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- Cost Recovery, Superfund, Natural Resource Damages and Citizen Suits
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ASTM Issues Revised Phase I Standard for Environmental Site Assessments
On November 15, 2021, ASTM International published its revised E1527-21 Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process. Prior iterations of ASTM's Phase I Standard have been in existence for over 25 years and have been utilized by purchasers of property seeking to conduct "all appropriate inquiries" and to satisfy some of the criteria required for certain defenses to federal Superfund liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The prior version of ASTM’s Phase I Standard has also been incorporated by reference into the Environmental Protection Agency’s (EPA’s) All Appropriate Inquiry (AAI) Rule, found at 40 C.F.R. §312.11. The revised 2021 ASTM standard, which updates the 2013 Standard, includes certain key changes that will affect how purchasers and environmental professionals conduct environmental due diligence.
As a follow-up to publication of the E1527-21 Standard by ASTM, EPA will begin the process of revising the AAI Rule to incorporate the current version of the standard. As of now, the federal regulations cite to the now historical E1527-13 Standard. The rulemaking process, including the proposed and final rulemaking, may take six months to a year. During this interim period, ASTM Phase I Standard users (real estate buyers, developers, investors, lenders, etc.) and those preparing Phase I’s (consultants/environmental professionals) will need to determine whether satisfying the current federal AAI regulations based on the 2013 standard will suffice, given that a new more modernized (and perhaps more robust) standard practice is now available for environmental professionals to utilize when conducting environmental due diligence. Conformance to the current version of the standard will likely be required to satisfy the EPA’s AAI requirements and qualify for the applicable CERCLA defenses within the next year. Users should consider the merits of conducting a Phase I under the 2021 E1527 Standard even though it is not officially incorporated into the federal regulations. This type of conundrum is similar to what occurred in the 2013 timeframe when ASTM last updated its standard.
As for the revised E1527-21 version of the Standard, the consensus driven process of standards development at ASTM International yielded several important changes that users and environmental professionals should be aware of. Some of the noteworthy changes include the following:
- Detailed discussion and guidance have been added related to key E1527-21 definitions such as Recognized Environmental Condition (REC), Controlled Recognized Environmental Condition (CREC) and Historical Recognized Environmental Condition (HREC). The Standard also now contains a breakdown of the REC definition with a Logic Diagram and several illustrative examples. These are meant to clarify these definitions and to build more consistency amongst the community of users and environmental professionals where environmental professionals are developing conclusions as to what is and what is not a REC.
- New definitions have been added, most notably the term Property Use Limitation (PUL). While ASTM International believes this definition defines existing concepts that were built into older version(s) of E1527, this particular definition was the subject of extensive debate and negative balloting during the E1527 Standard development process. Negative balloters argued that the term is ambiguous, is not a defined term in AAI, and has the potential to create confusion for users and environmental professionals on risk-based decision-making with the implementation of institutional controls when deciding if REC is a CREC.
- The historical research requirements in Section 8 have been restructured and updated to reflect best industry practices. Additionally, for environmental professionals reviewing the uses of adjoining properties, E1527-21 now requires that the following four standard historical resources be evaluated to determine if past uses of the adjoining property have led to a REC in conjunction with the subject property being evaluated. These include (1) aerial photographs, (2) fire insurance maps, (3) local street directories, and (4) topographic maps. Environmental professionals may see additional demands in their scope-of-work for a given property due to the review of standard historical resources for adjoining properties.
The E1527-21 Standard and redline document can be purchased directly from ASTM International for a nominal fee. Both users and environmental professionals should obtain and carefully review the revised E1527-21 Standard as well as the redline of changes from the 2013 version. For additional information regarding the revised 2021 ASTM E1527-21 Standard, and potential issues associated with the interplay between federal AAI requirements and the revised E1527-21 Standard, please feel free to contact Jonathan Spergel, Esquire or Michael Nines, P.E., LEED AP.