January 19, 2023 – On December 15, 2022, the United States Environmental Protection Agency (EPA) amended its All Appropriate Inquiries Rule, publishing a final rule that incorporates an updated Phase I Environmental Site Assessment standard from ASTM International. The new standard is known as ASTM E1527-21.
Under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), property purchasers and lessors have defenses against liability if “all appropriate inquiries” were undertaken into the ownership and use of the property. Effective February 13, 2023, ASTM E1527-21 will satisfy EPA’s requirements for conducting all appropriate inquiries under CERCLA. The previous ASTM standard, ASTM E1527-13, will also continue to satisfy all appropriate inquires for one year. On February 13, 2024, ASTM E1527-13 will no longer be deemed by federal regulations as satisfying all appropriate inquiries.
EPA first proposed adopting ASTM E1527-21 on March 14, 2022 through a direct final rule and a proposed rule. The direct final rule would have taken effect automatically in the absence of significant adverse comments. The new rule laid out the differences between ASTM’s 2013 and 2021 standards, including notes on whether emerging contaminants (substances not yet defined as hazardous substances under CERCLA, such as per- and polyfluoroalkyl substances, also known as PFAS) should be considered in a Phase I Environmental Site Assessment; clarification of certain key terms; and new requirements for historical research, figures, and appendices. Under the proposed rule, EPA did not plan to require businesses to use ASTM E1527-21 and would have instead allowed users to choose between the 2013 and 2021 standards. After receiving multiple adverse comments, EPA withdrew the direct final rule in order to address the adverse comments while still incorporating the majority of the above-referenced changes.
One major concern EPA needed to address from commenters was that the overlapping 2013 and 2021 standards would be confusing and allow for “outdated” standards. In response, EPA changed the final rule to phase out the earlier ASTM E1527-13 standard after a one-year period. Because the earlier ASTM standard will no longer be deemed by rule to satisfy all appropriate inquiries starting in February 2024, and because the new standard provides insight on additional risk areas, clients should consider whether to require Phase I Environmental Site Assessments that satisfy the new ASTM E1527-21 or to continue to utilize the prior standard until February 2024. Additionally, clients will need to determine whether any financing or other applicable programs adjust their environmental requirements based on these new standards.
Another concern raised by commenters was the inclusion of emerging contaminants such as PFAS in the new ASTM standard. Commenters asserted that emerging contaminants were outside the scope of all appropriate inquires because such contaminants are not hazardous substances under CERCLA. In addressing these comments, EPA clarified that while following ASTM E1527-21 will satisfy all appropriate inquiries, it is not the only way to do so. The all appropriate inquiries regulation (see 40 CFR Part 312) does not require a buyer to follow the ASTM standard. Because emerging contaminants may later be defined as a hazardous substance under CERCLA, and because some states currently regulate these contaminants, clients should consider utilizing the new ASTM standard even before February 2024 for these additional reasons.
Please contact us if you have any questions regarding the new ASTM standard for Phase I Environmental Site Assessments and how it may affect your environmental due diligence.
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