Natural Resource Damages AssessmentsType B Procedures

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DEPARTMENT OF THE INTERIOR

Office of the Secretary

43 CFR Part 11

RIN 1090-AA29 and 1090-AA43

Natural Resource Damages Assessments--Type B Procedures

AGENCY: Department of the Interior.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: The Department of the Interior is revising the regulations for

assessing natural resource damages resulting from a release or

discharge of a hazardous substance in compliance with a statutory

biennial review requirement and a court remand. The regulations provide

procedures that Federal, State, and Tribal natural resource trustees

may use to develop plans for restoring injured natural resources and to

determine appropriate compensation due from potentially responsible

parties. The regulations include an administrative process for

conducting assessments as well as two types of technical procedures for

the actual quantification of injuries and damages. ``Type A''

procedures are standard procedures for simplified assessments requiring

minimal field observation in cases of minor discharges or releases in

certain environments. ``Type B'' procedures are procedures for detailed

assessments in other cases. This document solicits comment on potential

revisions to the administrative process and the type B procedures in

light of recently promulgated natural resource damage assessment

regulations for oil discharges.

DATES: Comments will be accepted through September 16, 1996.

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

Environmental Policy and Compliance, ATTN: NRDA Rule--Type B, Mail Stop

2340, Department of the Interior, 1849 C Street NW, Washington, DC

20240.

FOR FURTHER INFORMATION CONTACT: Mary C. Morton at (202) 208-3302.

SUPPLEMENTARY INFORMATION:

Statutory Authority

This document solicits comment on the revision of regulations for

assessing natural resource damages for releases or discharges of

hazardous substances. The Comprehensive Environmental Response,

Compensation, and Liability Act (42 U.S.C. 9601 et seq.) (CERCLA)

provides that certain categories of persons, known as potentially

responsible parties (PRPs), are liable for natural resource damages

when a release of a hazardous substance has resulted in injury to,

destruction of, or loss of natural resources. 42 U.S.C. 9607(a).

Natural resource damages fund restoration, replacement, or acquisition

of the equivalent of the injured natural resources. 42 U.S.C.

9607(f)(1).

Only those Federal, State, and Tribal officials designated as

natural resource trustees may recover natural resource damages. CERCLA

defines ``State'' to include:

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

American Samoa, the United States Virgin Islands, the Commonwealth

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

which the United States has jurisdiction. 42 U.S.C. 9601(27).

Trustees may recover damages for those natural resource injuries

that are not fully remedied by response actions as well as the public

interim losses from the date of the release until the injured natural

resources have fully recovered or been restored. Trustees may also

recover the reasonable costs of assessing natural resource damages.

CERCLA requires the President to promulgate regulations for the

assessment of natural resource damages under CERCLA and the Clean Water

Act (33 U.S.C. 1251 et seq.) (CWA). 42 U.S.C. 9651(c)(1). CWA provides

authority for Federal and State trustees to recover natural resource

damages resulting from discharges of hazardous substances into

navigable waters. 33 U.S.C. 1321(f)(4) and (5).

The regulations must identify the ``best available'' procedures for

assessing natural resource damages. 42 U.S.C 9651(c)(2). CERCLA

requires that the natural resource damages assessment regulations

include two types of assessment procedures. ``Type A'' procedures are

``standard procedures for simplified assessments requiring minimal

field observation.'' 42 U.S.C. 9651(c)(2)(A). ``Type B'' procedures are

``alternative protocols for conducting assessments in individual

cases.'' 42 U.S.C. 9651(c)(2)(B). If trustees and PRPs fail to reach

settlement, Federal and State trustees who performed their assessments

in accordance with the natural resource damage assessment regulations

will receive a rebuttable presumption in litigation of their claims. 42

U.S.C. 9607(f)(2)(C). The President delegated the responsibility for

promulgating the natural resource damages assessment regulations to the

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

E.O. 12580.

Hazardous Substance Regulations

The Department has issued regulations that provide an

administrative process for conducting natural resource damages

assessments as well as technical type A and type B procedures for the

actual quantification of injuries and damages resulting from hazardous

substance releases and discharges. The Department recently published a

final rule containing two type A procedures--one for minor releases and

discharges in coastal and marine environments and the other for minor

releases and discharges in the Great Lakes. 61 FR 20560 (May 7, 1996).

In State of Ohio v. United States Department of the Interior, 880 F.2d

432 (D.C. Cir. 1989) (Ohio v. Interior), the U.S. Court of Appeals for

the D.C. Circuit vacated and remanded portions of the original

administrative process and the type B procedures that were issued in

1986. On March 25, 1994, the Department published a final rule in

response to the Ohio v. Interior remand. 59 FR 14261. This final rule

is currently being challenged in Kennecott Utah Copper Corp. v. United

States Department of the Interior, No. 93-1700 and consolidated cases

(D.C. Cir.).

The March 25, 1994, rule addressed all but one issue in the Ohio v.

Interior remand--the calculation of damages for interim lost nonuse

values. The Department's regulations currently provide that trustees

can recover from PRPs the cost of implementing a publicly reviewed plan

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

equivalent of the natural resources injured by a hazardous substance

release or discharge. The regulations also authorize trustees to

recover the economic values lost by the public pending restoration or

recovery of the injured resources. These values are known as

``compensable values'' and may include ``use'' and ``nonuse'' values,

if they can be reliably calculated. Trustees must eventually determine

how to spend damages recovered for compensable values on restoration

actions but only after the assessment has been completed and the funds

have been recovered.

On May 4, 1994, the Department published a notice of proposed

rulemaking concerning the reliability of calculating nonuse values

using the contingent valuation methodology. 59 FR 23097. The Department

then published an advance notice of proposed rulemaking announcing the

start of an overall review of the administrative process and the type B

procedures. 59 FR 52749 (Oct. 19, 1994). The Department must review the

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hazardous substance natural resource damages assessment regulations,

and revise them as appropriate, every two years. 42 U.S.C. 9651(c)(3).

The Department now intends to develop a proposed rule that will

address both the biennial review and the remaining aspect of the Ohio

v. Interior remand and that will supersede the May 4, 1994, proposed

rule. This document solicits comment on inclusion in this upcoming

proposed rule of the concepts of the recently promulgated oil natural

resource damages assessment regulations.

New Oil Regulations

On January 5, 1996, the National Oceanic and Atmospheric

Administration (NOAA) published a final rule under the Oil Pollution

Act of 1990 (33 U.S.C. 2701 et seq.) for assessing natural resource

damages caused by oil spills. 61 FR 439. The oil regulations adopt a

new approach to several aspects of natural resource damages assessment.

One particularly significant and promising feature of the oil

regulations is the adoption of a new method of measuring damages based

on unified restoration planning. The oil regulations extend the

hazardous substance regulations' emphasis on restoration to all

elements of a natural resource damages claim, including compensation

for interim loss of injured natural resources and resource services.

Under the oil regulations, a natural resource damages claim is

based on a unified restoration plan developed during the assessment

that incorporates both ``primary'' restoration actions to return

injured resources and services to the condition that would have existed

if the discharge had not occurred and ``compensatory'' restoration

actions to compensate the public for interim loss of resource services.

The oil regulations fundamentally change the role of economic

valuation in developing claims for interim loss of injured natural

resources and resource services. Unlike the current hazardous substance

regulations, the new oil regulations require trustees to determine

compensation for interim losses based on the cost of appropriately

scaled compensatory restoration actions, rather than economic values

per se.

The Department has indicated that during the biennial review it

will work to ensure the maximum consistency appropriate between the

hazardous substance regulations and the oil regulations. 59 FR 52752.

The Department believes that the unified restoration planning approach

in the oil regulations is one appropriate option for biennial reforms

to the hazardous substance regulations designed to expedite

restoration, reduce litigation, and encourage cooperative efforts among

trustees and PRPs.

The Department also believes that resolution of the Ohio v.

Interior remand concerning the calculation of nonuse values should be

considered within the same context as the overall biennial review of

the hazardous substance regulations. As NOAA has stated in connection

with its new method of measuring damages, ``[t]he 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.'' 61 FR 442.

Issues for Comment

To assist in the development of a proposed rule, the Department is

soliciting comment on how the hazardous substance regulations should be

revised to ensure maximum appropriate consistency with the oil

regulations and comply with Ohio v. Interior. The Department is

particularly interested in comments on revising the hazardous substance

regulations to incorporate the new method for measuring damages in the

oil regulations. The Department also solicits comment on revising the

hazardous substance regulations to reflect the more streamlined

approach to injury assessment contained in the oil regulations. Whereas

the current hazardous substance regulations contain relatively detailed

standards and procedures for all aspects of injury determination and

quantification, the oil regulations provide a general framework of

decision criteria within which trustees determine on a case-by-case

basis how best to assess injury. The Department solicits comment on the

suitability of the new approaches in the oil regulations for the

hazardous substance regulations, in light of the differences between

oil spills and hazardous waste sites.

Dated: July 10, 1996.

Willie R. Taylor,

Director, Office of Environmental Policy and Compliance.

[FR Doc. 96-17960 Filed 7-15-96; 8:45 am]

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