On December 30, 2013, EPA published a final rule (78 Fed. Reg. 79.319) amending the All Appropriate Inquiries (AAIs) Rule to reference ASTM International’s new, 2013 standard for Phase I Environmental Site Assessments. The final rule concerns environmental due diligence for real estate transactions and affects buyers of potentially contaminated properties seeking a limitation on Superfund liability as bona fide prospective purchasers, contiguous property owners, or innocent landowners and environmental professionals who conduct Phase I Environmental Site Assessments. In addition, parties conducting a site characterization or assessment on a property with a Brownfields grant awarded under Superfund, including state and local governments that receive Brownfields site assessment grants, may be affected. Banks, insurers, development authorities, developers, and others involved in Brownfields redevelopment should also take notice of EPA’s December 30 final rule.
The final rule allows a party seeking liability protection from Superfund to conduct a Phase I environmental site assessment using either the AAIs Rule at 40 CFR Part 312 or ASTM’s new standard, E1527-13 “Standard Practice For Environmental Site Assessments: Phase I Environmental Site Assessment Process.” When EPA published the proposed rule (78 Fed. Reg. 49,690; August 15, 2013), EPA added the 2013 standard as an additional acceptable standard but did not replace the reference to ASTM’s 2005 standard. Commenters expressed concern regarding EPA’s proposal to allow ASTM’s previous standard to continue to be considered compliant with the AAIs Rule. In the December 30 final rule, EPA states it intends to “publish a proposed rule, in the near future, that will propose amending the [AAIs] final rule to remove the previous reference to the ASTM E1527-05 Phase I Environmental Site Assessment Standard.”
Significant changes include:
- Delineation of historical releases: The 2013 ASTM standard clarifies the definitions of Recognized Environmental Condition (REC) and Historical Recognized Environmental Condition (HREC) and adds a new term, Controlled Recognized Environmental Condition (CREC). The revised definition of HREC clarifies that the scope and application of a HREC is limited to only past releases that have been addressed to a degree allowing for unrestricted use of the property. The new definition for CREC refers to past releases that have been addressed but allow contamination to remain in place subject to the implementation of required controls.
- Vapor migration: The 2013 ASTM standard clarifies that AAIs and Phase I environmental site assessments must include an assessment of the real or potential occurrence of vapor migration and vapor releases at the subject property. This is not a new requirement. In the December 30 final rule, EPA states that “in its view, vapor migration has always been a relevant potential source of release or threatened release that, depending on site-specific conditions, may warrant identification when conducting all appropriate inquiries.” Id at 79,322.
- Regulatory agency file and records review: The 2013 ASTM standard also includes additional guidance related to the regulatory agency file and records review requirement to provide a standardized framework for verifying agency information obtained from key databases. The additional guidance and added framework for file and record reviews clarifies that an environmental professional should make efforts to review and document the validity of information found from searches of agency databases.
For EPA’s summary of the differences between ASTM’s 2005 and 2013 standards, see EPA’s “Summary of Updates and Revisions to ASTM E1527 Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process; How E1527-13 Differs from E1527-05,” which is available in the docket for the December 30 final rule, Docket ID No. EPA-HQ-SFUND-2013-0513-0003, at www.regulations.gov.
Overall, the revisions and additions in the 2013 ASTM standard will provide enhanced information on potential contamination at a site and will improve upon the usefulness of Phase I site assessment reports by providing greater clarity for prospective purchase and others who rely upon the reports. Not surprisingly, EPA “recommends” and “strongly encourages” use of the updated 2013 ASTM standard by prospective purchasers, environmental professionals, and others involved in the redevelopment of Brownfields.
This article was authored by Gale Lea Rubrecht, Jackson Kelly PLLC. For more information on the author, see here.