from now and say you have to pay more or give more."(46) As Secretary Babbitt stated, the Policy makes it clear that the United States Fish and Wildlife Service (USFWS) and the National Marine Fisheries Service (NMFS) would not "change [the] rules in the middle of the game."(47) It does this by putting a new emphasis on one of the key elements of the first HCP, the assurances given to the San Bruno developers as an incentive to participate in the plan.

A. The Details of No Surprises

"No Surprises," as stated in the Policy, means:

In negotiating `unforeseen circumstances' provisions for HCPs, the Fish and

Wildlife Service and National Marine Fisheries Service shall not require the

commitment of additional land or financial compensation beyond the level of

mitigation which was otherwise adequately provided for a species under the

terms of a properly functioning HCP. Moreover, [the Services] shall not seek

any other form of additional mitigation from an HCP permittee except under

extraordinary circumstances.(48)

In other words, HCP permittees will receive "long-term assurances . . . that the terms of the plan will be adhered to and that further mitigation requirements will only be imposed in accordance with the terms of the plan."(49) However, this simple statement raises several questions. While it sounds like a great deal for permit holders, it is nonetheless important to examine each of these terms to determine what assurances a permit holder will actually receive. Only then can the Policy be understood.

With the release of the final Habitat Conservation Planning Handbook, the Services provided some elaboration on the terms of the Policy and answered many of the issues raised about the Policy and its implementation.(50) The seven key aspects of the No Surprises Policy are discussed below.

1. Guarantees for Landowners

The No Surprises Policy is a guarantee for landowners. If unforeseen circumstances occur during the life of an HCP, the USFWS and the NMFS (collectively, the Services) will not regulate additional lands, or impose additional fines, penalties, or restrictions on lands or other natural resources already devoted to development by or use of a permittee who in good faith is adequately implementing or has implemented an approved HCP.(51) In other words, it is intended that there will be no surprises over the life of the HCP because once the HCP is approved, the deal is done.(52) The permit holder can remain secure regarding the agreed upon costs of mitigation and know that the Services will not come asking for more money, or additional lands or resources that have been released for development or use. In this manner, the Policy removes a major impediment to nonfederal participation in HCPs.(53)

2. Adequately Providing for Species in the Plan

As the Policy explains, before the No Surprises assurances will apply, a species must be "adequately covered" in an HCP.(54) A listed species must be addressed in an HCP which has satisfied the permit issuance criteria in section 10(a)(2) of the ESA.(55) Likewise, unlisted species will be deemed to be "adequately covered" if they are addressed in the HCP as if they were listed.(56) In other words, the section 10 requirements must be met before a permittee can enjoy the guarantees of the Policy. The Services have stated that a species should not be included in an HCP if data gaps or insufficient information make it impossible to craft conservation or mitigation measures for that species. Data gaps, however, can be overcome through the inclusion of adaptive management clauses in a plan.

3. Mechanisms to Change a Plan in the Face of Changed Circumstances

The Policy provides that certain additional mitigation steps may be required only in the case of "unforeseen circumstances."(57) Unforeseen circumstances, or "extraordinary circumstances," are changes in circumstances surrounding an HCP that were not or could not have been anticipated by the HCP participants and the Services.(58) These are alterations that have resulted in a substantial and adverse change in the status of a covered species.

Unforeseen circumstances, however, are different from "changed circumstances."(59) The agencies and applicant can reasonably anticipate and plan for changed circumstances, which presumably are not uncommon during the course of a long-term HCP. These include listings of new species, modifications in the project or activity as described in the original HCP, or modifications in the HCP's monitoring program. Changed circumstances do not give rise to the requirement for new mitigation.

The Services state that an HCP should outline measures developed by the agencies and the applicant to respond to any anticipated and possible changed circumstances over time, possibly by incorporating adaptive management measures for any covered species in the HCP.(60) In other words, the Policy dictates that potential problems in the HCP should be identified in advance, and specific strategies or protocols should be set forth to deal with these issues. This adaptive management approach is an important aspect of habitat conservation planning. It assures opportunities to adjust the HCP as necessary without having to amend the plan.

4. Unforeseen and Extraordinary Circumstances--A Specifically Defined Set of Situations

The Policy speaks somewhat vaguely in terms of changes with respect to "unforeseen" or "extraordinary" circumstances which occur.(61) The Services have set forth some criteria for determining when extraordinary circumstances exist.(62) In essence, these criteria focus on the level of biological peril of the affected species covered by the HCP and the degree to which the welfare of those species is tied to a particular HCP. The Services explain that if the species is declining rapidly, and the HCP in question encompasses an ecologically insignificant portion of the species' range, then extraordinary circumstances typically would not exist.(63) However, if the HCP encompasses a maJority of the species' range, then extraordinary circumstances could justifiably be said to exist.(64) The broad policy guidance from this language and from the changed circumstances exceptions allows the parties to establish the procedures and define the terms during the negotiations for each specific plan.

5. Seeking Other Forms of Additional Mitigation From an HCP Permittee If Extraordinary Circumstances Arise

If unforeseen circumstances are found to exist, the Policy does not prohibit the Services from seeking other forms of mitigation beyond the commitment of additional land or financial compensation.(65)

The Services explain that these other mitigation measures must be limited to modifications within a conserved habitat area or adjustments in lands that are already set aside in the HCP's operating conservation program for the affected species, unless the permittee consents to other measures.(66) This means that changes will occur in plan areas explicitly designated for habitat protection or other conservation uses. To respond to these changes, the intensity, range, or effectiveness of conservation efforts in such areas may be redirected or increased, provided that the changes do not impose new restrictions on the permittee's activities or require additional financial compensation that the parties did not previously agree upon.

6. Stronger Assurances for Plans Providing an "Overall Net Benefit" for Species

The No Surprises Policy gives additional assurances to landowners that the Services will not seek any additional mitigation from a permittee where the terms of a properly functioning HCP were designed to provide an "overall net benefit" for the species and the HCP contains measurable criteria for the biological success of the plan which have been or are being met.(67) These provisions state that mitigation measures of any type will not be imposed on the landowner, regardless of whether unforeseen circumstances arise, if the HCP is designed to provide an overall net benefit for species. This was included in the Policy to provide an incentive to applicants to develop a plan that goes beyond the minimum required for HCP approval and provides an overall net benefit for affected species.

For listed species, an overall net benefit is defined as the cumulative results of the management activities identified in an HCP that provide for an increase in a species' population or the enhancement, restoration, or maintenance of covered species' suitable habitat with the HCP planning area, taking into account the length of the permit and the incidental taking allowed by the permit.(68) The Services state that the benefit must be sufficient to contribute to the recovery of the covered species if undertaken by other property owners similarly situated.(69) For unlisted species, overall net benefit is defined as management activities identified in an HCP that would remove the threats to the species and eliminate the need to list the covered species again, if undertaken on a broader scale by other property owners similarly situated.(70)

7. Ability of the Services or Other Government Agencies to Take Additional Action

The Services emphasize that there is nothing in the Policy that prevents the United States from interceding at its own expense on behalf of a species. Moreover, there is nothing in the Policy that prevents the Services from requesting that a permittee voluntarily undertake mitigation on behalf of affected species. The expectation is that when a plan is functioning properly it is unlikely that the Services will have to resort to protective or conservation action of this nature. Nonetheless, in the event that further mitigation is desired, the Services can use the authority and resources of the ESA and other laws to provide additional protection for species included in an HCP.

B. Implementation of the Policy--The Era of the HCP

Following its announcement, the No Surprises Policy quickly became one of the featured acts on the Administration's stage of ESA reforms and innovations. The Policy is among the most prominent of the Administration's efforts to prove that the ESA can work to protect species without stifling resource utilization and development It has also become a key element of the debate over ESA reauthorization, and the Policy is a central feature of a number of proposals for legislative changes to section 10 of the Act.(71) One important point often ignored by critics of the No Surprises Policy is that it has played an important role in muting the criticism that the ESA is unworkable and too stringent. At a time when the Act was under strong attack, the Policy and the HCP process it facilitated gave rise to a constituency of regulated entities who, although still not enthusiastic about the law, at least were willing to acknowledge that it is possible to balance conservation with development and resource use. These entities are using the long dormant section 10(a) provisions to allow activities to occur in a manner that minimizes the activities' impacts on species.

The No Surprises Policy assurances have been a central factor in the dramatic increase in HCPs. Between 1982 and 1994, only thirty-eight HCPs had been approved.(72) Most of these were small, single species plans. The median size of the area covered was only forty-eight acres, with eight of the thirty-eight covering ten acres or less.(73) In comparison, since the announcement of the Policy, over 180 plans and incidental take permits have been approved,(74) and over one hundred additional HCPs are presently being negotiated.(75) Close to half of these include No Surprises assurances. Moreover, of these new HCPs, several are areas of more than 100,000 acres.(76) With this dramatic-increase in the use of HCP provisions, USFWS expects eighteen million acres of fish and wildlife habitat to be protected on private lands under HCPs by the end of 1997.(77)

Included among the HCPs developed with No Surprises assurances are some of the most innovative and far-reaching habitat conservation efforts developed by nonfederal entities. These plans include multiple species, cover huge land and water areas, address habitat needs for unlisted as well as listed species, and provide conservation programs designed to last for decades. Of course, they also allow resource use and development to proceed in accordance with the rules set forth in the plans.

An examination of several of the most significant large-scale plans negotiated recently demonstrates the impact of the No Surprises Policy. It is unlikely any of these plans would have been pursued by the landowners involved without the assurances provided under the No Surprises Policy.

1. Plum Creek I-90 Multi-Species HCP

This plan, supporting a fifty-year permit, covers four listed species and numerous other unlisted species within a 418,690 acre area, in which Plum Creek property forms a checkerboard pattern with federal lands and other private lands.(78) Extensive wildlife surveys and watershed and habitat analyses were conducted with funding from the permit applicant. To support the plan's multi species approach, studies of 281 vertebrate wildlife species in the plan area were undertaken.(79) The plan incorporates a forest management strategy designed to minimize impacts to species.(80) In addition to forest management, the HCP also incorporates a riparian management strategy focused on protecting priority habitat for fish and wildlife in the area.(81) The plan also includes management for special habitat areas and seeks to protect these special habitats, which include wetlands, talus slopes, and caves.(82) As part of the plan, Plum Creek has committed to implementing a number of state-of-the-art management practices to preserve and protect wildlife habitat and forestland ecosystems. Management practices address a variety of habitat conditions and habitat-related concerns and seek to augment protection extended to listed and unlisted species on adjacent federal lands.(83) The plan provides for adaptive management allowing modification based on the results of monitoring data and evaluations of the plan's management strategy. Plum Creek committed to the plan largely as a result of the assurances set forth in the implementing agreement accompanying the plan.(84)

2. The Orange County Central and Coastal Subregion NCCP/HCP.

This seventy-five year habitat plan covers seven federally-listed species, including the California gnatcatcher, southwestern willow flycatcher, Riverside fairy shrimp, and Pacific pocket mouse.(85) The plan creates a 38,738 acre habitat reserve system (18,527 acres of coastal sage scrub, 6,950 acres of chaparral, 5,732 acres of grassland, 940 acres of woodlands, and 2,113 acres of marsh and riparian areas) and provides for conservation of all species within the reserve.(86) As part of the plan, a comprehensive management scheme is set forth so that actions within the reserve will be monitored closely and modified to respond to new scientific information and changing conditions and habitat needs. A long-term habitat management program is established to be funded by an efficiently managed $10.7 million endowment established by the plan participants with future anticipated mitigation fees.(87) A variety of landowners are participating in the plan, including the Irvine Company, Metropolitan Water District (MWD) of Southern California, Southern California Edison, Orange County, and the University of California at Irvine.(88) MWD, for example. has committed $1 million in annual payments of $250,000 beginning in 1997.(89)

Participants in the Orange County NCCP/HCP were drawn to the negotiations in large part because of the assurances offered by participating in the plan. MWD, for example, received regulatory assurances that operation and maintenance of its existing facilities in the area would be permitted activities under the plan.(90) The plan also provides assurances that MWD will be in compliance with the ESA for two important planned projects in the area.

3. The Elliott State Forest HCP

This long-term plan covers approximately 93,000 acres in the Oregon coast range and provides a conservation strategy for the protected northern spotted owl and marbled murrelet populations in the area.(91) The strategy's objective is to reconcile long-term timber management goals with the protection of spotted owls and marbled murrelets. Toward that end, the plan takes into consideration not only timber values, but also wildlife, fish, water quality, recreation, and other resource concerns.(92) Among the mitigation measures to minimize takings set forth in the plan are specific habitat management and habitat enhancement activities targeted toward spotted owls and marbled murrelets.(93) Plans for future research and funding by the applicant for this research are also discussed in the HCP. To evaluate the plan's success, annual monitoring reports are required along with a comprehensive review at the end of the plan's first five years.

4. Washington Department of Natural Resources HCP

This plan will cover 1,580,000 acres of forested land, of which approximately 1,520,000 acres are in timber production.(94) The plan includes measures for minimization and mitigation of impacts on spotted owls and marbled murrelets, and also conserves habitat for unlisted species in the area.(95) The plan sets forth a riparian conservation strategy for salmonid habitat which seeks to maintain or restore salmonid habitat on Washington lands managed by the Department of Natural Resources (DNR) and contribute to the conservation of other riparian species and species dependent on these areas. Ongoing research will be conducted to assess and improve the mitigation in the plan, and regular reports will be provided to the Services. Assurances have been provided to DNR regarding the type of additional mitigation that will be sought and when this will be done.

V. THE DEBATE OVER THE NO SURPRISES POLICY

The No Surprises Policy has undoubtedly ushered in an era of the habitat conservation plan (HCP), but the policy and the plans it has produced are not without critics. From the outset, some environmental groups have opposed the Policy, noting that changes frequently occur in the natural world and the perceived likelihood that some HCPs will have to be adjusted over time.(96), Scientists have pointed to fires and floods, epidemics and earthquakes, arguing that the Policy is troubling to scientists because it runs counter to the natural world."(97)

In March 1997, a group of biologists signed a letter to environmental leaders in Congress and the White House recommending, measures to be included in several of the proposed private land conservation planning, initiatives, including No Surprises assurances, that were being proposed by Congress and the Clinton Administration.(98) This letter includes recommendations for the No Surprises assurances. The scientists noted that "landowner friendly" initiatives could assist in meet the Endangered Species Act's (ESA) goals, but argued that changes would be necessary to ensure that HCPs and other planning initiatives alleviated, rather than contributed to, threats to species and their habitats.(99)

The scientists listed five principal areas of concern with the No Surprises Policy. Most of these concerns, however, are actually being addressed by the Services in their present implementation of the Policy. These concerns, when considered in the context of ongoing HCP planning, demonstrate why the No Surprises Policy is workable, and in fact may be necessary to habitat conservation planning. Each of these concerns are listed and addressed individually below.

1. The Possibility of Amending HCPs Based on New Information and Not Requiring Extraordinary Circumstances

As many of the existing plans demonstrate, an HCP does not have to be amended to deal with new problems, and it will not always require extraordinary circumstances to make changes to these plans. Many plans have built-in flexibility and provide for adaptive management.(100) If subsequent monitoring reveals that circumstances have changed or biological conditions are different from those originally estimated for the HCP, models can be refined and management practices modified under the adaptive management provisions built into a plan Monitoring and periodic reevaluation were a key component of the San Bruno plan,(101) and with the No Surprises Policy this continues to be an important component of HCPs.

The Plum Creek plan, for example, uses an adaptive management approach and stipulates that, should monitoring determine that biological conditions are outside the bounds estimated in the HCP, the permitholder and United States Fish and Wildlife Service (USFWS) will review the a gumptions, refine models and modify management.(102) The Elliott State Forest plan similarly calls for regularly scheduled assessments of management practices under the HCP.(103) This will be based on input from monitoring and research.(104) These examples show that adaptive management will incorporate the evolving information base, and management will be adjusted as necessary. The same is true for the Orange County NCCP/ HCP(105) and other recent plans.

In each of these plans, the parties have agreed that a change in circumstances or the discovery of new information may warrant changes to the HCP that would increase or change the level of mitigation required. These examples, as well as other HCPs developed with No Surprises assurances, demonstrate that the terms of the plan can provide for ongoing adjustments and changes to HCPs to respond to new information developed over the course of the plan implementation. Those situations where additional mitigation will be required should be spelled out however. In addition, beyond the management measures expressly stipulated, other amendments can also occur subject to the consent of both sides.

2. Adequate Funding Sources to Underwrite Program Changes When Parties Other than Landowners Request Them

Undoubtedly, a reliable, adequate funding source is desirable. In fact, as required by section 10, the obligations set forth in each plan must have an adequate source of landowner funding.(106) In the San Bruno plan, for example, the parties recognized that it would not be possible to rely solely on discretionary appropriations from public agencies. Thus, a private source of permanent funding was established to carry out conservation activities.(107) In the Orange County NCCP/HCP, the participants followed a similar approach establishing an endowment funded by participants to carry out the plan.(108) The central concern with the policy is that because the federal government may be called upon to undertake mitigation, it is essential that funding for this purpose be provided. The value of a funding source for this purpose is an issue that virtually all parties to the ESA debate agree upon. The issue is receiving concentrated effort from many sources, including Congressional staff, and it is possible that options to provide funding will be proposed soon.

Aside from this debate, however, a key point is that HCPs can themselves be designed to respond to most of the problems that give rise to the need for remedial action. Adequate planning at the front end reduces the likelihood of future problems. Furthermore, there is a lot the federal government can do with existing funds or programs. If a commitment of federal funds is needed to avoid a species' decline, it is hard to imagine those funds being denied. When the significant funding flexibility available to the federal government is considered along with the agencies' ability to undertake on-the-ground measures to mitigate habitat impact, the likelihood of a species doomsday scenario becomes remote. Thus, although all parties with an interest in HCPs should work together to establish an adequate funding source, it would be a serious mistake to forego current opportunities to develop these beneficial plans for the sake of awaiting an insurance policy that in all likelihood will rarely or never be drawn against.

3. Availability of Mechanisms to Ensure that Long-Term Conservation Plans Are Adequately Monitored

Research and monitoring provisions, as well as provisions for anticipated changes, are contractual terms to be negotiated as suitable for each plan. Most of the recent large-scale HCPs include monitoring and adaptive management to respond to identified problems. For example, the Plum Creek adaptive management strategy blends research and monitoring.(109) Monitoring includes surveys specifically targeted at protected species and at aquatic resources. This monitoring will also be used to detect trends in key areas such as watershed health. Negative results will trigger corrective action in the HCP before long-term habitat damage has occurred.

The Murray Pacific HCP for the Northern Spotted Owl illustrates how this area of concern is dealt with by the No Surprises Policy. Under the terms of the Murray Pacific HCP, the company is obligated to monitor spotted owl and other species, submit reports annually on the progress of the HCP, conduct regularly scheduled meetings to discuss the progress of the HCP, and review any necessary refinements or revisions.(110) Likewise, the Orange County Central and Coastal NCCP/HCP calls for direct monitoring of target and identified species, written reports to USFWS and the State, and annual evaluations of implementation of the permit terms and progress being made toward conservation goals.(111) For all of these plans monitoring is an integral part of the adaptive management in the plan.(112)

4. Clear Articulation and Demonstration of the Attainability of Measurable Biological Goals

Section 10(a)(2)(B) of the ESA requires the Secretary to determine whether the measures included in the plan will be met.(113) Many HCPs articulate such goals. Under the Plum Creek HCP, for example, goals are spelled out for spotted owl numbers. Modifications may be required should the estimate of owl carrying capacity be revised to less than eighty percent of the initially predicted level, based on monitoring data and a peer-reviewed opinion that the problem was due to conditions caused by the HCP or miscalculations of owl response to the habitat provided.(114) The plan also sets forth numerical goals for anadromous fish affected by the landowner's activities.(115) The important point is that the specification of articulated biological goals is a desirable aspect of HCP planning. Indeed, these goals are being included to the extent possible in many recent plans.

5. Extension of Assurances for Plans Articulating Only Species-Specific Goals to Further Regional Conservation

The intent of this recommendation is unclear. If it would require specific goals for every species subject to a multi-species or ecosystem-based plan, then it defeats the use of indicator species, and thus the ability to do ecosystem-based plans, and should be rejected. If, however, this principle means that such goals should be established for indicator species or for some similar method of determining HCP success for regional plans, then it is both realistic and achievable. Regional conservation efforts have the best chance of succeeding if the Policy is made readily available for these types of plans. By extending assurances to the parties undertaking these plans, an important incentive exists for large-scale, ecosystem-wide plans that "further conservation in a regional context."(116)

In summary, if these five principles are the criteria for determining whether the No Surprises Policy can work for the protection of species, then the answer is that it can. Plans can be changed to accommodate new information and within each plan, the means for obtaining information can be set forth. The bottom line is that the No Surprises Policy stands for one basic proposition--if the applicant develops a plan that meets all of the relevant criteria for approval and requests a commitment of regulatory certainty, assurances will be provided. The content of those assurances, however, is determined by contractual negotiations, by public comment, and by federal decision making based on the record. None of these No Surprises HCP provisions are preordained. The provisions of each HCP are tailored to the unique circumstances addressed. The result is a contract between the federal government and the permit holder, and like any contract the ultimate terms of the deal will be defined by the relative bargaining strength of the parties. Because the terms of the HCP are open to bargaining and public review, there is every reason to believe that, given the proper level of scrutiny, the plans which are ultimately approved will meet the needs of species and the expectations of landowners.

VI. CONCLUSION

The No Surprises Policy has emerged as a lightning rod of the drive to make the Endangered Species Act (ESA) more attractive to nonfederal landowners and more effective in advancing the goals of the ESA. It has undoubtedly played a significant role in encouraging landowners to make the commitments of land and resources necessary to make meaningful, long-term habitat conservation plans (HCPs) a reality.

In effect, the Policy opened the door and invited the landowners into the HCP approval process. Once inside, many HCP applicants have discovered the approval process to be a long, painful and expensive procedure. As attractive as the No Surprises Policy appears on its face, permit applicants have found that in reality the devil has been in the details of the HCP, its implementation agreement, and the supporting administrative record. This is one of the most important aspects of the No Surprises Policy. The Policy, in its vagueness and generality, gives way to the extensive detail of the plan itself. It is the process of defining the requirements of the plan that determines whether, when the No Surprises Policy is applied, the HCP involved is a fair bargain for the landowner and affected species or. as some critics have alleged, a sellout of the ESA.

The importance of the terms of each plan is highlighted when the generality and ambiguity of the Policy is taken into account. The No Surprises Policy appears to make a major concession to the landowners, but then it drops back to hide behind the excessively broad `extraordinary circumstances' qualifier.(117) Equally challenging, if not foreboding, to the landowner-applicant is the `net benefit test.'(118) Both of these qualifiers in the `no further mitigation requirement' of the Policy provide pertinent federal agencies and concerned third parties with ample opportunity to build important safeguards into HCPs.

This is the rub for the No Surprises Policy. All sides in the HCP process can accomplish their objectives only through the terms of the plan. The prudent landowner-applicant should nail down his or her No Surprises Policy commitments in detail and as binding terms of a final contract The United States Fish and Wildlife Service (USFWS) and the National Marine Fisheries Service (NMFS), in exchange, will no doubt seek the best deal possible for the affected species, including adaptive management and the ability to seek future changes from the landowner based on mutual consent. Third parties can and should engage in the negotiation process in good faith through the public review process and other opportunities for direct communication with the applicant. For major HCPs there are ample opportunities to influence decision making from the outside, and outside interests should take advantage of them. Landowner-applicants, especially those involved in large-scale HCPs, will find it to their benefit to hear out the concerns of third parties. The key to success on both sides of such a dialogue is the willingness to approach complex habitat conservation issues with flexibility and open minds.

The debate over the No Surprises Policy needs to move to the next level. As currently formulated, the Policy is sound and is an integral part of the section 10(a) permitting process as a matter of both law and policy. The effectiveness of the HCP process in balancing species conservation with resource utilization and landowner rights will be determined only when the debate over the Policy moves beyond jargon and rhetoric and focuses on the details of the plans themselves.

Large-scale, multi-species HCPs are an extremely promising tool for species conservation. The momentum generated by the Clinton Administration's willingness to say that it will live by the deal it negotiates and not circle back to demand more should not be lost. Now is the time to see if the section 10(a) process can truly be a consensus-building mechanism leading toward the achievement of the Act's goals, or whether it will be back to business as usual with polarized, high-stakes conflict and litigation under the ESA to determine what activities can and cannot occur on nonfederal lands and waters. The latter course has been unsuccessful in making major strides in species conservation in the past; it is time to try the alternative approach of which the No Surprises Policy is a key element. (1) 16 U.S.C. [subsections] 1531-1543 (1994).

(2) Administration's New Assurance Policy Tells Landowners: "No Surprises" in Endangered Species Planning, Office of the Secretary, U.S. Dep't of the Interior News Release, Aug. 11, 1994, available in 1994 WL 440313 [hereinafter No Surprises Press Release].

(3) H.R. Conf. Rep. No. 97 835, at 30 (1962), reprinted in 1982 U.S.C.C.A.N 2807, 2871.

(4) Section 10(a)(2)(A) of the ESA requires an applicant for an incidental take permit to submit a "conservation plan" specifying the impacts likely to result from the taking and the measures that the permit applicant will undertake to minimize or mitigate such impacts. 16 U.S.C. [sections] 1539(a)(2)(A)(1994). These are known as `habitat conservation plans,' or HCPS. They vary in form and complexity, but generally an HCP sets forth the actions a private party will undertake with regard to species and lands within their jurisdiction

(5) See No Surprise Press Release, supra note 2, at (*)1.

(6) Id. at (*)1 (quoting Secretary of the Interior Bruce Babbitt).

(7) See id at (*)3 (quoting one industry representative as saying that "[l]ack of certainty has been a major obstacle to large scale private conservation planning"). (8) Pub. L. No. 93-205 [sections] 2(b), 87 Stat. 884 (1973) (codified at 16 U.S.C [sections] 1531(b) (1994)).

(9) 16 U.S.C. 1538 (1994). The Act defines a person as an individual corporation, partnership, trust, association, or any other private entity; or any officer, employee, agent, department, or instrumentality of the Federal Government, of any State, municipality, or political subdivision of a state, or of any foreign government; any State, municipality, or political subdivision of a State: or any other entity subject to the jurisdiction of the United States.

Id. [sections] 1532(13). The [sections] 9 language applies only with respect to endangered species of fish or wildlife. Id. [sections] 1538(a)(1) (emphasis added). Under [sections] 4(d), however, USFWS is granted the discretionary authority to extend any of the prohibited acts of [sections] 9(a)(1) to threatened wildlife species. Id. [sections] 1533(d) (emphasis added). By regulation, the [sections] 9 take prohibition has generally been extended to threatened species. 50 C.F.R. [sections] 17.31(a) (1996).

(10) 16 U.S.C. [sections] 1532(19) (1994).

(11) 40 Fed. Reg. 44,412, 44,416 (Sept. 26, 1975) (codified at 50 C.F.R. [sections] 17.3 (1996)).

(12) Id. In 1981, USFWS amended the 1975 definition to clarify that only actions "actually killing or injuring wildlife" would be subject to [sections] 9.46 Fed. Reg. 54,748, 54,749 (Nov. 4, 1981) (codified at 50 C.F.R. [sections] 17.31 (1996)). In making the change, however, the agency emphasized again that [sections] 9 applies to significant habitat modifications which injure or kill wildlife or individual members of a listed species. Id.

(13) Palila v. Hawaii Dept. of land & Natural Resources, 471 F. Supp. 985 (D. Hawaii 1979).

(14) Palila v. Hawaii Dept. of Land & Natural Resources, 639 F.2d 495, 498 (9th Cir. 1981) [hereinafter Palila I].

(15) Palila v. Hawaii Dep't of Land & Natural Resources, 649 F. Supp. 1070 (D. Hawaii 1986), aff'd, 852 F.2d 1106 (9th Cir. 1988) [hereinafter Palila II]; see also infra note 16 and accompanying text (describing how the Supreme Court clarified that harm requires actual mortality or injury of wildlife).

(16) Babbitt v. Sweet Home Chapter of Communities for a Great Oregon, 115 S. Ct 2407 (1995). In this decision, the Court concluded that the Secretary of the Interior had not exceeded his authority in determining that the ESA's broad "take" prohibition encompassed habitat modification practices which actually killed or injured wildlife, citing, among other reasons, the conclusion that the term harm in the context of the statute "naturally encompasses habitat modification that results in actual injury or death to members of an endangered of threatened species." Id at 2412-13. The Court was also persuaded by Congress' decision to add the [sections] 10(a) permitting provisions to the Act and noted that this addition supported the conclusion "that activities not intended to harm an endangered species, such as habitat modification, may constitute unlawful takings under the ESA unless the Secretary permits them." Id. at 2414.

There is some dispute as to the implications of Sweet Home. Some commentators have argued that the decision actually narrowed the extent to which habitat modification on private lands constitutes a takings. See, e.g., Steven P. Quarles et al., Sweet Home and the Narrowing of Wildlife "Take" Under Section 9 of the Endangered Species Act, 26 Envtl. L. Rep. (Envtl. L. Inst.) 10,003 (Jan. 1996). Others have viewed the decision as a significant victory for environmental groups. See Beth S. Ginsberg, Babbitt v. Sweet Home Chapter 6 Communities for a Great Oregon: A Clarion Call for Property Rights Advocates, 25 Envtl. L. Rep. (Envtl. L. Inst.) 10,478 (Sept. 1995). Regardless of the actual impacts that the decision will have on the regulation of property owners under the ESA, the decision has attracted interest in the ongoing ESA reauthorization debate and has provoked a reexamination of the Act's restrictions on uses of private property. Id. at 10,483 85.

(17) Pub. L. No. 9205, [sections] 10, 87 Stat. 884, 896 (1973) (amended 1976, 1978, 1979, 1982, 1988) (codified at 16 U.S.C. [subsections] 1531-1543 (1994)).

(18) Determination that Six Species of Butterflies are Endangered Species, 41 Fed. Reg. 22,041, 22,042 (June 1, 1976).

(19) Proposed Endangered or Threatened Status or Critical Habitat for 10 Butterflies or Moths, 43 Fed. Reg. 28,938, 28,941 (July 3, 1978).

(20) San Bruno Mountain Habitat Conservation Plan Steering Committee, Final San Bruno Mountain Area Habitat Conservation Plan III-4, III-6 (1982) (on file with authors) [hereinafter San Bruno HCP].

(21) Reproposal of Critical Habitat for One Species of Butterfly, 45 Fed Reg. 20,503 (Mar. 28, 1980).

(22) Michael Bean et al, Reconciling Conducts Under The Endangered Species Act: The Habitat Conservation Planning Experience 7-8 (1991); see also Robert D. Thorton, Searching for Consensus and Predictability: Habitat Conservation Planning Under the Endangered Species Act of 1973, 21 Envtl. L. 603, 621-22 (1991).

(23) See San Bruno HCP, supra note 20, at 1-1.

(24) Although the plan was driven by the listing proposals and the need for a creative solution to resolve the conflict between development interests and the conservation requirements of the protected butterflies, the plan focuses not only on the butterflies, but also on the grassland habitat of which they are a part. Id. at III-1.

(25) Among the identified threats to the species' habitat were gorse, eucalyptus, and other exotic species colonizing grasslands. Removal of these exotics proved to be more difficult than expected and the restoration progressed slowly. Id.

(26) Id. at III-19 to III-21.

(27) See id, supra note 20, at V4 to V-7. Funds are raised through fees charged to developers and charges on dwellings in the development area. Id.

(28) Id.

(29) San Bruno Mountain Habitat Conservation Plan Steering Committee, Agreement with respect to the San Bruno Mountain Area Habitat Conservation Plan, 1 (March 4, 1983) (on file with authors).

(30) The agreement states: Based on and in return for the covenants and commitments of the Landowners, and the Cities to require that the Landowners, make substantial and valuable conveyances of real property and to pay and arrange for the payment of significant sums of money and to undertake other action in reliance upon the Assurances by the USFWS, CDF&G, the County and the Cities set forth herein, USFWS, CDF&G, the County and the Cities covenant, agree and assure the Landowners that as permitted by the Endangered Species Act, as amended, and authority under other applicable Acts, statutes, ordinances, orders and regulations:

a. Compliance with the terms of this Agreement in the development and use of lands constitutes compliance with the provisions of the Endangered Species Act (including the requirements imposed by Sections 7(a)(2) and 9 of such Act); and

b. Except as expressly set forth herein (including, but not limited to, Section V(C)(5)--Unplanned Pars, Section VIII(A)(3)--Remedies and Enforce meet, or Section IX--Amendments), no further mitigation or compensation is necessary or will be required by any of the parties hereto within or with respect to the Developable Administrative Parcels to provide for the conservation, protection or enhancement of the San Bruno Mountain Area Ecological Community, including, but not limited to, the Species of Concern.

Id. at 13-14.

(31) Thornton, supra note 22, at 625; Lindell L. Marsh, Conservation planning under the endangered species act: A New paradigm for conserving biological diversity 116 (1994)

(32) Endangered Species Act Reauthorization and Oversight: Hearing Before the Subcomm. on Fisheries and Wildlife Conservation and the Environment of the House Comm. on Merchant Marine and Fisheries, 97th Cong. 327-32 (1982) (statement of Lindell L. Marsh, attorney, Nossaman, Krueger & Knox).

(33) H.R. Conf. Rep. No. 97-304, at 31 (1982), reprinted in 1982 U.S.C.C.A.N. 2807, 2871-72.

(34) Id. at 29, reprinted in 1982 U.S.C.C.A.N. at 2870.

(35) Section 10(a) first sets forth the elements of an HCP, stating: No permit may be issued by the Secretary authorizing any taking referred to in paragraph (1)(B) unless the applicant therefor submits to the Secretary a conservation plan that specifies--

(i) the impact which will likely result from such taking;

(ii) what steps the applicant will take to minimize and mitigate such impacts, and the funding that will be available to implement such steps;

(iii) what alternative actions to such taking the applicant considered and the reasons why such alternatives are not being utilized; and

(iv) such other measures that the Secretary may require as being necessary or appropriate for purposes of the plan.

(16) U.S.C. [sections] 1539(a)(2)(A) (1994). The section next sets forth the approval criteria for an incidental take permit. After notice and comment, the Secretary must find:

(i) the taking will be incidental;

(ii) the applicant will, to the maximum extent practicable, minimize and mitigate the impacts of such taking;

(iii) the applicant will ensure that adequate funding for the plan will be provided;

(iv) the taking will not appreciably reduce the likelihood of the survival and recovery of the species in the wild; and

(v) the measures, if any, required under subparagraph (A)(iv) will be met.

Id. [sections] 1539(a)(2)(B). The Secretary issues a permit with "such terms and conditions as the Secretary deems necessary or appropriate to carry out the purposes of this paragraph including, but not limited to, such reporting requirements as the Secretary deems necessary for determining whether such terms and conditions are being complied with." Id. [sections] 1539(a)(2)(C).

(36) H.R. Conf. Rep. No. 97-4135, at 30-31, reprinted in 1982 U.S.C.C.A.N. 2807. The conference report states:

This provision is modeled after a habitat conservation plan that has been developed by three Northern California cities, the County of San Mateo, and private landowners and developers to provide for the conservation of the habitat of three endangered species and other unlisted species of concern within the San Bruno Mountain area of San Mateo County .... Because the San Bruno Mountain plan is the model for this long term permit and because the adequacy of similar conservation plans should be measured against the San Bruno plan, the Committee believes that the elements of this plan should be clearly understood.

Id.

(37) Id. at 32, reprinted in 1982 U.S.C.C.A.N. at 2873.

(38) Id. at 31, reprinted in 1982 U.S.C.C.A.N. at 2872.

(39) Id. at 30, reprinted in 1982 U.S.C.C.A.N. at 2871. This report language is quoted in the No Surprises Policy and in the recent proposed No Surprises rulemaking. See infra note 48 and accompanying text.

(40) 16 U.S.C. [subsections] 1538(a)(2)(B), 1539(a).

(41) 50 Fed. Reg. 39,681, 39,685 (Sept. 30, 1985).

(42) For a discussion of many of the legal and practical obstacles with the HCP process in the early years, see generally Thornton, supra note 22, at 639-52; Bean et al., supra note 22, at 59-60, Albert C. Lin, Participant's Experiences with Habitat Conservation Plans and Suggestions for Streamlining the Process, 23 Ecology L.Q. 369, 398-408 (1996).

(43) No Surprises Press Release, supra note 2, at (*)1.

(44) The Administration made its first announcement of user-friendly" ESA reforms in June 1994. Administrative Changes Will Make Endangered Species Act User-Friendly and Improve Benefits to At-Risk Species, U.S. Dep't. of Interior, U. S. Newswire, June 14, 1994, available in 1994 WL 3821529. Later, when the No Surprises Policy was introduced in August several interest groups were present at the introduction and spoke out in favor of the policy. These groups included the Western Urban Water Coalition, Weyerhaeuser Company, the Irvine Company, the Santa Margerita Company, the Alliance for Habitat Conservation, and the Nature Conservancy. Other policies were announced following the No Surprises Policy. In March 1995, the Department of the Interior and Department of Commerce released a "10-Point Plan" to improve the implementation of the ESA. Protecting America's Living Heritage: A Fair, Cooperative and Scientifically Sound Approach to Improving the Endangered Species Act, U.S. Fish and Wildlife Service & National Marine Fisheries Service, News Release, Mar. 6, 1985, (on file with authors). No Surprises was listed among the reforms for providing "quick, responsive answers and certainty to landowners." Id

(45) A few months after the Policy was released, it was included in the Draft handbook for habitat conservation Planning and Incidental take Permit processing which the Services released for a three month comment period. Notice of Availability of Preliminary Draft Handbook for Habitat Conservation Planning and Incidental Take Permit Processing, 59 Fed. Reg. 65,782 (Dec. 21, 1994). The original comment period was 60 days, but this was subsequently extended to April 7, 1995. Extension of Comment Period on Preliminary Draft Handbook for Habitat and Conservation Planning and Incidental Take Permit Processing, 60 Fed. Reg. 8,729 (Feb. 15, 1995). The draft Handbook set forth two pages of discussion on the policy, which was also included in an Appendix to the Handbook. See United States Fish and Wildlife Service & National Marine Fisheries Service, Endangered Species Habitat Conservation Planning handbook 34-36 (Nov. 1996) [hereinafter Final Handbook]. In December 1996, the Policy was included in expanded form, along with descriptions and analysis, in the text of the final HCP handbook Notice of Availability of Final Handbook for Habitat Conservation Planning and Incidental Take Permitting Process, 61 Fed Reg. 63,854 (Dec. 2, 1996).

Recently, the Policy was also released for notice and comment again as part of a proposal to codify the substance of No Surprises as a rule. Proposed Rule, Department of Interior & Fish and Wildlife Service, 62 Fed. Reg. 29,091 (May 29, 1997). The Services committed to publishing the Policy for public comment as part of the settlement of Spirit of the Sage Council v. Babbitt, No. 96-CV-02503 (D.D.C. Mar. 31, 1997) (final settlement agreement). This suit challenged the procedures under which the No Surprises Policy was adopted. In settling the suit in March, the Services continued to assert that there was sufficient authority under the ESA to issue the original policy and to issue HCPs and incidental take permits with No Surprises assurances. 62 Fed Reg. at 29,09

(46) No Surprises Press Release, supra note 2, at (*)1 (quoting Secretary of the Interior Bruce Babbitt).

(47) Id. No Surprises was described at the time as "significant change in policy," but it in fact was not a new idea in environmental law in general or the ESA in particular. Id. Shield provisions, which are similar to No Surprise in concept, were a central part of several other environmental programs beginning in 1980. See 45 Fed. Reg. 33,290, 33,311-33,313 (May 19, 1980) (setting forth shield provisions for RCRA). For the enforcement of the Resource Conservation and Recovery Act and the Clean Water Act programs, EPA has long recognized the benefits of enabling a permittee to rely on its EPA-issued permit document to know the extent of its duties under the relevant Act. This allows a facility to "plan and operate with knowledge of what rules apply" and to avoid "uncertainty as to the standing of their operations under the law." Id. at 33,312.

(48) Final Handbook, supra note 45, at 3-29.

(49) See H.R. Conf. Rep. No. 97-4135, at 30 (1982), reprinted in 1982 U.S.C.C.A.N. 2807, 2871.

(50) Final Handbook, supra note 45. The Habitat Conservation Planning Handbook is a detailed document describing the HCP and incidental take permitting process intended to provide internal guidance for USFWS and NMFS personnel. The stated purpose is to promote efficiency and nationwide consistency within and between the Services in conducting the incidental take permit program Id. at ii. The Handbook was first released in draft form in December 1994 and was released in final form in December 1996.

(51) Id. at 3-29 to 3-32

(52) No Surprises Press Release, supra note 2, at (*)2.

(53) Id. at (*)3.

(54) Final Handbook, supra note 45, at 3 30.

(55) Id see also 16 U.S C. [sections] 1539 (a) (2) (1994) (listing habitat conservation plan criteria).

(56) Final Handbook supra note 45, at 3-30.

(57) Id. at 3-31 to 3-32.

(58) Id. at 3-28.

(59) Id.

(60) Id.

(61) Id. at 3-28 to 3-32.

(62) In deciding whether any extraordinary circumstances exist which might warrant additional mitigation from an HCP permittee, USFWS and NMFS shall consider, but not be limited to, the following factors: 1) size of the current range of affected species, 2) percentage of range adversely affected by the HCP, 3) percentage of range conserved by the HCP, 4) ecological significance of that portion of the range affected by the HCP, 5) level of knowledge about the affected species and the degree of specificity of the species' conservation program under the HCP, 6) whether the HCP was originally designed to provide an overall net benefit to the affected species and contained measurable criteria for assessing the biological success of the HCP, and 7) whether failure to adopt additional conservation measures would appreciably reduce the likelihood of survival and recovery of the affected species in the wild Id. at 3-31.

(63) Id.

(64) Id.

(65) Id. at 3-30

(66) Id.

(67) Id. at 3-32.

(68) Id. at 3-21, 3-32.

(69) Id. at 3-20 to 3-21.

(70) Id. at 3-21, 3-32.

(71) See S. 1364, 104th Cong. (1995) (presenting proposed Endangered Species Act reauthorization legislation by Sen. Dirk Kempthorne (R-Idaho) which would codify the No Surprises Policy).

(72) Status of Habitat Conservation Plans, U.S. Fish and Wildlife Services. Fish and Wildlife Spreadsheet, Jan. 31, 1997, (on file with authors) [hereinafter Status of HCPS]; see also Lin, supra note 42, at 372.

(73) Lin, supra note 42, at 384.

(74) Status of HCPS, supra note 72.

(75) Scott Sonner, Cutting Deals to Save Species is Criticized; Failure to Invoke Law Draws Fire, Chattanooga Times, May 15, 1997, at C8.

(76) Id.

(77) Id.

(78) Plum Creek Timber Company, L.P. Cascades Multi-Species Habitat Conservation Plan [sections] 1, 24 (Mar. 1996) [hereinafter Plum Creek HCP].

(79) Id.

(80) Id.

(81) Id. [sections] 3.1, a 227-28.

(82) Id. [sections] 3.1, at 258-60.

(83) Id. [sections] 1.1 at 2.

(84) Id. [sections] 5.3.

(85) County of Orange Environmental Management Agency, Draft Natural Community Conservation Plan & Habitat Conservation Plan, Parts I & II: NCCP/HCP II-219 to II-225 (Dec. 7, 1995) [hereinafter Orange County NCCP/HCP].

(86) Id. at ES-9.

(87) Id. at II-988

(88) Id. at I-16.

(89) Id.

(90) Id.

(91) Oregon Department of Forestry, Elliott State Forest Habitat Conservation Plan S-1 (May 1995,) [hereinafter Elliott State Forest HCP].

(92) Id.

(93) Id. at S-2.

(94) Washington State Department of Natural Resources, Habitat Conservation Plan (March 1996).

(95) Id.

(96) Natural Resources species Act: Enviro Coalition Outlines Concern to Administration Greenwire, Vol. 6, No. 188 (Feb. 7, 1997), available in Westlaw, 2/7/97 APN-GR-14. Other environmental organizations have supported the policy noting that it provides a needed incentive for landowners to enter into conservation plans to protect species on private lands. Id.

(97) Letter from Reed Noss, Editor, Conservation Biology, to The Honorable William Jefferson Clinton, President of the United States (Apr. 3, 1997) (on file with the author).

(98) Brussard, Quinn, Meffe, Ralls, Murphy, Soule, Noon, Tracy, and Noss, A Statement on proposed private lands initiatives and reauthorization of the endangered species act from the meeting of Scientists at Stanford University (Mar. 31, 1997) (on file with authors).

(99) Id.

(100) See Plum Creek HCP, supra note 78, [sections] 5.3.

(101) See San Bruno HCP, supra note 20, at III-9 to III-21.

(102) See Plum Creek HCP, supra note 78, [sections] 5.3.

(103) Elliott State Forest HCP, supra note 91, at IV-15.

(104) Id.

(105) Orange County NCCP/HCP, supra note 85, at II-252 to II-268.

(106) 16 U.S.C. [sections] 1539 (a)(2)(B)(iii)(1994).

(107) San Bruno HCP, supra note 20, at V-4 to V-7.

(108) Orange County NCCP/HCP, supra note 85, at II-42 to II-350. (109) Plum Creek HCP, supra note 78, at 387.

(110) Murray Pacific, Inc., Habitat Conservation Plan For the Northern Owl 2-41 (May 1993).

(111) Implementation Agreement For Poway Subarea Habitat Conservation Plan/Natural Community Conservation Plan 20, 26 (Apr. 16).

(112) See, e.g., Plum Creek HCP, supra note 78, at II-268.

(113) 16 U.S.C. [sections] 1539(a)(2)(B) (1994).

(114) Plum Creek HCP, supra note 78, at 389.

(115) Agreement in Principal for cedar river wastershed Habitat Plan 17, (Mar. 14, 1997)

(116) Brussard et al, supra note 99.

(117) See supra notes 65-66 and accompanying text (defining extraordinary circumstances).

(118) See supra notes 67-70 and accompanying text (describing the net benefit test).

Donald C. Baur, Partner, Perkins Coie, Washington, D.C.; former General Cowsel, U.S. Marine Mammal Commission; former staff attorney, Solicitors Office, Department of the Interior, J.D. 1979, University of Pennsylvania; B.A. 1976, Trinity College.

Karen L. Donovan, Associate, Perkins Coie, Washington, D.C.; LL.M. in Environmental Law 1996, George Washington University Law School; J.D. magna cum laude 1992, Notre Dame Law School; B.A. 1987, University of Virginia. The assistance of Patricia O'Toole, Angela Killian, and Rebecca Brezenoff in the preparation of this article is greatly appreciated.