EPA Revises All Appropriate Inquiry Rule for Forestland and Rural Property
EPA publishes Direct Final Rule recognizing ASTM updates, changing Phase I Environmental Site Assessment requirements to satisfy the All Appropriate Inquires Rule when buying forestland and rural property.
Update: this rule is now in effect..
On June 20, 2017, EPA published a Direct Final Rule in the Federal Register, to provide official notice of its intention to amend the All Appropriate Inquiries (AAI) Rule, 40 CFR Part 312, to reflect the 2016 updates to ASTM E2247 governing the standard for Phase I investigations on rural and forested land–specifically the revised ASTM Standard E2247-16 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property”–which had been updated at the end of 2016.
EPA developed, and the Assistant Administrator signed, the Direct Final Rule recognizing the updated standard as compliant with AAI in early January. The Federal Register, however, did not publish it on January 20 and so it returned the rule to the agency to await approval and re-signature by new administration.
The AAI rule sets the requirements for satisfying CERCLA § 101(35)(B) to obtain CERCLA liability relief, including the innocent landowner defense, bona fide prospective purchaser liability protection and contiguous property owner liability protection. The AAI requirements also apply when conducting site characterizations and assessments for purposes of a brownfield grant under CERCLA § 104(k)(2)(B).
The proposed amendment updates the existing AAI Rule, which currently references a 2008 version of the E2247 Standard. Up until now the AAI Rule had referenced two voluntary standards for conducting Phase I site investigations. One of these standards, ASTM E2247, only applied to forestland and rural property, while the other standard–E1527-13–was not limited to certain types of property and could also be used on such lands. So, the old AAI Rule allowed purchasers to establish compliance by adhering to either of these industry standards.
As before, purchasers of forested and rural land will not be required to use the new version of E2247–but this avenue will be an allowed AAI alternative. If accepted without negative comment, the June 20 Direct Final Rule will replace the reference to the 2008 version of E2247 with a reference to the updated 2016 version. Therefore, once the Direct Final Rule goes into effect, property owners should take care that their environmental consultants are not using the outdated 2008 version of E2247 because it will no longer satisfy the AAI test.
Another key difference is the elimination of the 120 acre site requirement. As a result, the new standard will apply to rural or forested properties of any size. E2247 in some ways requires less rigorous site investigation than E1527-13, so this widening of the applicability of E2247 is a welcome change to property purchasers.
A summary of the differences between the 2008 and 2016 versions of E2247 can be found here.
Individuals interested in obtaining a copy of the 2016 E2247 standard can do so from ASTM International here.
The proposed amendment is not viewed as controversial and EPA does not anticipate receiving any comments, which is why the agency opted to publish the amendment as a Direct Final Rule. As such, the amended rule will go into effect on September 18, 2017, unless EPA receives adverse comments by July 20, 2017.
KEY TAKEAWAY: Property purchasers (or lessees) seeking to qualify for bona fide prospective purchaser (BFPP) protection should ensure that consultants are conforming their site assessments of rural or forested land to the new E2247-16 Standard in order to protect AAI defenses.
SUMMARY: The Environmental Protection Agency (EPA) is taking direct final action to amend the Standards and Practices for All Appropriate Inquiries (AAI) to update an existing reference to a standard practice recently revised by ASTM International, a widely recognized standards development organization. Specifically, this direct final rule amends the All Appropriate Inquiries Rule to reference ASTM International’s E2247–16 ‘‘Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property’’ and allow for its use to satisfy the statutory requirements for conducting all appropriate inquiries under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).
DATES: This rule is effective on September 18, 2017, without further notice, unless EPA receives adverse comment by July 20, 2017. If EPA receives such comment, it will publish a timely withdrawal in the Federal Register informing the public that this
direct final rule will not take effect. Submit your comments, identified by Docket ID No. EPA–HQ–OLEM–2016–0786 by going to http://www.regulations.gov and following the online instructions.
WHAT DOES THIS ACTION DO? This direct final rule amends the All Appropriate Inquiries Rule to allow the use of the recently revised ASTM standard, E2247–16, for conducting all appropriate inquiries, as required under CERCLA for establishing the innocent landowner defense, as well as qualifying for the bona fide prospective purchaser (BFPP) and contiguous property owner liability protections.
BACKGROUND: On January 11, 2002, President Bush signed the Small Business Liability Relief and Brownfields Revitalization Act (‘‘the Brownfields Amendments’’). In general, the Brownfields Amendments to CERCLA provide funds to assess and clean up brownfields sites; clarifies CERCLA liability provisions related to innocent purchasers of contaminated properties; and provides funding to enhance State and Tribal cleanup programs. In part, subtitle B of the Brownfields Amendments revises some of the provisions of CERCLA section 101(35) and limits Superfund liability under Section 107 for bona fide prospective purchasers and contiguous property owners, in addition to clarifying the requirements necessary to establish the innocent landowner defense under CERCLA. The Brownfields Amendments clarified the requirement that parties purchasing potentially contaminated property undertake ‘‘all appropriate inquiries’’ into prior ownership and use of property prior to purchasing the property in order to qualify for protection from CERCLA liability. The Brownfields Amendments required EPA to develop regulations establishing standards and practices for how to conduct all appropriate inquiries. EPA promulgated regulations that set standards and practices for all appropriate inquiries on November 1, 2005 (70 FR 66070). In the final regulation, EPA referenced, and recognized as compliant with the final rule, the ASTM E1527–05 ‘‘Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.’’ The regulation was amended in December 2013 to recognize the revised ASTM E1527–13, ‘‘Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process’’ (78 FR 79319). EPA also amended the All Appropriate Inquiries Rule in December 2008 to recognize another ASTM standard as compliant with the final rule, the ASTM E2247–08 ‘‘Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property’’ (73 FR 78716). Therefore, the All Appropriate Inquiries Rule (40 CFR part 312) currently allows for the use of both the ASTM E1527–13 and the ASTM E2247– 08 standards to conduct all appropriate inquiries, in lieu of following requirements included in the final rule. Note that in October 2014, EPA withdrew the reference to the ASTM E1527–05 standard from the AAI rule (79 FR 60087). Since EPA promulgated the All Appropriate Inquiries Rule setting standards and practices for the conduct of all appropriate inquiries, ASTM International published a revised Phase I site assessment standard for conducting Phase I environmental site assessments of large tracts of rural and forestland properties. This standard, ASTM E2247–16, ‘‘Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property,’’ was reviewed by EPA, in response to a request for its review by ASTM International, and determined by EPA to be compliant with the requirements of the All Appropriate Inquiries Rule.
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