[Federal Register Volume 59, Number 58 (Friday, March 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6749]


[[Page Unknown]]

[Federal Register: March 25, 1994]


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Part II





Department of the Interior





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Office of the Secretary



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43 CFR Part 11




Natural Resource Damage Assessments; Final Rule
DEPARTMENT OF THE INTERIOR

Office of the Secretary

43 CFR Part 11

RIN 1090-AA22

 
Natural Resource Damage Assessments

AGENCY: Department of the Interior.

ACTION: Final rule.

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SUMMARY: This final rule amends the regulations for assessing natural 
resource damages resulting from a discharge of oil into navigable 
waters under the Clean Water Act or a release of a hazardous substance 
under the Comprehensive Environmental Response, Compensation, and 
Liability Act. The Department of the Interior has previously developed 
two types of natural resource damage assessment regulations: standard 
procedures for simplified assessments requiring minimal field 
observation (the type A rule); and site-specific procedures for 
detailed assessments in individual cases (the type B rule).
    This final rule revises the type B rule to comply with all but one 
aspect of a court order. This rule establishes a procedure for 
calculating natural resource damages based on the costs of restoring, 
rehabilitating, replacing, and/or acquiring the equivalent of injured 
resources. This rule also allows for the assessment of all use values 
of injured resources that are lost to the public pending completion of 
restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources. The Department will soon issue a new proposed 
rule to address assessment of lost nonuse values of injured resources.

EFFECTIVE DATE: The effective date of the final rule is April 25, 1994.

FOR FURTHER INFORMATION CONTACT: Mary C. Morton, Cecil Hoffmann, or 
David Rosenberger at (202) 208-3301.

SUPPLEMENTARY INFORMATION: This preamble is organized as follows:

I. Background
    A. Statutory Provisions
    B. Regulatory History
    C. Judicial Review
    D. Implementation of the Court Order
    E. Other Rulemakings
II. Overview of this Final Rule
    A. Measure of Damages
    B. Restoration and Compensation Determination Plan
    C. Resources Covered by the Natural Resource Damage Assessment 
Regulations
    D. Other Significant Issues
III. Response to Comments
    A. General Comments Concerning this Rulemaking
    B. Overall Damage Assessment Process
    C. Resources Covered by the Natural Resource Damage Assessment 
Regulations
    D. Trustee Coordination
    E. Preliminary Estimate of Damages
    F. Reasonable Cost of an Assessment
    G. Calculation of Baseline
    H. Measure of Damages
    I. Restoration, Rehabilitation, Replacement, and/or Acquisition 
of Equivalent Services Versus Resources
    J. Selection of a Restoration, Rehabilitation, Replacement, and/
or Acquisition Alternative
    K. Costs of Restoration, Rehabilitation, Replacement, and/or 
Acquisition of Equivalent Resources
    L. Compensable Value
    M. Date of Promulgation of the Natural Resource Damage 
Assessment Regulations
    N. Judicial Review of an Assessment
    O. Use of Collected Damages
    P. Miscellaneous Comments

I. Background

A. Statutory Provisions

    The Clean Water Act, as amended (33 U.S.C. 1251 et seq.) (CWA) and 
the Comprehensive Environmental Response, Compensation, and Liability 
Act of 1980, as amended (42 U.S.C. 9601 et seq.) (CERCLA) authorize 
natural resource trustees to recover compensatory damages for injury 
to, destruction of, or loss of natural resources resulting from a 
discharge of oil into navigable waters or a release of a hazardous 
substance. CWA sec. 311(f); CERCLA sec. 107. Federal and State 
officials may be designated to serve as natural resource trustees under 
CERCLA and CWA. CERCLA also recognizes the authority of Indian tribes 
to commence actions as natural resource trustees.
    Damages may be recovered for those natural resource injuries and 
losses that are not fully remedied by response actions. All sums 
recovered in compensation for natural resource injuries must be used to 
restore, rehabilitate, replace, or acquire the equivalent of the 
injured natural resources. Trustee officials may also recover the 
reasonable costs of assessing natural resource damages and any 
prejudgment interest.
    CERCLA requires the promulgation of two types of regulations for 
the assessment of natural resource damages resulting either from a 
discharge of oil under CWA or from a release of a hazardous substance 
under CERCLA. CERCLA sec. 301(c). The type A regulations provide 
standard procedures for simplified assessments requiring minimal field 
observation. The type B regulations provide site-specific procedures 
for detailed assessments. Both regulations identify the best available 
procedures for determining natural resource damages. Assessments 
performed by Federal and State trustee officials in accordance with 
these regulations receive a rebuttable presumption in court. CERCLA 
sec. 107(f)(2)(C). The promulgation of these regulations was delegated 
to the Department of the Interior (the Department). E.O. 12316, as 
amended by E.O. 12580.
    The Oil Pollution Act (33 U.S.C. 2701 et seq.) (OPA) was signed 
into law on August 18, 1990. Among other things, OPA amended the 
natural resource damage provisions of CWA. OPA authorized the National 
Oceanic and Atmospheric Administration (NOAA) to develop new natural 
resource damage assessment regulations for discharges of oil into 
navigable waters. The Department is coordinating its rulemakings with 
NOAA to ensure, to the maximum extent possible, that consistent 
processes are established for assessing natural resource damages under 
CERCLA and OPA. OPA provides that until NOAA develops its regulations, 
the Department's regulations may be used to assess natural resource 
damages under OPA. OPA sec. 6001(b). NOAA published a proposed natural 
resource damage assessment rule on January 7, 1994. 59 FR 1062.

B. Regulatory History

    The Department has issued various final rules for the assessment of 
natural resource damages: 51 FR 27674 (Aug. 1, 1986); 52 FR 9042 (March 
20, 1987); 53 FR 5166 (Feb. 22, 1988); and 53 FR 9769 (March 25, 1988). 
These rulemakings are all codified at 43 CFR part 11.
    The natural resource damage assessment regulations provide an 
administrative process for conducting assessments as well as technical 
methods for the actual identification of injuries and calculation of 
damages. Under the regulations, both type A and type B, assessments 
consist of four major phases.
    The first phase of an assessment conducted under the regulations 
involves the activities that precede the actual assessment. For 
example, upon detecting or receiving notification of a discharge or 
release, trustee officials perform a preassessment screen to ascertain 
whether further assessment actions are warranted.
    The second phase involves the preparation of an Assessment Plan. 
The Assessment Plan, which is subject to public review and comment, 
assists the involvement of potentially responsible parties (PRPs), 
other trustee officials, the general public, and any other interested 
parties. The Assessment Plan also ensures that assessments are 
performed at a reasonable cost.
    In the third phase, trustee officials conduct the work described in 
the Assessment Plan. The work involves three steps: Injury 
Determination; Quantification; and Damage Determination. In Injury 
Determination, trustee officials determine whether any natural 
resources have been injured. If trustee officials determine that 
resources have been injured, they proceed to Quantification, in which 
they quantify the resulting reduction in services provided by the 
resources. Finally, in Damage Determination, trustee officials 
calculate the monetary compensation to be sought as damages for the 
natural resource injuries.
    In a type A assessment, trustee officials perform Injury 
Determination, Quantification, and Damage Determination through the use 
of standardized procedures involving minimal field work. The Department 
has adopted a phased approach to developing type A procedures for 
different environments. Only one type A rule has been developed to 
date. The existing type A rule provides for the use of a computer model 
to assess damages from small releases or discharges in coastal or 
marine environments. For other releases or discharges, trustee 
officials conduct a type B assessment, in which Injury Determination, 
Quantification, and Damage Determination are performed through the use 
of a range of alternative scientific and economic methodologies.
    The fourth phase of every natural resource damage assessment, 
whether the type A or type B rule is followed, consists of post-
assessment activities such as: Preparation of a Report of Assessment; 
establishment of an account for damage assessment awards; and 
development of a Restoration Plan for use of the awards.

C. Judicial Review

    A party may petition the Court of Appeals for the District of 
Columbia Circuit to review any regulation issued under CERCLA. CERCLA 
sec. 113(a). A number of parties filed such petitions for review of the 
natural resource damage assessment regulations. The type A rule was 
challenged in State of Colorado v. United States Department of the 
Interior, 880 F.2d 481 (D.C. Cir. 1989) (Colorado v. Interior). The 
type B rule was challenged in State of Ohio v. United States Department 
of the Interior, 880 F.2d 432 (D.C. Cir. 1989) (Ohio v. Interior).
    The court in Ohio v. Interior upheld various challenged aspects of 
the type B rule but did remand three issues. The court ordered the 
Department to revise the rule to reflect the statutory preference for 
using restoration costs as the measure of natural resource damages. The 
court used the term ``restoration costs'' to encompass the cost of 
restoring, rehabilitating, replacing, and/or acquiring the equivalent 
of the injured natural resources. The court also ordered the Department 
to revise the rule to allow for the recovery of all reliably calculated 
lost values of injured natural resources, including both lost use 
values and lost nonuse values, with no specific hierarchy of 
methodologies required of trustee officials in estimating those values. 
Use values are derived through activities such as hiking or fishing. 
Nonuse values are not dependent on use of the resource. Nonuse values 
include existence value, which is the value of knowing that a resource 
exists, and bequest value, which is the value of knowing that a 
resource will be available for future generations. Finally, the court 
asked the Department to clarify whether the natural resource damage 
assessment regulations apply to natural resources that are not actually 
owned by the government.

D. Implementation of the Court Order

    The Department published an advance notice of proposed rulemaking 
on September 22, 1989, to announce its intent to revise the type B rule 
to comply with Ohio v. Interior. 54 FR 39016. The Department issued a 
proposed rule on April 29, 1991, with comments requested by June 28, 
1991. 56 FR 19752. On July 2, 1991, the Department extended the comment 
period to July 16, 1991. 56 FR 30367. On July 22, 1993, the Department 
reopened the comment period to allow consideration of additional 
comments, including newly developed information on the contingent 
valuation methodology (CV), the only method currently available for the 
express purpose of estimating nonuse values. 58 FR 39328. The comment 
period was originally reopened until September 7, 1993, and then 
extended until September 22, 1993. 58 FR 45877 (Aug. 31, 1993).
    After reviewing the comments received in response to the July 22, 
1993, Federal Register notice, the Department has decided to issue a 
final rule addressing all aspects of the Ohio v. Interior remand other 
than the assessment of lost nonuse values. The Department is 
considering revising the type B rule to include certain standards to 
improve the reliability of CV when used to calculate lost nonuse 
values. In order to ensure that interested parties have an adequate 
opportunity for review and comment, the Department will soon publish 
the standards in a notice of proposed rulemaking. Pending completion of 
that rulemaking, the Department is temporarily leaving unchanged the 
remanded language of the original type B rule concerning assessment of 
lost nonuse values.

E. Other Rulemakings

    CERCLA mandates biennial review and revision, as appropriate, of 
the natural resource damage assessment regulations. The Department 
plans to publish an advance notice of proposed rulemaking to begin the 
biennial update of the type B rule in July 1994. All aspects of the 
administrative process and the type B rule will be subject to review 
during that update. During the biennial review, the Department will 
consider ways of ensuring the greatest possible consistency between its 
damage assessment regulations and the damage assessment regulations 
being developed by NOAA.
    Further, the Department plans to publish a proposed rule to revise 
the type A procedure for coastal and marine environments in compliance 
with Colorado v. Interior in November 1994. The Department is also 
developing an additional type A procedure for assessing damages in the 
Great Lakes. Like the type A procedure for coastal and marine 
environments, the type A procedure for the Great Lakes will incorporate 
a computer model. The Department expects to publish a proposed rule for 
the type A procedure for the Great Lakes in August 1994.

II. Overview of This Final Rule

A. Measure of Damages

    The type B rule as originally published on August 1, 1986, provided 
that damages consisted of the lesser of the cost of restoring the 
injured resources or the diminution in the value of the injured 
resources without restoration. In Ohio v. Interior, the court ordered 
the Department to revise the rule to reflect the statutory preference 
for using restoration costs as the measure of natural resource damages. 
CERCLA provides that sums recovered in natural resource damage actions 
may be used to restore, rehabilitate, replace, or acquire the 
equivalent of the injured natural resources. The court used the simple 
term ``restoration'' costs as shorthand for the cost of performing any 
of these actions. 880 F.2d at 441. In many cases, trustee officials 
will likely use damage awards to fund some combination of these 
actions, rather than only one. Therefore, the final rule allows trustee 
officials to recover the costs of restoration, rehabilitation, 
replacement, and/or acquisition of equivalent resources in all cases.
    The court recognized the Department's authority to establish

    * * * some class of cases where other considerations--i.e. 
infeasibility of restoration or grossly disproportionate cost to use 
value--warrant a [measure of damages other than the costs of 
restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources]. Id. at 459.

However, the Department believes that trustee officials will always 
perform some, albeit occasionally minor, form of restoration, 
rehabilitation, replacement, and/or acquisition of equivalent 
resources. Even in situations where natural recovery is the preferred 
action, trustee officials will nonetheless incur some costs, such as 
the expense of restricting public access or taking other actions to 
ensure that natural recovery is not impeded. Therefore, the final rule 
does not include any exceptions to the basic measure of damages. 
Moreover, the rule also provides trustee officials with the discretion 
to add to the basic measure of damages the value of the resource 
services lost to the public from the date of the discharge or release 
until restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources has been completed.

B. Restoration and Compensation Determination Plan

    To assist trustee officials in developing claims under the new 
measure of damages, the rule provides for the development of a 
Restoration and Compensation Determination Plan. The Restoration and 
Compensation Determination Plan replaces the Restoration Methodology 
Plan discussed in the original version of the rule. The Restoration and 
Compensation Determination Plan is designed to focus the scope of 
Damage Determination. The Restoration and Compensation Determination 
Plan is part of the overall Assessment Plan and, thus, subject to 
public review and comment.
1. Selection of a Restoration, Rehabilitation, Replacement, and/or 
Acquisition Alternative
    Since damages are based on the costs of restoring, rehabilitating, 
replacing, and/or acquiring the equivalent of the injured resources, 
trustee officials need a mechanism for projecting these costs. The rule 
includes a procedure for selecting a restoration, rehabilitation, 
replacement, and/or acquisition alternative that can be used in this 
projection.
    Under the rule, trustee officials first identify and consider a 
reasonable number of possible alternatives for restoring, 
rehabilitating, replacing, and/or acquiring the equivalent of the 
injured resources. Trustee officials also estimate those services that 
are likely to be lost to the public pending completion of each 
alternative under consideration. Trustee officials then select one of 
the possible alternatives. The rule lists factors that trustee 
officials must consider during the selection. The relative weight of 
these factors is left to the discretion of the trustee officials. 
Trustee officials document their decisions in the Restoration and 
Compensation Determination Plan.
2. Calculation of the Costs of Restoration, Rehabilitation, 
Replacement, and/or Acquisition of Equivalent Resources
    Once the trustee officials select a restoration, rehabilitation, 
replacement, and/or acquisition alternative, they must choose the 
methods they intend to use to estimate the costs of implementing that 
alternative. To do this, trustee officials select among the specific 
cost estimating methodologies provided in the rule. The rule provides a 
number of criteria to guide the selection of cost estimating 
methodologies, including a requirement that the chosen methodologies 
are reliable for the particular incident and type of damage being 
measured. Trustee officials include the rationale for their selection 
in the Restoration and Compensation Determination Plan.
3. Calculation of Compensable Value
    Under this rule, the costs of restoring, rehabilitating, replacing, 
and/or acquiring the equivalent of the injured resources are the basic 
measure of damages; however, these costs are only one component of the 
damages that trustee officials may assess. Trustee officials also have 
the discretion to assess the value of the services that the public lost 
from the date of the release or discharge until completion of 
restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources. The final rule uses the term ``compensable 
value'' to encompass all of the lost public economic values, including 
lost use values and lost nonuse values such as existence and bequest 
values. The Restoration and Compensation Determination Plan includes a 
description of the valuation methodologies trustee officials intend to 
use when estimating compensable value during Damage Determination.
    a. Use values. The original type B rule provided a ranked list of 
valuation methodologies that could be used to calculate lost use 
values. If the market for the injured resource was ``reasonably 
competitive,'' then the diminution of the market price attributable to 
the discharge or release was used to estimate damages. If a market-
price methodology was not available, then the trustee officials were 
required to use appraisal methodologies. Only when neither market-price 
nor appraisal methodologies were appropriate for the resources being 
assessed did the original version of the rule allow trustee officials 
to use non-market-based methodologies.
    The court ruled that the hierarchy of valuation methodologies 
incorrectly established a strong presumption in favor of market-price 
and appraisal methodologies. The proposed rule continued to rank 
valuation methodologies according to reliability but allowed trustee 
officials to use any of the methodologies whenever they wanted, 
notwithstanding the ranking. In light of potential confusion over the 
practical effect of the ranking in the absence of any restrictions on 
trustee officials' selections, the Department has eliminated the 
ranking from the final rule. The final rule leaves trustee officials 
free to choose any of the specified valuation methodologies. The rule 
provides a number of criteria to guide the selection of valuation 
methodologies, including a requirement that the chosen methodologies 
are reliable for the particular incident and type of damage being 
measured. Trustee officials include the rationale for their selection 
in the Restoration and Compensation Determination Plan.
    b. Nonuse values. Sections 11.83(b)(2) and 11.83(d)(5)(ii) of the 
original version of the type B rule provided that lost nonuse values 
could only be assessed if trustee officials could not determine any 
lost use values. In the August 1, 1986, preamble to the original type B 
rule, the Department provided the following explanation for this 
restriction:

    Ordinarily, option and existence values would be added to use 
values. However, section 301(c) of CERCLA mentions only use values. 
Therefore, the primary emphasis in this section is on the estimation 
of use values. 51 FR 27719.

    Ohio v. Interior held that the Department had ``erroneously 
construed the statute,'' stating:

    [S]ection 301(c)(2) requires Interior to ``take into 
consideration factors including, but not limited to * * * use 
value.'' 42 U.S.C. Sec. 9651(c)(2) (emphasis added). The statute's 
command is expressly not limited to use value; if anything, the 
language implies that DOI is to include in its regulations other 
factors in addition to use value. 880 F.2d at 464.

    The court went on to say that the Department--

    * * * is entitled to rank methodologies according to its view of 
their reliability, but it cannot base its complete exclusion of 
option and existence values on an incorrect reading of the statute. 
Id.

The court instructed the Department to consider a rule that would 
permit trustee officials to include all reliably calculated lost values 
in their damage assessments. Id.
    CV is currently the only method available for the express purpose 
of estimating nonuse values. CV can also be used to calculate use 
values. Under the original type B rule, CV was listed as a non-market-
based methodology for calculating either lost use values or lost nonuse 
values. Ohio v. Interior held that the Department's decision to include 
CV as a best available procedure was not improper. Id. at 478. However, 
the court did not require the Department to allow unlimited use of CV. 
Moreover, the court did not address the difference between use of CV to 
calculate lost use values and use of CV to calculate lost nonuse 
values.
    The Department received numerous comments on the use of CV. These 
comments focused on use of CV to estimate lost nonuse values rather 
than lost use values. In the April 29, 1991, notice of proposed 
rulemaking, the Department stated that ``[w]hen CVM is used to quantify 
use values alone, it is judged to be just as reliable as the other 
nonmarket valuation methodologies.'' 56 FR 19762. Commenters did not 
dispute this assertion and have not provided any information to the 
contrary, even though the Department specifically solicited ``reviews 
of CVM that address its reliability for measuring use values'' in the 
July 22, 1993, Federal Register notice. 58 FR 39329. Thus, this final 
rule allows trustee officials to use CV to assess lost use values 
subject only to the restrictions applicable to any of the listed 
methodologies for assessing lost use values. However, during the 
upcoming biennial review of the type B rule, the Department will 
reconsider whether additional standards for the use of CV to estimate 
lost use values are appropriate.
    Nonuse values, unlike use values, are not linked to behavior and, 
thus, are more difficult to validate externally than use values. 
Therefore, the Department will soon be issuing a proposed set of 
standards to improve the reliability of CV when used to estimate lost 
nonuse values. This final rule renumbers Secs. 11.83(b)(2) and 
11.83(d)(5)(ii) of the original rule, which restrict the assessment of 
lost nonuse values to cases where lost use values cannot be determined, 
as new Secs. 11.83(c)(1)(iii) and 11.83(c)(2)(vii)(B), respectively. 
However, pending completion of the rulemaking concerning assessment of 
lost nonuse values, the Department is temporarily leaving unchanged the 
language of renumbered Secs. 11.83(b)(2) and 11.83(d)(5)(ii), which was 
remanded by Ohio v. Interior.

C. Resources Covered by the Natural Resource Damage Assessment 
Regulations

    The final issue remanded by Ohio v. Interior concerns the scope of 
the resources covered by the rule. The rule as originally published 
incorporated the statutory definition of ``natural resources.'' This 
definition encompasses any resource--

    Belonging to, managed by, held in trust by, appertaining to, or 
otherwise controlled by the United States * * *, any State or local 
government, any foreign government, or any Indian tribe, or, if such 
resources are subject to a trust restriction on alienation, any 
member of an Indian tribe. CERCLA sec. 101(16).

    The court in Ohio v. Interior noted that, although CERCLA does not 
authorize recovery of damages for injuries to purely private resources, 
the statutory definition of ``natural resources'' is clearly not 
limited to resources literally owned by a government. 880 F.2d at 460. 
Similarly, in its oral argument in Ohio v. Interior, the Department 
recognized that applicability of CERCLA's natural resource damage 
provisions does not hinge solely on ownership. Id. at 461. However, the 
August 1, 1986, preamble to the final type B rule stated that ``section 
101(16) of CERCLA clearly indicates that privately owned natural 
resources are not to be included in natural resource damage 
assessments.'' 54 FR 27696. Therefore, the court asked the Department 
to clarify whether the natural resource damage assessment regulations 
may be used to assess damages for injuries to any resources that are 
not owned by the government.
    The Department never intended to suggest that the applicability of 
the regulations hinges solely on ownership of a resource by a 
government entity. The rule is available for assessments of all natural 
resources covered by CERCLA, which under the plain language of the 
statute includes more than just resources owned by the government. 
Section 11.14(z), which was not affected by this rulemaking, 
incorporates the statutory definition of ``natural resource.'' The rule 
does not interpret this statutory definition. This final rule does, 
however, add a requirement that trustee officials prepare statements 
explaining the bases for their assertions of trusteeship. This 
statement must be included both in the Notice of Intent to Perform an 
Assessment, which is sent to PRPs, and in the Assessment Plan, which is 
subject to public review and comment.

D. Other Significant Issues

    This final rule addresses two additional issues related to the 
court order:
    (1) Development of a preliminary estimate of damages; and
    (2) The date of promulgation of the natural resource damage 
assessment regulations.
1. Preliminary Estimate of Damages
    Under Sec. 11.35 of the rule as originally published, the 
determination of the appropriate measure of damages was made in the 
Economic Methodology Determination. In the Economic Methodology 
Determination, trustee officials were required to estimate both the 
costs of restoring the injured resources and the diminution in the 
value of the injured resources without restoration. The smaller value 
served as the measure of damages. The Economic Methodology 
Determination was then used to help trustee officials develop an 
Assessment Plan.
    Under this final rule, damages always include the costs of 
restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources. Therefore, the Department has eliminated the 
Economic Methodology Determination. However, the Economic Methodology 
Determination served a function that is still relevant under the 
revised rule. CERCLA provides that trustee officials may recover the 
costs of performing an assessment, but only if those costs are 
reasonable. Under the definition of ``reasonable cost'' in 
Sec. 11.14(ee), which was not affected by this rulemaking, the 
anticipated cost of the assessment must be expected to be less than the 
anticipated damage amount. Under the original rule, the damage 
estimates developed during the Economic Methodology Determination 
helped trustee officials design their Assessment Plans so that this 
standard was met. In order to continue assisting trustee officials in 
performing assessments at reasonable costs in the absence of the 
Economic Methodology Determination, this final rule requires trustee 
officials to prepare a preliminary estimate of damages before they 
begin the development of an Assessment Plan.
2. Date of Promulgation of the Natural Resource Damage Assessment 
Regulations
    CERCLA provides that natural resource damage claims other than 
those involving Federal facilities or sites on the National Priorities 
List must be commenced by Federal and State trustee officials:

    * * * within 3 years after the later of the following:
    (A) The date of the discovery of the loss and its connection 
with the release in question.
    (B) The date on which regulations are promulgated under section 
301(c). CERCLA sec. 113(g)(1).

Neither the language nor the legislative history of CERCLA defines the 
date of promulgation of the natural resource damage assessment 
regulations under section 301(c).
    There has been considerable confusion over this statutory provision 
in the aftermath of Ohio v. Interior and Colorado v. Interior. The 
natural resource damage assessment regulations are designed to 
calculate a monetary damage figure for injuries to natural resources. 
Ohio v. Interior and Colorado v. Interior remanded a fundamental issue, 
namely the measure of damages. Until the court orders are fully 
implemented, trustee officials are left without a complete procedure 
for calculating damages consistent with the provisions of CERCLA. 
Therefore, the Department has amended the rule to clarify that for the 
purposes of section 113(g)(1) of CERCLA, the ``date on which 
regulations are promulgated'' is the date on which final rules revising 
both the type A rule and the type B rule in compliance with Ohio v. 
Interior and Colorado v. Interior are published.

III. Response to Comments

    The Department received numerous comments on the July 22, 1993, 
Federal Register notice. The Department appreciates the time and effort 
expended by the commenters. This notice does not address any of the 
comments received concerning the use of CV to calculate lost nonuse 
values. Those comments will be addressed in the Department's upcoming 
notice of proposed rulemaking to revise the original language of the 
type B rule concerning the assessment of nonuse values.
    With respect to comments outside the confines of the Ohio v. 
Interior remand, the Department has for now simply reproduced guidance 
provided in prior Federal Register notices and indicated that further 
clarification is beyond the scope of this rulemaking. During the 
upcoming biennial review, the Department will carefully consider all of 
the comments submitted during this rulemaking that were beyond the 
scope of the court remand. Commenters need not resubmit these comments 
during the biennial review.

A. General Comments Concerning this Rulemaking

1. Scope of This Rulemaking
    Comment: Some commenters objected to the Department's decision to 
defer consideration of certain issues until the next biennial review. 
These commenters stated that all matters relating to the measure of 
damages should be addressed in this rulemaking.
    Response: As was explained in the April 29, 1991, notice of 
proposed rulemaking, the Department decided to limit this rulemaking to 
the court order in light of the potentially wide-ranging issues that 
will be considered during the biennial review. The Department believes 
that it has considered all issues within the scope of the Ohio v. 
Interior remand.
2. Timing of This Rulemaking
    Comment: Several commenters expressed concern that the Department 
was proceeding too slowly on implementation of Ohio v. Interior and 
Colorado v. Interior and commencement of the biennial review.
    Response: Implementation of Ohio v. Interior and Colorado v. 
Interior and commencement of the biennial review have involved 
considerable, time-consuming analysis and coordination. The Department 
has been proceeding, and will continue to proceed, as expeditiously as 
possible.
3. Goal of This Rulemaking
    Comment: One commenter stated that the Department had failed to 
articulate clear goals for this rulemaking. This commenter offered 
suggestions on possible goals, including promotion of timely, cost-
effective restoration. Another commenter requested that the Department 
attempt to eliminate ambiguity and vagueness from the rule in order to 
reduce transaction costs.
    Response: Section 11.11, which was not affected by this rulemaking, 
states that the purpose of the regulations is to provide standardized 
and cost-effective procedures for assessing natural resource damages. 
The Department has indicated that the primary goal of this particular 
rulemaking is to revise the type B rule to comply with Ohio v. 
Interior. The Department believes that promotion of timely, cost-
effective restoration and elimination of ambiguity and vagueness are 
worthy objectives and has attempted to further those objectives to the 
extent possible within the context of addressing the court order. The 
Department will consider whether additional revisions are necessary 
during the upcoming biennial review.
4. Regulatory Impact Analysis
    Comment: A few commenters disagreed with the Department's statement 
that this rulemaking is not ``major'' under Executive Order 12291 and, 
thus, does not require preparation of a Regulatory Impact Analysis. 
These commenters challenged a number of aspects of the Determination of 
Effects prepared for the proposed rule.
    Response: Executive Order 12291 has been rescinded since the 
Department prepared the Determination of Effects for the proposed rule. 
This final rule has been reviewed under Executive Order 12866 and has 
been determined to constitute a significant regulatory action. However, 
because of the difficulty of evaluating the effects of alternatives to 
this rule, the Office of Information and Regulatory Affairs within the 
Office of Management and Budget has waived preparation of the 
assessments described in sections 6(a)(3)(B) and 6(a)(3)(C) of 
Executive Order 12866 for the final rule.
5. Status of Prior Unpublished Notice of Final Rulemaking
    Comment: A number of commenters objected to the publication of the 
July 22, 1993, Federal Register notice on the ground that the 
Department had already sent a notice of final rulemaking to the Office 
of the Federal Register in January, 1993, that was never published.
    Response: The Department acknowledges that its former Assistant 
Secretary-Policy, Management and Budget sent a notice of final 
rulemaking to the Office of the Federal Register in January, 1993. The 
Department retrieved the notice from the Office of the Federal Register 
before it was filed out of concern that proper procedures had not been 
followed in connection with its preparation. Most notably, the notice 
improperly referred to and relied upon information received outside the 
comment period and had not received proper Departmental clearance. The 
Department, therefore, believes it was appropriate to retrieve the 
notice and publish the July 22, 1993, Federal Register notice to reopen 
the comment period.

B. Overall Damage Assessment Process

1. Trustee Discretion
    Comment: A number of commenters addressed the level of discretion 
that the proposed rule would afford trustee officials. Many commenters 
thought that trustee officials are in the best position to determine 
how to proceed at a specific site and praised the flexibility of the 
proposed rule. On the other hand, several commenters thought that the 
rule would delegate too much authority to trustee officials. These 
commenters stated that the language and legislative history of section 
301(c) of CERCLA, through reference to ``protocols,'' ``best available 
procedures,'' and ``most accurate and efficient procedures,'' require 
that the Department develop substantive objective standards. According 
to these commenters, the proposed rule relies upon subjective standards 
that will lead to arbitrary and capricious results. These commenters 
expressed concern that the Department was placing too much reliance on 
public review and comment to curb potential abuses of discretion by 
trustee officials.
    Response: The Department believes the rule appropriately balances 
the need for objective procedures against the need for flexibility. In 
order to comply with the statutory requirement to identify best 
available procedures for assessing natural resource damages, the 
Department has developed a detailed, standardized process that 
incorporates a specific range of acceptable alternative methodologies. 
However, the type B rule was also intended to have broad application. 
Natural resource damage cases range from situations involving discrete 
injury of one resource caused by a small, incidental release of a 
single substance to incidents involving extensive injury of multiple 
resources caused by large, long-term releases of mixtures of 
substances. In light of the myriad of possible natural resource damage 
scenarios, a type B rule that mandates a particular course of action at 
each stage of every assessment would generally be unusable or result in 
unreasonable assessment costs. Therefore, in certain areas the rule 
allows trustee officials to use their best judgment.
    Although trustee officials do have some discretion, the rule 
imposes a number of checks on that discretion. The rule requires 
trustee officials to document the rationale for their decisions. The 
rule also provides an opportunity for public comment and review of 
trustee officials' actions, which the Department believes will ensure a 
significant level of accountability for trustee officials. Also, the 
Department notes that all decisions made by trustee officials will 
ultimately be reviewable in court. Therefore, the rule includes 
criteria by which courts can evaluate trustee decisions.
2. Public and PRP Involvement
    Comment: Several commenters voiced opinions about the opportunity 
for PRP and public participation in the assessment process. Some 
commenters stated that the proposed rule would provide an appropriate 
level of public and PRP participation. Other commenters thought that 
the Department should encourage earlier involvement of PRPs to 
encourage settlement and avoid duplication of effort. A few commenters 
suggested that the rule be revised to clarify that trustee officials 
are authorized to allow PRPs to conduct assessment work.
    Response: This final rule does not affect the level or timing of 
PRP or public participation in the natural resource damage assessment 
process. The Department agrees that early participation of PRPs in the 
assessment process promotes amicable settlement of natural resource 
damage claims but does not think that any revisions of the rule are 
necessary in this regard.
    Section 11.32(d) already provides trustee officials with the 
discretion to allow PRPs to conduct assessment work. However, as was 
stated in the August 1, 1986, preamble:

    The Department's intention has always been that the decision to 
allow or not to allow potentially responsible parties to participate 
in the implementation of the Assessment Plan should rest solely with 
the authorized official, or the lead authorized official, when 
appropriate.
    Furthermore, a decision to allow such participation should only 
be made when the authorized official believes that a fair and 
accurate damage assessment will result from the potentially 
responsible party's participation and will be ensured through 
adequate direction, guidance, and monitoring by the authorized 
official * * *. The Department emphasizes that any and all actions 
taken by potentially responsible parties to implement an Assessment 
Plan occur under the ultimate approval and authority of the 
authorized official acting as trustee. The potentially responsible 
party functions in a strictly ministerial role. The final choice of 
methodologies rests solely with the authorized official. 51 FR 
27704.

Further clarification is beyond the scope of this rulemaking.
3. Separate Assessments for Each Injury
    Comment: Some commenters stated that the rule should encourage 
trustee officials to perform separate assessments for each injury in 
order to facilitate settlement.
    Response: Natural resources are generally highly interdependent. 
The selection of methods to address one injured resource will often 
affect the selection of methods to address other resources. Therefore, 
the rule leaves it to the discretion of the trustee officials whether 
separate assessments should be conducted for each injury. Further 
clarification is beyond the scope of this rulemaking.
4. Focus of Assessments
    Comment: Some commenters stated that the Department should take 
precautions to ensure that trustee officials do not undertake 
unnecessary basic research when performing damage assessments. These 
commenters suggested that the Department provide a list of sources of 
existing scientific data and prohibit trustee officials from performing 
new research unless there are no existing data regarding the effect of 
the particular substance on the particular natural resources involved.
    Response: As was noted in the August 1, 1986, preamble to the 
original type B rule:

    General research studies are not compensable under a damage 
assessment performed pursuant to this rule, since it is 
inappropriate that experimental research studies to advance general 
scientific understanding be included as a part of a specific natural 
resource damage claim. 51 FR 27710.

Further clarification is beyond the scope of this rulemaking.

C. Resources Covered by the Natural Resource Damage Assessment 
Regulations

    Comment: There were numerous comments on the issue of the resources 
covered by the natural resource damage assessment regulations. Several 
commenters supported the Department's proposal not to define which 
privately owned resources are covered by the regulations. These 
commenters stated that the question of whether a particular resource is 
covered by the regulations is governed by a wide variety of Federal, 
State, local, and tribal laws that are constantly evolving. These 
commenters further stated that trustee officials are the most familiar 
with these laws and, therefore, are in the best position to determine 
whether a particular resource is covered by the regulations.
    On the other hand, several commenters thought that the regulations 
should include some limits on the assessment of damages for injuries of 
privately owned resources in order to avoid overly broad claims and 
unnecessary litigation. Some of these commenters stated that the 
Department had misinterpreted Ohio v. Interior and that the court did 
ask the Department to clarify which privately owned resources are 
covered by the regulations.
    Response: The Department believes that the Ohio v. Interior court 
did not require or even request the Department to define precisely 
which privately owned resources are covered by the natural resource 
damage assessment regulations. The court merely asked for clarification 
of whether the Department intended the regulations to cover any non-
government-owned resources.
    The scope of resources covered by the natural resource damage 
assessment regulations is determined by section 101(16) of CERCLA, 
which defines ``natural resources'' as:

    [L]and, 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 * * *, any State or local 
government, any foreign government, any Indian tribe, or, if such 
resources are subject to a trust restriction on alienation, any 
member of an Indian tribe.

As the court noted, this definition, which is incorporated into 
Sec. 11.14(z) of the rule, extends beyond resources that are actually 
owned by the government.
    Use of the natural resource damage assessment regulations is not 
restricted to government-owned resources. Trustee officials can use the 
regulations to assess damages for all natural resources covered by 
CERCLA. The Department believes that no additional action is needed to 
comply with the court order.
    Not only is development of a definition of the privately owned 
resources covered by the regulations not required by Ohio v. Interior, 
it is also impractical. The question of whether a trustee official can 
assess damages for a particular natural resource is governed by CERCLA. 
However, CERCLA provides that trustee officials can only recover 
damages for injuries to those resources that are related to them 
through ownership, management, trust, or control. These relationships 
are created by other Federal, State, local, and tribal laws. In light 
of the diversity of these other laws, the Department believes that the 
determination of whether a particular privately owned resource 
constitutes a natural resource under CERCLA is best addressed on a 
case-by-case basis.
    The Department disagrees that lack of a definition of the privately 
owned resources covered by the regulations will result in overly broad 
claims and unnecessary litigation. This final rule requires a trustee 
official to prepare a statement explaining the basis for his or her 
assertion of trusteeship. This statement must be included both in the 
Notice of Intent to Perform an Assessment, which is sent to PRPs, and 
in the Assessment Plan, which is subject to public review and comment. 
These opportunities for early input from PRPs and the public provide 
both a check on the trustee officials' discretion and a means of 
resolving disputes prior to litigation. Other provisions of the 
regulations, such as the requirement that only committed public uses of 
resources be included in compensable value, provide additional 
protection against improper assertions of authority over private 
property.
    Comment: There were also many comments on the Department's proposal 
to clarify that a trustee official's statement of his or her basis of 
authority is not entitled to a rebuttable presumption. Several 
commenters supported this proposal. These commenters noted that a 
trustee official's basis of authority is an issue of legal standing to 
sue rather than an issue of assessment of damages. These commenters 
also stated that it was particularly appropriate not to grant a 
rebuttable presumption to a trustee official's statement since the rule 
contained no standards for determining which privately owned resources 
are covered by this rule.
    On the other hand, a number of commenters thought that the 
rebuttable presumption should apply to a trustee official's statement 
of his or her basis of authority. These commenters stated that one of 
the first steps that a trustee official takes in an assessment is the 
determination of whether the affected resources fall under his or her 
trusteeship. These commenters noted that nothing in CERCLA indicates 
that this rule should restrict the rebuttable presumption to certain 
aspects of an assessment.
    Response: In light of the fact that the Department has decided not 
to provide guidance on the scope of resources covered by the 
regulations, the Department does not believe that a trustee official's 
statement of authority should be given a rebuttable presumption. 
Section 11.31(a)(2) has been revised to clarify this point.
    Comment: One commenter noted that in the July 22, 1993, Federal 
Register notice, the Department referred to the ``Federal, State, 
local, and tribal laws'' that give rise to trusteeship. The commenter 
sought clarification of whether local governments could bring natural 
resource damage claims and whether States could bring natural resource 
damage claims on behalf of local governments.
    Response: The Department refers to local laws that may give rise to 
trusteeship because the statutory definition of ``natural resource'' 
mentions resources belonging to, managed by, held in trust by, 
appertaining to, or otherwise controlled by any local government. This 
rule does not address local governments' standing to sue for natural 
resource damages. However, at least one court has held that a local 
government could not bring a natural resource damage claim, relying in 
part on State law. Werlein v. United States, 746 F. Supp. 887, 910 (D. 
Minn. 1990). Ohio v. Interior states that CERCLA allows State trustee 
officials to recover damages for injured resources owned by, managed 
by, appertaining to, or otherwise controlled by a local government. 880 
F.2d at 460 n. 43.
    Comment: Some commenters requested that the rule be revised to 
require trustee officials to provide detailed statements of authority.
    Response: The Department believes that a trustee official's 
statement of authority, like all statements required under the 
regulations, should be detailed enough to provide PRPs, other trustee 
officials, the general public, any other interested parties, and 
ultimately the courts with an adequate opportunity to evaluate the 
statement. The level of detail may vary depending on the resources 
involved. The Department does not believe that any revision of the rule 
is necessary.
    Comment: A few commenters had questions about the application of 
the rule to specific resources. One commenter asked the Department to 
clarify that a tribal trustee official has authority to assert claims 
for natural resource damages no matter where the natural resources are 
located so long as the trustee official can establish trusteeship.
    Response: Nothing in these regulations prevents a Federal, State, 
or tribal trustee official from assessing damages for injuries to any 
natural resources, regardless of their location, so long as the trustee 
official can establish trusteeship over the resource.
    Comment: Other commenters raised questions about the Department's 
discussion of cultural and archaeological resources. Some commenters 
disagreed with the Department's statement that cultural and 
archaeological resources do not constitute natural resources under 
CERCLA. Other commenters agreed that such resources are not natural 
resources. However, these commenters disagreed with the Department's 
statement that trustee officials are allowed to factor the loss of 
archaeological and cultural attributes of a natural resource into a 
natural resource damage assessment through consideration of the loss of 
services provided by that natural resource. These commenters stated 
that consideration of archaeological and cultural services provided by 
a natural resource was tantamount to treating archaeological and 
cultural resources as natural resources in violation of the statute. 
One commenter requested that the Department clarify that an injury to 
an archaeological or cultural resource in and of itself is not a basis 
for a natural resource damage claim.
    Response: As was explained in the July 22, 1993, Federal Register 
notice, the Department acknowledges the confusion that has arisen as a 
result of multiple uses and meanings of the term ``resource'' under 
different statutes. ``Archaeological'' and other ``cultural'' resources 
are not ``land, fish, wildlife, biota, air, water, ground water, 
drinking water supplies, [or] other such resources.'' Therefore, 
``archaeological'' and ``cultural'' resources do not constitute 
``natural'' resources under CERCLA.
    Nevertheless, although archaeological and cultural resources, as 
defined in other statutes, are not treated as ``natural'' resources 
under CERCLA, the rule does allow trustee officials to include the loss 
of archaeological and other cultural services provided by a natural 
resource in a natural resource damage assessment. For example, if land 
constituting a CERCLA-defined natural resource contains archaeological 
artifacts, then that land might provide the service of supporting 
archaeological research. If an injury to the land causes a reduction in 
the level of service (archaeological research) that could be performed, 
trustee officials could recover damages for the lost service. Further 
clarification is beyond the scope of this rulemaking.

D. Trustee Coordination

    Comment: There were several comments concerning trustee 
coordination. A number of commenters wrote in support of the trustee 
coordination provisions in the rule. A few commenters thought that the 
rule should place greater emphasis on trustee coordination and provide 
additional guidance on how trustee officials can coordinate most 
effectively.
    Response: Trustee coordination is discussed in Sec. 11.32(a)(1), 
which was not affected by this rulemaking. Further clarification is 
beyond the scope of this rulemaking.
    Comment: Several commenters raised questions about designation of a 
lead authorized official. Some commenters asked the Department to 
revise Sec. 11.32(a)(1)(ii)(A) to prohibit an official from an agency 
that is both a trustee and a PRP from being designated as the lead 
authorized official. Another commenter stated that the lead authorized 
official should be selected on a case-by-case basis according to which 
agency has the greatest interests at stake.
    Response: Revision of the procedures for appointing a lead 
authorized official contained in Sec. 11.32(a)(1)(ii)(A) is beyond the 
scope of this rulemaking.
    Comment: One commenter questioned why the Department had raised the 
issue of collateral estoppel in the July 22, 1993, Federal Register 
notice.
    Response: The Department referred to collateral estoppel in 
response to a comment. The commenter thought that requiring Federal 
trustee officials to use the natural resource damage assessment 
regulations would eliminate collateral estoppel problems. The 
Department responded that revising the optional nature of the 
regulations was beyond the scope of this rulemaking and, moreover, 
would not necessarily resolve potential collateral estoppel problems.

E. Preliminary Estimate of Damages

    Comment: The commenters who addressed the issue of the preliminary 
estimate of damages agreed that an estimate of damages is needed to 
determine the proper scope of an assessment and to ensure the 
reasonableness of assessment costs. Several commenters thought that 
trustee officials should be required to disclose the preliminary 
estimate as soon as possible to ensure that the public and the PRPs 
have an opportunity to comment on the reasonableness of projected 
assessment costs. One commenter stated that trustee officials should be 
required to consult with the PRPs when developing the preliminary 
estimate.
    Response: The Department believes that premature disclosure of the 
preliminary estimate might adversely affect the ability of trustee 
officials to settle or litigate a natural resource damage case. 
Therefore, the Department has revised the language of proposed 
Sec. 11.35(d)(3) to clarify that trustee officials need not disclose 
the preliminary estimate until the assessment has been completed.
    Even though the preliminary estimate is not disclosed until the end 
of the assessment, PRPs and the general public will still have a 
meaningful opportunity to comment on the reasonableness of assessment 
costs. Under Sec. 11.14(ee), which was not affected by this rulemaking, 
the relationship between anticipated damages and anticipated assessment 
costs is only one factor of reasonable costs. Another factor is whether 
all aspects of the assessment directly contribute to the calculation of 
a monetary damage figure. The public and the PRPs need not know the 
preliminary estimate of damages to comment on whether an assessment 
satisfies this factor of reasonableness. Moreover, after the assessment 
has been completed, trustee officials are required to include the 
preliminary estimate in the Report of Assessment, which will allow PRPs 
and courts to evaluate whether anticipated damages exceeded anticipated 
assessment costs.
    Nothing in the rule prevents trustee officials from consulting with 
PRPs during the development of the preliminary estimate. However, the 
Department believes that requiring trustee officials to do so could 
adversely affect their ability to settle or litigate their claims.
    Comment: Some commenters thought that the preliminary estimate 
should always be completed before publication of the Assessment Plan. 
Other commenters thought that the Department should provide additional 
guidance on when delay of preparation of a preliminary estimate would 
be warranted.
    Response: The Department acknowledges the importance of the 
preliminary estimate in ensuring that the Assessment Plan is 
appropriately focused. However, the Department believes that trustee 
officials should have discretion to delay completion of the preliminary 
estimate until the end of Injury Determination if insufficient data 
exist upon which to base an estimate. The Department realizes that in 
some cases the injuries might be so complex or the existing data might 
be so sparse that any preliminary estimate of damages would be 
meaningless until Injury Determination is complete. The Department does 
not believe that additional guidance on this topic is needed.
    Comment: A few commenters suggested that trustee officials be 
allowed to develop a range of preliminary estimates rather than one 
specific estimate. These commenters expressed concern that if required 
to develop a specific number, trustee officials would be likely to 
develop a high preliminary estimate, which would then encourage them to 
find damages at least as high as the preliminary estimate, regardless 
of the actual damages.
    Response: The Department does not think that a range of preliminary 
estimates would provide an adequate standard for evaluating whether 
assessment costs are reasonable. Also, the Department does not believe 
that development of a specific preliminary estimate will encourage 
trustee officials to develop exaggerated damage claims, particularly 
since the preliminary estimate of damages may be revised as new 
information becomes available.

F. Reasonable Cost of an Assessment

    Comment: A number of commenters expressed support for the existing 
definition of ``reasonable cost.'' However, other commenters thought 
that the definition should be revised so that the reasonableness of 
assessment costs is determined by comparing the cost of each component 
of the assessment to the anticipated damages to be determined by that 
component.
    Response: The definition of ``reasonable cost'' contained in 
Sec. 11.14(ee) was upheld in Ohio v. Interior after thorough review. 
Revision of the definition is beyond the scope of this rulemaking.
    Comment: A few commenters suggested that the Department add a list 
of specific practices that would render assessment costs unreasonable.
    Response: Section 11.15(a)(3) of the rule specifies different types 
of expenses that constitute reasonable costs of an assessment. The only 
revision to Sec. 11.15(a)(3) that is being made in this rulemaking is a 
substitution of the phrase ``restoration'' with the phrase 
``restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources.'' Additional changes to Sec. 11.15(a)(3) are 
beyond the scope of this rulemaking.
    Comment: One commenter expressed concern that trustee officials 
might sacrifice scientific accuracy in order to meet the standards of 
reasonable cost.
    Response: The Department believes that the rule adequately ensures 
scientific accuracy. Also, as discussed above, the definition of 
``reasonable cost'' contained in Sec. 11.14(ee) was upheld in Ohio v. 
Interior after thorough review.
    Comment: Some commenters stated that reasonable assessment costs 
should include attorneys' fees. A few commenters thought that if 
attorneys' fees were included as recoverable assessment costs, then the 
Department should clarify that trustee officials may recover only those 
attorneys' fees necessary for the assessment not those related to 
preparation and litigation of a natural resource damage claim. One 
commenter expressed confusion about what the Department meant when it 
stated in the July 22, 1993, Federal Register notice that trustee 
officials may recover only those costs that are associated with the 
actual assessment.
    Response: As noted in the August 1, 1986, and the July 22, 1993, 
Federal Register notices, the Department believes that trustee 
officials will generally need the assistance of an interdisciplinary 
team of experts when performing natural resource damage assessments. 
The rule does not restrict recoverable assessment costs to the expenses 
of particular types of professionals. Section 11.60(d)(2), which was 
not affected by this rulemaking, provides that recoverable assessment 
costs are ``limited to those costs incurred or anticipated by the 
authorized official for, and specifically allocable to, site specific 
efforts taken in the assessment of damages.'' Therefore, if attorneys 
are involved in work specifically allocable to an assessment, the 
resulting attorneys' fees are recoverable as assessment costs under the 
rule. The rule does not address the recovery of attorneys' fees 
incurred in litigation over the results of the damage assessment, as 
opposed to those incurred during the assessment itself.

G. Calculation of Baseline

    Comment: There were a variety of comments about the calculation of 
baseline. A number of commenters supported the Department's proposal to 
revise Sec. 11.82(b)(1)(i) to clarify that baseline represents the 
conditions that would have existed had the release or discharge not 
occurred rather than the conditions that existed prior to the discharge 
or release.
    Response: As noted in the July 22, 1993, Federal Register notice, 
the definition of baseline, which was not affected by this rulemaking, 
is set forth at Sec. 11.14(e):

    Baseline means the condition or conditions that would have 
existed at the assessment area had the discharge of oil or the 
release of the hazardous substance under investigation not occurred.

Section 11.82(b)(1)(i) of the proposed rule inadvertently described 
restoration and rehabilitation actions as actions taken to return a 
resource to baseline as measured by ``the services previously 
provided.'' Section 11.82(b)(1)(i) of the final rule has been revised 
to conform with the definition in Sec. 11.14(e).
    Comment: A number of commenters sought additional guidance on how 
to determine baseline in industrial areas, particularly how to 
distinguish the effects of the release or discharge in question from 
the effects of other conditions.
    Response: Sections 11.72(c) through (k), which were not affected by 
this rulemaking, provide considerable guidance on the calculation of 
baseline. Additional clarification is beyond the scope of this 
rulemaking.
    Comment: There were a few comments about the discussion in the July 
22, 1993, Federal Register notice concerning the appropriate baseline 
for a river that in addition to being injured by a hazardous substance 
release also regularly receives sewer overflows that do not constitute 
hazardous substance releases under CERCLA. Some commenters noted that 
the Department stated that the effects of the sewer overflows did not 
render restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources pointless but did affect the baseline condition 
that must be reestablished. These commenters sought additional 
clarification that PRPs could not be held liable for the cost of 
restoring, rehabilitating, replacing, and/or acquiring fish if the 
sewer overflows would kill any stocked fish.
    Response: Baseline conditions are those that would have existed had 
the release or discharge in question not occurred. In the hypothetical 
case offered by the commenters, PRPs' liability for stocking fish 
depends on whether fish would have existed in the river but for the 
release in question. If fish would not survive in the river regardless 
of whether the release had occurred, then PRPs would not be liable for 
the cost of stocking fish.

H. Measure of Damages

    Comment: There were a number of comments on the proposed measure of 
damages. Several commenters supported the proposal to allow trustee 
officials to recover compensable value in addition to restoration, 
rehabilitation, replacement, and/or acquisition costs. However, many 
others thought that allowing recovery of compensable value in addition 
to restoration, rehabilitation, replacement, and/or acquisition costs 
violated the Ohio v. Interior holding that restoration costs are the 
preferred measure of damages. These commenters stated that compensable 
value should only be recovered when restoration, rehabilitation, 
replacement, and/or acquisition of equivalent resources is infeasible 
or poses grossly disproportionate costs.
    Response: The Department believes that providing trustee officials 
with the discretion to assess compensable value is consistent with the 
holding in Ohio v. Interior because it will help ensure that the public 
is more fully compensated for injuries to natural resources. Ohio v. 
Interior did hold that restoration costs are the preferred measure of 
damages. However, nothing in the decision prohibits the Department from 
allowing trustee officials to assess compensable values in addition to 
restoration, rehabilitation, replacement, and/or acquisition costs. In 
fact, the court explicitly stated that ``Congress intended the damage 
assessment regulations to capture fully all aspects of loss.'' 880 F.2d 
at 463. Further, even under Sec. 11.81(b) of the original rule, claims 
based on restoration costs could include damages for diminution of use 
values during the recovery period.
    Comment: Some commenters stated that even if the Department decides 
to allow assessment of compensable value for CERCLA claims, it should 
not allow assessment of compensable value for CWA claims. These 
commenters stated that unlike section 107(a)(C) of CERCLA, which 
imposes liability for ``damages for injury to, destruction of, or loss 
of natural resources,'' section 311(f)(4) of CWA merely refers to the 
``costs of removal,'' which include ``any costs incurred by the Federal 
government or any State government in the restoration or replacement of 
natural resources.'' Furthermore, these commenters stated that nothing 
in the legislative history of CWA suggests that lost use values were 
intended to be recoverable.
    Response: Although the specific issue raised by these commenters 
was not remanded by Ohio v. Interior and is not within the scope of 
this rulemaking, the Department believes that compensable values are 
recoverable under CWA. CWA provides that damages ``shall include any 
costs or expenses incurred by the Federal government or any State 
government in the restoration or replacement of natural resources 
damaged or destroyed.'' CWA sec. 311(f)(4). Similarly, CERCLA provides 
that damages ``shall not be limited by the sums which can be used to 
restore or replace such resources.'' CERCLA sec. 107(f)(1). The court 
in Ohio v. Interior compared these two provisions and concluded:

    These directives are in harmony: restoration is the basic 
measure of damages, but damages can exceed restoration cost in some 
cases. 880 F.2d at 450.

    Comment: Several commenters stated that CERCLA, Ohio v. Interior, 
and Commonwealth of Puerto Rico v. SS Zoe Colocotroni, 628 F.2d 652 
(1st Cir. 1980), cert. denied, 450 U.S. 912 (1981) (Puerto Rico v. SS 
Zoe Colocotroni), require inclusion of an exception from the basic 
measure of damages when restoration, rehabilitation, replacement, and/
or acquisition costs are grossly disproportionate to the lost value of 
the resource. A number of these commenters disagreed with the 
Department's statements in the July 22, 1993, Federal Register notice 
that no exceptions were needed because some form of restoration, 
rehabilitation, replacement, and/or acquisition of equivalent resources 
will always be performed.
    One commenter questioned the Department's statement in the July 22, 
1993, Federal Register notice that consideration of the factors set 
forth in proposed Sec. 11.83(a)(3) would ensure that trustee officials 
do not select inappropriate restoration, rehabilitation, replacement, 
and/or acquisition alternatives. This commenter observed that proposed 
Sec. 11.83(a)(3) addresses selection of cost estimating and valuation 
methodologies rather than selection of a restoration, rehabilitation, 
replacement, and/or acquisition alternative.
    A number of other commenters opposed the creation of an exception 
for grossly disproportionate restoration, rehabilitation, replacement, 
and/or acquisition costs. Some of these commenters urged the Department 
to use caution if such an exception were adopted. One commenter 
requested that the Department bear in mind the special spiritual and 
cultural significance of natural resources to Indian tribes when 
developing any such exception. Other commenters urged the Department to 
base any such exception on a comparison of restoration, rehabilitation, 
replacement, and/or acquisition costs to the total value of the 
resources in question rather than the values of the resources lost as a 
result of the injuries.
    Response: The Department believes it is not necessary to create an 
exclusion from the basic measure of damages when restoration, 
rehabilitation, replacement, and/or acquisition costs are grossly 
disproportionate to the lost value of the injured resources. The 
Department agrees that when trustee officials evaluate a particular 
restoration, rehabilitation, replacement, and/or acquisition 
alternative, they should consider the relationship between the costs of 
implementing that alternative and the lost value of the resource. 
However, if the costs of implementing a particular alternative do 
greatly exceed the lost value of the resource, trustee officials need 
not eliminate restoration, rehabilitation, replacement, and/or 
acquisition of equivalent resources as a basis for damages but should 
instead select a less costly method of restoration, rehabilitation, 
replacement, and/or acquisition of equivalent resources. Therefore, 
Sec. 11.83(a)(3) provides a number of factors for trustee officials to 
consider when selecting a restoration, rehabilitation, replacement, 
and/or acquisition alternative. These factors, when considered 
together, protect against the selection of an alternative that poses 
grossly disproportionate costs.
    As noted in the July 22, 1993, Federal Register notice, the 
Department does not agree that CERCLA, Ohio v. Interior, or Puerto Rico 
v. SS Zoe Colocotroni mandate an exclusion from the basic measure of 
damages when restoration, rehabilitation, replacement, and/or 
acquisition costs are grossly disproportionate to the lost value of the 
injured resources. CERCLA and Ohio v. Interior grant the Department the 
discretion to develop exceptions to the basic measure of damages but do 
not require such exceptions. Puerto Rico v. SS Zoe Colocotroni arose 
under a Puerto Rican statute, and although the case does contain dicta 
concerning CWA, it did not establish any standards for damages under 
either CWA or CERCLA.
    Furthermore, Puerto Rico v. SS Zoe Colocotroni focused on whether 
damages should be based on the costs of implementing a plan to dig up 
and replant an oiled mangrove forest instead of relying upon natural 
recovery. The court rejected the plan as ``impractical, inordinately 
expensive, and unjustifiably dangerous to the healthy mangroves and 
marine animals still present in the area to be restored.'' 628 F.2d at 
676.
    This rule neither requires nor authorizes trustee officials to 
pursue intensive activities to restore or rehabilitate an injured 
resource if such activities would be impractical, inordinately 
expensive, and unjustifiably dangerous. Under the rule, trustee 
officials evaluate a range of alternatives, including an alternative 
based on natural recovery, under a set of factors, including technical 
feasibility, cost-benefit considerations, cost-effectiveness, and 
potential for additional injury. The rule allows trustee officials to 
rely upon natural recovery when appropriate. If trustee officials 
decide to rely on natural recovery, they will still incur restoration, 
rehabilitation, replacement, and/or acquisition costs because they will 
take some sort of action, such as restricting public access or 
monitoring, to ensure that natural recovery is not impeded.
    In the July 22, 1993, Federal Register notice, the Department 
inadvertently stated that consideration of the factors set forth in 
proposed Sec. 11.83(a)(3) would ensure that trustee officials do not 
select a restoration, rehabilitation, replacement, and/or acquisition 
alternative that poses grossly disproportionate costs. Section 
11.83(a)(3) of the rule addresses selection of cost estimating and 
valuation methodologies rather than selection of a restoration, 
rehabilitation, replacement, and/or acquisition alternative. The 
Department meant to reference the factors set forth in Sec. 11.82(d).
    Comment: Some commenters agreed with the Department's proposal to 
allow trustee officials to base damages solely on restoration, 
rehabilitation, replacement, and/or acquisition costs when there is no 
acceptable methodology for calculating compensable value at a 
reasonable cost. One commenter, however, urged the Department to 
clarify that when trustee officials choose to base damages solely on 
restoration, rehabilitation, replacement, and/or acquisition costs, 
PRPs should not be allowed to challenge these costs based on their 
unilateral calculation of compensable values.
    Response: The Department has decided that a trustee official should 
have the discretion to base damages solely on the cost of restoration, 
rehabilitation, replacement, and/or acquisition of equivalent resources 
not only when compensable value cannot be calculated at a reasonable 
cost but whenever the trustee official deems it appropriate. The 
Department has revised the language of Sec. 11.80(b) accordingly. The 
rule provides that it is within the trustee official's discretion 
whether to base damages solely on restoration, rehabilitation, 
replacement, and/or acquisition costs; therefore, PRPs will not be able 
to use a unilateral calculation of compensable value to challenge a 
damage claim based solely on restoration, rehabilitation, replacement, 
and/or acquisition costs.

I. Restoration, Rehabilitation, Replacement, and/or Acquisition of 
Equivalent Services Versus Resources

    Comment: Despite the Department's attempts to clarify the issue in 
the July 22, 1993, Federal Register notice, commenters expressed 
continued confusion over whether the Department intended restoration, 
rehabilitation, replacement, and/or acquisition of the equivalent to 
focus on the resource itself, the services provided by a resource, or 
both. Several commenters continued to think that the rule dealt 
inconsistently with this issue.
    Some commenters thought that the Department should specify that 
damages are based on the cost of restoring, rehabilitating, replacing, 
and/or acquiring the equivalent of both the services provided by a 
resource and the resource itself. These commenters objected to the 
Department's statements that service levels provide a means of 
measuring restoration, rehabilitation, replacement, and/or acquisition 
of equivalent resources. These commenters expressed concern that using 
services alone as a measurement would result in less than complete 
restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources because the loss of potential services might be 
left unaddressed.
    A few commenters offered an example of a groundwater drinking 
supply that previously contained hazardous substances at concentrations 
significantly better than required by drinking water standards. The 
commenters noted that if service levels are used to measure 
restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources, then treating the groundwater to the point at 
which it meets drinking water standards might be deemed full 
restoration, rehabilitation, replacement, and/or acquisition but would 
fail to make the public whole. These commenters further stated that 
failure to account for potential services when measuring restoration, 
rehabilitation, replacement, and/or acquisition of equivalent resources 
would violate Ohio v. Interior, which stated that ``a trustee is not 
prohibited from recovering costs of restoring or replacing a natural 
resource even when that resource has no documented `committed use.''' 
880 F.2d at 462.
    Other commenters stated that service levels should not be viewed 
simply as a yardstick for, but rather as the very focus of, 
restoration, rehabilitation, replacement, and/or acquisition. These 
commenters thought that unless reestablishment of baseline service 
levels were used as the standard for restoration, rehabilitation, 
replacement, and/or acquisition, PRPs would be required to pay to 
replicate the exact natural resources that were injured, contrary to 
congressional intent. These commenters requested that the Department 
state explicitly that the actual injury need not be corrected if 
services can be restored through other means. Some commenters offered 
an example of contaminated sediment that destroys vegetation. These 
commenters stated that dredging should not be required if the 
vegetation can be restored through reseeding or fertilization.
    A number of commenters also objected to the Department's statement 
that Congress did not intend to allow trustee officials to simply 
restore the abstract services provided by a resource through an 
artificial mechanism. Some commenters asked the Department to clarify 
that its concern lies with creation of an artificial resource rather 
than use of a manufactured device to restore the injured resource.
    Response: As noted in the July 22, 1993, Federal Register notice, 
the Department did not intend to change the focus of restoration, 
rehabilitation, replacement, and/or acquisition of equivalent resources 
in this rulemaking. The Department has always intended restoration, 
rehabilitation, replacement, and/or acquisition of equivalent resources 
to involve actions taken to return a resource to baseline. Apparent 
inconsistencies in the rule arise because trustee officials need a 
means of measuring injury in order to determine when restoration, 
rehabilitation, replacement, and/or acquisition of equivalent resources 
is complete, and the concept of services provides that means. As was 
stated in the August 1, 1986, preamble to the original type B rule:

    Traditionally humans have valued natural resources in monetary 
terms on the basis of services provided by the resources. This 
method logically may be extended to valuing damages to an injured 
resource on the basis of changes in services. This rule establishes 
the link between measured adverse changes in the condition of the 
resource, the injury, and the damages through the measurement of 
changes in the services provided by the injured resource. 51 FR 
27686.

    In other words, although it is the natural resource that trustee 
officials are restoring, rehabilitating, replacing, and/or acquiring 
the equivalent of, such actions cause an increase in services, and that 
increase in services is used to measure the level of restoration, 
rehabilitation, replacement, and/or acquisition of equivalent 
resources.
    As evidenced by the statutory provision allowing trustee officials 
to acquire equivalent natural resources, Congress did not envision that 
trustee officials would, could, or should always replicate the exact 
same injured resources. Therefore, the rule gives trustee officials the 
discretion to decide, based on consideration of designated factors, how 
best to provide the public with natural resources that offer the same 
baseline level of services. Further, trustee officials have the 
discretion to decide which services to consider when determining the 
necessary level of restoration, rehabilitation, replacement, and/or 
acquisition of equivalent resources.
    The Department does not believe that using baseline service levels 
to measure restoration, rehabilitation, replacement, and/or acquisition 
of equivalent resources fails to make the public whole. In the 
groundwater example offered by the commenters, the resource may well 
provide a service other than that of being a drinking water supply. For 
example, in the August 1, 1986, preamble to the original type B rule, 
the Department noted that one service provided by resources with low 
baseline concentrations of hazardous substances or oil is the service 
of ``being able to absorb low levels of that material without exceeding 
standards or without other effects.'' 51 FR 27716. Trustee officials 
have the discretion to consider this and other services when 
determining the necessary level of restoration, rehabilitation, 
replacement, and/or acquisition of equivalent resources.
    Also, the Department does not think that using baseline services to 
measure restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources violates the Ohio v. Interior holding concerning 
committed uses. The term ``committed use,'' which applies only to 
calculation of compensable values, refers to human uses of resources. 
The definition of ``services,'' which was not affected by this 
rulemaking, includes more than just functions provided by the injured 
resource for humans. When determining the necessary level of 
restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources, trustee officials have the discretion to consider 
services provided by the injured resource for another resource, 
regardless of whether there is a committed human use of those services.
    Finally, the Department did not intend to suggest in the July 22, 
1993, Federal Register notice that trustee officials may not use 
manufactured devices to assist the restoration of injured resources. 
The Department simply meant that trustee officials should not replace 
injured natural resources with artificial resources.
    Comment: There were a number of comments about whether restoration, 
rehabilitation, replacement, and/or acquisition of equivalent resources 
should include reestablishing baseline services provided by the injured 
resource to other resources (e.g., provision of a food source for fish 
or wildlife). Some commenters supported consideration of inter-resource 
services in order to ensure complete restoration, rehabilitation, 
replacement, and/or acquisition of equivalent resources. Other 
commenters thought that trustee officials generally should not consider 
inter-resource services. These commenters stated that requiring 
restoration, rehabilitation, replacement, and/or acquisition of 
equivalent inter-resource services would amount to requiring 
replication of the exact natural resource that was injured. These 
commenters expressed concern that there is currently no way of 
accurately quantifying inter-resource service levels. Some of these 
commenters suggested that inter-resource services be considered only 
when they have value to humans.
    Response: Section 11.71(e), which was not affected by this 
rulemaking, allows trustee officials to consider inter-resource 
services when quantifying an injury. Since restoration, rehabilitation, 
replacement, and/or acquisition of equivalent resources is designed to 
correct an injury, trustee officials have the discretion to consider 
inter-resource services when determining the necessary level of 
restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources. As was noted in the August 1, 1986, preamble to 
the original type B rule:

    * * * The non-human services may be more important [than 
services used by humans] in measuring changes in how well a wildlife 
habitat or marsh is supporting wildlife, controlling floods, 
assimilating wastes, and providing any other services that may be 
important. 51 FR 27687.

    Moreover, as discussed above, prohibiting trustee officials from 
considering inter-resource services could violate the Ohio v. Interior 
holding concerning committed use. J. Selection of a Restoration, 
Rehabilitation, Replacement, and/or Acquisition Alternative
    Comment: There were numerous comments on the factors for 
consideration during selection of a restoration, rehabilitation, 
replacement, and/or acquisition alternative. Several commenters thought 
that the proposed rule would afford trustee officials the appropriate 
degree of discretion by providing factors for consideration but leaving 
the question of how to weigh those factors up to the trustee officials.
    A number of other commenters thought that the proposed rule would 
provide trustee officials with too much discretion over selection of a 
restoration, rehabilitation, replacement, and/or acquisition 
alternative. These commenters supported the Department's proposal to 
require trustee officials to consider all of the listed factors. 
However, these commenters stated that simply requiring consideration of 
the factors was inadequate. These commenters stated that the Department 
should provide guidance on how trustee officials should consider and 
weigh the factors in order to prevent abuses of discretion. A few 
commenters objected to the Department's statement that development of a 
post-award Restoration Plan would curb potential abuses of discretion 
by a trustee official in selecting a pre-award restoration, 
rehabilitation, replacement, and/or acquisition alternative to serve as 
the basis of the trustee official's claim.
    Response: Section 11.82(d) lists factors for trustee officials to 
consider when choosing a restoration, rehabilitation, replacement, and/
or acquisition alternative. The language of the proposed rule has been 
revised to require trustee officials to consider all of the listed 
factors. However, in light of the wide range of possible natural 
resource damage cases, the Department believes that trustee officials 
must have flexibility when selecting a restoration, rehabilitation, 
replacement, and/or acquisition alternative. Therefore, the rule does 
not mandate how trustee officials should weigh the listed factors.
    The rule provides a number of protections against potential abuses 
of discretion by trustee officials. Trustee officials are required to 
document their rationale for selecting a particular alternative. This 
documentation is included both in the Restoration and Compensation 
Determination Plan, which is subject to public review and comment, and 
in the Report of Assessment, which is reviewable in court. Finally, the 
rule provides that the Restoration Plan, which describes how the 
damages that are actually collected will be spent, is to be based on 
the alternatives selected in the Restoration and Compensation 
Determination Plan. Although the Restoration Plan is developed after 
damages have been recovered, the Restoration Plan is subject to public 
review and comment. Therefore, trustee officials who propose 
restoration, rehabilitation, replacement, and/or acquisition 
alternatives that differ from those used as a basis for damages will 
have to explain the reasons for the difference.
    Comment: Some commenters thought that trustee officials should be 
required to choose restoration, rehabilitation, replacement, and/or 
acquisition alternatives that are technically feasible.
    Response: The rule lists technical feasibility as one of the 
factors that trustee officials must consider when selecting a 
restoration, rehabilitation, replacement, and/or acquisition 
alternative. Under Sec. 11.14(qq) of the rule, an alternative is 
``technically feasible'' if it involves well-known technology and has a 
reasonable chance of successful completion in an acceptable period of 
time. Different alternatives may possess varying degrees of 
feasibility. The technical feasibility factor is designed to require an 
evaluation of these varying degrees of technical feasibility rather 
than to establish a strict standard of feasibility for acceptable 
alternatives. Nevertheless, trustee officials should not select 
alternatives that are infeasible.
    Comment: A number of commenters suggested that trustee officials 
should be required to choose the restoration, rehabilitation, 
replacement, and/or acquisition alternative that maximized net benefits 
or was most cost effective.
    Response: Ohio v. Interior recognized that cost considerations, 
although relevant, are not paramount under CERCLA. Therefore, the rule 
does not require trustee officials to select the alternative that is 
most cost effective or that minimizes costs. However, the rule does 
require trustee officials to consider both cost effectiveness and the 
relationship between costs and benefits when selecting a restoration, 
rehabilitation, replacement, and/or acquisition alternative.
    When considering the relationship between costs and benefits, 
trustee officials should consider how each restoration, rehabilitation, 
replacement, and/or acquisition alternative would affect not only the 
injured resources but also lost interim use of those resources. Total 
damages will depend on the sum of compensable value and restoration, 
rehabilitation, replacement, and/or acquisition costs. Often there will 
be tradeoffs between compensable value and restoration, rehabilitation, 
replacement, and/or acquisition costs. For example, a fast-paced 
restoration, rehabilitation, replacement, and/or acquisition 
alternative may result in a lower level of interim lost use, and thus 
reduce associated compensable values. However, implementation of such 
an alternative may result in significantly higher restoration, 
rehabilitation, replacement, and/or acquisition costs. In some cases, 
there may be sufficient data to demonstrate that some restoration, 
rehabilitation, replacement, and/or acquisition alternatives result in 
substantially lower total damages than others.
    In its January 7, 1994 notice of proposed rulemaking, NOAA 
solicited comment on whether its damage assessment regulations under 
OPA should require trustee officials to explain their rationale if they 
select a restoration, rehabilitation, replacement, and/or acquisition 
alternative that does not minimize total damages. 59 FR 1134. If NOAA 
does include such a requirement in its final damage assessment 
regulations, the Department will consider whether a similar requirement 
should be added to the Department's type B rule during the upcoming 
biennial review.
    Comment: A few commenters thought that the Department should 
require trustee officials to select a restoration, rehabilitation, 
replacement, and/or acquisition alternative that is consistent with the 
response actions taken at the site. These commenters expressed concern 
that without such a requirement, State trustee officials could 
circumvent section 121(f) of CERCLA, which requires States to bear the 
cost of obtaining cleanup levels beyond those selected by the United 
States Environmental Protection Agency (EPA).
    Response: Section 11.23(f) of the rule, which was not affected by 
this rulemaking, requires trustee officials to coordinate their 
activities with the lead response agency. Also, Sec. 11.82(d)(4) of 
this final rule requires trustee officials to consider the effects of 
any actual or planned response actions when selecting a restoration, 
rehabilitation, replacement, and/or acquisition alternative. The 
Department encourages trustee officials to work closely with EPA, the 
United States Coast Guard, and State response agencies. However, the 
Department recognizes that the purpose of a response action may differ 
from that of an action to restore, rehabilitate, replace, and/or 
acquire the equivalent of injured resources. Therefore, the Department 
does not believe that consistency with response actions should govern 
the selection of a restoration, rehabilitation, replacement, and/or 
acquisition alternative.
    The Department does not believe that section 121(f) of CERCLA is 
applicable in this context. Section 121(f) addresses whether the cost 
of attaining a certain cleanup level should be borne by the Federal 
Hazardous Substance Superfund or by the State; it does not address PRP 
liability for natural resource damages.
    Comment: Some commenters requested that trustee officials be 
required to provide a detailed analysis of the factors listed in 
Sec. 11.82(d).
    Response: The Department believes that a trustee official's 
analysis of the factors listed in Sec. 11.82(d), like all statements 
required under the regulations, should be detailed enough to provide 
PRPs, other trustee officials, the general public, any other interested 
parties, and ultimately the courts with an adequate opportunity to 
evaluate the analysis. The level of detail may vary depending on the 
alternatives involved. The Department does not believe that any 
revision of the rule is necessary.
    Comment: One commenter requested that proposed Sec. 11.82(d)(10), 
which addressed consideration of consistency with applicable Federal 
and State laws and policies, be amended to include reference to tribal 
laws and policies.
    Response: The Department agrees with the commenter and has revised 
the rule accordingly. As noted in the July 22, 1993, Federal Register 
notice, the Department has also decided that consideration of 
compliance with applicable Federal, State, and tribal laws should be 
distinguished from consideration of consistency with relevant Federal, 
State, and tribal policies. Therefore, the Department has revised the 
language of proposed Sec. 11.82(d)(10) to list these two factors 
separately.
    Comment: A few commenters suggested that the Department prohibit 
trustee officials from considering factors other than those listed. 
These commenters expressed concern that in the absence of such a 
prohibition, trustee officials might base their decisions on 
inappropriate considerations.
    Response: The Department believes that in some situations there may 
be appropriate considerations in addition to the factors listed in 
Sec. 11.82(d). Section 11.82(d) already provides that all factors 
considered must be relevant. The Department does not believe that any 
revision of the rule is necessary.
    Comment: Some commenters stated that the rule should clearly 
authorize trustee officials to choose a natural recovery alternative 
when selecting a restoration, rehabilitation, replacement, and/or 
acquisition alternative. Some commenters thought that the Department 
should provide guidance on how trustee officials could maximize the 
opportunities for natural recovery.
    Response: The Department believes that the rule does clearly 
authorize trustee officials to select a natural recovery alternative 
when appropriate. In fact, Sec. 11.82(c)(2) explicitly requires trustee 
officials to consider a ``No Action-Natural Recovery'' alternative. 
Development of additional guidance is beyond the scope of this 
rulemaking.
    Comment: Some commenters thought that the rule should not 
discriminate among the four components of restoration, rehabilitation, 
replacement, and acquisition of equivalent resources. Other commenters 
thought that the rule should not grant acquisition of land the same 
status as restoration, rehabilitation, or replacement. These commenters 
stated that CERCLA and Ohio v. Interior establish a clear preference 
for using restoration or replacement costs, as opposed to acquisition 
costs, as the measure of damages. The commenters noted that section 
107(f)(1) of CERCLA does list restoration, replacement, and acquisition 
of equivalent resources as legitimate uses of collected damages but 
then provides that the measure of damages shall not be limited by 
restoration and replacement costs. According to the commenters, these 
statutory provisions indicate, and the court in Ohio v. Interior 
recognized, that amounts recovered must be spent first on feasible 
restoration or replacement actions and then any excess funds are to be 
spent on acquisition of equivalent resources. These commenters also 
stated that land acquisition does nothing to improve the condition of 
the injured natural resources.
    Response: In light of the wide range of possible cases, the 
Department believes that the rule should provide flexibility in the 
selection of a method to return an injured resource to baseline. The 
term ``restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources'' was introduced to emphasize that trustee 
officials may select among a wide range of methods. The Department does 
not believe that the rule should establish a preference for restoration 
as opposed to acquisition of equivalent resources. CERCLA explicitly 
mentions use of recovered funds for restoration, rehabilitation, 
replacement or acquisition of equivalent resources. The ``shall not be 
limited by'' language quoted by the commenters simply provides that 
trustee officials may obtain damages in excess of restoration costs. 
The statutory language does not require that damages be based on 
acquisition costs only if restoration is infeasible. Further, the court 
in Ohio v. Interior did not establish any preference for restoration as 
opposed to acquisition of equivalent resources. In fact, the court 
specifically stated that its use of the term ``restoration'' was 
intended as shorthand for restoration, rehabilitation, replacement, or 
acquisition of the equivalent of the injured resources. 880 F.2d at 
441.
    Comment: Some commenters supported the Department's clarification 
that the restriction on land acquisition set forth in proposed 
Sec. 11.82(d)(8) would apply only to Federal trustee officials, not 
State or tribal trustee officials. Other commenters thought that the 
restriction should be eliminated altogether.
    Response: As was noted in the August 1, 1986, preamble to the 
original type B rule, the restriction on land acquisition by Federal 
trustee officials was included:

    * * * After extensive consultation with other Federal agencies. 
The purpose of this limitation is to limit the acquisition of 
private lands for Federal management under CERCLA, by eliminating 
the possibility of expanding the Federal estate without 
Congressional approval. 51 FR 27719.

    To avoid any confusion, the Department has removed the restriction 
from the list of factors that all trustee officials must consider when 
selecting a restoration, rehabilitation, replacement, and/or 
acquisition alternative and designated it as a separate provision. 
Further revision is beyond the scope of this rulemaking.
    Comment: Some commenters requested that trustee officials be 
prohibited from selecting a restoration, rehabilitation, replacement, 
and/or acquisition alternative that involves the purchase of 
contaminated land.
    Response: The Department anticipates that there may be situations 
in which it is difficult to identify available land in the appropriate 
geographical region that provides services identical to those provided 
by the injured resources. Therefore, the Department believes it would 
be inappropriate to further restrict trustee officials by requiring 
them to acquire only land that is free from all contamination.
    Comment: Some commenters thought that if trustee officials based 
their damage claim on acquisition costs, they should be required to 
demonstrate a clear link between the services lost and the services 
provided by the acquired resource.
    Response: The rule provides that trustee officials are to select a 
restoration, rehabilitation, replacement, and/or acquisition 
alternative that reestablishes baseline services. Therefore, any 
alternative based on acquisition of resources would have to involve 
acquiring resources that provide services equivalent to those lost as a 
result of the injury.
    Comment: One commenter expressed concern that proposed 
Sec. 11.82(b)(1) could be read to require trustee officials to examine 
restoration, rehabilitation, replacement, and/or acquisition 
alternatives on a resource-by-resource basis.
    Response: The Department did not intend to require trustee 
officials to examine restoration, rehabilitation, replacement, and/or 
acquisition alternatives on a resource-by-resource basis. To avoid any 
confusion, the Department has revised the language of the proposed rule 
to refer to ``resources'' rather than ``resource.''

K. Costs of Restoration, Rehabilitation, Replacement, and/or 
Acquisition of Equivalent Resources

    Comment: A number of commenters objected to the inclusion of 
indirect costs as recoverable restoration, rehabilitation, replacement, 
and/or acquisition costs. These commenters stated that indirect costs 
are not recoverable in natural resource damage cases as a matter of 
law. The commenters acknowledged that courts have awarded indirect 
costs in response actions; however, the commenters stated that those 
courts relied on the broad language of section 107(a)(4)(A) of CERCLA, 
which authorizes recovery of ``all costs of removal or remedial 
action.''
    Some commenters cited case law for the proposition that indirect 
costs are generally not recoverable. United States v. Rohm and Haas 
Company, 2 F.3d 1265 (3d Cir. 1993) (U.S. v. Rohm and Haas). A few 
commenters stated that recoverable indirect costs should be limited to 
those actually caused by the release and objected to the reference in 
proposed Sec. 11.83(b)(1)(ii) to recovery of costs of activities that 
``support'' the selected restoration, rehabilitation, replacement, and/
or acquisition alternative. These commenters also stated that the 
Department should clarify that the cost of policy formulation is not 
recoverable.
    Response: The Department believes that inclusion of indirect costs 
in an assessment is consistent with both Ohio v. Interior and the 
language and legislative history of CERCLA, which emphasize development 
of a damage figure that will make the public whole. 880 F.2d at 445. 
Section 107(f)(1) of CERCLA contains the broad language that ``[t]he 
measure of damages shall not be limited by the sums which can be used 
to restore or replace'' the injured resources.
    The Department agrees that PRPs are only liable for those indirect 
costs that are connected to a specific release or discharge. However, 
the Department does not believe that revisions to the language of the 
proposed rule are necessary. Furthermore, although the Department does 
not think that the cost of policy formulation would generally be 
recoverable, there may be some cases in which certain policy 
formulation activities would not take place but for the occurrence of a 
specific release or discharge. In those cases, and only in those cases, 
the costs of policy formulation could be recoverable.
    The Department does not believe that U.S. v. Rohm and Haas is 
relevant. The court in that case held that EPA oversight of cleanup 
activities conducted by PRPs did not constitute a ``removal'' action 
under CERCLA, and therefore the cost of the oversight was not 
recoverable. The court did not address the recoverability of indirect 
costs associated with government action. In fact, the court 
specifically stated that ``this case does not involve the issue of 
whether indirect, overhead costs associated with government removal or 
remedial activity at a particular facility are recoverable * * *.'' 2 
F.3d at 1273. The indirect costs recoverable under this rule are not 
oversight costs but rather costs that trustee officials will incur as 
they undertake restoration, rehabilitation, replacement, and/or 
acquisition.
    Comment: A few commenters sought clarification of the meaning of 
the following language in proposed Sec. 11.83(b)(1)(iii):

    When an indirect cost rate is used * * * [s]uch amounts 
determined in lieu of indirect costs shall be treated as an offset 
to the total indirect costs of the selected alternative before 
allocation to the remaining activities. The base upon which such 
remaining costs are allocated should be adjusted accordingly.

    Response: The Department acknowledges the confusion generated by 
these last two sentences of proposed Sec. 11.83(b)(1)(iii) and has 
deleted them.
    Comment: Some commenters objected to the language of proposed 
Sec. 11.83(b)(3) limiting trustee officials to cost estimating 
methodologies based on accounting practices. These commenters stated 
that accounting practices are generally developed to deal with past 
events and that methodologies developed in other disciplines are better 
suited for estimating future expenses. The commenters suggested that 
trustee officials be allowed to use methodologies based on ``standard 
and accepted professional practices'' or simply ``standard and accepted 
estimating practices,'' including engineering practices and public 
budgeting practices.
    Response: The Department did not intend to limit trustee officials 
to using only accounting practices. The Department has revised the 
language of proposed Sec. 11.83(b)(3) to allow for the use of any 
standard and accepted cost estimating practices provided that the 
trustee officials can document that those practices satisfy the 
criteria set forth in Sec. 11.83(a)(3).
    Comment: One commenter stated that the rule should explicitly 
recognize the authority of trustee officials to use combinations of 
different cost estimating methodologies.
    Response: The Department agrees that trustee officials should be 
allowed to use combinations of different cost estimating methodologies, 
so long as the different methodologies either do not double count 
damages or allow any double counting to be estimated and eliminated in 
the final damage calculation. The Department has revised the language 
of proposed Sec. 11.83(b)(2) to make this point clear.
    Comment: A few commenters thought that the proposed rule provided 
inadequate guidance on selection and use of cost estimating 
methodologies.
    Response: The Department believes that development of additional 
guidance is beyond the scope of this rulemaking.

L. Compensable Value

    Comment: A few commenters thought that the proposed rule provided 
inadequate guidance on selection and use of valuation methodologies.
    Response: The ``Type B Technical Information Document: Techniques 
to Measure Damages to Natural Resources,'' which was developed in 1987, 
is available through the National Technical Information Service, 5285 
Port Royal Road, Springfield, Virginia 22161, (703) 487-4650. The 
Department is considering updating the document; however, such revision 
is beyond the scope of this rulemaking.
    Comment: Some commenters requested that proposed Sec. 11.84(h)(3) 
be revised to allow State trustee officials to assess and recover 
compensable value for all individuals, not just those within the State.
    Response: The ``scope of analysis'' provisions contained in 
Sec. 11.84(h)(3) have not been substantively changed by this 
rulemaking. Virtually identical provisions were incorporated in 
Sec. 11.84(i) during the August 1, 1986, rulemaking. This final rule 
merely substitutes the term ``compensable value'' for the term ``use 
value.'' Further clarification is beyond the scope of this rulemaking.
    Comment: A few commenters questioned what was meant by the term 
``secondary economic impacts,'' which would be excluded from the 
definition of ``compensable value'' under proposed Sec. 11.83(c)(1).
    Response: The Department believes that introducing the term 
``secondary economic impacts'' into the regulations would create 
unnecessary confusion. Therefore, the Department has revised the 
proposed rule to eliminate the term. Nevertheless, the Department notes 
that all recoverable values must be traceable to a direct loss of 
services provided to the public.

M. Date of Promulgation of the Natural Resource Damage Assessment 
Regulations

    Comment: There were numerous comments on proposed Sec. 11.91(e) 
clarifying the date of promulgation of the natural resource damage 
assessment regulations for statute of limitations purposes. Several 
commenters supported proposed Sec. 11.91(e). These commenters stated 
that clarification of the date of promulgation was necessary and within 
the Department's statutory authority and technical expertise. Other 
commenters thought that clarification of a term in the statute of 
limitations was a judicial matter beyond the Department's authority and 
expertise.
    Response: The Department believes that it has full authority to 
issue Sec. 11.91(e). Section 301(c) of CERCLA authorizes the Department 
to ``promulgate regulations for the assessment of damages for injury to 
* * * natural resources.'' Section 113(g)(1) of CERCLA creates a 
statute of limitations based on the date that those regulations are 
``promulgated.'' Since Ohio v. Interior and Colorado v. Interior were 
issued, there has been considerable confusion over the statute of 
limitations. Nothing in the language or legislative history of CERCLA 
explicitly defines ``promulgation.'' As the agency given authority to 
develop procedures for assessing natural resource damages, the 
Department believes it is in the best position to evaluate when 
regulations establishing full procedures have been promulgated. 
Issuance of Sec. 11.91(e) is designed merely to clarify an unclear 
statutory term and is well within the scope of the Department's 
expertise and statutory grant of authority.
    Comment: Some commenters stated that the proposed clarification was 
consistent with Congressional intent. These commenters noted 
legislative history indicating that section 113(g)(1) was added to 
CERCLA out of concern that the absence of final natural resource damage 
assessment regulations had impaired the ability of trustee officials to 
pursue claims. According to these commenters, trustee officials are 
just as handicapped after Ohio v. Interior and Colorado v. Interior as 
they were when section 113(g)(1) was passed because those cases 
invalidated a crucial aspect of the regulations, namely the measure of 
damages.
    Other commenters stated that the proposed clarification could not 
be consistent with Congressional intent because it would allow the 
statute of limitations to be tolled indefinitely. These commenters 
disagreed with the Department's statement in the July 22, 1993, Federal 
Register notice that Ohio v. Interior and Colorado v. Interior left 
trustee officials without a measure of damages. These commenters stated 
that Ohio v. Interior established restoration costs as the measure of 
damages.
    Response: The Department believes that proposed Sec. 11.91(e) is 
completely consistent with Congressional intent. Ohio v. Interior did 
not overturn the regulations in their entirety; however, it did remand 
an extremely critical component of the regulations, namely the measure 
of damages. Although Ohio v. Interior held that restoration costs are 
the preferred measure of damages, the court also acknowledged that the 
Department has considerable authority and discretion to shape the 
specific scope of the measure of damages. Thus, until the Department 
revises the regulations, no valid measure of damages exists.
    Section 11.91(e) does not allow the statute of limitations to be 
tolled indefinitely, it merely ensures that trustee officials are not 
barred from bringing suit before they have the benefit of complete 
procedures for assessing natural resource damages. The legislative 
history of the Superfund Amendments and Reauthorization Act (SARA) 
indicates that section 113(g)(1) was added to CERCLA because Congress 
believed that so long as trustee officials lacked procedures for 
assessing natural resource damages they were handicapped in their 
ability to bring suit. In the absence of a valid damage formula, the 
very goal of the natural resource damage assessment regulations, namely 
the derivation of a monetary damage figure, cannot be fully realized.
    Comment: Some commenters stated that the proposed clarification of 
the date of promulgation was incorrect as a matter of law and common 
sense. The commenters cited dictionaries and case law for the 
proposition that the date of promulgation is the date on which a signed 
rule is first made public or is published, not when it has cleared 
judicial hurdles. United States v. City of Seattle, No. C90-395WD, slip 
op. (W.D. Wash. Jan. 28, 1991) (U.S. v. Seattle); American Petroleum 
Institute v. Costle, 609 F.2d 20, 23-24 (D.C. Cir. 1979) (API v. 
Costle); United Technologies Corp. v. Occupational Safety and Health 
Administration, 836 F.2d 52, 54 (2d Cir. 1987) (UTC v. OSHA).
    Response: The Department believes that the cases cited by 
commenters for the proposition that ``promulgation'' occurs when a 
regulation is first made public are inapposite. API v. Costle involved 
the interpretation of a provision of the Clean Air Act that prohibited 
the inclusion of documents in a rulemaking docket after the date of 
promulgation. 609 F.2d at 22. Noting that the statutory provision was 
designed to ensure adequate opportunity for public review and to 
prevent post hoc rationalizations, the court held that the date of 
promulgation was the date the final rule was first released to the 
public as opposed to the date of publication in the Federal Register. 
Id. at 23-24.
    UTC v. OSHA involved the statute of limitations period for filing a 
challenge to an OSHA standard. 836 F.2d at 53. The statute provided 
that any challenges to a standard issued by OSHA had to be brought 
within 60 days after the standard was promulgated. Id. OSHA regulations 
defined ``the date of issuance'' as the time of filing in the Office of 
the Federal Register but did not define ``promulgation.'' Nevertheless, 
OSHA argued that the date of promulgation should also be the date of 
filing with the Office of the Federal Register. The court noted that 
Congress, by using two different terms, must have intended the date of 
issuance to differ from the date of promulgation. Id. Therefore, the 
court held that the date of promulgation was the date of publication in 
the Federal Register. Id. at 54.
    Neither API v. Costle nor UTC v. OSHA purport to define 
``promulgation'' for all purposes. In fact, the cases reveal that the 
definition of ``promulgation'' can vary, depending on Congressional 
intent. The cases also do not address the specific question of the 
effect of a judicial remand on the date of promulgation for statute of 
limitation purposes. Further, the court in UTC v. OSHA recognized an 
agency's authority to determine when its regulations had been 
promulgated, stating that ``[t]he agency is certainly entitled to adopt 
a definition of `promulgated', and it may well have the power to equate 
`promulgated' with `issued', if it chooses to.'' Id. at 53. The problem 
in that case was that the agency had not issued a regulation defining 
``promulgation.''
    U.S. v. Seattle involved a motion to dismiss a natural resource 
damage case on statute of limitations grounds. The defendant had argued 
that the statute of limitations began to run on August 1, 1986, the 
date the original type B rule was published. In an unpublished opinion, 
the court denied the motion to dismiss and held that the statute of 
limitations did not begin to run until both type A and type B rules had 
been promulgated. Slip op. at 1. Because the case had been filed within 
three years of March 20, 1987, the date the original type A rule was 
published, the court did not need to reach, and did not address, the 
issue of the effect of Ohio v. Interior and Colorado v. Interior on the 
date of promulgation.
    However, in light of existing case law, the Department has decided 
that it would be more appropriate to base the date of promulgation on 
the date of publication of final rules complying with Ohio v. Interior 
and Colorado v. Interior rather than the date of effectiveness of those 
final rules. The Department has revised the rule accordingly.
    Comment: A few commenters noted that section 113(a) of CERCLA 
provides that any challenge to regulations issued under the statute 
must be brought within 90 days of promulgation. These commenters stated 
that if the natural resource damage assessment regulations had not been 
promulgated, the court in Ohio v. Interior would not have had 
jurisdiction.
    Response: The Department does not dispute that the court in Ohio v. 
Interior had jurisdiction under section 113(a) of CERCLA. However, the 
Department does not believe that determination of the date of 
promulgation for purposes of section 113(a) is necessarily dispositive 
of the issue of the date of promulgation for purposes of section 
113(g)(1).
    Comment: A few commenters expressed concern that the Department has 
a conflict of interest because issuance of the proposed clarification 
of the date of promulgation would preserve the Department's ability to 
pursue its own natural resource damage claims.
    Response: The Department does not believe that it has allowed its 
duties as a Federal trustee agency to prejudice the development of the 
natural resource damage assessment regulations. The Department has 
striven to develop regulations that are fair to not only trustee 
officials and the general public but also PRPs. Moreover, the 
Department notes that it is not only a trustee agency but frequently a 
PRP in natural resource damage cases.

N. Judicial Review of an Assessment

    Comment: There were a number of comments concerning judicial review 
of assessments performed in accordance with the rule. Some commenters 
supported the Department's statement in the July 22, 1993, Federal 
Register notice that the rebuttable presumption attaches only to those 
assessments that are performed in accordance with the entire rule.
    Other commenters disagreed, stating that the different components 
of the rule are not inextricably intertwined and that trustee officials 
need the flexibility to decide which aspects of the rule are 
appropriate for a particular assessment. These commenters stated that 
the language of section 107(f) of CERCLA, which grants a rebuttable 
presumption to assessments performed ``in accordance'' with the rule, 
allows trustee officials to obtain a rebuttable presumption for any 
portion of an assessment that is in accordance with the rule. These 
commenters thought that if trustee officials assessed one component of 
damages following the rule and another component without following the 
rule they should still be able to obtain a rebuttable presumption for 
the component that was assessed in accordance with the rule.
    Response: The Department's statement that the rebuttable 
presumption attaches only to those assessments performed in accordance 
with the entire rule was not intended to suggest that trustee officials 
would lose the rebuttable presumption if they supplemented the damage 
claim assessed under the rule with additional claims assessed without 
following the rule. The rule provides both an overall administrative 
process for development and review of documentation as well as a range 
of alternative methodologies for the actual determination and 
quantification of injury and damages. In order to obtain a rebuttable 
presumption, a trustee official must follow the entire administrative 
process set forth in the rule. If the trustee official has followed the 
administrative process, the rebuttable presumption attaches to those 
components of the damage claim that were calculated through the use of 
the methodologies described in the rule. However, trustee officials are 
not required to use all of the listed methodologies in order to obtain 
a rebuttable presumption.
    For example, if trustee officials decide not to use the rule to 
assess damages for injury to a particular resource, they need not 
follow those portions of the rule that describe the methodologies for 
determining injury to such a resource. In that case, the trustee 
officials could still obtain a rebuttable presumption for damages for 
injury to other resources that were calculated using methodologies 
described in the rule. Similarly, if trustee officials decide not to 
use the rule to assess damages for a particular element of lost use of 
an injured resource, they need not follow those portions of the rule 
that describe methodologies for calculating compensable value for such 
an element. In that case, the trustee officials could still obtain a 
rebuttable presumption for damages for other elements of lost use that 
were calculated using methodologies described in the rule.
    Comment: One commenter disagreed with the Department's statement 
that CERCLA does not grant a rebuttable presumption to assessments 
performed by tribal trustee officials. This commenter stated that when 
SARA was passed, Congress intended to grant tribes the same authority 
as States in the area of natural resource trustee activities. The 
commenter further stated that under established case law concerning the 
Federal government's fiduciary responsibility to tribes, any ambiguity 
in the statute concerning tribes' right to the rebuttable presumption 
must be construed in favor of the tribes.
    On the other hand, a few commenters agreed with the Department's 
statement that CERCLA does not grant a rebuttable presumption to tribal 
assessments. However, these commenters expressed concern that the 
Department's statement in the July 22, 1993, Federal Register notice 
that assessments performed jointly by Federal and tribal trustee 
officials or by State and tribal trustee officials would qualify for a 
rebuttable presumption. These commenters thought that such an 
interpretation would circumvent the language of the statute.
    Response: Section 11.91(c) of the rule was revised in 1988 to 
reflect the SARA amendment to CERCLA granting a rebuttable presumption 
to natural resource damage assessments performed by State trustee 
officials. In the preamble to that rule, the Department stated that 
SARA did not extend the rebuttable presumption to assessments performed 
by tribal trustee officials. 53 FR 5167. The Department went on to 
state that ``Federal trustees and Indian tribes can work closely 
together in assessments, and such assessments would qualify for a 
rebuttable presumption.'' Id. at 5168. Further clarification of this 
issue is beyond the scope of this rulemaking.
    Comment: There were several comments about the applicability of the 
rebuttable presumption to assessment costs. Some commenters stated that 
CERCLA provides a rebuttable presumption only for the actual damage 
assessment performed in accordance with this rule not for the costs of 
performing the assessment. Other commenters thought that trustee 
officials who comply with this rule, including the standards for 
reasonable costs, should be granted a rebuttable presumption that their 
damage assessment costs are recoverable.
    Response: Section 11.91(c), which was not affected by this 
rulemaking, provides that when trustee officials perform an assessment 
in accordance with this rulemaking, the assessment receives a 
rebuttable presumption. The Department believes that the determination 
of whether it is reasonable to incur a particular assessment cost is an 
integral component of a damage assessment. The rule contains specific 
provisions to guide trustee officials in determining whether to incur a 
particular assessment cost, including a definition of reasonable 
assessment costs that was specifically upheld in Ohio v. Interior. 
Therefore, the Department believes that trustee officials that comply 
with this rule, including the standards for determining reasonable 
assessment costs, should be granted a rebuttable presumption that their 
assessment costs are reasonable and, thus, recoverable.
    Comment: Some commenters thought that the Department should clarify 
that judicial review of an assessment is limited to the data in the 
administrative record. These commenters stated that, in the absence of 
such a clarification, PRPs would refuse to disclose any of their data 
until formal judicial discovery begins but would demand that trustee 
officials make all of their data available for public review and 
comment as early in the assessment process as possible. These 
commenters expressed concern that such a result would put trustee 
officials at a significant disadvantage in natural resource damage 
litigation.
    Response: Clarification of the data that will be admitted in a 
natural resource damage case is beyond the scope of this rulemaking.

O. Use of Collected Damages

    Comment: Some commenters stated that trustee officials should be 
required to spend all collected damages on implementation of the same 
restoration, rehabilitation, replacement, and/or acquisition 
alternative that was selected in the Restoration and Compensation 
Determination Plan as the basis for the damage claim. These commenters 
thought that without such a requirement, trustee officials would have 
little incentive to perform accurate assessments. There were 
suggestions that trustee officials be required to notify or obtain 
permission from the court or the PRPs before implementing a final 
Restoration Plan that differs significantly from the Restoration and 
Compensation Determination Plan.
    Response: The Department does not believe that the rule should 
explicitly require collected damages to be spent on implementation of 
the same restoration, rehabilitation, replacement, and/or acquisition 
alternative selected in the Restoration and Compensation Determination 
Plan. Section 11.93(a) provides that upon award of natural resource 
damages, trustee officials must prepare a Restoration Plan describing 
how the awarded funds will be used. Section 11.93(a) states that the 
Restoration Plan shall be based on the Restoration and Compensation 
Determination Plan. The Restoration Plan is intended to be a detailed 
description of the implementation of the alternative selected in the 
Restoration and Compensation Determination Plan. However, the 
Department recognizes that there may be unforeseen changes in the 
condition of the natural resources between the time the Restoration and 
Compensation Determination Plan is prepared and the time trustee 
officials actually collect damages. Also, the amount of damages 
ultimately collected may differ from the amount of damages claimed. 
Finally, the actual cost of restoring, rehabilitating, replacing, and/
or acquiring the equivalent of the injured resources may differ from 
the estimated cost. Therefore, trustee officials may need to revise the 
alternative selected in the Restoration and Compensation Determination 
Plan.
    The Department does not believe that absence of a requirement that 
trustee officials implement the same exact alternative selected in the 
Restoration and Compensation Determination Plan will eliminate trustee 
officials' incentive to conduct accurate assessments. The Restoration 
Plan is subject to public review and comment, and trustee officials who 
propose restoration, rehabilitation, replacement, and/or acquisition 
alternatives that differ from those used as a basis for damages will 
have to explain the reasons for the difference. The Department believes 
that making the draft Restoration Plan available for public review and 
comment should provide interested parties with adequate notice of 
proposed changes from the Restoration and Compensation Determination 
Plan.
    Comment: A few commenters requested guidance on determining when 
restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources is complete. Some commenters suggested that 
trustee officials provide PRPs with a certification when restoration, 
rehabilitation, replacement, and/or acquisition of equivalent resources 
is essentially completed so that PRPs will not remain liable 
indefinitely.
    Response: Section 11.73(a) provides that the recovery period is the 
time until baseline services have been reestablished. The Department 
does not believe it is necessary to require trustee officials to 
provide PRPs with a certification when restoration, rehabilitation, 
replacement, and/or acquisition of equivalent resources is essentially 
completed. The extent of a PRP's continuing liability after damages 
have been collected depends on the terms of the judgment or settlement 
agreement. Additional clarification is beyond the scope of this 
rulemaking.
    Comment: Some commenters stated that any portion of collected 
damages that is not spent to restore, rehabilitate, replace, and/or 
acquire the equivalent of the injured resources or to supply lost uses 
should be returned to the PRPs. These commenters disagreed with the 
Department's statement in the July 22, 1993, Federal Register notice 
that such a requirement was unnecessary because there should never be 
excess funds after completion of restoration, rehabilitation, 
replacement, and/or acquisition of equivalent resources. These 
commenters noted that because damages are based on estimated costs of 
restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources and estimated compensable values, there will be 
excess funds whenever trustee officials overestimate costs or 
compensable values.
    Response: The Department believes that revision of the regulations 
to address the disposition of any excess damage recoveries is beyond 
the scope of this rulemaking.
    Comment: One commenter asked the Department to recognize the right 
of co-trustees to spend collected damages on implementation of 
different Restoration Plans.
    Response: Nothing in the rule prohibits co-trustees from 
implementing different Restoration Plans. Additional clarification of 
this issue is beyond the scope of this rulemaking.

P. Miscellaneous Comments

1. Funding of Tribal Assessments

    Comment: One commenter asked the Department to acknowledge that its 
fiduciary responsibility to tribes extends to natural resource damage 
assessments involving tribal resources. This commenter requested that 
the Department develop funding mechanisms for natural resource damage 
assessments involving tribal resources.
    Response: Discussion of this issue is beyond the scope of this 
rulemaking.

2. Quality Assurance Plans

    Comment: Several commenters stated that the rule should be revised 
to eliminate the requirement that trustee officials adopt quality 
assurance plans that conform with EPA guidance. These commenters 
thought that EPA guidance on quality assurance is poorly suited for 
natural resource damage assessment work. One commenter noted that the 
Department had incorrectly stated that proposed Sec. 11.31(c)(4) 
contained a reference to EPA quality assurance guidance when in fact 
that reference is contained in Sec. 11.31(c)(3) of the existing rule.
    Response: In the July 22, 1993, Federal Register notice, the 
Department inadvertently suggested that proposed Sec. 11.31(c)(4) would 
require trustee officials to include in their Assessment Plans quality 
assurance plans that complied with EPA guidance. Section 11.31(c)(4) 
contains no reference to quality assurance plans. Section 11.31(c)(3), 
which was renumbered but not substantively affected by this rulemaking, 
does require that trustee officials develop a quality assurance plan 
that satisfies the requirements listed in EPA guidance, but only if 
that guidance is applicable. Further clarification is beyond the scope 
of this rulemaking.

3. Threat of a Release or Discharge

    Comment: Some commenters disagreed with the Department's statement 
in the July 22, 1993, Federal Register notice that the regulations may 
not be used to assess damages caused by a threat of a release or 
discharge. These commenters noted that section 107(a) of CERCLA 
specifically establishes liability for damages from a release or a 
threat of a release. Further, these commenters noted that natural 
resource damages include compensation for loss of use of a natural 
resource. Therefore, these commenters thought that if a threat of a 
release results in the loss of use of a natural resource, then trustee 
officials should be able to assess and bring a claim for natural 
resource damages.
    Response: Section 11.10, which was not affected by this rulemaking, 
provides that these regulations are only available for the assessment 
of damages resulting from a discharge of oil or a release of a 
hazardous substance. Although section 107(a) of CERCLA does refer to a 
release or a threat of a release, section 107(a)(4)(C) refers to 
damages for injury to, destruction of, or loss of natural resources 
``resulting from such a release.'' Also, section 301(c) of CERCLA 
authorizes the Department to develop regulations for assessment of 
``damages for injury to, destruction of, or loss of natural resources 
resulting from a release of oil or a hazardous substance.'' Therefore, 
the rule may only be used when there has been an actual release or 
discharge, as opposed to a threat of a release or discharge, and actual 
injury to, destruction of, or loss of a natural resource, as opposed to 
simply a reduction in use of a resource. Further clarification is 
beyond the scope of this rulemaking.

4. Coordination With Response Activities

    Comment: Some commenters thought that the rule should provide 
additional guidance on coordination of natural resource damage 
assessment activities with response activities. A few commenters stated 
that trustee officials should be required to participate in the 
remedial planning process. One commenter supported coordination of 
natural resource damage assessment activities and response activities 
but urged trustee officials to bear in mind the paramount need for 
rapid and effective cleanup. One commenter suggested that the On-Scene 
Coordinator be allowed to contact just one Federal trustee agency and 
one State trustee agency and that the contacted trustee agencies be 
required to notify all other trustee agencies.
    Response: The August 1, 1986, preamble to the original type B rule 
contains considerable discussion of the relationship between response 
actions and natural resource damage assessments. 51 FR 27681, 27692-93. 
Further clarification of the issue is beyond the scope of this 
rulemaking.

5. Injuries Caused by Response Activities

    Comment: One commenter asked the Department to clarify that State 
trustee officials are not allowed to recover damages for injuries 
caused or aggravated by State-ordered cleanup activities if those 
injuries were reasonably avoidable. Another commenter interpreted the 
rule to prohibit recovery of damages for any injuries that trustee 
officials could have reasonably avoided.
    Response: Section 11.15(a)(1)(ii), which was not affected by this 
rulemaking, provides that PRPs are liable for any increase in injuries 
that is reasonably unavoidable as a result of response actions taken or 
anticipated. As was stated in the August 1, 1986, preamble to the 
original type B rule,

    * * * The Department believes that any response actions 
undertaken by government agencies should strive to avoid additional 
injury to natural resources whenever possible. Damages from such 
``reasonably unavoidable'' increases in injury resulting from 
response actions by governmental agencies are not excluded from 
damage actions, because they are indirectly due to the discharge or 
release and thus included under section 301(c) of CERCLA. 51 FR 
27698.

    Therefore, if government response activities cause an increase in 
injuries, trustee officials can only recover damages for the increase 
if it was reasonably unavoidable. Section 11.15(a)(1)(ii) deals solely 
with liability for increases in injuries caused by response actions. 
Section 11.14(jj), which was not affected by this rulemaking, defines 
``response'' as removal or remedial actions as defined in sections 
101(23) and 101(24) of CERCLA.

6. Limitations on Liability

    Comment: A few commenters believed that the rule should clarify the 
application of various statutory limitations on liability, including 
the ceilings set forth in section 107(c) of CERCLA and the provision in 
section 107(f)(1) that excludes natural resource damages if those 
damages and the release that caused those damages occurred wholly 
before the enactment of CERCLA.
    Response: The Department notes that Secs. 11.15(b) and 11.24(b)(1), 
which were not affected by this rulemaking, already incorporate the 
ceilings on damages set forth in section 107(c) of CERCLA and the 
limitation on damages set forth in section 107(f)(1) of CERCLA. Any 
further clarification of these provisions is beyond the scope of this 
rulemaking.

7. Timing of the Restoration and Compensation Determination Plan

    Comment: Some commenters thought that the information needed to 
determine the required level of restoration, rehabilitation, 
replacement, and/or acquisition of equivalent resources would not be 
available at the time that the Assessment Plan is made available for 
public comment and review; therefore, the Restoration and Compensation 
Determination Plan should not be prepared until after Injury 
Determination and Quantification have been completed. Other commenters 
expressed concern that allowing preparation of the Restoration and 
Compensation Determination Plan to be delayed would lead trustee 
officials to perform unnecessary and unfocused assessment work during 
Injury Determination and Quantification. Therefore, the commenters 
suggested that trustee officials be required to use their best efforts 
to prepare the Restoration and Compensation Determination Plan at the 
same time as the rest of the Assessment Plan.
    Response: The Department believes that early preparation of the 
Restoration and Compensation Determination Plan is advisable to ensure 
that the costs of assessments are reasonable. The definition of 
``reasonable cost,'' which was not affected by this rulemaking, 
includes a requirement that Injury Determination, Quantification, and 
Damage Determination bear a well defined relationship to each other. 
The Assessment Plan, which includes the Restoration and Compensation 
Determination Plan, is designed to coordinate Injury Determination, 
Quantification, and Damage Determination. Therefore, the Restoration 
and Compensation Determination Plan should be prepared as early as 
possible. In most cases, trustee officials should be able to develop an 
initial Restoration and Compensation Determination Plan based on 
estimates of the extent and nature of the injuries and then make 
revisions as needed. Section 11.32(e)(1) of the rule, which was not 
affected by this rulemaking, authorizes trustee officials to modify any 
part of the Assessment Plan at any stage of the assessment as new 
information becomes available.
    However, the Department recognizes that selection of a restoration, 
rehabilitation, replacement, and/or acquisition alternative depends in 
part upon the extent and nature of the injuries, which will not be 
fully known at the outset of an assessment. Therefore, there may be 
cases where even a preliminary attempt to evaluate restoration, 
rehabilitation, replacement, and/or acquisition alternatives would be 
meaningless unless Injury Determination or Quantification had begun. In 
these cases, premature preparation of the Restoration and Compensation 
Determination Plan could temporarily misdirect Injury Determination and 
Quantification. Therefore, the rule provides that in those cases where 
existing data are insufficient to develop a Restoration and 
Compensation Determination Plan at the time that the rest of the 
Assessment Plan is prepared, the Restoration and Compensation 
Determination Plan may be developed later. Nevertheless, the 
Restoration and Compensation Determination Plan must always be 
developed before completion of Quantification in order to ensure that 
Quantification is correlated with Damage Determination.
    The Department believes that it is unnecessary to add a requirement 
that trustee officials use their ``best efforts'' to prepare the 
Restoration and Compensation Determination Plan along with the rest of 
the Assessment Plan. Nevertheless, the Department emphasizes that 
trustee officials should only delay development of the Restoration and 
Compensation Determination Plan when existing data are insufficient to 
develop even a rough estimate of the extent of the injuries. Further, 
if trustee officials do delay development of the Restoration and 
Compensation Determination Plan, they should complete the Plan as soon 
as they obtain sufficient information.

National Environmental Policy Act, Regulatory Flexibility Act, 
Paperwork Reduction Act, and Executive Orders 12866, 12630, 12778, and 
12612

    The Department 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 (43 U.S.C. 
4332(2)(C)) has been prepared.
    The Department certifies that this rule will not have a significant 
economic effect on a substantial number of small entities under the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The rule provides 
technical procedural guidance for the assessment of damages to natural 
resources. It does not directly impose any additional cost. As the rule 
applies to natural resource trustees, it is not expected to have an 
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 the Paperwork Reduction Act (44 U.S.C. 3501 
et seq.).
    This final rule has been reviewed under Executive Order 12866 and 
has been determined to constitute a significant regulatory action. 
However, because of the difficulty of evaluating the effects of 
alternatives to this rule, the Office of Information and Regulatory 
Affairs within the Office of Management and Budget has waived 
preparation of the assessments described in sections 6(a)(3)(B) and 
6(a)(3)(C) of Executive Order 12866 for the final rule.
    It has been determined that this rule does not have takings 
implications under Executive Order 12630. The Department has certified 
to the Office of Management and Budget that this rule meets the 
applicable standards provided in sections 2(a) and 2(b)(2) of Executive 
Order 12778. It has been determined that this rule does not have 
federalism implications under Executive Order 12612.

List of Subjects in 43 CFR Part 11

    Continental shelf, Environmental protection, Fish, Forests and 
forest products, Grazing land, Indian lands, Hazardous substances, 
Mineral resources, National forests, National parks, Natural resources, 
Oil pollution, Public lands, Wildlife, Wildlife refuges.

    For the reasons set out in the preamble, title 43, subtitle A of 
the Code of Federal Regulations is amended as follows:

PART 11--NATURAL RESOURCE DAMAGE ASSESSMENTS

    1. The authority citation for part 11 continues to read as follows:

    Authority: 42 U.S.C. 9651(c), as amended.

Subpart A--Introduction

    2. Section 11.13 is amended by revising paragraph (e)(3) to read as 
follows:


Sec. 11.13  Overview.

* * * * *
    (e) * * *
    (3) Damage Determination phase. The purpose of this phase is to 
establish the appropriate compensation expressed as a dollar amount for 
the injuries established in the Injury Determination phase and measured 
in the Quantification phase. The sections of subpart E of this part 
comprising the Damage Determination phase include guidance on 
acceptable cost estimating and valuation methodologies for determining 
compensation based on the costs of restoration, rehabilitation, 
replacement, and/or acquisition of equivalent resources, plus, at the 
discretion of the authorized official, compensable value, as defined in 
Sec. 11.83(c) of this part.
* * * * *
    3. Section 11.14 is amended by revising paragraph (qq) to read as 
follows:


Sec. 11.14  Definitions.

* * * * *
    (qq) Technical feasibility or technically feasible means that the 
technology and management skills necessary to implement an Assessment 
Plan or Restoration and Compensation Determination Plan are well known 
and that each element of the plan has a reasonable chance of successful 
completion in an acceptable period of time.
* * * * *
    4. Section 11.15 is amended by revising paragraph (a)(3)(ii) to 
read as follows:


Sec. 11.15  Actions against the responsible party for damages.

    (a) * * *
    (3) * * *
    (ii) Administrative costs and expenses necessary for, and 
incidental to, the assessment, assessment planning, and restoration, 
rehabilitation, replacement, and/or acquisition of equivalent resources 
planning, and any restoration, rehabilitation, replacement, and/or 
acquisition of equivalent resources undertaken; and
* * * * *

Subpart C--Assessment Plan Phase

    5. Section 11.30 is amended by revising paragraph (c)(1)(v) to read 
as follows:


Sec. 11.30  Assessment Plan--general.

* * * * *
    (c) * * *
    (1) * * *
    (v) Preliminary estimate of damages costs; and
* * * * *
    6. Section 11.31 is amended by revising paragraph (a)(2), removing 
paragraph (c)(2), removing the word ``and'' at the end of paragraph 
(c)(3), replacing the period at the end of paragraph (c)(4) with the 
words ``; and'', redesignating paragraphs (c)(3) and (c)(4) as 
paragraphs (c)(2) and (c)(3) respectively, and adding a new paragraph 
(c)(4) to read as follows:


Sec. 11.31  Assessment Plan--content.

    (a) * * *
    (2) The Assessment Plan shall be of sufficient detail to serve as a 
means of evaluating whether the approach used for assessing the damage 
is likely to be cost-effective and meets the definition of reasonable 
cost, as those terms are used in this part. The Assessment Plan shall 
include descriptions of the natural resources and the geographical 
areas involved. The Assessment Plan shall also include a statement of 
the authority for asserting trusteeship, or co-trusteeship, for those 
natural resources considered within the Assessment Plan. The authorized 
official's statement of the authority for asserting trusteeship shall 
not have the force and effect of a rebuttable presumption under 
Sec. 11.91(c) of this part. In addition, for type B assessments, the 
Assessment Plan shall include the sampling locations within those 
geographical areas, sample and survey design, numbers and types of 
samples to be collected, analyses to be performed, preliminary 
determination of the recovery period, and other such information 
required to perform the selected methodologies.
* * * * *
    (c) * * *
    (4) The Restoration and Compensation Determination Plan developed 
in accordance with the guidance in Sec. 11.81 of this part. If existing 
data are not sufficient to develop the Restoration and Compensation 
Determination Plan as part of the Assessment Plan, the Restoration and 
Compensation Determination Plan may be developed later, at any time 
before the completion of the Injury Determination or Quantification 
phases. If the Restoration and Compensation Determination Plan is 
published separately, the public review and comment will be conducted 
pursuant to Sec. 11.81(d) of this part.
    7. Section 11.32 is amended by revising paragraphs (a)(2)(iii)(A) 
and (f)(2), and by removing paragraph (f)(3) to read as follows:


Sec. 11.32  Assessment Plan--development.

    (a) Pre-development requirements. * * *
    (2) * * *
    (iii)(A) The authorized official shall send a Notice of Intent to 
Perform an Assessment to all identified potentially responsible 
parties. The Notice shall invite the participation of the potentially 
responsible party, or, if several parties are involved and if agreed to 
by the lead authorized official, a representative or representatives 
designated by the parties, in the development of the type and scope of 
the assessment and in the performance of the assessment. The Notice 
shall briefly describe, to the extent known, the site, vessel, or 
facility involved, the discharge of oil or release of hazardous 
substance of concern to the authorized official, and the resources 
potentially at risk. The Notice shall also contain a statement of 
authority for asserting trusteeship, or co-trusteeship, over those 
natural resources identified as potentially at risk.
* * * * *
    (f) Plan review. * * *
    (2) The purpose of this review is to ensure that the selection of 
methodologies for the Quantification and Damage Determination phases is 
consistent with the results of the Injury Determination phase, and that 
the use of such methodologies remains consistent with the requirements 
of reasonable cost, as that term is used in this part.
    8. Section 11.35 is revised to read as follows:


Sec. 11.35  Assessment Plan--preliminary estimate of damages.

    (a) Requirement. When performing a type B assessment pursuant to 
the requirements of subpart E of this part, the authorized official 
shall develop a preliminary estimate of: the anticipated costs of 
restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources for the injured natural resources; and the 
compensable value, as defined in Sec. 11.83(c) of this part, of the 
injured natural resources, if the authorized official intends to 
include compensable value in the damage claim. This preliminary 
estimate is referred to as the preliminary estimate of damages. The 
authorized official shall use the guidance provided in this section, to 
the extent possible, to develop the preliminary estimate of damages.
    (b) Purpose. The purpose of the preliminary estimate of damages is 
for reference in the scoping of the Assessment Plan to ensure that the 
choice of the scientific, cost estimating, and valuation methodologies 
expected to be used in the damage assessment fulfills the requirements 
of reasonable cost, as that term is used in this part. The authorized 
official will also use the preliminary estimate of damages in the 
review of the Assessment Plan, as required in Sec. 11.32(f) of this 
part, to ensure the requirements of reasonable cost are still met.
    (c) Steps. The preliminary estimate of damages should include 
consideration of the ability of the resources to recover naturally and, 
if relevant, the compensable value through the recovery period with and 
without possible alternative actions. The authorized official shall 
consider the following factors, to the extent possible, in making the 
preliminary estimate of damages:
    (1) The preliminary estimate of costs of restoration, 
rehabilitation, replacement, and/or acquisition of equivalent resources 
should include consideration of a range of possible alternative actions 
that would accomplish the restoration, rehabilitation, replacement, 
and/or acquisition of the equivalent of the injured natural resources.
    (i) The preliminary estimate of costs should take into account the 
effects, or anticipated effects, of any response actions.
    (ii) The preliminary estimate of costs should represent the 
expected present value of anticipated costs, expressed in constant 
dollars, and should include direct and indirect costs, and include the 
timing of those costs. The provisions detailed in Secs. 11.80-11.84 of 
this part are the basis for the development of the estimate.
    (iii) The discount rate to be used in developing the preliminary 
estimate of costs shall be that determined in accordance with the 
guidance in Sec. 11.84(e) of this part.
    (2) The preliminary estimate of compensable value should be 
consistent with the range of possible alternatives for restoration, 
rehabilitation, replacement, and/or acquisition of equivalent resources 
being considered.
    (i) The preliminary estimate of compensable value should represent 
the expected present value of the anticipated compensable value, 
expressed in constant dollars, accrued through the period for the 
restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources to baseline conditions, i.e., between the 
occurrence of the discharge or release and the completion of the 
restoration, rehabilitation, replacement, and/or acquisition of the 
equivalent of the injured resources and their services. The estimate 
should use the same base year as the preliminary estimate of costs of 
restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources. The provisions detailed in Secs. 11.80-11.84 of 
this part are the basis for the development of this estimate.
    (ii) The preliminary estimate of compensable value should take into 
account the effects, or anticipated effects, of any response actions.
    (iii) The discount rate to be used in developing the preliminary 
estimate of compensable value shall be that determined in accordance 
with the guidance in Sec. 11.84(e) of this part.
    (d) Content and timing. (1) In making the preliminary estimate of 
damages, the authorized official should rely upon existing data and 
studies. The authorized official should not undertake significant new 
data collection or perform significant modeling efforts at this stage 
of the assessment planning phase.
    (2) Where possible, the authorized official should make the 
preliminary estimate of damages before the completion of the Assessment 
Plan as provided for in Sec. 11.31 of this part. If there is not 
sufficient existing data to make the preliminary estimate of damages at 
the same time as the assessment planning phase, this analysis may be 
completed later, at the end of the Injury Determination phase of the 
assessment, at the time of the Assessment Plan review.
    (3) The authorized official is not required to disclose the 
preliminary estimate before the conclusion of the assessment. At the 
conclusion of the assessment, the preliminary estimate of damages, 
along with its assumptions and methodology, shall be included in the 
Report of the Assessment as provided for in Sec. 11.91 of this part.
    (e) Review. The authorized official shall review, and revise as 
appropriate, the preliminary estimate of damages at the end of the 
Injury Determination and Quantification phases. If there is any 
significant modification of the preliminary estimate of damages, the 
authorized official shall document it in the Report of the Assessment.

Subpart E--Type B Assessments

    9. Section 11.60 is amended by revising paragraphs (d)(1) (iii) and 
(iv) to read as follows:


Sec. 11.60  Type B assessments--general.

* * * * *
    (d) Type B assessment costs. (1) * * *
    (iii) Restoration and Compensation Determination Plan development 
costs including:
    (A) Development of alternatives;
    (B) Evaluation of alternatives;
    (C) Potentially responsible party, agency, and public reviews;
    (D) Other such costs for activities authorized by Sec. 11.81 of 
this part;
    (iv) Cost estimating and valuation methodology calculation costs; 
and
* * * * *
    10. Section 11.71 is amended by revising paragraphs (a)(2) and 
(l)(4)(ii) to read as follows:


Sec. 11.71  Quantification phase--service reduction quantification.

    (a) * * *
    (2) This determination of the reduction in services will be used in 
the Damage Determination phase of the assessment.
* * * * *
    (l) Biological resources. * * *
    (4) * * *
    (ii) Provide data that will be useful in planning efforts for 
restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources, and in later measuring the success of those 
efforts, and, where relevant, will allow calculation of compensable 
value; and
* * * * *
    11. Section 11.72 is amended by revising paragraph (b)(4) to read 
as follows:


Sec. 11.72  Quantification phase--baseline services determination.

* * * * *
    (b) * * *
    (4) Baseline data collection shall be restricted to those data 
necessary for conducting the assessment at a reasonable cost. In 
particular, data collected should focus on parameters that are directly 
related to the injuries quantified in Sec. 11.71 of this part and to 
data appropriate and necessary for the Damage Determination phase.
* * * * *
    12. Section 11.73 is amended by revising paragraph (a) to read as 
follows:


Sec. 11.73  Quantification phase--resource recoverability analysis.

    (a) Requirement. The time needed for the injured resources to 
recover to the state that the authorized official determines services 
are restored, rehabilitated, replaced, and/or the equivalent have been 
acquired to baseline levels shall be estimated. The time estimated for 
recovery or any lesser period of time as determined in the Assessment 
Plan shall be used as the recovery period for purposes of Sec. 11.35 
and the Damage Determination phase, Secs. 11.80 through 11.84, of this 
part.
    (1) In all cases, the amount of time needed for recovery if no 
restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources efforts are undertaken beyond response actions 
performed or anticipated shall be estimated. This time period shall be 
used as the ``No Action-Natural Recovery'' period for purposes of 
Sec. 11.82 and Sec. 11.84(g)(2)(ii) of this part.
    (2) The estimated time for recovery shall be included in possible 
alternatives for restoration, rehabilitation, replacement, and/or 
acquisition of equivalent resources, as developed in Sec. 11.82 of this 
part, and the data and process by which these recovery times were 
estimated shall be documented.
* * * * *
    13. Section 11.80 is revised to read as follows:


Sec. 11.80  Damage Determination phase--general.

    (a) Requirement. (1) The authorized official shall make his damage 
determination by estimating the monetary damages resulting from the 
discharge of oil or release of a hazardous substance based upon the 
information provided in the Quantification phase and the guidance 
provided in this Damage Determination phase.
    (2) The Damage Determination phase consists of Sec. 11.80--general; 
Sec. 11.81--Restoration and Compensation Determination Plan; 
Sec. 11.82--alternatives for restoration, rehabilitation, replacement, 
and/or acquisition of equivalent resources; Sec. 11.83--cost estimating 
and valuation methodologies; and Sec. 11.84--implementation guidance, 
of this part.
    (b) Purpose. The purpose of the Damage Determination phase is to 
establish the amount of money to be sought in compensation for injuries 
to natural resources resulting from a discharge of oil or release of a 
hazardous substance. The measure of damages is the cost of restoration, 
rehabilitation, replacement, and/or acquisition of the equivalent of 
the injured natural resources and the services those resources provide. 
Damages may also include, at the discretion of the authorized official, 
the compensable value of all or a portion of the services lost to the 
public for the time period from the discharge or release until the 
attainment of the restoration, rehabilitation, replacement, and/or 
acquisition of equivalent of the resources and their services to 
baseline.
    (c) Steps in the Damage Determination phase. The authorized 
official shall develop a Restoration and Compensation Determination 
Plan, described in Sec. 11.81 of this part. To prepare this Restoration 
and Compensation Determination Plan, the authorized official shall 
develop a reasonable number of possible alternatives for restoration, 
rehabilitation, replacement, and/or acquisition of equivalent resources 
and select, pursuant to the guidance of Sec. 11.82 of this part, the 
most appropriate of those alternatives; and identify the cost 
estimating and valuation methodologies, described in Sec. 11.83 of this 
part, that will be used to calculate damages. The guidance provided in 
Sec. 11.84 of this part shall be followed in implementing the cost 
estimating and valuation methodologies. After public review of the 
Restoration and Compensation Determination Plan, the authorized 
official shall implement the Restoration and Compensation Determination 
Plan.
    (d) Completion of the Damage Determination phase. Upon completion 
of the Damage Determination phase, the type B assessment is completed. 
The results of the Damage Determination phase shall be documented in 
the Report of Assessment described in Sec. 11.90 of this part.
    14. Section 11.81 is revised to read as follows:


Sec. 11.81  Damage Determination phase--Restoration and Compensation 
Determination Plan.

    (a) Requirement. (1) The authorized official shall develop a 
Restoration and Compensation Determination Plan that will list a 
reasonable number of possible alternatives for restoration, 
rehabilitation, replacement, and/or acquisition of equivalent resources 
and the related services lost to the public associated with each; 
select one of the alternatives and the actions required to implement 
that alternative; give the rationale for selecting that alternative; 
and identify the methodologies that will be used to determine the costs 
of the selected alternative and, at the discretion of the authorized 
official, the compensable value of the services lost to the public 
associated with the selected alternative.
    (2) The Restoration and Compensation Determination Plan shall be of 
sufficient detail to evaluate the possible alternatives for the purpose 
of selecting the appropriate alternative to use in determining the cost 
of restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources for the injured natural resources and the services 
those resources provided, and, where relevant, the compensable value of 
the services lost to the public through the completion of the 
restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources and their services to the baseline.
    (b) The authorized official shall use the guidance in Secs. 11.82, 
11.83, and 11.84 of this part to develop the Restoration and 
Compensation Determination Plan.
    (c) The authorized official shall list the methodologies he expects 
to use to determine the costs of all actions considered within the 
selected alternative and, where relevant, the compensable value of the 
lost services through the recovery period associated with the selected 
alternative. The methodologies to use in determining costs and 
compensable value are described in Sec. 11.83 of this part.
    (d) (1) The Restoration and Compensation Determination Plan shall 
be part of the Assessment Plan developed in subpart B of this part. If 
existing data are not sufficient to develop the Restoration and 
Compensation Determination Plan at the time that the overall Assessment 
Plan is made available for public review and comment, the Restoration 
and Compensation Determination Plan may be developed later, after the 
completion of the Injury Determination or Quantification phases.
    (2) If the Restoration and Compensation Determination Plan is 
prepared later than the Assessment Plan, it shall be made available 
separately for public review by any identified potentially responsible 
party, other natural resource trustees, other affected Federal or State 
agencies or Indian tribes, and any other interested members of the 
public for a period of no less than 30 calendar days. Reasonable 
extensions may be granted as appropriate.
    (3) Comments received from any identified potentially responsible 
party, other natural resource trustees, other affected Federal or State 
agencies or Indian tribes, or any other interested members of the 
public, together with responses to those comments, shall be included as 
part of the Report of Assessment, described in Sec. 11.90 of this part.
    (4) Appropriate public review of the plan must be completed before 
the authorized official performs the methodologies listed in the 
Restoration and Compensation Determination Plan.
    (e) The Restoration and Compensation Determination Plan may be 
expanded to incorporate requirements from procedures required under 
other portions of CERCLA or the CWA or from other Federal, State, or 
tribal laws applicable to restoration, rehabilitation, replacement, 
and/or acquisition of the equivalent of the injured resources or may be 
combined with other plans for related purposes, so long as the 
requirements of this section are fulfilled.
    15. Section 11.82 is revised to read as follows:


Sec. 11.82  Damage Determination phase--alternatives for restoration, 
rehabilitation, replacement, and/or acquisition of equivalent 
resources.

    (a) Requirement. The authorized official shall develop a reasonable 
number of possible alternatives for the restoration, rehabilitation, 
replacement, and/or acquisition of the equivalent of the injured 
natural resources and the services those resources provide. For each 
possible alternative developed, the authorized official will identify 
an action, or set of actions, to be taken singly or in combination by 
the trustee agency to achieve the restoration, rehabilitation, 
replacement, and/or acquisition of equivalent natural resources and the 
services those resources provide to the baseline. The authorized 
official shall then select from among the possible alternatives the 
alternative that he determines to be the most appropriate based on the 
guidance provided in this section.
    (b) Steps. (1) The authorized official shall develop a reasonable 
number of possible alternatives that would restore, rehabilitate, 
replace, and/or acquire the equivalent of the injured resources. Each 
of the possible alternatives may, at the discretion of the authorized 
official, consist of actions, singly or in combination, that would 
achieve those purposes.
    (i) Restoration or rehabilitation actions are those actions 
undertaken to return injured resources to their baseline condition, as 
measured in terms of the physical, chemical, or biological properties 
that the injured resources would have exhibited or the services that 
would have been provided by those resources had the discharge of oil or 
release of the hazardous substance under investigation not occurred. 
Such actions would be in addition to response actions completed or 
anticipated pursuant to the National Contingency Plan (NCP).
    (ii) Replacement or acquisition of the equivalent means the 
substitution for injured resources with resources that provide the same 
or substantially similar services, when such substitutions are in 
addition to any substitutions made or anticipated as part of response 
actions and when such substitutions exceed the level of response 
actions determined appropriate to the site pursuant to the NCP.
    (iii) Possible alternatives are limited to those actions that 
restore, rehabilitate, replace, and/or acquire the equivalent of the 
injured resources and services to no more than their baseline, that is, 
the condition without a discharge or release as determined in 
Sec. 11.72 of this part.
    (2) Services provided by the resources. (i) In developing each of 
the possible alternatives, the authorized official shall list the 
proposed actions that would restore, rehabilitate, replace, and/or 
acquire the equivalent of the services provided by the injured natural 
resources that have been lost, and the period of time over which these 
services would continue to be lost.
    (ii) The authorized official shall identify services previously 
provided by the resources in their baseline condition in accordance 
with Sec. 11.72 of this part and compare those services with services 
now provided by the injured resources, that is, the with-a-discharge-
or-release condition. All estimates of the with-a-discharge-or-release 
condition shall incorporate consideration of the ability of the 
resources to recover as determined in Sec. 11.73 of this part.
    (c) Range of possible alternatives. (1) The possible alternatives 
considered by the authorized official that return the injured resources 
and their lost services to baseline level could range from: Intensive 
action on the part of the authorized official to return the various 
resources and services provided by those resources to baseline 
conditions as quickly as possible; to natural recovery with minimal 
management actions. Possible alternatives within this range could 
reflect varying rates of recovery, combination of management actions, 
and needs for resource replacements or acquisitions.
    (2) An alternative considering natural recovery with minimal 
management actions, based upon the ``No Action-Natural Recovery'' 
determination made in Sec. 11.73(a)(1) of this part, shall be one of 
the possible alternatives considered.
    (d) Factors to consider when selecting the alternative to pursue. 
When selecting the alternative to pursue, the authorized official shall 
evaluate each of the possible alternatives based on all relevant 
considerations, including the following factors:
    (1) Technical feasibility, as that term is used in this part.
    (2) The relationship of the expected costs of the proposed actions 
to the expected benefits from the restoration, rehabilitation, 
replacement, and/or acquisition of equivalent resources.
    (3) Cost-effectiveness, as that term is used in this part.
    (4) The results of any actual or planned response actions.
    (5) Potential for additional injury resulting from the proposed 
actions, including long-term and indirect impacts, to the injured 
resources or other resources.
    (6) The natural recovery period determined in Sec. 11.73(a)(1) of 
this part.
    (7) Ability of the resources to recover with or without alternative 
actions.
    (8) Potential effects of the action on human health and safety.
    (9) Consistency with relevant Federal, State, and tribal policies.
    (10) Compliance with applicable Federal, State, and tribal laws.
    (e) A Federal authorized official shall not select an alternative 
that requires acquisition of land for Federal management unless the 
Federal authorized official determines that restoration, 
rehabilitation, and/or other replacement of the injured resources is 
not possible.
    16. Section 11.83 is amended by revising paragraph (a), removing 
paragraph (c), adding new paragraphs (c)(1) introductory text, 
(c)(1)(i), (c)(1)(ii), (c)(2) introductory text, (c)(2)(i) through 
(c)(2)(vi), and (c)(3), redesignating paragraph (b)(2) as paragraph 
(c)(1)(iii), revising paragraph (b), redesignating paragraphs (d)(5)(i) 
and (d)(5)(ii) as paragraphs (c)(2)(vii)(A) and (c)(2)(vii)(B) 
respectively, adding a new paragraph (c)(2)(vii) heading, adding a 
sentence to newly designated (c)(2)(vii)(A), and removing paragraph (d) 
to read as follows:


Sec. 11.83  Damage Determination phase--cost estimating and valuation 
methodologies.

    (a) General. (1) This section contains guidance and methodologies 
for determining: The costs of the selected alternative for restoration, 
rehabilitation, replacement, and/or acquisition of equivalent 
resources; and the compensable value of the services lost to the public 
through the completion of the restoration, rehabilitation, replacement, 
and/or acquisition of the equivalent of the injured resources and their 
services to baseline.
    (2)(i) The authorized official shall select among the cost 
estimating and valuation methodologies set forth in this section, or 
methodologies that meet the acceptance criterion of either paragraph 
(b)(3) or (c)(3) of this section.
    (ii) The authorized official shall define the objectives to be 
achieved by the application of the methodologies.
    (iii) The authorized official shall follow the guidance provided in 
this section for choosing among the methodologies that will be used in 
the Damage Determination phase.
    (iv) The authorized official shall describe his selection of 
methodologies and objectives in the Restoration and Compensation 
Determination Plan.
    (3) The authorized official shall determine that the following 
criteria have been met when choosing among the cost estimating and 
valuation methodologies. The authorized official shall document this 
determination in the Report of the Assessment. Only those methodologies 
shall be chosen:
    (i) That are feasible and reliable for a particular incident and 
type of damage to be measured.
    (ii) That can be performed at a reasonable cost, as that term is 
used in this part.
    (iii) That avoid double counting or that allow any double counting 
to be estimated and eliminated in the final damage calculation.
    (iv) That are cost-effective, as that term is used in this part.
    (b) Costs of restoration, rehabilitation, replacement, and/or 
acquisition of equivalent resources. (1) Costs for restoration, 
rehabilitation, replacement, and/or acquisition of equivalent resources 
are the amount of money determined by the authorized official as 
necessary to complete all actions identified in the selected 
alternative for restoration, rehabilitation, replacement, and/or 
acquisition of equivalent resources, as selected in the Restoration and 
Compensation Determination Plan of Sec. 11.81 of this part. Such costs 
shall include direct and indirect costs, consistent with the provisions 
of this section.
    (i) Direct costs are those that are identified by the authorized 
official as attributed to the selected alternative. Direct costs are 
those charged directly to the conduct of the selected alternative 
including, but not limited to, the compensation of employees for the 
time and effort devoted to the completion of the selected alternative; 
cost of materials acquired, consumed, or expended specifically for the 
purpose of the action; equipment and other capital expenditures; and 
other items of expense identified by the authorized official that are 
expected to be incurred in the performance of the selected alternative.
    (ii) Indirect costs are costs of activities or items that support 
the selected alternative, but that cannot practically be directly 
accounted for as costs of the selected alternative. The simplest 
example of indirect costs is traditional overhead, e.g., a portion of 
the lease costs of the buildings that contain the offices of trustee 
employees involved in work on the selected alternative may, under some 
circumstances, be considered as an indirect cost. In referring to costs 
that cannot practically be directly accounted for, this subpart means 
to include costs that are not readily assignable to the selected 
alternative without a level of effort disproportionate to the results 
achieved.
    (iii) An indirect cost rate for overhead costs may, at the 
discretion of the authorized official, be applied instead of 
calculating indirect costs where the benefits derived from the 
estimation of indirect costs do not outweigh the costs of the indirect 
cost estimation. When an indirect cost rate is used, the authorized 
official shall document the assumptions from which that rate has been 
derived.
    (2) Cost estimating methodologies. The authorized official may 
choose among the cost estimating methodologies listed in this section 
or may choose other methodologies that meet the acceptance criterion in 
paragraph (b)(3) of this section. Nothing in this section precludes the 
use of a combination of cost estimating methodologies so long as the 
authorized official does not double count or uses techniques that allow 
any double counting to be estimated and eliminated in the final damage 
calculation.
    (i) Comparison methodology. This methodology may be used for unique 
or difficult design and estimating conditions. This methodology 
requires the construction of a simple design for which an estimate can 
be found and applied to the unique or difficult design.
    (ii) Unit methodology. This methodology derives an estimate based 
on the cost per unit of a particular item. Many other names exist for 
describing the same basic approach, such as order of magnitude, lump 
sum, module estimating, flat rates, and involve various refinements. 
Data used by this methodology may be collected from technical 
literature or previous cost expenditures.
    (iii) Probability methodologies. Under these methodologies, the 
cost estimate represents an ``average'' value. These methodologies 
require information which is called certain, or deterministic, to 
derive the expected value of the cost estimate. Expected value 
estimates and range estimates represent two types of probability 
methodologies that may be used.
    (iv) Factor methodology. This methodology derives a cost estimate 
by summing the product of several items or activities. Other terms such 
as ratio and percentage methodologies describe the same basic approach.
    (v) Standard time data methodology. This methodology provides for a 
cost estimate for labor. Standard time data are a catalogue of standard 
tasks typically undertaken in performing a given type of work.
    (vi) Cost- and time-estimating relationships (CERs and TERs). CERs 
and TERs are statistical regression models that mathematically describe 
the cost of an item or activity as a function of one or more 
independent variables. The regression models provide statistical 
relationships between cost or time and physical or performance 
characteristics of past designs.
    (3) Other cost estimating methodologies. Other cost estimating 
methodologies that are based upon standard and accepted cost estimating 
practices and are cost-effective are acceptable methodologies to 
determine the costs of restoration, rehabilitation, replacement, and/or 
acquisition of equivalent resources under this part.
    (c) Compensable value. (1) Compensable value is the amount of money 
required to compensate the public for the loss in services provided by 
the injured resources between the time of the discharge or release and 
the time the resources and the services those resources provided are 
fully returned to their baseline conditions. The compensable value 
includes the value of lost public use of the services provided by the 
injured resources, plus lost nonuse values such as existence and 
bequest values. Compensable value is measured by changes in consumer 
surplus, economic rent, and any fees or other payments collectable by a 
Federal or State agency or an Indian tribe for a private party's use of 
the natural resources; and any economic rent accruing to a private 
party because the Federal or State agency or Indian tribe does not 
charge a fee or price for the use of the resources.
    (i) Use value is the value of the resources to the public 
attributable to the direct use of the services provided by the natural 
resources.
    (ii) Nonuse value is the difference between compensable value and 
use value, as those terms are used in this section.
* * * * *
    (2) Valuation methodologies. The authorized official may choose 
among the valuation methodologies listed in this section to estimate 
willingness to pay (WTP) or may choose other methodologies provided 
that the methodology can satisfy the acceptance criterion in paragraph 
(c)(3) of this section. Nothing in this section precludes the use of a 
combination of valuation methodologies so long as the authorized 
official does not double count or uses techniques that allow any double 
counting to be estimated and eliminated in the final damage 
calculation.
    (i) Market price methodology. This methodology may be used if the 
natural resources are traded in the market. In using this methodology, 
the authorized official should make a determination as to whether the 
market for the resources is reasonably competitive. If the authorized 
official determines that the market for the resources, or the services 
provided by the resources, is reasonably competitive, the diminution in 
the market price of the injured resources, or the lost services, may be 
used to determine the compensable value of the injured resources.
    (ii) Appraisal methodology. Where sufficient information exists, 
the appraisal methodology may be used. In using this methodology, 
compensable value 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 
(incorporated by reference, see Sec. 11.18). The measure of compensable 
value under this appraisal methodology will be the difference between 
the with- and without-injury appraisal value determined by the 
comparable sales approach as described in the Uniform Appraisal 
Standards.
    (iii) Factor income methodology. If the injured resources are 
inputs to a production process, which has as an output a product with a 
well-defined market price, the factor income methodology may be used. 
This methodology may be used to determine the economic rent associated 
with the use of resources in the production process. This methodology 
is sometimes referred to as the ``reverse value added'' methodology. 
The factor income methodology may be used to measure the in-place value 
of the resources.
    (iv) Travel cost methodology. The travel cost methodology may be 
used to determine a value for the use of a specific area. An 
individual's incremental travel costs to an area are used as a proxy 
for the price of the services of that area. Compensable value of the 
area to the traveler is the difference between the value of the area 
with and without a discharge or release. When regional travel cost 
models exist, they may be used if appropriate.
    (v) Hedonic pricing methodology. The hedonic pricing methodology 
may be used to determine the value of nonmarketed resources by an 
analysis of private market choices. The demand for nonmarketed natural 
resources is thereby estimated indirectly by an analysis of commodities 
that are traded in a market.
    (vi) Unit value methodology. Unit values are preassigned dollar 
values for various types of nonmarketed recreational or other 
experiences by the public. Where feasible, unit values in the region of 
the affected resources and unit values that closely resemble the 
recreational or other experience lost with the affected resources may 
be used.
    (vii) Contingent valuation methodology--(A) * * * This methodology 
may be used to determine lost use values of injured natural resources.
* * * * *
    (3) Other valuation methodologies. Other valuation methodologies 
that measure compensable value in accordance with the public's WTP, in 
a cost-effective manner, are acceptable methodologies to determine 
compensable value under this part.
    17. Section 11.84 is amended by revising paragraphs (a), (b)(1), 
(d)(2), (f), and (g) heading, (g)(1), (g)(2) introductory text, (g)(2) 
(i), (ii), and (iii); removing paragraph (h); and redesignating (i) as 
new paragraph (h) and revising it to read as follows:


Sec. 11.84  Damage Determination phase--implementation guidance.

    (a) Requirement. The authorized official should use the cost 
estimating and valuation methodologies in Sec. 11.83 of this part 
following the appropriate guidance in this section.
    (b) Determining uses. (1) Before estimating damages for compensable 
value under Sec. 11.83 of this part, the authorized official should 
determine the uses made of the resource services identified in the 
Quantification phase.
* * * * *
    (d) Uncertainty. * * *
    (2) To incorporate this uncertainty, the authorized official should 
derive a range of probability estimates for the important assumptions 
used to determine damages. In these instances, the damage estimate will 
be the net expected present value of the costs of restoration, 
rehabilitation, replacement, and/or acquisition of equivalent resources 
and, if relevant, compensable value.
* * * * *
    (f) Substitutability. In calculating compensable value, the 
authorized official should incorporate estimates of the ability of the 
public to substitute resource services or uses for those of the injured 
resources. This substitutability should be estimated only if the 
potential benefits from an increase in accuracy are greater than the 
potential costs.
    (g) Compensable value during the restoration, rehabilitation, 
replacement, and/or acquisition of equivalent resources. (1) In 
determining the amount of damages, the authorized official has the 
discretion to compute compensable value for the period of time required 
to achieve the restoration, rehabilitation, replacement, and/or 
acquisition of equivalent resources.
    (2) When calculating compensable value during the period of time 
required to achieve restoration, rehabilitation, replacement, and/or 
acquisition of equivalent resources, the authorized official should 
follow the procedures described below. The procedures need not be 
followed in sequence.
    (i) The ability of the injured resources to recover over the 
recovery period should be estimated. This estimate includes estimates 
of natural recovery rates as well as recovery rates that reflect 
management actions or resource acquisitions to achieve restoration, 
rehabilitation, replacement, and/or acquisition of equivalent 
resources.
    (ii) A recovery rate should be selected for this analysis that is 
based upon cost-effective management actions or resource acquisitions, 
including a ``No Action-Natural Recovery'' alternative. After the 
recovery rate is estimated, compensable value should be estimated.
    (iii) The rate at which the uses of the injured resources and their 
services will be restored through the restoration or replacement of the 
services should be estimated. This rate may be discontinuous, that is, 
no uses are restored until all, or some threshold level, of the 
services are restored, or continuous, that is, restoration or 
replacement of uses will be a function of the level and rate of 
restoration or replacement of the services. Where practicable, the 
supply of and demand for the restored services should be analyzed, 
rather than assuming that the services will be utilized at their full 
capacity at each period of time in the analysis. Compensable value 
should be discounted using the rate described in paragraph (e)(2) of 
this section. This estimate is the expected present value of uses 
obtained through restoration, rehabilitation, replacement, and/or 
acquisition of equivalent resources.
* * * * *
    (h) Scope of the analysis. (1) The authorized official must 
determine the scope of the analysis in order to estimate compensable 
value.
    (2) In assessments where the scope of analysis is Federal, only the 
compensable value to the Nation as a whole should be counted.
    (3) In assessments where the scope of analysis is at the State 
level, only the compensable value to the State should be counted.
    (4) In assessments where the scope of analysis is at the tribal 
level, only the compensable value to the tribe should be counted.

Subpart F--Post-Assessment Phase

    18. Section 11.90 is amended by revising paragraph (c) to read as 
follows:


Sec. 11.90  Post-assessment phase--Report of Assessment.

* * * * *
    (c) Type B assessments. For a type B assessment conducted in 
accordance with the guidance in subpart E of this part, the Report of 
Assessment shall consist of all the documentation supporting the 
determinations required in the Injury Determination phase, the 
Quantification phase, and the Damage Determination phase, and 
specifically including the test results of any and all methodologies 
performed in these phases. The preliminary estimate of damages shall be 
included in the Report of Assessment. The Restoration and Compensation 
Determination Plan, along with comments received during the public 
review of that Plan and responses to those comments, shall also be 
included in the Report of Assessment.
    19. Section 11.91 is amended by adding a new paragraph (e) to read 
as follows:


Sec. 11.91  Post-assessment phase--demand.

* * * * *
    (e) Statute of limitations. For the purposes of section 113(g) of 
CERCLA, the date on which regulations are promulgated under section 
301(c) of CERCLA is the date on which the later of the revisions to the 
type A rule and the type B rule, pursuant to State of Colorado v. 
United States Department of the Interior, 880 F.2d 481 (D.C. Cir. 
1989), and State of Ohio v. United States Department of the Interior, 
880 F.2d 432 (D.C. Cir. 1989), is published as a final rule in the 
Federal Register.
    20. Section 11.92 is amended to revise paragraph (b) to read as 
follows:


Sec. 11.92  Post-assessment phase--restoration account.

* * * * *
    (b) Adjustments. (1) In establishing the account pursuant to 
paragraph (a) of this section, the calculation of the expected present 
value of the damage amount should be adjusted, as appropriate, whenever 
monies are to be placed in a non-interest bearing account. This 
adjustment should correct for the anticipated effects of inflation over 
the time estimated to complete expenditures for the restoration, 
rehabilitation, replacement, and/or acquisition of equivalent 
resources.
    (2) In order to make the adjustment in paragraph (b)(1) of this 
section, the authorized official 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 expenditures for the restoration, rehabilitation, replacement, 
and/or acquisition of equivalent resources.
* * * * *
    21. Section 11.93 is amended to revise paragraph (a) to read as 
follows:


Sec. 11.93  Post-assessment phase--Restoration Plan.

    (a) Upon determination of the amount of the award of a natural 
resource damage claim as authorized by section 107(a)(4)(C) of CERCLA, 
or sections 311(f)(4) and 311(f)(5) of the CWA, the authorized official 
shall prepare a Restoration Plan as provided in section 111(i) of 
CERCLA. The plan shall be based upon the Restoration and Compensation 
Determination Plan described in Sec. 11.81 of this part. The Plan shall 
describe how the monies will be used to address natural resources, 
specifically what restoration, rehabilitation, replacement, or 
acquisition of the equivalent resources will occur. When damages for 
compensable value have been awarded, the Plan shall also describe how 
monies will be used to address the services that are lost to the public 
until restoration, rehabilitation, replacement, and/or acquisition of 
equivalent resources is completed. The Restoration Plan shall be 
prepared in accordance with the guidance set forth in Sec. 11.81 of 
this part.
* * * * *
    Dated: March 17, 1994.
Bonnie R. Cohen,
Assistant Secretary--Policy, Management, and Budget.
[FR Doc. 94-6749 Filed 3-24-94; 8:45 am]
BILLING CODE 4310-RG-P