NFIB Petition Prompts Deregulatory Reforms for Landowners

Date: August 22, 2019

The Endangered Species Act (ESA) can be a blunt instrument. Ranchers, farmers, homebuilders, timber companies and other land-dependent small businesses well know how much red tape comes with ESA regulation. Even a modest project can be held-up or rendered infeasible if it has inadvertent environmental impacts. But the good news is that the U.S. Department of Interior recently finalized new regulations that will minimize regulatory burdens for small business landowners going forward.

In April, 2016, NFIB filed a petition with the Department of Interior, urging the agency to revise ESA rules that imposed draconian restrictions to protect habitat for threatened species. NFIB argued that the threatened species rules conflicted with the statutory text of the ESA. Whereas the statute requires the agency to make reasoned decisions as to what level of restrictions are actually necessary to protect threatened species, longstanding U.S. Fish & Wildlife Service (U.S. FWS) regulations automatically imposed endangered species rules to threatened species. But, importantly, the statute requires that “endangered species” and “threatened species” be treated differently. “Endangered species” are those that face a significant possibility of extinction. By contrast, “threatened species” are somewhat abundant. A species listed as “threatened” is in some risk of population decline; however, threatened species are not—at present—at risk of extinction. For this reason, the ESA reserves its most heavy-handed regulations to protect endangered species, while requiring U.S. FWS to regulate with a lighter touch when it comes to protecting more healthy “threatened species” populations.

As NFIB argued in our petition, U.S. FWS regulations violated this regulatory scheme in imposing the very same blanket restrictions on threatened species as imposed for protection of endangered species. But the good news is that the Trump Administration heard us loud and clear. In direct response to our petition, the U.S. Department of Interior made changes that will bind U.S. FWS to make more reasoned and carefully calibrated regulatory decisions when listing new threatened species in the future.

Under the new rule, U.S. FWS must now decide what level of regulation is actually necessary to ensure adequate protection for threatened species and can no longer impose automatic blanket restrictions. Notwithstanding hyperbolic rhetoric from environmental advocacy groups, the reality is that these changes will advance the ESA’s conservation goals, while minimizing the impact to the regulatory community. Congress always intended the ESA to take a carrot and stick approach in encouraging conservation efforts. But the old regulation provided no carrots. Landowners had no incentive to rehabilitate endangered species because they would face the very same draconian restrictions even if the species recovered to “threatened” status. By contrast, the new rules encourage private conservation efforts in promising to lift at least some regulatory restrictions once an endangered species recovers.

Nonetheless, we expect environmental advocacy groups will seek to block these reforms. Several groups are already promising to sue. When and if that happens, we’ll be there to defend the new rule because it represents a significant win for the small business community. Stay tuned for further updates by following NFIB Legal Center on Facebook

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