EPA has published a direct final rule (78 Fed. Reg. 49,690; August 15, 2013) and a proposed rule (78 Fed. Reg. 49,714; August 15, 2013) to amend the All Appropriate Inquiries (AAIs) Rule to incorporate ASTM’s new standard for Phase I site assessments and to allow for its use to satisfy the AAIs Rule. Satisfying the AAIs Rule is important because it is a prerequisite for liability protection under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund) for certain categories of landowners, such as bona fide prospective purchasers, contiguous property owners, and innocent landowners. Understanding the requirements of the AAIs Rule is therefore important for any landowner falling into one of these categories, environmental consultants performing Phase I environmental site assessments, and anyone else engaged in brownfields remediation and redevelopment, including financial institutions, real estate developers, and development authorities. At issue is the quality of Phase I environmental site assessment reports and the tremendous liability risks that accompany reliance on them versus the marketplace demand for low-cost reports.
EPA has placed in the rulemaking docket a document, “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,” that identifies eleven changes to the E1527-05 that resulted in the revised E1527-13 standard. EPA calls these changes “clarifications” and “noncontroversial” and states in the preamble to the Direct Final Rule that “there are no legally significant differences between the regulatory requirements and the two ASTM E1527 standards.” Not everyone agrees with EPA’s view of the changes and decision to allow dual standards, however. Among the controversial changes are an express requirement to consider vapor intrusion and regulatory file reviews. Because EPA received adverse comment, the rule will not automatically take effect November 13, 2013. Instead, EPA will withdraw the Direct Final Rule and take comment on the proposed rule. For more information on the changes, comments, and the controversy involving Phase I environmental site assessments, continue reading.
Some commenters said that ASTM E1527-05 was sufficient and that the additional elements called for under E1527-13 were redundant and would result in additional costs to users of Phase I environmental site assessments reports. One comment estimated that “this could be several hundred dollars more or as much as 60% more than the current cost of a phase I, depending on the state and the type of property,” while a consulting firm, AKT Peerless, wrote it did not anticipate “a significant cost increase” in its work product. Negative comments also emphasized the added time for agency file reviews and questioned the necessity for a vapor intrusion assessment where the release is offsite and down or side gradient.
Julie Kilgore, chair of the ASTM committee and task force that developed the revised standard, commented that the revised standard does not mandate agency file reviews but only requires the environmental professional to review regulatory files associated with listings in standard environmental record databases or explain why a review of those records was not conducted. She stated that the majority of environmental professionals follow this procedure and understand that this is what was intended by E1527-05.
A majority of commenters objected to dual standards for compliance with AAIs, asserting that dual standards would lead to market confusion and create expensive and time consuming litigation that would delay cleanups and redevelopment. Some said that dual standards could result in potential malpractice liability for consultants performing Phase I environmental site assessments. Most environmental consulting firms and other commenters countered that the market would transition to ASTM E1527-13.
The chair of the legal subcommittee that worked on the ASTM E1527-13, Lawrence Schnapf, responded that the situation is not the same as past transitions to new ASTM standards because the expiring E1527 version is embedded in regulatory language that affords liability protection. He predicts: “The existence of two equally valid standards covering the exact same period of usage will inevitably lead to the market’s selection of the lower priced…standard.”
According to ASTM International, the ASTM E1527-13 supersedes ASTM E1527-05. Participants in the ASTM process that created the -13 version of the ASTM E1527 standard were also unequivocal in their comments that the revised standard was intended to replace the -05 standard. Some commenters urged EPA to develop a standalone procedure for satisfying AAIs rather than merely adopting ASTM’s product, while others urged EPA to proceed with its normal rulemaking so that only one version of E1527 emerges as the alternative for compliance with AAIs. Another view expressed by the Utility Solid Waste Activities Group (USWAG), an association of energy industry operating companies and associations, found E1527-13 to be “the more useful of the two standards,” but supported continued reference to E1527-05 in the AAIs Rule to “ensure a smooth transition to the newer standard while avoiding any complications that could arise in the future for property transactions that have been already been conducted on the basis of a site assessment performed in accordance with E1527-05.”
A majority of commenters also urged EPA to reopen the definition of “Environmental Professional” and clarify the meaning of “under the supervision” of an “Environmental Professional”. The American Society of Civil Engineers, for example, commented that only persons with a college degree in a scientific or engineering field should be allowed to oversee Phase I environmental site assessments at brownfield sites under Superfund. Several commenters offered that a licensing requirement would improve the quality of Phase I environmental site assessment reports. Some comments recommended that the Phase I process be conducted independently of companies engaging in Phase II remediation work to prevent what the commenters saw as an inherent conflict of interest.
Copies of the comments are available on EPA’s website at: http://www.regulations.gov, Docket ID No.: EPA–HQ–SFUND–2013–0513. For a read-only copy ASTM E1527-XX, see Document ID No.: EPA–HQ–SFUND–2013–0513-0004.
This article was authored by Gale Lea Rubrecht, Jackson Kelly PLLC. For more information on the author, see here.