EPA Amends All Appropriate Inquiries Rule To Clarify Best Practices

The EPA has amended its "All Appropriate Inquiries" Rule (AAI Rule) to reference the recently published ASTM International E1527–13 Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process," commonly referred to as the “ASTM Phase I Standard.”  The new rule makes clear that persons conducting all appropriate inquiries to purchase potentially contaminated properties may use, and are encouraged to use, the procedures included in the new ASTM standard to comply with the AAI Rule.  The amended rule became effective December 30, 2013.

The AAI Rule sets federal standards and practices (i.e., all appropriate inquiries) that prospective purchasers of potentially contaminated property must undertake with respect to past ownership and use of such property in order to qualify for protection from liability under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).  With the amended rule, EPA has established that persons seeking relief under CERCLA’s landowner  liability protections, as well as recipients of brownfields grants for conducting site assessments, will be considered to have met the standards and practices for all appropriate inquiries, if such persons follow the procedures provided in the new ASTM E1527–13 standard.  EPA made this determination based upon the agency’s finding that the ASTM E1527–13 standard is compliant with the AAI Rule. 

EPA has concluded that because the ASTM E1527-13 Phase I Standard is available, the agency should not continue to recognize the prior ASTM E1527-05 Phase I Standard, reversing its decision of several months ago.  The agency announced its intent to publish a proposed rule, in the near future, that will amend the AAI Rule to remove the current reference to the ASTM E1527–05 Phase I Environmental Site Assessment standard.  This action was not discussed in any of EPA’s earlier public notices, so the agency intends to propose this separately in order to provide an opportunity for public comment.  The existence of two ASTM standards, without ASTM’s repeal of the earlier (05) standard, has been a source of confusion for environmental lawyers and consultants.

In issuing its amended rule, EPA stated: “Although today’s action will not remove the current reference in the All Appropriate Inquiries Rule to the ASTM E1527–05 standard, EPA agrees with commenters that the revised ASTM E1527–13 standard includes improvements to the previous standard and its use will result in greater clarity for prospective purchasers with regard to potential contamination at a property.  Therefore, EPA recommends that environmental professionals and prospective purchasers use the ASTM E1527–13 standard.”

EPA commented that ASTM E1527–13 improves upon the E1527–05 standard and reflects evolving best practices and the level of rigor that will afford prospective property owners necessary information when making property transaction decisions and meeting continuing obligations under the CERCLA liability protections.  In particular, the new ASTM E1527–13 standard enhances the previous standard with regard to the delineation of historical releases or recognized environmental conditions at a property and makes important revisions to the standard practice to clarify that all appropriate inquires and phase I environmental site assessments must include, within the scope of the investigation, an assessment of the real or potential occurrence of vapor migration and vapor releases on, at, in or to the subject property.

EPA anticipates that prospective purchasers and environmental professionals will embrace the increased level of rigor provided by the revisions and will adopt the ASTM E1527–13 standard.  The agency went so far as to recommend that the ASTM E1527–13 standard be used to conduct all appropriate inquiries investigations and Phase I Environmental Site Assessments.  In our experience reviewing ASTM Phase I site assessments, it will take some time for purchasers and users to adapt to the new standard.  Our advice continues to be that a legal review of the site assessments for compliance with the AAI rule and the ASTM Phase I Standard is prudent to enhance the likelihood that the applicable CERCLA landowner liability defense is available.

Topics:  ASTM, CERCLA, Contaminated Properties, Environmental Assessments, EPA, Land Developers, Superfund

Published In: Environmental Updates, Commercial Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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