FOSC Funding Information i

PURPOSE

This document is designed to assist Federal On-Scene Coordinators (FOSCs) during oil spill and 

other hazardous material responses. The intent of this document is to provide an overview of financial 

aspects of spill response issues. It is not intended to be an all-inclusive guide on spill management 

issues or on the rights and liabilities of polluters and those damaged by pollution as defined by the Oil 

Pollution Act (OPA) or the Comprehensive Environmental Response, Compensation, and Liability Act 

(CERCLA).
FOSC Funding Information ii

FOSC Funding Information for Oil Spills and 

Hazardous Materials Releases

TABLE OF CONTENTS

TABLE OF CONTENTS ........................................................................................................................ II

I. WHAT IS THE OSLTF? ................................................................................................................ 1

II. ACCESS TO THE OSLTF ............................................................................................................ 1

FEDERAL WATER POLLUTION CONTROL ACT OIL SPILL RESPONSE AUTHORITY............... 1

WHO CAN ACCESS THE FUND ...................................................................................................... 1

COSTS FOR THE FOLLOWING CAN BE CHARGED TO THE OSLTF .......................................... 2

LIMITATIONS TO ACCESSING THE OSLTF................................................................................... 2

III. NATIONAL POLLUTION FUNDS CENTER SUPPORT ROLE................................................... 2

SERVICES NPFC CAN PROVIDE DURING A SPILL ...................................................................... 2

SERVICES THAT NPFC CANNOT PROVIDE DURING A SPILL .................................................... 3

IV. OPA RESPONSIBLE PARTY LIABILITY ISSUES.................................................................. 4

COFR REQUIREMENTS/ROLE OF GUARANTOR.......................................................................... 4

DETERMINING LIMITS OF LIABILITY ............................................................................................. 4

RP'S ROLE IN THE RESPONSE PROCESS ................................................................................... 4

RP’S ROLE IN THE CLAIMS PROCESS.......................................................................................... 5

V. FUNDS MANAGEMENT............................................................................................................... 5

CANAPS ............................................................................................................................................ 5

CONSIDERATIONS FOR ESTIMATING THE TOTAL COSTS OF THE SPILL ............................... 6

TRACKING DAILY BURN RATE FOR REMOVAL............................................................................ 7

ANALYZING AND MONITORING POTENTIAL DAMAGE CLAIMS COSTS.................................... 7

FUNDING CONSIDERATIONS FOR NRDAS................................................................................... 8

CEILING MANAGEMENT IN THE EVENT OF MULTIPLE INCIDENTS .......................................... 8

OSLTF EMERGENCY FUND ADVANCEMENT AUTHORITY ......................................................... 8

FUNDING CONSIDERATIONS FOR MULTIPLE RP INCIDENTS................................................... 8

FUNDING CONSIDERATIONS FOR MIXED OIL AND CERCLA INCIDENTS................................ 8

VI. CLAIMS PROCESS.................................................................................................................. 9

WHAT CLAIMS ARE COMPENSABLE............................................................................................. 9

RP’S ROLE........................................................................................................................................ 9

NPFC’S ROLE IF RP DENIES DESIGNATION OR IS UNKNOWN ............................................... 10

NEED FOR ON-SITE CLAIMS OFFICE.......................................................................................... 10

REQUIREMENT TO PAY INTERIM CLAIMS.................................................................................. 10

IMPORTANCE OF ADDRESSING CLAIMS ISSUES IN PRESS RELEASES............................... 10

VII. NATURAL RESOURCE DAMAGES...................................................................................... 10

DEFINITION..................................................................................................................................... 10

WHO ARE THE NATURAL RESOURCE TRUSTEES.................................................................... 10

FEDERAL ........................................................................................................................................ 10
FOSC Funding Information iii

STATE..............................................................................................................................................11

TRIBAL.............................................................................................................................................11

ROLE OF TRUSTEES IN THE FUNDING PROCESS ....................................................................11

COMPENSABLE NATURAL RESOURCE DAMAGES ...................................................................11

COORDINATION FOR NRD WITH THE RESPONSIBLE PARTY..................................................11

NRD CLAIMS PROCESS – ROLE OF OSLTF/NPFC IF RP DOESN’T PAY..................................11

NRD IMPACT ON THE LIFE CYCLE COST OF SPILL...................................................................12

VIII. CERCLA / WEAPONS OF MASS DESTRUCTION ...............................................................12

COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT 

(CERCLA) FUND USE CRITERIA...................................................................................................12

LEGAL/REGULATORY FRAMEWORK FOR RESPONSE .............................................................12

NON-COAST GUARD PARTICIPANTS ..........................................................................................12

IX. STAFFORD ACT / FEMA .......................................................................................................13

STAFFORD ACT FUND USE CRITERIA ........................................................................................13

LEGAL/REGULATORY FRAMEWORK FOR RESPONSE .............................................................13

NON-COAST GUARD PARTICIPANTS ..........................................................................................13

X. TERRORISM AND FEDERAL RESPONSE AUTHORITY .........................................................14

ADDITIONAL REFERENCES..............................................................................................................15

ACRONYM LIST ..................................................................................................................................16

FOSC Funding Information 1

I. WHAT IS THE OSLTF?

The Oil Spill Liability Trust Fund (OSLTF or Fund) is a billion-dollar fund established as a 

source of money to pay removal and certain other costs and damages resulting from oil spills 

or substantial threats of oil spills to navigable waters of the United States. The OSLTF is used 

for costs not directly paid by a responsible party (RP) or guarantor, including costs to respond 

to "mystery spills" for which there is no identified RP.

The United States Coast Guard's National Pollution Funds Center (NPFC), in Arlington, 

Virginia, manages the OSLTF.

II. ACCESS TO THE OSLTF

FEDERAL WATER POLLUTION CONTROL ACT OIL SPILL RESPONSE AUTHORITY 

 Federal On-Scene Coordinators may access the OSLTF Emergency Fund to respond to

an oil spill under the President’s FWPCA authority (33 U.S. Code § 1321(c)).

 Removal of a discharge or prevention and mitigation of a substantial threat of a discharge 

of oil into or on the navigable waters, adjoining shorelines, and the Exclusive Economic 

Zone (EEZ).

WHO CAN ACCESS THE FUND

 All Federal On-Scene Coordinators (FOSCs) obtain immediate access to a funding 

account and ceiling for incident response by accessing the Ceiling and Number 

Assignment Processing System (CANAPS) on the Internet: www.npfc.gov/canaps (see 

page 5). 

 Other Federal, state, local, and Indian tribal government agencies assisting the FOSC 

get reimbursable funding authority via a FOSC-approved Pollution Removal Funding 

Authorization (PRFA). NPFC will work with the FOSCs, the agencies, and the Incident 

Command (IC)/Unified Command (UC) to set PRFAs in place.

 States may opt to access up to $250,000 via the Oil Pollution Act's State Access 

provision. FOSCs still provide initial coordination of the request and subsequent oversight 

and coordination.

 Federal Lead Administrative Trustees (FLATs) may submit an Initiate Request to the 

NPFC to fund the initiation of a Natural Resource Damage Assessment (NRDA).

 Natural Resource Trustees designated by the President of the United States, state, 

territorial governor, or Indian tribal governing authority may submit natural resource 

damage (NRD) claims to the NPFC for NRD costs not paid by the RP.

 Claimants (individuals, corporations, and government entities) can submit claims for 

uncompensated removal costs or certain damages (natural resources, real/personal 

property, loss of profits, loss of subsistence use of natural resources, loss of government 

revenues, and increased costs of government services) caused by the oil spill to the 

NPFC if the RP does not satisfy their claims. NPFC adjudicates the claims and pays those 

with merit. RPs can submit claims provided that:
FOSC Funding Information 2

 the total of all response costs and damage claims exceed the RP's statutory limit of 

liability, or

 the spill was solely caused by a third party, an Act of God, or an Act of War.

COSTS FOR THE FOLLOWING CAN BE CHARGED TO THE OSLTF

 Removal − includes cleanup contractors (Oil Spill Response Organizations or OSROs), 

overtime for government personnel, equipment used in removal (generally at 

established standard rates or lease costs), testing to identify the type and source of oil, 

disposal of recovered oil and oily debris, and preparation of associated cost 

documentation

 Natural Resource Damages − refers to costs to restore, rehabilitate, replace, or 

acquire the equivalent of the injured resource; any interim lost use or diminution in value 

of the injured resource pending restoration; and the reasonable cost of assessing those 

damages

 Claims for removal and damages

LIMITATIONS TO ACCESSING THE OSLTF

 The maximum, per case, is $1 billion, or the balance in the OSLTF, whichever is less.

 Removal funding (including response to a substantial threat) and Initiate request funding 

are limited to the funds available in the OSLTF Emergency Fund that receives and 

additional $50 million on October 1st of each fiscal year.

 There is a maximum of $500 million per case to satisfy NRD claims and assessments.

 Initiation of NRDA costs may be paid out of the Emergency Fund, subject to its 

availability and the process through which the funding was requested.

 The discharge (or substantial threat of discharge) must impact navigable waters of the 

United States [including the 200-mile Exclusive Economic Zone (EEZ)].

III. NATIONAL POLLUTION FUNDS CENTER SUPPORT 

ROLE

SERVICES NPFC CAN PROVIDE DURING A SPILL

 Serve as troubleshooters and the spokesperson for all OSLTF access, documentation, 

and claims issues. NPFC personnel can be dispatched to the Incident Commander (IC). 

In a Spill of National Significance (SONS), NPFC may be called upon to head the 

Finance Section under the Unified Command System (UCS) or Incident Command 

System (ICS)

 Assure that the OSLTF ceiling for the FOSC's removal efforts remains adequate and is 

adjusted as needed 

 Assist in tracking obligations against the ceiling 

 Advise the FOSC of the remaining ceiling balance

 Advise and assist in RP identification 
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 Provide information concerning validity of an RP's Certificate of Financial Responsibility 

(COFR) and guarantor identity for vessel spills

 Provide information concerning RP limits of liability (LOL) 

 Prepare and deliver, with FOSC concurrence, Notices of Designation (including 

appropriate advertising requirements) to RPs

 Advise the FOSC and act as the FOSC's spokesperson on any matters related to the 

RP's response to the Notice of Designation

 Oversee the RP's efforts to advertise for claims or arrange for NPFC to advertise if the 

RP fails to do so or if an RP has not been identified

 Help negotiate and execute Pollution Removal Funding Authorizations (PRFAs) with any 

other Federal, state, local or Indian tribal government agency that the FOSC decides to 

use as part of the incident response and work with representatives of other agencies to 

ensure that their cost documentation is adequate for approval of reimbursement and 

supports cost recovery from the RP

 Negotiate and execute any requested funding agreement for Initiation of Natural 

Resource Damage Assessments (NRDA) with the Federal Lead Administrative Trustee 

(FLAT); Initiate requests are handled directly between the NPFC and the FLAT, but 

NPFC personnel coordinate the preassessment activities of the NRDA with the FOSC

 Handle all OPA claims-related issues, assist the FOSC in documenting the incident's 

impact with respect to potential claims, notify all RPs and guarantors when there are 

multiple RPs and arrange for adjudication of claims either directly or by the RP and 

answer claims-related questions for the FOSC

 Provide guidance on gathering/consolidating daily cost data and preparing the daily cost 

estimate summary for inclusion in Pollution Reports (POLREPs)

 Provide financial advice and forms for daily resource cost documentation and ensure that 

Coast Guard resources participating under the FOSC’s direction satisfactorily complete 

this documentation and monitor and help troubleshoot cost documentation problems

 Provide legal advice, as required, in coordination with the relevant Command's servicing 

legal office

SERVICES THAT NPFC CANNOT PROVIDE DURING A SPILL

 NPFC case officers do not have contracting authority and cannot act as a contracting 

officer (KO). With the exception of contractor support for RP identification, support for 

commercial contracts for oil spill clean-up actions must come from the District staff or 

from the Maintenance and Logistics Command (MLC) contracting staff. This may require 

that a KO be temporarily assigned to the UCS/ICS.

 NPFC case officers do not act as the FOSC's general finance officer or logistics officer, 

other than in the capacity of designated UCS Finance Section Chief during a SONS.

 NPFC does not validate utilization of resources. It is important that the FOSC assign 

individuals under FOSC direction to validate and track personnel and equipment 

employed during the spill response. This includes both Coast Guard and commercial 

resources used at specific clean-up sites and within the UCS/ICS. Generally, the 
FOSC Funding Information 4

individuals who validate the use of personnel and equipment are separate from the 

FOSC's pollution response on-scene representatives. Other governmental agencies 

(OGAs) must document their own costs of participation in order to be reimbursed under 

their PRFA agreements. Individuals responsible for validating resource utilization should, 

where possible, note the movement of OGA personnel into and out of a site.

IV. OPA RESPONSIBLE PARTY LIABILITY ISSUES 

COFR REQUIREMENTS/ROLE OF GUARANTOR

 Prior to any vessel >300 gross tons operating in U.S. waters, the owner/operator must 

obtain a Certificate of Financial Responsibility (COFR). This COFR is only issued if the 

owner/operator provides evidence of financial responsibility to pay for removal costs and 

damages up to the vessel's limit of liability (LOL). A vessel's liability limit is based on its 

gross tonnage and vessel type (e.g., higher limits apply to tank vessels than cargo 

vessels).

 RPs are permitted to self-insure their financial responsibility requirements. In most cases 

that involve self-insurers, they also have other insurance through a guarantor who is 

contractually obligated to pay. In these cases, the U.S. government does not have OPA 

Direct Action Rights against the other insurer.

DETERMINING LIMITS OF LIABILITY

 When vessel identity is reported in a spill incident, NPFC will provide information 

regarding potential statutory LOL to which an RP may be entitled; however, entitlement to 

the LOL is not usually well defined until long after the response. This issue may be 

resolved in litigation.

 What happens if the RP can only pay to their LOL?

 The OSLTF will provide continued funding if the RP stands down or cannot pay.

 What happens if the RP pays more than their LOL?

 The RP may submit a claim to the NPFC for excess removal costs and damages. 

The claim will be adjudicated according to the claims provisions in OPA and the 

claims regulation. The RP will be compensated for all excess removal costs and 

damages to which the RP is entitled under OPA.

 Entitlement to the LOL is lost if the RP fails or refuses:

 to report the incident as required by law 

 to provide all reasonable cooperation and assistance requested by the FOSC in 

connection with removal activities; or

 without sufficient cause, to comply with an order issued by the FOSC

RP'S ROLE IN THE RESPONSE PROCESS

 The RP has primary responsibility for response to a spill incident, including setting up 

the ICS and joining with the FOSC and state on-scene coordinator (SOSC) in the UC.
FOSC Funding Information 5

 Even when the RP leads a reasonable response effort, the FOSC is always in ultimate 

command and may decide to direct specific action or, for whatever reason it is deemed 

necessary, actually take the lead role in the response. 

 The RP faces challenges to balance their corporate response with the desires of the 

FOSC given cost, environmental, political, and public relations/media impacts. The 

FOSC’s responsibility extends further than taking appropriate action if the RP’s response 

is inadequate. The FOSC should be aware that the RP might request reimbursement 

from the OSLTF via the claims route if the RP exceeds the LOL or has a complete 

defense to liability. The FOSC should identify those times when a response may be 

inflated beyond the level necessary to ensure removal of the oil and should notify the RP 

and the NPFC of this observation.

RP’S ROLE IN THE CLAIMS PROCESS

 An RP has primary responsibility for handling claims, including advertising, adjudication, 

and payment.

 The RP may establish a claims office to serve the affected area for spills with large 

claims potential.

 If the RP is deficient, NPFC will perform the claims adjudication function and charge the 

cost to the RP.

 The NPFC will assure that all of the above responsibilities are met.

V. FUNDS MANAGEMENT

CANAPS

 The Ceiling and Number Assignment Processing System (CANAPS) automates and 

centralizes the creation and management of project numbers and ceilings for Federally 

funded responses initiated by Federal On-Scene Coordinators (FOSCs).

 CANAPS is a Web-based tool available at: https://npfc.uscg.mil/canaps/

 CANAPS collects basic incident information via a user-friendly, Internet “wizard” and 

immediately assigns a project number and the requested spending ceiling – up to a 

preset limit. An email confirmation of the project number and ceiling is sent to the 

requesting FOSC. CANAPS then creates the required official message and releases it 

through the Coast Guard Messaging System (CGMS).

 A field user tutorial is available. The tutorial is a helpful, comprehensive document that 

steps users through the process of opening and modifying a Federal Project. The tutorial 

is available at: 

http://www.uscg.mil/npfc/docs/PDFs/urg/Ch2/CanapsTutorial.pdf
FOSC Funding Information 6

 Ceiling and Project Limits

 Federal Project Numbers (FPNs) can be opened by EPA and USCG FOSCs for the 

removal of oil using the Oil Spill Liability Trust Fund (OSLTF). 

 CERCLA Project Numbers (CPNs) can be opened by USCG FOSCs for the removal 

of hazardous substances using Comprehensive Environmental Response, 

Compensation and Liability Act (CERCLA) funds. The EPA has its own process for 

opening Superfund projects outside of CANAPS.

 The need to manage the respective funds requires limits to the amount of money that 

can be obligated automatically by the CANAPS system before having to speak to the 

National Pollution Funds Center (NPFC).

 The USCG can open FPNs up to $500K and CPNs up to $249,999. 

 The EPA can open FPNs up to $50,000. 

 These thresholds are subject to change based on the availability of funds. Additional 

money is available. If the project is going to grow beyond these limits, contact the 

NPFC to request additional funding.

 User IDs and Passwords

 Access to CANAPS is controlled by use of user IDs and passwords, which users obtain 

at the CANAPS website. USCG users can make use of the CAC enabled logon which 

requires no password, but does require the user to be connected to the Coast Guard 

network. The user ID/password system allows not-USCG network users, particularly 

EPA FOSCs access to CANAPS. Demonstration Version

 A demonstration version of the CANAPS software is available at: 

http://www.npfc.gov/canapsv2demo

 The user ID for the demonstration version is Demo, and the password is DEMO.

CONSIDERATIONS FOR ESTIMATING THE TOTAL COSTS OF THE SPILL

 RP Limits of Liability (LOL)

 An RP can’t be assured LOL will hold until investigation and possible litigation are 

resolved.

 An RP who holds a COFR and exceeds the established LOL is expected to continue 

the response and file a claim for the actual costs in excess of the LOL.

 An RP’s involvement – and the increased probability of cost recovery – is more likely 

with the presence of a COFR guarantor or “other insurer.”

 An RP’s P&I coverage, the “other insurance,” is often considerably greater than the 

LOL.
FOSC Funding Information 7

 RP Responsiveness

 Media and public interest and political awareness often influence an RP’s 

responsiveness.

 RP Spending Past LOL

 RPs and their guarantors often continue to provide funding and support after 

exceeding the LOL (for which the RP may subsequently submit a claim to the NPFC 

for excess costs). The determination of whether or not this will be the case must be 

made as soon as it is feasible to minimize potential transition issues and to quickly 

estimate potential impacts to the OSLTF.

 RP’s spending and applicability of liability limits are usually not well defined until long 

after the response, especially in cases subject to litigation.

TRACKING DAILY BURN RATE FOR REMOVAL

 The FOSC tracks the daily costs (burn rate) for an incident. The RP may not be 

forthcoming with this data for legal or public relations reasons. These costs include:

 costs incurred by the OSLTF plus USCG resource usage (personnel, equipment, 

Marine Safety Laboratory, etc.)

 other government agencies (Federal, state, local) support costs

 Early warning is required to forecast ceiling increases so NPFC can estimate time to 

Fund depletion by tracking burn rates for each activity

NOTE: Regardless of whether the RP or the FOSC directs the response, government 

personnel, and equipment used in the response are considered a billable resource.

ANALYZING AND MONITORING POTENTIAL DAMAGE CLAIMS COSTS

 Typically, claims are presented long after removal is over. Claims must be first submitted 

to the RP. If the RP denies responsibility, or if 90 days passes without a settlement, 

claimants can submit the claim to the NPFC.

 Claims costs may be far greater than removal costs.

 Some key factors that drive up claims costs are:

 area and length of time for fisheries closures [National Marine Fisheries Service 

(NMFS) may make this call]

 affected traffic and length of time for shipping lane closures

 population and commercial density of affected area

 magnitude and length of time for business interruptions

 extent of impact on environmentally sensitive areas
FOSC Funding Information 8

FUNDING CONSIDERATIONS FOR NRDAS

 FLATs may request obligation of funds from NPFC for NRDA initiation. 

 Ceiling allocations and reimbursement for initiation of NRDAs are funded from the OSLTF 

Emergency Fund.

 Up-front or after-the-fact funding for assessment, restoration, and/or emergency 

restoration is available from the OSLTF through the claims process.

 Any natural resource trustee (Federal, state, or tribal) may submit claims for NRD. 

 Claims payments are based on approved plans.

 SONS presents high potential that removal costs and other claims may consume most of 

the OSLTF prior to NRD needs being met

CEILING MANAGEMENT IN THE EVENT OF MULTIPLE INCIDENTS

 Two or more major spills (non-SONS) may deplete the Emergency Fund.

 The Emergency Fund apportionment of $50 million per annum occurs at the start of each 

fiscal year. The Fund is drawn down for the rest of the year and could be substantially 

depleted by late in the fiscal year.

 Starting in FY 2003, advancements of up to $100 million are available.

OSLTF EMERGENCY FUND ADVANCEMENT AUTHORITY

 May supplement the Emergency Fund – The Coast Guard was recently given 

authority to advance up to $100 million from the OSLTF to supplement Emergency Fund 

shortfalls.

 Notification – The Coast Guard must notify Congress within 30 days after an advance 

as to the amount advanced and the facts and circumstances necessitating the advance.

 Impact on Responses – This advancement authority does not provide for any new or 

different uses of the Emergency Fund for Federal response, but may help the Coast 

Guard ensure funds will be available for Federal response when needed and are not 

delayed when a costly response threatens the balance of the Emergency Fund.

FUNDING CONSIDERATIONS FOR MULTIPLE RP INCIDENTS

 Spill size alone does not determine the impact on the Fund. The RP’s LOL, assets, and 

responsiveness are equally important.

 FOSCs must segregate all costs among incidents.

 Portions of discharged oil from multiple incidents could eventually co-mingle. RPs may 

need to decide how to pay claims resulting from the co-mingled oil, usually after removal 

operations cease.

FUNDING CONSIDERATIONS FOR MIXED OIL AND CERCLA INCIDENTS

 Presence of hazardous substances may create a mixed spill [co-mingled oil and 

hazardous substance(s)] or constitute a single response.
FOSC Funding Information 9

 A co-mingling scenario will generally be a Superfund response, although EPA and the 

USCG have not established a precise definition to distinguish between the two types of 

responses.

 A mixed site scenario requires that all costs be assigned to separate records for OSLTF 

or CERCLA cases. The FOSC must have both an FPN (Federal Project Number) for the 

OSLTF-funded removal actions and a CPN (CERCLA Project Number) for the hazardous 

substance response actions. 

NOTE: FPN/CPN generated by CANAPS

 When substances are not mixed, a single incident may also include a response that falls 

under OSLTF and CERCLA.

 The NPFC cannot pay claims for uncompensated removal costs or damages arising 

from a release of a hazardous substance.

VI. CLAIMS PROCESS

WHAT CLAIMS ARE COMPENSABLE

 uncompensated removal costs

 loss of profits or earning capacity

 net loss of Federal, state, or local government revenues

 net costs to state or local governments for increased public services

 loss of subsistence use of natural resources

 damages to real or personal property

 natural resource damages 

RP’S ROLE

 The RP and guarantor will receive a Notice of Designation (NOD). The RP has five days 

to deny designation.

 If the RP does not deny the designation, they have 15 days to respond by advertising 

their designation and the procedures for submitting claims.

 The RP, if fully responsive to the requirements in OPA, will assume the entirety of claims 

responsibilities: advertising, receipt, adjudication, and payment of claims. The NPFC will 

monitor closely to assure compliance.

 Claimants (other than states submitting claims for uncompensated removal costs) must 

first present their claims to the RP or the RP’s guarantor.

 State removal cost claims are permitted to go directly to the NPFC.

 A claimant can elect to commence action in court against the RP or present the claim to 

the NPFC if the RP does not settle a claim within 90 days after filing.
FOSC Funding Information 10

NPFC’S ROLE IF RP DENIES DESIGNATION OR IS UNKNOWN

 The NPFC, if assuming claims responsibility, will arrange for advertising, receipt, 

adjudication, and payment of claims.

 The NPFC will assume claims responsibility if the RP denies designation; if the RP’s 

claims response does not comply with OPA; or if the RP cannot be identified.

 The NPFC also accepts claims when the claimant has presented a claim to the RP and 

the RP does not settle it within 90 days of presentment.

NEED FOR ON-SITE CLAIMS OFFICE

For a major spill, either the RP or the NPFC may establish one or more claims offices in the 

area of greatest impact.

REQUIREMENT TO PAY INTERIM CLAIMS

 Either the RP or the NPFC can pay interim claims with appropriate documentation.

 An interim payment does not limit a claimant’s right to claim for other damages not paid 

or addressed under the interim claim.

IMPORTANCE OF ADDRESSING CLAIMS ISSUES IN PRESS RELEASES

 Damaged parties are major public affairs clients.

 NPFC will provide information to help the Joint Information Center (JIC) educate the 

public. This may be a copy of the RP’s advertisement and explanation of the RP’s claims 

process and/or copies of the NPFC Claimant’s Guide and phone numbers.

 Claims will be paid more quickly if the public knows the procedures. The need for good 

documentation by the claimant is especially important and is something that should be 

stressed in press releases.

VII. NATURAL RESOURCE DAMAGES

DEFINITION

“Natural resources” includes land, fish, wildlife, air, water, ground water, surface water, and 

other such resources belonging to, managed by, held in trust by, pertaining to, or otherwise 

controlled by the United States [including Exclusive Economic Zone (EEZ) resources], any 

state or local government or Indian tribe, or any foreign government.

WHO ARE THE NATURAL RESOURCE TRUSTEES

FEDERAL

 Department of Agriculture

 Department of Commerce

 Department of Defense

 Department of Energy

 Department of the Interior
FOSC Funding Information 11

STATE

State trustees are any state agency designated by the state’s Governor to serve as the 

natural resource trustee.

TRIBAL

Tribal trustees are federally recognized tribes that have governmental authority over lands. 

This does not include Alaska native regional or village corporations.

ROLE OF TRUSTEES IN THE FUNDING PROCESS

 Trustees must coordinate with each other during all phases of NRDA to ensure no double 

recovery of damages.

 In the pre-assessment phase of a NRDA, all affected trustees must select a Federal Lead 

Administrative Trustee (FLAT), who is then responsible for coordinating the effort and 

submitting necessary paperwork to NPFC.

 Trustees assess damages for “injury to, destruction of, loss of, or loss of use of” natural 

resources.

 Trustees develop restoration alternatives to address any injury to natural resources, from 

which they select the most appropriate alternative to implement.

 Trustees must also coordinate with the FOSC during the NRDA process to avoid 

interference with the ongoing response.

COMPENSABLE NATURAL RESOURCE DAMAGES

 Costs to restore, rehabilitate, replace, or acquire the equivalent of the injured resource

 Any interim loss of use or diminution in value of the injured resource pending restoration

 The reasonable cost of assessing NRD damages

COORDINATION FOR NRD WITH THE RESPONSIBLE PARTY

 The RP has primary responsibility to pay all of the costs/damages listed in previous 

sections.

 The trustees are encouraged, but are not required, to first seek Initiate funding from the 

RP for pre-assessment activities.

 Trustees must first present claims to the RP or the RP’s guarantor. If the RP is not 

responsive and/or refuses to pay, trustees can come to the Fund for relief.

 If the RP does not settle a claim within 90 days after filing, a claimant can elect to 

commence action in court against the RP or present the claim to the NPFC.

NRD CLAIMS PROCESS – ROLE OF OSLTF/NPFC IF RP DOESN’T PAY 

 If the NPFC assumes claims responsibility, then NPFC will arrange for receipt, 

adjudication, and payment of claims. 

 A contractor may be hired to analyze the supporting information submitted by the 

claimants.
FOSC Funding Information 12

NRD IMPACT ON THE LIFE CYCLE COST OF SPILL

 Natural resource damage costs can become substantial.

 Damages in environmentally sensitive areas (e.g., wetlands) may be very costly. Many 

variables figure into the overall cost, including the nature of the product spilled, duration 

of spill, time of year, response-related conditions, etc.

 Costs may not be known or estimable for months or years after the response is complete.

VIII. CERCLA / WEAPONS OF MASS DESTRUCTION

COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY 

ACT (CERCLA) FUND USE CRITERIA

 The spilled substance must be a hazardous substance, pollutant, or contaminant.

 The substance cannot

 The substance must impact land, water, or air in U.S. states, territories, possessions, and 

the EEZ.

be oil; if oil is contaminated with CERCLA substances, then it is a 

CERCLA substance (e.g., oil contaminated with PCBs).

 The substance must pose an imminent and substantial threat to public health or welfare.

 Immediate emergency response is necessary. 

 CERCLA allows the FOSC to pre-position response assets, such as the Strike Teams, 

when there is potential for an incident involving a vessel offshore.

 CERCLA allows Coast Guard and EPA FOSCs response flexibility in dealing with threats 

of an unknown nature (e.g., an anthrax response).

LEGAL/REGULATORY FRAMEWORK FOR RESPONSE

 The Commanding Officer of the Marine Safety Office (MSO) is the pre-designated FOSC 

and is in charge of the response.

 CERCLA, as amended, is the statutory basis for response.

 Response operations must comply with the NCP.

NON-COAST GUARD PARTICIPANTS

 The funding process for the OSLTF and CERCLA, from the FOSC perspective, is the 

same. When the FOSC accesses the Superfund for response, the full resources of the 

NCP are at his/her disposal.

 The FOSC can hire contractors through BOA agreements or new contracts.

 The FOSC, as with oil spills, can provide funding to Federal, state, and local government 

responders through incident-specific PRFAs.

 For CERCLA cases, costs are tracked and RPs are billed for those costs. CERCLA does 

not, however, have the same claims provisions as OPA. Generally, CERCLA does not 

pay claims filed by injured third parties who must pursue damages through the courts.
FOSC Funding Information 13

IX. STAFFORD ACT / FEMA

STAFFORD ACT FUND USE CRITERIA

 There must be a Presidential Declaration of Disaster (natural or other).

 The affected state that has requested assistance will contribute matching funds.

 FEMA has to issue a Mission Assignment (MA) to the Coast Guard identifying the work to 

be done and authorizing spending.

 Use of Stafford Act funds differs from typical pollution response. States are expected to 

deal with most problems, and the Federal government only becomes involved when state 

resources are not sufficient for the disaster response. 

 Stafford Act responses can be geographically limited (e.g., certain counties in a state).

LEGAL/REGULATORY FRAMEWORK FOR RESPONSE

 When the President issues a Disaster Declaration, FEMA establishes a senior official as 

the Federal Coordinating Officer (FCO). The FCO determines which parts of the Federal 

Response Plan (FRP)- will be activated and which actions the Federal government will 

support.

 The FCO is paired with a state counterpart, the State Coordinating Officer (SCO), and the 

two, working together, oversee the combined state/Federal response.

 The SCO also must approve all Mission Assignments, since the state normally must 

provide matching resources or funds (10% - 25%) for every Stafford Act dollar spent.

 Under certain circumstances, the Presidential Declaration may waive the matching fund 

(State Match) requirement. (e.g., this was done for the World Trade Center and the 

Shuttle Columbia responses).

NON-COAST GUARD PARTICIPANTS

 The funding process for Stafford Act Pollution Response (ESF-10), from the FOSC 

perspective is similar but not identical to oil or hazardous materials responses.

 Coast Guard Stafford Act responses must have an approved FEMA Mission Assignment 

(MA) in place or the Coast Guard cannot seek reimbursement after the response is 

completed. The FEMA MA defines what is to be done, where, and sets a spending limit.

 When the FOSC utilizes Stafford Act Funds, most of the resources of the NCP are at 

his/her disposal, including contractors and other Federal agencies (but not state or local 

agencies).

 The FOSC can hire contractors through BOA Agreements.

 The FOSC can provide funding to Federal government responders through incidentspecific PRFAs (but not state or local agencies).

 The Stafford Act provides separate and distinct claims procedures for Third Party claims 

within its overall disaster response system in the FRP.
FOSC Funding Information 14

X. TERRORISM AND FEDERAL RESPONSE AUTHORITY

 Whether terrorism or any other criminal act is the cause of an oil spill does not affect the 

President’s authority to respond to the spill or use the OSLTF Emergency Fund in that 

response, nor does not affect the applicability of the OPA Title I liability and compensation 

regime. The OSLTF is available to pay if the responsible party does not pay removal cost 

and damages claims.

 Terrorism or other criminal acts that cause an oil spill MAY present a liability defense. 

Such acts that cause a spill may give rise to a defense from OPA liability for responsible 

parties (e.g., owners or operators of vessels) if certain defense criteria are met. Whether a 

defense may apply often requires a fact-intensive analysis and often cannot be resolved 

until the circumstances of the spill have been fully investigated.
FOSC Funding Information 15

ADDITIONAL REFERENCES

Available via http://www.uscg.mil/hq/npfc

 NPFC User Reference Guide – available on CD-ROM

 Interim Claims Regulation

 Claimant Guide 

 Supplemental Claims Guidance

 Natural Resource Damage Funding Guidelines

 Technical Operating Procedures

 Resource Documentation

 Removal Cost (Oil)

 Removal Cost (CERCLA)

 Designation of Source
FOSC Funding Information 16

ACRONYM LIST

BOA Basic Ordering Agreement

CANAPS Ceiling and Number Assignment Processing System

CERCLA Comprehensive Environmental Response, Compensation, and Liability Act

CGMS Coast Guard Messaging System

COFR Certificate of Financial Responsibility

CPN CERCLA Project Number

EEZ Exclusive Economic Zone

EPA U.S. Environmental Protection Agency

ESF-10 Emergency Support Function #10 (Hazardous Materials Annex – Federal Response Plan)

FCO Federal Coordinating Officer

FEMA Federal Emergency Management Agency

FLAT Federal Lead Administrative Trustee

FOSC Federal On-Scene Coordinator

FPN Federal Project Number

FRP Federal Response Plan

FWPCA Federal Water Pollution Control Act

IC Incident Commander

ICS Incident Command System

JIC Joint Information Center

KO Contracting Officer

LOL Limit of Liability

MA Mission Assignment

MLC Maintenance and Logistic Command 

MSO Marine Safety Office (USCG)

NCP National Contingency Plan

NMFS National Marine Fisheries Service

NPFC National Pollution Funds Center

NOD Notice of Designation

NRD Natural Resource Damage

NRDA Natural Resource Damage Assessment

OGA Other Government Agency (ies)

OPA Oil Pollution Act 

OSLTF Oil Spill Liability Trust Fund (the Fund)

OSRO Oil Spill Response Organization

P & I Protection and Indemnity Insurance

PCB Polychlorinated biphenyls

PRFA Pollution Removal Funding Authorization

POLREPS Pollution Reports

RP Responsible Party

SCO State Coordinating Officer

SOSC State On-Scene Coordinator

SONS Spill of National Significance

UC Unified Commander

UCS Unified Command System

USCG United States Coast Guard