Federal Wildlife Agencies Propose ESA Changes Including Narrowing the Scope of Consultation
On November 21, 2025, the U.S. Fish and Wildlife Service (USFWS) and the National Marine Fisheries Service (NMFS) released four proposed rules revising implementation of the Endangered Species Act (ESA). Two proposed rules issued jointly by USFWS and NMFS (together referred to as the Services) relate to (i) interagency consultation and (ii) listing/delisting of species and designation of critical habitat. Two additional proposed rules issued solely by USFWS relate to (iii) critical habitat exclusions and (iv) threatened species protections. These alterations to the ESA framework could impact local land use and economic development priorities, advancement of public infrastructure, and federal water project operations.
Summary of the Proposed Rules
Interagency consultation. Section 7 of the ESA establishes procedures for interagency cooperation to ensure that actions authorized, funded or carried out by federal agencies do not (i) jeopardize the continued existence of endangered or threatened species or (ii) result in destruction or adverse modification of critical habitat. For local public agencies, formal consultation requirements are frequently triggered when projects have a “federal nexus,” meaning they require a federal permit or receive some funding from federal sources. The Services have proposed to reinstate and revise key definitions of “environmental baseline” and “effects of the action” (discussed further below) that will narrow the scope of consultation. In addition, the Services have proposed to reinstate factors to determine whether an activity or consequence is “reasonably certain to occur” and have proposed to remove provisions issued in 2024 related to compensatory mitigation. These 2024 provisions expressly authorize the Services to require an offset for unavoidable incidental take as part of reasonable and prudent measures in an incidental take statement.
Listing/delisting and designation of critical habitat. Section 4 of the ESA governs how the Services list species as threatened or endangered, delist or reclassify species and designate areas as critical habitat. The current rules prohibit consideration of economic impacts when making a listing, delisting or reclassification decision, but the Services now intend to allow that consideration. In addition, the Services have proposed limitations on the duration of “foreseeable future” in analyzing whether to list a species as threatened, making the determination of impacts less speculative. The Services have also proposed to reinstate a two-step process for designating critical habitat. The two-step process prioritizes areas occupied by a species over unoccupied areas for critical habitat determinations.
Critical habitat exclusions. Section 4(b)(2) of the ESA requires the Services to consider economic, national security and other impacts prior to designating critical habitat. The law allows the Services to exclude an area from a critical habitat designation when the benefits of exclusion outweigh the benefits of critical habitat designation for the area. USFWS has proposed a rule that largely reflects its mandatory obligation under section 4(b)(2) to identify and provide information on economic, national security, and other impacts in considering excluding areas from critical habitat designation. The proposed rule also provides several principles to give greater weight to the benefits of exclusion of a particular area from a critical habitat designation.
Rescinding the Blanket Rule. Section 9 of the ESA provides protections that apply to a listed endangered species. The USFWS section 4(d) “blanket rule” currently extends these protections to threatened species. The proposed rule would rescind this “blanket rule” and require USFWS to develop species-specific protections on a case-by-case basis for newly-listed threatened species (NMFS already proceeds in this way for the species it regulates). It is important to note that rescission of the blanket rule and the other three proposed rules would not apply retroactively. The blanket rule rescission would therefore affect only species that in the future are listed as threatened. This includes species downlisted from endangered to threatened.
Narrowing the Scope of Consultation
The proposed changes to interagency consultation could have significant implications for a variety of projects subject to the requirements of section 7, which courts have described as “the heart of the ESA.” W. Watersheds Project v. Kraayenbrink, 632 F.3d 472, 495 (9th Cir. 2011). Section 7 imposes an independent duty on all federal agencies to consult with the Services before engaging in any discretionary action that may affect a listed species or critical habitat. Turtle Island Restoration Network v. Nat'l Marine Fisheries Serv., 340 F.3d 969, 974 (9th Cir. 2003).
The proposed rule and its definitions narrow the scope of Section 7 interagency consultation. It would likely facilitate a more efficient and focused consultation process by establishing contours on concepts including “environmental baseline” and “effects of the action.” In Section 7 consultation, establishing the environmental baseline from which effects of the proposed action are evaluated significantly impacts the conclusions about that action’s effects. The revised definitions include in the baseline the ongoing activities outside a federal agency’s discretion to modify, thus leaving them outside the evaluation of effects caused by the proposed action. These proposed revisions to Section 7 consultation would consequently focus consultation on the direct effects of an agency’s proposed action rather than on aspects outside that agency’s control.
Importantly, the Services’ proposed rule clarifies that the obligation of a federal agency to consult under Section 7 applies only to actions involving discretionary federal involvement. The Services explain that the components of federal action lacking discretionary federal involvement or control is not subject to the consultation requirement, and, as a result, the impacts of those nondiscretionary activities to listed species and critical habitat are not considered consequences of a proposed discretionary federal action. The Services cite a 2007 Supreme Court ruling on Section 7, where the Court held that the Service’s “focus on ‘discretionary’ actions accords with the commonsense conclusion that, when an agency is required to do something by statute, it simply lacks the power to ‘insure’ that such action will not jeopardize endangered species.” National Ass’n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 667.
Looking Ahead
The four proposed rules—in addition to an ESA proposal previously reported—could impact local decision-making on projects with federal involvement. The Services have opened a 30-day comment period on the proposed rules. BBK can assist you in submitting comments and will continue to monitor further developments. For questions about the implications of the four proposed rules, please reach out to Gary Gold and Steve Anderson.
Disclaimer: BBK Legal Alerts are not intended as legal advice. Additional facts, facts specific to your situation, or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information herein.
