Effective December 30, 2013, the United States Environmental Protection Agency (EPA) has amended its “All Appropriate Inquiries” Rule (AAI Rule) to reference the recently published American Society for Testing and Materials (ASTM) E1527–13 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process,” commonly referred to as the “ASTM Phase I Standard.” The amendment approves the use of the new standard for purposes of meeting the AAI Rule requirements.
The AAI Rule sets forth federal standards and practices related to evaluating a property and its environmental conditions, as well as assessing the likelihood of the presence of any contamination. The premise of the rule is that once a prospective purchaser undertakes a review in accordance with the AAI Rule, such party has a basis to assert one of the available affirmative defenses against liability under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). With this amendment, persons seeking relief under CERCLA’s landowner liability protections (including the bona fide prospective purchaser, contiguous property owner, or innocent landowner defenses), or recipients of brownfields grants for conducting site assessments, will be considered to have met the standards and practices for the AAI Rule.
Prior Rule Remains in Effect for Now
The amendment does not delete reference to the previous ASTM standard (ASTM E1527-05), which means that a review conducted under this standard is still eligible for a demonstration of compliance with the AAI Rule. However, in the preamble to the amendment, the EPA announced plans to remove references to the old standard in the near future and recommended practitioners begin using the new standard:
"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. In the near future, EPA intends to publish a proposed rulemaking to remove the reference to the ASTM E1527-05 standard in the All Appropriate Inquiries Rule.
Key Revisions in the Standard
Some of the key revisions to the standard include:
Clarification to the definition of a Recognized Environmental Condition (REC). A REC is the presence or likely presence of any hazardous substances or petroleum products in, on, or at a property.
The addition of the term “Controlled RECs.” Controlled RECs refer to contamination that has been remediated, but still may be the basis for ongoing or future land use or exposure control obligations.
Expansion of the definition of “migration” to include the movement of vapors from hazardous substances or petroleum in subsurface soils and groundwater. While full vapor encroachment screening is not required, vapor migration must now be considered when conducting an inquiry.
Greater emphasis on conducting regulatory file reviews. An environmental professional must review regulatory files pertaining to the listing of the property on state or federal environmental databases to determine whether the listing constitutes an Environmental Condition.
The person intending to rely on the report to satisfy AAI and avoid liability (the “user”) must conduct a title search for environmental liens and limitations on use and must search judicial records if the jurisdiction only records or files such liens and limitations in judicial records.
The net effect of these changes is likely to increase the standard user’s expected cost for engaging a qualified environmental consultant to undertake a review under the new standard because of the increased focus and review necessary.