Natural Resource Damage Assessments

SUMMARY: Section 1006(e)(1) of the Oil Pollution Act of 1990 requires

the President, acting through the Under Secretary of Commerce for

Oceans and Atmosphere, to promulgate regulations for the assessment of

natural resource damages resulting from a discharge or substantial

threat of a discharge of oil. This final rule is for the use of

authorized federal, state, Indian tribe, and foreign officials,

referred to as ``trustees.'' Natural resource damage assessments are

not identical to response or remedial actions addressed by the larger

statutory scheme of the Oil Pollution Act of 1990. Assessments are not

intended to replace response actions, which have as their primary

purpose the protection of human health, but to supplement them, by

providing a process for restoring natural resources and services

injured as a result of an incident involving oil.

EFFECTIVE DATE: The effective date of the final rule is February 5,

1996.

ADDRESSES: Linda Burlington or Eli Reinharz, c/o NOAA/GCNR, 1315 East-

West Highway, SSMC #3, Room 15132, Silver Spring, MD 20910.

FOR FURTHER INFORMATION CONTACT: Linda Burlington (telephone (301) 713-

1217) or Eli Reinharz (telephone (301) 713-3038, ext. 193), Office of

General Counsel Natural Resources, FAX (301) 713-1229.

SUPPLEMENTARY INFORMATION: The Oil Pollution Act of 1990 (OPA), 33

U.S.C. 2701 et seq., provides for the prevention of, liability for,

removal of, and compensation for the discharge, or substantial threat

of discharge, of oil (hereinafter referred to as ``incident'') into or

upon the navigable waters of the United States, adjoining shorelines,

or the Exclusive Economic Zone. Section 1006(b) of OPA (33 U.S.C.

2706(b)) provides for the designation of federal, state, Indian tribe,

and foreign natural resource trustees to determine if injury to,

destruction of, loss of, or loss of use of natural resources and

services has resulted from an incident, assess natural resource damages

for those injuries, present a claim for damages (including the

reasonable costs of assessing damages), recover damages, and develop

and implement a plan for the restoration, rehabilitation, replacement,

or acquisition of the equivalent of the injured natural resources and

services under their trusteeship. Section 1006(e)(1) of OPA (33 U.S.C.

2706(e)(1)) requires the President, acting through the Under Secretary

of Commerce for Oceans and Atmosphere, to promulgate regulations for

the assessment of natural resource damages resulting from incidents.

Background

Prior to issuing this final rule, NOAA published eleven Federal

Register Notices requesting information and comments on approaches to

developing natural resource damage assessment procedures. 55 FR 53478

(December 28, 1990), 56 FR 8307 (February 28, 1991), 57 FR 8964 (March

13, 1992), 57 FR 14524 (April 21, 1992), 57 FR 23067 (June 1, 1992), 57

FR 44347 (September 25, 1992), 57 FR 56292 (November 27, 1992), 58 FR

4601 (January 15, 1993), 59 FR 1061 (January 7, 1994), 60 FR 39804

(August 3, 1995), and 60 FR 43574 (August 22, 1995). NOAA conducted a

public meeting on March 20, 1991, and held four regional workshops

during 1991 in Rockville, Maryland; Houston, Texas; San Francisco,

California; and Chicago, Illinois, to learn of regional concerns in

assessing injury and restoration for coastal and inland waters. One

workshop held in Alexandria, Virginia, in November 1991, provided a

forum for early discussions of various economic issues likely to be

raised during the rulemaking process. In addition, on August 12, 1992,

NOAA held a public hearing on the issue of whether constructed market

methodologies, including contingent valuation, (CV), can be used to

calculate reliably passive use values for natural resources, and if so,

under what circumstances and under what guidance. On January 15, 1993,

NOAA published in full the report of a panel commissioned to evaluate

the reliability of CV. 58 FR 4601.

NOAA published the proposed OPA rule on January 7, 1994 (59 FR

1061). The proposed rule contained a statement requesting specific

consideration of certain issues. Immediately after publishing the

proposed rule, NOAA held six regional meetings in January and February

of 1994. A seventh workshop was held in March 1994 in Washington, D.C.

NOAA then published an informational notice to summarize the concerns

raised in these workshops on June 22, 1994 (59 FR 32148).

Based upon comments received in response to the proposed rule and

regional meetings, NOAA reproposed the rule on August 3, 1995 (60 FR

39804). Immediately after publishing the proposed rule, NOAA held two

conferences in August and September of 1995 to discuss the 1995

proposed rule.

This final rule draws from the public issue-discussion process and

comments received to provide a natural resource damage assessment

process intended to meet OPA's goal of expeditious, cost-effective, and

feasible restoration of natural resources and services injured by

incidents involving oil.

This preamble is organized as follows: the Introduction gives an

overview of the rule and is followed by a discussion of each of the

subparts of the rule. Subpart A provides a general introduction,

subpart B describes trustee authorities, subpart C gives definitions

pertinent to this rule, subpart D describes the Preassessment Phase,

subpart E describes the Restoration Planning Phase, and subpart F

describes the Restoration Implementation Phase. Finally, the preamble

provides a general summary of and responses to the comments on the

proposed rule.

INTRODUCTION

I. Goal of OPA: Focus on Restoration

The goal of the Oil Pollution Act of 1990 (OPA) is to make the

environment and public whole for injuries to natural resources and

natural resource services resulting from an incident involving a

discharge or substantial threat of a discharge of oil (incident). This

goal is achieved through returning injured natural resources and

services to baseline and compensating for interim losses of such

natural resources and services through the restoration, rehabilitation,

replacement or acquisition of equivalent natural resources and/or

services. The purpose of this rule is to provide a framework for

conducting sound natural resource damage assessments that achieve

restoration under OPA.

Under the rule, restoration plans developed with input from the

public and responsible parties form the basis of a claim for natural

resource damages. Final restoration plans are presented to responsible

parties for funding. In addition, the rule allows responsible parties

to implement trustee-approved and monitored restoration plans. Because

assessments will be conducted in the open, and responsible parties and

the public will have opportunities to be

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involved in the planning process, it is expected that restoration will

be achieved more quickly, transaction costs will decrease, and

litigation will be avoided.

NOAA believes that an assessment that focuses on evaluating

injuries relevant to feasible restoration alternatives and soliciting

public input in restoration planning will accomplish three major goals:

validating trustee determinations regarding those actions that will

make the environment and public whole; ensuring that appropriate

assessment procedures for determining restoration actions for a given

incident are followed; and reducing transaction costs. The rule

provides for the use of a range of appropriate and cost-effective

procedures for an assessment. Procedures to be used within the rule

must meet certain standards: they must be capable of providing

information of use in determining the type and scale of restoration

appropriate for a particular injury; the additional cost of a more

complex procedure must be reasonably related to the expected increase

in the quality and/or quantity of information provided by the more

complex procedure; and they must be reliable and valid for the

particular incident. Trustees must select the most cost-effective of

two or more equally appropriate assessment procedures.

Restoration planning by federal trustee agencies is subject to the

requirements of the National Environmental Policy Act (NEPA) (42 U.S.C.

4321 et seq.), except when a categorical exclusion or other exception

to NEPA applies. The process identified in the rule mirrors the

decisionmaking process embodied in NEPA, without requiring

significantly different steps or products than those envisioned in OPA.

Recognizing that NEPA compliance requirements will vary among federal

agencies, and that state trustees may not be subject to NEPA, the rule

describes the general processes and products required under NEPA, and

provides guidance for integrating NEPA compliance into the assessment.

Finally, NOAA has developed guidance documents on various aspects

of the assessment. These guidance documents are available in draft on:

preassessment, injury assessment, restoration, compensation formulas,

and NEPA compliance (citations for the documents are included in the

Bibliography at the end of this preamble). These draft documents are

available from the address at the front of this preamble. The guidance

documents are being prepared in conjunction with this rulemaking to

provide additional technical information to those performing

assessments under OPA and other interested members of the public. These

documents will not constitute regulatory guidance, nor will they have

to be followed for an assessment to be conducted in accordance with

this rule. The documents, in their final form, will be made available

through a public information distribution service, and will be

announced in a future Federal Register notice.

II. Overview of the Restoration Planning Process Under the Rule

The natural resource damage assessment process in the rule includes

three phases as outlined below: (1) Preassessment; (2) restoration

planning; and (3) restoration implementation.

Preassessment Phase

When notified by response agencies of an incident involving oil,

trustees must first determine threshold criteria that provide their

authority to begin the natural resource damage assessment, such as

applicability of OPA and risks to natural resources under their

trusteeship. Based on early available information, trustees make a

preliminary determination whether natural resources or services have

been injured. Through coordination with response agencies, trustees

next determine whether response actions will eliminate the threat of

ongoing injury. If injuries are expected to continue, and feasible

restoration alternatives exist to address such injuries, trustees may

proceed with the assessment.

Restoration Planning Phase

The purpose of the Restoration Planning Phase is to evaluate

potential injuries to natural resources and services, and use that

information to determine the need for and scale of restoration actions.

The Restoration Planning Phase provides the link between injury and

restoration. The Restoration Planning Phase has two basic components:

injury assessment and restoration selection.

Injury Assessment

The goal of injury assessment is to determine the nature and extent

of injuries to natural resources and services, thus providing a

technical basis for evaluating the need for, type of, and scale of

restoration actions. Under the rule, injury is defined as an observable

or measurable adverse change in a natural resource or impairment of a

natural resource service. Trustees must determine that there is: (1)

Exposure, a pathway, and an adverse change to a natural resource or

service as a result of an actual discharge; or (2) an injury to a

natural resource or impairment of a natural resource service as a

result of response actions or a substantial threat of a discharge.

Trustees must also quantify the degree, and spatial and temporal extent

of injuries. Injuries are quantified by comparing the condition of the

injured natural resources or services to baseline, where necessary.

Restoration Selection

Once injury assessment is complete, trustees must develop a plan

for restoring the injured natural resources and services. Under the

rule, trustees must identify a reasonable range of restoration

alternatives, evaluate and select the preferred alternative(s), and

develop a Draft and Final Restoration Plan, that considers public

comments. Acceptable restoration actions include any of the actions

authorized under OPA (restoration, rehabilitation, replacement, or

acquisition of the equivalent), or some combination of those actions.

Restoration actions under the rule are either primary or

compensatory. Each restoration alternative considered will contain

primary and/or compensatory restoration actions that address one or

more specific injuries associated with the incident. Primary

restoration refers to actions taken to return the injured natural

resources and services to baseline on an accelerated time frame.

Natural recovery also must be considered under primary restoration, in

which no human intervention is taken to directly restore injured

natural resources and/or services to baseline. Alternative primary

restoration actions can range from natural recovery, to actions that

prevent interference with natural recovery, to more intensive actions

expected to return injured natural resources and services to baseline

faster or with greater certainty than natural recovery.

Compensatory restoration includes actions to compensate for interim

losses of natural resources and/or services pending recovery. The type

and scale of compensatory restoration may depend on the nature of the

primary restoration action, and the level and rate of recovery of the

injured natural resources and/or services given the primary restoration

action.

When identifying the compensatory restoration components of the

restoration alternatives, trustees must first consider compensatory

restoration actions that provide services of the same type and quality,

and of comparable value as those lost. If compensatory

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actions of the same type and quality and comparable value cannot

provide a reasonable range of alternatives, trustees may consider other

compensatory restoration actions among the alternatives, so long as the

actions, in the judgment of the trustees, will provide services of at

least comparable type and quality as those lost.

To ensure that a restoration action appropriately addresses the

injuries resulting from an incident, trustees must scale the action.

The approaches that may be used to determine the appropriate scale of a

restoration action include the resource-to-resource or service-to-

service approach, and the valuation approach. The possible use of

contingent valuation (CV) and other stated-preference methods of

valuation to determine what scale of compensatory restoration provides

an equivalent value to the lost services avoids many problems

identified by commenters regarding the use of CV to calculate a dollar

value for the damages as included in the 1994 proposal.

Under the resource-to-resource or service-to-service approach to

scaling, trustees determine the appropriate quantity of replacement

natural resources and/or services to compensate for the amount of

injured natural resources or services. Trustees must consider using the

resource-to-resource or service-to-service approach for actions that

provide natural resources and/or services of the same type, quality,

and value as those lost.

In situations where trustees must consider actions that provide

natural resources and/or services that are of a different type,

quality, or value than the injured natural resources and/or services,

or where use of resource-to-resource or service-to-service scaling is

inappropriate, trustees may use the valuation approach to scaling. To

evaluate actions that provide services of a different type or quality,

trustees need a common measure to compare services lost and services

provided, such as the value per unit of service. Trustees first

calculate the value of the lost services and then determine the value

gained from different scales of the restoration action. Trustees then

select the scale of the restoration action under consideration that

would provide value equal to the value lost. Responsible parties are

liable for the cost of implementing the restoration action that would

generate the equivalent value, not for the calculated interim loss in

value.

Selection of a Preferred Alternative

The identified restoration alternatives are evaluated based on a

number of factors that include: (i) cost to carry out the alternative;

(ii) extent to which each alternative is expected to meet the trustees'

goals and objectives in returning the injured natural resources and

services to baseline and/or compensate for interim losses; (iii)

likelihood of success of each alternative; (iv) extent to which each

alternative will prevent future injury as a result of the incident, and

avoid collateral injury as a result of implementing the alternative;

(v) extent to which each alternative benefits more than one natural

resource and/or service; and (vi) effect of each alternative on public

health and safety. Trustees must select the most cost-effective of two

or more equally preferable alternatives.

A Draft Restoration Plan will be made available for review and

comment by the public, including appropriate members of the scientific

community where possible. Public review and comment of the plan will

depend on the nature of the incident, and any applicable federal

trustee NEPA requirements. The Draft Restoration Plan will describe the

trustees' preassessment activities, as well as injury assessment

activities and results, evaluate restoration alternatives, and identify

the preferred restoration alternative(s). After reviewing public

comments on the Draft Restoration Plan, trustees must develop a Final

Restoration Plan. The Final Restoration Plan will become the basis of

claims for damages.

Restoration Implementation Phase

The Final Restoration Plan is presented to responsible parties to

implement or to fund the trustees' costs of implementing the plan, thus

providing the opportunity for settlement of damages claims without

litigation. Should responsible parties decline to settle a claim, OPA

authorizes trustees to bring a civil action for damages in federal

court or seek an appropriation from the Oil Spill Liability Trust Fund

for such damages.

DISCUSSION

Subpart A--Introduction

I. Purpose

The goal of the Oil Pollution Act of 1990 (OPA), 33 U.S.C. 2701 et

seq., is to make the environment and public whole for injuries to

natural resources and services resulting from an incident involving a

discharge or substantial threat of a discharge of oil (incident). This

goal is achieved through returning the injured natural resources and

services to baseline and through compensation for interim losses of

those natural resources and services from the date of the incident

until recovery.

The purpose of this rule is to promote expeditious and cost-

effective restoration of natural resources and services injured as a

result of an incident. To fulfill this purpose, the rule provides a

natural resource damage assessment process for developing a plan for

restoration of the injured natural resources and services and pursuing

implementation or funding of the plan by responsible parties. The rule

also provides an administrative process for involving interested

parties in the assessment, a range of assessment procedures for

identifying and evaluating injuries to natural resources and services,

and a means for selecting appropriate restoration actions from a

reasonable range of alternatives.

II. Scope

This rule may be used by designated federal, state, tribal, and

foreign natural resource trustees to determine appropriate actions to

restore natural resources and/or services injured by a discharge, or

substantial threat of a discharge, of oil into or upon navigable waters

or adjoining shorelines or the Exclusive Economic Zone of the United

States.

The Secretaries of the Interior, Commerce, Agriculture, Defense,

and Energy are the primary federal natural resources trustees, although

in some circumstances, the heads of other federal agencies may act as

trustees of natural resources (see 40 CFR 300.600). The roles and

responsibilities of the various federal trustees regarding an

assessment vary according to their natural resource management

responsibilities and the susceptibility of various natural resources

and/or services to injury. Designation of federal trustees and broad

guidelines describing trustee functions are addressed in subpart G of

the National Oil and Hazardous Substances Pollution Contingency Plan

(NCP), 40 CFR part 300.600. For state trustees, most governors have

delegated trustee responsibilities to specific state or local agencies,

as provided under OPA.

The process described in the rule is not intended to affect the

recoverability of natural resource damages when recoveries are sought

other than in accordance with this rule.

III. Overview

The rule describes three phases of a natural resource damage

assessment. The Preassessment Phase, during which trustees determine

whether to pursue restoration, is described in subpart D of the rule.

The Restoration Planning

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Phase, during which trustees evaluate information on potential injuries

and use that information to determine the need for, type of, and scale

of restoration, is described in subpart E of the rule. The Restoration

Implementation Phase, during which trustees ensure implementation of

restoration, is described in subpart F of the rule.

IV. Rebuttable Presumption

Assessments performed by federal, state, or tribal trustees in

accordance with this rule receive the evidentiary status of a

rebuttable presumption provided by section 1006(e)(2) of OPA (33 U.S.C.

2706(e)(2)). NOAA interprets this presumption to mean that the

responsible parties have the burdens of presenting alternative evidence

on damages and of persuading the fact finder that the damages presented

by the trustees are not an appropriate measure of damages. This

presumption applies to all assessment procedures conducted in

accordance with this rule. However, where trustees use procedures that

are determined not to be in accordance with this rule, trustees will

not obtain a rebuttable presumption for that portion of the assessment.

Assessments performed by foreign trustees in accordance with this rule

are not entitled to a rebuttable presumption, as provided in section

1006(c)(1) of OPA (33 U.S.C. 2706(e)(1)).

V. Coordination

A. General

Coordination among all parties affected by an incident is crucial

to an efficient and effective assessment. Coordination, in pre-incident

planning and throughout the assessment, can reduce time until

restoration is implemented and ensure that assessment costs are

reasonable. More detailed discussion of some aspects of coordination

appears in Appendix A at the end of this preamble.

B. Coordination Among Trustees

This rule encourages trustees with shared or overlapping

trusteeship to coordinate their assessment activities, including

coordination in pre-incident planning. Coordination among trustees will

avoid duplicative claims for damages, address shared trust natural

resource concerns, and result in more effective funding of assessment

work. When conducting joint assessments, trustees must designate a Lead

Administrative Trustee (LAT). The LAT should be selected by mutual

agreement of the trustees. The LAT's duties and responsibilities are

mainly administrative, unless all trustees agree otherwise. Depending

upon the circumstances of the incident, there may be co-LATs or

sequential LATs for different stages of the process. This rule

encourages trustees to consider using agreements, such as memoranda of

understanding (MOUs), to structure both pre-incident and incident-

specific activities. Trustees may act independently when there is a

reasonable basis for dividing assessment responsibilities, so long as

there is no double recovery of damages. However, independent

assessments may not achieve prompt restoration of injured natural

resources and services and may not be in the best interests of the

parties involved.

C. Coordination With Response Agencies

Trustees must coordinate their activities conducted concurrently

with response operations with response agencies consistent with the NCP

and any pre-incident plans or MOUs. Coordination among trustees and

response agencies can result in reducing or eliminating natural

resource and/or service injuries residual to the cleanup. ``Response''

refers to those actions taken under the NCP to protect public health

and welfare or the environment when there is a discharge or a

substantial threat of a discharge of oil, including actions to contain

or remove discharged oil from water and shorelines.

D. Coordination With Responsible Parties

Active and early involvement of responsible parties may eliminate

some of the problems trustees have encountered immediately following an

incident, such as lack of funding, personnel and equipment. In

addition, a joint trustee-responsible party assessment may be more

cost-effective and avoid duplicate studies. Thus, the rule requires the

trustees to invite the responsible parties to participate in the

assessment.

The rule leaves determination of the timing and extent of

responsible party participation to the judgment of the trustees on an

incident-specific basis. While active responsible party involvement is

the preferred means of conducting assessments, it may not be

appropriate for trustees to delay assessment activities while

negotiating the terms of responsible party involvement.

Trustees should extend the invitation to participate to known

responsible parties as soon as practicable, but not later than the

delivery of the Notice of Intent to Conduct Restoration Planning,

described in Sec. 990.44 of the rule. The invitation to participate

must be in writing, and a written response by the responsible parties

is required to confirm the desire to participate. Trustees and

responsible parties should consider entering into binding agreements to

facilitate their interactions and resolve any disputes during the

assessment. To maximize cost-effectiveness and cooperation, trustees

and responsible parties should attempt to develop a set of agreed-upon

facts concerning the incident and/or assessment. For example,

stipulated facts might concern the types of natural resources and

services injured, extent of injury or most appropriate assessment

procedures to determine injury and/or restoration needs, and how the

results of the procedures used will be interpreted.

The scope of the participation by responsible parties must be

determined by the trustees The rule provides a number of factors that

may assist trustees in making this determination. These factors

include, for identified responsible parties, the willingness of

responsible parties to participate in the assessment and provide

funding for assessment activities, the ability of responsible parties

to conduct assessment activities in a technically sound and timely

manner and to be bound by the results of jointly agreed upon studies,

the degree of cooperation in response activities, and the actions of

the responsible parties in prior assessments. However, the rule

provides for a minimum level of responsible party participation that

consists of notice of trustee determinations required by the rule, and

notice and opportunity to comment on documents or plans that

significantly affect the nature and extent of the assessment. Increased

levels of participation by responsible parties may be developed at the

mutual agreement of the trustees and responsible parties; however,

final authority to make determinations regarding injury and restoration

rests solely with the trustees. Submissions by responsible parties will

be included in the administrative record. Trustees may end

participation by responsible parties who, during the conduct of the

assessment, interfere with the trustees' capability to fulfill their

responsibilities under OPA and this rule.

The rule also provides that participating responsible parties may

formally request use of assessment procedures other than those that

have been selected by trustees as the most appropriate for the incident

and injury of concern. Responsible parties must identify specific

alternate procedures, and demonstrate that they meet the

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requirements for acceptable assessment procedures provided in

Sec. 990.27 of the rule. In addition, because trustees will already

have made a determination that a different procedure is appropriate,

responsible parties must agree not to challenge the results of the

requested alternate procedure and agree to fund the alternate

procedure. Trustees may deny the request for alternate procedures on

the grounds that they are not technically feasible or scientifically

sound, are inconsistent with Sec. 990.27 of the rule, or could not be

completed in a reasonable time frame. Trustees must document the

request and their response in the administrative record.

Trustees must document in the administrative record and Restoration

Plan the invitation for participation by the responsible parties,

briefly describe the nature and extent of the responsible parties'

participation, and briefly describe, if applicable, why the responsible

parties' participation was terminated.

E. Coordination With the Public

A major goal of OPA is to involve the public in the restoration

planning process. At a minimum, the rule requires that trustees provide

opportunities for public involvement after the trustees decide to

develop a restoration plan. The rule further encourages that trustees

involve the public in the assessment at any time earlier, if such

involvement is expected to enhance trustees' decisionmaking or

facilitate the restoration process.

Depending on the nature of the incident and expected assessment

actions, public comment may be solicited at various stages to ensure

the best information base is available to the trustees. In highly

complex incidents, or those incidents that are expected to involve

multi-year efforts, trustees may have an opportunity to set up one or a

series of public meetings to ensure opportunity for public input.

Attendance should be encouraged by all parties that are involved,

participating, or interested in the incident.

To the fullest extent practicable, trustees should involve the

public to:

(i) Encourage a broad understanding of restoration and build trust,

thus allowing for quicker recognition and support of the restoration

process overall;

(ii) Provide opportunities for joint fact-finding, improving the

collection of quality data; and

(iii) Incorporate public concern, providing for more effective

restoration planning.

VI. Considerations for Facilitating Restoration

A. General

Pre-incident planning and regional restoration plan development are

tools trustees should consider as means to enhance successful

restoration planning and implementation. These actions are not required

actions under the rule. More extensive discussion on these topics is

included in Appendix A at the end of this preamble.

B. Pre-Incident Planning

NOAA believes that commitment of time, funding, and personnel to

planning prior to an incident will help ensure that the assessment

results in technically sound and cost-effective restoration. Pre-

incident planning activities may identify natural resource damage

assessment teams, establish trustee notification systems, identify

support services, identify natural resources and/or services at risk,

identify and develop working relationships with area and regional

response agencies and officials, identify available baseline

information, establish data management systems, and identify assessment

funding issues and options. Potentially responsible parties, cleanup

agencies, representatives of local natural resource management

agencies, and representatives of local environmental groups should be

included in pre-incident planning to the fullest extent practicable.

C. Regional Restoration Planning

OPA intends that restoration actions make the environment and

public whole for natural resource and/or service injuries resulting

from an incident. Where practicable, development of restoration plans

on an incident-by-incident basis is the preferred alternative to

accomplish this goal. However, for many incidents, including smaller

incidents, such incident-specific plan development may be impractical

and costly. Yet, the impact of small incidents may still represent a

significant concern for trustees, particularly where small incidents

may have cumulative impacts. Thus, to achieve OPA's mandate to restore

injured natural resources and services regardless of the type and scale

of those injuries, trustees are encouraged to identify existing

Regional Restoration Plans or other existing restoration projects that

may be applicable in the event of an incident. Regional restoration

planning may consist of compiling databases that identify existing,

planned, or proposed restoration projects that may provide appropriate

restoration alternatives for consideration in the context of specific

incidents. Plans or projects developed on a regional basis (e.g.,

ecosystem, landscape, watershed, or any other basis) appropriate so

long as natural resources and/or services comparable to those expected

to be injured by an incident are addressed in the plans. In no event

may the use of a regional restoration plan or other existing proposed

restoration project violate OPA's limitation that natural resource

damages must be used solely to restore, rehabilitate, replace, or

acquire the equivalent of natural resources and services injured by an

incident.

Subpart B--Authorities

I. Relationship to the CERCLA Natural Resource Damage Assessment

Regulations

The Department of the Interior (DOI) has developed regulations for

assessing natural resource damages resulting from hazardous substance

releases under the Comprehensive Environmental Response, Compensation,

and Liability Act of 1980 (CERCLA) (42 U.S.C. 9601 et seq.), and the

Federal Water Pollution Control Act (Clean Water Act) (33 U.S.C. 1321

et seq.). The CERCLA regulations are codified at 43 CFR part 11. The

CERCLA regulations originally applied to natural resource damages

resulting from oil discharges as well as hazardous substance releases.

This rule supersedes 43 CFR part 11 with regard to incidents covered by

OPA. Trustees who began assessments under the CERCLA regulations before

the effective date of this rule may complete those assessments in

compliance with the CERCLA regulations or they may elect to use this

rule to obtain the rebuttable presumption.

If natural resources and/or services are injured by a discharge or

release of a mixture of oil and hazardous substances, trustees must use

43 CFR part 11 in order to obtain a rebuttable presumption.

II. Relationship to the NCP

This rule provides procedures by which trustees may determine

appropriate restoration of injured natural resources and services,

where such injuries are not fully addressed by response actions.

Response actions and coordination with damage assessment activities are

conducted pursuant to the National Oil and Hazardous Substances

Pollution Contingency Plan (NCP), 40 CFR part 300.

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III. Prohibition on Double Recovery

Trustees are subject to a prohibition on double recovery of damages

in section 1006(d)(3) of OPA (33 U.S.C. 2706(d)(3)). This rule

encourages trustee coordination as a means to avoid double recovery. In

general, the losses that trustees may estimate without the risk of

double recovery are:

(i) The value of losses to all public uses of natural resources as

measured by changes in:

(a) Monetized measures of utility or consumer surplus;

(b) Fees or other payments collectable by the government or a tribe

for use of the natural resource by a private party; and

(c) Any economic rent accruing to a private party because the

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

natural resource, provided such economic rent is not recovered under a

private cause of action; and

(ii) In instances where the trustee(s) is the majority operator or

controller of a for-profit or not-for-profit enterprise, and the injury

to the natural resource results in a reduction of net income to such an

enterprise, that portion of the lost net income due the trustee(s) from

this enterprise resulting directly or indirectly from the injury to the

natural resource.

Trustee claims for damages under this rule should not include:

(i) Losses to the government for forgone taxes, because these are

transfer payments from individuals to the government; or

(ii) Wages and other income lost by private individuals, except for

that portion of income that represents uncollected economic rent, where

these values may be the subject of lawsuits brought by the individuals

suffering the loss.

Where restoration actions are scaled using the resource-to-resource

or service-to-service scaling approach, trustees should ascertain the

extent to which the restoration actions also compensate for losses

typically scaled with a valuation approach.

IV. Compliance With NEPA and the CEQ Regulations

Under this rule, the National Environmental Policy Act (NEPA)

applies to restoration actions taken by federal trustees, generally

becoming applicable when the trustees begin the process of developing a

Draft Restoration Plan under subpart E of this rule, except where a

categorical exclusion or other exceptions to NEPA apply. Thus, when a

federal trustee proposes to take restoration actions under this rule,

it must integrate this rule with NEPA, the Council on Environmental

Quality (CEQ) regulations on NEPA, and any NEPA regulations promulgated

by that federal trustee agency. In conducting the NEPA process

concurrently rather than consecutively with the assessment, federal

trustees are more likely to make the environment and public whole,

avoid delays in restoration, and reduce transaction costs.

Likewise, certain state trustees may also have equivalent NEPA

requirements, usually referred to as State Environmental Policy Acts

(SEPA). Thus, where a SEPA applies to state trustees, they must

consider the extent to which this rule can be integrated with their

SEPA requirements. Although other trustees may not be bound by NEPA or

NEPA-equivalent requirements, the trustees may still find the

procedural planning process as defined under NEPA (or SEPA) useful in

facilitating restoration.

The provisions of Sec. 990.23 of this rule strictly relate to NEPA

and federal trustees. The rule provides a brief description of the

general procedures and products that may be expected if a restoration

action is subject to a federal trustee's NEPA compliance requirements.

Federal trustees should refer to the CEQ regulations and their own

agency(ies) NEPA regulations for specific guidance regarding NEPA

requirements.

D. Restoration Plans

1. Purpose

After selecting a restoration alternative, trustees must prepare a

Draft Restoration Plan. Development of a Draft Restoration Plan

provides a vehicle for informing the affected and interested public of

the results of the trustees' analyses and decisions, and encouraging

public review. Public review can also supplement expert peer review

when comments are solicited from various professional communities or

other knowledgeable persons.

2. Draft Restoration Plan

A Draft Restoration Plan should include:

(i) A summary of injury assessment procedures used;

(ii) A description of the nature, degree, and spatial and temporal

extent of injuries resulting from the incident;

(iii) The goals and objectives of restoration;

(iv) The range of restoration alternatives considered, and a

discussion of how such alternatives were developed and evaluated under

this rule;

(v) Identification of the trustees' tentative preferred

alternative(s);

(vi) A description of past and proposed involvement of the

responsible parties in the assessment; and

(vii) A description of monitoring for documenting restoration

effectiveness, including performance criteria that will be used to

determine the success of restoration and need for interim corrective

action.

When developing the Draft Restoration Plan, trustees must clearly

define plan objectives that specify the desired outcome to be

accomplished, and the performance criteria by which successful

restoration will be judged. Trustees should, at a minimum, determine

what criteria will constitute success such that responsible parties are

relieved of responsibility for further restoration actions or

necessitate corrective actions in order to comply with the terms of a

restoration or settlement agreement.

Performance criteria include structural, functional, temporal, and/

or other demonstrable goals that the trustees should determine with

respect to all restoration actions. For example, an agreement to create

new intertidal marsh habitat as compensation for a marsh injured by oil

could be described by performance criteria including the number of

acres to be created, location, elevation of new habitat, species to be

planted and details for planting such as density, and time frame in

which identifiable stages of the project should be completed.

The types of parameters that should be addressed in monitoring

include duration and frequency of monitoring needed to gauge progress

and success, the level of sampling needed to detect success or the need

for corrective action, and whether monitoring of a reference or control

site is needed to determine progress and success. Reasonable monitoring

and oversight costs cover those activities necessary to gauge the

progress, performance, and success of the restoration actions developed

under the plan.

3. Public Review and Comment

Public review and comment of both Draft and Final Restoration Plans

will depend on the nature of the incident and any applicable federal

trustee NEPA requirements, as described in Secs. 990.14(d) and 990.23

of the rule, but must be sufficient to satisfy OPA's requirement for

public involvement in planning restoration. Thus, trustees should

consider such factors as the form of the involvement (e.g., a hearing,

notice, or solicited comments), extent of

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public involvement (e.g., timing and frequency), and the forum for

communicating with the public (e.g., local papers, the Federal

Register, direct contacts to known interested parties).

4. Final Restoration Plan

After reviewing public comments on the Draft Restoration Plan,

trustees must develop a Final Restoration Plan. As part of the Final

Restoration Plan, trustees must consider comments on the Draft

Restoration Plan. In response to the comments, the trustees may need to

modify the restoration alternatives being considered, develop and

evaluate alternatives that have not been given serious consideration by

the trustees, supplement, improve, or modify the analyses, make factual

corrections, or explain why the comments do not warrant further trustee

response, citing the reasons to support the trustee position, and

possibly indicate the circumstances that would trigger reappraisal or

further response.

In the Final Restoration Plan, trustees indicate the restoration

alternatives that will be implemented and include the information in

the Draft Restoration Plan. The format of the Final Restoration Plan,

which essentially follows that of the Draft Restoration Plan, should

clearly indicate any changes to the Draft Restoration Plan.

V. Compliance With Other Applicable Laws and Regulations

When taking actions under this rule or while response actions are

on-going, trustee field activities must comply with any applicable

worker health and safety considerations specified in the NCP for

response actions. Where an incident implicates trustees' statutory or

regulatory requirements in addition to those under OPA and this rule,

trustees should comply with those requirements. This requirement also

relates to all legally applicable state, local or tribal procedural

requirements. Compliance with any applicable laws, regulations, and

associated permits will help to minimize duplicative and conflicting

efforts. When following procedural requirements other than those

specified by OPA and this rule, trustees should identify those

requirements in the restoration plan. Applicable federal requirements

that may need to be considered include, but are not limited to: the

Endangered Species Act; the Coastal Zone Management Act; the Migratory

Bird Treaty Act; the National Marine Sanctuaries Act; the National

Historic Preservation Act; the Marine Mammal Protection Act; and the

Archaeological Resources Protection Act. The use of NEPA as a planning

process may facilitate compliance with other federal requirements.

VI. Settlement

Trustees may settle claims for natural resource damages under this

rule at any time, provided that the settlement is adequate in the

judgment of the trustees to satisfy the goal of OPA and is fair,

reasonable, and in the public interest, with particular consideration

of the adequacy of the settlement to restore, replace, rehabilitate, or

acquire the equivalent of the injured natural resources and services.

Settlements by federal trustees will generally be subject to approval

by the U.S. Department of Justice. Sums recovered in settlement of such

claims, other than reimbursement of trustee costs, may only be expended

in accordance with a restoration plan, which may be set forth in whole

or in part in a consent decree or other settlement agreement, that is

made available for public review.

In determining the sufficiency of settlements to meet the public

interest test under other statutes, reviewing courts have afforded

broad deference to the judgment of federal agencies recommending such

settlements. Courts have looked to whether the agencies have considered

such factors as the benefits of early settlement as opposed to delayed

recovery through litigation, litigation risk, certainty in the claim,

and attitude of the parties toward the settlement, among other factors.

VII. Emergency Restoration

Emergency restoration actions should be considered in situations

where immediate action is necessary to minimize continuing or prevent

additional injury. Although emergency restoration actions may be

considered and implemented by trustees at any time throughout the

assessment, typically trustees begin evaluating the need for emergency

restoration during response. If response actions are still underway,

trustees, through their Regional Response Team member or designee, must

coordinate with the On-Scene Coordinator (OSC) before taking any

emergency restoration actions. Any emergency restoration actions

proposed by trustees should not interfere with on-going response

actions. Trustees must explain to response agencies through the OSC

prior to implementation of emergency restoration actions their reasons

for believing that proposed emergency restoration actions will not

interfere with on-going response actions.

Trustees must provide notice to identified responsible parties of

any emergency restoration actions and, to the extent time permits,

invite their participation in the conduct of those actions, consistent

with the provisions of Sec. 990.14(c) of the rule. Trustees must also

provide notice to the public, to the extent practicable, of these

planned emergency restoration actions. The rule allows trustees to take

emergency restoration action only if such action is feasible, likely to

minimize continuing or prevent additional injury, and can be conducted

at a cost that is not unreasonable. Trustees must also notify the

public of the justification for, the nature and extent of, and the

results of emergency restoration actions within a reasonable time

following the actions. The means by which this notice is provided to

the public is left to the discretion of the trustees.

The costs associated with evaluating, planning, and implementing

emergency restoration are recoverable costs.

VIII. Use of Assessment Procedures

A. Standards for Assessment Procedures

The rule addresses OPA's goal of efficient, cost-effective, and

feasible restoration by requiring that assessment procedures be

tailored to the circumstances of a particular incident and the

information needed to determine appropriate restoration for that

incident. The rule requires trustees to determine that the most

appropriate procedures for an incident be implemented by specifying a

set of standards for acceptable procedures. These standards are

applicable to every assessment procedure used under the rule. To be

considered in accordance with this rule, assessment procedures must

meet all of the following standards:

(i) The procedures provide assessment information of use in

determining the type and scale of restoration appropriate for a

particular injury;

(ii) The additional cost of a more complex procedure is reasonably

related to the expected increase in the quantity and/or quality of

relevant information provided by the more complex procedure; and

(iii) The procedures are reliable and valid for the particular

incident.

B. Assessment Procedures Available

This rule provides the use of a range of assessment procedures,

from field or laboratory procedures, to model- or literature-based

procedures, to a combination thereof. When practicable, assessment

procedures must be chosen that provide information of use in

determining the most appropriate alternative for restoring the injury

resulting from the incident. In addition,

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when selecting assessment procedures, trustees should consider factors

such as the time and cost to implement the procedure, nature, and

spatial and temporal extent of injury and information needed to

determine and quantify injury, possible restoration actions for

expected injuries, and information needed to determine appropriate

restoration. If more than one procedure providing the same type and

quality of information is available, the most cost-effective procedure

must be used. A further discussion of procedures is given in Appendix B

to this preamble.

Subpart C--Definitions

Relevant definitions in OPA are repeated in the rule as a matter of

reference. Important terms and concepts that are either not explicitly

defined or described in OPA or that require further clarification are

discussed below.

Baseline

Baseline refers to the condition of natural resources and services

that would have existed had the incident not occurred. Although injury

quantification requires comparison to a baseline condition, site-

specific baseline information that accounts for natural variability and

confounding factors prior to the incident may not be required. In many

cases, injuries can be quantified in terms of incremental changes,

rather than in terms of absolute changes relative to a known baseline.

For example, some procedures do not require site-specific baseline

information to quantify injury. Rather, the injury is quantified in

terms of incremental adverse changes resulting from the incident.

Counts of oiled bird carcasses can be used as a basis for quantifying

incremental bird mortality resulting from an incident.

The rule does not distinguish between baseline, historical,

reference, or control data in terms of value and utility in determining

the degree and spatial and temporal extent of injuries. To the extent

that historical data, reference data, or control data can provide valid

information on which to base a determination of the conditions of the

natural resource and service in the absence of the incident, these

forms of data may effectively serve as baseline information.

Types of information that may be useful in evaluating baseline

include:

(i) Information collected on a regular basis and for a period of

time from and prior to the incident;

(ii) Information identifying historical patterns or trends on the

area of the incident and injured natural resources and services;

(iii) Information from areas unaffected by the incident, that are

judged sufficiently similar to the area of the incident with respect to

the parameter being measured; or

(iv) Information from the area of the incident after a particular

natural resources or services have been judged to have recovered.

Incident

An incident is any occurrence or series of occurrences having the

same origin, involving one or more vessels, facilities, or any

combination thereof, resulting in the discharge or substantial threat

of discharge of oil into or upon navigable waters or adjoining

shorelines or the Exclusive Economic Zone. When a discharge of oil

occurs, natural resources and/or services may be injured by the actual

discharge of oil or response activities related to the discharge. When

there is a substantial threat of a discharge of oil, natural resources

and/or services may also be injured by the threat or response actions

related to the threat.

Injury

OPA authorizes trustees to recover damages for ``injury to,

destruction of, loss of, or loss of use of'' natural resources (section

1002(b)(2)(A) of OPA, 33 U.S.C. 2702(b)(2)(A)). Trustees must establish

that injury has resulted from an incident. Under this rule, injury is

defined as an observable (i.e., qualitative) or measurable (i.e.,

quantitative) adverse change in a natural resource or impairment of a

natural resource service.

There are two general bases for determining injury under this rule.

Trustees must either determine that:

(i) The natural resource was exposed, there is a pathway connecting

the incident with the natural resource, and an adverse change to the

natural resource and/or service has occurred; or

(ii) For injuries resulting from response actions or from a

substantial threat of a discharge of oil, an injury to a natural

resource or an impairment of use of a natural resource service has

occurred as a result thereof. Thus, under this rule, injury may result

from direct or indirect exposure to oil, as well as from response-

related activities, and loss of services is explicitly included in the

definition of injury.

Oil

Under section 1001(23) of OPA (33 U.S.C. 2701(23)), the term

``oil'' includes oil of any kind or in any form, including, but not

limited to, petroleum, fuel oil, sludge, oil refuse, and oil mixed with

wastes other than dredged spoil, but does not include petroleum,

including crude oil or any fraction thereof, which is specifically

listed or designated as a hazardous substance under subparagraphs (A)

through (F) of section 101(14) of CERCLA and which is subject to the

provisions of that Act.

On July 9, 1975, the U.S. Environmental Protection Agency published

a Federal Register notice to affirm that non-petroleum oils, such as

fats and oils from animal and vegetable sources, are subject to oil

spill reporting, civil penalties, cleanup costs, and oil spill

prevention plan preparation and implementation under 40 CFR part 112

and other requirements of section 311 of the Federal Water Pollution

Control Act (33 U.S.C. 1321 et seq.). The U.S. Environmental Protection

Agency and U.S. Coast Guard have interpreted and administered section

311 as applicable to incidents of non-petroleum oils. While the

mechanism of injuries by non-petroleum oils may be different than that

of petroleum oils, it is evident, based on current literature, that the

nature of such injuries is similar (e.g., death) for both types of

oils. However, the rule provides guidance to allow consideration of

differences in the physical, chemical, biological, and other

properties, and in the environmental effects of such oils in

determining whether injuries result from an incident involving non-

petroleum oils.

Pathway

Pathway is the medium, mechanism, or route by which the incident

has resulted in an injury. For discharges of oil, a pathway is the

sequence of events by which:

(i) The oil travelled through various components of an ecosystem

and contacted the natural resource of concern; or

(ii) Exposure to oil in one part of an ecosystem was transmitted to

the natural resource of concern, without the oil directly contacting

the natural resource.

Reasonable Assessment Costs

Reasonable assessment costs are costs that trustees incurred in

performing assessments in accordance with this rule. Trustees may

recover the reasonable assessment costs they incur under this rule even

if they ultimately determine not to pursue restoration, provided that

they have determined that actions undertaken were premised on the

likelihood of injury and need for restoration. Under the rule,

reasonable assessment costs also include administrative, legal, and

enforcement costs necessary to carry out this part, monitoring and

oversight costs, and

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costs associated with public participation and indirect costs.

Recovery

Recovery is the return of injured natural resources and services to

baseline. This concept encompasses the inherent tendency for natural

resource and service attributes to vary over space and time.

Projecting recovery involves determining the likelihood and rate at

which natural resources and/or services will return to baseline. The

availability and quality of baseline information can influence recovery

projections. Trustees should use the best available baseline

information that can be gathered relative to the incident and

associated injuries.

Restoration

Restoration is any action (or an alternative), or a combination of

actions (or alternatives), to restore, rehabilitate, replace, or

acquire the equivalent of injured natural resources and services.

This rule includes the concepts of primary and compensatory

restoration. Primary restoration is any action (whether on-site, off-

site, in-kind, out-of-kind) that returns injured natural resources and

services to baseline, while compensatory restoration is any action (or

an alternative) taken to compensate for the interim loss of natural

resources or services that occur from the date of the incident until

such natural resources and services have recovered to their baseline

condition. Trustees must consider, within the primary restoration

component, natural recovery, in which no human intervention is taken to

directly restore the injured natural resources and services. Depending

on the injury of concern, primary restoration actions may include

actions to actively accelerate recovery or simply to remove conditions

that would make recovery unlikely. The rule discusses types of primary

restoration actions that trustees may want to consider.

For some injuries, the need for and scale of compensatory

restoration actions may depend on the range of feasible primary

restoration actions, but trustees should evaluate the need to seek

compensatory restoration for all demonstrable service losses that occur

from the onset of the incident. The rule requires that trustees

preferentially evaluate compensatory restoration actions that provide

the same type, quality, and value of natural resources or services as

those lost. Actions that provide services of comparable type, quality,

and value may be considered if required to generate a range of feasible

restoration alternatives for evaluation.

Services

Natural resource services are all functions that a natural resource

provides for another natural resource(s) or for the public. Natural

resource services may be classified as follows:

(i) Ecological services--the physical, chemical, or biological

functions that one natural resource provides for another. Examples

include provision of food, protection from predation, and nesting

habitat, among others; and

(ii) Public services--the public uses of natural resources or

functions of natural resources that provide value to the public.

Examples include fishing, hunting, nature photography, and education,

among others.

Value

Value can be measured in units of natural resource services or

dollar amounts. An individual's value of a good or service is

represented by the maximum amount of goods, services, or money that the

individual is willing to give up to obtain a specific good or service,

or the minimum amount of goods, services, or money that an individual

is willing to accept to forgo a specific good or service. The total

value of a natural resource or service includes the value individuals

derive from direct use of the natural resource, for example, swimming,

boating, hunting, or birdwatching, as well as the value individuals

derive from knowing a natural resource will be available for future

generations. In many contexts, particularly in markets, value is

represented in terms of units of money. However, value can be measured

using other measures, including units of a natural resource service.

Subpart D--Preassessment Phase

I. Purpose

During the Preassessment Phase, trustees make critical

determinations that shape the remainder of the natural resource damage

assessment. Trustees determine, based on the circumstances of a given

incident, whether actions under OPA are justified and make preliminary

determinations regarding the type of injury assessment and restoration

actions that may be pursued.

Other matters considered during the Preassessment Phase include

funding, data collection, opening the administrative record, and

inviting responsible parties' participation. Trustees may also consider

the applicability of the defenses to liability provided in section 1002

of OPA (33 U.S.C. 2702).

II. Determinations

A. Determination of Jurisdiction

In order for trustees to proceed with any assessment activities

under OPA, certain conditions must be met:

(i) An ``incident'' under OPA must have occurred (i.e., there has

been a discharge or substantial threat of a discharge of oil);

(ii) The incident does not fall within exclusionary conditions set

forth in section 1002(c) of OPA (33 U.S.C. 2702(c)) (e.g., the

discharge was not permitted by federal permit); and

(iii) Natural resources or services under the trusteeship of the

trustee may have been, or are likely to be, injured as a result of the

incident.

Frequently, the first two conditions are determined by the response

agency. The U.S. Coast Guard, U.S. Environmental Protection Agency, or

a state response agency may have already made the determination that

OPA applies to the incident before notifying trustees. The third

condition, however, is necessarily determined by each trustee.

If all of the conditions listed above are met, trustees may proceed

with preassessment actions. If any one of the conditions is not met,

trustees may not take additional action under this rule, except action

to finalize this determination. Trustees may recover all reasonable

assessment costs incurred up to this point provided that the first two

conditions above were met and actions were taken with the reasonable

belief that natural resources or services under their trusteeship might

have been injured as a result of the incident.

A determination that OPA applies and that a trustee has

jurisdiction to act under OPA may trigger initiation of the natural

resource damage assessment process.

B. Determination to Conduct Restoration Planning

1. General

The determination to be made by trustees in the Preassessment Phase

is whether it appears that restoration actions should be pursued by the

trustees. This determination depends on the following conditions:

(i) Injuries have resulted, or are likely to result, from the

incident;

(ii) Response actions have not adequately addressed, or are not

expected to address, the injuries resulting from the incident; and

(iii) Feasible primary and/or compensatory restoration actions

exist to address the potential injuries.

If all the conditions listed above are met, trustees may proceed

with

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preassessment actions. If the trustees decide to proceed with the

natural resource damage assessment, the trustees must issue a Notice of

Intent to Conduct Restoration Planning, which is described below. If

any one of the conditions is not met, trustees may not take additional

action under this rule, except action to finalize this determination.

However, trustees may recover all reasonable assessment costs incurred

up to this point.

2. Identifying Natural Resources and Services at Risk

Determining whether natural resources and services are, or are

likely to be, injured requires that trustees consider the:

(i) Circumstances of the incident. Factors to consider include

geographic location, condition of the vessel or facility, environmental

conditions;

(ii) Characteristics of the discharge or substantial threat of the

discharge. Factors to consider include the type of oil, which may be

described by its physical and chemical parameters, source, time and

duration, and volume of the discharge;

(iii) Characteristics of the natural resources. Factors to consider

include the natural resources in the area of the incident, the services

they provide, habitat and species types, seasonal implications on

sensitive life stages, and unique ecological components; and

(iv) Potential for injury. Factors to consider include potential

for exposure, pathways, causal mechanisms, and availability of

assessment procedures and data to analyze these factors.

Trustees must consider injuries resulting from the incident as well

as from actions taken to respond to the incident.

3. Effectiveness of Response Actions in Eliminating Injury

Once trustees determine that natural resources and/or services are,

or may be expected to be, injured as a result of the incident, trustees

must then determine whether these injuries are likely to be adequately

addressed through response actions. This analysis should also consider

whether restoration is required for injuries that occurred at the time

of the incident, even if injured natural resources and services are

expected to return to baseline as a result of response actions. If

response actions will not alleviate residual natural resource and/or

service injuries, trustees must determine whether there is a need and

potential for restoration actions to address initial or residual

injuries, and begin identifying these actions, to facilitate the

Restoration Planning Phase of the assessment.

4. Early Identification of Potential Restoration Actions

Potential restoration actions need to be identified as early in the

assessment as practicable. Such identification is needed to help

justify the decision to proceed with an assessment that will lead to

effective restoration actions, and provide the focus for designing

injury assessment studies that will produce useful information on the

type and scale of restoration needed. Considerations important to the

early identification of restoration actions include:

(i) Potential nature, degree, and spatial and temporal extent of

injury, with or without restoration;

(ii) Need and potential for restoration given the types of

injuries;

(iii) Potential type and scale of restoration;

(iv) Extent to which information relevant to determining

restoration needs is known;

(v) Time, money, and personnel required and available to obtain

missing or additional information relevant to restoration; and

(vi) Requirements imposed by other applicable laws, regulations,

and permits that would affect restoration.

III. Data Collection During Preassessment Phase

This rule allows trustees to conduct data collection and analysis

during the Preassessment Phase if such activities are reasonably

related to making the determinations required during this phase. The

purpose of data collection and analysis at this stage is to facilitate

the determination of whether natural resources and/or services have

been injured by the incident and may require some form of restoration.

Ephemeral information (i.e., information that may be lost if not

collected immediately) may also be collected during the Preassessment

Phase if the information is necessary for any stage of the restoration

planning process. In addition, information needed to design and

implement anticipated assessment procedures may be collected during

this phase. Data collection and analysis during this phase must be

coordinated with response actions, such that the collection and

analyses do not interfere with response actions.

IV. Notice of Intent to Conduct Restoration Planning

If the trustees determine that there is a reasonable likelihood

that injury has occurred as a result of the incident and feasible

restoration actions exist that would address these injuries, the

trustees may proceed with the assessment. If trustees decide to

proceed, they must prepare a Notice of Intent to Conduct Restoration

Planning, which documents the trustees' preassessment activities and

the basis for the decision to proceed. Depending on information

available at this early stage of the assessment, the notice may also

include a description of the trustees' proposed strategy to assess

injury and determine the type and scale of restoration. The contents of

the notice may vary, but will typically discuss:

(i) The facts of the incident;

(ii) Trustee authority to proceed with the assessment;

(iii) Natural resources and services that are, or are likely to be,

injured as a result of the incident;

(iv) Potential restoration actions relevant to the expected

injuries; and

(v) If determined at the time, potential assessment procedures to

evaluate the injuries and define the appropriate type and scale of

restoration for the injured natural resources and services.

The notice must be made publicly available. The means by which the

notice is made publicly available and whether public comments are

solicited on the notice is left to the discretion of the trustee.

Trustees must also provide a copy of the notice to the known

responsible parties and invite their participation in the conduct of

restoration planning. As provided under Sec. 990.14(c) of the rule, the

determination of the timing, nature, and extent of responsible party

participation will be determined by the trustees on an incident-

specific basis.

V. Administrative Record

An administrative record facilitates the restoration process by

providing a central repository for all materials relied upon by

trustees in making final determinations about restoration actions

appropriate for an incident. Thus, as administrative record should be

opened after trustees decide to proceed with restoration planning, and

concurrently with the development of the Notice of Intent to Conduct

Restoration Planning.

The administrative record must contain sufficient information to

support review of the trustees' decisionmaking process. Depending on

the nature and extent of the incident, assessment, and restoration

planning process, the administrative record should include information

relied upon during the assessment, and required by this rule. Thus, the

administrative record should ordinarily include the Notice of Intent to

Conduct Restoration Planning, draft and final restoration

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plans, and public comments; any relevant data, investigation reports,

scientific studies, work plans, quality assurance plans, and

literature; and any agreements not otherwise privileged among the

participating trustees or with the responsible parties.

Federal trustees should maintain the administrative record in a

manner consistent with the Administrative Procedure Act, 5 U.S.C. 551-

59, 701-06. The administrative record should be limited to final

documents when possible. Where no final document is available at the

time of selection of restoration actions, draft documents may be

included in the administrative record if they contain information not

found in other documents in the record, but which is considered by the

trustees in selecting a restoration action. Pre-decisional,

deliberative internal agency memoranda should be treated like draft

documents (and be excluded from the record) unless relied upon in

choosing restoration actions.

Although this rule is silent on the standard of judicial review for

an assessment conducted in accordance with this rule, NOAA expects that

the administrative record will serve as the foundation for any judicial

review of such assessment.

Subpart E--Restoration Planning Phase

I. Purpose

The purpose of the Restoration Planning Phase is to evaluate and

quantify information on potential injuries to natural resources and/or

services (injury assessment), and use that information to determine the

need for and scale of restoration actions (restoration selection). The

assessment is essentially a restoration scoping exercise, and the

various studies and analyses conducted during this phase should be

viewed from the restoration perspective. Potential assessment

activities should be examined carefully to ensure that the results will

be useful and relevant to restoration.

Development of a conceptual linkage between injury and restoration

early in the natural resource damage assessment process should

facilitate and minimize the costs of the assessment by assisting the

trustees in focusing on the most relevant injuries to be included in

the assessment, designing studies that are relevant to restoration, and

planning appropriate restoration actions. The rule provides that

trustees may use a range of possible assessment procedures for injury

assessment and restoration planning (see the discussion of Sec. 990.27,

``Use of Assessment Procedures'').

II. Injury Assessment

A. Purpose

The goal of injury assessment, which includes determination and

quantification of injury, is to evaluate the nature, degree, and

spatial and temporal extent of injuries to natural resources and/or

services, thus providing a technical basis for evaluating the need for

and scale of restoration. While the basic steps discussed below are

applicable to all assessments, selection of approaches for

demonstrating exposure, pathway, and injury will be incident-specific.

To determine injury under this rule, trustees must determine if:

(i) The definition of ``injury'' is met; and

(ii) (a) An injured natural resource has been exposed to the

discharged oil, and a pathway can be established from the discharge to

the exposed natural resource; and/or

(b) Any injury to or impairment of a natural resource service has

occurred as a result of response actions or a substantial threat of a

discharge of oil. These steps for determining injury and related

concepts are described in more detail below.

B. Injury Determination

1. Definition of Injury

Under this rule, trustees must determine if the definition of

``injury'' has been met. ``Injury'' is defined as an observable or

measurable adverse change in a natural resource or impairment of a

service.

Injury includes adverse changes in the chemical or physical quality

or viability of a natural resource. The simplest example is death of an

organism, but indirect, delayed, or sublethal effects may also

constitute injury. Potential categories of injuries include adverse

changes in: survival, growth, and reproduction; health, physiology and

biological condition; behavior; community composition; ecological

processes and functions; physical and chemical habitat quality or

structure; and services to the public.

Although injury is often thought of in terms of adverse changes in

biota, the definition of injury under this rule is broader. Injuries to

non-living natural resources (e.g., oiled sand on a recreational beach)

as well as injuries to natural resource services (e.g., lost use

associated with a fisheries closure to prevent harvest of tainted fish,

even though the fish themselves may not be injured) may be considered.

This list of potential adverse changes is not intended to be

inclusive of all injuries that trustees may evaluate.

2. Exposure

The purpose of the exposure portion of an injury assessment is to

establish whether natural resources came into contact with the oil from

the incident. Early consideration of exposure should help to focus the

assessment on those natural resources and/or services that are most

likely to be injured by an incident.

Trustees must establish whether the natural resource came into

contact, either directly or indirectly, with the oil discharged from

the incident. Under the rule, exposure is broadly defined to include

not only direct physical exposure to oil, but also indirect exposure

(e.g., injury to an organism as a result of disruption of its food

web). Documenting exposure is a prerequisite to determining injury,

except for response-related injuries and injuries resulting from

substantial threats of discharges. However, evidence of exposure alone

may be insufficient to conclude that injury to a natural resource has

occurred (e.g., the presence of petroleum hydrocarbons in oyster

tissues may not, in itself, constitute an injury).

Exposure can be established with either quantitative or qualitative

procedures. As with other elements of the assessment, selection of

procedures for establishing oil exposure will depend on the type and

volume of discharged oil, natural resources at risk, and nature of the

receiving environment. A combination of assessment procedures may be

necessary to determine exposure. For example, chemical analysis of oil

in sediments, alone, may not be adequate to conclude that a benthic

organism was otherwise exposed to the oil. Likewise, the presence of

petroleum in fish tissue, alone, may not be adequate to link the

exposure to the discharge because metabolism of the oil may blur its

chemical characterization. The combination of the two procedures may,

however, add to the weight of evidence establishing exposure.

Trustees must determine the most appropriate procedures to evaluate

exposure on an incident-specific basis. For some types of incidents,

visual observation in the field and/or modeling may be adequate to

document exposure. For other incidents, more involved site-specific

sampling, including chemical analysis and biological data collection

and analysis, may be more appropriate.

3. Pathways

To determine whether an injury resulted from a specific incident, a

pathway linking the incident to the

[[Page 451]]

injury must be established. As with exposure, establishing a pathway is

a prerequisite to determining injury, except for response-related

injuries and injuries resulting from a substantial threat of a

discharge. However, evidence of a pathway, alone, is not sufficient to

conclude that injury has occurred (e.g., demonstrating that prey

species are oiled can be used to document that a pathway to a predator

species exists; however, such data do not, in themselves, establish

that the predator species is injured).

Pathway determination may include, but is not limited to an

evaluation of the sequence of events by which the discharged oil was

transported from the incident and either:

(i) Came into direct physical contact with the exposed natural

resource (e.g., oil transported from an incident by ocean currents,

wind, and wave action to directly oil shellfish); or

(ii) Caused an indirect injury to a natural resource and/or service

(e.g., oil transported from an incident by ocean currents, wind, and

wave action cause reduced populations of bait fish, which in turn

results in starvation of a fish-eating bird; or, oil transported from

an incident by currents, wind, and wave action causes the closure of a

fishery to prevent potentially tainted fish from being marketed).

Pathway determination does not require that injured natural

resources and/or services be directly exposed to oil. In the example

provided above, fish-eating birds are injured as a result of decreases

in food availability. However, trustees must always determine the

existence of a pathway relating the incident to the injured natural

resource and/or service, if the injury is caused by direct exposure to

oil.

Pathways may include, but are not limited to, movement/exposure

through the water surface, water column, sediments, soil, groundwater,

air, or biota.

As with exposure determination, trustees must determine the most

appropriate procedures to evaluate whether a pathway exists on an

incident-specific basis.

Understanding the potential pathways will also help to narrow the

scope of the assessment, and may be important in deciding which

assessment procedures to use. For example, if a particular procedure

does not address injuries that occur through air or terrestrial

pathways, it would not be appropriate to use that procedure in cases

where such pathways are predominant.

4. Selection of Injuries to Include in the Assessment

During the Preassessment Phase, trustees may collect information on

a wide range of potential injuries. As a result, a long inventory of

potential injuries resulting from the incident is often developed.

Because the collection of information on injury must be related to the

incident and consistent with restoration planning, developing

scientific knowledge for its own sake is not part of an assessment

under this rule.

To compile an inventory of potential injuries to include in the

assessment, trustees should determine the extent to which the following

information is known or can be obtained for each injury:

(i) Natural resources and services of concern;

(ii) Kinds of procedures available to evaluate and quantify injury,

and associated time and cost requirements;

(iii) Evidence indicating exposure;

(iv) Pathway from the incident to the natural resource and/or

service of concern;

(v) Adverse change or impairment that constitutes injury;

(vi) Evidence indicating injury;

(vii) Mechanism by which injury occurred;

(viii) Potential degree, and spatial and temporal extent of the

injury;

(ix) Potential natural recovery period; and

(x) Kinds of primary and/or compensatory restoration actions that

are feasible.

Analysis of the factors above should produce a list of injuries

appropriate to evaluate in the assessment.

C. Injury Quantification

Injury quantification is the process by which trustees determine

the degree, and spatial and temporal extent of injuries relative to

baseline. Thus, injury quantification typically provides information on

the scale of restoration that may be necessary.

1. Injury Quantification Information Needs

A variety of procedures for injury quantification may be available

to trustees. However, because the ultimate purpose of injury

quantification is ideally to facilitate the design and scale of

restoration actions, injury quantification should, at a minimum,

evaluate the following factors:

(i) Degree of the injury. Degree may be expressed in terms such as

percent mortality, proportion of a population, species, community, or

habitat affected, extent of oiling, and availability of substitute

services.

(ii) Spatial extent of the injury. Spatial extent may include

quantification of the total area or volume of injury.

(iii) Temporal extent of the injury. Duration of injury may be

expressed as the total length of time that the natural resource and/or

service is adversely affected, starting at the time of the incident and

continuing until the natural resources and services return to baseline.

In order to scale restoration actions, trustees may find it useful

to develop an estimate of the total quantity of injury that integrates

the degree, and spatial and temporal extent of injury. For example,

quantification of the total losses of wetland habitat injured by oil

could be obtained by estimating the total number of acres of severely

oiled wetland in which vegetation is totally killed, the natural

recovery time for severely oiled wetland, the total number of acres of

moderately oiled wetland in which vegetation is not completely killed

but the wetland has lower levels of productivity, and the natural

recovery time for moderately oiled wetland. This information could be

combined to quantify the total number of ``acre-years'' of wetland

injury to scale restoration actions.

2. Conceptual Approaches to Quantification

Trustees may pursue several different conceptual approaches to

injury quantification. Under these approaches, injury may be quantified

in terms of:

(i) The degree, and spatial and temporal extent of injury to a

natural resource;

(ii) The degree, and spatial and temporal extent of injury to a

natural resource, with subsequent translation of that adverse change to

a reduction in services provided by the natural resource; or

(iii) The amount of services lost as a result of the incident.

Examples of the first approach include quantifying the number of

fish or seabird mortalities caused by a discharge of oil. Examples of

the second approach include quantifying reductions in fish populations

with subsequent estimation of the reduction in the value of a

recreational fishing day lost, given the injury, or quantifying the

amount of lost spawning habitat as a result of oiling with subsequent

estimation of the number of fish that would have been produced by that

habitat. An example of the third approach includes direct measurement

of the number of beach user days lost as a result of a beach closure.

For a

[[Page 452]]

particular injury, trustees should use whichever approach is most

appropriate to the circumstances of the incident.

D. Analysis of Natural Recovery

Natural recovery is a restoration alternative whereby injured

natural resources and services are allowed to return to conditions

prior to the incident without human intervention, following any

response actions. Under this rule, trustees must estimate the time for

natural recovery in order to quantify injury. Analysis of recovery

times may include such factors as:

(i) The nature, degree, and spatial and temporal extent of injury;

(ii) The sensitivity and vulnerability of the injured natural

resource and/or service;

(iii) The reproductive and recruitment potential;

(iv) The resistance and resilience (stability) of the affected

environment;

(v) The natural variability; and

(vi) The physical/chemical processes of the affected environment.

Although it is desirable to account for these factors and produce a

rigorous quantitative natural recovery estimate for a particular

natural resource, this may not be practicable for many injuries. As

with any assessment procedure used under the rule, the most appropriate

procedure that meets the standards for acceptable procedures in

Sec. 990.27 of the rule must be used for estimating natural recovery.

Thus, under this rule, where quantitative procedures are lacking,

inadequate, or unnecessarily costly to precisely estimate natural

recovery times, trustees may use appropriate qualitative procedures to

develop estimates where needed.

III. Restoration Selection

A. Purpose

Once injury assessment is completed, trustees must develop a plan

for restoring the injured natural resources and services. Under this

rule, trustees must identify a reasonable range of restoration

alternatives, evaluate those alternatives, select an alternative,

develop a Draft Restoration Plan, and produce a Final Restoration Plan.

If the information on injury determination and quantification and

its relevance to restoration justify restoration, trustees may proceed

with restoration planning. Otherwise, trustees may not take additional

assessment actions. However, trustees may recover all reasonable

assessment costs incurred up to this point.

B. Developing a Reasonable Range of Alternatives

1. General

Trustees must identify a reasonable range of restoration

alternatives for consideration. Each alternative is comprised of

primary and/or compensatory restoration components that address one or

more specific injuries associated with the incident. Primary

restoration refers to any actions taken to return the injured natural

resources and services to baseline on an accelerated time frame.

Natural recovery, in which no human intervention is taken to accelerate

recovery of the injured natural resource and service, is included under

the primary restoration component. Compensatory restoration refers to

any actions taken to compensate for the interim losses of natural

resources and services, from the time of the incident until recovery is

achieved.

Each alternative must be designed so that, as a package of one or

more actions, the alternative would satisfy OPA's goal to make the

environment and public whole for injuries resulting from an incident.

Only those alternatives considered technically feasible and in

accordance with applicable laws, regulations, or permits may be

considered further under this rule. Acceptable restoration alternatives

include any of the actions authorized under OPA (restoration,

rehabilitation, replacement, or acquisition of the equivalent), or any

combination of those actions.

2. Primary Restoration

Trustees must consider primary restoration actions, including a

natural recovery alternative. Alternative primary restoration actions

can range from natural recovery with no human intervention, to actions

that prevent interference with natural recovery, to more intensive

actions expected to return injured natural resources and services to

baseline faster or with greater certainty than natural recovery.

When identifying primary restoration actions to be considered,

trustees should consider whether activities exist that would prevent or

limit the effectiveness of restoration actions (e.g., residual sources

of contamination). Trustees should also consider whether any primary

restoration actions are necessary to return the physical, chemical, and

biological conditions necessary to allow recovery or restoration of the

injured natural resources (e.g., replacement of sand or vegetation, or

modifying hydrologic conditions). Finally, trustees should consider

whether restoration actions focusing on certain natural resources and

services would be an effective approach to achieving baseline

conditions (e.g., replacing essential species, habitats, or public

services that would facilitate the replacement of other, dependent

natural resource and service components).

3. Compensatory Restoration

In addition to primary restoration, trustees must consider

compensatory restoration actions in some or all of the restoration

alternatives. The extent of interim natural resource or service losses

that must be addressed by a particular restoration alternative may vary

depending on the level and speed of recovery generated by the primary

restoration component of the restoration alternative.

To the extent practicable, when identifying the compensatory

restoration components of the restoration alternatives, trustees should

consider compensatory restoration actions that provide services of the

same type and quality, and of comparable value as those injured. This

is the preferred approach to identifying compensatory restoration

actions. If such actions do not provide a reasonable range of

alternatives, trustees should identify actions that, in the judgment of

the trustees, will provide services of at least comparable type and

quality as those injured. Where the injured and replacement natural

resources and services are not of comparable value, the scaling process

will involve valuation of injured and replacement services.

In general, both primary and compensatory restoration of services

must be accomplished through actions to restore natural resources or to

preserve or enhance the amount, quality, and/or availability of natural

resources that provide the same or similar services. This may include

actions to improve access to natural resources, although in selecting

such actions, the trustees must carefully evaluate the direct and

indirect impacts of the improved access on natural resource quality and

productivity. In the natural resource damages context, a service may

not be viewed as an abstract economic unit or activity that may be

restored independently of the natural resources from which the service

flows.

4. Scaling Restoration Actions

To ensure that a restoration action will appropriately address the

injuries resulting from an incident, trustees must scale the action.

For primary restoration, scaling as described in the rule

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generally applies to acquisition and/or replacement actions, whereas

the amount of direct restoration or rehabilitation to undertake may be

determined based on such factors as area of habitat contaminated at

unacceptable levels, or the volume of removed sand that should be re-

supplied. The approaches that may be used to assess the appropriate

scale of a restoration action to compensate for public losses include

resource-to-resource or service-to-service approaches, or valuation

approaches. Trustees should be careful to avoid double-counting, which

could result from developing multiple restoration actions that

compensate for ecological and direct human services losses over time.

For example, when determining the need for compensatory restoration

actions that directly address lost human services, trustees should take

into account any compensation for those lost human services provided by

other actions intended to compensate for lost ecological services.

a. Resource-to-Resource and Service-to-Service Scaling Approaches

Under the resource-to-resource and service-to-service approaches to

scaling, the appropriate quantity of replacement natural resources and/

or services is determined by obtaining equivalency between the injured

and replacement natural resources and/or services, after appropriately

discounting for differences in the timing of the injury and the

replacement. Trustees must consider use of the resource-to-resource or

service-to-service approach for actions that provide natural resources

and/or services of the same type and quality, and comparable value to

those injured.

Under the resource-to-resource or service-to-service approach, NOAA

recommends use of habitat equivalency analysis, or comparable

procedures, when injured natural resources and/or services are

primarily of indirect human use (e.g., species habitat or biological

natural resources for which human uses are primarily off-site). (See

Appendix B at the end of this preamble for a description of habitat

equivalency analysis.) If injured services are human uses (e.g.,

recreational services), then a behavioral model of human use may be

used to determine the scale of the restoration action necessary to

provide the appropriate level of human uses. For example, if the

interim lost services are lost recreational beach days, then the

restoration action may be designed to provide the requisite number of

recreational beach days by, for example, improving access to existing

public beaches.

b. Valuation Approach

Where trustees have determined that resource-to-resource or

service-to-service scaling is not appropriate, trustees may use the

valuation approach to scaling. The valuation approach requires that

trustees determine the amount of natural resources and/or services that

must be provided to produce comparable value to the public as the loss

in public value resulting from the injuries. The approach relies on the

concept that lost value can be determined using one of a variety of

possible units of exchange, including units of natural resource

services or dollars. The valuation approach requires that the value of

injured natural resources and/or services be measured explicitly, and

that a restoration action provide natural resources and/or services of

equivalent value to the public. To properly scale a restoration action,

trustees might have to measure the values of varying sizes of the

restoration action to determine the size of an action that will replace

the value of injured natural resources and/or services. For proper

comparison, all values lost or provided over time should be converted

into present value terms by discounting.

The valuation approach may be implemented with separate

calculations of losses and gains. A variety of valuation procedures is

available for this purpose, including the travel cost method, factor

income approach, hedonic price models, models of market supply and

demand, contingent valuation, and conjoint analysis. (See Appendix B at

the end of this preamble for descriptions of these procedures.)

Where feasible, trustees should use the same or similar valuation

procedures for measuring the value of the injured services and the

value of the services provided by the restoration actions. Trustees

must ensure that bias is not introduced into the scaling calculations

via the separate calculations of losses and gains, particularly when

different valuation procedures are used.

Alternatively, it may be possible to implement the valuation

approach with a single survey eliciting the direct resource-to-resource

trade-offs between the injured natural resources and potential

compensatory natural resources. Conjoint analysis, or contingent choice

analysis, may provide suitable procedures for these measurements.

Trustees may use any reliable procedure suitable for scaling

compensatory restoration that meets the standards for acceptable

procedures in Sec. 990.27 of the rule. Where the circumstances are such

that a site-specific application of a valuation procedure does not meet

the reasonable cost criterion, the trustees may consider using benefits

transfer. The choice of approaches in a particular context will depend

upon the types of injuries and the type of services provided by the

restoration action.

If valuation of the natural resources and/or services provided by a

compensatory restoration action could not, in the judgment of the

trustees, be performed within a reasonable time frame or at a

reasonable cost consistent with Sec. 990.27(a) of the rule, the

trustees may calculate the monetary value of the injured natural

resources and/or services, and then select the scale of a restoration

action that has a cost equivalent to the lost monetary value. However,

the responsible parties may request that trustees value the natural

resources and services provided by the restoration action, following

the process outlined in Sec. 990.14(c) of the rule.

c. Treatment of Uncertainty and Discounting

When scaling a restoration action, trustees should address the

uncertainties associated with the predicted consequences of both the

primary and compensatory restoration actions that will affect the level

and duration of losses from the injury and gains from the compensatory

restoration action. In addition, trustees must take account of the

value of time in the scaling calculations by discounting to the present

the interim lost services or the value of interim lost services due to

the injury, as well as the gain in services or service value from the

restoration action. The reference date for the discounting calculation

is the date at which the demand is presented.

NOAA recommends that, where feasible, the trustees should use risk-

adjusted measures of losses and gains, in conjunction with a riskless

rate of discount reflecting the social rate of time preference for

natural resources (i.e., the rate society is willing to substitute

between present and future consumption of natural resources with

certainty). Risk-adjusted measures of losses and gains take account of

the fact that people tend to be risk averse, and must be compensated

for bearing uncertainty. For example, it may be possible to compensate

for uncertainty in outcomes from compensatory restoration actions with

a larger scale action. Because of the difficulty in determining the

rate of time preference

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for goods (such as natural resources) that are not generally sold in a

market, a real rate of three percent (3%) is recommended as a riskless

rate, unless justification is presented for a rate more appropriate for

the specific context. Alternatively, if the streams of losses and gains

cannot be adequately adjusted for risks, then NOAA recommends use of a

discount rate that incorporates a suitable risk adjustment to the

riskless rate.

Existing economic literature suggests that three percent (3%) is a

reasonable choice for the social rate of time preference, given that it

is the middle of the range of values for the subjective rate of time

preference implied by long-run growth models of the U.S. economy.

Further, 3% is at the lower end of the range of the financial

opportunity costs of consumption, which are relatively low for

individuals who are net savers, and much higher for individuals who are

net borrowers. The long-term average real after tax rate of return on

3-month Treasury bills, a proxy for a riskless savings asset, is around

one percent (1%), though more recent rates are substantially higher

(around 2% during the 1983-1994 period). Consumer borrowing rates

depend upon the source of financing, but may exceed ten percent (10%)

in real terms for many credit cards. Because consumers' use of natural

resources does not occur primarily through market transactions,

consumers do not necessarily adjust their inter-temporal consumption of

natural resources in response to the relevant intertemporal financial

trade-offs available to them; nonetheless, the financial opportunity

costs provide an additional reference point.

The analysis should be conducted in real terms (e.g., in units of

services, or in dollars of a specified base year). By definition, an

analysis conducted in units of natural resources or services is in real

terms. If the analysis is conducted in money value terms, then all

money values should be specified in terms of the dollars of a specified

base year. To adjust the measures of monetary losses or gains to

dollars of the specified base year, the Consumer Price Index is most

appropriate when the measure of losses is consumer surplus.

Alternatively, for more generalized measures of losses or for future

projections of inflation, trustees may use the Gross Domestic Product

price index, for which the Administration predicts a time-series of

future deflators every year. Sources of information for discounting are

identified in the preamble discussion of discounting in the

Implementation Phase.

C. Evaluation of Restoration Alternatives

1. General

Once trustees have developed a reasonable range of restoration

alternatives, they must evaluate those alternatives. This evaluation is

based, at a minimum, on:

(i) The cost to carry out the alternative;

(ii) The extent to which each alternative is expected to meet the

trustees' goals and objectives in returning the injured natural

resources and services to baseline and/or compensate for interim

losses;

(iii) The likelihood of success of each alternative;

(iv) The extent to which each alternative will prevent future

injury as a result of the incident, and avoid collateral injury as a

result of implementing the alternative;

(v) The extent to which each alternative benefits more than one

natural resource and/or service; and

(vi) The effect of each alternative on public health and safety.

Based on an evaluation of these factors, trustees must select a

preferred restoration alternative(s). If the trustees conclude that two

or more alternatives are equivalent based on the above factors, the

trustees must select the most cost-effective alternative.

When selecting a restoration alternative, trustees should consider

the relationship between costs and benefits. However, reducing the

selection process to a strict comparison of restoration costs to

monetized natural resource values is not required and may not be

appropriate. Instead, the rule requires trustees to evaluate each

alternative according to the factors listed above and identify a

preferred alternative. NOAA believes this approach provides adequate

protection against selection of an inappropriately costly alternative.

2. Pilot Restoration Projects

If the range of restoration alternatives under consideration is

limited or poorly developed, or if a promising restoration action

cannot be adequately evaluated without testing, trustees may implement

pilot projects. Pilot projects should only be undertaken when, in the

judgment of the trustees, these projects are likely to successfully

provide information for the evaluation factors specified above at a

reasonable cost and in a reasonable time frame. Examples of situations

where pilot projects may be appropriate include application of a proven

technology in a different habitat type, or using different species than

those used in previous applications.

D. Restoration Plans

1. Purpose

After selecting a restoration alternative, trustees must prepare a

Draft Restoration Plan. Development of a Draft Restoration Plan

provides a vehicle for informing the affected and interested public of

the results of the trustees' analyses and decisions, and encouraging

public review. Public review can also supplement expert peer review

when comments are solicited from various professional communities or

other knowledgeable persons.

2. Draft Restoration Plan

A Draft Restoration Plan must include:

(i) A summary of injury assessment procedures used;

(ii) A description of the nature, degree, and spatial and temporal

extent of injuries resulting from the incident;

(iii) The goals and objectives of restoration;

(iv) The range of restoration alternatives considered, and a

discussion of how such alternatives were developed and evaluated under

this rule;

(v) Identification of the trustees' tentative preferred

alternative(s);

(vi) A description of past and proposed involvement of the

responsible parties in the assessment; and

(vii) A description of monitoring for documenting restoration

effectiveness, including performance criteria that will be used to

determine the success of restoration and need for interim corrective

action.

When developing the Draft Restoration Plan, trustees must clearly

define plan objectives that specify the desired outcome to be

accomplished, and the performance criteria by which successful

restoration will be judged. Trustees must, at a minimum, determine what

criteria will constitute success such that responsible parties are

relieved of responsibility for further restoration actions or

necessitate corrective actions in order to comply with the terms of a

restoration or settlement agreement.

Performance criteria include structural, functional, temporal, and/

or other demonstrable goals that the trustees should determine with

respect to all restoration actions. For example, an agreement to create

new intertidal marsh habitat as compensation for a marsh injured by oil

could be described by performance criteria including the number of

acres to be created, location, elevation of new habitat, species to be

planted and details for planting such as

[[Page 455]]

density, and time frame in which identifiable stages of the restoration

action should be completed.

The types of parameters that should be addressed in monitoring

include duration and frequency of monitoring needed to gauge progress

and success, the level of sampling needed to detect success or the need

for corrective action, and whether monitoring of a reference or control

site is needed to determine progress and success. Reasonable monitoring

and oversight costs cover those activities necessary to gauge the

progress, performance, and success of the restoration actions developed

under the plan.

3. Public Review and Comment

Public review and comment of both Draft and Final Restoration Plans

will depend on the nature of the incident and any applicable federal

trustee NEPA requirements, as described in Secs. 990.14(d) and 990.23

of the rule, but must be sufficient to satisfy OPA's requirement for

public involvement in planning restoration. Thus, trustees should

consider such factors as the form of the involvement (e.g., a hearing,

notice, or solicited comments), extent of public involvement (e.g.,

timing and frequency), and the forum for communicating with the public

(e.g., local papers, the Federal Register, direct contacts to known

interested parties).

4. Final Restoration Plan

After reviewing public comments on the Draft Restoration Plan,

trustees must develop a Final Restoration Plan. As part of the Final

Restoration Plan, trustees must consider comments on the Draft

Restoration Plan. In response to the comments, the trustees may need to

modify the restoration alternatives being considered, develop and

evaluate alternatives that have not been given serious consideration by

the trustees, supplement, improve, or modify the analyses, make factual

corrections, or explain why the comments do not warrant further trustee

response, citing the reasons to support the trustee position, and

possibly indicate the circumstances that would trigger reappraisal or

further response.

In the Final Restoration Plan, trustees indicate the restoration

alternatives that will be implemented and include the information in

the Draft Restoration Plan. The format of the Final Restoration Plan,

which essentially follows that of the Draft Restoration Plan, should

clearly indicate all significant changes to the Draft Restoration Plan.

E. Use of a Regional Restoration Plan or Existing Restoration Project

The rule allows trustees to consider all or part of an existing

Regional Restoration Plan or other existing, planned, or proposed

environmental restoration project as one of the range of restoration

alternatives, including natural recovery, evaluated to restore injuries

resulting from a particular incident. Like any other restoration

alternative considered, Regional Restoration Plans and existing

restoration projects must be consistent with OPA's requirement that

damages recovered be used solely to restore, replace, rehabilitate, or

acquire the equivalent of injured natural resources and/or services.

Regional Restoration Plans or other existing restoration projects meet

this requirement if the plan or project will return injured natural

resources and/or services to baseline and/or compensate for interim

losses. Use of an existing plan or project may be considered as either

a primary or compensatory restoration action under the rule, depending

on the circumstances of the incident, injuries, and natural resources

or services provided by the plan or project.

Under the rule, selection of an existing plan or project as the

preferred restoration alternative requires that the plan or project had

been developed with public review and comment, or is subject to public

review and comment in accordance with the rule. The existing plan or

project must also be demonstrated to provide a sufficient link to the

incident in terms of the type and scale of natural resources and

services provided by the plan or project.

The rule also allows trustees to recover partial funding of

existing plans or projects from responsible parties, where a plan or

project that represents the preferred primary or compensatory

restoration for an incident will provide significantly greater levels

of natural resources and/or services than those lost as a result of the

incident. In these instances, trustees may request the scale of the

restoration determined to be appropriate for the incident of concern.

Trustees may pool such partial recoveries until adequate funding is

available to implement the existing plan or project. Trustees must make

diligent efforts to ensure that the selected project is implemented in

a reasonable time following initial recovery of partial funding.

Subpart F--Restoration Implementation Phase

I. Introduction

After the completion of the Restoration Planning Phase, the

trustees must: (i) close the administrative record that incorporates

the Restoration Planning Phase and open a new administrative record for

the Restoration Implementation Phase; (ii) present a demand for

implementation or for damages to the responsible parties; (iii)

establish an account to receive any payments from the responsible

parties; and (iv) implement restoration. Additional actions that could

occur during the Restoration Implementation Phase include filing an

action for damages where the responsible parties refuse to implement or

pay for restoration on receipt of the trustees' demand, or seeking an

appropriation from to the Oil Spill Liability Trust Fund, so that

restoration can be implemented.

II. Administrative Record

Within a reasonable time after completing restoration planning

under subpart E of the rule, the administrative record of the

Restoration Planning Phase must be closed. Except as noted below, no

additional documents will be placed in the record. The closed record

will constitute the body of information supporting the trustees'

decisions through restoration planning.

Once the record is closed, trustees may, as a general matter, only

add documents that:

(i) Are offered by any interested party that did not receive actual

or constructive notice of the Draft Restoration Plan and the

opportunity to comment on the Plan;

(ii) Do not duplicate information already contained in the

administrative record; and

(iii) Raise significant issues regarding the Final Restoration

Plan.

For practical reasons, it is likely that trustees will need to open

and maintain an additional administrative record to document

implementation of restoration. This record should document, at a

minimum, all Restoration Implementation Phase decisions, actions, and

expenditures, including any modifications made to the Final Restoration

Plan. This record is necessary to keep the public informed and for

potential use in any enforcement actions, such as seeking additional

work from the responsible parties to comply with the restoration plan

and implementing agreements. The record will also ensure an accurate

and complete accounting of all actions and

[[Page 456]]

costs associated with implementing the Final Restoration Plan.

The administrative record for restoration implementation should

follow the same guidance for opening and maintaining the previous

record, and for its availability as discussed in Sec. 990.45 of the

rule. The costs of maintaining the administrative record and making it

available to the public are part of the costs of restoration.

III. Presenting a Demand for Damages to the Responsible Parties

If the trustees and responsible parties have successfully

implemented cooperative restoration planning, the responsible parties

will have thorough knowledge of the trustees' preferred restoration

alternative(s) and associated costs. In the best circumstances, the

responsible parties will already have entered into an enforceable

agreement to either pay assessment costs and the costs associated with

implementing the Final Restoration Plan, or to implement the Plan

according to trustee performance criteria and with trustee oversight

and reimburse trustees for assessment and oversight costs. Any such

existing agreements with the responsible parties should be described in

the Draft and Final Restoration Plans.

However, where such an agreement with responsible parties has not

been achieved, the trustees must follow some specific statutory

requirements to recover natural resource damages, as described below.

After completion of restoration planning under subpart E of the

rule, the trustees must present a demand in writing asking the

responsible parties either to:

(i) Implement the Final Restoration Plan or component of a Regional

Restoration Plan or existing restoration project, subject to trustee

oversight, and reimburse the trustees for their assessment and

oversight costs; or

(ii) Advance to the trustees a specified sum representing

assessment costs and the trustees' estimate of all direct and indirect

costs associated with developing and implementing the Final Restoration

Plan or some component of a Regional Restoration Plan or an existing

restoration project, discounted as provided in Sec. 990.63 of the rule.

When the trustees use a Regional Restoration Plan, as provided in

Sec. 990.56 of the rule, the demand will invite the responsible parties

to implement a component of a Regional Restoration Plan or existing

restoration project or advance the trustees' estimate of damages based

on the scale of the restoration determined to be appropriate for the

incident of concern. To avoid litigation, the responsible parties must

respond within ninety (90) calendar days in writing by paying or

providing binding assurance they will reimburse trustees' assessment

costs and implement the plan or pay assessment costs and the trustees'

estimate of the costs of implementation.

The demand must also include: identification of the incident from

which the claim arises; identification of the trustees asserting the

claim and a statement of the statutory basis for their trusteeship; a

brief description of the injuries for which the claim is being brought;

the index to the administrative record; the Final Restoration Plan or

Notice of Intent to Use a Regional Restoration Plan or Existing

Restoration Project; and a request for reimbursement of reasonable

assessment costs, as defined in Sec. 990.30 of the rule and discounted

as provided in Sec. 990.63(b) of the rule; the cost, if any, of

conducting emergency restoration under Sec. 990.26 of the rule,

discounted as provided in Sec. 990.63(b) of the rule; and interest on

the amounts recoverable, as provided in section 1005 of OPA (33 U.S.C.

2705), which allows for prejudgment and post-judgment interest to be

paid at a commercial paper rate, starting from thirty (30) calendar

days from the date a demand is presented until the date the claim is

paid.

IV. Discounting and Compounding Components of the Claim

A. General

Discounting is necessary for the trustees to be able to present a

claim for a ``sum certain,'' as required by section 1001(3) of OPA (33

U.S.C. 2701(3)). The reference date for the discounting calculations is

the date at which the demand is presented. Trustees must discount

future restoration costs back to the present and compound assessment

and emergency restoration costs already incurred forward to the

present. The use of discounting in scaling restoration actions is

discussed separately in subpart E of the rule.

NOAA recommends that trustees use the U.S. Treasury borrowing rate

on marketable securities of comparable maturity to the period of

analysis for both calculations, with some qualifications noted below.

Alternatively, for state or tribal claims for past damage assessment

and restoration costs, the state or Indian tribe may use the state or

tribal borrowing rate on marketable securities. The analysis should be

conducted either in terms of nominal values (denominated in dollars of

the year in which the losses or gains are incurred) or in constant

dollars of a specified base year. For compounding past emergency

restoration and assessment costs, trustees should use U.S. Treasury

rate as the discount rate and represent the costs in nominal terms,

since the nominal interest is observed and past costs are likely to be

denominated in nominal terms. Anticipated inflation can be incorporated

in estimates of future restoration costs with an appropriate inflation

index.

B. Estimated Future Restoration Costs

Most restoration actions will be carried out over a period of

years. If funds are insufficient to cover the full costs of

restoration, including post-implementation maintenance and monitoring

operations, natural resource and service recovery will be incomplete,

and the public will be deprived of full compensation for the injuries.

NOAA recommends that, for discounting future restoration costs,

trustees specify future restoration costs in nominal terms (i.e., in

terms of dollars of the year in which the costs will be incurred) and

then discount the nominal costs using the nominal U.S. Treasury rate

for marketable securities of comparable maturity to the period of

analysis, when this rate of return is available to the trustees for

investment of settlement monies. To specify the future restoration

costs in nominal terms, the trustees should employ the indices of

projected inflation appropriate to the major components of the

restoration costs (e.g., construction price indices for construction

costs; the federal employee wage index for trustee monitoring costs).

If component-specific inflation indices are unavailable, the Gross

Domestic Product price index may be used.

If legal and/or institutional constraints prevent investment of

settlement monies yielding the U.S. Treasury rate for marketable

securities of comparable maturity to the period of analysis, trustees

should structure the claim to ensure that sufficient funds will be

available to fund the entire selected restoration alternative. One

option is to calculate the discounted value of this component of the

claim using an alternative discount rate that represents the yield on

settlement monies available to the trustees. An alternative option is

to structure a multi-year schedule for claim payments to ensure it

provides the cash flow for each year required for planned expenditures.

If the settlement is structured so that the responsible parties

carry out the restoration actions, the trustee restoration costs to be

discounted will be substantially reduced, but they will

[[Page 457]]

not be eliminated because trustee monitoring and oversight costs will

still be included in the claim.

C. Past Assessment and Emergency Restoration Costs

Past assessment and emergency restoration costs may accrue from the

time of the incident to the date of the demand. To calculate the

present value of these costs at the time the demand is presented to the

responsible parties, the trustees will compound forward the costs

already incurred. Because the rate of interest employed as the compound

rate for past costs incurred should reflect the opportunity cost of the

money spent, NOAA recommends that the trustees use the actual U.S.

Treasury rate for marketable securities of comparable maturity to the

period of analysis for discounting this component of the claim. NOAA

acknowledges that, at the discretion of the trustees, a state or tribal

borrowing rate may be used to compound the state or tribal component of

past costs. Where the costs are denominated in dollars of the year in

which they were incurred (i.e., in nominal terms), the nominal interest

rate should be employed.

D. Sources of Data

U.S. Treasury bill and bond rates may be found in the Federal

Reserve Bulletin, issued monthly, or the Treasury Bulletin, issued

quarterly. The Gross Domestic Product fixed-weighted price index and

the Consumer Price Index may be found in the Survey of Current

Business, issued monthly, and the Economic Report of the President,

issued annually. The Administration prediction for future Gross

Domestic Product deflators is updated twice annually at the time the

budget is published in January or February and at the time of the Mid-

Session Review of the Budget in July. The current Treasury rates and

inflation adjustment assumptions, as well as guidance in calculation

procedures, are reported in regular updates of Appendix C of Circular

No. A-94, available from the OMB Publications Office (202-395-7332).

V. Unsatisfied Demands

If the responsible parties deny all liability for the claim or fail

to settle the claim embodied in the demand within ninety (90) calendar

days after they are presented with the demand, trustees may elect to

commence an action in court against the responsible parties or

guarantors, or to seek an appropriation from the Oil Spill Liability

Trust Fund. Thus, delivery of the demand should be made in a manner

that establishes the date of receipt by the responsible parties.

Judicial actions and claims must be filed within three (3) years

after the Final Restoration Plan or Notice of Intent To Use a Regional

Restoration Plan or Existing Restoration Project is made publicly

available, in accordance with the statute of limitations for natural

resource damages under OPA (33 U.S.C. 2717(f)(1)(B) and 2712(h)(2)).

VI. Opening an Account for Recovered Damages

Section 1006(f) of OPA (33 U.S.C. 2706(f)) requires that sums

recovered by trustees in satisfaction of a natural resource damage

claim be retained, without further appropriation, in a revolving trust

account. Sums recovered for past assessment costs and emergency

restoration costs may be used to reimburse the trustees. All other sums

must be used to implement the Final Restoration Plan, implement all or

an appropriate component of a Regional Restoration Plan or existing

restoration project.

Where multiple trustees are involved in a recovery, trustees may

wish to establish a joint account. One acceptable mechanism would be an

account under the registry of the applicable federal court when there

is a joint recovery involving federal and non-federal trustees. The

joint account should be managed by the trustees through an enforceable

written agreement that specifies the parties authorized to endorse

expenditures out of the account, and the agreed-upon procedures and

criteria for such expenditures.

Although a joint account may be the preferred approach, trustees

also have the option of dividing the recoveries and depositing their

respective amounts in their own separate accounts, if such action would

be consistent with the terms and objectives of the restoration plan.

These accounts should be interest-bearing, revolving trust accounts.

Trustees may establish escrow accounts or any other investment

accounts, if otherwise authorized by law. Funds in such accounts must

only be used as specified in section 1006(f) of OPA (33 U.S.C.

2703(f)).

Trustees must maintain appropriate accounting and reporting

procedures to keep track of the use of sums recovered. Brief reports on

the status of the sums recovered and expenditures for particular

incidents should be made part of the administrative record for the

Restoration Implementation Phase.

Any sums remaining in an account established under this section

that are not used either to reimburse trustees for past assessment and

emergency restoration costs or to implement restoration must be

deposited in the Oil Spill Liability Trust Fund, as provided in section

1006(f) of OPA (33 U.S.C. 2706(f)).

VII. Additional Considerations

A. General

As discussed throughout the rule, the Final Restoration Plan may be

implemented by the trustees, or by the responsible parties with trustee

oversight. In either case, several common steps may characterize the

Restoration Implementation Phase, including establishment of a trustee

committee and/or Memoranda of Understanding, development of more

detailed workplans for the conduct of restoration actions, monitoring

and oversight, and evaluation of restoration success or need for

corrective actions.

B. Trustee Committee and/or Memorandum of Understanding

In many instances, it is likely that a trustee committee and/or a

Memorandum of Understanding or other agreements will have governed

trustee involvement through the Restoration Planning Phase. However, it

is critical that these agreements extend through the Restoration

Implementation Phase, or that new agreements or committees are formed

for the restoration implementation. At a minimum, representatives of

each participating trustee agency should be appointed to an oversight

committee. Functions of such a committee may include authorizing

expenditures from a joint account, participating in monitoring and

oversight of restoration actions, evaluating performance criteria for

restoration actions, and making the determination that the goals and

objectives of the Final Restoration Plan have been achieved or

determining the type of corrective actions that need to be pursued, and

ensuring that these actions are implemented.

C. Detailed Workplans

Depending on the incident and the restoration alternative(s),

detailed workplans for accomplishing restoration goals and objectives

may have been developed during the Restoration Planning Phase. Clearly,

as many details outlining the restoration expectations, performance

criteria, timelines, criteria for success, etc., should be included in

the Final Restoration Plan and in agreements with the responsible

parties as are practicable to determine prior to presenting the demand

or settling a claim.

[[Page 458]]

D. Monitoring and Oversight

Reasonable monitoring and oversight costs are included in

recoverable damages. A well-designed and executed monitoring and

oversight plan is required to assess progress toward the stated goals

and objectives of a restoration plan. Reasonable monitoring and

oversight costs are limited to those costs necessary to determine

restoration success, or the need for, type of, and scale of corrective

actions. Monitoring should be designed around performance criteria that

will indicate success of restoration.

E. Restoration Success and Corrective Actions

Restoration plans, particularly those including agreements for

responsible parties to implement restoration, must identify criteria

against which success and completion of restoration actions will be

judged.

In some cases, pilot projects will lessen the need for corrective

measures. In other cases, settlement agreements can include reopeners

to deal with specific points of uncertainty, for instance, for

significant injuries that could not be determined and/or quantified at

the time of a settlement. Another possibility is for the responsible

parties to deposit an agreed-upon amount of money in an escrow account

to cover future contingencies that could not be fully anticipated at

the time of the settlement. These funds would then be used for future

actions, or revert to the responsible parties if not needed. In most

cases, trustees should consider including a mechanism to deliberate the

need for and type of corrective actions in a settlement agreement where

the types of contingencies that suggest the need for corrective actions

cannot be completely foreseen.

In all cases, the type and scale of corrective actions must be

determined relative to the restoration goals and objectives set out in

the Final Restoration Plan. In addition, trustees must recognize that

circumstances well beyond the control of any of the parties may not be

the basis of requiring corrective actions, such as natural occurrences

that would meet an ``Act of God'' standard.

TREATMENT OF COMMENTS

Extension of Comment Period

Comment: Several commenters requested a 60-day extension in the

public comment period. These commenters stated that an extension was

required to strike the proper balance between the time allotted for the

public's review and comment, and the time needed for a thorough

analysis of comments on the proposed rule. According to some

commenters, the public's interest in having an adequate opportunity to

review and comment on regulatory initiatives under the Administrative

Procedure Act (5 U.S.C. 551-59, 701-06) should not be compromised by

the establishment of arbitrary deadlines. One commenter requested that

the comment period be extended for at least 60 days after the last of

the guidance documents is made available for public review, as a

thorough understanding and review of the guidance documents are

essential to adequately present comments on the proposed rule.

Response: NOAA has made every effort to consider all comments

submitted on the 1994 proposal, the August 3, 1995, proposed rule, and

comments expressed during the conferences held in August and September

of 1995. NOAA believes that the rule describes the assessment process

in sufficient detail, including listing of decision points,

determinations, decision criteria, and standards for selection of

procedures such that the guidance documents are truly complementary,

and not required to understand how to plan assessments in accordance

with this rule.

Subpart A

Section 990.10--Purpose

Comment: Many commenters supported the scope and direction of the

new proposal. Some of these commenters specifically noted that the

focus on restoration is a positive change. One of these commenters

stated that this approach will provide increased flexibility and

improve cooperation among trustees and responsible parties in achieving

restoration. Other commenters noted that this proposal is simpler and

more straightforward. Several of these commenters in particular

supported the move away from the use of claims based upon monetization

of natural resource values.

Response: NOAA notes and appreciates the support from the

commenters for the scope and direction of the rule.

Comment: While supportive of the new direction of the rule, one

commenter pointed out that, as a federal agency, NOAA should recognize

its fiduciary duty to Indian tribes and tribal natural resources, and

take care not to impinge upon the ability of the tribes to recover

damages.

Response: NOAA believes the rule's restoration focus will better

facilitate recovery of damages, while still allowing trustees,

including tribes, the discretion to apply whatever assessment approach

is most appropriate to the particular natural resources and services

injured by a given incident.

Comment: Another commenter suggested that NOAA should consider

reserving troublesome sections of the rule for future development,

perhaps through one or more Federal Advisory Committee Act (5 U.S.C.

App. 2) groups.

Response: NOAA does not believe that any provisions of the rule are

so wholly problematic to warrant the treatment suggested by the

reviewer. NOAA believes that the process embodied in the rule will

facilitate development of appropriate solutions to some questions that

can only be answered on an incident-by-incident basis.

Comment: One commenter stated that the new approach is an untried

theory, thus it is unclear whether this approach would be better or

worse than the approach under the CERCLA rule. Another commenter

suggested that the provisions in the proposed rule are vague, that

critical terms are undefined, and insufficient guidance is provided for

implementation of the approach. Another commenter noted that the

proposed rule fell short of providing trustees with a balance of

discretion and constraint needed to apply the still-developing science

of natural resource damage assessment within the dictates of the law.

Response: NOAA notes that the approach embodied in the rule is far

from untried, rather it embodies the approaches taken in some of the

most successful cooperative settlements reached to date. Trustees,

responsible parties, and interested members of the public must be

afforded the ability to respond to injuries resulting from incidents

that can vary greatly from incident-to-incident; in this respect,

natural resource damage assessment will never be a static field. NOAA

has defined more terms in the final rule. The rule provides technical

and legal boundaries within which assessments must fall to be in

compliance with OPA. For instance, restoration must be necessary and

linked to the injuries from an incident under the rule. Finally,

assessment procedures must be technically appropriate for the

circumstances of an incident while providing information of use in

determining restoration needs.

Comment: Some commenters argued that the excessive and arbitrary

assessments anticipated, given the rule's unlimited grant of discretion

to trustees, will result in unnecessary financial

[[Page 459]]

burdens that cannot be borne by the maritime industries. Some

commenters suggested that the effect of the rule will be to rid from

U.S. waters all forms of water craft, as well as to freeze businesses

potentially liable under the rule. Another commenter suggested that the

potential large recoveries allowed by the rule could threaten the

ability of private individuals and businesses who suffer quantifiable

economic losses as a result of incidents to obtain full and fair

compensation for their losses.

In contrast, several commenters argued that the new proposal is

significantly weaker than the 1994 proposal, with no justification

except industry pressure for an untested restoration-based approach

instead of the well-tested and supported economic valuation procedures.

The commenters suggested that this approach will lead to greater delays

in prosecuting and settling cases and that, to conform with the intent

of Congress, the rule must allow trustees greater discretion in

choosing assessment procedures or restoration options.

Response: The intent of the rule is solely to ensure that natural

resources and their services that are injured, destroyed, or lost as a

result of an incident will be restored where there is a need to do so,

and where feasible and cost-effective means to accomplish restoration

are available. The rule's focus on restoration will eliminate unneeded

assessment studies and prevent unnecessary adversarial conflicts over

misunderstood goals of trustees. This rule invites responsible parties

to act cooperatively and responsibly to seek expeditious and cost-

effective restoration, while clearly constraining trustees' actions to

those necessary to achieve OPA's restoration goals. Thus, costs and

damages will not be excessive or unpredictable. The rule has no

relation to private party claims that may be brought against

responsible parties under OPA, but the cost savings expected under the

rule from cooperation alone should alleviate fears that some third

parties will go uncompensated. In any event, uncompensated third party

claims may be presented to the Oil Spill Liability Trust Fund.

Section 990.11--Scope

Comment: One commenter requested that the rule clarify that its

provisions apply only to assessments being conducted under this rule,

not other causes of actions, for example causes under federal admiralty

or maritime law.

Response: NOAA has explicitly stated in the rule that the various

provisions of this rule would apply only to assessments being conducted

under this rule for purposes of bringing a natural resource damages

claim pursuant to OPA and thus do not affect claims brought under other

authorities.

Comment: One commenter stated that the rule should provide guidance

on how to distinguish trustee claims on behalf of the public from

private causes of action, particularly when natural resource injuries

are caused indirectly by an incident on private property.

Response: It is not possible for NOAA to describe all instances

where trustee and private party claims may appear to be duplicative.

NOAA notes that the rule requires that trustees determine their

jurisdiction to proceed under the rule, which includes a determination

that the trustees have relevant responsibility over natural resources,

as defined under OPA, that are expected to be injured by an incident.

However, the preamble now includes guidance in the discussion of

Sec. 990.22 for trustees to avoid double recovery of damages with

private parties.

Comment: A number of commenters remarked on NOAA's inconsistent

reference to what may be assessed and what may be restored under the

rule, by interchangeably using the terms ``natural resources and/or

services,'' and ``natural resources or services.'' Similarly, the

commenters suggested that the proposed rule inconsistently referred to

OPA's goal as making the ``environment and public whole,'' or simply

making ``the public whole.''

Response: The rule has been clarified to reflect OPA's intent to

make the environment and public whole for injuries resulting from an

incident. This intent is clear in OPA's reference to natural resources

themselves as the focus of restoration, and in the distinction between

restoration costs and diminution in value as elements of a claim for

damages. Complete and expeditious restoration may be the best way to

make both the environment and public whole.

Section 990.13--Effect of Rule

Comment: One commenter questioned why, if a foreign entity is a

trustee under OPA, such entity cannot receive the rebuttable

presumption.

Response: OPA does not, by its terms in section 1006(c)(1) (33

U.S.C. 2706(c)(1), grant the rebuttable presumption to foreign

trustees.

Comment: Some commenters noted that the preamble description of the

meaning of the rebuttable presumption, i.e., that the responsible party

has the burden of proving that the trustees' claim and determinations

are incorrect, is wrong. Instead, the commenters stated that the

rebuttable presumption is overcome when the preponderance of the

evidence indicates a different result. Similarly, other commenters

argued that section 1006(e)(2) of OPA (33 U.S.C. 2706(e)(2)) describes

the rebuttable presumption as applying only to the determination or

assessment of damages, therefore it is only the final amount of

damages, not the particular steps taken to reach that result that

receive the rebuttable presumption.

Response: NOAA has revised the rule to incorporate the statutory

language describing the provision of a rebuttable presumption for

assessments. In response to the comment regarding the meaning of such a

provision, NOAA interprets this presumption to mean that the

responsible parties have the burdens of presenting alternative evidence

on damages and of persuading the fact finder that the damage assessment

presented by the trustee(s) is not an appropriate measure of damages.

Comment: Several commenters expressed strong support for the

provision found in Sec. 990.20(b) of the proposed rule extending the

rebuttable presumption to state, local, and tribal assessment

procedures. Some of these commenters noted that this will promote

consistency by providing an incentive for the development and use of

state and tribal procedures that are consistent with the federal

approach, thus benefiting responsible parties who deal with trustees

from different regions of the country. One commenter noted that the

five listed requirements for consistency with the proposed OPA rule are

straightforward and should aid state, local, and tribal trustees in

efficient implementation of the rule. Other commenters supported the

provision, but suggested that the rule explicitly include compensation

schedules, models, and procedures that estimate expected injuries in

the language of this section. One commenter was concerned that it is

unrealistic to expect any given procedure will not conflict in some way

with the proposed OPA rule.

In contrast, several other commenters strongly objected to

extending the rebuttable presumption to state, local, or tribal

assessment procedures as being contrary to OPA. These commenters stated

that the criteria provided in the rule are far too general to

constitute substantive standards for the performance of assessments.

The commenters argued that NOAA has no authority to define the scope of

the rebuttable presumption since it is not a regulatory issue

implicating the assessment of damages, but is within the exclusive

province of the federal courts

[[Page 460]]

to address. The commenters stated that Congress intended the rebuttable

presumption to attach only to assessments performed under section

1006(d) of OPA (33 U.S.C. 2706(d)), and only according to substantive

standards promulgated by NOAA, and that NOAA may not delegate this

authority. One other commenter argued that it would be unfair to allow

the rebuttable presumption for the plethora of assessment procedures

now available.

Response: NOAA has revised Sec. 900.20 of the rule and removed the

explicit reference to state, local or tribal assessment procedures.

NOAA agrees that determining the scope of application of the rebuttable

presumption is not a necessary task in promulgating this rule. However,

NOAA notes that existing procedures that may be applicable to assessing

natural resource injuries and restoration needs may be used for

assessments under this rule, regardless whether those procedures were

promulgated under state laws respecting natural resource damage

assessment, developed through private scientific research, or developed

or adapted by the parties assessing the injuries of a particular

incident. It is not feasible to identify all assessment procedures, nor

the varied ways of applying such procedures, that will constitute

reliable and valid technical application for all potential incidents.

Thus, this rule specifies standards, in Sec. 990.27, that must be met

in order for any particular procedure to be used and deemed in

accordance with this part.

Comment: One commenter stated that the rule does not provide

sufficient guidance to determine whether trustees' discretionary

actions are cost-effective, technically feasible, or in accordance with

generally accepted scientific practices. Therefore, assessments

conducted pursuant to this rule should not be granted a rebuttable

presumption. Another commenter, also arguing that it would be unfair to

grant a presumption to procedures that are speculative and unproven,

suggested that implementation of the rebuttable presumption be delayed

until there is more experience with restoration and valuation

procedures.

Response: NOAA believes that the rule does provide the appropriate

constraints and standards for fashioning assessments that will be

technically sound, cost-effective, and reliable. The assessment focuses

on determining only the types and amounts of restoration required given

the particular injuries resulting from individual incidents. A

requirement to use ``generally accepted scientific practices'' would

result in overly-costly assessments in most instances, as the goals of

research science may be different than the goals of science for

purposes of natural resource damage assessment and restoration.

Finally, procedures cannot be deemed to be reliable or unreliable out

of context; the merits of different procedures will vary depending on

how they are proposed to be used in a given incident scenario. This

judgment will be made by trustees, in an open record atmosphere, with

input from responsible parties and the public.

Use of Other Assessment Procedures, and the Scope of the Rebuttable

Presumption

Comment: Several commenters took issue with the provision in the

proposed rule that allowed the rebuttable presumption to apply to other

procedures in lieu of or in addition to the process described in this

rule so long as the other process is ``in accordance with this part.''

The commenters stated that Congress intended the assessment to function

as an integrated unit with each step in the process leading logically

to the next. The commenters also cited the Ohio decision (Ohio, et al.,

v. U.S. Department of the Interior, 880 F.2d 432 (D.C. Cir. 1989)) as

specifically emphasizing that the rebuttable presumption is

particularly appropriate given adherence to all of the regulatory

procedures that, in their totality, result in a logical, disciplined,

efficient, and cost-effective assessment. Several commenters argued

that such a provision is contrary to the statutory goal of cost-

effectiveness. Some commenters also found the language of the provision

both confusing and internally inconsistent because it would be

impossible for ``another'' process, which is a process other than one

included in the rule, to still be a process that is ``in accordance

with'' the rule.

Response: To eliminate confusion, NOAA has deleted the section

referring to other procedures from the final rule. The rule provides

procedural and substantive standards in Sec. 990.27 that must be

complied with in order for an assessment to be judged ``in accordance''

with this rule. Trustees must demonstrate that their assessments are in

accordance with this rule on an incident-by-incident basis in order to

obtain the rebuttable presumption.

Section 990.14--Coordination

Coordination Among Trustees

Comment: Several commenters argued that the rule should require,

and that OPA mandates, trustee coordination during assessments to avoid

an adversarial and litigation-charged atmosphere among trustees and

prevent double recovery of damages. Another commenter suggested that

the rule limit the number of trustees to those who have clear

restoration concerns for a particular incident. Some commenters

suggested that the rule deny the rebuttable presumption to trustees who

do not coordinate, while others suggested that an affirmative proof

burden of certifying a lack of double recovery should be placed on non-

coordinating trustees. Some commenters requested that model MOUs for

trustee coordination be included in the rule, while others who support

trustee coordination and incident-specific coordination agreements,

applauded the omission of any model agreements.

Response: Changes to the rule state that trustees should coordinate

their assessments in order to ensure there is no double recovery of

damages. NOAA believes that any claimant that files what appears to be

a duplicative claim for natural resource damages against a responsible

party will face a substantial burden of proof to demonstrate that the

claim has not already been satisfied. NOAA notes, however, that it is

conceivable that claims for distinct natural resource injuries

resulting from an incident could be effectively processed independently

by trustees without double recovery of damages. Finally, NOAA strongly

supports development of agreements among trustees, but realizes from

experience that it is not feasible to specify a single workable model

for all trustees, locales, and incidents.

Comment: Several commenters supported the designation of a Lead

Administrative Trustee (LAT), so long as the rule provides flexibility

in this designation. These commenters suggested that the rule allow for

co-LATs or sequential LATs, recognizing that one trustee may be the

lead for restoration planning while another trustee might be the lead

for the implementation phase. One of these commenters stated that

designation of an LAT should not be mandatory. Another commenter

suggested that, in cases where an incident affects multiple trustees,

the state trustee should be the LAT because of superior knowledge of

``local'' natural resources. Still other commenters argued that the

rule should vest arbitration authority in a lead trustee, citing the

Ohio decision as stating that such a provision is ``entirely

reasonable.'' The commenters stated that arbitration authority would be

essential to settling disputes among trustees, which might disrupt

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cooperative efforts among trustees and responsible parties.

Response: It has been NOAA's experience that an LAT is essential to

efficiently and cost-effectively manage most assessments. Executive

Order 12,777, section 1 (56 FR 54757, October 22, 1991), requires

Federal trustees to designate one trustee to act as Lead Administrative

Trustee for incidents at which more than one federal trustee is

involved. NOAA has amended the rule to allow for co-LATs or sequential

LATs. NOAA does not believe it is necessary, advisable, or within legal

authority to mandate that state trustees always serve as LATs. Finally,

NOAA believes it is unnecessary to provide for arbitration or veto

authority in a single trustee, given the experience that demonstrates

trustees have been successful in a consensus decisionmaking approach to

assessments.

Comment: One commenter specifically asked that the rule address the

issues associated with a trustee agency who might also be a responsible

party at an incident. The commenter suggested that the trustee/

responsible party would want to work closely with co-trustees to

develop a restoration strategy, but recognizes that, in doing so, would

open itself up to the risk of shared information being used against it

as a responsible party. The commenter also asked if the co-trustees

could exclude the trustee/responsible party from the assessment if the

trustee/responsible party could not afford to fund the assessment

activities. Other commenters stated that the rule should specifically

preclude a trustee agency that is also a responsible party for a

particular incident from being eligible to be an LAT for that incident.

The commenters suggested that such a provision would avert conflicts of

interest, minimize problems of public perception, and help the trustee/

responsible party fulfill its dual obligations.

Response: NOAA notes that the rule cannot exclude participation by

any trustee. Where a trustee is also a responsible party, all of the

co-trustees may want to determine among themselves the nature and

extent of involvement by any given trustee. Generally, participation

should not be denied unless it would impede the assessment or be an

inherent conflict of interest.

Coordination With Response Agencies

Comment: One commenter suggested that the rule explicitly state

that restoration actions by trustees are intended to supplement the

initial response and cleanup activities of response agencies. Another

commenter suggested that the rule require that response agencies

coordinate with trustees.

Response: NOAA agrees that restoration actions by trustees are

intended to supplement the initial response and cleanup activities of

response agencies. NOAA believes that response agencies and trustees

should coordinate during the response phase to prevent or minimize

residual injuries to natural resources that would require restoration.

However, OPA does not grant NOAA authority to place requirements on

response agencies.

Coordination With Responsible Party

Comment: Several commenters stated that early and substantial

involvement of the responsible party in the assessment would

significantly reduce the threat of litigation and facilitate cost-

effective, feasible restoration. Some of these commenters, however,

stated that the rule language is somewhat ambiguous and vague as to the

timing and extent of that participation, as well as the extent of the

trustees' discretion in excluding or refusing to continue responsible

party participation. These commenters suggested that the rule should

provide for mandatory participation by the responsible party, unless

the trustee can demonstrate that such participation will interfere with

trustees' fulfilling their responsibilities under the rule and OPA. One

of these commenters suggested that the rule provide that the parties

seek mediation if reasonable disagreements develop, to prevent trustees

unfairly characterizing the responsible party as interfering. Another

commenter stated that the responsible party should be involved in the

entire process as soon as trustees arrive on site and that the trustees

should not be allowed to exclude a responsible party unless there is

clearly documented evidence that the responsible party is intentionally

undermining the process. Another commenter suggested that the rule

encourage the parties to enter into an agreement respecting the

coordination of responsible party participation, with trustees

prohibited from imposing conditions that are not directly related to

the efficient coordination of the process.

Other commenters expressed concerns with participation by the

responsible party. These commenters argued that the rule should ensure

that trustees have the discretion as to whether, when, and how the

responsible parties are permitted to participate and when the trustees

will be able to dismiss a responsible party that is interfering with

the process. One commenter also suggested that the decision to exclude

a responsible party from the process should not be reviewable, so that

trustees would not have to divert time and resources in defending that

decision. Several commenters stated that the rule needs to be

consistent among sections in the provisions for responsible party

participation. Some commenters pointed out that the responsible party's

role is unique from that of the public represented by the trustees, in

that the responsible party has an interest in protecting the investment

of its owners and stock holders, and that this natural conflict of

interest should be acknowledged by the rule.

Some commenters suggested additional or alternative considerations

for responsible party participation, including the level of cooperation

provided by a particular responsible party in prior incidents and the

willingness of the responsible party to defer to the trustees' final

decisions. Other commenters stated that the responsible party should be

subject to the same administrative record rules as the trustees and,

therefore, be precluded from assembling experts and data outside the

public process. One commenter noted that a need for funding should not

be a determining factor in involving the responsible party in the

assessment, while another commenter stated that the rule should require

that the responsible party fund the assessment, requiring that the

responsible party place the trustees' estimate of costs in escrow.

Response: NOAA believes that open and cooperative assessments

performed by trustees and responsible parties can result in the most

expeditious and cost-effective assessments and restoration. NOAA has

clarified the rule to require trustees to invite identified responsible

parties to participate in the assessment as early as practicable, but

no later than issuing the Notice of Intent to Conduct Restoration

Planning. NOAA has also clarified the rule to indicate that it is

within trustees' authority to determine to what extent responsible

parties may participate, and that trustees can terminate or limit

responsible party participation if it interferes with trustees

fulfilling their statutory obligations. The rule specifies that the

minimum level of participation that will be afforded to responsible

parties is notification of all determinations required by trustees

under the rule, and notice and comment opportunity on all documents

that may significantly affect the direction or outcome of assessment

decisions. In no

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event may trustees delegate essential statutory decisionmaking powers

to responsible parties. The rule also now includes guidance, such as

that suggested by the commenters, to determining the nature and extent

of responsible party participation. Responsible party funding is not a

pre-condition to their participation. The rule also strongly encourages

formal agreements between trustees and responsible parties so as to

ensure cooperation and cost-effectiveness. The parties are encouraged

to reach agreement on a list of facts, such as the natural resources

injured, the extent of injury, the most appropriate assessment

procedures to determine injury and/or restoration needs, and how the

results of the procedures will be interpreted.

Public Involvement

Comment: Several commenters noted that public involvement should be

clearly designed so as not to detract from the primary goal of

restoration in a timely manner. One commenter suggested a graded

approach to public involvement. Some commenters noted the potential

expenses of public involvement. One of these commenters stated that

increased costs of public ou

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