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ASTM Issues New Standard Environmental Site Assessment Protocol; EPA’s ‘All Appropriate Inquiries’ Rule in Flux

On Wednesday, Nov. 6, ASTM International announced that it has officially approved and published the latest revision of its Phase I Environmental Site Assessment Protocol, E 1527-13, Standard Practice for Environmental Assessments: Phase I Environmental Site Assessment Process.

 ASTM International, formerly known as the American Society for Testing and Materials (ASTM), is a globally recognized leader in the development and delivery of international voluntary consensus standards. This standard is intended for use on a voluntary basis by parties who wish to assess the environmental condition of commercial real estate taking into account commonly known and reasonably available information.

Claiming protection from liability under CERCLA

The new standard supersedes the 2005 standard, ASTM E 1527-05, which had been deemed to satisfy the EPA’s “all appropriate inquiry” (AAI) rule. Parties seeking to claim protection from liability under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) for contaminated properties historically could have followed the regulatory requirements of the AAI rule or used the ASTM E 1527-05 standard.

As reported in a prior edition of Bingham Greenebaum Doll LLP’s Environmental Letter, the EPA issued a direct final rule on Aug. 15, 2013, that would have amended federal regulations to add ASTM E 1527-13 as a new and alternative standard for conducting AAI in a Phase I Environmental Site assessment (ESA). Under the terms of the direct final rule, the EPA would have allowed the 2013 ASTM standard to be used, as well as the existing and less onerous 2005 ASTM standard, ASTM E 1527-05, as an additional method for satisfying the rule’s requirements. However, because adverse comments were submitted on the direct final rule, the EPA officially withdrew the rule on Oct. 29. The EPA expects to confirm whether ASTM E 1527-13 is compliant with the AAI by the end of 2013. Note that E 1527-13 is not officially recognized by the EPA as sufficient to meet AAI until the EPA issues its final rule.

Differences between the ASTM standards

There are three major differences between ASTM E 1527-05 and ASTM E 1527-13. First, ASTM E 1527-13 adds a new defined term, “controlled recognized environmental condition” (CREC), for hazardous substance releases that have been partially addressed through remediation, but where some contamination remains in place under certain risk-based restrictions or conditions (e.g., engineering or institutional controls). Similarly, the definition of a historical recognized environmental condition (HREC) has been revised to limit applicability to situations where past contamination has been addressed to unrestricted residential standards. These definitions will likely increase the number of recognized environmental conditions (REC) identified in Phase I ESA reports.

Second, ASTM E 1527-13 contains an express requirement to consider vapor intrusion. The standard clarifies that the definition of “migrate” includes releases that migrate in vapor in the subsurface. Because ASTM E 1527-05 excludes consideration of indoor air quality concerns, vapor intrusion risks have typically been absent in Phase I ESA reports. However, under E1527-13, environmental professionals will need to assess possible indoor air quality impacts from vapor intrusion pathways if there is surface soil or groundwater contamination at or near the subject property. As a result, Phase I ESA reports will likely more frequently identify vapor intrusion issues since consultants may no longer use the “indoor air quality” exception to exclude vapor intrusion from the scope of the Phase I ESA.

Finally, the new definition of HREC requires a determination of whether a past release that would otherwise be identified as a HREC should, in fact, be designated as a REC under current standards. A release that has been fully investigated and remediated, and may be subject to a no further action letter, or has been designated as a HREC under prior assessments, may need to be designated as a current REC if more stringent regulatory criteria or thresholds are now in effect. Accordingly, Phase I ESA reports are likely to identify issues previously treated as HRECs as current RECs because federal or state regulatory requirements, such as reporting and cleanup standards, may have been updated since a prior ASTM E 1527-05 report for the property was prepared.

Until such time as the EPA adopts the new standard, parties to a property transaction seeking liability protection under CERCLA may continue to rely on ASTM E 1527-05 or ASTM E 2247-08 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forest Land or World Property,” if the subject property is forest land or rural property. Additionally, parties may follow the regulatory requirements of the AAI final rule.

If you have questions about how this new standard may affect you or your business, please contact a member of the Environmental and Natural Resources Practice Group at Bingham Greenebaum Doll LLP.

DISCLOSURE REQUIRED BY CIRCULAR 230. This Disclosure may be required by Circular 230 issued by the Department of Treasury and the Internal Revenue Service. If this article, including any attachments, contains any federal tax advice, such advice is not intended or written by the practitioner to be used, and it may not be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. Furthermore, any federal tax advice herein (including any attachment hereto) may not be used or referred to in promoting, marketing or recommending a transaction or arrangement to another party. Further information concerning this disclosure, and the reasons for such disclosure, may be obtained upon request from the author of this article. Thank you.



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