Natural Resource Damage Assessments

DEPARTMENT OF THE INTERIOR

Office of the Secretary

43 CFR Part 11

RIN 1090-AA29

Natural Resource Damage Assessments

AGENCY: Department of the Interior.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: The Department of the Interior is initiating a biennial review

of the regulations for assessing natural resource damages resulting

from a discharge of oil into navigable waters under the Clean Water Act

or a release of a hazardous substance under the Comprehensive

Environmental Response, Compensation, and Liability Act. The

regulations provide procedures that Federal, State, and Indian tribe

natural resource trustees may use to obtain compensation from

potentially responsible parties for injuries to natural resources. The

regulations provide an administrative process for conducting

assessments as well as two types of technical procedures for the actual

determination of injuries and damages. ``Type A'' procedures are

standard procedures for simplified assessments requiring minimal field

observation in cases of minor discharges or releases in certain

environments. ``Type B'' procedures are site-specific procedures for

detailed assessments in other cases. This advance notice solicits

comment on how the administrative process and all but one of the type B

procedures should be revised.

DATES: Comments will be accepted through January 17, 1995.

ADDRESSES: Comments should be sent in duplicate to the Office of

Environmental Policy and Compliance, ATTN: NRDA Rule--Biennial Review,

Room 2340, Department of the Interior, 1849 C Street NW., Washington,

DC 20240, telephone: (202) 208-3301 (regular business hours 7:45 a.m.

to 4:15 p.m., Monday through Friday).

FOR FURTHER INFORMATION CONTACT: Stephen F. Specht at (202) 208-3301,

or [email protected] on Internet.

SUPPLEMENTARY INFORMATION: This notice is organized as follows:

I. Statutory Provisions

II. Overview of the Department's Natural Resource Damage Assessment

Regulations

A. Preassessment Phase

B. Assessment Plan Phase

C. Assessment Phase

D. Post-Assessment Phase

III. Related Rulemakings

IV. Potential Topics for Review

A. Administrative Process

B. Injury

C. Economics

D. Legal Topics

E. Restoration, Rehabilitation, Replacement, and/or Acquisition

of Equivalent Resources

I. Statutory Provisions

This notice announces the commencement of a review of regulations

for assessing natural resource damages under the Comprehensive

Environmental Response, Compensation, and Liability Act, as amended (42

U.S.C. 9601 et seq.) (CERCLA) and the Clean Water Act, as amended (33

U.S.C. 1251 et seq.) (CWA). Under CERCLA, certain categories of

potentially responsible parties (PRPs) are liable for natural resource

damages resulting from a release of a hazardous substance. CERCLA sec.

107(a). Natural resource damages are monetary compensation for injury

to, destruction of, or loss of natural resources. CERCLA sec.

107(a)(4)(C). CWA creates similar liability for natural resource

damages resulting from discharges of oil into navigable waters. CWA

sec. 311(f).

Only designated natural resource trustees may recover natural

resource damages. CWA recognizes the authority of Federal and State

officials to serve as natural resource trustees. CERCLA recognizes the

authority of Federal and State officials as well as Indian tribes to

act as natural resource trustees. CERCLA defines ``State'' to include:

The District of Columbia, the Commonwealth of Puerto Rico, Guam,

American Samoa, the United States Virgin Islands, the Commonwealth

of the Northern Marianas, and any other territory or possession over

which the United States has jurisdiction. CERCLA sec. 101(27).

Damages may be recovered for those natural resource injuries that

are not fully remedied by response actions as well as public economic

values lost from the date of the discharge or release until the

resources have fully recovered. All sums recovered in compensation for

natural resource injuries must be used to restore, rehabilitate,

replace, or acquire the equivalent of the injured natural resources.

CERCLA sec. 107(f)(1). Trustee officials may also recover the

reasonable costs of assessing natural resource damages.

CERCLA requires the promulgation of regulations for the assessment

of natural resource damages resulting either from a discharge of oil

into navigable waters under CWA or from a release of a hazardous

substance under CERCLA. CERCLA sec. 301(c)(1). These regulations are to

identify the ``best available'' procedures for assessing natural

resource damages. CERCLA sec. 301(c)(2). CERCLA requires that the

natural resource damage assessment regulations include two types of

assessment procedures. ``Type A'' procedures are ``standard procedures

for simplified assessments requiring minimal field observation.''

CERCLA sec. 301(c)(2)(A). ``Type B'' procedures are ``alternative

protocols for conducting assessments in individual cases.'' CERCLA sec.

301(c)(2)(B). Assessments performed by Federal and State trustee

officials in accordance with the natural resource damage assessment

regulations receive a rebuttable presumption in court. CERCLA sec.

107(f)(2)(C). The promulgation of these regulations was delegated to

the Department of the Interior (the Department). E.O. 12316, as amended

by E.O. 12580.

The natural resource damage provisions of CWA were amended by the

Oil Pollution Act (33 U.S.C. 2701 et seq.) (OPA). The authority to sue

for natural resource damages resulting from discharges of oil into

navigable waters was extended to not only Federal and State natural

resource trustees but also Indian tribe and foreign natural resource

trustees. OPA also authorized the National Oceanic and Atmospheric

Administration (NOAA) to develop new natural resource damage assessment

regulations for discharges of oil into navigable waters. The Department

is coordinating its rulemakings with NOAA to ensure, to the maximum

extent appropriate, that consistent processes are established for

assessing natural resource damages under CERCLA and OPA.

OPA provides that any rule in effect under a law replaced by OPA

will continue in effect until superseded. OPA sec. 6001(b). In

particular, Senate committee report language makes it clear that

``[t]he existing Interior Department rules * * * may be used with a

rebuttable presumption in the interim'' until NOAA promulgates new

regulations. S. Rep. No. 101-94, 101st Cong., 1st Sess. 15 (1990).

Therefore, until NOAA promulgates its regulations, the Department's

regulations may be used to obtain a rebuttable presumption for natural

resource damage assessments under OPA.

The Department's natural resource damage assessment regulations

must be reviewed, and revised as appropriate, every two years. CERCLA

sec. 301(c)(3). The regulations provide an administrative process for

conducting assessments as well as technical type A and type B

procedures for the actual determination of injuries and damages. The

purpose of this advance notice is to announce the beginning of the

biennial review of the administrative process and all but one of the

type B procedures.

II. Overview of the Department's Natural Resource Damage Assessment

Regulations

The Department has published various final rules for the assessment

of natural resource damages: 51 FR 27674 (Aug. 1, 1986); 52 FR 9042

(March 20, 1987); 53 FR 5166 (Feb. 22, 1988); and 53 FR 9769 (March 25,

1988). These rulemakings are codified in the Code of Federal

Regulations at 43 CFR part 11. The Department also recently published a

final rule revising the administrative process and the type B

procedures that has not yet been codified in the Code of Federal

Regulations. 59 FR 14261 (March 25, 1994).

The Department's natural resource damage assessment regulations

provide an administrative process for conducting assessments. The

administrative process consists of four phases: The Preassessment

Phase, the Assessment Plan Phase, the Assessment Phase, and the Post-

Assessment Phase. The regulations also provide technical type A and

type B procedures to be used during the Assessment Phase for the actual

determination of injuries and damages.

During this biennial review, the Department intends to examine all

aspects of the Preassessment Phase, Assessment Plan Phase, and Post-

Assessment Phase, as well as all but one of the type B procedures

available for use during the Assessment Phase. The Department is

providing the following brief summary of its existing regulations to

assist commenters. Commenters should consult 43 CFR part 11 and 59 FR

14261 to obtain more detailed information about the administrative

process and type B procedures.

A. Preassessment Phase

The Preassessment Phase covers the activities that precede the

actual assessment. Upon detecting or receiving notification of a

discharge or release, trustee officials decide whether further

assessment actions are warranted. The Department's regulations provide

a number of criteria to assist trustee officials in making this

decision. The trustee officials' decision is documented in the

Preassessment Screen Determination. For more information on the

Preassessment Phase, see subpart B of 43 CFR part 11, as amended by 59

FR 14281.

B. Assessment Plan Phase

If trustee officials decide during the Preassessment Phase that the

criteria for continuing an assessment have been met, they then enter

the Assessment Plan Phase. The Assessment Plan Phase includes various

notification and coordination activities. The Department's regulations

provide guidance on coordination among trustee officials, including

selection of a ``lead authorized official'' to act as an administrative

point of contact. Trustee officials are also required to notify the

PRPs of their intent to perform an assessment.

During the Assessment Plan Phase, trustee officials also prepare a

written Assessment Plan describing the procedures, type A, type B, or

both, that will be used to determine injury and damages. The Assessment

Plan is designed to focus and organize the assessment, which helps

ensure that only reasonable assessment costs are incurred. The

Assessment Plan is subject to public review and comment. For more

information on the Assessment Plan Phase, see subpart C of 43 CFR part

11, as amended by 59 FR 14281-83.

C. Assessment Phase

During the Assessment Phase, the work described in the Assessment

Plan is conducted. The work consists of three steps: Injury

Determination; Quantification; and Damage Determination. In Injury

Determination, trustee officials determine whether any natural

resources have been injured and whether there is a pathway of exposure

between the site of the discharge or release and the injured resources.

If trustee officials determine that resources have been injured and

that a pathway of exposure exists, they proceed to the Quantification

step.

During Quantification, trustee officials quantify the extent of the

resource injuries by measuring the reduction from baseline conditions.

``Baseline'' conditions are the conditions that would have existed had

the discharge or release not occurred. Resources perform functions for

humans and for other resources, such as provision of a food source,

flood control, or provision of recreational opportunities. These

functions are known as ``services.'' Reductions from baseline

conditions can be measured by evaluating the change in the level of

services provided by the injured resources.

Finally, in Damage Determination, trustee officials calculate the

monetary compensation to be sought as damages for the quantified

natural resource injuries. The basic measure of damages is the cost of

restoring, rehabilitating, replacing, and/or acquiring the equivalent

of the injured resources. The Department's regulations also allow for

an additional component of damages. Trustee officials have the

discretion to assess damages for the economic value of the services

lost by the public from the date of the discharge or release until

completion of restoration, rehabilitation, replacement, and/or

acquisition of equivalent resources.

This value is known as ``compensable value.''

When a type A procedure is utilized, trustee officials perform

Injury Determination, Quantification, and Damage Determination through

the use of a standardized procedure involving minimal field work. The

Department is developing different type A procedures for different

environments in stages. Only one type A procedure has been included in

the regulations to date. That type A procedure incorporates a computer

model to perform Injury Determination, Quantification, and Damage

Determination for minor discharges or releases in coastal or marine

environments. The computer model is known as the Natural Resource

Damage Assessment Model for Coastal and Marine Environments (NRDAM/

CME). For more information on use of a type A procedure during the

Assessment Phase, see subpart D of 43 CFR part 11. There are two

ongoing rulemakings concerning type A procedures. The Department is

revising the NRDAM/CME in compliance with a court order and the

statutory biennial review requirement. The Department is also

developing a new type A computer model for use in Great Lakes

environments. Therefore, the Department does not intend to address the

content of the type A procedures during this review.

When a type A procedure is not applicable, trustee officials use

type B procedures instead of a type A procedure. In some cases, trustee

officials may also use type B procedures to supplement damages

calculated through use of an applicable type A procedure. When type B

procedures are utilized, trustee officials perform Injury

Determination, Quantification, and Damage Determination through the use

of site-specific studies. The Department's regulations divide natural

resources into five categories: surface water, ground water, air,

geologic, and biological resources. Specific definitions of injury are

provided for each of these categories. The regulations provide guidance

on the selection of testing and sampling methodologies to determine

whether an injury has occurred and whether a pathway of exposure

exists. The regulations also provide guidance on measuring the change

in baseline conditions during Quantification.

During the Damage Determination step of an assessment incorporating

type B procedures, trustee officials identify and consider a reasonable

number of possible alternatives for restoring, rehabilitating,

replacing, and/or acquiring the equivalent of the injured resources.

Trustee officials select one of the possible alternatives based on

several factors. The trustee officials document their decisions in a

Restoration and Compensation Determination Plan, which is part of the

overall Assessment Plan and, thus, subject to public review and

comment.

Once trustee officials have selected a restoration, rehabilitation,

replacement, and/or acquisition alternative, they select one or more of

the type B cost-estimating methodologies listed in the regulations. The

selected methodologies are used to estimate the cost of implementing

the restoration, rehabilitation, replacement, and/or acquisition

alternative. This estimated cost is the basic measure of damages.

Trustee officials also have the discretion to include compensable value

in their damage claim. Compensable value is calculated by applying one

or more of the type B economic valuation methodologies listed in the

regulations. For more information on use of type B procedures during

the Assessment Phase, see subpart E of 43 CFR part 11, as amended by 59

FR 14283-87.

D. Post-Assessment Phase

The Department's regulations cover the entire process that trustee

officials need to follow if they file a lawsuit and expect to obtain a

rebuttable presumption. Trustee officials have the authority to settle

their damage claims at any time during the administrative process.

However, if the trustee officials do not settle with the PRPs by the

end of the Assessment Phase, then trustee officials prepare a Report of

Assessment detailing the results of the Assessment Phase. Trustee

officials present the Report of Assessment to the PRPs along with a

demand for damages and assessment costs. If a PRP does not agree to pay

within 60 days, the trustee officials may file suit. Federal and State

trustee officials receive a rebuttable presumption of correctness for

assessments performed in accordance with the Preassessment Phase,

Assessment Plan Phase, Assessment Phase, and Post-Assessment Phase

procedures set forth in the regulations.

Once damages have been awarded or settlement has been reached,

trustee officials establish an account for the recovered damages and

prepare a Restoration Plan for use of the funds. When type B procedures

are used, the post-assessment Restoration Plan is based on the

restoration, rehabilitation, replacement, and/or acquisition

alternative selected in the Restoration and Compensation Determination

Plan during the Assessment Phase. For more information on the Post-

Assessment Phase, see subpart F of 43 CFR part 11, as amended by 59 FR

14287.

III. Related Rulemakings

There are several ongoing natural resource damage assessment

rulemakings other than this biennial review. State of Ohio v. United

States Department of the Interior (Ohio v. Interior) remanded portions

of the administrative process and the type B procedures. 880 F.2d 432

(D.C. Cir. 1989). On March 25, 1994, the Department published a final

rule that addressed all but one aspect of the remand. 59 FR 14261. The

March 25, 1994, final rule did not address the assessment of lost

nonuse values.

There are two potential types of compensable values associated with

natural resource injuries: Lost use values and lost nonuse values. Use

values are derived through activities such as hiking or fishing. Nonuse

values are not dependent on use of a resource and include the value of

knowing that the resource exists and knowing that a resource will be

available for future generations. The only method available for the

express purpose of estimating lost nonuse values is the contingent

valuation methodology (CV). On May 4, 1994, the Department published a

notice of proposed rulemaking addressing CV as a type B procedure for

estimating lost nonuse values. 59 FR 23097. The comment period on the

notice closed on October 7, 1994. 59 FR 32175 (June 22, 1994). The

Department does not intend to address the assessment of lost nonuse

values during this review.

State of Colorado v. United States Department of the Interior

remanded the type A procedure for coastal and marine environments. 880

F.2d 481 (D.C. Cir. 1989). The Department intends to publish a proposed

rule to revise the NRDAM/CME later this month.

The Department has begun the development of an additional type A

procedure for use in Great Lakes environments. This type A procedure

uses a computer model known as the Natural Resource Damage Assessment

Model for Great Lakes Environments (NRDAM/GLE). The Department

published a proposed rule on August 8, 1994. 59 FR 40319. The

Department does not intend to address the content of the type A

procedures during this biennial review.

Also, on January 7, 1994, NOAA published a proposed rule for

assessing natural resource damages resulting from oil discharges into

navigable waters under OPA. 59 FR 1062. The comment period on NOAA's

proposed rule closed on October 7, 1994. 59 FR 32148 (June 22, 1994).

IV. Potential Topics for Review

During this rulemaking, the Department will be considering ways of

revising the administrative process and the type B procedures to

reflect both experience to date in the use of the regulations as well

as scientific and technical advances. The Department solicits comment

on all aspects of the administrative process and the type B procedures,

other than the assessment of lost nonuse values. Based on the comments

received and its own analysis, the Department will develop a proposed

rule to revise the regulations.

The Department has already received numerous comments on the

administrative process and type B procedures over the last few years.

One source of comments has been State briefings on use of the

regulations. The Department has provided these briefings to State

trustee officials at their request. Another source of comments has been

telephone calls from individuals requesting technical assistance in the

application of the regulations to particular cases. Also, in the course

of revising the regulations to comply with Ohio v. Interior, the

Department received numerous comments that were beyond the scope of

that rulemaking. As indicated during the Ohio v. Interior rulemaking,

the Department has included a discussion of all of those comments in

this notice. See 59 FR 14266.

The following discussion is intended neither as an exhaustive

treatment of all possible topics for review nor as a definitive

indication of the Department's position. Instead, the discussion is

simply provided as an aid in generating further information and

analysis. Commenters are encouraged to provide comments not only on the

topics discussed in this notice but also on any other topics relating

to the administrative process or type B procedures that they deem

appropriate.

During this biennial review, the Department will also examine the

relationship between its CERCLA damage assessment regulations and the

OPA damage assessment regulations being developed by NOAA. The

Department will consider ways of clarifying the applicability of its

regulations versus NOAA's regulations. In this regard, the Department

solicits comment on what provisions, if any, its regulations should

continue to make for assessing damages from oil discharges. The

Department will also coordinate with NOAA to ensure the greatest

consistency appropriate between the two sets of regulations. The

Department has noted in the following discussion certain areas where

NOAA has proposed an approach that differs from that currently taken in

the Department's regulations. The Department solicits comment on

whether the Department's regulations should be revised to follow the

approach proposed by NOAA in areas of difference.

A. Administrative Process

1. Streamlining

One frequent comment has been that the Department's regulations are

``too wordy'' and ``not in plain English.'' Many commenters have

indicated that the administrative process is too complicated and needs

to be streamlined. NOAA's proposed OPA rule provides for an ``Expedited

Damage Assessment'' based on ``limited, focused studies in order to

facilitate restoration as soon as possible.'' 59 FR 1177.

Given the wide variety of activities involved in assessing damages,

the number of legal, scientific, and economic issues involved in damage

assessments, and the broad range of possible types of natural resource

damage cases, a certain level of intricacy is unavoidable in the

regulations. However, the administrative process and type B procedures

were designed to provide trustee officials with the flexibility to

tailor the scope and level of detail of an assessment to meet the needs

of the particular case. Trustee officials choose from a menu of

available type B procedures, using only those procedures and assessing

only those injuries and losses that they deem appropriate and adjusting

the level of documentation accordingly. The regulations allow both for

the performance of a limited number of short-term studies in a simple

case involving the release of a single substance affecting a single

resource, as well as the performance of numerous, long-term studies in

a complex case of a release of multiple substances affecting multiple

resources.

Nevertheless, the Department aims to make the regulations as clear

and straightforward as possible. Therefore, the Department solicits

comment on specific aspects of the administrative process that

commenters consider unduly burdensome or complicated.

2. Preassessment Phase

Several commenters requested additional guidance on the conduct of

preassessment activities. NOAA has developed a draft guidance document

on preassessment activities under OPA. See 59 FR 1065.

The Department's regulations already contain some guidance on

preassessment activities. See 43 CFR Secs. 11.20-11.25. The Department

notes that developing guidance requires balancing increased

predictability against reduced flexibility to respond to the unique

features of the broad range of potential natural resource damage cases.

Thus, there is a limit to the level of specificity that can be

appropriately provided in the regulations. With this in mind, the

Department solicits comment on specific aspects of the Preassessment

Phase that warrant additional guidance. The Department also solicits

comment on whether the guidance should be incorporated in the

regulations or in a separate guidance document.

Some commenters questioned whether a preassessment screen should be

required when a type A procedure is used. During the preassessment

screen, trustee officials determine whether the discharge or release is

covered by CWA or CERCLA and whether they have a reasonable probability

of making a successful claim before expending efforts to carry out a

damage assessment. See 43 CFR 11.23(b). This determination appears to

be relevant regardless of the substantive assessment methods ultimately

used. Moreover, the determination whether to use a type A procedure,

type B procedures, or both is not made until the Assessment Plan Phase,

which follows the performance of the preassessment screen. See 43 CFR

11.33. The Department solicits comment on ways to reduce the burden of

the preassessment screen while at the same time ensuring that trustee

officials adequately consider the appropriateness of pursuing a damage

claim before proceeding with either a type A procedure, type B

procedures, or both.

3. Coordination With Other Agencies

A number of commenters requested additional guidance on

coordination among trustee agencies and between trustee agencies and

response agencies. Commenters raised questions about the lead

authorized official. Some commenters sought clarification of the role

of the lead authorized official. Others requested a prohibition against

the designation of a trustee official who is also a PRP as lead

authorized official.

Suggestions for improved coordination between trustee and response

activities included: restricting the time allowed to conduct an

assessment in order to avoid potential conflicts with settlement

negotiations between response agencies and PRPs; requiring trustee

officials to participate in the remedial planning process; requiring

response agencies to coordinate with trustee officials; and authorizing

the On-Scene Coordinator to contact just one Federal trustee agency and

one State trustee agency and requiring that the contacted trustee

agencies notify all other trustee agencies.

The Department's regulations already provide some guidance on

trustee coordination. See 43 CFR 11.32(a)(1). The regulations also

include discussions of coordination with response agencies. 43 CFR

11.23(f) and 11.31(a)(3). The Department intends to take a close look

at these coordination provisions during the biennial review. The

Department encourages commenters to provide suggestions on ways of

improving coordination among trustee agencies and between trustee and

response activities.

NOAA's proposed OPA rule includes a model memorandum of

understanding designed to facilitate trustee coordination. See 59 FR

1185. Several States have been working to ensure better interagency

coordination. Also, as part of the recent National Performance Review

designed to streamline government operations, the Department developed

a number of recommendations concerning the improvement of trustee

coordination for natural resource damage assessments. The Department

intends to examine these efforts to see what lessons can be learned.

4. Public and PRP Participation

Several commenters voiced opinions about the opportunity for public

and PRP participation in the assessment process. Some commenters

thought that additional opportunities for public input were necessary

while others stated that the existing opportunities for public

participation were excessive. Several commenters thought that the

Department should encourage earlier involvement of PRPs in assessments

to avoid duplication of effort. NOAA's proposed OPA rule includes a

model memorandum of understanding for trustee officials and PRPs to use

when conducting joint assessments. 59 FR 1187.

With regard to public participation, the Department's regulations

require that the public be given an opportunity to review and comment

on the Assessment Plan, including the Restoration and Compensation

Determination Plan, as well as the post-assessment Restoration Plan.

See 43 CFR 11.32(c), 11.81(d)(2), and 11.93(a), as amended by 59 FR

14283, and 14287.

With regard to PRP participation, the Department's regulations

require that trustee officials provide PRPs with a Notice of Intent to

Perform an Assessment before beginning an assessment and invite the

participation of the PRPs. See 43 CFR 11.32(a)(2), as amended by 59 FR

14282. Trustee officials are also required to make the Assessment Plan

available to PRPs for review and comment. See 43 CFR 11.32(c). Finally,

trustee officials are authorized to allow PRPs to perform assessment

work. See 43 CFR 11.32(d).

Determining the appropriate level of public and PRP participation

in the natural resource damage assessment process requires balancing

the interests of the public, the PRPs, and the trustee officials. The

Department solicits comment on whether the regulations strike the

appropriate balance and, if not, how the regulations could be revised

to strike a more appropriate balance.

5. Optional Nature of Regulations

The Department's regulations are not mandatory but must be followed

in order to obtain a rebuttable presumption. 43 CFR 11.10. Some

commenters have questioned the decision to make the regulations

optional. For example, one commenter suggested that Federal trustee

agencies be required to use the regulations unless all affected

trustees agree otherwise. The Department solicits additional comment on

whether to require trustee officials to use the regulations when they

pursue a claim for natural resource damages under CERCLA.

6. Settlement Procedures

Several commenters have requested that the regulations address

settlement procedures. For example, when trustee officials use type B

procedures, they must develop a preliminary estimate of damages to help

scope the range of work appropriate during the Assessment Phase. See 43

CFR 11.35(a), as amended by 59 FR 14282. Some commenters have suggested

that trustee officials be encouraged to use the preliminary estimate of

damages to initiate settlement discussions. Other commenters have

suggested that trustee officials be encouraged to perform separate

assessments for each affected resource to facilitate settlement. NOAA's

proposed OPA rule includes guidance on settlement procedures. 59 FR

1171.

The Department strongly supports and encourages the use of the

regulations as a framework for negotiated resolutions of natural

resource damage claims. The Department is concerned that establishment

of specific settlement procedures in the regulations might unduly

restrict the flexibility of negotiating parties. However, the

Department solicits comment on the need for and possible nature of

settlement guidance.

7. Assessment Plan

There have been several comments about the Assessment Plan. The

regulations require trustee officials to develop a quality assurance

and quality control (QA/QC) plan that satisfies the requirements listed

in guidance developed by the Environmental Protection Agency (EPA), if

that guidance is applicable. See 43 CFR 11.31(c)(2), as amended by 59

FR 14281. Some commenters thought that the reference to EPA guidance

was inappropriate.

The Department notes that EPA's QA/QC guidance is a well-

established standard. Moreover, the Department's regulations provide

that EPA guidance need only be followed if applicable. The Department

solicits comment on specific areas of concern with EPA's QA/QC

guidance.

Some commenters questioned whether the requirement that the

Assessment Plan include information on sampling size, design, and

location and estimated recovery period was necessary. One commenter

stated that the Assessment Plan should include a summary of the nature

and extent of contamination to ensure that the approach used to assess

damages is commensurate with the potential impact on resources.

The purpose of the Assessment Plan is to provide the public with a

description of, and to organize, the work that will be performed during

the Assessment Phase. Inclusion of information about sampling size,

design, and location and estimated recovery periods seems appropriate

to fulfill that purpose. On the other hand, since a natural resource

damage assessment focuses on the actual injuries to resources rather

than the level of chemical present, inclusion of information about the

nature and extent of contamination may not be essential. However, the

Department solicits additional comment on the appropriate scope and

level of detail of the Assessment Plan.

Several commenters stated that the Department should take

precautions to ensure that trustee officials do not undertake basic

research when performing damage assessments. These commenters suggested

that the Department provide a list of sources of existing scientific

data and prohibit trustee officials from performing new research unless

there are no existing data regarding the effect of the particular

substance on the particular natural resources involved.

The Department agrees that trustee officials should not undertake

unnecessary basic research and one of the purposes of requiring a

publicly available Assessment Plan is to protect against such research.

A master list of existing data sources across the full range of

potentially affected resources would be costly and time-consuming to

compile, virtually impossible to keep up to date, and might also stifle

development of new approaches. However, the Department solicits comment

on alternative ways of guarding against the performance of unnecessary

basic research.

8. Post-Assessment Phase

Several commenters sought additional guidance on post-assessment

activities. The Department's regulations already provide some guidance

on post-assessment activities. See 43 CFR 11.90-11.93, as amended by 59

FR 14287. The Department notes that developing guidance requires

balancing increased predictability against reduced flexibility to

respond to the unique features of the broad range of potential natural

resource damage cases. Thus, there is a limit to the level of

specificity that can be appropriately provided in the regulations. With

this in mind, the Department solicits comment on specific aspects of

the Post-assessment Phase that warrant additional guidance. The

Department also solicits comment on whether the guidance should be

incorporated in the regulations or in a separate guidance document.

Commenters have sought additional clarification of the requirements

related to the establishment of a restoration account for recovered

damages. One commenter thought that the regulations should require

trustee officials to hold any collected damages in interest-bearing

accounts. Other commenters have asked whether joint damage recoveries

by co-trustee agencies can be placed in a single restoration account.

Trustee officials' authority to open various forms of accounts is

determined by applicable Federal, State, and tribal fiscal law.

Therefore, although nothing in the Department's regulations prevents

trustee officials from placing damage recoveries in an interest-bearing

account, the regulations do not require trustee officials to do so.

Instead, the regulations provide that when trustee officials do not

have the authority to place damage recoveries in an interest-bearing

account, they should adjust their damage claim to account for

inflation. 43 CFR 11.92(b), as amended by 59 FR 14287. Also, the

regulations neither prohibit nor require the opening of joint accounts.

The Department solicits comment on whether additional clarification of

the appropriate form of restoration accounts should be provided.

9. Assessment Costs

Many commenters sought additional clarification on the scope of

recoverable assessment costs. CERCLA provides that trustee officials

may only recover ``reasonable'' assessment costs. CERCLA sec.

107(f)(1). The Department's regulations include a definition of

``reasonable cost.'' See 43 CFR 11.14(ee). Among other things, this

definition requires that the anticipated cost of the assessment be

expected to be less than the anticipated damage amount. Some commenters

have stated that this definition should be revised so that the

reasonableness of assessment costs is determined by comparing the cost

of each component of the assessment to the anticipated damages to be

determined by that component. NOAA's proposed OPA rule defines

``reasonable cost of an assessment'' as those costs incurred in

performing an assessment in accordance with the OPA rule. 59 FR 1169.

The Department solicits comment on whether any revision of its

definition of ``reasonable cost'' is appropriate.

The Department's regulations provide that trustee officials may

recover the ``reasonable and necessary'' costs of an assessment. See 43

CFR 11.15(a)(3)(ii), as amended by 59 FR 14281. Some commenters have

questioned whether this provision would require trustee officials to

demonstrate not only that their assessment costs were reasonable but

also that they were necessary. These commenters noted that CERCLA

merely requires trustee officials to demonstrate that their assessment

costs were reasonable.

The reference to ``necessary'' assessment costs was not intended to

require trustee officials to make an additional demonstration beyond

that required by CERCLA. Therefore, the Department is considering

deleting the reference to ``necessary'' assessment costs.

The Department's regulations provide examples of recoverable

assessment costs. See 43 CFR 11.15(a)(3)(ii), as amended by 59 FR

14281. Some commenters have suggested that the regulations be amended

to include a list of specific practices that would render assessment

costs unreasonable. The Department questions whether addition of such a

list would be workable or necessary.

Several commenters questioned whether attorneys' fees were

recoverable assessment costs. The Department believes that trustee

officials will generally need the assistance of an interdisciplinary

team of experts when performing natural resource damage assessments.

The regulations do not restrict recoverable assessment costs to the

expenses of particular types of professionals. The Department's

regulations provide that recoverable assessment costs are ``limited to

those costs incurred or anticipated by the authorized official for, and

specifically allocable to, site-specific efforts taken in the

assessment of damages.'' 43 CFR 11.60(d)(2). Therefore, if attorneys

are involved in work specifically allocable to an assessment, the

resulting attorneys' fees are recoverable as assessment costs under the

regulations. The Department solicits comment on whether additional

guidance on the recoverability of attorneys' fees is warranted.

B. Injury

Some commenters have indicated that the injury definitions

contained in the Department's regulations should be relaxed. Several

commenters thought that trustee officials should be allowed to document

injury by measuring the mere presence of the oil or hazardous substance

in a natural resource. Other commenters have felt that the Department

should allow injury to be documented through a risk analysis.

On the other hand, some commenters have advocated the development

of more restrictive injury definitions. Several commenters have

contended that trustee officials should be required to link the

specific substance found in a natural resource to that of the discharge

or release in question. Other commenters have suggested that injuries

should be limited to lost public uses of the natural resources.

The regulations establish acceptance criteria for the development

of biological injury definitions. 43 CFR 11.62(f)(2). Some commenters

have stated that these criteria should be applied not only when a new

injury definition is developed but also each time trustee officials

document incident-specific injuries under existing injury definitions.

Others felt that the acceptance criteria should be applied to each

hazardous substance for which a particular biological injury definition

was to apply.

NOAA has proposed standards for determining injury under OPA that

differ from those in the Department's regulations. See 59 FR 1178-1180.

The Department intends to carefully examine the type B standards

and methods for determining injury during this review. The Department

encourages commenters to provide suggestions on injury determination

and quantification.

C. Economics

1. Compensable Value

Several commenters sought clarification on the economic values that

are included in compensable value. Some commenters questioned when lost

economic rent constitutes a compensable value. The Department's

regulations provide that compensable value includes ``any economic rent

accruing to a private party because the Federal or State agency or

Indian tribe does not charge a fee or price for the use of the

resources.'' 43 CFR 11.83(c)(1), as amended by 59 FR 14286. The

Department's regulations also provide that compensable value includes

changes in consumer surplus. Some commenters requested clarification of

what constituted consumer surplus. The Department solicits comment on

whether the regulations should provide additional guidance on the

assessment of damages for lost economic rent and consumer surplus.

A couple of commenters stated that compensable value should include

not only the value of services lost to humans but also the value of

services lost to other resources as a result of the injuries. Under the

Department's regulations, trustee officials may consider not only the

reduction in services to humans but also the reduction in services to

other resources when selecting appropriate restoration, rehabilitation,

replacement, and/or acquisition measures and estimating their costs.

However, compensable value may be calculated only for the resource

services lost to the public pending completion of restoration,

rehabilitation, replacement, and/or acquisition of equivalent

resources. See 43 CFR 11.83(c)(1), as amended by 59 FR 14286. The

Department notes that compensable value does account indirectly for

certain services lost to other resources. For example, compensable

value for lost fishing opportunities may reflect the results of food

web losses. If commenters think that additional values should be

included in compensable value, they should specify the values of

interest, explain the legal basis for including such values, and

provide specific suggestions on how those values should be measured.

The Department's regulations provide that in assessments where the

scope of economic analysis is at the State level, only the compensable

value to the State should be counted. 43 CFR 11.84(h)(3), as amended by

59 FR 14287. Several commenters suggested that this provision be

revised to allow State trustee officials to assess and recover

compensable value for all individuals, not just those within the State.

The Department solicits comment on the appropriate scope of economic

analysis for all trustee officials.

2. Guidance on Methodologies

There were numerous requests for additional guidance on

implementation of the cost-estimating and valuation methodologies

listed in the regulations. With regard to cost-estimating

methodologies, some commenters have stated that the guidance provided

on the incorporation of uncertainty into cost estimates is inadequate.

See 43 CFR Sec. 11.84(d), as amended by 59 FR 14286-87. Other

commenters requested additional guidance on selection and use of cost-

estimating methodologies.

With regard to valuation methodologies, commenters raised concerns

about the possibility of double counting if a hedonic pricing

methodology is used. One commenter noted that the regulations state,

``When regional travel cost models exist, they may be used if

appropriate.'' 43 CFR 11.83(c)(2)(iv), as amended by 59 FR 14286. This

commenter stated that this statement incorrectly implied that regional

cost models were more appropriate than other models. Another commenter

stated that use of the travel cost methodology should not be allowed

because the results of a travel cost model can be skewed by the actions

of one unusually avid traveler.

The Department solicits comment on the need for and possible

content of guidance on implementation of cost-estimating methodologies.

The Department also solicits comment on the need for and possible

content of guidance on implementation of methodologies for valuing lost

use values. Commenters should restrict their remarks to the calculation

of lost use values, because, as noted above, the Department is

addressing the estimation of lost nonuse values in a separate

rulemaking. See 59 FR 23097.

3. Willingness to Accept

Several commenters suggested that trustee officials be allowed to

calculate compensable value by estimating the minimum amount of money

an individual would require once an injury occurred in order to be as

well off as before the injury occurred (willingness to accept). The

Department agrees that, since natural resources are held in trust for

the public, willingness to accept is the correct theoretical measure of

compensable value. However, because of the practical difficulties

entailed in reliably measuring willingness to accept, the Department's

regulations require the use of methodologies that measure the amount of

money an individual would be willing to pay to prevent a natural

resource injury (willingness to pay). 43 CFR 11.83(c)(2), as amended by

59 FR 14286. The Department solicits comment on whether reliable

methods exist for measuring willingness to accept. The Department also

solicits comment on the conditions under which willingness to accept

rather than willingness to pay would, in theory, result in

significantly different estimates of compensable value.

4. Discount Rate

The Department's regulations provide that trustee officials should

discount the value of future costs and losses using the discount rate

specified in the Office of Management and Budget Circular A-94 (OMB

Circular A-94), dated March 27, 1972, which was ten percent. 43 CFR

11.84(e)(2). OMB Circular A-94 has been revised. The current version,

dated October 29, 1992, indicates that the discount rate for public

investment is 7 percent.

The Department is soliciting comment on whether use of a seven

percent discount rate (the current value in Circular A-94) is

appropriate or whether trustee officials should be allowed to use a

different discount rate. A possible alternative discount rate for

future public losses of natural resources is the consumer rate of time

preference, which is the rate of interest at which an individual would

be indifferent between consuming goods now and postponing consumption

to a later date. Interest rates on investments with little or no

default risk, such as U.S. Treasury bonds, provide an estimate of the

consumer rate of time preference. The Department solicits comment on

whether trustee officials should be allowed to use a discount rate

based on the U.S. Treasury borrowing rate on marketable securities with

maturities comparable to the period over which future losses will

occur. Such an approach would be consistent with that proposed by NOAA

under OPA. See 59 FR 1184. Information on U.S. Treasury borrowing rates

on marketable securities is provided in Appendix C of OMB Circular A-

94.

5. Cost-Effectiveness

The Department's regulations define ``cost-effectiveness'' to mean

that ``when two or more activities provide the same or a similar level

of benefits, the least costly activity providing that level of benefits

will be selected.'' 43 CFR Sec. 11.14(j). Commenters have expressed

confusion over the difference between cost effectiveness and

maximization of net benefits. Consideration of cost effectiveness

involves comparing activities that provide the same or a similar level

of benefits. In contrast, consideration of net benefits can be used to

compare activities that provide substantially different levels of

benefits.

Another commenter stated that the definition of ``cost-

effectiveness'' should be changed to delete the reference to

``similar'' levels of benefits, in order to ensure full restoration,

rehabilitation, replacement, and/or acquisition of equivalent

resources.

Use of the phrase ``same or similar'' was not intended to force

trustee officials into using methods that produce lower benefits.

Instead, the term merely reflects the fact that in the damage

assessment context trustee officials will often be comparing methods

that do not produce exactly the same benefits.

The Department solicits comment on whether additional clarification

is warranted.

D. Legal Topics

1. Judicial Review

One significant area of discussion has been judicial review of

damage assessments. CERCLA provides that any determination or

assessment of damages performed ``in accordance with'' the natural

resource damage assessment regulations ``shall have the force and

effect of a rebuttable presumption on behalf of the trustee.'' CERCLA

sec. 107(f)(2)(C). This provision is incorporated into the Department's

regulations without further clarification. See 43 CFR Sec. 11.91(c).

Commenters have asked the Department to define the term ``rebuttable

presumption'' and clarify when and to which aspects of the assessment

the rebuttable presumption applies. Some commenters have questioned

whether the phrase ``in accordance with'' the regulations allows

trustee officials to obtain a rebuttable presumption for any portion of

an assessment that complies with the regulations or whether it

restricts the rebuttable presumption to those assessments that follow

all portions of the regulations.

The Department's regulations provide both an administrative process

for development and review of documentation as well as a range of

alternative methodologies for the actual determination of injuries and

damages. The Department believes that in order to obtain a rebuttable

presumption, a trustee official must follow the entire administrative

process set forth in the regulations. If the trustee official has

followed the administrative process, the rebuttable presumption

attaches to those components of the damage claim that were calculated

through the appropriate use of any of the methodologies described in

the regulations. However, trustee officials are not required to use all

of the listed methodologies in order to obtain a rebuttable

presumption. The Department solicits comment on this interpretation and

on whether additional clarification of the effect of the rebuttable

presumption is warranted.

There have been comments about whether judicial review of an

assessment should be limited to an administrative record. Under NOAA's

proposed OPA rule, judicial review of assessment costs and estimated

costs of restoration, rehabilitation, replacement, and/or acquisition

of equivalent resources would be conducted on an administrative record.

59 FR 1185. The Department solicits comment on whether a similar

provision should be included in its regulations. The Department also

solicits comment on whether judicial review of compensable value should

be conducted on an administrative record.

2. Effect of Amendments

Commenters have expressed confusion over the applicability of

amendments of the natural resource damage assessment regulations to

ongoing damage assessments that were started before the amendments

became effective. The Department solicits comment on whether it should

clarify that trustee officials are entitled to a rebuttable presumption

so long as their assessments are in accordance with the regulations as

they were in effect at the time that the assessments began.

3. Limits of Liability

Some commenters have sought clarification of various statutory

limitations on liability, including the ceilings set forth in section

107(c) of CERCLA and the provision in section 107(f)(1) that excludes

natural resource damages if those damages and the release that caused

those damages occurred wholly before the enactment of CERCLA. The

Department's regulations incorporate the statutory limitations on

liability but do not provide any clarification of those limitations. 43

CFR 11.15(b) and 11.24(b)(1). The Department will consider the

development of additional guidance if commenters identify specific

areas of concern.

4. Double Recovery

Some commenters have sought clarification of the prohibition

against ``double recovery'' of damages contained in section 107(f)(1)

of CERCLA. The Department's regulations incorporate this prohibition.

43 CFR Secs. 11.15(d) and 11.84(c). Double recovery refers to the

recovery of two or more damage amounts to restore, rehabilitate,

replace, and/or acquire the equivalent of the same injured resource or

lost service or to compensate for the same lost public value. The

Department will consider the development of additional guidance if

commenters identify specific areas of concern.

5. Threatened Releases and Discharges

Another area of discussion has been the recovery of natural

resource damages caused by the threat of a release or discharge.

Section 107(a)(4) of CERCLA refers to liability for ``a release or a

threatened release.'' However, section 107(a)(4)(C) refers to damages

for injury to, destruction of, or loss of natural resources ``resulting

from such a release.'' Also, section 301(c) of CERCLA authorizes the

Department to develop regulations for assessment of ``damages for

injury to, destruction of, or loss of natural resources resulting from

a release of oil or a hazardous substance.''

The Department's regulations address only damages resulting from an

actual release or discharge. NOAA's proposed rule, relying on section

1002(a) of OPA, would allow for the assessment of diminished use of a

resource resulting from the threat of a discharge. 59 FR 1169. The

Department solicits comment on whether CERCLA allows for recovery of

damages resulting from a threatened release and whether the

Department's regulations should be revised to allow for the assessment

of damages resulting from a threatened release or discharge. The

Department also solicits examples of the types of damages that might be

assessed in the case of a threatened discharge or release.

6. Archaeological and Cultural Resources

Several commenters have questioned whether CERCLA authorizes the

recovery of damages for injury of archaeological and cultural

resources. The Department believes that ``archaeological'' and

``cultural'' resources do not constitute ``natural resources'' as

defined by CERCLA. However, the Department's regulations do permit

trustee officials to include the loss of archaeological and cultural

services provided by a natural resource in a natural resource damage

assessment.

7. Unused Damage Awards

Some commenters have suggested that the statutory requirement that

damages be spent to restore, rehabilitate, replace, and/or acquire the

equivalent of the injured resources dictates that any sums not used in

this manner be returned to the PRPs. The Department's regulations

provide that collected damages may only be used to fund actions

described in the Restoration Plan and do not address the disposition of

any ``excess'' funds. See 43 CFR 11.92(c).

The Department notes that CERCLA requires all collected damages to

be spent on restoration, rehabilitation, replacement, and/or

acquisition of equivalent resources, which includes mitigation of the

public loss of services during the recovery period. Therefore, all

funds should be used for restoration, rehabilitation, replacement, and/

or acquisition of equivalent resources.

8. NEPA

Several commenters sought clarification of whether the National

Environmental Policy Act (NEPA) applies to assessments or restorations

performed in accordance with the regulations. The Department does not

anticipate addressing the applicability of NEPA in the damage

assessment regulations. However, the Department believes that the

information needed for the Restoration and Compensation Determination

Plan should fulfill the requirements of NEPA, with equivalent

opportunities for public input. Thus if NEPA were applicable to an

assessment or restoration activity, the Department believes that

appropriate and timely information would be available.

9. Consideration of Benefits

Some commenters stated that the Department's regulations should be

revised to require trustee officials to offset any damages resulting

from the discharge or release with any benefits produced by the

discharge or release. The Department solicits additional comment.

10. Tribal Trustees

A number of commenters have sought to ensure that the interests of

tribal entities are adequately addressed in the Department's

regulations. A number of commenters expressed concern over the

treatment of tribal values, including the values associated with tribal

cultural resources. As noted above, the Department believes that

``cultural'' resources, including tribal cultural resources, do not

constitute ``natural resources'' as defined by CERCLA. However, the

Department's regulations do permit trustee officials to include the

loss of cultural services provided by a natural resource in a natural

resource damage assessment.

Other commenters suggested that the Department's fiduciary

responsibility to Indian tribes extends to financing natural resource

damage assessments involving tribal resources. Although the Department

exercises a fiduciary responsibility as trustee for Indian resources,

the Department believes that discussion of funding mechanisms for

damage assessment activities conducted by Indian tribes is not

appropriate for this rulemaking, except as addressed in the law and

regulation regarding the liability of PRPs and use of recovered sums.

One commenter stated that CERCLA grants a rebuttable presumption to

assessments performed by tribal trustee officials. This commenter

stated that when CERCLA was amended by the Superfund Amendments and

Reauthorization Act (SARA), Congress intended to grant tribes the same

authority as States in the area of natural resource trustee activities.

The commenter further noted that under established case law concerning

the Federal government's fiduciary responsibility to tribes, any

ambiguity in the statute concerning tribes' right to the rebuttable

presumption must be construed in favor of the tribes.

The Department notes that the regulations were revised in 1988 to

reflect the SARA amendment to CERCLA granting a rebuttable presumption

to natural resource damage assessments performed by State trustee

officials. See 43 CFR 11.91(c). At that time and in subsequent Federal

Register notices, the Department has taken the position that SARA did

not extend the rebuttable presumption to assessments performed by

tribal trustee officials and that granting a rebuttable presumption to

tribes will require a legislative change.

E. Restoration, Rehabilitation, Replacement, and/or Acquisition of

Equivalent Resources

1. Types of Alternatives

Some commenters have suggested that the regulations should

encourage trustee officials to select restoration and rehabilitation

alternatives rather than replacement or acquisition alternatives. The

Department's regulations do not indicate a preference for any

particular type of restoration, rehabilitation, replacement, or

acquisition alternative. The Department solicits comment on whether it

has the authority, and whether it is appropriate, to develop and

require adherence to a priority system for selecting a restoration,

rehabilitation, replacement, and/or acquisition alternative.

The Department's regulations provide that Federal trustee officials

may not select an alternative that requires acquisition of land for

Federal management, unless restoration, rehabilitation and replacement

are not possible. 43 CFR 11.82(e), as amended by 59 FR 14285. Some

commenters supported this restriction and requested that it be extended

to State and tribal natural resource trustees. Other commenters thought

that the restriction should be eliminated altogether. The Department is

interested in comments on this issue.

Some commenters stated that the regulations should clearly

authorize trustee officials to choose a natural recovery alternative

when selecting a restoration, rehabilitation, replacement, and/or

acquisition alternative. The Department believes that the regulations

already authorize trustee officials to select a natural recovery

alternative when appropriate. The Department's regulations explicitly

require trustee officials to consider a ``No Action-Natural Recovery''

alternative. 43 CFR 11.82(c)(2), as amended by 59 FR 14284.

2. Guidance on Selection of an Alternative

Several commenters have requested guidance on selection of a

restoration, rehabilitation, replacement, and/or acquisition

alternative. In particular, some commenters thought that the Department

should provide guidance on how trustee officials could maximize the

opportunities for natural recovery.

The Department's regulations already provide some guidance on the

selection of a restoration, rehabilitation, replacement, and/or

acquisition alternative. See 43 CFR 11.82, as amended by 59 FR 14284-

85. The Department's regulations require trustee officials to evaluate

a reasonable number of restoration, rehabilitation, replacement, and/or

acquisition alternatives, including natural recovery. The Department's

regulations also provide a number of factors that trustee officials

must consider when selecting an alternative. NOAA's proposed OPA rule

includes a similar list of factors and contains guidance on determining

when to select an alternative that relies on natural recovery. 59 FR

1181. NOAA has developed a draft guidance document on restoration

activities. 59 FR 1065.

The Department notes that developing guidance requires balancing

increased predictability against reduced flexibility to respond to the

unique features of the broad range of potential natural resource damage

cases. Thus, there is a limit to the level of specificity that can be

appropriately provided in the regulations. With this in mind, the

Department solicits comment on specific aspects of the selection

process that warrant additional guidance. The Department solicits

comment on whether the guidance should be incorporated in the

regulations or in a separate guidance document. The Department also

intends to consider the appropriateness of offering guidance on

available restoration and rehabilitation techniques and would

appreciate information on appropriate case studies demonstrating

successful application of restoration and rehabilitation measures.

3. Specific Selection Factors

Under the Department's regulations, one of the factors that trustee

officials must consider when selecting a restoration, rehabilitation,

replacement, and/or acquisition alternative is the relationship between

estimated costs and estimated benefits. 43 CFR 11.82(d)(2), as amended

by 59 FR 14285. Total damages will depend on the sum of compensable

value and restoration, rehabilitation, replacement, and/or acquisition

costs. Often there will be tradeoffs between compensable value and

restoration, rehabilitation, replacement, and/or acquisition costs. For

example, a fast-paced restoration, rehabilitation, replacement, and/or

acquisition alternative may result in a lower level of interim lost

use, and thus reduce associated compensable values. However,

implementation of such an alternative may result in significantly

higher restoration, rehabilitation, replacement, and/or acquisition

costs. In some cases, there may be sufficient data to demonstrate that

some restoration, rehabilitation, replacement, and/or acquisition

alternatives result in substantially lower total damages than others.

NOAA has solicited comment on whether, under OPA, trustee officials

should be required to explain their rationale if they select a

restoration, rehabilitation, replacement, and/or acquisition

alternative that does not minimize total damages. 59 FR 1134. The

Department solicits comment on whether a similar requirement should be

added to the Department's regulations.

A commenter suggested that socioeconomic effects of restoration,

rehabilitation, replacement, and/or acquisition alternatives might be

added to the list of factors that trustee officials are to consider in

making their selection among alternatives. The Department's regulations

provide that trustee officials may consider all relevant considerations

when selecting a restoration, rehabilitation, replacement, and/or

acquisition alternative. 43 CFR 11.82(d), as amended by 59 FR 14284-85.

Therefore, trustee officials already have the ability to consider

socioeconomic effects if relevant.

4. Services Versus Resources

Several commenters expressed confusion over whether the Department

intended restoration, rehabilitation, replacement, and/or acquisition

of the equivalent to be measured in terms of the services provided by a

resource, the resource itself, or both. Several commenters noted

apparent inconsistencies in the regulations.

Some commenters stated that restoration, rehabilitation,

replacement, and/or acquisition of the equivalent should be strictly

limited to the services provided by the resource. For example, some

commenters believed that if an injured stream was used for fishing and

nothing else, PRPs should only be liable for the cost of cleaning that

stream to the point where fishing opportunities are returned to

baseline. These commenters thought that requiring restoration,

rehabilitation, replacement, and/or acquisition of the equivalent of

both services and the resource itself would create economic

inefficiencies and would constitute double counting.

Other commenters indicated that measuring restoration,

rehabilitation, replacement, and/or acquisition of the equivalent in

terms of services only would fail to fully compensate the public. These

commenters expressed concern that using services alone as a measurement

could prevent trustee officials from attaining complete restoration,

rehabilitation, replacement, and/or acquisition of the equivalent.

The Department intends to carefully review the use of the terms

``resources'' and ``services'' in this biennial review. The Department

solicits comment on whether restoration, rehabilitation, replacement,

and/or acquisition should be measured in terms of services, resources,

or both. The Department also solicits comment on the definition of

``services'' and whether it should be modified or additional concepts

should be developed or defined to further clarify this issue.

5. Committed Use

One commenter stated that the concept of committed use should not

apply to restoration, rehabilitation, replacement, and/or acquisition

of equivalent resources, in the sense that restoration of a resource or

service to a level of environmental quality beyond that needed to

support existing committed uses should not be required.

``Committed use'' is defined as a current or planned public use for

which there is a documented commitment established. 43 CFR 11.14(h).

Under the Department's regulations, the concept of committed use

applies only to the calculation of compensable value and does not

affect the appropriate level of restoration, rehabilitation,

replacement, and/or acquisition of equivalent resources. See 43 CFR

11.84(b)(2).

The committed use requirement was designed to prevent trustee

officials from assessing compensable value for purely speculative uses

of a resource. When measuring restoration, rehabilitation, replacement,

and/or acquisition, the guiding concept is whether baseline conditions

have been reestablished, irrespective of consideration of compensable

values. Failure to account for potential services when measuring

restoration, rehabilitation, replacement, and/or acquisition of

equivalent resources could violate Ohio v. Interior, which stated:

Our decision to uphold the ``committed use'' requirement is

premised on our interpretation of the regulation to mean that a

trustee is not prohibited from recovering costs of restoring or

replacing a natural resource even when that resource has no

documented ``committed use.'' 880 F.2d at 462.

6. Implementation of an Alternative

A commenter said there should be provisions for starting

restoration, rehabilitation, replacement, and/or acquisition activities

while the damage assessment is still under way. The Department's

regulations provide for implementation of emergency restorations in

appropriate circumstances, generally limited to actions necessary to

abate an emergency situation. 43 CFR 11.21. Other than for emergency

restorations, starting restoration, rehabilitation, replacement, and/or

acquisition activities while damage assessment is underway, while not

precluded, is not expressly discussed in the regulations. However,

trustee officials may not expend funds received for restoration,

rehabilitation, replacement, and/or acquisition of equivalent resources

prior to developing a Restoration Plan and making it available for

public comment and review. 43 CFR 11.92(c); CERCLA sec. 111(i).

The assessment process is designed, in part, to ensure that

appropriate and efficient measures to accomplish restoration,

rehabilitation, replacement, and/or acquisition of equivalent resources

are adopted. Unless there is a compelling reason for early initiation

of restoration, rehabilitation, replacement, and/or acquisition

activities, the Department believes that the administrative process

established under the regulations should be followed. This approach is

similar to that provided under other existing legislation and

regulation (e.g., NEPA and the Administrative Procedure Act) whereby

there are general and specific constraints on taking certain actions or

making irrevocable decisions or irretrievable commitments of resources

prior to completion of appropriate planning and public involvement.

However, if initiation of certain restoration, rehabilitation,

replacement, and/or acquisition actions would not constrain

decisionmaking following completion of the assessment process, and if

the public was given adequate opportunity to comment on the proposed

actions consistent with CERCLA section 111(i), such actions could be

appropriate.

Commenters have also sought clarification of 43 CFR 11.21 (b) and

(c), which provide that a trustee official may undertake emergency

restoration actions ``consistent with its existing authority.''

Existing 43 CFR 11.21 was developed in recognition of section 111(i) of

CERCLA, which provides that trustee officials need not develop a

restoration plan subject to public comment prior to taking emergency

actions. The Department does not believe that section 111(i) of CERCLA

provides trustee agencies with independent authority to take action

they would not otherwise have authority to take. The Department

solicits comment on whether additional clarification is warranted.

One commenter asked the Department to recognize the right of co-

trustees to spend collected damages on implementation of different

Restoration Plans. While the Department's regulations require trustee

coordination and encourage joint development and implementation of

restoration, rehabilitation, replacement, and/or acquisition actions,

nothing in the regulations prohibits co-trustees from implementing

different Restoration Plans. The Department solicits further comment on

this issue.

A few commenters requested guidance on determining when

restoration, rehabilitation, replacement, and/or acquisition of

equivalent resources is complete. Some commenters suggested that

trustee officials provide PRPs with a certification when restoration,

rehabilitation, replacement, and/or acquisition of equivalent resources

is essentially completed so that PRPs will not remain liable

indefinitely.

The Department's regulations provide that the recovery period is

the time until baseline conditions have been reestablished. 43 CFR

11.73(a), as amended by 59 FR 14283. It is up to the trustee officials,

and in the case of settlements the joint agreement of the trustee

officials and the PRPs, whether a site-specific definition of

completeness should be included in the Restoration Plan. The Department

has not considered it necessary to require trustee officials to provide

PRPs with a certification when restoration, rehabilitation,

replacement, and/or acquisition of equivalent resources is essentially

completed. The extent of a PRP's continuing liability after damages

have been recovered by the trustee officials depends on the terms of

the judgment or settlement agreement.

Dated: September 21, 1994.

Bonnie R. Cohen,

Assistant Secretary--Policy, Management, and Budget.

[FR Doc. 94-25839 Filed 10-18-94; 8:45 am]

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