440 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

15 CFR Part 990

[950718181–5276–02]

RIN 0648–AE13

Natural Resource Damage

Assessments

AGENCY: National Oceanic and

Atmospheric Administration (NOAA),

Commerce.

ACTION: Final rule.

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 EastWest 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, costeffective, 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
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 441

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 costeffective 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
442 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

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-toresource 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 costeffective 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
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 443

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 § 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
444 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

requirements for acceptable assessment

procedures provided in § 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 § 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 preincident 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-byincident 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.
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 445

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 NEPAequivalent requirements, the trustees

may still find the procedural planning

process as defined under NEPA (or

SEPA) useful in facilitating restoration.

The provisions of § 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

§§ 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
446 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

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 OnScene Coordinator (OSC) before taking

any emergency restoration actions. Any

emergency restoration actions proposed

by trustees should not interfere with ongoing 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 § 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,
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 447

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
448 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

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, outof-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
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 449

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 § 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
450 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

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. Predecisional, 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 § 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 sitespecific 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
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 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 fisheating 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, fisheating 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 ‘‘acreyears’’ 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
452 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

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

§ 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
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 453

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 resupplied. The approaches that may be

used to assess the appropriate scale of

a restoration action to compensate for

public losses include resource-toresource 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-toService 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-toservice 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

§ 990.27 of the rule. Where the

circumstances are such that a sitespecific 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 § 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 § 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 riskadjusted 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
454 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

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 longrun 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 tradeoffs 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
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 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

§§ 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
456 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

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

§ 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 § 990.63 of the rule.

When the trustees use a Regional

Restoration Plan, as provided in

§ 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 § 990.30 of the rule and

discounted as provided in § 990.63(b) of

the rule; the cost, if any, of conducting

emergency restoration under § 990.26 of

the rule, discounted as provided in

§ 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 postjudgment 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 postimplementation 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 multiyear 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
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 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 interestbearing, 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.
458 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

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 agreedupon 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 stilldeveloping 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
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 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 § 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 § 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
460 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

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 § 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

§ 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 § 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 noncoordinating 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 coLATs 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
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 461

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 costeffective 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
462 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

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 precondition 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

outreach efforts should be explicitly

included in recoverable assessment

costs or trustees will be unable to

comply with these requirements.

Another commenter stated that trustees

should be required to give notice to the

responsible party regarding the stages at

which opportunities for public

involvement will be provided. One

commenter, however, stated that the

rule should expand the provisions for

public involvement and allow such

involvement in several stages of the

process.

Response: Public involvement is

required by OPA in development of

restoration plans. NOAA considers that

this requirement will be fulfilled by

allowing, at a minimum, opportunities

for public involvement in development

of draft and final restoration plans that

will form the basis of any claim for

damages. However, NOAA notes that it

may be advantageous or necessary to

seek broader public input, depending on

the circumstances of a particular

incident, particularly when that input

can be obtained from members of the

public that may have particular

expertise concerning the affected

environment or proposed assessment or

restoration approaches. NOAA is

mindful that restoration decisions made

by trustees are made on behalf of the

public, so public involvement should

augment the decisionmaking process.

Involving the public does not need to be

excessively costly if it is well-planned

and tailored to the incident. The costs

of public involvement required by OPA

are recoverable assessment costs.

Finally, as a member of the affected

public, responsible parties will be

notified when trustees seek public

input.

Section 990.15—Facilitation of

Restoration

Comment: Several commenters

expressed strong support for preincident planning, some stating that

such exercises should be required by the

rule. Some of these commenters pointed

out that the rule should encourage

involvement of response agencies,

natural resource managers, and area

industry representatives in the planning

process. The commenters also requested

that the rule clarify how these plans

might be coordinated with or included

in Area Contingency Plans or U.S. Fish

and Wildlife Service Recovery Plans

and Habitat Conservation Plans. One

commenter specifically suggested that

the rule add consideration of preincident baseline and injury datacollection procedures and protocols to

the list of possible pre-incident

planning activities. One commenter

asked for clarification as to whether preincident planning would be subject to

NEPA.

Response: NOAA has clarified the

rule to indicate that potentially

responsible parties, appropriate

response personnel, local governmental

natural resource management entities,

and local environmental groups or

representatives should be included in

any pre-incident planning. NOAA does

not believe it has the authority to

mandate pre-incident planning under

this rule, but does note that Area

Contingency Plans or U.S. Fish and

Wildlife Service Recovery Plans and

Habitat Conservation Plans may provide

an efficient focal point for structuring

pre-incident damage assessment

planning. Finally, NOAA does not

believe that pre-incident planning is

subject to NEPA, except where Regional

Restoration Plans serve as, or become

part of, a programmatic Environmental

Impact Statement process.

Comment: One commenter supported

further development of Regional

Restoration Plans with extensive federal

and state natural resource agency

coordination. The commenter noted,

however, that funding for such planning

activities is in question and asked for

any information on available funding

sources for such plans, other than

recovered damages.

Response: NOAA believes that

activities such as identifying planned,

proposed, or desired environmental

restoration projects, particularly for

areas expected to be injured often or

severely by incidents, can provide a

highly cost-effective means to identify

appropriate restoration alternatives for

particular incidents. NOAA suggests

that development of these project

databases can be a useful addition to

pre-incident planning activities.

Funding for these activities may come

from a variety of sources such as joint

funding by trustees and those parties

potentially liable under OPA for

restoration. Regional restoration

planning in some areas is already being

performed pursuant to other authorities,

such as the National Estuary Program

Plans.

Section 990.16—Review of Rule

Comment: Some commenters

expressed support for NOAA’s

commitment to review and revise this

rule every five years, especially with the

need to keep the OPA rule consistent

with the CERCLA rule, which is

reviewed every two years.

Response: NOAA has determined that

the specific five-year review provision is

unnecessary. NOAA is committed to

maintaining the accuracy and relevance

of the assessment process described in

the rule and will make every effort to

keep it current.

Subpart B

Section 990.20—Relation to CERCLA

Rules

Comment: Several commenters spoke

of the need for consistency between the

OPA and CERCLA rules, with one

reviewer stating that the proposed OPA

rule does not seem to be coordinated

with the CERCLA rule. Another

commenter asked, given that the OPA

rule is substantially different from the

CERCLA rule, whether DOI will

incorporate OPA rule changes into its

regulation so that it is effective for

incidents inland and in the Great Lakes

areas, or whether trustees and

responsible parties have to operate

within two separate processes. Another

commenter suggested that the OPA rule

is confusing in its discussion about

where the OPA rule will supersede 43

CFR part 11.

Response: The Department of the

Interior participated in the interagency

working group that drafted and

reviewed the OPA rule. Thus, NOAA

and DOI took advantage of the

experience gained in applying the

CERCLA rules. The rule was also

formulated in recognition of the

differences between oil and hazardous

substances, and the different nature of
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 463

the incidents involving these two types

of products. NOAA has referred

questions regarding incorporation of

OPA rule provisions into the CERCLA

rule to DOI. However, it should be noted

that the OPA rule does apply to

incidents in all navigable waters, which

would include inland incidents and

incidents in the Great Lakes. NOAA has

clarified the rule to incorporate

statutory language regarding where the

OPA rule supersedes 43 CFR part 11.

Comment: One commenter questioned

whether coal tar and other coal-derived

chemicals are more appropriately

classified as hazardous substances, and

covered by CERCLA rule, rather than

the OPA rule.

Response: NOAA notes that whether

coal tar and other coal-related chemicals

are oils or hazardous substances is an

on-going issue that is being evaluated by

the federal agencies implementing OPA.

Section 990.22—Prohibition on Double

Recovery

Comment: One commenter suggested

that requiring consideration of

independent actions of other trustees

may not be possible if trustees are acting

separately rather than together.

Response: Trustees must diligently

avoid double recovery of damages. In

NOAA’s experience, the identity of

other trustees with interests in incidents

has always been ascertainable early in

the process, thus facilitating efforts to

coordinate assessment objectives and

activities.

Section 990.23—Compliance With

NEPA and the CEQ Regulations

Comment: Some commenters noted

that rigid compliance with NEPA notice

requirements may not be desirable or

necessary for incidents involving nonfederal trustees, and that these notice

activities should be optional at trustees’

discretion. The commenters also

suggested the rule should explicitly

state that the provisions of the rule

fulfill the public notice requirements of

NEPA, even without providing the

Notice of Intent to Conduct Restoration

Planning.

Response: The rule has been amended

to indicate that NEPA compliance is

solely a federal trustee requirement, and

that the procedures entailed in

compliance will vary depending on the

identity of federal trustees involved and

their regulations governing their own

NEPA conduct. The notice requirements

contained in various sections of the

final rule are not related solely to NEPA

compliance, but are important elements

to facilitate the open and cooperative

process envisioned in this rule and

OPA.

Section 990.25—Settlement

Comment: Some commenters were

concerned that the U.S. Department of

Justice (DOJ) will impede settlements,

that state trustees can restore natural

resources in a more efficient manner

through administrative agreements, and

that the rule should provide guidance

for the scope and timing of DOJ

participation. One of these commenters

suggested that DOJ taking 3% of

settlement sums for participation is

unwarranted and, perhaps, an improper

use of restoration money.

Response: Except where explicitly

provided by statute, only the

Department of Justice has the authority

to compromise claims of the United

States. One of these exceptions,

applicable to some federal trustees

operating under OPA, is a provision

allowing executive agencies to

compromise claims within their

authority when such claims do not

exceed $100,000, or such other amounts

as the Attorney General may from time

to time prescribe (33 U.S.C. 3711). The

Department of Justice plays a vital role

in ensuring that the laws of the United

States are applied similarly by different

federal agencies. The costs to the

Department of Justice of collecting

recoveries for claims of the United

States in civil litigation, as authorized

by H.R. 2519 (November 16, 1993),

should be included in the estimated

costs of the assessment so that

restoration money is not impacted.

Comment: Several commenters

disagreed with the rule’s provisions

concerning terms of settlements. One

commenter argued that the decision to

accept such a settlement should be

within the discretion of a trustee, so

long as it is reasonable and justified.

Some commenters stated that this

provision could be read as establishing

substantive standards to govern

adequacy of a settlement, which would

be inappropriate and outside NOAA’s

authority. Several of these commenters

suggested that the rule simply provide

that settlement sums may only be

expended in accordance with a

restoration plan that is made available

for public review.

Response: NOAA has revised the

settlement provision, now § 900.25, to

reflect the standard of review that

federal courts have used in reviewing

natural resource damage assessment

settlements under other laws, and

settlements by federal agencies in

general. Federal courts will look

favorably upon the determination by an

agency entrusted with authority to

prosecute laws that a settlement of a

claim is in the public interest—that it is

fair, reasonable, adequate, and

consistent with the purposes of the

governing statute. With respect to OPA,

NOAA expects that a court will look to

see that a trustee has made a

determination of the adequacy of the

settlement to restore, rehabilitate,

replace, or acquire the equivalent of the

injured natural resources and services.

NOAA recognizes that in reviewing an

agency’s action in accepting a

settlement a court will also look to such

factors as litigation risk, time and

expense to litigate, and advantages to

obtaining an immediate recovery

through settlement, rather than through

litigation.

Section 990.26—Emergency Restoration

Comment: One commenter argued

that the On-Scene Coordinator (OSC)

must authorize emergency restoration

and that trustees act in a consultative

role during the removal phase. Another

commenter suggested that any

emergency restoration action had to be

tied into the National Response System

to alleviate any potential contradictory

actions or interference with the OSC’s

actions. One commenter suggested that

trustees do not have independent

authority to act or intervene in response

activities during that phase. This same

commenter noted, however, that the

requirement that responsible parties and

the public be notified of emergency

restoration actions, with the responsible

parties additionally being invited to

participate, will tend to foster

cooperation and trust. Another

commenter asserted responsible parties

should be invited to participate at first

notice of an emergency, not within a

‘‘reasonable time frame.’’ Several

commenters supported allowing

responsible parties to implement

emergency restoration. Another

commenter suggested that notice to the

public or responsible parties should be

discretionary due to the time-sensitive

nature of such actions.

Response: NOAA fully agrees that any

actions conducted during the response

phase should not interfere with nor be

independent of the OSC’s activity. The

rule is clear that the OSC must be

notified prior to implementation of

emergency restoration actions by

trustees, and that emergency restoration

may not interfere with response actions.

Further, the rule requires that any

emergency restoration actions must be

coordinated through the trustee

Regional Response Team (RRT) member

or designee, since the RRT is a part of

the National Response System, and that

this member must work through the

OSC to ensure adequate coordination. In

addition, the National Oil and
464 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

Hazardous Substances Pollution

Contingency Plan (NCP), 40 CFR part

300, is clear on the types of and

procedures for coordination between the

trustees and the OSC, who retains

overall responsibility for activities

during response. However, only

trustees, not response entities, have the

authority to assess injuries and collect

restoration costs under OPA. NOAA has

clarified the rule to indicate that known

responsible parties must be notified and

invited to participate in emergency

restoration actions, to the extent time

permits. Notice to the public is provided

to the public, to the extent practicable,

of these planned emergency restoration

actions.

Comment: Another commenter noted

that the requirement that emergency

restoration costs should not be

unreasonable appears to appropriately

suggest that trustees must affirmatively

demonstrate the reasonableness of such

costs, without any entitlement to the

rebuttable presumption.

Response: If trustees responsibly

make a determination that emergency

restoration is needed to prevent or

minimize natural resource injury, that

the action is feasible and likely to

succeed, and that the costs of such

action are not on their face excessive

compared to the expected benefits in

limiting injury, then emergency

restoration actions and costs are

reasonable, and entitled to a rebuttable

presumption.

Comment: Another commenter

questioned whether there are any

exclusions for liability for damages

resulting from any additional injuries

caused by the emergency restoration or

response actions.

Response: Liability for natural

resource damages extends to injuries

that result from reasonable and

necessary response and emergency

restoration actions taken in response to

an actual or threatened discharge of oil.

Section 990.27—Use of Assessment

Procedures

Criteria for Selecting Assessment

Procedures—General

Comment: One commenter noted that

the greater flexibility in assessment

procedures provided by the proposed

rule is likely to result in greater

likelihood of litigation. Another

commenter suggested that such

flexibility may result in trustees

applying numerous procedures,

charging the responsible party with

these costs, then basing their claim on

the procedures that yield the highest

damage figure. Another commenter

stated that the trustees should be

required to document the decision as to

why a particular assessment procedure

was chosen.

Other commenters, however, agreed

with the rule listing criteria that

assessment procedures should meet,

rather than specifying acceptable

procedures themselves. Some

commenters suggested that trustees

must be provided flexibility to select the

most efficient procedure to assess

injuries, based upon factors such as

reasonable cost, validity, reliability, and

incident-specific considerations,

however, one of these commenters

suggested that the rule should simply

require that procedures be reliable,

valid, and cost-effective as minimum

criteria and that other incident-specific

factors should be considered in

selection of procedures.

Response: In eliminating categories of

assessment procedures, and providing

instead a list of standards to guide

selection of the most appropriate

assessment procedure for the injury and

incident at hand, the rule will make

assessments less rigid and more costeffective, and NOAA expects this will

reduce litigation by fostering

cooperative settlements. The rule

expressly prohibits the approach

suggested by the commenter in which

trustees may apply a suite of procedures

to produce the highest damages

estimate, and charge for all of the

procedures used. This approach would

clearly violate provisions of § 990.27

and the definition of reasonable

assessment costs. Finally, standards for

selecting assessment procedures, and

the types of assessment procedures

available, are now included in § 990.27.

Comment: Most commenters

applauded the approach taken in

subpart E of the proposed rule to

provide generic standards for possible

assessment procedures, given the

universe of procedures available and

possible injuries likely to result from

incidents. However, several commenters

were concerned that some of the

proposed criteria might be mutually

exclusive and difficult to meet for all

incidents. For instance, one commenter

noted that procedures that meet the

criterion that procedures must provide

information useful in determining and

quantifying restoration needs, might not

be the most cost-effective procedures.

The commenter also noted that

procedures that provide information

required for restoration determinations

may entail additional costs with no

assessment benefit, violating the

requirement for consideration of cost.

Some commenters suggested that none

of these criteria be mandatory, or that

only the ‘‘cost-effectiveness’’ and ‘‘valid

and reliable’’ criteria might be

appropriately mandatory.

Response: The standards for

acceptable procedures were moved from

subpart E of the proposed rule into a

new section, § 990.27, to emphasize that

these standards apply to any and all

procedures used in performing

assessments under this rule. Procedures

must meet the standards in order to be

deemed part of an assessment in

accordance with this rule. The concerns

that one standard may be contrary to

another have been resolved. The

standards now provided in § 990.27

must all be met, but the criterion

concerning restoration information has

been changed to a recommendation,

rather than a requirement, in

recognition that procedures that provide

information useful in restoration scaling

are not always available, nor are they

always cost-effective.

Comment: Some commenters were

concerned that the criteria requiring

cost-effectiveness and weighing benefits

of a procedure against its costs might be

interpreted to require strict cost-benefit

analyses of all possible procedures,

inappropriately diverting trustee efforts

from assessment work, and needlessly

driving up costs. A few other

commenters suggested that strict costbenefit analyses should be required.

One commenter suggested that the

balance should more appropriately

weigh expected assessment costs against

overall expected damages, because

assessment costs cannot be

meaningfully scrutinized relative to

expected informational benefits from an

assessment procedure.

Response: The various standards for

procedures were never intended to

require a strict cost-benefit analysis. The

rule language has been revised to

indicate that additional costs of more

complex procedures must be reasonably

related to the expected increase in

information provided by those

procedures. The standards are intended

to guide trustees in selecting individual

assessment procedures and discourage

trustees from using procedures that do

not provide information beneficial for

restoration planning purposes.

Comment: Some commenters

suggested that the terms ‘‘reliable’’ and

‘‘valid’’ should be expressly defined.

Various definitions were offered by the

commenters.

Response: The technical definitions of

the terms ‘‘reliable’’ and ‘‘valid’’ vary in

usages of the terms across various

disciplines. In general, under this rule,

these terms refer to technical judgments

by experts in a particular field that a

procedure is consistent with best

technical practices for the measure
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 465

being investigated under the

circumstances.

Specific Procedures

Comment: Many of the commenters’

discussion on assessment procedures

focused on how specific procedures

might relate to the standards provided

in the rule. Some commenters were

concerned that the listing of procedures

in the appendix to the preamble might

be interpreted as an endorsement of

those procedures. The commenters

requested that the rule state that

procedures that do not meet the criteria

are not entitled to the rebuttable

presumption. The commenters noted

that, if specific procedures are listed in

the preamble, NOAA has a duty to

provide additional standards relating to

the use of such procedures, either in the

rule or in guidance documents. Other

commenters stated that the rule should

clarify that reliable and valid

procedures are not limited to those

specifically listed in the preamble and

should not necessarily be excluded from

use under the rule.

Response: Assessment procedures

must meet the standards in the rule in

order to be deemed part of an

assessment conducted in accordance

with this rule. No explicit or implicit

endorsement, nor lack of endorsement,

is intended to be given to the specific

identification or omission of any

particular procedure in either the

preamble or rule. It is not feasible for

the rule to identify all acceptable

procedures, nor the acceptable

applications of those procedures, for all

possible circumstances of all incidents.

Procedures and their applications must

be evaluated on a case-by-case basis.

Comment: A number of commenters

stated that NOAA should not establish

requirements for use of procedures and

strongly supported NOAA’s decision to

remove specific guidance on the

application of certain procedures (e.g.,

contingent valuation, benefits transfer).

The commenters suggested that

discussion on how to apply specific

procedures should be placed in

guidance documents. One commenter

suggested that the rule should allow

trustees to use any criteria that are

generally accepted by the scientific

community. One commenter stated that

the four criteria listed in the rule are

still insufficient, and could be

strengthened by distilling the most

important guidelines in the guidance

documents into rule language so that

they will be binding upon trustees.

Response: NOAA believes that

discussion on the appropriateness and

use of specific assessment procedures is

more suited to guidance documents.

The commenters should refer to these

guidance documents as well as the

literature for support along this line.

Comment: Another commenter asked

that the rule clarify that trustees may

use models or extrapolate from

literature when it is more appropriate

and cost-effective than gathering sitespecific data.

Response: The rule, in § 990.27,

provides that such procedures as

models or literature extrapolation that

meet the standards for acceptable

procedures are available for use in

accordance with the rule.

Option of Responsible Party to Request

Alternative Procedures

Comment: Some commenters argued

that trustees should be required to use

an incident-specific procedure when the

conditions in the rule are met. However,

the commenters stated that the

conditions currently in the rule are

contrary to OPA because they force the

responsible party to waive the right to

challenge the reasonableness of the

assessment costs. The commenters

argued that this would force responsible

parties to choose between using a

procedure that may assess non-existent

damages and waiving their statutory

right to expect reasonable assessment

costs. Another commenter noted that

the responsible party should not have to

advance the assessment costs if the

responsible party can demonstrate that

an incident-specific assessment is really

appropriate and warranted. Some

commenters also suggested that the rule

specify a time frame for the responsible

party request, such as 21 days from the

time of the incident, rather than the

ambiguous ‘‘acceptable time frame’’

currently in the rule.

One commenter pointed out that

responsible parties would want to do

expanded assessments in any case in

order to assist in the defense of third

party claims.

Some commenters noted that detailed

field studies may be expensive and in

those instances where the likelihood of

injury is so high as to not require

extensive study, trustees and

responsible parties may agree that nonfield-based procedures may be used.

Other commenters argued that the

ultimate decision on assessment

procedures should always be left to the

trustees. The commenters suggested

that, if trustees determine that

procedures selected by a responsible

party are technically unsound or would

inadequately address natural resource

injuries, then the trustees should have

the ability to modify or reject the

request. Some commenters also noted

that the rule should be clarified to state

that the responsible party must advance

the trustee’s estimate of the costs of

conducting the incident-specific

assessment.

Response: The final rule has clarified,

in § 990.14(c), the conditions for the

responsible party option to request a

different procedure than that selected by

the trustees. The option will be

provided to responsible parties who

have accepted the trustees’ invitation to

participate in an assessment, and who

are doing so cooperatively. Alternative

procedures proposed by the responsible

party must meet the standards for

acceptable procedures provided in

§ 990.27. The rule allows trustees to

reject the responsible party’s request if

the alternate procedure, in the judgment

of trustees, is not technically feasible,

not technically or scientifically sound,

and could not be completed within a

reasonable time frame. Because

participating responsible parties will

have already been afforded opportunity

to review and comment on proposed

procedures that trustees have selected in

accordance with § 990.27, the

responsible party option is really a

mechanism to resolve disputes between

trustees and responsible parties as to the

most appropriate procedure for the

injury and incident at hand.

Responsible parties should be willing to

fund alternative procedures they feel

strongly about, given that trustees will

have already made a determination that

other procedures are appropriate, and

they should agree not to challenge the

results of procedures that they request

be used. The rule has removed the

requirement that responsible parties

agree not to challenge the costs of those

requested procedures.

Simplified Procedures—General

Comment: Several commenters raised

objections to the use of simplified

assessment procedures. Several

commenters argued that all existing

simplified procedures, federal and state,

are flawed and unreliable. The

commenters argued that these

procedures should not be used without

any field verification. Several of these

commenters stated that any procedure

that generates average values is by

definition not incident-specific as

required by OPA, basic requirements for

proof of injury and causation in tort,

and recent case law on causation

requirements.

Several commenters argued that there

are strong statutory arguments against

simplified procedures under OPA. Some

of these commenters stated that the

wording of the various sections of OPA

that set forth the natural resource

damage provisions and describe liability
466 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

under OPA all explicitly speak to direct

impacts ‘‘resulting from’’ a particular

incident, not some speculative concept

of what might have resulted from the

incident. The commenters cite section

1002(b)(2)(A) of OPA (33 U.S.C.

2706(b)(2)(A)), ‘‘damages . . . that result

from such incident,’’ and section

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

calling for rules to assess damages

‘‘resulting from the discharge of oil.’’

These commenters also noted legislative

history associated with these provisions

in OPA. A House Committee Report (H.

Rep. No. 241, Part 1, 101st Cong., 1st

Sess. at 34(Sept. 13, 1989)) is quoted

supporting recovery for ‘‘the natural

resources that were injured.’’ Also

quoted was the Committee of

Conference Report (H.R. (Conf.) Rep.

No. 101–653, 101st Cong., 2d Sess.

(1990) at 103) which refers to damages

‘‘resulting from an incident.’’ These

commenters also argued that Congress

rejected simplified procedures under

OPA because an early draft of a Senate

bill (S. 686, 101st Cong., 1st Sess.,

§ 102(d)(3)(A)(1989)) calling for

simplified assessments was not

incorporated into the final bill. The

commenters stated that Congress could

have adopted the type A model, which

was in existence during the

development of OPA, but didn’t. In fact,

the commenters noted that the

Conference Report (at 109) explicitly

states that the OPA rule, not the

CERCLA rule, which contains the type

A model, would apply to assessments

under OPA.

Some commenters referred to the

procedures and requirements

promulgated by the U.S. Department of

Transportation concerning claims

against the Oil Spill Liability Trust

Fund (57 FR 36314 (Aug. 12, 1992)) and

suggested that such a claim would be

rejected if based upon simplified

procedures because such claims would

not be based upon evidence of damages.

These commenters argued that trustees

must show evidence of actual exposure

and actual injury at all levels of

biological organization, not use models

or literature to extrapolate upon

evidence of exposure of some natural

resources or lower-level biota to predict

indirect exposure and a pathway to

other, higher-level, biota. The

commenters argued that models and

literature-based procedures are

unreliable and tend to overstate injury

and cannot take into account the various

incident-specific factors that affect the

outcome of incidents.

Several commenters argued that these

procedures may result in double

recoveries for the same natural

resources when one or more trustees

and private claimants make claims

based on the same natural resources,

with a few commenters suggesting that

these procedures promote

uncoordinated actions by trustees.

Some commenters stated that

simplified assessment procedures,

including models, need to incorporate

uncertainty by, perhaps, giving a range

of possible results rather than one

definitive answer. Other commenters

requested that any and all simplified

procedures that might be included in

the rule should be final procedures,

submitted for public and industry

review. Some commenters requested

that the rule should provide sufficient

standards and guidelines for the use of

simplified procedures, including

threshold levels for the use of those

approaches.

One commenter suggested an

alternative to the simplified procedures

listed in the rule. The commenter

suggested that NOAA should develop a

decision tree-based simplified

procedure that would enable trustees to

collect limited field samples and/or

make minimal field observations and

then, based on a process outlined in the

rule, make a determination in

cooperation with the responsible party

of what, if any, restoration alternatives

should be pursued.

Other commenters stated that NOAA

has unquestionable statutory authority

to promulgate rules that include models

and formulas. The commenters argued

that the legislative history of OPA

demonstrates Congress’s desire to

simplify assessment procedures and,

therefore, it is NOAA’s responsibility to

accurately and cost-effectively

promulgate the necessary procedures to

make the public whole for injuries it has

sustained. These commenters argued

that it would be a waste of public and

private resources to require trustees to

conduct incident-specific assessments

of injury when experience, models, and

the literature are adequate to predict

injury. The commenters pointed out that

an assessment that incorporates the

extensive preexisting body of

knowledge is reliable, valid and on solid

scientific standing.

Some commenters expressed surprise

over the depth of concern regarding the

use of the simplified assessments, since

they should reduce the costs of

determining restoration alternatives and

provide consistency to the process.

These commenters indicated that the

data and the ‘‘bugs’’ in the simplified

procedures should be the concern,

rather than the use of the procedures per

se.

The commenters stated that the

argument that computer models fail to

provide an incident-specific damage

assessment is without merit. The

commenters pointed out that modelbased assessments may not be exact, but

the same can be said for physical

sampling or any scientific process in

which averages are employed to

approximate the true conditions. The

commenters noted that computer

analysis is simply another tool to be

used in damage assessment and that, if

responsible parties are concerned that

liability for damages will be

inaccurately determined using models

or compensation formulas, they can

simply opt to have a full-scale field

research operation.

Other commenters pointed out that

the proposed rule listed only two types

of simplified procedures, which could

easily be misinterpreted to mean that

these are the only two simplified

assessment procedures usable under

this section. To correct this problem, the

commenters suggested that additional

language is needed in the rule to

provide flexibility and efficiency in the

use of simplified procedures. The

commenters requested that NOAA

expand the description of ‘‘simplified

procedures’’ by specifically referencing

other procedures such as state formulas,

or procedures such as habitat

equivalency analysis. These

commenters stated that the use of

simplified procedures is the only way to

determine restoration costs for the

thousands of small incidents that occur

annually, since trustees lack the

personnel, time and financial resources

to conduct in-depth, incident-specific

assessments for each and every incident.

Some commenters argued that, without

procedures to address the vast majority

of incidents, NOAA is failing to

implement the intent of Congress to

provide regulations that allow trustees

to efficiently, reliably, and costeffectively address the injuries to public

natural resources from incidents.

Other commenters argued that, since

most incidents are less than 1000

gallons, NOAA should make it a priority

to include in the rule a credible

simplified tool. The commenters

suggested that the lack of such a

procedure will result in a rule that does

not fully meet the intent of OPA, since,

at this time, the options listed in the

rule are not available to trustees, nor is

there any guarantee that they will ever

become available. The commenters

stated that provisions should be

included in the rule that would allow

for the development and use of other

simplified procedures. Other

commenters specifically suggested that

passive values should be incorporated

into these simplified procedures.
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 467

Response: NOAA agrees that OPA

intends that responsible parties be held

liable only for restoration needed to

redress the injuries caused by specific

incidents. NOAA does not believe that

simplified procedures, such the type A

model per se, contravene the OPA

liability limitations to actual injuries

caused by specific incidents. However,

the rule does not suggest, state, or imply

that these procedures are acceptable

procedures in all instances. Like any

assessment procedure proposed for use

under the rule, simplified procedures

must meet the criteria for acceptable

procedures listed in new § 990.27. If a

tool is not appropriate for the

circumstances of an incident, it cannot

be used and still receive a rebuttable

presumption for assessments performed

in accordance with this rule. The final

rule, however, does not explicitly

reference ‘‘simplified’’ procedures as a

distinct category of assessment

procedures, and does not identify any

particular procedure(s) as appropriate

for particular circumstances. This

determination must be made by trustees

on an incident-by-incident basis.

NOAA places no significance on the

omission of reference to simplified

procedures in the final language of OPA.

Congress merely chose not to tie

NOAA’s hands in promulgating these

rules. The same conference committee

report relied upon by many commenters

to disavow simplified procedures states

that these regulations should be

designed to simplify the trustees’ task of

assessing and recovering the full

measure of damages resulting from an

incident. NOAA believes that Congress

clearly intended that the rule should

facilitate prompt, cost-effective

restoration, by providing a technical

framework focused on restoration, not

on needless scientific experimentation.

While simplified procedures may be

used as a stand-alone assessment

procedure for small incidents, these

procedures are rarely, if ever, used for

larger incidents without some level of

field assessment. In these instances,

simplified procedures are used to

quantify the extent of injury and scale

restoration actions only after field

investigations have determined that

natural resources have been exposed,

injuries have been demonstrated, or lost

use has occurred.

Type A Model

Comment: Several commenters argued

that there are serious shortcomings in

DOI’s proposed type A models, and that

NOAA should not allow use of these

models in their current form under any

conditions. Some of these commenters

argued that NOAA should reserve this

section until the models are made

reliable. The commenters raised specific

objections to certain provisions of the

proposed type A models (e.g., cleanup

and containment of oil, use of

dispersants, bird oiling probabilities,

boating and fishing closures, potentially

grossly disproportionate restoration

costs, possibly arbitrary and speculative

mitigation costs). Many of these

commenters argued that these

unexplained problems make the

proposed models unusable. Other

commenters suggested that NOAA

should continue to review and revise

the models and subject them to further

public comment.

Some of these commenters stated that

NOAA has not undertaken any review

of the type A models that could

constitute an independent finding of

reliability. One of these commenters

raised several procedural arguments

regarding the rule’s adoption of the type

A models, particularly that adopting the

proposed type A models would violate

the Administrative Procedure Act

principles of notice and opportunity for

comment because the public cannot, at

present, know what the final type A rule

would be in the future. The commenter

argued that, if NOAA wishes to use type

A procedures, it must develop and

propose its own version and subject it

to public comment. Other commenters

stated that the rule’s criteria for the use

of the type A model are too vague in

simply requiring conditions

‘‘sufficiently similar’’ to those required

under the CERCLA rule. Another

commenter requested that NOAA revise

the rule to specify that the type A

models should not be used when the

services provided in an area differ from

those contained in the models, or when

field observations clearly contradict

model results.

Some commenters disagreed with the

use of models to assess injury because

of the potential for determining damages

where no injury exists. The commenters

also argued that the lack of actual data

in these procedures makes it impossible

for trustees to evaluate restoration

alternatives in the manner required by

the rule. One commenter, although

supporting the concept of a simplified

procedure, urged NOAA not to adopt

the type A models until they can be

corrected to prevent occasionally

arbitrary and unreasonable results and

to focus on restoration, consistent with

OPA. One commenter noted that

predictions made through the use of

models should not be allowed since

these assume that an adverse change

will always occur, whereas the evidence

of past incidents shows that injury is

not inevitable.

One commenter noted that, if NOAA

incorporates simplified procedures

developed by DOI, NOAA would be

engaged in a redelegation of its statutory

authority under OPA.

Response: First, NOAA was not

tasked with promulgating any specific

type of assessment procedure, thus there

was no such duty that was

inappropriately re-delegated to DOI.

Further, as discussed above, DOI’s type

A models are not incorporated per se

into the rule. Trustees desiring to use

the models must evaluate whether these

tools meet the acceptable procedures

standards listed in § 990.27, and if they

are not met, trustees must determine

whether use of the tools outweighs the

loss of the rebuttable presumption, or

whether another procedure exists that

does meet the acceptable procedures

standards. In addition, even if trustees

have selected a procedure in accordance

with the standards in § 990.27, such as

the type A model, participating parties

who disagree with this decision can

identify valid and reliable alternate

procedures and request that trustees

implement the alternate procedure, as

provided in § 990.14(c)(6) of the rule.

Trustees must consider this request and

determine whether to accept or reject

the request based upon such factors as

feasibility, validity, relevance, and

timeliness of the suggested procedure.

The various technical concerns raised

by commenters may only be valid if a

model is applied in certain

circumstances, thus it would be

inappropriate to bar use of the models

completely under this rule.

Compensation Formulas

Comment: Many comments received

on the compensation formula proposed

in 1994 deal with such issues as: utility

for small incidents; understating or

overstating damages; questions

regarding factual underpinnings of the

formulas; assumptions of injury built

into the formulas; lack of authority to

promulgate non-site-specific assessment

procedures; predicted detrimental

impacts on the oil industry; conclusive

nature of formulas; size of incidents

appropriate for application of formulas;

relationship to state formulas;

generation of formulas from the type A

models; as well as several comments

about specific technical or factual

aspects. Several commenters on the

1995 proposed rule supported NOAA’s

decision to reserve the compensation

formulas and strongly urged NOAA to

withdraw the formulas from the final

rule. Some commenters noted that the

formulas were based on the earlier

versions of the proposed type A models

and, therefore, did not benefit from later
468 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

improvements and corrections made to

those models. The commenters,

however, suggested that the

development of the compensation

formula guidance document seems to

confer a regulatory or legal status to a

tool that should be limited to an

informal aid to settlement discussions.

Many commenters were concerned

about the withdrawal or reservation of

the compensation formulas. The

commenters argued that, without these

tools, trustees are unlikely to be able to

fulfill their responsibility to make the

environment and public whole. The

commenters noted that the procedures

for incident-specific assessments are too

rigorous and costly for most small

incidents so that these small incidents

will not be adequately addressed, with

the losses being absorbed by the public

in the form of lost natural resources and

services.

Several commenters pointed out that,

by promulgating a compensation

formula, NOAA has the opportunity to

provide an alternative to individual

state models and promote some

consistency in the assessment of

damages resulting from smaller

incidents. These commenters suggested

that NOAA should either recalculate the

compensation formulas with the most

current version of the type A models

and publish the formulas in an interim

final rule, or include the original

formulas, which could then be

withdrawn when new formulas are

published using the final type A

models.

On the issue of the use of the formulas

in an actual assessment, some

commenters specifically requested that

NOAA establish that only the data

inputs into the formulas are contestable,

but that the algorithms of the formulas

are not, similar to the standard for the

Social Security disability regulations

and Medicare regulations, where the

diagnosis of a malady is contestable but

the costs of treating the malady are not.

Response: The proposed rule of 1995

reserved the compensation formula

primarily due to revisions being made

in the type A models on which the

formulas were based. The final rule,

however, does not incorporate

compensation formulas as acceptable

procedures per se; like any other

proposed assessment procedures,

compensation formulas must meet the

criteria for acceptable procedures in

§ 990.27 of the rule in order to be in

accordance with the rule. NOAA still

supports the concept of such simplified

procedures as compensation formulas.

NOAA developed a guidance document

in 1995 on how one might recreate

scenarios contained in the 1994

compensation formulas using the

revised type A models. This guidance

document is still available for use.

When the type A models under

development are promulgated by DOI as

final rules, NOAA intends to generate

the compensation formulas again.

Types of Assessment Procedures

Available

Comment: Several commenters argued

that, because trustees would be allowed

to use the four listed procedures alone

or in any combination, trustees could

recover damages that are not based on

proof that the incident actually and

proximately caused an actual natural

resource injury, in conflict with OPA.

Some commenters requested that the

rule require that the procedures be

appropriate for the types of incidents to

which they will be applied. These

commenters argued that the proposed

procedures lack adequate rigor and that

some of the procedures result in far

more persuasive scientific evidence

than other, abstract procedures.

Several of these commenters argued

that literature-based procedures are not

defined and are not allowed under the

CERCLA rule. The commenter stated

that this procedure will allow an injury

determination based solely on the

reporting of an injury in the literature,

without considering the conditions

existing at the incident of concern,

which are determinative of the effects.

Other commenters argued that even

laboratory studies alone are insufficient

to demonstrate injury in the field and

cannot take account of incident-specific

compensatory mechanisms that may be

at work in an actual population of biota.

The commenters stated, therefore, that

laboratory evidence must be combined

with field verification that an injury has

actually occurred.

One commenter argued that the

guidance provided in the rule on

incident-specific procedures fails to

meet basic requirements for proof of

injury and causation. The commenter

stated that the listed procedures can

only, at best, suggest that injury may

have occurred and, therefore, should not

be allowed without field verification.

Some commenters stated that the rule

should provide explicit acceptance

criteria for the use of procedures to

ensure that actual injury and causation

are established, based on scientifically

valid and reliable evidence that the

natural resource was in fact exposed,

directly or indirectly, to the discharged

oil (with an exception for substantial

threat), that the natural resource has in

fact experienced injury, and that

exposure to oil is known to cause such

injury in the field. These commenters

note that the rule should provide that

these criteria may be waived, in whole

or in part, only with the concurrence of

the responsible party.

Another commenter noted that

trustees have broad discretion under the

rule to decline to use the DOI type A

models, and thereby employ costly

incident-specific studies and analyses

whose costs could equal or exceed

damages. The commenter recommended

that the rule should require trustees to

use the DOI type A models whenever

the criteria for applying such

procedures listed at 43 CFR 11.33 may

be satisfied.

Response: The rule adopts a general

approach, that a range of assessment

procedures, from simplified to more

detailed, should be available to the

trustees so that assessments can be

appropriately tailored to incidents.

Procedures for documenting and

quantifying any particular injury must

be selected by considering a variety of

factors, all focused on making the

determination of necessary restoration

actions, while ensuring that assessments

are technically valid and cost-effective.

Procedures selected must be capable of

determining injury pursuant to subpart

E of the rule.

Scaling Procedures Listed in Appendix

B of the Preamble

Habitat Equivalency Analysis

Comment: Several commenters stated

that HEA is a new and unproven

procedure and has limited application

for assessments. Some commenters

argued that the procedure is

inconsistent with economic theory since

there is no direct relationship between

the cost of replacement and the value of

the natural resource. Commenters noted

that HEA is based on many

assumptions, such as: strict

proportionality between unit of measure

and value; substituting cost for value

yields social gain; marginal natural

resource values assumed constant over

time; and service flows assumed

constant and additive across time. The

commenters noted that fulfilling the

assumption of equal unit value is

difficult and that the chosen metric may

not reflect the unique characteristics

that define the flow of services from the

habitat. Commenters suggested that:

HEA does not address fundamental

assessment issues, such as: the concept

of baseline, making it difficult to

estimate percent of baseline services

lost; in a complex release in which

different natural resource services are

injured to different extents, there is no

obvious way short of economic

valuation of the services to combine the
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 469

different levels of impairment into a

single index which would allow all the

impaired natural resources to be

expressed in terms of a single unit; HEA

is not useful for habitats that are not

replaceable or reproducible; and that

problems occur in incorporating unit

values of indigenous habitat when

restoration converts one habitat type to

another. The commenters noted that it

is problematic to use HEA to address

lost use services, because changes that

may occur in the unit value of currently

offered services at the improved site

need to be considered (e.g. effects of

congestion). Also, the commenters

noted that physical natural resource

measures do not reflect quality, and

thus do not reflect appropriate

consumer surplus values. The

commenters suggested that HEA does

not measure benefits of compensatory

replacement, increasing the chances of

selecting restoration actions for which

the costs are disproportionate to the

value of the lost services. Also, other

commenters noted that substitutes must

be taken into account when measuring

service reductions.

Other commenters, however,

supported the use of HEA, stating that

the procedure is appropriate, costefficient, and effective. One commenter

suggested that HEA not be limited in

use to ecological services. The

commenter stated that the description of

the procedure should clarify that the

metrics used are simply indicators of

overall environmental quality, not

complete measures of damages.

Commenters suggested that, when

using HEA, trustees should provide

evidence that the unit values of the lost

and replacement services are likely to be

equivalent. The commenters stated that

HEA should explicitly account for

baseline service quantification issues.

The commenters also argued that,

because the components of HEA

embody substantial uncertainty, the

trustees should undertake explicit

sensitivity analysis as part of HEA. The

commenters suggested that HEA should

focus on overall habitat or ecosystem

services and not on individual

organisms or specific ecosystem

components not of significance to

overall functioning of a system. Some

commenters stated that HEA models

should be used for biological/ecological

services, not human use services. The

commenters also argued that the habitat

or species replacement cost procedure

should be specifically excluded by the

rule, except where natural resources

and/or services are actually restored.

Travel Cost Method

Comment: Some commenters

suggested that trustees should use

multi-site random utility models instead

of single-site analyses in conducting

travel cost studies. The commenters

noted that the travel cost studies should

clearly show the linkage between the

injuries and a reduction in services, as

well as allowing for unrestricted

substitution between recreation

opportunities. Finally, the commenters

suggested that the sample of users

should be representative of the

population being studied and the travel

costs should be measured accurately to

reflect the true costs to the recreators.

Factor Income Method

Comment: Some commenters noted

that the factor income method is an

unreliable procedure for calculating

values when natural resources vary in

abundance over time. Other commenters

stated that the factor income approach

measures private economic losses, not

losses to the public, and is

inappropriate for use in assessments

under OPA.

Hedonic Price Model

Comment: Commenters suggested that

the hedonic price model is generally

inappropriate for assessments, due to

major difficulties with potential double

recovery for public and private losses.

Other commenters suggested that the

hedonic pricing method should not be

used for incidents because of the brief

and temporary nature of incidents and

their impacts.

Market Models of Demand and Supply

Comment: Several commenters stated

that the market models of demand and

supply are poorly specified in the rule,

and that the rule should specify their

use and some standards for that use.

Contingent Valuation

Comment: Many of the commenters

argued that CV should not be used in

scaling. The commenters argued that CV

has not been proven reliable, that it

should not be used for transitory effects,

and would generate overstated damage

claims. Some of these commenters

noted that CV is a highly controversial

procedure, and has not survived

rigorous peer review within an

atmosphere of impartial scientific

research.

Some commenters argued that the

inherent upward bias in CV would drive

up the cost of restoration. However,

other commenters noted that concerns

about CV may be satisfied if it were

used in ‘‘both sides’’ of the scaling

calculation (i.e., to calculate both the

losses from the injury and the gains

from the replacement action). This way,

the overall scale of the selected

restoration alternative would likely not

be affected.

Many commenters stated that the rule

should allow for the use of CV. Some

commenters noted that CV is reliable if

performed properly. These commenters

noted that CV has already been

endorsed by the Ohio court. Other

commenters stated that test-retest CV

experiments show that CV can be

reliable. Several commenters pointed

out that CV is essential for obtaining

damages for lost passive values.

Commenters also argued that CV should

be used in scaling. The commenters

argued that trustees should retain as

broad a spectrum of valuation

procedures as possible.

One commenter indicated that survey

procedures can elicit what the public

needs for compensation by presenting

different restoration choices and,

therefore, gaining information on the

scale of restoration actions needed.

Another commenter suggested that mailout surveys could be used to assess

relative values, even though the Blue

Ribbon Panel recommended in-person

surveys for dollar determinations. Other

commenters noted the particular utility

of parts of CV, such as focus groups and

survey procedures, in planning

restoration.

Many commenters argued that CV

should not be included in the final rule;

however, that if it is included, the rule

should contain specific standards for its

use, and it should not be accorded the

rebuttable presumption. Several of the

commenters stated that the rule should

include the Blue Ribbon Panel’s

recommendations on study design,

implementation and verification. Other

commenters argued that damages

considered by respondents in CV

surveys should reflect only injuries that

have been established in injury

determination and quantification. These

commenters also stated that CV

scenarios should not be based on

willingness to pay to prevent incidents.

The commenters stated that the rule

should provide for scope tests that:

show substantial variation with the size

of the commodity; focus only on natural

resource damages; and exclude no

respondents when carried out. The

commenters also recommended that, for

response rates: standards must be

developed for calculating response rates

and zero value should be attributed to

survey nonrespondents as a

conservative approach to handling

nonresponse bias. The commenters

suggested that CV should not be

employed in cases where nonuse values
470 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

are expected to be small and that

additivity tests should be required. The

commenter also stated that a zero value

should be attributed to individuals

unaware of the injury before the survey

was administered.

Conjoint Analysis

Comment: Several commenters stated

that conjoint analysis is an unproven

procedure for natural resource

applications, and is not reliable. Some

of the commenters noted that conjoint

analysis may be better than CV, but it

raises similar difficulties. Some

commenters noted the importance of

realistic descriptions. The commenters

also suggested the procedure is subject

to the potential for protest valuation.

The commenters suggested that, when

using the procedure, trustees need to

define a relevant population for

sampling and for use in the scaling

calculations. The commenters suggested

that the results of the analysis can be

very sensitive to design decisions,

implementation, and interpretation

decisions. The commenters pointed out

that preferences are still expressed

under hypothetical conditions. The

commenters also suggested that

respondents are unlikely to be familiar

with the different attributes and levels

of habitat services and are

inexperienced in evaluating their

relative merits, that some respondents

may feel the answers are the purview of

scientific experts rather than the general

public, and that answers to early

questions may be of lower quality due

to learning effects during course of

survey. The commenters stated that

respondents may experience fatigue in

evaluating numerous options. The

commenters also stated that the

experimental design can easily become

burdensome. The commenters noted the

problem of environmentally correlated

attributes when using the procedure.

The commenter noted that a

component-wise valuation would be

useful in calculating compensatory

damages for partially injured natural

resources. The commenters argued that,

because of a close relationship between

conjoint analysis and CV, all the issues

raised by the NOAA Blue Ribbon Panel

may need to be considered.

However, some of these commenters

noted that the procedure need not be

limited to evaluating restoration

alternatives that provide services of the

same type and quality and subject to

comparable scarcity and demand

conditions as interim lost services. The

commenters suggested that the

procedure could reduce assessment

costs, since a single conjoint

questionnaire could evaluate the lost

interim services, as well as the services

from several different restoration

alternatives.

The commenters argued that conjoint

analysis should not be used to estimate

passive use values. The commenters

also suggested that the population of

survey respondents should be familiar

with the goods involved, the survey

should present the choices in terms that

are concrete and realistic as possible,

and the investigators should test for and

present evidence that the results are not

sensitive to extraneous design decisions.

The commenters stated that the

elicitation format should be designed to

prevent interviewer bias and protest

valuation. Some of these commenters

stated that the experimental design

should be consistent with accepted

design standards. The commenter noted

that the applications should include at

least two different elicitation formats,

and should perform sensitivity analysis

on the effects of format choice. The

commenters suggested that the

attributes used in the survey should

reflect: characteristics of the natural

resource that are salient to the

responder, temporal nature of lost

services, and restoration alternatives

that are technically feasible. The

commenters also stated that the

estimation of results should be

consistent with utility theoretic

principles. The commenter noted that

the study should include a description

of commodities that serve as substitutes

for the lost and replacement services

and that the relevant population to be

sampled should be limited to users of

the same type of services or to

individuals sufficiently familiar with

the natural resource to be able to form

preferences for the relevant services.

Commenters also stated that, if the

conjoint analysis includes a price term,

the following standards should be

added: the conjoint analysis should not

be used to measure nonuse values;

trustees should empirically demonstrate

that respondents have considered their

budget constraints; the survey should

use a payment vehicle that is

appropriate for the type of value to be

measured, is credible, incentivecompatible, avoids implied value cuing,

and distributes burden of payment

equitably; the survey should include

design points that test for ‘‘warm glow’’

effects; trustees should demonstrate

empirically that results are sensitive to

scope of lost services; and trustees

should determine the extent of the

relevant population whose values are to

be included and document and justify

that determination.

Benefits Transfer

Comment: Several commenters stated

that the responsible party must be

allowed to challenge the merits of

valuation studies conducted by the

trustees, rather than allowing the trustee

to use values derived from some other

study.

Some commenters pointed out that

the benefits transfer approach should

not be accepted uncritically. Other

commenters, however, argued for more

flexibility in the use of the procedure.

Several commenters stated that

studies to be used in the benefits

transfer approach should address

natural resources and services similar to

those injured by the incident, should be

scientifically sound, should use reliable

valuation procedures, and should not

attempt to measure passive use values,

since no reliable studies have been

conducted to date.

Response: NOAA believes that the

standards set forth in § 990.27 are

sufficient to allow trustees and

responsible parties to determine the

acceptability of a particular assessment

procedure for a given incident. NOAA

supports the use of all of the procedures

discussed in Appendix B of the

preamble as reliable and valid within

the appropriate context and when

performed in accordance with accepted

professional practices. NOAA does not

believe that the rule should set forth

specific standards regarding the

implementation of individual

procedures, as it is not feasible to

prescribe all valid uses of these

procedures. The validity and reliability

of procedures will depend on the

circumstances of particular incidents.

However, NOAA is considering the

development of a separate guidance

document addressing issues pertaining

to the use of the procedures discussed

above to scale restoration actions under

the resource-to-resource or service-toservice and valuation scaling

approaches.

Thus, NOAA believes that most of the

comments received, which relate to

potential problems with certain

applications of these procedures, will be

dealt with in the context of specific

incidents. If procedures do not meet the

standards listed in the rule they are not

acceptable procedures to use pursuant

to this rule. In addition, responsible

parties have the option to request

alternative procedures that meet the

requirements of the rule, if they do not

accept the trustees’ judgment that a

procedure is reliable for the

circumstances of an incident.

In response to some common

concerns expressed relative to all
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 471

procedures, NOAA offers the following:

(1) Trustees must make a determination

that procedures are reliable and valid

for the circumstances of an incident; (2)

there must be no double recovery of

damages for the same injury or loss; (3)

only public losses are recoverable by

trustees under this rule; (4) primary

restoration only recovers to baseline or

comparable conditions or levels; and (5)

the rule requires that the most costeffective of equally appropriate

procedures be used.

Subpart C—Definitions

Section 990.30—Definitions

General

NOAA has revised certain definitions

in the rule to ensure that these

definitions conform with those that are

explicitly defined in OPA.

Comment: Many commenters made

reference to various terms used in the

proposed rule considered to be vague

and likely to hamper expeditious

restoration if they are not defined. These

terms include: ‘‘observable;’’

‘‘measurable;’’ ‘‘adverse;’’

‘‘impairment;’’ ‘‘nexus;’’ ‘‘reliable;’’

‘‘valid;’’ ‘‘comparable;’’ ‘‘equivalent;’’

‘‘same;’’ ‘‘similar;’’ ‘‘scarcity;’’

‘‘demand;’’ ‘‘scale;’’ ‘‘scaling;’’ and

‘‘substantial threat.’’

Response: NOAA intends that the

majority of these terms have their

ordinary and customary meaning for

purposes of this rule, but offers the

following clarification. ‘‘Reliable’’ and

‘‘valid’’ refer to technical judgments by

experts in a particular field that a

procedure is consistent with best

practices for the measure being

investigated under the circumstances.

‘‘Equivalent’’ and ‘‘comparable,’’ as

applied to acquiring natural resources or

services other than those injured or lost,

have the meaning used in the legislative

history of OPA-natural resources that

can enhance the recovery, productivity,

and survival of the ecosystem affected

by a discharge, preferably in proximity

to the affected area. (H.R. (Conf.) Rep.

No. 101–653, 101st Cong., 2d Sess. at

109 (1990).) ‘‘Demand’’ has the meaning

used in section 1013 of OPA (33 U.S.C.

2712), encompassing presenting a claim

for damages, based upon a plan for

restoration of injured natural resources

and services, to a responsible party for

payment or implementation.

‘‘Substantial threat’’ will be determined

by response entities on a case-by-case

basis. Finally, ‘‘scale’’ and ‘‘scaling’’

refer to the size or extent, and

procedures to determine appropriate

size, of injuries or restoration actions.

Comment: Many other commenters

felt that NOAA should reinsert some of

the terms, which were included in the

January 1994 proposed rule but were

left out in the current proposed rule, or

add new terms. These terms include:

‘‘damages;’’ ‘‘emergency restoration;’’

‘‘interim restoration;’’ ‘‘ecological

services or natural resources of special

importance;’’ ‘‘passive use;’’

‘‘commercial and productive services;’’

‘‘recreational services;’’ ‘‘services of

natural resources of special

significance’’ ; and ‘‘Regional

Restoration Plan.’’

Response: NOAA has incorporated

the statutory definition of ‘‘damages’’

into the rule and has expanded the

discussion of emergency restoration and

Regional Restoration Plans in the

preamble. NOAA has also expanded the

discussion of ‘‘services’’ and ‘‘value’’

and does not believe that detailed

discussion of various specific types of

natural resource services is necessary.

Baseline

Comment: A few commenters stated

that the definition of ‘‘baseline’’ is too

restrictive, while others felt that the

definition is too flexible. Commenters

on both sides stated that NOAA should

provide additional clarification. Some

commenters argued that ‘‘baseline’’

should not be so strictly applied as to

prohibit use of information collected

reliably but on an intermittent or shortterm basis, if it provides a valuable

comparison. These commenters

suggested that trustees should be

allowed to make comparisons against

reference, historical, or control

conditions. Another commenter stated

that baseline data must provide a

reliable estimate of variability in the

natural resources and services of

interest, and that historical or reference

data may not be adequate. The

commenter pointed out that, in the

absence of reliable data on variability,

there cannot be a ‘‘baseline,’’ however,

there can be a ‘‘basepoint’’ or ‘‘reference

point.’’

Response: Baseline under this rule is

used to determine the extent of natural

resource injury such that the

appropriate scale of restoration actions

can be determined. NOAA has

simplified the definition of ‘‘baseline’’

to encompass the use of ‘‘control,’’

‘‘historical’’ and ‘‘reference’’ data.

Trustees and responsible parties may

use any data, so long as that data are

reliable (e.g., appropriately collected)

and relevant (e.g., collected sufficiently

recently) to the incident such that a

‘‘baseline’’ can be determined. In terms

of assessing baseline, procedures should

be chosen to meet the standards

contained in the rule, including

expected costs and expected increases

in the quality of the estimate of baseline

conditions.

Comment: One commenter suggested

that NOAA change the definition of

‘‘baseline’’ to read: ‘‘Baseline means the

condition of the natural resource and/or

service that would exist had the

incident not occurred.’’ The commenter

noted that, since baseline is not static

over time, defining the term in past

tense could be misleading or

misinterpreted.

Response: Natural resources or

services may only be restored to their

expected current condition or level had

the incident not occurred. It may not be

appropriate to interpret baseline solely

with reference to the condition of the

natural resources at the time of the

incident for all injuries or losses,

although that condition may well be

valuable evidence of the baseline.

Comment: Several commenters

insisted that baseline, like injury and

restoration, may only be assessed with

respect to natural resource services, and

more specifically, services used directly

by the public, as opposed to the

condition of the natural resources

themselves.

Response: OPA is very clear that

injury and restoration apply to natural

resources themselves. Further,

restoration of injured natural resources

is one element of a claim for damages,

distinct from the diminution in value of

injured natural resources suffered by the

public from the time of an injury until

recovery.

Contributing Factor

Comment: One commenter expressed

concern that the term ‘‘contributing

factor,’’ present in the 1994 proposed

rule, is absent in the reproposed rule.

Other commenters supported omission

of a discussion of this concept from the

rule, although these commenters

differed in their view as to whether a

more or a less rigorous standard should

be applied by reviewing courts.

Response: Under the new structure of

the rule, NOAA does not believe that a

discussion of this concept is needed.

Cost-effective

Comment: A number of commenters

emphasized that Congress intended that

assessments be cost-effective, but

suggested there are no meaningful

restraints on the number, extent, or cost

of damage assessment activities that

trustees may implement under the rule.

Response: NOAA agrees that

assessments, as well as restoration, must

be cost-effective, and believes the

definition indicates that the least costly

of several procedures accomplishing the

same goals with outcomes of similar
472 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

quality must be selected by trustees.

NOAA suggests that the extent of

assessment actions and costs are

appropriately limited under both OPA

and this rule through the reasonable

cost requirement, the standards for

acceptable procedures in § 990.27 of the

rule, and the pervasive requirement to

focus activities on determining needed

restoration.

Discharge

Comment: Some commenters

requested clarification of the definition

of ‘‘discharge.’’

Response: In response to comments,

NOAA has replaced the previous

definition of ‘‘discharge’’ with the

statutory definition.

Exposure

Comment: One commenter suggested

that exposure should be defined to

mean the presence of any detectable

amount of the discharged oil, including

oil sheen. Several other commenters

recommended that exposure be defined

as in 43 CFR § 11.14(q), when natural

resources ‘‘may be’’ in contact with oil,

rather than requiring actual evidence of

exposure.

Response: For the purposes of this

rule, exposure refers to direct or indirect

contact with oil. A sheen does indicate

that the surface water natural resource

has been exposed, which may affect

services provided, such as boating.

Incident

Comment: Some commenters

suggested that the definition of

‘‘incident’’ should be replaced with the

statutory definition.

Response: NOAA has replaced the

previous definition of ‘‘incident’’ with

the statutory definition.

Injury

Comment: A number of commenters

noted that the definition of injury is an

improvement from that of the January

1994 proposed rule and that of the

CERCLA rule’s definition, in that it is

simpler, easier to apply, and includes

adverse impacts that might be excluded

under the CERCLA rule delimiting

specific categories of injury.

In contrast, other commenters argued

that the definition of injury is

insufficient because it applies to natural

resources themselves, rather than

strictly to services provided by natural

resources, and does not incorporate the

concept of baseline. Some of these

commenters suggested that the

definition allows the mere presence of

a contaminant in water to be an injury.

These commenters suggested that

NOAA redefine injury as ‘‘(a) an

observable or measurable adverse

change in a natural resource that

produces a quantifiable reduction in the

level of services provided by that

natural resource, or (b) an observable or

measurable impairment of a natural

resource service,’’ further specifying

that ‘‘such change and/or impairment

must be measured relative to baseline.’’

According to these commenters,

although the physical, chemical, and

biological characteristics of a natural

resource contribute to the type and level

of services it offers, the public does not

value those characteristics in and of

themselves, it values only the services

the natural resource provides. Thus, the

commenters argued that, if a change in

a natural resource does not affect such

services, it cannot constitute a

compensable injury. The commenters

stated that, to the extent that trustees

obtain compensation for harm to the

environment as something separate from

the services provided to the public,

society would be overcompensated for

its loss. Further, these commenters

suggested that compensable natural

resource service losses be restricted to

those of ‘‘measurable ecological

significance’’ (effects are manifested at

the population, community or

ecosystem level) and/or those used

directly by the public.

In addition, the commenters

suggested that failure to include

reference to baseline in the definition of

injury will allow trustees to measure

adverse changes relative to pristine, preindustrial levels.

Response: NOAA believes that OPA

clearly intends that injuries to natural

resources themselves form the primary

focus of trustees’ restoration actions.

This intent is evident in the definition

of liability under the statute (‘‘injury to,

destruction of, loss of, or loss of use of

natural resources’’), as well as the

measure of damages under the statute

which provides an explicit distinction

between liability for injuries to natural

resources (costs to restore) and liability

for interim lost services (diminution in

value). Adoption of the commenters’

approach to assessment and restoration

would severely undercompensate the

public for injuries suffered as a result of

an incident and would result in a

needless sacrifice of natural resources

that could otherwise be cost-effectively

restored. The only way to ensure that all

valuable present and future services of

natural resources are available to the

public is to restore the injured natural

resources to their pre-incident

condition. The rule requires trustees to

quantify injuries relative to baseline,

which is defined as the without-theincident condition of the natural

resources. This requirement clearly

prevents assumption of a ‘‘preindustrial’’ baseline. NOAA does not

believe that the concept of baseline has

useful meaning in defining injury, as

opposed to quantifying injury. Finally,

because the rule requires a measurable

or observable adverse change in a

natural resource or service be

documented in addition to exposure,

the ‘‘mere presence’’ of oil will not

constitute an injury under the rule.

Comment: One commenter suggested

that an existing state regulatory

definition of injury be adopted to allow

for consistent natural resource damage

assessment within the state.

Response: NOAA believes that the

definition of injury in the rule is

consistent with the intent of OPA to

facilitate expeditious, necessary, and

cost-effective restoration.

Comment: Some commenters

suggested the terms ‘‘measurable’’ and

‘‘observable’’ inappropriately allow

injury to be determined using simplified

procedures, notably the type A model or

compensation formulas, which assume

that injury always occurs from the

presence of oil in the environment.

Other commenters suggested that NOAA

clarify that models that predict expected

injuries based on past data are

encompassed within the definition of

injury.

Response: The commenters are

referred to the procedures for

determining injury in § 900.51 of the

rule. The definition of injury must be

met, and exposure and a pathway must

be documented to determine injury.

Any procedure used to document

injury, exposure, and pathway must

meet the standards enumerated in new

§ 990.27 of the rule, which seeks to

ensure that the most technically

appropriate procedure for the

circumstances of an incident and an

injury be used to make injury

determinations, including those for

exposure and pathway.

Comment: One commenter suggested

that the injury definition be broadened

to include habitat degradation.

Response: NOAA believes that OPA

and the rule do apply to habitat

degradation caused by incidents, so long

as the requirements of the rule for

determining injury are met.

Oil

Comment: A few commenters agreed

that animal fats and vegetable oils are

covered by OPA’s definition of oil, but

asserted that their limited capacity to

cause harm in the environment should

exempt them from coverage by this rule,

or provide for a separate assessment

process specifically tailored to these
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 473

different products. The commenters

argued that Executive Order No. 12,866

on Regulatory Planning and Review

requires that differential treatment be

afforded these products. Other

commenters similarly requested

clarification as to whether natural or

synthetic gas products, or coal tar and

other coal-derived chemicals are

classified as oil for purposes of the rule.

Response: NOAA notes that the

commenters do recognize the capacity

for animal fats and vegetable oils to

cause natural resource injury if they are

released in significant quantities. These

products are included in the definition

of oil under the NCP. NOAA believes

that the rule’s Preassessment Phase

requirement that trustees assess the

likelihood of natural resource injuries

resulting from a discharge, along with

the requirement that injury actually be

determined prior to quantification, will

provide appropriate safeguards for

nonharmful products discharged into

the environment. The preamble advises

trustees that the nature of the product

discharged (e.g., differences in physical,

chemical, biological, and other

properties, and environmental effects)

should be evaluated in the trustee’s

Preassessment Phase. As to synthetic

gas and coal-derived chemicals,

substances that have been classified as

hazardous substances are clearly not

covered by this rule, but by the CERCLA

rule.

Pathway

Comment: One commenter stated that

the definition of ‘‘pathway’’ is

somewhat vague in the use of the term

‘‘nexus.’’

Response: NOAA has replaced the

term ‘‘nexus’’ with ‘‘link,’’ to refer to the

required connection between an

incident and a natural resource or

service of concern.

Person

Comment: Several commenters

suggested that the definition of

‘‘person’’ should be modified to include

agencies of the federal government.

Response: NOAA notes that the rule

definition is consistent with the

statutory definition.

Reasonable Assessment Costs

Comment: One commenter noted that

the costs of conducting assessments

represent unanticipated financial

burdens on trustee agencies, so the rule

should include provisions that require

responsible parties to reimburse trustees

for all legitimate expenses associated

with incidents covered by the rule.

Several commenters suggested that

oversight costs for responsible party

participation and/or implementation of

any assessment activities should be

explicitly recoverable. While several

commenters supported inclusion of

administrative, legal, and enforcement

costs in the definition, others strongly

opposed this as outside NOAA’s

statutory authority. These commenters

pointed to rulings prohibiting recovery

of court costs in CERCLA cost recovery

actions, and suggested that damage

assessment costs necessarily cease at the

point monetary damages are determined

for a claim. Some commenters stated

that duplicate assessment costs incurred

as a result of trustees’ failure to

coordinate their efforts should be

explicitly excluded from recovery.

Response: OPA defines damages as

the costs of restoration, plus the

reasonable cost of assessing those

damages. Thus, damages encompasses

whatever actions are reasonable and

lawful under OPA to implement

restoration, clearly including

administrative, legal, and enforcement

costs, as well as monitoring and

oversight costs. OPA’s requirement for

public involvement in developing a

restoration plan to form the basis of a

claim for damages presented to a

responsible party likewise makes the

reasonable costs of facilitating public

participation recoverable. OPA prohibits

double recovery of damages, including

assessment costs. However, NOAA does

not believe that an inference of double

assessment costs should be drawn solely

from the fact that two or more trustees

are assessing damages independently.

The reasonableness of damage

assessment costs must be evaluated

relative to the specific injury for which

a restoration action is being considered.

Comment: With respect to

incremental costs and benefits, one

commenter suggested that the phrase

‘‘reasonably related’’ is vague and

subjective and should be modified.

Another commenter stated that

reasonable costs should include

‘‘expected’’ before ‘‘incremental cost’’

and ‘‘incremental increase.’’ Some

commenters interpreted the proposed

rule to require a strict cost-benefit

analysis in selecting any assessment

procedures. One commenter suggested

that the definition of ‘‘reasonable

assessment costs’’ should not use word

‘‘reasonably’’ to define ‘‘reasonable.’’

One commenter suggested that the

reasonable cost definition should return

to the 1994 proposed language of

‘‘reasonable under the circumstances,

but only if in accordance with the rule.’’

Response: NOAA agrees that the 1995

proposed definition of reasonable costs

was somewhat vague. NOAA also

believes that the element of the

reasonable cost definition in the

proposed rule, requiring incremental

costs and benefits to be evaluated, is

duplicative of the analysis trustees must

make in selecting all assessment

procedures used under this rule, as

provided in the new § 990.27. Thus, this

element has been deleted from the

definition. The new provision in

§ 990.27 of the rule does not require a

strict cost-benefit analysis of assessment

procedures, as this would result in

unreasonable assessment costs. Rather

the costs and benefits analysis is

intended to constrain the scope and

scale of assessments to fit the

circumstances of individual incidents

and injuries.

Comment: Several commenters

suggested that assessment costs should

be strictly proportional to damages, with

some suggesting that costs must not

exceed damages to be reasonable,

consistent with the CERCLA rule.

Another commenter stated that

assessment costs should be

proportionate to the value of the

restoration action, rather than the cost of

that action. Other commenters suggested

that reasonable costs must be related to

the severity of an incident. Several

commenters were troubled by allowing

recovery of assessment costs where

restoration is not pursued.

Response: NOAA agrees that trustees

should determine an appropriate

relationship between assessment costs

and the costs of restoration and

compensation sought as a result of the

incident. However, NOAA does not

believe that a strict proportion, or a cost

ceiling equal to total damages or total

value, is appropriate for all cases. There

may be instances where assessment

costs to determine appropriate

restoration are necessarily high due to

unique sampling or testing

requirements, yet high costs would be

justifiable given the importance of

undertaking restoration—for instance,

where an endangered species

population has been injured. The rule

places strict limits on instances where

trustees can recover assessment costs if

they do not pursue restoration. Trustees

must have made, in good faith, all

determinations required in the rule and

proceeded in the assessment with a

reasonable expectation that injury had

occurred and restoration was needed.

Comment: One commenter stated that

reasonable assessment costs should only

include those costs associated with an

assessment made at the site of the

incident, not any assessment costs

incurred at regional restoration sites.

Other commenters argued that trustee

costs of NEPA compliance and

production of an administrative record
474 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

should not be recoverable, pointing to

the CERCLA rule’s omission of these

procedural requirements.

Response: Reasonable assessment

costs include costs associated with

evaluating restoration alternatives and

selecting an equally preferred approach

for an incident. Costs associated with

identifying and evaluating existing

regional restoration plans or other

existing proposed restoration projects

among a range of alternatives to restore

injuries resulting from an incident are

reasonable costs under the rule. In

addition, NOAA believes that

maintenance of an administrative record

will be a cost-effective mechanism of

keeping the public and responsible

parties informed of the progress and

results of an assessment, and judges

these costs to be reasonable costs of

assessment. Similarly, because NEPA

compliance is an existing statutory

requirement applicable to restoration

actions by federal trustees, these

compliance costs are recoverable, just as

any permitting requirements would be

recoverable in implementing restoration

under OPA.

Recovery

Comment: Several commenters argued

that a focus on recovery of natural

resources themselves, as opposed to

services is counter to OPA’s mandate.

Other commenters suggested that

baseline be explicitly incorporated

within the definition of recovery, to

ensure that the proper focus is the

‘‘without an incident’’ condition.

Response: As discussed under the

definition of injury above, the condition

of natural resources themselves may

lawfully be assessed in identifying and

quantifying injuries. NOAA does not

believe that baseline needs to be

redefined in the definition of recovery,

but agrees that recovery refers to the

condition the natural resources and

services would have been had the

incident not occurred.

Responsible Party

Comment: Some commenters

requested revisions to the 1994

proposal’s definition of ‘‘responsible

party’’ to conform with the statutory

definition.

Response: NOAA has replaced the

definition of responsible party with the

statutory definition.

Restoration

Comment: Most commenters were

satisfied with the definition of

restoration as encompassing all

authorized actions under the statute

(restoration, rehabilitation, replacement,

acquisition of the equivalent), without

setting a preference for any of the

statutory alternatives. Other

commenters, however, felt that the rule

limited trustee discretion in requiring

consideration of restoration measures

over acquisition measures.

Response: The rule does not require

that restoration, rehabilitation, or

replacement be considered before

acquisition of equivalent natural

resources. Acquisition of the equivalent

is a viable option and includes actions

that would enhance the recovery,

productivity, and survival of the

ecosystem affected by a discharge,

preferably in proximity to the affected

area.

Comment: Several commenters

suggested that the distinction between

‘‘primary’’ and ‘‘compensatory’’

restoration needs clarification. Some of

the commenters suggested that primary

restoration should include any action,

whether on-site, off-site, in-kind, or outof-kind, that will return natural resource

and/or service levels back to baseline

condition. These commenters supported

defining compensatory restoration as

actions to make the environment and

public whole for interim losses resulting

from the incident.

Some commenters stated that the

proposed rule could be interpreted to

limit primary restoration to actions

focused on the injured natural resources

themselves. These commenters stated

that relegating replacement or

acquisition alternatives that use other

natural resources solely to

compensatory restoration is inconsistent

with section 1006(d)(1)(A) of OPA (33

U.S.C. 2706(d)(1)(A)), which prescribes

replacement and acquisition of the

equivalent as measures of ‘‘primary

restoration.’’

Response: NOAA intends that

primary restoration actions encompass

all actions authorized under section

1006(d)(1)(A) of OPA (33 U.S.C.

2706(d)(1)(A)), while compensatory

restoration includes actions to

compensate for the diminution in value

of injured natural resources or services

pending their recovery (section

1006(d)(1)(B) of OPA (33 U.S.C.

2706(d)(1)(B)). NOAA does not believe

that OPA contains any explicit

preference for a specific type of

restoration, or whether it be

accomplished on or off-site and has

revised the rule. Because damages

recovered for diminution in value must

be spent solely to restore, rehabilitate,

replace, or acquire the equivalent of the

interim natural resource injuries,

trustees should assess damages for

diminution in value in terms of these

types of actions. NOAA has amended

the rule to reflect these considerations.

Comment: Several commenters

asserted that NOAA has improperly

broadened potential recovery for

diminution in value by dressing it up as

compensatory restoration, and defining

these actions as those to make the

environment whole, in addition to

making the public whole. These

commenters argued that compensatory

restoration may only replace interim

lost service flows to the public.

Response: The diminution in value of

natural resources may be measured by a

number of metrics, such as dollars or

quanta of services lost. If no restoration

actions are taken, or recovery with

active restoration may still require a

number of years, many types of services

may be lost or diminished in the interim

period, including ecological services,

and OPA does not intend that only

certain types of lost services be

compensated. Diminution in value

under the rule still appropriately

encompasses interim lost services

pending recovery and has not been

broadened. The rule requires that

trustees determine restoration actions to

compensate for these losses rather than

monetize the claim.

Comment: A number of commenters

asked for or offered additional

clarification on the distinction between

‘‘natural recovery’’ and ‘‘no action.’’

Several commenters requested that

NOAA delete the no action alternative.

Several commenters strongly disagreed

with classifying natural recovery as

restoration, while several others

appreciated the explicit requirement to

consider natural recovery, which they

expect will often provide the most costeffective mechanism to return natural

resources to baseline. One of the

commenters noted that there should be

a requirement that restoration only be

undertaken if it significantly accelerates

natural recovery. Finally, some

commenters remarked on the difficulty

and expense likely to be incurred to

estimate the time required for natural

recovery.

Response: NOAA has deleted the ‘‘no

action’’ alternative from the final rule,

as it was confusing in the context of

evaluating restoration alternatives at the

stage that injury and the need for

restoration have been determined. The

final rule will continue to require that

natural recovery be evaluated as one of

a range of primary restoration actions—

actions intended to return injured

natural resources and services to

baseline conditions. The rule already

requires trustees to assess the relative

capability of each restoration alternative

to accelerate recovery, so it is not

necessary to add a requirement that a

restoration alternative significantly
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 475

accelerate recovery relative to natural

recovery. Finally, the rule requires that

procedures to estimate natural recovery

be evaluated according to the standards

governing acceptability of any other

assessment procedure, including the

cost of alternative procedures relative to

expected informational benefits for the

circumstances of a particular incident.

Thus, the rule allows that natural

recovery may be estimated qualitatively

or quantitatively. The rule also provides

a number of factors as guidance in

estimating natural recovery timelines.

Services

Comment: Many comments on the

definition of services discussed the

distinctions between ‘‘ecological’’ and

‘‘human’’ services. One commenter

stated that the definition appropriately

encompasses both concepts, but that the

term ‘‘public services’’ is overly

restrictive. By using the term ‘‘public’’

services, the commenter suggested that

NOAA may inadvertently preclude

recovery for lost services that benefit

many individuals but not the general

public. To address this problem, the

commenter urged NOAA to use the term

‘‘human services’’ rather than ‘‘public

services’’ throughout its final rule.

A number of commenters argued that

the proposed definition of compensable

services is faulty in including functions

performed by one natural resource for

another. These commenters suggested

that ecological services are only

compensable to the extent they provide

services of value to the public, because

ecosystem functions do not have

economic value unless they help to

support service flows to people.

These commenters further suggested

that the proposed definition exceeds the

scope of NOAA’s authority since OPA

does not authorize trustees to assess

damages on behalf of non-human things

or beings. The commenters noted that

the measure of damages under OPA

refers to losses to the public, since it is

only people who have values for natural

resource services. The commenters

pointed out that the legislative history

of OPA also makes it clear that

‘‘diminution in value’’ refers to the lost

use value standard for measuring

natural resource damages used in the

Ohio decision (880 F.2d at 462–

480)(H.R. (Conf.) Rep. No. 101–653,

101st Cong., 2d Sess. 108 (1990)), which

made it apparent that the lost use value

standard related to lost values to the

public. Further, the commenters stated

that the CERCLA rule on remand from

Ohio specifies that compensable value

means the value of ‘‘services lost to the

public.’’ 43 CFR 11.80(b).

Response: Humans and other species

in the ecosystem are inextricably linked;

consequently, ecological services are

generally linked to human services.

Trustees may not double-count public

losses attributable to injured natural

resources by seeking compensation both

for human losses and for the ecological

services that will return the same direct

human services. However, in some cases

it may be much more cost-effective to

focus on the ecological services that

occur on-site rather than the human

services that occur off-site as a result of

these ecological interactions. For

example, a wetland habitat may provide

on-site ecological services such as

faunal food and shelter, sediment

stabilization, nutrient cycling, and

primary productivity. Off-site human

services may include commercial and

recreational fishing, bird watching along

the flyway, water quality improvements

for drinking water supply or the

aesthetics of nearby residential

property, and storm protection for onshore properties due to the creation of

wave breaks.

Consequently, the inclusion of

ecosystem services is consistent with

OPA. However, trustees must ensure

that they do not seek compensation both

for human losses and for the ecological

services that will return the same direct

human services, which would create a

double recovery.

Comment: Many commenters asserted

that the concept of baseline should be

built into the definition of compensable

services. These commenters suggested

that baseline measures of use services

should incorporate relevant site-specific

factors that influence demand for the

services and should reflect established

committed uses rather than speculative

levels of use. The commenters stated

that NOAA should include the

CERCLA’s rule definition and

requirement of ‘‘committed use’’ in its

rule, which is defined as either ‘‘a

current public use; or a planned public

use for which there is a documented

legal, administrative, budgetary, or

financial commitment before the

discharge of oil or release of a hazardous

substance’’ (43 CFR 11.14).

Response: NOAA does not believe

that baseline must be incorporated into

the definition of services, given the

requirement to quantify services injuries

relative to baseline. NOAA agrees with

the commenters that speculative future

uses of natural resources are not

compensable under OPA and that this

limitation is inherent in the requirement

that trustees determine the existence of

injury or service injuries before

quantifying restoration requirements.

Comment: Several commenters

suggested that the definition of

‘‘services’’ should explicitly include

both ‘‘direct and passive uses.’’ Some of

these commenters also requested that

NOAA include examples of passive

services in the definition.

Response: NOAA agrees that

compensable services include both

direct and passive uses, and that the

rule provides for recovery of both.

Value

Comment: A number of commenters

supported the definition of ‘‘value’’ as

proposed. However, other commenters

suggested that this definition is vague,

and needs to be refined. One commenter

suggested that the definition of ‘‘total

values’’ in the rule and the discussion

in the preamble are not consistent.

Another commenter did not understand

what the ‘‘units’’ represent in the

definition, with another commenter

suggesting that OPA restricts

compensation to dollars. A few

commenters indicated that NOAA

should replace the word ‘‘good’’ with

goods or services, as people value both

goods and services. One commenter

suggested that NOAA change the last

sentence to read: ‘‘The total value of a

natural resource and/or service is equal

to the sum of all values held by an

individual across all individuals.’’

Finally, a few commenters argued that

passive values should be excluded

because they cannot be reliably

measured. The commenters suggested

that NOAA’s silence results in an equal

treatment of use and nonuse values;

implicitly allowing for the calculation of

nonuse values using contingent

valuation without any specific

standards.

Response: NOAA does not believe

that OPA restricts measuring lost value

solely in terms of dollars, and has

amended the rule to allow for

computation in terms of goods, services,

or money.

Subpart D—Preassessment Phase

Section 990.40—Purpose

Comment: Several commenters felt

that the proposed new language on

preassessment is a significant

improvement over the January 1994

proposal. These commenters stated that

the new Preassessment Phase achieves

the necessary goals of this early stage of

an assessment, which is to costeffectively and timely determine

whether injuries to natural resources

have likely occurred such that further

trustee action on behalf of the public is

warranted.

A few general concerns, however,

were expressed by one commenter. This
476 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

commenter was under the impression

that preassessment activities require

identification (as reflected by the

qualifier ‘‘observable’’) and

quantification (as reflected by the

qualifier ‘‘measurable’’) of injury. The

commenter noted that observing adverse

changes is typically less difficult than

measuring actual or approximate losses,

suggesting that this portion of the rule

not be so narrow as to require precise

measurement of degradation in

situations where a loss has been

observed. To facilitate more effective

mitigative strategies, the commenter

suggested preassessment activities be

segregated into analyses of impacts to

aquatic organisms and habitat.

The same commenter further stated

that the costs of conducting

preassessment activities may represent

unanticipated financial burdens on

trustees. The commenter suggested the

rule include provisions that require

responsible parties to reimburse trustees

for all legitimate expenses associated

with incidents covered by the rule.

Response: The purpose of

Preassessment Phase activities is to

determine whether it is legitimate for

trustees to take action under this rule for

purposes of OPA, and whether it is

reasonable to do so, given their

responsibilities to act on behalf of the

public to see that injured natural

resources and services are restored. At

this stage of an assessment, actual

determination and quantification of

injury are not required. Costs should not

necessarily be great at this phase of an

assessment, depending on the

circumstances of an incident and

resulting injuries, and trustees are

encouraged to contain costs by limiting

the amount of data collection and

analysis conducted, and to coordinate

early with response agencies and

responsible parties to prevent

duplicative efforts.

Section 990.41—Determination of

Jurisdiction

Comment: One commenter stated that

the notification language is too weak

and that the OSC or lead response

agency should be required to notify

natural resource trustees. This

commenter indicated that the OSC or

lead response agency should not only

consult with the affected trustees

concerning removal actions, but should

also consult with affected trustees

concerning protection strategies.

Response: NOAA notes that

coordination between the OSC and

trustees is covered in section 1011 of

OPA (33 U.S.C. 2711) and in the NCP.

The duties of the OSC, including

coordination, are covered by other

rulemakings, not this rule.

Excluded Discharges

Comment: One commenter suggested

that the language in this part should be

modified to exclude only those

discharges that are in compliance with

a permit under federal, state or local

law. The commenter pointed out that

discharges that exceed permitted limits

should not receive an exemption from

natural resource damages liability

simply because they emanate from a

permitted discharge point.

Another commenter remarked that

tribal permits should also be included

within this language.

Response: The language of the rule

copies the statutory language on

excluded discharges, including the

reference to permits under local law.

NOAA interprets the phrase ‘‘permitted

by a permit’’ to mean that only

discharges that are authorized by, and

thus in compliance with, the terms of a

permit are eligible for the exclusion.

Comment: One commenter noted that

public vessels are used as an example of

exclusion from liability and suggested it

would be helpful for the preamble to

reiterate that exclusion in addition to

the permitted discharge exclusion.

Another commenter questioned why

onshore facilities subject to the TransAlaska Pipeline Authority Act

(TAAPA), 43 U.S.C. 1651 et seq., are

exempt from liability.

Response: NOAA has amended the

preamble to include the citation to the

OPA sections providing for the

excluded discharges and notes that the

TAAPA facility exclusion is provided

by OPA.

Comment: Another commenter noted

that the Oil Spill Liability Trust Fund

cannot be accessed to initiate

assessments for incidents originating

from a federal facility. The commenter

asked what mechanisms exist that

would allow for restoration given this

situation.

Response: NOAA notes that trustee

agencies may be called upon to carry

out restoration out of agency budgets

where there are no other funding

sources available.

Injured Natural Resources or Services

Comment: Several commenters stated

that the rule necessitates identification

and notification of all trustees in order

to determine whose trust natural

resources may be injured, which is

crucial to coordination among trustees.

One commenter indicated that the

rule should clearly state that all

physical, on-site trustee activities,

including data collection and analysis,

occurring concurrently with removal

efforts are subject to the approval and

overall direction of the OSC. The

commenter stated that the rule should

also require effective coordination

between natural resource trustees and

participants in the incident response,

consistent with the NCP (40 C.F.R.

§ 300.305(e), 50 FR 47384, 47445 (Sept.

15, 1994)).

Response: NOAA agrees that

coordination among all affected trustees

is extremely important, especially

during Preassessment Phase activities.

The requirements for coordination are

enumerated in § 900.14 of the rule

rather than in individual subparts, to

emphasize that the duty to coordinate is

applicable to the entire assessment.

NOAA does not believe that an explicit

requirement to identify and contact

other trustees should be included in the

rule. Trustees need maximum flexibility

during the often hectic response phase

to ensure that, among other things,

ephemeral data is collected. NOAA

notes that identification and contact

among trustees virtually always occurs

during the response phase, if for no

other reason than requests for initiation

funding from the Oil Spill Liability

Trust Fund require such coordination.

The requirement to coordinate with

the OSC is also included in § 990.14.

Although NOAA agrees and the rule

reflects that trustees activities may not

interfere with response activities,

NOAA disagrees that any requirement

exists, nor should it exist, that the OSC

must approve all trustee activities.

Many of these activities are far outside

the realm of authority or interest of the

OSCs.

Decision to Proceed

Comment: One commenter indicated

that injury determination should be a

precondition to trustee jurisdiction. The

commenter pointed out that restoration

under OPA is, by definition, wholly

retrospective, and does not extend to

measures designed to prevent or contain

‘‘threatened discharges.’’ The

commenter stated that the injury

determination in § 990.51 should be

satisfied in the Preassessment Phase

before the restoration planning process

begins.

Response: NOAA disagrees with the

comment. Injury determination is

properly part of the formal assessment,

and is not required during the

Preassessment Phase. Determination of

injury at this point may result in

unreasonable assessment costs without

some sort of screening process provided

in this phase.
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 477

Section 990.42—Determination to

Conduct Restoration Planning.

Considerations

Comment: One commenter suggested

that the conditions in this part are

subjective and require more specific

guidance. However, another commenter

was concerned about being required to

complete some of the determinations at

such an early stage in the process when

it may be particularly difficult to

determine whether response actions

will adequately address injuries.

Response: There is necessarily a

subjective component in trustees

applying their best professional

judgment to existing or readily available

information in order to make the

determinations in this section. NOAA

believes that this balance of judgment

and data analysis is most appropriate

and cost-effective at this stage of an

incident.

Comment: A number of commenters

indicated that the responsible parties

should be included (and officially

notified) in the determination to

conduct restoration planning. The

commenters questioned whether the

administrative record will be open

during this stage, and whether all data

used to make a determination to

conduct restoration planning will be

made available to responsible parties.

Response: The rule provides that

identified responsible parties be notified

and invited to participate in the

assessment as soon as practicable, but

no later than the point that trustees

decide to conduct restoration planning

and prepare a public notice to that

effect. Participating responsible parties

will be provided documents detailing

the determinations that are required

under the rule. The rule also indicates

that the administrative record should be

opened concurrently with issuing the

Notice of Intent to Conduct Restoration

Planning. The record is available to

responsible parties as well as any other

member of the public.

Comment: Another commenter noted

that the need for restoration is based on

an evaluation of whether response

actions will alleviate the residual

injuries. The commenter suggested that

the rule should clarify that both residual

injuries and direct, initial injuries are to

be considered at this point.

Another commenter suggested that it

may also be difficult to determine

whether feasible restoration alternatives

exist when the trustees do not yet know

the full extent of the injuries. A number

of commenters were concerned that the

notion of ‘‘feasible’’ might be narrowly

interpreted to mean ‘‘on-site/in-kind,’’

in which case restoration may not be

possible. One of these commenters

suggested that the rule allow both

primary and/or compensatory

restoration actions that might be

considered.

Response: NOAA agrees that all

injuries occurring from the time of the

initial or threatened discharge should be

considered in evaluating the efficacy of

response actions in alleviating the need

for restoration. Response actions may be

effective in restoring some injuries

caused by the initial incident, for

instance by removing oil from a sandy

beach so that the beach can be

reopened. While this response action

may restore a natural resource service to

baseline, it would not compensate for

the interim lost use that occurred during

the closure period. The rule has also

been amended to indicate that feasible

primary or compensatory restoration

actions should be assessed in making

the determination to proceed with

restoration planning.

Decision to Proceed

Comment: Several commenters

supported the provision authorizing

trustees to recover reasonable

assessment costs incurred up to the

point that preassessment determinations

are made. However, one commenter

notes that it is thus incumbent upon the

trustees to limit their assessment costs.

The commenter suggested that prompt

decisions by the trustees on jurisdiction

and the need for restoration will ensure

that costs are contained, and eliminate

the possibility for responsible parties to

delay completion of response measures

until such trustee determinations are

made. The commenter thus

recommended trustees be required to

make both determinations within ninety

(90) days of an incident.

Response: The rule provides that all

reasonable costs of assessment are

recoverable, including those costs

incurred up to the point trustees decide

not to pursue restoration. Costs must

meet the rule’s definition of ‘‘reasonable

assessment costs’’ to be recoverable.

NOAA disagrees with the need for or

utility of a ninety-day limit on making

the determination to conduct restoration

planning, and doubts that fear of this

determination will cause responsible

parties to drag out costly response

activities. NOAA believes that any time

limit would be arbitrary, given the great

variability in the progress and timing of

cleanup activities from incident to

incident.

Section 990.43—Data Collection

Comment: One commenter questioned

how the determinations in § 990.42 are

to be made based upon ‘‘readily

available information.’’ The commenter

suggested this limitation is acceptable if

it includes all the sources listed in this

section. One commenter also suggested

the term ‘‘limited’’ in the proposed rule

may imply that if trustees went too far

in data collection, they might not be

entitled to the rebuttable presumption

and/or costs for that data collection

because they might not be considered

‘‘reasonable.’’ A few commenters stated

that, so long as the data to be collected

is reasonably related to the assessment,

no other restrictions should be placed

on its collection. In contrast, one

commenter noted that there are no

controls specified in this part over the

expense or timing of preassessment data

collection activities.

Response: The rule has been amended

to specify that data collection and

analysis that are reasonably related to

the purposes of the Preassessment Phase

may be conducted in accordance with

the rule. The rule provides guidance on

the types of information that may be

useful in making Preassessment Phase

determinations. The term ‘‘limited’’ has

been removed from the rule, but was

originally intended to suggest that data

collection should be related to the

determinations required to be made at

this stage, and thus to the nature of the

incident and its injuries, and the

relevance and utility of available

information.

Comment: Another commenter

suggested that trustees should be able to

use models or extrapolations from

scientific literature when it is more

appropriate and cost effective than

gathering site-specific data.

Response: NOAA notes that the type

of analysis suggested by the commenter

is exactly the type of reliance upon

existing information that this section

intends to be available to trustees, if

such information is relevant to the

incident.

Section 990.44—Notice of Intent to

Conduct Restoration Planning

Comment: Several commenters

suggested that the rule should explicitly

acknowledge the need for flexibility in

completing the Preassessment Phase.

The commenters noted that, since

incidents vary greatly in scope, the

effort invested by trustees should be

proportional to the magnitude of the

incident, therefore, the rule should

allow the public notice and

participation steps to be compressed,

when appropriate. Other commenters

pointed out that the proposed language

requires trustees to prepare a public

notice, even if they have declined to

proceed with an assessment. Another

commenter suggested that trustees
478 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

should be required to provide the

specific authority for which the trustees

are asserting a potential claim in the

Notice.

Response: NOAA believes that the

rule does direct trustees to tailor their

preassessment activities to the nature

and extent of an incident, given the

determinations that this section requires

trustees to make. Section 990.14(d) has

been amended to explicitly provide that

the degree, extent, and timing of public

participation prior to development of a

draft restoration plan is within the

discretion of the trustees. The final rule

also indicates that the manner of making

the Notice of Intent to Conduct

Restoration Planning publicly available

will depend on the nature and extent of

the incident. The final rule also

explicitly requires that the notice

reference the specific authority under

which trustees are pursuing a claim for

restoration of their trust natural

resources.

Comment: One commenter suggested

that notice requirements to the

responsible party, and required contents

of the notice, are unclear. Another

commenter noted the requirements to

prepare a notice and open the

administrative record should be moved

to a later point in the assessment, so that

such requirements will not hamper

necessary trustees activities.

Response: NOAA has amended the

rule to indicate that a written copy of

the notice must be sent to identified

responsible parties, and the rule at

§ 990.44 now specifies information for

inclusion in the notice. The rule

provides trustees the flexibility to

conduct essential Preassessment Phase

activities that will allow them to make

the requisite determination that they

should proceed with restoration prior to

turning their efforts to preparing a

Notice of Intent to Perform Restoration

Planning and opening an administrative

record.

Section 990.45—Administrative Record

Review on the Record

Comment: Several commenters argued

that the rule should not be silent on the

standard of review for assessments, but

should emphatically, specifically, and

clearly state that the standard of review

applicable to trustee decisions, based

upon an administrative record, is like

that of any other ‘‘final agency action’’

contemplated under the Administrative

Procedure Act (5 U.S.C. 551–59, 701–

06), or applicable State or tribal

counterparts. Some of these commenters

suggested that because OPA authorizes

NOAA to provide for the administrative

adjudication of damages (33 U.S.C. 2706

(c)–(e)), the promulgation of a rule

providing for such administrative

adjudication would ensure that OPA’s

restoration goals are met. These

commenters also objected to NOAA’s

failure to provide for procedures to

administratively adjudicate natural

resource damages that should, in

particular, provide for a hearing to be

held by a neutral arbitrator when

requested as the statute requires.

Several commenters noted that, if

NOAA is wrong about the effect of the

rule, then following the rule will

severely prejudice the trustees. The

commenters stated that, if responsible

parties are successful in conducting

‘‘shadow’’ assessments and convincing

courts that they are entitled to trials de

novo, then the public will be ill-served

by trustees complying with the rule. The

commenters pointed out that, unlike the

responsible parties, trustees will be

forced to reveal their claim, data,

procedures, and analyses in an open

process and losing any litigation

privileges on their scientific

information, which will put trustees at

a distinct disadvantage in litigation

compared to responsible parties. The

commenters also noted that protections

are necessary so that a breakdown of a

cooperative process, in which

information has been shared, does not

undermine the ability of trustees to

make recoveries and complete

restoration.

Several commenters described the

expected benefits of review on the

administrative record process, including

greatly reduced amounts of litigation,

and associated transaction costs, greater

public participation in damage

assessment and restoration decisions,

and enabling trustee agencies to make

decisions on natural resource damage

assessments and restoration plans

within their areas of expertise, instead

of having courts decide extremely

complex technical, scientific, and

economic determinations. Other

commenters stated that record review

would be beneficial to the responsible

party, who will be able to contest any

trustee decisions from a neutral,

common body of data which they may

help to develop.

Other commenters argued that the

Seventh Amendment to the U.S.

Constitution, which guarantees a jury

trial in suits at common law, does not

preclude record review of the damage

determination, stating that the Supreme

Court has interpreted this language as

applying to actions analogous to those

brought in 18th-century English courts

of law as opposed to courts of equity or

admiralty. The commenters argued that

a claim for damages to natural resources

is much more analogous to an equitable

action than a legal one. Some

commenters stated that record review is

also mandated by the rebuttable

presumption since it would make no

sense for there to be such a presumption

absent record review. The commenter

noted that the rebuttable presumption is

based on the existence of a full record

and careful administrative decisions.

Other commenters addressed other

statutory processes that grant record

review to comparable regulatory

processes, such as NEPA. The

commenters pointed out that, although

the cases are not directly on point, a few

courts have applied a deferential

standard of review to decisions of state

or local agencies made pursuant to

NEPA. One commenter specifically

stated that NOAA should not try to

imply that NEPA compliance is

intended to or construed as an indirect

means of attaining deferential review on

record.

Some commenters suggested that the

rule now creates a negative inference

regarding applicability of record review

by retreating from its earlier, wholly

defensible position. The commenters

stated that NOAA need not make the

standard of review mandatory in the

rule, but should express its legal

opinion in the preamble regarding

record review based on the ‘‘arbitrary

and capricious’’ standard.

Several commenters endorsed the

decision not to expressly address in the

rule a standard of judicial review, but

the commenters argued that legal and

policy considerations dictate that

NOAA should not imply such a

standard either. The commenters noted

that simply changing ‘‘compensable

values’’ to ‘‘compensatory restoration’’

is not enough to bring such components

under a presumed preferential standard

of review. The commenters argued that,

since this element remains based on the

same statutory provision for

‘‘diminution in value,’’ it would still be

subject to de novo review.

One commenter noted that the rule

provides so little meaningful restraint

on trustee discretion, the unfairness of

a record review approach is patent.

Response: NOAA agrees that damage

assessment determinations made

pursuant to OPA constitute final agency

actions typically subject to review on

the record by federal courts, and fully

expects that this is the standard of

review that will be applied. NOAA

agrees with the benefits and rationales

discussed in support of record review,

and also agrees that the rebuttable

presumption is not inconsistent with

review on the record. NOAA does not

agree that diminution in value
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 479

necessarily provides for de novo review

by a court, given that this is but one

element of a claim for damages, all of

which must be applied to restoration.

NOAA does not believe that many

responsible parties are interested in

conducting ‘‘shadow’’ assessments.

However, NOAA does not believe that

it is within the scope of responsibility

tasked to NOAA to promulgate natural

resource damage assessment regulations

to specify reviewing court procedures

and protocols. No negative inference

should be drawn from lack of

declaration within the rule that review

on the record is the expected standard

of review.

Comment: Some commenters noted

that preparation of an administrative

record need not significantly delay the

assessment or ‘‘overwhelm’’ trustees in

conducting assessments. The

commenter stated that it is usually

rather simple and straightforward for

the trustee contemporaneously to

organize all documentation supporting

its decisions into an administrative

record, and that such preparation will

save tremendous time and resources in

preparing for a record review trial,

although not necessarily for a trial de

novo.

Some commenters stated that the

responsible party should be required to

meet the same public disclosure

standards as the trustees, to whatever

extent they are involved in the

assessment. These commenters noted

that public involvement is made more

meaningful and restoration plans are

more properly suited to the injury as

more data is available, and the

availability of data also removes the

uncertainty of litigation as well. One

commenter expressed concern that the

use of the record will compromise

trustees’ litigation, with no

corresponding risk for the responsible

party. Some commenters noted that

sharing information may be an

enticement to responsible parties to join

trustees in an assessment; this incentive

would not exist if the trustee is required

to reveal information in the record in

any case.

Response: NOAA agrees that

preparation of an administrative record

need not delay the assessment. Past

experience has indicated that secretive

assessments are not in the best interests

of the public or the natural resources. It

is in all parties’ interests to openly and

cooperatively determine what

restoration actions are needed as a result

of an incident, so that restoration can be

implemented quickly. NOAA believes

that delayed restoration defeats the

purposes of OPA. NOAA does not

believe that responsible parties are

likely to gain any advantage by not

participating equally and openly in

preparation of the administrative record,

and expects a reviewing court would

view with disfavor the withholding of

information to spring upon the trustees

at the eve of trial.

Contents of the Record

Comment: One commenter asked for

clarification as to what types of

documents should be included in the

administrative record.

Response: NOAA points out that

federal trustees should maintain the

administrative record, including what

documents might be included in

administrative record, in manner

consistent with the Administrative

Procedure Act. Trustees should be

guided by an understanding that all

documents relied upon in making

ultimate determinations about

restoration should be included in the

record.

Comment: Some commenters

expressed concern that third party

litigants would use the information in

the record to advance private claims.

One commenter suggested that attempts

by third parties to obtain information

from the record would delay the

restoration process. Another commenter

noted that the kind of information in the

record, focused on restoration, may not

be particularly helpful to third party

litigants.

Response: It is not uncommon that

private parties use publicly available

information obtained from governments

to support their private claims.

Information gathered during an

assessment on behalf of the public

should not be withheld from the public.

NOAA does not expect that allowing

public access to an administrative

record will result in delays in

restoration.

Subpart E—Restoration Planning Phase

Section 990.51—Injury assessment

Causation

Comment: Some commenters stated

that the proposed rule does not clearly

require trustees to use sound and

reliable science, or provide specific

requirements to be met in the various

steps of the injury assessment. Several

commenters stated that the rule must

include rigorous standards and criteria

for determining that an observed injury

was caused by an incident to avoid

unsupported, unnecessary, and

unreasonable claims. One commenter

noted that if the damage assessment is

used for evidence collection, the

question of how the data will be used

raises a question of the level of

confidence.

Response: The treatment of injury

determination within the rule supports

the use of sound and reliable science to

demonstrate that injuries identified

have resulted from the incident. This

treatment embodies the principles and

practices of natural resource damage

assessments developed over the past

several years.

Comment: Several commenters raised

concerns regarding demonstrating

causation for injuries resulting from

response actions or a substantial threat

of a discharge. These commenters noted

that trustees must still show clear and

specific causation for those injuries

resulting from the response or threat,

not from some other cause. Other

commenters also stated that the rule

should clarify that injury assessment is

not limited solely to addressing injury

residual to response actions, but should

include direct, initial injuries.

Response: For injuries resulting from

an actual discharge, trustees must

evaluate exposure and pathway and

demonstrate that injury resulted from

the incident. For injuries resulting from

a response action or a substantial threat

of a discharge, trustees must also

demonstrate that the injury occurred

because of the incident. Under this rule,

assessments are not limited solely to

addressing injuries residual to response

actions, but include the direct, initial

injuries. Evidence supporting the

linkage between the incident and injury

must be established to demonstrate

injury. The rule’s requirement to

quantify injuries relative to baseline

may provide the proof of causation.

Comment: One commenter requested

that the rule state that an incident

should be deemed the cause of an injury

if the incident was a contributing factor

to an indivisible injury, as provided in

the 1994 proposal.

Response: NOAA does not believe it

is appropriate to advocate legal

standards of causation in the rule.

Injuries must be determined to have

occurred, then quantified relative to

baseline, to be in accordance with the

rule.

Injury Determination

General

Comment: Several commenters stated

that the exceedance of some threshold

or criterion by itself should not

constitute an injury unless it can be

shown to be relevant to each phase of

injury determination, have population,

habitat, or ecosystem level effects, or

directly affect the human population.

The commenters noted that the rule
480 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

should require injury determination and

quantification for such injuries unless

there are special circumstances such as

threatened or endangered species.

Response: NOAA disagrees that the

suggested limitations on the definition

of injury are appropriate or warranted

given OPA’s mandate to make the

environment and public whole. If an

injury resulting from an incident can be

cost-effectively and reliably determined

and quantified, and feasible, costeffective, environmentally-beneficial

restoration actions can be identified,

then restoration should be pursued.

However, NOAA does not suggest that

each and every injury, regardless of its

nature and scale, should be pursued in

an assessment. Trustees proceed with an

assessment when the information on

injury is adequate to justify restoration.

Comment: Some commenters

suggested that the acceptance criteria in

the CERCLA rule for injuries should be

adopted in this rule. Other commenters

did not understand the need for

acceptance criteria, which were viewed

as too restrictive and narrow. Another

commenter specifically asked that the

rule make the assessment consistent

with the Archaeological Resources

Protection Act (ARPA), 16 U.S.C. 1361

et seq., or at least incorporate the ARPA

criteria.

Response: The rule does not list

specific acceptance criteria for injuries

per se. The rule does, however, include

factors aimed at achieving meaningful

restoration. NOAA believes that the rule

is adaptable and will allow trustees to

select the injuries and assessment

procedures that will provide reliable

and valid information to determining

appropriate restoration. Thus, the

assessment process described in the rule

should be flexible enough to incorporate

the concerns and goals of ARPA.

Demonstrating Exposure and Pathway

Comment: Several commenters argued

that allowing demonstration of exposure

and pathway by procedures other than

field procedures would allow trustees to

claim injury without leaving their desks.

The commenters stated that the rule

should require trustees to show

evidence of actual exposure and a

pathway. Another commenter, however,

suggested that trustees might use

procedures other than those used in the

field to demonstrate exposure and a

pathway, if environmental conditions or

other assumptions are comparable

between the proposed procedures and

the actual field conditions. Some

commenters suggested that the phrase

‘‘plausible pathway’’ be changed to

‘‘reasonably likely pathway.’’

Response: Like any other assessment

procedure used under this rule,

procedures to determine exposure and

pathway must meet the standards for

acceptable procedures in § 990.27. Thus,

the most appropriate procedure for the

circumstances will be selected by

trustees, and NOAA does not believe

that any of the suggested limitations or

qualifiers are necessary in the rule.

Focus on Services

Comment: Many commenters argued

that injury assessment should focus on

the services provided by a natural

resource rather than simply the natural

resource’s physical, chemical, or

biological properties. The commenters

noted that, given that ecosystems need

some level of disturbance to maintain

biological diversity, and the difficulty in

determining recoverability of natural

resources since natural resource

stability does not exist, adverse effects

to natural resources that cannot be

linked to services provided to the public

or the overall functioning of the

population, community, or ecosystem

ought not be considered under the rule.

Response: OPA states that trustees

‘‘shall assess natural resource damages’’

(section 1006(c)) and that these damages

are ‘‘for injury to, destruction of, loss of,

or loss of use of, natural resources’’

(section 1002(b)(2)(A)). The language of

OPA clearly does not indicate a

preference for services over natural

resources.

On a practical basis, the

determination of recovery is possible, as

demonstrated by the wealth of

information on this topic in the

literature and summarized on NOAA’s

restoration guidance document, listed in

the Bibliography at the end of the

preamble. Ecological concepts such as

stability, although not static, can also be

reasonably determined and thus used to

define recovery. This is also supported

by the literature. Thus, contrary to the

commenter’s position, NOAA maintains

that recovery of natural resources, as a

practical matter, can and must be

considered in order to fulfill OPA’s goal

of making the environment and public

whole.

Panel of Experts

Comment: Some commenters

suggested that NOAA establish a team of

experts in ecology to provide a better

scientific basis for determining and

quantifying injury to natural resources.

These commenters also had specific

concerns with the use of certain

procedures, e.g., biomarkers, and the

manner of accounting for indirect

effects.

Response: NOAA does not believe it

is necessary at this time to convene a

panel of experts. Instead, the standards

for procedures provided in § 990.27

should address the concerns about

certain procedures on a case-by-case

basis.

Types of Injuries

Comment: Several commenters

suggested that the rule include a list of

pre-accepted biological and nonbiological injuries and parameters such

as reproductive success and juvenile or

adult survival. The commenters stated

that the rule should also provide a

mechanism to modify the list of

accepted injuries as new information

becomes available. These same

commenters stated that, whether or not

such a list is finalized, the rule should

allow an injury to be determined based

on a discharge, known concentrations,

and literature documentation that such

substances in such amounts injure

certain natural resources. One

commenter suggested the rule implies

that trustees will assess injuries that do

not meet some unarticulated threshold.

The commenter stated that the decision

to select injuries for assessment should

be left to the discretion of the trustees.

Response: The rule does provide that

it is within the discretion of trustees to

select subsets or representative injuries

and parameters from the suite of injuries

and parameters to include in the injury

assessment and restoration planning.

Rather than specify discrete categories

for limiting this scope, e.g., recreational

importance, the rule encourages a focus

on accomplishing meaningful

restoration by identifying factors to

consider in selecting injuries to include

in the assessment. The guidance

document on injury provides

information on the types of injuries that

may result from incidents involving oil.

Framework for Assessment

Comment: One commenter indicated

that the rule should provide a

framework that is interpretable to all

trustees. The commenter suggested that

the ecological risk assessment procedure

would greatly facilitate the assessment.

Response: NOAA believes that the

rule does provide a comprehensible,

logical, and straightforward assessment

procedural framework. The general logic

of ecological risk assessment is reflected

in the assessment process in the rule.

However, NOAA does not believe that

the approach typically involved in risk

assessment is appropriate for all, or

even most, incidents.
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 481

Injury Procedures

Comment: One commenter stated that

the rule should more clearly state that

both quantitative and qualitative

procedures may be used in an injury

assessment.

Response: Both quantitative and

qualitative procedures are available to

trustees under this rule. This flexibility

is made clear in the discussion of the

standards for acceptable procedures in

§ 990.27 and in the definition of injury

in § 990.30.

Proceeding With the Assessment

Comment: One commenter stated that

the rule requires that all of the listed

criteria for determining injury must be

met before trustees may proceed with an

assessment. The commenter noted that

it might not be feasible to have

documented all the criteria at this point,

thus the rule should simply require that

trustees ‘‘consider’’ these criteria before

proceeding with restoration planning.

Response: The conditions in the rule

are intended to encourage a focus on

necessary and meaningful restoration.

Therefore, proceeding with an

assessment at this stage is contingent

upon demonstrating injury.

Public Involvement

Comment: Some commenters argued

that there should be greater public

involvement in the injury

determination, quantification, and

restoration process so that the public

will be allowed to participate in the

selection of injuries to be included in

the assessment. The commenter noted

that the public may be aware of injuries

of which the responsible party and

trustees are unaware. The commenters

stated that, if the public input is to be

meaningful and comply with OPA, the

public must be given a formal means of

involvement throughout the process.

Response: The rule acknowledges the

value of involving the public in the

assessment, and requires that trustees

provide opportunities for public

involvement after making the decision

to develop restoration plans. Additional

opportunities may be provided at any

time prior to this decision if such

involvement facilitates the

decisionmaking process or helps to

avoid delays in restoration.

Section 990.52—Quantification

Baseline

Comment: Some commenters stated

that the rule does not require

quantification relative to baseline.

Commenters noted a number of

difficulties associated with determining

baseline for quantification purposes

including the use of historical data that

may not reflect current conditions at the

site of the assessment and the need to

account for natural variability or

confounding influences to adequately

compensate for injuries without

overestimating the injuries. The

commenters also pointed out that nonequilibrium systems are the rule, so

baseline may be difficult to define, let

alone achieve. Finally, the commenters

also noted that funding is rarely if ever

available for establishing baseline.

Some commenters argued that

quantification should focus on services

rather than natural resources, therefore

baseline should be defined as the flow

of services to the public that would have

existed in the absence of the incident.

Response: The approach for

quantification does relate injury to

baseline. The rule acknowledges the

inherent difficulties in collecting

traditional baseline data and has been

expanded to encompass other

appropriate types of data for

comparison. Broadening the concept of

baseline will allow trustees to more

appropriately adapt the quantification

approaches to the circumstances of an

incident. NOAA also notes that strict

reliance on services is neither explicitly

stated nor implied under OPA. Thus,

the definition of baseline and its

application to quantification is retained

in the rule.

Quantification Approaches

Comment: A number of commenters

argued that the rule should require

quantification of the reduction in

services resulting from the incident, as

required in the CERCLA rule. Some of

the commenters stated that the

dichotomy of measuring the change in

the natural resource itself, or directly in

the services is unnecessary and that

only the measurement of reduced

services can serve as a predicate for

compensable natural resource damages.

Some commenters argued that NOAA

should adopt acceptance criteria for

injury quantification, such as: service

reductions must be linked to the

discharge and the natural resource

injury; service reductions must be

measured relative to baseline; service

reductions must be measured in terms

of functions provided by the injured

natural resources, not the physical

quantities or qualities of the natural

resources; and measurements of service

reductions must account for the

presence and availability of substitute

services.

Response: The rule allows trustees to

assess the injured natural resources

directly and/or directly assess the lost

services provided by injured natural

resources. NOAA believes that narrow

restrictions on assessing services to

humans will fall far short of fulfilling

the intent of OPA to make the

environment and public whole. NOAA

believes that the public does value and

benefit from productive, functional, and

healthy natural resources, habitats, and

ecosystems. Neglecting OPA’s mandate

to restore that which was injured and

substituting natural resources on a

narrow cost and human use basis would

result in real degradation of the natural

resources. Establishing additional

quantification criteria focusing on

human services would be inappropriate.

Scale of Injury

Comment: One commenter stated that

quantification should be limited to only

those injuries necessary, and only to the

degree necessary, to develop

appropriate restoration measures. Some

commenters pointed out that a

consideration of the extent of injuries

should not be restricted to the physical

boundaries of the incident, particularly

where natural resources at risk are

highly mobile and seasonal in their

distributions.

Response: Quantification is

appropriate where injury has been

determined to have resulted from the

incident. Where information on injury

provided by quantification procedures

is adequate to justify restoration, then

restoration actions should be pursued.

Also, under the rule, the spatial and

temporal extent of injury is not

restricted to the physical boundaries of

the incident and trustees may consider

the particular characteristics of a natural

resource, including its mobility, in

quantifying injury.

Committed Services

Comment: Some commenters

requested that the rule allow reduction

in service flows only for established or

‘‘committed’’ services to avoid

speculative recoveries.

Response: The provisions in the rule

relating to quantification of services lost

relative to baseline ensure that

speculative recoveries are avoided.

Injury Quantification Procedures

Comment: One commenter stated that

the rule should call for field-based

quantification procedures, including a

set of general and basic standards for

quantifying reductions in services.

Other commenters requested that the

rule provide trustees with the ability to

choose one or any combination of

quantification procedures, so long as

there is no double recovery.

Response: NOAA does not believe

that the rule should prescribe limited or
482 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

specific procedures for quantifying

injury, as it is infeasible to determine

the universe of procedures that would

be appropriate for all incidents. Such a

limitation would prevent trustees from

using the most appropriate procedure

for the circumstances of the incident,

and would likely prevent use or

adaptation of procedures to provide

quantification information that is useful

in restoration scaling. Instead, the rule

provides standards in § 990.27 for use in

determining appropriate procedures.

The rule does allow trustees to use a

combination of the suggested

quantification approaches, but prohibits

trustees from applying injury

quantification procedures in a manner

that would result in double recovery.

Substitutes

Comment: One commenter argued

that the rule fails to require

consideration of substitutes when injury

is defined in terms of a reduced

population as opposed to a broad

enough category to incorporate

substitution.

Response: Substitution is not

explicitly identified as a factor in

quantifying injuries because it is only

relevant to a subset of injuries or

losses—those that relate to value

flowing from behavioral opportunities

available to humans.

Natural Recovery

Comment: Several commenters stated

that the requirement for estimating the

time for natural recovery may be

difficult to meet, and that the rule

should instead call for this estimate

when such estimate is readily available

and cost-effective, and when no primary

restoration is likely to be effective.

Response: NOAA acknowledges the

difficulty in estimating natural recovery

and has provided the necessary

flexibility to trustees. The rule has been

amended to provide that recovery may

be estimated quantitatively or

qualitatively, depending on the

circumstances of the incident and

procedures available that meet the

standards for procedures under

§ 990.27.

Section 990.53 Restoration Selection—

Developing Restoration Alternatives

General

Comment: Many commenters

supported the shift in focus from

monetization of damages to scaling of

restoration actions. These commenters

stated that the proposed rule properly

places the focus of the damage

assessment on the ultimate goal of OPA

to restore injured natural resources and

services, and incorporates best current

practices currently being used by

trustees and responsible parties to

achieve this goal in an expeditious

manner. However, many other

commenters raised concerns that the

scaling approach would lead to delays

and increased assessment costs, since

trustees would undertake studies of lost

services and replacement services, and

would not substantially further the goal

of reducing transaction costs. Other

commenters suggested that requiring

trustees to quantify all damages in terms

of specific restoration actions and costs

places trustees in the position of either

settling for compensation for

immediately apparent, short-term losses

or delaying the restoration process

while waiting for long-term injuries to

become apparent. One commenter noted

that the public will not be served in

either case; therefore, trustees should be

allowed to recover damages, then

determine the most appropriate

restoration approach over time. Another

commenter argued that as accurate

assessment becomes more difficult and

costly, less scientific rigor will be

required.

Response: Trustees are required,

under section 1006(c) of OPA (33 U.S.C.

2706(c)), to ‘‘develop and implement a

plan for the restoration, rehabilitation,

replacement, or acquisition of the

equivalent, of the natural resources

under their trusteeship.’’ By permitting

a variety of possible restoration

activities, this section of OPA leaves to

the trustees’ discretion the

determination of the most appropriate

activity, recognizing the legislative

history’s indicated preference for

restoration over acquisition of

equivalent natural resources. All

damages recovered must be spent on

some restoration activity. Thus, it makes

sense that evaluating potential

restoration actions provide the focus of

an assessment. It does not benefit the

natural resources or the public if monies

are collected without a view toward

how they will be spent, nor whether

sufficient funds have been collected to

implement any meaningful action. OPA

is not about collecting money. NOAA

believes that, contrary to some

comments, the restoration approach will

generally speed restoration and avoid

litigation, by alleviating distrust that

claims for monetary damages are

speculative and punitive. Practical

experience in implementing the

restoration scaling approach in past

cooperative assessments has led NOAA

to the belief that this approach is

effective in significantly expediting the

restoration of injured natural resources

and services, and that the benefits to the

environment and public do not come at

the expense of increased assessment

costs. While trustees now must assess

replacement services in addition to lost

services in most incidents, NOAA

believes that, in general, a net increase

in assessment costs will not result, due

to both the cooperative provisions set

forth within this rule and the removal

of the requirement that trustees estimate

the monetary value of damages. NOAA

also believes that the standards for

assessment procedures set forth in

§ 990.27(a) of the rule will ensure a

sufficient level of rigor for all

assessments.

Range of Alternatives

Comment: Some commenters

requested guidance on what might be an

appropriate range of restoration

alternatives. Other commenters noted,

however, that the rule should not

require the development and

consideration of a predetermined

number of potentially unreasonable

alternatives.

Response: NOAA does not agree with

the commenters who recommended a

limit on the range of alternatives

trustees should consider. Trustees

should consider a range of alternatives

that is reasonable for the incident of

concern, and the specific natural

resources injured. The rule requires that

only actions that are feasible and legal

be considered. The range of feasible

actions may vary greatly, depending on

the types of injuries suffered, or the

nature of the environment or habitat,

among other things. Guidance on the

types of actions and how they might be

considered is provided in the

Restoration Guidance Document,

referenced in the Bibliography at the

end of this preamble.

Natural Recovery Alternative

Comment: Some commenters

suggested that, when injuries are not

extensive or are short-term, no

restoration actions are needed,

therefore, the rule should more strongly

require consideration of natural

recovery. Many commenters supported

the requirement that trustees always

consider natural recovery as an option.

Several commenters stated that the rule

should adopt a preference for natural

recovery.

Other commenters stated that the

language regarding the ‘‘no action’’

alternative is confusing. Another

commenter suggested that the confusion

over the terms might be a result of the

different objectives of OPA and NEPA.

Several commenters stated that the

rule should set out reasonable
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 483

expectations for analysis of natural

recovery, especially where injuries are

evident from the Preassessment Phase

investigations and feasible restoration

alternatives exist. These commenters

suggested either deleting the

requirement to evaluate a no action

alternative or making it optional.

Response: The rule requires that

natural recovery be evaluated as a

primary restoration action in every case.

‘‘No action’’ refers to alternatives in

which trustees take no primary

restoration action and no compensatory

restoration actions. Natural recovery,

which must be considered for each

incident, is only considered under the

primary restoration component of the

alternative and only refers to direct

restoration involving no human

intervention. Trustees have the

discretion to choose any combination of

primary and/or compensatory

restoration actions, given the

circumstances of the incident.

Primary Restoration

Comment: Many commenters

requested that the rule clarify the

distinction or relationship between

primary and compensatory restoration.

Another commenter, however,

suggested that this was a distinction

without any significance. Some

commenters interpreted the regulations

to allow only on-site, in-kind actions in

primary restoration. Some commenters

noted that, if the rule is interpreted to

limit primary restoration to actions

focused on the injured natural resources

themselves, and to relegate replacement

or acquisition actions solely to

compensatory restoration, it is

inconsistent with OPA, which

authorizes replacement and acquisition

of the equivalent as measures for

primary restoration. Other commenters

noted that primary restoration could

include any action, whether on-site, offsite, in-kind, out-of-kind, that returns

natural resource and/or service levels

back to baseline condition.

Response: NOAA has sought to clarify

the distinction between primary and

compensatory restoration, including

specifying explicitly in the preamble

discussion of the definition of

‘‘restoration’’ that primary restoration

may include on-site, off-site, in-kind,

and/or out-of-kind restoration actions

that return injured natural resources and

services to baseline. Actions to restore,

replace, rehabilitate, or acquire the

equivalent of injured natural resources

or services may be considered in

evaluating both primary and

compensatory restoration actions.

Comment: Some commenters

suggested that primary restoration

should attempt to make the public

whole by returning net services to the

public to baseline.

Response: NOAA believes that in

most cases, primary restoration alone

will not be sufficient to make the

environment and public whole. When

incidents result in interim lost services,

an additional compensatory restoration

component will be necessary to fully

compensate for injuries to trust natural

resources.

Comment: One commenter stated that

the rule should require a hierarchy of

alternatives, such as on-site, in-kind;

off-site, in-kind; and off-site, with

substitute natural resources or services

with equivalent economic value.

Response: NOAA does not support

the development of such a hierarchy,

since it may prevent the trustees from

selecting and implementing the

alternative which best meets the criteria

for evaluation of alternatives presented

in § 990.54(a).

Acquisition of the Equivalent

Comment: One commenter contended

that acquisition of the equivalent is

inconsistent with the stated aim of

compensatory awards and should not be

considered. The commenter questioned

how acquiring the equivalent restores

the injured natural resources, since the

effects of most incidents are transient.

Some commenters on the 1994 proposal

objected to the ranking of restoration

alternatives whereby acquisition of the

equivalent is the option of last resort,

especially where natural resources are

subject to development or other

pressures (e.g., in urban areas). The

commenter stated that trustees should

be free to acquire the equivalent even if

other restoration alternatives are

possible. Some commenters stated that

the goal of restoration is to make the

public whole through whatever

alternatives are available under OPA,

which may or may not include returning

natural resources to baseline.

Response: NOAA contends that, in

some instances, acquisition of

equivalent natural resources or services

may be necessary to adequately

compensate the environment and

public. The present rule does not

prevent acquisition of the equivalent

even in the presence of other feasible

alternatives.

Restoration of Services

Comment: Several commenters argued

that restoration alternatives must be

formulated and evaluated by reference

to the services provided by the injured

natural resource, not the natural

resource itself. Therefore, the

commenter suggested that NOAA

should make every effort to clarify that

the restoration of services of natural

resources refers only to those services or

functions provided to society.

Commenters added that the servicefocus is needed to select the most costeffective, rational, and efficient

restoration alternatives. The

commenters argued that allowing

trustees to choose full physical

restoration where a less expensive

alternative can fully replace the services

provided by the natural resource is

contrary to the goal of cost-effectiveness

since the additional expenditure

required for full physical restoration

provides no additional benefit to the

public. Other commenters suggested

that a natural resource-based approach

could result in overcompensating the

public.

Response: The rule focuses all

assessment decisions on restoration, and

making the environment and public

whole. Primary restoration focuses on

the injured natural resources

themselves, as authorized by OPA’s

language basing liability and damages

on injuries to natural resources

themselves, while compensatory

restoration focuses on the services that

are lost as a result of the incident, and

which are not compensated for by

implementing the primary restoration

action. Both elements must be

considered in designing restoration

alternatives. Because OPA defines

damages to include both the cost of

restoration and diminution in value, a

focus solely on natural resources or

solely on services risks

undercompensating the environment

and the public.

Other considerations

Comment: Several commenters

suggested that a focus on ‘‘certain key

species or habitats’’ may lead to

controversy, since terms are not defined.

The commenters noted that there is

sufficient guidance in the quantification

section on this issue and that these

terms are not needed. However, the

commenters suggested that, if the terms

are retained, the phrase ‘‘key services’’

should be added.

One commenter suggested that there

is the need to develop procedures that

allow for non-predictable attributes of

the ecosystem. The commenter noted

that, for other programs requiring

restoration, a poor job has been done in

the past of documenting restoration

outcomes needed to provide data for

development of new models.

One commenter stated that the

procedures for restoration under OPA

are unlikely to replace injured natural

resources because of inadequate
484 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

knowledge on critical habitat functions,

long-term success and the lack of

procedures to assess impacts due to

multiple stressors.

Response: The final rule retains the

guidance that primary restoration

actions that return key natural resources

or services to baseline may be an

appropriate restoration alternative if, for

instance, such an action would facilitate

return or recovery of other natural

resources. The concept of key services

has been added to the rule. NOAA

believes that the rule’s requirements to

determine standards to gauge the

success of restoration actions, and

performance criteria to measure the

progress of actions in achieving goals

and success, will provide the types of

information through monitoring that the

commenters suggest are needed.

Compensatory Restoration

Mandatory Inclusion

Comment: Some commenters argued

that the inclusion of compensatory

restoration should be required in all

planning efforts, and not be

discretionary. Some of these

commenters stated that if trustees do not

include compensatory restoration

actions, they should include a written

justification for compelling reasons of

why such actions were not included.

Response: The rule and preamble

have been revised to reflect that trustees

must consider compensatory restoration

action and also must document this

decision in the restoration plan.

General

Comment: Many commenters noted

that there are too many undefined

terms, e.g., ‘‘scarcity,’’ ‘‘comparable,’’

‘‘equivalent,’’ used in the compensatory

restoration provisions.

Response: NOAA has amended the

rule to require that the relative value of

injured and replacement natural

resources and services be evaluated,

rather than scarcity and demand.

Comment: Several commenters

suggested that the compensatory

restoration approach seems to have been

structured as an attempt to circumvent

the difficulties in accurately measuring

interim lost values. However, the

commenters stated that the concepts of

compensatory restoration and scaling do

not address the defects of the 1994

proposal and that these concepts are

based upon economically and legally

unsound assumptions and, therefore,

fail to comply with the statutory

measure of damages.

Response: NOAA has put forth the

revised rule with the intent of

expediting restoration of injured natural

resources and services. NOAA believes

that the compensatory restoration

approach in this rule is technically and

legally sound, and consistent with the

language and intent of the statute, and

more appropriate to adequately assess

and compensate for interim losses than

previous approaches.

Concept of Compensatory Restoration

Comment: Several commenters argued

that the concept of compensatory

restoration creates the potential for

exaggerated or excessive damage awards

and will enable excess money to be

spent on natural resource projects

without limitations. Some of these

commenters argued that this approach

has insufficient constraints on the

application of procedures, which may

result in double counting, assessments

beyond the scope of OPA, or damages

that are grossly disproportionate to the

value of the natural resources.

Response: NOAA believes that the

standards provided in the rule for

acceptable procedures, the prohibition

on double recovery, and the

opportunities for public review and

input provide constraints sufficient to

avoid the problems suggested by the

commenters.

Services Eligible for Compensatory

Restoration

Comment: Some commenters

suggested that the rule is unclear as to

what types of services would be eligible

for compensatory restoration. The

commenters stated that the rule should

have an additional section that would

list protocols that would enable trustees

and responsible parties to easily

ascertain what service functions were

impaired by the incident, if any, and

then make rational decisions about what

types of projects would serve as

adequate restoration.

Response: NOAA has developed draft

guidance documents, listed in the

Bibliography at the end of the preamble,

that directly address these commenters’

concerns. These guidance documents

will be finalized after the rule is final.

All quantifiable lost services for which

feasible restoration actions can be

identified are compensable under the

rule.

Components Included Under

Compensatory Restoration

Comment: Some commenters noted

that the rule should clarify that

compensatory restoration is defined as

actions to make the environment and

public whole for interim losses. Another

commenter noted that compensatory

restoration could also address any

additional injury associated with the

incident. On the other hand, another

commenter stated that interim lost

values should not be collected by

trustees because that would be double

recovery, and that collection of these

damages should be allowed only if there

is a mechanism for distributing those

recoveries to the group injured by the

incident.

Some commenters noted that the rule

should clarify that compensatory

restoration is defined as actions to make

the environment and public whole for

interim losses. Another commenter

noted that compensatory restoration

could also address any additional injury

associated with the incident.

Response: In order to make the public

whole for the resource injuries, it is not

sufficient to ensure that the resources

are returned to baseline condition, the

public also must be compensated for the

losses from the time of the injury until

full recovery of the resources. For

example, when beaches, parks, or

fisheries are closed and natural resource

stocks are injured, people either will

lose or will have impaired opportunities

for fishing, hunting, hiking,

birdwatching, and other activities. OPA

provides that the measure of damages

includes recovery of the costs of

restoring natural resources and services

to baseline, plus compensation for

interim losses (and for assessment

costs). These recoveries are not to be

distributed to affected groups or

individuals, rather OPA requires that

they be used to restore, rehabilitate,

replace, or acquire the equivalent of the

injured natural resources. The

recoveries are to be collected and spent

on natural resource restoration actions

by the public agencies managing the

natural resources in trust for the public.

Private parties also may have standing

to claim for private losses resulting from

a particular incident. Double recovery is

not allowed under statute. Public and

private claims are for logically different

categories of losses. Specific provisions

are articulated in the rule in order to

avoid double recoveries.

Comment: Some commenters stated

that the rule should not allow for

recovery of any private losses because of

the potential for double recovery. These

commenters noted that such recoveries

would include economic rent, private

recreational losses (consumer surplus),

lost commercial revenue, and

government revenues. One commenter

stated that changes in economic rent as

a result of an incident are too

complicated to estimate reliably because

of changes in factor costs and other

prices. Another commenter argued that

trustees should not be able to collect for

economic rent even when private
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 485

parties do not make such claims because

this recovery by trustees is not included

within the language of OPA.

Some commenters noted that the final

rule should include the ‘‘multiplier

impact’’ from interim losses to estimate

the true loss. These same commenters

also stated that the final rule should

consider nationwide, statewide, and

regional assessments to account for

areas affected outside the direct impact

area.

Another commenter suggested that

the final rule should clarify the factors

that may weigh into a natural resource

damage assessment involving

subsistence resources, particularly

nutritionally and culturally critical, as

well as highly regulated natural

resources.

Response: The preamble discussion of

§ 990.22 has been revised to provide

trustees with detailed guidance in

distinguishing between public and

private economic losses in order to

avoid double recovery. Under the

valuation scaling approach, trustees are

entitled to scale restoration actions

based on the total diminution in value

of lost or diminished services from

injured public trust natural resources

not recovered by a private party. One

component of this total diminution in

value is the resulting reduction in

economic rent, which represents the

income that accrues to a producer as a

result of access to an unpriced natural

resource. The procedures identified for

calculating economic rent are well

accepted economic procedures. The

rule, in § 990.27, provides standards for

a case-by-case determination of reliable

application of any procedures employed

by trustees.

In general, private parties can make

claims for damages under common law

only when a private proprietary interest

has been injured (with an exception

under admiralty that commercial

fishermen do not require an injury to a

proprietary interest). These claims are

generally limited to ‘‘economic’’ (i.e.,

financial) losses. This restriction

excludes claims for lost consumer

surplus attributable to impaired

recreation. See Alaska Sport Fishing

Ass’n v. Exxon Corp., 34 F.3d 769 (9th

Cir. 1994) (affirming dismissal of private

claims on behalf of approximately

130,000 recreational anglers seeking

compensation for the Exxon Valdez

spill.)

Ambiguities could arise where

impaired recreational uses of public

natural resources are linked with uses of

private property that is injured due to

an incident. In this case, the trustees

would seek full recovery occur except

for those losses being sought by private

parties so that double recovery did not

occur.

The loss of government fees

attributable to a reduction in

government services as a result of

injuries from an incident are

appropriately elements of public claims.

On the other hand, the changes in

expenditures captured by the multiplier

effect do not represent public losses. For

example, when an incident occurs,

tourists may shift the location of their

vacations to other substitute sites. The

loss in hotel and restaurant business at

the site of the incident will have a

ripple effect on suppliers of goods and

services for those businesses. The

‘‘multiplier effect’’ captures the secondand later-round losses in expenditures

from an incident. However, the shift in

tourist expenditures to hotels and

restaurants at substitute sites (and to

substitute activities) will bring

comparable gains, with a comparable

positive multiplier effect. The net

impact will be zero in markets in which

there is no change in price or direct

impairment of productive capacity as a

result of the incident. Consequently,

public claims do not take into account

shifts in expenditures as a result of the

incident. Private parties may be able to

file claims for such losses.

In addressing claims for subsistence

losses the trustees must take into

account all of the services provided by

the injured resources, including

nutrition and cultural/spiritual values.

Because evaluation of compensatory

restoration actions requires scaling of

the natural resources or services lost

and linking them to appropriate

compensatory restoration actions, there

will be no double recovery for services

restored under primary restoration

actions. This approach should also ease

concerns over speculative injuries being

included in an assessment, as only

measurable service losses, and only

public losses, will be included.

Restorable Natural Resources

Comment: Some commenters noted

that the rule should not limit restoration

to ‘‘restorable’’ natural resources or

services since, from an ecosystem point

of view, almost any injury can be

redressed at least in part even if the

particular services or site cannot be.

Response: NOAA agrees and believes

the rule is sufficiently flexible to

provide compensation for those natural

resources or services that are not

directly restorable.

Types of Compensatory Actions

Comment: One commenter stated that

the rule should require that lost services

and the replacement services be truly

equivalent in type and quality. Other

commenters, however, suggested that

trustees may also consider, when

establishing the range of compensatory

restoration actions, actions that provide

comparable injured natural resources

and/or services. These commenters

noted that the rule is unclear whether

trustees may examine restoration

options that provide comparable

services in those cases where there are

sufficient options that restore same-type

services. The commenters suggested that

this limitation should be removed and

trustees permitted to identify and

choose any restoration options since a

limitation to ‘‘same or comparable’’

services is too narrow given the

complexity of natural ecosystems and

their use (and nonuse) by humans. One

commenter stated that the division

between ecological and human services

is blurry and that in planning

restoration of lost services, it is often

possible to restore both ecological and

human services through the same

action. Other commenters pointed out

that the rule does not require that the

selected compensatory restoration

actions will have any connection

whatever with the injured natural

resources.

Response: The rule states that trustees

must consider compensatory restoration

actions that provide services of the same

type and quality and comparable value

as those injured. However, if a

reasonable range of actions meeting

these criteria is not available, trustees

are afforded the flexibility to consider

actions that provide natural resources

and services of comparable type and

quality. The rule also develops a clear

linkage between the injured natural

resources and services and the selected

compensatory action(s) by requiring that

trustees develop restoration alternatives

that provide services of the same or

comparable type and quality.

Scaling

Scaling Primary Restoration Actions

Several commenters suggested that

scaling of primary, as well as

compensatory, restoration will be

necessary.

Response: The rule has been revised

to provide that scaling of actions

generally applies to primary restoration

actions that involve either replacement

or acquisition of equivalent natural

resources and/or services.

Scaling Compensatory Restoration

Actions

Inclusion of Passive Use Values

Comment: Some commenters stated

that the heavy reliance on services for
486 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

scaling may result in passive use

services and services flowing from the

unique character of a natural resource

being excluded from recoveries, and

that, even if they are included, the

direct restoration approach is unlikely

to be successful. Some commenters

stated that passive uses should

specifically be used in scaling the

restoration actions.

Some commenters noted that the loss

of passive values should be

compensated because such values

represent part of the total value,

therefore damages, under OPA. Other

commenters noted that the rule should

encourage rather than discourage the

recovery of passive values in order to

increase the incentives for actions to

avoid and reduce such damages.

Several other commenters specifically

argued that passive use values should

not be included in scaling restoration

actions, primarily because such values

cannot be measured reliably. Other

commenters stated that including such

values would unreasonably extend the

scope of potential liability for

responsible parties; would generate

overstated damage claims, and would be

punitive. Some of these commenters

argued that such values are

inappropriate for compensation because

they are already incorporated into the

legal requirements and compliance

programs of OPA and, therefore,

recovery of such values in natural

resource damage cases would result in

double recovery. Some commenters

stated that Congress did not expressly

provide for the recovery of passive

values in OPA and that such values are

overly inclusive and unrealistic. One

commenter suggested that passive value

loss is not meaningful within the

statute.

Some commenters stated that,

generally, incidents involve short-term,

transitory injuries, therefore recovery for

lost passive values is especially

inappropriate because such recoveries

would be punitive.

Some commenters noted that future

effects from injuries are highly

speculative and, in the case of small

injuries, insignificant; therefore, any

passive value determinations should be

reduced to real, near-term losses if they

are to be included in a damage claim.

Other commenters pointed out that

compensable values should have a

maximum recovery period for the

future. One commenter suggested that

some passive values involve behavioral

traces, contrary to the proposed rule

definition, and that the rule should

encourage the measurement of

observable damages, even for those who

do not directly use the natural resource.

Other commenters suggested that such

values are not only speculative, but are

not economic in nature.

Response: NOAA believes that the

flexibility provided by the range of

available scaling approaches will

prevent the public from being deprived

of full compensation. By allowing

trustees to consider restoration actions

providing natural resources and services

of comparable type, quality and value,

the rule provides a means for

compensating the public for injuries to

unique natural resources, even in cases

where direct restoration of these injured

natural resources is either not feasible or

fails to bring the injured natural

resources and/or services fully back to

baseline.

NOAA notes that there is a general

consensus in the economic community

that passive use values exist. Under

OPA, and in accordance with the Ohio

decision, passive use values may be

used in calculating the level of

compensation necessary to fully

compensate the public. The procedures

used to quantify passive use losses are

subject to the same standards for

acceptable procedures in § 990.27 as all

other procedures used to scale

compensatory restoration actions.

NOAA recognizes that in cases

involving temporary injury, individuals

may not experience a significant sense

of loss. However, there are cases where

the death of individual members of a

species may cause a significant loss in

passive use values even though the

species levels may at some point return

to baseline.

Where appropriate, NOAA supports

the inclusion of reliably calculated

passive use values in the scaling

process. NOAA notes that some of the

commenters’ concern about inclusion of

passive use losses may have been

addressed by defining compensation for

interim losses in terms of the cost of

compensatory restoration actions rather

than as the value of interim losses.

Furthermore, in the revised format for

claims, valuation procedures, including

stated preference methods, are used to

make relative comparisons between the

loss and the compensatory restoration

action gains, rather than to generate

absolute dollar amounts of lost value for

a claim. Scaling compensatory

restoration actions may involve a single

survey eliciting the direct resource-toresource trade-offs between the injured

natural resources and potential

compensatory natural resources. In this

case it is not necessary to elicit a

monetary value for natural resources.

Alternatively, scaling may involve a

two-sided calculation, in which

measures of both loss due to injury and

gains from compensatory restoration

actions are estimated separately. Where

valuation procedures are employed, the

decision as to the appropriate scale of a

restoration action will require a relative

comparison of the loss in value and the

potential gains in value. NOAA

recommends that, where feasible,

trustees should use the same or similar

valuation procedures for both sides of

the calculation in order to reduce the

possibility of bias in the scaling

calculations.

Inclusion of Nonmeasurable Functions

Comment: Some commenters stated

that the rule should include

nonmeasurable functions provided by

natural resources, allowing for

subjective assessments by trustees in

determining the value of such losses.

One of these commenters specifically

requested that the rule acknowledge the

spiritual, cultural, and religious nature

of services unique to tribes. Some

commenters argued that full

consideration must be given to all of the

natural resource services, whether they

are of direct human use or not.

Response: The rule does not limit the

range of services to be included in

scaling compensatory restoration

actions, except to the extent that the

procedures used to assess service

injuries and scale compensatory

restoration meet the standards presented

in § 990.27.

Need for Guidelines in Conduct of

Scaling

Comment: Many commenters

suggested that the rule should contain

guidelines for the scaling approach and

procedures in the rule. Several

commenters argued that economic

valuation procedures are not sufficiently

accurate or reliable at this time to allow

trustees to make the comparison of

services gained to services lost in a

reliable way in many cases. Some

commenters noted that detailed

guidance is necessary to expedite

damage claims and to avoid lengthy and

expensive litigation.

Some commenters stated that

experimental and/or unreliable scaling

procedures should not be accorded the

rebuttable presumption under the rule.

Several commenters argued that the

absence of standards would allow the

rebuttable presumption for any

valuation procedure, no matter how

poorly structured, including unnamed

procedures that the trustees believe are

appropriate. Therefore, some of these

commenters stated that the rule should

clearly define what ‘‘valid’’ and

‘‘reliable’’ mean with regard to

assessment procedures. The
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 487

commenters also suggested that trustees

who choose to use new or unorthodox

procedures should be required to

demonstrate that these procedures

provide comparable or higher levels of

validity and reliability than the

procedures previously recognized by

NOAA.

Several other commenters, however,

supported the decision to remove

specific guidance on procedures from

the rule and place them in guidance

documents. These commenters argued

that the rule should not establish

premature or overly prescriptive

procedural requirements for any

economic or natural science procedure,

since such procedures are the subject of

research and refinement.

Response: NOAA notes that the rule

has been revised to provide a set of

standards in § 990.27 with which to

judge all procedures under

consideration, as well as factors to

consider when selecting among those

procedures. Assessments using

procedures that meet these standards

may receive the rebuttable presumption,

if they are otherwise performed in

accordance with the rule. In addition,

NOAA is considering the development

of a separate guidance document on

resource-to-resource, service-to-service,

and valuation scaling procedures.

Choice of Resource-to-Resource and

Service-to-Service vs. Valuation Scaling

Approaches

Comment: Many commenters opposed

mandating the use of the service-toservice scaling approach for restoration

options providing the ‘‘same type and

quality’’ of services subject to

‘‘comparable scarcity and demand

conditions.’’ These commenters state

that this requirement restricts the

flexibility of trustees in an assessment.

The commenters stated that the

restriction is unworkable, given the lack

of direction as to what constitutes

‘‘same type and quality’’ and

‘‘comparable scarcity and demand

conditions.’’ The commenters stated

that trustees should be allowed

maximum flexibility in selection of the

most efficient assessment procedure.

Some commenters pointed out that the

requirement of service-to-service for any

portion of restoration where in-kind

natural resources or services are feasible

will in some cases present difficulty in

application of valuation procedures for

remaining portions of a claim due to

problems of double counting or

indivisible losses and gains. The

commenters argued that the selection of

procedures should be based on factors

such as reasonable cost, validity,

reliability and incident specific

considerations, which will not always

favor the use of service-to-service

scaling over valuation. The commenters

pointed out that OPA defines the

measure of damages to include

‘‘diminution in value’’ to the public;

therefore, NOAA’s authority to preclude

trustees from assessing diminution in

value in monetary terms is questionable.

Some of these commenters argued that

the service-to-service approach is not

yet well developed, especially in the

areas of human uses. However, the

commenters pointed out that economic

procedures have been well developed

and frequently relied upon and should

be accorded equal weight in the rule.

Some commenters noted that the rule

does not clearly specify when trustees

should use the service-to-service instead

of the valuation scaling approach.

Response: NOAA agrees with the

comments recommending elimination of

the requirement to use a resource-toresource or service-to-service scaling

procedure when determining the scale

of a compensatory restoration action

that provides natural resources and/or

services that are of the same type and

quality and are subject to comparable

natural resource scarcity and demand

conditions as those lost. Consequently,

NOAA has modified the rule to

maximize the trustees’ flexibility in

choosing the most appropriate scaling

approach. The trustees must now

consider, but are not required to

implement, a resource-to-resource or

service-to-service approach for actions

that provide natural resources and/or

services of the same type and quality,

and of comparable value to those lost.

NOAA also has replaced the phrase

‘‘comparable scarcity and demand’’ with

‘‘comparable value.’’ The rule requires

that the relative value of injured and

replacement natural resources and

services be evaluated.

Use of Public Natural Resources for

Restoration Actions

Comment: Some commenters argued

that the compensatory restoration

approach would transfer to the polluter

for free the consumer surplus provided

by public natural resources. The

commenters stated that many public

goods and natural resources provide a

public benefit in excess of the cost of

maintaining them. The commenters

pointed out that a restoration-based

approach is preferable to industry

because it focuses on the cost of

restoring an injury, rather than the value

of the injury; that the difference

between these two figures is the surplus

value inherent in the natural resource.

Therefore, the commenters argued that

the responsible party pays the ‘‘cost,’’

the ‘‘surplus’’ is contributed and the

appropriate ‘‘value’’ is achieved. The

commenters stated that the rule must be

amended to require restoration actions

of a magnitude that create a net benefit

(i.e., subtracting the pre-existing value)

equal to the injury.

Response: The rule does require that

restoration actions create comparable

benefits to those that were lost due to

the injury. NOAA agrees that trustees

should only count the incremental

benefits created by a restoration action.

For example, if an action is

rehabilitating a wetland currently

functioning at 50% effectiveness, only

the incremental improvements beyond

50% should be taken into account.

Trustees also should carefully consider

the opportunity costs associated with

the use of public natural resources for

compensatory restoration actions. For

example, if the restoration action is to

transform land currently in upland use

into marsh, the opportunity cost of

forgoing the previous upland uses needs

to be taken into account.

Consideration of Economic Benefits

Comment: One commenter suggested

that scaling should also consider the

economic benefits resulting from the

incident.

Response: The economic benefits

resulting from incidents will accrue

primarily to individuals and, in most

cases, will represent transfer payments

rather than net social benefits. For

example, whereas hotels in the area of

an incident may lose tourist business,

hotels in a substitute location may incur

gains comparable to the on-site hotel

losses. Just as losses to private parties

are not included in the trustees’ claim,

neither should private gains be

included.

Use of Same Procedure to Measure

Injured and Replacement Natural

Resources/Services

Comment: Several commenters argued

that the same procedure should be used

to measure the value of losses and value

of benefits of restoration. One

commenter pointed out that the use of

different assessment procedures for the

same injury or loss would make it

impossible to adjust accurately for bias

and that the rule should require that

trustees use procedures that are not

subject to upward bias.

Response: NOAA agrees that, where

feasible, use of the same procedure to

measure the value of injuries and

benefits is recommended to reduce the

opportunity for introducing bias in the

scaling of compensatory restoration.

However, NOAA believes that requiring

trustees to use the same procedures to
488 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

measure the value of injuries and

benefits is overly restrictive, since such

a requirement may preclude trustees’

ability to apply revealed preference

procedures (i.e., procedures based on

data on use of natural resources) in a

range of circumstances. Revealed

preference methods can only be used to

value natural resources and

opportunities to use natural resources

with characteristics that fall within the

range of currently existing natural

resources and use opportunities.

Consequently, though it may be feasible

to value lost recreational use of a

particular natural resource with a

revealed preference method, such as the

travel cost model, it will not be feasible

to evaluate the benefits of a proposed

compensatory restoration action if its

attributes are outside of the range of

what is currently available. For

example, if there are no dune walkways

at regional beaches it will not be feasible

to value a restoration action

constructing a dune walkway with

revealed preference methods. NOAA

believes that the issue of bias is

addressed by the requirement in

§ 990.27(a) requiring assessment

procedures to be reliable and valid for

the particular context.

Discretion to Use Valuation Procedures

Comment: Several commenters argued

that the rule gives virtually unbounded

discretion to the trustees with regard to

valuation procedures. The commenters

were concerned that valuation ‘‘sneaks

in the back door’’ through the

restoration planning process by

allowing the option to value lost

services while not valuing the services

gained.

Response: NOAA believes that the

conditions under which the trustees

may employ the valuation scaling

approach are sufficiently specified in

§ 990.53(d). Under the valuation scaling

approach, trustees explicitly or

implicitly measure the value of both the

natural resources/services lost and

natural resources/services provided by

the selected restoration action(s). The

one exception is when the valuation of

the replacement natural resources/

services cannot be performed within a

reasonable time frame or at reasonable

cost, but the valuation of natural

resources/services lost is practicable.

Comment: Some commenters

requested clarification as to what

conditions invoke the ‘‘unreasonable

cost’’ exception in which trustees may

use the interim loss in value to scale the

restoration claim, rather than scaling the

action by demonstrating that an action

of the chosen size will provide benefits

equal to the interim losses from the

injury.

Response: Assessment costs are

deemed to be unreasonable if trustees

fail to follow the guidance provided in

the rule. For example, the additional

costs of a procedure must be related to

the information expected to be gained

with that procedure, as provided in

§ 990.27 of the rule. These standards are

intended to avoid excessive costs in an

assessment.

Comment: Several commenters

pointed out that the rule does not, but

should, explicitly provide for the use of

valuation procedures when a

responsible party challenges the cost of

service-to-service restoration as

disproportionate to the value of the

damages.

Response: Section 990.14(c)(5) allows

responsible parties to request

assessment procedures other than those

selected by the trustees, if they follow

the procedures for making the request in

§ 990.14(c)(5) and the alternative

procedures meet the standards for

acceptable procedures provided in

§ 990.27.

Comment: Several commenters argued

that the responsible party should not

have the unilateral right to require

economic valuation of restoration

options. The commenters noted that

such an option would result in the

responsible party having more rights

than the trustees to choose assessment

procedures, which would be improper

and unfair. The commenters stated that

the trustees, in all cases, should have

the right to use valuation procedures.

Another commenter argued that the

option for the responsible party to

request a more specific procedure

contravenes OPA, which requires

trustees to perform assessments,

advance costs, file, and establish claims

for damages.

Response: The rule has been revised

to allow the trustees to reject the

responsible parties’ proposed alternate

assessment procedures if they do not

meet the criteria specified under

§ 990.14 (c)(5)(iii), and thus the

requirements for acceptable procedures

described in § 990.27.

Discounting and Uncertainty

Addressing Uncertainty

Comment: Several commenters stated

that trustees should be required to

address uncertainties in measures of

losses and gains as a separate matter

from discounting. Some of these

commenters suggested addressing

uncertainties using a Monte Carlo

framework. The commenters pointed

out that differences in discount rates are

driven by financial risks, which are

unrelated to uncertainties in measuring

lost or replacement service flows. The

commenters stated that the use of riskadjusted discount rates should be

eliminated from the rule.

Other commenters, however,

suggested that the language ‘‘must

address the uncertainties associated

with the predicted consequences of the

alternative’’ should be revised to read

‘‘should address when possible in a

valid manner.’’

Response: NOAA agrees that, where

feasible, the trustees should use riskadjusted measures of losses and gains,

in conjunction with a riskless rate of

discount reflecting the social rate of

time preference for natural resources.

However, in cases where the streams of

losses and gains cannot be adequately

adjusted for risks, trustees should use a

discount rate that incorporates a

suitable risk adjustment to the riskless

rate. NOAA agrees that in some cases,

Monte Carlo analysis may be an

appropriate approach to addressing

uncertainties. The discount rate

employed in a scaling application is to

reflect the social rate of time preference

for the injured and replacement natural

resources and/or services. Because of

the difficulty in determining the rate of

time preference for goods, such as

natural resources, that are not generally

sold in a market, a real rate of 3% is

recommended as a riskless rate, unless

justification is presented for a rate more

appropriate for the specific context.

Use of ‘‘Over-Compensation’’

Comment: One commenter questioned

the amount of ‘‘over-compensation’’ that

should be included in the restoration

plan as a contingency for possible lack

of restoration action success. The

commenter suggested that such overcompensation could be used to account

for restoration aspects that do not

produce the expected results or fail

completely. The commenter suggested

that responsible parties would agree to

over-compensation if doing so would

provide absolute closure for the

responsible party.

Response: This comment basically

restates the requirement in

§ 990.53(c)(4) that trustees must

evaluate the uncertainties associated

with the projected consequences of the

restoration action. The selected

restoration action(s) should be scaled to

incorporate the reasonable range of

uncertainty associated with the level of

natural resources/services that will be

provided by the action(s).
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 489

Bounds on discount rates

Comment: Several commenters

suggested that the rule should place

some bounds on an appropriate

discount rate for societal time

preference. These and other commenters

also requested guidance on risk and

uncertainty.

One commenter suggested that, in the

case where services will be lost or

interrupted for a relatively short period

of time, trustees should use the OMB

projected rates of return on 20-year U.S.

Treasury bills, rather than a long-term

average of past rates. The commenter

noted that a long-term average may be

unduly influenced by unusually high or

low past rates arising from past

economic circumstances not applicable

to the period in question. The

commenter suggested that, should the

final rule mandate a long-term average,

trustees should calculate that average as

a moving average to give more weight to

recent rates. The commenter also

recommended that, in the event that the

damages must be estimated for an

extended period, the most distant

projection available from OMB be used.

Finally, the commenter suggested that

the discount rates for HEA should be

real, after-tax, riskless rates.

Some commenters suggested that a

discussion should be placed in the

preamble that describes a discount

range of 3% to 7% as generally

reasonable for most future benefits

associated with restoration actions, and

a range of 0% to 3% for discount rates

associated with natural resource and/or

service losses. The commenters stated

that it is appropriate to discount future

losses at a very low rate, if at all.

Some commenters suggested that the

procedure for determining a discount

rate should reflect the guidelines for

water resource projects since those

projects provide a much closer analogy

to natural resource damage assessments

than the lease-purchase or benefit/cost

and cost-effectiveness analysis currently

in use.

Response: For scaling restoration

actions, the appropriate rate of discount

is the social rate of time preference for

the injured natural resources, i.e., the

rate at which society is willing to trade

off natural resources during the period

of the incident for natural resources

during the period of restoration action.

NOAA is recommending that use a 3%

discount rate as a proxy for the social

rate of time preference (unless

justification for a more appropriate rate

is presented).

Because the public use of natural

resources does not occur primarily

through private market transactions,

consumers do not necessarily adjust

their inter-temporal consumption of

natural resources in response to the

relevant intertemporal financial tradeoffs available to them, as represented by

the U.S. Treasury rates. U.S. Treasury

rates (both realized and projected future

rates) have been relatively volatile over

the last few years, even for long-term

rates. There is no particular reason to

assume that the volatility of the

observed financial rates carries over to

the social rate of time preference for

these non-marketed goods.

NOAA is considering the

development of a separate guidance

document on resource-to-resource,

service-to-service, and valuation scaling

procedures that would address issues

pertaining to discounting, risk, and

uncertainty in greater detail.

Comment: One commenter also stated

support for the use of state and tribal

borrowing rates in calculation of present

value of assessment costs. This

commenter agreed with the use of

discount rates that represent the yield

on recoveries available to the trustees.

Several commenters noted that, when

the state is the lead administrative

trustee, the corresponding state

borrowing rate should be used as the

discount rate instead of the U.S.

Treasury rate.

Response: NOAA supports the use of

state or tribal rates where appropriate.

However, designation of the lead

administrative trustee is primarily an

administrative decision and should not

substantively affect the choice of an

appropriate discount rate, except to the

extent that it affects the yield on

recoveries available to trustees.

Discounting and HEA

Some commenters suggested that the

rule should clarify the role of discount

rates in HEA. The commenters stated

that the rule should explicitly state the

assumptions that the unit dollar value of

forgone services equals the unit dollar

value of the restoration services and

these dollar values do not change over

time, in order for financial discount

rates to be appropriate in HEA models.

Response: NOAA does not disagree

with the substance of these comments,

but believes that such a level of detail

regarding specific procedures is most

appropriately included in guidance

documents, rather than the rule itself.

Sensitivity of Scale to Discount Rate

Choice

Comment: Some commenters noted

that the choice of discount rate is largely

responsible for the resulting size of the

compensatory restoration action.

Response: The sensitivity of the scale

of compensatory restoration action to a

given discount rate will depend on the

relationships among a number of factors

including, but not limited to, the

duration of the injury, the time

necessary for the compensatory

restoration action(s) to provide full

service flows, and the lifespan of the

compensatory restoration action(s).

Choice of Appropriate Inflation Index

Comment: One commenter

recommended using the Gross Domestic

Product (GDP) deflator when the

adjustment is being made to determine

the present value of future restoration

costs or when a stream of future service

flows is being discounted, and using the

Consumer Price Index when lost

consumer surplus requires discounting.

The commenter stated that when a clear

distinction cannot be drawn, the GDP

deflator should be used because it is

more general.

Response: NOAA believes that this

structure for scaling restoration actions

is generally acceptable and consistent

with the rule language. However, by

definition, a quantity of services is

already in real terms. Quantities of

services generally will not need

adjustment with a price index because

they only appear in the scaling

calculation, which will generally be

carried out in real terms (with a real

discount rate). For purposes of

calculating restoration costs, more

specific indices, such as construction

and employment cost indices, may be

used where appropriate and available.

Section 990.54 Restoration Selection—

Evaluation of Alternatives

Selection Criteria for Alternatives

Comment: Many commenters had

suggestions for revisions to the selection

criteria for restoration alternatives.

These commenters argued that the

selection criteria in the rule provide no

overall standard for selection of

alternatives. Some commenters

suggested that without standards for

evaluating and selecting restoration

alternatives, there are no meaningful

bounds on responsible party liability.

Other commenters, however, argued

that the rule should establish no specific

‘‘weight’’ for any of the selection factors,

that such a requirement would limit the

flexibility required for restoration and

could undermine the validity of the

whole process. One commenter stated

that the requirement to minimize

damages is unnecessary so long as

trustees are required to document the

relevant factors and tradeoffs in

selecting a restoration alternative and
490 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

explain their selection in response to

any public comments prior to the

implementation of the restoration plan.

Response: NOAA believes that the

modified criteria for evaluation of

restoration alternatives presented in

§ 990.54 in the final rule are sufficient

to ensure that selected alternatives are

reasonable, cost-effective, and adequate

to compensate the environment and

public for injuries to natural resources

and/or services. The selection of

restoration actions that truly make the

environment and public whole is a

highly incident-specific analysis, and

NOAA believes that prescribing a rigid

hierarchy of selection criteria will not

facilitate achieving OPA’s compensatory

goal. Trustees must evaluate the

numerous selection criteria listed in the

rule, at a minimum, and describe in the

draft restoration plan how each factor

played in the selection and elimination

of alternatives.

Comment: Some commenters pointed

out that, if all the parties agree to a

restoration solution, the trustees should

not have to develop numerous

restoration alternatives.

Response: Under the rule, trustees

may settle claims for natural resource

damages at any time, provided that the

settlement is adequate in the judgment

of the trustees to satisfy the goal of OPA

and is in the public interest. However,

it is expected that even early settlement

will entail an evaluation of available

restoration actions in order to meet the

varied interests of all parties.

Cost Effectiveness

Comment: Some commenters argued

that the rule should specifically require

cost effectiveness as the major selection

criterion. Other commenters disagreed,

stating that a simple requirement to

select the most ‘‘cost-effective’’ option is

too narrow and should not be required.

These commenters argued that costeffectiveness alone disregards

distributional differences and ecological

integrity, which may well leave a

natural resource seriously impaired. The

commenters suggested that the selection

decision should be driven by criteria

that emphasize making the environment

and public whole, both in aggregate and

by user group.

Response: NOAA fully supports

choosing the least costly restoration

action(s) among equivalent alternatives.

However, NOAA believes that

prescribing a rigid hierarchy of selection

criteria, including designating one

criterion as always singularly more

important than others, will not facilitate

achieving OPA’s compensatory goal.

Minimization of Costs/Damages

Comment: A number of commenters

stated that, when sufficient data on

costs and benefits are available, trustees

should ultimately base their selection of

restoration alternatives on a costeffective approach that will minimize

total damages or make the public whole

at the least cost. The commenters stated

that selection of the alternative that

minimizes damages is consistent with

economic theory, OPA’s legislative

history, and the decision in Ohio. Many

other commenters opposed any strict

requirement to minimize damages as

inconsistent with the statutory language

of OPA (section 1106(d)(1)) as well as

the holding in Ohio overturning the

approach contained in the 1986 version

of the CERCLA rule that directed

trustees to recover the lesser of

restoration cost or diminution in value.

The commenters stated that OPA

contains the statutory preference of

restoration, and not the minimization of

damages.

Response: NOAA supports the

consideration of the relationship

between costs and benefits when

selecting a preferred restoration

alternative(s). However, NOAA does not

support reducing the selection process

to a strict cost-benefit or costminimization decision rule. The rule

requires trustees to identify and

consider a reasonable range of

restoration alternatives for a given

incident, or for individual injuries of an

incident. The rule further enumerates

specific criteria that must be considered

by trustees in selecting preferred

restoration approaches from the range of

alternatives. These criteria include

feasibility, likelihood of success,

effectiveness, and speed with which

baseline will be returned, benefits to

multiple natural resources, and cost.

Consideration of these criteria will

constitute a qualitative cost-benefit

analysis that is appropriate to the task

at hand—restoration—and will ensure

that cost-effective actions are selected.

Qualitative Assessments

Comment: Some commenters stated

that benefits should be required to be

quantified in cases where it is

practicable. One commenter suggested

that, for cases where benefits cannot be

measured at reasonable cost, the

assessment should be qualitative;

however, qualitative assessment should

not be used to justify very costly

restoration.

Response: The resource-to-resource,

service-to-service, and valuation scaling

approaches all inherently involve the

quantification of benefits of the selected

restoration alternative(s), either in terms

of quantifying the level of natural

resources/services or the value provided

by the restoration actions. The

evaluation standards for selecting the

preferred alternative(s) presented in

§ 990.54 represent a combination of

quantitative and qualitative factors.

Not Grossly Disproportionate

Comment: A number of commenters

stated that the trustees should also be

required to compare costs to benefits/

value of services, to determine whether

the cost of the alternative being

evaluated is grossly disproportionate to

the value of the injured natural

resources or, alternatively, to the

benefits of that alternative. Some

commenters requested that NOAA

clarify the term ‘‘grossly

disproportionate’’ and state whether it

has a role in the process, especially in

the compensatory restoration process.

Response: NOAA believes that the

evaluation and selection of restoration

alternatives according to the factors

provided in the rule will ensure that

preferred actions are commensurate

with the value of natural resource

losses.

Reinstatement Costs

Comment: One commenter argued

that restoration should be based on the

reasonable cost of reinstatement of the

environment under the international

regime.

Response: The international regime

allowing recovery of reasonable

reinstatement costs generally

incorporates only direct restoration of

natural resources directly injured by an

incident, which is more narrow than

actions authorized by OPA and thus

would not be appropriate for this rule.

Violation of Laws and Regulations

Comment: Another commenter argued

that the criterion concerning violation of

laws or regulations be taken into

account in determining the viability of

a particular alternative, rather than in

determining which restoration

alternative(s) is preferred.

Response: NOAA agrees that legality

of alternatives is a screening criterion to

eliminate alternatives from

consideration, and has amended

§ 990.53 of the rule to reflect this.

Effects on Public Health and Safety

Comment: Some commenters noted

that any alternative considered should

not exacerbate natural resource injuries

or otherwise cause adverse effects on

public health, safety or the

environment.
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 491

Response: NOAA agrees. Section

990.54 of the rule directly states that

these factors must be considered by

trustees when evaluating restoration

alternatives.

Pilot Projects

Comment: Several commenters

suggested that the provision allowing

pilot projects should be revised, or at

least clarified. Some of the commenters

argued that the responsible parties

should not be required to fund pilot

projects. Other commenters stated that

pilot projects should only be allowed

where they can be shown to be

reasonable, relevant, and linked directly

to the incident of concern.

Response: The rule has been clarified

to indicate that pilot projects may only

be undertaken when additional

information is needed to identify and

evaluate the feasibility or likelihood of

success of restoration alternatives, and

where they can be undertaken in a

reasonable time frame and at a

reasonable cost.

Section 990.55—Restoration Selection—

Preparation of a Draft and Final

Restoration Plan

Comment: One commenter expressed

concern about placing injury

determination and quantification

information in the Draft Restoration

Plan, making this information available

to the public and the responsible party,

all within the context of civil litigation.

The commenter recommends that

trustees be granted some litigation

privilege to protect their potential claim.

Response: This information, if relied

upon by the trustees in decisionmaking,

is essential to meaningful public

involvement.

Comment: Some commenters

suggested that the proposed restoration

planning process prior to presenting a

demand to responsible parties places

unreasonable expectations on the

parties. These commenters suggested

that the rule naively assumes that

restoration efforts can be described in

terms of a detailed restoration plan in a

short period of time after completing

assessment studies. These commenters,

noting the Exxon Valdez experience,

suggested that this will not always be

practicable. The commenters requested

that the rule provide trustees authority

to make additions, substitutions, or

other modifications to the restoration

plan based on experience and additional

information gained in the

implementation phase.

Response: The extent to which

trustees can, and need to, develop

specific, detailed workplans to

implement restoration actions as part of

draft or final restoration plans will

depend on the circumstances of the

incident, the nature of the preferred

restoration actions, and trustees’

relationship with responsible parties. It

may be possible to reach binding

agreements regarding the nature and

scale of actions that will constitute

restoration and compensation, with an

agreed upon timetable for developing

the implementation plans for those

actions. Often it will be advantageous to

all parties that the responsible parties or

their representatives develop the

workplans based on the trustees’ goals

and objectives. However, if a

cooperative relationship has not been

possible or effective, and trustees expect

they may have to implement restoration

themselves or litigate to recover the

funds to implement restoration, it is in

the best interests of the public for

trustees to have a plan that provides the

most accurate estimate of required

restoration costs possible. Depending on

the preferred alternative, detailed work

or implementation plans may have been

developed for prior actions, parts or all

of which may be applicable to the

incident at hand.

Comment: Some commenters

disagreed with a prescribed minimum

public comment period for all incidents,

while others stated that 30 days should

be an absolute requirement, with a

corresponding requirement that trustees

respond to public comments in the

subsequent 30 days.

Response: NOAA has removed a

specific time requirement for a public

notice and comment period, realizing

that the circumstances of individual

incidents and localities, and in addition

the requirements for NEPA or other

regulatory compliance, are so varied

that any one specified time may be

inappropriate.

Comment: A number of commenters

stated their belief that restoration

monitoring costs are not recoverable as

natural resource damages. These

commenters cite judicial decisions

barring oversight costs as recoverable

response costs under CERCLA, and an

explicit reference to ‘‘monitoring’’

within OPA, respecting recovery from

the Oil Spill Liability Trust Fund of the

costs of monitoring removal actions.

Other commenters agreed that

monitoring is essential to the successful

implementation of restoration, and

urged that rule language be more

explicit regarding the scope, extent, and

purpose of recoverable monitoring costs.

These commenters suggested that

monitoring costs should be related to

the value of the natural resource being

restored, that monitoring should only be

conducted long enough to ensure that

the action is proceeding as planned, and

that the rule should provide for

performance bonds if implementation is

conducted by responsible parties.

Response: NOAA believes that

restoration monitoring costs are a

recoverable component of natural

resource damages. Monitoring is

essential to ensure that restoration

actions accomplish their intended goals

and objectives and do not cause

unanticipated harm to the environment

or public health. In addition, monitoring

is essential to determine whether the

terms of restoration agreements have

been met, upon which a release from

liability is premised. NOAA agrees that

the rule itself should speak to the

purposes and scope of monitoring, and

has amended the rule accordingly.

Section 990.56—Use of Regional

Restoration Plans or Existing

Restoration Projects

Comment: Several commenters argued

that using Regional Restoration Plans to

spend money generated from simplified

assessments is contrary to OPA and

traditional tort principles of

individualized injury and causation.

Some commenters noted that the

legislative history of OPA demonstrates

a rejection of such regional approaches

to restoration (H.R. 1465, 1st Cong., 1st

Sess. (1989), a predecessor bill to OPA,

contained a natural resource damage

civil penalty section (1006(g)(4)) that

allowed funds recovered to go to

‘‘general enhancement of the

ecosystem’’). The commenters made the

point that common law tort principles

applicable under OPA require damages

to be used to restore a specific injury to

a specific natural resource in order to be

compensatory rather than punitive.

Some commenters argued that, for

small incidents where incident-specific

plans would be unreasonable, trustees

should allow natural recovery. The

commenters stated that there is no OPA

mandate to restore injured natural

resources and services regardless of the

scope and scale of those injuries, and

that, in such cases, OPA firmly implies

liability for small incidents is de

minimis in the absence of actual

evidence of significant natural resource

services losses. One commenter

suggested that regional plans could not

possibly identify precisely where

discharged oil would go, and in the

actual event of an incident, a regional

plan will likely be inapplicable. Other

commenters noted that before a regional

plan could be used, a link between the

actual injury and the plan must be

established.

Some commenters argued that such

plans would be self-fulfilling and
492 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

become a proxy for investigating

injuries. Several commenters noted that,

under these provisions, trustees could

amass large sums of money to undertake

various quasi-public works projects,

having no connection whatsoever to any

of the incident sites. These commenters

argued that this provision will allow

trustees to essentially do an ‘‘end run’’

around the legislative process and to

pursue their own ends, which is clearly

not authorized by OPA.

One commenter argued that this

provision would be fundamentally

unfair to responsible parties who will

have no opportunity to participate in

the development of these regional plans.

Several commenters strongly

encouraged the use of Regional

Restoration Plans, stating that trustees

must have multiple options available for

redressing injuries. These commenters

stated that Regional Restoration Plans

allow trustees to maximize the

effectiveness of a restoration action by

combining recoveries from other

incidents. Some of these commenters

noted that only Regional Restoration

Plans can provide for an effective

response to the cumulative impacts of

many small incidents. These

commenters argued that such plans are

clearly within the ambit of OPA and

that there is no provision in OPA

requiring that damages collected be

spent remediating the specific site

injured. In fact, the commenters noted

that contrary intent is evident in

Congress’ inclusion of acquisition of

equivalent natural resources as a

restoration option.

Several commenters expressed

concern that the rule limits use of a

Regional Restoration Plan to situations

where a simplified assessment

procedure was used. The commenters

argued that whether damages from a

specific incident are best used

independently, or to fund part of a

Regional Restoration Plan, is a separate

issue that is not related to the type of

assessment procedure used. They stated

that, if implementation of a project plan

provides suitable compensation for

injuries that occurred as a result of a

discharge, trustees should be able to use

that specific project plan.

Other commenters expressed concern

about restrictive language related to

‘‘commingling’’ of simplified

assessment recoveries and the use of

newly developed Regional Restoration

Plans. These commenters stated that it

would be difficult at best to define

‘‘similar’’ natural resources or services

in relation to small incident impacts

and that pooling of small incident

damages should not be tied to such a

criterion. The commenters suggested

that the only criterion for pooling of

small incident settlements should be the

lack of affordable and efficient

restoration alternatives given the size of

the damage recovery.

One commenter requested more

guidance in the rule for criteria for

developing and implementing such

plans. One commenter said the

proposed rule was unclear about the

calculation of appropriate costs for cases

where the formulas or type A models

were used and even more confusing

where calculation of such costs are

necessary for the implementation of a

regional restoration plan. Another

commenter stated that the costs of

developing regional plans is not an

appropriate use of recovered natural

resource damages.

Commenters proposed a number of

guidelines to permit regional restoration

planning under OPA, when the trustee

and the responsible party agree that it is

appropriate, including: (1) There is an

ecological relationship between the

injured natural resources and the

objectives of the regional restoration

plan; (2) on-site restoration is either not

technically feasible or not cost effective;

(3) the level of services provided by the

proposed restoration action is

substantially similar to that provided by

the injured natural resources; (4) the

restoration measures will be beneficial

given the potential for natural recovery;

(5) the measures are likely to be

successful in significantly accelerating

the natural recovery of the injured

population or area; (6) the proposal will

not itself result in degradation of the

environment; and (7) the cost of the

program is not out of proportion to the

value of the natural resources.

One commenter asked whether NOAA

will initiate a regional restoration

planning process and identify areas

where regional plans could be of high

priority, or whether it is incumbent

upon industry and state trustees to do

so. Another commenter noted that preincident planning may not be

achievable in all cases, and

recommended NOAA’s rule endorse

post-incident development of Regional

Restoration Plans, with public review

and comment, for application of

subsequent recoveries.

Some commenters suggested that

regional restoration plans identify areas

within the region in need of restoration

or acquisition that are important to

various species of fish and wildlife

vulnerable to incidents and prioritize

them by cost of restoration. In addition,

this commenter suggested that the

trustees be required to make a showing

that it is environmentally ineffective to

restore the injured natural resource and

that restoration of another would

provide substantially greater benefit to

the ecology injured by the incident.

Some commenters suggested the

importance of early public involvement

in the prioritization of areas most

heavily injured by incidents and to

ensure that the restored areas serve the

same human populations as those

served by the injured natural resources.

One commenter noted that Regional

Restoration Plans inappropriately

exclude local participation in

restoration planning, as large-scale

efforts would bar smaller attempts.

Response: NOAA agrees that OPA

intends that responsible parties be held

liable only for restoration needed to

redress the injuries caused by specific

incidents. Injury must be determined

under the rule for all incidents.

However, NOAA also views regional

restoration planning as one means to

resolve liability for injuries in an

expeditious and cost-effective manner.

The rule has been amended to make

it clear that in no event will the use of

a regional restoration plan violate OPA’s

limitation that natural resource damages

be used solely to restore, replace,

rehabilitate, or acquire the equivalent of

the natural resources and/or services

injured by an incident. OPA’s legislative

history defines ‘‘equivalent’’ natural

resources as those that will enhance the

recovery, productivity, and survival of

the ecosystem affected by a discharge,

preferably in proximity to the affected

area (Conference Report at 109). The

requirements in the rule are strict

enough to ensure that regional

restoration plans or other existing

restoration projects used in lieu of an

incident-specific plan do not violate

OPA’s constraints on expenditure of

damages. Whether an existing plan or

project represents restoration,

rehabilitation, replacement, or

acquisition of the equivalent will

depend on the nature of the incident

and the restoration plan or project.

The final rule also requires that use of

possible restoration actions in an

existing plan or project be evaluated

within the range of restoration

alternatives that trustees are required to

consider, including natural recovery.

But the rule recognizes that it may be in

the best interests of all parties not to

expend funds developing incidentspecific restoration plans in all

instances.

Experience with past incidents has

shown that responsible parties have

often identified existing planned or

proposed environmental restoration

actions that may have been developed

by local governmental natural resource

agencies or environmental groups, and
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 493

proposed to fund these actions as

compensation for the injuries of an

incident. NOAA intends regional

restoration planning to build on this

cost-effective approach to restoration

planning, by developing databases that

identify existing or desirable unfunded

actions in a manner that will allow an

appropriate linkage between actions and

particular incidents. The geographic

scale of a ‘‘regional’’ plan database will

likely vary with locality, variability of

local environmental conditions, and

expected local impacts from incidents,

but actions can be scrutinized in terms

of the type and scale of natural

resources and/or services they are

expected to provide. If projects match

the incident in terms of the scale of

injuries and the scale of expected

natural resources or services that will be

provided, responsible parties may be

given the option to fund or implement

the project. If the scale of the incident

and the project do not appear

consistent, trustees may request that

responsible parties pay damages equal

to the relative proportion of the total

cost of the project that would

compensate for the scale of injuries from

the incident. Such partial recoveries

may be pooled until funding is adequate

to implement the project.

The rule has been revised to eliminate

restrictions on the type of assessment

procedures that will enable use of a

regional restoration plan or other

existing restoration project, and have

omitted any restrictions on how partial

recoveries may be pooled or

commingled pending collection of

adequate funds to implement a project.

Finally, the rule is clear in providing

for responsible party participation in

identification of appropriate existing

plans or projects that will resolve their

liability for the injuries from a particular

incident. The rule also provides that

potentially responsible parties be given

an opportunity to participate in any preincident development of regional

restoration plans or existing restoration

project databases.

Subpart F—Restoration

Implementation Phase

Section 990.60—Purpose

Comment: Some commenters noted

that the provision requiring Final

Restoration Plans in the context of

incident-specific assessments is a

significant improvement over past

proposals, since the current proposal

bases the liability claim on projected

costs of implementing the Final

Restoration Plan, rather than developing

a financial payment for liability and

then deciding what to do with the

money. Some of these commenters had

argued that the 1994 proposal, with the

Final Restoration Plan being developed

in the Post-Assessment Phase, violated

OPA by allowing trustees to spend

recoveries on non-site-specific

restoration actions, i.e., implementing

restoration plans other than those

developed by the trustees in the

assessment phase and that supported

the damage claim.

Response: NOAA agrees that

recoveries will be used to implement

the restoration plans developed through

the assessment, except where new

information received after completion of

the plan indicates that the plan needs to

be modified to conform to the standards

of this rule. Any such modification must

be made by a public process

documented in the administrative

record for restoration implementation.

Section 990.61—Administrative Record

Comment: One commenter approved

of opening a parallel administrative

record for the implementation phase to

ensure that there is accurate and

complete accountability of all activities

and costs. The commenter suggested,

however, that the provisions allowing

addition of documents to the record is

questionable and should be deleted. The

commenter noted that the trustees

should be required to document their

implementation or the responsible

party’s implementation of the

restoration plan, that the monitoring

requirements were adhered to, and that

cost effective or cost beneficial

requirements were followed. The

commenter suggested that the rule also

should specify the documents expected

to be placed in the administrative record

by the trustees.

Response: The final rule restricts

augmenting the closed record of

assessment except where new

information raises significant issues

regarding final restoration decisions, is

not duplicative of information already

in the record, and is offered by an

interested party that did not receive

actual or constructive notice of the

availability of the draft plan. NOAA

agrees with the commenter’s suggestions

to provide some minimum requirements

for documents or determinations to be

included in the Implementation Phase

record, and has amended the rule to

include this guidance.

Section 990.62—Presenting a Demand

Comment: Several commenters

complained that the rule language is

vague in terms of discretion over the

form of a demand presented to

responsible party. These commenters

noted that restoration actions involve

management of natural resources and

numerous laws at federal, state, tribal,

and foreign levels that require that

specific agencies maintain the

responsibility for decisions involving

management of natural resources. The

commenters argued that NOAA cannot

delegate this responsibility away from

trustees to responsible parties. The

commenters stated that the trustee

should not be required in every case to

go first to the responsible party for

restoration implementation, but should

evaluate, prior to commencing

implementation of restoration actions,

the most efficient procedure of

implementing the plan. This evaluation

should include consideration of the

responsible party’s ability to accomplish

effective conduct of the restoration

actions.

Several other commenters strongly

supported the provisions allowing the

responsible party to either implement

the restoration plan or pay damages.

The commenters also stated that linking

liability to the responsible party’s

implementation of a plan is a significant

improvement over earlier proposals.

Another commenter asked why there

are different standards for allowing a

responsible party to implement all or

part of an incident-specific versus a

Regional Restoration Plan.

Response: The rule does not delegate

any essential trustee functions or

responsibilities to responsible parties,

nor does it create any inalienable rights

in responsible parties with respect to

implementation of restoration. This

provision in the rule recognizes that

responsible parties or their agents may

be far better equipped to implement

restoration promptly and costeffectively, given certain constraints on

governmental spending and contracting

authorities. The rule also recognizes that

trustees must act responsibly in

allowing responsible parties to

implement restoration, and this decision

regarding participation should be

evaluated according to at least the same

criteria suggested in § 990.14(c) for

determining the scope of responsible

party participation in any stage of the

assessment. The rule requires trustees to

identify performance criteria to gauge

the success of restoration efforts, and

encourages monitoring and oversight to

confirm that restoration actions are

carried out as intended in agreements

with the responsible party.

The rule has been amended to remove

the unintended differences in standards

for responsible party implementation of

incident-specific versus regional

restoration plans.
494 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

Prejudgment Interest

Comment: Several commenters

suggested that more flexibility must be

added to address those circumstances

when a substantial period of time

elapses from the date the demand for

payment is made to the date payment is

actually made; in such cases, trustees

should be able to use date of payment

as the time to which to discount future

costs or inflate ‘‘present’’ cost estimates

to present value of the restoration

action.

Response: This rule addresses interest

up to the point that the formal demand

is presented to the responsible parties.

Section 1005 of OPA (33 U.S.C. 2705)

addresses the payment of pre-judgment

interest from the point the demand is

made until the claim is paid.

Comment: Some commenters argued

that interest computed on past costs

amounts to prejudgment interest and

section 1005 of OPA (33 U.S.C. 2705)

provides that such interest runs only

from 30 days after claim is presented

and is to be paid at a commercial paper

rate. Therefore, the commenters stated

that the rule cannot allow recovery of

interest on periods prior to demand,

which would give trustees prejudgment

interest in excess of that which Congress

deemed proper.

Response: NOAA notes that interest

recovered on past costs represents lost

opportunity costs for the trustees,

intended to encourage prompt payment

of claims. Such a recovery is not an

inappropriate recovery of prejudgment

interest.

Section 990.64—Unsatisfied Demands

Comment: Several commenters stated

that NOAA should clarify that

uncompensated financial damages for

compensatory restoration, which is

intended to represent compensation for

diminution in value, may not be sought

from the Oil Spill Liability Trust Fund

(Fund); only site-specific plans for

primary restoration may be paid from

that Fund.

Response: The Oil Spill Liability

Trust Fund (Fund) is not available to

federal trustees for payment of

uncompensated damages under section

1012(a)(4) of OPA (33 U.S.C. 2712(a)(4))

(see Matter of USCG–OSLTF, B–255979,

1995 Comp. Gen. LEXIS 670 (October

30, 1995)). However, federal trustees

may seek an appropriation from the

Fund for implementation of restoration

plans. The rule does not provide for

recovery of monetized damages, but

does provide for the use of restoration

actions that will restore, replace,

rehabilitate, or acquire equivalent of

interim lost services.

Comment: Several commenters

suggested that the language allowing the

responsible party to agree to a demand

in order to forestall legal action should

be changed to require a responsible

party to either pay the demand or enter

into an enforceable agreement within 90

calendar days after the trustees present

the demand to perform services.

Response: NOAA agrees that the

suggestion is a useful clarification of

OPA’s requirements in light of the rule’s

allowance for responsible party

implementation of restoration actions.

Comment: One commenter strongly

objected to the requirement that trustees

cannot file a civil judicial action until

90 calendar days after presentation of

the demand to the responsible party.

This commenter argued that this

provision has no statutory support,

would serve no purpose, and might

prove to be a problem for statute of

limitations considerations.

Response: NOAA believes that the

contested provision is consistent with

the plain meaning of section 1013(c) of

OPA (33 U.S.C. 2713(c)).

Section 990.65—Account

Comment: Some commenters

suggested that the rule should specify

that administrative costs associated with

setting up a trustee account are

compensable. Some commenters

suggested that, if the damage amount is

not placed in an interest-bearing

account, the rule should allow

adjustment to the appropriate state rate.

Response: NOAA notes that recovery

is provided by OPA for costs incurred

as a result of an incident. Therefore, the

costs associated with setting up

accounts are also recoverable. Also,

NOAA agrees that adjustments should

be made if damages are not placed in an

interest-bearing account.

Comment: Some commenters

expressed support for the idea of

creating separate, interest-bearing

accounts to hold recovered sums. One of

these commenters, however, stated that

joint trust accounts can be a problem

between state and federal trustees, if the

accounts are required to be registered

under a federal court. The commenter

suggested that joint recoveries should be

exempt from the requirements of the

Miscellaneous Receipts Act, and that

NOAA should explicitly allow for

administration of joint restoration

accounts by reputable non-profit

organizations that address restoration/

replacement/acquisition types of

activities at local, state, or national

levels. Some of these commenters asked

for clarification as to why escrow

accounts could be used. One commenter

stated that interest accrued on these

accounts should be required to be used

for restoration.

Response: The rule explicitly allows

the use of such accounts. Also, interest

earned on recoveries (not including

recoveries for past costs incurred)

should be used only for restoration.

Comment: Some commenters strongly

encouraged NOAA to provide guidance

on implementing accounting

procedures, although there was concern

that rigorous accounting procedures

would be expensive for trustees and

thus recovery for accounting costs

should be allowed.

Response: In 1986, EPA implemented

Financial Management Procedures for

Documenting Superfund Costs. This

document is available from the Office of

the Comptroller, Financial Management

Division, Superfund Accounting

Branch. These procedures provide

guidance to ensure that documentation

of EPA’s costs for cleaning up

Superfund sites are complete and

accurate and can be furnished if

litigation is required. These procedures

are also relevant guidance to trustees on

procedures of recordkeeping that will

satisfy the requirement that costs be

appropriate/accurate/reasonable. NOAA

recognizes that certain expenses are

inherent in any cost-tracking system.

Recovering such costs as part of the

assessment and restoration

implementation costs is appropriate

since it enables a trustee to demonstrate

when, how and where funds for natural

resource restoration have been

expended, therefore theses costs are

recoverable.

Trustees must maintain appropriate

accounting and reporting procedures to

keep track of the use of sums recovered.

As determined by the trustee, brief

reports on the status of the sums

recovered and expenditures for

particular damage assessment or

restoration activities may be reported in

the administrative record for the

restoration phase.

Comment: One commenter noted that

there is no definition of ‘‘excess

damages’’ in the proposed rule, and

requested that the rule explicitly state

that excess damages must not be

collected, or, if collected, must be

returned to the responsible party.
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 495

Response: NOAA believes that

damages will never be ‘‘excessive’’ or in

‘‘excess’’ of the costs needed to restore

injured natural resources and/or

services if assessments are conducted in

accordance with this rule, and

restoration is implemented in a timely

manner. However, NOAA can envision

circumstances where unanticipated

environmental conditions require

adjustments to restoration actions,

conceivably resulting in surplus

damages.

Comment: Several commenters

strongly disagreed with the language

that requires all excess restoration funds

to be placed in the Oil Spill Liability

Trust Fund. These commenters noted

that damages are generally settled

jointly between state and federal

trustees and the responsible party and

that any excess funding should first be

available for additional restoration. The

commenters suggested that the

responsible party should not expect to

recover excess funds unless they are

willing to pay additional funding for the

restoration cases that result in deficits

(e.g., a contingency fee), due to factors

beyond the control of the trustees. These

commenters recommended, at a

minimum, that remaining funds should

be deposited in both federal and state

response trust funds, where states have

such a fund.

Response: The rule allows for the

recovery of damages required by OPA,

namely: (1) The cost of restoring,

rehabilitating, replacing, or acquiring

the equivalent of, the injured natural

resources and/or services pending

restoration; (2) the diminution in value

of those natural resources pending

restoration; plus (3) the reasonable cost

of assessing those damages. The

recovery of those three items is not

excess recovery. Trustees are to use the

money to restore, rehabilitate, replace,

or acquire the equivalent of the injured

natural resources and/or services

provided by those natural resources and

to reimburse the reasonable costs of

conducting the assessment. Any

recoveries that may be left over after

implementing the restoration plan must

be deposited in the Oil Spill Liability

Trust Fund, in accordance with the

provisions of section 1006(f) of OPA (33

U.S.C. 2706(f)).

Section 990.66—Additional

Considerations

Comment: One commenter suggested

that the final rule establish timetables

for the development and

implementation of restoration plans.

Response: NOAA disagrees that any

time table for developing and

implementing restoration plans could

have broad enough applicability for all

possible incidents without hampering

the process for some subset of incidents.

Comment: Several commenters

indicated the importance of monitoring

and oversight and the need to plan for

failure of a restoration plan. Other

commenters argued that monitoring

costs are not recoverable because such

costs are not mentioned in section 1002

of OPA and, therefore, not intended by

the statute.

Response: As discussed in response to

comments on the definition of

reasonable assessment costs, NOAA

believes that monitoring and oversight

costs are recoverable damages. NOAA

agrees with the importance of

monitoring and oversight and has

amended the rule to specifically discuss

the purpose and scope of monitoring

and oversight activities within the

restoration implementation phase.

Comment: One commenter stated that

allowing for reopeners within the rule

will make it difficult for businesses to

anticipate costs and create proper

reserves. Other commenters questioned

the degree to which a responsible party

could be held accountable for a

restoration plan selected by the trustees

that did not work, requesting that

NOAA reexamine the propriety of

reopeners and raised the question as to

who should bear the risks inherent in

implementing a Restoration Plan.

Another commenter suggested that the

rule provides no standards for midcourse corrections, but that such

standards are needed. One commenter

questioned whether a responsible party

would be subject to the restoration plan

if that responsible party had not been

involved in the development of that

plan.

Response: Reopeners may be required

to properly ensure that the environment

and public are appropriately made

whole for the injuries from a particular

incident. Thus, reopeners should reflect

the degree of certainty in the assessment

of the nature and extent of injuries and

losses. NOAA also agrees that reopeners

must not be used irresponsibly, i.e.,

holding responsible parties accountable

for unknowable consequences for an

indeterminate period of time. Trustees

must specify criteria upon which

restoration actions will be judged

successful, so that responsible parties

may understand the goals and targets for

their actions. Both parties should strive

to identify any uncertainties in

successful implementation of a plan

such that requests for additional actions

on the part of the responsible party will

not likely result. NOAA has amended

the rule to provide some guidance on

the nature of performance criteria that

trustees should consider in formulating

agreements with responsible parties.

Comment: One commenter suggested

that the selection of a lead trustee to

coordinate implementation of

restoration should be mandatory.

Response: Section 990.14 of the rule

advises identification of a lead

administrative trustee, or co-lead

administrative trustees, for all phases of

a joint assessment.

Bibliography

NOAA Guidance Documents

All of the following NOAA Guidance

Documents are currently in draft form

and are expected to be available as Final

Guidance Documents within a short

time following promulgation of this

final rule. A Notice of Availability will

be published in the Federal Register as

soon as the Final Guidance Documents

are complete.

Michel, J. and E. Reinharz. 1994.

Preassessment Phase Guidance

Document. National Oceanic and

Atmospheric Administration, Office of

General Counsel Natural Resources,

Damage Assessment Regulations Team,

Silver Spring, MD.

NOAA. 1993. Restoration Guidance

Document for Natural Resource Injury

Resulting from a Discharge of Oil.

National Oceanic and Atmospheric

Administration, Office of General

Counsel Natural Resources, Damage

Assessment Regulations Team, Silver

Spring, MD.

NOAA. 1995. Specifications for Use of the

NRDAM/CME Version 2.2 to Generate:

Compensation Formula for Natural

Resource Damage Assessments under

OPA. National Oceanic and Atmospheric

Administration, Office of General

Counsel Natural Resources, Damage

Assessment Regulations Team, Silver

Spring, MD.

NOAA. 1995. Injury Guidance Document for

Natural Resources and Services under

the Oil Pollution Act of 1990. National

Oceanic and Atmospheric

Administration, Damage Assessment and

Restoration Program, Silver Spring, MD.

NOAA. 1995. NEPA Compliance in Natural

Resource Damage Assessment Guidance

Document. National Oceanic and

Atmospheric Administration, Damage

Assessment and Restoration Program,

Silver Spring, MD.
496 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

Department of the Interior Documents

DOI. 1987. Measuring Damages to Coastal

and Marine Natural Resources: Concepts

and Data Relevant to CERCLA Type A

Damage Assessments (NRDAM/CME

technical document). U.S. Department of

the Interior, Office of Environmental

Policy and Compliance, Washington,

D.C., DOI–14–01–0001–85–C–20, Vol I–

II.

DOI. 1993. The CERCLA Type A Natural

Resource Damage Assessment Model for

the Great Lakes Environments (NRDAM/

GLE). U.S. Department of the Interior,

Office of Environmental Policy and

Compliance, Washington, D.C., Vol I–III.

DOI. 1994. The CERCLA Type A Natural

Resource Damage Assessment Model for

Coastal and Marine Environments

(NRDAM/CME). U.S. Department of the

Interior, Office of Environmental Policy

and Compliance, Washington, D.C., Vol

I–VI.

Appendix A—Considerations To

Facilitate the Restoration Process

I. Pre-Incident Planning

General

NOAA believes that commitment of

time, funding, and personnel to up-front

planning prior to an incident will help

ensure that the assessment results in

appropriate and cost-effective

restoration. Thus, trustees are

encouraged to develop pre-incident

plans.

Pre-Incident Plan Contents

NOAA suggests that pre-incident

plans:

(a) Identify natural resource

assessment teams. The restoration

process requires an interdisciplinary

approach to ensure the integrated use of

science, economics, and law necessary

in planning and implementing

restoration. Trustees are encouraged to

identify appropriately experienced

personnel needed for natural resource

assessment teams at the area and

regional levels.

Personnel required for natural

resource assessment teams should be

appropriate to the scope and scale of the

incident and natural resources and/or

services injured. For instance, for

incidents with complicated or long-term

ecological injuries, the core team could

include a natural resource trustee

coordinator, restoration expert, natural

resource biologist, environmental

(petroleum) chemist, natural resource

economist, quality assurance specialist,

data manager/sample custodian,

statistician, natural resource attorney,

and administrative support specialist. If

at all possible, the team should not be

ad hoc; members should be

knowledgeable about relevant statutes

and regulations, and be able to establish

a working relationship with the various

parties likely to be involved in

incidents.

(b) Establish trustee notification

systems. Prompt notification is essential

for efficient and effective initiation of

the restoration process. Response

personnel are required under the NCP to

notify trustees whenever natural

resources under their jurisdiction or

management have been, or are likely to

be, injured as a result of an incident.

Thus, each trustee should establish

emergency notification protocols so that

the process can be initiated on a 24-hour

basis. Notification could be coordinated

to minimize the number of calls

response personnel must make to the

trustees. Notification protocols are also

needed within trustee agencies so that

appropriate regional and local personnel

can be informed of an incident. Area

and Regional Contingency Plans should

include contact information for each

trustee and clear, unambiguous criteria

for trustee notification (e.g., all

incidents, incidents over a certain size,

location, etc.).

(c) Identify likely support services. In

many circumstances, trustees may

require specialized contractor support.

For example, research vessels may be

necessary for sample collection, or

outside experts may be necessary to

design and conduct studies. If, as part

of pre-incident planning, the trustees

can identify appropriate support

services and pursue contracting

procedures that will expedite incidentspecific hiring of contractors,

potentially detrimental delays in the

assessment can be avoided during

incidents.

The types of support and expertise

expected to be needed, as well as

potential contractor and expert names,

should be identified as part of preincident planning. Contracts should be

established to allow rapid acquisition of

contractor services. Identified

contractors may even be called on to

participate in pre-incident planning so

that all parties are familiar with the

specific needs of the restoration process.

Backup services should also be

identified since the needs of both

response and natural resource activities

can exceed even regional capabilities.

(d) Identify natural resources and

services at risk. In the NCP, regional and

area planning committees are

responsible for the identification of

natural resources under their

jurisdiction that are potentially

vulnerable to incidents for given

geographic areas such as wetland

habitats near oil terminals or bird

rookeries near shipping routes. If there

is an incident, the response teams will

focus their efforts on protection of these

natural resources and/or services

considered most vulnerable.

Trustees should actively participate in

such planning committees to identify

natural resources and services at risk.

Further, trustees should identify and

evaluate possible assessment procedures

for these natural resources and services.

(e) Identify area and regional response

agencies and officials. In order to

participate actively in area and regional

planning activities, trustees should

identify the response agencies and

officials. Developing a working

relationship with these response

agencies and officials will optimize

coordination between assessment and

response activities following an

incident.

(f) Identify available baseline and

other relevant information. Trustees

should identify and catalog sources of

baseline information as part of preincident planning, including seeking

input on sources of information. Types

of information that may be important

include: (i) Petroleum hydrocarbon

contamination in indicator organisms;

(ii) species census and inventory data;

(iii) baseline data on species

populations; (iv) recreational use

statistics; (v) values for selected natural

resources and services; and (vi)

restoration measures applicable to

injured natural resources and services.

Familiarity with the types of baseline

information and identification of data

gaps and needs will allow the trustees

to formulate better study designs and

restoration approaches.

(g) Establish data management

systems. Data management and record

keeping are critical throughout the

restoration process. Data management

systems may best be designed during

pre-incident planning to minimize the

possibility of losing critical information

during an incident. For small incidents,

this may be a relatively simple filing

system, but for large incidents, a

centralized computer-based system may

be essential.

Trustees may decide to develop

consistent data management formats,

such as field, laboratory and quality

assurance forms, to facilitate data

management. At a minimum, data

management should address the: (i)

Type and volume of data; (ii) uses and

users of the data; (iii) availability of

existing data management structures;

(iv) quality assurance needs; (v)

reporting requirements; and (vi)

accessibility of the data. Data

management should also include

provisions for distribution of updates

for the trustees and others on a timely

basis; and
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 497

(h) Identify assessment funding issues

and options. Funding of trustee

activities should be addressed during

pre-incident planning because of the

need to initiate actions expeditiously

after an incident. Trustees may have

several sources of potential funding,

including: (i) Responsible parties; (ii)

Oil Spill Liability Trust Fund (Fund);

and (iii) agency funding. Trustees

should consult the most up-to-date

guidance available from the U.S. Coast

Guard for access to the Fund and

incorporate these procedures into preincident planning.

II. Regional Restoration Planning

General

OPA emphasizes making the

environment and public whole for

injuries to natural resources and

services. Where practicable, incidentspecific restoration plan development is

the preferred approach. However, for

many incidents, such incident-specific

planning may be impractical because,

for instance, injuries are not extensive

or are short-term. For small incidents,

incident-specific planning costs may be

high compared to the estimated

damages.

Thus, to achieve OPA’s mandate to

make the environment and public

whole, trustees are strongly encouraged

to use or modify existing restoration

plans, identify other existing restoration

projects, or develop new regional

restoration plans. Such regional

planning is appropriate so long as

natural resources and services

comparable to those expected to be

injured by an incident are addressed in

the plans.

Availability of Regional Restoration

Plans

Trustees may rely on or adjust

existing regional restoration plans, so

long as they have followed or can be

modified to meet the planning

requirements under the rule. Lacking

existing regional plans, trustees should

seek to develop such plans. The trustees

may organize these plans based on such

factors as geography (e.g., ecosystems or

watersheds), injuries anticipated from

incidents, or restoration alternatives.

Regional restoration plans must be

developed or annotated in such a way

that trustees are able to justify linking

the injuries from a particular incident or

set of incidents with a specific

restoration project or set of projects

within the plan. This may be facilitated

by describing the types of injuries

anticipated from incidents to specific

natural resources within a region, and

describing these injuries in terms of the

types and importance of functions and

services, ecological and human use.

III. Coordination

General

Trustee coordination is crucial to an

efficient and effective assessment and

restoration planning process because of

the need to address shared trustee

interests in natural resources and

services injured by incidents. OPA

prohibits double recovery of damages,

which strongly suggests that, where

multiple trustees are involved in an

incident, they actively coordinate their

activities as early in the process as

possible.

Incentives for Coordination

Incentives for coordination include:

(a) Access to funding—requests for

reimbursement of the costs of initiating

natural resource damage assessment

from the Fund require that trustees

attempt to coordinate their assessments

and funding requests;

(b) Conflict resolution—lack of

coordination among the trustees or with

the responsible parties will likely

produce an adversarial, litigationcharged atmosphere. A joint trusteeresponsible party effort will help resolve

legal, administrative, and technical

conflicts; and

(c) Pooling limited resources—a joint

trustee-responsible party effort will

allow the pooling of financial and

human resources for more efficient and

effective restoration planning and

implementation.

Trustees will benefit greatly if

coordination procedures can be

established well before an incident

occurs. However, cooperative

arrangements allowing for responsible

party implementation of assessment

activities are subject to trustee oversight

because of the trustees’ fiduciary

responsibility to the public.

Agreements

Trustees should consider Memoranda

of Understanding (MOUs) to formalize

their co-trustee relationships. The MOU

or similar agreements may be prepared

either in anticipation of an incident or

shortly after an incident. It is important

that trustee agreements address, at a

minimum: the purpose of the

agreement; trustee participants; trustee

organization; trustee responsibilities;

and a decisionmaking process.

Lead Administrative Trustee (LAT)

When conducting joint assessments

under this rule, trustees must designate

a Lead Administrative Trustee (LAT).

The LAT serves as the contact for

trustee interaction with response

agencies, responsible parties and the

public, and provides general

administrative support to the restoration

process.

The rule does not require that a LAT

be a federal agency. However, when

more than one federal trustee(s) is

involved, the federal trustees must

select a federal LAT if the trustees wish

to access the Fund to initiate natural

resource damage assessment activities.

Where appropriate, the trustees may

designate co-LATs, consisting of a

federal LAT and the state, tribal, or

foreign trustees. Trustees may also elect

to provide for sequential LATs to cover

different stages of the restoration

planning and implementation process.

The LAT should be selected by

mutual agreement of the trustees. In

designating a LAT, trustees may want to

consider such factors as: relative extent

of jurisdiction over natural resources

and services injured by an incident;

capability and willingness to conduct

assessment actions; and sequence and

duration of involvement in the incident

or similar incidents. Selection of a LAT

should be made as soon as practicable

after notification of an incident.

Co-Trustee Responsibilities

Co-trustees should be prepared to

participate fully in the restoration

planning and implementation process

by: participating in or conducting those

studies or analyses for which they have

special expertise or management

authority; making staff available to

participate in other assessment

activities, in particular, to represent the

trustee in decisions requiring co-trustee

unanimity; and committing financial

resources. Each trustee may limit this

participation based on the extent of

injury to its natural resources as well as

legal and financial constraints.

Coordination With Response Agencies

To the fullest extent practicable

without interfering with response

activities, natural resource concerns

should be integrated with response

activities before pursuing an

assessment; liability for natural resource

damages is limited to damages for

injuries residual to the response phase,

plus any injuries related to the response.

NOAA strongly encourages trustees to

coordinate natural resource injury

assessment activities, such as gathering

ephemeral data related to an incident,

with response actions. Mechanisms to

coordinate response and trustee data

gathering needs and processes may also

be addressed in pre-incident planning.
498 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

Coordination With the Responsible

Parties

Under OPA, trustees have the

responsibility to determine appropriate

actions to restore injured natural

resources and services. However, the

rule requires trustees to invite the

responsible parties to be full or partial

participants in the assessment and

restoration process, whenever it can be

achieved without compromise of the

trustees’ statutory obligations to act on

behalf of the public trust.

Enforceable Agreements

Trustees and responsible parties

should consider entering into

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,

assessment, and/or restoration. For

example, stipulated facts might concern

the types of natural resources and

services injured, the extent of injury, or

the most appropriate assessment

procedures to determine injury and/or

restoration needs, and how the results of

the procedures used will be interpreted.

Coordination Among the Responsible

Parties

While it is obviously not as easy to

identify the mix of potential responsible

parties that will participate in a given

incident, there are issues that can be

addressed in general terms by the

potential responsible parties in advance,

that will enable them to enter the

cooperative restoration process more

efficiently and effectively. In an

incident with a single well-identified

responsible party, the ability to assess

the situation, identify the appropriate

course of action and most effectively

implement a cooperative response will

be improved by pre-incident planning.

In an incident with multiple potential

responsible parties, the need for preincident planning is more apparent. In

this latter situation, the potential

responsible parties need to consider the

efficacy of a cooperative restoration

process, and the terms under which

they would consider entering into such

a process.

Appendix B—Assessment Procedures

Any procedures used to assess injury

and scale restoration actions (i.e.,

procedures used throughout the natural

resource damage assessment) must meet

all of the standards listed in § 990.27 of

the rule if they are to be in accordance

with the rule. The rule allows for the

use of a range of assessment procedures.

The scientific and technical adequacy of

these procedures will be judged based

on the circumstances of the incident

and associated injuries, and the

information needed to determine

restoration actions. If a range of

assessment procedures providing the

same type and quality of information is

available, the least costly procedure

must be used.

Type A Procedures

The Department of the Interior (DOI)

is responsible for developing ‘‘type A’’

assessment procedures under CERCLA.

These procedures were originally

intended to cover both hazardous

substance releases as well as oil

discharges. This rule would allow

trustees to use any final type A

procedure incorporated into DOI’s

regulations that addresses discharges of

oil.

Compensation Formulas

As part of the 1994 proposed

regulations, NOAA proposed a

compensation formula that could be

used for small incidents in both the

estuarine and marine environments and

the Great Lakes (and other inland

waters). The formula was developed

using early drafts of type A models

being developed by DOI. The purpose of

the formula is to readily estimate

impacts based on the amount of oil

discharged and several simple data

inputs. The compensation formula was

reserved in the 1995 proposed rule.

DOI is scheduled to issue the final

revised type A models in early 1996.

When those models are final, NOAA

intends to reissue the compensation

formulas. Pending the final

promulgation of the models, NOAA has

developed a guidance document to

provide an interim tool for such a

purpose.

The compensation formula guidance

document is intended to provide

instructions on how to recreate the

incident scenarios used to develop the

1994 proposed estuarine/marine

compensation formulas. Using the data

in the guidance document, trustees will

have a cost-effective tool to use in

estimating expected impacts of most

discharges of oil. This information may

prove to be useful in early

decisionmaking in a natural resource

damage assessment or in settlement

discussions.

Restoration Scaling Procedures

The following is a list of procedures

that are mentioned in this preamble as

potential approaches to scaling

restoration actions. The trustees are not

limited to these procedures and may use

any procedure deemed to be appropriate

to the particular situation, pursuant to

the guidance given above and in

§ 990.27 of the final rule.

A. Habitat Equivalency Analysis

This procedure may be used to scale

restoration actions that replace entire

habitats that support multiple species or

that replace individual species that

provide a variety of natural resource

services. To ensure that the scale of the

restoration action does not over- or

under-compensate the public for

injuries incurred, the trustees must

establish an equivalency between the

present value of the quantity of lost

services and the present value of the

quantity of services provided by the

restoration action(s) over time.

B. Travel Cost Method

The travel cost method is principally

employed to model demand for

recreational experiences. This

measurement procedure evolved from

the insight that the travel costs an

individual incurs to visit a site are like

a price for the site visit. In essence, the

travel cost method assesses an

individual’s willingness to travel further

(thereby incurring higher travel costs) in

order to recreate at more highly valued

sites. It is important to take into account

the availability and quality of substitute

recreation sites. Multiple-site models of

recreational demand, such as the

random utility model, focus attention on

the recreationist’s choice among

alternative recreational sites. This

version of the travel cost model is

particularly appropriate where many

substitutes are available to the

individual and/or when the incident has

affected quality at multiple sites. For

this reason, multiple-site models of

recreational demand are preferred to

single-site models, unless it is feasible

to include in the single-site model price

and quality information about the

relevant substitute sites (or there are no

substitute sites). If a literature value

from a single-site model, without full

accounting for substitutes, is the only

available estimate, an appropriate

adjustment should be made to the

estimate of trip value.

In cases where the change in the

quantity or quality of natural resource

services to be analyzed is outside of the

range of observed behavior, trustees may

choose to collect contingent behavior

data. Contingent behavior refers to the

behavior of users or potential users of a

natural resource service under

hypothetical conditions presented to

them in the travel cost survey.
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 499

C. Factor Income Approach

This approach can be employed to

calculate changes in economic rent

under certain special conditions; in

more general cases, the procedure

appropriate for calculating economic

rent is market models of supply and

demand. The factor income approach

relies upon the production function

model that relates the contribution of

inputs to the production of an output.

(Inputs are also referred to as factors of

production.) An incident may decrease

the quality and/or quantity of a natural

resource, and thereby effectively

increase the cost of employing a natural

resource input in a production process.

For example, contamination of water

supplies or of sediments in navigational

waterways may increase the costs of

providing drinking water or of

maintaining navigational waterways

through dredging. Where the prices of

the final product and of the other factors

of production do not change, the change

in economic rent is simply the sum of

the changes in factor costs (or factor

income) for the affected inputs.

D. Hedonic Price Model

The hedonic price model relates the

price of a marketed commodity to its

various attributes. In the natural

resource damage assessment context, it

may be used to determine the change in

value of some nonmarket services from

public trust natural resources (for

example, environmental amenities such

as water or air quality) where they

function as attributes of private market

goods, such as property. For example,

the value of beach front property may be

directly related to the quality and

accessibility of the adjacent coastline.

The change in value of the property

owners associated with the reduction in

the quality or accessibility, as may occur

due to an incident, may be captured in

the value of the property if the effect is

large enough. All else equal, the

decrease in property values as a result

of a discharge measures the change in

use value of the injured coastline

natural resources accruing to local

property owners. This measure of the

reduction in value of coastline natural

resources will not capture any loss in

value of the natural resources that may

accrue to members of the public who do

not own property in the area.

E. Market Models of Demand and

Supply

For those goods and services regularly

traded in markets, economists typically

rely upon market transactions to reveal

the values that individuals place on the

goods and services and the costs of

producing them. When the quality of

the natural resource directly affects the

value individual consumers place on a

good or service, the correct measure of

damage is the change in consumer

surplus, or individuals’ willingness-toaccept compensation plus the economic

rent component of producer surplus, if

any, for the injuries associated with the

discharge.

F. Contingent Valuation

The contingent valuation (CV) method

determines the value of goods and

services based on the results of carefully

designed surveys. The CV method

obtains an estimate of the total value,

including both direct and passive use

values of a good or service by using a

questionnaire designed to objectively

collect information about the

respondent’s willingness to pay for the

good or service. A CV survey contains

three basic elements: (i) A description of

the good/service to be valued and the

context in which it will be provided,

including the method of payment; (ii)

questions regarding the respondent’s

willingness to pay for the good or

service; and (iii) questions concerning

demographics or other characteristics of

the respondent to interpret and validate

survey responses.

G. Conjoint Analysis

Conjoint analysis is a survey

procedure that is used to derive the

values of particular attributes of goods

or services. Information is collected

about individuals’ choices between

different goods that vary in terms of

their attributes or service levels. With

this information, it is possible to derive

values for each particular attribute or

service. If price is included as an

attribute in the choice scenarios, values

can be derived in terms of dollars which

can be used with the valuation

approach.

Alternatively, it is possible to value

attributes in terms of units of

replacement services. Survey

respondents would be presented with

choices between two or more options

that may represent restoration actions

with varying levels or types of services.

The goal is to obtain the value of the

injured services in terms of alternative

natural resource services so that

restoration actions can be scaled

directly using the resource-to-resource

or service-to-service approaches or the

valuation approach.

H. Benefits Transfer Approach

Benefits (or valuation) transfer

involves the application of existing

value estimates or valuation functions

and data that were developed in one

context to address a sufficiently similar

natural resource valuation question in a

different context.

Where natural resource values have

been developed through an

administrative or legislative process and

are relevant and reliable under the

circumstances, the trustees may use

these values, as appropriate, in a

benefits transfer context. Other values

may be used so long as three basic

issues are considered in determining the

appropriateness of their use: the

comparability of the users and of the

natural resource and/or service being

valued in the initial studies and the

transfer context; the comparability of

the change in quality or quantity of

natural resources and/or services in the

initial study and in the transfer context

(where relevant); and the quality of the

studies being transferred.

National Environmental Policy Act,

Regulatory Flexibility Act, Paperwork

Reduction Act and Executive Orders

12630, 12778, and 12612

The National Oceanic and

Atmospheric Administration has

determined that this rule does not

constitute a major federal action

significantly affecting the quality of the

human environment. Therefore, no

further analysis pursuant to section

102(2)(C) of the National Environmental

Policy Act of 1969 (42 U.S.C.

4332(2)(C)) has been prepared.

The Assistant General Counsel for

Legislation and Regulation, in

accordance with the Regulatory

Flexibility Act, certifies to the Chief

Counsel for Advocacy, Small Business

Administration, that this rule will not

have a significant economic effect on a

substantial number of small entities.

The rule is intended to make more

specific, and easier to apply, the

standards set out in OPA for assessing

injury to natural resources and/or

services as a result of actual or

threatened discharges of oil. The rule is

not intended to change the balance of

legal benefits and responsibilities

among any parties or groups, large or

small. To the extent any are affected by

the rule, it is anticipated that all parties

will benefit by increased ease of

application of law in this area.

It has been determined that this rule

does not contain information collection

requirements that require approval by

the Office of Management and Budget

under the Paperwork Reduction Act (44

U.S.C. 3501 et seq.).

The final rule has been reviewed

under Executive Order 12,866 and has

been determined to constitute a

significant regulatory action. However,

because of the difficulty of evaluating
500 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

the effects of alternatives to this rule,

the Office of Information and Regulatory

Affairs within the Office of Management

and Budget has waived preparation of

the assessments described in sections

6(a)(3)(B) and 6(a)(3(C) of Executive

Order 12,866 for the final rule.

It has been determined that this rule

does not have takings implications

under Executive Order 12,630. The

Department has certified to the Office of

Management and Budget that this rule

meets the applicable standards provided

in sections 2(a) and 2(b)(2) of Executive

Order 12,778. It has been determined

that this rule does not have federalism

implications under Executive Order

12,612.

List of Subjects in 15 CFR Part 990

Coastal zone, Endangered and

threatened species, Energy,

Environmental protection, Estuaries,

Fish, Fisheries, Fishing, Gasoline,

Historic preservation (archeology),

Hunting, Incorporation by reference,

Indian lands, Marine pollution,

Migratory birds, National forests,

National parks, National Wild and

Scenic Rivers System, Natural

resources, Navigable waters, Oil, Oil

pollution, Petroleum, Plants, Public

lands, Recreation and recreation areas,

Rivers, Seashores, Shipping, Waterways,

Water pollution control, Water

resources, Water supply, Water

transportation, Wetlands, Wildlife.

Dated: December 21, 1995.

D. James Baker,

Under Secretary for Oceans and Atmosphere.

Under the authority of the Oil

Pollution Act of 1990, and for the

reasons set out in this preamble, title 15

of the Code of Federal Regulations,

chapter IX is amended to add a new

Subchapter E—Oil Pollution Act

Regulations and a new part 990 as set

forth below.

SUBCHAPTER E—OIL POLLUTION ACT

REGULATIONS

PART 990—NATURAL RESOURCE

DAMAGE ASSESSMENTS

Subpart A—Introduction

Sec.

990.10 Purpose.

990.11 Scope.

990.12 Overview.

990.13 Rebuttable presumption.

990.14 Coordination.

990.15 Considerations to facilitate

restoration.

Subpart B—Authorities

990.20 Relationship to the CERCLA natural

resource damage assessment regulations.

990.21 Relationship to the NCP.

990.22 Prohibition on double recovery.

990.23 Compliance with NEPA and the

CEQ regulations.

990.24 Compliance with other applicable

laws and regulations.

990.25 Settlement.

990.26 Emergency restoration.

990.27 Use of assessment procedures.

Subpart C—Definitions

990.30 Definitions.

Subpart D—Preassessment Phase

990.40 Purpose.

990.41 Determination of jurisdiction.

990.42 Determination to conduct

restoration planning.

990.43 Data collection.

990.44 Notice of Intent to Conduct

Restoration Planning.

990.45 Administrative record.

Subpart E—Restoration Planning Phase

990.50 Purpose.

990.51 Injury assessment—injury

determination.

990.52 Injury assessment—quantification.

990.53 Restoration selection—developing

restoration alternatives.

990.54 Restoration selection—evaluation of

alternatives.

990.55 Restoration selection—developing

restoration plans.

990.56 Restoration selection—use of a

Regional Restoration Plan or existing

restoration project.

Subpart F—Restoration Implementation

Phase

990.60 Purpose.

990.61 Administrative record.

990.62 Presenting a demand.

990.63 Discounting and compounding.

990.64 Unsatisfied demands.

990.65 Opening an account for recovered

damages.

990.66 Additional considerations.

Authority: 33 U.S.C. 2701 et seq.

Subpart A—Introduction

§ 990.10 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 the

return of the injured natural resources

and services to baseline and

compensation for interim losses of such

natural resources and services from the

date of the incident until recovery. The

purpose of this part is to promote

expeditious and cost-effective

restoration of natural resources and

services injured as a result of an

incident. To fulfill this purpose, this

part 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. This

part 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

restoration actions from a reasonable

range of alternatives.

§ 990.11 Scope.

The Oil Pollution Act of 1990 (OPA),

33 U.S.C. 2701 et seq., provides for the

designation of federal, state, and, if

designated by the Governor of the state,

local officials to act on behalf of the

public as trustees for natural resources

and for the designation of Indian tribe

and foreign officials to act as trustees for

natural resources on behalf of,

respectively, the tribe or its members

and the foreign government. This part

may be used by these officials in

conducting natural resource damage

assessments when natural resources

and/or services are injured as a result of

an incident involving an actual or

substantial threat of a discharge of oil.

This part is not intended to affect the

recoverability of natural resource

damages when recoveries are sought

other than in accordance with this part.

§ 990.12 Overview.

This part 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

this part. The Restoration Planning

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

this part. The Restoration

Implementation Phase, during which

trustees ensure implementation of

restoration, is described in subpart F of

this part.

§ 990.13 Rebuttable presumption.

Any determination or assessment of

damages to natural resources made by a

Federal, State, or Indian trustee in

accordance with this part shall have the

force and effect of a rebuttable

presumption on behalf of the trustee in

any administrative or judicial

proceeding under OPA.

§ 990.14 Coordination.

(a) Trustees. (1) If an incident affects

the interests of multiple trustees, the

trustees should act jointly under this

part to ensure that full restoration is

achieved without double recovery of

damages. For joint assessments, trustees

must designate one or more Lead
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 501

Administrative Trustee(s) to act as

coordinators.

(2) If there is a reasonable basis for

dividing the natural resource damage

assessment, trustees may act

independently under this part, so long

as there is no double recovery of

damages.

(3) Trustees may develop pre-incident

or incident-specific memoranda of

understanding to coordinate their

activities.

(b) Response agencies. Trustees must

coordinate their activities conducted

concurrently with response operations

with response agencies consistent with

the NCP and any pre-incident plans

developed under § 990.15(a) of this part.

Trustees may develop pre-incident

memoranda of understanding to

coordinate their activities with response

agencies.

(c) Responsible parties—(1) Invitation.

Trustees must invite the responsible

parties to participate in the natural

resource damage assessment described

in this part. The invitation to participate

should be in writing, and a written

response by the responsible parties is

required to confirm the desire to

participate.

(2) Timing. The invitation to

participate should be extended to

known responsible parties as soon as

practicable, but not later than the

delivery of the ‘‘Notice of Intent to

Conduct Restoration Planning,’’ under

§ 990.44 of this part, to the responsible

party.

(3) Agreements. 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.

(4) Nature and extent of participation.

If the responsible parties accept the

invitation to participate, the scope of

that participation must be determined

by the trustees, in light of the

considerations in paragraph (c)(5) of this

section. At a minimum, participation

will include notice of trustee

determinations required under this part,

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 the responsible parties.

Trustees will objectively consider all

written comments provided by the

responsible parties, as well as any other

recommendations or proposals that the

responsible parties submit in writing to

the Lead Administrative Trustee.

Submissions by the responsible parties

will be included in the administrative

record. Final authority to make

determinations regarding injury and

restoration rest solely with the trustees.

Trustees may end participation by

responsible parties who, during the

conduct of the assessment, in the sole

judgment of the trustees, cause

interference with the trustees’ ability to

fulfill their responsibilities under OPA

and this part.

(5) Considerations. In determining the

nature and extent of participation by the

responsible parties or their

representatives, trustees may consider

such factors as:

(i) Whether the responsible parties

have been identified;

(ii) The willingness of responsible

parties to participate in the assessment;

(iii) The willingness of responsible

parties to fund assessment activities;

(iv) The willingness and 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;

(v) The degree of cooperation of the

responsible parties in the response to

the incident; and

(vi) The actions of the responsible

parties in prior assessments.

(6) Request for alternative assessment

procedures. (i) The participating

responsible parties may request that

trustees use assessment procedures

other than those selected by the trustees

if the responsible parties:

(A) Identify the proposed procedures

to be used that meet the requirements of

§ 990.27 of this part, and provide

reasons supporting the technical

adequacy and appropriateness of such

procedures for the incident and

associated injuries;

(B) Advance to the trustees the

trustees’ reasonable estimate of the cost

of using the proposed procedures; and

(C) Agree not to challenge the results

of the proposed procedures. The request

from the responsible parties may be

made at any time, but no later than,

fourteen (14) days of being notified of

the trustees’ proposed assessment

procedures for the incident or the

injury.

(ii) Trustees may reject the

responsible parties’ proposed

assessment procedures if, in the sole

judgment of the trustees, the proposed

assessment procedures:

(A) Are not technically feasible;

(B) Are not scientifically or

technically sound;

(C) Would inadequately address the

natural resources and services of

concern;

(D) Could not be completed within a

reasonable time frame; or

(E) Do not meet the requirements of

§ 990.27 of this part.

(7) Disclosure. Trustees must

document in the administrative record

and Restoration Plan the invitation to

the responsible parties to participate,

and briefly describe the nature and

extent of the responsible parties’

participation. If the responsible parties’

participation is terminated during the

assessment, trustees must provide a

brief explanation of this decision in the

administrative record and Restoration

Plan.

(d) Public. Trustees must provide

opportunities for public involvement

after the trustees’ decision to develop

restoration plans or issuance of any

notices to that effect, as provided in

§ 990.55 of this part. Trustees may also

provide opportunities for public

involvement at any time prior to this

decision if such involvement may

enhance trustees’ decisionmaking or

avoid delays in restoration.

§ 990.15 Considerations to facilitate

restoration.

In addition to the procedures

provided in subparts D through F of this

part, trustees may take other actions to

further the goal of expediting restoration

of injured natural resources and

services, including:

(a) Pre-incident planning. Trustees

may engage in pre-incident planning

activities. Pre-incident plans may

identify natural resource damage

assessment teams, establish trustee

notification systems, identify support

services, identify natural resources and

services at risk, identify 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,

as well as all other members of the

public interested in and capable of

participating in assessments, should be

included in pre-incident planning to the

fullest extent practicable.

(b) Regional Restoration Plans. Where

practicable, incident-specific restoration

plan development is preferred, however,

trustees may develop Regional

Restoration Plans. These plans may be

used to support a claim under § 990.56

of this part. Regional restoration

planning may consist of compiling

databases that identify, on a regional or

watershed basis, or otherwise as

appropriate, existing, planned, or

proposed restoration projects that may
502 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

provide appropriate restoration

alternatives for consideration in the

context of specific incidents.

Subpart B—Authorities

§ 990.20 Relationship to the CERCLA

natural resource damage assessment

regulations.

(a) General. Regulations for assessing

natural resource damages resulting from

hazardous substance releases under the

Comprehensive Environmental

Response, Compensation, and Liability

Act of 1980, as amended (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., 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 part supersedes

43 CFR part 11 with regard to oil

discharges covered by OPA.

(b) Assessments commenced before

February 5, 1996. If trustees commenced

a natural resource damage assessment

for an oil discharge under 43 CFR part

11 prior to February 5, 1996 they may

complete the assessment in compliance

with 43 CFR part 11, or they may elect

to use this part, and obtain a rebuttable

presumption.

(c) Oil and hazardous substance

mixtures. For natural resource damages

resulting from 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.

§ 990.21 Relationship to the NCP.

This part 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

the coordination with damage

assessment activities are conducted

pursuant to the National Oil and

Hazardous Substances Pollution

Contingency Plan (NCP), 40 CFR part

300.

§ 990.22 Prohibition on double recovery.

When taking actions under this part,

trustees are subject to the prohibition on

double recovery, as provided in 33

U.S.C. 2706(d)(3) of OPA.

§ 990.23 Compliance with NEPA and the

CEQ regulations.

(a) General. The National

Environmental Policy Act (NEPA), 42

U.S.C. 4321 et seq. and Council on

Environmental Quality (CEQ)

regulations implementing NEPA, 40

CFR chapter V, apply to restoration

actions by federal trustees, except where

a categorical exclusion or other

exception to NEPA applies. Thus, when

a federal trustee proposes to take

restoration actions under this part, it

must integrate this part with NEPA, the

CEQ regulations, and NEPA regulations

promulgated by that federal trustee

agency. Where state NEPA-equivalent

laws may apply to state trustees, state

trustees must consider the extent to

which they must integrate this part with

their NEPA-equivalent laws. The

requirements and process described in

this section relate only to NEPA and

federal trustees.

(b) NEPA requirements for federal

trustees. NEPA becomes applicable

when federal trustees propose to take

restoration actions, which begins with

the development of a Draft Restoration

Plan under § 990.55 of this part.

Depending upon the circumstances of

the incident, federal trustees may need

to consider early involvement of the

public in restoration planning in order

to meet their NEPA compliance

requirements.

(c) NEPA process for federal trustees.

Although the steps in the NEPA process

may vary among different federal

trustees, the process will generally

involve the need to develop restoration

plans in the form of an Environmental

Assessment or Environmental Impact

Statement, depending upon the trustee

agency’s own NEPA regulations.

(1) Environmental Assessment. (i)

Purpose. The purpose of an

Environmental Assessment (EA) is to

determine whether a proposed

restoration action will have a significant

(as defined under NEPA and § 1508.27

of the CEQ regulations) impact on the

quality of the human environment, in

which case an Environmental Impact

Statement (EIS) evaluating the impact is

required. In the alternative, where the

impact will not be significant, federal

trustees must issue a Finding of No

Significant Impact (FONSI) as part of

the restoration plans developed under

this part. If significant impacts to the

human environment are anticipated, the

determination to proceed with an EIS

may be made as a result, or in lieu, of

the development of the EA.

(ii) General steps. (A) If the trustees

decide to pursue an EA, the trustees

may issue a Notice of Intent to Prepare

a Draft Restoration Plan/EA, or proceed

directly to developing a Draft

Restoration Plan/EA.

(B) The Draft Restoration Plan/EA

must be made available for public

review before concluding a FONSI or

proceeding with an EIS.

(C) If a FONSI is concluded, the

restoration planning process should be

no different than under § 990.55 of this

part, except that the Draft Restoration

Plan/EA will include the FONSI

analysis.

(D) The time period for public review

on the Draft Restoration Plan/EA must

be consistent with the federal trustee

agency’s NEPA requirements, but

should generally be no less than thirty

(30) calendar days.

(E) The Final Restoration Plan/EA

must consider all public comments on

the Draft Restoration Plan/EA and

FONSI.

(F) The means by which a federal

trustee requests, considers, and

responds to public comments on the

Draft Restoration Plan/EA and FONSI

must also be consistent with the federal

agency’s NEPA requirements.

(2) Environmental Impact Statement.

(i) Purpose. The purpose of an

Environmental Impact Statement (EIS)

is to involve the public and facilitate the

decisionmaking process in the federal

trustees’ analysis of alternative

approaches to restoring injured natural

resources and services, where the

impacts of such restoration are expected

to have significant impacts on the

quality of the human environment.

(ii) General steps. (A) If trustees

determine that restoration actions are

likely to have a significant (as defined

under NEPA and § 1508.27 of the CEQ

regulations) impact on the environment,

they must issue a Notice of Intent to

Prepare a Draft Restoration Plan/EIS.

The notice must be published in the

Federal Register.

(B) The notice must be followed by

formal public involvement in the

development of the Draft Restoration

Plan/EIS.

(C) The Draft Restoration Plan/EIS

must be made available for public

review for a minimum of forty-five (45)

calendar days. The Draft Restoration

Plan/EIS, or a notice of its availability,

must be published in the Federal

Register.

(D) The Final Restoration Plan/EIS

must consider all public comments on

the Draft Restoration Plan/EIS, and

incorporate any changes made to the

Draft Restoration Plan/EIS in response

to public comments.

(E) The Final Restoration Plan/EIS

must be made publicly available for a

minimum of thirty (30) calendar days

before a decision is made on the federal

trustees’ proposed restoration actions

(Record of Decision). The Final

Restoration Plan/EIS, or a notice of its

availability, must be published in the

Federal Register.

(F) The means by which a federal

trustee agency requests, considers, and

responds to public comments on the
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 503

Final Restoration Plan/EIS must also be

consistent with the federal agency’s

NEPA requirements.

(G) After appropriate public review on

the Final Restoration Plan/EIS is

completed, a Record of Decision (ROD)

is issued. The ROD summarizes the

trustees’ decisionmaking process after

consideration of any public comments

relative to the proposed restoration

actions, identifies all restoration

alternatives (including the preferred

alternative(s)), and their environmental

consequences, and states whether all

practicable means to avoid or minimize

environmental harm were adopted (e.g.,

monitoring and corrective actions). The

ROD may be incorporated with other

decision documents prepared by the

trustees. The means by which the ROD

is made publicly available must be

consistent with the federal trustee

agency’s NEPA requirements.

(d) Relationship to Regional

Restoration Plans or an existing

restoration project. If a Regional

Restoration Plan or existing restoration

project is proposed for use, federal

trustees may be able to tier their NEPA

analysis to an existing EIS, as described

in §§ 1502.20 and 1508.28 of the CEQ

regulations.

§ 990.24 Compliance with other applicable

laws and regulations.

(a) Worker health and safety. When

taking actions under this part, trustees

must comply with applicable worker

health and safety considerations

specified in the NCP for response

actions.

(b) Natural Resources protection.

When acting under this part, trustees

must ensure compliance with any

applicable consultation, permitting, or

review requirements, including but not

limited to: the Endangered Species Act

of 1973, 16 U.S.C. 1531 et seq.; the

Coastal Zone Management Act of 1972,

16 U.S.C. 1451 et seq.; the Migratory

Bird Treaty Act, 16 U.S.C. 703 et seq.;

the National Marine Sanctuaries Act, 16

U.S.C. 1431 et seq.; the National

Historic Preservation Act, 12 U.S.C. 470

et seq.; the Marine Mammal Protection

Act, 16 U.S.C. 1361 et seq.; and the

Archaeological Resources Protection

Act, 16 U.S.C. 470 et seq.

§ 990.25 Settlement.

Trustees may settle claims for natural

resource damages under this part 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. 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, which is

made available for public review.

§ 990.26 Emergency restoration.

(a) Trustees may take emergency

restoration action before completing the

process established under this part,

provided that:

(1) The action is needed to minimize

continuing or prevent additional injury;

(2) The action is feasible and likely to

minimize continuing or prevent

additional injury; and

(3) The costs of the action are not

unreasonable.

(b) If response actions are still

underway, trustees, through their

Regional Response Team member or

designee, must coordinate with the OnScene Coordinator (OSC) before taking

any emergency restoration actions. Any

emergency restoration actions proposed

by trustees should not interfere with ongoing 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.

(c) 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 as provided in § 990.14(c) of this

part.

(d) Trustees must provide notice to

the public, to the extent practicable, of

these planned emergency restoration

actions. Trustees must also provide

public notice of the justification for,

nature and extent of, and results of

emergency restoration actions within a

reasonable time frame after completion

of such actions. The means by which

this notice is provided is left to the

discretion of the trustee.

§ 990.27 Use of assessment procedures.

(a) Standards for assessment

procedures. Any procedures used

pursuant to this part must comply with

all of the following standards if they are

to be in accordance with this part:

(1) The procedure must be capable of

providing assessment information of use

in determining the type and scale of

restoration appropriate for a particular

injury;

(2) The additional cost of a more

complex procedure must be reasonably

related to the expected increase in the

quantity and/or quality of relevant

information provided by the more

complex procedure; and

(3) The procedure must be reliable

and valid for the particular incident.

(b) Assessment procedures available.

(1) The range of assessment procedures

available to trustees includes, but is not

limited to:

(i) Procedures conducted in the field;

(ii) Procedures conducted in the

laboratory;

(iii) Model-based procedures,

including type A procedures identified

in 43 CFR part 11, subpart D, and

compensation formulas/schedules; and

(iv) Literature-based procedures.

(2) Trustees may use the assessment

procedures in paragraph (b)(1) of this

section alone, or in any combination,

provided that the standards in

paragraph (a) of this section are met,

and there is no double recovery.

(c) Selecting assessment procedures.

(1) When selecting assessment

procedures, trustees must consider, at a

minimum:

(i) The range of procedures available

under paragraph (b) of this section;

(ii) The time and cost necessary to

implement the procedures;

(iii) The potential nature, degree, and

spatial and temporal extent of the

injury;

(iv) The potential restoration actions

for the injury; and

(v) The relevance and adequacy of

information generated by the procedures

to meet information requirements of

restoration planning.

(2) If a range of assessment procedures

providing the same type and quality of

information is available, the most costeffective procedure must be used.

Subpart C—Definitions

§ 990.30 Definitions.

For the purpose of this rule, the term:

Baseline means the condition of the

natural resources and services that

would have existed had the incident not

occurred. Baseline data may be

estimated using historical data,

reference data, control data, or data on

incremental changes (e.g., number of

dead animals), alone or in combination,

as appropriate.

Cost-effective means the least costly

activity among two or more activities

that provide the same or a comparable

level of benefits, in the judgment of the

trustees.

CEQ regulations means the Council

on Environmental Quality regulations

implementing NEPA, 40 CFR chapter V.
504 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

Damages means damages specified in

section 1002(b) of OPA (33 U.S.C.

1002(b)), and includes the costs of

assessing these damages, as defined in

section 1001(5) of OPA (33 U.S.C.

2701(5)).

Discharge means any emission (other

than natural seepage), intentional or

unintentional, and includes, but is not

limited to, spilling, leaking, pumping,

pouring, emitting, emptying, or

dumping, as defined in section 1001(7)

of OPA (33 U.S.C. 2701(7)).

Exclusive Economic Zone means the

zone established by Presidential

Proclamation 5030 of March 10, 1983 (3

CFR, 1984 Comp., p. 22), including the

ocean waters of the areas referred to as

‘‘eastern special areas’’ in Article 3(1) of

the Agreement between the United

States of America and the Union of

Soviet Socialist Republics on the

Maritime Boundary, signed June 1,

1990, as defined in section 1001(8) of

OPA (33 U.S.C. 2701(8)).

Exposure means direct or indirect

contact with the discharged oil.

Facility means any structure, group of

structures, equipment, or device (other

than a vessel) which is used for one or

more of the following purposes:

exploring for, drilling for, producing,

storing, handling, transferring,

processing, or transporting oil. This

term includes any motor vehicle, rolling

stock, or pipeline used for one or more

of these purposes, as defined in section

1001(9) of OPA (33 U.S.C. 2701(9)).

Fund means the Oil Spill Liability

Trust Fund, established by section 9509

of the Internal Revenue Code of 1986

(26 U.S.C. 9509), as defined in section

1001(11) of OPA (33 U.S.C. 2701(11)).

Incident means 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, as

defined in section 1001(14) of OPA (33

U.S.C. 2701(14)).

Indian tribe (or tribal) means any

Indian tribe, band, nation, or other

organized group or community, but not

including any Alaska Native regional or

village corporation, which is recognized

as eligible for the special programs and

services provided by the United States

to Indians because of their status as

Indians and has governmental authority

over lands belonging to or controlled by

the tribe, as defined in section 1001(15)

of OPA (33 U.S.C. 2701(15)).

Injury means an observable or

measurable adverse change in a natural

resource or impairment of a natural

resource service. Injury may occur

directly or indirectly to a natural

resource and/or service. Injury

incorporates the terms ‘‘destruction,’’

‘‘loss,’’ and ‘‘loss of use’’ as provided in

OPA.

Lead Administrative Trustee(s) (or

LAT) means the trustee(s) who is

selected by all participating trustees

whose natural resources or services are

injured by an incident, for the purpose

of coordinating natural resource damage

assessment activities. The LAT(s)

should also facilitate communication

between the OSC and other natural

resource trustees regarding their

activities during the response phase. NCP means the National Oil and

Hazardous Substances Pollution

Contingency Plan (National

Contingency Plan) codified at 40 CFR

part 300, which addresses the

identification, investigation, study, and

response to incidents, as defined in

section 1001(19) of OPA (33 U.S.C.

2701(19)).

Natural resource damage assessment

(or assessment) means the process of

collecting and analyzing information to

evaluate the nature and extent of

injuries resulting from an incident, and

determine the restoration actions

needed to bring injured natural

resources and services back to baseline

and make the environment and public

whole for interim losses.

Natural resources means land, fish,

wildlife, biota, air, water, ground water,

drinking water supplies, and other such

resources belonging to, managed by,

held in trust by, appertaining to, or

otherwise controlled by the United

States (including the resources of the

Exclusive Economic Zone), any state or

local government or Indian tribe, or any

foreign government, as defined in

section 1001(20) of OPA (33 U.S.C.

2701(20)).

Navigable waters means the waters of

the United States, including the

territorial sea, as defined in section

1001(21) of OPA (33 U.S.C. 2701(21)).

NEPA means the National

Environmental Policy Act, 42 U.S.C.

4321 et seq.

Oil means 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. However, the term does

not include petroleum, including crude

oil or any fraction thereof, that is

specifically listed or designated as a

hazardous substance under 42 U.S.C.

9601(14)(A) through (F), as defined in

section 1001(23) of OPA (33 U.S.C.

2701(23)).

On-Scene Coordinator (or OSC)

means the official designated by the

U.S. Environmental Protection Agency

or the U.S. Coast Guard to coordinate

and direct response actions under the

NCP, or the government official

designated by the lead response agency

to coordinate and direct response

actions under the NCP.

OPA means the Oil Pollution Act of

1990, 33 U.S.C. 2701 et seq.

Pathway means any link that connects

the incident to a natural resource and/

or service, and is associated with an

actual discharge of oil.

Person means an individual,

corporation, partnership, association,

state, municipality, commission, or

political subdivision of a state, or any

interstate body, as defined in section

1001(27) of OPA (33 U.S.C. 2701(27)).

Public vessel means a vessel owned or

bareboat chartered and operated by the

United States, or by a state or political

subdivision thereof, or by a foreign

nation, except when the vessel is

engaged in commerce, as defined in

section 1001(29) of OPA (33 U.S.C.

2701(29)).

Reasonable assessment costs means,

for assessments conducted under this

part, assessment costs that are incurred

by trustees in accordance with this part.

In cases where assessment costs are

incurred but trustees do not pursue

restoration, trustees may recover their

reasonable assessment costs provided

that they have determined that

assessment actions undertaken were

premised on the likelihood of injury and

need for restoration. Reasonable

assessment costs also include:

administrative, legal, and enforcement

costs necessary to carry out this part;

monitoring and oversight costs; and

costs associated with public

participation.

Recovery means the return of injured

natural resources and services to

baseline.

Response (or remove or removal)

means containment and removal of oil

or a hazardous substance from water

and shorelines or the taking of other

actions as may be necessary to minimize

or mitigate damage to the public health

or welfare, including, but not limited to,

fish, shellfish, wildlife, and public and

private property, shorelines, and

beaches, as defined in section 1001(30)

of OPA (33 U.S.C. 2701(30)).

Responsible party means:

(a) Vessels. In the case of a vessel, any

person owning, operating, or demise

chartering the vessel.

(b) Onshore facilities. In the case of an

onshore facility (other than a pipeline),

any person owning or operating the

facility, except a federal agency, state,

municipality, commission, or political

subdivision of a state, or any interstate

body, that as the owner transfers
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 505

possession and right to use the property

to another person by lease, assignment,

or permit.

(c) Offshore facilities. In the case of an

offshore facility (other than a pipeline or

a deepwater port licensed under the

Deepwater Port Act of 1974 (33 U.S.C.

1501 et seq.)), the lessee or permittee of

the area in which the facility is located

or the holder of a right of use and

easement granted under applicable state

law or the Outer Continental Shelf

Lands Act (43 U.S.C. 1301–1356) for the

area in which the facility is located (if

the holder is a different person than the

lessee or permittee), except a federal

agency, state, municipality,

commission, or political subdivision of

a state, or any interstate body, that as

owner transfers possession and right to

use the property to another person by

lease, assignment, or permit.

(d) Deepwater ports. In the case of a

deepwater port licensed under the

Deepwater Port Act of 1974 (33 U.S.C.

1501–1524), the licensee.

(e) Pipelines. In the case of a pipeline,

any person owning or operating the

pipeline.

(f) Abandonment. In the case of an

abandoned vessel, onshore facility,

deepwater port, pipeline, or offshore

facility, the persons who would have

been responsible parties immediately

prior to the abandonment of the vessel

or facility, as defined in section

1001(32) of OPA (33 U.S.C. 2701(32)).

Restoration means any action (or

alternative), or combination of actions

(or alternatives), to restore, rehabilitate,

replace, or acquire the equivalent of

injured natural resources and services.

Restoration includes:

(a) Primary restoration, which is any

action, including natural recovery, that

returns injured natural resources and

services to baseline; and

(b) Compensatory restoration, which

is any action taken to compensate for

interim losses of natural resources and

services that occur from the date of the

incident until recovery.

Services (or natural resource services)

means the functions performed by a

natural resource for the benefit of

another natural resource and/or the

public.

Trustees (or natural resource trustees)

means those officials of the federal and

state governments, of Indian tribes, and

of foreign governments, designated

under 33 U.S.C. 2706(b) of OPA.

United States and State means the

several States of the United States, 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 of the United

States, as defined in section 1001(36) of

OPA (33 U.S.C. 2701(36)).

Value means the maximum amount of

goods, services, or money an individual

is willing to give up to obtain a specific

good or service, or the minimum

amount of goods, services, or money 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.

Vessel means every description of

watercraft or other artificial contrivance

used, or capable of being used, as a

means of transportation on water, other

than a public vessel, as defined in

section 1001(37) of OPA (33 U.S.C.

2701(37)).

Subpart D—Preassessment Phase

§ 990.40 Purpose.

The purpose of this subpart is to

provide a process by which trustees

determine if they have jurisdiction to

pursue restoration under OPA and, if so,

whether it is appropriate to do so.

§ 990.41 Determination of jurisdiction.

(a) Determination of jurisdiction.

Upon learning of an incident, trustees

must determine whether there is

jurisdiction to pursue restoration under

OPA. To make this determination,

trustees must decide if:

(1) An incident has occurred, as

defined in § 990.30 of this part;

(2) The incident is not:

(i) Permitted under a permit issued

under federal, state, or local law; or

(ii) From a public vessel; or

(iii) From an onshore facility subject

to the Trans-Alaska Pipeline Authority

Act, 43 U.S.C. 1651, et seq.; and

(3) Natural resources under the

trusteeship of the trustee may have

been, or may be, injured as a result of

the incident.

(b) Proceeding with preassessment. If

the conditions listed in paragraph (a) of

this section are met, trustees may

proceed under this part. If one of the

conditions is not met, trustees may not

take additional action under this part,

except action to finalize this

determination. Trustees may recover all

reasonable assessment costs incurred up

to this point provided that conditions in

paragraphs (a)(1) and (a)(2) of this

section 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.

§ 990.42 Determination to conduct

restoration planning.

(a) Determination on restoration

planning. If trustees determine that

there is jurisdiction to pursue

restoration under OPA, trustees must

determine whether:

(1) Injuries have resulted, or are likely

to result, from the incident;

(2) Response actions have not

adequately addressed, or are not

expected to address, the injuries

resulting from the incident; and

(3) Feasible primary and/or

compensatory restoration actions exist

to address the potential injuries.

(b) Proceeding with preassessment. If

the conditions listed in paragraph (a) of

this section are met, trustees may

proceed under § 990.44 of this part. If

one of these conditions is not met,

trustees may not take additional action

under this part, except action to finalize

this determination. However, trustees

may recover all reasonable assessment

costs incurred up to this point.

§ 990.43 Data collection.

Trustees may conduct data collection

and analyses that are reasonably related

to Preassessment Phase activities. Data

collection and analysis during the

Preassessment Phase must be

coordinated with response actions such

that collection and analysis does not

interfere with response actions. Trustees

may collect and analyze the following

types of data during the Preassessment

Phase:

(a) Data reasonably expected to be

necessary to make a determination of

jurisdiction under § 990.41 of this part,

or a determination to conduct

restoration planning under § 990.42 of

this part;

(b) Ephemeral data; and

(c) Information needed to design or

implement anticipated assessment

procedures under subpart E of this part.

§ 990.44 Notice of Intent to Conduct

Restoration Planning.

(a) General. If trustees determine that

all the conditions under § 990.42(a) of

this part are met and trustees decide to

proceed with the natural resource

damage assessment, they must prepare a

Notice of Intent to Conduct Restoration

Planning.

(b) Contents of the notice. The Notice

of Intent to Conduct Restoration

Planning must include a discussion of

the trustees’ analyses under §§ 990.41

and 990.42 of this part. Depending on

information available at this point, the

notice may include the trustees’
506 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

proposed strategy to assess injury and

determine the type and scale of

restoration. The contents of a notice

may vary, but will typically discuss:

(1) The facts of the incident;

(2) Trustee authority to proceed with

the assessment;

(3) Natural resources and services that

are, or are likely to be, injured as a

result of the incident;

(4) Potential restoration actions

relevant to the expected injuries; and

(5) 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.

(c) Public availability of the notice.

Trustees must make a copy of the Notice

of Intent to Conduct Restoration

Planning publicly available. The means

by which the notice is made publicly

available and whether public comments

are solicited on the notice will depend

on the nature and extent of the incident

and various information requirements,

and is left to the discretion of the

trustees.

(d) Delivery of the notice to the

responsible parties. Trustees must send

a copy of the notice to the responsible

parties, to the extent known, in such a

way as will establish the date of receipt,

and invite responsible parties’

participation in the conduct of

restoration planning. Consistent with

§ 990.14(c) of this part, the

determination of the timing, nature, and

extent of responsible party participation

will be determined by the trustees on an

incident-specific basis.

§ 990.45 Administrative record.

(a) If trustees decide to proceed with

restoration planning, they must open a

publicly available administrative record

to document the basis for their decisions

pertaining to restoration. The

administrative record should be opened

concurrently with the publication of the

Notice of Intent to Conduct Restoration

Planning. Depending on the nature and

extent of the incident and assessment,

the administrative record should

include documents relied upon during

the assessment, such as:

(1) Any notice, draft and final

restoration plans, and public comments;

(2) Any relevant data, investigation

reports, scientific studies, work plans,

quality assurance plans, and literature;

and

(3) Any agreements, not otherwise

privileged, among the participating

trustees or with the responsible parties.

(b) Federal trustees should maintain

the administrative record in a manner

consistent with the Administrative

Procedure Act, 5 U.S.C. 551–59, 701–06.

Subpart E—Restoration Planning

Phase

§ 990.50 Purpose.

The purpose of this subpart is to

provide a process by which trustees

evaluate and quantify potential injuries

(injury assessment), and use that

information to determine the need for

and scale of restoration actions

(restoration selection).

§ 990.51 Injury assessment—injury

determination.

(a) General. After issuing a Notice of

Intent to Conduct Restoration Planning

under § 990.44 of this part, trustees

must determine if injuries to natural

resources and/or services have resulted

from the incident.

(b) Determining injury. To make the

determination of injury, trustees must

evaluate if:

(1) The definition of injury has been

met, as defined in § 990.30 of this part;

and

(2)(i) 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; or

(ii) An injury to a natural resource or

impairment of a natural resource service

has occurred as a result of response

actions or a substantial threat of a

discharge of oil.

(c) Identifying injury. Trustees must

determine whether an injury has

occurred and, if so, identify the nature

of the injury. Potential categories of

injury include, but are not limited to,

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 public services.

(d) Establishing exposure and

pathway. Except for injuries resulting

from response actions or incidents

involving a substantial threat of a

discharge of oil, trustees must establish

whether natural resources were

exposed, either directly or indirectly, to

the discharged oil from the incident,

and estimate the amount or

concentration and spatial and temporal

extent of the exposure. Trustees must

also determine whether there is a

pathway linking the incident to the

injuries. Pathways may include, but are

not limited to, the sequence of events by

which the discharged oil was

transported from the incident and either

came into direct physical contact with

a natural resource, or caused an indirect

injury.

(e) Injuries resulting from response

actions or incidents involving a

substantial threat of a discharge. For

injuries resulting from response actions

or incidents involving a substantial

threat of a discharge of oil, trustees must

determine whether an injury or an

impairment of a natural resource service

has occurred as a result of the incident.

(f) Selection of injuries to include in

the assessment. When selecting

potential injuries to assess, trustees

should consider factors such as:

(1) The natural resources and services

of concern;

(2) The procedures available to

evaluate and quantify injury, and

associated time and cost requirements;

(3) The evidence indicating exposure;

(4) The pathway from the incident to

the natural resource and/or service of

concern;

(5) The adverse change or impairment

that constitutes injury;

(6) The evidence indicating injury;

(7) The mechanism by which injury

occurred;

(8) The potential degree, and spatial

and temporal extent of the injury;

(9) The potential natural recovery

period; and

(10) The kinds of primary and/or

compensatory restoration actions that

are feasible.

§ 990.52 Injury assessment—

quantification.

(a) General. In addition to

determining whether injuries have

resulted from the incident, trustees must

quantify the degree, and spatial and

temporal extent of such injuries relative

to baseline.

(b) Quantification approaches.

Trustees may quantify injuries in terms

of:

(1) The degree, and spatial and

temporal extent of the injury to a natural

resource;

(2) 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

(3) The amount of services lost as a

result of the incident.

(c) Natural recovery. To quantify

injury, trustees must estimate,

quantitatively or qualitatively, the time

for natural recovery without restoration,

but including any response actions. The

analysis of natural recovery may

consider such factors as:

(1) The nature, degree, and spatial and

temporal extent of injury;

(2) The sensitivity and vulnerability

of the injured natural resource and/or

service;
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 507

(3) The reproductive and recruitment

potential;

(4) The resistance and resilience

(stability) of the affected environment;

(5) The natural variability; and

(6) The physical/chemical processes

of the affected environment.

§ 990.53 Restoration selection—

developing restoration alternatives.

(a) General. (1) If the information on

injury determination and quantification

under §§ 990.51 and 990.52 of this part

and its relevance to restoration justify

restoration, trustees may proceed with

the Restoration Planning Phase.

Otherwise, trustees may not take

additional action under this part.

However, trustees may recover all

reasonable assessment costs incurred up

to this point.

(2) Trustees must consider a

reasonable range of restoration

alternatives before selecting their

preferred alternative(s). Each restoration

alternative is comprised of primary and/

or compensatory restoration

components that address one or more

specific injury(ies) associated with the

incident. Each alternative must be

designed so that, as a package of one or

more actions, the alternative would

make the environment and public

whole. Only those alternatives

considered technically feasible and in

accordance with applicable laws,

regulations, or permits may be

considered further under this part.

(b) Primary restoration. (1) General.

For each alternative, trustees must

consider primary restoration actions,

including a natural recovery alternative.

(2) Natural recovery. Trustees must

consider a natural recovery alternative

in which no human intervention would

be taken to directly restore injured

natural resources and services to

baseline.

(3) Active primary restoration actions.

Trustees must consider an alternative

comprised of actions to directly restore

the natural resources and services to

baseline on an accelerated time frame.

When identifying such active primary

restoration actions, trustees may

consider actions that:

(i) Remove conditions that would

prevent or limit the effectiveness of any

restoration action (e.g., residual sources

of contamination);

(ii) May be necessary to return the

physical, chemical, and/or biological

conditions necessary to allow recovery

or restoration of the injured natural

resources (e.g., replacing substrate or

vegetation, or modifying hydrologic

conditions); or

(iii) Return key natural resources and

services, and would be an effective

approach to achieving or accelerating a

return to baseline (e.g., replacing

essential species, habitats, or public

services that would facilitate the

replacement of other, dependent natural

resource or service components).

(c) Compensatory restoration. (1)

General. For each alternative, trustees

must also consider compensatory

restoration actions to compensate for the

interim loss of natural resources and

services pending recovery.

(2) Compensatory restoration actions.

To the extent practicable, when

evaluating compensatory restoration

actions, trustees must consider

compensatory restoration actions that

provide services of the same type and

quality, and of comparable value as

those injured. If, in the judgment of the

trustees, compensatory actions of the

same type and quality and comparable

value cannot provide a reasonable range

of alternatives, trustees should identify

actions that provide natural resources

and services of comparable type and

quality as those provided by the injured

natural resources. Where the injured

and replacement natural resources and

services are not of comparable value, the

scaling process will involve valuation of

lost and replacement services.

(d) Scaling restoration actions. (1)

General. After trustees have identified

the types of restoration actions that will

be considered, they must determine the

scale of those actions that will make the

environment and public whole. For

primary restoration actions, scaling

generally applies to actions involving

replacement and/or acquisition of

equivalent of natural resources and/or

services.

(2) Resource-to-resource and serviceto-service scaling approaches. When

determining the scale of restoration

actions that provide natural resources

and/or services of the same type and

quality, and of comparable value as

those lost, trustees must consider the

use of a resource-to-resource or serviceto-service scaling approach. Under this

approach, trustees determine the scale

of restoration actions that will provide

natural resources and/or services equal

in quantity to those lost.

(3) Valuation scaling approach. (i)

Where trustees have determined that

neither resource-to-resource nor serviceto-service scaling is appropriate,

trustees may use the valuation scaling

approach. Under the valuation scaling

approach, trustees determine the

amount of natural resources and/or

services that must be provided to

produce the same value lost to the

public. Trustees must explicitly

measure the value of injured natural

resources and/or services, and then

determine the scale of the restoration

action necessary to produce natural

resources and/or services of equivalent

value to the public.

(ii) If, in the judgment of the trustees,

valuation of the lost services is

practicable, but valuation of the

replacement natural resources and/or

services cannot be performed within a

reasonable time frame or at a reasonable

cost, as determined by § 990.27(a)(2) of

this part, trustees may estimate the

dollar value of the lost services and

select the scale of the restoration action

that has a cost equivalent to the lost

value. The responsible parties may

request that trustees value the natural

resources and services provided by the

restoration action following the process

described in § 990.14(c) of this part.

(4) Discounting and uncertainty.

When scaling a restoration action,

trustees must evaluate the uncertainties

associated with the projected

consequences of the restoration action,

and must discount all service quantities

and/or values to the date the demand is

presented to the responsible parties.

Where feasible, trustees should use riskadjusted measures of losses due to

injury and of gains from the restoration

action, in conjunction with a riskless

discount rate representing the consumer

rate of time preference. If the streams of

losses and gains cannot be adequately

adjusted for risks, then trustees may use

a discount rate that incorporates a

suitable risk adjustment to the riskless

rate.

§ 990.54 Restoration selection—evaluation

of alternatives.

(a) Evaluation standards. Once

trustees have developed a reasonable

range of restoration alternatives under

§ 990.53 of this part, they must evaluate

the proposed alternatives based on, at a

minimum:

(1) The cost to carry out the

alternative;

(2) 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

compensating for interim losses;

(3) The likelihood of success of each

alternative;

(4) 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;

(5) The extent to which each

alternative benefits more than one

natural resource and/or service; and

(6) The effect of each alternative on

public health and safety.
508 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

(b) Preferred restoration alternatives.

Based on an evaluation of the factors

under paragraph (a) of this section,

trustees must select a preferred

restoration alternative(s). If the trustees

conclude that two or more alternatives

are equally preferable based on these

factors, the trustees must select the most

cost-effective alternative.

(c) Pilot projects. Where additional

information is needed to identify and

evaluate the feasibility and likelihood of

success of restoration alternatives,

trustees may implement restoration

pilot projects. Pilot projects should only

be undertaken when, in the judgment of

the trustees, these projects are likely to

provide the information, described in

paragraph (a) of this section, at a

reasonable cost and in a reasonable time

frame.

§ 990.55 Restoration selection—

developing restoration plans.

(a) General. OPA requires that

damages be based upon a plan

developed with opportunity for public

review and comment. To meet this

requirement, trustees must, at a

minimum, develop a Draft and Final

Restoration Plan, with an opportunity

for public review of and comment on

the draft plan.

(b) Draft Restoration Plan. (1) The

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 under § 990.53 of this

part, and evaluated under § 990.54 of

this part;

(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 or need for interim

corrective action.

(2) When developing the Draft

Restoration Plan, trustees must establish

restoration objectives that are specific to

the injuries. These objectives should

clearly specify the desired outcome, and

the performance criteria by which

successful restoration will be judged.

Performance criteria may include

structural, functional, temporal, and/or

other demonstrable factors. Trustees

must, at a minimum, determine what

criteria will:

(i) Constitute success, such that

responsible parties are relieved of

responsibility for further restoration

actions; or

(ii) Necessitate corrective actions in

order to comply with the terms of a

restoration plan or settlement

agreement.

(3) The monitoring component to the

Draft Restoration Plan should address

such factors as duration and frequency

of monitoring needed to gauge progress

and success, 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.

(c) Public review and comment. The

nature of public review and comment

on the Draft and Final Restoration Plans

will depend on the nature of the

incident and any applicable federal

trustee NEPA requirements, as

described in §§ 990.14(d) and 990.23 of

this part.

(d) Final Restoration Plan. Trustees

must develop a Final Restoration Plan

that includes the information specified

in paragraph (a) of this section,

responses to public comments, if

applicable, and an indication of any

changes made to the Draft Restoration

Plan.

§ 990.56 Restoration selection—use of a

Regional Restoration Plan or existing

restoration project.

(a) General. Trustees may consider

using a Regional Restoration Plan or

existing restoration project where such

a plan or project is determined to be the

preferred alternative among a range of

feasible restoration alternatives for an

incident, as determined under § 990.54

of this part. Such plans or projects must

be capable of fulfilling OPA’s intent for

the trustees to restore, rehabilitate,

replace, or acquire the equivalent of the

injured natural resources and services

and compensate for interim losses.

(b) Existing plans or projects—(1)

Considerations. Trustees may select a

component of a Regional Restoration

Plan or an existing restoration project as

the preferred alternative, provided that

the plan or project:

(i) Was developed with public review

and comment or is subject to public

review and comment under this part;

(ii) Will adequately compensate the

environment and public for injuries

resulting from the incident;

(iii) Addresses, and is currently

relevant to, the same or comparable

natural resources and services as those

identified as having been injured; and

(iv) Allows for reasonable scaling

relative to the incident.

(2) Demand. (i) If the conditions of

paragraph (b)(1) of this section are met,

the trustees must invite the responsible

parties to implement that component of

the Regional Restoration Plan or existing

restoration project, or advance to the

trustees the trustees’ reasonable estimate

of the cost of implementing that

component of the Regional Restoration

Plan or existing restoration project.

(ii) If the conditions of paragraph

(b)(1) of this section are met, but the

trustees determine that the scale of the

existing plan or project is greater than

the scale of compensation required by

the incident, trustees may only request

funding from the responsible parties

equivalent to 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 successfully

implement the existing plan or project.

(3) Notice of Intent To Use a Regional

Restoration Plan or Existing Restoration

Project. If trustees intend to use an

appropriate component of a Regional

Restoration Plan or existing restoration

project, they must prepare a Notice of

Intent to Use a Regional Restoration

Plan or Existing Restoration Project.

Trustees must make a copy of the notice

publicly available. The notice must

include, at a minimum:

(i) A description of the nature, degree,

and spatial and temporal extent of

injuries; and

(ii) A description of the relevant

component of the Regional Restoration

Plan or existing restoration project; and

(iii) An explanation of how the

conditions set forth in paragraph (b)(1)

of this section are met.

Subpart F—Restoration

Implementation Phase

§ 990.60 Purpose.

The purpose of this subpart is to

provide a process for implementing

restoration.

§ 990.61 Administrative record.

(a) Closing the administrative record

for restoration planning. Within a

reasonable time after the trustees have

completed restoration planning, as

provided in §§ 990.55 and 990.56 of this

part, they must close the administrative

record. Trustees may not add
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations 509

documents to the administrative record

once it is closed, except where such

documents:

(1) Are offered by interested parties

that did not receive actual or

constructive notice of the Draft

Restoration Plan and the opportunity to

comment on the plan;

(2) Do not duplicate information

already contained in the administrative

record; and

(3) Raise significant issues regarding

the Final Restoration Plan.

(b) Opening an administrative record

for restoration implementation. Trustees

may open an administrative record for

implementation of restoration, as

provided in § 990.45 of this part. The

costs associated with the administrative

record are part of the costs of

restoration. Ordinarily, the

administrative record for

implementation of restoration should

document, at a minimum, all

Restoration Implementation Phase

decisions, actions, and expenditures,

including any modifications made to the

Final Restoration Plan.

§ 990.62 Presenting a demand.

(a) General. After closing the

administrative record for restoration

planning, trustees must present a

written demand to the responsible

parties. Delivery of the demand should

be made in a manner that establishes the

date of receipt by the responsible

parties.

(b) When a Final Restoration Plan has

been developed. Except as provided in

paragraph (c) of this section and in

§ 990.14(c) of this part, the demand

must invite the responsible parties to

either:

(1) Implement the Final Restoration

Plan subject to trustee oversight and

reimburse the trustees for their

assessment and oversight costs; or

(2) Advance to the trustees a specified

sum representing trustee assessment

costs and all trustee costs associated

with implementing the Final

Restoration Plan, discounted as

provided in § 990.63(a) of this part.

(c) Regional Restoration Plan or

existing restoration project. When the

trustees use a Regional Restoration Plan

or an existing restoration project under

§ 990.56 of this part, 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, which may

be the entire project or a portion thereof.

(d) Response to demand. 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.

(e) Additional contents of demand.

The demand must also include:

(1) Identification of the incident from

which the claim arises;

(2) Identification of the trustee(s)

asserting the claim and a statement of

the statutory basis for trusteeship;

(3) A brief description of the injuries

for which the claim is being brought;

(4) An index to the administrative

record;

(5) The Final Restoration Plan or

Notice of Intent to Use a Regional

Restoration Plan or Existing Restoration

Project; and

(6) A request for reimbursement of:

(i) Reasonable assessment costs, as

defined in § 990.30 of this part and

discounted as provided in § 990.63(b) of

this part;

(ii) The cost, if any, of conducting

emergency restoration under § 990.26 of

this part, discounted as provided in

§ 990.63(b) of this part; and

(iii) 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.

§ 990.63 Discounting and compounding.

(a) Estimated future restoration costs.

When determining estimated future

costs of implementing a Final

Restoration Plan, trustees must discount

such future costs back to the date the

demand is presented. Trustees may use

a discount rate that represents the yield

on recoveries available to trustees. The

price indices used to project future

inflation should reflect the major

components of the restoration costs.

(b) Past assessment and emergency

restoration costs. When calculating the

present value of assessment and

emergency restoration costs already

incurred, trustees must compound the

costs forward to the date the demand is

presented. To perform the

compounding, trustees may use the

actual U.S. Treasury borrowing rate on

marketable securities of comparable

maturity to the period of analysis. For

costs incurred by state or tribal trustees,

trustees may compound using parallel

state or tribal borrowing rates.

(c) Trustees are referred to

Appendices B and C of OMB Circular

A–94 for information about U.S.

Treasury rates of various maturities and

guidance in calculation procedures.

Copies of Appendix C, which is

regularly updated, and of the Circular

are available from the OMB Publications

Office (202–395–7332).

§ 990.64 Unsatisfied demands.

(a) If the responsible parties do not

agree to the demand within ninety (90)

calendar days after trustees present the

demand, the trustees may either file a

judicial action for damages or seek an

appropriation from the Oil Spill

Liability Trust Fund, as provided in

section 1012(a)(2) of OPA (33 U.S.C.

2712(a)(2)).

(b) 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 33 U.S.C. 2717(f)(1)(B) and

2712(h)(2).

§ 990.65 Opening an account for

recovered damages.

(a) General. Sums recovered by

trustees in satisfaction of a natural

resource damage claim must be placed

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 or all or an

appropriate component of a Regional

Restoration Plan or an existing

restoration project.

(b) Joint trustee recoveries. (1)

General. Trustees may establish a joint

account for damages recovered pursuant

to joint assessment activities, such as an

account under the registry of the

applicable federal court.

(2) Management. Trustees may

develop enforceable agreements to

govern management of joint accounts,

including agreed-upon criteria and

procedures, and personnel for

authorizing expenditures out of such

joint accounts.

(c) Interest-bearing accounts. Trustees

may place recoveries in interest-bearing

revolving trust accounts, as provided by

section 1006(f) of OPA (33 U.S.C.

2706(f)). Interest earned on such

accounts may only be used for

restoration.

(d) Escrow accounts. Trustees may

establish escrow accounts or other

investment accounts.

(e) Records. Trustees must maintain

appropriate accounting and reporting

procedures to document expenditures

from accounts established under this

section.

(f) Oil Spill Liability Trust Fund. Any

sums remaining in an account
510 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Rules and Regulations

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

by section 1006(f) of OPA (33 U.S.C.

2706(f)).

§ 990.66 Additional considerations.

(a) Upon settlement of a claim,

trustees should consider the following

actions to facilitate implementation of

restoration:

(1) Establish a trustee committee and/

or memorandum of understanding or

other agreement to coordinate among

affected trustees, as provided in

§ 990.14(a)(3) of this part;

(2) Develop more detailed workplans

to implement restoration;

(3) Monitor and oversee restoration;

and

(4) Evaluate restoration success and

the need for corrective action.

(b) The reasonable costs of such

actions are included as restoration costs.

[FR Doc. 95–31577 Filed 12–29–95; 8:45 am]

BILLING CODE 3510–12–P