The U.S. Environmental Protection Agency (EPA) is accepting public comment on its proposal to eliminate the dual standard for compliance with the “All Appropriate Inquiries” (AAI) requirement under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Parties purchasing potentially contaminated property must undertake AAI into prior ownership and prior uses of the property at issue – prior to its purchase – in order to qualify for protection from CERCLA liability. A copy of the proposed rule is available here.
AAI requirements are critical to assess environmental conditions arising from past operations at a property prior to its acquisition, so that an owner or operator can qualify for the bona fide prospective purchaser, innocent landowner, or contiguous property owner defenses to CERCLA strict liability (and often for state law counterparts).
Proposal to Eliminate Dual Standard
As AGC reported in January, EPA authorized the use of the 2013 ASTM (American Society for Testing and Materials) “Standard Practice for Environmental Site Assessment Process” (E1527-13) to comply with AAI requirements. However, EPA did not remove the reference to the 2005 ASTM Phase I assessment standard (E1527-05), from its rules that lay out the procedures and practices for conducting AAI. The 2013 revision added a new requirement for the environmental professional conducting the Phase I to undertake a review of agency files and records about the property. Stakeholders have raised concerns about having two different ASTM standards for complying with the AAI rule, predicting that it would cause confusion in the market and lead to litigation.
EPA recently proposed to amend its AAI rule at 40 CFR 312 to remove the reference to ASTM E1527-05. According to EPA’s proposal, the “proposed action removes the reference to a standard that ASTM International no longer recognizes as current and that it no longer represents as reflecting its current consensus-based standard.”
For properties acquired between Nov. 1, 2005, and the effective date of the proposed rule, the 2005 ASTM standard will satisfy the AAI Rule. EPA anticipates a one-year delay in the effective date of the final action to provide adequate time for parties to complete ongoing investigations and become familiar with the updated 2013 standard. EPA is accepting comments until July 17, 2014.
Background
Phase I environmental site assessments are standard industry tools prepared by environmental professionals to evaluate the potential for environmental contamination at a property. They commonly include a review of databases and historical records to identify other potential sources in the vicinity of the property, a site inspection, interviews with key personnel about the property’s historical use, and an evaluation of known or reasonably ascertainable information about the property. Phase I assessments do not typically include sampling or laboratory analysis.
If you need more information, please contact AGC’s Senior Environmental Advisor Leah Pilconis at pilconisl@agc.org.