[Federal Register: February 29, 2008 (Volume 73, Number 41)]
[Proposed Rules]
[Page 11081-11087]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29fe08-35]
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DEPARTMENT OF THE INTERIOR
43 CFR Part 11
RIN 1090-AA97
Natural Resource Damages for Hazardous Substances
AGENCY: Department of the Interior.
ACTION: Proposed rulemaking.
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SUMMARY: We are proposing to revise certain parts of the natural
resource damage assessment regulations for
[[Page 11082]]
hazardous substances. The regulations provide procedures that natural
resource trustees may use to evaluate the need for, and means of
restoring, replacing, or acquiring the equivalent of public natural
resources that are injured or destroyed as a result of releases of
hazardous substances. This notice seeks comment on the proposed
revisions to the regulations in response to the biennial statutory
review requirement, two court decisions, and the recommendations of the
Department of the Interior's Natural Resource Damage Assessment and
Restoration Federal Advisory Committee.
DATES: We will accept comments through May 29, 2008.
ADDRESSES: You may submit comments, identified by the number [insert
RIN], by any of the following methods:
--Federal rulemaking portal: http://www.regulations.gov. Follow the
instruction for submitting comments.
--Mail: Department of the Interior, Natural Resource Damage Assessment
and Restoration Program, Mail Stop 3548, 1849 C Street, NW.,
Washington, DC 20240.
--Hand delivery: Room 3548, 1849 C Street, NW., Washington, DC.
FOR FURTHER INFORMATION CONTACT: Frank DeLuise at (202) 208-4143.
SUPPLEMENTARY INFORMATION: This preamble is organized as follows:
I. What the Natural Resource Damage Regulations Are About
II. Why We Are Proposing To Revise Parts of the Regulations
III. Major Issues Addressed by the Proposed Revisions
A. Further Emphasizing Restoration Over Economic Damages, as
Recommended by the Natural Resource Damage Assessment and
Restoration Federal Advisory Committee
B. Complying With Ohio v. Interior and Responding to Kennecott
v. Interior
C. Technical Corrections To Provide Consistent Timing Guidelines
for the Administrative Assessment Process Set Out in the Rule
I. What These Natural Resource Damage Regulations Are About
The regulations describe how to conduct a natural resource damage
assessment for hazardous substance releases under the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C.
9601, 9607) (CERCLA) and the Federal Water Pollution Control Act (33
U.S.C. 1251, 1321) (Clean Water Act). CERCLA required the President to
promulgate these regulations. 42 U.S.C. 9651(c). The President
delegated this rulemaking responsibility to the Department of the
Interior (DOI). E.O. 12316, as amended by E.O. 12580. The regulations
appear at 43 CFR part 11.
A natural resource damage assessment is an evaluation of the need
for, and the means of securing, restoration of public natural resources
following the release of hazardous substances or oil into the
environment. The regulations we are proposing to revise only cover
natural resource damage assessments for releases of hazardous
substances under CERCLA and the Clean Water Act. There are also natural
resource damage assessment regulations at 15 CFR part 990 that cover
oil spills under the Oil Pollution Act, 33 U.S.C. 2701 (the OPA
regulations). The current hazardous substance natural resource damage
assessment and restoration regulations, this preamble, and the proposed
revisions to the regulations use ``restoration'' as an umbrella term
for all types of actions that the natural resource damage provisions of
CERCLA and the Clean Water Act authorize to address injured natural
resources, including restoration, rehabilitation, replacement, or
acquisition of equivalent resources.
Natural resource damage assessments are conducted by government
officials designated to act as ``trustees'' to bring claims on behalf
of the public for the restoration of injured natural resources.
Trustees are designated by the President, state governors, or tribes.
If trustees determine, through an assessment, that hazardous substance
releases have injured natural resources, they may pursue claims for
damages against potentially responsible parties. ``Damages'' include
funds needed to plan and implement restoration, compensation for public
losses pending restoration, reasonable assessment costs, and any
interest accruing after funds are due. See 43 CFR 11.15.
The regulations establish an administrative process for conducting
assessments that includes technical criteria for determining whether
releases have caused injury, and if so, what actions and funds are
needed to implement restoration. The regulations are for the optional
use of trustees. Trustees can use the regulations to structure damage
assessment work, frame negotiations, and inform restoration planning.
If litigation is necessary to resolve the claim, courts will give
additional deference--referred to as a ``rebuttable presumption'' in
CERCLA--to assessments performed by federal and state trustees in
accord with the regulations.
The regulations provide guidance on two different types of
assessment procedures identified in CERCLA: ``Type A'' and ``type B''
procedures. Type A procedures are simplified procedures for small
cases. The current type A procedures are computer programs, available
in a limited range of cases, that model the fate of a released
substance in order to project the injuries caused by the release and
calculate damages. Type B procedures outline an assessment process and
assessment methods that trustees utilize on a case by case basis. We
are proposing to revise certain parts of the type B procedures (case by
case assessment provisions) in the regulations.
II. Why We Are Proposing To Revise the Regulations
CERCLA provides that we review and revise the regulations as
appropriate every two years. 42 U.S.C. 9651(c)(3). The regulations are
due for such a review. To assist in this review, in May 2005, DOI
convened a Natural Resource Damage Assessment and Restoration (NRDAR)
Federal Advisory Committee (advisory committee) to provide
recommendations regarding DOI's NRDAR activities, authorities and
responsibilities. The advisory committee comprised 30 members,
representing a diverse group of interested stakeholders--including
state, tribal, and federal trustee agencies, industry groups and
potentially responsible party representatives, scientists, economists,
and national and local environmental and public interest organizations.
A key recommendation of the advisory committee was that DOI should
undertake, without delay, a targeted revision of the regulations to
emphasize restoration over economic damages. This proposed revision
implements that recommendation, and responds to two court decisions
addressing the regulations: State of Ohio v. U.S. Department of the
Interior, 880 F.2d 432 (D.C. Cir. 1989) (Ohio v. Interior); and
Kennecott Utah Copper Corp. v. U.S. Department of the Interior, 88 F.3d
1191 (D.C. Cir. 1996) (Kennecott v. Interior). Finally, we are
proposing a technical revision to resolve an inconsistency on the
appropriate timing for the administrative process set out in the rule.
We have considered:
(a) The NRDAR advisory committee report, which was released in May
of 2007;
(b) Comments (provided during prior rulemakings, and more
informally during public meetings, symposiums, and discussion on
natural resource damage assessment and restoration) from members of the
private sector, representatives of federal, state, and tribal trustees,
public interest groups,
[[Page 11083]]
and others who have experience with the existing regulations;
(c) The Ohio v. Interior opinion;
(d) The Kennecott v. Interior opinion; and
(e) The OPA regulations.
III. Major Issues Addressed by the Proposed Revisions
Our proposed revisions would largely leave the framework of the
existing rule intact. We are not proposing substantive changes to legal
standards for reliability of assessment data and methodologies. The
NRDAR advisory committee made a number of recommendations to encourage
faster, more efficient and more cost-effective resolution of claims.
The committee endorsed a tiered approach to implementing its
recommendations that would immediately address the option of
emphasizing restoration over economic damages in the regulations, while
leaving the implementation of a broader range of recommendations--
including providing technical guidance documents and streamlining of
the restoration planning process--to the future. The rest of this
section discusses the major issues addressed by the proposed revisions.
The following section references the OPA regulations. These references
are solely for the purpose of providing context and background. We are
soliciting comments only on the proposed revisions to the CERCLA
regulations. For guidance on conducting natural resource damage
assessments under OPA, see 15 CFR Part 990.
A. Further Emphasizing Restoration Over Economic Damages
Under the current regulations, trustees utilizing the Type B
procedures must base their claim on the cost of implementing a publicly
reviewed restoration plan designed to return injured resources to their
baseline condition, which is defined as the condition that would have
existed had the release not occurred (see 43 CFR 11.80-82). CERCLA and
the Clean Water Act authorize trustees to recover damages not only for
the cost of restoring injured or destroyed resources to their baseline
condition, but also for public losses pending restoration to baseline.
The regulations call these interim losses ``compensable values'' (see
43 CFR 11.83(c)). The regulations define compensable value as the
amount of money required to compensate the public for the loss in
``services'' provided by the injured resources pending restoration (see
43 CFR 11.83(c)(1)). Services are defined in the current regulations as
the physical and biological functions performed by the resources,
including the human use of those functions. The current regulations
provide that compensable value should be measured by the economic value
of public losses arising from the resource injury until restoration can
be achieved, which arguably could be read as excluding restoration-
based approaches to determining compensable value.
To comply with CERCLA and the Clean Water Act, trustees must spend
any compensable value recoveries on restoration actions. Under the
current regulations, however, trustees do not need to consider
restoration actions to address interim losses until they have already
determined and recovered damages. This can be inefficient and
confusing. The NRDAR advisory committee recommended that DOI should
amend its current regulation to explicitly authorize trustees to use
the cost of restoration actions that address service losses to
calculate all damages, including interim losses. Providing the option
for a ``restoration-based'' approach to all damages better comports
with CERCLA's overall restoration objectives. It also promotes an
earlier focus on feasible restoration options, which can encourage
settlements by providing opportunities for designing creative and cost-
effective actions to address losses. We are proposing to revise 43 CFR
11.83(c) to provide trustees with the option of estimating compensable
values for losses pending restoration utilizing the cost of
implementing projects that restore those lost natural resource
services.
Methodologies that compare losses arising from resource injury to
gains expected from restoration actions are frequently simpler and more
transparent than methodologies used to measure the economic value of
losses. Our proposed revisions include four examples of project-based
assessment methodologies--conjoint analysis, habitat equivalency
analysis, resource equivalency analysis, and random utility models--
which have been used successfully to resolve claims under both the
CERCLA and the OPA regulations. We are proposing to add a brief
description of these restoration-based methodologies to the non-
exclusive list of economic valuation methodologies in the current
regulation. Our proposed revisions do not sanction or bar the use of
any particular methodology, so long as it complies with the
``acceptance criteria'' for relevance that appear in the rule.
The list of proposed methodologies for assessing compensable values
remains non-exclusive, allowing for the introduction of new and
innovative techniques that may arise. In 43 CFR 11.83(a), the current
regulations provide that when choosing among any cost estimation or
valuation methodology, trustees should seek to ensure that the
methodologies selected are feasible and reliable for a particular
incident or type of damage to be measured. To assist trustees in
evaluating such feasibility and reliability, we are proposing to
provide a list of factors that set out general principles of
feasibility and reliability for all methodologies. This includes the
cost reasonableness, cost effectiveness, and avoidance of double
counting criteria in the current regulations, along with other
factors--such as the ability to provide useful restoration information,
peer review, and methodological standards--for trustees to consider
when evaluating the reliability of all damage assessment methodologies.
Each of the listed factors we are proposing may not be applicable in
every case, but trustees continue to be required to document their
consideration of relevant factors in the Report of Assessment. We
solicit comment on providing the option for the use of restoration-
based approaches and methodologies to resolve NRDAR claims.
B. Complying With Ohio v. Interior and Responding to Kennecott v.
Interior
Several provisions of the current regulations were invalidated by
the D.C. Circuit Court of Appeals in Ohio v. Interior and Kennecott v.
Interior. Some invalidated provisions from the 1986 rule were carried
over in the 1994 revisions responding to the Ohio v. Interior decision.
Additionally, the Kennecott v. Interior decision in 1996 invalidated
certain provisions from the 1994 revisions which have not yet been
corrected to comply with the decision. We are proposing technical
corrections to the CFR in accord with these decisions.
The Ohio v. Interior decision invalidated the limitation on
estimating option and existence value in 43 CFR 11.83(c)(1)(iii). Our
revisions will therefore delete this provision from the CFR. The
restatement of this limitation in 43 CFR 11.83(c)(2)(vii)(B) will also
be deleted from the CFR.
Estimating option and existence value through the use of contingent
valuation methodologies remains controversial. We note, however, that
our proposed revision's focus on compensating for public losses pending
restoration with restoration actions rather than monetary damages for
the economic value of the losses would provide options for comparing
functional losses from resource injuries to functional gains
[[Page 11084]]
expected from restoration actions, which would reduce the need for
trustees to seek to recover the monetary value of passive economic
losses such as option and existence value.
The Kennecott v. Interior decision invalidated DOI's attempt to
define the date of promulgation of the 1994 revisions to the rule. This
was relevant because it affected the three-year statutory limitations
for filing a claim at some CERCLA sites. In 43 CFR 11.91(e), DOI
defined the date of promulgation as the later of the date when either
the Type A or Type B rule was finalized, pursuant to the Ohio v.
Interior decision. The Court of Appeals found this interpretation
unreasonable and invalidated the provision, which we will delete from
the CFR. Since both the Type A and Type B revisions finalized pursuant
to the Ohio v. Interior decision were finalized more than three years
ago, this deletion is merely a technical correction which has no
material effect.
The 1994 revisions to the NRDAR rule stated that the measure of
natural resource damages under CERCLA was the cost of restoration of
``the injured natural resources and the services those resources
provide'' (see 43 CFR 11.80(b)). In the Kennecott decision, the Court
of Appeals invalidated this language because it was inconsistent with
DOI's preamble explanation of the measure of damages, which endorsed
the concept of quantifying resource injury and resulting public losses
by utilizing a services metric. The court reasoned that creating an
apparent dichotomy between restoration of resources and restoration of
services implied an abandonment of the services approach that was
unexplained. The court therefore invalidated the ``resources and
services'' language and ``reinstated'' the services approach, pending
further clarification.
Under the current rule, natural resource damages include both the
cost of restoring injured resources to their baseline level of services
and, when appropriate, compensation for interim service losses pending
restoration. Under the current rule, restoration to baseline focuses on
the resource condition, while compensable value focuses on compensation
for lost services pending the restoration of resources. ``Resources and
services'' reflects the distinct emphases for different damage
components, but it was not intended as a rejection of a services-based
approach. As the proposed revisions make clear, the metric for
evaluating natural resource conditions for baseline restoration is the
baseline level of services, while the compensable value for losses
pending restoration is either the value of the services lost pending
restoration or the cost of projects that compensate for services lost
pending restoration.
The proposed revision to 43 CFR 11.80(b) clarifies that the measure
of damages is the cost of restoring injured natural resources to their
baseline level of services, and, at the discretion of the trustees, the
compensable value of services lost pending restoration. This clear
construct is carried over for conforming changes to 43 CFR 11.81(a)(1)
and (2), 43 CFR 11.82(a), (b)(iii), and (c), and 43 CFR 11.83(a).
C. Technical Correction To Provide Consistent Timing Guidelines
The current regulations provide that a Restoration and Compensation
Determination Plan (RCDP) which evaluates and selects restoration
alternatives may be developed after completion of the injury
determination and quantification phases of the assessment (see 43 CFR
11.81(d)(1)). However, an earlier provision of the current regulations
provides that the RCDP can be developed ``at any time before''
completion of the injury determination or quantification phases. (See
43 CFR 11.31(c)(4)). Since the evaluation and selection of restoration
alternatives can benefit from more definitive injury determination and
quantification data, we propose to resolve this inconsistency by
correlating 43 CFR 11.31(c)(4) with 43 CFR 11.81(d)(1) to provide that
the RCDP may be completed after the injury determination and
quantification phases of the assessment.
IV. How We Have Complied With Rulemaking Requirements
Regulatory Planning and Review under E.O. 12866--The Office of
Management and Budget has reviewed the proposed revisions. The
revisions are a significant regulatory action under E.O. 12866 because
the rule will raise novel legal or policy issues. The revisions clarify
that trustees have the option of calculating total damages using the
cost of restoration actions that compensate for losses, rather than
requiring a two-part process where natural resource damages are
calculated using the cost of restoration actions, and public losses
pending restoration are calculated using the economic value of the
loss.
These revisions do not fall under other criteria in E.O. 12866:
a. This rule will not have an annual economic effect of $100
million or adversely affect an economic sector, productivity, jobs, the
environment, or other units of government. The regulations we are
revising apply only to natural resource trustees by providing technical
and procedural guidance for the assessment of natural resource damages
under CERCLA and the Clean Water Act. The revisions are not intended to
change the balance of legal benefits and responsibilities among any
parties or groups, large or small. It does not directly impose any
additional cost.
In fact, the proposed revisions should assist in reducing natural
resource damage assessment transaction costs by allowing trustees to
utilize simpler and more transparent methodologies to assess damages
when appropriate. The proposed revisions do not sanction or bar the use
of any particular methodology, so long as it meets the acceptance
criteria for relevance and cost effectiveness that are set out in the
rule.
We also believe that in many cases an early focus on feasible
restoration and appropriate restoration actions, rather than on the
economic value of public losses, can result in less contention and
litigation, and faster, more cost-effective restoration. Meanwhile,
existing criteria in the rule for evaluating restoration alternatives--
including cost effectiveness--remain intact (see 43 CFR 11.82(d)). The
likely result will be the encouragement of settlements, less costly and
more timely restoration, and reduced transaction costs. To the extent
any are affected by the proposed revisions, it is anticipated that all
parties will benefit by the increased focus on restoration in lieu of
economic damages.
b. The proposed revisions will not create inconsistencies with
other agencies' action. The general approach to losses pending
restoration set forth in this rule is consistent with the OPA
regulations. Both allow for basing damages on the cost of restoration
actions to address public losses associated with natural resource
injuries.
Regulatory Flexibility Act--We certify that this rule revision will
not have a significant economic effect on a substantial number of small
entities as defined under the Regulatory Flexibility Act (5 U.S.C. 601)
(see section on E.O. 12866 above for discussion of potential economic
effects.)
Small Business Regulatory Enforcement Fairness Act--This rule
revision is not a major rule under the Small Business Regulatory
Enforcement Fairness Act (5 U.S.C. 804(2)). This rule revision:
(a) Does not have an annual effect on the economy of $100 million
or more (see section on E.O. 12866 above for
[[Page 11085]]
discussion of potential economic effects.)
(b) Will not cause a major increase in costs or prices for
consumers, individual industries, Federal, State, or local government
agencies, or geographic regions (see section on E.O. 12866 above for
discussion of potential economic effects.)
(c) Does not have significant adverse effect on competition,
employment, investment, productivity, innovation, or the ability of
U.S.-based enterprises to compete with foreign-based enterprises (see
section on E.O. 12866 above for discussion of potential economic
effects.)
Unfunded Mandates Reform Act--This rule revision does not mandate
any actions. The existing regulations do not require trustees to
conduct assessment or pursue damage claims, and trustees who choose to
conduct assessments and pursue damage claims are not required to do so
in a manner described in the regulations. The proposed revisions do not
change the optional nature of the existing regulations. The revisions
themselves do not replace existing procedures; they merely clarify that
trustees have the option of employing other procedures. Therefore, this
rule revision will not produce a Federal mandate of $100 million or
greater in any year.
Takings Analysis under E.O. 12630--A takings implication assessment
is not required by E.O. 12630 because no party can be compelled to pay
damages for injury to natural resources until they have received ``due
process'' through a legal action in federal court. This rule and the
proposed revisions merely provide a framework for assessing injury and
developing the claim.
Federalism Analysis under E.O. 12612--E.O. 12612 requires federal
agencies to consult with elected state officials before issuing
proposed rules that have ``federalism implications'' and either impose
unfunded mandates or preempt state law. A rule has federalism
implications if it has ``substantial direct effects on the states, on
the relationship between the national government and the states, or on
the distribution of power and responsibilities among the various levels
of government.'' This rule and the proposed revisions do not require
state trustees to take any action; therefore it does not impose any
unfunded mandates. The rule and the proposed revisions do not preempt
state law. The rule and the proposed revisions have no significant
effect on intergovernmental relations because they do not alter the
rights and responsibilities of government entities. Therefore, a
federalism summary impact statement is not required under section 6 of
the Order.
Civil Justice Reform under E.O. 12988--Our Office of the Solicitor
has determined that the proposed revisions do not unduly burden the
judicial system and meet the requirements of section 3(a) and 3(b)(2)
of the Order. The proposed revisions are intended to provide the option
for an early focus on restoration, utilization of simpler and more
cost-effective assessment methodologies, and increased opportunities
for cooperation among trustees and potentially responsible parties.
This should minimize litigation.
Paperwork Reduction Act--The proposed revisions do not pose
``identical questions'' to, or impose ``identical reporting, record
keeping, or disclosure requirements,'' on trustees. Therefore, the
proposed revisions do not include an ``information collection''
governed by the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.
National Environmental Policy Act--We have analyzed the proposed
revisions in accordance with the criteria of the National Environmental
Policy Act, 43 U.S.C. 433 et seq. (NEPA). Restoration actions
identified through the proposed revisions may sometimes involve major
federal actions significantly affecting the quality of the human
environment. In those cases, federal trustees will need to comply with
NEPA. However, the proposed revisions do not require trustees to take
restoration action. Further, if the trustees decide to pursue
restoration, they are not required to follow the rule when selecting
restoration actions. Finally, the rule and the proposed revisions do
not determine the specific restoration actions that trustees can seek.
Therefore, the rule and the proposed revisions do not significantly
affect the quality of the human environment. Even if the rule revisions
were considered to significantly affect the quality of the human
environment, they would fall under DOI's categorical exclusion for
regulations that are of a procedural nature or have environmental
effects too broad or speculative for meaningful analysis and will be
subject later to the NEPA process.
Public Availability of Comments
Before including your address, phone number, e-mail address, or
other personal identifying information in your comment, you should be
aware that your entire comment--including your personal identifying
information--may be made publicly available at any time. While you can
ask us in your comment to withhold your personal identifying
information from public review, we cannot guarantee that we will be
able to do so.
List of Subjects in 34 CFR Part 11
Natural resources, Environmental protection.
Dated: January 10, 2008.
James E. Cason,
Associate Deputy Secretary.
For the reasons given in the preamble, we propose to amend part 11
of title 43 of the Code of Federal Regulations as follows:
PART 11--NATURAL RESOURCE DAMAGES FOR HAZARDOUS SUBSTANCES
1. The authority citation for part 11 continues to read as follows:
Authority: 42 U.S.C. 9651(c), as amended.
2. In Sec. 11.31, revise paragraph (c)(4) to read as follows:
Sec. 11.31 What does the Assessment Plan include?
(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,
after 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.
* * * * *
3. In Sec. 11.38, revise paragraph (c)(2)(i) to read as follows:
Sec. 11.38 Assessment Plan--preliminary estimate of damages.
(c) * * *
(2) * * *
(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 to their baseline level of
services. The estimate should use the same base year as the preliminary
[[Page 11086]]
estimate of costs of restoration, rehabilitation, replacement, and/or
acquisition of equivalent resources. The provisions detailed in
Sec. Sec. 11.80 through 11.84 of this part are the basis for the
development of this estimate.
* * * * *
4. In Sec. 11.80, revise paragraph (b) to read as follows:
Sec. 11.80 Damage determination phase--general.
* * * * *
(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 to their baseline level of services.
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 baseline.
* * * * *
5. In Sec. 11.81, revise paragraph (a) 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
to their baseline level of services, and, where relevant, the
compensable value; 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 to their baseline level of services, and, where
relevant, the compensable value.
* * * * *
6. In Sec. 11.82, revise paragraphs (a), (b)(1)(iii), and (c)(1)
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 to their baseline level of services. 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 to
their baseline level of services. 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) * * *
(1) * * *
(iii) Possible alternatives are limited to those actions that
restore, rehabilitate, replace, and/or acquire the equivalent of the
injured resources to their baseline, that is, the condition without a
discharge or release as determined in Sec. 11.72 of this part.
* * * * *
(c)(1) The possible alternatives considered by the authorized
official that return the injured resources to their baseline level of
services 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.
* * * * *
7. In Sec. 11.83, revise paragraphs (a)(1), (a)(3), and (c) 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
to their baseline level of services; 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 to baseline.
* * * * *
(3) Only those methodologies that are feasible and reliable for a
particular incident and type of damage to be measured shall be
utilized. The authorized official should consider the following factors
to evaluate feasibility and reliability of methodologies. Each factor,
however, may not be applicable to every case. The authorized official
shall document the consideration of relevant factors in the Report of
Assessment:
(i) Is the methodology capable of providing information of use in
determining the restoration cost or compensable value appropriate for a
particular natural resource injury?;
(ii) Can the methodology be implemented at a reasonable cost, as
that term is used in this part?;
(iii) Does the methodology avoid double counting or allow any
double counting to be estimated and eliminated in the final damage
calculation?;
(iv) Is the methodology cost-effective, as that term is used in
this part?;
(v) Does the methodology address the particular natural resource
injury and associated service loss in light of the nature, degree, and
spatial and temporal extent of the injury?;
(vi) Has the methodology been subject to peer review, either
through publication or otherwise?;
(vii) Does the methodology enjoy general or widespread acceptance
by experts in the field?;
(viii) Is the methodology subject to standards governing its
application?;
(ix) Are methodological inputs and assumptions supported by a
clearly articulated rationale?;
(x) Are cutting edge methodologies tested or analyzed sufficiently
so as to be reasonably reliable under the circumstances?
* * * * *
(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 are fully returned to their baseline conditions.
The compensable value can include the economic value of lost services
provided by the injured resources, including both public use and nonuse
values such as existence and bequest
[[Page 11087]]
values. Economic value can be 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. Alternatively, compensable
value can be determined utilizing a restoration cost approach, which
measures the cost of implementing a project or projects that restore,
replace, or acquire the equivalent of natural resource services lost
pending restoration to baseline.
(i) Use value is the economic 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 economic value the public derives from
natural resources that is independent of any direct use of the services
provided.
(iii) Restoration cost is the cost of a project or projects that
restore, replace, or acquire the equivalent of natural resource
services lost pending restoration to baseline.
(2) Valuation methodologies. The authorized official may choose
among the valuation methodologies listed in this section to estimate
appropriate compensation for lost services 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.
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Type of methodology Description
------------------------------------------------------------------------
(i) Market price............. The authorized official may determine the
compensable value of the injured
resources using the diminution in the
market price of the injured resources or
the lost services. May be used only if:
(A) The natural resources are traded
in the market; and
(B) The authorized official determines
that the market for the resources, or
the services provided by the
resources, is reasonably competitive.
(ii) Appraisal............... The measure of compensable value is the
difference between the with- and without-
injury appraisal value determined by the
comparable sales approach as described
in the Uniform Appraisal Standards. Must
measure compensable value, to the extent
possible, in accordance with the
``Uniform Appraisal Standards for
Federal Land Acquisition,'' Interagency
Land Acquisition Conference, Washington,
DC, 1973 (incorporated by reference, see
Sec. 11.18).
(iii) Factor income May be used only if the injured resources
(sometimes referred to as are inputs to a production process,
the ``reverse value added'' which has as an output a product with a
methodology). well-defined market price. May be used
to determine:
(A) The economic rent associated with the
use of resources in the production
process; and
(B) The in-place value of the resources.
(iv) Travel cost............. May be used to determine a value for the
use of a specific area. Uses an
individual's incremental travel costs to
an area to model the economic value 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.
Regional travel cost models may be used,
if appropriate.
(v) Hedonic pricing.......... 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/benefits Unit values are preassigned dollar values
transfer. 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... Includes all techniques that set up
hypothetical markets to directly elicit
an individual's economic valuation of a
natural resource. Can determine:
(A) Use values and explicitly
determine option and existence
values; and
(B) Lost use values of injured natural
resources.
(viii) Conjoint Analysis..... Like contingent valuation, conjoint
analysis is a stated preference method.
However, instead of seeking to value
natural resource service losses in
strictly economic terms, conjoint
analysis compares natural resource
service losses that arise from injury to
natural resource service gains produced
by restoration projects.
(ix) Habitat Equivalency May be used to compare the natural
Analysis. resource services produced by habitat or
resource-based restoration actions to
natural resource service losses.
(x) Resource Equivalency Similar to habitat equivalency analysis.
Analysis. This methodology may be used to compare
the effects of restoration actions on
specifically identified resources that
are injured or destroyed.
(xi) Random Utility Model.... Can be used to:
(A) Compare restoration actions on the
basis of equivalent resource services
provided; and
(B) Calculate the monetary value of
lost recreational services to the
public.
------------------------------------------------------------------------
(3) Other valuation methodologies. Other methodologies that measure
compensable value in accordance with the public's willingness to pay
for the lost service, or with the cost of a project that restores,
replaces, or acquires services equivalent to natural resource services
lost pending restoration to baseline in a cost-effective manner, are
acceptable methodologies to determine compensable value under this
part.
* * * * *
Sec. 11.91 [Amended]
8. In Sec. 11.91, remove paragraph (e).
[FR Doc. E8-3683 Filed 2-28-08; 8:45 am]
BILLING CODE 4310-RG-P