[Federal Register Volume 59, Number 5 (Friday, January 7, 1994)]
[Proposed Rules]
[Pages 1062-1189]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-225]


[[Page Unknown]]

[Federal Register: January 7, 1994]


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Part II





Department of Commerce





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National Oceanic and Atmospheric Administration



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15 CFR Part 990




Natural Resource Damage Assessments; Proposed Rules
DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

15 CFR Part 990

RIN 0648-AE13
[No. P20105-3196]

 
Natural Resource Damage Assessments

AGENCY: National Oceanic and Atmospheric Administration (NOAA), 
Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: Section 1006(e)(1) requires the President, acting through the 
Under Secretary of Commerce for Oceans and Atmosphere, to promulgate 
regulations for the assessments of natural resource damages resulting 
from discharges of oil. By today's Notice, NOAA is seeking comments 
concerning the proposed rule. The proposed rule is for the use of 
authorized federal, state, and tribal officials referred to in the Oil 
Pollution Act of 1990 (OPA) as ``trustees,'' for the assessment of 
damages to natural resources and/or services from a discharge of oil. 
Natural resource damage assessments are not identical to response or 
remedial actions addressed by the larger statutory scheme of OPA. 
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 determining proper compensation to the 
public for injury to natural resources.

DATES: Written comments should be received no later than April 7, 1994.

ADDRESSES: Written comments are to be submitted to Linda Burlington, 
Project Manager, or Eli Reinharz, Assistant Project Manager, Damage 
Assessment Regulations Team (DART), c/o NOAA/DAC, 1305 East-West 
Highway, SSMC #4, 10th Floor, Workstation #10218, Silver Spring, MD 
20910.

FOR FURTHER INFORMATION CONTACT: Linda Burlington or Eli Reinharz, 
Office of General Counsel, DART, telephone (202) 606-8000, FAX (202) 
606-4900.

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 into or upon the navigable waters of the United 
States, adjoining shorelines, or the Exclusive Economic Zone. Section 
1006(e) requires the President, acting through the Under Secretary of 
Commerce for Oceans and Atmosphere, to develop regulations establishing 
procedures for natural resource trustees to use in the assessment of 
damages for injury to, destruction of, loss of, or loss of use of 
natural resources covered by OPA. Section 1006(b) provides for the 
designation of federal, state, Indian tribal, and foreign natural 
resource trustees to determine resource injuries, assess natural 
resource damages (including the reasonable costs of assessing damages), 
present a claim, recover damages, and develop and implement a plan for 
the restoration, rehabilitation, replacement, or acquisition of the 
equivalent of the injured natural resources under their trusteeship.
    NOAA has published eight Federal Register Notices, 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), and 58 
FR 4601 (January 15, 1993), requesting information and comments on 
approaches to developing damage assessment procedures. NOAA conducted a 
public meeting on March 20, 1991, for additional public participation 
into the process and held four regional workshops during 1991 in 
Rockville, Maryland; Houston, Texas; San Francisco, California; and 
Chicago, Illinois, to learn of regional concerns in 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 damage assessment 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, at 58 FR 4601, NOAA published in 
full the report of the panel commissioned by NOAA to evaluate the 
reliability of CV in calculating passive use values for natural 
resources.
    The proposed rule summarizes the written comments received by the 
agency and issues raised during the public meetings and workshops, 
responds to those comments, and contains proposed regulatory language 
on the various issues raised. Many of the specific comments summarized 
in the proposed rule refer to the status report published by NOAA in 
the March 13, 1992, Federal Register notice.
    This preamble is organized in the following manner: the 
Introduction gives an overview of the proposed rule and is followed by 
a discussion of each of the subparts of the proposed rule. Subpart A 
deals with the optional prespill planning for a damage assessment and 
other general topics, subpart B describes the Preassessment Phase, and 
subparts C, D, E, F, and G contain the description of the Assessment 
Phase and the range of assessment procedures. Subpart H describes the 
Post-assessment Phase.

INTRODUCTION

Overview of Process

I. General

    The proposed rule simplifies the task of the natural resource 
trustee(s) by providing a flexible and logical process for assessing 
natural resource damages resulting from a discharge of oil. To assist 
the trustee(s) in conducting damage assessments, the proposed rule 
defines a number of key statutory terms relevant to damage assessment 
and identifies a number of damage assessment techniques that NOAA has 
determined are the best available. In addition, the proposed rule is 
intended to facilitate public and responsible party (RP) involvement in 
the restoration of injured natural resources and/or services by 
creating an open, administrative process for selection of restoration 
measures. The proposed rule promotes a cooperative approach to 
resolution of natural resource damage cases by providing greater 
certainty regarding the measure of damages and the process by which 
damages will be determined.
    The proposed rule is intended to provide the trustee(s) with 
maximum flexibility in conducting damage assessments. It is important 
to bear in mind that the proposed rule is optional. The trustee(s) is 
free to depart from the proposed rule, however, section 1006(e)(2) of 
OPA provides that damage assessments conducted pursuant to this 
proposed rule shall have a rebuttable presumption of accuracy in any 
administrative or judicial proceedings under OPA. Also, this proposed 
rule makes possible judicial review on the administrative record for 
the Assessment/Restoration Planning process. The administrative record 
is the repository of all the information and data considered by the 
trustee(s) during the assessment. The trustee(s) may use damage 
assessment techniques outside the scope of this proposed rule at the 
cost of assuming the burden of proof with respect to those components 
of the damage assessment.
    The nature and scope of this proposed rule can best be understood 
in the context of the overall statutory scheme for natural resource 
damage cases. The elements of liability under sections 1002(a) and 
(b)(2) of OPA are simple and straightforward: (1) A discharge (2) of 
oil (3) from a vessel or facility (4) into or upon navigable waters, 
adjoining shorelines or the Exclusive Economic Zone, (5) which results 
in injury to natural resources and/or services. Thus, liability is 
established when there is some injury to a natural resource and/or 
service resulting from a discharge of oil. The damage assessment is 
designed to determine and quantify injury, the appropriate restoration 
approach, and the damages resulting from the injury.
    The damage assessment process described in this proposed rule has 
three major phases: (1) The Preassessment Phase; (2) the Assessment 
Phase; and (3) the Post-Assessment Phase (See Figure 1).

BILLING CODE 3510-12-P

TP07JA94.000


BILLING CODE 3510-12-C
Prespill planning involves planning and coordination among trustees, 
coordination with the Area Committees, potential RPs, and the public to 
ensure a cost-effective and coordinated assessment once a discharge of 
oil occurs. Thus, it is not part of an incident-specific assessment, 
but an important part of preparation by the trustee(s) for fulfilling 
their natural resource damage assessment responsibilities during spill 
response. The Preassessment Phase involves two basic decisions: The 
decision whether to proceed with the Preassessment Phase and the 
decision as to the scope of the assessment to conduct, if any. The 
Assessment Phase offers a choice involving four types of assessment 
procedures: compensation formulas, computer models, expedited 
procedures, and comprehensive procedures. The Post-Assessment Phase 
gives guidance on using the recoveries effectively and efficiently to 
bring about the recovery of injured natural resources and/or services.
    NOAA is also developing detailed guidance on various aspects of 
damage assessment. It is anticipated that guidance documents will soon 
be available on: Preassessment, injury determination and 
quantification, and restoration. NOAA will publish a Notice of 
Availability when these documents are ready for the public. These 
guidance documents are being prepared in conjunction with this 
rulemaking to provide more specific technical information to those 
performing assessments and restorations under OPA and other interested 
members of the public. These documents will not constitute regulatory 
guidance nor must they be followed to obtain the rebuttable 
presumption. The documents, in their final form, will be made available 
through a public information distribution service.

II. Prespill Planning

    Prespill planning and coordination by various parties are likely to 
be involved in damage assessments under OPA. Prespill activities are a 
crucial component of trustee responsibilities. Immediately after an oil 
discharge, it is extremely difficult to determine the availability of 
baseline scientific data, plan additional data collection, and 
coordinate the damage assessment approach of the trustee(s). Thus, 
baseline data collection and planning are important to a successful 
assessment.
    The proposed rule strongly encourages natural resource trustees to 
coordinate among themselves, the response agencies, the public, and any 
potential RPs interested in developing contingency plans for a damage 
assessment. These prespill plans can consist of products of previous 
planning efforts, or can be management plans modified or supplemented 
to cover damage assessment issues.
    In prespill planning, the trustee(s) should anticipate what may be 
required to document the damage assessment. The documentation 
requirements in the proposed rule are drawn largely from the comparable 
process set out in the National Contingency Plan (NCP) for selection of 
remedies at hazardous waste sites. The trustee(s) should have the 
procedures in place to begin the assessment and restoration planning 
process when a discharge occurs.

III. Preassessment Phase

A. Introduction
    A natural resource damage assessment begins with the Preassessment 
Phase, which consists of two basic components: (1) Preassessment 
Determination and (2) Damage Assessment Determination. The 
Preassessment Determination requires a decision by the trustee(s) 
whether to initiate the Preassessment Phase. During the Preassessment 
Phase, the trustee(s) may conduct limited data collection and analysis 
(data collection). At the end of the Preassessment Phase, the 
trustee(s) decides whether to proceed with a damage assessment in the 
Damage Assessment Determination.
    The Preassessment Phase also identifies the conditions for 
notification, coordination, estimation of assessment costs, reporting, 
and emergency restoration. Guidance on conducting the Preassessment 
Phase will be available in the Preassessment Phase Guidance Document.
B. Relationship of Preassessment Activities to Response Activities
    It is very probable that the Preassessment Phase will be conducted 
simultaneously with the On-Scene Coordinator (OSC)-coordinated response 
activities. Any activities conducted in the discharge area should be 
coordinated with the OSC or designee, especially with regards to damage 
assessment trustee(s) requests for response operations resources. The 
trustee(s) at the discharge site is likely to be participating as a 
part of the OSC's response organization and member of the damage 
assessment team. The response activities are under the jurisdiction of 
the OSC, whereas the damage assessment activities are under the 
jurisdiction of the trustee(s).
C. Preassessment Process
    1. Preassessment Determination. After notification, the trustee(s) 
should determine if conducting the Preassessment Phase is justified. 
The Preassessment Determination is largely a ``desktop'' exercise based 
upon readily available information on the discharge and environmental 
setting.
    Based on that information, the trustee(s) should determine if: (1) 
The discharge of oil meets the exclusionary conditions as set forth in 
section 1002(c) of OPA; (2) the trustee(s) has authority under OPA to 
assert damage claims for natural resources and/or services that may be 
adversely affected by the discharge of oil; and (3) there is a 
reasonable probability that the trustee(s) can make a successful damage 
claim based on the scientific, economic, and legal merits of the case, 
i.e., potential for injury resulting from the discharge and successful 
and meaningful restoration and/or compensation. If these conditions are 
met, the trustee(s) may proceed with the Preassessment Phase.
    2. Damage Assessment Determination. In the Damage Assessment 
Determination, the trustee(s) decides which, if any, damage assessment 
procedure to conduct. Further, damage assessment is appropriate for 
those injured natural resources and/or services that can be restored or 
for which damages can be estimated. As part of the Damage Assessment 
Determination, the trustee(s) should make a preliminary determination 
regarding the applicability of the damage assessment procedures. These 
decisions should be documented in the Preassessment Phase Report.
    The trustee(s) has a great deal of flexibility in selecting 
appropriate damage assessment methods. If at any time during the 
Preassessment Phase the trustee(s) determines sufficient information 
was collected in order to select a damage assessment procedure, the 
trustee(s) may complete the preassessment and move into the Assessment 
Phase. The proposed rule provides factors for the trustee(s) to 
consider in the selection of appropriate assessment procedures.
    3. Preassessment Phase Report. At the conclusion of the 
Preassessment Phase, the trustee(s) should document briefly: 
preassessment actions, such as data collection and emergency 
restoration; estimated costs directly related to those actions; and 
decisions to proceed with preassessment and damage assessment. The 
report should provide sufficient information for input in the damage 
assessment/restoration process.
    If no further damage assessment actions are taken, the 
Preassessment Phase Report becomes the Report of Assessment. If damage 
assessment actions are undertaken, the Preassessment Phase Report 
becomes part of the Report of Assessment. If the trustee(s) decides to 
proceed with an assessment, the trustee(s) should develop a Draft 
Assessment/Restoration Plan (DARP) as a guide to how the damage 
assessment will be conducted.
D. Data Collection and Analysis
    The primary reason for data collection and analysis (data 
collection) in the Preassessment Phase is to ensure that there is 
sufficient information to evaluate the risk to natural resources and/or 
services resulting from the exposure to oil. The scope of the 
trustee's(s') data collection should be reasonable in light of the 
characteristics of the discharge and natural resources and/or services 
potentially affected by the discharge. However, the trustee(s) and 
RP(s) may agree to undertake limited injury determination studies to 
verify that no significant injury to natural resources and/or services 
has resulted from the discharge, although costs for such undertakings 
are not recoverable.
    When reasonably practicable, the trustee(s) should collect the 
following types of information during the Preassessment Phase: (1) Data 
that are necessary to make a determination to proceed with the 
Preassessment Phase; (2) ephemeral or perishable data that may be lost 
if not collected immediately; and (3) necessary data that serves as the 
basis for the selected damage assessment procedure, the absence for 
which data would prevent the trustee(s) from proceeding with the damage 
assessment determination of Sec. 990.23 (i.e., input into the 
compensation formulas of Type A models, or the study design for the 
Expedited Damage Assessment (EDA) or Comprehensive Damage Assessment 
(CDA)).
E. Emergency Restoration
    At any time after the discharge, the trustee(s), with the approval 
of the OSC, may decide to conduct emergency restoration as long as it 
does not interfere with response actions. These actions are designed to 
protect natural resources and/or services where there is insufficient 
time to await completion of the entire damage assessment/restoration 
planning process.
    Emergency restoration is not subject to required public review and 
comment. Consequently, the proposed rule requires the trustee(s) to 
document that any actions taken under this authority are necessary and, 
to the extent reasonably practicable, cost-effective.

IV. Assessment Phase

A. General
    Through this proposed rule, NOAA is providing the trustee(s) with a 
variety of assessment procedures in recognition of the need for 
flexibility in dealing with situations that, by their nature, are 
incident-specific. The trustee(s) can choose among the various 
procedures based upon the circumstances of the discharge or natural 
resource and/or service involved.
    In the selection process, the trustee(s) should first consider the 
simplified procedures, either the compensation formula, the Type A 
model, or Expedited Damage Assessment (EDA), before a Comprehensive 
Damage Assessment (CDA). The RP(s) may request that the trustee(s) use 
a more complex assessment procedure than that chosen by the trustee(s), 
only if the RP(s) provides the money up front to fund such an effort, 
and it is understood that the trustee(s) has the ultimate 
responsibility for the design and management of that study. The 
trustee(s) has the option to decline to conduct the more complex 
assessment procedure, but must justify and document that decision in 
the Report of Assessment.
B. Draft Assessment/Restoration Plan (DARP)
    The proposed rule requires that the trustee(s) prepare a DARP for 
all assessments. The DARP is the document that gives the trustee(s) the 
opportunity to present for comment the chosen approach for restoration, 
replacement, rehabilitation, or acquisition of the equivalent of the 
injured resources and services. The DARP will also give enough 
information about the injury determination and quantification to allow 
for a meaningful review of the trustee's(s') determination of the 
restoration approach. The DARP will also contain the estimated costs of 
implementing the chosen approach. The DARP also may, at the trustee's 
discretion, contain a list of the planned valuation studies.
    After the DARP has been reviewed by the public, the trustee(s) will 
then modify it as appropriate. The DARP then becomes the Report of 
Assessment, which is the final description of the restoration approach 
selected by the trustee(s) and the estimated costs of implementing that 
approach.
    Although each assessment will be incident-specific, many elements 
of a DARP will be essentially the same. At a minimum, the DARP should 
identify the following: (1) The objectives of the trustee(s); (2) how 
the trustee(s) plans to accomplish the objectives; and (3) whether the 
planned actions are conducted in a cost-effective manner to the extent 
reasonably practicable. It is expected that the DARP will address 
issues such as study design, data collection and analysis, quality 
assurance (QA), data management, and guidelines for conducting the 
overall assessment/restoration process and individual studies within 
that process. The proposed rule addresses these common components as 
they are addressed through the DARP. Not all of these elements will be 
required in every DARP, particularly in a compensation formula or Type 
A assessment.
    As mentioned throughout this preamble and proposed rule, the 
trustee(s) is strongly encouraged to develop prespill plans for 
conducting an assessment. Those prespill plans could even identify the 
type of assessment procedure conducted under certain discharge 
scenarios. When the trustee(s) determines that the assessment will be 
conducted pursuant to prespill plans, the DARP shall document that 
decision and be consistent with the actions identified in the prespill 
plan to the maximum extent practicable. If the circumstances of the 
incident are such that the trustee(s) determines that the assessment 
will be conducted on an incident-specific manner rather than pursuant 
to any prespill plans, the DARP shall document that decision.
    The trustee(s) will prepare a DARP following the determination to 
proceed with further assessment activities. The DARP should be based 
upon the findings of the Preassessment Phase, identify the assessment 
procedures the trustee(s) is planning to use, describe proposed studies 
relating to injury determination and quantification, if any, and 
describe proposed actions relating to the determination of the type and 
nature of restoration actions, if any, subject to the prespill plans. 
Although the trustee(s) should view the development of the DARP as one 
process, it may be reasonable to develop the restoration component 
separately and at a later date than the assessment component.
    The development of a DARP will assist the trustee(s) in conducting 
an efficient assessment and, subject to prespill plans, be available 
for public review. The scope of the public notice and review should be 
comparable to the scope of the extent of the assessment area and 
expected effects. The DARP (including comments and responses) is to be 
included in the administrative record accompanying the assessment. The 
DARP will also ultimately become the Report of Assessment. The 
trustee(s) is not required under the proposed rule to provide a review 
and comment period of any specific injury determination/quantification 
studies, only general notification of the nature and type of assessment 
being conducted.
    The trustee(s) must review and respond to public comments during 
preparation of the restoration component of the DARP. In addressing 
comments received concerning the proposed restoration approach, it is 
not necessary for the trustee(s) to respond to each comment received. 
Comments may be summarized in like-subject areas and responded to only 
once.
    The proposed rule allows the trustee(s) to modify the restoration 
component of the DARP, if necessary. Public review is required for 
modifications deemed significant by the trustee(s). Large discharges or 
discharges with extensive environmental effects may require the 
trustee(s) to develop multi-year plans. Again, modifications of the 
annual restoration plans that are significantly different from the 
preceding year should be provided for public review.
C. Compensation Formulas
    The estuarine/marine and inland waters compensation formulas 
described in this proposed rule would be applicable to the vast 
majority of oil discharges. An analysis of reported coastal discharges 
of oil from 1973-1990 shows that 99.8% of the discharges were less than 
50,000 gallons and 99% were less than 10,000 gallons. Compensation 
formulas could be used for most of these relatively small discharges, 
particularly for those that occur in areas where it would be difficult 
to ascertain precise environmental effects, e.g., small discharges in 
open water or in areas that are subject to frequent discharges.
    These formulas allow an estimate of damages per gallon taking into 
account average restoration costs, plus average lost direct use values 
pending restoration. The formulas assume various levels of natural 
resource effects likely to result from the discharge of oil. These 
assumptions consider the amount and type of oil discharged and region 
and habitat type in which the discharge occurs. The formulas are 
applicable to a wide range of the most commonly discharged oil 
products. This approach allows both a national consistency and regional 
specificity.
D. Computer Models
    NOAA is proposing that the natural resource trustee(s) may use the 
Natural Resource Damage Assessment Model for Coastal and Marine 
Environments, Version 1.2, known as the Type A model, developed by the 
U.S. Department of the Interior (DOI), for damage assessments under 
OPA. The Type A model is described at 43 CFR Part 11, subpart D. The 
Type A model may be used when the conditions of the discharge are 
sufficiently similar to the conditions at 43 CFR 11.33(b).
    It is likely NOAA will also recommend the new set of computer 
models being developed by DOI. The current computer model, for use in 
coastal and marine environments, is being revised to comply with the 
circuit court's decision in Colorado v. U.S. Department of the 
Interior, 880 F.2d 481 (D.C. Cir. 1989) (Colorado v. DOI) and as part 
of the statutorily-mandated review and update. The court in Colorado v. 
DOI held that natural resource damage assessments should be based upon 
costs to restore, replace, rehabilitate, or acquire the equivalent of 
the injured natural resources, plus the diminution of all reliably 
calculated values pending recovery. Until the revisions to the Type A 
model are completed, the trustee(s) may use the current Type A model 
for lost use values and supplement the resulting figure with estimates 
of restoration costs and other applicable damages. DOI is also 
developing a second computer model for use in the Great Lakes and their 
connecting channels.
    These new computer models are under development through DOI, but 
are not yet available for public review. NOAA is working closely with 
DOI in its development of these computer models. Based upon an initial 
evaluation of these models, it is likely that NOAA will recommend that 
there be available procedures that the trustee(s) may choose to use.
E. Expedited Damage Assessment (EDA)
    Included in the proposed rule is a new type of assessment 
procedure--Expedited Damage Assessment. EDA reflects a damage 
assessment approach that is intermediate between the current Type A and 
the CDA procedures. This approach recognizes that a Type A model may 
not address all key natural resources and/or services injured or at 
risk, particularly for inland discharges. The approach also recognizes 
that the size, location, and timing of a given discharge may not 
warrant the extensive procedures associated with a CDA. The EDA offers 
an option that addresses a broader range of natural resources and/or 
services than a Type A model but is less time consuming and less 
expensive than a CDA.
    The goal of an EDA is to initiate necessary restoration as quickly 
as possible by truncating the injury determination and quantification 
components. Accordingly, an EDA does not include comprehensive or long-
term injury determination and quantification studies nor does it 
address injury for every natural resource and/or service that may be 
injured.
    An EDA is not necessarily a unitary approach to damage assessment. 
It encompasses a range of techniques that permit the trustee(s) to 
determine injury based on limited, focused observations. In some 
circumstances, an EDA may entail supplementing the Type A model with 
field studies. In other situations, an EDA may comprise an abbreviated 
CDA approach. Accordingly, the EDA should be viewed as a dynamic, 
flexible process rather than a rigid step-by-step approach.
    Simply stated, the goals of an EDA are to: (1) Identify and 
quantify injuries to selected natural resources and/or services 
resulting from a discharge, (2) accomplish the above goal using focused 
studies and/or preexisting information, and (3) provide the basis for 
restoration and recovery of natural resources and/or services. The 
trustee(s) may undertake injury determination and quantification only 
for selected natural resources and/or services.
    Ideally, data collection in an EDA should not exceed two field 
seasons. During this period, the trustee(s) should quickly develop 
appropriate injury determination and quantification studies, and a 
draft restoration plan. The remaining time should be devoted to 
completion of the restoration plan, and to public review of the consent 
decree and/or restoration plan.
F. Comprehensive Damage Assessment (CDA)
    1. General. Whereas the EDA described above is intended primarily 
for situations involving cooperative efforts completed within a 
relatively short time, the CDA should be used where it is anticipated 
that the assessment will require prolonged (i.e., multi-year) studies. 
The CDA is particularly appropriate where the trustee(s) expects 
complex effects for which there is little documentation in the 
literature. The CDA includes guidance on: injury determination, injury 
quantification, restoration planning and costs, and economic valuation.
    2. Injury determination. The purpose of the injury determination 
component in CDA is to verify injury to natural resources and/or 
services. Before beginning the CDA, the trustee(s) must assess the 
feasibility of detecting injury based on a scientifically valid study 
design.
    If an injury cannot be determined or cannot be linked to the 
discharge, further assessment efforts should be terminated and the 
results of the injury determination component documented in the Report 
of Assessment. If injury is determined, the approach for the next two 
components (i.e., quantification and damages) must be selected 
consistent with the findings of the injury determination.
    3. Injury quantification. After establishing that a natural 
resource and/or service is injured by the discharge of oil, the next 
step calls for quantifying the effects on natural resources and/or 
services. Close coordination is required between natural resource 
specialists and economists in planning and implementing this phase of 
the assessment to estimate values in the economic valuation phase. 
Quantification should only be conducted for natural resources and/or 
services that can be restored and for which damages will be sought.
    The proposed rule allows the trustee(s) to quantify injuries in one 
of two ways: (1) Measuring direct changes in the natural resource 
itself (i.e., changes in the chemical, physical, or biological 
parameters); or (2) measuring changes in the level of services provided 
by the natural resource. In either case, injury quantification requires 
before-after and reference/contol-impact comparisons. Such comparisons 
will depend on the recovery period of both the affected natural 
resources and/or services. Quantification will ultimately be essential 
for the evaluation of restoration alternatives, and measuring the 
compensable value of lost services.
    4. Restoration Planning. The purposes of the restoration component 
are to: (1) Determine the most appropriate restoration approach for the 
recovery of natural resources and/or services injured by a discharge of 
oil; and (2) estimate the costs of implementing that approach. The goal 
of restoration is to return an injured natural resource and/or service 
to as close to the baseline condition as possible. OPA provides the 
trustee(s) the following options to remedy injury to natural resources 
and/or services: restoration, rehabilitation, replacement, and 
acquisition of the equivalent natural resources. Natural recovery is an 
option that should always be considered. When acquisition of equivalent 
natural resources is selected, the DARP shall define clearly the 
relationship of acquired natural resources to the injured natural 
resources and/or services.
    5. Compensable Values Determination. Natural resources are public 
assets. Like other assets they provide a flow of services. The basic 
types of services associated with natural resources include, but are 
not limited to: (1) Recreational, (2) commercial, (3) ecological, (4) 
special significance, and (5) passive use. Lost services may result 
from the loss of, or reduction in, the quality or quantity of services 
provided by a natural resource as a result of a discharge of oil. The 
final estimate of interim lost value will, therefore, depend on the 
most likely restoration approach. If no restoration is being considered 
for the injured natural resources and/or services, damages include the 
value of the lost or impaired/diminshed services from the time of the 
discharge through the completion of natural recovery.
    The total diminution in the value of natural resources and/or 
services, whether with restoration actions or natural recovery, is 
referred to as ``compensable values.'' For the purposes of this 
proposed rule, compensable values include all reliably calculated 
values that comprise the total diminution in value of lost or 
diminished services of trust resources as a result of a discharge, from 
the onset of the event until recovery to baseline or comparable 
conditions is deemed complete by the trustee(s), i.e., interim lost 
values. ``Compensable values'' are defined broadly to encompass both 
direct use and passive use values that can be reliably calculated in a 
manner that is trustworthy or worthy of confidence.
    Direct use values are defined as the value individuals derive from 
direct use of a resource. Passive use values are defined as the values 
individuals place on resources independent of direct use of a resource 
by the individual. The term ``nonuse values'' has also been used to 
refer to the same concept, but NOAA prefers the term ``passive use 
values.''
    Factors to consider in calculating compensable values include: (1) 
The value of the services injured or lost, (2) the predicted level of 
services if the discharge had never occurred, (3) the predicted level 
of services given injury and natural recovery, and (4) the predicted 
level of services given injury and a feasible restoration plan. For 
some categories of economic damage, it will be possible to conduct 
site-specific analyses. For example, the economic damages associated 
with the loss of access to a marine transportation corridor due to 
closure of a waterway can be estimated using existing site-specific 
data in most instances. In other cases the trustee(s) may employ 
benefits transfer procedures to apply valuation estimates or valuation 
functions from existing valuation studies from other contexts to 
estimate losses in the present incident.
    Several methodologies exist to measure direct use and passive use 
values. This proposed rule provides maximum flexibility to the 
trustee(s) for selecting any methodology that can provide reliable and 
valid resource values and that is appropriate for valuing the injuries 
associated with a particular discharge. The trustee(s) will have broad 
discretion in selecting among existing and potential new methodological 
approaches that may be employed in damage assessment. The flexibility 
to exercise professional judgment in selecting and applying specific 
analytical techniques is necessary because of the ``site-specific'' 
nature of discharges of oil. Further, the trustee(s) may use different 
methodologies to produce separate damage estimates for different 
resource services, so long as there is no double recovery of losses. 
The choice of methodological approaches in a particular context will 
depend upon the types of injuries associated with a discharge. 
Estimates of the value of lost services pending recovery of injured 
natural resources and/or services will be submitted as part of the 
total damage determination.

V. Post-Assessment Phase

    At the conclusion of an assessment the trustee(s) shall prepare a 
Report of Assessment. The Report of Assessment, which is the final 
description of the restoration approach selected by the trustee(s) and 
the estimated costs of implementing that approach serves as the basis 
for the judicial review on the record of the assessment.
    Once the Report of Assessment is compiled, the trustee(s) should 
present to the RP(s) a demand in writing for the total damages. The 
demand is the document that is presented as the summation of all 
damages claimed by the trustee(s) resulting from the discharge. The 
demand will consist of an identification of the discharge, the identity 
of the trustee(s), the amount of damages, and the Report of Assessment 
as an attachment.
    The total damage figure may be divided into two components: 
estimated restoration costs and other damages, including but not 
limited to assessment costs and compensable values. Judicial review of 
that portion of the demand representing costs shall be conducted on the 
administrative record. Judicial review of that portion of the demand 
representing compensable values shall be conducted with the trustee(s) 
receiving the benefit of the rebuttable presumption.
    There are several issues involving handling sums recovered. One 
issue is management of the account into which sums recovered are 
placed. The proposed rule allows trustees to establish a ``joint 
trustee account.'' This trustee account should be managed by all 
trustees through a mutually agreed upon trustee committee or council. 
However, if for some reason, the trustees cannot establish a joint 
account, the proposed rule allows the trustees to divide the recoveries 
and deposit their respective amounts into separate accounts.
    The second issue is the possible pooling of recoveries from more 
than one discharge into one account for Regional Restoration Plans. 
Whether the trustee(s) establishes joint or separate accounts, there 
are two possibilities for handling sums recovered from discharges. The 
trustee(s) may establish an incident-specific account into which sums 
recovered from a single discharge may be placed. However, an 
alternative allowed by the proposed rule would be for the trustee(s) to 
establish a combined account into which sums recovered from several 
discharges could be placed.
    Finally, whether joint or separate, incident-specific or combined, 
these various accounts may be established within the trustee agency's 
own treasury, in an account under the registry of the applicable 
federal court, or in a commercial account. The commercial account may 
be an escrow account or any other type of account not prohibited by 
law. Each of these various types of accounts should be interest 
bearing. The trustee(s) should provide that money may only be withdrawn 
from such accounts with trustee(s) approval. Also, because of the 
multiple types of accounts, the trustee(s) must maintain appropriate 
accounting and reporting methods to ensure the proper use of sums 
recovered. The damages representing compensation for injuries to 
natural resources and/or services are to be spent to develop and 
implement a final restoration plan.
    The proposed rule describes two types of post-assessment 
restoration plans. First, the trustee(s) may develop an incident-
specific restoration plan to address the effects of the discharge of 
concern. This plan shall be based upon the restoration component of the 
DARP developed using guidance given in the CDA phase of the proposed 
rule.
    Second, the trustee(s) is allowed to pool recoveries to apply them 
to a Regional Restoration Plan for a specific area. This Regional 
Restoration Plan would have to be developed through a public review and 
comment process consistent with the restoration planning process 
described in the proposed rule. Where such a plan already exists, 
whether developed pursuant to this proposed rule or under other 
management efforts, that plan may be used subject to the requirements 
for such a plan listed in the proposed rule. This Regional Restoration 
Plan would allow the trustee(s) to apply several relatively small 
recoveries to a specific area, such as a bay or estuary to achieve a 
more comprehensive restoration than what may otherwise be achieved 
through a smaller, more segmented approach.
Relationship to 43 CFR Part 11
    The U.S. Department of the Interior (DOI) has promulgated natural 
resource damage assessment regulations under the Comprehensive 
Environmental Response, Compensation, and Liability Act of 1980, as 
amended (CERCLA), 42 U.S.C. 9601 et seq. These regulations, which are 
codified at 43 CFR part 11, establish an administrative process and 
procedures for the assessment of damages for injuries to natural 
resources affected by a release of a hazardous substance or a discharge 
of oil. These regulations currently provide guidance for damage 
assessments resulting from both oil and hazardous substances. After the 
OPA regulations are promulgated, the 43 CFR part 11 procedures can 
still be used to assess damages for natural resource injuries resulting 
from a release of a hazardous substance or a discharge of oil not 
covered under OPA.
    The procedures identified in 43 CFR part 11 provided a base from 
which to identify assessment procedures to be promulgated under OPA. 
NOAA requested comments on the applicability to oil discharges of 43 
CFR part 11, as modified by the court decisions of Ohio v. U.S. 
Department of the Interior, 880 F.2d 432 (D.C. Cir. 1989), and Colorado 
v. U.S. Department of the Interior, 880 F.2d 481 (D.C. Cir. 1989). In 
addition, NOAA and DOI are coordinating their respective rulemakings to 
ensure consistency, when practicable, for the trustee(s) and RP(s) in 
conducting natural resource damage assessments due to either a 
discharge of oil or release of a hazardous substance. Although similar, 
these proposed procedures vary in several aspects from the DOI rule.
Procedural Comparison
    Figure 2 shows a rough structural comparison between the two 
processes. First, this proposed rule strongly encourages actions 
conducted prior to a discharge for ``prespill planning.''

BILLING CODE 3510-12-P

TP07JA94.001


BILLING CODE 3510-12-C
NOAA wishes to emphasize with this designation that actions taken 
before a discharge actually occurs are important to the conduct of an 
assessment after the discharge has occurred.
    Second, the Preassessment Phase described in this proposed rule has 
been expanded to reflect more clearly those actions that must occur 
before beginning an assessment. This phase includes the Preassessment 
Determination, similar to the Preassessment Screen found in 43 CFR part 
11. However, the decision as to what kind of assessment procedure is 
appropriate for a given incident has been moved up to the Preassessment 
Phase in this proposed rule in recognition that this decision must, by 
necessity, precede the actual assessment.
    Third, the Assessment Phase in this proposed rule lists a wider 
range of assessment procedures available to the trustee(s). Section 
301(c) of CERCLA, which requires the development of the 43 CFR part 11 
process, calls for two types of assessment procedures. Section 1006(e) 
of OPA, which requires the promulgation of this proposed rule, does not 
specify the number of assessment procedures to be made available to the 
trustee(s). Therefore, this proposed rule offers four types of 
assessment procedures--two new procedures and two procedures based upon 
43 CFR part 11. The two new procedures contained in this proposed rule 
are the compensation formulas and the expedited damage assessment 
procedures. The compensation formulas are the simplest procedure 
available and are designed to address the vast majority of discharges, 
those under 50,000 gallons. The expedited damage assessment procedure 
recognizes the need for a procedure that falls somewhere on a scale 
between the current Type A and Type B procedures found in 43 CFR part 
11. Besides these two new procedures, NOAA recognizes the need for 
assessment procedures like the Type A and Type B procedures. Therefore, 
NOAA is proposing to adopt the use of the current Type A procedure of 
43 CFR part 11, subpart D, for use in assessments conducted pursuant to 
this proposed rule. Finally, NOAA has also used the current Type B 
procedure as a base to develop the comprehensive damage assessment 
procedure in this proposed rule. The current Type B process has been 
modified to allow a streamlining of the process to recognize the 
dynamic nature of a discharge of oil, even a discharge requiring a 
multi-year assessment process.
    Fourth, the Post-assessment Phase of this proposed rule is 
structured in a similar way to 43 CFR part 11. NOAA recognizes that, at 
the completion of a damage assessment, the same basic actions are 
necessary.
Substantive Comparison
    In reviewing this proposed rule, the reader will find numerous 
substantive differences between this proposed rule and 43 CFR part 11. 
Some of these differences are dictated by the differences between OPA 
and CERCLA. Other differences are necessary either to reflect lessons 
learned in damage assessments in the last several years or to 
acknowledge the inherent differences between oils and hazardous 
substances. One example of the substantive differences between the two 
rules is in the components of the assessment procedures. In this 
proposed rule, restoration planning and compensable value determination 
are separated, as opposed to the ``Damage Determination'' step of 43 
CFR part 11. This separation is necessary to allow a clear line for the 
record review of the restoration component without trying to include 
the compensable valuation component into that review. Other substantive 
differences appear throughout the proposed rule.
Issues of Interest in Proposed Rule
    Several specific issues within the rulemaking process have been the 
focus of attention among interested parties. Some of the interest is in 
response to the fact that damage assessment regulations were 
promulgated under CERCLA. These current regulations, codified at 43 CFR 
part 11, apply to both hazardous substances and oils. The OPA rule, 
when it becomes effective, will supersede those parts of the CERCLA 
rule that deal with oil. Therefore, NOAA is specifically seeking 
comments on those aspects of this proposed rule that are different from 
the CERCLA rule.
    Although the entire proposed rule is open for comment, NOAA is also 
particularly interested in receiving comments on several issues that 
have drawn much interest from very different points of view. These 
issues include: The appropriate standard of judicial review of damage 
assessments; the proposed definition of assessment costs; causation as 
it relates to injury; the use of a compensation formula and the nature 
of its results; and whether the trustee(s) may pool recoveries from 
various ``small'' discharges to conduct restoration efforts from a 
regional or watershed approach. Specific economic issues include: the 
recovery of passive use values for natural resources and the 
measurement of these values using the contingent valuation method; and 
the appropriate discount rate to use in converting damages to current 
dollars. Each of these issues is discussed in the following pages.
Review on the Record
    Section 1006(c) of OPA provides that the trustees shall ``develop 
and implement a plan for the restoration, rehabilitation, replacement, 
or acquisition of the equivalent, of the natural resources under their 
trusteeship.'' Section 1006(c)(5) provides that ``plans shall be 
developed and implemented under this section only after adequate public 
notice, opportunity for a hearing and consideration of all public 
comment.'' NOAA is proposing to implement these provisions by requiring 
the trustee(s) to document development of restoration plans in an 
administrative record through notice and comment procedures.
    A majority of the commenters who have spoken to the issue of the 
administrative record and judicial review ``on the record'' support the 
concept. Several commenters pointed out that these assessments involve 
highly technical, scientific findings in which courts have 
traditionally treated the agency's determination with great deference. 
Therefore, the commenters conclude that judicial review of the 
assessment/restoration plan should be conducted on the administrative 
record, applying an arbitrary and capricious standard.
    Other commenters, however, contend that NOAA would exceed its 
statutory authority in granting such a standard of review. Several 
commenters stated that the responsible party has the legal right to a 
jury trial in natural resource damage assessment disputes as guaranteed 
by the United States Constitution. The commenters argued that every 
CERCLA natural resource damage case that has addressed the issue has 
required a jury trial for these actions at law, therefore, issues 
related to the selection of assessment/restoration plans must be 
decided by a trial court.
    NOAA notes that the administrative record provisions in the 
proposed rule are intended to implement several important policy 
concerns expressed by Congress in OPA. NOAA has considered 
administrative law principles and various comparable policies found in 
CERCLA to be relevant to the natural resource damage assessment process 
in several areas. The administrative record provisions of this proposed 
rule are intended to create an open assessment/restoration process to 
allow an objective evaluation of how to restore or replace resources 
injured by discharges of oil. Whether these provisions would result in 
``record review'' is ultimately the decision of the courts. However, 
NOAA feels that record review is essential for the type of expeditious, 
fair assessments called for by OPA, and specifically asks for comments 
on this approach.
Assessment Costs
    OPA allows recovery of damages for injury to natural resources as 
well as the reasonable costs of assessing those damages. Under the 
CERCLA rule, reasonable costs are defined in terms of the costs being 
less than the anticipated damage amount. NOAA has received several 
comments in support of adopting the CERCLA rule's definition of 
``reasonable costs'' to avoid exorbitant assessment costs. However, 
some commenters have argued that it is difficult at the onset of a 
discharge to make a preliminary damage estimate that will then be used 
to shape the subsequent assessment.
    Within the proposed rule, NOAA is defining reasonable costs to mean 
those costs associated with performing an assessment in accordance with 
the proposed rule. The proposed rule, in turn, gives guidance for each 
phase of the assessment as to the reasonableness of assessment 
activities. The proposed rule requires that any studies or procedures 
be directly related to the purpose of the assessment and are conducted 
in a cost-effective manner. This approach does not require the 
trustee(s) in the early stages of a discharge to devise a preliminary 
estimate of total damages likely to result from that discharge. 
However, the proposed rule does require that the assessment be 
conducted in such a manner to avoid unnecessary and excessive costs.
Injury/Causation
    Under section 1002 of OPA, liability is established when there is 
any injury to a natural resource resulting from a discharge of oil. 
Injury under OPA encompasses the phrases ``injury to,'' ``destruction 
of,'' ``loss,'' and ``loss of use.'' The definition of ``injury'' 
proposed by NOAA is different from that contained in the CERCLA rule.
    According to the CERCLA rule, injury is defined as ``a measurable 
adverse change, either long- or short-term, in the chemical or physical 
quality or the viability of a natural resource resulting either 
directly or indirectly from exposure to a discharge of oil or release 
of a hazardous substance, or exposure to a product of reactions 
resulting from the discharge of oil or release of a hazardous 
substance.'' The definition of injury under CERCLA incorporates the 
concepts of injury and causality. Specific injury definitions and 
causation for resources are detailed in the CERCLA rule.
    Under the OPA proposed rule, NOAA has attempted to more clearly 
delineate these terms. The definition of injury under the OPA proposed 
rule is more relaxed because it does not require that there be a 
``measurable'' adverse change. Consequently, any discharge is likely to 
result in an injury. The OPA proposed rule defines injury as ``any 
adverse change in a natural resource, or any impairment of a human or 
ecological service provided by a resource.'' Injury causation (i.e., 
definition of ``injury resulting from a discharge'') has been 
determined when the trustee(s) has demonstrated that: (1) With direct 
exposure, (a) the natural resource was exposed; (b) there is a pathway 
between the discharge and exposed natural resource; and (c) the 
exposure of oil, its components, or by-products has been shown by 
rigorous and appropriate scientific methodology to have an adverse 
effect on the natural resource in laboratory experiments or the field; 
or (2) in the absence of direct exposure, (a) the adverse effect on or 
impaired/diminished use of a natural resource has been shown by 
rigorous and appropriate scientific methodology; and (b) the adverse 
effect on or impaired/diminished use of the natural resource would not 
have occurred but for the fact of the discharge or threat of a 
discharge. The rationale for this approach is to simplify the legal 
determination of liability. Basically, liability is established by the 
presence of oil in the water. The trustee(s), however, recovers damages 
by establishing a causal link between the presence of oil and the 
observed adverse change in the resource or impairment of a human or 
ecological service. Conceptually, this approach does not change 
substantially the definition of injury under the CERCLA rule.
Compensation Formulas
    The proposed rule offers a new damage assessment procedure in the 
form of compensation formulas for both estuarine/marine and inland 
waters. The estuarine/marine and inland waters compensation formulas 
described in this proposed rule are applicable to the vast majority of 
oil discharges. An analysis of reported coastal discharges of oil from 
1973-1990 shows that 99.8% of the discharges were less than 50,000 
gallons and 99% were less than 10,000 gallons. Compensation formulas 
would be used for most of these relatively small discharges. These 
formulas would allow an estimate of damages per gallon taking into 
account average restoration costs, plus average lost direct use values 
pending restoration. For various reasons, passive use values are not 
included in these formulas at this time. The formulas assume various 
levels of natural resource effects likely to result from the discharge 
of oil. These assumptions consider the amount and type of oil 
discharged and region and habitat type in which the discharge occurs. 
The formulas are applicable to a wide range of the most commonly 
discharged oil products. This approach allows both a national 
consistency and regional specificity.
    Some commenters expressed concern that such formulas may under-
value resources in industrialized or biologically degraded areas. 
Others noted several disadvantages in simplified assessments, including 
the potential overlapping trustee interests in certain natural 
resources, damages will not sufficiently reflect the extent of the 
actual injury, and the risk that a compensatory assessment could be 
transformed into a punitive exercise.
    Since the compensation formula is based upon averages, it is 
impossible to include all known coastal habitats and every combination 
of discharges. As proposed, the Estuarine and Marine Environments 
Compensation Formula is based upon 55 representative province/habitat 
combinations, ranging from Northern Maine to the Alaskan coast, the 
Hawaiian and Pacific Islands. The Inland (Freshwater) Waters 
Compensation Formula is based upon 100 representative province/habitat 
combinations representing the Great Lakes and other inland waters by 
type, i.e., river, lake, fast flowing stream, etc. By comparing the 
habitat of the actual discharge with the province and specific habitat 
used to estimate the damages in the formula, the trustee(s) should, in 
most cases, find the most applicable scenario. NOAA emphasizes that the 
primary advantages of a compensation formula are for simplicity and 
cost-effectiveness.
    In cases where the circumstances of an actual discharge are 
determined to be far out of the bounds of the compensation formula, the 
trustee(s) should consider the use of another assessment procedure. The 
compensation formulas generate damages based on average restoration 
costs and average diminution of value of the affected natural resources 
and are thus compensatory as authorized by OPA. Therefore, the 
compensation formulas are not akin to punitive damages.
    NOAA is also proposing that the damages generated by the 
compensation formulas will be conclusive in nature. That is, once the 
rule becomes final and survives any judicial review, parties may 
challenge the information used in applying the formulas in a particular 
assessment, but may not challenge within that assessment the underlying 
data used in developing the formulas.
Regional Restoration Plans
    Section 1006(f) of OPA requires that sums recovered as damages be 
used to develop and implement a plan for the restoration, 
rehabilitation, replacement, or acquisition of the injured natural 
resources. The proposed rule describes two types of Restoration Plans. 
First, the trustee(s) may develop an Incident-Specific Restoration Plan 
to address the effects of the discharge of concern. This plan would be 
based upon the restoration planning guidance given in the proposed 
rule. This plan should serve to define the objectives and approach 
based on a sound decisionmaking process for the particular discharge 
site. However, under this proposed rule, the trustee(s) would also be 
allowed to pool recoveries to apply them to a Regional Restoration 
Plan. These plans could be developed on a geographical or habitat basis 
to allow the recovery of the system covered by the plan. Where such a 
plan already exists, whether developed through prespill planning 
efforts or under regular management efforts, that plan may be used if 
it has been developed through a public review and comment process that 
considers the major factors contained in the restoration planning 
guidance in the rule. The plan must also address the same or similar 
resource injuries as those identified in the assessment procedure. 
These requirements are completely consistent with the current CERCLA 
rule, which also allows for pooling damages. This option will likely be 
most useful in areas with long-term pollution effects where damages 
from a single discharge would be too small to ``restore'' the ecosystem 
or where the planning costs for the restoration after a single 
discharge would be quite high compared to the damage figure. However, 
where a Regional Restoration Plan has not been developed, an Incident-
Specific Restoration Plan must be developed for use of the damages 
recovered.
    Several commenters have strongly rejected the use of recoveries 
from several discharges for an ecosystem, bay, or area approach. The 
commenters argued that pooling and usage of funds is contrary to the 
principles of compensatory damages and avoidance of double damages 
enunciated by Congress in passing OPA. Further, this usage contradicts 
section 1006(f) that ``there be a nexus between monies recovered 
resulting from a particular spill and their use to restore or enhance 
the specific resources `affected by a discharge.''' Other commenters, 
however, have supported a pooling of funds in order to fund a 
restoration plan for an entire region, provided a legally-approved 
regional restoration plan exists.
    NOAA does not believe that pooling recoveries for use in a Regional 
Restoration Plan contradicts the requirement in OPA that recoveries be 
used to restore the resources affected by a discharge. A relatively 
small recovery, assessed by a compensation formula, is unlikely to be 
sufficient to restore a bay or estuary affected by a discharge where 
many forces are working to degrade that ecosystem. By pooling 
recoveries, the trustee(s) has a chance to carry out meaningful actions 
to help that system recover. The responsible party will be able to 
defend against an attempted double recovery by showing how the damage 
figure is to be applied within the regional plan.
Resource Values
    The major focus on economic issues within the rulemaking has been 
the question of what types of values should be included in a damage 
assessment and what methods should be used to measure those values. 
Section 1006(d) of OPA authorizes the trustee(s) to recover: The cost 
of restoring, rehabilitating, replacing or acquiring the equivalent of 
the injured or lost natural resources and/or services; the diminution 
in value of the injured or lost natural resources pending restoration; 
plus the reasonable cost of assessing those damages. In the proposed 
rule, the total diminution in value of resources and/or services 
affected by a discharge is referred to as compensable values, which 
include all reliably calculated values that comprise the total 
diminution in value of lost or diminished services of trust resources 
as a result of a discharge, from the onset of the event until recovery 
to baseline or comparable conditions is deemed complete by the 
trustee(s). In accordance with the OPA Conference Report,``diminution 
of value'' refers to the standard for measuring resource damages cited 
in the D.C. Circuit Court decision on Ohio v. DOI. The Ohio opinion 
defines ``use values'' broadly, to encompass both direct use and 
passive use values that can be reliably calculated, i.e., calculated in 
a manner that is trustworthy or worthy of confidence.
    Direct use values are defined as the value individuals derive from 
direct use of a natural resource. Direct uses of resources include both 
consumptive uses, such as fishing and hunting in which resources are 
harvested, and nonconsumptive uses, in which the activity does not 
reduce the stock of resources available for others at another time, 
such as bird watching and swimming. Passive use values are defined as 
the values individuals place on natural resources independent of direct 
use of a resource by the individual. The term ``nonuse values'' has 
also been used to refer to the same concept, but NOAA prefers the term 
``passive use values.'' Passive use values include, but are not limited 
to: the value of knowing the resource is available for use by family, 
friends, or the general public; and the value derived from protecting 
the natural resource for its own sake; and the value of knowing that 
future generations will be able to use the resource.
    Some interested parties have asserted that passive use value 
damages should only be assessed for permanent or long-lasting injuries 
to unique natural resources--atypical conditions for discharges of oil. 
They argued there is no need for compensation for lost passive use 
values when the resource will fully recover and when compensation will 
be paid for direct use losses pending restoration.
    Others have argued that passive use values should be included in 
damage assessment, because exclusion would understate the true cost of 
exposing natural resources to environmentally risky activities. They 
have also argued that exclusion of passive use values would induce 
systematic reallocation of environmentally risky activities to those 
environments that generate greater passive use values relative to 
direct use values.
    NOAA has found no empirical evidence to suggest that a natural 
resource must be unique, non-reproducible and/or permanently injured in 
order to have significant passive use values. NOAA recognizes that, in 
cases involving temporary injury, individuals may not experience a 
significant sense of loss because the existence of the resource is not 
permanently threatened. NOAA has found ample evidence, from the OPA 
Conference Report and the decision in Ohio v. DOI, to believe that 
``diminution of value'' refers to the standard for measuring resource 
damages cited in Ohio v. DOI. This opinion defines ``use values'' 
broadly, to encompass both direct use and passive use values that can 
be reliably measured. NOAA believes that failure to include all 
relevant categories of damages in a claim would understate the true 
loss to the American public attributable to a discharge of oil. Under 
OPA, and in accordance with the Ohio v. DOI decision, passive use 
values are a component of compensable values that are necessary to 
fully compensate the public for losses as a result of a discharge, and 
to return the public, as nearly as possible, to the level of well-being 
it enjoyed before the discharge.
Contingent Valuation Method
    In the Ohio decision, the D.C. Circuit Court determined that the 
interim lost value portion of the claim was to include total resource 
value, encompassing both direct use (recreational, commercial, 
cultural/historical) and passive use of resources. In the comments, 
there has been substantial discussion about contingent valuation (CV), 
the only known methodology for measuring the passive use component of 
total resource value. CV is a survey-based approach to the valuation of 
nonmarket goods and services that relies on a questionnaire for the 
direct elicitation of information about the value of the good or 
service in question.
    Contingent valuation surveys generally measure total value of a 
good or service, which includes both direct use value and passive use 
values. Because passive uses of resources leave no behavioral trace, 
they are difficult to validate externally. A number of criticisms of CV 
pertain specifically to its use in valuing the passive use component of 
total use value and the difficulty of external validation of that 
component of total value. Proponents of CV assert that these problems 
are not inherent to the method and that well-designed and well-executed 
CV studies can eliminate them or render them inconsequential.
    Though no other methods are available to provide alternative 
estimates of the passive use component of total value, it is possible 
to develop a variety of tests to evaluate the validity of the 
responses. Due to the substantial interest in the topic, NOAA convened 
a panel of experts co-chaired by two Nobel laureates, to evaluate the 
reliability of CV to measure passive use values. The report issued by 
the panel is part of the administrative record of this rulemaking, 
along with the comments received from economists, industry 
representatives and other interested parties. Based upon information in 
the panel's report and other comments, NOAA is recommending several 
validity tests in guidance for designing and conducting CV studies 
provided in the proposed rule.
    NOAA is proposing that reliable estimates of lost passive use value 
due to discharges of oil can be estimated using CV so long as the CV 
study follows the guidance offered in this preamble and the proposed 
regulations. This guidance basically states that the trustee(s) should 
follow a conservative approach when designing a CV instrument, that is, 
to choose the design that would understate the natural resource damage 
rather than overstate the damage.
    One commenter has noted that any damage assessment rule authorizing 
CV to measure passive use damages could well cost the U.S. economy 
hundreds of millions of dollars annually by generating excessively high 
estimates of passive use damages and could result in the bankruptcy of 
some responsible parties. The proposed rule has been designated as a 
``major'' rule because of the significant issues involved in the 
rulemaking. However, because of the difficulty of evaluating the 
effects of alternatives to this proposal, a Regulatory Impact Analysis 
under E.O. 12866 is not necessary and has been waived.
Discounting Damages
    Calculation of natural resource damages will generally require the 
use of discounting in the estimation of: (1) Estimated restoration 
costs; (2) diminution in value of the injured or lost resources pending 
restoration; and (3) damage assessment and restoration costs incurred 
by the trustee(s). ``Discounting'' is a widely used economic procedure 
that allows the trustee(s) to convert past and future damage sums to 
current dollars. This conversion is necessary for the trustee(s) to be 
able to present a claim for a ``sum certain.'' Currently, the CERCLA 
rule requires that a 10% discount rate be used. NOAA is proposing that 
the U.S. Treasury rate should be used for discounting a trustee damage 
claim.

DISCUSSION

Subpart A

Scope, Applicability, Purpose

    OPA provides for the prevention of, liability for, removal of, and 
compensation for the discharge of oil into or upon the navigable waters 
or adjoining shorelines of the United States, including the natural 
resources of the Exclusive Economic Zone. OPA provides for the 
designation of federal, state, Indian tribe, and/or foreign officials 
to act on behalf of the public as trustee(s) for the nation's natural 
resources. In the event that natural resources are injured, destroyed, 
lost, or the loss of use of natural resources occurs as a result of a 
discharge of oil covered by OPA, these officials are to assess natural 
resource damages, present a claim to the RP(s), recover damages, and 
develop and implement a plan for the restoration, rehabilitation, 
replacement, or acquisition of the equivalent of natural resources and/
or services under their trusteeship.
    This part applies to assessments of damages resulting from 
discharges of oil where those discharges occurred after the effective 
date of OPA (August 18, 1990). Discharges involving mixtures of oil and 
hazardous substances would ordinarily be covered by CERCLA. However, 
the U.S. Environmental Protection Agency (U.S. EPA) has issued guidance 
on the petroleum exclusion under sections 101(14) and 104(a)(2) of 
CERCLA. (U.S. EPA Memorandum on the Petroleum Exclusion under the 
Comprehensive Environmental Response, Compensation, and Liability Act, 
July 31, 1987; BNA Environment Reporter 41:3321, 2/12/88.) Under this 
guidance oil covered by OPA would be: (1) Crude oil and fractions of 
crude oil including the hazardous substances, such as benzene, toluene, 
and xylene, which are indigenous to petroleum and its refined products; 
and (2) hazardous substances that are normally mixed with or added to 
crude oil or crude oil fractions during the refining process, including 
hazardous substances that have increased in level as a result of the 
refining process. However, hazardous substances added to petroleum that 
increase in concentration through any process other than refining, or 
added as a result of contamination of the petroleum during use 
(including waste oil), would not be excluded from CERCLA. For example, 
the presence of dioxin in oil used as a dust suppressant on highways 
would bring a discharge of such a mixture under the jurisdiction of 
CERCLA, not OPA.
    This part applies to all natural resource damages caused by oil (as 
defined by the Clean Water Act amended by OPA) discharged into 
navigable waters of the United States. The ``oil'' definition includes 
petroleum and non-petroleum (e.g., animal, vegetable, and wood 
chemical). A natural resource damage assessment may be appropriate even 
in discharges caused by carriers transporting quantities smaller than 
the threshold limits that would require OPA response plans. The 
determination of when natural resource damage assessment will be 
conducted is a responsibility of the trustee(s) acting on behalf of the 
public.
    NOAA is using in the proposed rule, the OPA definition of natural 
resources that provides for various degrees of government regulation, 
management or other form of control over the natural resources to make 
the OPA natural resource damage provisions applicable. The proposed 
rule repeats the statutory language of ``belonging to, managed by, held 
in trust by, appertaining to, or otherwise controlled by,'' and thus 
covers a broad range of government interest in natural resources on 
behalf of the public. Pursuant to that language, general sources of 
authority for recovery under the rule could include, but not 
necessarily be limited to, relevant treaty or other provision of 
international law, constitution, statute, common law, regulation, 
order, deed or other conveyance, permit, or agreement.
    The statutory phrase ``belonging to'' connotes ownership and would 
cover government-owned lands, as well as resources affixed, i.e., 
permanently attached, to such lands. However, the remaining terms, 
``managed by, held in trust by, appertaining to, or otherwise 
controlled by,'' ensure a wide range of legitimate government interest 
in natural resources that may, in fact, be held in private ownership.
    Therefore, the proposed rule directs the trustee(s), or co-
trustees, to state briefly the authority for asserting trusteeship, or 
co-trusteeship in the Preassessment Report and in the Draft Assessment/
Restoration Plan. In describing the natural resources of concern to the 
trustee(s), the trustee(s) will cite the relevant treaty or other 
provision of international law, constitution, statute, common law, 
regulation, order, deed or other conveyance, permit, or agreement 
providing the basis for the trusteeship.
    This part supplements the procedures established under the National 
Oil and Hazardous Substances Pollution Contingency Plan (NCP), 40 CFR 
part 300, for the identification, investigation, study, and response to 
a discharge of oil, and provides procedures for a natural resource 
trustee(s) to determine compensation for injuries to natural resources 
and/or services that have not been nor are expected to be sufficiently 
addressed by response actions conducted pursuant to the NCP.
    This part provides for a process to develop a DARP to document the 
most appropriate restoration approach for the administrative record, 
with its estimated costs, for a particular discharge. Therefore, any 
judicial review of the development of the restoration component of the 
assessment would be based solely upon the administrative record. Once 
the restoration approach is developed, the trustee(s) then can 
determine the expected interim lost values. It is anticipated that the 
calculation of those values would not be included in the administrative 
record and would not, therefore, be reviewed on the basis of the 
administrative record.

Response to Comments

Scope, Applicability, Purpose

    Comment: Several commenters noted that the damage assessment 
procedures outlined in this proposed rule apply only to discharges of 
oil under OPA. These commenters pointed out that this rule replaces the 
current DOI rule, at 43 CFR part 11, for natural resource damage 
assessments in discharges of oil. One of these commenters noted that 
the DOI rule cannot be incorporated since parts of that rule were 
declared illegal and are not yet revised.
    Response: NOAA agrees that the proposed rule only applies to 
natural resource damage assessments performed for discharges of oil 
under OPA. When this proposed rule is promulgated as a final rule, it 
will supersede those parts of the current 43 CFR part 11 that deal with 
discharges of oil covered by OPA. The status of 43 CFR part 11 is 
immaterial to this ongoing rulemaking since only those sections upheld 
by the Court in the Ohio decision were used as a starting point for the 
OPA regulations.
    Comment: One of these commenters specifically stated that, since 
the decisions of Ohio v. U.S. Department of the Interior (Ohio) and 
State of Colorado v. U.S. Department of the Interior (Colorado) 
concerning 43 CFR part 11 were decided before OPA's passage, those two 
decisions are not controlling over NOAA's rule. These commenters argue 
that Congress was aware of the decisions but did not incorporate them 
in the NOAA charge to promulgate this proposed rule.
    Response: NOAA notes that the decisions in Ohio and Colorado cases 
are not directly controlling on the OPA rules. However, the decisions 
do represent the only existing case law on some of the issues involved 
in this rulemaking. Also, Congress did specifically reference the Ohio 
decision's definition of ``diminution of value'' in the Conference 
Report on OPA.
    Comment: Several commenters noted that the natural resource damage 
assessment rule is a part of the regulatory scheme covered by OPA. 
These commenters urged NOAA to keep this perspective in mind so that 
NOAA's rule does not duplicate or overlap other OPA regulations; 
therefore, NOAA's rule should not allow punitive damages, since 
penalties are set up in other provisions of OPA, nor should this rule 
allow scientific research beyond what is needed to determine the 
natural resource damages.
    Response: NOAA recognizes that this proposed rule is but a small 
part of the larger scheme of regulations required by OPA. For example, 
this proposed rule would supplement the overall activities surrounding 
a response to oil discharges set out in the NCP, 40 CFR part 300. There 
are also regulatory requirements for transport of oil, certification of 
vessels, etc., called for by Title IV of OPA. These other rulemakings 
are separate and apart from this proposed rule. NOAA has been 
coordinating with other federal agencies, particularly those other 
agencies that have regulatory and planning responsibilities under OPA 
to ensure consistency and avoid overlapping requirements.
    NOAA also notes that Title VII of OPA authorizes an ambitious 
research and development program on oil pollution to cover the basic 
research that is beyond a natural resource damage assessment. As noted 
elsewhere in the preamble, this proposed rule disallows work beyond 
that needed to determine, quantify, restore, rehabilitate, replace, 
acquire the equivalent, and value injury to, destruction of, loss of, 
or loss of use of natural resources and/or services resulting from a 
discharge of oil.
    NOAA further recognizes that penalties or other punitive measures 
are provided for elsewhere in OPA. The natural resource damage 
provisions of OPA are compensatory, not punitive. A discussion of 
allowable damages is found in the discussion of Sec. 990.14--``Recovery 
of Damages'' and elsewhere in this preamble.
    Comment: One commenter recommended that NOAA consider clarifying 
whether CERCLA or OPA would cover a particular discharge of oil.
    Response: NOAA notes that the previous preamble discussion on the 
scope of this proposed rule describes the types of oil that are covered 
by OPA.
    Comment: One commenter suggested that NOAA's rule should serve to 
provide the basic framework from which different state and local 
agencies can adopt and expand upon through implementation.
    Response: NOAA notes that, while the use of the proposed rule is 
optional, it is hoped that the guidance and procedures in this proposed 
rule will prove useful to all trustee agencies.
    Comment: A few commenters discussed the requirement that new 
regulations result in greater benefits than costs to society, as 
directed by E.O. 12291 [now E.O. 12866].
    Response: NOAA notes that this proposed rule is explicitly designed 
to allow for expeditious and fair compensation to the public for 
effects of a discharge on the public's natural resources. Purely 
speculative damages clearly are not allowed under this damage 
assessment process.
    Comment: One commenter suggested that the natural resource damage 
assessment rule allow for consideration of the size of the business 
enterprise responsible for the damages. Another commenter suggested 
that damages should be allocated somehow proportionately across the 
different stages of oil production, i.e., production, transport, use.
    Response: NOAA points out that the RP's ability to pay based on its 
financial ``size'' should not be a determining factor. The damage 
assessment process required under section 1006(e) of OPA is to 
determine the type and extent of adverse effects and define the best 
approach for the recovery of the affected natural resources and/or 
services. In fact, Congress explicitly removes this concern from the 
assessment of damages by allowing uncompensated claims against the 
Fund. Allocation across stages of production is not possible within 
this proposed rule.
    Comment: One commenter stated that loss of subsistence use of 
resources should be covered in the natural resource damage assessment 
process.
    Response: NOAA points out that section 1002(b)(2)(C) of OPA 
specifically provides for the recovery of damages for the loss of 
subsistence use of natural resources. Such damages are recoverable by 
anyone who uses natural resources for subsistence.
    Comment: Although several commenters mentioned that section 1006(e) 
of OPA provides a rebuttable presumption for assessments performed 
pursuant to the natural resource damage assessment rule, one commenter 
specifically raised the question of how one might define the phrase 
``in accordance with.'' One commenter noted that, so long as the 
trustee(s) follows the rule and the public is given the opportunity to 
review and comment on the restoration plans called for by section 
1006(c)(5), the trustee's(s') determination of damages is granted the 
rebuttable presumption. Another commenter suggested that the rebuttable 
presumption should only apply to issues and components of an assessment 
that are specifically included in the proposed rule. A few commenters 
questioned the relationship between the statutorily granted rebuttable 
presumption and the NOAA suggestion of assessments being conducted ``on 
the record'' to be reviewed under the ``arbitrary, capricious, or 
otherwise not in accordance with law'' standard of review. Another 
commenter pointed out that the trustee(s) is also entitled to the 
rebuttable presumption when presenting a claim to the Fund.
    Response: NOAA notes that the damage assessment and restoration 
planning process developed through this rulemaking is a framework that 
offers both guidance and a range of procedures for the trustee(s) to 
design the assessment/restoration approach most appropriate for the 
specific discharge. The philosophy of this proposed rule is to provide 
flexibility to allow the most cost-effective assessment/restoration 
approach for a particular incident while giving guidance on how this 
assessment can be conducted using ``good science.''
    The rebuttable presumption applies, in the statutory language, to 
``any determination or assessment of damages to natural resources.'' 
This language indicates that the entire assessment, including the 
dollar figure is granted the presumption. Given the need for 
flexibility in an assessment, the presumption will apply to any part of 
the assessment conducted pursuant to this proposed rule, even if some 
part of the assessment activities are not specifically listed in the 
rule. NOAA also notes that section 1006(e) applies both to actions 
against an RP and claims against the Fund.
    In response to the commenters' questioning the relationship between 
the rebuttable presumption and a review on the record, NOAA notes that 
the rebuttable presumption goes to the trustee(s) who conducts an 
assessment ``in accordance with'' this proposed rule. This language is 
comparable to the ``not inconsistent with the NCP'' language found in 
section 107(a)(4)(A) of CERCLA, which allows recovery of response costs 
that are not inconsistent with the NCP by the United States, a state, 
or an Indian tribe. Therefore, one challenging such costs must show 
that the claimant acted in a way that was inconsistent with the NCP. In 
a natural resource damage assessment under OPA, the trustee(s) gets a 
rebuttable presumption for the assessment conducted ``in accordance 
with'' this proposed rule. Therefore, someone challenging the 
assessment must affirmatively prove that the assessment was 
inconsistent with the assessment process set forth in this proposed 
rule.
    Reviewing a damage assessment ``on the record'' refines the phrase 
``in accordance with.'' The review is of the information, data, and 
procedures used in the assessment/restoration planning process, to 
determine the type and extent of effects and best approach for 
ecosystem recovery. In this way, therefore, the rebuttable presumption 
and record review complement each other. (A further discussion of 
record review and this proposed rule is provided later in this 
preamble.)
    Comment: Several commenters noted that NOAA should develop guidance 
and technical support documents, rather than rigid rules. One other 
commenter, however, stated that the proposed rule should contain a 
clear process to ensure the consistent application of the damage 
assessment process and gain public trust in that process. This 
commenter urged that NOAA not limit the rulemaking to developing 
``guidance'' for damage assessment instead of providing clear 
requirements. Other commenters recognized that national uniformity is a 
desirable goal, but less formalized, i.e., flexible procedures are 
preferable in dealing with a wide range of incidents.
    Response: NOAA believes that flexibility is important in the 
proposed rule. The trustee(s) must be allowed the ability to design an 
assessment/restoration approach that is appropriate for the situation 
at hand. No national scheme could possibly anticipate all possible 
discharge situations. In response to the requests for guidance, NOAA is 
providing guidance on the best approaches to an assessment, in addition 
to certain required steps and criteria. NOAA is also developing 
technical guidance documents on: Preassessment, Injury Determination 
and Quantification, and Restoration (Guidance and Bibliography), as 
part of this rulemaking.

II. Definitions

Response to Comments

``Acquisition''

    Comment: One commenter disagreed with grouping ``replacement'' and 
``acquisition'' together, as acquisition implies an off-site activity. 
Another commenter indicated that the proposed definition describes 
``replacement,'' but the definition of ``acquisition of the 
equivalent'' should also incorporate the requirement of ``proximity to 
the affected area,'' for the purpose of ``enhancing the recovery * * * 
of the ecosystem affected by a discharge.'' In addition, the commenter 
stated that the regulations should reflect Congress' preference for on-
site restoration and should limit the availability of acquiring 
equivalent resources to those rare situations where the cost of site 
specific restoration would be ``grossly disproportionate to the value 
of the resources involved.''
    Another commenter noted that acquisition must be accompanied by 
some effort to restore the discharge-impaired habitat. Acquisition 
involves only a transfer of property accompanied by a net loss of the 
species affected by the discharge. However, the commenter also stated 
that acquisition may be used to replace the loss of resources between 
the time of initial loss and full recovery of the habitat affected by a 
discharge. One commenter noted that acquisition of equivalent resources 
is not the same as replacement because it does not occur in the area 
affected by the discharge.
    Response: NOAA agrees that the terms ``acquisition'' and 
``replacement'' should be defined separately. NOAA recognizes that the 
Conference Report accompanying OPA states that the alternative of 
acquiring equivalent natural resources should be chosen only when the 
other alternatives are not possible, or when the cost of those 
alternatives would, in the judgment of the trustee(s), be grossly 
disproportionate to the value of the natural resources involved. This 
discussion, however, is more appropriate in other parts of the preamble 
and proposed rule.

``Baseline''

    Comment: One commenter requested a more clear definition of 
``baseline.'' Another commenter recommended that the definition of 
``baseline'' reflect that, in the absence of reliable data on natural 
variability, the baseline condition will be the condition of the 
resources that existed at the location and time of the discharge. 
Further, the commenter suggested that the definition be replaced or 
supplemented with the following definition: Baseline data are those 
which have been collected for natural resources and environmental 
variables of interest for an extended period of time (typically years) 
on a regular basis (e.g., annually, quarterly) up to the time of the 
discharge. This database should describe the temporal mean and 
variation of the variable(s) of interest, so that statistically 
significant departures from this mean could be measured. Baseline data, 
therefore, should ``take into account the natural variability that 
would have existed at the assessment area.'' The commenter suggested 
that ideally, the last sampling period in a baseline would have 
occurred immediately prior to the discharge and included specific 
locations that are or will be affected by the discharge. The commenter 
stated that the early sampling program cannot provide a baseline (as 
defined above), and should be clearly distinguished from a baseline. 
The early sampling program cannot document the temporal variability in 
the natural environment, especially for resources that have life cycles 
longer than a few days or environmental variables that have seasonal 
components.
    Response: NOAA agrees that the definition of baseline should be 
clarified and has revised the definition accordingly. The definition of 
early sampling has been deleted.

``Biological Resources''

    Comment: One commenter recommended that habitats, such as the water 
column or substrate, must be included as ``biological resources'' along 
with the interrelationships between species that are necessary for a 
normal healthy functioning ecosystem. The commenter argued that species 
depend on these habitats for successful completion of their normal life 
histories. If the discharge adversely affects these ecosystem 
components, then it should be presumed that injury to biological 
resources has occurred.
    Response: NOAA has deleted the definition of ``biological 
resources'' along with those for ``air,'' ``drinking water supply,'' 
and ``surface water.'' NOAA believes that these natural resources are 
included in the statutory definition of natural resources, which 
encompass ``other resources belonging to, managed by, held in trust by, 
appertaining to, or otherwise controlled by,'' the trustee(s). NOAA 
takes the position that this provision includes biological resources, 
and therefore there is no need for a separate definition. Further, NOAA 
interprets the statutory definition as sufficiently broad to include 
the water column or substrate. Accordingly, a trustee(s) may seek 
damages for injury to the water column or substrate.

``Compensation''

    Comment: One commenter suggested ``compensation'' is the sum total 
of payment for damages to natural resources. The commenter noted that 
payment shall include costs for injury and assessment investigations, 
restoration of affected resources in the assessment area, monitoring of 
the restoration implementation, necessary mid-course adjustments to the 
restoration plan based on monitoring results, and acquisition of 
additional habitat for the same or comparable resources affected by the 
discharge to offset resource injuries between the time of the discharge 
incident and full recovery following implementation of the restoration 
plan. The term ``compensation'' must either be incorporated as a part 
of the definition for ``restoration or rehabilitation'' or contained in 
a separate definition as proposed. This concept for compensation should 
also be included within the scope of ``damages.''
    Response: NOAA has not specifically defined ``compensation.'' 
However, Sec. 990.14 of this proposed rule addresses recoveries and 
includes items that the commenter suggested should be compensable. The 
trustee(s), therefore, may recover: (1) For injury to natural resources 
and/or services through the recovery period, including monitoring 
costs, (2) costs of emergency restoration, (3) the reasonable costs of 
assessment including preassessment and methodologies provided for in 
the various assessment procedures, (4) the cost of restoration, 
rehabilitation, replacement, or acquiring equivalent resources, and (5) 
interest on the amounts recoverable, as provided in section 1005 of 
OPA.

``Control Area'' or ``Resource and Reference Area'' or ``Resource''

    Comment: One commenter believed ``control area,'' ``control 
resource,'' ``reference area,'' or ``reference resource'' need further 
definition and clarification. The commenter stated that all have 
identical definitions and are cross-referenced in the earlier notice. 
The commenter recommended that the terms ``control area'' and ``control 
resource'' be deleted or restricted in the regulation, and that the 
terms ``reference area'' and ``reference resource'' be used instead. 
The word ``control'' should only be used in relation to the laboratory 
or some microcosm and mesocosm testing facilities. The commenter 
believed that ``control area'' refers to completely controlled systems. 
Natural environments, however, are affected by many variables (in time 
and/or space). The commenter noted that ``reference area'' data and 
information are collected following the discharge, but in areas 
unaffected by the discharge. The reference areas should be as nearly 
identical to the affected areas as practical, except that there will 
not be oil from the incident in the reference area. The reference area 
sampling program(s) should be identical to those in the affected areas 
in order to conduct quantitative comparisons regarding effects, 
recovery, natural variation, etc. Further, the commenter stated the 
``reference area'' concept is based on the reality that there may be 
frequent and often substantial change in physical, chemical, and 
ultimately, biological variables in the natural resources of interest, 
due to natural, not man-made, factors. These natural changes should be 
monitored so that their influence on the affected, and recovering, 
community can be evaluated. The commenter noted that the effect of 
natural variation, as documented in reference areas, on affected areas 
may be very important in the injury assessment and quantification 
phases of the natural resource damage assessment, and thus in the 
ultimate damages assessed against the RP.
    Response: NOAA recognizes that the terms ``control'' and 
``reference'' are distinct. NOAA has incorporated the commenter's 
concerns both in the rule and preamble language. NOAA further has 
addressed the importance of natural variation in the damage assessment 
process.

``Destruction''

    Comment: One commenter believed the definition of ``destruction'' 
is so narrow that almost nothing will be covered because ``total'' and 
``irreversible loss'' are very difficult to achieve. Further, the 
commenter suggested that this definition be omitted.
    Response: NOAA agrees, in part, and has revised the definition by 
deleting the phrase ``irreversible loss.''

``Drinking Water Supply''

    Comment: One commenter suggested that a ``drinking water supply'' 
for less than ten people would not justify restoration so that an 
alternate supply would be a better answer for the limited period an oil 
discharge would affect such a water supply. Another commenter noted the 
definition is too broad as it would cover any water supply that one 
person might drink once. The commenter suggested that the definition be 
amended to read ``drinking water supply'' means any raw or finished 
water which is or may be used by a public water system, as defined in 
the Safe Drinking Water Act, or as drinking water by one or more 
individuals on a regular basis.
    Response: NOAA has deleted the definition of ``drinking water 
supply'' because it is included in the statutory definition of natural 
resources.

``Early Sampling Data''

    Comment: One commenter noted ``early sampling data'' are those 
obtained in the early sampling of both affected and reference areas 
immediately after the discharge occurs. The commenter stated that often 
this program will be designed without benefit of baseline or historical 
data (as defined earlier). The early sampling program provides data on 
the natural resources and environmental variables at the time of the 
discharge. It may be described as a ``time slice,'' a ``benchmark,'' or 
a ``base point'' in time, compared to a baseline (i.e., a series of 
``base points'').
    Response: NOAA agrees with the commenter's description of early 
sampling data. While NOAA has not included the phrase ``early sampling 
data'' in the definitions section, the concepts outlined by the 
commenter are included in the preamble and this proposed rule.

``Equivalent''

    Comment: Two commenters stated ``equivalent'' resources under this 
section are resources that the trustee(s) determines are comparable to 
the injured resources. They noted ``equivalent'' resources should be 
acquired to enhance the recovery, productivity, and survival of the 
ecosystem affected by a discharge, preferably in proximity to the 
affected area. Another commenter defined ``equivalent'' as, ``to have 
equal power * * * equal in force, amount or value * * * corresponding 
or virtually identical especially in effect or function * * *'' 
Webster's New Collegiate Dictionary (1981). The commenter noted that 
NOAA does not define the term ``equivalent'' and recommends a 
nationally consistent definition be developed.
    Response: The OPA Conference Report, H.R. 101-653 at p. 109, 
defines ``equivalent'' to mean natural resources that the trustee(s) 
determines are comparable to the injured natural resources. NOAA adopts 
a similar definition.

``Exposed to'' or ``Exposure of''

    Comment: One commenter noted that the definition of ``exposed to'' 
properly implies that physical contact with the oil discharge must be 
the proximate cause of any compensable natural resource damage.
    Response: NOAA disagrees that the definition of ``exposed to'' 
implies that physical contact with oil discharge must be the proximate 
cause of any compensable natural resource damage. NOAA defines 
``exposed to'' to mean that all or part of a natural resource that may 
be in contact with oil or with any medium containing oil. Further, NOAA 
is not limiting recovery of damages to natural resources that have been 
exposed to oil (see definition of ``resulting from'').

``Geologic Resources''

    Comment: One commenter believed the definition of ``geologic 
resources'' is redundant under the OPA regulations and should be 
omitted.
    Response:  NOAA has adopted the statutory definition of natural 
resources which implies that ``geologic resources'' are included. 
Specifically, the definition includes ``other resources belonging to, 
managed by, held in trust by, appertaining to, or otherwise controlled 
by,'' the trustee(s). NOAA takes the position that this provision may 
include geologic resources, and therefore, there is no need to include 
a separate definition of geologic resources.

``Historical Data''

    Comment: One commenter believed ``historical data'' are those that 
have been collected prior to the incident, but may not have been 
collected for several periods (e.g., months, quarters, years) prior to 
the incident. This database may provide a description of the resources 
in the past, but there may be a temporal discontinuity long enough that 
there could have been a significant change in the variable during that 
time. The temporal gap, therefore, may be sufficient so that: (a) It 
exceeds a few generation times of the ``important'' resources, (b) a 
major episodic recruitment event could have occurred, or (c) that a 
major disturbance event (e.g., storm) could have occurred. Further, 
``historical data'' from areas similar to the affected area, though the 
areas may not be suitable as reference areas, may be appropriate. 
``Historical data'' may provide a ``gestalt'' about the present 
affected areas, in some cases, but may not be appropriate for 
quantitative comparison.
    Response: NOAA agrees with the commenter's discussion of historical 
data and has revised the definition accordingly.

``Natural Resource Damage Assessment''

    Comment: One commenter believed the definition of ``natural 
resource damage assessment'' should include new scientifically 
developed methodologies that may be devised for the unique resource 
damage circumstance related to the discharge at hand. Such 
methodologies may not necessarily exist in a prescribed state prior to 
the discharge.
    Response:  NOAA agrees and has eliminated the restrictions in the 
earlier notice.

``Natural Resources''

    Comment: One commenter urged that areas that are privately owned 
but that support public natural resources should be included. A 
commenter agreed with NOAA's decision not to attempt to limit the broad 
statutory definition of ``natural resources'' by providing specific 
guidelines on the degree of governmental control necessary to allow 
public recovery. The commenter stated that a natural resource located 
on private property may have both public and private value, and it is 
the trustee(s) who should determine whether the public has an interest 
in the resource.
    Response: NOAA recognizes that there are times when natural 
resources located on private property may have public value. However, 
the ``public'' nature of the resource would have to be decided on a 
case-by-case basis. At the time of the Preassessment Phase, the 
trustee(s) is required to determine if there are resources of concern 
to the trustee(s) that might be affected by the discharge. It is at 
that time that the determination could be made of the nature of the 
public's interest in the resource.
    Comment: One commenter stated that NOAA should attempt to ensure 
inclusion of all potentially affected trustee resources, such as 
archeological resources and park lands or other preserved natural areas 
valued particularly for their pristine state, into the natural resource 
damage assessment process.
    Response:  NOAA has included a new definition of ``resources of 
special significance.'' This definition is designed to address the 
concerns of the comments (see ``resources of special significance'').

``Nonuse (Passive use) Value''

    Comment: Two commenters questioned whether a regulatory definition 
for passive use value is necessary, except to refer to values that 
cannot be reliably calculated. Another commenter urged the inclusion of 
the phrase, ``such services encompass values associated with the 
knowledge that such resources simply exist as well as associated with 
the option to directly use or not use such resources in the future.''
    Response: NOAA believes that a definition of nonuse values, 
referred to as passive use values, is appropriate and therefore will 
continue to include such definition. NOAA's definition of passive use 
values is broad and therefore includes the notions included in the 
second commenter's proposed definition.

``Oil''

    Comment: One commenter contended that unless the material under 
consideration is definitely a single hazardous compound derived from 
processing oil, it should be classified as ``oil'' (e.g., diesel or 
gasoline would be oil for this purpose). Another commenter believed the 
definition seems practical and reasonable to focus on what has been 
discharged and not on its degradation products. The commenter 
recognized the potential for dual regulation (CERCLA and OPA) of one 
discharge of oil due to the hazardous constituents contained in some 
oils. The same commenter noted, however, that the proposed definition 
is cumbersome.
    Response: NOAA agrees that the definition of oil is cumbersome and 
has revised it accordingly.

``Reasonable Cost''

    Comment: One commenter urged NOAA to revise the definition of 
``reasonable cost.'' Two commenters urged NOAA to adopt the 
requirements in DOI's rule 43 CFR 11.14(ee). One of those commenters 
requested adoption of DOI's rule provided it is modified to show that 
the reasonable cost test applies to separable subparts of the 
assessment, as well as the assessment as a whole. Another commenter 
believed that this definition is circular and recommended the cost of a 
natural resource damage assessment be reasonable in keeping with the 
size of the discharge and type and amount of natural resource damages 
to be determined. Another commenter believed the definition is 
incomplete, stating that just because a cost can be recovered, does not 
mean it is reasonable.
    Response: NOAA agrees that the definition in the Advance Notice of 
Proposed Rulemaking (ANPRM) is somewhat circular and has revised the 
definition. The costs of the damage assessment are deemed reasonable if 
the assessment is conducted in accordance with this proposed rule, or 
if the costs are otherwise reasonable under the circumstances. NOAA 
believes this definition is simpler than the DOI definition.
    Comment: One commenter stated that making the definition of 
reasonable costs contingent on a preliminary and probably inaccurate 
estimate is unreasonable because scientists' present understanding of 
the effects of oil pollution is limited. In addition, the full extent 
of damages may not be apparent for several years following a discharge.
    Response: NOAA's definition of reasonable cost avoids the problems 
the commenter identified with respect to the difficulty of ascertaining 
reasonable costs based on preliminary information.

``Responsible Party(ies)'' (RP(s))

    Comment: One commenter noted that the proposed definition of 
``responsible party(ies)'' is confined to ``person or persons.'' The 
commenter noted the RP should include the company or corporate entity 
that owns or is otherwise responsible for the vessel or facility that 
contained the discharged material. The owner of the discharged material 
perhaps should also be initially included until the investigation 
ascertains responsibility.
    Response: NOAA agrees and that definition has been modified in the 
proposed rule.

``Restoration or Rehabilitation''

    Comment: One commenter endorsed the existing DOI definition of 
``restoration,'' as occurring once resources are capable of providing 
baseline service levels. This definition is consistent with Ohio v. DOI 
as well as OPA's legislative history, which revealed no Congressional 
intent to alter that definition. Another commenter agreed that 
restoration occurs when the resources are capable of providing the 
``without spill'' service levels. One commenter urged NOAA to clarify 
the definition as meaning ``measures to restore the services provided 
by the affected resources.'' Another commenter agreed with the proposed 
definition as encompassing all four management options set forth. The 
same commenter, however, urged NOAA to state that these techniques 
should be designed to achieve the best possible overall restoration of 
resources. One commenter disagreed with grouping ``restoration'' or 
``rehabilitation'' together. The commenter argued that ``restoration'' 
is commonly used as an inclusive term for restoration, rehabilitation 
and replacement as all are in situ approaches. For example, 
``replacement'' may mean reestablishing a population at the site.
    One commenter noted the proposed definitions of ``restoration'' and 
``rehabilitation'' appear to expand the measure of natural resource 
damages to include restoration of both ``the injured resources' 
physical, chemical or biological properties.'' Any attempt by NOAA to 
expand the measure of damages to require restoration of the resources' 
properties beyond what is necessary to restore their services would be 
contrary to economic principles and inconsistent with the structure of 
section 1006(d)(1) of OPA. The same commenter suggested the definitions 
of ``restoration'' and ``rehabilitation'' should be refined to read 
``measures adopted to return injured natural resources to the condition 
where they provide the same or substantially similar services as they 
would have provided if the spill of oil had not occurred.''
    Response: NOAA agrees that the terms restoration and rehabilitation 
should be defined separately. In the revised definition, NOAA 
distinguishes restoration from rehabilitation. Restoration actions are 
designed to return the injured natural resources and/or services to 
baseline conditions. The baseline condition is measured in terms of the 
physical, chemical, or biological properties of those resources and/or 
services prior to the discharge. Rehabilitation refers to actions that 
are designed to bring the injured natural resources and services to a 
different state from baseline conditions, but still beneficial to both 
the environment and public. NOAA agrees with the suggestion that 
sometimes a combination of techniques would best serve the overall 
goals of resource recovery. Under those circumstances, the trustee(s) 
may consider a combination of restoration techniques.

``Restoration, Rehabilitation, Replacement and Acquisition''

    Comment: One commenter noted the definitions of ``restoration, 
rehabilitation, replacement, and acquisition of equivalent'' resources 
that are set forth in the notice do not maintain the hierarchy of 
choices and their interrelationship as contemplated by OPA.
    Response: The OPA Conference Report specifies that acquisition of 
the equivalent resources will be undertaken when the alternatives of 
restoration, rehabilitation, and replacement of damaged natural 
resources will be technically infeasible or grossly disproportionate to 
the value of the resources involved. Discussion regarding the use of 
any of these options is addressed elsewhere in the preamble and the 
proposed rule.

``Technical Feasibility''

    Comment: One commenter suggested the definition of ``technical 
feasibility'' seems to preclude the implementation of new or innovative 
strategies in restoration/rehabilitation efforts. The commenter 
believed that nontraditional approaches should be explored where 
appropriate. The commenter also recommended that these approaches 
should be encouraged where there is mutual agreement among the 
trustees. Another commenter believed the proposed definition of 
``technically feasible'' is too stringent. Currently very few recovery 
techniques are well known. The same commenter recommended the 
definition be revised as, ``technical feasibility means those on-site 
restoration actions that are deemed possible following appropriate 
planning, implementation, monitoring, and necessary mid-course 
corrections of a restoration project.'' The commenter also noted that 
project costs shall not be a part of technical feasibility but may be 
considered as part of the overall settlement for damages taking into 
account technical feasibility of restoration, acquisition, or other 
means to make the damaged resources whole over a reasonable period of 
time.
    Response: NOAA agrees that the definition of technical feasibility 
is too stringent and has revised the definition accordingly.

``Trauma''

    Comment: One commenter recommended the definition of ``trauma'' 
include all adverse, sublethal, chemical, physical and behavioral 
changes to living fish and wildlife resources, including adverse change 
in the presence and activity levels of enzymes and other vital 
components of living systems, caused by a discharge of oil and 
attendant necessary cleanup and response activities. Trauma may include 
disruption of reproductive rate or reproductive cycles normally 
associated with a species. As used within this context, the commenter 
argued that trauma is an injury and should be included within the scope 
of damages.
    Response: NOAA does not agree that a separate category of injury 
defined as trauma should be included in this proposed rule. The current 
injury definition is broad enough to include much of what the commenter 
is concerned about.

``Use Value or Values''

    Comment: One commenter agreed with the definition for ``use value 
or values'' under OPA in the March 13, 1992, Notice.
    Response: The proposed rule no longer defines ``use value'' 
separately, but defines ``compensable values'' to incorporate all use 
values, including direct and passive uses.

``Water''

    Comment: One commenter recommended ``water'' in the definition be 
revised to ``waters of the United States'' consistent with the 
definition in the Clean Water Act.
    Response: OPA defines ``navigable waters'' to mean the waters of 
the United States, including the territorial sea. NOAA has adopted this 
definition in the proposed rule.

``Wetlands''

    Comment: One commenter recommended that ``wetlands'' be included in 
the definition of ``natural resources.''
    Response: NOAA has adopted the definition of natural resources from 
OPA and believes that the definition encompasses wetlands. Therefore, 
there is no need to revise the definition to specifically include 
wetlands.

III. Recoveries

    Section 990.14 identifies what is recoverable as damages. In 
section 1006 of OPA, Congress clearly delineates the measure of damages 
to include the costs (both direct and indirect) of restoring, 
rehabilitating, replacing, or acquiring the equivalent of the injured 
natural resources, the diminution in value of those natural resources 
pending restoration, plus the reasonable costs of assessing those 
damages. These damages are based upon injuries occurring from the onset 
of a discharge of oil through the recovery period (including monitoring 
costs), less any mitigation of those injuries by response actions taken 
or anticipated, plus any increase in injuries that are a result of 
response actions taken or anticipated. Damages may also include the 
costs of emergency restoration actions and the reasonable costs of the 
assessment, which includes the cost of performing the preassessment, 
assessment, and post-assessment phases; administrative or legal or 
other enforcement costs, including base and incremental costs, and 
expenses necessary for and incidental to the preassessment, assessment, 
restoration planning, and post-assessment (including salaries); any 
restoration or replacement undertaken; restoration monitoring; mid-
course corrections, and interest on the amounts recoverable as set 
forth in section 1005 of OPA. The period for which interest shall be 
paid is the period beginning on the 30th day following the date on 
which the claim is presented to the RP(s) or guarantor(s) and ending on 
the date on which the claim is paid. Interest is to be calculated in 
accordance with Section 1005 of OPA. The determination of the damage 
amount shall consider any applicable limitations provided for in 
section 1004 of OPA.
    In accordance with section 1006(d)(3) of OPA, there shall be no 
double recovery under this rule. Actions for damages and assessment 
costs shall comply with the statute of limitations set forth in section 
1017(f) of OPA.
    Finally, this proposed rule clearly authorizes the trustee(s) to 
settle claims without completing an assessment. The trustee(s) is 
authorized to reach settlement with the RP(s) at any time following a 
discharge; neither OPA nor this proposed rule requires that an 
assessment procedure of any type be completed. However, the trustee(s) 
should be mindful of the great public interest in many discharges of 
oil and may provide the public an opportunity to review and comment 
upon the settlement terms and/or the restoration component of the DARP 
should the assessment not be completed.

Response to Comments

Recoveries

``Assessment Costs''

    Comments:  Several comments were received regarding the appropriate 
definition of ``reasonable costs'' and to the extent that such costs 
are recoverable. Many of these comments are addressed in the section 
dealing with definitions within the rule. Others indicated that the 
trustee(s) could capture many of the administrative costs by simple 
bookkeeping, i.e., recording the number of man-hours, travel costs, 
etc. Several commenters indicated that the individual study costs 
conducted in the context of an assessment should only be recoverable if 
the individual study costs are reasonable. Other commenters indicated 
their preference for the overall approach, i.e., the total costs of the 
assessment are anticipated to be less than the damages.
    Response: NOAA agrees that the trustee(s) should document all 
administrative costs. The costs of damage assessments are deemed 
reasonable if the damage assessment is conducted in accordance with 
this proposed rule or if the costs are otherwise reasonable under the 
circumstances. However, the trustee(s) is required to conduct only 
studies that will provide data directly relating to the purpose of the 
assessment, to the extent practicable under the circumstances, and to 
conduct those studies in a cost-effective manner. NOAA does not require 
the trustee(s) to consider whether individual study costs are 
reasonable so long as the trustee(s) meets the requirements specified 
in the previous sentence. To determine reasonableness, the trustee(s) 
should consider the overall costs of the assessment against the 
expected recovery.
    Comment: Some commenters requested that the costs of monitoring 
during the Assessment Phase be recoverable.
    Response: NOAA has specifically included monitoring costs in the 
recoverable damages.
    Comment: Several commenters suggested that recoverable costs should 
include the costs of recovering damages.
    Response: NOAA agrees that the costs of ``assessing damages'' 
includes the costs of recovering those damages.
    Comment: Some commenters desired more clarification on recoverable 
damages, specifically, whether the rule would allow recovery of funds 
in excess of the costs of restoration plus the assessment cost.
    Response:  The proposed 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 and/or services pending restoration; 
plus (3) the reasonable cost of assessing those damages. The recovery 
of those three items is not excess recovery. The trustee(s) is to use 
the money to restore, rehabilitate, replace, or acquire the equivalent 
of the injured natural resources and/or services and to be reimbursed 
for the reasonable costs of conducting the assessment. Any recoveries 
that remain after implementing the restoration plan shall be deposited 
in the Oil Spill Liability Trust Fund in accordance with section 
1006(f) of OPA.
    Comment: One commenter indicated that the costs of emergency 
restoration are more properly classified as response costs and not 
associated with restoration.
    Response: NOAA agrees that the appropriate avenue of redress is 
through the OSC's response structure, which may consist of simply 
having the OSC approve the trustee actions and costs as removal actions 
and costs. While these actions/costs are not strictly preassessment 
activities, it is likely that such actions/costs will be taken while 
the trustee(s) is conducting the preassessment and can be included in 
the Preassessment Phase. In circumstances where the trustee(s) takes 
emergency restoration to repair or replace habitat or resources, these 
are technically restoration costs, but again can be claimed in the 
costs of conducting an assessment. NOAA reminds the trustee(s) that 
emergency restorations are the exception, not the usual course of 
business. NOAA expects fully that close cooperation and coordination 
with the response agency(ies) and the RP(s) will greatly alleviate the 
need for emergency restoration.
    Comment: One commenter noted several disadvantages in simplified 
assessments, including the potential overlapping trustee interests in 
certain natural resources, damages will not sufficiently reflect the 
extent of the actual injury, and the risk that a compensatory 
assessment could be transformed into a punitive exercise.
    Response: NOAA notes that double recovery is prohibited to the 
extent provided by section 1006(d)(3) of OPA. The simplified damage 
assessment procedures produce calculations based on statistical 
averages and will reasonably reflect the damages of the actual injury 
in a timely and economical manner. Finally, NOAA disagrees with the 
charge that simplified damage assessments are akin to punitive damages. 
The computer models and compensation formulas generate damages based on 
average restoration costs and average diminution of value of the 
affected natural resources and are thus compensatory as authorized by 
OPA.

``Coordination With Legal Counsel''

    Comment: Commenters covered the possible range concerning the 
appropriate involvement of legal counsel. Some indicated that attorneys 
will slow down the assessment process while others indicated that 
assessments are complicated legal processes that may involve a variety 
of legal issues, including Freedom of Information Act requests and 
coordination among federal and state laws, and that attorneys must be 
involved in the process from the onset. Most commenters indicated that 
a formal process for attorneys need not be identified in the rule. Some 
commenters indicated that, since many assessments have been conducted 
under the threat of litigation, attorneys have more say than the 
scientists in the assessment process. One commenter suggested that 
early involvement of attorneys leads to adoption of extreme positions 
by both parties and encourages unnecessary and poorly designed studies 
aimed at litigation, not restoration.
    Response: NOAA has determined that there is no need to specifically 
provide a role for either trustee agency counsel or attorneys 
representing the RP(s) in the proposed rule. NOAA has attempted to 
propose a rule that is scientifically driven, and not specifically 
geared to the potential of litigation, even though that potential 
certainly looms ever-present. As a practical matter, NOAA encourages 
trustee agencies to keep their respective counsels informed of the 
assessment and seek their advice in legal matters. It is expected that 
the RP(s) will rely upon its attorney(s) for advice and counsel 
throughout most assessments.

``Private Causes of Action''

    Comment: Some commenters encouraged NOAA to specifically allow the 
trustee(s) to recover for private causes of action under OPA. They 
reasoned that often it is the government that is the most logical party 
to recover for what are arguably ``private'' harms, i.e., increased 
prices due to fishery closures, since the consumers would have no 
mechanism to individually recover those damages. Another example cited 
was recreational users, who would be unlikely to pursue individual 
claims.
    Response: Section 1002 of OPA provides specifically for damages 
recoverable under OPA, including natural resources, real or personal 
property, subsistence use, revenues, profits and earning capacity and 
public services. However, although OPA states that a natural resource 
trustee may seek recovery of damages for injuries to, or loss of use 
of, natural resources, OPA gives the right of action for the other 
types of damages to the actual users or owners of the property 
affected.

``Punitive Damages''

    Comment: Some commenters expressed the opinion that recoveries 
under OPA should not include punitive damages.
    Response: NOAA agrees fully. The proposed rule is designed to 
assess compensatory damages for the injury to, and loss of use of 
natural resources, their corresponding diminution in value pending 
restoration, and the reasonable costs of conducting an assessment.

``Future Damages''

    Comment: Some commenters suggested that the damage figure should 
include an added amount to pay for cumulative unknown effects that 
cannot be determined by the assessment, comparable to the Superfund 
provision with respect to damages for unforseen future liability. One 
of these commenters suggested that these damages could be used to carry 
out additional research, monitoring, etc.
    Response: NOAA does not believe that OPA requires damages for 
unforeseen future natural resource injuries. Such recoveries may be 
speculative in nature. However, for any particular discharge the 
trustee(s) and RP(s) may agree, through negotiations, to establish an 
escrow account to cover future effects, perhaps with unused sums 
reverting back to the RP(s) after a specified amount of time.

``Limits of Liability''

    Comment: One commenter stated that liability limits for oil and gas 
extractive facilities should hold under OPA, except on cases of proven 
gross negligence, willful misconduct, or violation of certain federal 
stipulations.
    Response: NOAA notes that the commenter is requesting a statutory 
change, clearly outside the scope of this rulemaking.

IV. Assessment on the Record

Purpose

    Section 1006(c) of OPA provides that the trustee(s) shall ``develop 
and implement a plan for the restoration, rehabilitation, replacement, 
or acquisition of the equivalent, of the natural resources under their 
trusteeship.'' 33 U.S.C. section 2706(c)(1)(C), (c)(2)(B), (c)(3)(B) 
and (c)(4)(B). Section 1006(c)(5), 33 U.S.C. section 2706(c)(5), 
provides that ``plans shall be developed and implemented under this 
section only after adequate public notice, opportunity for a hearing 
and consideration of all public comment.'' Thus, Congress intended that 
restoration plans be developed by the trustee(s) pursuant to an 
administrative process that provides an adequate opportunity for public 
participation in the selection of restoration measures. In accordance 
with traditional principles of administrative law, NOAA is proposing to 
implement these provisions by requiring the trustee(s) to document 
development of draft assessment/restoration plans (DARP) in an 
administrative record through notice and comment procedures.
    The administrative record has four basic purposes. First, it 
facilitates selection of restoration, rehabilitation, replacement, or 
equivalent acquisition actions by providing a central repository for 
scientific data. Second, it documents the relevant factors the 
trustee(s) considered in selecting restoration actions. Third, it 
facilitates public participation. Fourth, it provides the basis for 
judicial review.
    The DARP serves to document, for the administrative record, the 
most appropriate restoration approach, with its estimated restoration, 
rehabilitation, replacement, or equivalent acquisition costs for a 
particular discharge. Therefore, the judicial review standard of 
``arbitrary, capricious, or otherwise not inconsistent with law'' would 
apply to determinations through the development of the restoration 
approach. Once the restoration approach is developed, the trustee(s) 
then can determine the expected interim lost resource values. It is 
anticipated that the calculation of those values would not be included 
in the administrative record. This approach is suggested in the 
legislative history of OPA, which states:

    Calculating the total measure of damages under this section will 
ordinarily be dependent upon the development by the trustees of the 
appropriate plans for mitigating the injury to those resources. This 
is because the estimated cost of implementing the plans will be a 
major component of the measure of damages. Therefore, the trustees 
should, in sequence, conduct the necessary assessments, develop and 
estimate the cost of implementing the appropriate plans, and 
calculate the diminution in lost use and other values of the injured 
resources pending restoration. At that point, the total liability of 
a responsible party under this section can be calculated (Committee 
of Conference Report No. 101-653; 101 Cong. 2d Sess. at 109 (Aug. 1, 
1990)).
Content and Level of Detail
    The administrative record must contain sufficient information to 
support judicial review of the assessment. The administrative record 
should contain all documents considered by the trustee(s) in selecting 
assessment and restoration measures, including documents that support 
options the trustee(s) ultimately rejected. Pertinent documents that 
are timely submitted by the RP(s) or the public shall be included in 
the administrative record.
    The administrative record should be limited to final documents when 
possible. For example, draft documents that are superseded by final 
documents are not considered documents on which the trustee(s) 
specifically relies and therefore are not included in the record. Where 
no final document is available at the time of selection of assessment/
restoration measures, the draft may be included in the record if the 
document contains information not found in other documents in the 
record but which is considered by the trustee(s) in selecting a 
restoration approach.
    Pre-decisional, deliberative internal agency memoranda will 
ordinarily not be included in the administrative record. Like draft 
documents, however, portions of these documents may be included if they 
contain information that is not included in other documents. Documents 
relating exclusively to liability will ordinarily not be included in 
the administrative record unless they are relied upon in selecting 
restoration measures. The trustee(s) may maintain a confidential file 
for materials in the administrative record that might be sensitive 
(e.g., the U.S. EPA Superfund process allows for Confidential Business 
Information to be maintained in a confidential appendix to the 
administrative record for a Superfund remedial action). If the 
restoration approach is challenged, the judge may review that 
confidential information in camera, i.e., in the judge's chambers in a 
confidential manner. Scientific data and other information concerning 
damages to natural resources, however, may not be subject to a claim of 
being Confidential Business Information. Scientific data that fail 
appropriate quality assurance/quality control requirements should not 
be included in the administrative record except where such data are 
relied upon in some manner in selecting restoration measures.
    Ordinarily, the record should include documents regarding the 
nature of the discharge, preassessment determination, restoration 
planning, the draft assessment/restoration plan, public comments, 
response to public comments, transcripts of public hearings, if any, 
relevant investigation reports, scientific studies, work plans, quality 
assurance plans, engineering evaluations, decision documents, and an 
index to the documents in the administrative record.
    The volume of material compiled for the administrative record 
should be consistent with the scope of the assessment/restoration. 
Compilation of massive documentation for a minor discharge with limited 
restoration measures would not be appropriate.
    Certain types of information will be common to all assessments, 
regardless of the type of procedure selected. Therefore, each 
administrative record will contain: (1) Information considered in the 
Preassessment Phase; (2) a copy of the DARP; (3) any comments received 
in response to public review of the DARP, with the responses to those 
comments; (4) a copy of the demand made to the RP(s), including the 
Report of Assessment; and (5) the costs of conducting that assessment. 
Other items included in the record will be specific to the particular 
type of assessment procedure selected. For a Compensation Formula 
assessment, in addition to the common items listed above, the 
administrative record should include documentation of the information 
requirements for use of the formula and identification of the formula 
used. For a Type A assessment using one of the computer models 
developed by DOI, the administrative record should include 
documentation of the information requirements for the Type A model 
listed in 43 CFR part 11, subpart D, and the computer printout of the 
application of the Type A model. For an Expedited Damage Assessment 
(EDA) or Comprehensive Damage Assessment (CDA) the administrative 
record should include all documentation supporting the restoration 
determinations required in the EDA or CDA. Determinations in EDA or CDA 
may include, but are not limited to: the injury determination/
quantification component and the restoration component (specifically 
including the test results of any and all methodologies performed in 
these phases).
Post-decisional Documents
    Occasionally, the administrative record may require supplementing 
after finalization of the DARP. Supplements to the record may be 
allowed if: the interested party(ies) did not receive actual or 
constructive notice of the DARP and the opportunity to comment on the 
plan; the information submitted does not duplicate information already 
contained in the administrative record; and the information raises 
sufficiently significant issues regarding the scope, effectiveness, or 
cost of the plan as to warrant having the trustee(s) reconsider the 
plan. If the trustee(s) supplements the administrative record with 
documents submitted by the RP(s) or the public, the trustee(s) may also 
add to the record other documents pertinent to the matters addressed by 
the RP(s) or the public.
    Post-decisional documents are generally not part of the 
administrative record. However, where these documents result in 
modification of the DARP, the administrative record should be 
supplemented to include the post-decisional documents. Also, where the 
DARP provides for the development of certain components at a later 
date, the information or documents used to develop these components 
should be added to the administrative record as they become available.
    The trustee(s) has the discretion, of course, to modify the plan at 
any time. However, the public will have the right to review and comment 
upon modifications that are, in the opinion of the trustee(s), 
significant.
Availability of the Record
    To the extent practicable, the administrative record should be 
compiled and made available for review as documents are generated or 
received by the trustee(s). NOAA believes that public information is 
critical to the credibility of assessments and restoration efforts. 
However, the degree of public notice and involvement in the 
administrative record will necessarily vary depending on the choice of 
damage assessment procedures. NOAA is proposing that the administrative 
record be open for public review and comment concurrently with the 
DARP. The availability and review of the administrative record may also 
be arranged in prespill planning conducted by the trustee(s).
Judicial Review
    Under the Administrative Procedure Act, 5 U.S.C. 706(2)(A), review 
of selection of restoration measures would be conducted on the 
administrative record. Review on the record would address several major 
concerns expressed by Congress in passing OPA. First, Congress mandated 
public participation in restoration planning. Section 1006(c)(5) of OPA 
requires the development and implementation of the restoration plan 
``only after adequate public notice, opportunity for a [public] 
hearing, and consideration of all public comment.'' A trial de novo 
would circumvent public participation in the selection and 
implementation of the restoration plan by allowing the litigants and 
the court to make the decision as to the type of restoration approach. 
In interpreting similar Congressional intent with respect to the 
selection of remedial action under CERCLA, courts have held that a 
trial de novo of selection of a response action is inconsistent with 
meaningful public involvement in selection of remedies for hazardous 
waste sites. A discussion of these cases was provided in Appendix III 
of the ANPRM of March 13, 1992 (57 FR 8964, at 8987). Inherent in these 
decisions is the recognition that the general public does not have the 
resources or the procedural mechanisms to protect its interests in the 
courtroom.
    Further, a trial de novo of assessment/restoration measures creates 
incentives for parties to withhold scientific data for use at trial. 
One of the most significant criticisms of the EXXON VALDEZ case noted 
by commenters was the unavailability of scientific data produced by the 
parties to the litigation. By contrast, a public administrative process 
should create the incentive to disclose scientific data. The government 
will be required to publicly disclose its scientific data and 
conclusions in the administrative record developed in connection with 
the DARP. Other parties will be required to publicly disclose their 
scientific data and conclusions in connection with the administrative 
development of the DARP or risk waiving their objections to the plan 
during judicial review.
    Second, record review is necessary to carry out the Congressional 
mandate that the trustee(s), as the resource manager(s) and expert(s), 
select assessment/restoration measures. NOAA's interpretation of OPA 
indicates that Congress intended the Restoration Plan be developed and 
implemented by the trustee(s) pursuant to an administrative process, 
not by a courtroom battle of experts. Adequate evaluation of the 
complex scientific issues involved in assessment/restoration is more 
likely to result from a public administrative process conducted by 
agencies with specialized scientific expertise.
    Finally, Congress emphasized that assessment of damages be 
conducted at ``reasonable'' costs. By requiring the various parties 
involved in an assessment to submit their findings to a central 
repository, much duplicative study can be avoided. Limiting the review 
of the assessment/restoration to the administrative record will greatly 
reduce the transaction costs.

Administrative Record

Response to Comments

``General''

    Comment: A majority of the commenters who spoke to the issue of the 
administrative record and judicial review ``on the record'' supported 
the concept. Several commenters noted that general administrative law 
principles and case law prior to the Superfund reauthorization of 1986 
supported record review of expert agency decisions on injury, 
restoration, and economic assessments. One commenter explicitly stated 
that the injury determination, restoration strategies, and economic 
damage amount would receive both the rebuttable presumption and the 
deferential standard of judicial review. Some commenters referred to 
OPA's reference to the rebuttable presumption's use in ``any 
administrative . . . proceeding,'' as well as OPA's provisions for 
claims against the Fund in an administrative proceeding, as support for 
NOAA's creation of an administrative process that would be granted 
record review. Other commenters, however, objected to NOAA's attempt to 
allow a standard of review that these commenters perceived to be 
inconsistent with the rebuttable presumption. Finally, some commenters 
stated that assessment studies and restoration planning within the 
context of an assessment should not be made public unless record review 
were granted.
    Response: NOAA notes that the administrative record provisions in 
the proposed rule are intended to implement several important policy 
concerns expressed by Congress in OPA. NOAA has considered 
administrative law principles and various comparable policies found in 
CERCLA to be relevant to natural resource damage assessment process in 
several areas. In both CERCLA and OPA, Congress has reflected the 
public's concern over expeditious recovery of resources injured by 
pollution. Further, in OPA, Congress has explicitly provided that 
restoration measures be selected by the natural resource trustee(s) 
through notice and comment procedures. Therefore, NOAA feels that there 
is statutory authority to establish review on the record. The 
administrative record provisions of this proposed rule are intended to 
create an open assessment/restoration process to allow an objective 
evaluation of how to restore or replace resources injured by discharges 
of oil. Whether these provisions would result in ``record review'' is 
ultimately the decision of the courts. However, NOAA feels that record 
review is essential for the type of expeditious, fair assessments 
called for by OPA. As discussed earlier in this preamble, judicial 
review on the record would apply to the entire assessment process with 
the exception of the determination of the compensable value component 
of damages. Finally, NOAA points out that the ``rebuttable 
presumption'' is not a standard of review.

``Advantages''

    Comment: Many of the commenters pointed out that an administrative 
record would avoid the costs associated with a protracted trial de novo 
and result in a more timely restoration of the affected resources. Many 
of these commenters also noted that an administrative record of an 
assessment would allow for the availability of scientific information 
on the effects of oil and the efficacy of various cleanup strategies. 
Others pointed out that this process would, in effect, allow for peer 
review of assessments. Quite a few commenters noted that limiting 
judicial review to the administrative record of the assessment would 
facilitate the Congressional goal that the agency, as the organization 
with the expertise, undertake the assessment as well as the 
restoration. Some commenters noted that creating an administrative 
record would ensure a more fair and objective process by encouraging 
participation by the public and the RP(s). One of these commenters 
pointed out that having such an open process would avoid the public 
distrust that results from secrecy. Another commenter noted that an 
``open record'' would foster a more cooperative process that could 
avoid having litigators shield assessment studies and having scientists 
conduct unnecessary research. Finally, a few commenters were pleased to 
see an assessment/restoration process that is similar to the Remedial 
Investigation/Feasibility Study process in Superfund with which so many 
agencies are familiar.
    Response: NOAA agrees with the advantages of an administrative 
record process outlined by these commenters. In particular, creating an 
open process that facilitates access to the science in the restoration 
process is an important advantage. An open process will also allow 
consideration of a wider range of views. Finally, NOAA relied upon, 
with some modification, the NCP's administrative record provisions 
since those provisions have already undergone extensive rulemaking 
development and are somewhat familiar to most trustee agencies.

``Disadvantages''

    Comment: Some commenters stated that an administrative record 
requirement would result in a slower and more costly assessment process 
and could seriously prejudice the ability of the trustee(s) to 
negotiate a settlement. One of these commenters stated that the 
requirement could overwhelm the ability of the trustee(s) to conduct an 
effective assessment. Another commenter noted that such an open record 
may allow parties to influence the results of the assessment and skew 
the economic data gathered. Some commenters noted that outside 
information submitted to the record is strictly advisory in nature, and 
not controlling upon the trustee(s). Yet another commenter warned that 
a court could decide to conduct a trial de novo anyway, which could 
make the trustee(s) vulnerable. Finally, one of these commenters noted 
that the RP(s) could totally disrupt the process.
    Response: NOAA does not intend an administrative record requirement 
that would add to the time and/or expense of a damage assessment. The 
preamble discusses the requirement that the administrative record be 
tailored to the scope of the assessment. The fact that materials 
submitted ``for the record'' would be intended to influence the 
assessment in a particular way is inherent in an open record. However, 
the trustee(s) is given responsibility to manage and consider the 
record in a manner that is consistent with the reasonable cost 
requirement of the proposed rule, using best professional judgment. 
With respect to the possibility that the courts might not uphold record 
review for restoration, NOAA believes that this is unlikely, given the 
statutory language. Because lack of record review would undercut a 
number of the policies underlying the use of an administrative process 
for selection of restoration measures, NOAA would review the process as 
a whole if record review were not upheld by the courts.
    Comment: Several commenters expressed concern regarding the 
involvement of the RP(s) in the administrative record. One of these 
commenters noted that, since the trustee(s) compiles the record, the 
RP(s) has no incentive to disclose information that the trustee(s) 
might decide to exclude from the record. Another commenter stated that 
due process for the RP would require judicial review of the findings 
and conclusions of the trustee(s), particularly in a tort type action.
    Response: NOAA notes that under general principles of 
administrative law, the RP(s) will be entitled to submit relevant 
material to the administrative record if timely submitted. The 
reviewing court will examine the documentation of the assessment/
restoration process for any significant omissions.

``Scope''

    Comment: Several commenters spoke to the issue of the scope of the 
administrative record of assessment. Some of these commenters stated 
that the administrative record should include all data and information 
gathered for the assessment. One commenter pointed out, however, that 
confidential information gathered by the RP(s) for use in litigation 
should not be included. Other commenters also noted that information 
pertaining to liability, that may be litigated as a separate issue, 
would not go into the record.
    Response: NOAA notes that, with few exceptions, all data and 
information considered by the trustee(s) in selecting restoration 
measures would be contained in the record. Also, participants in an 
assessment must recognize that any document that is put into the record 
is in fact ``public.'' The RP(s) is free to decide whether to submit 
information for the record, at the risk that, if he does not do so, the 
information may not be considered when the court reviews the 
assessment/restoration plan.
    Comment: Other commenters noted specific questions regarding the 
administrative record. One asked if (1) any documents could remain 
confidential; (2) all data required by the trustee(s) must be given to 
the RP(s) and the public; (3) chain of custody procedures would apply; 
and (4) deliberative documents would be subject to FOIA. Another asked 
that NOAA clearly identify the kinds of documents to be included in the 
record, the requirements for public access and comment, and the type of 
scientific basis for decisionmaking. Finally, one commenter suggested 
that additions to the record after closure of the public comment period 
should be carefully and narrowly defined.
    Response: NOAA has noted the requests for specific information on 
the types of documents to be included in an administrative record. The 
general discussion in the preamble above lists examples of documents 
that would be included or excluded in an administrative record. 
Generally, those documents releasable under FOIA would be included in 
the administrative record. Those documents not releasable under FOIA 
would be excluded. The preamble and proposed rule provide guidance as 
to what types of documents would be allowed into the record after the 
public review period is closed.

``Components''

    Comment: Some commenters stated that all documents relied upon by 
the trustee(s) should be placed in the administrative record. One 
commenter provided the following as examples of what should be included 
in the administrative record: (1) Scientific data collected, generated, 
and analyzed during the assessment; (2) the determination of scope of 
injury; (3) comments and data provided by the public and the RP(s), and 
the consideration of that information by the trustee(s); and (4) 
relevant facts relied on in selecting the restoration plans and 
calculating the damages.
    Response: NOAA agrees that all documents and data forming the basis 
for the selection of restoration measures, including these in each 
phase of the assessment leading up to the development of a restoration 
approach should be placed in administrative record. Additional data and 
comments that are timely submitted by the RP(s) and the public should 
also be included in an administrative record. Guidance for 
documentation is provided in this preamble.

``Additional Components''

    Comment: One commenter noted that its state open records law would 
apply to the administrative record if maintained by a state trustee and 
that the record requirements are broader than those suggested by NOAA. 
The commenter noted that the state law requires that the following 
types of documents be made available for public review: (1) Draft 
documents; (2) pre-decisional, deliberative internal agency memoranda; 
and (3) scientific data generated by the state or a contractor and in 
the possession of the state regardless of whether it fails quality 
assurance. The commenter noted, however, that documents relating 
exclusively to liability, if prepared by or for an attorney under 
client privilege, can be excluded from public view.
    Response: NOAA recognizes that some state laws may require broader 
availability of documents than what is described in this proposed rule 
for the administrative record. If a state has additional requirements 
for public availability of documents beyond those outlined in this 
proposed rule, the state requirements may apply to state trustees. 
NOAA's proposed rule describes the minimum requirements for public 
review for the various types of assessment procedures. It should also 
be noted that because record review of restoration measures selected by 
federal trustees alone or jointly with state trustees is premised upon 
the requirements of the federal Administrative Procedure Act, selection 
of restoration measures by state trustees alone may be subject to 
different principles of judicial review.

``Conditions''

    Comment: Several commenters stated that their agreement with a 
record review standard was conditional upon having the review available 
for the assessment and restoration selection/cost decisions, but not 
for the calculation of economic damages. These commenters stated that 
the economics determination should then be entitled to the same 
protection as other work product until trial. One commenter noted that 
the legislative history of CERCLA (relevant to OPA) makes it clear that 
Congress, by stressing the restitutionary nature of natural resource 
damages, intended at least the selection of restoration plans to be 
reviewed by the court on an administrative record.
    Response: NOAA believes that the statutory language clearly 
contemplates record review of selection of restoration measures. The 
availability of record review for all aspects of the damage assessment 
is less clear. The proposed rule provides for an administrative record 
process only for those aspects of the assessment leading to selection 
of restoration measures, including the estimate of the costs of such 
measures. NOAA solicits comment on whether the administrative record 
provisions should be extended in the final rule to other aspects of the 
damage assessment.
    Comment: Other commenters agreed with the open record so long as 
the rule ensured that the RP would be given a joint and meaningful role 
in the assessment. These commenters stated that the integration of the 
open record with the later proposed ``jointly conducted, phased 
assessments'' with responsible parties, would be essential.
    Response: NOAA agrees that the RP(s) would play a major role in the 
development of the administrative record for the assessment/restoration 
process. As noted in the section of this preamble on cooperative 
assessments, NOAA strongly encourages joint work with the RP(s). Also, 
the administrative record process will work more smoothly where there 
is a joint assessment in progress. However, there will undoubtedly be 
instances where such joint efforts will not be possible. In those 
cases, the administrative record is even more important, because it 
gives both the RP(s) and the public the opportunity to provide material 
for the administrative record, and it will require the trustee(s) to 
address that material if relevant.

``Time of Review''

    Comment: Another commenter stated that the record of assessment 
actions should be final only after the trustee(s) has determined 
damages and selected a restoration approach. Some commenters stated 
that NOAA should consider the applicability of the concept of 
``preenforcement review,'' which would allow selection, possibly 
implementation, of the Restoration Plan without first having to prove 
its validity in court.
    Response: NOAA notes in its general discussion above that review on 
the record would generally take place in an action to obtain damages. 
Prior to this time, there would be no final agency action subject to 
review.

``Levels of Documentation Required''

    Comment: One commenter noted that, even where there is an expedited 
damage assessment conducted, an administrative record should be 
compiled to provide at least some information for public review.
    Response: NOAA notes that, in the general discussion of detail of 
an administrative record, documentation requirements would have to be 
tailored to the scope of the case. In all cases other than emergency 
restoration actions, however, final restoration measures would be 
selected only after public review and comment.

``Support--Legal Arguments''

    Comment: Several commenters noted that natural resource damages are 
not measured by the traditional common law methods. These commenters 
pointed out that these assessments involve highly technical, scientific 
findings in which courts have traditionally treated the agency's 
determination with great deference. A few of these commenters suggested 
that the federal courts have neither the time nor the expertise to 
decide these scientific issues. Therefore, the commenters conclude that 
judicial review of the assessment/restoration plan should be conducted 
on the administrative record, applying an arbitrary and capricious 
standard.
    Response: NOAA agrees that courts generally defer to agency 
expertise in cases involving highly technical or scientific content. 
For this reason, NOAA agrees that review of restoration measures, which 
involve highly technical judgments, should be on the record.
    Comment: Some commenters spoke to the issue of consistency with the 
provisions for claiming natural resource damages against the Fund. 
These commenters pointed out that, in presenting such a claim against 
the Fund, the trustee is entitled to a rebuttable presumption of 
correctness. The United States is then subrogated to the rights of the 
trustee in pursuing the claim against the RPs. It follows that the 
documented determination of injury, selection of restoration plans, and 
calculation of the costs to assess, restore, and compensate for lost 
use/nonuse value by the trustee is the only available evidentiary basis 
on which the United States can proceed in court on behalf of the Fund, 
to recover the damages paid out to the trustee(s) from that Fund. The 
commenters then argue that the same standard should apply to 
assessments reviewed by courts.
    Response: NOAA agrees that consistency in the implementation of a 
statute is a desirable goal. If there were two standards for 
determining compensation for injuries to natural resources under OPA, 
expensive and confusing assessments would result. Accordingly, the same 
standard of review would apply to restoration in actions by the OPA 
fund as to actions by the trustee(s).
    Comment: Other commenters noted that, where the right to sue for 
damages to private property existed at common law through a tort 
action, the public's right to sue for restitutionary money to make an 
injured environment whole did not exist. These commenters pointed out 
that all components of natural resource ``damages'' (as defined under 
OPA) are restitutionary in nature including quantification of lost use/
nonuse values. The commenters suggested that, when Congress creates a 
public right by statute that did not exist at common law (such as the 
ability to seek money to make whole an environment injured by an oil 
discharge), it may entrust the determination of such public rights to 
an administrative body. Therefore, the commenters argued that the right 
to trial by jury for common law damages would not present an obstacle 
to record review of a damage assessment.
    Response: NOAA notes that Congress, in the legislative history of 
CERCLA and OPA, pointed out problems with pre-CERCLA common law actions 
for damages to public resources. This concern resulted in the set of 
environmental statutes specifically allowing recovery by a public 
government agency for damages as compensation for injuries to natural 
resources. Because natural resource damage claims are essentially 
restitutionary and because Congress has required that trustees (rather 
than courts in the first instance) select a restoration approach and 
compute damages to natural resources, NOAA agrees that the right to a 
jury trial would not apply to damage actions under OPA. Further, most 
OPA actions are likely to be brought in the courts' admiralty 
jurisdiction, where there is no right to jury trial.
    Comment: Several commenters noted that NOAA has the authority to 
declare that judicial review of damage assessments would be on the 
administrative record since there was no explicit statement as to the 
standard of review in OPA. These commenters pointed out that, where the 
legislative delegation to an agency on a particular question is 
implicit rather than explicit, a court will generally defer to a 
reasonable interpretation made by the agency.
    Response: NOAA agrees that Congress' directions to NOAA were not 
explicit as to the type of judicial review to be accorded to damage 
assessments. However, the legislative history does note that this 
proposed rule is to create a system of damage assessment that is 
expeditious and fair. The report of the Committee of Conference 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.'' See H. Con. Rept. No. 653, 101st. Cong., 2d Sess. 
at 109 (1990). NOAA feels that providing for record review of damage 
assessments is necessary to achieve this goal. Further, while the issue 
of the standard of judicial review will ultimately be decided by the 
courts, NOAA believes that, as the agency charged with implementing the 
natural resource damage provisions of OPA, its views should be entitled 
to some deference.

``Against--Legal Arguments''

    Comment: Several commenters stated that the RP has the legal right 
to a jury trial in natural resource damage assessment disputes as 
guaranteed by the United States Constitution. The commenters pointed 
out that a damage assessment is not a rulemaking under section 553 of 
the Administrative Procedure Act, but is similar to an adversarial 
administrative activity that will often result in litigation. The 
commenters argued that every CERCLA natural resource damage case that 
has addressed the issue has required a jury trial for these actions at 
law. These commenters stated that issues related to the selection of 
assessment/restoration plans must be decided by a trial court.
    Response: As stated in the above discussion, the due process rights 
of the RP(s) will not be sacrificed in the administrative record 
process. While a few district courts have held that there is a right to 
jury trial for the lost compensable value aspects of CERCLA natural 
resource damage cases, at least one court has held that there is no 
right to jury trial for the restoration aspects of natural resource 
damage cases. Further, even if there is a right to jury trial, NOAA 
does not perceive a conflict between a non-jury record review of 
restoration measures and cost estimates under the ``arbitrary, 
capricious, or otherwise not in accordance with law'' standard, and a 
jury trial on other issues.
    Comment: Some of these commenters spoke to the issue of the 
rebuttable presumption in relation to record review. Some commenters 
suggested that a court should review the choice of restoration 
alternatives by the trustee(s) on an ``arbitrary and capricious'' 
standard, i.e., the trustee(s) is presumed to be correct unless it can 
be proven that the trustee(s) acted in an arbitrary or capricious 
manner. Other commenters argued that Congress would not have offered 
the favorable rebuttable presumption as a standard of review if the 
trustees had any underlying entitlement to the ``arbitrary and 
capricious'' standard. The commenters contended that Congress was 
attempting to offer the trustee(s) the slightly more favorable review 
standard of a ``rebuttable presumption'' as an incentive for trustees 
to follow the regulations; failure by the trustee(s) to follow 
regulations apparently results in their having to prove their case, by 
a preponderance of the evidence, on the de novo review standard. 
Reconciling the congressional provision of a ``rebuttable presumption'' 
with the Administrative Procedure Act's arbitrary and capricious 
standard of judicial review would require that, to rebut the 
presumption, the RP would have to point to clear and convincing 
evidence in the aforementioned administrative record demonstrating that 
the injury determination, restoration selection, or monetary 
quantification by the trustee(s) was arbitrary and capricious.
    Response:  The selection of restoration alternatives by the 
trustee(s) for a particular incident will either be identified during 
prespill planning as part of a Regional Restoration Plan (see the 
discussion of Sec. 990.16) or in an incident-specific restoration plan 
developed for that incident. NOAA agrees that the ``arbitrary, 
capricious, or otherwise not in accordance with law'' standard of 
judicial review for that choice is appropriate. NOAA points out that 
the rebuttable presumption is a rule concerning level of evidence, not 
a standard of review. Therefore, the statutory provision for a 
rebuttable presumption for the damage assessment as a whole does not 
preclude the development of an administrative record for the assessment 
through restoration components of a damage assessment. There is no 
reason why different aspects of the assessment cannot be subject to 
different standards of review, which is precisely what the language of 
OPA appears to require.
    Comment: Several commenters stated that NOAA had exceeded its 
statutory authority in declaring record review of assessments. These 
commenters contended that Congress was not silent on the issue of the 
standard of review. These commenters contended that Congress did not 
delegate to NOAA the authority to determine the standard of review a 
court will apply when considering a trustee's natural resource damage 
claim filed before the court. These commenters pointed out that, in 
section 1006(e)(2) of OPA, Congress specified that: ``Any determination 
or assessment of damages to natural resources for the purposes of this 
Act made * * * by a * * * trustee in accordance with the regulations * 
* * shall have the force and effect of a rebuttable presumption. * * 
*'' In contrast, the commenters pointed out that OPA's directive to 
NOAA for promulgating regulations is limited to the assessment of 
damages. OPA contains several provisions that address the procedure for 
the trustee(s) to file a claim(s) against the RP(s). These commenters 
stated that the issue of the standard of judicial review is determined 
by the Congress and courts, not by regulation, and that NOAA should not 
attempt to preempt judicial resolution of that issue.
    Response: NOAA agrees that the ultimate decision as to the standard 
of review for a damage assessment is for the courts. Nevertheless, NOAA 
believes that its mandate to develop an assessment process that is both 
fair and expeditious requires it to provide its views on the 
appropriate standard of review, since this has crucial implications for 
the assessment process. As noted above, administrative record review is 
contemplated by OPA's requirement for selection of restoration measures 
based on notice and comment procedures. Further, this position is 
supported by the courts' consistent interpretation of CERCLA's 
provisions with respect to lead agency selection of a response action 
for a Superfund site. While the issue of the appropriate standard of 
review is ultimately for the courts, NOAA's views on the interpretation 
of the statute should be entitled to some deference.
    Comment: Some commenters noted that NOAA might wish to explore the 
possibility that non-RP challenges to an assessment/restoration plan 
would be subjected to more limited judicial review.
    Response: Provided that the non-RP has standing and right to sue, 
NOAA notes that, to ensure fairness in implementation of OPA, the same 
standard of review should apply to all who seek judicial review of 
trustee's(s') actions.

``Miscellaneous''

    Comment: One commenter noted that, while the rule might provide 
that changes in plans or decisions predicated upon public comments 
should not be available for critical use against an assessment in 
administrative or court proceedings, a trustee who changes a decision 
or plan because of public comment should be able to defend that change 
easily on facts and reasoning, and thus will not feel a constraint to 
defend a wrong initial determination.
    Response: NOAA agrees that a trustee who changes initial findings 
or plans based upon later information gained through public comment 
would simply document that change in the administrative record. One of 
the crucial advantages of an administrative process is the incentive 
created for disclosure and public participation. The trustee(s) will be 
required to disclose information relevant to selection of restoration 
measures in a public record, and the trustee(s) will be required to 
fairly evaluate public and RP comments in selecting restoration 
measures. Based on NOAA's experience in numerous cases, it expects that 
public comment will be seriously considered by the trustee(s) and in 
some cases may lead to significant modifications of proposed 
restoration measures.
    Comment: One commenter stated that NOAA should seek to ensure that 
scientific studies are conducted openly, with full and rigorous 
scientific peer interaction and review, to avoid a trustee expending 
large sums of money non-competitively on poor quality science that will 
not withstand scientific scrutiny.
    Response: NOAA believes that an administrative process is the best 
method of ensuring thorough review of restoration by both the 
scientific community and public.

V. Prespill Planning

General
    In many discharges, multiple trustees have been able to reach 
agreement on coordinating assessment and restoration activities. In 
light of that experience, the proposed rule strongly encourages 
federal, state, tribal and foreign trustees to develop prespill plans 
at the local area or regional level. In a corresponding effort, these 
plans might be implemented through a general Memorandum of 
Understanding (MOU) among trustees on a state level for the state 
trustee(s), and local area or regional basis for the rest of the 
trustee(s).
    This proposed rule includes, in Appendix A, a sample MOU that has 
been reviewed in an earlier Notice, that could establish a coordination 
framework for trustees for prespill planning. Trustees could develop 
MOUs with provisions for specific areas such as bays, ports, waterways, 
or areas of special sensitivity concerns.
    To the extent practicable, it is strongly encouraged that this 
planning process mirror the areas covered by Area and/or Regional 
Contingency Plans authorized by section 4204(a) of OPA under the NCP or 
could be on a state-by-state basis. The trustees should establish 
working groups at the regional or local area level to undertake these 
activities.
Prespill Plans
    Without regulating the exact contents of the plans, the proposed 
rule notes that the plans should identify the responsibilities of the 
trustees, and other willing participants where appropriate, in the 
event of a discharge of oil covered by OPA. Suggested prespill planning 
activities include, but are not limited to, the following areas:
    1. Develop a natural resource damage assessment management and 
technical team. The natural resource damage assessment team is 
responsible for planning and conducting damage assessments in the event 
of a discharge of oil. The size of the team should be a function of the 
scope and complexity of the assessment, and may include a natural 
resource trustee agency coordinator, resource biologist, environmental 
(petroleum) chemist, resource economist, restoration expert, QA 
specialist, data manager/sample custodian, statistician, and resource 
attorney. It is not always necessary to have a different person for 
each role, but experience has shown that each role is a full-time 
commitment, especially for highly significant discharges. Each person 
on the team, to the extent relevant to his or her own discipline, 
should have a working knowledge of natural resource damage assessment 
regulations and requirements, and be ready to begin preassessment 
activities immediately upon notification of a discharge. The team 
should not be ad hoc; members should be knowledgeable in natural 
resource damage assessment issues and have established working 
relationships with each other, the co-trustees, and the response 
community.
    2. Identify outside experts. Since discharges of oil are sudden and 
episodic, it is not always possible to maintain sufficient staff to 
conduct all natural resource damage assessment activities. Depending on 
the discharge conditions, the trustees will need different experts on 
the team to assist in designing and conducting of studies for different 
natural resources and/or services. The trustees should identify the 
types of natural resource damage assessment expertise needed if there 
is a discharge in their area, and prepare a list of potential contacts 
available to provide that expertise. Experts without conflicts of 
interest should be used as an independent peer review group for 
potential natural resource damage assessment activities.
    3. Identify support services. Certain support services, such as 
analytical and testing laboratories capable of performing the 
specialized hydrocarbon chemistry, toxicity testing, and histopathology 
needed for a discharge of oil natural resource damage assessment, 
should be identified ahead of time. Backup services should also be 
identified since the needs of both response and damage assessment 
activities can exceed even regional capabilities. Support activities 
conducted at the discharge site or potentially affecting any response 
activities must be coordinated with the OSC or designee. Other types of 
support services that may be needed include:
    a. Field support for reconnaissance surveys by aircraft or vessel;
    b. Monitoring logistics for sample collection, handling, 
preservation, storage, and transport;
    c. Data management support;
    d. Human health and safety support; and
    e. Natural resource damage assessment training support.
    4. Collect information on natural resources and/or services 
potentially affected by oil discharges along high risk areas. Area 
Planning Committees are responsible for the identification of sensitive 
natural resources and/or services in their areas, and development of 
protection priorities and strategies for these resources and/or 
services. The trustee(s) is encouraged to serve on these committees to 
ensure incorporation of all special concerns and considerations, and 
ensure consistency with the natural resource damage assessment Prespill 
Plans. Examples of issues include the seasonality of natural resources, 
along with unique protection approach questions, the overall 
effectiveness of cleanup countermeasures and effect versus natural 
recoveries, etc. These types of response issues are addressed in the 
Fish and Wildlife and Sensitive Environments Annexes to Area 
Contingency Plans (ACP). Besides having an opportunity to assist in 
creating and updating the ACPs, the trustee(s) is also given an 
opportunity to comment when those ACPs are submitted to the Regional 
Response Team (RRT) for review. The trustee(s) conducting damage 
assessment should coordinate with response personnel on issues 
affecting natural resources and/or services; clarifying the anticipated 
activities and roles of each during the discharge, and identifying the 
data needs of the trustee(s) that could be implemented through joint 
activities. Strategies for data sharing among the trustees, response 
agencies, and possibly the RPs, should be developed. This is 
particularly important since damage assessment data are often not made 
immediately available to the public. The trustee(s) is encouraged to 
participate in training and coordination activities of the response 
community, such as drills for the discharge of oil.
    5.  Lead Administrative Trustee (LAT).  Whether planned in advance 
of a discharge or not, when assessments involve more than one trustee, 
trustees should select a LAT, although the proposed rule does not 
require that a LAT must be selected. The selection of a LAT should be 
by consensus and can be based on such factors as the trustee with a 
majority of natural resources at risk or the ability of a particular 
trustee agency to provide administrative support. While the federal 
trustees are required to select a LAT under E.O. 12777, 56 FR 54757 
(October 22, 1991), this proposed rule does not require that the LAT be 
a federal agency when non-federal trustees are involved. In such cases, 
the federal trustees will still select a federal LAT, who will 
coordinate federal efforts with the LAT. Where appropriate, trustees 
may designate Co-LATs, consisting of a federal LAT and the state, 
tribal, or foreign trustee(s). It is also possible that, under certain 
circumstances, it might be appropriate for the LAT to be a single non-
federal agency.
    The LAT will not have veto or arbitration authority over the other 
trustees, but should be responsible for activities such as: scheduling 
meetings of the trustee working group or committee, preparing agendas, 
procuring space, etc.; acting as a central contact point for damage 
assessment trustee agencies involved in the incident, liaison with the 
appropriate OSC or designee; coordinating preassessment data gathering 
and other activities; and establishing and maintaining the 
administrative record, as well as other records, for the trustees.
    6. Identify sources of information for background data. The 
trustees should develop lists or databases on the types of background 
information currently collected that may be of potential use in a 
natural resource damage assessment. If practicable, the trustees should 
identify and prioritize the most important information, and encourage 
or support the collection of such information in a cost-effective 
manner. Types of information considered potentially important include: 
petroleum hydrocarbon contamination in indicator organisms and exposure 
pathways; species census and inventory, baseline data on species 
populations, recreational use statistics, and economic values for 
selected natural resources and/or services. Familiarity with the types 
of baseline data available will allow the trustees to formulate better 
data collection strategies. The trustees should also collect 
information on successful restoration efforts for trust resources and/
or services, and needed restoration efforts in their region.
    7. Design a general approach and develop protocols for data 
collection and analysis. The trustees may want to develop scenarios for 
the types of natural resources and/or services that may be affected by 
a discharge of oil, and plan for an appropriate study design, including 
data collection and analysis protocols. Where practicable, protocols 
should be similar to those used in baseline studies to ensure 
comparability with the incident-specific assessment. The trustees 
should prepare standard protocols in a format that allows easy 
customization for a specific discharge. With prespill planning, initial 
damage assessment efforts may be better-implemented and generate more 
useful data. The trustees should prepare field kits for collection of 
samples and measurements in the early or emergency stages of a 
discharge.
    8. Establish a centralized data management system for natural 
resource damage assessment data. There is a pressing need to have a 
data management plan in place that provides efficient access to 
collected data following a discharge of oil. Typical natural resource 
damage assessment studies are highly multidisciplinary, involving 
experts from many different organizations, who need access to data 
collected by various groups. For example, wetlands specialists studying 
injury to oiled marshes should use the same degree-of-oiling 
classifications as mapped by shoreline survey teams. The trustees are 
encouraged to develop a centralized data management system to support 
natural resource damage assessment needs. At a minimum, the plan should 
address the type and volume of data, uses of the data, existing data 
management capabilities, types of analyses conducted, QA needs, 
reporting requirements, and access to data. The data management plan 
should also include provisions for distribution of updates to natural 
resource damage assessment team members on a timely basis.
Regional Restoration Plans
    Restoration plans have typically been directed towards a single 
resource (i.e., species or habitat type). In recent years for example, 
projects have focused on the preservation of rare and endangered 
species. The resource by resource management approach tends toward a 
never ending cycle of salvage operations. There is now a concern for 
maintaining and conserving genetic diversity. This goal requires that 
healthy, viable populations be maintained in the environment in which 
they co-evolved. The essential argument is that the community is the 
level of hierarchy needed to maintain the level of ecological 
diversity, ensuring the conservation of threatened/endangered species, 
gene pools, species diversity, natural community interactions, and 
known and unknown ecosystem species and processes.
    Since human values arise from the attributes that are naturally 
scaled to the region, it makes sense that such a regional perspective 
be considered. Regional evaluation can be addressed through the 
consideration of five technical issues; (1) spatial boundaries (i.e., 
size of the study required to encompass the range of resources of 
concern); (2) time scale (i.e., timeframe or lifecycle of the 
resources); (3) ecological complexity (i.e., identification of 
ecosystem components based on habitat structure and/or function); (4) 
ecosystem pattern (i.e., patch size, continuity and contiguity); and 
(5) increment of the environmental change (i.e., setting goals and 
limits to restore the resource base). This follows from the proposed 
approach by Gosselink, J.G. and L.C. Lee, CUMULATIVE IMPACT ASSESSMENT 
IN BOTTOMLAND HARDWOOD FORESTS; Center for Wetland Resources, Louisiana 
State University, Baton Rouge; LSU-CEI-86-09 (1987). The area of 
concern should be evaluated relative to its importance and significance 
to the regional resource base as well as the special status of the 
area's components.
    Where appropriate, the trustee(s) can develop, as part of the 
prespill planning, such Regional Restoration Plans. These plans could 
be developed on geographical or habitat basis to allow the recovery of 
the system covered by the plan. The trustee(s) may develop these plans 
as new efforts, but are encouraged to use existing plans that can be 
modified to meet the needs of this proposed rule. Examples of 
preexisting plans are Coastal Zone Management or the National Estuary 
Program Plans. To qualify as an appropriate Regional Restoration Plan 
pursuant to this proposed rule, a plan would have to be developed, or 
an existing plan modified, through a public review and comment process 
consistent with the restoration planning process described in subpart G 
of this proposed rule. Recoveries from damage assessments pursuant to 
this proposed rule may be applied to these plans, as provided in 
Sec. 990.84(b) of this proposed rule. Coordination with Response 
Agencies: OPA covers inland navigable waters as well as coastal areas. 
From a federal perspective, as a general rule, the U.S. Coast Guard 
directs response activities in the coastal zone including the Great 
Lakes. The U.S. EPA directs response activities in the inland zone. See 
NCP, 55 FR 8815, 8816 (March 8, 1990). State response agencies may also 
direct response activities.
    Effective coordination with the response activities necessitates 
that coordination procedures be established prior to a discharge. This 
proposed rule strongly encourages the trustee(s) to plan and coordinate 
damage assessment activities prior to a discharge. Similarly, the 
trustee(s) is encouraged to either develop prespill agreements with the 
OSC, participate in the OSC's Area Committee planning meeting, and/or 
attempt to include the OSC in general prespill planning. Agreements or 
joint plans should address, but are not limited to, the following 
issues: establishment of communication roles; identification of a 
damage assessment trustee and OSC contact; human health and safety 
requirements; development of joint activities, i.e., sampling, spill 
drills; identification of natural resources of particular concern; and 
information and data sharing. These issues can be facilitated by the 
NOAA Scientific Support Coordinator in the U.S. Coast Guard District.
    Such coordination has already effectively taken place in the 
development of the Fish and Wildlife and Sensitive Environments Annexes 
to the ACPs being developed as part of the NCP. Section 311(d)(2)(M) of 
the Clean Water Act (CWA), as amended by section 4201(b) of OPA, 
requires the development of a fish and wildlife response plan, and 
section 311(j)(4)(B)(i) and (ii) of the CWA, as added by section 
4202(a) of OPA, calls for preplanning in area committees to include 
concerns for sensitive environmental areas as well as fisheries and 
wildlife.
    The trustee(s) recognizes that the OSC should not be unduly 
hindered by the trustee's(s') requests for use of equipment and/or 
information. Conversely, response agencies also recognize the 
trustee(s) as a potential source of information for damage assessment 
activities.
Coordination With the Public
    OPA requires public notice, opportunity for a hearing and 
consideration of all public comments prior to implementation of the 
restoration plan. NOAA, however, does not believe that public 
involvement should always be limited to the restoration plan alone. 
NOAA is of the opinion that because the natural resource damage 
assessment process will be enhanced by public comment, the trustee(s) 
may provide for public review of the natural resource damage assessment 
component in addition to the restoration plan. The proposed rule, 
therefore, urges the trustee(s) to provide the public with an 
opportunity to review and comment on prespill plans discussed elsewhere 
in this preamble as well as to comment on the natural resource damage 
Assessment Restoration Plan. Additional public involvement, i.e., 
oversight or advisory committees, open trustee meetings, etc., will be 
at the option of the trustee(s). The scope of public participation in 
meetings would be advisory, not as voting membership. NOAA is also 
ensuring public involvement and information through the requirement for 
an administrative record for assessments.

Response to Comments

``Coordination--General''

    Comment: All of the commenters who spoke to the issue of 
coordinated assessments agreed that all natural resource trustees 
should coordinate their damage assessment activities among themselves 
and with other interested parties. Many of these commenters supported 
NOAA's efforts to encourage prespill planning to accomplish this 
coordination. One commenter stated that there should also be strong 
incentives for trustee coordination, the implementation of MOUs, and 
the development of local and regional assessment protocols. Other 
commenters urged NOAA to develop detailed guidance as to how 
coordination might occur and explicit details on how prespill plans 
would be formulated and implemented by an MOU.
    Response: NOAA agrees that coordination among parties involved with 
discharges of oil is crucial. NOAA cannot offer incentives for such 
coordination within this rulemaking, but notes that the increased 
efficiency and chances of successful recovery of the environment are 
incentives in and of themselves. This preamble discussion on the 
different aspects and avenues of coordination offers guidance on those 
areas NOAA has identified through this rulemaking process. There are 
undoubtedly more areas where the various parties can work together.
    Comment: Most of the commenters agreed that trustee coordination is 
crucial to a successful and expeditious damage assessment and that this 
coordination is strongly encouraged by OPA. These commenters urged NOAA 
to provide clear but flexible guidance on trustee coordination. They 
noted that, absent such language, the assessment process is more likely 
to be adversarial and have the potential for overlapping studies and 
claims. Another commenter stated that this coordination would help to 
ensure that all potentially affected trust resources are included in 
the assessment process.
    Response: NOAA agrees that coordinated efforts are best for all 
parties involved and can spare much wasted time and expense.
    Comment: A large number of commenters on this issue pointed out 
that good coordination among trustees is essential to avoid double 
recovery, prohibited by OPA. Some of these commenters suggested that 
the trustees should be required to include in their damage claim a 
certification of how the assessment avoids double recovery. Several 
commenters stated that coordination among trustees would do much to 
improve the efficiency of assessments, particularly to avoid duplicate 
assessments, and the success of the assessment. Other commenters 
pointed out that better coordination could avoid prolonged and 
unnecessary litigation, and speed the actual restoration and recovery 
of injured resources. One commenter noted that coordination would help 
avoid competition among trustees for sometimes limited funds available 
to pay damages. Finally, some commenters noted that when faced with 
multiple assessments and claims the RP(s) is forced to commission 
parallel assessments in its own defense.
    Response: Coordinated efforts would help avoid double recovery of 
damages. NOAA does not include in this proposed rule a requirement that 
the trustee(s) include a certification of how double recovery is 
avoided. That kind of detail will be resolved through the cooperative 
process. These cooperative efforts allow trustee agencies to 
efficiently use limited budget and personnel for a successful effort. 
These efforts may also foster cooperative efforts with the RP(s) as 
well.
    Comment: Several commenters urged NOAA to prescribe specific 
sanctions against trustees who do not coordinate assessments. Most of 
these commenters stated that trustees who do not coordinate their 
assessments should be denied the rebuttable presumption for the 
assessment. Others stated that if trustees do not coordinate, they 
should be required to affirmatively carry the burden of proof to show 
no overlapping of claims. Finally, some of these stated that they would 
urge the U.S. Coast Guard, in the promulgation of its claims against 
the Fund regulations, to deny payment from the Fund to trustees who do 
not coordinate.
    Response: This proposed rule does not contain penalties for failure 
to cooperate. Since these coordinated efforts are encouraged and not 
required by the proposed rule, the rebuttable presumption would not 
hinge on the presence or absence of coordination. Trustees should 
recognize, however, that assessments will be more effective and 
successful if coordinated. The suggestion that disbursements from the 
Fund be denied to trustees who do not cooperate is clearly outside the 
scope of this proposed rule.
    Comment: Several commenters stated that the rule should encourage, 
or require, trustees to establish a committee to coordinate resource 
damage assessment and restoration activities among trustees as well as 
RPs. These commenters stated that the trustee council should also 
designate a committee chair.
    Response: NOAA points out that past experience has shown the 
success of, and need for, trustee committees or councils. These 
councils are discussed in the section of this preamble describing the 
trustee MOU.
    Comment: Several commenters stated that, since federal and state 
trustees are co-equals under OPA, there should be an equal number of 
state and federal trustees involved in the assessment activities, each 
with his own vote or, failing that, the trustees should operate on 
consensus.
    Response: NOAA agrees that natural resource trustees are equal 
partners in the protection and restoration of the environment. However, 
the number and type of trustees involved in a particular discharge is 
entirely incident-specific. NOAA would certainly not like to see 
trustees jockeying for control of a situation by ``stacking'' 
committees with large numbers of representatives. Since decisions 
should be made through the consensus of the trustees involved, the 
number of particular representatives is immaterial.
    Comment: Although many of the commenters agreed that decisions 
among trustees should be through consensus, the commenters pointed out 
that NOAA should provide guidance for the case involving controversial 
issues where consensus among multiple trustees is not possible. One of 
these commenters suggested that NOAA might consider having trustees use 
a mediator or facilitator for these deliberations.
    Response: NOAA encourages trustees to decide upon a decisionmaking 
process before a discharge occurs. Such agreements may easily be 
modified at a later date, but are extremely difficult to decide during 
a discharge event. NOAA does not believe that the proposed rule could 
provide a mechanism that would apply to all discharges.
    Comment: At least one commenter indicated that NOAA should develop 
a list of technical experts that could be called upon to carry out 
preassessment and assessment/restoration activities in order to ensure 
efficacy in the process.
    Response: NOAA agrees that such a list may be useful. However, 
since the majority of damage assessments will likely be localized, a 
list provided by NOAA may not prove useful to the local trustee(s). 
NOAA encourages the trustee(s) to assemble such lists as part of the 
prespill planning process, based upon past experience and the 
qualifications of potential experts. The trustee(s) is advised to be 
aware of conflicts of interest when developing such lists.

``Lead Administrative Trustee (LAT)''

    Comment: Many of the commenters stated that the designation of a 
Lead Administrative Trustee (LAT) is crucial to the success of an 
assessment. One commenter noted that the current practice results in a 
de facto LAT in the person of the litigator who conducts the 
negotiation, a process which takes the issues out of the hands of the 
resource manager.
    Response: NOAA agrees that trustees are in a much better position 
during a discharge if they can decide among themselves whether a LAT 
would be useful, and if so, who should serve in that position.
    Comment: Some commenters stated that the LAT be a federal trustee, 
others that the LAT be a state official. Some suggested that the rule 
allow for the LAT to be either an official from a federal or state 
agency or a tribe with no restrictions. One commenter suggested that 
there be appointed co-LATs, with the duties rotating among these 
accordingly. Another commenter suggested that there may be many cases 
in which it would be appropriate for there to be a single non-federal 
LAT. Finally, one commenter pointed out that U.S. EPA is required by 
E.O. 12777, to amend the NCP to indicate that the federal trustees 
shall designate one federal trustee to act as the LAT in the event of a 
discharge of oil.
    Response: NOAA points out that any of the possible suggestions for 
LAT designation could be appropriate. The designation of a LAT is so 
fundamentally affected by the circumstances of the event that it would 
simply not be possible for NOAA to decide ahead of time on behalf of 
the trustees. Finally, a discussion of federal trustee requirements 
under E.O. 12777 is given in the discussion in this preamble on 
prespill planning.
    Comment: Several commenters stated that where there are both 
federal and state trustee agencies involved, there should be one 
federal LAT and one state LAT selected. One commenter noted, however, 
that the correct allocation would be one federal LAT and one non-
federal LAT.
    Response: NOAA notes that, as mentioned in an earlier discussion, 
it is possible that trustees at an incident could decide to appoint co-
LATs. Another way to deal with potential multiple LATs would be to 
rotate or split LAT duties on a mutually agreeable schedule among the 
trustees.
    Comment: Many of the commenters who spoke to the issue of how one 
would select a LAT stated that the rule should allow for the trustees 
to make that decision at the time of the discharge, based upon the 
particular situation. One commenter, however, asked for specific 
guidance in the rule as to how a LAT would be selected, while another 
stated that such designation would take place in the prespill planning. 
Some of the commenters suggested that the trustees consider such things 
as the habitat affected, the experience of the trustees involved, or 
the liability limits of possible state law as opposed to OPA. Other 
commenters pointed out that the scope of the effects should be the 
deciding factor. A state agency may have the majority of concerns in a 
particular situation, but in other situations the effects may extend 
well beyond the state's borders so that the federal trustee may be the 
logical choice. Finally, one commenter suggested NOAA adopt the 
provisions found in 43 CFR 11.32(a)(1)(ii), which suggests appointment 
of a lead official based upon the trusteeship of the resources most 
affected or upon the ownership of the waters or land upon which the 
incident occurs.
    Response: Again, NOAA notes that all of these suggestions may be 
considered in the selection of a LAT, but that it would be impossible 
to require a particular designation within the proposed rule.
    Comment: Several commenters stated that the LAT's duties should be 
ministerial, i.e., scheduling meetings, coordinating communications 
with the OSC and the RP(s), serving as a central contact for 
information exchange and data collection. Some of the commenters noted 
that the nature of the LAT's duties should not be allowed to usurp or 
interfere with the rights of the other trustees. Other commenters, 
however, suggested that the LAT should have a true leadership role.
    Response: NOAA agrees that the LAT's duties should be mainly 
administrative unless all trustees agree otherwise.
    Comment: Commenters on the issue of arbitration authority for the 
LAT were split. Many of the commenters stated that the LAT must not 
have the authority to preempt the other trustees' exercise of their 
trustee responsibilities. These commenters noted, as support, that OPA 
requires the various classes of trustees be responsible for conducting 
assessments for their own resources. These commenters also pointed out 
that arbitration authority in one trustee would be an impossible 
situation where that trustee is also the response agency or the RP.
    Response: NOAA points out that the intent of Congress is quite 
clear on the issue of any trustee having preemptive authority over 
other trustees. The OPA Conference Report, at 209, states that ``[o]ne 
class of trustees cannot preempt the right of other trustees to 
exercise their trustee responsibilities.''
    Comment: The other side of the argument was presented by quite a 
few commenters. These commenters noted that a LAT with arbitration 
authority is a necessity for any assessment. They pointed out that 
there must be someone with the authority to settle disputes, or the 
integrity and effectiveness of the assessment are lost. These 
commenters argued that any assessment without a decisionmaker would 
break down into a contentious, ineffective process. Some endorsed 43 
CFR 11.32(a)(1)(ii) as an effective way to appoint an arbitrator LAT.
    Response: NOAA agrees that some process should be worked out for 
settling disagreements or disputes. However, as stated earlier, this 
rulemaking could not dictate that process. Also, as mentioned elsewhere 
in this proposed rule, there is no prohibition against trustees doing 
parallel assessments so long as there is no double recovery of damages.
    Comment: Some commenters expressed concern over the trustees' 
ability to reach agreement by consensus. One commenter even suggested 
that the LAT be vested with the sole decisionmaking authority. One 
suggested that the LAT should have arbitration authority, and one 
suggested that all trustees always acknowledge NOAA in that role.
    Response: No trustee can abrogate another trustee's(s') 
responsibility. Experience has shown that once the trustees have become 
fully informed of the facts of a particular incident, their common 
interests lead to consensus decisionmaking. NOAA agrees that in any 
incident an agreement upon the appointment of a LAT should be an early 
order of business. For the reasons discussed regarding agreement by 
consensus, giving arbitration authority to the LAT would not be 
workable. Since the selection of the LAT is usually dependent upon the 
circumstances peculiar to each incident, advance designation of NOAA, 
or any other trustee in that role, would not appear to be a prudent 
procedure.
    Comment: One area that some commenters felt needed clear language 
in the rule was where a trustee is also the RP. In such cases, these 
commenters stated that the trustee/RP should never be allowed to serve 
as the LAT, unless, as suggested by one commenter, there is unanimous 
consent of the other trustees.
    Response: NOAA notes that trustees at the time of an incident may 
need to decide whether another trustee who is also an RP could serve as 
the LAT. Such selection is not impossible, but should be considered at 
the time.
    Comment: Some commenters suggested that in some cases no LAT may be 
designated, at the option of the trustees.
    Response: NOAA agrees that there may be cases where there is no LAT 
selected, but only where there are state and no federal trustees.
    Comment: Various commenters agreed with appointing a LAT. Many 
suggested that all trustees should agree upon a LAT prior to receiving 
funds from the OPA trust fund, so that all would have the necessary 
incentives to meet reasonable and responsible guidelines for their 
expenditures.
    Response: Federal trustees, under E.O. 12777, may need to agree to 
designate a federal LAT before receiving monies from the OPA Fund. The 
management of that Fund, however, is not within the scope of this 
proposed rule.
    Comment: Several commenters agreed that trustees should coordinate 
the assessment/restoration process, but pointed out that OPA does not 
preclude different trustees from conducting parallel assessments with 
individual plans, so long as there is no double recovery of damages.
    Response: NOAA notes that these commenters are correct. The 
trustee(s) may, under OPA and this proposed rule, conduct separate, 
parallel assessments so long as there is no double recovery of damages.
    Comment: One commenter suggested that NOAA should propose guidance 
on when a foreign trustee could serve as the LAT, particularly when the 
LAT's duties require spending U.S. public funds.
    Response: Like so many of the other issues in trustee situations, 
the option of selecting a foreign trustee to serve as LAT is best 
decided by parties involved in a particular discharge.
    Comment: Quite a few commenters suggested that NOAA has the 
technical expertise and experience to assume the role of LAT for 
assessments conducted pursuant to OPA.
    Response: NOAA appreciates the commenters who suggested that NOAA 
should serve as the federal LAT at discharges. However, it would 
clearly be inappropriate for NOAA, within this rulemaking, to appoint 
itself LAT.

``Model MOU''

    Comment: A number of commenters recommended increased coordination 
between state and federal agencies through a Memorandum of 
Understanding (MOU). One commenter suggested that MOUs should be 
generic enough to cover any applicable discharge, but specific enough 
to avoid conflict. Some were concerned that a state would be given only 
one voice or participant pursuant to an MOU. Some cited the need for 
multiple-state, and state-by-state/regional MOUs, or even MOUs based 
upon tribal jurisdictional areas. Another commenter noted that the 
model MOU should not require unanimous decisionmaking.
    Response: The model MOU contained in NOAA's notice was included as 
an illustration of the type of agreement that would facilitate and 
coordinate the trustees' activities. The nature of an MOU developed by 
trustees would need to be as general or specific as deemed necessary by 
the particular trustees. It is understandable that each region and/or 
incident would require some modification to adapt to local 
circumstances. For example, the inclusion in the model MOU of one state 
signature line was not intended to preclude the situation where more 
than one state agency exercises trustee responsibilities, or the 
situation where more than one state or tribe might be involved in the 
same incident or region. Also, with consensus decisionmaking, the 
number of voices (or ``votes'' in the words of one commenter) speaking 
for any given trustee is essentially immaterial.
    Comment: One commenter suggested that an MOU should be developed 
through prespill planning to include provisions for the establishment 
of: damage assessment working groups, trustee responsibilities, trustee 
notification, coordination with the OSC or designee and trustees' 
activities in the response structure, opportunity for participation by 
all affected trustees, designation of a lead trustee, decisionmaking 
procedures, contracting objectives and guidelines, maintenance and use 
of damage recoveries, and other such provisions.
    Response: To the extent practicable, NOAA agrees that all parties 
would benefit from having such provisions included in a prespill MOU.
    Comment: Another commenter suggested that NOAA, in particular, 
should enter into MOUs with state trustees concerning every important 
aspect of the state trustee's assessment process.
    Response: NOAA has worked with certain state trustees under MOUs 
for particular discharges and would hope to reach agreement on the 
model MOU language with as many states as possible.
    Comment: The concept of prespill planning and development of an MOU 
between the potentially affected trustees was favorably received and 
encouraged by those who commented upon it.
    Response: NOAA agrees fully and through this proposed rule is 
encouraging prespill planning in order to reduce, to the extent 
reasonably practicable, the waste of precious time in start-up 
activities when an incident occurs.
    Comment: Two commenters suggested that failure to participate in an 
MOU, or failure to coordinate efforts between the trustees, should 
result in the loss of the rebuttable presumption that the trustees' 
assessments were conducted in accordance with the regulations. Another 
commenter noted that the MOU should provide for the loss of the 
rebuttable presumption if NOAA's rule is not followed.
    Response: A trustee cannot be forced to enter into an MOU, and the 
failure to do so cannot result in the elimination of a right granted to 
it by statute. Further, the use of this proposed rule is optional, not 
mandatory. Therefore, although the trustees may agree on an MOU to use 
this proposed rule, such an agreement would be optional to the 
trustee(s).
    Comment: One commenter suggested that development of local and 
regional assessment protocols or MOUs be required by the proposed rule.
    Response: The proposed rule recommends that such agreements be 
developed.
    Comment: One commenter addressed the ``confidentiality'' provision 
contained in the model MOU, and expressed concern that its inclusion 
would hinder public participation in the decisions to be made by the 
trustees.
    Response: NOAA is committed to public participation to the greatest 
extent possible in all of these situations. However, on a case-by-case 
basis, some provision for confidentiality may be necessary in the event 
of a potential adversarial proceeding against the RP(s).

``MOUs With Potential RP's''

    Comment: Some commenters suggested that potential RPs should be 
involved in the development of, or included as parties to, the 
trustees' MOUs. Another commenter pointed out, however, that the RP 
MOUs should be developed separately from the trustee MOUs because the 
responsibilities of the parties are so different. One commenter 
specifically suggested that a generic enforceable agreement be drafted 
and negotiated with a large group of potential RPs. This agreement 
could then be offered to an RP following a specific discharge to allow 
early RP involvement without wasting time negotiating. The commenter 
noted that the agreement would be enforceable and would allow the 
trustee(s) to oversee all work done by the RP(s). Finally, the 
commenter noted that the development of such an agreement prior to a 
discharge would allow meaningful public comments on the contents of the 
agreement.
    Response: The basic concept underlying these MOUs is an attempt to 
organize and coordinate the efforts and duties of the various trustees 
at the time of an incident or, hopefully, prior to the occurrence of an 
incident. The trustee(s) is encouraged, where appropriate, to consider 
potential RPs in this process, or to negotiate separately with 
potential RPs to develop prespill enforceable agreements.

``Advantages of Prespill Planning''

    Comment: The vast majority of the commenters agreed that prespill 
planning would be advantageous. Some of the advantages included: 
helping to define the response priorities of the damage assessment 
activities to be accomplished during response; presenting a united 
front to the RP(s); increasing the public's perception of a coordinated 
effort; improving the transition from ``cleanup'' to ``restoration;'' 
sorting out organization and administrative responsibilities in 
advance; increasing chances of a successful recovery; increasing 
timeliness of the natural resource damage assessment; and improving 
chances of involving more interests in advance of a discharge.
    Response: NOAA agrees that all of these goals are in the best 
interest of the public and environment.

``Disadvantages''

    Comment: Some of the commenters pointed out potential problems 
associated with the concept of prespill planning. These possible 
problems included: The potential for conflicting provisions with the 
existing response structure; adding another layer of planning 
activities that would burden smaller companies, and the personnel and 
budget constraints of many states; and adding another layer of plans 
that might cause confusion during a response. Some commenters noted 
that the prespill planning process would be quite expensive, diverting 
millions of dollars that could be used for true environmental purposes, 
and would not be practical for all locations, but should be limited to 
endangered species, sensitive areas, or areas where large discharges or 
effects are likely to occur. Another commenter noted that such plans 
might identify unnecessary studies that might be carried out in the 
event of a discharge, with little or no connection to the actual or 
anticipated effects related to that specific discharge.
    Response: NOAA notes that engaging in prespill planning is not 
intended as an empty exercise. Where prespill planning would complement 
preparedness plans already in place, or create such a plan not yet in 
existence, the planning would be a worthwhile effort. It would not be 
worthwhile, however, to go through the effort if the result is not 
beneficial or would interfere with other duties. The level of effort 
and expense should depend upon the need. Also, the purpose of the 
prespill planning is to clearly identify the types of concerns and 
possible solutions that the trustee(s) is likely to encounter when the 
oil hits the water.

``Optional''

    Comment: Several commenters stated that the prespill planning 
should be discretionary, particularly if funding is not available, and 
should not lose the rebuttable presumption argument for an assessment 
conducted in an area where there are no applicable prespill plans in 
place. Another commenter suggested that these plans should be funded by 
the federal, e.g., Oil Spill Liability Trust Fund, and/or state 
governments.
    Response: NOAA agrees that the prespill planning is optional and 
recognizes that agencies need funding for such activities. Trustees 
will undoubtedly need to draw to some extent from their budgets to 
develop such plans. The management of and disbursement of some funds, 
e.g., Oil Spill Liability Trust Fund, will be dependent on the 
regulating agency and is outside the scope of this rule.

``Other Plans''

    Comment: Many commenters spoke to the issue of other existing or 
future plans under OPA, particularly the NCP. Some commenters stated 
that the damage assessment prespill plans should be appended as 
discrete documents to the various contingency plans, such as the Spill 
Prevention Control and Countermeasure Plan program for oil storage 
facilities (U.S. EPA, 40 CFR 1 12, 1974). Other commenters stated that 
the trustees should defer to the new NCP, especially the fish and 
wildlife response plans, and not require a separate level of planning 
that might be duplicative and counterproductive for trustee concerns. 
Other commenters stated that the NCP would not be the appropriate 
vehicle for trustee plans because the contingency plans are focused on 
response scenarios, not resource concerns. Many of the commenters 
suggested that the trustee planning would fit in well with the 
contingency planning at the local area committee level since these area 
committees are to be formed in logical geographical areas and many of 
the personnel and agencies involved in a discharge will have a chance 
to meet and discuss issues of common concern at the local level. This 
prespill interaction at the local level will provide increased response 
and cooperative actions during both spill drills and actual discharge 
events. One commenter even suggested that Local Area Plans be amended 
to provide for assessment procedures.
    Response: NOAA agrees that some trustees may want to have damage 
assessment prespill plans referenced by or attached to response 
contingency plans so that the OSC would have the broadest possible base 
of information available during a discharge. Such decisions would be 
left to the trustee(s), in coordination with the OSC. However, NOAA 
does not agree that this type of planning is unnecessary for the 
purposes of response cleanup and natural resource concerns occurring as 
part of the response phase of a discharge incident. Resource planning 
is a vital part of ACPs. Prespill plans will be needed to address the 
damage assessment coordination issues of the natural resource trustees. 
NOAA does agree that the Area Planning Committees called together for 
response planning would, in many cases, be a logical starting point for 
setting up follow-up meetings of the trustees for damage assessment 
planning activities. It should be left to the trustee(s) to choose the 
appropriate vehicle and areal extent of trustee planning exercises.

``Parties Involved''

    Comment: Many of the commenters agreed that representatives of 
federal, state, tribal, and foreign trustees in logical geographical 
areas should meet to develop prespill plans. Several commenters, 
however, noted that prespill planning should involve not only the 
various trustees, but members of the response agencies and 
representatives from industries that may be involved in transport or 
storage of oil in those areas covered by the plans. Some commenters 
noted that private response contractors should also become involved and 
not only gain from meeting and establishing relationships with agency 
personnel, but also through becoming more aware of environmental 
concerns associated with various response strategies.
    Response: NOAA agrees that the broader the planning and information 
base the better for prespill planning purposes. However, the most 
appropriate forum for relaying the issues would be as technical working 
group members of the OPA Area Committees. Additionally, NOAA again 
cautions that the scope of these planning actions is left to the 
judgment of the trustees.

``Specific Response-Related Prespill Planning Issues''

    Comment: Some commenters specifically noted certain areas of common 
concern to both the trustee(s) and OSCs. For example, it was suggested 
that prespill agreements could be worked out with the OSC-chaired area 
response structure to cover: establishing communication roles; 
identifying trustee damage assessment and OSC contacts; human health 
and safety requirements; conducting spill drills that include damage 
assessment components; working with the Fish and Wildlife and Sensitive 
Environments working groups of Area Committees to identify resources of 
particular concern; and issues of sampling, information, and data 
sharing.
    Response: NOAA agrees that there are numerous areas of overlapping 
interests between the damage assessment trustee(s) and OSC coordinated 
response structure. These issues are discussed at length in the section 
of this preamble concerning coordination between damage assessment 
trustees and the OSC coordinated response structure.

``Public Involvement''

    Comment: Many commenters stated that the trustee(s) should involve 
the public in the prespill planning activities. Some commenters stated 
that this involvement could be accomplished through a review and 
comment process of drafted prespill plans. Other commenters suggested 
that members of the public could be helpful in developing those plans. 
One commenter noted that public involvement in the prespill plan is 
important to avoid litigation.
    Response: NOAA believes that public involvement in prespill 
planning is important to the success of these plans. Public awareness 
is generally high during an actual discharge. Much public anxiety could 
be avoided if the public is informed of the operations of the network 
of agencies during a discharge. As these commenters noted, vital 
information can be gained by those members of the public most familiar 
with the natural resources.

``Scope''

    Comment: Several commenters suggested that the prespill plans be as 
broad as possible to cover as many trustee concerns as possible before 
the oil hits the water. Another commenter, however, recommended that 
damage assessment prespill plans not be rigidly drawn. The commenter 
cautioned that the plan could become a liability where the nature of a 
particular discharge is not contemplated in the prespill plan. Further, 
the commenter stated it could be an unwise expenditure to develop a 
contingency plan broad enough in scope to address an endless array of 
possible discharges.
    Response: NOAA agrees that such plans should be as broad as 
possible. However, as noted previously, there are many demands upon the 
time and resources of trustee agencies. The plans, therefore, should be 
tailored to meet the needs of the trustee(s) and must, of necessity, be 
flexible.

``Contents''

    Comment: Most of the commenters had specific suggestions as to the 
particular items to be included in prespill plans. These items 
included: identification of sensitive areas; appropriate response 
techniques that would have the least adverse effect on resources of 
concern; location, types, and level of detail of baseline information; 
identification of the types of data needs of trustees during a 
discharge and subsequent assessment; agency contacts for the purpose of 
notification and information sharing; surveillance and monitoring 
schemes; sampling protocols; sensitive ecological, economic, and social 
areas and priorities for protection; resource inventories; avenues for 
trustee input on response actions; response plans for trustee actions; 
methods for public information and involvement; socioeconomic effects; 
prespill drills; and a compilation of various environmental and safety 
laws that might apply to a damage assessment effort.
    Response: NOAA agrees that the components listed in these comments 
are the types of concerns that should be addressed. However, the items 
mentioned for inclusion in prespill plans mixes: (1) Issues that should 
be covered in the ACPs and only referenced in the natural resource 
damage assessment prespill plans; (2) issues that should be covered in 
both (but normally collected only once, sometimes by working groups of 
the Area Committees and others by the natural resource damage 
assessment prespill plan working groups); and (3) items belonging only 
in the damage assessment prespill plans. In the first group belongs: 
appropriate response technologies, priorities for protection, avenues 
for trustee input on response actions, response plans for trustee 
actions, and most of the surveillance and monitoring. In the second 
group belongs: identification of sensitive areas, public information, 
contacts notification and information sharing. The remainder falls in 
the third group.
    Comment: A commenter proposed that NOAA establish a centralized 
database that can be accessible to all trustees nationally. The Lead 
Administrative Trustee at each incident should be obliged to ensure 
that the data are collected and submitted to the central database in a 
compatible manner. Several states are now implementing and upgrading 
Geographical Information Systems (GIS) that could be the repository of 
this data. Such a database would save time and money for both the 
trustee(s) and RP(s). It would be a useful way to build a history of 
scientific information and costs.
    Response: NOAA agrees that a centralized database would be helpful 
to trustees in the future, but has no plans for such a project at this 
time. However, NOAA has conducted a comprehensive literature survey of 
restoration techniques that is available as an additional guidance 
document.
    Comment: One commenter stated that NOAA should emphasize the need 
for involvement of experts on the fate, behavior, and ecological 
effects of oil and various cleanup and restoration options. One 
commenter noted that scientific literature is available to guide 
decisionmakers. Another commenter recommended that the trustee(s) refer 
to area contingency plans in determining environmentally sensitive 
areas.
    Response: NOAA agrees that the trustee(s) should take advantage of 
existing sources of appropriate information. The Area Contingency 
Plan's Fish and Wildlife and Sensitive Environments Annex is also the 
repository of trustee(s) input for response actions and should contain 
a mechanism for ongoing input during the spill's response phase to the 
OSC about response actions affecting natural resources.
    Comment: One commenter suggested NOAA, with its extensive 
experience and expertise in habitat and species restoration, offer the 
services of NOAA's ``Restoration Center'' or NOAA's HAZMAT group to the 
trustees as necessary.
    Response: NOAA appreciates the opinion of the commenter and notes 
that NOAA, in appropriate circumstances, may lend any expertise it has 
to the other trustee(s). However, there may be discharges in which NOAA 
does not have experience to share.

``Restoration''

    Comment: One commenter stated that trustees might include in 
prespill planning the development of an overall restoration approach.
    Response: NOAA agrees that the earlier the trustee(s) begins to 
think in terms of restoration, where possible, the better. Elsewhere in 
this preamble, NOAA states that, where the trustee(s) has adopted a 
regional restoration plan for a specific area, recoveries of several 
discharges may be pooled to help fund such plans. This option for use 
of recoveries will likely be most useful in areas with long-term 
pollution effects where damages recovered from a single discharge would 
be too small to improve the ecosystem.

``Limits/Exclusions''

    Comment: Several commenters pointed out that even comprehensive 
prespill plans will not be able to foresee the multitude of possible 
unique circumstances and events associated with a particular discharge. 
One commenter pointed out that the trustee(s) should stress that there 
may be some data requirements for a particular discharge that might not 
be covered by generic prespill plans. Another commenter suggested that, 
instead of trying to list within prespill plans specifics on sampling, 
data collection, baseline studies, and specific contract obligations 
and performance standards, the trustee(s) could reference the locations 
of such items in a supplemental document format. Another commenter 
stated that long-range damage assessment and restoration management 
plans should be developed only after a discharge, when the specifics of 
the resource injury are known.
    Response: NOAA recognizes that no plan can ever encompass all 
possible events. Therefore, any plan must be flexible and recognize 
that it is subject to change in the event of a discharge. NOAA also 
agrees that any long-range damage assessment would have to be tailored 
to the specific discharge, but points out that certain components, such 
as administrative management, will likely need to be addressed for all 
discharges. As to restoration management, as noted previously, some 
restoration planning for areas frequently affected by discharges might 
be possible.

``Guidance''

    Comment: One commenter suggested that prespill planning activities 
should include the development of a ``generic'' damage assessment 
``initiation'' workbook. Such a workbook could include a general list 
of the types of information that the trustee(s) would routinely need 
during the early stages of response and damage assessment. Another 
commenter stated that the trustee(s), in prespill planning activities, 
should recognize the importance of developing socioeconomic damage 
assessment responsibilities, guidelines, and procedures. Finally, one 
commenter stated that prespill plans should reflect the fact that 
planning officials from agencies may not be the trustee officials who 
would actually be involved in the assessment and restoration 
activities.
    Response: NOAA encourages the development of guidance documents or 
workbooks wherever possible. Such knowledge should be documented so 
that one is not ``reinventing the wheel'' with each discharge. NOAA 
also notes that socioeconomic damage assessment issues might be covered 
in prespill planning, should the trustee(s) desire. Finally, NOAA 
recognizes that in some entities, contingency planning and response 
personnel may not be the same personnel involved in damage assessment 
and activities. Therefore, it is important that all those concerned in 
a discharge, both from the response side and the trust resources side, 
become familiar with the various responsibilities of each other before 
the oil hits the water.

Coordination With Response Agencies Response to Comments

``General''

    Comment: Commenters were almost unanimous in agreeing that the 
actions of OSC response agencies and the response and damage assessment 
trustees should be coordinated to ensure effective and efficient 
cleanup and minimize the environmental effects of the discharge. Some 
of these commenters urged NOAA to clearly define each agency's role in 
the cleanup and assessment processes. Others noted that such 
coordination is already addressed in section 1011 of OPA and, 
therefore, should not be repeated within NOAA's rule. These commenters 
were concerned that another layer of required coordination would add 
possible confusion and conflict. Therefore, these commenters suggested 
general, non-binding guidance for this proposed rule.
    Response: NOAA agrees that trustee agencies should work closely 
with OSC agencies to minimize the effects of a discharge through 
cleanup strategies. Although NOAA cannot dictate to OSC agencies their 
roles in cleanup, NOAA does give guidance to the damage assessment 
trustee(s), in this proposed rule, on interaction with the response 
structure regarding damage assessment issues. NOAA recognizes that 
coordination between the OSC and trustee agencies is covered in section 
1011 of OPA and that such duties will be covered in other rulemakings 
under OPA. Any guidance in this proposed rule is intended to supplement 
the explanation of the damage assessment trustee's concerns about 
efficient coordination. As such, NOAA agrees that any guidance in this 
proposed rule is not binding.

``Role of OSC''

    Comment: Many commenters pointed out that, during a response to a 
discharge, the On-Scene Coordinator (OSC) is the government's 
authorized source of information and directions to the RP(s). As such, 
the OSC must be advised of and retain oversight over all activities 
occurring during that response phase. Other commenters, however, noted 
that the OSC cannot divert his attention from the response to 
coordinate damage assessment. Also, any concerns over litigation, 
whether for response costs or natural resource damages, should not come 
up during the response where the common goal should be prompt and 
effective response.
    Response: NOAA agrees that only the OSC is the spokesperson for 
response purposes at a discharge and, as such, has oversight of all 
response activities. However, the OSC has quite enough to do during a 
response without needing to be burdened with assessment duties as well. 
In any event, the trustee(s) has these assessment duties as statutory 
requirements and cannot pass those duties off to an OSC.

``Response Preeminent''

    Comment: Several commenters stress that coordination between the 
trustee(s) and the OSC must not deter the OSC from overseeing the 
response effort, or undermine the cleanup as effectively and promptly 
as possible or hamper free flow of information.
    Response: NOAA agrees that the trustee(s) should not disrupt the 
cleanup directed by the OSC.

``Role of Trustee(s) During Response''

    Comment: Several commenters pointed out that the trustee(s), 
because of resource expertise, has an advisory role to provide input in 
the response planning process and help influence response priorities 
and techniques for protection. These commenters noted that, during the 
response, the trustee(s), not the OSC, has the responsibility for 
damage assessment issues and should be the one collecting information 
for the damage assessment, not the OSC or the RP(s). Some commenters 
stated that the trustee(s) does not, in fact, have a response role as 
such and should not issue orders to the RP(s) during a response. One 
commenter noted that, if the trustee(s) is involved in natural resource 
damage assessment activities during a discharge, he should not have a 
part in decisionmaking since there may be a conflict of interest or 
conflict of mission when one agency has both responsibilities. Another 
commenter noted, however, that there is no conflict of interest if one 
agency is both trustee(s) and response agency since the role of the 
response agency is to protect, enhance, and restore the environment, 
which is consistent with the mission of the trustee(s).
    Response: NOAA agrees that the trustee(s) when acting as the 
resource expert, has an advisory role, as the resource expert, to the 
response planning process and that the trustee(s) has the 
responsibility for damage assessment. However, in the interest of 
efficiency, if an OSC or the RP(s) is collecting samples, those samples 
may be shared with the trustee(s) if all parties are agreeable. NOAA 
believes that the trustee(s) should always be involved with response 
decisions. As one of the commenters pointed out, both the trustee(s) 
and OSC agencies have the same basic mission--protection of the 
environment. These roles complement, not conflict with, each other.

``Decisionmaking''

    Comment: Several commenters noted that an emergency response cannot 
be directed by committee or consensus. One of these commenters 
suggested that the goal of coordination is to involve the most 
knowledgeable discharge experts, not simply to involve the greatest 
number of interested parties. Finally, this same commenter noted that 
the Advance Notice of Proposed Rulemaking was not clear as to the 
extent to which NOAA is recommending participation of trustee agencies 
in discharge response decisionmaking.
    Response: NOAA acknowledges that emergency decisions cannot be 
directed by outside committees and did not mean to suggest differently. 
NOAA agrees that decisionmaking should be focused through knowledgeable 
advice. NOAA also points out that discharge response decisions are the 
ultimate responsibility of the OSC, but the OSC does not make these 
decisions without foundation. The trustee(s), in their response role, 
have a consultation role to play in the decisions.

``Notification/Consultation''

    Comment: One commenter pointed out that to fulfill the statutory 
obligation of section 1011 of OPA, the OSC will need to initiate 
immediate contact after a discharge with all affected trustees and will 
also need to communicate with them throughout the removal process. Some 
commenters stated that they wanted to be notified of every discharge. 
One commenter noted that this kind of notification would ensure that 
only the trustee(s) would be deciding if the discharge warrants a 
damage assessment or not. Another commenter stated that, even if the 
affected trustee(s) does not take damage assessment action at each 
discharge, the notification requirement is important to build a 
comprehensive history of a particular site. Some commenters suggested 
that a routine notification procedure, for example, once a week for 
most discharges, with basic information sent to all potential trustees, 
would be sufficient for a trustee(s) to determine whether trustee 
resources may suffer significant injury. However, for significant oil 
discharges that may affect trustee resources, the trustee(s) will still 
require simultaneous notification. One commenter suggested that, to 
differentiate those discharges that would require weekly rather than 
simultaneous notification, resources could be categorized 
hierarchically in terms of value. One commenter stated that the DOI 
rules suggest that the most likely federal or non-federal trustee could 
receive the notification and be responsible for notifying other 
trustees. Another commenter suggested that NOAA consider the creation 
of a Damage Assessment Officer position, through NOAA resources, to 
work with OSC for the purpose of notification and communication. This 
person would augment the resources targeted to the notification process 
and allow expeditious determination of the discharge's significance.
    Response: NOAA agrees that the OSC will notify the trustee(s) of 
discharges. It is also understood that it is the statutory duty of the 
trustee(s) to determine whether a discharge warrants a damage 
assessment, especially since the trustee(s) cannot assign this duty to 
the OSC or any other entity. NOAA also notes that notification of 
discharges helps the trustee(s) build an important history of the 
area's exposure to discharges of oil. NOAA notes that a weekly 
notification of the numerous relatively small discharges might be a 
good arrangement to establish in the prespill planning. However, this 
proposed rulemaking cannot dictate the timing or manner of notification 
for either the small discharges or the larger ones. Nor can NOAA 
establish in this proposed rulemaking that one or another trustee 
agency will have the duty to notify all other trustees. There are 
several problems with that kind of assumption of responsibility. First, 
that duty to notify is already conferred upon the OSC by OPA. It is 
unclear that it would be beneficial for some other agency to assume 
that duty. Second, any trustee agency that might agree to serve such a 
function as a surrogate for the response agency would have to recognize 
the budget and personnel costs of such a duty. NOAA believes that 
prespill planning is essential for working out such notification 
requirements.
    Comment: Other commenters noted that there are numerous regulations 
to be promulgated by the response agencies pursuant to OPA that would 
address, among other things, multiple duties in consultation with the 
natural resource trustee(s). These commenters pointed out that the OSC 
should not be burdened with the responsibility of determining all the 
trustees to notify for a particular discharge.
    Response: NOAA agrees that the consultation procedures should be 
worked out during other pertinent rulemaking efforts. The 
identification of trustees requiring notification is a good example of 
the kind of process that should be developed in the prespill planning.
    Comment: Some commenters cautioned that the current statutory 
requirement that the RP(s) notify the National Response Center when 
discharges occur does not include notification of such discharges to 
the trustee(s). These commenters noted that the trustee(s) and OSC must 
establish communication roles and identify contacts for purposes of 
such notification. These commenters pointed out that the RP(s) should 
not have trustee notification added to its responsibilities.
    Response: NOAA acknowledges the fact that the only reporting 
requirement of the RP(s) is to the National Response Center. There is 
no duty to notify the trustee(s) over and above what is provided in 
OPA. This proposed rule would not be an appropriate vehicle for such a 
requirement.

``Data Sharing During Response''

    Comment: Many commenters noted that information should flow freely 
between response and damage assessment trustee agencies during an 
event.
    Response: NOAA agrees with these commenters and will encourage such 
information sharing as much as possible.
    Comment: One commenter suggested that the OSC may be able to gather 
data on samples more efficiently than the damage assessment trustee 
agencies and save time and avoid additional effects. Another commenter, 
however, suggested that there should be damage assessment trustee data 
collection teams separate from the OSC's response structure.
    Response: NOAA agrees that it would be more efficient and less 
risky to the natural resources to have the OSC-coordinated response 
structure collect all information needed at the site of a discharge. 
However, in most cases, such data collection is simply not possible. 
Separate data collection teams may be a good idea so long as there is 
no interference with the response and no ``unreasonable'' costs 
associated with it.
    Comment: Commenters noted that the OSC relies primarily upon 
information about sensitive or valuable resources contained in the 
appropriate ACP, but that this information can be augmented by the 
advice of the trustee(s) during a discharge. Many of these commenters 
noted that any information requested by an OSC to make a response 
decision must be immediately provided, if available. These commenters 
stated that withholding information due to litigation concerns does not 
outweigh the need to minimize environmental damage. Some of these 
commenters noted, however, that such information will become public 
information through the OSC.
    Response: NOAA notes that all of these concerns are valid.The fact 
that some information may be used in some future litigation is not a 
good reason for possibly impeding a response action.
    Comment: Many commenters noted that the OSC, by nature of being on 
scene, has information critical to the trustee's(s') preassessment work 
and that this information should be shared with the trustee(s). One of 
these commenters pointed out that by sharing such information with 
damage assessment trustee(s), the OSC is allowing the trustee(s) to 
spend time compiling any additional information it needs rather than 
duplicating efforts. Other commenters noted that where the trustee(s) 
damage assessment data needs are clear and not burdensome, the OSC 
might be able to collect additional information on behalf of the damage 
assessment trustee(s), so long as such efforts do not interfere with 
the response effort.
    Response: NOAA agrees that the OSC may be able to share much 
information with the damage assessment trustee(s), thereby improving 
the efficiency of both. The possibility that the OSC could actually 
collect additional information beyond what is needed for response might 
be worth exploring in the prespill plans and ACPs so long as the 
parties understand that the OSC could not conduct such work if it would 
interfere with the response.
    Comment: Several commenters pointed out that the trustee(s) should 
not exclusively rely upon the OSC to collect information necessary for 
an assessment, but should be allowed to gather additional information 
during the discharge.
    Response: NOAA is of the opinion that where OSC-collected 
information is relevant to the damage assessment process, such 
information should be used to avoid redundancy and double counting. 
However, it is ultimately the responsibility of the damage assessment 
trustee(s) to collect the necessary data for a damage claim.
    Comment: Some commenters noted that the OSC should seek early 
involvement of the trustee(s) in order to share information about the 
characteristics of the discharge and the potential effect to the 
environment, particularly information on local conditions and 
resources. Several commenters pointed out that this sharing of 
information would also allow the trustee(s) to evaluate and make 
recommendations on the response activities themselves, so that the 
damage caused by the discharge is not worsened by the type of response 
and cleanup techniques, but that the cleanup might accelerate the 
recovery of the resources.
    Response: NOAA points out that there is currently a mechanism for 
funneling important resource information to the OSC, providing 
technical advice and recommendations to minimize the effects of the oil 
and response activities. The OSC accomplishes this by soliciting input 
from trustee agency experts, academia, etc. The mechanism for relaying 
this information is already in place through the ACPs, but could be 
restated in the prespill plans.
    Comment: One commenter stated that high-impact cleanup methods that 
remove living organisms and greatly modify the habitat are not 
justified when the oil left in the environment has already lost most of 
its toxicity. There may be less injury and faster recovery with limited 
or no removal and natural recovery. The commenter stated more research 
is needed in all areas of restoration ecology. Several commenters urged 
trustees to help plan response and cleanup actions that will have 
lesser effects on the resources.
    Response: NOAA agrees that more research is needed in the field of 
resource restoration. The commenters are correct in pointing out that 
trustee input to cleanup decisions may greatly reduce resource effects 
to be corrected by restoration. NOAA agrees that the ecological effects 
of any planned action should be considered in the restoration planning. 
There may be certain instances where the public uses of an area may 
require removal of residual oil in order to restore the services 
provided prior to the discharge.

``Funding''

    Comment: Some commenters were encouraged that there would be 
provisions for the use of the Oil Spill Liability Trust Fund for 
trustee activities, including the initiation of natural resource damage 
assessments and time-sensitive damage assessment activities where other 
funding is not available. Another commenter noted that agencies within 
a state might not be the ones designated to apply for funding, but 
still need access to the Fund to participate in the process.
    Response: NOAA points out that the procedures for the management of 
the Fund are the subject of different rulemaking efforts by the U.S. 
Coast Guard and are outside the scope of this proposed rule. The 
problem noted by one commenter as to different agencies within a state 
having different roles is an internal state issue, clearly not within 
this rulemaking. Hopefully, such problems can be identified and 
resolved within the prespill planning.

``Define When `Cleanup' is Over''

    Comment: Quite a few commenters requested guidance on when the 
removal portion of a response would be deemed to have ended, and when 
remedial and/or assessment activities might be more appropriate and 
suggested criteria for the OSC to use in making this determination. 
Some of these commenters noted that this determination is important 
since liability for restoration measures can only be determined to be 
necessary if natural resource injuries still exist after the legal 
conclusion of the ``removal'' phase. Another commenter pointed out 
that, although data on the scientific effects of a discharge should be 
collected as soon after the discharge as possible, damage assessment 
activities should occur only after the response and cleanup activities 
are completed.
    Response: NOAA notes that the end of the removal portion of a 
response is defined by the OSC and it would not be appropriate for this 
proposed rule to try to dictate the criteria for making that decision. 
NOAA does note that there is a clear line of division, legally, between 
removal and restoration. The commenters are correct in noting that 
restoration is residual to response efforts. The trustee(s) must 
determine what, if any, further actions beyond response work are 
necessary for the recovery of the system. However, the trustee(s) 
cannot always wait until the end of all response work before beginning 
assessment/restoration activities. Such a delay would not be in keeping 
with OPA's policy of expeditious actions on behalf of the environment.

```Cleanup' vs. `Restoration'''

    Comment: Several commenters were concerned with the issue of 
allowing the trustee(s) to undertake emergency restoration during 
response. These commenters were concerned that the proposed rule might 
blur the distinction between cleanup and restoration. Some of these 
commenters noted that in practice the distinction between cleanup and 
restoration eventually becomes difficult to maintain. These commenters 
pointed out that failure to make the distinction clear could result in: 
(1) Trustee-directed damage assessment activities conflicting with 
ongoing cleanup operations; (2) restoration money spent to reimburse 
cleanup activities; and (3) RP(s) requesting credits for 
``restoration'' projects against assessed damages, when in fact those 
restoration projects were actually cleanup activities. As an example, 
one commenter pointed out that NOAA implied that physical removal of 
contaminated sediments and bioremediation are restoration techniques, 
whereas these were both considered to be cleanup methods during the 
EXXON VALDEZ response.
    Response: NOAA agrees that, although there must be a separation 
under OPA between response and restoration because of the liability 
provisions and different implementing authorities, in the practical 
sense the two can sometimes involve the same type of activities. NOAA 
notes that ``emergency restoration'' (discussed in the section on the 
Preassessment Phase) should not conflict with on-going activities so 
long as they are part of the OSC-coordinated response. NOAA also notes 
that damages recovered for emergency restoration actions are not 
reimbursements for response actions, but are to reimburse the 
trustee(s) for actions deemed necessary due to the exigencies of the 
situation. Also, the RPs is not granted a ``credit'' to offset damages 
for funding emergency restoration. The effect of these emergency 
actions is to lessen, perhaps dramatically, increased effects and, 
therefore, larger future damages.
    In some circumstances, the same action could be considered either a 
removal or restoration action, depending upon the purpose of the action 
and agency that is carrying it out. For example, if dredging is done 
for human health concerns by the response agency, it is a removal 
action. However, if the trustee(s) decides that cleanup to lower levels 
of contamination is needed to take care of resource concerns, then 
additional dredging may be necessary by the trustee to be able to 
``restore'' the system.
    Comment: One commenter pointed out that the natural resource 
trustee(s) currently has authority under 43 CFR part 11 to undertake 
emergency ``restorations'' to avoid, prevent, or mitigate certain 
imminent threats to particular natural resources. However, this 
commenter noted that restorative efforts, though important, cannot be 
allowed to physically interfere with emergency response.
    Response: NOAA is familiar with the 43 CFR part 11 provision for 
emergency restoration and is hoping to foster consistency with this 
proposed rule. As mentioned earlier, trustee actions are not to 
interfere with response actions.
Coordination With the Public 
Response to Comments
``Advantages''

    Comment: One commenter pointed out that openness that allows for 
broad participation encourages directness. Another commenter pointed 
out that the public has the right to ensure that the assessment and 
restoration are done accurately and thoroughly. Some commenters noted 
that such participation will help find the most cost-effective actions 
and equitable damages. Other commenters noted that the public has an 
important and legitimate interest in the process and, in many cases, 
members of the public have expertise in a particular area of concern 
and can help with the assessment as well as restoration process. This 
commenter also noted that public participation is needed as a 
counterweight to the RP's participation. One commenter pointed out that 
withholding information would impede public and scientific input into 
the assessment process. Several commenters noted that every effort must 
be made to ensure that the assessment and restoration process is 
conducted in an objective manner to preserve public confidence in the 
process.
    Response: NOAA agrees that each phase of an assessment/restoration 
process, including prespill planning, should involve the public to the 
extent practicable. Members of the public are an excellent source of 
information about particular natural resources and available expertise 
in the community. The public, as the owners of the natural resources, 
have a real interest in the assessment and restoration and might 
provide a balanced representation of the public interest.

``Not Necessary''

    Comment: Some commenters stated that there is no need for extensive 
public involvement in the assessment process since the public natural 
resource trustees are, after all, the representative of the public. One 
of these commenters stated that the trustees' involvement in developing 
plans and assessments satisfies OPA requirements of public involvement. 
Another commenter pointed out that OPA directs the trustees to act on 
behalf of the public.
    Response: NOAA recognizes that the trustee(s) is, in fact, acting 
on behalf of the public. However, this relationship does not mean that 
the trustee(s) is not accountable to the public. The involvement of the 
public in the assessment/restoration process does not mean the 
trustee(s) is abdicating fiduciary duties to the public. One of these 
duties is to adequately ascertain the wishes of the public concerning 
the management of the public's natural resources.

``Scope/Extent''

    Comment: One commenter stated that public participation should be 
limited to safeguarding the trustees' accountability. Some commenters 
stated that there should be some exceptions to the amount of public 
participation allowed for an assessment. For example, one commenter 
suggested that members of the public should be allowed access to raw 
data if they demonstrate they have the resources to carry out the 
analysis. One commenter stated that providing for less than full review 
and comment by the public might appear that the trustee(s) is trying to 
exclude the public from the process. Another commenter stated that 
public review of purely scientific data would probably not interfere 
with litigation or negotiations. Other commenters stated, however, that 
the public review and participation should be mandatory for the entire 
process, including any modifications of plans that have already been 
available for public review and comment.
    Response: NOAA notes that there will undoubtedly be some exceptions 
to the public involvement in this process. After all, the trustee(s) 
simply may not have the budget or time to allow for extensive public 
involvement. There are times when quick action is necessary, in which 
cases it would be unreasonable for the trustee(s) to wait for an 
opportunity for a public meeting before acting. In fact, this need for 
expediency is another reason for involving the public in the prespill 
planning. Also, there may well be sensitive information that is simply 
not possible to make public, e.g., litigation-sensitive material 
relating to liability. NOAA agrees that public review of data would 
not, in many cases, delay litigation or the assessment/restoration 
process. Also, NOAA agrees that significant modifications to materials 
that have already undergone public review should also be reviewed 
wherever possible.

``Levels of Review''

    Comment:  Several commenters pointed out that the extent and degree 
of public involvement on a particular discharge would depend upon the 
particular situation and the type of activity. One commenter suggested 
that the trustee(s) could inform the public through press conferences, 
press releases, open meetings, and Federal Register notices. Other 
commenters pointed out that public participation in each stage of an 
assessment may be impossible due to the dynamics of the discharge and 
would overburden the trustee(s) staff and budget.
    Response:  NOAA has stated elsewhere that the extent and degree of 
public involvement must be left to the judgment of the trustee(s). 
There will undoubtedly be discharges in which public review of 
documents would be quite expensive when compared to the effects caused 
by the discharge. Costs associated with dissemination of information 
for review must be reasonable.
    Comment:  A few commenters suggested that NOAA is proposing greater 
public participation in the assessment process than is provided for in 
OPA.
    Response:  OPA describes the assessment process in terms of the 
restoration planning process. Therefore, NOAA believes the trustee(s) 
has the discretion to determine the level and extent of public 
involvement.

``Timing''

    Comment:  One commenter suggested that the public have notice and 
opportunity to comment after the Preassessment Phase, after the full 
assessment, and before the adoption of a restoration plan. Another 
commenter stated that OPA provides the public with an opportunity to 
comment before restoration plans are developed and implemented. One 
commenter suggested that the public should have the option to review 
any modification of the Assessment/Restoration Plan. Another commenter 
stated that even preliminary plans for discharges into sensitive areas 
should be open for public review and comment. Another commenter stated 
that public comment should not be requested until after the post-
recovery restoration plan is developed. One commenter stated that 
public participation should be sought at the prespill stage, not during 
a discharge investigation. Finally, one commenter stated that public 
comment at any stage should be at the discretion of the trustee.
    Response:  NOAA is leaving the timing and scope of public 
involvement to the judgment of the trustee(s). Clearly, in most oil 
discharge cases, the trustee(s) will be unable to delay action to allow 
for public review of all actions. However, at the first sensible 
opportunity, the trustee(s) should inform the public of the state of 
the process and seek public review as appropriate. NOAA agrees that the 
best time for public involvement is in prespill planning when the 
trustee(s) is not engaged in actual discharge activities. This does not 
mean, however, that this prespill involvement would substitute for 
appropriate public involvement in the case of an actual discharge. NOAA 
also notes that the discussion of the assessment/restoration planning 
process, found in subpart C of this proposed rule, provides for the 
review of ``significant'' revisions.

``Notice of Meetings''

    Comment:  One commenter noted that notice of public meetings 
concerning an assessment should be timely and posted in a publication 
of general circulation.
    Response:  NOAA agrees that, to be successful, notice of any 
meeting seeking public input must be published in a timely and visible 
manner and in a local publication of general circulation.

``Delays''

    Comment:  Several commenters noted that public involvement should 
take place during the response planning stage, not during an incident 
when such involvement might delay the response. These commenters noted 
that opening up the entire assessment process would significantly 
decrease efficiency and could interfere with an objective evaluation of 
the situation. Some of these commenters also noted that such public 
involvement in early restoration planning could delay the early start 
on restoration actions that may be possible. One commenter noted that 
delays caused by public involvement might increase the damages owed by 
the RP(s).
    Response:  NOAA emphasizes that the overall goal of this proposed 
damage assessment rule is to get from a discharge to the recovery of 
affected natural resources and services as quickly as possible. 
Therefore, unnecessary delays should be avoided wherever possible. 
However, as discussed elsewhere in this preamble, public involvement 
does not necessarily mean holding a large public meeting for each and 
every discharge. The same principle works in restoration planning and 
implementation. The trustee(s) is not serving the public if his actions 
slow down the healing process. However, the RP(s) is responsible for 
all reasonable damages caused by the discharge. When public natural 
resources are affected, it is reasonably foreseeable that the 
trustee(s) must comply with certain administrative processes and may 
have the duty to inform and involve members of the public during that 
time.

``Litigation Concerns''

    Comment:  One commenter noted that public comment specifically on 
the issue of the economic damages would strengthen those figures and 
increase the likelihood of successful recovery. However, another 
commenter noted that the trustee(s) needs free and open discussion of 
options with staff, outside of the public domain, as part of litigation 
approach. Another commenter noted that putting out the proposed 
restoration plan that would show proposed acquisition of land as an 
approach would cause a sharp increase in the price of that land.
    Response:  NOAA recognizes that public review and comment on 
various aspects of a study plan is a desirable goal. However, public 
information laws, such as the Freedom of Information Act (FOIA), take 
note of the fact that there is an exception to public review where a 
free discussion of litigation strategies or other sensitive issues are 
necessary. Also, any descriptions of land to be acquired as part of a 
restoration plan should remain general so that the prices would not be 
elevated.

``Limits on Public Involvement''

    Comment:  Several commenters noted that public involvement should 
be limited to the Congressional intent as shown by section 1006(c)(5) 
of OPA, which calls for opportunity for public involvement in 
restoration planning.
    Response:  NOAA notes that the section 1006(c)(5) requirement for 
public involvement in restoration planning is read as a minimum 
requirement in OPA. The clear Congressional intent revealed in OPA and 
its legislative history is that the public be involved in a meaningful 
way. Therefore, NOAA hopes to ensure that goal is met.

``Public Involvement in Restoration Planning''

    Comment:  Most of the commenters agreed that public involvement is 
necessary in the development of restoration plans.
    Response:  NOAA agrees that the development of restoration plans 
should be open to public involvement as noted above.

``Rebuttable Presumption''

    Comment:  One commenter noted that an assessment based upon a 
restoration plan that had not been developed with public review and 
comment would not receive the rebuttable presumption.
    Response:  NOAA points out that OPA specifically requires public 
review and comment on restoration plans. As noted earlier, however, 
full restoration planning for hundreds of small discharges may not be 
possible for all trustees. In such cases, the trustee(s) should 
consider developing regional or local plans that would go through the 
public review and comment process, receive the rebuttable presumption, 
and be ready to implement when funding is available.

``Citizen Oversight Committees (COC)''

``COC: Advantages''

    Comment:  Many of the commenters noted that allowing 
representatives of local groups to either attend trustee meetings to 
monitor the assessment process or participate in oversight committees 
will further the goal of meaningful public participation. One commenter 
pointed out that such participation is needed to gain a full 
understanding of effects on the affected community. Another commenter 
stated that such public involvement is crucial if jointly conducted, 
phased assessments are permitted. Another commenter suggested that 
assessment groups or teams should give adequate notice to and be open 
for public participation.
    Response:  NOAA agrees with the goal of involving the public and 
keeping the public informed of progress of the assessment and 
restoration of its natural resources. It is also expected that such 
public participation will add to the information pool available to the 
trustee(s). The point raised by the commenter that public involvement 
is needed in joint RP-trustee assessments, is well taken. If such 
efforts are to succeed, they must be conducted in the open. Finally, 
NOAA agrees that the public must be aware of the opportunities for 
involvement. Notice of meetings should be given in the manner most 
appropriate for any particular assessment.

``COC: Disadvantages''

    Comment: Several commenters argued that there is no need for such 
groups since the trustee(s), the source of expertise in this area, is 
the representative of the public. Others warned that such oversight 
would impede the assessments, negotiations, and subsequent restoration 
efforts, if for no other reason than the sheer numbers of persons 
involved. Another commenter noted that this involvement would also 
greatly add to the cost of the assessment and restoration.
    Response: NOAA agrees that the resource management agencies do have 
a wealth of expertise concerning their natural resources. Because no 
trustee can be omniscient, agencies must remain open to new sources of 
information. It is also unlikely that the process would be overwhelmed 
by vast numbers of citizens wanting to participate. In most cases, 
citizen or environmental groups represent the general views of the 
community and serve as focal points for interaction. Any discharge that 
invokes the personal interest of large numbers of people is clearly a 
discharge that needs public involvement. NOAA does not wish to suggest 
that these groups are being given the responsibility of running the 
assessment/restoration process. NOAA does not read the term 
``oversight'' to mean ``control.'' The trustee(s), by law, cannot give 
up their trust duties. Therefore, the citizen groups cannot have 
decision or arbitration authority. The term ``oversight'' in this 
context simply means participation, not authority. Public participation 
in this rule does not include ``oversight'' of management functions. 
Although the costs of preparation of materials and distribution of such 
materials would be considered part of the regular costs of an 
assessment, the costs borne by citizens interested in attending 
meetings or other citizen-borne costs of participation would not be 
included in the assessment costs.

``COC: Makeup of COC's''

    Comment: Several commenters noted that Citizen Oversight Committees 
(COCs) should involve groups with environmental expertise in a 
systematic way to increase the collective knowledge available during an 
assessment. Another commenter suggested that a group similar to the 
National Science Foundation or the National Academy of Sciences could 
help minimize decisions and associated expenditures founded on poor 
science or made for political reasons.
    Response: NOAA notes that the makeup of any group representing the 
public interest is highly incident-specific. The types of interest 
groups or organizations noted in these comments are good examples of 
groups that are likely to contribute the most to an assessment and 
restoration.

``COC: Optional''

    Comment: Several commenters noted that, if NOAA decides to include 
a provision for a COC in the rule, this involvement should be strictly 
optional at the discretion of the trustee(s). Several other commenters, 
however, pointed out that, even if such provisions were optional, 
groups would come to see this participation as an entitlement and would 
demand it in each case.
    Response: NOAA notes that the fear of some kind of ``entitlement'' 
specter should not prevent the trustee(s) from carrying out their 
duties in the most appropriate manner for a particular discharge. This 
proposed rule strongly encourages public involvement in assessments, 
but leaves the timing, scope, and extent of such participation to the 
judgment of the trustee(s). No national rule could possibly cover all 
scenarios that might arise due to a discharge of oil; therefore, this 
proposed rule must leave the trustee(s) with the flexibility to tailor 
the process to fit the discharge.

VI. Participation of the Responsible Party

    While liability and responsibility of the RP(s) for removal and/or 
response activities are addressed clearly in OPA, little guidance is 
given in either the statutory language or the legislative history 
concerning the role of the RP(s) in the assessment process.
    The degree of involvement of the RP(s) in the assessment process 
will likely have a direct bearing on several aspects of the assessment. 
For instance, active and early involvement of a cooperative RP(s) may 
eliminate some of the problems trustees have encountered immediately 
following a discharge of oil, such as the lack of funding, personnel 
and equipment. In addition, a joint trustee/RP assessment may be more 
cost effective and avoid duplicate studies by the trustee(s) and RP(s).
    After reviewing and analyzing all comments concerning this issue, 
NOAA's proposed rule strongly encourages RP involvement but leaves the 
ultimate decision with the trustee(s) and RP(s) on a case-by-case 
basis. The reasons were many, varied, and well argued by the numerous 
commenters that expressed an opinion on this issue ranging from full to 
no involvement, but it is impossible to dictate through this proposed 
rule a one-size-fits-all solution for all discharges. The trustee(s) is 
entrusted by Congress in section 1006 of OPA to assess natural resource 
damages and develop and implement restoration plans. While active RP 
involvement is the preferred method of conducting assessments, the 
trustee(s) can ill afford to delay assessment activities while 
attempting to entice RP involvement.
    In determining the nature of RP involvement in the assessment/
restoration process, the trustee(s) and RP(s) have many opportunities 
for cooperative participation, from preassessment activities to 
implementation of restoration activities.
    Preassessment Phase: As noted in this preamble and in subpart B of 
the proposed rule, this step requires the collection of preliminary 
data concerning the circumstances of the discharge, characteristics of 
the oil, nature of the receiving environment, and characteristics of 
the affected natural resources and services potential for further 
injury to natural resources. Based upon this information, the 
trustee(s) will determine which, if any damage assessment procedure to 
proceed. While there is no specific time limit for the Preassessment 
Phase, the effectiveness of this phase will depend on how early the 
trustee(s) is able to gather that information. Since time is critical, 
the proposed rule does not require that the trustee(s) invite the RP(s) 
to participate in this phase. It is the option of the trustee(s) 
whether to invite the RP(s) to participate and enter into an agreement 
to gather Preassessment Phase information. In making this 
determination, the trustee(s) should consider, but not be limited to, 
the following factors: whether the RP(s) has been identified; the 
willingness of the RP(s) to participate in the preassessment; the 
willingness of the RP(s) to pay preassessment activities; and the 
ability of the trustee(s) to conduct the Preassessment Phase in a 
timely and cost-effective manner.
    The completion of the Preassessment Phase includes written 
notification to the identified RP(s), by the trustee(s) of the decision 
to proceed with further damage assessment procedures. The proposed rule 
provides that the trustee(s) must invite the RP(s) to participate in 
the assessment process, if it is reasonably practicable to do so. The 
RP(s) has ten calendar days in which to respond. If the response is 
positive, the trustee(s) and RP(s) begin negotiations as soon as 
practicable on an agreement detailing the RP(s) involvement. Should the 
trustee(s) determine that the RP(s) is no longer participating in good 
faith, but is using participation as an opportunity to obstruct the 
assessment, the trustee(s) may terminate the agreement. The trustee(s) 
may proceed with necessary assessment actions such as the assessment/
restoration plan and necessary data collection during those 
negotiations, although the initial plan may have to be modified before 
public review, once RP involvement is established. It is expected that 
all parties will negotiate in good faith, realizing that a cooperative 
assessment will likely result in the implementation of assessment and 
the resultant restoration activities as soon as possible. If, however, 
some type of agreement (including a phased joint agreement discussed 
later or an agreement to agree in the future) cannot be reached within 
45 calendar days, the trustee(s) may terminate the negotiations.
    Phased Joint Assessments: To encourage cooperation between the 
trustee(s) and the RP(s), the proposed rule authorizes the trustee(s) 
and the RP(s) to enter into a phased joint assessment administrative 
procedure for conducting assessments. A phased approach to conducting 
joint assessments is authorized due to the apparent reluctance of the 
trustee(s) and RP(s) to agree to work together before the actual 
assessment process begins. The phased approach may allow a working 
relationship to develop between the trustee(s) and RP(s) yet allow 
maximum freedom to both parties should the joint process be determined 
unworkable.
    The assessment process may be divided into distinct phases and 
components, and the RP(s) may be invited to participate in the various 
phases and components. Prior to the beginning of each phase or 
component, the RP(s) and trustee(s) may enter into an enforceable 
agreement to conduct that particular phase or component. The 
responsibilities of each party, including financial contributions by 
the RP(s), will be identified in the agreement with provisions for 
termination of the agreement and for nonperformance. The agreement 
should identify who should collect the data and under what guidelines. 
The agreement should also include provisions for actual possession and 
ownership of data jointly collected and for funding. In addition, the 
parties could agree who will analyze the data, and what criteria will 
be used in the analysis. The use of oversight groups or public 
involvement might also be addressed.
    While it may be most expedient for the trustee(s) and RP(s) to use 
internal personnel for data collection and analysis, such use may not 
be possible. Should both parties not be able to agree upon the use of 
joint internal personnel, the data gathering and/or preliminary 
analysis of the data may be contracted out to an agreed upon third 
party. Regardless of who conducts the assessment activities, the 
trustee(s) maintains management and control of all such activities. 
Once each phase or component is complete, the data collected and 
analyzed will be provided in the administrative record, and will 
eventually become part of the Report of Assessment.
    The key incentive to a phased joint assessment is the agreement 
that the trustee(s) and RP(s) are limited to the use of the jointly 
collected data for that phase or component, even though they might not 
enter into an agreement for the next phase or component. For example, 
the trustee(s) and RP(s) may enter into an agreement to jointly collect 
data for all injury determination studies. Once the data are collected, 
the parties decide to forgo any other joint ventures. However, both 
parties are barred from introducing collateral data collected outside 
the assessment process for the injury determination studies covered by 
the agreement. Each may conduct his own analysis of that existing data, 
but the injury determination data collected outside the joint venture 
could not be entered in the administrative record of the assessment, 
and thus remain outside the assessment process and any judicial 
determination under OPA. The purpose of the bar on collateral data is 
to encourage cooperative assessments instead of the trustee(s) and 
RP(s) conducting separate, duplicative assessments. Where a joint phase 
or component is completed, it is a waste of time and money for either 
party to repeat the study. To make this provision clear and enforceable 
to all parties and equally enforceable, the regulations suggest that 
the bar be spelled out in the enforceable agreement as well as provided 
for in Sec. 990.17 of the proposed rule.

Assessment Phase

    Assessment Component: The agreement to conduct portions of the 
assessment component of the Assessment Phase should be as specific as 
possible, with trustee and RP activities identified. NOAA suggests that 
the following steps of the assessment component be considered for joint 
agreements for Expedited and Comprehensive Damage Assessments: Injury 
data collection and/or analysis of injury determination data to 
quantify loss of natural resources' services. When practicable, the 
trustee(s) and RP(s) are encouraged to combine data collection and 
analysis into one agreement, resulting in a more efficient assessment 
process.
    Restoration Component: As with the rest of the assessment process, 
the degree of participation of the RP(s) in developing the restoration 
component is discretionary with the trustee(s) and RP(s). However, the 
use of the knowledge and expertise of many RPs could be useful to the 
trustee(s) and is encouraged. The proposed rule provides that the 
trustee(s) must invite the participation of the RP(s) in the 
restoration planning process if the RP(s) has participated in the 
earlier assessment activities to date. In determining whether to invite 
the RP(s) into the restoration process, the trustee(s) should consider, 
but not be limited to, the following factors: (1) The willingness of 
the RP(s) to participate and the reasons the RP(s) was not involved in 
the earlier assessment activities (an uncooperative RP may have delayed 
the earlier assessment process, or was unable to participate, but is 
able to do so in the restoration effort; if the RP(s) has already 
indicated no interest, it would be a waste of time to invite him to 
join in the process); (2) the ability, i.e., knowledge, expertise, 
unique natural resources, etc., of the RP(s) to participate in the 
restoration process; and (3) the willingness of the RP(s) to pay for 
restoration activities and for trustee costs.
    If the RP(s) is involved in restoration, the trustee(s) and the 
RP(s) shall develop a joint agreement describing the specific 
responsibilities of the RP(s) and trustee(s). The agreement should 
cover the activities of the RP(s) related to determination and 
implementation of restoration activities. Since it is likely a range of 
possible restoration activities and costs will be identified early in 
the injury determination component, the development of a restoration 
component of the DARP is actually initiated in the Assessment Phase. 
Some RPs may want to actively assist in developing and implementing a 
restoration plan. Others may prefer to pay the damages and leave the 
restoration activities to the trustee(s). Again, agreements should 
include specific responsibilities of the trustee(s) and RP(s). Such 
agreements could cover the determination and implementation of 
restoration alternatives.
    Management Structure: NOAA does not propose a specific management 
structure in order to conduct either a trustee or joint trustee-RP 
assessment. However, NOAA recommends that the trustee(s) establish 
committees or teams to manage the assessments. The core members of 
these committees may already be selected in the prespill plans. As 
discussed earlier, the committees should have a lead administrative 
trustee and include representatives from all affected trustee agencies 
and provide opportunities, ad hoc, for involvement from response 
agencies and other interested parties, as deemed necessary by the 
trustee(s).
    Other Party Involvement: A great number of commenters indicated a 
real concern that RP involvement will result in less than complete 
recoveries through less than comprehensive assessments. To ensure that 
the assessment and recoveries are adequate, the proposed rule 
authorizes and encourages the trustee(s) to provide for ``outside'' 
review of assessment/restoration plans by the scientific and economic 
communities. Comments as a result of the ``peer review process'' will 
be a part of the administrative record. Peer reviewers will be selected 
by the RP(s) and trustee(s). The trustee(s) should consult local and/or 
national interest groups, scientific agencies, and universities for 
suggestions of appropriate reviewers.
    Also, the joint-management team will keep the public informed of 
the progress of the assessment/restoration process and will allow 
public review and comment of the on-going assessment and restoration 
plans. In addition, at the discretion of the trustee(s), 
representatives of local interested groups may be invited to attend 
assessment management meetings to monitor the decisionmaking process.

Participation of the Responsible Party

Response to Comments

    Comment: Some commenters recommended that all prespill planning 
efforts be channeled through the development of the Area Contingency 
Plans under section 4202 of OPA.
    Response: NOAA agrees. When practicable, the trustee(s) and 
potential RP(s) should use existing planning mechanisms to coordinate 
their efforts. To do otherwise would be inefficient and duplicative. 
Industry should be strongly encouraged to participate in and/or 
coordinate with the technical working groups of the Area Committees 
(including appropriate trustees) in the development and update of Area 
Contingency Plans. Such plans identify and rank sensitive environments 
and define appropriate protective strategies and removal technologies. 
In addition, such prespill meetings with industry would allow the 
trustee(s) to clarify the damage assessment process. Where prespill 
planning is appropriate, the trustee(s) is still encouraged to involve 
potential RP(s) in prespill planning and identification of potential 
natural resources at risk.
    RP(s) Involvement in the Assessment Process (General): While the 
comments were very numerous and often very detailed on this subject, 
they largely fell into two categories: (1) No RP involvement vs. 
unlimited RP involvement and (2) RP involvement is possible under some 
circumstances, with appropriate trustee oversight. The comments and 
responses for this section follow these general categories.
    Comment: Commenters indicated a wide range of views on this issue, 
from unlimited RP involvement to no RP involvement, except to pay the 
required damages. In this vein, many commenters stated that the RP(s) 
will approach the damage assessment process with the goal of minimizing 
the injury and resulting damage assessment. A multiple trustee 
conducted assessment is difficult enough, but allowing the RP(s) into 
the process could disrupt the assessment. Others indicated further 
potential problems, claiming that allowing the RP(s) in the assessment 
process is tantamount to allowing the RP(s) to determine its own 
damages. In any assessment, it is in the public's interest to conduct a 
full and fair assessment. It is in the interest of the RP to show 
little injury so that the damages will be lessened. Others were 
concerned that consultation and involvement of the RP in the assessment 
process may seriously prejudice the trustees' ability to recover 
damages, particularly through negotiations. Any involvement of the RP 
should require unanimous approval of the trustees.
    Many commenters expressed the opposite view, claiming that the 
opportunity for RP involvement in a damage assessment is a legal 
necessity as well as fortuitous. Since the damage assessment process 
determines the amount of damages the RP will pay, it would be unfair to 
exclude the RP from the process. In addition, the RP would serve as a 
control on ``state and federal bureaucrats,'' ensuring that assessments 
would be cost-effective. At least one commenter indicated that 
assessments conducted without providing the RP the opportunity to 
participate should not be awarded the force and effect of a rebuttable 
presumption. Others indicated that while the RP's interests may be 
different than those of the trustees, involvement of the RP will likely 
encourage the RP to pay the damages rather than challenge the 
assessment in court. Other possible advantages of RP involvement 
included: Elimination of costly duplication of studies; ensuring that 
studies/investigations are planned to answer pertinent questions; and 
providing another source of funding for studies that must be conducted 
in a timely manner. RPs are fully aware of the legal responsibilities 
under OPA and are quite willing to cooperate with the trustee(s) to 
resolve them in a fair and timely fashion. Others justified substantial 
and preferential involvement of the RP based upon the ruling in Ohio v. 
Department of the Interior, which upheld DOI's decision to allow 
greater RP participation than the public as a whole. Other commenters 
insisted that any participation by the RP is at the discretion of the 
RP and/or the trustee(s).
    Other commenters stressed that cooperation must work both ways. The 
trustee(s) should also be willing to cooperate with the RP. The 
commenters noted that it can be more expeditious for the RP to fund the 
work, with oversight or ``audit'' by the trustee(s). Some RPs (either 
foreign or domestic based) may have neither the motivation nor the 
resources for close cooperation with the trustee(s). Such RPs should 
not be penalized for not participating to the fullest possible extent. 
Some suggested that public perception of the RP conducting the 
assessment might be helped by agreeing in advance upon a list of ``pre-
approved'' consultants to assist in ``peer review'' and/or to carry out 
the actual studies. The use of assessment ``over-sight'' groups 
consisting of RPs, scientists, environmental groups and the public was 
also suggested. One commenter suggested that a generic agreement be 
drafted by representatives of trustees and RP and be provided as a 
model agreement for use in the event of an actual discharge. This 
agreement would identify the activities of the RP and trustees leaving 
little need for additional negotiations for specific discharges. This 
model agreement would have gone through a public review process and the 
roles of the respective parties would be already identified, thereby 
reducing the time needed to negotiate specific activities and ensuring 
that the public's concerns were addressed.
    Response: Many of the concerns over RP involvement represent actual 
discharge scenarios where involvement of the RP(s) was difficult and 
frustrating to the trustee(s). On the other hand, the advantages of a 
cooperative RP in an assessment have resulted in smooth assessments and 
a focus on the environment, not the courthouse. It is virtually 
impossible for the proposed rule to dictate the level of involvement of 
the RPs in every possible assessment. Each discharge will present a 
different set of circumstances, with different RPs and trustees. As 
explained elsewhere in the preamble the eventual degree of involvement 
of the RP(s) is at the discretion of all the trustees involved in the 
assessment and RP(s). On the whole, cooperative involvement of the 
RP(s) will likely provide many benefits to the assessment process, but 
currently trustees and RPs have little experience in conducting 
cooperative assessments. The proposed rule reflects this lack of 
experience, and strongly encourages that the trustee(s) first look to a 
cooperative assessment, even if such cooperation can only be fostered 
through the use of a series of joint agreements. However, OPA does not 
necessitate the loss of the rebuttable presumption due to lack of RP 
involvement and neither does the proposed rule. Since participation of 
the RP is optional on the part of the RP(s) and trustee(s), those 
opting not to participate are not penalized. The assessment remains 
under the direction of the trustee(s).
    NOAA agrees with the suggestion that a model agreement would be 
beneficial and provides a sample of such an agreement for comment in 
Appendix B. Such an agreement, however, would not be mandatory. NOAA 
perceives that trustees and potential RPs are on the verge of 
conducting a new generation of cooperative assessments, but they need 
time to work out the details and provide for adequate checks in the 
process. The proposed rule provides for that period of testing and 
adjustment.
    A large number of commenters also expressed the opinion that RP 
involvement is helpful in some phases of the assessment if conducted 
under the oversight of the trustee(s). However, there was little 
agreement over which phases of an assessment might be appropriate for 
RP involvement and the appropriate degree of oversight. Various phases 
of the assessment and respective comments are discussed below.
    Comment: Some commenters were strongly opposed to allowing the 
RP(s) more access to the assessment process than the public in general. 
Others indicated that additional access was a right accorded the RP(s), 
because of the financial stake of the RP(s). One commenter contended 
that the RP could serve in an ``advisory'' role to avoid duplication of 
effort and studies. Another commenter noted that, although the RP has 
the constitutional right to participate in the assessment, 
participation is discretionary on the part of the RP and cannot be 
mandatory.
    Response: The proposed rule does provide the RP(s) with more access 
to the assessment process than the general public. This is consistent 
with other provisions in connection with oil discharges, i.e., the 
response and cleanup. The greater access is not because of the 
financial stake of the RP(s), it is NOAA's position that a cooperative 
RP can assist in restoring the environment in as short a time as 
possible and, like the cleanup, may be able to provide services, 
funding and/or personnel not available to the trustee(s) in either a 
cooperative or advisory role. However, the trustee(s) is required to 
keep the public informed of the participation of the RP(s) and provide 
an opportunity for meaningful public participation, not only regarding 
the involvement of the RP(s), but for the entire assessment process. 
Also the RP(s) does have the right to refuse participation.

``Preassessment''

    Comment: Concerning the preassessment, several commenters indicated 
that since preassessment decisions need to be made quickly, involvement 
of the RP would likely delay the process. Involving the RP in the 
preassessment may prevent the trustee(s) from fully exploring all the 
options for the assessment and resulting restoration activities. Others 
indicated that the RP should be invited to participate from the onset 
of the discharge, since it is possible that the RP can provide data 
necessary for use in the preassessment to determine the nature and 
extent of subsequent assessment activities. A cooperative preassessment 
would likely foster a cooperative assessment and possible early 
settlement of claims. In addition, early RP involvement does not 
prejudice public participation, since the assessment/restoration plan 
will be available for public review.
    Response: The proposed rule encourages the trustee(s) to involve 
known RPs in the Preassessment Phase. However, because of the 
constraints in the Preassessment Phase, the proposed rule does not 
require the trustee(s) to invite the RP(s) into the preassessment. The 
various affected trustee agencies must focus the initial efforts into 
coordinating their early efforts and coordinating with the OSC agency. 
Efforts to involve the RP(s) should not detract from this focus.

``Assessment/Restoration''

    Comment: Commenters who agreed with the general principle of RP 
involvement indicated that the assessment and restoration components of 
the assessment are the most appropriate for such involvement. However, 
the nature and extent of this involvement were widely contested. 
Concerning the initial invitation and acceptance, many commenters 
indicated that the thirty-day waiting period after Notice of Intent To 
Perform An Assessment provided in 43 CFR part 11 is not practicable for 
discharges of oil and some recommended a ten-calendar day period for 
response from the RP. Considering the degree of involvement, some 
commenters indicated that the RP can provide very useful information 
and financial resources for planning the assessment/restoration that 
might be unavailable to the trustees. An assessment/restoration plan 
developed with the full involvement of the RP will likely be cost 
effective and efficient. In addition, the RP would likely be more 
willing to participate in the assessment and restoration activities if 
involved in the planning process. One commenter noted that 
participation by the RP should also allow for keeping the RP informed 
as to how monies recovered are spent in restoration. Some commenters 
recommended the RP's role be similar to response actions, where the RP 
could develop and submit plans to assess natural resource damages to 
the trustee(s) for their approval. Once approved, the RP could 
implement the plans under the direction and monitoring of the 
trustee(s). One commenter recommended that the degree (size, duration, 
etc.,) of the discharge is immaterial to the involvement of the RP in 
the assessment process. Another commenter asked for clarification of 
what circumstances might justify denial of RP participation.
    Others recommended a more limited role for the RP, i.e., the up-
front funding or the conduct of actual assessment and restoration 
activities planned and approved by the trustee(s). However, such 
involvement must be tempered by the realization that under OPA the 
trustee(s) is ultimately and continuously responsible for all 
assessment/restoration activities, regardless of who pays for and/or 
conducts them. Some commenters indicated that OPA requires that the 
trustee(s) develop and implement a restoration plan, and any 
involvement of the RP contravenes this statutory mandate. One commenter 
noted that a ``requirement'' to invite RP participation contradicts the 
statement in the proposed rule that such participation is at the 
discretion of the trustee.
    Response: The nature of these comments and past experience with oil 
discharges indicate to NOAA the wide range of concern as well as 
support concerning RP involvement in any natural resource damage 
assessment. In some instances, extensive participation of the RP(s) has 
led to an early settlement of claims. In other assessments, RP 
involvement has, from the trustee's point of view, resulted in undue 
delays and a laborious process. The proposed rule follows NOAA's 
general philosophy of active involvement of the RP(s), but leaves the 
degree of that involvement up to the trustee(s), since it is the 
trustee(s) who is ultimately responsible for the conduct of the 
assessment/restoration process. The trustee(s) is encouraged to invite 
the known RPs to be involved in the assessment/restoration process. If 
not contacted during the Preassessment Phase, the trustee(s) should 
contact the known RPs as soon as practicable following the 
determination to proceed with some form of assessment procedure. The 
RP(s) should indicate a willingness to participate within ten days of 
receipt of the invitation. The trustee(s) and interested RP(s) should 
begin negotiations concerning the degree of involvement as soon as 
possible following that ten-day period.
    Incentives for the trustee(s) to involve the RP(s) are numerous, 
including a less litigious atmosphere, possible immediate funding for 
assessment activities, and additional data and personnel support. The 
RP(s) should also recognize the advantages of involvement, including 
lower costs since dual assessments may be avoided. The RP(s) can also 
often provide considerable expertise in the effects of oil upon natural 
resources and benefit from the public perception that there is a real 
interest by the RP(s) in restoring the environment.
    Both parties should negotiate in good faith, with restoration of 
the environment as the ultimate goal. The participation of the RP(s) 
throughout the entire assessment/restoration process need not be 
established, and parties are free to negotiate a series of agreements 
as the assessment/restoration continues. The involvement of the RP(s) 
should be clearly identified in the DARP, so that appropriate review 
and comment will be accorded. All assessment/restoration activities 
must remain under the direction and responsibility of the trustee(s), 
although the trustee(s) may allow the RP(s) to conduct all or part of 
an assessment. As with all restoration components and assessment 
components under EDA and CDA, appropriate peer review must be provided 
to ensure that the components are adequate. In addition, the trustee(s) 
is reminded that the ultimate responsibility and results of the damage 
assessment rest with the trustee(s).
    While the size of the discharge may be immaterial to the basic 
decision of RP involvement, it is relevant to the degree of RP 
involvement. Discharges appropriate for the compensation table or the 
Type A model require minimal assessment activities; therefore possible 
RP activity would be limited to restoration planning and 
implementation, unless the RP(s) opted to finance and possibly conduct 
either an EDA or CDA.

``Phased Joint Assessments''

    Comments: During the workshops and the March 13, 1992, ANPRM, NOAA 
presented the concept of a ``phased joint assessment,'' allowing the 
trustee(s) and RP(s) to jointly conduct certain phases of an 
assessment. Commenters indicated that, for joint work, industry would 
need some assurance that the damages amount determined by the process 
is reasonable and supportable. Others indicated that such agreements 
should be designed to avoid the conduct of dual assessments and provide 
provisions for nonperformance. Some commenters indicated that 
nonperformance provisions should only apply to RPs and not trustees, 
since the financial obligations for the assessment always rest with the 
RP.
    Others suggested a dispute resolution mechanism involving impartial 
third parties. At least one commenter stressed that it must be 
absolutely clear that completion of one phase indicates no obligation 
to proceed with another phase. Such agreements would give the RP(s) the 
greatest incentive to participate in and fund the assessment work, and 
still allow the trustee(s) to ensure that the assessment is carried out 
in accordance with OPA. Some commenters indicated that the joint 
assessment process may work well for data collection and analysis or 
for determining the extent of injury to the natural resources. However, 
some thought this cooperation would be unacceptable in the economic 
valuation portion of the assessment process where the actual amount of 
damages is determined based upon that injury because of the 
controversial nature of such damages in the RP community.
    Response: The proposed rule authorizes the trustee(s) and RP(s) to 
enter into enforceable agreements in order to conduct any phase or 
component of a natural resource damage assessment. The purpose of these 
agreements is to foster cooperation when practicable and provide 
incentives to both the trustee(s) and RP(s) to meet their respective 
obligations. The phased joint assessments are not mandatory and may 
cover any phase or component in the assessment process. The completion 
of one agreement does not obligate either the trustee(s) or the RP(s) 
to any further joint activities. Since these agreements can cover 
distinct phases, NOAA does not deem it necessary for third party 
dispute resolution, although non-binding mediation has been suggested. 
If disputes could not be settled through regular trustee and RP 
channels, parties could agree to terminate the agreement and not 
participate in any further joint activities.
    These agreements seem most appropriate for the conduct of 
assessment/restoration activities, but are certainly allowed for 
preassessment activities. The trustee(s) and RP(s) will most likely use 
these agreements for the EDA, since a cooperative RP is important to 
that procedure, and there is a limited suite of studies upon which 
agreements could be negotiated and finalized in a reasonable amount of 
time. However, these types of agreements may also be applicable to a 
CDA, where the trustee(s) and RP(s) wish to eliminate dual assessment 
studies.
    NOAA disagrees with the general notion that nonperformance 
provisions should only apply to RPs. Trustee agencies should also meet 
their agreed upon duties.

VII. Compliance/Conflict With Applicable Laws

     Section 990.18 pertains to the relationship of this proposed rule 
to other laws. Section 990.18(a) requires that the trustee(s) comply 
with all human worker health and safety requirements, as specified in 
the NCP. In many cases, the conduct of an assessment will require 
extensive field work during an actual discharge and/or cleanup. The 
trustee(s) is responsible for ensuring that the assessments are 
conducted in accordance with those applicable laws.
    Section 990.18(b) provides that other environmental and procedural 
laws also apply to the assessment/restoration process. This proposed 
rule mentions some of the more well-known laws, but the indicated list 
is for the purpose of example and is not inclusive.
    Subsection (c) mirrors the OPA provision that OPA does not preempt 
state oil spill laws and related regulations, thus allowing for the 
potential for possible duplicative and conflicting claims and 
recoveries. Since section 1018 of OPA does not prevent states from 
establishing additional liability as a result of a discharge of oil, 
this proposed rule cannot require state trustees to adopt or follow the 
procedures promulgated by NOAA in lieu of other state laws or damage 
assessment schemes. However, since OPA also prohibits the double 
recovery of natural resource damages, all trustees will be encouraged 
to conduct joint assessments and present a total unified claim for 
damages. Such claims should be deemed sufficient by the trustees to 
restore the injured natural resources and/or services and for 
diminution in values until restoration is complete.
    As discussed in the ``Use of Sums Recovered'' section of this 
proposed rule, any monies received under OPA must be used to restore, 
rehabilitate, replace, or acquire the equivalent of the affected 
natural resources and/or services. In this proposed rule, NOAA 
encourages the trustee(s) to concentrate upon ``fixing the resources'' 
and not be distracted by ill-fated ventures of attempting to divide the 
natural resources and pursue individual claims.
    The unified trustee approach will also encourage participation from 
the RP(s), instead of a multi-assessment process that would encourage 
the RP(s) to pursue litigation in order to lessen the number of claims. 
In addition, unified trustees will allow the pooling of resources for a 
more effective assessment and, if necessary, litigation.
    While NOAA cannot require the coordination and cooperation of all 
trustees, there are some incentives for such cooperation. For example, 
state trustees should be encouraged to coordinate with federal 
trustees, since section 7 of E.O. 12777, 56 FR 54757 (October 22, 
1991), requires that monies from the Fund for the ``initiation of 
assessments'' are provided to the federal trustees. The federal 
trustees may then distribute such monies to other trustees.
    As discussed in ``Trustee Coordination'' and ``Prespill Planning,'' 
many of these potential conflicts could be settled in advance of an 
actual discharge.

Response to Comments

Compliance With Applicable Laws and Statutes

``Double Recovery''

    Comment: Many commenters were concerned that since OPA does not 
preempt state laws, the trustee(s) would pursue claims under both state 
law and OPA, thereby using conflicting methodologies and enhancing the 
possibility of double recovery. Some suggested that the NOAA 
regulations should preclude recovery under OPA if damages were being 
pursued under state law. Others suggested that NOAA require that the 
trustee(s) proceed under either state law or OPA and thereby waive all 
claims under the statutory scheme not selected. Some commenters, 
recognizing that NOAA could not direct the trustee(s) to forgo claims 
under applicable state or federal statutes, suggested that early 
coordination among the trustees be strongly encouraged to avoid 
parallel assessment and claims procedures. Other commenters suggested 
that double recovery can be avoided by the trustees conducting joint 
assessments resulting in a single unified claim.
    Response: NOAA agrees with the last commenters. Where Congress has 
specifically declined to preempt state law in section 1018 of OPA, 
NOAA's proposed rule cannot force trustees to limit their options under 
applicable state or federal law. However, the regulations do encourage 
early coordination among the trustees and, in accordance with section 
1006(d)(3) of OPA, prohibit double recovery. Congress, in the 
Conference Report accompanying OPA, encourages coordinated assessments 
but does not preclude parallel assessments. (H. Con. Rep. No. 101-653, 
101st Cong. 2d Sess. 109 (1990).) Accordingly, NOAA has determined that 
the proposed rule cannot require joint trustee assessments. NOAA 
emphasizes, however, that trustees must recognize the potential of 
violating the double recovery prohibition if separate assessments are 
conducted, and trustees are encouraged to avoid even the appearance of 
double recovery by conducting a single joint assessment. In addition, 
the possibility of multiple assessments will likely foster litigation 
between the trustee(s) and the RP(s), thus delaying the assessment and 
restoration process. NOAA also notes that the trustee(s) could address 
many of these concerns through prespill planning and coordination.
    Comment: While double recovery is clearly disallowed under OPA, 
NOAA received comments that argued that natural resource damage 
assessment regulations must guard against ``counting any resource for 
two purposes.''
    Response: Injury to a given natural resource and the attributable 
cost of restoration, rehabilitation, replacement, or acquisition, can 
only be assessed once for purposes of a compensable claim. However, OPA 
also provides for recovery of diminution in value during the interval 
between the discharge and complete restoration. Any number of ``service 
flow'' costs, attributable to the natural resource injury, may be 
appropriately claimed, under OPA rules. These compensable losses would 
be additive, and would not constitute double recovery. Therefore, it 
would be incorrect to suggest, as the comment cited above seems to, 
that the OPA rules disallow counting any resource for two purposes.
    Comment: One commenter expressed concern over the lack of 
discussion of the applicability of the National Environmental Policy 
Act (NEPA) to the assessment/restoration process.
    Response: NOAA, in a change from the earlier notice, has determined 
that NEPA does apply to the assessment/restoration actions conducted by 
the trustee(s) following a discharge of oil. NEPA requirements should 
not pose an additional burden in time and effort on the trustee(s), but 
will be incorporated into the assessment/restoration process.
    Comment: Some commenters pointed out that certain states are in the 
process of completing, or have completed, procedures for conducting 
natural resource damage assessments. Concerns were raised over the 
possibility of conflicting procedures.
    Response: NOAA fully recognizes that states have the authority to 
develop their own assessment procedures under applicable state law. 
NOAA has attempted to consider the different procedures in the course 
of the rulemaking, but since many state statutes do not require that 
the measure of damages be the same as OPA, many procedures are not 
applicable to this rulemaking or OPA. When possible, NOAA has attempted 
to be as consistent with the applicable state procedures. It is also 
expected that the states currently contemplating developing assessment 
procedures will attempt to be consistent with this proposed rule.
    Comment: One commenter was concerned that a unified trustee 
approach may not always be practical, particularly where the RP is also 
a trustee.
    Response: If those circumstances would arise, a unified approach 
may still be possible, but different representatives of the trustee/RP 
may need to be identified for either RP or trustee purposes. Of course, 
there may be circumstances where parallel assessments would be 
preferable until liability issues were settled with the RP/trustee.
    Comment: Commenters also raised the issue of trustee conflicts over 
ownership of a particular resource, and that the regulations should 
attempt to clarify which resources should be appropriately claimed by 
which trustee. Other commenters indicated the regulations should not 
attempt to address the issue.
    Response: NOAA agrees with the latter approach. Congress provided 
very broad authority for federal, state, tribal and foreign trustees to 
claim trusteeship over natural resources. Section 1006 of OPA states 
that each trustee entity may exert trusteeship over natural resources 
``belonging to, managed by, controlled by or appertaining to'' that 
trustee entity. See 33 U.S.C. 2706(a). Additionally, many natural 
resources fall within the trusteeship of two or more trustees. For 
example, a salmon spends part of its life in federal waters, and part 
in state waters. Further, a tribe may also have certain rights over the 
salmon. Thus, rather than waste time and resources on negotiations and 
litigation in allocating natural resources into federal, state, tribal, 
and possible foreign categories, NOAA encourages the trustees to 
conduct unified assessments, complete with restoration plans that 
address the affected natural resources as a whole and not as a trustee-
specific piece-meal process. Trustees are encouraged to remember that 
the purpose of the OPA assessment/restoration process is to restore 
affected natural resources and/or services in an efficient and orderly 
manner. Arguments over such things as the ownership of a duck merely 
delay this process and, from the duck's point of view, are immaterial. 
As mentioned earlier, trustee prespill planning and coordination could 
alleviate this concern.

VIII. Review of Regulations

     Although OPA does not contain a specific provision for the update 
of this proposed rule, NOAA strongly believes that the proposed rule 
must be reviewed on a regular basis to keep the procedures current with 
new developments. Therefore, NOAA is recommends that this proposed rule 
be reviewed and revised as appropriate at least every five years.

Preassessment Phase

Subpart B Preamble

General

Purpose/Scope
    Natural resource damage assessment begins with the Preassessment 
Phase. The Preassessment Phase provides guidance to the natural 
resource trustee(s) for early action in the case of a discharge of oil 
through a two step process: (1) Preassessment Determination; and (2) 
Damage Assessment Determination. The first step or Preassessment 
Determination requires a decision by the trustee(s) to continue with 
the Preassessment Phase. Once preassessment is justified, the 
trustee(s) proceeds to the Damage Assessment Determination. In this 
second step, the trustee(s) decides which damage assessment procedures 
to undertake, if any. The trustee(s) may conduct limited data 
collection and analysis during these steps. The Preassessment Phase 
also identifies the conditions for notification, coordination, 
estimation of assessment costs, reporting, and emergency restoration. 
Additional guidance on conducting preassessment can be found in the 
Preassessment Phase Guidance Document. Michel, J., and E. Reinharz. 
1993. Preassessment Phase Guidance Document. Research Planning Inc., 
Columbia, SC & NOAA-Damage Assessment Regulations Team, Washington, DC.
    Notification: A natural resource damage assessment begins with 
notification of a discharge of oil. Notification should be consistent 
with the NCP. According to the NCP, the OSC or lead response agency 
generally provides notification to the natural resource trustee(s) when 
natural resources and/or services may be injured by a discharge of oil. 
If the trustee(s) learns of an unidentified or unreported discharge of 
oil, the trustee(s) must report that discharge to the appropriate 
authority as designated in the NCP.
    After learning of a discharge of oil, the trustee(s) should attempt 
to notify all other known potential trustees of the possibility of a 
natural resource damage assessment. Actions taken by the trustee(s) 
must be consistent with the NCP and this subpart.
    In addition, in accordance with section 1011 of OPA, the OSC or 
lead response agency must consult with the affected trustee(s) 
concerning removal actions.
    Coordination: To the extent practicable, the Preassessment Phase 
should be coordinated with the response agency(ies) (consistent with 
the NCP), trustee(s), and possibly RP(s). Such coordination fosters 
cooperation and early and effective implementation of the Preassessment 
Phase. While the proposed rule encourages the trustee(s) to contact the 
RP(s), the trustee(s) cannot afford to delay the Preassessment Phase 
while negotiating with the RP(s). Although not required by this 
proposed rule, prespill planning, as outlined in Sec. 990.16, will 
facilitate the coordination of the Preassessment Phase and other 
assessment/restoration actions.
    Preassessment Phase Costs: Preassessment Phase costs include and 
are recoverable only for trustee-approved activities that deal directly 
with preassessment. Examples of Preassessment Phase costs include, but 
are not limited to, costs necessary for: (1) Notification; (2) 
coordination; (3) preassessment determination; (4) damage assessment 
determination; (5) data collection and analysis; (6) report 
preparation; and (7) emergency restoration. Excluded from preassessment 
costs are strictly response-related actions, and costs that reflect 
non-incident specific activities performed by the trustee(s) in the 
management of natural resources and/or services. Preassessment costs 
should be supported by appropriate and sufficient documentation.
    Preassessment Phase Report: At the conclusion of the Preassessment 
Phase, the trustee(s) should document: preassessment actions, estimated 
costs related to those actions, and decisions whether to proceed with 
preassessment and damage assessment/restoration actions. These 
materials become the Preassessment Phase Report. The report should 
provide sufficient information for use in the damage assessment/
restoration process, if necessary. If no additional actions are 
undertaken, the Preassessment Phase Report becomes the Report of 
Assessment. If the trustee(s) conducts further assessment/restoration 
actions, the Preassessment Phase Report becomes part of the Report of 
Assessment. If the trustee(s) decides to proceed with damage assessment 
and restoration actions, the next step involves the development of a 
DARP to guide the trustee(s).

Preassessment Phase Process

    Preassessment Determination: Following notification of a discharge 
of oil, the trustee(s) must conduct a Preassessment Determination to 
decide whether to continue with the Preassessment Phase. The 
determination is intended to be primarily a ``desktop'' exercise that 
is based upon readily available information on the nature of the 
discharge and environmental setting; namely the circumstances of the 
discharge incident, oil characteristics, nature of the receiving 
environment, and natural resources and/or services characteristics.
    Using this information, the trustee(s) should determine if: (1) The 
discharge of oil does not qualify for the exclusionary conditions as 
set forth in section 1002(c) of OPA; (2) the trustee(s) has authority 
under OPA to assert damage claims for natural resources and/or services 
that may be adversely affected by the discharge of oil; and (3) there 
is a reasonable probability that the trustee(s) can make a successful 
damage claim based on the scientific, economic, and legal merits of the 
case (i.e., potential for injury resulting from the discharge of oil 
and successful and meaningful restoration and/or compensation).
    If these conditions are met, the trustee(s) may proceed with 
preassessment actions. If the trustee(s) determines that all three 
conditions are not met, further preassessment activities should not be 
conducted. Costs incurred to this point are not recoverable as damages 
if the discharge meets the exclusionary conditions of section 1002(c) 
of OPA. Otherwise, the costs up to this point are recoverable from the 
RP(s) or Fund. Damage Assessment Determination: Following the decision 
to proceed with the Preassessment Phase, the trustee(s) collects data 
sufficient to decide which damage assessment procedures to conduct, if 
any. The proposed rule provides that the trustee(s) should follow the 
steps outlined below in Damage Assessment Determination:
    (1) Characterize Discharge and Environmental Setting. Based on data 
collection and analysis, the trustee(s) should first characterize the 
discharge and environmental setting. These characterizations encompass 
the following categories: circumstances of the discharge incident; oil 
characteristics; nature of the receiving environment; and natural 
resources and/or services characteristics. These activities are similar 
to those undertaken in the Preassessment Determination, but are now 
conducted in greater detail. Characterization of the discharge and 
environmental setting will serve as the basis for the analysis of the 
following steps.
    (2) Determine Potential Exposure. Once the trustee(s) has 
characterized the discharge and environmental setting, he should then 
determine the potential for direct exposure from the discharge of oil. 
The exposure pathway through which the oil may be transported should 
also be determined. The potential for exposure may be based upon 
fingerprinting or chemical analyses of the pathway, bioaccumulation 
information, and transport/fate models. The trustee(s) is further 
required to consider the indirect adverse effects in a natural resource 
and/or service, such as the reduction or elimination of higher trophic 
level resources not exposed to the discharge of oil which rely on 
affected lower food chain resources exposed to the discharge of oil, 
e.g. birds that feed on fish. In the absence of exposure, the 
trustee(s) should determine impaired/diminished use of a natural 
resource and/or service, such as a recreational beach threatened by a 
discharge of oil. Such injury determinations are conducted in the 
following step.
    (3) Determine Potential Injury. Simultaneous with the above step, 
the trustee(s) should determine those natural resources and/or services 
that may be directly or indirectly injured from the discharge of oil. 
Potential injury determination requires that the trustee(s) describe 
the manner in which the physical, chemical, biological, or other 
attributes of natural resources and/or services may be adversely 
affected. Chemistry, toxicity and ecological effects information, and 
effects models may be useful in determining potential injury to natural 
resources and/or services. If there is no potential for injury, 
preassessment actions should cease and no further damage assessment 
procedures should be conducted.
    (4) Characterize Potential Risk to Natural Resources and/or 
Services. Characterizing risk requires that the trustee(s) evaluate the 
potential cause-effect associations from the weight of evidence 
developed in the previous steps as well as using best professional 
judgment. A formalized risk assessment procedure may be used, but is 
not required. Potential risk of injury to natural resources and/or 
services may occur if it is likely to result from the discharge of oil 
as defined in this proposed rule.
    The correlation of field and laboratory information is the best 
means of establishing potential risk. If such correlation is not 
possible, potential risk may be determined relative to established 
standards or criteria, health advisories, bans on the use or 
consumption, or limits on harvesting applicable to the resource. Where 
literature or regulatory information is insufficient, transport/fate/
effects models may provide evidence of possible links between the 
discharged oil and predicted injuries.
    Once the trustee(s) determines that there is the potential for risk 
of injury to natural resources and/or services, the trustee(s) should 
continue with the Damage Assessment Determination. If there is no 
potential for risk, preassessment actions should cease and no further 
damage assessment activities should be conducted.
    (5) Estimate Extent of Injury to Natural Resources and/or Services. 
The trustee(s) should estimate the current and future extent, i.e., 
magnitude and duration, of injury to natural resources and/or loss of 
services after establishing potential risk to those resources and/or 
services. This determination requires that the trustee(s) define the 
spatial and temporal boundaries of the discharge and its effects on 
natural resources and/or services. This information should be described 
or mapped in such a way as to provide a sequential summary of the 
discharge and associated effects.
    Defining boundaries for potentially affected natural resources and/
or services requires comparison of affected to unaffected conditions 
using baseline, reference, and/or control data. Current trends can be 
based on measurements and/or model predictions of existing conditions. 
Future trends can be based on model predictions of anticipated 
conditions. Identification of boundaries makes it more likely that all 
natural resources and/or services affected by the discharge of oil will 
be included.
    If estimates on the extent of injury to natural resources and/or 
services can be determined in a cost-effective manner, the trustee(s) 
should then proceed with the damage estimation using any of the 
procedures in the proposed rule. If such estimates cannot be determined 
in a cost-effective manner, the trustee(s) should cease preassessment 
activities.
    (6) Estimate Damages. Damage estimation should encompass: (1) the 
environmental and/or economic values of a natural resource and/or 
service potentially injured until recovery; (2) the likely cost of 
restoration actions, if any; and (3) all assessment-related costs. As 
with all estimates during the Preassessment Phase, such estimates are 
strictly preliminary and subject to change as more information is 
obtained.
    If damage estimation is practicable, the trustee(s) should then 
proceed with selecting the most appropriate damage assessment 
procedure. However, if the Preassessment Phase results in a 
determination that further data collection and analysis are not 
necessary, no additional assessment actions are to be taken.
    The proposed rule authorizes the trustee(s) and RP(s) to agree to 
undertake limited injury determination studies to determine that no 
significant injury to natural resources and/or services has resulted 
from the discharge. While this may seem to be an unlikely scenario, 
there may be circumstances when the trustee(s), possibly in conjunction 
with the RP(s), would like to conduct additional studies for scientific 
or public information purposes. Where no injury is identified, the 
costs of these studies are not recoverable under this subpart and must 
be borne by the trustee(s). Should such additional studies indicate 
that significant and quantifiable injury has occurred to natural 
resources and/or services, the trustee(s) may reinitiate the 
Preassessment Phase, and the costs are then part of the assessment 
costs.

Select Damage Assessment Procedures

    Following the decision to continue damage assessment, the 
trustee(s) is encouraged to use the damage assessment procedure that is 
most appropriate to the discharge. To assist the trustee(s) in making 
this decision, the proposed rule identifies general considerations and 
specific factors when selecting the procedure(s). These proposed 
considerations and factors are not rigid, nor does the proposed rule 
require the trustee(s) to select a particular procedure for a 
particular discharge. The trustee(s) shall generally consider the 
following in determining which type of damage assessment approaches to 
utilize: (1) The size and nature of the discharge and environmental 
setting; (2) the extent to which the discharge of oil is expected to 
cause injury to natural resources and/or services; (3) the expected 
environmental and/or economic values provided by the affected natural 
resources and/or services; (4) the extent to which response actions 
carried out or planned will avoid further injury to natural resources 
and/or services without further action; (5) the extent to which the 
discharge meets the conditions for using the potential damage 
assessment procedures; (6) the extent to which injury to natural 
resources and/or services can be determined with available information 
and quantification methods; (7) the extent to which restoration 
alternatives can return injured natural resources and/or services to 
their baseline or comparable conditions; (8) the extent to which 
damages based on injury to natural resources and/or services can be 
determined with available information and quantification methods; and 
(9) whether the anticipated damage assessment procedure(s) is cost-
effective. Specific selection factors for each damage assessment 
procedure are provided below.
    The trustee(s), using his best professional judgment, has the 
option to use any of the four procedures, singly or in combination, to 
craft an assessment process that is most appropriate for the situation 
at hand. The assessment designed by the trustee(s) would receive the 
rebuttable presumption, so long as the procedures included in that 
assessment are encompassed by this proposed rule and there is no double 
recovery.
    NOAA is specifically requesting comments on the advantages or 
disadvantages of proposing such a range of procedures. It is hoped that 
the trustee(s) can use this set of standard procedures in a beneficial 
manner to craft an assessment that is most appropriate for the 
particular discharge of concern.
    Compensation Formulas: The estuarine/marine and inland waters 
compensation formulas proposed are applicable to the vast majority of 
discharges of oil. These compensation formulas are available for use by 
the trustee(s) for relatively small discharges, particularly when 
assessing discharges that occur in areas where it would be difficult or 
very costly to ascertain precise environmental effects, e.g., small 
discharges in open water or occurring in areas that are subject to 
frequent environmental insults. Where the circumstances of the actual 
discharge are determined by the trustee(s) to be far out of bounds of 
the compensation formula, then the trustee(s) should use one of the 
other assessment procedures.
    The formulas assume various effects to natural resources likely to 
occur as a result of a discharge of oil. These assumptions take into 
account the amount and type of oil discharged and region and habitat 
type in which the discharge occurs. This approach allows both a 
national consistency and regional specificity. Also, the use of 
dispersants cannot be factored in since there likely will be additional 
effects in the water column as a result of using them. For the purposes 
of the compensation formulas, residual and tidal currents are assumed 
to be zero, the discharge is assumed to be instantaneous at the water 
surface, seasonal temperatures and wind speed are ``set at average 
values,'' as explained in volume I of the technical document, and wind 
direction is controlled to avoid having the discharge move into a 
different habitat. Also, the ranges of discharge sizes covered by the 
formulas are: 10 gallons to <1,000 gallons; 1,000 gallons to <5,000 
gallons; 5,000 gallons to <10,000 gallons; and 10,000 gallons to 50,000 
gallons.
    However, if there are significant differences between the 
assumptions in the formulas and incident of concern, then the formulas 
may not be appropriate for the discharge of concern. Finally, these 
formulas allow an estimate of damages per gallon, taking into account 
average restoration costs plus average lost direct use values pending 
restoration. Passive use (nonuse) values are currently not included in 
the formulas. Therefore, discharges under 50,000 gallons that are 
likely to result in a significant loss in passive use values should be 
assessed under another procedure.
    The Type A model: When considering using the Type A model for an 
assessment under OPA, the trustee(s) should consider several factors. 
Basically, the Type A may be appropriate when the trustee(s) determines 
that the compensation formulas of subpart D of this part alone are not 
sufficient to estimate the injury and damages resulting from the 
discharge, and that there is no other cost-effective procedure 
available to estimate the injury and damages resulting from the 
discharge.
    Key factors involved in the decision to use the Type A model for an 
assessment under OPA are found at 43 CFR 11.33. In the preamble to the 
final rule incorporating the Type A model, DOI stated:

    The rule requires that whenever an injury to a natural resource 
due to an incident occurs in the coastal or marine environment a 
Type A assessment shall be performed unless the limitations of the 
Natural Resource Damage Assessment Model--Coastal and Marine 
Environments (NRDAM/CME) make it inappropriate to the given 
incident. The assumptions and data bases contained in the NRDAM/CME 
constrain its applicability to only selected types of discharges or 
releases and resources. For example, the discharge or release must 
occur in, or enter into, a coastal or marine environment; the 
substance discharged or released must be contained in the chemical 
data base of the NRDAM/CME; and estimates of the type and quantity 
of biological resource potentially injured should not differ 
significantly from the averages listed within the biological data 
base for the area in which the discharge or release occurred.
    Whether certain of these conditions exist will necessarily be a 
subjective decision required by the authorized official in some 
incidents. The NRDAM/CME, including its data bases, is based upon 
averaged values and may not necessarily reflect the actual events of 
any specific incident (52 FR at 9048 (March 20, 1987)).

    The factors discussed at 43 CFR 11.33 include the following 
requirements: the substance discharged or released is contained in the 
database of the model; the estimated quantity and species type of 
biological resources potentially injured are not expected to differ 
significantly from the average biomass listed in the database of the 
model, for the season, province, and bottom type in which the discharge 
or release occurred; the discharge or release was of a short duration; 
the discharge or release was minor; the discharge or release was a 
single event; the estimated injury to biological resources due to the 
discharge or release is expected to be primarily due to mortality of a 
species listed in data base of the model; the discharge or release 
resulted in the closure of a fishing area, a beach area, or a hunting 
area; the discharge or release occurring outside the coastal or marine 
environment resulted in the substance entering the coastal or marine 
environment; the use of chemical dispersants or other agents or 
management actions used in a cleanup of a discharge or release is not 
estimated to have caused significant injury to natural resources; the 
discharge or release occurred at or near the water surface of the 
coastal or marine environment or in the intertidal area; the discharge 
or release is not expected to cause a significant change in the price 
of species categories by season, province, or bottom type contained in 
the data base of the model; and the expected injury to the biological 
resource due to the discharge or release is not expected to have been 
primarily due to exposure through the air pathway (43 CFR 11.33).
    Expedited Damage Assessment: Included in the range of proposed 
damage assessment procedures is the expedited damage assessment (EDA). 
EDA reflects a damage assessment approach that is intermediate between 
the current Type A model and proposed Comprehensive Damage Assessment 
(CDA) procedures. This approach recognizes that the trustee(s) may want 
to address more effects than currently available in the Type A model or 
the proposed compensation formula, particularly for inland discharges. 
The approach also recognizes that the size, location, and timing of a 
given discharge may not warrant the complex, prolonged procedures 
associated with a CDA.
    The trustee(s) may determine that the use of an EDA is appropriate 
after considering the factors discussed below. (1) The use of the 
compensation formulas or Type A models alone would not sufficiently 
account for the injury and damages resulting from the discharge. This 
decision may be influenced by the following data: The volume of the 
discharge is not known or readily estimated; the discharge occurred 
over a period greater than a few days; injuries to unique habitats or 
species occurred and are readily quantified; a complex discharge 
trajectory that covers very large areas that are not readily modeled; 
the distribution and/or abundance of affected biota are known to differ 
significantly from seasonal averages (e.g., usually large 
concentrations of wintering waterfowl were present and affected); the 
ecosystems affected are not addressed by the model (e.g., rivers, small 
lakes); and there are known, readily determined injuries resulting from 
chronic discharges.
    The injury and damages resulting from the discharge may be 
adequately calculated using a combination of the Type A Model, and 
limited, focused injury determination/quantification and compensable 
values studies. For some discharges, the Type A model may address most 
of the potential injuries and damages, with a few notable exceptions 
that can be readily determined from limited data collection efforts. 
The most cost-effective approach is the use of components of the Type A 
model to calculate damages for those natural resources and/or services 
that are appropriate, and conduct the limited studies needed to address 
the remaining injuries to natural resources and/or services. For 
example, the Type A model may be used to calculate damages to 
fisheries, assuming the conditions of the discharge generally meet the 
assumptions in the model. Recreational losses from beach closures may 
be calculated separately based upon incident-specific, baseline data on 
user days, and surveys conducted after the discharge.
    (2) There is readily available information on the nature of the 
discharge and its effect on natural resources and/or services. To the 
extent practicable, the trustee(s) should rely on existing information 
regarding natural resources and/or services at risk when undertaking an 
EDA. This is particularly true for information that helps establish a 
baseline for natural resources and/or services. Such data enable the 
trustee(s) to: (a) Establish background levels and types of 
hydrocarbons in key exposure pathways prior to the discharge; (b) 
characterize the physical and chemical parameters prior to the 
discharge; (c) characterize the status of the biological and habitat 
resources prior to the discharge; and (d) identify other information 
sources, such as population surveys or catch statistics that may be 
useful in quantifying injury and determining lost services. In addition 
to baseline data, other information useful for an EDA includes 
literature that documents injuries to similar natural resources and 
identifies the level and flow of services provided by injured natural 
resources.
    Sources of information include government, academia, and private 
organizations. Existing federal monitoring programs that may provide 
the data for environmental parameters include NOAA's National Status 
and Trends (NS&T), U.S. Fish and Wildlife's Biological and 
Environmental Status and Trends (BEST), U.S. Geological Survey's 
National Water Quality Assessment Program (NAWQA), the U.S. EPA's 
Environmental Monitoring and Assessment Program (EMAP), and Fisheries 
of the United States (NMFS, NOAA). Abundant baseline information in 
each of the categories may not always be available to the trustee(s). 
Failure to locate relevant information, however, does not preclude the 
trustee(s) from selecting an EDA. An EDA may still be appropriate 
provided that the trustee(s) can obtain the necessary data from limited 
focused studies.
    Selection of an EDA may depend on general categories and 
characteristics of oil. The physical and chemical properties of oil may 
help determine the exposure pathway, natural resources likely to be 
injured, and duration of that injury. The nature and extent of injury 
to natural resources, in turn, will depend on the type of petroleum 
hydrocarbons. Many types of oil have been studied extensively and their 
particular characteristics and effects upon natural resources are often 
well established in scientific literature. Discharges of such oil are 
most suitable for an EDA. In circumstances where the trustee(s) 
determines that the characteristics and effects of the particular 
discharge are not well known or are uncertain, an EDA may yet be 
appropriate provided that injury can be established by limited, focused 
studies.
    Petroleum hydrocarbons can generally be organized into the 
categories of: (1) Very light refined products (i.e., gasoline and jet 
fuel), (2) light oil (i.e., diesel, No. 2 fuel oil, and certain light 
crudes), (3) medium crude oil, and (4) heavy oil (i.e., No. 6 fuel oil 
and Bunker C). For each category, some generalizations can be made 
regarding the volatility, degree of persistence, and toxicity 
associated with oil. These characteristics should assist the trustee(s) 
in determining whether an EDA is appropriate. See Appendix C for a 
discussion regarding the attributes of each of the categories and the 
suitability of each category for an EDA.
    Size and location are other important factors to be considered in 
determining whether an EDA is appropriate. Accordingly, the proposed 
rule encourages the trustee(s) to take both size and location of the 
discharge into account when selecting the relevant damage assessment 
procedure.
    Discharges smaller than 50,000 gallons in open water generally 
either disperse, contaminate small areas, or have limited effects. 
Compensation formulas or the Type A model may adequately address damage 
assessment needs for these discharges. Discharges larger than 1,000,000 
gallons may spread over large areas and lead to extensive contamination 
and effects to natural resources and/or services. Accordingly, 
discharges greater than 1,000,000 gallons may require a CDA with 
greater emphasis on injury determination and quantification. The EDA 
approach, therefore, may be most appropriate for most discharges 
between 50,000 and 1,000,000 gallons. These guidelines do not preclude 
the trustee(s) from conducting an EDA for discharges below 50,000 or 
above 1,000,000 gallons. A discharge less than 50,000 gallons that 
occurs in a unique or sensitive habitat, for example, may lead the 
trustee(s) to conclude that the Type A model should be supplemented 
with limited, focused studies. Likewise, injury determination and 
quantification for a discharge of 1,000,000 gallons in open water may 
be adequately addressed by an EDA. Accordingly, the trustee(s) will 
have to assess the size of the discharge in the context of the location 
of the discharge and natural resources and/or services affected when 
selecting the appropriate damage assessment procedure.
    When discharges occur in unique or sensitive habitats, such as 
marshes, mangroves, or coral reefs, or where there are synergistic 
effects, the effects relative to the size of the discharge may be 
disproportionately large. Under those circumstances, selection of an 
EDA will be based upon the trustee's(s') determination that the 
procedure can accurately account for this injury. Where there are 
studies documenting important aspects of a unique or sensitive habitat, 
for example, the existence of this data may be relevant in a 
trustee's(s') decision to select an expedited approach.
    Occasionally, a single location may be plagued by consecutive 
discharges in a relatively short time frame. Likewise, a discharge may 
occur in a chronically degraded location where multiple pollutants have 
been discharged over long periods of time. Under either of these two 
scenarios, it may be difficult for the trustee(s) to differentiate 
effects resulting from each discharge with only minimal field data. 
Designing and implementing a study to differentiate effects pursuant to 
the CDA procedures, however, is likely to be very costly. Accordingly, 
where the trustee(s) expects that the costs of a CDA under such 
circumstances are likely to greatly exceed the estimated damages, the 
trustee(s) may wish to consider an EDA.
    (3) The injury and damages resulting from the discharge can be 
adequately calculated by conducting limited, focused injury 
determination/quantification and compensable values studies. These 
studies are generally limited in two ways. First, the trustee(s) should 
be able to limit the types of natural resources for which injuries will 
be sought to those of recreational, commercial, or ecological 
importance as well as resources of special significance. Second, the 
scope of injuries the trustee(s) will examine should be limited to 
mortality, sublethal effects that can be determined with limited and 
focused studies, and/or lost services.
    Natural resources and/or services of commercial, recreational, or 
ecological importance, or resources of special significance are most 
appropriate for an EDA because such resources are often being managed, 
conserved, or protected. Accordingly, extensive data on life history, 
population, distribution, abundance, and economic values for services 
may already exist for these resources. Further, concern regarding the 
effects of oil on these resources may have stimulated studies that 
document certain effects. Extensive new data collection requirements to 
establish injury for these natural resources and/or services, 
therefore, may not be necessary.
    The scope of injuries addressed in an EDA should be more limited 
than that of a CDA. For an EDA, the trustee(s) should focus primarily 
on mortality, sublethal effects that are considered significant and can 
be documented with limited, focused studies, and loss of services 
provided by natural resources.
    (4) Potential restoration actions can be implemented without 
complex (i.e., multiple habitats/biological resources), prolonged 
(i.e., multi-year) injury determination/quantification and compensable 
values studies. One of the main objectives of an EDA approach is to 
speed the damage assessment process so that restoration is initiated 
more quickly. Thus, the restoration alternatives for the affected 
resources and/or services should be technically feasible, have a high 
probability of success, are cost-effective, and result in a net 
environmental benefit. In addition, the injury determination/
quantification and compensable values studies should be cost-effective 
when compared to the likely level of damages. Where, for example, the 
costs of a CDA greatly exceed the expected damages, the trustee(s) 
should consider narrowing the scope of studies and using an EDA. 
Finally, restoration actions should be derived from the limited, 
focused injury studies.
     Comprehensive Damage Assessment: Comprehensive Damage Assessment 
(CDA), by its nature, is complex, requiring extensive field and/or 
laboratory studies to document and quantify injury, plan a restoration 
approach, and estimate compensable values. Such studies usually require 
scientifically valid study designs so that the resulting data and 
analyses meet the standards of litigation-quality products. The key 
factors for selection of CDA are summarized below.
    (1) The injury and damages resulting from the discharge can best be 
determined through a complex, prolonged process, involving a broad 
scope of injury determination/quantification and compensable values 
studies. The discharge conditions that would not be sufficiently 
considered by any of the other damage assessment approaches include, 
but are not limited to: the extent of exposure and injury is large 
spatially and temporally (e.g., affecting many habitats and species 
through multiple pathways that are pervasive and persistent); injury 
via chronic toxicity is likely to comprise a significant component; the 
discharge conditions are likely to result in significant 
bioaccumulation; community- and ecosystem-level effects are likely; and 
there are no standards or criteria with which to make comparison. 
Injury at discharges where ecosystem-level effects may be significant 
can only be assessed from in-depth, incident-specific studies. Further, 
when chronic exposure via contaminated sediments and food webs 
resulting in sublethal effects is believed a significant component of 
the injury, the only approach for determining and quantifying is 
through detailed studies. For these conditions, there are seldom 
sufficient baseline data or a basis for calculating damages.
    (2) Information concerning the nature of the discharge and its 
effects on natural resources and/or services is not readily available. 
All of the other approaches only consider effects that are well-
documented or readily determined. There are many conditions of a 
discharge that are not adequately studied in the past and would require 
detailed studies to determine natural resource and/or service injuries 
and damages, such as: discharges of an unusual oil type for which there 
were insufficient data on behavior, fate, and toxicity; when the 
exposure pathway is not clearly identifiable; significant effects are 
likely to occur to natural resources that were not previously studied, 
e.g., there are little data on the effects of oil on terrestrial 
mammals, reptiles, or amphibians; and economic valuation techniques are 
not well-developed for the affected natural resources and/or services.
    (3) Potential restoration actions cannot be determined or 
implemented without substantive injury determination/ quantification 
and compensable values determination studies. Where the distribution 
and abundance of injured natural resources and quality and quantity of 
services are poorly understood or considered unique, more complex and 
prolonged assessments may be needed as a basis for restoration. Limited 
injury studies may be insufficient to determine the feasibility, 
effectiveness, success, and cost-benefit of various restoration 
alternatives in such cases. Quantitative information on injury may be 
critical to recovery, monitoring (especially if more than one 
generation of a natural resources is injured), and potential 
restoration research (new approaches to restore natural resources and/
or services not recovering or recovering at lower than expected rates).

Data Collection and Analysis

    Purpose/Scope: The proposed rule allows the trustee(s) to conduct 
limited data collection and analysis (data collection) throughout the 
Preassessment Phase. The purpose of data collection is to ensure that 
there is sufficient information to evaluate the risk to natural 
resources and/or services resulting from the discharge of oil. 
Selection of protocols and Quality Assurance (QA) for data collection 
in preassessment should be based on the guidance provided in subpart C.
    Only information that provides a connection to natural resources 
and/or services injury or is considered necessary to the assessment 
process, likely restoration alternatives to be implemented, and/or 
compensable values should be collected. Where practicable, such 
information should be collected from other sources such as response 
agencies in order to avoid or, at least, minimize duplication of 
efforts. Appropriate data collection in the Preassessment Phase 
include: (1) Data necessary to make a determination to proceed with the 
Preassessment Phase; (2) ephemeral or perishable data that may be lost 
if not collected immediately; and (3) necessary data that serves as the 
basis for the selected damage assessment procedure, the absence of 
which data would prevent the trustee(s) from proceeding with damage 
assessment determination of Sec. 990.23 (i.e., input into the 
compensation formulas or Type A models, or the study design for the EDA 
or CDA).
    Baseline and Reference/Control Information:  Data collection 
encompass baseline and reference/control information. Baseline 
information refers to on-site data of conditions prior to the discharge 
that are compared to incident-specific information of those same 
conditions subsequent to the discharge. Reference and control 
information refers to off-site data of unaffected conditions that are 
compared to similar or the same on-site conditions affected by the 
discharge. Case histories of previous discharge events or other 
relevant studies, although not considered as baseline or reference/
control information, may also prove useful where conditions of the case 
or study are comparable in some manner to the actual discharge.
    When available, the trustee(s) should collect baseline data. 
Baseline data is important because it provides a temporal comparison of 
conditions on natural and other (human-induced) variability. The value 
of baseline information depends on the: (1) Corresponding quality of 
baseline and incident-specific data; (2) absence of intervening events 
such as ancillary contamination, storms, droughts, etc.; and (3) 
comparability of the study design between baseline and incident-
specific activities. In many circumstances, though, the quality or 
quantity of baseline data may not be adequate or sufficient to 
determine the potential risk of injury to natural resources and/or 
services. When such baseline information is lacking, the trustee(s) may 
need to rely on historical data, if available, that may serve to 
identify preexisting trends.
    In contrast to baseline information, the value of reference or 
control data lies in the ability to make spatial comparisons. Reference 
and control conditions should be selected based on their resemblance 
and proximity to the affected conditions of the discharge, and 
exclusion from potential impact from the discharge. However, such 
conditions may not always be available because of the nature or size of 
the discharge relative to natural resources and/or services affected, 
or the special status of specific natural resources and/or services 
(protected natural resources and/or services). In such cases, the 
trustee(s) may need to rely on other comparable measures, such as case 
histories or other relevant studies.
    The trustee(s) is encouraged to collect both baseline and 
reference/control information when practicable. Together, such 
collection efforts provide the optimal means of determining potential 
risk and estimating damages to natural resources and/or services.

Emergency Restoration

    Section 990.25 of the proposed rule provides authority for the 
trustee(s) to conduct emergency restoration to be taken by the 
trustee(s) under limited circumstances. Emergency restoration is not 
considered to be an actual part of the Preassessment Phase, but is 
included in this discussion and the proposed rule since it will likely 
occur during the time frame of the Preassessment Phase. Ideally, 
emergency restoration would be addressed through the response actions 
authorized by the OSC. Emergency restoration is intended for those 
limited situations where immediate action is required to avoid an 
irreversible loss or prevent or reduce any continuing danger to natural 
resources and/or services. Emergency restoration may be taken following 
notification and during response with the approval of the OSC such that 
it does not interfere with response actions. The proposed rule does not 
augment the existing authority of the trustee(s). For example, if the 
trustee(s) has independent authority to undertake emergency 
restoration, the trustee(s) should exercise that authority. This 
provision creates no additional authority to take actions on lands or 
waters the trustee(s) would not otherwise have authority to take.
    If practicable under the circumstances, the RP(s) should be invited 
to participate prior to the trustee(s) proceeding with emergency 
restoration. However, the trustee(s) cannot delay such restoration for 
any reason. The costs for conducting emergency restoration are 
recoverable as damages and are not considered response-related costs.
    As consistent with section 1012(j)(2) of OPA, emergency restoration 
is an exception to the requirement that actions be subject to prior 
public review and comment. Because of this exception, the proposed rule 
requires that the trustee(s) demonstrate that any emergency restoration 
taken under this authority are reasonable and necessary, and conducted 
in a cost-effective manner as defined in the proposed rule. Any costs 
associated with emergency restoration may be claimed as part of the 
damage claim or as uncompensated claims under section 1012(a)(4) of 
OPA. The appropriateness of such claims against the Fund is currently 
under consideration.

Response to Comments

    Comment: Several commenters discussed the concept that the 
trustee(s) must meet certain criteria in the Preassessment Phase before 
proceeding with additional assessment actions. Those criteria mentioned 
were: (1) A discharge of oil has occurred; (2) natural resources for 
which the trustee(s) may assert trusteeship have been or are likely to 
have been injured by the discharge of oil; (3) the quantity and 
concentration of the discharged oil are sufficient to potentially cause 
injury to those natural resources; (4) data sufficient to pursue an 
assessment are readily available or likely to be obtained at reasonable 
cost; and (5) response actions carried out or planned do not or will 
not sufficiently remedy the injury to natural resources or the public 
has not been adequately compensated for a loss of natural resource 
services.
    Many commenters strongly supported the notion that the proposed 
rule should require that all five criteria be met. One commenter 
indicated that the fifth criterion should be eliminated, since it is 
premature, unduly vague and subjective and duplicates the first four 
criteria. Some commenters were concerned that the meeting of all five 
criteria was unnecessary and contrary to OPA. In addition, the fourth 
criterion is unwarranted since lack of data or its cost is irrelevant 
to the extent of injury and should not prevent the assessment from 
proceeding. Some commenters stated that only significant and 
compensable injuries to natural resources must exist before proceeding 
with additional assessment procedures. One commenter was concerned that 
NOAA would allow the trustee(s) to continue assessments ``if the public 
has not been adequately compensated for a significant loss of natural 
resource services.'' This language was thought to be vague and 
subjective.
    Response: NOAA is proposing a two-step Preassessment Phase to 
determine: (1) if preassessment is should continue, and (2) with which 
assessment procedure to proceed, if any. While no longer identified as 
five separate criteria, the trustee(s) will have to determine that it 
is legally, scientifically, and economically justified to proceed with 
some form of damage assessment. In the first step, the trustee(s) will 
likely rely upon readily available data. In order to proceed with a 
preassessment, the trustee(s) must determine that: (1) the discharge 
does not qualify for an exclusion under section 1002(c) of OPA; (2) 
natural resources and/or services under trusteeship may be adversely 
affected by the discharge; and (3) there is a reasonable probability 
that the trustee(s) can make a successful damage assessment claim based 
on the scientific, economic, and legal merits of the case (i.e., 
potential for injury resulting from the discharge of oil and successful 
and meaningful restoration and/or compensation).
    If these conditions are not met, the trustee(s) must discontinue 
any further preassessment activities. Once the trustee(s) has met these 
conditions, additional data collection and analysis may be conducted to 
determine the most appropriate damage assessment procedure.
    The previous five criteria are incorporated in this proposed rule 
at different steps, and should still be addressed by the trustee(s) 
during the Preassessment Phase. The first two criteria are two of the 
conditions for the Preassessment Determination of Sec. 990.21(c). The 
essence of the other three ``criteria'' would be considered during the 
Damage Assessment Determination of Sec. 990.22.
    Comment: Most commenters indicated that the trustee(s) should 
initiate the Preassessment Phase as soon as possible following a 
discharge. Some commenters thought that the Preassessment Phase should 
be merely a desktop determination of whether to proceed with additional 
assessment activities. These commenters were concerned that NOAA's 
initial proposal would require the trustee(s) to engage in more than a 
desktop review. If so, one commenter suggested that time limits should 
be placed upon the trustee(s), to ensure timely decisions regarding 
assessments. Other commenters indicated that any preassessment process 
must allow flexibility to the trustee(s) to gather sufficient data in 
order to proceed with and decide upon damage assessment. Some data may 
not be available immediately following the discharge, but will have to 
be collected later in the process in order to make such decisions.
    Response: NOAA agrees that preassessment should begin as soon as 
possible after the discharge occurs. However, the proposed rule, as 
stipulated in the above response, provides for more than a desktop 
review. The Preassessment Phase provides a mechanism for initiating a 
damage assessment. The Preassessment Phase is not intended to be 
extensive, expensive, or time-consuming. The Preassessment Phase may 
indicate that the use of the compensation formula, Type A model, 
expedited damage assessment, or comprehensive damage assessment will 
appropriately address injuries to natural resources and/or services. 
For some discharges, the trustee(s) might also determine that no 
further damage assessment actions are necessary.
    This preassessment process also allows the trustee(s) to collect 
ephemeral or perishable data that may be lost if not collected 
immediately, data that are necessary to make a determination required 
in the Preassessment Phase, and data necessary for any of the damage 
assessment procedures. The extent of data collection is left to the 
discretion of the trustee(s). Since the circumstances surrounding any 
discharge will vary, only general time frames can be suggested for 
completing the Preassessment Phase.
    Comment: Some commenters indicated that, where the RP(s) is 
adequately remedying injuries to natural resources, considerable effort 
and expense of conducting any part of an assessment are unnecessary. 
Another commenter noted that small offshore discharges that pose no 
threat to natural resources do not justify the trustee(s) conducting a 
preassessment.
    Response: NOAA disagrees with the general thrust of these comments. 
While many discharges will not require a comprehensive damage 
assessment in order to fulfill the mandate under OPA, the trustee(s) 
must make some type of determination shortly following a discharge of 
what type of damage assessment should be completed, if any. Further, 
even if the RP(s) responds adequately to the discharge, the lost use 
value pending restoration is still recoverable.
    Comment: Many commenters suggested developing a plan that allows 
the trustee(s) to make decisions based on data collection efforts. Such 
a framework should address the nature and extent of injuries to natural 
resources and/or services. Another commenter was concerned that 
preassessment should not be distinct from data collection and early 
sampling.
    Response: NOAA considers identification and extent of injuries to 
natural resources and/or services as essential and is incorporating 
those factors into the Preassessment Phase. In the Preassessment Phase, 
the trustee(s) will consider the: Nature of the discharge and 
environmental setting; potential for exposure, injury, and risk; extent 
of injury; and estimated damages. Such a framework will aid the 
trustee(s) to select the most appropriate damage assessment approach, 
if any. Data collection and analysis may be conducted throughout the 
Preassessment Phase.
    Comment: One commenter indicated the importance of realizing that 
the quantity of oil estimated during the preassessment is only an 
estimate and is certainly subject to change.
    Response: Oil quantity and other estimates made during the 
preassessment are preliminary and subject to change as additional 
information is collected by the trustee(s).
    Comment: Most commenters indicated that both data collection and 
early sampling activities are helpful in defining the need for 
potential damage assessment and restoration and were supportive of such 
efforts so long as they were relevant to existing or anticipated injury 
to natural resources and/or services. A few commenters questioned the 
utility of baseline data collection, and others questioned the 
usefulness of early sampling efforts as originally outlined in the 
ANPRM. Another commenter indicated that baseline data collection might 
be redundant to other ongoing efforts.
    One commenter suggested that all compiled information be put in a 
form that would also prove useful in future prespill planning. Some 
commenters offered examples of the type and sources of information that 
should be used.
    Response: NOAA agrees that only information on natural resources 
and/or services (current or planned) that the trustee(s) considers 
relevant should be collected. The information should provide a 
connection to the damage assessment process and likely restoration 
actions.
    Baseline collection efforts could provide a basis for information 
needed during the Preassessment Phase. Baseline data collection should 
not be redundant, but should be coordinated with other data collection 
efforts.
    NOAA agrees that the information collected could be useful in 
future prespill planning activities and is recommending such 
integration. NOAA is also providing information on the types and 
sources of information that might be required in the Preassessment 
Phase in the proposed rule and the Preassessment Phase Guidance 
Document.
    Comment: Several commenters stressed the importance of baseline 
data and reference areas over background data. If these areas are 
properly selected, then such data may provide the best type of 
information to estimate injury than are baseline and historical 
comparisons. Both baseline and reference information serve as the basis 
for damage assessment and restoration.
    Response: NOAA agrees with these comments and has incorporated this 
notion in the proposed rule.
    Comment: At least one commenter stressed that preassessment 
activities must be consistent with the NCP or other response plans 
developed under OPA.
    Response: NOAA agrees. The Preassessment Phase stresses 
coordination and following all applicable plans (i.e., area contingency 
plans, etc.) in order to ensure consistency and efficiency.
    Comment: Some commenters encouraged the early participation of the 
RP(s) in the preassessment and assessment process. Early cooperation 
could set the tone for a productive joint assessment and allow the 
trustee(s) and RP(s) to settle major issues, including the scope of the 
damage assessment and funding. The lack of early participation and 
cooperation could result in parallel assessments. Others were concerned 
that early participation by the RP(s) might encourage the trustee(s) to 
delay the process while negotiating with the RP(s). In addition, the 
RP(s) could influence the trustee(s) to lessen the scope of the 
preassessment and eventual assessment. Other commenters indicated that 
it should be the option of the RP(s) whether to participate in 
preassessment, and the RP(s) should not be forced to do so. To 
encourage participation early in the damage assessment process, one 
commenter suggested that the RP(s) have an active role, if desired, in 
the development and implementation of data collection and early 
sampling activities, and that the information and cost be shared on a 
mutually acceptable basis. Another commenter suggested that the 
trustee(s) should take the lead role with the RP(s) having the 
opportunity to review and comment on proposed activities.
    Response: To the extent practicable, NOAA encourages the trustee(s) 
to invite cooperative RP(s) participation early in the damage 
assessment process. Such an invitation is in line with NOAA's goal of 
fostering cooperation and early resolution rather than litigation. The 
trustee(s) will maintain oversight over all activities so that the 
quality and integrity of information are ensured. NOAA is also 
recommending that, when appropriate, all data collection and analysis 
be coordinated with the RP(s) so that there is no duplication of 
effort. The RP(s) can provide immediate financial and technical support 
to the preassessment process that might be unavailable to the 
trustee(s). However, OPA provides that the overall responsibility for 
any part of the assessment resides with the trustee(s). It will be up 
to the trustee(s) in each preassessment to determine the appropriate 
involvement of the RP(s). Where the RP(s) is known, the trustee(s) may 
contact the RP(s) and invite the RP(s) to participate in the 
preassessment. However, the trustee(s) cannot significantly delay the 
onset of the preassessment while waiting for a response from the RP(s). 
The proposed rule does not require participation of the RP(s). Thus, 
the RP(s) may always opt not to participate.
    Comment: One commenter argued the RP(s) must be allowed to conduct 
a full scientific assessment to determine actual damages, regardless of 
the assessment procedure chosen by the trustee(s). Another commented 
that the RP(s) must be in agreement with the selection of modeling to 
assess damage.
    Response: Section 990.23 of the proposed rule allows the RP(s) to 
request a more comprehensive damage assessment than the trustee(s) 
selection if the RP(s) is willing to bear the additional costs at the 
outset of the more comprehensive assessment. The RP(s) is also free to 
fund a separate assessment.
    Comment: Another commenter argued that the RP(s) should not be 
allowed to conduct a different type of assessment to be presented in 
court when they are dissatisfied with the trustee's damage assessment 
selection. If the RP(s) does disagree with the selection, he should be 
required to submit a contrary position early in the administrative 
process in an attempt to persuade the trustee to reconsider. The 
trustee's selection should be reviewed on the administrative record. 
Another commented that the RP(s) should not be allowed to challenge 
simplified methods of assessment based on the fact that more accurate 
data exist, since protracted litigation would defeat their very 
purpose.
    Response: As mentioned above, the proposed rule does allow the 
RP(s) to request and fund a more comprehensive damage assessment. NOAA 
agrees that the trustee(s) should be notified of the RP's(s') request 
early in the process and provides for that early notification. In 
addition, the trustee(s) decisions must be documented in the 
administrative record, including the choice of an assessment procedure. 
NOAA's proposed rule establishes that a reviewing court will be limited 
to the administrative record.
    Comment: At least one commenter indicated that public participation 
in the preassessment is vital and that preassessment decisions should 
be available for public review.
    Response: Since discharges of oil are dynamic and rapid events, the 
early activities of the trustee(s) will necessarily be conducted 
without concurrent public review and comment. As indicated in the 
prespill planning of the proposed rule, the trustee(s) is encouraged to 
involve the public in the formation of plans of what to do in case of a 
discharge. In addition, Sec. 990.20(e) of the proposed rule requires 
that the trustee(s) prepare a Preassessment Report, which will be 
available for public review as part of the assessment record.
    Comment:  One commenter indicated the requirement in 43 CFR 
11.23(b), which calls for a ``reasonable probability of making a 
successful claim,'' is noticeably lacking from the proposal in the 
ANPRM of March 13, 1992.
    Response: NOAA agrees. This proposed rule provides language based 
on the potential for injury resulting from the discharge of oil. The 
trustee(s) should first seek to recover damages from the RP(s). If the 
RP(s) is insolvent or unreachable under OPA, NOAA's position is that 
such claims may then be pursued from the Oil Spill Liability Trust Fund 
under section 1012(a)(4) of OPA.
    Comment: Another commenter suggested that ``reasonable cost'' be 
more clearly defined.
    Response:  NOAA has revised the definition of reasonable cost. All 
costs of conducting the overall assessment in accordance with this 
proposed rule are reasonable. Although no longer included in the 
definition of reasonable cost, the trustee(s) should be cautious about 
proceeding with assessments in which the anticipated costs of 
conducting the total assessment (not individual studies) are more than 
the anticipated damages.
    Comment: One commenter suggested that a RP who responds quickly to 
the discharge and is cooperative should be awarded good faith points 
and reduced assessment costs.
    Response:  The RP(s) that has adequately responded to the discharge 
may, in effect, have reduced the damages for injuries to natural 
resources since rapid containment and cleanup would likely reduce the 
effect of the oil in the environment. However, OPA does not provide the 
trustee(s) the authority to reduce damage claims for any RP(s) on this 
basis. It is expected that the overall costs of conducting assessments 
will be lower to the RP(s) when the RP(s) is cooperative, since both 
the RP(s) and trustee(s) will not be conducting separate assessments.
    Comment: Several commenters suggested that funding be available to 
the trustee(s) to conduct data collection and early sampling and that 
funding not be subject to a lengthy approval process. In addition, some 
commenters suggested that NOAA establish a fund through the proposed 
rule that would provide funds for emergency response/restoration 
actions.
    Response: OPA does not authorize NOAA to establish such a fund for 
either purpose. It is NOAA's position that uncompensated costs of 
emergency restoration actions authorized under Sec. 990.25 may be 
pursued as uncompensated claims under section 1012(a)(4).
    Comment:  A commenter argued for allowing the use of increased 
costs required to protect natural resources at risk from a discharge to 
be recoverable, if these costs are not covered by private claimants. 
The commenter concluded that, often such increased costs are a 
reasonable estimate of the value of natural resources at risk.
    Response: The proposed rule allows recovery of such increased 
costs. However, it would not be correct to suggest that such additional 
costs are, in any way, a measure of the true value society places on 
natural resources at risk. For example, if a discharge of oil were to 
occur in an area adjacent to a breeding and rearing habitat for an 
endangered or threatened species, the cost of preventing the oil from 
fouling that habitat, and thus injuring the resident population of 
animals, would have no obvious or direct relationship to the ``value'' 
society places on those endangered or threatened species.
    Comment: Several commenters cautioned against NOAA requiring the 
trustee(s) to estimate costs of assessment and restoration activities. 
Many indicated that this practice would lead to a strict cost/benefit 
analysis and such estimates are preliminary and may be substantially 
revised as new information is collected. Others indicated that such 
estimates are not needed in the Preassessment Phase.
    Response: Since the costs of conducting an assessment and 
restoration are a part of the measure of damages under OPA, NOAA feels 
that preliminary estimates of both are necessary for determining cost 
effectiveness and for planning purposes. However, such estimates at 
this stage are merely preliminary and are to be used in determining 
whether to proceed with further assessment procedures. Estimates are 
subject to change as more information is collected. The trustee(s) is 
cautioned against using these preliminary figures for other purposes 
since they are subject to change. A strict cost/benefit analysis is not 
required by OPA or this proposed rule.
    Comment: At least one commenter indicated that the regulations 
should identify the recoverable costs and require the trustee(s) to 
document such costs.
    Response: NOAA agrees, and Sec. 990.20(e) of the proposed rule 
identifies examples of preassessment costs and requires adequate 
documentation.
    Comment:  Several commenters indicated the usefulness of emergency 
restoration activities in reducing injury and future restoration costs. 
Others recommended limited public review of such actions due to the 
emergency situation, yet noted efforts should be made to keep the 
public informed of such activities.
    Response:  NOAA agrees and provides for emergency restoration in 
Sec. 990.25 of the proposed rule. Since these actions would only be 
taken in emergency situations, full public review and comment would be 
impossible. However, to the extent practicable, the trustee(s) should 
keep the public informed of such actions. Of course, such actions will 
be a part of the Preassessment Report and eventually part of the Report 
of Assessment. As part of prespill planning, generic restoration/
protective plans could be developed with public review.
    Comment: One commenter requested that the rule should not limit 
emergency restoration to situations involving endangered or threatened 
species and their habitats.
    Response: NOAA agrees, and no such limitation is proposed in 
Sec. 990.25.
    Comment: Some commenters raised concern over a trustee(s) 
conducting emergency restoration without coordinating with the response 
agency. Others indicated that such actions should be part of the 
established response mechanism.
    Response:  NOAA agrees with this concern. In the proposed rule, the 
trustee(s) is to take emergency restoration only after notification 
and/or consultation with the response agency and the trustee's(s') 
determination that current or anticipated response actions are 
insufficient. The response agency(ies) and where identified, the RP(s), 
should be given an opportunity to address the emergency situation 
before the trustee(s) takes such actions. In addition, NOAA recognizes 
that the possibility of needing to conduct such emergency restoration 
should be greatly reduced following the completion of the Fish and 
Wildlife and Sensitive Environments Plan required under section 4201 of 
OPA. However, emergency restoration will be incident- or resource-
specific and may not be specifically identified in the Fish and 
Wildlife and Sensitive Environments Plan.
    Comment:  Other commenters indicated that emergency restoration was 
not properly part of the Preassessment Phase.
    Response:  NOAA has included this subpart under the Preassessment 
Phase because that is the time-frame during which the trustee(s) may 
likely be faced with the possibility of conducting emergency 
restoration.
    Comment: A number of commenters provided support for the 
development of national, regional, and local protocols; each 
respectively being more specific. Others cautioned against a strong 
emphasis on the use of local plans and protocols, since a discharge may 
never occur in many areas.
    Response:  NOAA does not require the development of such protocols, 
but encourages the trustee(s) to develop appropriate protocols for 
assessment activities through prespill planning in order to avoid 
confusion and lengthy delays in a damage assessment. It is the 
determination of the trustee(s) whether such protocols should be 
developed for specific area(s). Areas that have a history of oil 
discharges will likely benefit from the development of such protocols.

Draft Assessment/Restoration Plan (DARP)

Subpart C Preamble

General

    The proposed rule authorizes the trustee(s) to use a variety of 
assessment procedures, depending on the nature and extent of potential 
effects of the discharge of oil. Although each assessment will be 
incident-specific there are many common elements. For example, the 
trustee(s) will always conduct the Preassessment Phase as outlined in 
subpart B and develop a DARP under this subpart. The purposes of the 
DARP are to ensure that the assessment/restoration is performed in a 
planned, cost-effective, and systematic manner, and provide for public 
review and comment of the restoration plans as required under section 
1006 of OPA. The DARP should be developed in accordance with the 
requirements and procedures in this subpart and in subparts D, E, F, 
and G.
    In addition, NEPA and ESA compliance shall be incorporated into the 
restoration planning process and be made part of the DARP. NEPA 
complements the purposes of OPA to develop an integrated approach to 
environmental planning and decisionmaking. NOAA encourages the 
trustee(s) to integrate NEPA procedures with the DARP procedures 
described below at the earliest possible time. The DARP should be 
combined with the appropriate NEPA document to create a single 
integrated environmental planning tool for the trustee(s) and the 
public. The scoping and public review procedures of these regulations 
should be implemented to provide compliance with NEPA.
    NEPA compliance should not impose additional burdens upon the 
trustee(s). Rather, those procedures normally contemplated as part of 
the DARP can be framed as NEPA analysis and full NEPA compliance 
achieved without additional paperwork or data gathering. The 
regulations of the Council on Environmental Quality (CEQ) require 
environmental impact statements (EIS) to be analytic rather than 
encyclopedic (40 CFR 1502.2) and encourage the discussion of impacts in 
proportion to their significance. The DARP need not be expanded in 
scope or length to achieve NEPA's goal of producing an environmental 
decision document useful to the trustee(s) and the public. (40 CFR 
1502.14, 40 CFR 102.15) Rather, concise analysis of available 
restoration alternatives, and the consequences of their implementation 
in the post-spill environment is at the heart of the DARP as well as 
any NEPA document with which it may be combined.
    As mentioned throughout this preamble and proposed rule, the 
trustee(s) is strongly encouraged to develop prespill plans for 
conducting an assessment and restoration. Those prespill plans could be 
so specific as to identify the type of assessment procedure and 
restoration actions likely to be conducted under certain discharge 
scenarios. If so, the DARP should be consistent with the actions 
identified in the prespill plan to the maximum extent practicable. NOAA 
also encourages the trustee(s) to view the prespill planning process as 
an opportunity to develop broad or programmatic NEPA documents to which 
future site or project specific NEPA documents may be tiered. (See 40 
CFR 1502.20, 40 CFR 1502.40) The inclusion of the NEPA analysis with 
the prespill plan will assist both the trustee(s) and the public to 
anticipate necessary restoration actions, their impacts and successes, 
and promote early resolution of oil spill incidents.
    The DARP, along with any significant modifications and associated 
comments and responses, shall be placed in the administrative record. 
The DARP shall also become the Report of Assessment. The trustee(s) 
shall have final approval as to the content and development of the 
DARP. The DARP shall be developed in order to fulfill applicable NEPA 
requirements. Those restoration actions that do not individually or 
cumulatively have a significant effect on the human environment may be 
categorically excluded from NEPA compliance by a federal trustee 
through its NEPA implementation regulations. (See 40 CFR 1508.4) The 
federal trustee(s) should also consider the need for coastal states 
consistency evaluations and rulings, pursuant to the Coastal Zone 
Management Act for the DARP.
    NOAA specifically solicits comments upon NEPA compliance and the 
availability of the ``functional equivalence'' doctrine to federal 
trustees.

Content

    Just as each assessment/restoration will have common elements, each 
DARP will address the same components of each assessment/restoration. 
The DARP will address each of the four components of the Assessment 
Phase: (1) The injury determination component, i.e., results of injury 
determination studies, to the extent they are known, with documentation 
of those results; (2) the injury quantification component, i.e., the 
results of quantification studies, to the extent they can be 
calculated, with documentation of those results; (3) the restoration 
component, i.e., the evaluation, selection, and estimated cost of 
planned restoration actions; and (4) the compensable values component, 
i.e., valuation studies planned, subject to some exceptions, with the 
results of those studies if deemed appropriate by the trustee(s). It is 
recognized that, for CDAs, where there are prolonged (multi-year) 
studies, the trustee(s) need not develop all components of the DARP 
simultaneously, but may develop annual reports to update the DARP as 
the assessment progresses.
    Each DARP should include the following common elements. First, the 
DARP shall identify the discharge of concern and give descriptions of 
the natural resources and/or services involved. The trustee(s) should 
include a statement of authority for asserting trusteeship, or co-
trusteeship, for those natural resources and/or services considered in 
the DARP. The DARP shall also include the Preassessment Phase Report 
and the information requirements of each of the assessment procedures, 
as described in subparts D, E, F, and G. For example, for a Type A 
assessment, subpart E requires that the trustee(s) provide a copy of 
the inputs used to apply the model. These are the types of information 
requirements that would be included in a DARP for a Type A assessment. 
Therefore, the level of detail for each component of the DARP shall be 
consistent with what is appropriate for the type of assessment 
procedures being conducted.

Development

    Because of the dynamic nature of discharges of oil, the trustee(s) 
should begin implementation of the injury determination and 
quantification components of the assessment/restoration as soon as 
practicable after these components are developed and approved by the 
trustee(s). As data are produced in the injury determination and 
quantification components, the trustee(s) should then complete the 
restoration component and design of the compensable values component 
for the injured natural resources and/or services. However, except as 
provided for in prespill plans (Sec. 990.30(c) of the proposed rule) or 
for emergency restoration (Sec. 990.25 of the proposed rule), the 
restoration planning and compensable values components may not be 
implemented before public review and comment, as discussed below.
    Where there are multiple trustees, these trustee(s) should also 
jointly develop the DARP. The proposed rule provides that, where there 
are multiple trustees, a lead administrative trustee should be 
designated to administer the DARP. The lead administrative trustee 
should act as coordinator and contact regarding all aspects of the 
DARP. The trustees are encouraged to cooperate and coordinate any DARP 
that involves coexisting or contiguous natural resources or concurrent 
jurisdiction, but they arrange to divide responsibility for 
implementing the components of the assessment in any manner that is 
agreed upon by all of the affected natural resource trustees.
    The proposed rule requires public involvement in various aspects 
and stages of the assessment/restoration process. Therefore, the 
proposed rule does not require the trustee(s) to seek public review and 
comment of injury determination/quantification studies proposed in the 
DARP except those undertaken pursuant to a CDA. For the compensation 
formula, the Type A model, and the EDA, the trustee(s) need only notify 
the public as to the type of assessment procedure being conducted. The 
trustee(s), however, always has the option to provide for formal public 
review and comment should the trustee(s) deem this appropriate. For a 
CDA, the trustee(s) must provide for public review and comment of the 
injury determination and quantification studies.
    The trustee(s) must provide an opportunity for public comment on 
the restoration component of the DARP. Where there is no Regional 
Restoration Plan developed and adopted following public review and 
comment pursuant to prespill planning, as described in Sec. 990.16 of 
this part, the trustee(s) must provide for public review and comment of 
the restoration component of DARPs developed pursuant to the 
compensation formula, Type A model, EDA, and CDA. However, where a 
Regional Restoration Plan has been developed and adopted, following 
public review and comment pursuant to prespill planning, as described 
in Sec. 990.16 of this part, the trustee(s) must notify the public of 
the availability of a DARP for a compensation formula or Type A 
assessment and seek comment on that decision. The trustee(s) may 
provide for such public comment on each assessment using a compensation 
formula or Type A assessment or may provide periodic notice (e.g., once 
a month) of the intent to apply several recoveries from these 
assessments to a Regional Restoration Plan. The trustee(s) must provide 
for public review and comment of the restoration components of DARPs 
developed pursuant to an EDA or CDA.
    It is at the discretion of the trustee(s), however, to provide for 
notification, review, and comment of those portions of the DARP 
concerning the calculation of compensable values. The trustee(s), at 
his discretion, may withhold the description of studies and 
methodologies for determining the damages for the compensable values 
from public review and comment. Such damages are still afforded the 
rebuttable presumption, but may not be eligible for judicial review on 
the record.
    Where the trustee(s) is required to provide for public review and 
comment, the trustee(s) must provide a minimum of 30 calendar days. The 
trustee(s), in his discretion, may grant reasonable extensions for that 
review. Notification or publication of a DARP may be provided in a 
publication of local, state, regional, or national circulation, as 
deemed appropriate to the scope of the assessment/restoration by the 
trustee(s).
    The proposed rule states that the DARP may be modified at any stage 
of the assessment/restoration process as new information becomes 
available. Any modification to the DARP that is significant in the 
judgment of the trustee(s) shall be made available for review and 
comment for a period of at least 30 calendar days, with reasonable 
extensions granted at the discretion of the trustee(s), before tasks 
subject to modification are begun. However, any modification to the 
DARP that is not significant in the judgment of the trustee(s) may be 
made available for review at the discretion of the trustee(s), but the 
implementation of such modification need not be delayed as a result of 
such review.
    The proposed rule provides that the trustee(s) must review and 
respond to public comments during preparation of the restoration 
component of the DARP. In addressing comments received concerning the 
proposed restoration approach, it is not necessary for the trustee(s) 
to respond to each comment received. Comments may be summarized in 
like-subject areas and responded to only once.
    Finally, the proposed rule provides that, at the option of the 
trustee(s), and if agreed to by any RP(s) acting jointly, the RP(s) or 
any other party under the direction, guidance, and monitoring of the 
trustee(s) may implement all or any part of the DARP as approved by the 
trustee(s). Any decision to involve the RP(s) shall be documented in 
the DARP.
Other Common Elements of a DARP
    Protocols: Selection or development of specific data collection 
protocols in the preassessment and assessment/restoration activities is 
left to the discretion of the trustee(s) because of the incident-
specific nature of discharges and broad range of natural resources and/
or services potentially affected. Therefore, only general guidelines 
for protocol selection are provided to the trustee(s) in this preamble 
and proposed rule. Protocols should be chosen that: (1) Are applicable 
to the discharge and environmental setting; (2) are cost effective; and 
(3) will provide information consistent with data quality requirements. 
Factors that should be considered in selecting the protocols include, 
but are not limited to: (1) The nature of the discharge and 
environmental setting; (2) applicable study design requirements, such 
as that developed by Green, R.H., Sampling Design and Statistical 
Methods for Environmental Biologists; John Wiley & Sons, New York, NY 
(1979); (3) QA and data management requirements; (4) potential human 
health and safety; and (5) benefits and costs of alternative protocols.
    Where practicable, the trustee(s) should use protocols that are 
scientifically verified, well documented and standardized by the U.S. 
Environmental Protection Agency (U.S. EPA), U.S. Fish and Wildlife 
Service, U.S. Army Corps of Engineers, American Society for Testing and 
Materials, American Public Health Association, Organization of Economic 
Cooperation and Development, or other government or scientific 
agencies. Some protocols may not be standardized but nevertheless are 
appropriate for incident-specific evaluations or may be the only 
protocols available at the time. Other protocols may need to be 
modified or developed. The trustee(s) should have the option to use 
whatever protocols may be relevant to the discharge.
    Quality Assurance (QA): When practicable, data collection in 
preassessment and subsequent damage assessment should be consistent 
with the QA guidance developed by the U.S. EPA, Guidelines and 
Specifications for Preparing Quality Assurance Program Plans; Office of 
Monitoring Systems and Quality Assurance, Washington, DC, EPA-QAMS-005/
80, (1980); U.S. EPA, Interim Guidelines and Specifications for 
Preparing Quality Assurance Project Plans; Office of Monitoring Systems 
and Quality Assurance, Washington, DC, EPA-QAMS-005/80, (1980); and 
U.S. EPA, Preparing Perfect Project Plans; Office of Research and 
Development, Cincinnati, OH, EPA/600/9-89/087, (1989). The Program Plan 
outlines the overall quality of assessment activities; addressing QA 
issues in regard to policy, planning, review, and implementation. 
Project Plans, a vital part of the Program Plan, serve as guidance on 
aspects of data collection for the individual studies comprising the 
damage assessment. Preassessment project plans should serve to assess 
suppositions for the damage assessment process. EDA project plans may 
be combined among studies with similar scope and substance. CDA project 
plans should be of sufficient scope and substance that they can stand 
on their own. The trustee(s) should develop both Program and Project 
Plans in an EDA and a CDA.
    It is understood that due to the nature of oil discharges, certain 
QA requirements as prescribed by the U.S. EPA may not be practicable. 
Therefore, the trustee(s) is encouraged to develop his own QA plans to 
allow for relevant data collection. Data collection involving actual 
measurement may also be subject to the provisions concerning human 
health and safety and applicability of natural resource protection 
statutes.
    Data Management: Where appropriate, the trustee(s) should also 
develop a data management plan. This is most appropriate for an EDA or 
a CDA. Establishment of a data management system provides efficient 
access to collected data and information. The trustee(s) is encouraged 
to develop such a centralized data management plan, if not done so 
during prespill planning, to accommodate the volume and complexity of 
data. An effective data management plan should address, at a minimum, 
the following: (1) Type and volume of data; (2) uses of the data; (3) 
existing data management capabilities; (4) types of analyses conducted; 
(5) QA needs; (6) reporting requirements; and (7) access to data 
further information is available in the Preassessment Phase Guidance 
Document referenced earlier in this preamble.

Responses to Comments

    Comment: One commenter recommended that damage assessment 
contingency plans not be rigidly drawn. The commenter cautioned that 
such a plan could become a liability where the nature of a particular 
discharge is not contemplated in the plan. Further, it could be an 
unwise expenditure to develop a contingency plan broad enough in scope 
to address an endless array of possible discharges.
    Response: NOAA agrees that damage assessment and restoration plans 
should not be rigidly drawn.
    Comment: One commenter stated that NOAA must guard against the 
frivolous spending of company funds, when the company has little or no 
input into how that money is spent.
    Response: NOAA agrees. The assessment/restoration guidance 
procedures allow for public notice, comment, and consideration of all 
public comment before a final restoration plan is developed. These 
procedures should mitigate against any frivolous expenditures.
    Comment: Most commenters indicated that the trustee(s) should 
follow quality assurance (QA) procedures developed by or similar to 
those of the U.S. EPA. Some commenters, however, indicated that the 
full QA procedure may add more expense without necessarily increasing 
the quality of the data.
    Response: NOAA agrees that, when appropriate, the trustee(s) and 
RP(s) together should develop and implement QA plans. However, NOAA 
suggests that the trustee(s) determine those components of the U.S. 
EPA's QA procedures that are relevant to the discharge.

Compensation Formulas

Subpart D Preamble

General

    Through this proposed rule, NOAA is providing the trustee(s) with a 
variety of assessment procedures in recognition of the need for 
flexibility in dealing with situations that, by their nature, are 
incident-specific. The criteria for the selection of any procedure are 
not rigid, nor does the proposed rule require the trustee(s) to select 
a particular procedure for a particular discharge. To assist the 
trustee(s) in making this decision, NOAA is providing guidance to the 
trustee(s) in selecting the procedure most appropriate for a particular 
discharge. The trustee(s) is then able to choose among the various 
procedures based upon the circumstances of the discharge or the 
resources and/or services involved. However, due to the large number of 
small discharges, it is expected that the trustee(s) will use the 
compensation formulas or the Type A model to determine damages more 
frequently than either the EDA or the CDA.
    The availability of a compensation formula or a computer model for 
a particular discharge, for example, would not necessarily rule out the 
use of an expedited or comprehensive damage assessment procedure where 
the trustee(s) finds that either the formula or the model would not be 
the best method for assessing damages. Parallel assessments using a 
combination of more than one procedure may be allowed, provided there 
is no double recovery. NOAA is suggesting that the trustee(s) may 
exercise best professional judgment in fashioning an approach to an 
assessment using the four proposed procedures singly or in some 
combination. This approach is consistent in concept with the parallel 
assessments provided for under the current CERCLA rule.
    The compensation formulas were developed after extensive review of 
the scientific and economic literature, with particular emphasis on 
restoration of various habitat types. This information was then 
compiled to be used with both the current Type A model for Coastal and 
Marine Environments and a draft version of the Type A model under 
development for the Great Lakes Environment in developing the 
compensation formulas. NOAA is proposing these formulas for use in 
certain circumstances as a reasonable approach to natural resource 
damage assessment. NOAA is specifically seeking comments on the 
reasonableness and appropriateness of such an approach.

Range of Formulas

    The estuarine/marine and inland waters compensation formulas 
proposed are applicable to the vast majority of oil discharges. An 
analysis of reported coastal oil discharges from 1973 through 1990 
shows that 99.8% of the discharges were less than 50,000 gallons (99% 
were less than 10,000 gallons). These compensation formulas are 
available for use by the trustee(s) for these relatively small 
discharges, particularly when assessing discharges that occur in areas 
where it might be difficult or very costly to ascertain precise 
environmental effects, e.g., small discharges in open water or 
discharges occurring in areas that are subject to frequent discharges.
    The compensation formulas cover a range of sizes by volume of 
discharge. These ranges are broken down into four categories: 10 
gallons to <1,000 gallons; 1,000 gallons to <5,000 gallons; 5,000 
gallons to <10,000 gallons; and 10,000 gallons to 50,000 gallons. Ten 
gallons is the lower limit on discharges covered by the compensation 
formulas. NOAA is not saying that discharges of less than 10 gallons do 
not cause injury. However, after evaluating thousands of simulations of 
scenarios involving very small spills, NOAA determined that ten gallons 
is a statistically valid lower limit for this type of assessment 
procedure.
    An analysis of the data used to develop the formulas showed that 
the smaller discharges, i.e., fewer than 10 gallons, were statistically 
meaningless, i.e., too much scatter, from which to draw ``average'' 
assumptions. However, this lower limit is not meant to preclude 
recovery for these smaller discharges. There are several options 
available to the trustee(s). In some cases, it may be reasonable for 
the trustee(s) to linearly extrapolate downward from the lower damage 
figure contained in the formulas for the 10-gallon discharges. On the 
other hand, where the environmental conditions at the time of the 
discharge indicate that extrapolation from the averages in the formulas 
is inappropriate, the trustee(s) may apply the Type A model at 43 CFR 
11 to the discharge. Finally, if there are unusual circumstances that 
indicate the need for site-specific analysis, the trustee(s) may decide 
that an EDA would be more appropriate.
    As for the upper limit of 50,000 gallons, experience indicates that 
discharges over 50,000 gallons are likely to result in injury that 
would be more appropriately addressed by another assessment procedure, 
e.g., the Type A or EDA. These large discharges do not typify the 
``small'' discharges described by the scenarios used to develop the 
compensation formulas. Determining the ``volume'' of oil discharged is 
dependent upon whether the trustee(s) is using the estuarine/marine 
formula or the inland formula. This distinction is due to the different 
treatment of cleanup between the two types of water systems. Therefore, 
the discussion concerning estimating the volume discharges is given 
below within the discussion of each formula.

Damage Formula

    Generally, with increasing volume discharged, damage totals 
increase while damages per gallon decrease. However, this relationship 
between damages and volume discharged is a complex non-linear function 
that varies by scenario. The results of the scenarios showed a definite 
damage curve. The goal then was to define as accurately as possible the 
shape of that curve. Breaking down the scenarios into the four ranges 
of size defined earlier gives a linear interpolation of the scenario 
results. The formula itself is designed to place the incident of 
concern on a given point of the curve. The formula is given as 
``1991$=m(VOL)+b.'' In this formula, ``m'' is multiplier, multiplied by 
the number of gallons discharged, that represents the change in dollars 
per gallons discharged, and ``b'' (positive or negative) represents the 
number of dollars added to that product to arrive at the actual damages 
for the volume discharged. Both ``m'' and ``b'' are given in the tables 
in Appendix A of each of the technical documents. ``(VOL)'' is the 
amount of oil discharged, as defined in the proposed rule. This 
formula, as applied, defines damages as a function of volume 
discharged.
    The dollar figures produced by applying the compensation formula 
described above represent 1991 U.S. dollars. These damages calculated 
in 1991 U.S. dollars may be translated to U.S. dollars for another year 
using the gross national product price deflator price index. This index 
may be obtained from the Economic Report of the President, issued 
annually, or the Survey of Current Business, issued monthly, for years 
not yet in the Economic Report.
    These formulas allow an estimate of damages per gallon, taking into 
account average restoration costs plus average direct lost use values 
pending restoration. The following types of damages are included in the 
formulas: fishery species consumptive use values (fishing), wildlife 
species consumptive use values (hunting) and nonconsumptive (viewing) 
use values, restocking costs and direct restoration costs of affected 
habitats. Restoration costs are included for restoration activities 
that are technically feasible and cost-effective.
    Passive use (nonuse) values are currently not included in the 
formulas, since, at the time of their development, NOAA determined that 
sufficient information did not exist concerning average passive use 
values applicable to the compensation formula approach. NOAA has 
decided to propose the formulas without passive use values so that they 
would be available for use by the trustee(s) rather than delay 
proposing to a future date. Even though passive values are not included 
in the proposed compensation formulas, NOAA is considering how such 
values may be included. Therefore, NOAA specifically requests comments 
on how such passive values might be included in the compensation 
formulas. Until that time, discharges under 50,000 gallons that are 
likely to result in a significant loss in passive use values should be 
assessed under another procedure.

Variations in Type of Oil, Region, Habitat, and Seasons

    The formulas assume degrees of injuries to natural resources likely 
to result from a discharge of oil. These assumptions take into account 
the amount and type of oil discharged and the region and habitat type 
in which the discharge occurs. The scenarios consider the various 
discharges in each of the four seasons. The proposed rule defines the 
four seasons as: Winter being from January 1 through March 31; spring 
being from April 1 through June 30; summer being from July 1 through 
September 30; and fall being from October 1 through December 31. These 
seasonal boundaries correspond closely with biological seasonal 
variations. The trustee(s), therefore, identifies the correct scenario 
by locating the season in which the date of the discharge falls. This 
approach allows both a national consistency and a regional specificity.

Damage Claim

    Section 1017(a) of OPA provides:
    Review of any regulation promulgated under this Act may be had upon 
application by any interested person only in the Circuit Court of 
Appeals of the United States for the District of Columbia. Any such 
application shall be made within 90 days from the date of promulgation 
of such regulations. Any matter with respect to which review could have 
been obtained under this subsection shall not be subject to judicial 
review in any civil or criminal proceeding for enforcement or to obtain 
damages or recovery of response costs.
    Because the compensation formulas are being developed as a 
regulation through public review and comment, any challenges to the 
data or models used to develop the formulas would have to be made 
within ninety days of the promulgation of this regulation rather than 
in a particular natural resource damage case, as provided in section 
1017(a) of OPA. If a trustee(s) uses one of the compensation formulas 
in a particular damage case, the RP would still have an opportunity to 
challenge the damage claim; however, that opportunity would be limited 
to challenging the applicability of the formulas and the accuracy of 
any site-specific input data used by the trustee(s). The damages 
calculated by the use of the compensation formula are conclusive for 
the injuries included in that formula.
    The damages computed by using the compensation formulas may be 
combined with damages determined for beach and/or shoreline closure. 
These damages, along with the reasonable costs of assessing those 
damages, are included in the demand presented to the RP(s) pursuant to 
Sec. 990.81 of this part. Additional damages determined by conducting a 
parallel assessment may be added to the damages determined with the 
compensation formula so long as there is no double recovery.
    The trustee(s) shall document the data required to use a 
compensation formula. This documentation shall be included in the 
Report of Assessment required by Sec. 990.80 of this part.

Final Restoration Plan

    The trustee(s) shall develop a Final Restoration Plan based upon 
the damages recovered through the use of a compensation formula. This 
plan shall be developed pursuant to subpart H of this part.

References

    The proposed formulas and supporting documents for both the 
Estuarine and Marine Environments and the Inland (Freshwater) 
Environments are incorporated into the proposed rule by reference. They 
are: ``Compensation Formula for Natural Resource Damage Assessment 
under OPA: Oil Spills Into Estuarine and Marine Environments, Volumes 
I-IV'' and ``Compensation Formula for Natural Resource Damage 
Assessments under OPA: Oil Spills Into Inland (Freshwater) Waters, 
Volume I-III.'' Copies can be obtained from the address at the 
beginning of this preamble.

Estuarine and Marine Compensation Formula

General

    The estuarine and marine compensation formula is based upon the 
various coastal provinces with representative habitat types for each of 
these provinces, giving a total of 55 province/habitat combinations. 
Each possible province/habitat combination has an associated set of 
damage estimates based upon each of the four seasons, five 
representative oils, and five possible discharge sizes. The 
compensation tables given in Appendix A of Volume I of the 
``Compensation Formula for Natural Resource Damage Assessments under 
OPA: Oil Spills into Estuarine and Marine Environments Document'' (the 
Document) are based upon simulated discharge scenarios of the possible 
combinations listed above, for a total of 5,500 resulting damage 
estimate ranges. Each of these 5,500 scenarios has certain 
environmental and other conditions that were specified at a 
predetermined level to allow for representation of relatively 
``simple'' discharges. Basically, the fates and effects portions of the 
NRDAM/CME were run, augmented with updated biological and economic data 
bases and a restoration cost data set. These scenarios were run with an 
augmented natural resource damage assessment model, Coastal and Marine 
Environments, Version 1.2 (NRDAM/CME) found at 43 CFR part 11 subpart 
D.
    For the purposes of the compensation formulas, residual and tidal 
currents are assumed to be zero, the discharge scenario is assumed to 
be instantaneous at the water surface, seasonal temperatures and wind 
speed are ``set at average values'' for the scenario location as 
explained in volume I of the document, and wind direction is controlled 
to avoid having the discharge move into a different habitat. The oil 
products contained in the formulas are: heavy crude oil; light crude 
oil; No. 2 fuel oil, diesel, and gasoline. However, there is a 
conversion table to determine which commonly discharged oil products 
correspond to the types of oils covered in the formulas.

Using the Formula

    To use the formulas, the trustee(s) must identify: (1) Whether the 
discharge occurred in a marine, estuarine, subtidal, or intertidal 
area, as defined in Volume I of the Document; (2) location of 
discharge, using the boundaries and definitions of the provinces 
provided in Volume I of the Document; (3) the habitat type that 
typifies the habitat affected by the discharge, as described in Volume 
I of the Document; (4) type of oil discharged; (5) amount discharged 
(the user may subtract from the discharge amount the volume of oil that 
is cleaned up if the cleanup is from the water and conducted within 24 
hours of the onset of the discharge. Because the compensation formulas 
are intended for relatively small discharges, it is expected that in 
these smaller discharges much of the toxic constituents or the surface 
slick will dissipate within 24 hours of discharge. Most of the effects 
of the discharge will occur within that 24-hour period. Therefore, 
cleanup must be carried out quickly to be effective in avoiding or 
minimizing impacts. For these reasons, NOAA is proposing that any oil 
removed from the environment within 24 hours from the onset of the 
discharge may be subtracted from the total amount discharged to 
determine the volume of oil to which the formula is applied. Cleanup 
from shorelines shall not be subtracted since the majority of impacts 
on shore are immediate. Also, the use of dispersants cannot be factored 
in since there likely will be additional effects in the water column as 
a result of using them.); and (6) season of discharge based upon date 
of discharge and the definitions of the seasons given in the proposed 
rule.

Determining Damage Figure

    For the purposes of valuing the effects of discharges, the 
estuarine and marine waters compensation formula is based upon the 
probability of effects in particular province/habitat combinations from 
oil discharges through a range of discharge sizes. To determine the 
damage figure for a particular discharge, the trustee(s) would first 
locate the appropriate table in Appendix A of the Document based upon 
province and habitat type using the guidance in Volume I of the 
``Compensation Formula for Natural Resource Damage Assessments under 
OPA: Oil Spills into Estuarine and Marine Environments.'' The 
trustee(s) would then select from that table corresponding to the 
season of the discharge, the substance discharged, and the size of the 
discharge. The trustee(s) would then compute the dollar figure based on 
linear interpolation from the range of discharge sizes listed. To do 
this, the trustee(s) takes the ``m'' figure and multiplies that figure 
by the number of gallons discharged. The trustee(s) then adds the ``b'' 
figure number to this first total to get the final damages figure.
    For example, for a discharge of 500 gallons of diesel fuel 
discharged in the area covered by scenario M01 (NEW ENGLAND OFF SHORE) 
on November 1, the trustee(s) would locate the table representing a 
discharge of diesel in the fall, follow the M01 line to the appropriate 
column (spills between 100 and under 1,000 gallons) and apply the 
following formula derived from that table: 500(7.87)+0 = $3,935.00. A 
1,000 gallon discharge of heavy crude on November 1 in the same area 
would be computed as follows: 1,000(19.7778)+4481 = $24,258.00.
    Volume III of the Document provides guidance to the trustee(s) in 
calculating losses due to beach and/or shoreline closure. Such losses 
would be in addition to the damage figure arrived through the formulas.
    Unlike inland (freshwater) systems, there were no data that could 
be used to develop damages for lost recreational boating opportunities 
within the estuarine/marine compensation formula. However, the 
trustee(s) may add such damages to the formula where there is 
information to develop such estimates.

Inland Waters Compensation Formula

General

    The compensation formula for the freshwater systems covered by OPA 
was developed using the same concept as the Estuarine and Marine 
Formula. The compensation tables given in Appendix A of Volume I of the 
``Compensation Formula for Natural Resource Damage Assessments under 
OPA: Oil Spills into Inland (Freshwater) Waters'' (the Document) are 
based on simulated scenarios of a total of 100 province/habitat 
combinations. These scenarios cover Great Lakes habitats, fast and slow 
flowing rivers, streams, brooks, lakes, ponds, and wetlands. In 
addition, the tables are grouped by provinces, including: Each of the 
Great Lakes and connecting channels, Northeast, Southeast, South 
Florida and West Indian, North Central, South Central, Mountain, 
Pacific Northwest, Southwest, Alaska, and Pacific Islands. Each 
possible province/habitat combination has an associated set of damage 
estimates based upon each of the four seasons, five representative 
oils, and five possible discharge sizes. The compensation tables given 
in Appendix A of the Document are based upon simulated discharge 
scenarios of the possible combinations listed above, for a total of 
10,000 resulting damage estimate ranges. Each of these 10,000 scenarios 
has certain environmental and other conditions that were specified at a 
predetermined level to allow for representation of relatively 
``simple'' discharges. The computer model used to develop the formula 
was a draft of the Type A model for the Great Lakes Environment.
    The Natural Resource Damage Assessment Model for the Great Lakes 
Environments (NRDAM/GLE) is scheduled for publication in 1994 as a 
proposed rule, and thus will not be available to the public at the same 
time as the inland waters compensation formula is published. In order 
to ensure adequate public review, the version of the draft NRDAM/GLE 
used to develop the inland waters formula, along with the technical 
documentation, is available from the address given at the front of this 
Notice. Anyone wishing to review this material should call the contacts 
listed in this Notice and indicate whether a hard copy or electronic 
version is preferred. NOAA encourages requestors to ask for the 
electronic version [as a WordPerfect 5.1 document in IBM format] to 
reduce the expense of printing.
    The version of the NRDAM/GLE that is eventually published as a 
proposed rule by the U.S. Department of the Interior (DOI) may differ 
somewhat from the version used by NOAA to develop the inland waters 
formula. Moreover, the NRDAM/GLE will undoubtedly be revised as a 
result of the public review and comment of the DOI's rulemaking effort. 
Therefore, once the NRDAM/GLE has been issued as a final rule, NOAA 
will revise, as necessary, the inland waters compensation formula to 
reflect the final version of that computer model. Because NOAA's 
proposed rule may be published as a final rule before the NRDAM/GLE is 
promulgated as a final rule, NOAA is considering three options: (1) 
Publish the inland waters formula as a final rule, with the option to 
revise once the NRDAM/GLE is promulgated as a final rule; (2) publish 
the inland waters formula as an interim final rule, pending revision 
based upon the completion of the NRDAM/GLE; or (3) reserve the inland 
waters formula as a proposed rule pending the completion of the NRDAM/
GLE, with the rest of the NOAA rule being published as a final rule. 
NOAA seeks comments on these options.
    For the purposes of the compensation formulas, residual and tidal 
currents are assumed to be zero, the discharge scenario is assumed to 
be instantaneous at the water surface, seasonal temperatures and wind 
speed are ``set at average values'' for the scenario location as 
explained in volume I of the document, and wind direction is controlled 
to avoid having the discharge move into a different habitat. The oil 
products contained in the formulas are: heavy crude oil; light crude 
oil; No. 2 fuel oil, diesel, and gasoline. However, there is a 
conversion table to determine which commonly discharged oil products 
correspond to the types of oils covered in the formulas.

Using the Formula

    To use the formula, the trustee(s) must identify: (1) Location of 
discharge to determine in which province the discharge occurred; (2) 
the habitat type that typifies the habitat affected by the discharge, 
as described in Volume I of the Document; (3) substance discharged; (4) 
amount discharged (the user may subtract from the discharge amount the 
volume of oil that is cleaned up in certain large river and large lakes 
specified in Volume I of the Document if the cleanup is from the water 
and conducted within 24 hours of the discharge. Cleanup from shorelines 
shall not be subtracted. Also, the use of dispersants cannot be 
factored in since there likely will be additional effects in the water 
column as a result of using them.); and (5) season of discharge based 
upon date of discharge and the definitions of the seasons given in the 
proposed rule.

Determining Damage Figure

    For the purposes of valuing the effects of discharges, the inland 
waters compensation formula is based upon the probability of effects in 
particular province/habitat combinations from oil discharges through a 
range of discharge sizes. To determine the damage figure for a 
particular discharge, the trustee(s) would first locate the appropriate 
table in Appendix A of the Document based upon province and habitat 
type using the guidance in Volume I of the ``Compensation Formula for 
Natural Resource Damage Assessments under OPA: Oil Spills into Inland 
(Freshwater) Waters.'' The trustee(s) would then select from that table 
corresponding to the season of the discharge, the substance discharged, 
and the size of the discharge. The trustee(s) would then compute the 
dollar figure based on linear interpolation from the range of discharge 
sizes listed. To do this, the trustee(s) finds the ``m'' figure and 
multiplies that figure by the number of gallons discharged. The 
trustee(s) then adds the ``b intercept'' number to this first total to 
get the final damages figure.
    For example, a discharge of 6,000 gallons of road oil would result 
in the following. The representative oil product for road oil is heavy 
crude. The season is spring and the province and habitat are 
represented by scenario N73, a Pacific Northwest stream. Using the 
formula, m=2.18 and b=13969 for the range of discharges between 5,000 
and under 10,000 gallons. The calculation is 
(6,000)(2.18)+13969=$27,049. A same size discharge of diesel in the 
summer would result in a calculation of: (6,000)(2.255)+16616=$30,146.
    Volume III of the Document provides guidance to the trustee(s) in 
calculating losses due to beach and/or shoreline closure and boating 
closures. Such losses would be in addition to the damage figure arrived 
through the formulas.
    The trustee(s) may also recover for lost recreational boating 
opportunities. Volume III of the Document describes how the trustee(s) 
may estimate these losses. Volume III contains average figures for 
densities of boating trips for several types of lakes. These densities 
are given both for those lakes that provide year-round boating and for 
seasonal boating sites.
    Volume III of the Document also has an analysis of various 
freshwater boating values that sets the average value of an inland 
boating day at $36.48. The trustee(s) can then use the densities and 
value given in Volume III, together with the area closed to boating to 
compute damages for the lost boating opportunities. The formula used to 
compute these damages is: V2A2T2 ($36.48) where 
V2=density (given in Volume III) of boating trips per square 
kilometer per day, A2=area closed in square kilometers, 
T2=time area was closed in days, and $36.48=the value per trip per 
day.

Responses to Comments

    Comment: NOAA received several comments concerning the average 
costs of restoration. One commenter asked if it was currently possible 
to accurately model the costs of restoration, particularly in Alaska. 
One commenter asserted that NOAA should institute a comprehensive data 
collection program to acquire sufficient baseline information. Only 
then could NOAA implement reliable desktop assessment options in 
Alaska. Were NOAA to pursue this course, data collection activities 
should be concentrated in high risk areas, such as Cook Inlet and 
Prince William Sound.
    Another urged assessment procedures to be inexpensive but as 
accurate as possible, and based on science. Another commenter asserted 
that multiple assessment costs should only be compensable up to the 
reasonable cost of a single assessment.
    Response: NOAA agrees that economical and accurate scientific 
assessment procedures are in the best interest of every party. In 
determining the ``average'' costs of restoration for the compensation 
formula, an extensive research study was conducted of information 
concerning restoration of natural resources in several environments, 
including Alaska (See ``Compensation Formula for Natural Resource 
Damage Assessments under OPA: Oil Spills into Estuarine and Marine 
Environments, Volumes I-IV'' and ``Compensation Formula for Natural 
Resource Damage Assessments under OPA: Oil Spills into Inland 
(Freshwater) Waters, Volumes I-III''). This information was factored 
into the formula in order to reflect the best available information to 
date. Of course, all simplified assessments are based upon average 
conditions. If the trustee(s) decides that the use of the formulas does 
not adequately address the specific circumstances surrounding a 
particular discharge, another assessment procedure should be used. 
Concerning the reasonable costs of assessments, costs of parallel 
assessments are allowed, provided the separate assessments do not 
result in double recovery.
    Comment: Some commenters were concerned that traditional 
comprehensive damage assessment techniques would be inefficient for 
small discharges. One commenter recommended an established de minimis 
discharge volume that would not lead to a recovery of damages.
    Response: The proposed rule provides guidance and criteria for the 
trustee(s) to determine the appropriate procedures for a particular 
discharge. The decision to proceed with a claim is left to the 
discretion of the trustee(s) based upon the information and data 
collected through the Preassessment Phase. NOAA's proposed rule does 
not adopt the use of a rigid de minimis standard to excuse liability. 
OPA addresses the effect and not the nature of a discharge--the 
characteristics of a particular environment may render it vulnerable to 
even a small discharge of oil. The range of assessment procedures 
available to the trustee(s) should ensure that an appropriate type of 
assessment will be conducted. NOAA's proposed rule does provide, 
however, that the compensation formula is appropriate for determining 
damages for discharges of ten or more gallons, up to 50,000 gallons.
    Comment: NOAA received several comments recommending specific 
factors to include in the simplified assessments, such as season and 
location of the discharge, and wind and surface currents present at the 
time of the discharge.
    Response: NOAA agrees that the inclusion of these factors is 
helpful in the assessment. These types of variables are accounted for 
in the Type A model. In the compensation formula, wind and surface 
currents are predetermined to maintain the scenario of a ``small'' 
discharge.
    Comment: A number of commenters challenged the use of computer 
models and compensation tables for damage assessment. One commenter was 
opposed to these methods because of insufficient data. Another 
commenter speculated that trustees would not use the models for fear of 
the passive use valuations being challenged.
    Response: NOAA believes that the computer model and compensation 
formulas provide a reasonable means for conducting rapid and economical 
damage assessments. Based upon extensive review of available 
literature, NOAA believes that the data collected for the formula are 
sufficient to make a reasonable determination of damages. If the 
trustee(s) determines that there are insufficient data for an 
appropriate assessment based on the model, an incident-specific 
analysis may be appropriate, such as an EDA or CDA. The compensation 
formula does not include passive use values at this time. Discharges 
that are likely to have resulted in significant reduction for passive 
use values should be assessed through a CDA, and possibly an EDA.
    Comment: Several commenters supported the development of 
compensation tables for the assessment of small discharges. Some 
conceded that the tables were in some instances less accurate than 
incident-specific assessments but were justified by their cost 
effectiveness.
    Response: NOAA agrees. Not only is the reduced cost a factor, but 
there is a more predictable outcome following a discharge and the 
trustee(s) and the RP(s) are able to focus on the actual restoration or 
acquisition of the equivalent resources as soon as possible.
    Comment: One commenter questioned the reliability of desktop models 
that require highly technical, current environmental information that 
is not always available. Another commenter agreed and stressed that 
such assessment methods must meet clearly defined criteria of 
scientific validity. One commenter noted that, although compiling 
scientific information would be cumbersome at first, trustees would 
come to appreciate the efficiencies of the structured tables that would 
facilitate expedited settlements.
    Response: NOAA concurs that desktop models are most effective when 
the averages that are produced reflect the most current and detailed 
information available. For regions where little data are known, 
however, models are still capable of producing reasonable estimates. 
Although the proposed rule only requires revision of the rule every 
five years, the computer model and formulas will be the subject of 
continuing evaluation. As new scientific literature becomes available 
which enables further refinements to the models by DOI, NOAA will 
evaluate whether revisions to the formulas are appropriate in advance 
of the five-year requirement.
    Comment: One commenter charged that tables and models are based on 
statistical averages and by their nature cannot produce values that are 
reasonably related to actual costs. As such, they are not authorized by 
OPA. However, the commenter continued to state that small discharges 
with limited effects may not call for a Comprehensive Damage Assessment 
(CDA).
    Response: NOAA believes that the development of formulas and models 
is within the scope of its authority under OPA. Although based on 
statistical averages, the values do reasonably assess restoration/
replacement costs and are therefore authorized by OPA. The computer 
models and compensation formulas are appropriate for small discharges 
of limited effect where a comprehensive damage assessment may be 
impracticable.
    Comment: One commenter noted that restoration is a new and rapidly 
changing field where there are few case studies from which to draw 
information and calculate damages. Therefore, restoration costs may 
have to be determined on a case-by-case basis.
    Response: NOAA agrees with this statement when the trustee(s) is 
conducting either an EDA or CDA.
    Comment: One commenter recommended that NOAA's proposed regulations 
should address only the framework for comprehensive and expedited 
damage assessments, especially where OPA, unlike CERCLA, does not 
specifically call for the preparation of regulations for simplified 
assessment methods. Further, the feasibility of simplified assessment 
procedures should be explored in the context of a negotiated 
rulemaking, comprised of representatives from industry, insurers, 
environmental groups and other trustees.
    Response: NOAA disagrees with the notion that OPA limits this 
rulemaking to EDA or CDA procedures. Simplified assessments provide an 
opportunity for quick recoveries and therefore lower transaction costs 
to both the trustee(s) and the RP(s). The use of negotiated rulemaking 
for development of the compensation formula was considered to be very 
time consuming, expensive, and potentially resulting in damages based 
more upon compromise than restoration costs and compensable values.
    Comment: One commenter noted that areas that are presently 
``biologically degraded'' will be retarded in the recovery following a 
discharge. NOAA's suggestion that the compensation table could be used 
where there may be difficulty in ascertaining precise injury, seems to 
equate difficulty with insignificance. This approach will encourage the 
trustee(s) to use a cookbook approach rather than a fact-based 
assessment.
    Response: In the selection of the appropriate assessment 
procedures, the trustee(s), at the time following the discharge, will 
be in the best position to determine the most appropriate procedure for 
the discharge conditions.
    Comment: Two commenters expressed concern that tables may under-
value resources in industrialized or biologically degraded areas. 
Another commenter particularly noted that any table should fully value 
urban resources. One commenter felt that NOAA is being optimistic in 
that the tables can cover many issues.
    Response: The Estuarine and Marine Environments Compensation 
Formula is based upon 55 representative province/habitat combinations, 
ranging from Northern Maine to the Alaska Coast, the Hawaiian and 
Pacific Islands. Since the compensation formula is based upon averages, 
it is impossible to include all known coastal habitats and every 
combination of discharges. However, several industrialized areas are 
specifically represented, i.e., Boston Harbor, New York Harbor, Mobile 
Bay, etc.
    The Inland (Freshwater) Waters Compensation Formula is based upon 
100 representative province/habitat combinations representing the Great 
Lakes and other inland waters by type, i.e., river, lake, fast flowing 
stream, etc.
    By comparing the habitat of the actual discharge with the province 
and specific habitat used to estimate the damages in the formula, the 
trustee(s) should, in most cases, find the most applicable scenario. 
NOAA emphasizes that the primary advantages of a compensation formula 
are for simplicity and cost-effectiveness. In addition, any time a 
simplified assessment is used, it is unlikely that the exact 
circumstances of an actual discharge will be represented, only 
approximated. In cases where the circumstances of an actual discharge 
are determined to be far out of the bounds of the compensation formula, 
the trustee(s) should consider the use of another assessment procedure, 
i.e., EDA or CDA.
    Comment: One commenter suggested using tables in small discharges 
to establish base damages, and conducting more incident-specific 
assessments for larger discharges or sensitive areas. Others indicated 
that tables would be too simplistic and have limited value.
    Response: The compensation formula is specifically designed for use 
in most discharges of under 50,000 gallons. It is likely that 
discharges over 50,000 gallons would result in injuries that would be 
more appropriately addressed by another assessment procedure. Again, 
the trustee(s) will determine if a specific discharge may be 
appropriately assessed by the compensation formula. It is well within 
NOAA's statutory authority to include compensation formulas with the 
proposed rule.
    Comment: One commenter was concerned with the formulas that give no 
credit for responsible cleanup. Another commenter cited that no 
adjustment is made for short-term versus long-term injuries. This 
commenter also stated that there is no difference for companies that 
take remedial action to clean up or reduce injuries of a discharge. The 
commenter stated that the lack of these adjustments is a disincentive 
to RPs. Others indicated that the tables should be based upon the 
assumption that the total cargo was discharged, requiring the RP to 
produce evidence to the contrary.
    Response: The formulas introduced in this proposed rule provide 
that the gallon amount used is the estimated amount of oil left in the 
water environment 24 hours after the onset of the discharge. Hence, if 
oil is immediately contained and cleaned up, the ten gallon threshold 
of the compensation formula may not be reached. Discharges of highly 
volatile oil products may result in significant negative injuries to 
the environment, even if cleaned up within 24 hours. Such discharges 
would be more appropriately assessed using another assessment 
procedure. This should provide a significant incentive for RP(s) to 
begin immediate cleanup and yet allow for the assessment of injuries 
resulting from the actual discharge. Discharges that may result in 
long-term injuries may be more appropriately assessed through the use 
of another assessment procedure. NOAA is confident that the lead 
response agency and the RP(s) can and will identify the amount of oil 
discharged to a degree of confidence necessary to conduct a damage 
assessment, either through the formulas or other assessment procedure.
    Comment: Some commenters stated formulas should not be based simply 
on mortality counts or gallons discharged. Yet another stated that, if 
a dollar per gallon formula is used, NOAA should consider toxicity of 
discharged oil as well as persistence. Another indicated that any 
compensation formula based on destroyed flora or fauna ignores the rate 
of natural replenishment. This commenter also stated that damages 
should not be based on artificial valuation of ``commercially valueless 
creatures.''
    Response: The compensation formulas introduced in the proposed rule 
are based upon gallons discharged, restoration costs (where 
appropriate), restocking costs, and average direct use values of the 
affected resources. Restoration costs are only included when the 
scenario is one in which anticipated habitat restoration efforts would 
have lessened the overall damage figure, i.e., done more good than 
harm. Since the formula represents small discharges few scenarios 
resulted in habitat restoration costs. However, restocking costs of 
fish, shellfish, and wildlife are included when it is expected that 
there would be a loss of those resources. Restocking costs and direct 
use values could only be calculated for resources that had a current 
value that could be determined.
    In addition, the formulas provide for five different representative 
types of oil: (1) Heavy crude; (2) light crude; (3) No. 2 fuel oil; (4) 
diesel oil; and (5) gasoline. If the oil discharged is not one of those 
types of oil, the trustee(s) is given guidance on which representative 
oil is the closest to the type of oil discharged. The data used to 
develop the formula recognize the different toxicity properties of each 
representative oil.
    Comment: Some commenters strongly objected to the inclusion of 
passive use values in simplified assessments. One noted that passive 
use values are ``particularly ill-suited'' in the context of small 
discharges, but NOAA should not rule them out for those discharges. The 
model or table will not capture passive use losses well, but NOAA 
should continue to explore inclusion of them in such a table or model 
as the number of passive use value studies is rapidly increasing.
    Response: Through a lengthy, deliberative, and exhausting process 
for the review of contingent valuation, NOAA has determined that the 
formulas in the proposed rule will not include passive use values. In 
addition, the formulas are designed for small discharges that would 
generally not have a significant effect upon passive use values. Small 
discharges likely to have a significant effect upon passive use values, 
as determined by the trustee(s), should be assessed through a different 
procedure.
    NOAA is considering how passive use values might be included in the 
compensation formulas and is requesting comments on this issue.
    Comment: One commenter stated that use of a compensation table 
would avoid the cost of performing an assessment and represent a 
savings to the RP. The commenter stated the RP should not have the 
ability to challenge a table by using ``real data.'' However, some 
collection of ``real data'' between the RP(s) and trustee(s) should be 
allowed. RP-collected data should not be admissible in court, unless 
submitted to the trustee(s) as a part of the administrative record.
    Response: One of the advantages of using the compensation formula 
is the reduced cost. However, the proposed rule specifically allows the 
RP(s) to request a more comprehensive damage assessment, provided those 
costs are borne up front by the RP(s). Where the trustee(s) and the 
RP(s) determine it necessary to collect additional data, another 
assessment procedure can be used. As outlined in this proposed rule, 
all data to be considered in the restoration process must be submitted 
to the administrative record. Once the formulas are final, including 
possible judicial review, NOAA believes that the bases of the formulas 
will no longer be subject to challenge, although the trustee(s) may be 
challenged concerning the data inputs, i.e., size of discharge, type of 
oil, etc. To avoid unnecessary litigation, NOAA encourages the RP(s) 
and the trustee(s) to enter into enforceable agreements to use the 
formulas to determine the appropriate damages.
    Comment: One commenter stated that any compensation formulas or 
computer modeling must include a continuous ``reality check'' of 
observed effects and results for assessment awards. Another commenter 
took the opposite view, favoring compensation tables only if they are 
not subject to unilateral ``reality checks.''
    Response: NOAA believes that the proposed compensation formulas 
represent the best available information at the time of compilation in 
terms of the fate and effect of oil, the likely biological effects, and 
the average restoration costs and direct use values, for a variety of 
discharges. As stated earlier, if the circumstances of an actual 
discharge are significantly out of the parameters of the formulas, an 
alternative assessment procedure should be used. Again, any simplified 
assessment procedure will not mirror reality in every single discharge. 
The proposed rule does provide, however, for NOAA to review the 
procedures every five years. This will allow the formulas to be kept 
current on biological, toxicological, and valuation information.
    Comment: One commenter stated that formulas should not be used as 
an assessment tool. Another cited a compensation formula as a theory of 
``liquidated damages'' or ``worker's compensation'' recovery, being 
contrary to the statutory injunctions of OPA. Also cited was the Zoe 
Colocotroni case as discrediting compensation formulas.
    Response: NOAA disagrees that compensation formulas are not 
appropriate as assessment tools, provided the formulas are based upon 
the measure of damages required by OPA. These include: The costs of 
restoring, rehabilitating, replacing, or acquiring the equivalent of 
the damaged resources; the diminution of value; plus the reasonable 
costs of conducting the assessment. The proposed formula is based upon 
that premise, although it is likely that costs of conducting the 
assessment will be very low. As stated throughout the proposed rule, 
the formula is one of four procedures available to the trustee(s). If 
the particular circumstances of the discharge are beyond the scope of 
the formula, another procedure should be used.
    Comment: One commenter recommended that any simplified damage 
assessment technique be based on the equation that: Total Damages = 
Cost of Restoration + Diminution of Value of the Resource Pending 
Restoration + Cost of Conducting the Assessment.
    Response: NOAA agrees that a simplified damage assessment procedure 
based on such an equation satisfies the criteria of being simple, 
accurate, reliable, and understandable and is in accordance with OPA.

Type A Model

Subpart E Preamble

    NOAA is proposing that a natural resource trustee(s) may use the 
Natural Resource Damage Assessment Model for Coastal and Marine 
Environments (NRDAM/CME), Version 1.2, known as the Type A model, 
developed by the U.S. Department of the Interior (DOI), for damage 
assessments under OPA. The Type A model is described at 43 CFR Part 11, 
subpart D. The Type A model may be used when the conditions of the 
discharge are sufficiently similar to the conditions of 43 CFR 11.33(b) 
to make the Type A model a useful method for the discharge of concern. 
The trustee(s) shall publish the DARP stating the intent to use the 
NRDAM/CME and identifying the inputs to be used in that application. 
The public will have thirty calendar days in which to comment on the 
use of the NRDAM/CME. If the trustee(s) has set out, as part of 
prespill planning, the circumstances under which the NRDAM/CME would be 
used and a different process for public input in that use, the process 
identified in the prespill plan may be used, subject to the provisions 
for prespill planning in Sec. 990.16 of this part.
    It is likely that NOAA will also recommend the new set of computer 
models being developed by DOI for use in estimating damages for 
injuries to natural resources resulting from relatively minor 
discharges of oil. The current computer model for use in coastal and 
marine environments is being revised by DOI to comply with the court's 
decision in Colorado v. DOI and as part of the statutorily-mandated 
review and update. The court in Colorado v. DOI, held that natural 
resource damage assessments should be based upon costs to restore, 
replace, rehabilitate, or acquire the equivalent of the injured 
resources, plus the diminution of all reliably calculated compensable 
values pending recovery. The current model is still in effect pending 
those revisions. DOI is also developing a second computer model for use 
in the Great Lakes and their connecting channels.
    These computer models use the same basic approach to estimating 
damages. Each model is composed of several major components modeling 
the physical and chemical fate of the substance discharged, spread of 
the substance throughout the environment, the present and future 
biological effects of the discharge, the restoration approach and its 
costs where appropriate, and the value of natural resources and 
services lost pending recovery.
    These new computer models, are under development through DOI, but 
are not yet available for public review. NOAA is working closely with 
DOI in its development of these computer models. Based upon an initial 
evaluation of these models, it is likely that NOAA will recommend that 
they are available procedures that the trustee(s) may choose to use 
under OPA.

Response to Comments

``Use of Computer Models''

    Comment: Several commenters noted that simplified procedures are 
most applicable for small discharges that would otherwise not be 
addressed because the cost of conducting an assessment might be greater 
than the ultimate recovery. Commenters noted that the use of simplified 
procedures would be less costly to the trustee(s) as well as the RP(s), 
and will result in more timely recoveries.
    Response: NOAA agrees that a major advantage of a simplified 
assessment procedure like a computer model would allow for more timely 
and cost-effective assessments for a majority of oil discharges.
    Comment: Concerning the use of a computer model, commenters 
indicated that it would more accurately evaluate variables than a 
simplistic formula. Models incorporating a number of key variables 
could be a useful assessment tool and provide a cost-effective, 
reliable, and rapid assessment.
    Response: NOAA agrees that a computer model that allows a large 
range of variables to be considered in a standardized fashion is a 
valuable assessment tool.
    Comment: Several commenters indicated that a computer model must be 
based upon an accurate estimate of restoration costs and that such 
costs must bear a reliable relationship both to actual injuries to 
natural resources as a result of the discharge and restoration actions.
    Response: NOAA agrees that a computer model would look at the most 
appropriate type of restoration action typically considered for the 
type of incident being modelled. This action would be based on the 
average types of expected injuries. The model would then calculate the 
average, regional costs of carrying out such an action.
    Comment: Several commenters expressed concern about the use of a 
model because of the possibility that it would underestimate the 
damages. Commenters in this category, therefore, argued for the 
inclusion of passive use values. According to these commenters, even if 
the resource does recover, there will be some diminution in value over 
the recovery period. Similarly, passive use values may remain impaired/
diminished until recovery.
    Other commenters, however, argued that the factors taken into 
account by a model should be limited. Since OPA is compensatory and not 
punitive, a model should not incorporate values that may be difficult 
to measure. Accordingly, these commenters would not allow the use of 
any passive use values. Also, one commenter stated a model would be 
improper for large values.
    Response: NOAA points out that the court's direction in the Ohio 
and Colorado decisions was to include in all types of assessments all 
reliably calculated values. Therefore, to the extent possible, these 
values would be included in a computer model.
    Comment: One commenter stated that, where multiple trustees are 
involved in one discharge, the RP is unlikely to agree to a damage 
figure derived from a computer model or compensation table until all 
the trustees agree that the resulting damage figure is the sole measure 
of damages for all injuries. Otherwise, the commenter noted that the RP 
would be faced with paying damages to satisfy the computer model or 
table figure while still facing claims for specific restoration 
projects, all resulting from the same discharge.
    Response: NOAA notes that the danger of double recovery can be 
avoided by the RP(s) scrutinizing a natural resource and/or injury upon 
which damage claims are made by several trustees. Such review would 
show whether the same resource injury is being claimed by the various 
trustees.
    Comment: Some commenters suggested NOAA develop and propose a 
similar computer model for rivers, streams, lakes, and interior 
wetlands.
    Response: NOAA is currently developing the inland compensation 
formula for relatively minor discharges in inland waters (see 
discussion elsewhere in this preamble). DOI is also investigating 
possible additional damage assessment methods for use as inland Type A 
procedures. NOAA will work with DOI in this effort to the extent 
possible.

``DOI's Type A Model''

    Comment: Several commenters stated that the revised Type A model, 
under development by DOI, must contain more accurate data than the 
current Type A model. It should be area specific and reflect the actual 
species densities and distributions, as well as variations in those 
distributions and densities. The commenter noted that entire coastlines 
should not be classified within the model as one biologically 
homogenous unit. Some commenters identified factors that the table or 
model should take into account. These factors include: The scarcity of 
a resource or the presence of a critical species in a given area; 
seasonal differences; the size of the discharge; and the cumulative 
effects of small discharges over time. In addition, the data should be 
periodically updated.
    Response: NOAA notes that DOI is updating the data considered in 
the Type A model and collecting all available information. As for 
including such things as regional or local information on species 
densities and distributions, NOAA is helping to gather such data, but 
notes that such detailed information is only available for certain 
well-studied areas that represent a relatively small portion of the 
entire coastal and marine environments of the United States and its 
territories.
    Comment: Some commenters noted that the original Type A model 
severely underestimated damages in its use of a flawed economic 
valuation and that the damages should be significant enough to act as a 
deterrent.
    Response: The court in Colorado v. DOI instructed DOI to include in 
the Type A models, damages based upon costs to restore, replace, 
rehabilitate, or acquire the equivalent of the injured resource, plus 
the diminution of all reliably calculated direct use and passive use 
values pending the recovery of the injured natural resources and their 
services. DOI has stated that the Type A models will incorporate these 
components of the damages to the extent practicable. The Type A models 
are compensatory, not punitive, so they are not intended to serve as 
deterrents.
    Comment: One commenter stated that the model should provide for 
frequent information updating, and should require public input in the 
process.
    Response: NOAA agrees that the Type A model should be periodically 
updated through a public review and comment process. In fact, section 
301(c) of CERCLA requires a review and revision, as appropriate, every 
two years. DOI is currently conducting such a revision of the Type A 
model for coastal and marine environments, along with the Colorado 
court's suggested revisions.

Expedited Damage Assessment

Subpart F Preamble

General

Purpose/Scope
    Included in the range of proposed damage assessment procedures is 
the expedited damage assessment (EDA). EDA reflects a damage assessment 
approach that is intermediate between the current Type A model and 
proposed CDA procedures. This approach recognizes that the trustee(s) 
may want to address more effects than currently available in the Type A 
model or proposed compensation formula, particularly for inland 
discharges. The approach also recognizes that the size, location, and 
timing of a given discharge may not warrant the broad, extensive 
procedures associated with a CDA. An EDA encompasses a variety of 
methods that permit the trustee(s) to determine and quantify injury 
based on limited, focused studies. The trustee(s) is accorded 
considerable discretion in determining which methods are the most 
suitable for a given EDA. Accordingly, the EDA should be viewed as a 
dynamic process rather than a rigid, step-by-step approach.
    The goal of an EDA is to initiate restoration as quickly as 
possible. This goal can be achieved by truncating the injury 
determination and quantification process. Using limited, focused 
studies, the trustee(s) may determine and quantify injury in one of two 
general approaches. First, the trustee(s) may supplement the Type A 
model with additional injury or compensable value studies for those 
natural resources and/or services not specifically included in the 
model's assumptions. Second, the trustee(s) may undertake an attenuated 
CDA. The latter approach involves the trustee(s) selecting only certain 
key resources and/or services that warrant injury assessment and 
conducting focused studies to quantify injuries to determine the 
restoration approach and compensable values. The proposed rule 
encourages the trustee(s) to begin initial restoration planning early 
in the assessment/restoration process in order to focus efforts on 
developing a restoration approach. These early restoration 
alternatives, however, may be modified as the injury determination and 
quantification data is refined.
    The EDA process allows the trustee(s) to exercise his best 
professional judgment to narrow the scope of studies conducted during 
the Assessment/Restoration Phase to a few key natural resources and/or 
services. To help select the appropriate resources for inclusion, the 
proposed rule recommends that the trustee(s) focus on those natural 
resources and/or services that are of commercial, recreational or 
ecological importance, or of special significance. The trustee(s) may 
determine, for example, that studies focusing only on one, or few 
resources (i.e., murres or wetlands), will produce a restoration 
approach sufficient to restore the affected resources and/or services. 
The proposed rule also provides guidance for focusing the injury 
determination and quantification components.
    In examining the relationship of the EDA with the other proposed 
assessment procedures, it is helpful to think in terms of what EDA is 
not. Large or unusually destructive discharges may require a broad 
suite of extensive studies over a multi-year period to determine the 
nature and extent of the injuries to natural resources and/or services 
and calculate compensable values. While it is important to have a 
comprehensive damage assessment option, NOAA believes that most 
assessments will not require an extensive, often litigation-driven, 
approach. Through this proposed rule, NOAA has interpreted Congress' 
apparent desire to spend less time rediscovering that a discharge is 
harmful to the environment, and focus more efforts on restoration 
measures. EDA provides a vehicle for that purpose.
    Finally, the proposed rule provides that the trustee(s) should 
complete the natural resource and/or service injury determination/
quantification process and develop a restoration approach within two 
years from the date of the discharge, where possible. This time-frame 
is not required, but an assessment taking longer to reach this point is 
not expedited.
Guidance in Selecting the EDA Approach
    In evaluating whether an EDA is appropriate for a given discharge, 
the trustee(s) should take into account the guidance provided by the 
proposed rule. This guidance is not intended to be rigidly applied. 
Rather, the trustee(s) should exercise best professional judgment in 
evaluating the usefulness of this guidance for any given discharge.
    Near the close of the Preassessment Phase, the trustee(s) will 
examine the information regarding the discharge in light of the 
guidance and decide whether to select the EDA approach or another 
assessment procedure. In all cases, this decision is reserved for the 
trustee(s). See discussion earlier in this preamble.
The Expedited Damage Assessment Approach
    EDA Objectives: The steps involved in the EDA or CDA damage 
assessment are similar. The scope of effort associated with each step, 
however, differs considerably between the two procedures.
    The objectives of an EDA are to: (1) Expeditiously determine and 
quantify injuries to selected natural resources and/or services 
resulting from a discharge using limited, focused studies and baseline 
or reference/control information, and (2) provide the basis for 
restoration and recovery of natural resources and/or services. To 
achieve these objectives, the EDA procedure consists of: (1) Injury 
determination; (2) injury quantification; (3) restoration component; 
and (4) compensable values determination.

Injury Determination

General
    Injury resulting from (or caused by) the discharge of oil has been 
determined when the trustee(s) has demonstrated that: (1) With direct 
exposure, (a) the natural resource was exposed; (b) there is a pathway 
between the discharge and exposed natural resource; and (c) the 
exposure of oil, its components, or by-products has been shown by 
rigorous and appropriate scientific methodology to have an adverse 
effect on the natural resource in laboratory experiments or the field; 
or (2) in the absence of direct exposure, (a) the adverse effect on or 
impaired/diminished use of a natural resource has been shown by 
rigorous and appropriate scientific methodology; and (b) the adverse 
effect on or impaired/diminished use of the natural resource would not 
have occurred but for the fact of the discharge or threat of a 
discharge. The trustee(s) should establish baseline or reference/
control conditions from which changes in environmental and biological 
parameters may be measured.
    Contributing Factor: Where multiple factors may have contributed to 
an indivisible injury to a natural resource and/or service, the 
discharge of oil may be considered a contributing factor to the injury.
Exposure
    Once the discharge of oil has been documented, the next step 
involves either confirmation of exposure or threat of exposure to the 
natural resources to the oil. Confirmation and exposure entails 
determining the amount of product discharged into the environment. 
Initial estimates developed in the Preassessment Phase should now be 
verified or modified as appropriate. Where practicable, the trustee(s) 
should rely on figures developed by the On-Scene Coordinator (OSC) and 
request continual updates. The OSC may also be requested to provide a 
final estimate of the amount discharged, recovered, or removed. The 
trustee(s), however, may conduct additional surveys to determine the 
amount of oil discharged into the environment, should the figures 
provided by the OSC prove insufficient.
    Using field data collected thus far, the next step should be to 
identify exposure pathways. Field data that may help the trustee(s) 
accomplish this step include documentation of the areal extent of the 
oil and collection of water samples along the oil contamination 
gradient. The trustee(s) may rely on models, in conjunction with 
limited field data, to document exposure pathways. These models should 
be relatively simple and acceptable to the scientific and regulatory 
community. The trustee(s) should confirm that natural resources were in 
fact exposed to oil.
    Where the injury is an indirect adverse effect or impaired/
diminished use, the trustee(s) should begin to document the nature and 
extent of such injury. An example of impaired/diminished use is where a 
recreational beach is closed in anticipation of oiling. An example of 
an indirect adverse effect is where exposure to oil has resulted in the 
reduction or elimination of food chain resources thereby resulting in 
starvation of a higher trophic level resource (e.g., birds). If such 
injuries are readily quantifiable, studies that document the injury are 
appropriate for an EDA. Determination of impaired/dimished use or 
adverse effects is addressed in the section entitled Injury 
Determination: Scope of Injuries.
    Identify Natural Resources: The trustee(s) should identify those 
natural resources for which injury determination and quantification 
will be conducted. Eligible natural resources will include those which 
are of commercial, recreational, ecological importance, or of special 
significance.
    Initiate Early Restoration Planning: At this point in the process, 
the trustee(s) should initiate early restoration planning. To 
supplement the information on restoration provided in this section, the 
trustee(s) should refer to the restoration discussion in subpart G of 
the preamble, in the proposed rule, and the Restoration Guidance 
Document.
    The trustee(s) should develop a restoration scoping statement to 
focus the planning process. The scoping statement should identify those 
restoration alternatives that the trustee(s) may consider to remedy 
discharge effects, including source control and remediation where 
appropriate. The ``natural recovery'' alternative should be 
specifically addressed. In addition, the trustee(s) may consider 
acquisition of the equivalent natural resources as an alternative, but 
only in light of OPA's preference for the other alternatives. The 
scoping statement will rely on information derived from the 
Preassessment Phase and exposure determination, and may be developed 
along a roughly parallel time line as the DARP. (See preamble 
discussion of the DARP in subpart C.)
Scope of Injuries
    The scope of injuries in an EDA are limited relative to a CDA. 
Injuries to natural resources and/or services that may be appropriate 
for an EDA include, but are not limited to, mortality, and sublethal 
effects that are relatively easy to document. Categories of injury that 
meet the acceptance criteria in Sec. 990.71(e) of the proposed rule and 
are appropriate for an EDA are currently being developed.
    With respect to fish and wildlife resources, the trustee(s) should 
estimate direct mortality using body counts in the affected areas in 
accordance with standard field procedures (such as the ``fish-kill'' 
investigation methods described by the American Fisheries Society). 
(See Part II (Fish-Kill Counting Guidelines) of ``Monetary Values of 
Freshwater Fish and Fish-Kill Counting Guidelines,'' American Fisheries 
Society Special Publication Number 13, 1992.) The trustee(s) should 
correct the estimates using established procedures in the literature 
along with ``off-the-shelf'' models. Published water and sediment 
toxicity data can be used in the models. In addition, toxicity tests 
may be conducted on the discharged oil to provide specific information 
for the model on the effects of the discharged oil at the estimated 
concentrations on the species and life stages of concern. The toxicity 
tests, however, should be time- and cost-effective. Mortality may also 
be determined by baseline and reference/control comparisons.
    Mortality estimates may be less applicable to vegetation associated 
with natural resource habitats. Oiled vegetation may suffer 
considerable sublethal injury including, but not limited to, reduction 
in growth rates, loss of above-ground biomass, and reproductive 
impairment. These injuries, especially the loss of plant biomass, may 
result in changes in species diversity and abundance utilizing the 
habitat. Nevertheless, chronic contamination or a severe discharge may 
result in direct mortality. The trustee(s) may need to undertake 
limited surveys to verify early vegetative mortality, as well as 
mortality likely with time.
    As mentioned earlier, mortality resulting from a discharge may also 
be indirect. The trustee(s) may include indirect mortality in the 
injury focus provided there is baseline information documenting such 
injury or the indirect mortality can be determined with limited, 
focused studies. Measures of indirect mortality include, but are not 
limited to, starvation; failure to nest; hatching failure; and loss of 
critical habitat.
    Sublethal effects as measures of injury should be carefully 
selected in an EDA. Only those that can be determined using limited, 
focused studies and that are expected to result in quantifiable 
injuries should be included. Sublethal effects that may meet these 
requirements include, but are not limited to, impairment of growth, 
reproduction, development and behavior.
    The trustee(s) should also consider injuries to services. The first 
step in determining injury to the services is to inventory the services 
provided by a natural resource prior to discharge and identify those 
services affected or expected to be affected by the discharge. Services 
commonly affected by a discharge of oil to the natural environment 
include recreational, commercial, ecological, and those of special 
significance as defined earlier in this proposed rule. Recreational 
services provided by natural systems include, but are not limited to, 
provision of recreational fishing, boating, boat mooring, bathing, 
beach use, wildlife viewing, sightseeing, and hunting opportunities. 
Commercial services include finfish and shellfish harvest, as well as 
marine transportation, marine development, and industrial and municipal 
water use. Commercial services differ from recreational, ecological, 
and passive use services in that some parties other than the trustee(s) 
(e.g., commercial fishermen) may make claims related to the diminution 
of value. Therefore, the potential for overlap between the 
trustee's(s') and a private claim should be carefully considered. 
Typical ecological services (i.e., biological diversity, habitat 
protection, food chain transfer, contaminant control/ assimilation, 
water quality/quantity aesthetics) could include wetland functions, 
such as water quality enhancement, waterfowl nesting sites, and estuary 
functions, such as provision of nurseries for fin and shellfish or 
habitat to endangered or threatened species. Services provided by 
resources of special significance include, but are not limited to, 
subsistence fishing, education, scientific and cultural research.
    Not all services inventoried will suffer injury or a reduction in 
their flow. The trustee(s), therefore, must identify those services to 
be addressed by the EDA. For example, wetlands provide a range of 
services including, but not limited to flood control, fish nurseries, 
and recreational opportunities. A discharge that results in oiling of 
above ground wetland vegetation may leave the roots intact, therefore 
leaving the flood control service unaffected. The oiling of the 
emergent vegetation, however, could substantially reduce the bird 
viewing opportunities. The trustee(s) should include in the EDA only 
those services that have actually been interrupted or lost.

Injury Quantification

General
    The trustee(s) should quantify injuries to natural resources and/or 
services identified through injury determination. Based on the services 
identified as interrupted or lost, the trustee(s) should select a 
subset of this list for detailed analysis. The trustee(s) should 
determine the duration of lost or diminished services. This is 
accomplished by comparing the level of baseline or reference services 
(i.e., the conditions as they existed prior or adjacent to the 
discharge and would have continued to exist in the future but for the 
discharge) to the level of services after the discharge. In some cases, 
baseline or reference service flow estimates may not be available. For 
example, state and federal agencies may not maintain data on commercial 
fish catch at the level of detail required for economic damage 
assessment. Where critical information is lacking, the trustee(s) must 
decide whether to: (1) Continue with the EDA in the absence of the 
compensable value estimate for the given service flow; or (2) 
reconsider the appropriateness of the EDA approach, given the magnitude 
or importance of the service flow in question.
Develop Restoration Component
    The trustee(s) should develop the restoration component of the DARP 
at this phase in the process. The restoration component should include 
an analysis of restoration alternatives and the preferred restoration 
approach for each injured resource or service. The trustee(s) should 
refer to subpart G for a full discussion on the restoration component 
of the DARP.
Compensable Values Component
    The compensable values component for an EDA contains the study 
design to estimate the values of the lost services. In this part of the 
EDA, the trustee(s) will consider the interim lost services associated 
with the restoration component and identify available methodologies for 
estimating these values.
    While an EDA does not necessarily preclude large-scale original 
studies such as a site-specific travel cost model, economic assessment 
of lost values should be accomplished by limited, focused efforts where 
possible. The EDA, therefore, may rely on simplified valuation models 
or the applications of benefits transfer. As discussed here and in the 
``Compensable Values'' section of the preamble accompanying subpart G, 
a wide range of methods exist for estimating lost resource values.
    Applicability of market valuation techniques will depend on site-
specific factors, such as the types of services affected and data 
availability. Important and commonly-applied approaches include: Market 
price and appraisal value; travel cost models; random utility models, 
and hedonic property valuation models. The trustee(s) may determine 
that economic methods currently do not exist to estimate the damages 
resulting from the loss or reduction in one or more of the important 
service flow categories. Where the trustee(s) anticipates that 
implementing a particular technique will exceed a reasonable time to 
accomplish an EDA or will result in implementation costs that are 
unreasonable relative to the expected level of damages, the trustee(s) 
should consider selecting another damage assessment technique. Factors 
influencing this decision will include increase in the precision of the 
damage assessment, and the time and budget required to complete such 
research.
    Once the extent of the lost services has been estimated, economic 
values must be assigned to these services to estimate the compensable 
values. For some categories of economic damage, it will be possible to 
conduct site-specific analyses. For example, the damages associated 
with the closure of a marine transportation corridor will, in most 
instances, be estimated using site-specific data. In other cases, the 
trustee(s) will apply estimates, equations, models, or data from 
existing valuation studies, through the use of benefits transfer. 
Benefits transfer may be used where the trustee(s) determines that 
benefit estimates are available to support a defensible benefits 
transfer (see discussion of benefits transfer in the preamble 
discussion of valuation methodologies). If such estimates do not exist, 
the trustee(s) may undertake a cost-effective study at the site.
    The EDA procedure is a new concept, that is designed to facilitate 
the damage assessment process for a large number of discharges. It 
represents a hybrid approach that entails either supplementing the Type 
A model with limited, focused studies, or studying key natural 
resources and/or services for which limited, focused studies will be 
undertaken. NOAA wishes to solicit comments regarding the scope and 
applicability of the EDA.

Response to Comments

    Comment: NOAA received comments supporting the use of an Expedited 
Damage Assessment (EDA) procedure so long as it could make accurate 
estimates and meet, in an expedited way, other natural resource damage 
assessment criteria.
    Response: The proposed rule provides for an EDA in this subpart and 
meets those criteria.

Comprehensive Damage Assessment

Subpart G Preamble

General

Purpose/Scope
    The Comprehensive Damage Assessment (CDA) is the most detailed of 
the assessment procedures available to the trustee(s). The purposes of 
a CDA are to: (1) Comprehensively determine the nature and extent of 
injury to natural resources and/or services; (2) develop a restoration 
plan to remedy that injury; and (3) determine the total compensable 
values for discharges requiring a complex, prolonged assessment/
restoration process as deemed necessary by the trustee(s). Since there 
is no single CDA approach appropriate for every discharge, the 
trustee(s) must tailor each CDA to the specific oil discharge 
circumstances.
    A CDA consists of four components, including Injury Determination, 
Injury Quantification, Restoration Planning, and Compensable Values 
Determination. After completion of a CDA, a Report of Assessment, which 
includes the determinations made in each of these components, must be 
prepared.
CDA Costs
    CDA costs include those costs associated with injury determination 
and quantification, restoration planning, and compensable values 
determination. Costs incurred should be limited to those the trustee(s) 
considers necessary. Such costs should be supported by appropriate 
records and documentation in the administrative record, and must not 
reflect regular activities performed by the trustee(s) in the 
management of natural resources and/or services not related to the 
discharge of oil.
Report of Assessment
    At the conclusion of a CDA, the natural resource trustee(s) should 
document all pertinent activities and decisions in the administrative 
record and prepare the Report of Assessment. The Report of Assessment 
is the basis of the CDA claim. The Report of Assessment is the DARP, as 
modified based upon comments received during the public comment period. 
The Report of Assessment contains the trustee's(s') selected 
restoration approach. The administrative record should contain the 
rationale for conclusions regarding each component of the CDA process.

Injury Determination

Purpose/Scope
    The purpose of Injury Determination in a CDA is to verify or modify 
the nature of the injury to natural resources and/or services resulting 
from the discharge of oil. Injury determination in a CDA should be made 
for natural resources and/or services that can be restored or for which 
the public can be compensated.
    Should the trustee(s) be able to document the nature of the injury 
to a natural resource and/or service resulting from the discharge of 
oil, he should then proceed to Injury Quantification. If the trustee(s) 
is unable to determine such injury, further assessment efforts should 
be terminated and the results of the Injury Determination documented in 
the Report of Assessment.
Objectives and Study Designs
    Based on the information regarding the discharge and environmental 
setting collected in the Preassessment Phase, the trustee(s) should 
first develop objectives governing the overall CDA and for the 
individual component studies comprising the CDA. These objectives 
provide direction for the design of the CDA and each study. Once the 
objectives are defined, the trustee(s) should develop appropriate study 
designs. Study designs address the level of effort for each given 
study. The study design may include, but is not limited to, 
identification of: (1) The hypotheses or questions posed; (2) changes 
in injury that may be considered statistically and environmentally 
significant; (3) expected endpoints, i.e., effects, for each resource 
and/or service; (4) the appropriate assessment methods for each 
endpoint; (5) data quality objectives to ensure that data are collected 
and analyzed effectively; (6) sampling design that provides the logical 
structure on how to collect the data; and (7) the statistical analyses 
to test the hypotheses. Guidance on study designs can be found in the 
Injury Determination and Quantification Guidance Document, currently 
being prepared.
Injury Determination
    Once the individual study designs are complete, the trustee(s) 
should then document the nature of the injury resulting from the 
discharge of oil. Injury resulting from (or caused by) the discharge of 
oil has been determined when the trustee(s) has demonstrated that: (1) 
With direct exposure, (a) the natural resource was exposed; (b) there 
is a pathway between the discharge and exposed natural resource; and 
(c) the exposure of oil, its components, or by-products has been shown 
by rigorous and appropriate scientific methodology to have an adverse 
effect on the natural resource in laboratory experiments or the field; 
or (2) in the absence of direct exposure, (a) the adverse effect on or 
impaired/diminished use of a natural resource has been shown by 
rigorous and appropriate scientific methodology; and (b) the adverse 
effect on or impaired/diminished use of the natural resource would not 
have occurred but for the fact of the discharge or threat of a 
discharge.
    Where multiple factors may have contributed to an indivisible 
injury to a natural resource and/or service, the discharge of oil may 
be considered a contributing factor to the injury.
    The trustee(s) should identify the pertinent exposure pathways, and 
relevant injuries to natural resources and/or services. The definitions 
of exposure, injury, and causality in the proposed rule are different, 
but not inconsistent, than that found in the CERCLA natural resource 
damage assessment rule, known as the Type B rule (43 CFR 11.62(b)-(f)). 
Guidance on natural resource and service injuries exclusive to oil 
discharges can be found in the Injury Determination and Quantification 
Guidance Document, currently being prepared.
    The method for determining injury in this proposed rule is also 
different than that of the CERCLA rule. These methods should be chosen 
based on the capability of the method to demonstrate an effect on or 
impaired/diminished use of a natural resource. For any injury to be 
considered such under this proposed rule, it must satisfy the following 
acceptance criteria: (1) For natural resources, (i) the exposure to 
oil, its components, or by-products has been demonstrated to cause an 
adverse effect on the natural resource in laboratory experiments or the 
field; and (ii) the measurement for a natural resource adverse effect 
is cost-effective and can be obtained through the application of a 
scientifically rigorous and appropriate methodology. Categories of 
natural resource and service injury for the CDA (as well as the EDA) 
that meet the acceptance criteria specified for discharges of oil are 
also currently being developed.
    The public is asked to review these changes relative to the CERCLA 
rule. Constructive comments should reflect the flexibility and 
discretion accommodated to the trustee(s) throughout the OPA proposed 
rule.

Injury Quantification

Purpose/Scope
    The purpose of injury quantification is to determine the effects on 
natural resources and/or services resulting from the discharge as 
defined in the proposed rule. The proposed rule allows the trustee(s) 
to measure the change in either a natural resource itself, or directly 
in a service. The trustee(s) is encouraged to use whichever approach 
proves to be most appropriate for a natural resource and/or service 
being considered. In either case, Injury Quantification usually 
requires comparisons to baseline or reference/control conditions, or 
some other known measures. Such comparisons are based upon the 
completion of any response actions, and will depend on the recovery 
period of both resources and/or services.
    Should the trustee(s) be able to quantify injury to natural 
resources and/or services resulting from the discharge of oil, the 
trustee(s) should then proceed to the restoration component. If the 
trustee(s) is unable to quantify such injury, further assessment 
efforts should be terminated and the results of the Injury 
Quantification documented in the Report of Assessment. Quantification 
of Injury: In certain circumstances, the trustee(s) may decide to 
quantify natural resource injury and translate that injury to the 
reduction in services. If the trustee(s) bases quantification on 
natural resources injury, he should determine the: (1) Extent to which 
a natural resource injury has occurred; (2) extent to which the injured 
natural resources differ from baseline or reference/control conditions; 
(3) services normally produced by the injured natural resources and (4) 
reduction of services resulting from the discharge of oil.
    However, where there are insufficient data to quantify natural 
resource injury or where there is no associated injured natural 
resource, the trustee(s) may directly quantify the reduction in the 
services resulting from the discharge.
    Even where natural resource injury does occur, direct 
quantification of the reduction in services may be the approach of 
choice. In these cases, the reduction in services may be a measure of 
injury when the: (1) Extent of change in the services resulting from 
natural resource injuries can be determined without also calculating 
the extent of change in the resources; and (2) services to be 
determined are expected to provide a better indication of compensable 
values caused by the natural resources injury than would direct 
quantification of the resources themselves.
    If the trustee(s) bases quantification on injury to services, he 
should determine the: (1) Extent of impaired/diminished services; and 
(2) extent to which the level of impaired/diminished services differs 
from baseline and/or reference/control conditions.
Quantification Methods
    Guidance on quantification methods can be found in the Injury 
Determination and Quantification Guidance Document, currently being 
prepared. Quantification methods generally include before/after (using 
baseline data) and reference/control-impact study designs, using 
combined (at the community/population level) and/or individual (at the 
organism/biomarker level) injuries. Since particular quantification 
methods cannot be recommended to the trustee(s) at this time, guidance 
on specific natural resources and/or services to quantify can be 
provided. Such selection can be based upon the: (1) Extent to which a 
particular natural resource and/or service is affected; (2) extent to 
which a given natural resource and/or service can be used to represent 
a broad range of related resources or services; (3) consistency of the 
quantification method with the requirements of the compensable values 
determination component to be used; (4) ability to quantify changes in 
a given natural resource and/or service at reasonable cost; and (5) 
preliminary estimates of services.
    Injury quantification for a CDA requires information on the extent 
of injured natural resources and/or services. Information needed for 
natural resource injury includes: (1) Total area or volume, if 
appropriate, or quantity of natural resources and/or services affected; 
(2) degree to which natural resources and/or services are affected; (3) 
ability of a natural resources and/or service to recover; (4) 
proportion of a natural resources and/or service affected; and (5) 
services that the injured natural resources provide to other resources 
and humans. Information needed for injured natural resource services 
include: (1) a list of the relevant natural resource services; (2) 
availability and characteristics of those services; and (3) information 
on past and current services. Sources for this information include 
government agencies, trade associations, academic organizations, 
resident population, response personnel, RP(s), experts, databases, and 
the open literature.
Recovery Analysis
    The trustee(s) should estimate the time necessary for natural 
recovery without restoration efforts and beyond response activities. 
Recovery is defined as a return of natural resources and/or services to 
baseline or comparable conditions within the limits of natural or other 
(human-induced) variability. It is possible for the recovery of 
resource services to occur long before or after natural resources 
recovery is complete. However, in many cases, resource services are 
directly derived from natural resources and the recovery of resource 
services should correspond closely with the recovery of the natural 
resource.

Response to Comments

    Comment: Some commenters suggested that injury should be 
hypothesized or justified within a reasonable period (e.g., one to two 
weeks).
    Response: NOAA disagrees. A good faith effort to expeditiously 
complete an injury hypothesis should be made following a discharge. 
Nonetheless, it would be unreasonable to require completion of such an 
initial assessment within a specific interval, because conditions and 
circumstances will vary widely from site-to-site and situation-to-
situation. Further, all concerned should recognize that an initial 
hypothesis of injury is just that. Because not all injuries will occur 
immediately following a discharge, and those that do may not be 
discernable until some time later, the hypothesis may be subject to 
significant, and perhaps repeated, revision over time.
    Comment: One commenter was concerned that statistical analysis be 
used judiciously and also indicated that although specific statistical 
analysis cannot be prescribed, statistical criteria can be set forth.
    Response: NOAA agrees with this comment and is suggesting judicious 
use of statistics.
    Comment: Many commenters wanted NOAA to carefully consider the 
ultimate use of the data collected so as to be cost- and time-
effective.
    Response: NOAA understands this concern all too well. Data use is 
integral to the development of damage assessment strategies and 
designs. Therefore, NOAA is recommending that data use be specified 
early on in the process as part of the objectives of the study as well 
as in data quality objectives in the study design.
    Comments: One commenter indicated that NOAA does not adequately 
address the assessment of the impact on services on natural resource 
injury. Another commenter contends that actual, proven services are all 
that are included in OPA for quantification purposes. Some commenters 
suggested that natural resource damage assessment should include injury 
to archaeological and historical services in particular.
    Response: To assert natural resource damages under OPA, injury to 
natural resources and/or services must be demonstrated. NOAA recognizes 
that there is both direct and indirect injury. The trustee(s) should 
account for both forms so long as such injuries are relevant to 
restoration and compensation efforts. Further, all damages, except 
those that are considered speculative, are included under OPA. Injuries 
to natural resource services may include archaeological sites and other 
resources of historical significance.
    Comment: One commenter stated that natural resources are valued in 
terms of the services or functions they provide to society, either 
directly by providing services to humans or indirectly by providing 
services to other natural resources.
    Response: NOAA agrees and states in the definition of ``services'' 
that natural resources provide a wide range of functions that include, 
but are not limited to, functions provided to society.

Restoration

Subpart H--Preamble Language

General

Purpose
    OPA provides the trustee(s) with the following range of 
alternatives to remedy injury to natural resources and/or services: 
restoration, rehabilitation, replacement, or acquisition of the 
equivalent natural resources and/or services. The proposed rule 
provides that natural recovery is also an alternative that must be 
considered. If the trustee(s) deems that natural recovery is not an 
acceptable alternative for a particular incident, i.e., cannot be 
achieved given the scope, scale, and timing of natural recovery, then 
restoration, rehabilitation, replacement, or acquisition of equivalent 
natural resources and/or services should be examined. For each 
alternative, there may be various options or procedures to accomplish 
that alternative. Each of the alternatives and options mentioned above 
may be considered by itself or combined in a number of ways.
    The purposes of the restoration planning process are to: (1) 
Determine the most appropriate restoration alternatives for the 
recovery of injured natural resources and/or services resulting from a 
discharge of oil; and (2) estimate the costs of implementing 
restoration.
    The goal of restoration is to return the injured natural resources 
and/or services to their baseline conditions. Site-specific restoration 
objectives should be established and prioritized throughout the 
assessment/restoration planning process to provide a blueprint for 
restoring the injured natural resources and/or services to baseline or 
comparable conditions. These objectives should be clear and identify 
the desired outcome.
Restoration Component
    The first step in the development of a restoration component by the 
trustee(s) is to develop a scoping statement. The scoping statement 
identifies natural resources and/or services of concern, as well as 
potential restoration alternatives to focus the restoration planning 
process. The trustee(s) should develop preliminary restoration 
alternatives that address specific injuries.
    As the assessment process progresses and significant new 
information becomes available, the trustee(s) should begin developing 
the restoration component of the DARP. The restoration component, 
incorporating preliminary results of the injury determination and 
quantification studies, should be based upon the scoping statement. The 
DARP will provide the means for soliciting public comments on the 
proposed restoration alternatives.
Coordination
    Early coordination and cooperation is essential in restoration as 
well as assessment where multiple trustees are involved. When multiple 
trustee involvement is indicated, a Memorandum of Understanding (MOU) 
should be considered to clearly delineate trustee responsibilities. An 
example of such an MOU is given in appendix A of the proposed rule.
    Participation of the RP(s) early on in restoration planning is also 
encouraged in the proposed rule, particularly if the RP(s) is active in 
the assessment process. The knowledge and expertise of the RP(s) could 
be useful to the trustee(s). The trustee(s), however, has the ultimate 
responsibility for all restoration activities and should develop a 
joint enforceable agreement or Memorandum of Agreement (MOA) describing 
the specific responsibilities of all parties if the RP(s) is selected 
to participate. An example of such an MOA is given in appendix B in the 
proposed rule.
Emergency Restoration
    Emergency restoration prior to the development of the restoration 
component is permitted where immediate action is necessary to avoid 
irreversible loss, or to prevent or reduce continuing danger to natural 
resources and/or services. These actions are described in detail in the 
preamble discussion of subpart B--Preassessment Phase.
Restoration Costs
    Restoration costs include the costs of implementing the restoration 
plan. Both direct and indirect restoration costs, including those 
associated with pre-settlement, will be used in the determination of 
the total damages.

Restoration Component Development

Requirements
    In developing the restoration component for a CDA, the trustee(s) 
should: Develop a restoration scoping statement; develop the 
restoration component of the DARP; and estimate the costs of 
implementing the restoration component described below. The trustee(s) 
should also address NEPA implementation requirements relative to the 
restoration component.
Scoping Statement
    During the preliminary stage of the assessment/restoration planning 
process, the trustee(s) should develop a restoration scoping statement. 
The scoping statement is intended to serve as a tool to focus the 
restoration planning process. The scoping statement should identify 
those potential restoration alternatives that the trustee(s) may 
consider as potential actions to remedy the effects of the discharge of 
oil. The scoping statement will rely on information provided during the 
injury determination and quantification studies and may be developed 
along a slightly delayed but parallel time line as those components. 
This offset but parallel development will facilitate coordination 
between the injury determination/quantification and restoration 
planning, thereby encouraging the collection of data for both 
processes.
    The scoping statement should include a summary of the natural 
resources and/or services of concern, an evaluation of the 
circumstances of the discharge, and the expected injured natural 
resources and/or services. Next, the scoping statement should identify 
the range of alternatives available to the trustee(s). Where 
appropriate, source control and remediation should be considered. 
Finally, the scoping statement should identify any opportunity to pool 
the recovery with other similar recoveries in a given region in order 
to develop a more encompassing restoration plan.
    As a tool for the trustee(s), the scoping statement should help 
identify the most appropriate restoration alternatives as well as 
clarify additional information needs for the restoration component. 
While some of this information may be gathered from existing sources, 
much may be gleaned from the results of injury determination and 
quantification studies. It is expected, therefore, that the 
alternatives identified in the scoping statement will evolve as new 
information from the assessment process becomes available. The scoping 
statement should be included in the administrative record of the 
assessment.
    If prespill plans or similar supporting documents have been 
developed that address the injured natural resources and/or services 
and the public was fully involved in the prespill planning, the 
trustee(s) may decide that a scoping statement is not needed. However, 
the trustee(s) should begin developing the restoration component at an 
early stage.
Restoration Component of the DARP
    The restoration component of the DARP should be developed during 
the latter stage of the injury quantification component. It should be 
based upon the scoping statement as well as the results of injury 
determination/quantification studies, and feasibility or pilot studies 
that may affect the analysis of a given restoration alternative.
    The restoration component of the DARP should consist of three broad 
components. First, it should include an analysis of the restoration 
alternatives considered for each natural resource and/or service and 
provide the basis for estimating the restoration costs associated with 
each alternative. Included in this analysis should be an estimate of 
the rate and degree of recovery for the injured natural resources and/
or services depending upon a given restoration alternative. Second, the 
restoration component should identify the preferred approach for each 
injured natural resource and/or service under consideration for 
restoration. Finally, the restoration component should include the 
results of any feasibility or pilot studies proposed. To the extent 
practicable, the restoration component should consider opportunities 
for pooling recoveries from multiple cases and identify other statutory 
review and consultation requirements.
    The restoration component of the DARP will be made available for at 
least a thirty calendar day public review and comment period, as 
provided by Sec. 990.32(c)(4) of the proposed rule. The trustee(s) 
should consider the comments received on this plan and make any 
revisions necessary. Significant changes, in the judgment of the 
trustee(s), should also be made available to the public.
    The restoration component will be the basis for the Post-Assessment 
Restoration Plan that will be developed after compensation is received. 
The Post-Assessment Restoration Plan must reflect the amount of the 
actual damage award. This Final Restoration Plan is discussed in detail 
in the preamble discussion of the Post-Assessment Phase.
    In order to provide for the timely development of the DARP, the 
injury determination, quantification, and restoration components should 
be conducted concurrently, where practicable. The proposed rule 
provides that the trustee(s) will develop, where practicable, the 
restoration component early in the assessment/restoration process so 
that the trustee(s) can focus efforts towards restoring, 
rehabilitating, replacing, or acquiring the equivalent natural 
resources and/or services. Estimate Restoration Costs: Costs of 
restoration will include direct, as well as indirect (e.g., overhead) 
costs. Both direct and indirect restoration costs will be incurred by 
the trustee(s) throughout the damage assessment/restoration process. 
The costs of the trustee's(s') recommended restoration component will 
be used in the determination of damages. Also, the anticipated costs of 
the public review of the Post-assessment Restoration Plan, the plan 
refined after the damage award, should be included in the damage figure 
that the trustee(s) presents to the RP(s). These are part of the 
planning and implementation costs estimated by the trustee(s) when 
developing the restoration component.
    Direct costs are those that the financial management system of the 
trustee(s) records on a site-specific basis and hence are costs that 
are readily allocated to the damage claim made against the RP(s) for 
that incident. Examples of direct restoration costs associated with 
preliminary survey work and planning prior to implementation of 
restoration include: Site visits; chemical/physical/biological 
analyses; restoration plan development; human health and safety plan; 
and community relations program; trustee oversight of restoration 
activities by the RP(s); and site plan. Examples of direct costs 
associated with specific restoration actions include: contaminant 
removal; habitat reconstruction and creation; replanting and 
restocking; physical and chemical treatment; any trustee oversight of 
any restoration activities of the RP(s); and bioremediation. Other 
examples of direct restoration costs include salaries and benefits, 
travel costs, materials and supplies purchased specifically for the 
implementation of the selected alternative, equipment lease costs, 
building related costs if a building is leased or purchased for the 
sole purpose of implementing the selected alternative, and payments for 
goods and services furnished by private companies or other government 
agencies under contract with the trustee agency. Direct costs can 
include all costs of other entities performing actions for the trustee 
agency. These costs include a contractor's overhead, labor and material 
costs, which the contractor bills directly to the trustee agency, if 
such costs are paid by the trustee(s). Other direct costs might include 
capital, labor, and materials, as well as administrative costs 
associated with the development of task orders for engineering design, 
evaluation and selection of contractors for project management and 
implementation, provision of relevant QA, and other independent 
technical/analytical support functions. The cost estimates for 
restoration shall include not only the cost of planning and 
implementing the recommended restoration component, but the costs of a 
monitoring program, mid-course corrections, and feasibility studies, 
and other elements the trustee(s) determines appropriate to carry out 
his restoration activities, including the oversight of any actions 
taken by the RP(s).
    Indirect costs are support costs, compared to a private company's 
overhead, which support assessments or restoration actions, but which 
cannot be directly accounted for on a site-specific basis. Such 
indirect costs may include support services to those involved in the 
assessment and restoration process, e.g., facilities or personnel, 
budgeting, procurement, auditing, or other administrative management 
services, as well as policy formulation and assessment/restoration 
program costs that are not accounted for on a site-specific basis. In 
the related context of cost recovery under CERCLA, the courts have 
upheld the recovery of indirect costs. See, e.g., United States v. R.W. 
Mever, Inc., 889 F.2d 1497, 1502-04 (6th Cir. 1989); United States v. 
Hardage, 750 F. Supp. 1460, 1504 (W.D. Tex. 1990), aff'd, 982 F.2d 1436 
(10th Cir. 1992); United States v. American Cyanamid Co., 786 F. Supp. 
152, 159 (D.R.I. 1992); United States v. Bell Petroleum Services, Inc., 
734 F. Supp. 771, 782-83 (W.D. Tex. 1990). The trustee(s) may calculate 
indirect costs in accordance with any reasonably sound method.
    The estimated restoration costs make up that component of the 
damage claim representing the costs to restore, replace, rehabilitate, 
or acquire the equivalent of the injured natural resources and/or 
services. These estimates are to be documented in the administrative 
record and included in the DARP.
Phased Restoration Planning
    Because of the large scale and present rudimentary knowledge of the 
science of restoration, the trustee(s) should consider undertaking 
restoration planning in phases. Phased planning and implementation is 
proposed through an Adaptive Management Approach (AMA). AMA considers 
the following steps: (1) Design and implement the initial phase; (2) 
monitor the results; (3) evaluate and interpret the results; (4) 
recommend and prioritize follow-up studies; and (5) decide needs for 
next phase. This process will facilitate the learning process because 
early phases will generate information about how well procedures work, 
what problems develop, and what unforeseen benefits might be 
capitalized upon in designing future phases. AMA will allow the 
trustee(s) to make reasoned assessments of the outcome of the actions 
taken so as to protect existing resource values and ensure likelihood 
of successful restoration. This approach is a mechanism for dealing 
with uncertainty and variability in managing resources. It involves a 
process whereby alternatives can be suggested and tested (i.e., pilot 
projects) often in small scale before undertaking full scale 
restoration. Results of initial experiments are then evaluated to 
select the approach for later projects. Later phases will benefit from 
information generated in earlier phases. While adaptive management 
depends on results from previous work, new projects can be started 
before previous phases prove successful, provided the new phase 
contains everything thought necessary for successful restoration.
    Significant costs may be incurred as a result of the phased 
approach to restoration simply as a result of repeated mobilization and 
demobilization of necessary equipment, personnel and support functions. 
However, the needs of the resource should outweigh any need for human 
expediency. The phased approach was developed to respond to a complex 
planning milieu as is often the case in a CDA. A programmatic NEPA 
Environmental Impact Statement (EIS) with subsequent environmental 
assessments serves as the appropriate framework for timely restoration. 
A phased approach will allow the trustee(s) to work within funding 
constraints, which may enable them to implement complementary projects 
more easily than collaborating on a single, large project.

Analysis and Selection of Restoration Alternatives

Restoration Alternatives

    The trustee(s) may choose natural recovery, restoration, 
rehabilitation, replacement, acquisition of the equivalent, or a 
combination thereof in deciding on the most appropriate restoration 
alternatives to select for particular natural resources and/or services 
injured by the discharge of oil. These alternatives are described 
herein and in the Restoration Guidance Document available from the 
address given at the front of this preamble.
    (1) Natural Recovery: The natural recovery alternative (comparable 
to the ``No Action Alternative'') is based upon the process of natural 
succession following a discharge whereby the injured resource is left 
to recover without any intervention by man. This alternative may not 
always result in restoring natural resources and/or services to their 
baseline conditions, but should always be considered. Natural recovery 
may be selected when: (1) There is evidence that the natural recovery 
process will be more effective than other available restoration 
alternatives; (2) the resulting natural resources and/or services are 
predicted to resemble the original, within the constraints of natural 
or other (human-induced) variability, in a time frame not significantly 
different from that resulting from human intervention; (3) other 
natural resources and/or services will not be adversely affected prior 
to the recovery of those originally injured resources and/or services; 
and (4) there are no threats to human health and safety from the length 
of time for natural recovery.
    Where it is clear that natural recovery can restore injured natural 
resources and/or services to baseline conditions, additional 
restoration measures may not be justified. Nevertheless, because some 
natural resources and/or services will eventually recover on their own 
does not necessarily mean that restoration should be excluded. Since 
one intent of OPA is restoring the environment from the effects of a 
discharge of oil, the public should not unduly bear the burden of 
natural healing if there are reasonable alternatives available to 
hasten the recovery. The trustee(s) should document the decision on the 
adequacy of natural recovery in the administrative record.
    The ability to determine when natural recovery is optimal may be 
constrained by the quality and quantity of baseline information. 
Nevertheless, the trustee(s) should attempt to estimate the rate of 
natural recovery for each relevant injured natural resource and/or 
service based on the information derived from damage assessment and 
restoration studies, the scientific literature, and other sources. If 
it appears that natural recovery may effectively restore natural 
resources and/or services without significant, concomitant adverse 
effects, then the trustee(s) should select the natural recovery 
alternative. However, if it appears that natural recovery may not 
effectively achieve baseline or comparable conditions, the trustee(s) 
should consider other restoration alternatives.
    (2) Restoration: ``Restoration'' means actions undertaken to return 
injured natural resources and/or services to their baseline conditions. 
Generally, restoration relates to man's efforts to enhance the recovery 
process. Restoration is usually distinguished from response as being 
performed after the completion of cleanup activities. Response is 
commonly defined as action to contain and clean up oil immediately 
following a discharge or to protect natural resources and/or services 
by a response agency. Restoration actions, such as the removal of 
contaminated resources, may be performed during and after response to 
facilitate the recovery of relevant natural resources and/or services. 
In the present context, restoration performed at the location of impact 
is referred to as ``direct restoration.'' The other alternatives 
identified below may result in beneficial, but not duplicative, natural 
resources and/or services to those injured, and are therefore described 
as ``compensatory restoration.''
    (3) Rehabilitation: ``Rehabilitation'' refers to actions to bring 
injured natural resources and/or services to a state different from 
baseline conditions but still beneficial to the environment and public. 
This alternative is particularly important when direct restoration is 
technically or economically infeasible, but the affected site retains 
the potential to support alternative valuable natural resources and/or 
services. The definition of rehabilitation encompasses enhancement 
actions taken on an affected site to increase one or more values, 
possibly at the expense of other values. This alternative should be 
distinguished from the ``natural recovery'' alternative, which relies 
exclusively upon natural recovery unassisted by man.
    (4) Replacement: ``Replacement'' refers to actions that substitute 
natural resources and/or services that provide the same or comparable 
natural resources and/or services as those injured. Replacement, as 
opposed to ``direct'' restoration, results from restoration actions 
taken away from the affected site to furnish or create equivalent 
natural resources and/or services within the region. For example, 
habitats away from the discharge site may be created to provide 
equivalent services within the region in terms of fish and wildlife 
production. Injured services provided by natural resources that might 
be replaced include those of recreational, commercial, or ecological 
importance, or those of special significance.
    (5) Acquisition of Equivalent: ``Acquisition of equivalent 
resources'' refers to obtaining natural resources and/or services that 
the trustee(s) determines are comparable to those injured. Equivalent 
natural resources should be acquired to hasten recovery, and protect 
and maintain the natural resources affected by a discharge. Acquisition 
of equivalent resources is distinguished from replacement of resources 
by the fact that the acquired resources already exist rather than being 
created or enhanced. ``Acquisition of equivalent resources'' addresses 
specifically ``resources,'' not ``services.'' Acquisition of equivalent 
resources should only be used when the trustee(s) has determined that 
restoration, rehabilitation, or replacement of specific natural 
resources is technically infeasible or the cost is grossly 
disproportionate to the value of the resources involved.
    (6) Combination of Alternatives: Each alternative discussed above 
may be considered individually or combined in various ways; depending 
upon feasibility, environmental-effectiveness, and relative cost 
considerations. Also, each alternative may be implemented through one 
or more options or procedures selected by the trustee(s). When 
mentioned, alternatives imply associated options. Differences among 
combinations of alternatives and the related options within each 
alternative could be based upon the severity of the natural resource 
injuries, quality and quantity of knowledge about recovery, expected 
effectiveness of the alternatives, or the environmental or human 
significance of the injured natural resources and/or services.

Analysis of Restoration Alternatives

    As the results of the injury and quantification studies become 
available, the trustee(s) should revise the list of restoration 
alternatives developed. As this list is revised, the trustee(s) should 
analyze each alternative taking into account not only the feasibility, 
but also the effectiveness and relative cost (described below). The 
choice of restoration alternatives is influenced by the nature of the 
injuries to the natural resources and/or services, and the extent to 
which immediate action is taken to remedy those injuries. Also, the 
restoration alternatives should seek to ensure the recovery of injured 
natural resources and/or services. Examples of services provided by the 
natural resources that might be returned to baseline conditions include 
human uses (e.g., recreational, commercial), ecological, or those of 
special significance. Certain services that are of cultural 
significance (e.g., archaeological sites) are not typically living, 
renewable resources and have no capacity to heal themselves. Therefore, 
such services cannot recover ``naturally'' and, to the extent 
restoration is practicable, will need human intervention.
    Certain factors should be considered for each restoration 
alternative. If, based upon these considerations, an alternative is 
unacceptable, it will be eliminated from further consideration. The 
evaluation of the relevant factors should be documented in the 
administrative record. When the DARP is made publicly available, the 
trustee(s) should provide for the administrative record a brief 
description of how the restoration alternatives contained in the DARP 
comply with these factors.
    (1) Feasibility: The key factor to consider in selecting 
restoration alternatives is feasibility. Feasibility depends upon 
whether an action is possible given certain constraints. These 
constraints include, but are not limited to: Availability of services, 
materials and equipment; expertise; construction and operational 
limitations; need or capability for future restoration; and 
administrative, legal, or regulatory requirements.
    Where practicable, the trustee(s) should consider methods currently 
available, i.e., proven methods should take preference over unproven 
methods. Under many circumstances, however, existing methods will need 
to be modified for a given discharge. For example, the trustee(s) may 
propose providing artificial nesting sites for a particular species of 
bird to replenish the population. While there is ample information on 
the nesting requirements of a similar species of bird, little 
information is available about the nesting requirements of the injured 
bird species. The trustee(s), therefore, may have to rely upon the 
requirements of the similar species in designing nesting site 
alternatives for the injured species.
    (2) Environmental Effectiveness: Once the trustee(s) determines 
that a restoration alternative is feasible, the trustee(s) should then 
evaluate the environmental effectiveness of the alternative. 
Effectiveness deals with the general question of whether an action 
accomplishes the goals and objectives of restoration. Effectiveness is 
dependent upon the: (1) Extent to which the proposed alternative can 
return natural resources and/or services to acceptable conditions; (2) 
extent to which the proposed alternative causes additional injury; (3) 
extent to which the proposed alternative improves the rate of recovery 
and success; and (4) level of risk and uncertainty in the success of 
the proposed alternative.
    (3) Relative Cost: Simultaneous with the environmental 
effectiveness determination, the trustee(s) should evaluate the 
relationship of the expected costs of implementing the alternative 
relative to other alternatives and to their anticipated benefits. This 
requires that the trustee(s) consider, among other things, the: (1) 
Significance of the natural resource and/or service to the environment 
and public; (2) extent to which the proposed alternative benefits more 
than one natural resource and/or service; (3) cost of the proposed 
alternative; (4) relationship of the expected costs to the expected 
benefits; and (5) level of risk and uncertainty in the cost-benefit 
analysis.
    Total damages will depend on the sum of compensable value and 
restoration costs. Often, there will be tradeoffs between compensable 
value and restoration costs. For example, faster-paced and more-
intensive restoration activities may reduce the associated compensable 
values, e.g., interim lost use values, but may do so at the expense of 
substantially higher restoration costs. In some cases, there may be 
sufficient data to demonstrate that some (combinations of) restoration 
alternatives would result in substantially lower total damages than 
others. NOAA seeks comment on the following questions. Where 
restoration data on costs and benefits are sufficient, should the 
trustee(s) be required to select the (combination of) restoration 
alternatives that minimize total damages? If not, should the trustee(s) 
be required to explain the rationale for selecting (a combination of) 
restoration alternatives that do not minimize total damages?
    Cost evaluation is not a straight economic cost/benefit analysis. 
Rather, it is primarily a consideration of qualitative, rather than 
quantitative, factors. There may be overriding policy considerations 
that would cause the trustee(s) to consider certain ``collateral 
benefits.'' For example, if a scenario involves certain non-renewable 
natural resources, i.e., an endangered species or a resource of 
cultural significance, the costs of restoration may appear, under a 
straight cost/benefit analysis, to be grossly disproportionate to the 
value of the benefit of restoration over natural recovery. However, the 
possibility of continuing or additional effects to these nonrenewable 
resources may require that restoration actions be taken.
    In this regard, NOAA's approach is similar to the one proposed 
earlier by the U.S. Department of the Interior (DOI). In April of 1991, 
DOI proposed revisions to its damage assessment rule to comply with the 
ruling in the Ohio decision. In those proposed revisions, DOI stated 
that the trustee(s) should:


consider the relationship of the expected costs of an alternative to 
the benefits from the implementation of that alternative, both in 
terms of the recovery of the resource and the benefits to the public 
that would result. This consideration is not intended to be a 
straight cost/benefit analysis. The trustee should weigh 
circumstances unique to each assessment against the expected 
alternative costs.


56 FR at 19758.
    Basically, the trustee(s) must judge the advantage or desirability 
of a particular restoration alternative in terms of the expected costs 
of implementing the alternative compared to the benefit of that 
alternative. When possible, the trustee(s) should attempt to quantify 
such benefits. However, NOAA recognizes that situations will arise when 
it is more reasonable for the trustee(s) to forgo such quantification. 
For example, if the cost of restoration is $3 million, and it will cost 
more than that to quantify the benefits, the trustee(s) should rely on 
a qualitative approach, i.e., one that considers the other factors 
discussed in this subpart. Those factors include technical feasibility, 
effectiveness of the restoration component, nonrenewability of the 
resource (i.e., archaeological resource), and the significance or 
uniqueness of the resource (i.e., an endangered species or a resource 
of cultural significance). Further, any analysis must take into account 
discounting and uncertainty, as well as other factors deemed relevant 
by the trustee(s). (These concepts are discussed in a later section of 
this preamble.)
    Depending upon the type of discharge and nature and extent of the 
injury, the proposed alternatives and related costs may vary 
significantly. A determination that expected costs are reasonable when 
compared to the anticipated benefits includes a careful comparison of 
direct and indirect expenses. Of all alternatives that achieve similar 
benefits and meet the goals and objectives of restoration, the most 
cost-effective alternative should be chosen. A restoration alternative 
will be cost-effective if it is determined to have the lowest costs 
expressed in present value for a given amount of benefits. If the 
benefits can be quantified in dollars, that dollar figure should be 
discounted to present value. However, should the benefits be quantified 
in terms other than dollar values, those benefits should also be 
discounted to present value.
    This proposed rule does not define the term ``grossly 
disproportionate'' as a numeric ratio. Instead, NOAA adopts the 
approach recommended by DOI in its April 1991 proposed rulemaking. The 
trustee(s) must consider all of the factors discussed in this subpart 
in selecting the most appropriate alternative. However, it is not 
required that each factor be given the same weight for each discharge 
situation or even for each alternative considered. As stated in the DOI 
proposed rule,


* * * the various alternatives considered may address and balance 
these factors in different ways. In practice, the alternative 
selected by the trustee as the most appropriate might not satisfy 
all the considerations, yet still be ``correct'' for the purposes of 
the assessment. The trustee, after considering all the relevant 
factors, may make a selection that gives greater weight to some 
factors over others.


56 FR at 19757.
    In addition, the trustee(s) must document this consideration in the 
administrative record. Such documentation will constitute the grossly 
disproportionate determination. Selection of Restoration Alternatives: 
Based upon the analysis of the restoration alternatives for each 
category of injured natural resources and/or services, the trustee(s) 
should select the alternative or some combination thereof that best 
meets the needs of each injured natural resource and/or service based 
upon the factors listed above. The trustee(s) should then develop the 
restoration component of the DARP based upon this selection for each 
natural resource and/or service.
    The restoration component is that part of the DARP that will be 
used to estimate the restoration costs. The restoration component 
should also contain the site-specific objectives of the restoration and 
an initial listing of priorities of natural resources and/or services 
of concern. The restoration component and its estimated costs of the 
DARP then goes out for public review and comment.

Feasibility (Pilot) Studies

    Because restoration science is continually evolving, and injuries 
to natural resources and/or services may be unique on a site-specific 
basis, restoration alternatives for certain natural resources and/or 
services may be limited. Therefore, the scoping statement may 
conceptually identify small-scale, focused feasibility or pilot studies 
where the trustee(s) finds that a particular restoration alternative 
needs to be tested to determine whether implementation is not only 
technically and economically feasible, but also effective. The costs 
associated with the implementation of these studies are part of the 
costs of developing the DARP.
    Where possible, the scoping statement should conceptually identify 
feasibility or pilot studies the trustee(s) may require to evaluate 
alternatives. The scoping statement should also provide the public with 
notice that additional feasibility or pilot studies, associated with 
the development of restoration alternatives, may be conducted 
throughout the development of the DARP.
    As appropriate, the trustee(s) should coordinate with the OSC prior 
to proceeding with any feasibility or pilot studies during the response 
phase to ensure that such studies are not incompatible with response 
activities. Anticipated studies become part of the DARP and costs of 
these actions become part of the trustee's(s') damage claim.

Evaluation of Recovery and Success of Restoration

Definition

    Recovery is defined in the proposed rule as the return of the 
injured natural resources and/or services to baseline or comparable 
conditions, within the limits of natural or other (human-induced) 
variability. This definition recognizes the inherent tendency for 
natural resources and/or services characteristics to vary over space 
and time. Defining restoration goals, selecting appropriate criteria 
for monitoring goal achievement, identifying appropriate performance 
standards (endpoints), and measuring levels of achievement of these 
standards are necessary to determine success in restoration. Particular 
attention should be paid to reestablishing and maintaining the 
diversity of the site(s) as evidence of the total health of the 
recovering system. The recovered condition is not required to be 
identical to the baseline or reference/control condition; however, it 
should not be functionally different from that condition.

Monitoring

    Monitoring should be an integral part of the recovery 
implementation process. Recovery cannot be properly established without 
a well-designed and executed monitoring plan. Every natural resource 
and/or service is unique, which makes it inappropriate to propose fixed 
monitoring plans for a generic habitat or biological resource. 
Nevertheless, there are several general principles that apply to any 
such effort: (1) Monitoring should be sufficiently long to ensure 
recovery to a stable condition; (2) all relevant components of the 
affected environment should be monitored, as it relates to the 
restoration alternative; (3) the progress of recovery should be 
compared with natural changes occurring in similar unaffected reference 
or control areas; (4) sampling should be designed to provide 
statistically significant and defensible results; and (5) the 
monitoring plan should be sufficiently flexible to permit mid-course 
corrections if the need arises. In the event that maintenance is 
required to ensure success, the decision on the need for such 
maintenance should be part of the restoration component.

Mid-Course Corrections

    The restoration component should incorporate provisions allowing 
for mid-course corrections. Monitoring and evaluating recovery will 
enable the trustee(s) to determine when mid-course corrections are 
necessary. Mid-course corrections should be based upon, but not limited 
to, the nature and extent of injuries suffered by the natural resources 
and/or services, actual effectiveness of the restoration alternatives, 
and results of monitoring.
    The possibility of the need for mid-course corrections should be 
considered in the restoration component. It could be that feasibility 
or pilot studies will obviate the need for mid-course corrections. In 
some cases, settlement agreements have specifically addressed this 
issue. One possible approach is to include in a settlement agreement a 
``reopener'' clause, i.e., a specific provision to revisit an issue if 
it becomes necessary at a future time. Another possibility is for the 
RP(s) to deposit an agreed-upon amount of money in an escrow account to 
cover future restoration actions that could not be fully developed at 
the time of the settlement. These funds would then be used for these 
future actions, or would revert to the RP(s) if not needed for 
restoration.

Responses to Comments

    Comment: One commenter indicated there may be some confusion with 
semantics in the terms used for and hierarchy of restoration, 
rehabilitation, replacement, or acquisition of the equivalent.
    Response: NOAA hopes to minimize confusion by defining all terms in 
the proposed rule. Further, the proposed rule does not suggest a 
hierarchy of restoration alternatives, except in the case of 
acquisition of equivalent resources, and leaves such prioritization to 
the discretion of the trustee(s) on a case-by-case basis.
    Comment: One commenter suggested that the assessment process should 
focus on natural resources that may actually benefit from restoration. 
The commenter noted that such an approach would reduce contention 
between the trustee(s) and RP(s), and reassure the public that its 
resources are receiving attention.
    Response: NOAA agrees with the suggestion that restoration should 
be implemented only where the trustee(s) determines that such efforts 
would benefit the natural resources and/or services. However, the 
trustee(s) cannot totally ignore those natural resources that either 
will recover naturally or are not recoverable. The trustee(s) must 
still seek restoration of or compensation for these interim lost 
services.
    Comment: One commenter stated that the primary objective of the 
restoration process should be the timely restoration of the affected 
natural resources to levels that are adequate to support the services 
they normally provide to the biological community in general and humans 
in particular.
    Response: NOAA agrees with the commenter based on the assumption 
that ``normally'' means baseline or reference/control conditions.
    Comment: A few commenters noted that restoration, beyond what is 
needed to return to baseline conditions and specific numeric levels, 
would be an inefficient use and an over-investment of society's 
economic resources. Such efforts would result in a net loss in economic 
welfare, which is inconsistent with section 1006(d)(1) of OPA.
    Response: The goal of restoration is the recovery of the natural 
resources and/or services to baseline conditions in the most cost-
effective and beneficial manner. Recovery refers to structural or 
functional equivalence, which is left to the discretion of the 
trustee(s). If the result of the trustee(s)' actions are to somewhat 
enhance the level of services to a level higher than existed before the 
discharge, such an action may be justified. These actions are 
appropriate so long as the public is made whole for those services 
denied from the time of the discharge until recovery is complete.
    Comment: Many commenters indicated that the trustee(s) should 
choose a restoration procedure on a case-by-case basis.
    Response: NOAA agrees that restoration procedures must be chosen on 
an incident-specific basis, except for those situations where an 
approach has been developed through prespill planning pursuant to 
Sec. 990.16(c).
    Comment: Several commenters urged that plans be revised as the 
restoration progresses and new information becomes available to provide 
the greatest potential for recovery of all its natural resources. 
Several commenters stated that the trustee(s) should base decisions on 
previous studies and restoration efforts.
    Response: The proposed rule does allow for revision of the 
restoration component as new information becomes available. NOAA agrees 
that access to information on previous restoration studies would be 
beneficial to the trustee(s). The restoration literature survey that 
NOAA has compiled will assist the trustee(s) in this regard.
    Comment: One commenter noted that when total restoration is 
impossible, NOAA should, at a minimum, require: (1) The use of sites 
identical to the site of the discharge that are adversely affected by 
other oil discharges; (2) the use of sites identical to the site of the 
discharge that are assured success as a mitigation bank; or (3) the 
consideration of alternatives to a mitigation bank.
    Response: NOAA chooses not to ``require'' the suggestions listed by 
the commenter and leaves this to the discretion of the trustee(s). The 
Restoration Guidance Document does give some guidance on what might be 
``identical'' sites. The trustee(s) has many possibilities on how to 
approach restoration. If total restoration is not possible, the 
trustee(s) can estimate lost compensable values, discount to present 
value, and use that sum to acquire equivalent services.
    Comment: One commenter noted that restoration science is relatively 
new and this science is not yet sufficiently developed to assure the 
success of human-initiated restoration of resources over natural 
recovery.
    Response: NOAA notes that restoration is a relatively new science 
and that there are no absolute guarantees that any planned effort will 
succeed. However, the trustee(s) cannot afford to wait for such 
assurances before acting to help systems recover from discharges. The 
trustee(s) should be mindful of the overall goal of restoration. The 
restoration component should be designed to come as close as possible 
to that goal.
    Comment: One commenter stated that biologic resources exhibit 
natural variability. Biological communities are not static. They are 
drastically affected by natural forces such as weather, food supply, 
and predation. The commenter argues that despite these adverse forces, 
biological systems are accepted as ``healthy and vibrant'' if the 
plants and animals characteristic of that community are present and 
functioning normally.
    Response: NOAA agrees that certain biological communities have a 
high degree of natural variability. In such cases, only restoration 
that allows the natural cycle to continue as before should be 
considered.
    Comment: One commenter noted it may not always be appropriate to 
give preference to sites closest to the discharge area since this may 
increase use pressures on already injured ecosystems.
    Response: NOAA agrees that such factors as possible increased 
pressures on the affected system should be considered by the 
trustee(s).
    Comment: One commenter argued that the RP(s) has a discretionary 
right under the Fifth Amendment to take part in any of the trustee(s) 
assessment activities. Another strongly opposed the RP(s) having sole 
responsibility for monitoring the affected area.
    Response: NOAA points out that participation by the RP(s) in either 
the assessment or restoration is discretionary with the trustee(s). The 
proposed rule does not require participation. The trustee(s) has the 
right to offer the RP(s) the chance to participate, and the RP(s) has 
the right to decline.
    Comment: One commenter noted oil removal activities are mentioned 
as feasible restoration alternatives, and that restoration activities 
should be confined to those needed after response is completed.
    Response: NOAA points out that a particular action, e.g., removal 
of contaminated sediment, might be considered as either a response 
action or restoration action. The dividing line for such 
classifications is dependent upon timing and authority of the person 
carrying out the actions. The response agency is acting under the NCP 
to respond to incidents to protect human health and the environment. 
The trustee(s) may be directed under other statutory schemes to take 
similar actions for the protection of its trust resources. For example, 
the response agency might remove a certain amount of contaminated 
sediment to bring concentrations to a certain level set for human 
health reasons. The trustee(s), however, may determine that an 
additional amount of contaminated sediment may need to be removed to 
attain concentrations that will not result in bioaccumulation in fish 
populations.
    Comment: One commenter suggested that empowering the trustees to 
pursue emergency restoration outside response under the direction of 
the OSC will lead to chaos.
    Response: NOAA notes that the OSC does not have the authority to 
implement restoration of natural resources. The trustee(s) is 
ultimately responsible for that duty. If response actions are 
continuing while the trustee(s) is developing the restoration 
component, the two entities should work closely together.
    Comment: Many commenters recommended NOAA require the trustee(s) to 
identify and consider a full range of restoration alternatives, 
including cleanup or remediation actions. Some commenters also 
recommended limits on the range of restoration alternatives the 
trustee(s) can consider for final selection. A number of commenters 
suggested a preference for restoration, rehabilitation, and replacement 
over acquisition of the equivalent. One commenter noted inclusion of 
the four alternatives is consistent with DOI's proposed definition of 
restoration. One commenter thought the descriptions of the restoration 
alternatives should be contained in guidance material, rather than in 
regulatory language.
    Response: NOAA does not agree with the commenters who recommended a 
limit on the range of alternatives the trustee(s) should consider. The 
trustee(s) should consider a range of alternatives that is 
``reasonable'' for the discharge of concern. The consideration of a 
``reasonable number'' of alternatives should give a full range of 
options that might be suitable for the specific natural resources and/
or services. NOAA notes that, although the alternatives might include 
acquiring equivalent natural resources, acquisition of equivalent 
resources should be considered appropriate in those cases where 
restoration is technically infeasible or costs are grossly 
disproportionate to the value of the resources. Guidance on the types 
of alternatives and how they might be considered is given in the 
Restoration Guidance Document.
    Comment: Several commenters noted some discharges will not require 
full action. These commenters requested an alternative requiring no 
action (except, perhaps, for monitoring) beyond the cleanup actions 
taken or planned. Other commenters recommend ``No Action Natural 
Recovery'' as the preferred restoration alternative, e.g., prohibiting 
human activity, and that all other alternatives be compared to it for 
cost-effectiveness, reasonableness of costs, technical feasibility, 
rate of restoration of lost services, and ecological sensitivity. A 
number of commenters questioned whether human intervention will result 
in more rapid recovery than would occur naturally.
    Response: NOAA agrees that ``Natural Recovery'' should be an 
alternative considered in every case. This proposed rule does direct 
the trustee(s) to consider such an alternative in each restoration 
component drafted.
    Comment: A few commenters stated a restoration alternative should 
not be selected unless the trustee(s) had included in the 
administrative record evidence the trustee(s) used to determine that 
that alternative is both possible and preferable to the other 
alternatives considered.
    Response: NOAA is sensitive to the concern regarding the public's 
opportunity to have access to information available to the trustee(s). 
Therefore, documentation of the trustee's(s') decisionmaking process is 
one of the reasons behind NOAA's decision to provide for the 
administrative record process established in Sec. 990.15 of the 
proposed rule. A discussion of the types of documentation available to 
the public in this record can be found in the earlier section of this 
preamble that discusses subpart A of this proposed rule.
    Comment: Several commenters believe acquisition should not be a 
last resort, while others suggested that acquisition should never be 
considered as an alternative. Exceptions to acquisition as a last 
alternative were indicated when natural resources or services are 
subject to intense or continuous pressures, or unique habitats or 
threatened/endangered species are involved not under the protection of 
another regulatory program. The rationale for eliminating acquisition 
altogether was based on the notion that this alternative would diminish 
the underlying benefit of resource sustainability as a result of 
restoration, accelerating depreciation of natural resource assets.
    Response: NOAA does not agree that ``acquisition of the 
equivalent'' should be eliminated from consideration by the trustee(s), 
and retains this alternative in the proposed rule. NOAA points out that 
the legislative history of OPA states that acquisition of equivalent 
natural resources should be chosen if restoration is infeasible or its 
costs are grossly disproportionate to the value of the resources.
    Comment: One commenter noted that NOAA provides different standards 
for replacement and acquisition of natural resources. The commenter 
recommends NOAA define ``substantially similar'' to meet the mandate in 
OPA requiring equivalence between the affected natural resource and 
``new'' natural resource. The commenter also stated that NOAA should 
recognize the fact that, although acquisition may be necessary, it only 
protects the status quo and will not replace the lost functions of the 
affected area.
    Response: NOAA did not intend to suggest different standards for 
replacement and acquisition of equivalent natural resources. The term 
``substantially similar'' is defined to ensure that the services 
provided after the event are as close as possible to baseline 
conditions. In response to the suggestion that acquisition of 
equivalent natural resources simply preserves the status quo, NOAA 
notes that the evaluation of restoration alternatives should seek to 
ensure return to baseline or comparable conditions of natural resources 
and/or services. Therefore, acquisition of equivalent resources might 
also include some improvement of the acquired resources to make up for 
what the public lost.
    Comment: A number of commenters suggested a screening process for 
selecting a restoration alternative to ensure the selected alternative 
is technically feasible, environmentally-effective, and has costs that 
are not grossly disproportionate to the anticipated benefits. In the 
screening process, the trustee(s) should identify all restoration 
alternatives that could be pursued. The trustee(s) should then 
eliminate those that are not technically feasible, inconsistent with 
applicable federal and state laws and policies, not cost-effective, or 
have costs that are grossly disproportionate to the anticipated 
benefits of restoration, but not using a numerical criterion. The 
``grossly disproportionate'' criterion should apply to incremental, not 
marginal, costs and benefits as well as total costs and benefits. 
Finally, from the remaining alternatives, the trustee(s) should select 
the one most suitable for restoring the natural resource injuries. One 
commenter cited one court, in Commonwealth of Puerto Rico v. Zoe 
Colocotroni, 628 F.2d 652 (1st Cir. 1980), that suggested similar 
factors be considered in the planning of restoration.
    Response: NOAA notes that the selection factors indicated by the 
commenters are incorporated in some form in the proposed rule and 
Restoration Guidance Document.
    Comment: One commenter opposed the promulgation of any rule that 
allows the use of mitigation banking. The commenter noted mitigation 
banks have not been successful in restoring other affected natural 
resources such as wetlands, and urged NOAA consider other methods of 
restoration where total restoration of the affected area is not 
possible. The commenter stated no preference should be given to sites 
that have similar resources in another watershed since it has no 
restorative effect on the affected area, and would potentially result 
in the total sacrifice of the discharge area.
    Response: NOAA notes that the concept of ``mitigation banking'' has 
met with criticism in recent years. However, NOAA does not wish to 
preclude the use of any tool that may be useful to the trustee(s). 
Therefore, although not required, mitigation banking would still be an 
option to consider where the trustee(s) feels it may be appropriate. 
The location of the activity, i.e., one watershed or another, would be 
a factor that the trustee(s) should consider.
    Comment: Some commenters noted that pilot projects prior to full 
restoration are appropriate in some cases, but should not be required. 
Several others agreed pilot projects should be used, but only prior to 
restoration. Another noted that pilot studies are unnecessary under any 
circumstances.
    Response: NOAA points out that the proposed rule allows feasibility 
or pilot studies to determine the effectiveness of restoration actions. 
However, the such efforts should be carefully defined and their need 
documented.
    Comment: Many commenters stated that both early and long-term 
monitoring is essential to evaluate the recovery of the affected 
resource. One commenter recommended that the affected area be monitored 
for a minimum of five years.
    Response: NOAA agrees that the restoration component should 
consider monitoring, but leaves the details to the trustee(s) regarding 
the nature and extent of such activities. NOAA does not agree that 
there should be an absolute time requirement for monitoring since these 
plans are site-specific.
    Comment: A number of commenters agree that mid-course corrections 
be used as a gauge for measuring the effectiveness of restoration. 
Another agreed that such corrections should be required until the 
system has stabilized. Several commenters supported the inclusion of 
mid-course corrections, so long as the RP(s) is not held accountable 
for additional costs, unless the RP(s) participated in the original 
restoration plan, or unless there was a stipulation for mid-course 
corrections previously included in the restoration component of the 
damage settlement.
    Response: NOAA notes that the proposed rule does allow for mid-
course corrections in restoration. However, it would not be reasonable 
to expect a damage award to have reopeners in perpetuity for taking new 
approaches to restoration of a system following one discharge. 
Therefore, the trustee(s) needs to design the restoration component 
carefully to spell out the conditions under which mid-course 
corrections would be called for and try to anticipate an endpoint to 
the restoration process.
    Comment: One commenter pointed out that OPA does not mention 
``grossly disproportionate'' costs. The commenter noted that the phrase 
is only discussed in OPA's legislative history in terms of a factor to 
consider in choosing between restoration and acquisition of the 
equivalent. As such, the phrase cannot be used to relieve the RP(s) 
from the obligation to either restore or acquire equivalent resources, 
as seems possible under the Ohio decision.
    Response: NOAA agrees that discussion of the phrase ``grossly 
disproportionate'' in OPA's legislative history is different from the 
discussion found in the Ohio decision. Under OPA, the trustee(s) is to 
consider whether the costs of restoration, rehabilitation, or 
replacement would be grossly disproportionate to the value of the 
injured natural resource only in deciding to acquire equivalent natural 
resources.
    Comment: Several commenters indicated that the selection of a 
restoration alternative not be ``grossly disproportionate'' to the 
benefits derived from the action.
    Response: NOAA agrees with this comment to the extent that it uses 
the term ``grossly disproportionate'' as discussed in this proposed 
rule. As previously noted, NOAA believes that the OPA proposed rule 
should not strictly define a numeric ratio delimiting the term 
``grossly disproportionate.'' Instead, NOAA has established a number of 
factors that the trustee(s) must consider. NOAA concludes that this is 
the most appropriate approach for meeting OPA's strict objective of 
complete ``restoration, rehabilitation, replacement, and/or acquisition 
of the equivalent resources, * * *,'' following the discharge of oil.
    Comment: Several commenters discussed the earliest treatment by a 
court of the issue of grossly disproportionate restoration costs, 
Commonwealth of Puerto Rico v. Zoe Colocotroni, 628 F.2d 652 (1st Cir. 
1980). The court in Zoe Colocotroni stated that the appropriate measure 
of damages would be the cost reasonably incurred to restore or 
rehabilitate the injured resources to as close to baseline condition as 
is feasible without grossly disproportionate costs. The court suggested 
that where such restoration is either physically impossible or 
disproportionately expensive, the measure of damages might be the 
acquisition of comparable lands. The commenters suggested that NOAA 
should use the standards given by the Zoe Colocotroni court.
    Response: NOAA notes that the standards listed in the Zoe 
Colocotroni decision are, in fact, included in the factors to be 
considered in evaluating restoration alternatives under OPA.
    Comment: Several commenters proposed that the OPA rule provide for 
restoration cost estimates in tabular format based historical data. One 
other commenter noted the dearth of restoration cost information from 
which to draw estimates.
    Response: NOAA feels there is sufficient information to proceed 
with the development of damage cost estimates in tabular format, i.e., 
compensation formulas. The data on costs will be based upon a ``dollar-
per-gallon'' formula, taking into account average restoration costs, 
plus average lost direct use pending restoration. NOAA recognizes, 
however, that for certain incidents or types of natural resources and/
or services, site-specific restorations must be planned for which 
detailed cost estimates could then be established.
    Comment: One commenter stated that it is premature to limit the 
quality or quantity of restoration to the ability of the RP(s) to pay. 
The RP(s) must, in principle, be held to fully offsetting the damages 
that was caused by the discharge. Another commenter noted that because 
of the limited liability of the RP(s) in section 1004 of OPA, all costs 
may not be recovered from the RP(s). Therefore, restoration priorities 
must be made and funded by the proven claimants.
    Response: NOAA does believe that the RP(s) should be liable for all 
reasonable damages. However, NOAA also notes that the trustee(s) must 
develop realistic plans if any benefit is to be expected rather than 
spend time and effort on unrealistic plans. Also, the trustee(s) may be 
able to fund necessary restoration actions through an ``uncompensated 
claim'' submission, pursuant to section 1012(a)(4) of OPA.
    Comment: One commenter pointed out that intervening outside 
influences and their effects must not be charged against the RP(s).
    Response: NOAA notes that ordinarily independent, intervening 
actions or conditions may not be within the liability of the RP(s).
    Comment: One commenter noted that if there is no impairment of the 
services of a natural resource, then society suffers no damage. 
Following, if society suffers damage due to impairment of a resource's 
services, that damage is fully remedied when the resource's services 
are restored, since society's welfare is then returned to the state in 
which it would have been in the absence of the injury.
    Response: Damages include the value of lost services pending 
recovery of the natural resources and/or services. Return to baseline 
levels of services does end the current losses of values but does not 
address the past losses to the public pending that return. Therefore, 
those past losses are recoverable as a part of the damage figure.
    Comment: One commenter agreed that NOAA's ANPRM correctly 
recognizes that the measure of natural resource damages is based on the 
services provided by the affected natural resources. Another commenter, 
however, stated that restoring services is not the same as restoring 
natural resources and, therefore, should not be the preferred measure 
of damages.
    Response: NOAA agrees that the value of lost services is one 
component of the damage figure. However, restoration of the injured 
natural resource is always preferred where practicable.
    Comment: Several commenters objected to the suggestion that the 
trustees ``improve'' access to the injured site or another site as a 
method of restoration. These commenters argued that use of sums 
recovered for such purposes would be inconsistent with OPA.
    Response: NOAA did not intend to suggest that increased use of an 
injured natural resource is a viable restoration alternative. NOAA 
suggests that one way of providing services for interim lost use 
pending recovery might be to provide public use of a substitute site. 
The substitute site would have to be capable of sustaining such use 
without impairment. This suggestion of alternative services may also be 
a way to use those sums recovered representing diminution of use in a 
way to make the public whole for its loss.

Compensable Values Determination

I. Introduction

    Section 1006(d) of OPA authorizes the trustee(s) to recover: The 
cost of restoring, rehabilitating, replacing or acquiring the 
equivalent of the injured or lost natural resources and/or services; 
the diminution in value of the injured or lost natural resources 
pending restoration; plus the reasonable cost of assessing those 
damages. Guidance on estimating restoration costs is discussed 
previously in this preamble. This discussion provides guidance to the 
trustee(s) for estimating the total diminution in value of resources 
and/or services affected by a discharge, hereinafter referred to as 
compensable values.
    For the purposes of this proposed rule, compensable values include 
all reliably calculated values that comprise the total diminution in 
value of lost or diminished services of trust resources as a result of 
a discharge, from the onset of the event until recovery to baseline 
conditions is deemed complete by the trustee(s), i.e., interim lost 
values. If the resources and/or services will not fully recover with 
the implementation of the Restoration Plan, the calculation of 
compensable values will include the value of a perpetual stream of lost 
services. Failure to include all relevant categories of damages in a 
claim would understate the true loss to the American public 
attributable to the discharge of oil. In accordance with the 
Congressional Conference Report (H. Conf. Rep. No. 653, 101st Cong., 
2nd Sess. at 108), ``diminution of value'' refers to the standard for 
measuring resource damages cited in the D.C. Circuit Court decision on 
Ohio v. DOI. The Ohio opinion defines ``use values'' broadly, to 
encompass both direct use and passive use values that can be reliably 
calculated, i.e., calculated in a manner that is trustworthy or worthy 
of confidence. (See 57 FR at 23067.)
    Direct use values are defined as the value individuals derive from 
direct use of a resource. Direct uses of resources include both 
consumptive uses, such as fishing and hunting, in which resources are 
harvested, and nonconsumptive uses, in which the activity does not 
reduce the stock of resources available for others at another time, 
such as birdwatching and swimming.
    Passive use values are defined as the values individuals place on 
resources independent of direct use of a resource by the individual. 
The term ``nonuse values'' has also been used to refer to the same 
concept, but NOAA prefers the term ``passive use values.'' Passive use 
values include, but are not limited to: the value of knowing the 
resource is available for use by family, friends, or the general 
public; the value derived from protecting the resource for its own 
sake; and the value of knowing that future generations will be able to 
use the resource. Passive use values pertain to the provision of, 
improvement to, or prevention of injury to natural resources.
    The total value of a resource to an individual consumer encompasses 
both direct use and passive use values. When an injury occurs to a 
resource, the measure of damages to an individual is the change in the 
individual's utility or level of well-being, as measured in monetary 
terms (i.e., monetized changes in utility). Economic analysis provides 
two exact monetary measures of any change in individual's well-being: 
Willingness to pay (WTP) and willingness to accept (WTA). WTP is the 
maximum amount of money that an individual would be willing to give up 
to ensure access to, provision of, improvements to, or prevention of 
injury to a natural resource. WTA is the amount of money that would be 
needed to compensate an individual for the loss of access to or for the 
injury of a natural resource. To calculate the monetized change in an 
individual's utility resulting from a resource injury, net willingness 
to pay or willingness to accept is calculated. Net willingness to pay 
or willingness to accept is total WTP or WTA minus the costs an 
individual incurs to use the resource services, including travel and 
time costs.
    An approximation for the exact measures of the change in utility or 
well-being is the Marshallian ``consumer surplus,'' the value of which 
generally falls between WTP and WTA. Marshallian consumer surplus is 
the difference between the maximum sum of money an individual would be 
willing to pay for a good or service, as calculated from a Marshallian 
demand function, and the amount the individual is actually required to 
pay. The Marshallian consumer surplus is calculated directly from 
observed behavior in market or market-like transactions. This measure 
of value of a good or service incorporates the income effects of 
changes in its price or quality; for example, a reduction in price or 
an increase in quality would have the effect of increasing real buying 
power. As a result, Marshallian consumer surplus does not measure value 
from a fixed baseline level of utility. In contrast, the exact measures 
of WTP and WTA are so labeled because they calculate the monetized 
change in utility or well-being from a fixed baseline level of utility.
    In any given context, the more appropriate choice between the exact 
value measures depends upon the allocation of property rights. Because 
the government is holding natural resources in trust for the public, 
the WTA criterion is conceptually the more appropriate measure of 
damages for natural resource damage claims. However, in some 
circumstances it may be infeasible or impractical to provide reliable 
measures of WTA. In those circumstances, the more conservative measures 
of WTP or the Marshallian consumer surplus are appropriate for 
measuring damages.
    In addition to losses in value to individuals, compensable values 
also include losses to trustee agencies or Indian tribes that protect 
and manage the resources for the individual members of the public. The 
losses include the reduction in fees collected for the use of natural 
resources in the public domain by government agencies or Indian tribes 
that are designated as trustees of the natural resources. Similarly, 
the reduction in economic rent accruing to a private party because the 
government or Indian tribe does not charge a fee equal to the value of 
the resource in that use also represents a loss to the public. In this 
context, economic rent refers to the difference between the fees that 
users would be willing to pay for the use of a public natural resource, 
and the fees actually paid. Finally, the loss to the public includes 
the reduction in net revenues to public enterprises controlled by the 
trustee(s) as a result of the injury to natural resources.
    In summary, the compensable values that may be claimed by a trustee 
for the losses to the public include, but are not limited to: (i) The 
value of losses to all public uses of natural resources (including 
passive use) as measured by changes in (a) monetized changes in 
utility, or consumer surplus, (b) fees or other payments collectable by 
the government or an Indian 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 Indian tribe does not charge a fee or price 
for the use of the resource equal to the value of the resource 
services, provided such economic rent is not recovered under a private 
cause of action; and (ii) in instances where the natural resource 
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.
     Although section 1002 of OPA allows other types of recoveries for 
damages resulting from a discharge of oil, this proposed rule covers 
only damages recoverable by natural resource trustees for injuries to 
natural resources and/or services resulting from the discharge. 
Therefore, damages assessed in accordance with this proposed rule do 
not include: (1) Taxes forgone, because these are transfer payments 
from individuals to governments; (2) wages and other income lost by 
private individuals, except for that portion of income that represents 
uncollected economic rent, because these values do not accrue to the 
trustee(s) and may be the subject of lawsuits brought by the 
individuals suffering the loss; or (3) any speculative losses.

II. Economic Valuation Process

    Natural resources can be viewed as long-lived assets that provide 
flows of services through time; for example, fisheries and forests 
provide continuing opportunities for commercial harvests of fish and 
timber, as well as for fishing, hiking, and other recreational 
activities. A fundamental principle of asset valuation is that the 
current value of an asset is equal to the present discounted value of 
the stream of future services from the asset. When a discharge injures 
trust resources and/or services, the diminution in value will equal the 
sum of the changes in the present discounted values of all affected 
services.
    The basic types of services associated with natural resources 
include: (1) Recreational; (2) commercial; (3) cultural/historical; (4) 
ecological; (5) subsistence; and (6) passive use. A discharge may 
affect any or all of these services.
    Injuries resulting from a discharge may reduce either the quality 
or the quantity of services and resources available to provide 
services. For example, if a municipal beach is oiled by a discharge, 
recreational beach use will be identified as a category of services to 
be analyzed. If the beach is closed for some period, the quantity of 
recreational beach services available to the public is reduced. In 
addition, after the beach is reopened, the continuing presence of 
tarballs on the sand and in the water may reduce the quality of 
services available at the beach. The reduction in service quality may 
result in a lower value to the user from a visit, and consequently 
individuals may reduce their visitation at the beach, with some 
stopping visitation entirely during the affected period. In summary, 
damages during the period of injury after the reopening of the beach 
may include lost values due to reduction in visitation and decreased 
value per trip for trips that do occur.
    Where resources are used as inputs into a production process, a 
reduction in the quantity or quality of the resource may effectively 
increase the costs of the input. For example, a closure or a fish kill 
in a commercial fishery may increase the transportation costs of 
achieving a given commercial catch level. As a result, the injury may 
reduce the economic rent accruing to the producer from use of the 
public trust resource, the fishery. If the producer is able to pass 
part of the effective cost increase onto the consumer, the injury will 
reduce consumer surplus as well.
    The first step in measuring compensable interim lost values is to 
identify the services provided by the natural resources before the 
injury. For example, wetlands provide a wide range of services 
including, but not limited to, flood control, habitat for plants and 
animals (particularly during early life stages), and recreational 
opportunities. Any given discharge may not affect all of these 
services. For example, a discharge that results in oiling of wetland 
vegetation above ground may leave the roots intact. As a result, the 
flood control services may be relatively unaffected, while the quality 
of habitat for plants and animals may be significantly reduced.
    Once a list of services potentially affected by the discharge has 
been developed, the trustee(s) will identify which services to consider 
in the damage assessment process and the methods for quantifying 
economic damages due to those lost or diminished services. As discussed 
below, a variety of valuation methodologies are available to the 
trustee(s). However, for a given service affected by the discharge, 
there may be only one or two methods that are suitable for valuing the 
specific type of loss. The availability of data can also affect the 
choice of methodology.
    The next step involves estimating the change in the quantity and 
quality of services attributable to the discharge. This effort requires 
information from the Injury Quantification portion of the damage 
assessment that identifies the change in the quantity or quality of 
resources available to provide services. Users' behavioral responses to 
the quantity or quality changes can be estimated, where relevant. For 
example, when a fish kill affects a recreational fishery, the lost 
recreational services result in the reduction of angler days at the 
site. To calculate the change in participation, the change in fish 
stock needs to be translated into the resulting change in anglers' 
hourly catch rate. Then, the anglers' behavioral response to the change 
in quality can be modeled to determine the reduction in recreational 
fishing at the site attributable to the discharge.
    Once the magnitude of the lost services has been estimated, 
economic values are assigned to these services. For example, with 
recreational demand models, the change in consumer surplus attributable 
to the discharge is calculated directly from the model along with the 
change in number of trips. Alternatively, where welfare losses accrue 
due to increased input costs, the full welfare loss can be captured by 
measuring the reduction in factor income (or surplus).
    The diminution of value pending full recovery of the resource is 
calculated as the present discounted value of services in the absence 
of the injury minus the present discounted value of services with the 
injury. To determine the present discounted value with the injury, the 
choice of restoration method must be explicit: If no restoration 
actions are planned, the with-injury calculation will be based on a 
natural recovery scenario. If restoration actions are planned, the 
with-injury calculation will need to take into account the effect of 
restoration actions on resource recovery paths.
    When the recovery period for a resource extends over multiple time 
periods, it is important to adjust the damage calculations for each 
period for the increases in the quantity and/or quality of the resource 
prior to full recovery: In most cases the services will be increasing 
toward baseline as the quantity and/or quality of the resource 
recovers. The recovery path may differ for each service, so each may 
need to be considered separately. For example, in the wetland context 
cited above, individuals may choose to return to the wetland to view 
wildlife in a matter of weeks, whereas recovery of the habitat to 
support a fish hatchery may take months or years.
    For some categories of economic damage, it will be possible to 
conduct site-specific analyses. For example, the economic damages 
associated with the loss of access to a marine transportation corridor 
due to closure of a waterway can be estimated using existing site-
specific data in most instances. In other cases the trustee(s) may 
employ benefits transfer procedures to apply valuation estimates or 
valuation functions from existing valuation studies from other contexts 
to estimate losses in the present incident.

III. Measurement Techniques

A. Introduction
     Several methodologies exist to measure direct use and passive use 
values. This proposed rule provides maximum flexibility to the 
trustee(s) for selecting any methodology that can provide reliable and 
valid estimates of resource values and that is appropriate for valuing 
the injuries associated with a particular discharge. The trustee(s) 
will have broad discretion in selecting among existing and potential 
new methodological approaches that may be employed in damage 
assessment. The flexibility to exercise professional judgment in 
selecting and applying specific analytical techniques is necessary 
because of the ``site-specific'' nature of discharges of oil. Further, 
the trustee(s) may use different methodologies to produce separate 
damage estimates for different resource services, so long as there is 
no double recovery of losses. Either market or nonmarket resource 
methodologies may be employed, as relevant to the specific valuation 
issues in a given context.
    To measure consumer values economists often rely upon directly 
observable data on prices and quantities from transactions in private 
markets. By definition, nonmarket goods and services are not traded in 
traditional markets, generally because such exchange arrangements are 
not practical or efficient. For example, national defense, the 
interstate highway system, and national parks are nonmarket commodities 
provided by the public sector and generally are not traded in private 
markets. For goods that are not provided through private markets, 
alternative means of determining values have been developed.
    The proposed rule identifies reliable valuation techniques for 
assessing the economic value of natural resources and/or services 
including: The travel cost method; the factor income approach; the 
hedonic price model; market models of demand and supply; and the 
contingent valuation method. The trustee(s) is not limited to these 
methods, and may use any method suitable for calculating compensable 
value. Where the circumstances are such that a site-specific 
application of one of these valuation methods is not appropriate and/or 
does not meet the reasonable lost criterion, the trustee(s) may 
estimate compensable values using benefits transfer or may estimate 
damages for interim lost services using the habitat or species 
replacement cost method. The choice of approach(es) in a particular 
context will depend upon the types of injuries associated with a 
discharge.
B. Measurement Techniques
    1. Site-specific valuation methods--a.Travel cost method. The 
travel cost method is principally employed to model demand for 
recreational experiences. This measurement technique 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 (and thereby 
incurring higher travel costs) in order to recreate at more highly 
valued sites. A site demand function for a sample of households can be 
estimated with information on total trips to the site and travel cost 
to the site. With trip participation data for before and after a 
discharge, it is generally possible to estimate the shift in demand 
induced by the discharge (holding all other factors constant) and 
calculate either the resulting change in the exact welfare measures of 
willingness-to-accept or the Marshallian consumer surplus 
approximation. However, if recovery of the resource will occur in 
increments over an extended time period, it will not be feasible to 
collect site-specific participation data for the full period of the 
recovery within the timeframe of the assessment. Adjustments to the 
immediate decline in site-specific participation will need to be made 
to capture the incremental recovery in participation throughout the 
period of resource recovery.
    Recent advances in the travel cost method may allow the trustee(s) 
to value the variation in quality at a site due to a discharge even 
when before and after participation data are not available. Instead of 
focusing on the number of recreation trips to a given site (or to all 
sites) in a season, the random utility method focuses 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 when the discharge 
affected quality at multiple sites.
    b. Factor income approach. This approach relies upon the production 
function model, which relates the contribution of inputs to the 
production of an output. (Inputs are also referred to as factors of 
production.) Changes in the availability or price of inputs will affect 
the availability and price of the output and hence the level of income 
accruing to the producer. Where unpriced natural resources are an input 
in the production process, producer income will include both economic 
profit (the amount of profit a producer requires to keep capital in 
this use in the long run) and economic rent (the income accruing to a 
producer as a result of access to an unpriced resource). For example, 
fish stocks allocated to commercial fisheries are inputs to the 
production of commercially sold fish; access to navigable waterways is 
an input into the transport of raw materials and processed goods. 
Though the government generally does not charge fees (or charges only a 
nominal fee) for the use of fishery or navigational channel resources 
or their services, the producer does incur labor and equipment costs to 
acquire the services of the natural resource.
    A discharge may decrease the quality and/or quantity of a resource 
and thereby effectively increase the cost of acquiring the natural 
resource input. For example, closure of a fishery may force commercial 
fishermen to travel farther to obtain catch, or closure of a commercial 
waterway may force vessels to travel longer distances or may delay 
docking at port; in both cases, producer costs have increased. As a 
result, the injury may reduce the economic rent accruing to the 
producer from use of the public trust resource. The change in economic 
rent attributable to a discharge can be evaluated by calculating the 
change in surplus either in the product market or in the input markets. 
Where the output price is not affected, the change in economic rent is 
simply the sum of the change in factor costs (or factor income) for 
each affected input.
    c. 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 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. Reduction in the quality or accessibility, as may occur due 
to a discharge, will be captured in the value of the property. All else 
equal, the decrease in property values as a result of a discharge 
measures the change in use value of the injured coastline resources 
accruing to a subset of the potentially affected public, i.e., the 
local property owners. This measure is only a partial accounting of the 
reduction in value of coastline resources because it does not capture 
the loss in value of the resources accruing to members of the public 
who own no property in the area.
    d. 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 
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-to-accept compensation 
for the injuries associated with the discharge. The standard method for 
valuing injuries that affect consumers' value of a marketed resource is 
to estimate models of market supply and demand for the resource and/or 
service. Assuming the injury does not affect the production side of the 
market, the damages are calculated as the difference between the total 
consumer surplus for the marketed resource with and without the injury, 
holding all else constant. The calculation is more complicated when the 
production side is also affected. With some demand models, it is 
possible to calculate exact willingness-to-accept measures from the 
demand analysis; in other cases, the more readily available measure of 
Marshallian consumer surplus is used as a proxy.
    When the supply of the resource is fixed (or quasi-fixed), then the 
observed or predicted change in market price may be used as a proxy for 
the change in resource values. An example of a quasi-fixed resource 
would be land--the supply of land is fixed in the short-run, but in the 
medium-run, improvements to the land may change the flow of services 
(agricultural, floral/faunal habitat, housing) available from 
individual parcels of land. Market-based methods only capture the 
reduced value of services accruing to owners of the resource, and will 
not capture the lost value of services provided to the members of the 
public with no ownership rights in the resource.
    When the resource is regularly traded in the market, the change in 
market price may be readily observable. If the injured resource is not 
regularly traded in a market, but similar or like resources are traded, 
the trustee(s) may use the appraisal technique. The appraisal technique 
also will only capture the reduced value of services accruing to owners 
of the resource, and will not capture the lost value of services 
provided to the members of the public with no ownership rights in the 
resource. To the extent possible, all appraisals should conform to the 
``Uniform Appraisal Standards for Federal Land Acquisitions'' (Uniform 
Appraisal Standards), Interagency Land Acquisition Conference, 
Washington, DC, 1973. In those instances when state statutes may be in 
variance with these standards, a state trustee(s) should follow the 
applicable state guidance on performing appraisals.
    e. Contingent Valuation Method. Contingent valuation (CV) is a 
survey-based approach to the valuation of nonmarket goods and services, 
that relies on a questionnaire for the direct elicitation of 
information about the value of the good or service in question. The 
value obtained for the good or service is said to be contingent upon 
the nature of the constructed (hypothetical or simulated) market and 
the good or service described in the survey scenario. This aspect of CV 
gives the approach great flexibility, allowing valuation of a wider 
variety of nonmarket goods and services than is possible with any of 
the other aforementioned techniques. Indeed, it is the only method 
currently available for the express purpose of estimating passive use 
values. In the area of natural resources, CV studies generally derive 
values through elicitation of respondents' willingness to pay (WTP) to 
prevent injuries to natural resources or to restore injured natural 
resources.
    The first published CV study, valuing outdoor recreation, appeared 
in 1963. There are now over 1,400 documented papers, reports and books 
on CV. In recent years, it has become one of the most widely used 
methods of nonmarket valuation.
    Four basic elements common to CV questionnaires are: (1) An 
explanation of the structure and rules of the market in which the good 
or service being valued is either bought or sold; (2) a description of 
the good/service and how it is to be provided; (3) the value 
elicitation question; and (4) validation questions, to verify 
comprehension and acceptance of the scenario and to elicit 
socioeconomic and attitudinal characteristics to interpret the 
variation in responses to the valuation question across respondents. 
There are no universal rules on how each of these elements of a CV 
questionnaire should be designed, since the appropriate formulation of 
each depends on the good or service being valued and its context and, 
consequently, will vary across applications.
    CV surveys generally measure total value of a good or service, 
which includes both direct use value and passive use value. Because 
passive uses of resources leave no behavioral record, they are 
difficult to validate externally. A number of criticisms of CV pertain 
specifically to its use in valuing the passive use component of total 
value and the difficulty of external validation of that component of 
total value. Among the most commonly cited criticisms are: The stated 
intentions of willingness to pay in CV surveys may exceed ``true'' 
willingness to pay; CV may produce results that appear inconsistent 
with the tenets of rational choice; respondents to CV surveys on 
passive use may be unfamiliar with the good/service being valued and 
therefore may not have an adequate basis for articulating their true 
value; CV respondents may be expressing a value for the satisfaction 
(``warm glow'') of giving rather than the value of the good/service in 
question; and respondents may fail to take CV questions seriously 
because the financial implications of their responses are not binding. 
Most proponents of CV acknowledge that poorly designed and administered 
CV studies can produce results that reflect the potential problems 
identified above. However, proponents also assert that these problems 
are not inherent to the method and that well designed and well executed 
CV studies can eliminate them or render them inconsequential. Further, 
survey design, development and administration standards will promote 
quality control for CV surveys. NOAA proposes standards on survey 
design, development and administration, and the nature of results 
below.
    There is considerable interest over the inclusion of passive use 
values as part of a natural resource damage claim and the use of CV to 
measure such values. NOAA received many, often conflicting, comments on 
this issue. To provide a thorough analysis, NOAA convened a Contingent 
Valuation Panel (Panel) of economic and survey experts to evaluate the 
reliability of CV to measure passive use values. By establishing this 
Panel, NOAA attempted to provide an atmosphere in which an unbiased 
academic analysis of CV could be conducted. The Panel received hundreds 
of pages of comments and conducted a public meeting to hear all sides 
of the issue. Upon completion of its study, the Panel submitted its 
report to NOAA. That report constitutes a public comment and as such is 
part of the administrative record of this rulemaking. A copy of that 
report can be found at 58 FR 4601 (Jan. 15, 1993). NOAA considered that 
report along with the comments received from economists, industry 
representatives and other interested parties in the development of this 
proposed rule.
    Based upon consideration of all comments received, NOAA believes 
that the trustee(s) should have the discretion to include passive use 
values as a component within the natural resource damage assessment 
determination of compensable values. This position is consistent with 
OPA legislative history that specifically refers to diminution in value 
as a part of damages and cites the Ohio decision definition of value, 
which includes both direct use and passive use. Further, NOAA believes 
that reliable estimates of lost passive use value due to discharges of 
oil can be estimated using CV so long as the CV study follows the 
standards provided in the proposed regulations. NOAA worked closely 
with the Department of the Interior during the development of the 
proposed standards for CV in order to ensure consistency between the 
two sets of natural resource damage assessment regulations. NOAA 
understands that the Department of the Interior will soon propose 
identical standards for inclusion in its damage assessment regulations.
    NOAA believes that the proposed standards are necessary when CV 
surveys are used for natural resource damage assessment, because such 
studies will be given a rebuttable presumption in litigation over the 
specific amount of money a particular party must pay as compensation 
for liability. However, this same level of precision for CV surveys is 
not necessarily required for other applications of CV.
    In proposing its standards for the use of CV in the damage 
assessment context, NOAA has relied heavily on the recommendations of 
the Panel. NOAA bases this reliance on the fact that the Panel reviewed 
a number of studies and considered the viewpoints of many individuals 
in reaching its conclusions.
    The Panel's recommendations fall into two categories--those that 
should be met to assure reliability and those that must be met. 
Regardless of the category in which the recommendations are included, 
almost all the recommendations deal with survey design, development and 
administration. Because NOAA believes that a properly designed and 
administered survey is essential to ensure reliable responses, NOAA has 
proposed a number of standards in these areas.
    There is also considerable interest in ``performance standards.'' 
Performance standards would be those tests that can be used to 
determine whether reliable measures of passive use value were obtained. 
The Panel briefly addresses this issue in its discussion of whether CV 
results violate assumed properties of rational choice. The Panel 
returns to this area only in the form of one of the five conditions CV 
surveys must meet--responsiveness to the scope of the environmental 
insult. NOAA proposes a performance standard for this condition, which 
is discussed in more detail below.
    The standards for passive use value estimation in the proposed rule 
cover three distinct aspects of a CV study: (1) Survey instrument 
design and development, (2) survey administration, and (3) the nature 
of the results. The regulatory standards proposed by NOAA are intended 
to provide flexibility to the trustee(s) so that it can take advantage 
of new developments that may occur in CV methodology. Further, the 
standards are subject to amendment as new research is conducted and 
additional knowledge is achieved.
    Survey Instrument Design and Development. The reliability of a CV 
estimate of passive use value begins with the design and development of 
the survey instrument. The proposed rule contains a number of standards 
for the design and development of the survey instrument, including 
standards regarding the selection of a choice mechanism. Past CV 
studies have used different methods to elicit values. These methods 
include open-ended WTP questions; bidding cards; and voting formats 
typically termed ``referenda.'' In the damage assessment context, the 
survey will be offering a public good in one of two forms--prevention 
of injury or restoration of the injured resource. NOAA proposes that 
the trustee(s) use a choice mechanism and payment vehicle that are both 
credible and incentive compatible, i.e., do not impose strategic bias. 
The trustee(s) is to use his discretion in selecting the choice 
mechanism, and is to document the rationale for the choice and explain 
how it is incentive compatible.
    However, NOAA would encourage the trustee(s) to consider the 
Panel's recommendation to pose the valuation question as a vote on a 
referendum. NOAA believes that there are many advantages for using a 
voting format for a CV survey for natural resource damage assessment 
purposes. NOAA believes that the method of elicitation should be one 
with which people are familiar and one which provides a realistic 
context in which respondents can choose to increase levels of public 
goods. Local jurisdictions and state governments often ask voters to 
increase taxes on themselves so that public goods may be increased 
(i.e., school bond issues; special assessments for public 
infrastructure). Thus, the voting mechanism is both a familiar and 
realistic context for individuals to make choices regarding public 
goods. Second, in our society, most goods are offered using posted 
prices. Asking an individual to reveal his or her maximum WTP for a 
good is both unfamiliar and unrealistic. Third, it is important that 
respondents should believe that they will receive the program offered 
in the CV survey. To CV respondents, the cost of the program naturally 
determines the price they must pay. If no set price is offered, the 
respondents may perceive uncertainty regarding the program's costs and 
therefore uncertainty regarding the provision of the program. Finally, 
the voting format is incentive compatible. If respondents desire the 
program at the stated price, they must reveal their preference and vote 
for the program. Voting against or refusing to vote will only lower the 
probability of obtaining the program.
    Survey Administration. The most carefully designed CV survey can 
produce unreliable results if the survey administration is faulty. 
Therefore, NOAA proposes standards for survey administration. For the 
most part, the standards specified for survey administration are 
similar to those one would expect any high quality survey to meet.
     One of the aspects of survey administration dealt with in the 
proposed rule is determination of an appropriate response rate. NOAA 
proposes that the trustee(s) should obtain as high a response rate as 
possible consistent with the requirements of reasonable cost in order 
to ensure reliable inferences to the general population. Low response 
rates pose a risk of compromising the statistical validity of the 
survey when nonrespondents have systematically different passive use 
values than respondents. Another risk associated with low response 
variance may be significantly affected such that the indicated 
confidence of survey results is questioned. Since the likelihood of 
this risk cannot be determined unless nonrespondents have been 
surveyed, the trustee(s) should minimize nonresponse in the final 
survey to the extent practicable. For example, the trustee(s) may 
design the survey instrument so that individuals must decide whether to 
respond before the exact nature of the environmental insult is 
revealed.
    Balancing the desirability of a high response rate against cost 
considerations, NOAA has proposed that response rates should not fall 
below 70%. NOAA is interested in further comments on whether there 
should be a specified response rate and, if so, whether 70% is a 
reasonable floor.
    Another aspect of survey administration addressed in the proposed 
rule is selection of the mode of administration. The three generally 
used CV survey administration modes are in-person, mail and telephone. 
Recently, mixed mode surveys have combined mailed information with 
telephone interviews. There are advantages and disadvantages of each 
method, and often the selection of the appropriate method is dependent 
on a number of factors such as cost, turn-around time, desired response 
rate, type of information to be conveyed, use of visual aids, required 
population coverage and the ultimate use of the survey results. For 
example, telephone surveys can approximate simple random sampling of 
households through random digit dialing; can produce fast results; are 
relatively easy to administer; and are less expensive than in-person 
interviews. On the other hand, visual aids cannot be used; interviews 
need to be relatively short; interviewer bias may be involved; and 
individuals without telephones are necessarily omitted from the sample. 
Self-administered mail surveys are the least costly of the three 
methods. However, probability sampling is exceeding difficult; 
respondents can review the survey before deciding to participate 
(imparting self-selection bias); there can be no random selection 
within the household and no control of question sequencing; and a 
higher number of incomplete responses are likely to result because 
there is no interviewer to motivate the respondent. Finally, in-person 
interviews permit random selection of the respondent within the 
household; maintain control of question ordering; allow the use of 
visual materials; and generate high response rates. In-person 
interviews, though, are the most costly method to administer and may 
involve interviewer bias. Administration requires complex field 
operations and involves the use of many documents and forms (i.e., 
calling cards, interviewer evaluation forms, verification forms). For a 
more in-depth discussion of each method, see EPA, ``Survey Management 
Handbook,'' vol. II, pp. 24-35, 230/12-84-002, December 1984.
    In analyzing the advantages and disadvantages of the use of each 
method for CV surveys of natural resource damages, NOAA considered the 
Panel's report. In that report, the Panel stated that ``[i]t is 
unlikely that reliable estimates of values could be elicited with mail 
surveys. Face-to-face interviews are usually preferable, although 
telephone interviews have some advantages in terms of cost and 
centralized supervision.''
    While recognizing that mail surveys can provide invaluable 
information for many academic studies and regulatory purposes (e.g., 
U.S. decennial census), NOAA believes that mail surveys at this time 
lack certain features that are desirable for use in the natural 
resource damage assessment area. In deciding between the use of 
telephone and in-person surveys, NOAA suggests that the trustee(s) 
consider seriously the use of in-person interviews for the final survey 
because of the characteristics of a survey needed for damage assessment 
purposes. A CV survey designed for natural resource damage assessment 
purposes is likely to impart a large amount of information to 
respondents causing interviews to be lengthy and often complex. In-
person interviews offer the opportunity to motivate the respondents and 
to hold their interest by providing important information in a 
graphical and pictorial format and asking interactive questions 
regarding the respondents' understanding and acceptance of key features 
of the instrument. It also permits interviewers to record verbatim 
responses to important open-ended questions. Such information may be 
critical in demonstrating that the trustee(s) has adhered to the 
regulatory standards proposed by NOAA.
    Even though NOAA recommends the use of in-person interviews for the 
final survey, it recognizes that there may be instances where other 
modes of administration may be appropriate. Therefore, under the 
proposed rule, selection of the mode of administration is left to the 
discretion of the trustee(s); however, the trustee(s) must document the 
rationale for the selected mode of administration. NOAA anticipates 
that this documentation would include a discussion of the factors that 
led the trustee(s) to reject use of in-person interviews.
    NOAA also encourages the trustee(s) to consider the use of modes of 
administration other than in-person interviews during the survey 
instrument development stage. For example, a telephone survey may be an 
appropriate and cost-effective method to test a design feature such as 
question ordering or the understanding of technical terms. Further, 
NOAA is interested in comparative empirical testing of other 
administration modes, such as random digit dialing for initial 
contacts, followed by mailed descriptive information and visual 
materials, culminating with a telephone survey. If such testing 
demonstrates that other modes can produce the type of information and 
results comparable to in-person interviews, NOAA would encourage the 
trustee(s) to consider the use of those methods for the final survey.
    Regardless of the mode of administration, NOAA proposes that all 
surveys be administered by a survey research organization because the 
preparation and administration of a general population survey require 
practical survey expertise and substantial logistical support. NOAA 
also recommends that the trustee(s) select a survey research 
organization that has implemented procedures to meet the standards 
outlined in either the Council of American Survey Research 
Organizations' Code of Standards for Survey Research or the American 
Association for Public Opinion Research's Code of Professional Ethics 
and Practices. Use of such an organization will help to maintain 
reliability and confidentiality. Further, such organizations are likely 
to have proven track records and the staff necessary to conduct a 
survey in accordance with the proposed regulatory standards.
    Nature of Results. In addition to the standards for survey 
instrument design and development and for survey administration, the 
proposed rule contains a standard for evaluating the results of CV 
surveys. The Panel report stated that one indication that a CV study is 
unreliable is when respondents show inadequate responsiveness to the 
scope of variations in the environmental insult. This statement 
suggests that the Panel was concerned that WTP be sensitive to 
characteristics of the described natural resource injuries and of 
methods of preventing those injuries or restoring the injured 
resources. The proposed rule includes a performance standard to address 
this concern.
    The scope of an environmental insult such as a discharge of oil is 
multi-dimensional, where the dimensions are influenced by biological 
and social attributes. A discharge can affect all or part of an 
ecosystem. Its effects can be short- or long-lived, lethal or 
sublethal, geographically contained or widely dispersed. From the human 
perspective, the effects of a discharge may be directly visible and 
disturbing, or out of sight and perceived only indirectly once there is 
knowledge about the loss of natural resources.
    In the first phase of the scope analysis, the many dimensions of 
the scope of the discharge under investigation need to be identified. 
Once the trustee(s) has defined the dimensions of scope deemed to be 
important to passive use losses, the trustee(s) shall employ a split 
sampling technique where some respondents are provided with an 
alternative survey instrument. The trustee(s) begins the analysis with 
the primary survey instrument that will be used to estimate the passive 
use losses due to the discharge in question. This instrument is 
designated the base instrument. It is assumed that the trustee(s) has 
pre-tested and performed field pilot tests on the instrument and is 
convinced that the instrument meets the design or guidance criteria 
laid out in the proposed rule. Analyses performed using incompletely 
developed or tested preliminary instruments cannot be considered 
evaluations of scope sensitivity because in these situations it is not 
possible to distinguish the effects of variations in instrument design 
from those effects on respondent decisions of changes in the scope of 
injury or the proposed program.
    In designing a CV survey instrument, the trustee(s) must determine 
the dimensions of scope that are relevant to the discharge under 
investigation and decide whether there exists a subset of dimensions 
that are important to passive use value or whether all of the 
dimensions are linked and therefore equally important. In cases where a 
subset is deemed important, the trustee(s) must choose whether to scale 
these dimensions up or down in relation to the levels described in the 
base instrument and by how much to scale the dimensions. If all 
relevant dimensions are to be scaled, the trustee(s) must still decide 
in which direction and magnitude to scale each dimension. The 
dimensions should be designed to be ordinal in scope, i.e., A>B>C, 
unless such ordinal scope is infeasible.
    After the trustee(s) has decided on the dimensions to be scaled, in 
what direction and by how much, the trustee(s) shall produce second and 
third instruments that differ from the base instrument only with 
respect to the scope dimensions. NOAA recognizes that the trustee(s) 
may choose to scale dimensions regarding the injury description, 
dimensions concerning the CV prevention or restoration programs offered 
to respondents, or both.
    After the scaled instruments are pre-tested, all three instruments 
should be employed in a split sample design. Since inferences to the 
relevant population will not be part of a scope analysis, true 
probability sampling is not required and convenience samples may be 
employed so long as random assignment of the two treatments is 
maintained. The trustee(s) should endeavor to employ large samples in 
these analyses since scope effects may be small and large samples will 
be needed to attain the desired 95 percent confidence levels of 
statistical significance. The trustee(s) is free to demonstrate 
sensitivity to scope using statistical techniques of its choosing; 
however, pooling both samples and employing a simple dichotomous 
variable (analysis of covariance) framework allowing general 
differences in the WTP valuation function will usually be a sufficient 
basis for testing. In some circumstances, more complex designs may be 
required.
    The validity of the scope analysis depends upon the respondents' 
perception of differences in the scope dimensions across the three 
treatments. It is incumbent upon the CV designer to include questions 
that can be used to determine whether the understanding and credibility 
criteria laid out in these regulations have been met. This 
determination is vitally important and, if it is found to be violated, 
the analysis may lead to unreliable results.
    The three-scenario approach is not required when the trustee(s) 
provides a reasonable showing that it is infeasible due to 
considerations of cost or lack of plausibility of the scenarios. In 
such circumstances, the trustee(s) may perform the analysis using only 
the original scenario and one alternative scenario. However, as CV 
surveys of passive values are routinized and their costs fall, the 
trustee(s) may find that the three-scenario analysis is feasible in 
most cases.
    Concern was expressed that differences between the scenarios not be 
so large that passing the total value test would be a foregone 
conclusion, nor so small that it would be very difficult to demonstrate 
statistical differences without extremely large (and costly) split 
samples. The issue is complicated by the possibility, based on the 
State of Alaska-sponsored study of the Exxon Valdez spill, that a 
significant minority of the population may be insensitive to any 
reasonable differences in scenarios: some individuals may not be 
willing to pay anything for any environmental cleanup, others may be 
willing to pay unrealistically high (and invariant) amounts for any 
size environmental cleanup. The trustees are to develop procedures for 
identifying these people, so that the demonstration that the scenarios 
are meaningfully different would rest on the remaining participants. To 
accept the scenarios for the total value test, no more than 95% of the 
remaining participants may indicate that the differences between the 
scenarios are real and meaningful--i.e., that the values of the 
respective commodities differ. NOAA is seeking comment on whether it is 
feasible to design such a procedure to demonstrate differences in 
scenarios, and if not, on alternative schemes to achieve a comparable 
goal. For example, the total value test is to be performed on split 
samples: how should ``insensitive'' individuals be excluded? If so, how 
should the threshold defining ``meaningful differences'' be 
characterized? Is it feasible to identify scenario differences also 
using a split sample procedure? If not, should the threshold criterion 
for determining ``meaningful difference'' be adjusted, since 
individuals impose internal consistency on their answers in the face of 
direct comparisons (recognizing much finer differences than in split 
samples)? Once a procedure has been developed to determine if 
individuals are sensitive to the scope of the injury, should this 
information be incorporated into the selection of the sample for the 
total value test?
    While the proposed rule requires a split sample with multiple 
scenarios for demonstrating the total value test, NOAA seeks comment on 
the option of alternatively using an indirect test to explain variation 
in WTP as a function of independent variables, including belief in the 
size of the damage scenario, and/or effectiveness of the avoidance 
policy. Commenters should consider under what circumstances an indirect 
test should be allowed for performing the scope test. An indirect 
approach examines the sensitivity to scope indirectly through the use 
of a WTP valuation function, relying entirely on the base instrument. 
In the context of a single dichotomous choice referendum (or a double 
bounded formulation), a WTP valuation function may relate the 
probability of a yes vote to a list of variables assumed to underlie 
the voting decision (e.g., the amount the household is asked to pay, 
household demographics, etc.). The indirect approach may expand this 
list to include variables based on information collected from 
respondents that are related to the scope dimensions of the discharge. 
These measures must be meaningful to the respondent given the 
information provided in the survey. For example, a useful question 
following the WTP elicitation question is one that asks whether the 
respondent believed the injuries caused by the discharge were more 
severe or were less severe than described. All other things equal 
(i.e., similar preferences, budget constraints, etc.), respondents 
believing the injuries to be worse than described, and having equal 
confidence in the prospects for restoring the injured resources through 
the offered plan, might be willing to pay more. Such a finding would be 
an indirect verification of scope sensitivity.

``Calibration''

    Estimates of hypothetical willingness-to-pay (WTP) may incorporate 
biases in opposite directions. On the one hand, the appropriate measure 
of damages is willingness-to-accept (WTA) not WTP, although the former 
is not recommended in the proposed rule because of a concern for 
limited reliability of current procedures for eliciting WTA. There are 
theoretical arguments for why WTA may exceed WTP by a substantial 
margin in a natural resource context with relatively few substitutes, 
although there is debate on this point. On the other hand, several 
experimental studies (of a lower quality survey design than proposed in 
this rule) suggest that stated intentions of WTP in CV surveys exceed 
observed responses in simulated markets or in solicitations for 
charitable contributions. (There is, however, debate as to whether the 
simulated markets or charitable contribution solicitations capture 
``actual'' WTP in the available studies.)
    Because of the various possible biases, a discount factor is 
included in the proposed rule to apply to estimated WTP. The proposed 
rule gives a default factor of fifty percent for the purposes of 
soliciting comment. However, the trustee(s) may adopt a different 
calibration factor if it can be shown that a different factor is 
appropriate for a specific application of CV. NOAA is asking commenters 
to propose other reasonable calibration tests. In particular, NOAA 
requests comment on how such calibration could be done consistent with 
the framework of these proposed regulations and for the type of public 
goods likely to be injured by an oil spill. Commenters should consider 
adopting a stringent discount factor while at the same time suggesting 
relaxing some of the other standards contained in the proposed rule.
    Reporting. Because a well-designed study will include questions 
that assist in the interpretation of responses to the WTP elicitation, 
the final report should include a breakdown of WTP by various 
categories such as income, belief in the scenario, and attitudes toward 
the environment. Data from the survey should be retained by the 
trustee(s) and ultimately made part of the administrative record once 
the trustee(s) considers the survey a public document.
    Additional Guidance. NOAA recognizes that implementation of a CV 
survey requires decisionmaking about a variety of features, not all of 
which are specifically addressed in the standards in the proposed rule. 
In many instances, the trustee(s) can turn to established economic 
theory and survey research for guidance, but in other instances 
economic theory and survey research provide little or no guidance and 
reasonable decisions must be based on other criteria. In these 
circumstances, NOAA recommends that the trustee(s) follow a 
conservative approach. That is, when one is deciding among 
alternatives, and economic theory or survey research cannot inform the 
decisions, the trustee(s) is encouraged to choose that alternative that 
would understate the natural resource damages rather than overstate the 
damages.
    The following examples are instructive. Suppose the trustee(s) 
selects a referendum framework for the elicitation of willingness-to-
pay values from respondents. Using such a framework, respondents might 
be asked to vote on a program that would be paid for in a one-time (or 
lump-sum) payment, or annually over a period of years. Economic theory 
does not generally differentiate between these two alternatives, 
viewing each as equally appropriate. However, because it is less 
financially burdensome for credit-constrained individuals to make 
installment payments than to pay for a good in a single payment, 
requiring payment only for a proposed restoration or protection program 
in a lump-sum may provide a smaller value than if the same individuals 
were asked to pay in installments. In this case, the adoption of a 
conservative approach would lead to the use of the lump-sum payment. 
Similar decisions involve the selection of photographs for use in the 
description of injuries or the proposed prevention or restoration 
program in a CV survey. While a picture of dead, oiled sea otters might 
accurately depict an injury, NOAA believes that more neutral 
photographs would be the appropriate and conservative approach. 
Additional examples of conservative design and guidance can be found in 
the Response to Comments section of this preamble.

Request for Comments

    NOAA requests comments directed toward additional tests for 
determining the reliability of CV results that could be considered for 
inclusion in a more detailed guidance document. NOAA intends to work 
with the Department of the Interior to develop a guidance document on 
use of CV to estimate passive use values. This document will provide 
additional technical information on possible means of satisfying the 
standards contained in the proposed rule as well as other issues 
involved in conducting CV studies. In order to evaluate any additional 
tests, NOAA requests that commenters proposing such tests address four 
issues. First, NOAA requests that commenters provide a complete list of 
the behavioral assumptions underlying their theoretical framework of 
rational choice. NOAA assumes that all commenters will begin with the 
generally accepted axioms of neoclassical consumer choice theory or 
revealed preference theory. NOAA requests that commenters clearly state 
all further assumptions underlying the test and describe the 
sensitivity of the test's results to the assumptions presented. Second, 
if commenters are proposing tests that rely on marginal or infra-
marginal changes in the scope of the injuries, the commenter should 
define the variation of quantity dimensions of injuries involved in the 
test. Third, and perhaps most important, NOAA asks that commenters 
demonstrate that any proposed test can be accomplished feasibly within 
the CV design and administration standards specified in the proposed 
rule. Tests causing CV surveys to violate these design and 
administration standards are themselves unreliable tests. Finally, the 
commenter should give examples of how these tests would be structured 
in the context of an oil spill.

``Prior Knowledge''

    The objective of conducting a CV study in connection with these 
regulations is to determine the damages suffered by the public as a 
result of a discharge of oil into the environment. For consideration of 
passive use values, the relevant public may include the entire U.S. 
population, or may include a regional subset of the population. Damages 
may be sustained by each individual in the relevant public, but only a 
small fraction of the public will actually participate in the survey. 
The damages an individual suffers from an oil spill depend on many 
factors. These include the effects of the spill on the natural 
environment, how much the individual uses the services provided by the 
injured environment, individual preferences, and the individual's 
information about the spill and the world in general.
    In conducting the survey, it is necessary to educate the respondent 
about the natural resource itself, the facts surrounding a spill and 
the impacts of the spill on the environment. This education process 
greatly changes the respondent's information set. Upon gaining this new 
information, respondents are then asked to place a value on the damages 
suffered. There is general agreement that the losses an individual 
experiences from the spill after learning the new information are 
likely to be systematically different than the losses they would 
experience prior to learning the new information. The fact that the CV 
method itself actively changes the information set of an individual 
prior to valuing the good or service makes it fundamentally different 
than other economic valuation methodologies.
    Some commenters have questioned whether it is appropriate to 
extrapolate value estimates based on post-survey information to the 
general population. Given the assessment's objective of estimating 
damages to the public at large, the small fraction of the public that 
actually participates in the survey, some have argued that the relevant 
information set for the purposes of extrapolating to the general 
population is the pre-survey information set. One way to move towards 
value estimates that reflect the information set of the general public 
is to obtain information in the survey itself regarding respondents' 
pre-existing knowledge about the resource and injury to it. Regardless 
of the value a respondent states after learning information from the 
survey, those respondents who were not aware of the resource or an 
injury to it or both would be assigned a value of zero. The rationale 
for assigning a zero value is that if X percent of the survey 
respondents did not know about the resource or injury, then X percent 
of the relevant public is likely to be similarly uninformed. (Implicit 
is the assumption that individuals who are unaware of the injury at the 
time of the survey would continue unaware, but for the survey, for the 
foreseeable future.)
    Other commenters have articulated the point of view that the level 
of respondents' prior information about the injury is irrelevant to the 
determination of natural resource damages. The basis for this position 
is that the resources being injured are common property resources, for 
which governments and Indian tribes are the trustees for the public. 
Consequently, to determine fair compensation for injury to property 
held in the public trust, the responsible parties should contract to 
provide full compensation to all members of the public ex ante, based 
on information about expected injuries. By this logic, it is 
inappropriate to require that respondents' values only be counted if 
they were aware of the injured resources before the survey.
    NOAA seeks comments on whether or not it is appropriate to use 
information regarding pre-existing knowledge of respondents to reassign 
to zero any positive values expressed by individuals who were unaware 
of the injuries prior to the survey in the calculation of natural 
resource damages. Commenters who believe that it is inappropriate to 
assign zero damages to individuals with limited prior knowledge should 
articulate their rationale for using the post-survey information set to 
extrapolate damages to a public that only has pre-survey information.

``Screening or Threshold Factor''

    Because of a concern by many commenters that CV surveys may be 
undertaken in damage cases where expected damages may be too small to 
justify the costs of the CV survey, NOAA is seeking comment on the 
concept of a screening factor the trustee(s) should apply in deciding 
whether to conduct a CV survey in a particular case. Factors currently 
limiting the use of contingent valuation include the high costs for 
surveys to meet the proposed requirements, trustee budget and staff 
limits, trustee desire for speedy judgment to enable expeditious 
restoration activities, and the procedures necessary to justify a 
Comprehensive Damage Assessment (the only assessment procedure 
incorporating contingent valuation surveys). To employ an additional 
screening factor, expected damages might be estimated using a small 
sample with protocols designed to minimize survey costs and, therefore, 
not necessarily subject to the standards contained in this rule. 
Alternatively, expected damages might be estimated by scaling damages 
estimated in other contingent valuation studies. Other methods may be 
possible. Several/possible thresholds have been suggested. These 
possibilities include setting the threshold for a particular case at 
the greater of twice the expected cost of a full CV survey or the 
product of multiplying $5.00 per household by the number of households 
expected to hold passive values for the resource of concern. NOAA is 
specifically seeking comment on the concept of setting such a screening 
factor and, if so, what form such a factor might take, and whether it 
should apply to total damages or only to passive use losses.
    2. Alternative methods--a. Benefits transfer approach. Given the 
expense and time associated with designing and implementing site-
specific studies or models to value resource services, ``benefits 
transfer'' may be a reasonable alternative method to determine interim 
lost values. Benefits (or valuation) transfer involves the application 
of existing valuation point estimates or valuation functions and data 
that were developed in one context to address a similar resource 
valuation question in a different context. Benefits transfer provides a 
less time consuming and less expensive procedure than original 
valuation analysis, but may not provide as accurate results.
    Where resource values exist that have been developed through an 
administrative or legislative process, the trustee(s) may use these 
values, as appropriate, in a benefits transfer context. An example of 
such values is found in the approach to use in estimating recreational 
benefits given in Chapter II, Section VIII, Appendix 3 (pp. 83-87) of 
Economic and Environmental Principles and Guidelines for Water and 
Related Land Resources Implementation Studies; U.S. Water Resource 
Council, February 1983. 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 study(ies) and the transfer 
context; the comparability of the change in quality or quantity of 
resources and/or services in the initial study and in the transfer 
context (where relevant); and the quality of the study(ies) being 
transferred.
    It may be possible in some contexts to tailor the results from a 
prior study to the site of the discharge by transferring or creating a 
valuation function characterizing willingness-to-pay as a function of 
socioeconomic, demographic, or discharge characteristics. Where data 
from the site of the discharge are available, the valuation function 
may be used to calculate site-specific resource values.

Comparability of the Resource/Services

    To evaluate whether existing data are sufficiently similar to the 
conditions of a particular assessment to allow a benefits transfer, the 
trustee(s) should consider at a minimum the following questions: Are 
the markets for the services in the original study similar to those 
services being valued, in terms of size of the user population and 
availability of substitutes? Does the existing study consider the same 
or a similar geographic area in terms of demographic and socio-economic 
characteristics? Were baseline environmental (and other) conditions in 
the existing study similar to baseline conditions in the case at hand? 
Did the existing study address a specific or unique problem that may 
have influenced the magnitude of the estimates obtained? Have general 
attitudes, perceptions, or levels of knowledge changed in the period 
since the existing study was performed in a way that would influence 
the value of the benefit estimate? If the value being considered is for 
a generic resource category (e.g., common song birds), are the species 
considered in the original study relevant to the case at hand?

Comparability of the Change in Quality or Quantity

    To evaluate the comparability of the changes in quality or quantity 
of resources and/or services in the existing study and in the incident 
of concern, the trustee(s) should consider at a minimum the following 
questions: Was the original analysis conducted to value all organisms 
of a given species, a sub-population, individual members of the 
species, or some other grouping? Is this level of analysis suited to 
valuing injuries at the site(s) of impact? Is the discharge-related 
change in the resource and/or service in question within the range of 
changes valued in the original study?

Quality of the Study

    To evaluate the quality of the existing study, the trustee(s) 
should consider at a minimum the following questions: Was the initial 
study based on proper survey design and sampling procedures, sound 
economic analysis, and appropriate statistical techniques? Was the 
study peer reviewed? If current ``best practice'' was not used to 
generate the value estimate(s), can the estimate(s) be adjusted to 
reflect changes in the state-of-the-art?
    In all cases the trustee(s) should evaluate all available estimates 
and/or valuation functions, based on the factors described above, to 
determine which are the most appropriate for benefits transfer. 
Consideration should be given to the range of value estimates generated 
from alternative methods. If the value estimates in the relevant 
studies differ significantly, or if values generated using alternative 
models within the same study differ significantly from one another, 
consideration should be given as to whether the values differ in a 
predictable and consistent manner. Such predictable variation may 
indicate that a more selective choice of studies or models would be 
appropriate for the specific context.
    It is recommended that use of benefits transfer by the trustee(s) 
in a natural resource damage assessment be predicated on guidance from 
the professional and academic economics community on the current 
minimum conditions for quality assurance of the benefits transfer.
    The Economic Analysis and Research Branch of the U.S. EPA, Office 
of Policy Planning and Evaluation has prepared a data base, 
Environmental Economics Database, of some of the existing natural 
resource or environmental resource valuation studies that are available 
to the trustee(s). This database may be obtained from the Economic 
Analysis and Research Branch, Office of Policy Planning and Evaluation, 
U.S. EPA.
    b. Habitat or Species Replacement Cost Method. Alternatively, the 
habitat or species replacement cost methodology may be used to estimate 
damages for lost services from injured habitats and/or biological 
resources. This method is suitable for use when the trustee(s) 
determines that the human services provided by the habitat or species 
are difficult to quantify. This method involves estimating damages in 
terms of the cost of obtaining from alternative sources the equivalent 
of the value of services diminished by the injury until full recovery 
of the resource and/or services. The recovery process may occur through 
natural recovery or may be expedited or enhanced by human intervention. 
If full recovery is not expected to occur, then the ``interim'' loss in 
services continues in perpetuity. Depending on the nature of the 
injury, damages may be calculated as the cost of replacing individual 
species or of replacing entire habitats that support multiple species 
and provide a variety of resource services. This methodology provides a 
practical alternative to the sometimes difficult estimation of consumer 
value in the valuation methods identified above.
    In order to ensure that the scale of the compensatory restoration 
or replacement project(s) on which the cost calculation is based does 
not over- or under-compensate the public for injuries incurred, the 
trustee(s) must establish an equivalency between the present discounted 
value (PDV) of the quantity of lost services and the PDV of the 
quantity of services provided by the replacement project(s) over time. 
The trustee(s) is to incorporate a factor reflecting any differences in 
the efficacy of replacement habitat or resources in providing services 
from that of the injured habitat or resources in absence of the injury. 
If the value of the additional units of services provided by the 
replacement project is expected to be reasonably comparable to the 
value of units of services lost due to injury, then equivalency may be 
established by comparing total services without actually estimating a 
dollar value of those services. However, the values may not be 
comparable, for example due to changes in the scale of total services 
or the temporal pattern of replacement services. In this case, an 
adjustment factor reflecting the relative values should be included in 
the calculation of equivalencies. Alternatively, another measurement 
technique may be employed.
    It may be useful to consider a specific scenario where the habitat 
or species replacement cost method might be used. If ten acres of a 
habitat were completely destroyed and no recovery is expected through 
natural processes or restoration activities, the goal of the 
restoration program would be to provide a replacement project 
equivalent to the lost ten acres of habitat. However, since the 
replacement project may not provide baseline levels of services for 
several years at a minimum, the public will experience interim lost 
services for which they are entitled compensation. Additional acres 
will need to be replaced to make the public whole.
    In another context with ten injured acres of habitat, the resources 
and services may recover fully in five years with natural recovery, and 
this may be the most appropriate recovery option. In this instance, 
there will be no formal restoration program for this resource, but the 
compensation for the five years of losses prior to full recovery can be 
calculated in terms of the costs of a compensating restoration program. 
Such a program might consist of acquisition and creation or enhancement 
of habitat to provide a flow of services equivalent to the lost 
services equivalent to the lost services.
    Establishing the resource equivalencies necessary to ensure the 
proper level of compensation is a four-step process. First, the 
trustee(s) must quantify a total discounted measure of lost services 
over the full duration of the injury, taking into account the extent to 
which the resource and/or service will recover over time. These lost 
services can be expressed in a resource-time measure, such as lost 
``acre-years'' of services provided by an oiled wetland, where an acre-
year of services is the total level of services provided by one acre of 
wetland over the course of a single year. Factors to be considered in 
quantifying the level of services lost include, but are not limited to: 
The severity of the initial injury (i.e., did the injury result in a 
full or partial loss of services); the duration of injury; and the rate 
of recovery of services.
    The second step in establishing resource equivalency is to 
determine the total discounted measure of services provided by the 
proposed restoration or replacement projects over the full life of the 
relevant habitat or species. Again, these services may be expressed in 
a resource-time measure, such as acre-years. Factors to be considered 
in quantifying the level of services provided include, but are not 
limited to: the productivity of the replacement resource relative to 
the productivity of the injured resource but for the discharge; the 
amount of time required for the replacement resource to reach its 
maximum productivity level; and the life-span of the replacement 
resource. If the value of additional units of services provided by the 
restoration project is not comparable to the value of lost services, 
then an adjustment factor reflecting the relative value should be 
included in the calculation of equivalency.
    In the third step, the trustee(s) calculates the appropriate scale 
of the replacement project(s), such that the total discounted value of 
services provided by the replacement project is equivalent to the total 
discounted value of interim lost services due to the injury. The final 
step consists of the determination of replacement costs. Total 
replacement costs are obtained by multiplying the scale of the project 
(e.g., number of acres of wetlands to be created) by the unit cost of 
restoration or replacement, including acquisition, construction, 
maintenance, and monitoring costs. These unit costs can be obtained 
either from existing literature values or from experts in the field.

IV. Implementation Guidance on Calculating Compensable Values

A. Committed Use
    As stated in the proposed rule, damages are recoverable for all 
committed uses of injured natural resources and/or services. For the 
purposes of this proposed rule, committed uses include: (1) Any direct 
or passive use of the injured natural resource and/or service available 
to the public but for the discharge; and (2) any documented planned 
future use. The concept of committed use is intended to avoid recovery 
for purely speculative uses of injured resources and/or services. Any 
future use is considered a committed use if it is adequately documented 
through such things as permit application, purchase or investment 
agreement, engineering or architectural plans, etc. Because there are 
no behavioral records comparable to those that exist for direct uses, 
documentation of committed use is not required for valuing passive use 
losses and option values claimed under OPA as well.
B. Willingness To Accept and Willingness To Pay
    Humans derive both direct use and passive use values from the flow 
of services provided by natural resources. If the quantity or quality 
of a service is reduced or eliminated by a discharge of oil, the 
measure of damages to an individual is the change in the individual's 
utility or level of well-being, as measured in monetary terms. Economic 
analysis provides two exact monetary measures of any change in an 
individual's well-being: Willingness-to-pay (WTP) and willingness-to-
accept (WTA). Given the occurrence of a discharge of oil, WTP would 
measure the individual's willingness-to-pay to have avoided the injury; 
WTA would measure the amount the individual would require in order to 
be as well off (i.e., to have the same level of utility), given the 
injury occurred, as before the injury. To calculate the monetized 
change in an individual's WTP or WTA resulting from a resource injury, 
net willingness to pay or willingness to accept is calculated. Net 
willingness to pay or willingness to accept is total WTP or WTA minus 
the costs an individual incurs to use the resource services, including 
travel and time costs.
    An approximation for the exact measures of the change in utility or 
well-being is the Marshallian ``consumer surplus,'' the value of which 
is between WTP and WTA. Marshallian consumer surplus is the difference 
between the maximum sum of money an individual would be willing to pay 
for a good or service, as calculated from a Marshallian demand 
function, and the amount the individual is actually required to pay. 
The Marshallian consumer surplus is calculated directly from observed 
behavior in market or market-like transactions. This measure of value 
of a good or service incorporates the income effects of changes in its 
price or quality; for example, a reduction in price or an increase in 
quality would have the effect of increasing real buying power. As a 
result, Marshallian consumer surplus does not measure value from a 
fixed baseline level of utility. In contrast, the exact measures of WTP 
and WTA are so labeled because they calculate the monetized change in 
utility or well-being from a fixed baseline level of utility.
    The choice as to which criterion is more appropriate in a given 
context depends upon the allocation of the property rights. Because the 
government is holding natural resources in trust for the public, the 
WTA criterion is more appropriate as the measure of damages. The 
conventional wisdom in the academic literature regarding changes in the 
price of a commodity indicates that WTP and WTA are likely to be fairly 
close in value, with the difference depending directly on the size of 
the income elasticity of demand for the commodity whose price changes. 
However, it has recently been shown that in this context where the 
quality of public goods or services is reduced due to injuries caused 
by a discharge, the difference between WTP and WTA may be substantial 
if the public goods have few substitutes.
    In some circumstances it may be infeasible or impractical to 
provide reliable measures of WTA. In those circumstances, the more 
conservative measures of WTP or the Marshallian consumer surplus are 
appropriate for measuring damages. For example, WTA is very difficult 
to elicit from respondents in CV studies, and consequently may create 
greater empirical uncertainties than eliciting WTP. At present, 
recognizing that WTP provides a lower-bound estimate of WTA (for normal 
goods), NOAA recommends that the more conservative WTP criterion be 
elicited in CV studies at present. For the methodologies in which exact 
welfare measures, providing the monetized changes in individual 
utility, can be derived from the Marshallian models through analytical 
techniques, WTA and WTP measures are of equal reliability. In those 
circumstances, WTA should be used where feasible and practical.
C. Substitutability
    In calculating the diminution of value, the availability of 
substitute resources and/or services should be taken into account. For 
example, substitutes may exist for individuals who have lost or 
diminished use of a resource and/or service, such as a recreational 
site. Generally, the fewer substitutes available for a particular 
resource and/or service or the poorer the match of attributes between 
the injured and substitute sites, the greater is the lost value to the 
public. However, though substitute sites may exist, congestion at these 
sites will increase as they absorb displaced participants from the 
injured site. Consequently, the quality of the recreational experience 
at the substitute sites may deteriorate due to the discharge. Potential 
effects of congestion on reducing quality at alternate sites should be 
taken into account in the damage calculation.
    Incorporating the availability of substitute resources and/or 
services, for example in recreational demand models, may increase the 
cost and complexity of a damage assessment. Therefore, the additional 
cost and complexity should be undertaken only if the probable benefits 
from an increase in accuracy of the damage estimate are greater than 
the probable increase in damage assessment costs.
D. Uncertainty
    Uncertainty regarding the predicted consequences of restoration 
options and predicted supply and demand of natural resources and/or the 
services they provide should be addressed in the economic analysis of 
restoration alternatives and determination of diminution in values and 
documented in the Report of Assessment.
E. Discounting
    In calculating natural resource damages, the trustee(s) should 
discount the three components of a claim: (1) Interim lost value of 
injured resources pending full recovery, also referred to as 
compensable values; (2) restoration costs; and (3) damage assessment 
and restoration costs already incurred. Discounting is a widely used 
economic procedure that allows the trustee(s) to convert past and 
future damage sums to current dollars. (Discounting expenditures from 
the past to the present is also referred to as capitalizing or 
compounding forward past expenditures.) This conversion is necessary 
for the trustee(s) to be able to present a claim for a ``sum certain.'' 
NOAA recommends that the trustee(s) use the U.S. Treasury borrowing 
rate on marketable securities of comparable maturity to the period of 
analysis to discount each of the components. The reference date for the 
discounting calculation is the date at which the claim is presented.
    Note that discounting the components of the claim is separate from 
calculating the pre-judgment interest. Section 990.14 of the proposed 
rule, as required by section 1005(b) of OPA, provides for pre-judgment 
interest and post-judgment interest to be paid at a commercial paper 
rate, starting from 30 calendar days from the date a claim is presented 
until the date the claim is paid. (For a discussion of pre-judgment 
interest see the earlier preamble discussion of Sec. 990.14 of this 
proposed rule.)
    Logical consistency requires that the analysis be conducted either 
in terms of nominal values or in constant dollars. The nominal Treasury 
rate shall be used if the components of the claim are denominated in 
dollar values of the year a loss or expenditure is to occur (i.e., in 
nominal terms). Otherwise, if components of the claim are denominated 
in constant dollars (of the discounting reference year), then real 
Treasury rates are to be used. The real rates are calculated by 
removing expected inflation over the period of analysis from nominal 
Treasury interest rates. To characterize expected inflation, NOAA 
recommends the trustee(s) use the Administration's assumption about the 
rate of increase in the Gross Domestic Product deflator for the period 
of analysis (as reported in the Budget of the President). For projects 
or programs that extend beyond the six-year budget horizon, the 
inflation assumption can be extended by using the inflation rate for 
the sixth year of the budget forecast. The logic of the choice of the 
U.S. Treasury rate is discussed for each component of the claim in turn 
below.
    1. Compensable values. The compensable values component of the 
damage claim reflects the lost consumer surplus, lost fees, and lost 
economic rent (that could have been charged by the government for use 
of a public resource) resulting from injuries caused by the discharge. 
The losses may occur from the time of the discharge over many years 
into the future. To value these losses, the trustee(s) must determine 
how much compensation consumers would require as of the date of the 
claim presentation to make them as well off as they would have been, 
but for the discharge. Because the purpose of the litigation is to make 
the public whole, the relevant discount rate is the consumers' rate of 
time preference, which is the rate of interest at which an individual 
would be indifferent between consuming goods or services in the present 
and postponing consumption to a later date.
    Market interest rates available to consumers provide an estimate of 
the consumer rate of time preference for lost services. To identify the 
discount rate that reflects the ``pure'' time preference, one looks to 
the yield on a ``safe'' investment with little or no default risk, such 
as the U.S. Treasury rate.
    2. Estimated restoration costs. Most restoration projects will be 
carried out over a period of years. The effectiveness and ultimate 
success of a restoration strategy depends on the ability of the 
trustee(s) to conduct restoration activities until the resource 
recovery is complete, including post-construction maintenance and 
monitoring operations. If funds are insufficient to cover the full 
costs of restoration, natural resource recovery will be incomplete or 
will be further delayed, and the public will be deprived of full 
compensation for the injuries. The recommendation that trustee(s) use 
the U.S. Treasury rate for marketable securities of comparable maturity 
to the period of analysis is predicated on the assumption that this 
rate of return is available to the trustee(s) for investment of 
settlement monies.
    If legal and/or institutional constraints prevent investment of 
settlement monies yielding the U.S. Treasury rate, then it is incumbent 
upon the trustee(s) to structure the damage claim to ensure that 
sufficient funds will be available to fund the entire set of 
restoration activities. One option is to calculate the discounted value 
of this component of the claim, using an alternative discount rate that 
represents the yield on settlement monies available to the trustees. An 
alternative option is to structure a multi-year schedule for claim 
payments to ensure it provides the cash flow for each year required for 
planned expenditures.
    3. Past Costs Incurred. The third category of damages is damage 
assessment and emergency restoration costs, which may have been 
accruing from the time of the discharge. To calculate the present value 
of these costs at the time the claim is presented to the RP, the 
trustee(s) will discount forward (also referred to as capitalize or 
compound forward) the costs already incurred. Note that if the trustees 
are discounting damages denominated in the year the claim is presented 
(i.e., constant dollars) using a real Treasury rate, then expenditures 
from previous years must also be translated to dollars of the claim 
year using an appropriate inflation index, prior to discounting (or 
compounding forward). Because the rate of interest employed as the 
discount rate for past costs incurred should reflect the opportunity 
cost of the money spent, NOAA recommends the U.S. Treasury rate for 
discounting this component of the claim as well.
    U.S. Treasury 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 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 (for translating the nominal 
Treasury rates to real terms for future years) 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 are 
reported in regular updates of Appendix C of Circular No. A-94, 
available from the OMB Publications Office (202-395-7332).

Response to Comments

``Value of a Claim''

    Comment: Commenters were divided over interpretation of the meaning 
of ``diminution of value'' within the natural resource damage 
assessment context. Some suggested that there was no clear indication 
provided, either by the courts or the Congressional Conference Report, 
as to the intent within CERCLA and OPA concerning measurement of 
diminution of value. Others disagreed, finding specific guidance on 
this matter. Two commenters quoted the ruling by the court in Ohio v. 
DOI to mean that values should not be limited to strictly consumptive 
use values, but also should include non-consumptive use values.
    Response: NOAA finds that there is ample evidence, from the 
Congressional Conference Report (H. Conf. Rep. No. 653, 101st Cong., 2d 
Sess. at 108), and the D.C. Circuit Court decision on Ohio v. DOI, to 
believe that ``diminution of value'' refers to the standard for 
measuring resource damages cited in the D.C. Circuit Court decision on 
Ohio v. DOI. This opinion defines ``use values'' broadly, to encompass 
both direct use and passive use values that can be reliably measured. 
Failure to include all relevant categories of damages in a claim would 
understate the true loss to the American public attributable to a 
discharge of oil. NOAA concurs with commenters that recoverable losses 
include direct consumptive use losses (for example, to hunting or 
fishing activities), direct non-consumptive use losses (for example, 
bird watching or swimming activities), and passive use losses (for 
example, existence values).
    Comment: Some commenters argued that passive use values should be 
included in damage assessment, because exclusion would understate the 
true cost of exposing natural resources to environmentally risky 
activities and induce systematic reallocation of environmentally risky 
activities to those environments that generate greater passive use 
values relative to direct use values. Another commenter stated that if 
passive use values are not considered in the determination of total 
value of the resource, it is more likely that the cost of restoration 
will be inappropriately characterized by the RP(s) as ``grossly 
disproportionate'' to the value of the resource being restored.
    Other commenters contended that in some cases the cost of trying to 
measure the passive use losses may well exceed the potential total 
value of passive use damages, and hence the effort would not be 
worthwhile and would violate the reasonable cost test.
    Response: As previously stated, under OPA, and in accordance with 
the Ohio decision, passive use values are a component of compensable 
values that are necessary to compensate fully the public for its losses 
resulting from a discharge and to return the public, as nearly as 
possible, to the level of well-being it enjoyed before the discharge. 
By determining total compensable value, the natural resource trustee(s) 
avoids serious resource misallocation effects. When the true value of 
the loss is positive, but not known with certainty, the use of zero as 
a measure of that positive loss will be in error, creating downward 
bias in the damage estimate by understating the true social loss. The 
result of such a systematic bias will be: (1) Smaller than appropriate 
recovery for, and thus investments in, restoration, rehabilitation, 
replacement, or acquisition of equivalent resources; (2) smaller than 
appropriate investments in spill prevention, mitigation, and clean-up 
technology; and (3) more intensive use of the natural resources of the 
nation than appropriate. Thus, it is important that the total 
compensable value be determined to rebut an argument that the cost of 
restoration is grossly disproportionate to the value of the resource 
being restored. However, as discussed earlier in this preamble, NOAA is 
not adopting a strictly quantitative approach to the grossly 
disproportionate determination. Rather, a number of qualitative factors 
must also be considered.
    The decision to include passive use value estimates as part of 
total value in a damage assessment should be predicated upon the 
probable magnitude of passive use losses associated with a specific 
discharge, as well as on the specific attributes of the injured natural 
resources. If the expected value of the passive use loss is small 
relative to the cost of estimating it, then its inclusion in the damage 
assessment may not be justified.
    Comment: A number of commenters asserted that passive use value 
damages should only be assessed for permanent or long-lasting injuries 
to unique natural resources--atypical conditions for discharges of oil. 
They argued there is no need for compensation for lost passive use 
values when the resource will fully recover and when compensation will 
be paid for direct use losses pending restoration. They further argued, 
even when significant lost use values are present, the potential for 
significant lost passive use values is not very great. One commenter 
stated that this criterion applies most obviously in the case of 
bequest value when resources will be restored in a reasonable time 
frame and so future generations will not be denied the bequest. One 
commenter stated that there is no credible evidence that inherent or 
existence values are likely to be significant even if the resource is 
unique and non-reproducible and the injury is irreversible.
    Response: NOAA has found no empirical evidence to suggest that a 
natural resource must be unique (i.e., have few substitutes), non-
reproducible and/or permanently injured in order to have significant 
passive use values. NOAA recognizes that in cases involving temporary 
injury, individuals may not experience a significant sense of loss 
because the resource's existence is not permanently threatened. 
Further, after restoration, rehabilitation, replacement, and/or 
acquisition of equivalent resource, the resource will be available for 
future use and may be left as a legacy to future generations. However, 
there are cases where the death of individual members of a species may 
cause a significant loss in passive use values even though species 
levels may return to baseline. While complete recovery of an injured 
resource or service may result in lower passive use losses than 
otherwise, there is no evidence to suggest that compensable passive use 
losses do not exist in the interim pending recovery. The extent and 
magnitude of the losses will depend on the restoration alternative 
chosen, biological and ecological factors, including availability of 
substitute resources, and the type and extent of the original injury.
    Comment: Several commenters expressed concern as to whether 
``option values'' and/or ``existence values'' could be affected by a 
discharge, if the injured natural resources were ultimately restored 
through natural recovery or restoration. One commenter suggested that 
option values arise because of uncertainty about future availability 
and future demand for the resources in question. Thus, the shorter the 
elapsed time between injury and restoration, the less such uncertainty 
will matter. Similarly, several commenters suggested that passive use 
losses may be small or insignificant in situations where the loss in 
services is only for a short period of time until restoration or 
natural recovery is completed. Therefore, there is no reason to include 
passive use losses in a natural resource damage assessment.
    Response: Regardless of whether complete recovery occurs naturally 
or through human intervention (i.e., restoration), there may be a loss 
or diminution of passive use values during the time period from the 
injury through recovery. For example, in the case of ``option'' value, 
the precise timing of a decision to exercise the option to use the 
resource may be unspecified, therefore the potential for access must be 
continuously available to maintain the full value of the option. Absent 
the uninterrupted opportunity to exercise the option to access the 
resource, the ``option'' is diminished and a loss accrues. Likewise, 
even when complete restoration to baseline conditions is possible, 
during the time between injury and recovery, the resource, as defined 
prior to the discharge, effectively does not exist. Therefore, 
existence value may be diminished. In addition, individuals may 
experience a loss in well-being because animal deaths occurred through 
anthropogenic causes. The size of passive use value losses is an 
empirical question that can only be answered with further empirical 
studies in these cases.
    Comment: One commenter noted the difficulty of disaggregating total 
values into direct use and passive use components.
    Response: NOAA believes that a consensus is emerging in the 
economics community that the appropriate conceptual approach for 
valuing natural resources is to measure the total value of the 
resource, which includes both direct use and passive use values. 
Contingent valuation is the only methodology currently available to 
provide estimates of combined direct use and passive use value. When 
other valuation studies are included in a damage assessment along with 
a CV study, the total damages are to be calculated in such a way as to 
avoid possible double-counting for compensable values between estimates 
from the contingent valuation study and from the direct use valuation 
study(ies).
    Comment: Several commenters noted that OPA prohibits double 
recovery in the damage assessment claim. They claimed that CV as 
currently applied results in double recovery.
    Response: NOAA believes that direct use and passive use losses are 
additive and the inclusion of each in the damage assessment does not 
result in double recovery. However, the potential for double recovery 
does exist when a CV study and a direct use study both elicit direct 
use values in the same category in samples covering the same 
usergroups. For example, if the trustee(s) considers use of both CV-
based and travel cost method-based estimates of the value of 
recreational fishing losses, double recovery could occur if the 
relevant CV study elicited total value of the resource and its sample 
included recreational anglers. Double recovery can be avoided through 
careful preparation of the damage claim.
    Comment: One commenter suggested that CV cannot be justified on the 
grounds that it is necessary to provide incentives for deterrence of a 
discharge, without a careful analysis of the entire system of 
regulations and other incentives that a potential RP faces.
    Response: As discussed earlier, OPA's incentives to avoid 
environmental injuries are dependent upon knowing what the potential 
liability from discharges is likely to be. Without the availability of 
CV as an assessment tool, that full potential liability cannot be 
estimated.
    Comment: A number of commenters discussed passive use values--some 
questioning the inclusion of such values by suggesting that they are 
poorly defined while others felt that such valuation has no relevance 
because the environment is priceless. Other commenters supported 
inclusion of passive use values.
    Response: NOAA notes that there is a general consensus in the 
economic community that passive use values exist; there is no basis in 
economic theory to suggest otherwise.
    Comment: One commenter noted a continuing debate over defining 
passive use values. The commenter suggested that any judgment on the 
definition of passive use values in the rule is premature. Rather, the 
rule should allow analysts to make use of emerging, state-of-the-art 
theories and techniques for defining and measuring passive use values.
    Response: NOAA believes that passive use values are well-defined 
and are an appropriate component within a damage assessment 
determination of compensable values. To facilitate consistent usage, 
NOAA defines passive use values in the definition section of subpart A 
of the proposed rule. As stated in the preamble, the proposed rule 
allows the trustee(s) broad discretion in the selection of valuation 
methods specifically to allow for the use of new methods of valuation 
as they become recognized and accepted in the economics profession.
    Comment: A number of commenters contended that the relevant law, 
the Ohio decision, and the precedents do not require that passive use 
value damages be calculated by CV or any other methodology and that 
nothing in OPA mandates use of CV to impose liability for potential 
impairment of passive use values.
    Response: NOAA believes that the Ohio decision should be considered 
in this rulemaking because the natural resource provisions of OPA are 
patterned after those of CERCLA. In that decision, the circuit court 
upheld CV as an allowable method for calculating passive use damages. 
The trustee(s) has the discretion to use CV where appropriate.
    Comment: One commenter stated that if NOAA does not recognize the 
practical limits on the ability of the marine industry to insure 
against speculative losses, the result will be awards that the industry 
cannot afford to pay. Similarly, other commenters noted that the 
financial resources of the insurance market and individual shipowners 
should govern the size of recoverable claims under OPA.
    Response: NOAA disagrees. In the statutory language of OPA, the 
Congress of the United States established a standard of strict 
liability and the objective of full compensation for all attributable 
loss. NOAA does not have discretion to change these requirements and 
substitute others.
    Further, NOAA believes that economic theory supports a 
comprehensive definition of the social cost of a discharge when 
identifying cost elements to be included in an assessment. 
Alternatively, if damage claims systematically understate the size of 
compensable losses resulting from discharges of oil, society will 
underinvest in preventing damages from future discharges.
    Comment: Numerous commenters indicated that damages under OPA 
should be compensable, not punitive.
    Response: NOAA concurs that natural resource damages under OPA are 
compensatory rather than punitive.
    Comment: One commenter stated that the existence of substitute 
sites in an evaluation of lost resources becomes irrelevant if the 
damage was caused by negligence.
    Response: NOAA believes that there is no theoretical reason to 
separate the estimation of damages caused by negligence from those 
which were not. (The discussion of how to treat substitutability among 
resources appears below.)
    Comment: Several commenters suggested that a trustee(s) should be 
required to select the ``minimum social cost'' restoration alternative, 
including natural recovery, when selecting a restoration approach.
    Response: NOAA disagrees that this will be true for all cases. 
These commenters are essentially recommending that NOAA adopt the 
``lesser-of'' rule contained in the natural resource damage assessment 
regulations promulgated by DOI, and rejected by the court in Ohio v. 
DOI. This rule specified, in essence, that the trustee(s) should choose 
to do restoration projects only if restoration costs were less than the 
interim lost value avoided by the restoration project. Consequently, 
cost-effectiveness and benefit/cost comparisons are factors in 
restoration alternatives analysis, as outlined in subpart G of the 
draft regulations and in the Restoration Guidance Document, but are not 
the sole factors to be applied in choosing among competing restoration 
alternatives.
    Comment: A few commenters suggested that the value of the claim 
should be the cost of the most cost-effective restoration alternative.
    Response: NOAA disagrees. Section 1006 of the OPA Conference Report 
(H. Conf. Rep. No. 653, 101st Cong., 2d Sess. at 108 (Aug. 1, 1990)) 
provides a clear mandate to NOAA to ``establish a system for assessing 
damages to natural resources, including a measure of damages equal to 
the costs of restoration, replacement or acquisition of equivalent 
resources, and the diminution in value of those resources pending 
restoration'' (emphasis added). Moreover, the appropriate restoration 
approach to include in a damage claim may not be the one that is most 
cost-effective because the trustee(s) must consider a number of factors 
when selecting restoration options. It is important to note that cost-
effectiveness only allows ranking of alternatives that accomplish the 
same increase in services at the same rate over time. Other criteria 
are necessary to compare alternatives that accomplish different 
outcomes.
    Comment: Some commenters indicated that actions taken by the RP(s) 
in connection with a discharge may be beneficial to the environment 
and/or the local economy and thus should be considered as an offset to 
damages resulting from the discharge. For example, one commenter argued 
that passive use and/or nonmarket losses should not enter into damage 
assessments because for every category of persons suffering a loss as a 
result of a natural resource injury, there will be other individuals 
who gain. Other commenters said that such ``offsetting'' is not 
authorized by OPA and that the trustee(s) must not consider any such 
actions.
    Response: NOAA agrees that offsetting public damages against 
private gains is not authorized by OPA. The scope of a natural resource 
damage assessment is limited to the losses to the public due to injury 
to public trust natural resources--losses that are not actionable under 
private actions. To the extent that some actions taken by the RP(s) may 
mitigate the injuries to the environment and speed restoration of the 
resources, the impacts will be lessened, as will the damages; 
consequently the size of the damage claim will be smaller than it would 
have been if the RP(s) had not taken the mitigative actions.
    However, damage claims brought by public trustees do not include 
the positive or negative effects on private parties, such as reduced 
income accruing to local recreation-related businesses due to declining 
tourism or increased income to spill response firms. Further, to the 
extent that such expenditures are simply shifted from one location to 
another, the gain of businesses in one location is the loss of 
businesses in another and the net effect on the private parties 
throughout the whole country is essentially zero.
    Comment: Several commenters were concerned about ``double 
counting'' or ``double recovery'' within the damage assessment process. 
Each observed that OPA does not allow double recovery of damages, and 
proposed that the NOAA rules explicitly disallow such claims.
    Response: NOAA agrees that no double recovery is permitted under 
OPA.
    Comment: One commenter raised the issue of ``rents'' within the 
compensable claim. One commenter recommended that the regulations state 
that the trustee(s) cannot collect forgone resource rents accruing to a 
private party(ies), even if that rent is generated from the private 
party's use of public resources.
    Response: NOAA does not concur. In the event of a discharge covered 
under OPA, the trustee(s) is entitled to recover from the RP(s) the 
total diminution in value of lost or diminished services from affected 
public trust resources that is not recoverable by a private party. One 
part of the diminution in value of affected resources is the resulting 
reduction in economic rent, which represents the fee or price the 
trustee(s) could charge for use of the public trust resource. The loss 
in value created by the public resource occurs whether or not the rent 
was collected from the private parties before the discharge. Unless 
such rents are recovered under a private action, the trustee(s) is 
entitled to recover them.
    Comment: A number of commenters suggested the OPA rules should 
exclude recovery of damages for injury to privately owned natural 
resources, or that recovery should be limited to those natural 
resources in which the government has a dominant interest.
    Response: NOAA agrees that recoveries for injuries to private 
resources shall not be included in any estimate of the public damage 
claim under OPA, and shall be accomplished through private causes of 
action. NOAA recognizes, however, that trust resources (e.g., birds) 
can use private resources (e.g. land). To the extent that an injury to 
a privately-owned natural resource causes injury to a trust resource, 
the trustee(s) can recover for the injuries to the trust resource.
    Comment: One commenter noted that aesthetic injury should be 
considered in addition to physical impacts. The long-term assessment 
should account for impacts, too.
    Response: NOAA believes that, if the aesthetic injury affects the 
physical experience of users or affects passive use values, then by 
definition this is a compensable loss.

``Valuation Methodologies''

    Comment: Several commenters reflected the position that, because 
each discharge and the injury it causes are unique, no single procedure 
or standard economic equation could or should apply to all situations. 
One of these commenters recommended that an analyst should have the 
flexibility to examine each valuation problem on a case-by-case basis, 
and determine which type of valuation technique is likely to generate 
the most valid and useful results.
    Response: NOAA agrees that flexibility in the determination of 
assessment procedures is important. NOAA is therefore providing four 
alternative assessment procedures from which the trustee(s) may choose. 
In addition, parallel assessments, in which the valuation of damages 
for one incident employs different assessment procedures, are permitted 
under OPA provided there is no double recovery of damages. One example 
of parallel assessments would be supplementing Type A model 
calculations with expedited damage assessment calculations for service 
losses that are excluded or not fully estimated in the Type A model. In 
addition, within the comprehensive damage assessment procedures, 
allowable calculation procedures range from benefits transfer 
procedures to original studies conducted with site-specific data.
    Comment: Some commenters expressed the opinion that monetary 
measures of value, in particular for natural resources and related 
services, must be empirically ``stable'' in order to be characterized 
as ``well formed'' value preferences. Others argued that no such 
``stability'' criterion is required for such values to be theoretically 
consistent with consumer theory.
    Response: NOAA notes that monetary measures of economic values for 
all goods and services, including natural resources and services from 
natural resources, are derived in theory from consumer preference 
orderings. From an individual's complete preference ordering, one can 
derive the trade-offs individuals are willing to make between 
alternative bundles of goods and services, holding all else constant. 
It is also possible to determine monetary measures of value. Where 
consumer preference orderings are stable, but an individual's 
circumstances change because the price, quality or availability of 
other goods changes, then the individual's monetary measures of value 
are expected to adjust as well.
    Comment: One commenter noted that since Congress intended that full 
compensation for natural resource damages be awarded, NOAA's 
regulations should not limit available economic valuation methodologies 
and should allow the trustee(s) broad discretion in choosing between 
currently available standard methodologies and new methodologies that 
may become available and accepted. The commenter stated that, while 
minimum standards of quality might be useful, regulations should not 
``lock in'' the current state-of-the-art as improvements in nonmarket 
valuation techniques continue to occur at a rapid pace.
    Response: NOAA stresses that the trustee(s) should use all 
applicable, reliable economic value measurement techniques in order to 
adequately assess all compensable values to be incorporated in the 
damage claim. As stated earlier, NOAA is determined to take no action 
that would arbitrarily preclude the use of new methodologies, as they 
become recognized and accepted in the economics profession.
    Comment: Other commenters warned that exclusion of nonmarket 
techniques may result in undervaluing the effect of oil pollution on a 
wide range of goods and services such as real estate values, 
recreational use and wildlife viewing. They argued that ignoring such 
values leads to distorted and incomplete damage assessments.
    Response: NOAA concurs with the suggestion that the trustee(s) 
should have broad discretion in selecting the methodologies that will 
be employed in performing the damage assessment, because each discharge 
will be unique in some respects. The nonmarket valuation techniques, 
including Contingent Valuation (CV), Travel Cost Method (TCM) and 
Hedonic Price Model (HPM), would appropriately be among the range of 
methodological options available to the trustee(s). Each of the 
identified methodological approaches values injuries to different 
resource services. As a result, for the most part the methods are not 
substitutes for one another; the choice of which to use depends upon 
the injuries to be valued in the given application.
    Comment: A few commenters argued that all nonmarket valuation 
techniques are inherently less reliable than market-based approaches. 
Other commenters supported CV, as well as TCM, and HPM. Many of the 
economic methodologies for estimating the diminution in value of 
resource services are nonmarket methodologies that do not have a long 
history of experience to indicate when and how they can be applied to 
produce reliable estimates in individual cases. They noted these 
valuation techniques have been shown to produce reliable estimates of 
WTP, when ``appropriately'' applied. Another commenter noted empirical 
market-based valuation techniques are subject to many of the same 
potential problems as nonmarket-based valuation techniques, such as 
conceptual difficulties, data limitations, and accuracy of statistical 
estimation techniques.
    Response: NOAA does not support the conclusion that all nonmarket 
valuation techniques are inherently less reliable than market-based 
approaches. In fact, it is widely recognized that market-based 
valuation techniques are potentially subject to many of the same 
criticisms and weaknesses attributed to nonmarket techniques. In 
addition, it is not possible to use market valuation techniques for 
natural resource services that are not traded in markets.
    NOAA observes that CV, TCM, and HPM techniques have each been 
successfully employed in a wide range of nonmarket valuation 
applications, and have undergone extensive scrutiny. NOAA finds no 
justification for arbitrarily ranking, nor unilaterally precluding the 
use of, any valuation methodology that is regarded by the trustee(s) as 
useful and appropriate to the specific injuries of a given discharge of 
oil. The specific characteristics of the discharge event and the nature 
of the injuries to be valued should guide the choice of valuation 
method.
    Comment: One commenter recommended that NOAA establish criteria or 
guidelines to ensure that estimates of the diminution in use value of 
injured resources are valid and reliable. Further, NOAA should provide 
criteria and guidance to the trustee(s) regarding the selection and use 
of such methodologies to ensure that the value estimates are valid, 
reliable, and accurate.
    Response: NOAA, in the proposed rule, has stated that the 
trustee(s) should follow the best practices established in the 
literature. This recommendation is generally the best guidance NOAA 
could provide. However, where new information has been made available 
to NOAA as part of the rulemaking, that guidance has been provided, 
e.g., guidance concerning CV.
    Comment: Two commenters questioned the validity of the hedonic 
price model (HPM) in discharge cases because ``the environmental value 
of a site is difficult to isolate in comparison studies'' due to the 
innumerable other variables that affect property values.
    Another commenter noted that impacts are typically of short 
duration and unlikely to cause any measurable change in property 
values. Further, where property value changes are observed and are 
solely caused by a discharge of oil, they would represent otherwise 
compensable private losses, not natural resource damages. The commenter 
argues that any such private losses would be poor indicators of a 
public loss.
    Response: NOAA agrees that the type of injuries HPM is designed to 
value may not be significant in most discharges. Most discharges will 
have only small effects on housing prices. Even where there are 
effects, it may be difficult to estimate them using standard 
econometric methods because so many factors influence housing prices, 
and many are correlated. However, the HPM technique is reasonably 
straightforward to apply and may be useful in certain situations. 
Therefore, NOAA supports the inclusion of the HPM in the list of 
available value measurement techniques.
    One of these commenters misinterpreted the use of HPM in damage 
assessments. The technique is not used to estimate the private property 
loss to consumers; rather, the method takes into account the fact that 
the quality of local environmental resources (e.g., water, air, 
biological resources) is a factor in the value of property. Further, 
because local environmental quality is part of any purchase of private 
property, environmental quality is considered an attribute of the 
property. As a result, the value of the environmental quality is 
reflected in property values. Hedonic valuation analysis uses the 
reduction in property prices of local residents as a measure of a 
portion of the reduced value of public resources due to the discharge.
    Comment: Another commenter argues that HPM is based upon 
questionable assumptions, such as the ideas that households continually 
reevaluate their location decisions, that decisions are based upon 
current environmental quality, and that a family can easily move its 
entire household in response to nearby natural resource damage.
    Response: The HPM is predicated on the assumption that the 
preferences for nonmarket goods and services can be revealed through 
directly observable transactions in related markets. To the extent that 
the housing transaction costs are high, individuals may not respond to 
marginal changes in attributes of housing. As a result, the method is 
likely to understate the sensitivity of individual's values to the 
attributes.
    Comment: One commenter strongly recommends that hedonic property 
damages can be determined by following normal tort (e.g., trespass) 
type damage procedures.
    Response: Given the range in approaches by various jurisdictions to 
property and natural resource damages, it is difficult to determine 
what is meant by ``normal'' tort procedures. NOAA believes that its 
approach is consistent with that envisioned by OPA.
    Comment: One commenter was concerned that an earlier Notice 
suggests that single-site travel cost models do not account for 
substitute sites, but multiple-site models do.
    Response: NOAA did not mean to imply that single-site travel cost 
models are incapable of treating substitutes. In practice, however, the 
collinearity among travel cost (price) and environmental attributes of 
the set of substitute sites substantially limits the number of 
substitutes that can be incorporated in a single equation model.
    Comment: One commenter stated that the rules should emphasize that 
the travel cost model, for the purpose of measuring lost use value, is 
only a technique for estimating interim lost value to supplement 
restoration/replacement value during the time period after the 
discharge and before restoration. The commenter noted that because 
restoration efforts in most cases will gradually reduce the natural 
resource injury from its peak within a short time after the discharge, 
TCM damage estimates should be adjusted for the improvement factor, and 
should be phased out entirely when restoration is complete.
    Response: NOAA concurs that, as an injured resource (say a 
recreational fishery) recovers through time, the quality of the 
services will generally increase. As the quality of the recreational 
fishery improves toward baseline, the value per fishing trip will tend 
to increase and as a consequence, so will the demand for fishing. For 
versions of the TCM in which recreational demand is a function of both 
the travel cost and the environmental quality of the site (such as 
catch rate), the model may be used to predict these changes in value 
and participation so long as data on expected environmental quality 
improvements (such as the increase in catch rate) during the recovery 
period are available. When the relationship between quality and 
participation is not explicitly modeled, and the TCM only predicts 
total participation at the site, adjustments in the damage calculations 
will be necessary as participation returns to baseline. NOAA concurs 
that the interim lost values are calculated from the time of the 
discharge until restoration is deemed complete by the trustee(s).
    Comment: Two commenters noted problems with TCM. One said TCM 
provides estimates of the value of a site as a whole and does not 
measure the impact of relatively slight changes in the availability of 
natural resources. Another indicated visitors may lack information or 
have a misconception about a particular site, which will skew the 
resulting data. Another noted it is also very difficult and ultimately 
ambiguous to attempt to measure lost opportunity costs, which depend on 
each individual's wage rate as well as his/her ability and inclination 
to work during travel time. Also, the commenter notes there is an 
unsettled controversy over whether individual data on travel cost are 
better than zonal aggregation of travel costs.
    Response: NOAA recognizes the limitations in applicability of the 
TCM. The greatest disadvantage of the TCM, and other indirect 
techniques as well, is that it cannot be employed unless there is some 
easily observable behavior that can be used to reveal values. Advances 
in the TCM incorporating multiple-site visits, improved models of the 
value of time, and the availability of substitutes continue to broaden 
the range of this measurement technique. In addition, the economics 
profession has developed procedures for valuing changes in 
environmental quality of a site, in addition to valuing access to a 
particular site. Random utility models, a multi-site extension of TCM, 
can value changes in quality at sites without requiring observed 
participation levels. This feature is useful, because for sites in 
which recovery is expected to occur over a long period, it will not be 
feasible to collect site-specific data through the full period of 
recovery within the time frame of the damage assessment.
    In prevailing economic theory and practice, it is assumed that 
individuals' behavioral responses are derived from their personal 
perceptions of reality. These behavioral responses provide the basis 
for valuation. Therefore, if a discharge of oil produces an injury to a 
site, it is not necessary that a user know with scientific certainty 
what the specific extent of the injury has been. If the consumer 
perceives that the value of the site has been diminished as a result of 
the discharge, there has been a reduction in utility, and thus a 
potentially compensable loss. If additional information eventually 
reduces the perception and experience of loss, then the damages will be 
reduced accordingly. However, past losses derived from uncertainty 
regarding consequences of a discharge may still be a compensable loss. 
To the extent that individuals are unaware of injuries to resources, 
their responses may understate the values they might express with full 
information. Since these individuals will most likely eventually 
experience the service losses (though they be unaware of the cause), 
these future losses should be estimated and included as compensable 
values.
    Comment: Two commenters stated TCM will be superior to HPM in most 
cases.
    Response: NOAA contends that both the TCM and HPM have their 
advantages and disadvantages, and are suited to different 
circumstances. NOAA finds that both models should be considered for 
potential use in damage assessment.

``Contingent Valuation Methodology''

``General''

    Comment: Several commenters stated that compensatory natural 
resource damage assessment is all that is included in OPA. They claimed 
that CV as currently applied has such an upward bias as to be punitive.
    Response: Under OPA, the compensatory framework includes 
calculations of both direct use and passive use values. NOAA has found 
no empirical evidence to support the contention that CV measures of 
passive use values are so upwardly biased as to be punitive.
    Comment: A number of commenters contended that authorizing the 
application of unreliable methodologies such as CV for measuring 
speculative elements of loss, such as theoretical passive use damages, 
even under limited circumstances, will result in increased litigation 
costs because the RP(s) will be more likely to go to trial on the 
grounds that CV will significantly overstate passive use damages.
    Response: The use of CV, in and of itself, does not promote 
litigation. The potential for litigation depends upon the nature and 
quality of the damage assessment and the litigious nature of the 
trustee(s) and RP(s). A CV study that is carefully constructed, 
administered, and analyzed should not meet with the skepticism that 
many past CV estimates have received.
    Comment: One commenter stated that the use of CV is inconsistent 
with the general law of damages. That commenter contended that a 
decision to employ CV measures of passive use losses would invite wider 
use of CV, with potentially serious repercussions for the legal system 
and could lead to speculative claims like a claim for harm due to the 
death of a friend.
    Commenters further compared traditional tort law and the natural 
resource damages under OPA. These commenters noted that imposing 
liability for natural resource damages based upon CV studies for 
passive use values does not further the public's interest in preserving 
and restoring publicly owned natural resources. Additionally, these 
commenters stated that liability under OPA is limited to the costs to 
restore or replace injured resources, and that any passive use values 
assessed above those costs are punitive damages. These commenters also 
noted that even if OPA authorized such damages, tort law actions 
generally do not allow damages for losses that cannot be determined 
with sufficient evidentiary reliability and economy.
    In contrast, other commenters stated that recovery for passive use 
values is not punitive since OPA specifically recognizes two components 
of the damage figure--costs to restore, replace, rehabilitate, or 
acquire the equivalent of the injured resources and diminution in value 
pending that restoration. Failure to include passive use values in a 
natural resource damage claim under OPA would, in fact, be a violation 
of law. Also, these commenters noted that there is no requirement in 
private tort law that the damages must be proven with mathematical 
precision and that difficulty in determining damages is not a bar to 
their recovery.
    Response: Although NOAA observes that certain claims, such as those 
for emotional distress, etc., are recognized by the American judicial 
system, it also points out that it is not the role of this rulemaking 
to speculate whether CV will gain acceptance in areas of the law other 
than that dealing with natural resource injuries. Because OPA 
explicitly includes diminution in value as part of the damage claim for 
natural resource injuries, damages under OPA are not limited to the 
costs to restore, rehabilitate, replace, or acquire the equivalent. As 
stated elsewhere in this proposed rule, the OPA compensatory framework 
includes both direct use and passive use values. Thus, the inclusion of 
passive use values in a damage claim cannot be considered punitive. 
Rather determination of passive use values furthers the public interest 
by ensuring adequate compensation to restore, rehabilitate, replace, or 
acquire the equivalent of the injured resources.
    As indicated in this rule, CV is a valid, proven technique when 
properly structured and professionally applied, and as such is an 
acceptable method for use by natural resource trustees. Further, use of 
CV to measure passive use values has been sanctioned in the Ohio 
decision. As stated earlier, NOAA believes that CV studies of passive 
use values can produce reliable estimates of damages. In cases where 
passive use values cannot be estimated at reasonable costs, they may be 
omitted from the damage claim.
    Comment: One commenter stated that assessment of damages for 
impacts on existence or option values is inappropriate because no 
restoration effort will serve to avoid this claimed impact. Therefore, 
it is an irremediable element of the event and constitutes a penalty.
    Response: NOAA does not agree that impacts to existence or option 
values are an irremediable element of a discharge of oil unless 
restoration, replacement, or rehabilitation of the injured resources 
(and thus services) is impossible. Liability is for foregone direct use 
and passive use values during the interval from the discharge to 
complete recovery. Should recovery be impossible, these losses are, by 
definition, irremediable. Such losses are, nonetheless, compensable 
under OPA and do not constitute a penalty. Recovery for such losses can 
be used to acquire the equivalent of the injured resources.
    Comment: One commenter recommended that the federal government 
produce standard damage assessments for a few specific reference 
discharges of oil, either hypothetical or actual, ranging from small to 
large. These standard valuations could be generated by any method, 
including through a jury of experts. These benchmarks could serve as 
reference points for later CV studies. That is, when a damage 
assessment is required, surveys could be used to elicit answers to 
questions like: ``Would you pay [much more, more, about the same, less, 
much less] to prevent this spill than you would to prevent Standard 
Spill A?''
    A few commenters suggested as an alternative to using CV to 
estimate interim lost values, that NOAA consider establishing a range 
of pre-set monetary values that reflect lost passive use values. For 
any specific discharge or incident, NOAA could establish a methodology 
for applying these values to calculate the precise amount of payment 
due to compensate the public for lost passive use values. The values 
and methodology should be established by an expert panel.
    Response: NOAA will consider the feasibility and desirability of 
establishing reference studies. NOAA is proposing a compensation 
formula with values for relatively small discharges. Though the current 
version of the formula does not include passive use values, the 
intention is to include passive use values when reliable estimates are 
available for such discharges.
    Comment: A number of commenters asserted that use of CV will reduce 
the credibility of the entire trustee framework and result in 
undesirable social consequences.
    Response: NOAA believes the use of CV will not reduce the 
credibility of the damage assessment process if it is done correctly, 
with consideration of the guidance and guidelines set forth in the 
proposed rule. In addition, use of CV should produce some socially 
desirable consequences by enabling the trustee(s) to determine total 
compensable value and ensure that there is adequate compensation to 
restore the injured natural resources.
    Comment: One commenter noted that any damage assessment rule 
authorizing CV to measure passive use damages could well cost the U.S. 
economy hundreds of millions of dollars annually by generating 
excessively high estimates of passive use damages. This could result in 
reduction of the number of competitors in the transportation industry, 
including bankruptcy of some responsible parties. Industry 
concentration could follow which, in turn, could lead to higher freight 
rates and unnecessary costs borne by U.S. oil consumers. Under E.O. 
12291 (now E.O. 12866), a rule imposing such costs cannot be 
promulgated prior to completion of a regulatory impact analysis.
    Response: NOAA has considered the possible impacts of the proposed 
rule. The proposed rule has been designated as a ``major'' rule because 
of the significant issues involved in the rulemaking. However, because 
of the difficulty of evaluating the effects of alternatives to this 
proposal, a Regulatory Impact Analysis under E.O. 12866 is not 
necessary and has been waived.

``Reliability''

    Comment: A great deal of controversy surrounds the use of CV to 
estimate passive use values. Critics state that, as an approach to 
assessing these values, CV is: (1) Deeply and irretrievably flawed; (2) 
highly unreliable as a measurement tool for passive use values; and (3) 
unable to meet basic standards of accuracy such as tests of theoretical 
validity and convergent validity. These critics pointed out that 
studies frequently cited as providing support for the reliability of CV 
have never been replicated and do not provide clear scientific evidence 
in support of CV.
    Another commenter stated that the empirical literature on CV 
estimates of passive use values is too thin at this time to establish 
or dismiss the credibility of reported estimates, while another 
suggested that no perfect instrument exists for measuring peoples' 
values for any commodity--marketed or nonmarketed--and that we will 
never know the exact nature of peoples' true value functions for any 
commodity.
    Proponents stated that CV is the only viable means to meet OPA's 
mandate that both direct use and passive use values be considered in 
assessing natural resource damages. Thus, passive use values measured 
by CV need to be sanctioned. These individuals argued that the fact 
that it is difficult to quantify passive use values using CV does not 
justify ignoring such values. Further, CV should not be held to a 
higher standard of reliability than other types of analysis.
    Response: NOAA includes CV as one of the measurement techniques 
available to the trustee(s) for the determination of the diminution in 
value of natural resources and/or their services as a result of a 
discharge. NOAA believes that CV studies can produce reliable estimates 
of damages. Further, NOAA agrees that CV should be held to the same, 
not a greater, standard of reliability as other types of analysis.
    Comment: Several commenters argued that the use of CV to measure 
passive use values cannot be tested or validated by comparison to 
valuations derived by other methods. Thus, there is no standard against 
which CV answers can be compared to detect bias. Since no valid 
alternative method currently exists for assessing ``true'' passive use 
values, it is impossible to judge the extent of any overestimation 
produced by CV surveys. Several commenters acknowledged that there have 
been some attempts to investigate criterion validity, which provide 
some suggestive evidence establishing the validity of estimated passive 
use values.
    Response: NOAA agrees that it is difficult to validate externally 
the results of CV studies measuring passive use values as there are no 
other methods currently available to provide external validation with 
an alternative estimate. This same disadvantage, however, will exist 
for any method used to estimate passive use values. To minimize any 
potential bias, CV studies should consider the guidance provided 
elsewhere in this proposed rule concerning survey design, development 
and administration. Furthermore, this rule proposes a test for 
determining the validity of the results.

``Survey Design Issues''

``Injured Substitute Commodities, Budget Constraints, and Alternative 
Expenditure Possibilities''

    Comment: Several commenters expressed the view that CV-based 
estimates of willingness to pay would be overstated if respondents: (1) 
Were unaware of the availability of substitute natural resources that 
were not injured by the discharge under investigation, (2) were not 
cognizant of their existing financial claims (i.e., their budget 
constraint), or (3) were unaware that they may be asked to pay for 
future public programs. These commenters suggested that respondents be 
reminded of uninjured substitute natural resources, budget constraints, 
and future expenditure possibilities prior to the CV willingness to pay 
elicitation question.
    Response: NOAA agrees that it is important to inform respondents of 
related natural resources that have not been injured by a discharge if 
such resources exist and to remind respondents prior to the elicitation 
question that there may be things they would wish to spend their money 
on other than the program offered in the survey. However, NOAA does not 
agree that respondents should be told about speculative future programs 
that might be proposed as people are not reminded of future potential 
expenditures when they purchase a marketed good or make decisions 
concerning expenditures for public commodities. For example, voters are 
not reminded of issues that may appear on future ballots at the time 
they cast their votes in actual referenda. Further, if the trustee(s) 
selects the conservative lump-sum payment vehicle recommended by NOAA 
in the preamble to this proposed rule, this design component will 
greatly reduce the respondents' need to consider the future financial 
implications of their willingness-to-pay decisions.

``Sensitivity to the Scope of Injuries''

    Comment: Many commenters expressed concern that estimates of 
willingness to pay (WTP) for the services of natural resources obtained 
through CV studies are not sufficiently sensitive to the magnitude of 
the services being offered, and therefore, those results are 
inconsistent with accepted economic theory and must be deemed 
unreliable estimates of lost passive use value.
    Response: NOAA is sympathetic to this concern; however, NOAA is not 
convinced that phenomena such as insensitivity to scope are endemic to 
the CV approach. The concern of the commenters can be illustrated with 
a simple example. Consider two samples of respondents, identical in all 
respects. The first sample is confronted with a CV survey that elicits 
a WTP for a well-defined natural resource service. The second sample is 
confronted with the identical survey, with the exception that the 
quantity of the natural resource service offered is significantly 
larger than that in the first survey. If environmental services enter 
individuals' utility functions in a manner analogous to common consumer 
goods (e.g., household electronics, clothing etc.), one might expect 
WTP from the second sample to be larger than that from the first, 
although relevant economic theory states only that the WTP of the 
second sample should not be smaller than that of the first.

``Substitutes''

    Comment: A number of commenters contended that CV responses for 
generic sites indicate that survey respondents have not considered 
substitute sites sufficiently because their responses are too close to 
the responses for irreplaceable sites. Lacking clear preferences, 
individuals are unlikely to recognize substitutes for the service in 
question, unless a description of these substitutes is specifically 
included in the survey instrument.
    Response: Reminding respondents of undamaged substitutes has been 
outlined in the literature as a good CV practice. In order to obtain 
reliable estimates of WTP, NOAA recommends that the survey instrument 
places the commodity to be valued in the context of related natural 
resources, if such related resources exist or describes the future 
state of the same natural resources. This reminder should be introduced 
prior to the main valuation question to ensure that respondents have 
the alternatives in mind when revealing their willingness-to-pay.

``Hypothetical Questions''

    Comment: One commenter claimed that CV surveys cannot provide 
reliable estimates of lost passive use since such surveys ask 
respondents about hypothetical programs to provide public goods and 
that respondents view the survey as a purely hypothetical exercise. 
Under these conditions the commenter claimed that the respondent 
undertakes no mental effort to answer the questions since there is no 
cost to being wrong.
    Response: NOAA acknowledges that poorly designed and administered 
CV surveys may be subject to the criticism that individuals do not take 
the decisions posed by the survey seriously and do not undertake the 
effort necessary to make decisions consistent with their preferences 
and financial constraints. However, NOAA rejects this comment when 
applied to all CV surveys. CV surveys designed and conducted according 
to the guidance laid out in this proposed rule will lead to careful 
decisionmaking on the part of respondents. This is ensured by the 
proposed regulations which require: (1) An accurate and understandable 
injury description; (2) credible prevention or restoration programs 
that are offered to the respondent; (3) a realistic choice mechanism 
and payment vehicle and (4) followup questions that ask respondents to 
explain aspects of their decisions. Further, NOAA believes that its 
recommendation to use in person interviews will motivate respondents to 
complete the interview and will maintain the respondents' interest in 
the subject matter of the survey.

``Referendum''

    Comment: Several commenters recommended the use of a referendum 
format to pose the valuation question. Critics, however, contended that 
the use of the currently popular dichotomous-choice payment question 
format can lead to even less credible results than those using open-
ended formats. They argued that studies show means from dichotomous-
choice data to be significantly larger than the means from the open-
ended data and that results of dichotomous-choice models suffer from 
starting-point bias.
    Response: NOAA believes that the more appropriate method of 
questioning for the estimation of reliable estimates of WTP is the 
dichotomous-choice or referendum format. Open-ended CV questions are 
less likely to provide the most reliable valuations because they lack 
realism. In our society, most goods are offered using posted prices. 
Asking an individual to reveal his or her maximum WTP for a good is 
both unfamiliar and unrealistic. On the other hand, a voting format for 
public goods is one with which people are familiar (i.e., school bond 
issues; special assessments for public infrastructure). Further, an 
open-ended request for WTP may invite strategic overstatement or 
failure to respond to the valuation question.

``Strategic Behavior''

    Comment: One commenter claimed that respondents confronted with CV 
questions regarding public environmental programs will attempt to 
increase the amount of money spent on the proposed project by 
increasing their expressed willingness-to-pay beyond the level 
consistent with their preferences.
    Response: Strategic behavior is less likely to occur if the 
trustee(s) uses the voting format recommended by NOAA. If this approach 
is used, the survey will specify that some public entity, such as a 
state or federal government, is considering a plan that would provide a 
public good and is conducting a survey to see how individuals would 
vote on this plan if it were offered on a ballot and the cost to the 
respondent's household was $X. The referendum format does not permit 
the respondent to express an amount greater than that asked nor does it 
suggest that the level of the public good offered is being debated, 
thus the respondent cannot increase the amount of the public good 
provided by offering to pay a greater amount. Moreover, it has been 
shown that the referendum format is incentive compatible, implying that 
respondents' only incentive is to vote for the plan if his or her WTP 
equals or exceeds the required payment, or to vote no if his or her WTP 
is less than the required payment.

``Warm Glow''

    Comment: Several comments suggested that expressed willingness-to-
pay for the programs offered in CV surveys are not expressions of value 
for the services provided by the natural resources described in the 
programs, but rather are expressions of the simple pleasure one 
receives from giving to any good cause (sometimes referred to as the 
warm glow of giving).
    Response: NOAA finds no evidence to suggest that the warm glow 
motivation is prevalent in properly designed and administered CV 
surveys that follow the guidance outlined in the proposed rule. If warm 
glow were a prevalent motivation, one would not expect to find large 
numbers of respondents refusing to pay anything at all for 
environmental programs offered in a CV survey.
    A very common and effective payment vehicle employed in CV studies 
is a lump-sum tax payment. NOAA finds no evidence to support the notion 
that the warm glow hypothesis would imply that individuals get a 
similar warm glow from taxing themselves. Certainly, casual evidence 
suggests the opposite is true. Since a tax vehicle is one of the 
preferred methods of payment in CV surveys, NOAA believes that 
responses to such surveys are not amenable to explanation via the warm 
glow hypothesis.

``Sensitivity of Results to Various Factors''

    Comment: Several commenters voiced concern that in the absence of 
clear preferences, respondents are subject to even unintentional 
influence by the framing of the survey instrument. These commenters 
stated that WTP values derived from CV are highly sensitive to 
variables that, according to economic theory, should be irrelevant to 
the valuation of a specific resource, including elicitation format, the 
sequence of questions, and the starting point value given in the 
questionnaire. Conversely, they assert that CV results are quite 
insensitive to changes that, according to economic theory, should 
matter, including variation in the quantity or quality of the resource. 
This evidence further demonstrates that CV results do not reflect valid 
economic measures of value.
    Response: NOAA is not persuaded that CV results do not represent 
valid measures of lost value. NOAA recommends that CV surveys be 
designed to provide the highest degree of realism possible. Additional 
guidance is discussed in this preamble in the responses to comments on 
embedding, income constraints, and uninjured substitutes. In addition, 
NOAA proposes a test in its proposed regulations to demonstrate 
sensitivity to the scope of the environmental insult.

``Present Value Calculation of Interim Losses''

    Comment: One commenter noted the distinction between interim and 
steady state passive use losses and claimed that respondents to a CV 
survey are unlikely to be able to discount appropriately the specific 
time path of interim losses. The commenter then presented an 
alternative procedure whereby respondents would value interim losses 
for a single year and technical experts would estimate how the services 
provided by the resource will vary from year to year as the restoration 
takes place. These experts would scale the respondents' valuation by 
the amount of the recovery that has taken place each year and compute 
the appropriate present value.
    Response: There is no evidence to suggest that respondents' 
expressions of willingness to pay embody inappropriate discounting. 
Moreover, the alternative approach advocated in the comment is not only 
inconsistent with economic theory, but, at an implementation level, 
infuses the valuation with unnecessary economic and ecological 
uncertainty. Rates of time preference for the restoration of natural 
resources are specific to each individual. CV valuation of natural 
resource injuries is consistent with this fact and permits individuals 
to discount at their own rates. The alternative proposed by the comment 
would abandon individual-specific time preference rates, for a single 
rate chosen by some expert. This would clearly lead to discounting 
errors and is therefore an unacceptable approach. At the implementation 
stage, the alternative would require experts to estimate the actual 
time path of recovery and levels of recovery for each of the natural 
resources injured, and then to form a suitable index of the recovery 
that could be used to scale the respondents' willingness to pay 
amounts. Even if the experts could quantify the specific time path of 
recovery for each of the resources, they could not form the appropriate 
aggregate since this would rely on information about each respondent's 
preferences. Therefore, NOAA finds the proposed alternative 
unacceptable.

``Temporal Averaging''

    Comment: One commenter stated that time dependent measurement noise 
should be reduced by averaging across independently drawn samples taken 
at different points in time. The commenter also suggested that a clear 
and substantial time trend in responses would cast doubt on the 
reliability of the finding.
    Response: NOAA disagrees with this comment. Expressed willingness 
to pay can vary over time for valid economic reasons (e.g., increase 
certainty concerning expected recovery) and simple time averaging would 
mask these economic reasons. Moreover, even if such averaging were 
appropriate and warranted, it would require the trustee(s) to field 
several full-scale surveys that would greatly increase damage 
assessment costs and, at best, add nothing to the reliability of the CV 
results.

``Unfamiliarity With the Good''

    Comment: A great deal of concern was voiced over the complexity of 
the policy issue and/or the level of familiarity of the good 
(environmental amenity) and changes in the level of the good with which 
the CV respondent is faced. Moreover, the benefits from environmental 
projects can be complicated, cumulative, and systemic, and knowledge 
about these things cannot be quickly absorbed and used by average 
survey respondents. As a result, the respondent has no experience or 
basis for valuing the good, leading them to construct values that are 
not related to the good itself. On the other hand, a number of 
commenters criticized the empirical research used to support claims of 
the unreliability of CV, due to the ambiguity of the valuation 
scenarios used in this research.
    Response: If CV surveys are to elicit useful information about WTP, 
respondents must understand what it is they are being asked to value 
and must accept the scenario in formulating their responses. NOAA 
recognizes that some past CV surveys have provided only sketchy details 
about the program(s) being valued, calling into question the estimates 
derived from those surveys. NOAA posits that a conservative approach 
should be taken regarding the knowledge of the respondent. A 
conservative CV study will provide sufficient information about the 
environmental program such as frequency and magnitude of discharges of 
oil, the peculiar features of the discharge in question, and similar 
relevant information.

``Embedding''

    Comment: A number of commenters highlighted a form of embedding 
which is sometimes related to the inclusiveness of the resource. This 
form of embedding is suggested by the very different responses given by 
an individual when asked about a single resource as compared to surveys 
when the individual is asked to begin with an overall sum for 
environmental causes and is asked to then allocate this amount among 
various resources. The difference between a ``bottom up'' approach and 
a ``top down'' approach indicates that an individual is not observing 
his budget constraint in the bottom up approach. Because the respondent 
is unable to distinguish between what he is being asked to value and a 
more inclusive good, he may state an identical or similar WTP for a 
subset of a resource as for the entire resource.
    Other commenters suggested that some of the phenomena associated 
with the embedding effect are simply standard propositions in utility 
theory (diminishing marginal utility of the asset in question). 
Further, a poorly designed survey instrument can contribute to 
embedding effects that can be largely avoided with an instrument that 
identifies more effectively the good(s) to be valued.
    Another commenter suggested that the measurement issues raised by 
the embedding controversy involve a well recognized and potentially 
serious category of biases that are referred to as ``amenity 
misspecification.'' Although these potential biases pose a 
methodological challenge to CV researchers and require careful 
attention in the design phase of the study, they are often avoidable if 
the scenario is plausible and the good is well described.
    Response: NOAA rejects the ``top down'' approach advocated by the 
commenters because it suffers from two problems that invalidate its use 
in CV studies of lost passive use. First, the ``top down'' approach 
permits respondents to change the levels of vast aggregates of public 
goods as they move down a decision tree ordering of public goods toward 
the injuries to be valued. Thus, the value given for the injuries is 
predicated on the new levels of public goods chosen by the respondent 
as he moves down the decision tree. Since each respondent may choose 
his own levels for all public goods offered, and the levels of other 
public goods in part determine the value of the injuries, it is 
impossible to recover the value of the injuries associated with the 
level of public goods that actually prevailed at the time the injuries 
occurred from survey responses.
    Second, at points in the decision tree lying above the injuries to 
be valued, the definitions of the public goods provided to respondents 
are necessarily broad and cover vast aggregates of public goods. The 
result of this broad definition of the goods offered is a lack of 
specificity regarding the components of any aggregate. It is left to 
the respondent to decide for himself what the precise components of the 
aggregate might be. The value finally given for the injuries in 
question is dependent on the definitions of the public goods made by 
the respondents at earlier levels and these definitions are unknown. 
Therefore, no consistent set of definitions may be inferred and thus no 
value for injuries, contingent upon those definitions, may be measured.
    Finally, NOAA agrees with the commenters who believe that alleged 
biases in CV responses resulting from the embedding phenomenon can be 
avoided through careful questionnaire design and execution of the 
survey.

``Pristine Environment''

    Comment: One commenter noted that proponents of CV have not 
addressed the issue of CV's capability of measuring passive use values 
for less than pristine environments. That commenter questioned whether 
CV can reliably measure passive use values in an already diminished 
area.
    Response: NOAA notes that there is nothing in the empirical 
literature to suggest that respondents cannot formulate WTP estimates 
for less than pristine environments. A well-designed survey instrument 
that describes the baseline conditions before the discharge and the 
impacts of the discharge should provide respondents with adequate 
information upon which to base WTP.

``Temporal Measurement''

    Comment: One commenter was concerned that CV has not been proven 
capable of measuring passive use damages when there is gradual 
restoration of the injured resources over time.
    Response: In order to obtain reliable estimates of WTP, the CV 
survey should provide a description of possible restoration activities 
and their expected outcomes as well as the time period for natural 
recovery. This information allows the respondent to distinguish between 
interim and steady state losses and the timing of restoration. Given 
such information, there is nothing in the empirical literature to 
suggest that a respondent cannot submit a reliable WTP estimate.
    Comment: One commenter asserted that in implementing a CV survey, 
it should be made apparent that respondents can distinguish interim 
from steady state losses. This assertion is based on the assumption 
that most passive use values of natural resources may be derived only 
or mostly from its steady state and not from its day-to-day state.
    Response: NOAA rejects this comment as there is no empirical 
evidence to suggest that passive use values are derived solely from the 
steady state characteristics of the resource.

``Extent of the Market''

    Comment: One commenter noted that the passive use values derived 
from an environmental good are likely to be concentrated locally, but 
may extend to a large distance. Deciding where to draw the line for 
valuation is crucial. Another commenter noted that there is currently 
no accepted theoretical or empirical structure for determining the 
appropriate geographic extent of the population across which to 
extrapolate the WTP values. Thus, damage figures derived from CV 
studies for passive use values have no reliable or predictable basis.
    Response: NOAA agrees that there is no clear line for determining 
extent of the market, but it does not follow that passive use value 
estimates have no reliable basis. The extent of the market is an 
empirical question best left to the discretion of the trustee(s) in 
consultation with their survey research experts, based on the 
particular case in question and guided by the results of survey 
pretests and pilots.
    Comment: A few commenters asserted that CV studies focus on 
controversial subjects and, as a result, exaggerated perceptions almost 
certainly undermine the objectivity of the study. If CV is to be used, 
it is imperative that surveys not be framed in terms of discharges of 
oil, but rather should describe reductions in resource services due to 
some noncontroversial source, such as natural mortality.
    Response: The underlying concern of these commenters is whether the 
potential controversy surrounding a discharge can undermine the 
objectivity of a CV survey. NOAA believes that this potential problem 
will not be a factor in well-designed CV surveys because they are 
generally conducted at times sufficiently distant from the discharge. 
This time lapse occurs because of the long lead-time necessary to 
determine the likely injuries from the discharge so that they can be 
accurately represented to the respondent and because of the time needed 
to prepare and implement the final CV survey. Further, media attention 
that may generate controversy will likely have focused on other events 
by the time the full survey can be conducted. The referendum approach 
also prevents potential controversy from tainting WTP. Because 
respondents are voting to increase their own taxes or the price of a 
consumer product such as oil rather than voting on how much the oil and 
gas company should pay to remedy the injury, respondents cannot vent 
their frustrations at the oil or gas company. Thus there is little or 
no possibility that potential controversy will undermine the 
objectivity of the CV study.

``Ex-ante v. Ex-post Questioning''

    Comment: One commenter contended that CV surveys are biased and 
inaccurate because they do not really measure the value of the resource 
but are designed instead to determine WTP to prevent harm to a 
resource. This is because CV is always carried out in the aftermath of 
an accident and does not reflect pre-existing values independent of the 
accident and the valuation process.
    A number of critics of CV claimed that CV questionnaires focus on 
total values (although passive use values dominated) in an ex-ante 
setting--that is, protecting waterfowl and preventing injury resulting 
from the discharge. They suggested that such ex-ante CV studies are 
better suited for damage assessment than are assessments that involve 
an ex-post valuation.
    Response: In NOAA's judgment, the conceptually correct measure of 
damages is the ex-ante WTA. That is, ideally one would wish to place 
individuals at a point in time just prior to the injury and elicit from 
them an expression of WTA for the future injury. For reasons discussed 
earlier in the preamble, WTP, not WTA, is proposed as the basis for 
measuring passive use values. Thus, the obvious WTP analog is ex-ante 
prevention. It is true, though, that under certain circumstances, it 
may not be possible to develop an ex ante WTP CV commodity that is both 
plausible and reasonable to respondents. In these instances, the 
trustee(s) is free to use ex-post WTP programs. The trustee(s) should 
determine whether to use an ex-ante or an ex-post scenario on a case-
by-case basis.

``Distribution of Responses''

    Comment: A number of critics of CV contended that the mean WTP is 
estimated with low statistical precision, due to extreme responses. The 
distribution of WTP appears to be strongly skewed, so that trying to 
circumvent the problem by using medians or similar statistical devices 
is likely to introduce serious bias. These commenters assert that very 
large samples should be required to provide acceptable statistical 
accuracy.
    Response: NOAA agrees with the commenters that extreme responses 
may skew results. However, standard practice in empirical research is 
to begin with a large sample size and treat outliers appropriately. 
NOAA believes that probability sampling is essential for a survey used 
for damage assessment and that the size of the sample must be large 
enough to ensure statistical precision. Due to the complexity of 
sample-specific design and size, the trustee(s) should consult with 
sampling statisticians in the design of a CV survey.

``Calibration/Scaling''

    Comment: One commenter asked whether a CV study can generate useful 
information when respondents fail to answer truthfully. This commenter 
suggested that a ``calibration approach'' can be applied to 
environmental goods, for example, a CV response predicated on a 
hypothetical scenario could be statistically mapped into a response 
that would be obtained if the opportunity to purchase the good were 
actually provided. A number of commenters suggested that if systematic 
divergence existed between actual behavior and CV survey responses and 
this divergence could be quantified, then calibration of CV results 
could be undertaken.
    Response: NOAA notes that there are some studies that suggest that 
stated intentions of WTP in CV surveys significantly exceed observed 
responses in simulated markets or in solicitations for charitable 
contributions (though none of the surveys meet the standards proposed 
in the rule, and there is debate as to whether the simulated markets or 
charitable contributions capture ``actual'' WTP). Because of the 
possible bias, a discount factor is included in the proposed rule to 
apply to estimated WTP. The proposed rule gives a default factor of 50 
percent for the purposes of soliciting comment. However, the trustee(s) 
may adopt a different calibration factor if it can be shown that a 
different factor is appropriate for a specific application of CV.

``WTP vs. WTA''

    Comment: A number of commenters addressed the subject of WTP versus 
WTA compensation measures within the damage assessment context. Some of 
these commenters noted that WTA is the correct measure because the 
public trust doctrine embodied in OPA implies that the property right 
for the resources rests with the government, in trust for the public. 
Consequently, the public has the right to be compensated when injuries 
occur. Another commenter stated that CV studies frequently find large 
differences between WTP and WTA and that this difference is another 
sign of the failure of CV to measure correctly any genuine underlying 
preferences for passive use values. Other commenters noted that the 
conventional wisdom applies only to changes in the price (of marketed 
goods). Recent research has shown that, for changes in the quality of 
either marketed or unmarketed goods, large differences between WTP and 
WTA may be consistent with economic theory, particularly for public 
goods.
    Response: While NOAA agrees that the conceptually correct measure 
of lost passive use value for environmental damage is WTA, it is 
concerned that respondents to CV questionnaires would give 
unrealistically high answers to such questions. Therefore, NOAA 
contends that the WTP format should be used instead of the compensation 
required (WTA) because the former is the conservative choice unless 
future empirical evidence suggests otherwise. NOAA encourages the 
trustee(s) to remain current with the state-of-the-art in this area and 
to use the criterion that reflects the best available practice among 
natural resource economists. NOAA disagrees with the assertion that the 
large difference between WTA and WTP is an indication that CV fails to 
correctly measure underlying preferences, as experiments have shown 
that such differences also exist for market goods.

``Research''

    Comment: Several commenters stated that the results of past CV 
studies are sufficiently interesting and demonstrate sufficient promise 
to warrant the commitment of substantial resources to further research. 
There is an urgent need for methodological research on CV.
    Response: NOAA encourages further research in this area.

``Expressions of Punishment''

    Comment: One commenter claimed that CV surveys of passive use 
permit the respondents in such surveys to express in their WTP amounts 
feelings that responsible parties should be fined or punished for the 
effects of discharges of oil.
    Response: Such problems can be avoided in a properly designed 
survey if the trustee(s) selects a voting format as the choice vehicle 
coupled with a tax as the payment mechanism. By asking the respondent 
how he or she would vote on such a plan if the plan would cost the 
household $X, the respondent cannot express any anger directed at the 
RP in terms of the respondent's household's willingness to pay for the 
program offered, except possibly to refuse to answer the question or to 
answer the question based on a belief that taxpayers should not be 
required to pay for impacts resulting from the discharge.

``Survey Methods''

    Comment: Several commenters argued that high nonresponse rates in 
CV surveys would bias survey results, producing unreliable estimates.
    Response: While NOAA agrees that a high response rate is desirable, 
there is no bright line to determine at what level of response a 
survey's results become ``unreliable.'' NOAA proposes that the 
trustee(s) shall obtain as high a response rate as possible that can be 
achieved at a reasonable cost while ensuring reliable inferences to the 
general population.
    In addition, good survey technique generally involves a followup 
analysis of nonrespondents and/or respondents to determine whether the 
sample is representative of the target population for the survey.

``Self-Selection Bias''

    Comment: One commenter claimed that respondents with strong 
environmental preferences have a higher survey response rate than those 
with weaker preferences and thus are overrepresented in the final 
sample employed in the passive use value calculations.
    Response: NOAA disagrees with this comment. Under the survey 
administration guidelines laid out in the proposed rule, probability 
sampling is specified. Probability sampling ensures that the sample 
drawn does not over-sample those with strong environmental preferences.
    The proposed regulations also direct the trustee(s) to minimize 
self-selection bias related to the contents of the survey instrument. 
NOAA's recommended use of in-person interviews will help to ensure that 
respondents do not know the true intent of the survey until the 
interviewing process has started. Only at this time can a self-
selection bias enter, and previous evidence from in-person CV 
interviews suggests that interviews once started are completed.

``No-answer Option''

    Comment: One commenter asserted that a ``no-answer'' option should 
be explicitly allowed in addition to the ``yes'' and ``no'' vote 
options on the main valuation question of a CV survey.
    Response: It is not clear at this time that the inclusion of a 
``no-answer'' option would substantially change the measure of passive 
use values for the injury. NOAA supports further research in the area.

``Survey Mode''

    Comment: Several commenters criticized the use of mail and 
telephone interviews in CV surveys, especially in the context of 
complex goods. A few commenters argued in favor of mail surveys, 
asserting that telephone and face-to-face interviews typically provide 
the respondents with inadequate time to formulate a response or test it 
against their actual budget and expenditures.
    Other commenters argued that in-person interviews are simply not 
required to elicit the ``opinions and feelings'' required from CV 
questionnaires and may lead to bias in results by giving the issue high 
apparent importance and exposing the respondent to undue influence from 
the interviewer.
    Response: There are advantages and disadvantages of each mode of 
administration, and the selection of the appropriate method is 
dependent on a number of factors such as cost, turn-around time, 
desired response rate, type of information to be conveyed, use of 
visual aids, required population coverage and the ultimate use of the 
survey results.
    After analyzing the advantages and disadvantages of each method, 
NOAA believes that while mail surveys can provide invaluable 
information for many academic studies and regulatory purposes (i.e., 
U.S. decennial census), mail surveys at this time lack certain features 
that are desirable for use in the natural resource damage assessment 
area. In deciding between the use of telephone and in-person surveys, 
NOAA suggests that the trustee(s) consider seriously the use of in-
person interviews for the final survey because of the characteristics 
of a survey needed for damage assessment purposes. A CV survey designed 
for natural resource damage assessment purposes is likely to impart a 
large amount of information to respondents causing interviews to be 
lengthy and often complex. In-person interviews offer the opportunity 
to motivate the respondents and to hold their interest by providing 
important information in a graphical and pictorial format and asking 
interactive questions regarding the respondents' understanding and 
acceptance of key features of the instrument. It also permits 
interviewers to record verbatim responses to important open-ended 
questions. Such information may be critical in demonstrating that the 
trustee(s) has adhered to the regulatory guidance proposed by NOAA.
    NOAA, however, encourages the trustee(s) to consider the use of the 
other modes of administration during the survey development stage. For 
example, a telephone survey may be an appropriate and cost effective 
method to test a design feature such as question ordering or the 
understanding of technical terms. Further, NOAA is interested in 
comparative empirical testing of other administration modes. If such 
testing demonstrates that other modes can produce the type of 
information and results comparable to in-person interviews, NOAA would 
encourage the trustee(s) to consider the use of those methods for the 
final survey.

``Standards for CV Studies''

    Comment: Several commenters observed that if CV is to be included 
in the rule, it is critical that NOAA provide strict guidelines that 
minimize the problems associated with CV and identify cases where the 
problems are relevant, despite efforts to minimize them.
    Response: In this proposed rule, NOAA has provided guidelines for 
the use of CV. The guidelines are discussed earlier in this preamble.

``Interviewer Effects''

    Comment: One commenter suggested that CV surveys differ from actual 
referenda since an interviewer is present. The commenter argued that 
the presence of the interviewer can cause ``social desirability'' bias 
since many of the programs that would be valued in a CV survey would 
preserve or restore the environment, which may be considered ``socially 
or politically'' correct. The implication of this bias would be 
exaggerated expressions of willingness to pay. This comment recommended 
that CV studies should test for the presence of such effects.
    Response: Evidence of interviewer effects is sometimes found in 
surveys that ask respondents questions about illegal behavior, such as 
drug use, but there is no evidence to support the claim that the 
presence of interviewers would bias the willingness-to-pay amounts 
elicited in a CV survey used to assess natural resource damages. 
Nevertheless, until research on this issue has produced definitive 
conclusions, NOAA encourages the trustee(s) to be cognizant that such 
effects may be present.

``Prior Approval''

    Comment: One commenter recommended that the trustee(s) seeks 
concurrence of the RP(s) prior to using a CV to measure passive use 
values.
    Response: NOAA always encourages cooperation between the trustee(s) 
and RP(s) when appropriate. Due to the trustee's(s') fiduciary 
responsibilities, however, the trustee(s) cannot be placed in the 
posture of compromising his position in on-going or potential 
litigation. Thus, the decision to seek prior concurrence from the RP(s) 
is left to the discretion of the trustee(s). However, NOAA encourages 
the trustee(s) and other interested parties, such as industry or 
environmental groups, to consider cooperative development of CV surveys 
for natural resources that may be at risk of being impacted by 
discharges (i.e., resources of national marine sanctuaries). Such 
studies could then be used as a reference value should a discharge 
occur that injures such resources.

``Benefits Transfer Method''

    Comment: One commenter stated that the concept of a ``unit day'' 
consisting of ``average per day values for resource uses'' is unsound 
because it unfairly undervalues the injured resource by treating unique 
resources as fungible. The commenter cited a statement in an earlier 
Notice that unit day values should be accepted as a measure of damages 
when there is a ``small spill or a small impact,'' and stated that if 
such a measure is adopted, its use should only be allowed where there 
is a ``small spill'' and ``small impact'' and the resource ranks low in 
biodiversity.
    Response: NOAA finds that the unit day value methodology is 
appropriate to damage assessment, when applied under standard and 
accepted procedures, and within the appropriate context. NOAA agrees 
with the commenter that most applications of unit values are regarded 
as relatively crude approximations of resource values. However, they 
have proven useful when more rigorous, detailed, and theoretically 
sound techniques are too costly or time consuming for the specific 
application.
    Comment: One commenter noted the use of user-day values of an 
activity (i.e., recreation) or administratively-determined values have 
been common for a variety of policy purposes in the past. Another 
commenter noted that the absence of any accepted protocols for benefits 
transfer make it important for NOAA to provide reasonable guidelines 
for such transfers. Absence of such will assure lengthy and expensive 
litigation for many incidents. Such guidance must be specific and yet 
flexible. These guidelines should include the following criteria: (1) 
Studies must meet minimum standards for quality assurance in terms of 
data, theory, and analysis; (2) the activities from the transferred 
studies must accurately mirror those impacted by the incident; and (3) 
methodologies used for transfer should conform with standards for 
benefits transfer, as they are developed.
    Response: For purposes of damage assessments under OPA, use of 
``benefits transfer'' is a practical necessity, given the time and 
resources typically available to the trustee(s). While extensive 
research into these procedures is underway in the academic community, 
no formal benefits transfer protocol presently exists. The current 
state-of-the-art in benefits transfer does suggest that where feasible, 
it may be preferable to transfer a valuation function that 
characterizes the variation in use values with characteristics of the 
individuals and of the experience. However, NOAA agrees that the 
quality of the studies to be transferred and the applicability of the 
study context to the damage assessment context are important 
considerations.

``General Guidance''

    Comment: Many comments were received concerning the appropriate 
discount rate. Several commenters stated that the rules should 
establish that present value of future year damages be discounted at 
the 10% discount rate as upheld in the Ohio vs. DOI ruling. Other 
commenters were critical of the 10% rate. Those commenters indicated 
that the 10% rate was too high, unrealistic, and inadequately 
represented future generations' interest. Instead of the 10% rate, some 
commenters recommended much lower rates, ranging from 0% to 3%. Others 
recommended that NOAA allow the rate to be determined on a case-by-case 
basis.
    Response: NOAA finds that the appropriate rate of discount to be 
used by a trustee(s) is the U.S. Treasury note. For a detailed 
explanation of the rationale for this choice, see the earlier preamble 
discussion on discount rates.
    Comment: Several commenters addressed the concept of ``committed 
use,'' i.e., current or planned public uses at the time of the 
discharge, within OPA damage assessment regulations. Some expressed 
concern that restricting damage determination to ``committed uses'' 
would significantly understate the true value of the injured resource, 
and thus fail to provide adequate compensation to fully offset the 
public loss.
    Response: NOAA feels that the concept of committed use adequately 
provides compensation for public losses resulting from resource injury 
due to a discharge of oil. As stated in the preamble, committed use 
implies that a resource is or has been directly utilized or employed or 
there exist attributable passive use values. In addition, a documented 
future use is considered a committed use, and thus would be included in 
compensable and recoverable damages, assuming incomplete recovery of 
the resource or delay in implementation of a future use due to a 
recovery timelag.
    Comment: One commenter suggested that estimates of diminution of 
value must consider the availability of substitutes.
    Response: NOAA agrees that in calculating the diminution in value, 
it is desirable to take into account the availability of substitute 
services. However, incorporating such information may increase the cost 
and complexity of a damage assessment. Therefore the additional cost 
and complexity should be undertaken only if the potential benefits from 
an increase in accuracy of the damage estimate outweighs the potential 
increase in damage assessment costs.
    Comment: Some commenters observed that in assessing diminution in 
value the extra cost of obtaining substitute services may be regarded 
as the upper bound estimate of that loss.
    Response: NOAA disagrees that the extra cost of obtaining 
substitute services is necessarily an upper bound of the loss. Unless 
the substitute source(s) is a perfect equivalent and has sufficient 
capacity to accommodate additional demand without congestion, the extra 
cost of obtaining those services will not reflect the true and complete 
attributable loss.
    Comment: A number of commenters addressed the subject of WTP versus 
WTA compensation measures within the damage assessment context. Some of 
these commenters noted that WTA would be the correct measure.
    Response: As noted above, NOAA concurs that WTA is the correct 
measure of compensation. At present, WTA is very difficult to elicit 
from respondents in a reliable manner. Consequently, NOAA recommends 
that CV studies elicit the more conservative WTP criterion at the 
present time. For methodologies such as the travel cost model in which 
exact (Hicksian) welfare measures, measuring monetized changes in 
utility, can be derived from the Marshallian models through analytical 
techniques, WTA and WTP measures are of equal reliability. In those 
circumstances, WTA should be used where feasible.

Subpart H--Post-Assessment Preamble Language

Introduction

    At the completion of an assessment of any type described in this 
proposed rule, the trustee(s) shall prepare a Report of Assessment, 
present a demand for damages to the RP, set up an account to receive 
any payment of those sums, and develop a Final Restoration Plan. If a 
settlement agreement is reached at any point before the formal 
completion of the assessment, the same basic steps are required, except 
that the sum agreed upon as damages constitutes the demand for damages. 
Also, if there is a Regional Restoration Plan in place through prespill 
planning to which the damages may be appropriately applied, the 
trustee(s) need not develop a separate Final Restoration Plan.
 Report of Assessment
    At the conclusion of an assessment, the trustee(s) shall prepare a 
Report of Assessment as described in Sec. 990.80 of the proposed rule. 
The Report of Assessment should be made available to the public, but 
the timing of publication may vary. In some cases, the trustee(s) may 
wish to issue the Report of Assessment in connection with entry of a 
consent decree resolving natural resource damage claims, in order to 
give the court and the public adequate information to evaluate the 
settlement.
    The Report of Assessment consists of the DARP, as modified based 
upon any comments received on the DARP. The Report of Assessment 
describes the selected restoration approach and the estimated costs of 
implementing that approach. The Report of Assessment will also contain 
an index of the administrative record of the assessment as an 
attachment.
Demand
    At the conclusion of the assessment, the trustee(s) should present 
to the RP(s) a demand in writing for the damages, as described in 
Sec. 990.81 of the proposed rule. The demand should be delivered to the 
RP(s) in a manner that will establish the date of receipt.
     The demand shall include an identification of the discharge of oil 
from which the claim arises, the natural resource trustee(s) asserting 
the claim, and a brief description of the natural resources and/or 
services for which the claim is being brought. The demand will include 
the Report of Assessment as an attachment. Finally, the demand shall 
state the amount of damages being sought.
    The damages presented in the demand will include the estimated 
costs to restore, replace, rehabilitate, or acquire the equivalent of 
the injured natural resources and/or their services, the diminution in 
value pending that recovery, costs already incurred in carrying out 
emergency restoration, and the reasonable costs of conducting the 
assessment and recovering the damages.
Review of Damage Figure
    As explained earlier in this preamble, NOAA is proposing that the 
restoration component of the Report of Assessment be granted record 
review. Therefore, of the total damage figure, that part of damages 
representing the estimated costs of implementing the restoration 
component is that portion subject to record review. The other damages, 
including but not limited to assessment costs and compensable values, 
are to be reviewed with the trustee(s) receiving the benefit of the 
rebuttable presumption.
Account
    This proposed rule allows the use of various types of accounts into 
which the trustee(s) may place sums recovered. If more than one trustee 
is involved in the recovery, the proposed rule, in Sec. 990.82(a), 
allows trustees to establish a ``joint trustee account'' under the 
registry of the applicable federal court when there is a joint recovery 
involving both federal trustees and state or Indian tribe trustees. A 
federal court is listed since section 1017(b) of OPA states that 
actions for natural resource damages shall be filed in a United States 
district court. Such an account may be interest bearing, depending upon 
the rules of the court. The joint trustee account should be managed by 
all trustees through a mutually agreed upon trustee committee or 
council. Such an account and its management could be agreed to in a 
Memorandum of Understanding (MOU) such as the one suggested in 
Sec. 990.16 and given as an example in Appendix A.
    While the joint trustee account may be the preferred alternative, 
trustees also have the option of dividing the recoveries and depositing 
their respective amounts in their own separate accounts. These accounts 
should be interest-bearing, revolving trust accounts. These accounts 
may be new, separate accounts established for each incident or 
preexisting accounts to which additional deposits are allowed for 
specific purposes. In addition, trustees may establish escrow accounts 
or any other type of investment account(s) unless specifically 
prohibited by law.
    Regardless of the placement of recoveries into joint or separate 
accounts, the sums shall be used as specified in Sec. 990.83 of this 
proposed rule. Also, the trustee(s) must maintain appropriate 
accounting and reporting methods to ensure the proper use of sums 
recovered, including independent auditing.
    Although OPA clearly intends that trustee accounts are to be 
interest bearing, there may be circumstances where this is not the 
case, e.g., the rules of the court on court registry accounts do not 
allow it. Therefore, it is essential that the trustee(s) determines the 
likely repository of any potential recovery when determining the 
appropriate damage amount to demand. The calculation of the expected 
present value of the damages amount should be adjusted to correct for 
the anticipated effects of inflation over the time estimated to 
complete the restoration alternative chosen. The damage amount should 
be adjusted by the rate payable on notes or bonds issued by the United 
States Treasury with a maturity date that approximates the length of 
time estimated to complete the chosen restoration alternative.
    Because of the possibly long-term nature of the Regional 
Restoration Plan described in Sec. 990.84(b) of this proposed rule, 
this adjustment for inflation applies only to the incident- specific 
restoration plans described in Sec. 990.84(a) of the proposed rule.
Use of Sums Recovered
    As mentioned earlier, section 1006 of OPA establishes damages for 
injury to natural resources to be the: (1) Costs of restoring, 
rehabilitating, replacing, or acquiring the equivalent of the injured 
natural resources and their services; (2) diminution in value of those 
natural resources and/or services pending the restoration; and (3) 
reasonable costs of assessing those damages. The damages recovered are 
to be placed, upon receipt, into one of the accounts described in 
Sec. 990.82 of the proposed rule.
    At the trustee's(s') option, prior to the deposit of a recovery in 
an account, the trustee(s) may request immediate receipt of those sums 
recovered that represent assessment costs already incurred, costs 
necessary to complete the assessment, emergency expenses, costs 
necessary to develop the final restoration plan and costs to implement 
a restoration plan or individual project that is part of that 
restoration plan. The remaining sums, those consisting of restoration 
or replacement costs and diminution of value, are damages representing 
compensation for the injuries to the natural resources.
    The damages representing compensation are to be spent to develop 
and implement a final restoration plan. In order to refine this 
restoration plan, the trustee(s) should be allowed to immediately use 
that part of the damages representing compensation necessary to meet 
the expenses involved in developing the final restoration plan.
Final Restoration Plan
    The proposed rule describes two types of Final Restoration Plans. 
First, the trustee(s) may develop an Incident-Specific Restoration Plan 
to address the effects of the discharge of concern. This plan shall be 
based upon the restoration component developed under subpart G of the 
proposed rule. This Final Restoration Plan is the post-assessment 
restoration planning document. This plan should serve to define the 
objectives and the approach for the particular discharge site, and 
establish the procedures for restoration, and where applicable, 
rehabilitation, replacement, and acquisition of the equivalent actions. 
The Final Restoration Plan incorporates all proposed restoration 
activities for the discharge site that have been selected by the 
trustee(s), taking into consideration public comments. Once damages are 
awarded or a settlement with the RP(s) reached, the trustee(s) shall 
review the restoration plan for possible modifications. The Final 
Restoration Plan shall take into account the available funds; 
priorities of natural resources and/or services of concern; direct and 
indirect (i.e., interdependency and feedback between restoration 
options) benefits to the natural resources and/or services of concern; 
and sequence of restoration steps. If there are significant 
modifications between the restoration component of the DARP made 
available to the public prior to the damage award, and the restoration 
plan that the trustee(s) intends to implement after receiving the 
award, the rule requires the trustee(s) to make the revised plan 
available to the public for a 30 calendar day comment period. The 
trustee(s) should make the plan publicly available, along with a 
response to public comments.
    Under this proposed rule, the trustee(s) would also be allowed to 
pool recoveries to apply them to a Regional Restoration Plan, as 
described in Sec. 990.16 of this proposed rule. Where such a plan 
already exists, whether developed through prespill planning efforts or 
under regular management efforts, that plan may be used subject to the 
conditions listed below. This option will likely be most useful in 
areas with long-term pollution effects where damages from a single 
discharge would be too small to ``restore'' the ecosystem or where the 
planning costs for the restoration after a single discharge would be 
quite high compared to the damage figure. This type of approach may 
allow meaningful restoration efforts to result from several recoveries 
received through the use of a compensation table or one of the Type A 
models developed by DOI. However, where a Regional Restoration Plan has 
not been developed, an Incident-Specific Restoration Plan must be 
developed for use of the damages recovered.
    The proposed rule states that, to qualify as a Regional Restoration 
Plan under this rule, the plan must be developed through a process 
consistent with the prespill planning process described in Sec. 990.16 
of the proposed rule. The plan must also address the same or similar 
resource injuries as those identified in the assessment procedure. 
These requirements are completely consistent with the DOI rule at 43 
CFR 11.93, which also allows for pooling damages assessed using a Type 
A procedure.

Post Assessment Response to Comments

``Account''

    Comment: Some commenters suggested the OPA rule allow for the 
establishment of an account in the court registry, particularly where 
federal and state trustees are jointly seeking natural resource 
damages. One commenter suggested this joint account may ensure that 
monies will be spent on restoration without obtaining special 
appropriations from the legislature. It also provides a mechanism for 
state and federal trustees to decide on expenditure of funds. Other 
commenters, however, stated that the role of the court should be 
limited to ensuring that uses of sums recovered are consistent with the 
statutory directives, and noted that such accounts do not yield a high 
rate of interest.
    Response: NOAA agrees with the commenters suggesting deposit of 
sums recovered into an account in the court registry and has allowed 
that as an option in Sec. 990.82(a) of the proposed rule. NOAA also 
notes that there are concerns over expanding the role of the court to 
assume a greater role than the statute seems to allow. However, it is 
unlikely that a court would usurp the role of the trustee(s) over the 
management of the natural resources where the trustee(s) has developed 
a plan for the use of such sums.
    Comment: A few commenters indicated that a joint fund system will 
only work if the trustees work well together and can agree on a process 
to manage and disburse the funds. These commenters suggested that there 
should be provisions for dispute mechanisms and for a working group 
dissolution. Otherwise, the commenters were concerned that funds for 
restoration would be stuck in the account pending resolution of 
disputes.
    Response: NOAA agrees that the trustee(s) should establish a 
process for management and disbursement of the funds in a way to avoid 
deadlock.
    Comment: Two commenters noted that funds awarded for natural 
resource damages under 43 CFR part 11 must go into non-interest bearing 
accounts in the Federal Treasury, but that supplemental appropriations 
language permitted DOI to place award monies into an interest-bearing 
account.
    Response: NOAA notes that the 43 CFR part 11 rule may have a 
different provision for interest-bearing accounts. However, OPA does 
provide for such accounts.
    Comment: One commenter, although agreeing with the joint trustee 
account, encouraged NOAA to develop alternatives that would eliminate a 
trustee's submissions to a legislative appropriations process before 
using the awarded monies. Another commenter suggested an alternative of 
an additional ``Joint Trust Fund'' to be applied to costs other than 
those paid by the RP(s). The single account would simplify 
administration of the monies, as opposed to the trustees dividing the 
funds into their various agency accounts.
    Response: NOAA points out that the accounts provided for in 
Sec. 990.82 of the proposed rule allow for use of funds without 
appropriations, as provided for in section 1006(c) of OPA. Also, it 
would be allowable for the trustee(s) to deposit monies other than 
those paid by the RP(s) into these accounts.
    Comment: One commenter recommended that the RP(s) pay directly for 
services performed under its supervision in lieu of depositing funds in 
the Federal Treasury. One commenter noted that if the RP(s) is to 
underwrite a joint fund, or any fund, the RP(s) must legally have a 
primary role in the management of the funds.
    Response: NOAA agrees that the RP(s) may pay directly for 
restoration actions (see discussion on ``Participation of the 
Responsible Party'' earlier in this preamble). However, NOAA cannot 
agree that the RP(s) who pays into an account would have a primary role 
in managing the account. Once the money is paid to the trustee(s), it 
is then the responsibility of the trustee(s) to manage the account 
according to statutory directions. Under the discretion of the 
trustee(s), the RP(s) may have the right to participate in the 
development of the restoration plan, which will be paid for by the 
monies in the account.

``Accounting for Expenditures''

    Comment: One commenter also urged a final disclosure and accounting 
of the recovered funds to the RP(s) and to the public.
    Response: NOAA agrees that the trustee(s) must provide an 
accounting of the way recovered sums are used. Therefore, 
Sec. 990.82(d) of this proposed rule requires the trustee(s) to 
maintain appropriate accounting and reporting methods to document the 
use of the sums recovered.

``Use of Sums''

    Comment: Several commenters noted that the only activities to which 
recovered sums can be dedicated are assessments and the implementation 
of restoration plans. Some commenters stated that the first priority of 
the funds should be restoration, and only if restoration is not 
possible, or when the cost of those restoration alternatives would be 
grossly disproportionate to the value of the resources involved, should 
other actions, such as acquisition of the equivalent be considered. 
Another commenter strongly urged that any sums recovered by the federal 
government for discharges occurring in a state should be spent in the 
same state.
    Response: NOAA agrees that sums recovered as damages should be used 
to restore, replace, rehabilitate, or acquire the equivalent of the 
injured natural resources as required by OPA. OPA suggests that 
restoration, replacement, or rehabilitation be the first choices of 
action, with the trustee(s) acquiring equivalent natural resources only 
when restoration is not possible or the cost would be grossly 
disproportionate to the value of the resources. The proposed rule 
allows the trustee(s) to make those determinations. NOAA does not agree 
that the rule should require that sums recovered by the federal 
government always be spent in the state in which the incident occurred. 
The nature of the federal trust resources that are not ``land'' is such 
that those resources are likely either to cross state boundaries or to 
be of national interest. For example, if a large number of migratory 
birds is killed by a discharge of oil in a flyway, the most appropriate 
method of restoring those populations may be to enhance the birds' 
nesting grounds hundreds of miles away from the discharge site.

``Reimbursement of Assessment Costs''

    Comment: Another commenter stated the rules should be clear about 
the use of recovered sums that represent the costs of the assessment 
and emergency restoration by ensuring the trustee(s) will have ready 
access to that portion.
    Response: NOAA agrees with this commenter and points out that 
Sec. 990.83(a) specifies that the trustee(s) is to have immediate 
reimbursement of assessment costs already incurred, costs necessary to 
complete the assessment, emergency restoration expenses, costs 
necessary to develop the final restoration plan and costs to implement 
a restoration plan or individual project that is part of that 
restoration plan.
    Comment: Several commenters strongly rejected uses of ``recoveries 
from previous spills'' or current recoveries held in suspense until 
there is a sufficient amount of money to conduct restoration activities 
``on an ecosystem, bay or area approach.'' Commenters argued that 
pooling and usage of funds is contrary to the principles of 
compensatory damages and avoidance of double damages enunciated by 
Congress in passing OPA. Further, this usage contradicts section 
1006(f) that ``there be a nexus between monies recovered resulting from 
a particular spill and their use to restore or enhance the specific 
resources `affected by a discharge.''' They cite section 1006(c), that 
requires the trustee(s) to ``implement'' the specific restoration plans 
that have provided the basis of the RP's(s') liability. Some commenters 
argue that, only when the RP(s) can refer to the site-specific 
restoration measures undertaken by the trustee(s) for a specific 
discharge of oil, can it defend itself against overlapping claims by 
other trustees.
    One commenter noted that Congress defined ``equivalence'' as 
properly focused on ``enhanc[ing] the recovery, productivity, and 
survival of the ecosystem affected by a discharge.'' As such, both the 
statute and legislative history reflect congressional intent for a 
strong connection between recovered monies in a case and their 
application.
     Another commenter, however, supports a pooling of funds in order 
to fund a restoration plan for an entire region, provided a legally-
approved regional restoration plan exists. The commenter supports this 
so long as NOAA maintains the definition of ``acquisition of the 
equivalent'' or ``replacement'' as it appeared in the ANPRM of March 
13, 1992, so that sums are not spent on unlike resources.
    Response: NOAA does not believe that pooling recoveries for use in 
a Regional Restoration Plan contradicts the requirement in OPA that 
recoveries be used to restore the resources affected by a discharge. A 
relatively small recovery, assessed by a compensation table or Type A 
model, is unlikely to be sufficient to restore a bay or estuary 
affected by a discharge where many forces are working to degrade that 
ecosystem. By pooling recoveries, the trustee(s) has a chance to carry 
out meaningful actions to help that system recover. The trustee(s), in 
the assessment, is to outline how the damage figure was derived, i.e., 
compensation table or Type A model. Those procedures are based on 
restoration costs when feasible. If restoration is not feasible for 
such a discharge, both the compensation table and Type A model base 
damages on compensable value. Therefore, recoveries are to go to 
restoring the services previously provided by the injured resources. In 
this way, a Regional Restoration Plan will help return those services. 
The RP(s) will be able to defend against an attempted double recovery 
by showing how the damage figure is to be applied within the regional 
restoration plan. As one commenter pointed out in the legislative 
history, the monies recovered are closely tied to the ``ecosystem 
affected.'' The definitions of ``replacement'' and ``acquisition of the 
equivalent'' remain in the proposed rule and should help ensure that 
the pooled recoveries are, in fact, meaningfully used for the recovery 
of the system.

```Excess' Recoveries''

    Comment: Many commenters noted that any excess monies should be 
deposited in the Oil Pollution Trust Fund and not be used for unrelated 
environmental projects.
    Response: The proposed rule allows for the recovery of damages 
required by OPA, namely: (1) the cost of restoring, rehabilitating, 
replacing or acquiring the equivalent of, the damaged resources 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. The 
trustee(s) is to use the money to restore, rehabilitate, replace, or 
acquire the equivalent of the damaged resources and/or services 
provided by those resources and to reimburse the reasonable costs of 
conducting the assessment. Any recoveries that may be left over after 
implementing the restoration plan shall be deposited in the Oil Spill 
Liability Trust Fund.

National Environmental Policy Act, Executive Order 12866, Regulatory 
Flexibility Act, and Paperwork Reduction Act

    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 
General Counsel, in accordance with the Regulatory Flexibility Act, 
certifies to the Chief Counsel for Advocacy, Small Business 
Administration, that this proposed rule will not have a significant 
economic effect on a substantial number of small entities.
    The National Oceanic and Atmospheric Administration has determined 
that this document is not a major rule under Executive Order 12866. The 
rule provides optional procedures for the assessment of damages to 
natural resources. It does not directly impose any additional cost. In 
addition, estimates of the potential economic effects of this rule are 
well below $100 million annually. As the rule applies to federal, 
state, and tribal entities acting as trustees for natural resources, it 
is not expected to have a significant effect on a substantial number of 
small entities.
    It has been determined that this rule does not contain information 
collection requirements that require approval by the Office of 
Management and Budget under 44 U.S.C. 3501 et seq.

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 30, 1993.
Katharine W. Kimball,
Deputy Assistant 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 proposed to be 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--General

Sec.
990.10  Scope and Applicability.
990.11  Purpose.
990.12  Overview.
990.13  Definitions.
990.14  Recovery of Damages.
990.15  Administrative Record for Development of Draft Assessment/
Restoration Plan.
990.16  Prespill Planning.
990.17  Participation of the Responsible Party(ies). RP(s).
990.18  Compliance with Other Applicable Laws and Statutes.
990.19  Review of Regulations.

Subpart B--Preassessment Phase

990.20  Preassessment Phase--General.
990.21  Preassessment Phase--Preassessment Determination.
990.22  Preassessment Phase--Damage Assessment Determination.
990.23  Preassessment Phase--Damage Assessment Selection.
990.24  Preassessment Phase--Data Collection and Analysis.
990.25  Preassessment Phase--Emergency Restoration.

Subpart C--Draft Assessment/Restoration Plan

990.30  Draft Assessment/Restoration Plan--General.
990.31  Draft Assessment/Restoration Plan--Content.
990.32  Draft Assessment/Restoration Plan--Development.
990.33  Draft Assessment/Restoration Plan--Other Elements.

Subpart D--Assessment Phase--Compensation Formulas

990.40  Compensation Formulas--General.
990.41  Compensation Formulas--Estuarine and Marine Formula.
990.42  Compensation Formulas--Inland (Freshwater) Waters Formula.

Subpart E--Assessment Phase--Type A Models

990.50  Type A Models--General.
990.51  Type A Models--Natural Resource Damage Assessment Model for 
Coastal and Marine Environments, Version 1.2.

Subpart F--Assessment Phase--Expedited Damage Assessment

990.60  Expedited Damage Assessment--General.
990.61  Expedited Damage Assessment--Selection.
990.62  Expedited Damage Assessment--Objectives and Approach.
990.63  Expedited Damage Assessment--Injury Determination.
990.64  Expedited Damage Assessment--Injury Quantification.

Subpart G--Assessment Phase--Comprehensive Damage Assessment

990.70  Comprehensive Damage Assessment--General.
990.71  Comprehensive Damage Assessment--Injury Determination.
990.72  Comprehensive Damage Assessment--Injury Quantification.
990.73  Comprehensive Damage Assessment--Restoration/General.
990.74  Comprehensive Damage Assessment--Restoration Component 
Development.
990.75  Comprehensive Damage Assessment--Analysis and Selection of 
Restoration Alternatives.
990.76  Comprehensive Damage Assessment--Evaluation of Restoration.
990.77  Comprehensive Damage Assessment--Compensable Values.
990.78  Comprehensive Damage Assessment--Compensable Values, 
Measurement Techniques.
990.79  Comprehensive Damage Assessment--Compensable Values, 
Implementation Guidance.

Subpart H--Post-Assessment Phase

990.80  Post-assessment Phase--Report of Assessment.
990.81  Post-assessment Phase--Demand.
990.82  Post-assessment Phase--Accounts.
990.83  Post-assessment Phase--Use of Sums Recovered.
990.84  Post-assessment Phase--Final Restoration Plan.

Appendix A to Part 990--Draft Memorandum of Understanding

Appendix B to Part 990--Memorandum of Agreement

Appendix C to Part 990--Expedited Damage Assessment: Oil 
Characteristics

Appendix D to Part 990--List of Acronyms

    Authority: 33 U.S.C. 2706(e).

Subpart A--General


Sec. 990.10  Scope and applicability.

    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 of oil into or upon navigable waters, 
adjoining shorelines, or the Exclusive Economic Zone. OPA also provides 
for the designation of federal, state, tribal, and foreign officials to 
act on behalf of the public as trustee(s) for natural resources. In the 
event that natural resources are injured, lost, destroyed, or the loss 
of use of natural resources occurs as a result of a discharge of oil 
covered by OPA, these officials are authorized to assess natural 
resource damages, present a claim for those damages, and develop and 
implement a plan for the restoration, rehabilitation, replacement, or 
acquisition of the equivalent of the natural resources under their 
trusteeship. Because the assessment procedures provided in this part 
are not mandatory, a trustee(s) may use other assessment procedures. 
However, this proposed rule must be used by the natural resource 
trustee(s) in order to obtain the rebuttable presumption provided by 
section 1006(e)(2) of OPA. This part applies to discharges covered by 
OPA. This part supplements the procedures established under the 
National Oil and Hazardous Substances Pollution Contingency Plan (NCP), 
40 CFR Part 300, for the identification, investigation, study, and 
response to a discharge of oil, and provides procedures by which the 
natural resource trustee(s) can determine compensation for injuries to 
natural resources that are not addressed by response actions conducted 
pursuant to the NCP.


Sec. 990.11  Purpose.

     This part provides a range of standardized and cost- effective 
procedures for assessing natural resource damages. These procedures 
will allow expeditious actions on the part of the trustee(s) to return 
natural resources and/or services to the public as compensation for 
injuries resulting from a discharge of oil. The results of an 
assessment performed by the federal, state, or tribal natural resource 
trustee(s) according to these procedures shall be accorded the 
evidentiary status of a rebuttable presumption as provided in section 
1006(e)(2) of OPA.


Sec. 990.12  Overview.

    (a) General. This part provides guidance on three basic phases that 
may be a part of a natural resource damage assessment under OPA. These 
three phases are: Preassessment Phase, Assessment Phase, and Post-
Assessment Phase.
    (b) Organization. Each of the three basic phases described above 
has various components. Phase I includes the Preassessment Phase--
subpart B of this part. Phase II includes the Assessment Phase--
subparts C, D, E, F and G of this part. Finally, Phase III includes the 
Post-Assessment Phase--subpart H of this part.


Sec. 990.13  Definitions.

    Acquisition of the equivalent means obtaining natural resources 
and/or services that the trustee(s) determines are comparable to those 
injured.
    Assessment area means the area in which natural resources and/or 
services are affected by the discharge of oil.
    Baseline means the condition(s) of the natural resources and/or 
services, taking into account natural or other (human-induced) 
variability, that would have existed had the discharge of oil under 
investigation not occurred. In the absence of reliable data on 
variability, the baseline is the condition of the resources and/or 
services of interest immediately prior to the discharge.
    Baseline data means those data that are systematically collected 
for natural resources and/or services environmental parameters of 
interest over a period of time and on a regular basis.
    CERCLA means the Comprehensive Environmental Response, 
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. 9601 et 
seq., frequently referred to as the ``Superfund Act.''
    Commercial services or ``resources of commercial importance'' means 
those natural resources and/or services that are oriented toward the 
provision of income or profit for a private party. Examples include: 
agriculture, shipping, commercial fishing, charter boat operations, 
water intake for plant operations, mining, and log harvesting.
    Compensable values means the total diminution in value of the 
injured natural resources and/or services as a result of the discharge, 
from the onset of the discharge until recovery to baseline or 
comparable conditions is deemed complete by the trustee(s).
    Comprehensive damage assessment (CDA) means a range of procedures 
to assess damages to natural resources and/or services based on 
complex, prolonged studies.
    Contributing factor means where multiple factors may have 
contributed to an indivisible injury to a natural resource and/or 
service, the discharge of oil may be considered a contributing factor 
to the injury.
    Control means conditions where all variables, except the presence 
of the discharged oil, are the same, and which can be manipulated, 
measured, and monitored.
    Cost-effective means that when two or more activities provide the 
same or comparable level of benefits to the natural resources and/or 
services, the least costly activity providing that level of benefits 
will be selected.
    Damages means the amount of money calculated to compensate for 
injury to, destruction of, loss of, or loss of use of natural 
resources, including the reasonable costs of assessing or determining 
the damage, which shall be recoverable by the United States, a state, 
Indian tribe, or foreign trustee.
    Destruction means the total loss of a natural resource and/or 
service.
    Direct use value means the value individuals derive from direct use 
of a natural resource, including consumptive and nonconsumptive uses.
    Discharge means any emission of oil (other than natural seepage), 
intentional or unintentional and includes, but is not limited to, 
spilling, leaking, pumping, pouring, emptying, or dumping.
    Ecological services or ``resources of ecological importance'' means 
the physical, chemical, and biological functions that one natural 
resource provides for another. Examples include the provision of food, 
protection from predation, nesting habitat, biodiversity, erosion 
control, and waste assimilation.
    Effect means the impact on or result of a natural resource and/or 
service exposed to the discharge of oil.
    Equivalent resources mean those natural resources that provide the 
same or comparable services as the injured resources.
    Exclusive Economic Zone means the zone established by Presidential 
Proclamation Number 5030, dated March 10, 1983, 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.
    Expedited damage assessment (EDA) means a range of procedures to 
assess damages to natural resources and/or services based on limited, 
focused studies.
    Exposed to means all or part of a natural resource that may be in 
contact with oil or with any medium containing the oil.
    Exposure means that the natural resource was exposed and there is a 
pathway between the discharge and exposed natural resource.
    Fund means the Oil Spill Liability Trust Fund, established by 
section 9509 of the Internal Revenue Code of 1986 (26 U.S.C. 9509).
    Historical data means those data that are collected for natural 
resources and/or services but that may be temporally or spatially 
discontinuous.
    Incident means an occurrence 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.
    Injury means any adverse change in a natural resource or impairment 
of a service provided by a resource relative to baseline, reference, or 
control conditions. Injury incorporates the definitions of 
``destruction,'' ``loss,'' and ``loss of use.''
    Injury resulting from a discharge of oil (or injury caused by the 
discharge of oil) has been determined when the trustee(s) has 
demonstrated that:
    (1) With direct exposure,
    (i) The natural resource was exposed;
    (ii) There is a pathway between the discharge and exposed natural 
resource; and
    (iii) The exposure of oil, its components, or by-products has been 
shown by rigorous and appropriate scientific methodology to have an 
adverse effect on the natural resource in laboratory experiments or the 
field; or
    (2) In the absence of direct exposure,
    (i) The adverse effect on or impaired/diminished use of a natural 
resource has been shown by rigorous and appropriate scientific 
methodology; and
    (ii) The adverse effect on or impaired/diminished use of the 
natural resource would not have occurred but for the fact of the 
discharge or threat of a discharge.
    Lead administrative trustee (LAT) means a natural resource trustee 
who is designated on an incident-by-incident basis for the purpose of 
preassessment and damage assessment, and chosen by the other trustees 
whose natural resources are affected by the incident. The LAT 
facilitates effective and efficient communication between the OSC and 
other natural resource trustees regarding their activities during the 
Response Phase. An LAT may also be chosen to coordinate prespill 
planning for damage assessment.
    Loss means a reduction in a natural resource.
    Loss of use of means a reduction in a service provided by the 
natural resource.
    Natural resource(s) or resource(s) 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, Indian tribe or foreign government.
    Natural resource damage assessment or assessment means the process 
of collecting and analyzing information to determine damages for 
injuries to natural resources and/or services as set forth in this 
part.
    Navigable waters means waters of the United States, including the 
territorial sea.
    Oil means oil of any kind or in any form, including, but not 
limited to, petroleum, fuel oil, sludge, oil refuse, 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 the Comprehensive Environmental 
Response, Compensation, and Liability Act (CERCLA, 42 U.S.C. 9601) and 
which is subject to the provisions of that Act.
    OPA means Oil Pollution Act of 1990, 33 U.S.C. 2701 et seq.
    Passive use value means the value individuals place on natural 
resources that are not linked to direct use of a natural resource by 
the individual, including, but not limited to, the value of knowing the 
natural resource is available for use by family, friends, or the 
general public; the value derived from protecting the natural resource 
for its own sake; and the value of knowing that future generations will 
be able to use the natural resources.
    Pathway means the course the oil takes from the point of discharge 
to, between, and among natural resources.
    Person means an individual, corporation, partnership, association, 
state, municipality, commission, or political subdivision of a state, 
or any interstate body.
    Protocol means scientific, economic, legal, or regulatory accepted 
procedures used as guidance to implement an activity.
    Reasonable cost of assessment means those costs incurred in 
performing a natural resource damage assessment, or any part thereof, 
in accordance with this rule.
    Recovery means the return of the injured natural resource and/or 
service to its baseline or comparable condition within the constraints 
of natural or other (human-induced) variability.
    Recovery period means the length of time required for the injured 
natural resources and/or services to return to their baseline or 
comparable condition.
    Recreational services or resource of recreational importance means 
the direct use of natural resources by individuals for purposes of 
enjoyment or relaxation. Examples include consumptive uses (those uses 
that involve harvesting of the resource) such as fishing and hunting, 
as well as nonconsumptive uses such as swimming, picnicking, boating, 
bird watching, nature photography, hiking, and camping.
    Reference means a natural resource and/or service that is 
physically, chemically, and/or biologically similar to that affected by 
the discharge.
    Rehabilitation means actions that bring injured natural resources 
and/or services to a state different from baseline conditions, but 
still beneficial to the environment and public.
    Replacement means actions that substitute natural resources and/or 
services for those injured. The natural resources and/or services that 
are substituted provide the same or comparable resources and/or 
services as those injured.
    Resources of special significance means a category of natural 
resources that is afforded statutory or regulatory protection (e.g., 
threatened or endangered species), or is of cultural or archaeological 
significance (e.g., religious or native American artifacts).
    Responsible party (RP) means a person described in or potentially 
described in one or more of the categories set forth in section 
1001(32) of OPA.
    Restoration means actions that return injured natural resources 
and/or services to their baseline condition.
    Services or natural resource services means the physical, chemical, 
biological, aesthetic, and cultural functions performed by the natural 
resources, including the human uses of those functions.
    State means the several states of the United States, the District 
of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the 
U.S. Virgin Islands, the Commonwealth of Northern Marianas, and any 
other territory or possession over which the United States has 
jurisdiction.
    Technical feasibility or technically feasible means that the 
technology necessary to implement an element of the damage assessment 
plan or a restoration methodology has a reasonable chance of successful 
completion in an acceptable period of time.
    Trustee(s) means those officials of the federal and state 
governments, of Indian tribes, and of foreign governments designated 
according to section 1006(b) of OPA who may present a claim for and 
recover damages for injury to natural resources.
    Type A procedure means one of the simplified natural resource 
damage assessment procedures requiring minimal field observation, found 
in subpart D of 43 CFR part 11.
    Type B procedure means an alternative procedure for comprehensive 
natural resource damage assessments, currently found in subpart E of 43 
CFR part 11.


Sec. 990.14  Recovery of damages.

    (a) General. In an action filed pursuant to section 1006 of OPA, 
the natural resource trustee(s) may recover:
    (1) Damages based on injuries occurring from the onset of the 
discharge through the recovery period (including monitoring costs), 
less any mitigation of those injuries by response actions taken or 
anticipated, plus any increase in injuries as a result of response 
actions taken or anticipated;
    (2) The costs of emergency restoration under Sec. 990.20(g) of this 
part; and
    (3) The reasonable costs of the assessment, including:
    (i) The cost of performing the preassessment, assessment, and post-
assessment phases and procedures provided in this part; and
    (ii) Any administrative or legal costs, including base and 
incremental costs, incidental to assessment and restoration; and
    (4) Interest on the amounts recoverable as provided in section 1005 
of OPA.
    (b) Statutory limitations on liability. The determination of the 
damage amount shall consider any applicable limitations on liability 
provided for in section 1004 of OPA.
    (c) Double recovery. There shall be no double recovery for damages 
as a result of the same discharge, as set forth in section 1006(d)(3) 
of OPA.
    (d) Parallel assessments. Nothing in this part precludes the 
determination of damages for injuries to separate natural resources 
and/or services resulting from a single discharge, so long as such 
determination does not result in the double recovery of damages. 
Therefore, the trustee(s) may conduct parallel assessments, combining 
assessment procedures for separate resources and/or services.
    (e) Statute of limitations. Actions for damages and assessment 
costs shall consider the statute of limitations set forth in section 
1017(f) of OPA.
    (f) Settlements. The trustee(s) and responsible party(ies) may 
settle a claim for natural resource damages at any time following a 
discharge of oil. Federal trustees shall seek the approval of the 
Department of Justice in the compromise of any claim of the United 
States. Subject to prespill restoration plans, the trustee(s) shall 
provide for public review of such agreed upon settlements and the 
related restoration plans.
    (g) Oil Spill Liability Trust Fund. Any excess damages shall be 
deposited in the Oil Spill Liability Trust Fund in accordance with 
section 1006(f) of OPA.


Sec. 990.15  Administrative record for development of draft assessment/
restoration plans

    (a) Purpose. The administrative record has four basic purposes:
    (1) Facilitate selection of restoration alternatives by providing a 
central repository for scientific data;
    (2) Document the trustee's(s') consideration of the relevant 
factors in selecting restoration actions;
    (3) Facilitate public participation; and
    (4) Provide the basis for judicial review.
    (b) General. The trustee(s) shall establish an administrative 
record upon which the trustee(s) shall base the selection of 
restoration alternatives. The restoration plan shall include the 
rationale for selection of the alternatives and an estimate of the cost 
of implementing the plan.
    (c) Content. An administrative record should consider the documents 
that form the basis of the selection of the trustee's(s') plan to 
restore, rehabilitate, replace, or acquire equivalent resources.
    (1) Documents that form the basis of the trustee's(s') selection of 
this plan will generally include:
    (i) Documents containing factual information, data, or analysis of 
the factual information or data, that may form a basis for the 
selection of a plan;
    (ii) Guidance documents, technical literature, and site-specific 
policy memoranda that may form a basis for the selection of a plan;
    (iii) Relevant documents that are timely submitted by the RP(s) or 
other members of the public; and
    (iv) Decision documents such as the Report of Assessment.
    (2) Documents that do not form the basis for the selection of a 
plan, such as draft documents, internal memoranda, and day-to-day notes 
of staff, should not be included in the administrative record, unless 
such documents contain information that forms the basis of selection of 
the plan and the information is not included in any other document in 
the administrative record. Documents relating exclusively to liability 
or calculation of compensable values will ordinarily not be included in 
the administrative record.
    (d) Level of detail. The contents and level of detail of the record 
will vary according to the type of procedure selected. Certain types of 
information will be common to all assessments, regardless of the type 
of procedure selected. However, the volume of material compiled for the 
administrative record should be consistent with the scope of the 
assessment and restoration.
    (e) Supplementing the record. (1) Supplements to the record may be 
allowed if the:
    (i) Interested party did not receive actual or constructive notice 
of the Draft Assessment/Restoration Plan and the opportunity to comment 
on the plan;
    (ii) Information submitted does not duplicate information already 
contained in the administrative record; and
    (iii) Information raises sufficiently significant issues regarding 
the scope, effectiveness, or cost of the plan as to warrant having the 
trustee(s) reconsider the plan.
    (2) Where the Draft Assessment/Restoration Plan provides for the 
development of certain components at a later date, the information or 
documents used to develop these components should be added to the 
administrative record as they become available.
    (3) Where the Draft Assessment/Restoration Plan is modified, the 
public will have the right to review and comment upon modifications 
that are, in the opinion of the trustee(s), significant.
    (4) Where the Final Restoration Plan of Sec. 990.84 is a result of 
significant modifications of the restoration component in the Report of 
Assessment, the administrative record should be supplemented with any 
additional material or data considered in developing that modification.
    (f) Availability of the administrative record. (1) To the extent 
practicable, the administrative record should be compiled and made 
available for review and comment as documents are generated or received 
by the trustee(s). However, the degree of public notice and involvement 
in the administrative record should be determined by the trustee(s) on 
a case-by-case basis.
    (2) The administrative record should be made available for public 
review and comment concurrently with the Draft Assessment/Restoration 
Plan.
    (g) Judicial review. The administrative record shall form the basis 
of review of the Report of Assessment in any judicial or administrative 
proceeding.


Sec. 990.16  Prespill planning.

    (a) Prespill planning. To the extent practicable and in conjunction 
with other willing participants where appropriate, the trustee(s) 
should conduct the following prespill activities:
    (1) Develop a natural resource damage assessment management and 
technical team. The size of the team should be a function of the scope 
and complexity of the assessment.
    (2) Identify outside experts to assist in the design and conduct of 
studies, and serve in independent peer review;
    (3) Identify support services;
    (4) Collect information on natural resources and/or services 
potentially affected by discharge of oil along high risk areas;
    (5) Identify the potential trustee(s) and a process to designate a 
lead administrative trustee (LAT), using guidance in paragraph (b) of 
this section at sites that may be affected by discharges of oil;
    (6) Identify sources of information for background data;
    (7) Design a general approach and develop protocols for an early 
sampling program; and
    (8) Establish a centralized data management system for natural 
resource damage assessment baseline data.
    (b) Lead Administrative Trustee. (1) Trustees are encouraged to 
cooperate and coordinate any assessment that involves coexisting or 
contiguous natural resources or concurrent jurisdiction. They may 
arrange to divide responsibility for implementing the assessment in any 
manner that is agreed to by all of the affected natural resource 
trustees with the following conditions:
    (i) A lead administrative trustee should be designated to 
administer the assessment. The lead administrative trustee should act 
as coordinator and contact regarding all aspects of the assessment. The 
lead administrative trustee should be designated by mutual agreement of 
all the natural resource trustees.
    (ii) If there is a reasonable basis for dividing the assessment, 
the natural resource trustees may act independently and pursue separate 
assessments, actions, or claims so long as the claims do not overlap. 
In these instances, the natural resource trustees should coordinate 
their efforts, particularly those concerning the sharing of data and 
the development of the Draft Assessment/Restoration Plan (DARP).
    (iii) If a natural resource trustee(s) takes action as a result of 
a discharge of oil prior to the designation of a lead administrative 
trustee, all damage assessment actions performed by that trustee(s) 
shall be documented and transmitted to the lead administrative trustee 
to avoid duplication of efforts and double counting.
    (2) If the discharge affects trust resources of the other natural 
resource trustee(s) as a result of coexisting or contiguous natural 
resources or concurrent jurisdiction, the trustee(s) may conduct an 
assessment pursuant to this rule without designating a lead 
administrative trustee. However, if appointed the lead administrative 
trustee, conducting an assessment pursuant to this rule, shall ensure 
that all other known affected natural resource trustees are notified 
that a DARP is being developed. This notification shall include the 
results of the Preassessment Phase.
    (c) Regional restoration plan. The trustee(s) is encouraged in 
prespill planning to develop Regional Restoration Plans. These plans 
should be developed, or existing plans modified, through a public 
review and comment process consistent with the restoration planning 
process described in subpart G of this part.
     (d) Trustee memorandum of understanding (MOU). It is strongly 
recommended that, to the extent practicable, natural resource trustees, 
on some logical geographic or political basis, enter into a Memorandum 
of Understanding (MOU) to ensure the coordination and cooperation of 
the trustees in the initiation of assessment and assessment of damage 
determination for injuries to natural resources and/or services 
resulting from a discharge of oil and the application of any natural 
resource damages recovered toward the restoration, rehabilitation, 
replacement, and/or acquisition of equivalent natural resources.
    The MOU is recommended because of the importance of integrating and 
coordinating the assessment of natural resource damages for injuries to 
natural resources affected by a discharge, seeking compensation for 
those injuries to natural resources and/or services, and restoration of 
those affected resources and/or services. This MOU should be prepared 
either in anticipation of a discharge of oil or as soon as possible 
after an actual discharge of oil. A sample MOU is given in Appendix A 
of this part.


Sec. 990.17  Participation of the responsible party(ies) RP(s).

    (a) General. When practicable, the trustee(s) should seek the 
participation of the responsible party(ies) in the natural resource 
damage assessment process. Such participation is not mandatory and is 
at the discretion of the trustee(s).
    (b) Prespill activities. The trustee(s) is encouraged to invite the 
participation of the potential responsible party(ies) in prespill 
planning activities authorized in Sec. 990.16 of this part. Where 
practicable, such prespill planning shall be in connection or 
coordination with the development of Area Contingency Plans authorized 
under section 4202 of OPA. In their prespill plans, the trustee(s) and 
potential responsible party(ies) may consider, but not be limited to, 
the following: identification of likely natural resources at risk, 
possible protective measures taken in the event of a discharge, and 
identification of personnel and agencies likely involved in the event 
of a discharge.
     (c) Preassessment activities. If deemed practicable by the 
trustee(s), the trustee(s) should invite the responsible party(ies) to 
participate in the conduct of the Preassessment Phase in accordance 
with Sec. 990.20 of this part.
    (d) Assessment activities--(1) Offer to participate. Upon 
completion of the preassessment and determination by the trustee(s) 
under Sec. 990.23 of this part to continue assessment procedures under 
subpart F (EDA) or subpart G (CDA) of this part, the trustee(s) should 
invite the participation of the identified RP(s) in such assessment 
actions. Such offer shall be in writing and will serve as the 
notification under Sec. 990.23(c) of this part. The RP(s) shall have 
ten calendar days to respond to the trustee's(s') invitation. Sampling 
or data collection and emergency restoration that are appropriate and 
necessary during the ten-day waiting period may continue. If the RP(s) 
has not responded to the trustee(s) in that time, the trustee(s) may 
continue activities geared towards the conduct of a solo assessment/
restoration process.
    (2) Development of agreement. If the responsible party(ies) 
indicates a willingness to participate in further assessment 
activities, the trustee(s) and RP(s) shall, in good faith, initiate 
negotiations to develop an enforceable agreement considering the 
guidance in subsection (f) of this section. However, such negotiations 
should not prevent the trustee(s) from conducting assessment activities 
during this time period. Such agreement may address all or any part of 
the damage assessment and may be conditioned upon the RP(s) agreement 
to pay trustee costs. If the trustee(s) and RP(s) cannot reach any 
agreement within 45 calendar days from the first day of negotiations, 
the trustee(s) may continue activities geared towards a solo 
assessment/restoration process.
    (3) Draft Assessment/Restoration Plan. The participation of the 
responsible party(ies) must be specifically noted in the Draft 
Assessment/Restoration Plan developed under subpart C of this part in 
order to provide an adequate opportunity for public review.
    (e) Restoration activities. The trustee(s) and responsible 
party(ies) may agree to participate jointly in restoration activities 
identified in the Restoration Plan developed through any of the 
assessment procedures identified in this part. In determining whether 
to invite the responsible party(ies), the trustee(s) may consider, but 
not be limited to, the following factors:
    (1) The willingness of the responsible party(ies) to participate in 
restoration activities (If the responsible party(ies) has not 
participated in earlier phases of the assessment, the trustee(s) may 
also consider the reasons for the responsible party(ies) not 
participating in those earlier activities.);
    (2) The ability (knowledge, expertise, personnel) of the 
responsible party(ies) to participate in restoration activities; and
    (3) The willingness of the responsible party(ies) to pay for 
restoration activities and for trustee costs.
    (f) Jointly-conducted phased assessments.
    (1) To encourage cooperative assessments, the trustee(s) and 
responsible party(ies) are authorized to enter into enforceable 
agreements to jointly conduct any assessment activities in steps or 
phases. These enforceable agreements should contain, but are not 
limited to, the following provisions:
    (i) Identification of the step or phase jointly conducted and end 
product of enforceable agreement (data collection, data analysis, 
etc.);
    (ii) Identification of the activities and responsibilities of the 
respective parties;
    (iii) Conditions for terminating the enforceable agreement;
    (iv) Provisions for nonperformance;
    (v) Provision that the end product of the enforceable agreement 
(data, studies, and other information) will be included in the 
administrative record;
    (vi) Provisions for funding for the various activities; and
    (vii) An agreement that end products of the joint effort cannot be 
challenged by either party with collateral data, studies, and other 
information, collected outside the joint assessment process.
    (2) The trustee(s) and responsible party(ies) should stipulate that 
all data, studies, and other information, jointly collected shall be 
included in the administrative record at the completion of each 
enforceable agreement. The trustee(s) and RP(s) should also stipulate 
that each party to the agreement will be barred from introducing new or 
different data, studies, or other information collected outside the 
joint process to challenge the jointly collected data in either a 
judicial or administrative proceeding under OPA.
    (3) A sample enforceable agreement is given in appendix B of this 
part.


Sec. 990.18  Compliance with other applicable laws and statutes.

    (a) Worker human health and safety. All worker human health and 
safety considerations specified in the NCP for response actions shall 
also apply to the assessment/restoration process.
    (b) Resource protection. Before taking any actions under this part, 
particularly before taking samples or making determinations of 
restoration or replacement, compliance is required with any applicable 
statutory consultation or review requirements, including, but not 
limited to, the Endangered Species Act; the Migratory Bird Treaty Act; 
the Marine Protection, Research, and Sanctuaries Act; and the Marine 
Mammal Protection Act, that may govern the taking of samples or in 
other ways affect alternative management actions.
    (c) State laws. Nothing in this part shall affect, or be construed 
or interpreted as preempting, any state or political subdivision 
thereof from promulgating natural resource damage assessment 
regulations under applicable state or common law. Nothing in this part 
shall affect or be construed or interpreted as preempting any state or 
political subdivision thereof from the use of their applicable natural 
resource damage assessment regulations under applicable state or common 
law.


Sec. 990.19  Review of regulations.

    NOAA plans to review and revise as appropriate these regulations as 
often as necessary, but no less than once every five years.

Subpart B--Preassessment Phase


Sec. 990.20  Preassessment phase--General.

    (a) Purpose/Scope. The Preassessment Phase provides for early 
action in the case of a discharge of oil through a two-step process 
consisting of: Preassessment Determination, to decide whether to 
continue with preassessment; and Damage Assessment Determination, to 
decide which damage assessment procedure to conduct, if any. This 
process is based on limited data collection and analysis. This part 
also provides for notification, coordination, estimation of assessment 
costs, reporting, and emergency restoration.
    (b) Notification. (1) Notification should be consistent with the 
NCP. According to the NCP, the OSC or lead response agency generally 
provides notification to the natural resource trustee(s) when natural 
resources and/or services may be injured by a discharge of oil. If the 
trustee(s) learns of an unidentified or unreported discharge of oil, 
the trustee(s) shall report that discharge to the appropriate authority 
as designated in the NCP.
    (2) After learning of a discharge of oil, the trustee(s) should 
attempt to notify all other known potential trustees of the possibility 
of a natural resource damage assessment. Actions taken by the 
trustee(s) shall be consistent with the NCP and this subpart.
    (3) In addition, in accordance with section 1011 of OPA, the OSC or 
lead response agency shall consult with the affected trustee(s) 
concerning removal actions.
    (c) Coordination. The trustee(s) should coordinate the 
Preassessment Phase with the response agency(ies), as appropriate, 
consistent with the NCP and prespill plans developed pursuant to OPA. 
To the extent practicable, the Preassessment Phase should also be 
coordinated with the trustee(s) whose natural resources and/or services 
are affected by the discharge of oil. The trustee(s) may invite the 
RP(s) to participate in the Preassessment Phase.
    (d) Preassessment Phase costs. (1) Preassessment Phase costs 
include and are recoverable only for trustee-approved activities that 
deal directly with preassessment. Examples of preassessment costs 
include, but are not limited to, costs necessary for: Notification; 
coordination; Preassessment Determination; Damage Assessment 
Determination; data collection and analysis; report preparation, and 
emergency restoration.
    (2) Preassessment Phase costs shall not reflect response-related 
actions and non-incident specific activities performed by the 
trustee(s) in the management of natural resources and/or services.
    (3) The costs stipulated in Sec. 990.20 (d)(1) shall be supported 
with appropriate and sufficient documentation.
    (e) Preassessment Phase Report. At the conclusion of the 
Preassessment Phase, the trustee(s) shall prepare a Preassessment Phase 
Report documenting all preassessment actions taken, estimated costs 
related to those actions, and decisions to proceed with preassessment 
and damage assessment/restoration actions. If no additional actions are 
undertaken, the Preassessment Report becomes the Report of Assessment. 
If the trustee(s) conducts further actions, the Preassessment Phase 
Report becomes a part of the Report of Assessment.


Sec. 990.21  Preassessment phase--preassessment determination.

    (a) Purpose. Following notification of a discharge of oil, the 
trustee(s) shall conduct a Preassessment Determination to decide 
whether to continue with the Preassessment Phase.
    (b) Scope. The trustee(s) shall gather readily available 
information on the nature of the discharge and environmental setting, 
i.e., circumstances of the discharge incident, oil characteristics, 
nature of the receiving environment, and natural resources and/or 
services characteristics.
    (c) Conditions. Using such information, the trustee(s) will decide 
if the following conditions are met:
    (1) The discharge does not qualify for an exclusion under section 
1002(c) of OPA;
    (2) Trust natural resources, as defined by OPA, and/or services may 
be adversely affected by the discharge; and
    (3) There is a reasonable probability that the trustee(s) can make 
a successful damage claim based on the scientific, economic, and legal 
merits of the case, i.e., potential for injury resulting from the 
discharge and successful and meaningful restoration and/or 
compensation.
    (d) Continuing with preassessment. If these conditions are met, the 
trustee(s) may continue with the Preassessment Phase. If all conditions 
are not met, further preassessment activities should not be conducted.


Sec. 990.22  Preassessment phase--damage assessment determination.

    (a) Purpose. Following the decision to proceed with the 
Preassessment Phase, the trustee(s) collects data sufficient to decide 
which damage assessment procedures to conduct, if any.
    (b) Scope. Damage Assessment Determination requires that the 
trustee(s):
    (1) Characterize the discharge and environmental setting based on 
similar but more detailed data collection and analysis efforts 
conducted in Preassessment Determination, encompassing circumstances of 
the discharge incident, oil characteristics, nature of the receiving 
environment, and natural resources and/or services characteristics;
    (2) Determine potential exposure based on direct and indirect 
exposure or the threat of exposure;
    (3) Determine potential injury based on physical, chemical, 
biological, or other attributes of the natural resource and/or service;
    (4) Characterize the potential risk (probable cause-effect 
associations) to natural resources and/or services based on the weight 
of evidence and best professional judgment of the information developed 
above;
    (5) Estimate extent of injury to natural resources and/or services 
based on spatial and temporal boundaries; and
    (6) Estimate damages based on possible environmental and/or 
economic values, likely cost of restoration actions, and all 
assessment-related costs.
    (c) Additional injury determination studies. If the trustee(s) 
determines that no further assessment activities are to be conducted, 
but that additional information regarding the discharge may be 
beneficial, the trustee(s) with or without the RP(s) may decide to 
conduct limited injury determination studies to collect additional 
information verifying that no significant injury to natural resources 
and/or services has resulted from the discharge. Where no injury is 
identified, the costs of such studies are not recoverable under this 
subpart and shall be borne by the trustee(s). Should such additional 
studies indicate that significant and quantifiable injury has occurred 
to natural resources and/or services, the trustee(s) may reinitiate the 
Preassessment Phase and the costs are then part of the assessment 
costs.


Sec. 990.23  Preassessment phase--damage assessment selection.

    (a) Decision on type of assessment. The trustee(s), at his 
discretion, may select any of the following assessment procedures at 
the completion of the Preassessment Phase:
    (1) Compensation Formula;
    (2) Type A model;
    (3) Expedited Damage Assessment (EDA); or
    (4) Comprehensive Damage Assessment (CDA).
    (b) Parallel assessments. The trustee(s) may use more than one 
procedure for a discharge of oil, provided there is no double counting.
    (c) Responsible Party option. The RP(s) may request the trustee(s) 
to conduct an EDA or CDA procedure, so long as the costs of that study 
are provided by the RP(s) in advance of conducting the procedure.
    (d) Estimates. Using the estimates developed in Sec. 990.22(b)(6), 
the trustee(s) should select the assessment procedure(s) that is 
reasonable. These estimates will necessarily be of a preliminary 
nature, subject to change as more information is obtained. The 
trustee(s) may select from the procedures identified in subparts D, E, 
F, and G of this part.
    (e) General considerations. The trustee(s) should examine the 
following general considerations for the most appropriate damage 
assessment procedure:
    (1) The size and nature of the discharge and environmental setting;
    (2) The extent to which the discharge of oil is expected to cause 
injury to natural resources and/or services;
    (3) The expected environmental and/or economic values provided by 
those affected natural resources and/or services;
    (4) The extent to which response actions carried out or planned 
will avoid further injury to natural resources and/or services without 
further action;
    (5) The extent to which the discharge meets the conditions for 
using the selected damage assessment procedures;
    (6) The extent to which injury to natural resources and/or services 
can be determined with available information and quantification 
methods;
    (7) The extent to which restoration alternatives can return injured 
natural resources and/or services to their baseline or comparable 
conditions;
    (8) The extent to which damages based upon injury to natural 
resources and/or services can be determined with available information 
and quantification methods; and
    (9) Whether the anticipated damage assessment procedure(s) is cost 
effective.
    (f) Specific factors. The trustee(s) should consider the following 
specific factors in selecting a particular damage assessment procedure.
    (1) Compensation formulas. The Compensation Formulas require the 
least amount of information concerning the discharge. All information 
necessary for the use of the procedures is likely gathered during the 
Preassessment Phase. Procedures for conducting the compensation 
formulas are found in subpart D of this part. The trustee(s) shall 
consider, but not be limited to, the following factors when determining 
whether use of the compensation formulas is appropriate:
    (i) The amount of the discharge is between 10 gallons and 50,000 
gallons, 24 hours after the discharge begins;
    (ii) The likely injury and damages resulting from the discharge are 
appropriate for calculation using the compensation formulas as 
described in either: ``Compensation Formula for Natural Resource Damage 
Assessments under OPA: Oil Spills into Estuarine and Marine 
Environments, Volumes I-IV'' or ``Compensation Formula for Natural 
Resource Damage Assessments under OPA: Oil Spills into Inland 
(Freshwater) Waters, Volumes I-III''; and
    (iii) The discharge is of the nature where the accurate 
quantification of injury and damages would not be cost-effective in the 
determination of the trustee(s).
    (2) Type A models. Any one of the Type A models found at 43 CFR 
part 11 subpart D may be used to determine the damages resulting from a 
discharge. Procedures for conducting the Type A models are found in 
subpart E of this part. The trustee(s) shall consider, but not be 
limited to, the following factors when determining whether use of a 
Type A model is appropriate:
    (i) The conditions of the discharge are sufficiently similar to the 
conditions of 43 CFR 11.33(b);
    (ii) The compensation formulas of subpart D of this part are not 
sufficient alone to estimate the injury and damages resulting from the 
discharge; and
    (iii) There is no other cost-effective procedure available to 
estimate the injury and damages resulting from the discharge.
    (3) Expedited Damage Assessment (EDA). This procedure focuses the 
trustee(s) on determining and quantifying injuries to selected natural 
resources and/or services. Procedures for conducting an EDA are found 
in subpart F of this part. The trustee(s) may determine that the use of 
an expedited damage assessment procedure is appropriate after 
considering, but not limited to, the following factors:
    (i) The use of the compensation formula or Type A model alone may 
not sufficiently account for the injury and damages resulting from the 
discharge;
    (ii) There is readily available information on the nature of the 
discharge and its effect on natural resources and/or services;
    (iii) The injury and damages resulting from the discharge can be 
adequately calculated by conducting limited, focused injury 
determination/quantification and compensable values studies as outlined 
in subpart F of this part; or
    (iv) Potential restoration actions can be implemented without 
complex, prolonged injury determination/ quantification and compensable 
values studies.
    (4) Comprehensive Damage Assessment (CDA). The trustee(s) may 
determine that the circumstances of the particular discharge will 
require a more lengthy and detailed damage assessment. Procedures for 
conducting a CDA are found in subpart G of this part. The trustee(s) 
shall consider, but not be limited to, the following factors in 
selecting a CDA:
    (i) The injury and damages resulting from the discharge can best be 
determined through a complex, prolonged process, involving a broad 
scope of injury determination/ quantification and compensable values 
studies;
    (ii) Information concerning the nature of the discharge and its 
effects on the natural resources and/or services at risk is not readily 
available; and
    (iii) Potential restoration actions cannot be determined or 
implemented without substantive injury determination/quantification and 
compensable values studies.


Sec. 990.24  Preassessment phase--data collection and analysis.

    (a) Purpose. The purpose of data collection and analysis (data 
collection) in the Preassessment Phase is to ensure that there is 
sufficient information to evaluate the risk to natural resources and/or 
services resulting from the discharge of oil.
    (b) Scope. (1) The trustee(s) may conduct limited data collection 
throughout the Preassessment Phase.
    (2) Only information on natural resources and/or services that is 
related to the discharge, and considered relevant to the assessment 
process, restoration alternatives likely to be implemented, and/or 
compensable values, should be collected. Such information serves as the 
basis for the Assessment Phase.
    (3) When practicable, data collection protocols and Quality 
Assurance (QA) procedures should follow the guidance provided in 
subpart C of this part.
    (4) When reasonably practicable, the trustee(s) should collect the 
following types of information during the Preassessment Phase:
    (i) Data necessary to make a determination to proceed with the 
Preassessment Phase;
    (ii) Ephemeral or perishable data that may be lost if not collected 
immediately; and
    (iii) Necessary data that serves as the basis for the selected 
damage assessment procedure, the absence of which data would prevent 
the trustee(s) from proceeding with damage assessment determination of 
Sec. 990.23, i.e., input into the compensation formulas or Type A 
models, or the study design for the EDA or CDA.
    (5) The trustee(s) is encouraged to collect baseline, reference, 
control, or other necessary information to determine the appropriate 
assessment procedures to the extent that such information is available 
or can be readily determined.


Sec. 990.25  Preassessment phase--emergency restoration.

    (a) Purpose. After notification and during response, the 
trustee(s), with the approval of the OSC, may undertake emergency 
restoration such that it does not interfere with response actions. 
Emergency restoration is deemed necessary to restore natural resources 
and/or services in those limited situations where the imminent loss of 
that resource and/or service may occur before any assessment of injury 
and restoration plan could be developed and implemented.
    (b) Costs. Any costs associated with emergency restoration may be 
claimed as part of the damage claim or as uncompensated claims under 
section 1012(a)(4) of OPA.

Subpart C--Draft Assessment/Restoration Plan


Sec. 990.30  Draft assessment/restoration plan--general.

    (a) Purpose. The purpose of the Draft Assessment/Restoration Plan 
(DARP) is to ensure that the assessment/restoration is performed in a 
planned, cost-effective, and systematic manner, and provide for public 
review and comment of the restoration plans as required under section 
1006 of OPA.
    (b) DARP requirement. The trustee(s) shall develop plans for the 
assessment of damages and restoration of natural resources and/or 
services affected by the discharge. These plans shall be developed in 
accordance with the requirements and procedures provided in this 
subpart and in subparts D, E, F, and G of this part.
    (c) Prespill plans. To the maximum extent practicable, a DARP 
developed by the trustee(s) under this subpart shall be consistent with 
any applicable prespill plans completed under Sec. 990.16, unless the 
trustee(s) justifies and documents the departure from such plans.
    (d) Administrative Record, Report of Assessment. The DARP, along 
with any significant modifications and associated comments and 
responses, shall be placed in the administrative record. The DARP, as 
modified after public review, as appropriate, is the basis of the 
Report of Assessment.
    (e) Plan approval. The trustee(s) shall have final approval as to 
the content and development of the DARP.
    (f) NEPA compliance. The DARP shall be developed in order to 
fulfill applicable NEPA requirements.


Sec. 990.31  Draft assessment/restoration plan--content.

    (a) General. (1) The DARP shall address the four major components 
of the Assessment Phase, the:
    (i) Injury determination component, i.e., results of injury 
determination studies, to the extent they are known, with documentation 
of those results;
    (ii) Injury quantification component, i.e., the results of 
quantification studies, to the extent they can be calculated, with 
documentation of those results;
    (iii) Restoration planning component, i.e., the evaluation, 
selection, and estimated cost of planned restoration actions; and
     (iv) Compensable values component, i.e., valuation studies 
planned, subject to Sec. 990.32(c)(4) of this part, with the results of 
those studies if deemed appropriate by the trustee(s).
    (2) For CDAs, where there are prolonged (multi-year) plans, the 
trustee(s) need not develop all components of the DARP simultaneously, 
but may develop annual reports to update the DARP as the assessment 
progresses.
    (b) DARP information requirements. The DARP should include:
    (1) A brief identification of the discharge of concern based upon 
information from the Preassessment Phase;
     (2) Descriptions of the natural resources and/or services 
involved;
     (3) A statement of authority for asserting trusteeship, or co-
trusteeship, for those natural resources and/or services considered in 
the DARP;
     (4) The Preassessment Phase Report; and
     (5) Those requirements of each of the assessment procedures, 
described in subparts D, E, F, and G of this part, used by the 
trustee(s).
     (c) Level of detail. The level of detail for each component of the 
DARP shall be consistent with what is appropriate for the type of 
assessment procedures being conducted.


Sec. 990.32  Draft assessment/restoration plan--development.

     (a) Timing of DARP development. (1) Following the development and 
trustee approval of the injury determination and quantification 
components of the DARP, the trustee(s) should implement those 
components of the DARP to the extent practicable.
    (2) As data are produced in the injury determination and 
quantification components, the trustee(s) should complete the 
restoration component and the design of the compensable values 
component for the injured natural resources and/or services.
     (b) Development requirements for multiple trustees. The trustee(s) 
should fulfill the following requirements in developing a DARP for 
assessments in which there are multiple trustees:
     (1) A lead administrative trustee should be designated to 
administer the DARP. The lead administrative trustee should act as 
coordinator and contact regarding all aspects of the DARP.
     (2) The trustees are encouraged to cooperate and coordinate any 
DARP that involves coexisting or contiguous natural resources or 
concurrent jurisdiction. They may arrange to divide responsibility for 
implementing the components of the assessment in any manner that is 
agreed upon by all of the affected natural resource trustees.
    (c) Public involvement. (1) Injury determination and quantification 
components of the DARP. The trustee(s) shall provide notification of 
the selection of the methodologies used to determine and quantify 
injury to natural resources and/or services pursuant to the 
compensation formula, Type A model, and the EDA. The trustee(s) shall 
provide formal public review and comment for the injury determination 
and quantification components of the CDA.
    (2) Restoration planning component of the DARP. The trustee(s) must 
provide for public notice and comment of the restoration planning 
component of the DARP. Where there is no Regional Restoration Plan 
developed and adopted following public review and comment pursuant to 
prespill planning, as described in Sec. 990.16 of this part, the 
trustee(s) must provide for public review and comment of the 
restoration component of DARPs developed pursuant to the compensation 
formula, Type A model, EDA, and CDA. Where a Regional Restoration Plan 
has been developed and adopted following public review and comment 
pursuant to prespill planning as described in Sec. 990.16 of this part, 
the trustee(s) must provide for public notice, review and comment of 
the intent to apply one or more recoveries from a compensation formula 
or Type A assessment to the Regional Restoration Plan. The trustee(s) 
must provide for public review and comment of the restoration 
components of DARPs developed pursuant to an EDA or CDA.
    (3) The trustee(s) may provide for public notification or review of 
the compensable values component of the DARP, subject to 
Sec. 990.32(c)(5) of this part.
    (4) Public review period. Where the trustee(s) is required to 
provide a minimum for public review and comment, the trustee(s) must 
provide a minimum of 30 calendar days for public review and comment. 
The trustee(s) may grant reasonable extensions for that review.
    (5) Exception to public notification, review, and comment. It is at 
the discretion of the trustee(s) to provide for notification, review, 
and comment of those portions of the DARP concerning the calculation of 
compensable values. The trustee(s) may further withhold the description 
of studies and methodologies for determining the damages for the 
compensable values from public review and comment. Such damages are 
still afforded the rebuttable presumption, but may not be eligible for 
judicial review on the record.
    (6) Method of publication. Notification or publication of a DARP 
may be provided in a publication of local, state, regional, or national 
circulation, as deemed appropriate to the scope of the assessment/
restoration by the trustee(s).
    (d) Modification. (1) The DARP may be modified at any stage of the 
assessment/restoration process as new information becomes available.
    (2) Any modification to that portion of the DARP that has been the 
subject of review and comment that, in the judgment of the trustee(s), 
is significant shall be made available for review and comment for a 
period of at least 30 calendar days, with reasonable extensions granted 
as appropriate, before tasks subject to modification are begun.
    (3) Any modification to the DARP that in the judgment of the 
trustee(s) is not significant may be made available for review at the 
discretion of the trustee(s), but the implementation of such 
modification need not be delayed as a result of such review.
    (e) DARP implementation by RP(s). At the option of the trustee(s) 
and if agreed to by any RP(s) acting jointly, the RP(s) or any other 
party under the direction, guidance, and monitoring of the trustee(s) 
may implement all or any part of the DARP as approved by the 
trustee(s). Any decision to involve the RP(s) shall be documented in 
the DARP.


Sec. 990.33  Draft assessment/restoration plan--other elements.

    (a) Protocols. Selection of specific data collection protocols in 
damage assessment is left to the discretion of the trustee(s). In 
general, protocols should be applicable to the discharge and 
environmental setting, cost-effective, and provide information 
consistent with data quality requirements.
    (b) Quality Assurance (QA). The trustee(s) may implement or modify 
existing, or develop new quality assurance (QA) program and project 
plans relative to the requirements and constraints of incident.
    (c) Data Management. Where appropriate, the trustee(s) should 
develop a data management plan to accommodate the input, uses, needs, 
and access for the data.

Subpart D--Compensation Formulas


Sec. 990.40  Compensation formulas--general.

    (a) General. Based upon best professional judgment, the trustee(s) 
may determine damages as compensation for injury to natural resources 
and/or services using the compensation formulas authorized by this 
subpart for all or part of the assessment. The formulas may be used by 
the trustee(s) for discharges of oil ranging from ten gallons to 50,000 
gallons and where the trustee(s) determines that there has not been a 
significant loss in passive use values.
    (b) Seasons. For the purposes of this subpart, the seasons of the 
year are defined as follows:
    (1) Winter=January 1 through March 31;
    (2) Spring=April 1 through June 30;
    (3) Summer=July 1 through September 30; and
    (4) Fall=October 1 through December 31.
    (c) Incorporation by reference. The following publications are 
incorporated by reference:
    (1) ``Compensation Formula for Natural Resource Damage Assessments 
under OPA: Oil Spills into Estuarine and Marine Environments,'' Volumes 
I-IV. Available from DART, Suite 604, 1825 Connecticut Avenue, N.W., 
Washington, DC 20235.
    (2) ``Compensation Formula for Natural Resource Damage Assessments 
under OPA: Oil Spills into Inland (Freshwater) Waters,'' Volumes I-III. 
Available from DART, Suite 604, 1825 Connecticut Avenue, N.W., 
Washington, DC 20235.
    (d) Damage claim. (1) The damages include the compensation formula 
result plus any damages computed by the trustee(s) due to beach and/or 
shoreline closure, plus for inland (freshwater) waters damages due to 
lost boating days, plus the reasonable costs of conducting the 
assessment. Additional damages determined through other assessment 
methods may also be included so long as there has been no double 
counting. This damage figure is included in the Report of Assessment 
and the Demand under Secs. 990.80 and 990.81 of this part, and is 
documented in the administrative record.
    (2) Damages calculated using one of the compensation formulas 
provided in subpart D of this part are conclusive for the injuries 
included in that formula. Judicial review of the demand shall be 
limited to the applicability of the formula and the accuracy of any 
site-specific input data.
    (e) Final Restoration Plan. Based upon the final damages recovered, 
the trustee(s) shall develop a restoration component plan, either 
implementing restoration actions identified in a prespill Regional 
Restoration Plan or as an incident-specific plan as provided by subpart 
H of this part.


Sec. 990.41  Compensation formulas--estuarine and marine formula.

    (a) Use of estuarine and marine formula. To use the Estuarine and 
Marine formula, the trustee(s) must identify:
    (1) Whether the discharge occurred in a marine, estuarine, 
subtidal, or intertidal area using the definitions given in ``Volume 
I--Technical Documentation'' of ``Compensation Formula for Natural 
Resource Damage Assessments under OPA; Oil Spills in Estuarine and 
Marine Environments;''
    (2) Location of discharge, using the boundaries and definitions of 
the provinces provided in ``Volume I--Technical Documentation'' of 
``Compensation Formula for Natural Resource Damage Assessments under 
OPA; Oil Spills in Estuarine and Marine Environments,'' to determine in 
which province the discharge occurred;
    (3) Habitat type that typifies the habitat affected by the 
discharge using definitions provided in ``Volume I--Technical 
Documentation'' of ``Compensation Formula for Natural Resource Damage 
Assessments under OPA; Oil Spills in Estuarine and Marine 
Environments;''
    (4) Type of oil discharged as determined by the definitions 
provided in ``Volume I--Technical Documentation'' of ``Compensation 
Formula for Natural Resource Damage Assessments under OPA: Oil Spills 
in Estuarine and Marine Environments;''
    (5) Amount discharged. The trustee(s) shall subtract from the total 
amount discharged the trustee's(s') estimate of the volume of oil that 
is cleaned up within 24 hours from the beginning of the discharge, if 
the cleanup is from the water. Cleanup from shorelines shall not be 
subtracted;
    (6) Season of discharge, as defined in Sec. 990.40 of this subpart; 
and
    (7) Amount of beach and/or shoreline closed, if any, determined by 
linear measure and days closed.
    (b) Determining damage figure. The trustee(s) should:
    (1) Determine the damages using the estuarine and marine 
compensation formula based upon the requirements of this subsection and 
``Volumes I through IV--Technical Documentation'' of ``Compensation 
Formula for Natural Resource Damage Assessments under OPA; Oil Spills 
in Estuarine and Marine Environments;''
    (2) Determine the appropriate habitat/province scenario using 
``Volume I--Technical Documentation'' of ``Compensation Formula for 
Natural Resource Damage Assessments under OPA: Oil Spills in Estuarine 
and Marine Environments.'' Locate the table in Appendix A corresponding 
to the season discharge and the type of oil discharged using the 
scenario and volume discharged, identify the applicable formula. 
Compute the damage figure as instructed in ``Volume I--Technical 
Documentation'' of ``Compensation Formula for Natural Resource Damage 
Assessments under OPA; Oil Spills in Estuarine and Marine 
Environments;'' and
    (3) Determine damages for beach and/or shoreline closure by 
identifying the linear measure of beach and/or shoreline closed, in 
accordance with Volume III of the ``Compensation Formula for Natural 
Resource Damage Assessments under OPA; Oil Spills in Estuarine and 
Marine Environments,'' and multiplying the length by the time period 
for which the beach and/or shoreline was closed.


Sec. 990.42  Compensation formulas--inland (freshwater) waters formula.

    (a) Use of Inland (Freshwater) formula. To use the Inland 
(Freshwater) Waters formula, the trustee(s) must identify:
    (1) The appropriate freshwater habitat in which the discharge 
occurred, as defined in ``Volume I--Technical Documentation'' of 
``Compensation Formula for Natural Resource Damage Assessments under 
OPA: Oil Spills into Inland (Freshwater) Waters;''
    (2) Location of the discharge, using the boundaries and definitions 
of the provinces provided in ``Volume I--Technical Documentation'' of 
``Compensation Formula for Natural Resource Damage Assessments under 
OPA: Oil Spills into Inland (Freshwater) Waters;'' to determine in 
which province the discharge occurred;
    (3) Habitat type that typifies the habitat affected by the 
discharge using definitions provided in ``Volume I--Technical 
Documentation'' of ``Compensation Formula for Natural Resource Damage 
Assessments under OPA: Oil Spills into Inland (Freshwater) Waters;''
    (4) The type of oil discharged as determined by the definitions 
provided in ``Volume I--Technical Documentation'' of ``Compensation 
Formula for Natural Resource Damage Assessments under OPA: Oil Spills 
into Inland (Freshwater) Waters;''
    (5) Amount discharged. For those large water bodies identified in 
``Volume I--Technical Documentation'' of ``Compensation Formula for 
Natural Resource Damage Assessments under OPA: Oil Spills into Inland 
(Freshwater) Waters;'' the trustee(s) may subtract from the total 
amount discharged the trustee's(s') estimate of the volume of oil that 
is cleaned up within 24 hours from the beginning of the discharge, if 
the cleanup is from the water. Cleanup from all other inland 
(freshwater) waters and from shorelines shall not be subtracted;
    (6) Season of discharge, as defined in Sec. 990.40 of this subpart;
    (7) Amount of shoreline and/or beach closed, if any, determined by 
linear measure; and
    (8) Amount of recreational boating area closed, if any, determined 
by square kilometer.
    (b) Determining damage figure. The trustee(s) should:
    (1) Determine the damages using the Inland (Freshwater) Waters 
compensation formula based upon the requirements of this subsection and 
``Volumes I through III--Technical Documentation'' of ``Compensation 
Formula for Natural Resource Damage Assessments under OPA; Oil Spills 
in Inland (Freshwater) Waters;''
    (2) Determine the appropriate habitat/province scenario using 
``Volume I--Technical Documentation'' of ``Compensation Formula for 
Natural Resource Damage Assessments under OPA: Oil Spills in Inland 
(Freshwater) Waters.'' Locate the table in Appendix A corresponding to 
the season discharge and the type of oil discharged using the scenario 
and volume discharged, identify the applicable formula. Compute the 
dollar figure as instructed in ``Volume I--Technical Documentation'' of 
``Compensation Formula for Natural Resource Damage Assessments under 
OPA: Oil Spills into Inland (Freshwater) Waters;''
    (3) Determine damages for beach and/or shoreline closure by 
identifying the linear measure of beach and/or shoreline closed in 
accordance with Volume III of ``Compensation Formula for Natural 
Resource Damage Assessments under OPA: Oil Spills into Inland 
(Freshwater) Waters,'' and multiplying the length by the time period 
for which the beach and/or shoreline was closed; and
    (4) Determine damages for lost recreational boating closure by 
identifying the square kilometers closed and multiplying by the density 
of use and value per day as found in Volume III of ``Compensation 
Formula for Natural Resource Damage Assessments under OPA: Oil Spills 
into Inland (Freshwater) Waters,'' and the number of days the area was 
closed.

Subpart E--Type A Models


Sec. 990.50  Type A models--general.

    (a) The trustee(s) may use a computer model for natural resource 
damage assessments under OPA.
    (b) The trustee(s) shall document the use of a computer model 
through the development of the DARP under subpart C of this part.


Sec. 990.51  Type A models--natural resource damage assessment model 
for coastal and marine environments, version 1.2.

    (a) The trustee(s) may use the Natural Resource Damage Assessment 
Model for Coastal and Marine Environments (NRDAM/CME), Version 1.2, 
incorporated by reference in 43 CFR 11.18 and 11.41. The trustee(s) 
must show that the conditions of the discharge are sufficiently similar 
to the conditions of 43 CFR 11.33(b).
    (b) The assessment component for application of the NRDAM/CME will 
contain the items required in 43 CFR 11.41(c), which are the inputs 
required to apply the NRDAM/CME.
    (c) Damage claim. The total damage figure includes the result of 
the application of the NRDAM/CME plus the reasonable costs of 
conducting the assessment. This damage figure is included in the Report 
of Assessment and the Demand under Secs. 990.80 and 990.81 of this part 
and documented in the administrative record.
    (d) Restoration. Based upon the final damages recovered, the 
trustee(s) shall develop a restoration component plan, either 
implementing restoration actions identified in the prespill plan 
developed under Sec. 990.16(a) or as an incident-specific plan under 
subpart G of this part.

Subpart F--Expedited Damage Assessment


Sec. 990.60  Expedited damage assessment--general.

    (a) Purpose/Scope. The purpose of an EDA is to determine and 
quantify injury based on limited, focused studies in order to 
facilitate restoration as soon as possible. This subpart provides the 
trustee(s) with guidance and procedures for selecting and undertaking 
an EDA.
    (b) Scope of natural resources and services. The trustee(s) should 
focus injury determination and quantification on those resources that 
are of commercial, recreational, or ecological importance or of special 
significance as deemed by the trustee(s).
    (c) Time frame. Where possible, the trustee(s) should complete the 
Assessment Phase, including, but not limited to, the development of a 
restoration component within two years from the date of the discharge. 
This time frame, however, is not mandatory. The trustee(s) need not 
complete the Assessment Phase before beginning to prepare the damage 
claim, undertake settlement negotiations, if appropriate, provide 
public review of the restoration component and finalize the restoration 
plan.
    (d) EDA costs. EDA costs cover the same categories as those defined 
in a CDA, including costs associated with injury determination and 
quantification, restoration planning, and compensable values 
determination. However, costs associated with injury determination and 
quantification should be limited to the focused studies undertaken.
    (e) Administrative Record. The trustee(s) should document all 
pertinent activities and decisions within the Administrative Record, as 
with a CDA.


Sec. 990.61  Expedited damage assessment--selection.

    (a) Guidelines. The trustee(s) should examine the various 
guidelines in evaluating whether an EDA is appropriate for a given 
discharge and exercise best professional judgment in making the final 
determination. Factors to be considered by the trustee(s) include, but 
are not limited to:
    (1) The use of the compensation formulas or Type A models alone 
would not sufficiently account for the injury and damages resulting 
from the discharge.
    (2) There is readily available information on the nature of the 
discharge and its effect on natural resources and/or services.
    (3) The injury and damages resulting from the discharge can be 
adequately calculated by conducting limited, focused injury 
determination/quantification and compensable values studies.
    (4) Potential restoration actions can be implemented without 
complex, prolonged injury determination/quantification and compensable 
values studies.
    (b) [Reserved].


Sec. 990.62  Expedited damage assessment--objectives and approach.

    (a) The objectives of an EDA are to:
    (1) expeditiously determine and quantify injuries to selected 
natural resources and/or services resulting from a discharge using 
limited, focused studies and baseline or reference/control information, 
and
    (2) Provide the basis for restoration and recovery of natural 
resources and/or services.
    (b) To achieve these objectives, the EDA procedure consists of: (1) 
Injury determination; (2) Injury quantification; (3) Restoration; and 
(4) Compensable values.


Sec. 990.63  Expedited damage assessment--injury determination.

     (a) General. Injury resulting from (or caused by) a discharge of 
oil has been determined when the trustee(s) has demonstrated that:
    (1) With direct exposure,
    (i) The natural resource was exposed;
    (ii) There is a pathway between the discharge and exposed natural 
resource; and
    (iii) The exposure of oil, its components, or by-products has been 
shown by rigorous and appropriate scientific methodology to have an 
adverse effect on the natural resource in laboratory experiments or the 
field; or
    (2) In the absence of direct exposure,
    (i) The adverse effect on or impaired/diminished use of a natural 
resource has been shown by rigorous and appropriate scientific 
methodology; and
    (ii) The adverse effect on or impaired/diminished use of the 
natural resource would not have occurred but for the fact of the 
discharge or threat of a discharge. The trustee(s) should establish 
baseline or reference/control conditions from which changes in 
environmental and biological parameters may be measured.
    (b) Contributing factor. Where multiple factors may have 
contributed to an indivisible injury to a natural resource and/or 
service, the discharge of oil may be considered a contributing factor 
to the injury.
    (c) Exposure. The trustee(s) shall confirm that at least one of the 
natural resources and/or services identified as potentially injured in 
the Preassessment Phase has been exposed or threatened to be exposed to 
the oil. To confirm exposure, the trustee(s) should determine that:
    (1) The natural resource was exposed to the discharge; and
    (2) There is a pathway between the discharge and the exposed 
natural resource.
    (d) Identify natural resources and services. The trustee(s) should 
identify those natural resources and services for which injury 
determination and quantification will be conducted. Eligible natural 
resources will include those that are of recreational, commercial, or 
ecological importance, or of special significance.
    (e) Initiate early restoration planning. The trustee(s) should 
begin the restoration planning process by developing a restoration 
Scoping Statement to identify potential restoration alternatives to 
remedy the effects of the discharge of oil. In undertaking restoration 
planning for an EDA, the trustee(s) should refer to Secs. 990.73, 
990.74, 990.75 and subpart G to supplement the guidance provided in 
this section.
    (f) Scope of injuries. Injuries to natural resources and/or 
services for which the trustee(s) may claim damages will, by 
definition, be limited relative to a CDA, and may include, but not 
limited to, mortality, sublethal effects, and lost or diminished 
services. Categories of injury which meet the acceptance criteria 
specified in Sec. 990.71(e) and which are appropriate to the EDA are 
currently being developed.
    (1) Mortality. (i) The trustee(s) may derive estimates of acute 
mortality to fish and wildlife resources from body counts in the 
affected area in accordance with acceptable procedures such as the 
American Fisheries Society Fish-Kill Investigations (See PART II of 
``Monetary Values of Freshwater Fish and Fish-Kill Counting 
Guidelines,'' American fisheries Society Special Publication Number 13, 
1992). In addition, the trustee(s) may determine acute mortality using 
standard, laboratory toxicity testing or acceptable models.
    (ii) Where appropriate, the trustee(s) shall identify direct 
mortality of the flora resulting from the oil. Surveys may be employed 
to estimate both initial and delayed mortality.
    (iii) The trustee(s) may estimate indirect mortality such as 
starvation, failure to nest, and hatching failure, loss of critical 
habitat from the existing literature or from limited, focused studies.
    (2) Sublethal effects. The trustee(s) should identify sublethal 
effects that the trustee(s) deems significant and that can be 
documented with limited, focused studies. Sublethal effects may 
include, but are not limited to, reproductive impairment, reduction in 
growth rates of the flora and/or fauna, and changes in species 
diversity and abundance utilizing the habitat.
    (3) Services. The trustee(s) should determine injury to services.
    (i) The trustee(s) should inventory all services provided by the 
resource prior to the discharge and identify those lost or diminished, 
or expected to be lost or diminished. Services that may be considered 
for an EDA include, but are not limited to, recreational, commercial, 
ecological, and those of special significance.
    (ii) The trustee(s) should determine whether there are adequate 
baseline data to support the calculation of lost or diminished 
services.


Sec. 990.64  Expedited damage assessment injury quantification.

    (a) General. The trustee(s) should quantify injuries to natural 
resources and/or services identified through injury determination. The 
trustee(s) should also establish the extent of the lost or diminished 
services. Quantification of natural resources and/or services can be 
accomplished through before-after (using baseline data) or reference/
control-impact study designs, using combined (at the community/
population level) and/or individual (at the organism/biomarker effects 
level) injuries.

By definition, EDA quantification will be scaled down relative to the 
CDA.
    (b) Develop Restoration Component. The trustee(s) shall develop the 
restoration component pursuant to the guidance in Secs. 990.73-990.76 
of this part.
    (c) Compensable Values Component.
    (1) The trustee(s) should develop the compensable value component 
by:
    (i) Determining the lost services associated with the restoration 
components;
    (ii) Identifying the appropriate measurement methods to estimate 
the compensable values of those services; and
    (iii) Implementing these methods.
    (2) Estimating compensable values may be based on site-specific 
analysis, provided such analysis falls within the trustee's(s') general 
time parameters prescribed by the EDA. Assignment of compensable values 
may also be based on estimates, equations, models, or data from 
existing valuation studies through the use of benefits transfer.
    (3) The trustee(s) should follow the guidance in Secs. 990.77-
990.79 of subpart G in developing the compensable values component of 
an EDA.

Subpart G--Comprehensive Damage Assessment (CDA)


Sec. 990.70  Comprehensive damage assessment--general.

    (a) Purpose/Scope. The purposes of the CDA are to:
    (1) Comprehensively determine the nature and extent of injury to 
natural resources and/or services;
    (2) Develop a restoration plan to remedy that injury; and
    (3) Determine the total compensable values for discharges requiring 
a complex, prolonged assessment/restoration process as deemed necessary 
by the trustee(s). The CDA consists of Injury Determination, Injury 
Quantification, Restoration, and Compensable Values.
    (b) CDA costs. CDA costs include those costs associated with injury 
determination and quantification, restoration planning, and compensable 
values determination. Costs incurred should be limited to those the 
trustee(s) considers necessary.
    (c) Administrative Record. The trustee(s) should document all 
pertinent activities and decisions within the Administrative Record. 
The Administrative Record should provide the rationale for conclusions 
regarding each component of the CDA process.


Sec. 990.71  Comprehensive damage assessment--injury determination.

    (a) Purpose/Scope. (1) The purpose of injury determination in a CDA 
is to verify or modify the nature of the injury to natural resources 
and/or services resulting from the discharge of oil.
    (2) Injury determination in a CDA should be made for natural 
resources and/or services that can be restored or for which the public 
can be compensated.
    (3) Should the trustee(s) be able to document the nature of the 
injury to the natural resources and/or services resulting from the 
discharge of oil, he should then proceed to Injury Quantification. If 
the trustee(s) is unable to determine the nature of the injury to the 
natural resources and/or services resulting from the discharge, further 
assessment efforts should be terminated and the results of the Injury 
Determination documented in the Report of Assessment.
    (b) Objectives and study designs. The trustee(s) should develop 
objectives governing the overall CDA and for the individual component 
studies. The trustee(s) should also develop individual study designs to 
serve as the framework for the CDA.
    (c) Injury determination. Once the individual study designs are 
complete, the trustee(s) should then document the nature of the injury 
resulting from the discharge of oil. Injury resulting from (or caused 
by) a discharge of oil has been determined when the trustee(s) has 
demonstrated that:
    (1) With direct exposure,
    (i) The natural resource was exposed;
    (ii) There is a pathway between the discharge and exposed natural 
resource; and
    (iii) The exposure of oil, its components, or by-products has been 
shown by rigorous and appropriate scientific methodology to have an 
adverse effect on the natural resource in laboratory experiments or the 
field; or
    (2) In the absence of direct exposure,
    (i) The adverse effect on or impaired/diminished use of a natural 
resource has been shown by rigorous and appropriate scientific 
methodology; and
    (ii) The adverse effect on or impaired/diminished use of the 
natural resource would not have occurred but for the fact of the 
discharge or threat of a discharge.
    (d) Contributing factor. Where multiple factors may have 
contributed to an indivisible injury to a natural resource and/or 
service, the discharge of oil may be considered a contributing factor 
to the injury.
    (e) Injury criteria. The method for determining injury should be 
chosen based on the capability of the method to demonstrate an effect 
on or impaired/diminished use of a natural resource. For any injury to 
be considered such under this proposed rule, the trustee(s) must 
satisfy the following acceptance criteria:
    (1) For natural resources,
    (i) The exposure to oil, its components, or by-products has been 
demonstrated to cause an adverse effect on the natural resource in 
laboratory experiments or the field; and
    (ii) The measurement for a natural resource adverse effect is cost-
effective and can be obtained through the application of a 
scientifically rigorous and appropriate methodology.
    (2) For resource services,
    (i) The use of a natural resource has been demonstrated to be 
impaired/diminished; and
    (ii) The measurement for impaired/diminished use is cost-effective 
and can be obtained through the application of a scientifically 
rigorous and appropriate methodology.
    (f) Categories of injury. Categories of natural resource and/or 
service injury for the CDA (as well as the EDA) that meet the 
acceptance criteria specified in (e) for discharges of oil are 
currently being developed.


Sec. 990.72  Comprehensive damage assessment--injury quantification.

    (a) Purpose/Scope. (1) The purpose of injury quantification is to 
determine the extent of effects on natural resources and/or services 
resulting from the discharge as defined in the proposed rule.
    (2) The trustee(s) has the option to measure the change in the 
natural resource itself, or directly in the services. The trustee(s) is 
encouraged to use whichever approach proves to be most appropriate for 
the natural resources and/or services being considered.
    (3) Should the trustee(s) be able to quantify injury to natural 
resources and/or services resulting from the discharge of oil, the 
trustee(s) should then proceed to the restoration component. If the 
trustee(s) is unable to quantify injury, further assessment efforts 
should be terminated and the results of the injury quantification 
documented in the Report of Assessment.
    (b) Quantification of injury. (1) For quantifying injury to natural 
resources, the trustee(s) may quantify the injury to the natural 
resources themselves and translate that injury to the reduction in 
services provided by the resources prior to the discharge.
    (2) For quantifying injury to services where there are insufficient 
data to quantify a natural resource injury or where there is no 
associated injured natural resource, the trustee(s) may directly 
quantify the reduction in the services resulting from the discharge.
    (3) If the trustee(s) chooses to quantify the natural resource 
injury, the trustee(s) should determine the:
    (i) Extent to which the natural resource injuries have occurred;
    (ii) Extent to which the injured natural resources differ from 
baseline or reference/control conditions;
    (iii) Services normally provided by the injured natural resources; 
and
    (iv) Reduction of services resulting from the discharge of oil.
    (4) To quantify the injury to services, the trustee(s) should 
determine the:
    (i) Extent of impaired/diminished services; and
    (ii) Extent to which the level of impaired/diminished services 
differs from baseline and/or reference/control conditions.
    (c) Quantification methods. (1) Specific natural resources and/or 
services to quantify should be selected based upon the: extent to which 
a particular natural resource and/or service is affected; extent to 
which a given natural resource and/or service can be used to represent 
a broad range of related resources and/or services; consistency of the 
quantification method with the requirements of the compensable values 
determination component to be used; ability to quantify changes in a 
given natural resource and/or service at reasonable cost; and 
preliminary estimates of services.
    (2) The trustee(s) should consider before-after (using baseline 
data) or reference/control-impact study designs, using combined (at the 
community/population level) and/or individual (at the organism/
biomarker effects level) injuries. Quantification methods appropriate 
to a CDA are currently being developed.
    (d) Recovery. The trustee(s) should estimate the time necessary for 
natural recovery without restoration efforts and beyond response 
activities. Recovery is defined as a return of natural resources and/or 
services to baseline or comparable conditions within the limits of 
natural or other (human-induced) variability.


Sec. 990.73  Comprehensive damage assessment--restoration/general.

    (a) Purpose. The purposes of the restoration planning process are 
to:
    (1) Determine the most appropriate restoration alternatives for the 
recovery of natural resources and/or services resulting from a 
discharge of oil; and
    (2) Estimate the costs of implementing restoration.
    (b) Restoration component. The restoration component outlines the 
most appropriate approach to bring about the recovery of the natural 
resources and/or services to baseline or comparable conditions based 
upon a consideration of available alternatives.
    (c) Coordination. Where multiple trustees are involved, 
coordination and responsibilities may be facilitated through a 
Memorandum of Understanding (Appendix A). Participation of the RP(s) in 
the restoration process is encouraged, as described in Sec. 990.17 of 
this part, and should be identified in the restoration component. The 
trustee(s), however, has the ultimate responsibility for all 
restoration activities. A joint enforceable agreement or Memorandum of 
Agreement (Appendix B) should be considered between the trustee(s) and 
RP(s) where the RP(s) is involved.
    (d) Emergency restoration. Consistent with Sec. 990.25, emergency 
restoration prior to the development of an incident-specific 
restoration plan is permitted where immediate action is necessary to 
avoid irreversible loss, or to prevent or reduce continuing danger to 
natural resources and/or services.
    (e) Restoration costs. Costs of restoration will include direct and 
indirect costs. These costs will be one component of the total damage 
figure.


Sec. 990.74  Comprehensive damage assessment--restoration component 
development.

    (a) Requirements. In developing the restoration component for a 
CDA, the trustee(s) should:
    (1) Develop a restoration Scoping Statement;
    (2) Develop the restoration component of the DARP; and
    (3) Estimate the costs of implementing the restoration component.
    (b) Restoration scoping statement. (1) The trustee(s) should 
develop a restoration Scoping Statement to identify those restoration 
alternatives that the trustee(s) may consider as potential actions to 
remedy the effects of the discharge of oil.
    (2) The Scoping Statement should:
    (i) Include a summary of the natural resources and/or services of 
concern, an evaluation of the circumstances of the discharge, and the 
expected injured natural resources and/or services;
    (ii) Identify the range of restoration alternatives available to 
the trustee(s); and
    (iii) Identify the opportunity to pool the recovery with other 
similar recoveries in a given region for a more encompassing 
restoration plan.
    (3) The Scoping Statement should be included in the administrative 
record.
    (4) If prespill plans have been developed that encompass the 
injured natural resources and/or services, the trustee(s) may decide 
that a Scoping Statement is not needed.
    (c) Restoration component of the DARP.
    (1) The restoration component of the DARP should be based on the 
Scoping Statement and injury determination/ quantification studies, and 
will serve as the basis of the Post-assessment Restoration Plan.
    (2) The restoration component of the DARP should:
    (i) Include an analysis of the restoration alternatives considered 
for each natural resource and/or service, and provide the basis for 
estimating the restoration costs associated with each alternative;
    (ii) Identify the preferred restoration approach for each injured 
natural resource and/or service; and
    (iii) Include the results of any feasibility or pilot studies.
    (3) The restoration component of the DARP should analyze 
opportunities for pooling recoveries from multiple cases and identify 
other statutory review and consultation requirements.
    (4) The restoration component of the DARP, including any 
significant changes, will be made available pursuant to Sec. 990.32(c) 
of this part.
    (d) Estimate restoration costs. (1) Once the restoration component 
is chosen, the trustee(s) must estimate the costs of planning, 
developing, and implementing that component. These costs shall include 
both direct and indirect costs.
    (2) Direct costs are those that are identified by the trustee(s) as 
charged directly to the conduct of the selected restoration 
alternative. Direct costs would include trustee agency expenses for a 
specific action(s).
    (3) Indirect costs are costs associated with a particular action 
for restoration, rehabilitation, replacement, and/or acquisition of 
equivalent natural resources and/or services where there is no direct 
way to calculate or attribute them to a particular action(s).
    (4) Compensation for indirect costs can be included in the damage 
claim in one of two ways. The trustee(s) could either identify indirect 
costs or claim a certain indirect cost rate for expenses.
    (5) Restoration component of the damage claim. The estimated 
restoration costs make up that component of the damage claim 
representing the costs to restore, replace, rehabilitate, or acquire 
the equivalent of the injured natural resources and/or services. These 
estimates are to be documented in the administrative record.
    (e) Phased Restoration Planning. NOAA recommends that the 
trustee(s) should consider undertaking restoration planning in phases. 
Phased planning and implementation is proposed through an Adaptive 
Management Approach (AMA). AMA involves a process whereby alternatives 
can be suggested and tested (i.e., pilot projects) often in small scale 
before undertaking full scale restoration. Results of initial 
experiments are then evaluated to select the approach for later 
projects.


Sec. 990.75  Comprehensive damage assessment--analysis and selection of 
restoration alternatives.

    (a) Restoration alternatives. In developing the restoration 
component, the trustee(s) should consider the following alternatives. 
Each alternative may be implemented through one or more options or 
methods selected by the trustee(s). When mentioned, alternatives imply 
associated options.
    (1) The natural recovery (no-action) alternative should always be 
considered. Natural recovery may be selected when:
    (i) There is evidence that the natural recovery process will be 
more effective than other available restoration alternatives;
    (ii) The resulting natural resources and/or services are predicted 
to resemble the original, within the constraints of natural or other 
(i.e., human-induced) variability, in a time frame not significantly 
different from that resulting from human intervention;
    (iii) Other natural resources and/or services will not be adversely 
affected prior to the recovery of those originally injured resources 
and/or services; and
    (iv) There are no threats to human health and safety from the 
length of time for natural recovery.
    (2) The restoration alternative, i.e., direct restoration, includes 
actions undertaken to return injured natural resources and/or services 
to their baseline conditions.
    (3) The rehabilitation alternative includes actions to bring 
resources and/or services to a state different from baseline conditions 
but still beneficial to the environment and public.
    (4) The replacement alternative includes actions that substitute a 
natural resource and/or service that provides the same or comparable 
resources and/or services as those injured.
    (5) The acquisition of equivalent natural resources alternative 
includes obtaining natural resources and/or services that the 
trustee(s) determines are comparable to those injured. Equivalent 
natural resources should be acquired to hasten recovery, and protect 
and maintain the natural resources affected by the discharge.
    (6) Each alternative discussed above may be considered individually 
or combined in various ways, depending upon the factors outlined in 
Sec. 990.75(b).
    (b) Analysis of restoration alternatives. As the results of the 
injury and quantification studies become available, the trustee(s) 
should revise the list of restoration alternatives developed. The 
trustee(s) should analyze each alternative taking into account the 
feasibility, environmental effectiveness, and relative cost described 
below. If an alternative is unacceptable, it will be eliminated from 
further consideration. The rationale for this determination must be 
documented in the administrative record.
    (1) Feasibility is determined upon, but not limited to, the 
following factors: availability of services, materials and equipment; 
expertise; construction and operational limitations; need or capability 
of future restoration; and administrative, legal, or regulatory 
requirements. The trustee(s) should consider technically feasible 
methods, i.e., those methods that are currently available.
    (2) Once the trustee(s) determines that a restoration alternative 
is feasible, the trustee(s) should then evaluate the environmental 
effectiveness of the alternative. Effectiveness addresses whether an 
action accomplishes the goals and objectives of restoration. 
Effectiveness is dependent upon the:
    (i) Extent to which the proposed alternative can return natural 
resources and/or services to acceptable conditions;
    (ii) Extent to which the proposed alternative causes additional 
injury;
    (iii) Extent to which the proposed alternative improves the rate of 
recovery and success; and
    (iv) Level of risk and uncertainty in the success of the proposed 
alternative.
    (3) Simultaneous with environmental effectiveness determination, 
the trustee(s) should evaluate the expected cost of implementing the 
alternative relative to other alternatives and its expected benefits. 
The trustee(s) should consider, among other things:
    (i) Significance of the natural resource and/or service to the 
environment and public;
    (ii) Extent to which the alternative benefits more than one 
resource and/or service;
    (iii) Cost of the alternative;
    (iv) Relationship of the expected costs to the expected benefits; 
and
    (v) Level of risk and uncertainty in the cost-benefit analysis.
    For alternatives that achieve similar benefits and meet the goals 
and objectives of restoration, the most cost-effective alternative 
should be chosen. In the event that value estimates are not available, 
the alternative will be judged on the basis of the increase in the rate 
of recovery time relative to the costs of the alternative.
    (c) Selection of restoration alternatives. Based upon the analysis 
of the restoration alternatives for each category of injured natural 
resource and/or service, the trustee(s) should select the alternative 
or some combination thereof that best meets the needs of each injured 
natural resource and/or service. The trustee(s) should then develop the 
restoration component of the DARP based upon this selection for each 
natural resource and/or service.
    (d) Feasibility (pilot) studies. (1) If restoration alternatives 
for certain natural resources and/or services are limited or poorly 
developed, the trustee(s) may implement small-scale feasibility or 
pilot studies. The costs associated with these actions are recoverable 
under this proposed rule.
    (2) The trustee(s) should coordinate with the OSC prior to 
proceeding with any feasibility or pilot studies during the 
Preassessment Phase to ensure that such studies are not incompatible 
with response activities. The RP(s) may be given the opportunity to 
participate in such studies, if appropriate.


Sec. 990.76  Comprehensive damage assessment--evaluation of 
restoration.

    (a) Recovery and success. The trustee(s) should define restoration 
goals, select appropriate criteria for monitoring goal achievement, 
identify performance standards (endpoints), and measure levels of 
achievement of those standards in determining recovery and success in 
restoration.
    (b) Monitoring. The trustee(s) should evaluate recovery through 
effective monitoring until recovery is attained without human 
intervention. To enable the trustee(s) to accomplish this goal:
    (1) Monitoring should be sufficiently long to ensure recovery to a 
stable condition;
    (2) All relevant components of the affected environment should be 
monitored (as it relates to the restoration alternative);
    (3) The progress of recovery should be compared with natural 
changes occurring in similar unaffected reference or control areas;
    (4) Sampling should be designed to provide statistically 
significant and defensible results; and
    (5) The monitoring plan should be sufficiently flexible to permit 
mid-course corrections if the need arises.
    (c) Mid-course corrections. Restoration components should 
incorporate provisions allowing for necessary mid-course corrections. 
Mid-course corrections should be based upon, but limited to, the:
    (1) Nature and extent of the injured natural resources and/or 
services;
    (2) Actual effectiveness of the restoration alternatives; and
    (3) Results of monitoring.


Sec. 990.77  Comprehensive damage assessment--compensable values.

    (a) Purpose. Section 1006(f) of OPA authorizes the trustee(s) to 
recover: The cost of restoring, rehabilitating, replacing or acquiring 
the equivalent of the injured or lost natural resources and/or 
services; the diminution in value of the injured or lost natural 
resources pending restoration; plus the reasonable cost of assessing 
those damages. The purpose of this subpart is to provide guidance to 
the trustee(s) for estimating the total diminution in value of 
resources and/or services affected by the discharge, hereinafter 
referred to as compensable values.
    (b) Requirement. The trustee(s) shall determine the compensable 
values resulting from the discharge of oil based upon the information 
collected during the assessment/restoration process and the guidance 
provided in this subpart.
    (c) Services. Before estimating compensable values under this 
subpart, the trustee(s) should determine the uses of the resources 
identified in the Injury Quantification component.
    (d) Time period of losses. Compensable values include, for each 
affected resource and/or service, the diminution in value of the 
resource and/or service from the onset of the discharge through the 
estimated time of full recovery to baseline or comparable conditions, 
as determined by the trustee(s). As identified in subpart G of this 
part, to the extent possible, restoration actions will be designed to 
yield full recovery of the resources and/or services; however, in some 
cases, only partial recovery may occur. If the resources and/or 
services will not fully recover with the implementation of the 
Restoration Plan, the calculation of compensable values will include 
the value of a perpetual stream of lost services.
    (e) Completion of the Compensable Values Component. Upon completion 
of the valuation component, the results shall be briefly described in 
the Report of Assessment. Those results, combined with the restoration 
costs and costs of conducting the assessment, shall comprise the 
trustee(s) damage claim.
    (f) Compensable values are the total diminution in value of the 
injured natural resource(s) and/or services as a result of a discharge, 
from the onset of the discharge until recovery to baseline or 
comparable conditions is deemed complete by the trustee(s).
    (g) Compensable values include:
    (1) Direct use value, i.e., the value individuals derive from 
direct use of a natural resource, including consumptive and 
nonconsumptive uses, and
    (2) Passive use value, i.e., the value individuals place on natural 
resources that is not linked to direct use of a natural resource by the 
individual, including the value of knowing the natural resource is 
available for use of family, friends, or the general public; the value 
derived from protecting the natural resource for its own sake; and the 
value of knowing that future generations will be able to use the 
natural resource.
    (h) Compensable values include, but are not limited to:
    (1) The value of losses to all public uses of natural resources as 
measured by changes in:
    (i) Monetized measures in utility, or consumer surplus,
    (ii) Fees or other payments collectable by the government or an 
Indian tribe for use of the natural resource by a private party, and
    (iii) Any economic rent accruing to a private party because the 
government or Indian tribe does not charge a fee or price for the use 
of the resource, provided such economic rent is not recovered under a 
private cause of action; and
    (2) In instances where the natural resource 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.
    (i) Compensable values do not include:
    (1) Taxes forgone, because these are transfer payments from 
individuals to the government;
    (2) Wages and other income lost by private individuals, except for 
that portion of income that represents uncollected economic rent, 
because these values do not accrue to the trustee(s) and may be the 
subject of lawsuits brought by the individuals suffering the loss; or
    (3) Any speculative losses.


Sec. 990.78  Comprehensive damage assessment--compensable values, 
measurement techniques.

    (a) General. (1) The methodologies listed in this subpart, or other 
appropriate methodologies selected by the trustee(s), shall be used to 
estimate compensable values. The trustee(s) should select only those 
methods that can provide valid and reliable resource values and that 
are appropriate for valuing the injuries associated with a particular 
discharge.
    (2) Nothing in this part precludes the use of different 
methodologies to produce separate damage estimates for different 
resource services, so long as there is no double counting.
    (b) Site-specific valuation techniques. (1) Travel cost method. The 
travel cost method may be used to estimate the value of recreational 
services provided by a specific site based on information on the number 
and costs of recreational visits to that site. The value of 
recreational losses resulting from injury to an area (which may include 
multiple sites) is measured as the difference between the values of 
recreational services provided by the area with and without the 
discharge of oil.
    (2) Factor income method. If a lost or injured resource and/or 
service is an input to a production process, the factor income 
methodology may be used. This methodology may be used to estimate the 
change in economic rent attributable to the injured natural resource as 
a result of the discharge. When the price of the good being produced is 
not affected by the injuries, the change in economic rent is simply the 
sum of the changes in factor costs for each affected input.
    (3) Hedonic price model. The hedonic price model relates the price 
of a marketed commodity, such as property, to its attributes, such as 
the quality of the surrounding environment or access to environmental 
amenities. Where nonmarket services provided by public trust resources, 
such as local water or air quality, function as attributes of private 
property or other market goods, the hedonic price model may be used to 
determine the value of the change in services for property owners.
    (4) Market models of supply and demand. (i) For natural resources 
that are traded in markets, the trustee(s) may estimate models of 
market supply and demand for the natural resource. The measure of 
damages to consumers of the marketed natural resource or of its 
marketed services is the difference between the total consumer surplus 
for the marketed natural resource/service with and without injury.
    (ii) When the supply of the natural resource is fixed (or quasi-
fixed), then the observed or appraised change in market price may be 
used as a proxy for damages per unit of affected natural resource or of 
affected service. The measure of damages to consumers of the marketed 
services is the sum of difference between the without- and with-injury 
market or appraisal prices for each affected unit. When the appraisal 
method is employed, damages should be measured, to the extent possible, 
in accordance with the applicable sections of the ``Uniform Appraisal 
Standards for Federal Land Acquisition,'' Uniform Appraisal Standards, 
Interagency Land Acquisition Conference, Washington, DC, 1973.
    (5) Contingent valuation method. The trustee(s) may use the 
contingent valuation method to determine individuals' valuation of 
natural resources or of the services provided by natural resources in 
order to estimate compensable values. When using contingent valuation 
pursuant to this part, the trustee(s) shall adhere to the following:
    (i) Survey instrument design and development--(A) Willingness to 
pay for Prevention or Restoration.
    (1) The survey instrument shall elicit from respondents their 
willingness-to-pay (WTP) either to prevent described injuries to 
natural resources or to restore injured resources as described to their 
baseline or comparable condition.
    (2) The trustee(s) shall document the rationale for selecting a 
prevention program or restoration program as the commodity to be 
valued.
    (B) Commodity definition. (1) During development of the survey, the 
trustee(s) shall determine whether respondents understood and found 
credible the description of the injuries (including whether they are 
permanent or interim losses) and the program (including the timing of 
the process) for preventing injuries or restoring the natural resource.
    (2) Prior to the value elicitation, the trustee(s) shall identify 
the natural resource context of the injured resources, if related 
resources exist, including commodities that might serve as substitutes.
    (C) Budget constraints. Prior to the value elicitation, respondents 
shall be reminded of their budget constraints and their alternative 
expenditure possibilities. Respondents shall be reminded that their WTP 
for the environmental program in question would reduce their 
expenditures on other goods. This reminder should be more than 
perfunctory but less than overwhelming. The goal is to induce 
respondents to keep in mind other likely expenditures, including those 
on other environmental goods, when evaluating the main scenario. After 
the value elicitation, respondents shall be reminded again of their 
alternative expenditure possibilities. Respondents shall be given an 
opportunity to reconsider and change their votes (bid) after this 
second reminder of alternative expenditure possibilities.
    (D) Comparability with real transactions. (1) The survey instrument 
shall use a credible choice mechanism and payment vehicle.
    (2) The trustee(s) shall select a choice mechanism that is 
incentive compatible and shall document the rationale for the selected 
choice mechanism.
    (3) The trustee(s) shall ask follow-up questions to determine 
whether the respondents accepted the choice mechanism and payment 
vehicle as credible.
    (4) The survey instrument or analysis method shall provide a 
mechanism for calibrating hypothetical WTP to actual WTP. The 
trustee(s) shall document the rationale for the selected calibration 
mechanism. If the survey instrument or analysis method fails to provide 
such a mechanism or the trustee(s) fails to document the rationale for 
the selected calibration mechanism, actual WTP shall be presumed to be 
one-half of stated WTP.
    (E) Pretesting. (1) Survey development shall include adequate field 
testing to ensure that the above design criteria are met.
    (ii) Survey administration--(A) Sampling procedures. (1) The 
trustee(s) shall determine the relevant population(s) to be sampled and 
document the rationale for that determination.
    (2) The trustee(s) shall draw a probability sample(s) from the 
target population for the administration of the final survey. Less 
rigorous sampling is suitable for pretesting and pilot surveys so long 
as the heterogeneity of the target population is considered.
    (3) The sample size(s) shall be sufficient to draw statistically 
significant population inferences and to estimate WTP valuation 
functions or to test relevant statistical hypotheses.
    (4) The trustee(s) shall minimize nonresponse bias to the extent 
practicable by striving for as high a response rate in the final survey 
as possible, consistent with the requirements of reasonable cost. In no 
case shall the response rate be less than seventy percent.
    (5) The trustee(s) shall document the rationale for the selected 
response rate.
    (B) Mode of administration. (1) The trustee(s) shall document the 
rationale for the selected mode of survey administration.
    (2) If interviewers are used, the survey administration shall be 
conducted by trained interviewers who are supervised by experienced 
interviewer field managers.
    (3) Regardless of the mode of administration, the trustee(s) shall 
use an experienced survey research organization to administer the 
survey.
    (C) Confidentiality. The trustee(s) should ensure respondent 
confidentiality.
    (iii) Nature of results--(A) Scope test. Controlling for 
attitudinal, demographic, perceptual, and other differences across 
respondents, the trustee(s) shall demonstrate statistically that the 
aggregate WTP across all respondents for the prevention or restoration 
program increases (decreases) as the scope of the environmental insult 
is expanded (contracted). The scope of the environmental insult is 
characterized by the severity of the natural resource injuries and the 
level of effectiveness and timing of the restoration or prevention 
program. The demonstration shall be conducted through the use of split 
samples.
    (B) Number of scenarios. The trustee(s) shall administer to split 
samples different survey instruments containing three variations of the 
scope of the environmental insult that respondents perceive as 
different unless the trustee(s) can provide a reasonable showing that 
the three-scenario test is infeasible due to considerations of cost or 
lack of plausibility of scenarios. Where three scenarios are feasible, 
the statistical test shall involve pairwise comparisons. In either 
case, the scenarios may vary along any of the margins of intensity, 
geography, and duration of damage and, for prevention scenarios, the 
probability of an event occurring. The trustee(s) shall document the 
rationale for the selected variations of the scope of the environmental 
insult. In determining the descriptions to be used with the split 
samples, the trustee(s) shall use realistic injury scenarios and 
prevention or restoration programs that the respondents accept as 
credible.
    (C) Maximum amount of difference between scenarios. The trustee(s) 
shall develop scenarios for the total value test. Prior to the 
performance of the test, the trustee(s) shall demonstrate that not more 
than ninety-five percent of respondents in a pre-test or in focus 
groups indicate that there are meaningful value differences between the 
scenarios to be tested in any pairwise comparison. The demonstration 
shall be based on a minimum of sixty valid responses. The trustee(s) 
shall exclude from this demonstration any individuals who indicate in 
screening questions that they are not willing to pay anything for any 
size environmental cleanup or who would be willing to pay 
unrealistically large and invariant amounts for any size environmental 
cleanup.
    (iv) Reporting. The trustee(s) shall ensure that reports of 
contingent valuation studies discuss the relevant factors identified in 
the standards pertaining to survey instrument design and development, 
survey administration, and nature of results in this section. A copy of 
the survey instrument shall be included.
    (c) Alternative techniques. (1) Benefits transfer approach. 
Benefits (or valuation) transfer involves the application of existing 
valuation point estimates or valuation function estimates and data that 
were developed in one context to value a similar resource and/or 
service affected by the discharge of concern. When using benefits 
transfer, the trustee(s) should consider:
    (i) The comparability of the users and of the resource and/or 
services being valued in the initial study(ies) and the changes 
resulting from the discharge of concern;
    (ii) The comparability of the change in quality or quantity of 
resources and/or services in the initial study(ies) and the ones 
affected by the discharge of concern; and
    (iii) The quality of the study(ies) being used for the transfer(s).
    (2) Habitat or species replacement cost method. The habitat or 
species replacement cost method involves estimating damages in terms of 
the cost of obtaining from alternative sources the equivalent of the 
quality and quantity of services diminished by the injury from the 
onset of the discharge through full recovery. As appropriate, damages 
may be calculated as the cost of replacing entire habitats that support 
multiple species and provide a variety of resource services. In 
applying this method, the trustee(s) should:
    (i) Quantify a total discounted measure of the value of lost 
services over the full duration of the injury, taking into account the 
extent to which the resource and/or service will recover over time;
    (ii) Determine the total discounted measure of the value of 
services provided by the restoration or replacement project over the 
full life of the relevant species or habitat;
    (iii) Calculate the appropriate scale of the restoration or 
replacement project, such that the total discounted value of services 
provided is equivalent to the total discounted value of interim lost 
services; and
    (iv) Estimate the cost of implementing the restoration or 
replacement project.


Sec. 990.79  Comprehensive damage assessment--compensable values, 
implementation guidance.

     (a) Committed use. Only losses in committed uses of injured 
natural resources and/or services shall be recoverable. Damages for 
losses of purely speculative uses are not recoverable. For the purposes 
of this subpart, a committed use is:
    (1) Any direct or passive use of the injured natural resource and/
or service available to the public, but for the discharge; or
    (2) Any documented, planned future use.
    (b) Willingness to accept and willingness to pay. For purposes of 
this part, the trustee(s) may use willingness to accept, willingness to 
pay, or Marshallian consumer surplus (the value of which is between 
willingness to accept and willingness to pay) as the criterion to 
measure damages. However, only willingness to pay shall be elicited in 
contingent valuation survey instruments.
    (c) Substitutability. When calculating compensable values, the 
trustee(s) should take into account, to the extent practicable, the 
ability to substitute alternative resources and/or services for the 
injured resources.
    (d) Uncertainty. Uncertainty regarding the predicted consequences 
of restoration options and predicted supply and demand of natural 
resources and/or services should be addressed in the economic analysis 
of restoration alternatives and determination of compensable values and 
documented in the administrative record.
    (e) Discounting. (1) The trustees should discount the three 
components of the damage claim: Compensable values; future restoration 
costs; and assessment and restoration costs already incurred. NOAA 
recommends that the trustee(s) use the U.S. Treasury borrowing rate on 
marketable securities of comparable maturity to the period of analysis 
for discounting the value of each of the components. The reference date 
for the discounting calculation is the date at which the claim is 
presented. Section 9.14 of the proposed rule, as required by section 
1005(b) of OPA, provides for pre-judgment interest and post-judgment 
interest to be paid at a commercial paper rate, starting from 30 
calendar days from the date a claim is presented until the date the 
claim is paid.
    (2) Trustees are referred to Appendix C of OMB Circular A-94 for 
information about nominal and real U.S. Treasury rates of various 
maturities and for further guidance in calculation procedures. Copies 
of the Appendix, which is regularly updated, and of the Circular are 
available from the OMB Publications Office (202-395-7332).
    (f) Economic definitions. (1) ``Commodity'' as used in contingent 
valuation, refers to the item respondents are asked to value. In damage 
assessment, the item to be valued will generally be a plan or program 
to protect against future oil spills or a plan or program to restore an 
already injured set of resources.
    (2) ``Payment vehicle'' is the method by which contingent valuation 
survey respondents will pay for the commodity being valued. Common 
payment vehicles used in contingent valuation include increases in 
local, state or federal taxes, or increases in process of consumer 
goods or services.
    (3) ``Choice mechanism'' is the institutional format in which 
contingent valuation survey respondents are asked to express their 
value for the commodity offered in the survey. A frequently used choice 
mechanism is the voting format (referendum) where respondents express 
their value for the commodity offered by choosing to vote for or 
against a ballot proposal that would provide the commodity by raising 
respondents' taxes.
    (4) ``Probability sampling'' refers to the use of sampling 
techniques that assign each sampling unit in the target population a 
known non-zero probability of being included in the sample. Sampling 
units for survey research are usually individuals or households.

Subpart H--Post Assessment Phase


Sec. 990.80  Post-assessment phase--report of assessment.

     (a) Requirement. At the conclusion of any of the assessment 
procedures provided in this part or upon reaching settlement with the 
RP(s) under Sec. 990.14(f) of this part, the trustee(s) shall prepare a 
Report of Assessment.
    (b) Contents. The Report of Assessment shall contain:
    (1) The selected restoration approach;
    (2) The estimated costs of implementing that approach; and
    (3) An index to the administrative record.


Sec. 990.81  Post-assessment phase--demand.

    (a) Requirement. Where the trustee(s) and RP(s) have not reached 
settlement by the conclusion of the Assessment Phase, the trustee(s) 
shall present to the RP(s), jointly or individually, a demand in 
writing for a sum certain representing the damages as determined by the 
trustee(s). The demand should be delivered in such a manner as will 
establish the date of receipt.
    (b) Contents. The demand shall include the following items:
    (1) Identification of the discharge of oil from which the claim 
arises;
    (2) The natural resource trustee(s) asserting the claim;
    (3) A brief description of the natural resources and/or services 
for which the claim is being brought;
    (4) The Report of Assessment, as an attachment; and
    (5) The amount of damages being sought.
    (c) Damages. (1) The damages presented in the demand include:
    (i) Costs of restoration, replacement, rehabilitation, or 
acquisition of equivalent natural resources and/or services;
    (ii) Compensable values; and
    (iii) Reasonable costs of the assessment.
    (2) The damage figure should be adjusted, if necessary, by the 
guidance in Sec. 990.82(e) of this part.
    (d) Review of damage figure. The total damage figure may be divided 
into two components: costs (both assessment costs and estimated costs 
of restoration) and compensable values. Judicial review of that portion 
of the demand representing costs shall be conducted on the 
administrative record. Judicial review of that portion of the demand 
representing compensable values shall be conducted with the trustee(s) 
receiving the benefit of the rebuttable presumption.


Sec. 990.82  Post-assessment phase--accounts.

    (a) Joint account. For joint recoveries involving both federal 
trustees and state or Indian tribe trustees, trustees may establish an 
interest-bearing joint trustee account under the registry of the 
applicable federal court. The account should be jointly managed by all 
the trustees through a mutually agreed upon trustee committee or 
council. Such funds shall be used only as specified in Sec. 990.83 of 
this part.
    (b) Separate accounts. The trustees have the option of dividing the 
recoveries and depositing their respective shares in separate interest-
bearing accounts. Such funds should be retained by each trustee in a 
revolving trust account, without further appropriation, for use only as 
specified in Sec. 990.83 of this part.
    (c) Other accounts. The trustees may establish escrow accounts or 
any other investment account(s) unless specifically prohibited by law. 
Such funds shall be used only as specified in Sec. 990.83 of this part.
    (d) Records. Regardless of the type of account used, the trustee(s) 
must maintain appropriate accounting and reporting methods to document 
the use of those sums, including independent auditing.
    (e) Adjustments. (1) If, for any reason, a recovery cannot be 
placed in an interest-bearing account, prior to the presentation of a 
demand for the damage amount, the calculation of the expected present 
value of the damage amount should be adjusted to correct for the 
anticipated effects of inflation over the time estimated to complete 
the restoration, rehabilitation, replacement, or acquisition of the 
equivalent of the natural resources and/or services.
    (2) In order to make the adjustment in paragraph (e)(1) of this 
section, the trustee(s) should adjust the damage amount by the rate 
payable on notes or bonds issued by the United States Treasury with a 
maturity date that approximates the length of time estimated to 
complete the restoration, rehabilitation, replacement, or acquisition 
of the equivalent.
    (3) The adjustment outlined in this paragraph applies only to those 
sums to be expended through an Incident-Specific Restoration Plan 
described in Sec. 990.84 of this part.


Sec. 990.83  Post-assessment phase--use of sums recovered.

    (a) Reimbursable costs. Prior to deposit of the sums recovered, as 
provided in Sec. 990.82 of this part, the trustee(s) may immediately 
request receipt of those sums recovered that represent the:
    (1) Costs of the assessment already incurred and costs necessary to 
complete the damage assessment;
    (2) Costs already incurred for emergency restoration as described 
in Sec. 990.25;
    (3) Costs necessary to develop the final restoration plan; and
    (4) Costs necessary to implement a restoration plan or individual 
project that is part of that restoration plan.
    (b) Damages representing compensation. Damages recovered as 
compensation for injuries to natural resources and/or services, as 
specified in Sec. 990.81 of this part, shall be paid out of the account 
established under Sec. 990.82 of this part only for those actions 
described in a restoration plan developed pursuant to the guidance in 
Sec. 990.84 of this part.


Sec. 990.84  Post-assessment phase--final restoration plan.

    (a) Incident-specific Restoration Plan. The Final Restoration Plan 
is that plan implemented after damages have been received. The Final 
Restoration Plan can be either one of two types: Incident-specific or 
regional.
    (1) Upon determination of the amount of the award of a natural 
resource damage claim, as authorized by section 1006(a)(2) of OPA, the 
trustee(s) shall prepare a Final Restoration Plan as provided in 
section 1006(c) of OPA.
    (2) This post-assessment restoration plan should be based upon the 
restoration component developed pursuant to subpart G of this part.
    (3) If there are significant modifications between the restoration 
component developed under subpart G of this part, which was made 
available to the public, and the Final Restoration Plan, the Final 
Restoration Plan shall be made available for a 30 calendar day public 
review and comment period.
    (4) Before implementing the significantly modified plan discussed 
in paragraph (a)(3) of this section, the plan and a response to any 
public comments received, should be made available to the public.
    (5) This Final Restoration Plan shall be implemented using the sums 
in one or more of the accounts described in Sec. 990.82 of this 
subpart.
    (b) Regional Restoration Plan. (1) Where the trustee(s) has 
developed a Regional Restoration Plan, as described in Sec. 990.16 of 
this part, through a public review and comment process, for a specific 
area, e.g., bay or estuary, monies placed in an account established 
under Sec. 990.82 of this part may be pooled with other recoveries to 
implement that Regional Restoration Plan, in whole or in part.
    (2) Where a Regional Restoration Plan has not been or is not in the 
process of being developed, an incident-specific plan must be developed 
for use of the damages recovered.
    (3) To qualify as a Regional Restoration Plan for use of sums 
recovered pursuant to this part, the plan must:
    (i) Be developed through a process consistent with the prespill 
planning process described in Sec. 990.16 of this part, including 
public review and comment; and
    (ii) Address the same or similar resource injuries as those 
identified in the assessment.

Appendix A to Part 990--Draft Memorandum of Understanding (MOU)

I. Introduction

    This Memorandum of Understanding (MOU) by and between the state 
of ________ (state), the National Oceanic and Atmospheric 
Administration of the United States Department of Commerce (NOAA), 
the United States Department of the Interior (DOI) and the United 
States Department of Agriculture (USDA) (collectively referred to as 
the Trustees) is entered into to ensure the coordination and 
cooperation of the trustees in the initiation of assessment and 
assessment of damages for injuries to natural resources and/or 
services resulting from ________, and the application of any natural 
resource damages recovered toward the restoration, rehabilitation, 
replacement and/or acquisition of equivalent natural resources.

    [Note: Obviously, in any given incident there may be more or 
fewer trustees than those indicated above.]

II. Parties

    The following officials, or their designees, are parties to this 
MOU and act on behalf of the public as Trustees for natural 
resources under this MOU:
    1. The ________ of the state of ________,
    2. The Under Secretary for Oceans and Atmosphere, Administrator 
of the National Oceanic and Atmospheric Administration, acting on 
behalf of the Secretary of Commerce,
    3. The Secretary of the Department of the Interior,
    4. The Secretary of the Department of Agriculture,
    5. [The Secretary of Department of Defense, Department of 
Energy, and/or the designated trustee of a Tribe and any foreign 
[international] trustee.]

III. Location

    This MOU is intended to address natural resources injured 
[damaged] * * *
    [Identify as precisely as possible geographic location and 
incident(s) involved]
    * * * (the Incident).

IV. Purpose

    The trustees recognize the importance of integrating and 
coordinating the assessment of natural resource damages for injuries 
to natural resources affected by the Incident, seeking compensation 
for those injuries to natural resources and/or services and 
restoration of those affected resources and/or services. The purpose 
of this MOU is to provide a framework for such coordination and 
cooperation between the trustees, and for the implementation of the 
activities of the trustees in furtherance of their natural resource 
trustee responsibilities. The trustees' activities will primarily 
involve assessing damages for injuries to natural resources, seeking 
compensation for those injuries to natural resources and/or services 
and restoring the injured natural resources and/or services affected 
by the incident. Nothing in this MOU is to imply that any signatory 
trustee is in any way abrogating or ceding any responsibility or 
authority inherent in its control or trusteeship over natural 
resources.

V. Authority

    The trustees enter into this MOU in accordance with the natural 
resource trustee authorities provided for each trustee by the 
Federal Water Pollution Control Act, 33 U.S.C. 1251 et seq., the Oil 
Pollution Act of 1990, Public Law 101-380, the Comprehensive 
Environmental Response, Compensation and Liability Act, as amended, 
42 U.S.C. 9601 et seq., and, if utilized, the Natural Resource 
Damage Assessment Regulations, 43 CFR part 11, or the OPA 
regulations, when promulgated.

VI. Organization

    The trustees recognize the importance of coordinating their 
efforts in order to effectively and efficiently meet their 
respective natural resource trustee responsibilities under 
applicable federal and state law. Accordingly, there is hereby 
created a Trustee Council (Council) to implement the MOU to which 
each trustee will designate a representative and an alternate. The 
Council may create subcommittees when they are deemed necessary to 
effect the purposes of this MOU. A representative designated by 
unanimous consent of the Trustee Council members will serve as Lead 
Administrative Trustee for administrative purposes. This 
representative shall fully coordinate his activities with and act 
under the direction of the Council. The Trustee Council will also 
seek advisory participation from the United States Department of 
Justice, the United States Department of Transportation (Coast 
Guard), the State Attorney General or other legal advisor and the 
United States Environmental Protection Agency, when appropriate.

VII. Duties and Responsibilities

    On behalf of the trustees, the Trustee Council shall coordinate 
and authorize all trustee activities and matters under this MOU in 
accordance with the decisionmaking requirements contained in Section 
VIII. The Trustee Council may take whatever actions the Council, in 
its discretion, determines are necessary to fulfill the trust 
responsibilities of each trustee under and to effectuate the 
purposes of applicable federal and state law. It is expected that 
the Trustee Council, in accordance with applicable laws and 
policies, may take the following actions, among others, to address 
the trustees' natural resource trustee responsibilities:
    A. Conduct scientific and technical studies, sampling and other 
matters related to the assessment of natural resource damages for 
injury to natural resources with respect to trust resources which 
may be lost, injured or destroyed.
    B. Seek compensation from responsible parties for the damages 
assessed by the trustees and for the costs of planning and 
implementing the assessment.
    C. Acting in concert with its attorneys, participate in 
negotiations with responsible parties.
    D. In accordance with applicable law, supervise, manage and 
obligate any money paid to the trustees by or on behalf of 
responsible parties for the purpose of assessing, restoring, 
replacing, rehabilitating, and/or acquiring the equivalent of the 
affected natural resources.
    E. Oversee the development and implementation of a plan for the 
restoration, replacement, rehabilitation, and/or acquisition of 
equivalent resources for those trust resources, and/or services, 
that may be injured, destroyed or lost.
    F. In accordance with applicable law, make all necessary 
decisions for the management and administration of funds pursuant to 
Section IX of this MOU.
    G. In accordance with applicable law, arrange for one or more 
contracts with professional consultants, technical or otherwise, 
that the Trustee Council determines are necessary and best qualified 
to provide services to the Council.
    H. Identify a contact for coordination with the U.S. Coast Guard 
regarding access to the Oil Spill Liability Trust Fund.
    The duties of the Lead Administrative Trustee shall include, but 
are not limited to: coordination and monitoring of the progress of 
the natural resource damage assessment process; scheduling of 
meetings of the Trustee Council, and preparation of agendas for 
those meetings; acting as a central contact point for the Trustee 
Council; establishment and maintenance of the administrative record 
and other records and relevant documents; and such other duties as 
directed by the Trustee Council. The Lead Administrative Trustee 
will be responsible for informing the other trustees of all 
pertinent developments on a timely basis.

VIII. Decisionmaking

    The trustees agree that all decisions implementing this MOU 
shall require unanimous approval. In the event that unanimous 
agreement cannot be reached among the members of the Trustee 
Council, the matter in dispute will be elevated to the Trustees for 
resolution. If necessary, the trustees may establish further 
mechanisms by which disputes may be resolved. The trustees further 
agree that decisionmaking deliberations will focus upon the 
trustees' mutual purpose of assessing, restoring, rehabilitating, 
replacing and/or acquiring the equivalent of the affected natural 
resources, rather than upon control or respective trusteeship over 
those resources.

IX. Funds

    The trustees agree to cooperate in good faith to attempt to 
establish, to the extent consistent with applicable law, a joint 
trust account for purposes of receiving, depositing, holding, 
disbursing, managing and expending all natural resource damage 
recoveries obtained or received by the trustees relating to the 
natural resource injuries arising out of the Incident and interest 
earned thereon. This joint trust account will be established under 
the registry of the applicable Federal district court. Such 
recovered damages shall be used for restoration activities conducted 
under this MOU to address those injuries to natural resources and/or 
services. Any recoveries for injury to natural resources obtained or 
received by or on behalf of any trustee shall be deposited in this 
joint trust account.
    The Trustee Council, in accordance with its decisionmaking 
process in section VIII of this MOU, shall establish standards and 
procedures governing the joint use of all natural resource damages 
received by the Trustees for the purposes of restoring, replacing, 
rehabilitating and/or acquiring the equivalent of natural resources 
injured as a result of the Incident and the reduced or lost services 
provided by such resources pursuant to the final Restoration Plan.
    The trustees further agree that the following damage assessment 
costs shall be advanced or reimbursed to each trustee out of any 
damage assessment cost recoveries or payments thereon, including 
funds received from the Oil Spill Liability Trust Fund: reasonable 
unreimbursed costs jointly agreed upon for the planning, conduct, 
evaluation and coordination of all natural resource damage 
assessment activities pursued by the Trustee Council with respect to 
injuries incurred resulting from the Incident.

X. Confidentiality

    The trustees agree that it is in the public interest that all 
scientific data arising out of their review of the injury to natural 
resources as a result of the Incident be made public. Therefore, 
such data shall be made public as soon as publication will not 
prejudice the on-going assessment. Public sharing of scientific data 
will be the general policy of the trustees.
    However, all parties to this MOU recognize that all written or 
oral communications related to the assessment and recovery of 
damages for injury to natural resources and/or services may be 
undertaken in anticipation of litigation. Accordingly, all oral and 
written communications and work product will be treated as 
privileged attorney-client communications, attorney work product or 
protected by other applicable privilege (or a combination thereof), 
as appropriate, and will be protected from disclosure to the maximum 
extent possible under applicable federal or state law. They further 
agree that when a request for production of such a record is 
received pursuant to any applicable federal or state law, the 
request will be forwarded for response to the trustee or trustees to 
which the privilege applies or whose representatives originally 
generated or contributed the record requested. Nothing contained 
herein shall be construed as prohibiting or restraining the trustees 
or the Trustee Council from agreeing to release any record.

XI. Reservation of Rights

    Except for the confidentiality agreement contained in Section X, 
all parties understand that this document is not intended to create 
any further legal rights or obligations between the parties, the 
trustees or any other persons not a party to this MOU.

XII. Modification of Agreement

    It is acknowledged that additional agreements may be executed by 
the trustees with regard to natural resource damage claims that 
arise and to planning for the restoration, replacement, 
rehabilitation, and/or acquisition of equivalent natural resources 
that may be injured, destroyed or lost. Therefore, modification of 
this MOU must be in writing and upon approval of all Trustees 
currently parties to the MOU.

XIII. Termination

    This MOU shall be in effect from the date of execution until 
termination by agreement of the trustees. At any time the trustees 
determine that the purposes underlying this MOU have been addressed, 
the MOU will terminate upon such a finding. In the event any trustee 
withdraws from the MOU, such withdrawal must be in writing at least 
thirty calendar days in advance of the withdrawal. In the event of 
such withdrawal, this MOU remains in full force and effect for the 
remaining parties.
    In the event of the withdrawal of any trustee, or at the 
termination of this MOU, there shall be a full and complete 
accounting of all funds received, deposited, held, disbursed, 
managed, expended pursuant to Section IX of this MOU, or otherwise 
controlled in any joint account by the trustees as a result of the 
incident.

XIV. Limitation

    Nothing in this MOU shall be construed as obligating the United 
States, a state or any other public agency, their officers, agents 
or employees, to expend any funds in excess of appropriations 
authorized by law.

XV. Third Party Challenges or Appeals

    The rights and responsibilities contained in this MOU are 
subject to the availability of funding and are intended to be 
guidance for the respective trustees. They may not be the basis of 
any third party challenges or appeals.

XVI. Execution: Effective Date

    This MOU may be executed in counterparts. A copy with all 
original executed signature pages affixed shall constitute the 
original MOU. The date of execution shall be the date of the final 
trustee's signature.

Appendix B to Part 990--Memorandum of Agreement (MOA)

     This memorandum of agreement (MOA) is between the [trustee(s)], 
referred to as ________, and [responsible party(ies)], referred to 
as ________. The [trustee(s)] and [RP(s)] are hereafter collectively 
referred to as ``the parties.'' This MOA shall become effective as 
of the last date of its execution by the authorized representatives 
of the parties.
    The parties, in order to pursue a [negotiated settlement of 
possible claims or phased joint assessment (PJA)] arising from 
[description of discharge], have executed this MOA, which addresses 
the nature and scope of [settlement negotiations in this case or the 
PJA].
    The parties agree that, by entering into this MOA, neither party 
is making any admission of fact or law. This MOA shall not be 
admissible as evidence of proof of liability or nonliability or the 
validity or nonvalidity of any claim or defense in the above-
referenced or other discharge. This MOA shall not prejudice the 
position of either party in the above-referenced or other discharge, 
nor shall it be used for any purpose other than the attempted 
[settlement of this case or PJA].

Recitals

    Whereas, the parties to this MOA seek to resolve without further 
litigation all issues in the [case or PJA];
    Whereas, the parties are entering into the negotiations in good 
faith and agree to consider and discuss all issues that either party 
deems necessary or appropriate to a final resolution;
    Whereas, the parties intend to negotiate in good faith through 
their expressly designated representatives and do not intend to 
undermine negotiations through other means or methods;
    Now, therefore, based upon the above premises and the mutual 
covenants and considerations set forth below, the parties agree as 
follows:

PJA Process and Schedule

    The [settlement or PJA] process shall take the (five)-phase 
approach, described below. The parties will use their best efforts 
to adhere to the schedule set forth in Attachment A, hereto. This 
(five)-phase approach and schedule may be modified upon written 
agreement of the parties.

Phase I--Agreeing to the Settlement Process

    During Phase I the parties discussed and formulated a process to 
engage in substantive settlement negotiations. The agreements of the 
parties as a result of those discussions are contained in this MOA. 
If this MOA is negotiated as part of a claim, this MOA will be 
submitted to the Court in the litigation in conjunction with a joint 
petition of the parties for a stay of the litigation. Phase II of 
the settlement process shall proceed upon the Court's approval of 
such joint petition.
    [The following section outlines the maximum extent of agreement 
between the possible parties. This section is designed to be modular 
in nature, i.e., one may pick appropriate phases or components to 
revise and include in a particular MOA.]

Phase II--Preassessment Phase

    During Phase II the parties will discuss the technical, 
scientific, and other issues pertaining to preassessment, 
particularly as to the type of assessment procedure to conduct for 
[the expected area of impacts]. The discussions will proceed on the 
basis of natural resource units. The natural resource units were 
chosen because they logically lend themselves to segregated 
discussion. The natural resource units will be:
    [Natural resource units may consist of resource categories, 
e.g., surface waters, geologic units; aquatic resources, including 
surface water, sediments, fish, etc.; terrestrial resources; acres 
of particular wetland or other habitat type; certain populations of 
fish and/or wildlife species; recreational areas.]
    The substantive discussions on a particular natural resource 
unit will proceed according to the Settlement Process Schedule 
provided in Attachment A as follows:
    A. The basis for the [trustee's(s')] trusteeship of the 
resources and the precise geographical location and extent of the 
same; and
    B. The [trustee's(s')] initial recommendation of the type of 
assessment procedure to implement for this incident.

Phase III--Assessment/Restoration Phase

    During Phase III, the parties will discuss the nature and extent 
of the injuries, along with the appropriate restoration approach, 
the cost of implementing that approach, and compensation for 
resources or services that are not restored. Phase III may be broken 
down into as many as three components as described below:
    A. Injury determination/quantification component:

--Baseline/reference/control conditions
--Change from above conditions
--Quantification of injured natural resources and/or services

    B. Restoration Component:

--Development of an approach
--Estimating rate of recovery
--Estimating interim lost uses

    C. Economic Valuation Component:

--Estimate lost compensable values

Phase IV--Post-Assessment Phase

    During Phase IV, the parties will discuss the actions to be 
carried out in the Post-Assessment Phase, including the components 
listed below:
    A. Development of Final Restoration Plan.
    B. Compensatory Restoration.
    C. Accounts and Disbursements.
    D. Monitoring.

Phase V--Final Settlement Negotiations

    During Phase V, the parties will discuss and attempt to resolve 
the outstanding issues necessary for a final settlement. If not 
previously resolved, these will include: (1) The amount of any 
natural resource damages and assessment costs to be paid to the 
[trustee(s)] by [RP(s)]; and (2) the contents and details of the 
final settlement agreement and consent decree.
    By the conclusion of Phase V, the parties should have agreed to 
a settlement agreement and consent decree resolving all issues that 
will be made available for public review and comment and submitted 
for court approval. The parties will submit to each other written 
statements of their positions as necessary during the Phase V 
discussions. Phase V should conclude no later than ________.

Joint Data

    The [trustee(s)] and the [RP(s)] stipulate that each party to 
the agreement shall be barred from introducing new or different data 
(information, analysis, etc.) collected outside the joint process to 
challenge the jointly collected data in either a judicial or 
administrative proceeding under OPA.

Public Review

    During the settlement process, appropriate public review shall 
be provided as follows:
    1. Following the complete execution of this MOA, the MOA shall 
be submitted to the Court and released to the public. Any subsequent 
modifications of this MOA shall also be submitted to the Court and 
released to the public.
    2. During Phases II, III, IV, and V of the [settlement or 
assessment] process, the [trustee(s)] at its discretion may make 
available for public review copies of any information that it has 
submitted to the [RP(s)], provided that such information does not 
contain information submitted by the [RP(s)] to the [trustee(s)] in 
the [settlement or assessment] process. Ten (10) days prior to any 
submission of such information, the [trustee(s)] shall deliver to 
the [RP(s)] a general written description of such information that 
is sufficient to assure the [RP(s)] that such information will not 
contain any confidential information submitted by the [RP(s)] to the 
[trustee(s)] in the [settlement or assessment] process.
    3. During Phases II, III, IV, and V, of the [settlement or 
assessment] process, the [trustee(s)], following the express written 
agreement of the [RP(s)], may make available for public review any 
information that the [RP(s)] has submitted to the [trustee(s)].
    4. During Phases II, III, IV, and V, of the [settlement or 
assessment] process, the [trustee(s)] shall make available for 
public review and comment any final agreements reduced to writing by 
the parties.
    5. The [trustee(s)] negotiators, at their discretion, may meet 
with the general public or with individual members of the public 
regarding the status of the settlement process, provided that the 
[trustee(s)] does not discuss at such meetings information submitted 
by the [RP(s)] to the [trustee(s)] in the settlement process. The 
[RP(s)] may have a representative present at the meetings that are 
open to the general public.
    6. At the completion of each phase, the [trustee(s)] shall enter 
all documentation developed for that phase into the Administrative 
Record of the [settlement or assessment] process to be made 
available to the public during the review of the settlement 
agreement or consent decree.
    7. Following the complete execution of any final settlement 
agreement(s) and consent decree(s) that will be submitted for court 
approval, the [trustee(s)] shall make such agreement(s) and 
decree(s) available for public review and comment for a period of 
____ days. The [trustee(s)] may hold a public meeting to receive 
comments during the comment period. The parties agree that any such 
consent decree(s) shall not be approved as an order of the court 
until the comment period expires and all comments received have been 
duly considered by the parties and jointly submitted to the court 
together with responses and/or mutually agreed amendments to the 
consent decree(s).

Stay of Litigation

[For Litigation-Driven Assessments]

     Upon complete execution of this MOA, the parties shall file the 
MOA with a joint petition to the Court to stay the litigation in its 
entirety, including all discovery and motions practice, except as 
hereinafter provided dealing with matters or issues covered by this 
MOA. It is agreed that the parties will use their best efforts 
(provided that such efforts are reciprocal as between the parties) 
to respond to all Rule 34 F.R. Civ. P. requests for production of 
documents which were served prior to [some date prior to this MOA] . 
It is agreed that should any disputes over production of documents 
arise, no motions to compel shall be filed during the pendency of 
this stay and each party shall reserve its right to file any such 
motion after the stay is lifted.
    In addition, either party at any time may request, in writing, 
that the other party make available to it, for review and/or 
copying, documents not previously requested or produced in the 
litigation that are reasonably required in the negotiation process. 
Such requests shall be limited in nature and reasonably precise in 
their description of the documents requested; such requests shall 
not be burdensome or overly-broad. Further, the parties reserve 
their right to withhold any such documents that, under applicable 
law, are irrelevant or qualify as attorney-client or litigation work 
product materials. It is agreed that should any disputes over 
document production under this paragraph arise, such disputes shall 
not affect the [settlement or assessment] process schedule and no 
motions to compel may be filed during the pendency of this stay; and 
each party shall reserve its right to file any appropriate discovery 
requests or motions to compel production of such documents after the 
stay is lifted.
    The parties in their joint petition shall request that the court 
vacate all deadlines dealing with matters or issues covered by this 
MOA. The parties agree that the stay of litigation should remain in 
effect so long as the parties are engaged in the [settlement or 
assessment] process pursuant to this MOA. If this MOA should 
terminate prior to a final settlement and court approval of a final 
consent decree, all litigation shall continue as before, all pending 
motions shall be recalendered, and all court deadlines shall be 
reimposed, except all such deadlines shall be extended as set forth 
in Attachment ____, hereto.
    The parties may jointly request the court to designate a 
mediator or special master, with expertise in natural resource 
damage actions, for assistance in resolving disputes over legal or 
other issues upon which the parties cannot agree. Such involvement 
by the court's designee shall not result in any final or binding 
decision on any such issue, but rather shall be in the form of 
mediation assistance to help the parties reach mutual agreement on 
such disputed issues. The costs for any such mediator or special 
master shall be shared equally between the [trustee(s)] and the 
[RP(s)].

Confidentiality

    To encourage full and frank discussions, the parties further 
agree to jointly petition the court to order that the substance of 
all settlement negotiations are confidential and that all documents 
and information related thereto, except the parties' joint petition, 
the court's Order, and the matters described in Section ____ above, 
shall not be released to anyone outside of the attorneys, 
consultants, and administrative personnel involved in this action or 
the negotiations and their principals.

Modification

    This MOA may be modified by agreement of the parties. All 
modifications shall be in writing and signed by authorized 
representatives of the parties. All modifications shall be submitted 
to and filed with the court.

Termination

    At any time either party may terminate this MOA and the 
[settlement or assessment] process upon thirty (30) days' written 
notice to the other party. The stay of litigation shall be lifted 
thirty (30) days after receipt by the non-terminating party of the 
notice of termination; and the date upon which the stay is lifted 
shall be the ``MOA Termination Date.''

Non-Waiver of Claims, Defenses, and Privilege

    Neither party waives any privilege, defenses, or claims that 
could otherwise be asserted with respect to any claims made or 
information or data communicated or acquired by virtue of these 
settlement discussions or related proceedings. Statements made in 
the negotiation process shall not constitute a waiver of any claims 
or defenses nor serve any party as a substitute for the need to 
develop evidence to be used in any litigation now pending or which 
may subsequently be filed for or against the parties. Neither party 
will oppose discovery, including the depositions of witnesses, 
relating to the natural resource damage action on the grounds that 
the discussions as contemplated herein serve as a substitute for 
discovery or that discovery shall be repetitive of information 
obtained during the negotiations. These negotiations shall be 
conducted pursuant to Rule 408, Federal Rules of Evidence, which 
shall be binding upon all participants in the [settlement or 
assessment] process discussions. These negotiations do not protect 
from discovery any information otherwise discoverable merely because 
it is presented in these or subsequent negotiations.

Attachment A--Schedule for Performance

    [Note: Parties should devise reasonable time tables for each 
phase and component. Parties should also provide for an expedited 
process for modifications that may become necessary in the 
schedule.]

Appendix C to Part 990--Expedited Damage Assessment: Oil 
Characteristics

    Very light refined products, such as gasoline and jet fuel, are 
extremely volatile and usually evaporate within hours to days after 
being discharged. They usually contain high concentrations of toxic 
compounds that can result in high but localized mortality to water-
column and intertidal resources. Yet, because of their volatility, 
they are generally non-persistent and cause little or no residual 
contamination of sediments and organisms. Where a discharge of these 
products results in minimal residual contamination of sediments and 
organisms, the trustee(s) may determine an EDA is appropriate.
    Light oil includes diesel, No. 2 fuel oil, and certain light 
crudes. These oils are considered to be moderately volatile. Up to 
50 percent can evaporate within the first 24 hours depending upon 
the air and water temperatures. Like very light, refined products, 
light oils contain high concentrations of the most toxic water-
soluble compounds and therefore may be acutely toxic to water-column 
organisms. These oils are moderately persistent and likely to leave 
residual oil in the environment with the attendant risk of long-term 
contamination of sediments and chronic toxicity to benthic 
organisms. Because of these characteristics, the trustee(s) should 
evaluate discharges of light oil very carefully prior to selecting 
EDA procedures.
    Medium crude oils comprise the third category of oil types. Up 
to one-third of these oils can evaporate within the first 24 hours 
leaving a significant amount of oil persistent in the environment. 
The water soluble fraction is acutely toxic immediately after the 
discharge. In addition, residual contamination of the sediment 
creates chronic toxicity problems. However, there are extensive 
databases regarding toxicity problems associated with the sediment 
and water column. There are also studies from previous discharges 
that have documented the effects of the contamination of certain 
habitats, fish and wildlife. The trustee(s) may adopt the EDA 
approach where existing data are sufficient to determine injury 
using limited, focused studies.
    Finally, heavy oils, such as No. 6 fuel oil and Bunker C, result 
in little or no loss by evaporation and have very low water 
solubilities. These oils can sink in fresh-water habitats and may be 
highly persistent in both fresh and salt water systems. Acute 
effects may result from smothering rather than aquatic toxicities. 
While persistent, the bioavailability and resulting toxicity of the 
high molecular-weight polynuclear aromatic hydrocarbons (PAHs) is 
not well known. Where extensive contamination of intertidal or 
subtidal sediments is likely, it may be necessary to conduct 
extensive studies, more appropriate for a CDA, to determine the 
injury to resources and/or services.

Appendix D to Part 990--List of Acronyms

ANPRM--Advance Notice of Proposed Rulemaking.
BNA--Bureau of National Affairs.
CDA--Comprehensive Damage Assessment.
CERCLA--Comprehensive Environmental Response, Compensation, and 
Liability Act of 1980.
CEQ--Council on Environmental Quality.
CFR--Code of Federal Regulations.
COC--Citizen Oversight Committee.
CV--Contingent Valuation.
CWA--Clean Water Act, as Amended.
DARP--Draft Assessment/Restoration Plan.
DART--Damage Assessment Regulations Team.
DOI--U.S. Department of the Interior.
EDA--Expedited Damage Assessment.
EIS--Environmental Impact Statement.
E.O.--Executive Order.
Fund--Oil Spill Liability Trust Fund.
HVM--Hedonic Valuation Methodology.
LAT--Lead Administrative Trustee.
MOA--Memorandum of Agreement.
MOU--Memorandum of Understanding.
NCP--National Oil and Hazardous Substance Pollution Contingency 
Plan.
NEPA--National Environmental Policy Act of 1969.
NMFS--National Marine Fisheries Service.
NOAA--National Oceanic and Atmospheric Administration.
NRDAM/CME--Natural Resource Damage Assessment Model/Coastal and 
Marine Environments.
NRDAM/GLE--Natural Resource Damage Assessment Model/Great Lakes 
Model.
OMB--Office of Management and Budget.
OPA--Oil Pollution Act of 1990.
OSC--On-Scene Coordinator.
PAH--Polynuclear Aromatic Hydrocarbons.
PJA--Phased Joint Assessment.
QA--Quality Assurance.
RI/FS--Remedial Investigation/Feasibility Study
RP--Responsible Party.
RRT--Regional Response Team.
TCM--Travel Cost Methodology.
U.S. EPA--U.S. Environmental Protection Agency.
U.S.C.--United States Code.
USDA--United States Department of Agriculture.
WTA--Willingness to Accept.
WTP--Willingness to Pay.

[FR Doc. 94-225 Filed 1-4-94; 8:45 am]
BILLING CODE 3510-12-M