Natural Resource Damages for Hazardous Substances, 57259-57268 [E8-23225]

Agencies

• DEPARTMENT OF THE INTERIOR

[Federal Register Volume 73, Number 192 (Thursday, October 2, 2008)]
[Rules and Regulations]
[Pages 57259-57268]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-23225]


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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: Final rule.

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SUMMARY: This final rule amends certain parts of the natural resource 
damage assessment regulations for 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. 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 emphasize resource 
restoration over economic damages. It also responds to two court 
decisions addressing the regulations: State of Ohio v. U.S. Department 
of the Interior, 880 F.2d 432 (DC Cir. 1989) (Ohio v. Interior); and 
Kennecott Utah Copper Corp. v. U.S. Department of the Interior, 88 F.3d 
1191 (DC Cir. 1996) (Kennecott v. Interior), and includes a technical 
revision to resolve an apparent inconsistency in the timing provisions 
for the assessment process set out in the rule.

EFFECTIVE DATE: The effective date of this final rule is November 3, 
2008.

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 Revising Parts of the Regulations
III. Major Issues Addressed by the Revisions
    A. Further Emphasizing Natural Resource Restoration Over 
Economic Damages
    B. Complying With Ohio v. Interior and Responding to Kennecott 
v. Interior
    C. Technical Corrections for Consistent Assessment Timing 
Guidelines
IV. Response to Comments
    A. Emphasizing Restoration Over Economic Damages
    B. Examples of Restoration-Based Damage Determination 
Methodologies
    C. Factors for Evaluating the Feasibility and Reliability of 
Methodologies
    D. Restoration of Resources Versus Services
    E. Clarification on Assessment Process Timing
    F. Deletion of the Bar on the Use of Contingent Valuation to 
Estimate Option and Existence Value To Comply With Ohio v. Interior
    G. Deletion of the Date of Promulgation for the Statute of 
Limitations Provisions To Comply With Ohio v. Interior
    H. Miscellaneous Comments

I. What The 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 in the Code of Federal Regulations (CFR) 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 revising 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 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,

[[Page 57260]]

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 revising certain parts of the Type B procedures (case by case 
assessment provisions) in the regulations.

II. Why We Are Revising the Regulations

    CERCLA provides that we review and revise the regulations as 
appropriate every two years. 42 U.S.C. 9651(c)(3). To assist in this 
most recent 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 monetary damages. This 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 (DC Cir. 1989) (Ohio v. Interior); and Kennecott Utah Copper Corp. 
v. U.S. Department of the Interior, 88 F.3d 1191 (DC Cir. 1996) 
(Kennecott v. Interior). Finally, we are making 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 on the proposed rule revisions published in 
the Federal Register on February 29, 2008;
    (c) The Ohio v. Interior opinion;
    (d) The Kennecott v. Interior opinion; and
    (e) The OPA regulations.

III. Major Issues Addressed by the Revisions

    Our revisions will largely leave the framework of the existing rule 
intact. We are not making 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 revisions. The following section references the 
OPA regulations. These references are solely for the purpose of 
providing context and background. 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 revising 43 CFR 11.83(c) to 
provide trustees with the option of estimating compensable values for 
losses pending restoration

[[Page 57261]]

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 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 also adding a brief description of these 
restoration-based methodologies to the non-exclusive list of economic 
valuation methodologies in the current regulation. Our revisions do not 
sanction or bar the use of any particular methodology, so long as it 
complies with the four mandatory ``acceptance criteria''--which include 
feasibility and reliability, reasonable cost, avoidance of double 
counting, and cost effectiveness--that appear in the current rule in 
Sec.  11.83(a)(3).
    The list of methodologies for assessing compensable values remains 
non-exclusive, allowing for the introduction of new and innovative 
techniques that may arise. As mentioned above, the current regulations 
provide that when choosing among any cost estimation or valuation 
methodology, trustees must 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 feasibility and reliability, 
we are providing a list of factors that set out general principles of 
feasibility and reliability--such as the ability to provide useful 
restoration information, peer review, and methodological standards--for 
trustees to consider when evaluating the reliability of all valuation 
and damage assessment methodologies. Each of the listed factors may not 
be applicable in every case, and other relevant factors may be 
considered. Trustees continue to be required to document their 
consideration of relevant factors in the Report of Assessment.

B. Complying With Ohio v. Interior and Responding to Kennecott v. 
Interior

    Several provisions of the current regulations were invalidated by 
the DC 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. In the final rule, we are making 
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 revision's focus on compensating for public losses pending 
restoration with restoration actions rather than monetary damages for 
the economic value of the losses will provide options for comparing 
functional losses from resource injuries to functional gains expected 
from restoration actions, which will 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 a condition where they can 
provide the level of services available at 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 revisions make clear, the metric for evaluating 
natural resource conditions for baseline restoration is the 
availability of 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 revision to 43 CFR 11.80(b) clarifies that the measure of 
damages is the cost of (1) restoring or rehabilitating the injured 
natural resources to a condition where they can provide the level of 
services available at baseline, or (2) replacing and/or acquiring 
equivalent natural resources capable of providing such services. Of 
course, damages can be measured by an appropriate combination of 
partial restoration or rehabilitation, and partial replacement and/or 
acquisition of equivalent resources, so long as there is no double 
counting. Damages may also include, 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.

[[Page 57262]]

(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 are resolving 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. Response to Comments

    The Department received 21 comments on the February 29, 2008 
Federal Register Proposed Rulemaking Notice. The Department appreciates 
the time and effort expended by the commenters. This notice does not 
address any comments outside of the scope of the proposed targeted 
revisions. The NRDAR Advisory Committee considered other NRDAR practice 
issues--such as encouraging an early focus on restoration planning and 
streamlining the restoration implementation process. These and other 
issues concerning these regulations may be addressed in future biennial 
reviews.

A. Emphasizing Restoration Over Economic Damages

1. Providing the Option To Calculate All Natural Resource Damages 
Utilizing a Restoration-Based Approach
    Comment: Most commenters who expressed an opinion on the issue of 
allowing for restoration-based approaches to public losses pending 
restoration generally supported this change. Many commenters believed 
that restoration-based approaches better comport with the purposes of 
CERCLA.
    Response: We believe that in many cases, restoration-based 
approaches can lead to timelier, more efficient, and more cost 
effective --which is the key objective of these revisions. The NRDAR 
process is streamlined by focusing directly on restoration alternatives 
that address losses, rather than on first estimating the monetary value 
of losses and then determining how to address them with appropriate 
projects. Moreover, the transparency involved in comparing resource 
gains to resource losses reduces controversy and transaction costs, and 
encourages collaborative efforts to identify projects that yield high 
human and ecological benefits relative to their monetary cost.
    Comment: The factors to consider when selecting restoration-based 
alternatives to compensate for interim public losses pending 
restoration should be the same as those for selecting restoration-based 
alternatives to restore, rehabilitate, replace, or acquire resources 
equivalent to those injured in Sec.  11.82 of the rule.
    Response: We agree that all restoration-based alternatives for 
damages should be evaluated consistently under the rule, and the 
revisions reflect this in Sec.  11.82.
2. Preserving the Option To Calculate Interim Public Loss Damages 
Utilizing the Economic Value of the Loss
    Comment: Some commenters expressed concern that restoration-based 
approaches were ``over-emphasized'' and that trustees should retain the 
option of making claims for public losses pending restoration based on 
the monetary value of the losses.
    Response: The purpose of the revisions is to remove any barriers 
that exist to utilizing restoration-based approaches to all damages, 
including damages for public losses pending restoration (compensable 
values.) The revisions do not, however, bar the use of methodologies 
that estimate the monetary value of public losses pending resource 
restoration. Therefore, recovering the monetary value of public losses 
pending restoration remains an option for trustees. Nevertheless, 
regardless of how damages are calculated, the focus of the NRDAR 
program is on achieving restoration, not on recovering monetary damages 
for their own sake.

B. Examples of Restoration-Based Damage Determination Methodologies

1. Formally Sanctioning or Barring Particular Valuation and Assessment 
Methodologies
    Comment: Some commenters suggested that DOI's decision not to 
formally sanction or bar particular valuation and assessment 
methodologies is inconsistent with CERCLA and prior rulemakings. These 
commenters suggest that since CERCLA requires DOI to select the ``best 
available procedures'' (42 U.S.C. 9651(c)) to determine natural 
resource damages, and since the Ohio decision confirmed that contingent 
valuation--which is listed as a valuation and assessment methodology in 
Sec.  11.83 as a best available procedure--DOI is required to sanction 
or bar valuation and assessment methodologies.
    Response: The Kennecott decision upheld the rule's use of ``catch-
all'' provisions in Sec.  11.83 that give trustees the discretion to 
utilize assessment methodologies other than those specifically listed 
in that section. This directly contradicts the idea that only 
specifically sanctioned assessment methodologies are consistent with 
CERCLA. More importantly, the Kennecott decision made clear that the 
procedures and protocols required by CERCLA at 42 U.S.C. 9651(c) are 
interpreted to mean a standard method of evaluation, not a 
determinative list of methodologies that are definitively accurate in 
all circumstances. ``Best available procedures'' for applying an 
assessment or valuation methodology to the wide range of site specific 
conditions trustees might encounter should be considered in the context 
of the entire rule. This includes utility for determining appropriate 
restoration actions, evaluation against the four mandatory acceptance 
criteria, and the documentation of trustee choices and rationales in a 
plan subject to public review and comment. This is consistent with 
CERCLA, judicial interpretations of this rule, and statements by DOI in 
prior rulemakings.
2. The Reliability of Restoration-Based Methodologies (Habitat/Resource 
Equivalency Analysis, Conjoint Analysis, and Random Utility Models) 
Referred to in the Revised Rule
    Comment: Some commenters welcomed the proposal to provide some 
examples of restoration-based methodologies that have been used to 
formulate and resolve natural resource damage claims for calculating 
compensable values, and add those examples to a list that had 
exclusively included methodologies to determine monetary damages based 
on the economic value of the losses. A few commenters suggested that 
the CERCLA NRDAR rule should affirmatively encourage the use of habitat 
equivalency analysis, which is the case under the OPA NRDAR rule. 
Conversely, some commenters suggested that habitat equivalency, 
resource equivalency, and conjoint analyses were not unanimously 
considered to be reliable, and could be applied in a way that yielded 
unreliable results.
    Response: The use of habitat equivalency analysis is explicitly 
encouraged under the OPA NRDAR rule. Conjoint analysis--a stated 
preference method that compares the resource services provided by 
various restoration alternatives to each other, rather than just 
estimating their monetary values--can be as properly applied and 
structured, consistent with the holdings of the Ohio court and the 
Report of the NOAA Blue Ribbon Panel on Contingent Valuation, as the 
currently listed contingent valuation methodology. Few of the 
methodologies currently listed in Sec.  11.83 of the rule are 
universally accepted as definitively

[[Page 57263]]

accurate means for determining appropriate compensation for natural 
resource injury, and no listed methodology is immune from being applied 
in a way that could yield unreliable results. As stated in the previous 
response, the reliability of any methodology applied to a specific 
assessment is determined by a process that requires a trustee decision 
maker to develop and consider options, to evaluate those options based 
on certain criteria, and to document the rationale for choices made in 
a plan subject to public review and comment.
3. The Need for Further Guidance on the Use of Restoration-Based and 
Other Assessment Methodologies
    Comment: Many commenters suggested that the Department should 
develop guidance on the proper utilization and application of 
restoration-based and other assessment methodologies.
    Response: As recommended by the NRDAR FACA Committee, the 
Department plans to undertake and sponsor multi-stakeholder efforts to 
develop additional guidance to supplement existing guidance on best 
assessment practices.
4. Some of the Restoration-Based Methodologies Referred to in the 
Revised Rule Can Also Be Used To Estimate the Monetary Economic Value 
of Public Losses
    Comment: One commenter said that although it is true that habitat 
equivalency, resource equivalency, and conjoint analyses, as well as 
random utility models are examples of restoration-based methodologies, 
conjoint analyses and random utility models can also be used to 
estimate monetary damages based on the economic value of losses.
    Response: The list of methodologies is intended to include both 
restoration-based and the traditional monetary economic value based 
methodologies, since the rule gives the option to calculate damages for 
public losses pending restoration utilizing either approach. The 
revised rule specifically states that Random Utility Models may be 
suitable for to calculating either restoration-based or monetary 
economic damages.

C. Factors for Evaluating the Feasibility and Reliability of 
Methodologies

1. Reasonable Cost, Cost Effectiveness, and Avoiding Double Counting 
Should Remain Mandatory Criteria for Valuation and Assessment 
Methodologies, and Not Just Factors To Utilize To Evaluate Feasibility 
and Reliability
    Comment: Some commenters indicated general support for offering 
guidance to trustees on discretionary factors to consider on 
methodology feasibility and reliability, but pointed out that no 
justification is given for transforming mandatory acceptance criteria 
for valuation and assessment methodologies into discretionary 
``factors'' that trustees should consider and document in their 
Restoration and Compensation Determination Plan.
    Response: We did not intend to suggest that reasonable cost, cost 
effectiveness, and avoiding double counting were no longer mandatory 
acceptance criteria. All three of these criteria are required by other 
parts of the rule, so the intent was that they would be applicable in 
all cases, even if they were included within a list of factors that 
would not be applicable in all cases. The final rule revision clarifies 
this by leaving the current rule's language on mandatory criteria for 
methodologies that includes feasibility and reliability, reasonable 
cost, cost effectiveness, and avoiding double counting intact, and 
distinguishing these criteria from discretionary factors that can be 
used to consider and document feasibility and reliability.
2. The New Feasibility and Reliability Factors in the Proposed Rule 
Amount to Additional Mandatory Criteria, Which Are Unnecessary and Will 
Lead to Increased Transaction Costs and Delay, Further Deterring 
Trustees From Using the Rule
    Comment: Some commenters indicated they were strongly opposed to 
DOI suggesting additional factors that trustees could utilize to 
evaluate the feasibility and reliability of assessment methodologies. 
The mandatory application of some or all of these factors will increase 
transaction costs, create hurdles to completing assessments and 
implementing restoration, and thus deter trustees from utilizing this 
discretionary rule.
    Response: As indicted in the response above, the four mandatory 
criteria for assessment methodologies remain unchanged in this final 
rule. We do not believe that including a new section that includes 
discretionary, non-exclusive factors for trustees to consider in 
evaluating the mandatory (but non-specific) ``feasibility and 
reliability'' criteria will unduly burden trustees, increase 
transaction costs, or deter trustees from utilizing the rule and 
availing themselves to a rebuttable presumption in any judicial or 
administrative proceeding on the claim. In fact, since feasibility and 
reliability are mandatory criteria for assessment methodologies under 
the rule, offering general guidance that includes examples of standard 
established indices of reliability will assist trustees in evaluating 
and documenting their choices, as required by the rule.
3. The Rule Should Affirmatively Provide That Methodologies Listed in 
43 CFR 11.82 Are Feasible and Reliable
    Comment: Some commenters said that the rule should make clear that 
all methodologies listed in Sec.  11.83 have met the four mandatory 
criteria for assessment methodologies.
    Response: The wide range of situations that trustees encounter when 
conducting a natural resource damage assessment makes it infeasible to 
determine that certain methodologies are definitively reliable in all 
circumstances and applications. As previously stated, the reliability 
of a particular assessment methodology in a particular situation is 
determined in the context of a rule which describes a process that 
requires a trustee decision maker to develop and consider options, to 
evaluate those options based on certain criteria, and to document the 
rationale for choices made in a plan subject to public review and 
comment.

D. Restoration of Resources vs. Services

1. The Reinstatement of the Services Based Approach to Quantifying 
Injury and Damages in the Rule Will Inappropriately Lead to the 
Restoration of Services Instead of Resources
    Comment: The proposal ``overemphasizes'' the restoration of 
services over resources, and implies that CERCLA only requires the 
restoration of services, not the restoration of resources.
    Response: CERCLA and the CWA unambiguously require that all NRDAR 
recoveries be used ``only to restore, replace, or acquire the 
equivalent'' of injured natural resources. Neither this rule, nor the 
Kennecott decision's ``reinstatement'' of the services-based approach 
alters these mandatory and fundamental statutory requirements. As we 
are specifically providing in these revisions, and have made clear in 
previous rulemakings (See, e.g., 59 Federal Register 1472-73, March 25,

[[Page 57264]]

1994, 58 Federal Register 39339-41, July 22, 1993, and 51 Federal 
Register 27686, August 1, 1986) ``services'' are a metric for measuring 
resource conditions and resource restoration. They are not abstract 
functions that are disassociated from natural resources, and they are 
restored or replaced by actions related to the quality, quantity, or 
availability of natural resources.
2. Describing the Services-Based Approach
    Comment: A few commenters suggested that to improve clarity and 
correct syntax, the description of the four types of restoration work 
(restoration, rehabilitation, replacement, or acquisition of equivalent 
resources) in Sec.  11.80 should be described in two separate clauses.
    Response: For the purpose of clarity, Sec.  11.80 has been revised. 
Similar revisions have been made to Sec. Sec.  11.81, 11.82, and 11.83.
3. Defining Services
    Comment: One commenter suggested that DOI needs to emphasize that 
services include the full suite of human and ecological functions 
performed by natural resources.
    Response: We believe the current definition of services in the rule 
includes both human and ecological services.
    Comment: A few commenters said that the definition of ``restoration 
or rehabilitation'' in 43 CFR 11.14 needs to also be revised to reflect 
the services based approach, since it refers to actions that restore 
the physical, chemical, or biological properties of resources, as well 
as their services.
    Response: The current definition of services in the rule, which 
remains unchanged, makes clear that services ``result'' from the 
physical, chemical, or biological quality of resources. Accordingly, we 
do not believe any revision is needed in the definition of 
``restoration or rehabilitation'' to comport with the services-based 
approach.

E. Assessment Process Timing Clarification

1. Consistent Timing Guidelines
    Comment: All commenters who addressed this issue voiced support for 
technical corrections to provide consistent timing guidelines for 
completion of the Restoration and Compensation Determination Plan.
    Response: This technical correction is included in the final rule.

F. Deletion of the Bar on the Use of Contingent Valuation To Estimate 
Option and Existence Value To Comply With Ohio v. Interior

1. Technical Correction on Deleting the Bar on Estimating Option and 
Existence Value
    Comment: All commenters who addressed this issue were supportive of 
this technical correction, which codifies an explicit ruling of the 
Ohio decision.
    Response: This technical correction is included in the final rule.

G. Deletion of the Date of Promulgation for the Statute of Limitation 
Provision To Comply With Kennecott v. Interior

1. Technical Correction To Strike Out Rule Promulgation Date
    Comment: All commenters who addressed this issue were supportive of 
this technical correction, which codifies an explicit ruling of the 
Kennecott decision.
    Response: This technical correction is included in the final rule.

H. Miscellaneous Comments

1. Consideration of Damages for Compensable Values Pending Restoration 
Should Be Mandatory, not Discretionary
    Comment: One commenter said that damages for public losses pending 
restoration should be mandatory, not discretionary as set forth in the 
existing rule.
    Response: This is beyond the scope of the current revisions. The 
current rule grants broad discretion to trustees on formulating and 
pursuing claims.
2. Cultural Resources
    Comment: One commenter expressed concern that the rule revisions 
would hinder trustees seeking recoveries for the value of cultural 
natural resource services lost as the result of natural resource 
injury.
    Response: Cultural, religious, and ceremonial losses that rise from 
the destruction of or injury to natural resources continue to be 
cognizable under the revisions. The revisions do not affect the 
treatment of these losses under the rule.
3. Terminology--Monetary Damages
    Comment: One commenter suggested that the preamble should 
distinguish restoration-based approaches from monetary damages for the 
economic value of losses, rather than from ``economic'' approaches, 
since some restoration-based approaches are economic methodologies.
    Response: The revised preamble to this final rule utilizes the more 
precise terminology of ``monetary damages for the economic value of 
public losses''.
4. General Support for the Concept of Natural Resource Damages
    Comment: One commenter voiced general support for the concept of 
damages to restore natural resources injured by releases of hazardous 
substances or oil.
    Response: We acknowledge the comment, and believe that the 
revisions will improve the NRDAR practice and encourage quicker, more 
effective, and more efficient restoration of injured natural resources.

V. How We Have Complied With Rulemaking Requirements

Regulatory Planning and Review Under E.O. 12866

    The Office of Management and Budget has reviewed these 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 monetary 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 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 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 
monetary value of public

[[Page 57265]]

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 timelier restoration, and 
reduced transaction costs. To the extent any are affected by the 
revisions, it is anticipated that all parties will benefit by the 
increased focus on restoration in lieu of monetary damages.
    b. The 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 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 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 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 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 revisions do not 
require state trustees to take any action; therefore it does not impose 
any unfunded mandates. The rule and the revisions do not preempt state 
law. The rule and the 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 revisions do 
not unduly burden the judicial system and meet the requirements of 
section 3(a) and 3(b)(2) of the Order. The 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 revisions do not pose ``identical questions'' to, or impose 
``identical reporting, record keeping, or disclosure requirements,'' on 
trustees. Therefore, the 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 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 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 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 revisions do not 
determine the specific restoration actions that trustees can seek. 
Therefore, the rule and the 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.

List of Subjects in 43 CFR Part 11

    Natural resources, environmental protection.

    Dated: September 25, 2008.
James E. Cason,
Associate Deputy Secretary.

0
For the reasons given in the preamble, we are amending part 11 of title 
43 of the Code of Federal Regulations as follows:

PART 11--NATURAL RESOURCE DAMAGES FOR HAZARDOUS SUBSTANCES

0
1. The authority citation for part 11 continues to read as follows:

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


0
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

[[Page 57266]]

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.
* * * * *

0
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 (A) the 
restoration or rehabilitation of the injured natural resources to a 
condition where they can provide the level of services available at 
baseline, or (B) the replacement and/or acquisition of equivalent 
natural resources capable of providing such 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 Sec. Sec.  11.80-11.84 
of this part are the basis for the development of this estimate.
* * * * *

0
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 (i) 
restoration or rehabilitation of the injured natural resources to a 
condition where they can provide the level of services available at 
baseline, or (ii) the replacement and/or acquisition of equivalent 
natural resources capable of providing such 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.
* * * * *

0
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 (i) the restoration or 
rehabilitation of the injured natural resources to a condition where 
they can provide the level of services available at baseline, or (ii) 
the replacement and/or acquisition of equivalent natural resources 
capable of providing such 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 baseline restoration, rehabilitation, replacement, and/or 
acquisition of equivalent resources, and, where relevant, the 
compensable value.
* * * * *

0
6. In Sec.  11.82, revise paragraphs (a), (b)(1)(iii), and (c) 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 (i) the restoration or 
rehabilitation of the injured natural resources to a condition where 
they can provide the level of services available at baseline, or (ii) 
the replacement and/or acquisition of equivalent natural resources 
capable of providing such 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 baseline restoration, rehabilitation, replacement, and/or 
acquisition of equivalent natural resources. 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 (i) 
restore or rehabilitate the injured natural resources to a condition 
where they can provide the level of services available at baseline, or 
(ii) replace and/or acquire equivalent natural resources capable of 
providing such services.
* * * * *
    (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, 
combinations of management actions, and needs for resource replacements 
or acquisitions.
* * * * *

0
7. In Sec.  11.83, revise paragraph (a)(1), add new paragraphs (a)(4) 
and (a)(5), and revise paragraph (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 (i) the 
restoration or rehabilitation of the injured natural resources to a 
condition where they can provide the level of services available at 
baseline, or (ii) the replacement and/or acquisition of equivalent 
natural resources capable of providing such services; and the 
compensable value of the services lost to the public through the 
completion of the baseline restoration, rehabilitation, replacement, 
and/or acquisition of equivalent natural resources.
* * * * *
    (4) Factors that may be considered by trustees to evaluate the 
feasibility and reliability of methodologies can include:
    (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) Does the methodology address the particular natural resource 
injury and

[[Page 57267]]

associated service loss in light of the nature, degree, and spatial and 
temporal extent of the injury?
    (iii) Has the methodology been subject to peer review, either 
through publication or otherwise?
    (iv) Does the methodology enjoy general or widespread acceptance by 
experts in the field?
    (v) Is the methodology subject to standards governing its 
application?
    (vi) Are methodological inputs and assumptions supported by a 
clearly articulated rationale?
    (vii) Are cutting edge methodologies tested or analyzed 
sufficiently so as to be reasonably reliable under the circumstances?
    (5) All of the above factors may not be applicable to every case, 
and other factors may be considered to evaluate feasibility and 
reliability. The authorized official shall document any consideration 
of factors deemed applicable in the Report of Assessment.
* * * * *
    (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, 
or until the resources are replaced and/or equivalent natural resources 
are acquired. 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 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.

------------------------------------------------------------------------
        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 (sometimes      May be used only if the injured
 referred to as the ``reverse        resources are inputs to a
 value added'' methodology).         production process, which has as an
                                     output a product with a 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 transfer.  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........  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 Analysis.  May be used to compare the natural
                                     resource services produced by
                                     habitat or resource-based
                                     restoration actions to natural
                                     resource service losses.
(x) Resource Equivalency Analysis.  Similar to habitat equivalency
                                     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.
------------------------------------------------------------------------


[[Page 57268]]

    (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