The “Harm Rule” Rescinding Protections Under The Endangered Species Act Creates Significant Uncertainty For Developers

The “Harm Rule” adopted by U.S. Fish and Wildlife Service (“FWS”) and National Marine Fisheries Service (“NMFS”) on July 14, 2026, and effective as of September 14, 2026, rescinds the longstanding regulatory definition of "harm" found in each agency’s Endangered Species Act (ESA) regulations.¹ The practical effect of this change is that habitat modification or degradation is no longer considered "take" under the federal ESA. Perhaps even more significantly, though, a guidance memorandum issued by FWS² reveals the sweeping scope of that agency’s interpretation of the Harm Rule, which extends well beyond mere recission of the prior regulatory definition of harm. Both the Harm Rule and the FWS’s interpretative guidance may usher in a new era in which FWS will only identify as “take” affirmative acts that are directed intentionally and immediately at listed species.

Ostensibly aimed at reducing burdens on the regulated community, the Harm Rule creates uncertainty for developers regarding the ESA take permitting process. Somewhat ironically for California developers in particular, the Harm Rule could also result in increased regulation under California law, a phenomenon seen elsewhere in those instances where the federal administration has pulled away from environmental protections and the state of California has pushed back.

While it is still too early to tell how substantial—or insignificant—the Harm Rule’s effects on state and federal species permitting will be, potential ramifications could be wide-ranging:

• Permitting Strategy Uncertainty:Prior to the Harm Rule, the most conservative approach to compliance with the federal ESA was to obtain some form of incidental take authorization – pursuant to either Section 10 (for projects with no federal nexus) or Section 7 (for projects with a federal nexus) – if a project results in the modification or degradation of even unoccupied habitat for species listed under the federal ESA. Under the Harm Rule and new FWS guidance, these sorts of effects probably are not “take,” meaning developers might not need federal ESA incidental take authorization where habitat modification is the only potential effect on listed species. However, because of the potential civil and criminal consequences of an unpermitted “take,” without more guidance either from FWS itself or a court interpreting the Harm Rule, such an approach would entail risks that ought to be considered. The new rule is already being litigated, and it is unclear how the courts will rule on the legality of the FWS’ rollback of ESA protections.
• Effects on Habitat Conservation Planning under ESA Section 10:The Harm Rule explains that “private parties seeking ITPs and [enhancement of survival] permits pursuant to [ESA Section10] will no longer need to articulate the 'impact' to species' habitat, explain how they will 'minimize and mitigate' habitat modification or degradation, or consider alternatives in service of mitigating habitat modification or degradation in their conservation plans . . . to obtain an incidental take permit." Practically speaking, this means developers and private landowners whose projects affect listed species habitat but do not involve direct, intentional acts against individual animals may no longer require a federal ESA incidental take permit.
   
• Effects on ESA Section 7 Consultation:The Harm Rule does not diminish the requirement under ESA Section 7 to consult with FWS regarding the potential for their actions to jeopardize the continued existence of listed species or result in destruction or adverse modification of designated critical habitat, but the scope of “take” considered in Section 7 consultation may be narrow. Rather than emphasizing the sorts of unintentional, “incidental” take that has featured prominently in Section 7 consultation for decades, FWS may instead focus on direct, intentional actions, such as translocation and removal of listed species from a project site.
   
• Potential AB 1319 Trigger:As we described here, in 2025 the California Legislature passed AB 1319 to safeguard against the Trump Administration’s anticipated weakening of federal ESA protections. AB 1319 allows California Department of Fish and Wildlife (“CDFW”) to identify as “provisional candidate species” under the California ESA (“CESA”) any species for which federal ESA protections are decreased, giving those species the same protection from take under CESA as listed species. If CDFW determines that the Harm Rule has decreased protections for federally listed species, it could choose to designate as provisional candidate species several species listed under the federal ESA but not currently protected under CESA. If that were to occur, the reduction in mitigation requirements that might have otherwise resulted from the Harm Rule would not occur for projects located in California.³

California is the lead plaintiff in one lawsuit already filed against the Harm Rule, and other lawsuits challenging the Rule are expected. Litigation adds further uncertainty regarding potential effects of the Rule on developers. In the near term, however, we expect delays in the Section 10 permitting process and Section 7 consultation process as FWS staff determine how to proceed with currently pending applications and more generally how to implement the Harm Rule, particularly in light of the FWS’s guidance. If CDFW takes action under AB 1319 to designate provisional candidate species, we might similarly expect delays as CDFW staff determine how to assess CESA incidental take permit applications covering species CDFW has not previously regulated. 

Footnotes

1 See Rescinding the Definition of "Harm" Under the Endangered Species Act, 91 Fed. Reg. 43300 (July 14, 2026).

2 See Brian Nesvik, Director, U.S. Fish and Wildlife Service, Scope of the Endangered Species Act’s “Take” Prohibition Following the Harm Rule (91 Fed. Reg. 43300) (Sept. 14, 2026).

3 While CESA does not regulate habitat modification, CDFW often establishes mitigation requirements in CESA incidental take permits based upon the acreage of listed species habitat that would be affected by a project.