EPA Adopts New Rule Modifying “All Appropriate Inquiries” Protocols
The United States Environmental Protection Agency (EPA) has amended the standards and practices of the All Appropriate Inquiries (AAI) requirement under which an entity may qualify for protection from liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) as an innocent landowner, a bona fide prospective purchaser or a contiguous property owner.
02.13.23
The primary impact of this new rule will be seen in Phase One Environmental Site Assessments (ESA) which seek to satisfy AAI obligations.
Federal law prescribes that liability protection may be achieved, in part, by making “all appropriate inquiries” into the past ownership and uses of potentially contaminated real property. The new EPA regulation adopts the protocols set by ASTM E1527-21 (the 21 Standards) as the new standard by which to qualify for these protections. The 21 Standards replace the ASTM E1527-13 standards and practices (the 13 Standards), which have been used since August 15, 2013, to satisfy the AAI requirement. ASTM International reviews the 1527 standard for renewal every eight years.
The 21 Standards were developed with the goals of clarifying language, improving consistency in reports and updating requirements to conform with current practice. Though similar, the 21 Standards differ from the 13 Standards in several areas. The new 21 Standards require review of additional sources and types of information and may cause a slight increase in the cost and time of performing Phase One ESAs in certain cases.
Some of the more prominent changes implemented by the 21 Standards are:
- Clarifying language relating to the terms Recognized Environmental Condition, Historical Recognized Environmental Condition, and Controlled Environmental Condition, making their identification during property assessments more consistent. The Environmental Professional (EP) performing the assessment is given somewhat more latitude to exercise professional judgment in determining the existence of Recognized Environmental Conditions.
- Expanding the research required and the sources that must be consulted regarding a property’s previous uses and relating to adjoining properties, limiting the EP’s ability to discount the need to review specified information sources, and also increasing the necessary title information to be reviewed. These changes are likely to increase the work required for locations in denser urban areas or with or near past retail uses.
- Clarifying that the shelf life of a Phase One ESA is 180 days after performance of the earliest of any one of five specified components of the report, rather than after issuance of the report itself.
- Adding requirements to be included with the Phase One ESA, including a site plan and photographs, identification (and definition) of “significant data gaps”, and incorporation of all recognized environmental conditions, controlled recognized environmental conditions, and significant data gaps into the report’s conclusion.
- Specifying that emerging contaminants known as “PFAS” (per- and polyfluoroalkyl substances) are not required to be included in the Phase One ESA until regulated under federal law, but that they can be addressed as a non-scope consideration.
To allow for a period of transition, while the 21 Standards are now effective, the 13 Standards may continue to be used to fulfill the AAI requirement, as well, through February 12, 2024.
For further information regarding the ASTM E1527-21 Standards, the All Appropriate Inquiries requirement, or the Comprehensive Environmental Response, Compensation, and Liability Act, please contact Alan Logsdon alogsdon@klehr.com, 215.400.2827) or Douglas Schleicher (dschleicher@klehr.com, 215.569.2795).
Co-authors Alan Logsdon, associate and Douglas Schleicher, partner are members of the Real Estate and Finance Department at Klehr Harrison.