To amend the Endangered Species Act of 1973 to establish limitations on the designation of critical habitat, and for other purposes.

Amends the Endangered Species Act of 1973 (ESA) to prohibit the Secretary (the Secretary of the Interior or the Secretary of Commerce) from designating as critical habitat any habitat located within the high water mark of a water storage reservoir, water diversion structure, canal, or other artificial water delivery facility if such habitat is periodically created and destroyed as the result of water level fluctuations caused by operation of such facility.

Requires the Secretary, in determining whether a Federal agency action is likely to result in the destruction or adverse modification of critical habitat, to consider the offsetting effects of habitat conservation measures proposed to be implemented as part of the action including the protection and management of certain alternative habitat.

States that the requirement to minimize and mitigate the impact of an incidental taking shall be deemed satisfied if the Secretary finds that proposed minimization and mitigation measures are rationally related to the level of take under the conservation plan.

Exempts operators of water storage reservoirs, water diversion structures, canals, or other artificial water delivery facilities from liability under ESA for any take of specified aquatic species that results from predation, competition, or other adverse effects attributable to non-native aquatic species introduced by another person into the river basin where the facility is located.