## Response to Comments on Proposed Amendment to the

Standards and Practices for All Appropriate Inquiries

December 2013

Office of Brownfields and Land Revitalization Office of Solid Waste and Emergency Response

## Response to Comments on Proposed Amendment to the

Standards and Practices for All Appropriate Inquiries

1. Introduction
On August 15, 2013, EPA published a direct final rule to amend the All Appropriate Inquiries Rule to reference ASTM International ’s updated standard practice for the perfo rmance of Phase I environmental site assessments, E1527

- 13 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process” and make clear that it may be use d to satisfy the requirements for conducting all appropriate inquiries under CERCLA. A companion proposed rule, also published on August 15, 2013, invited comment on the direct final rule and stated that if EPA received negative comment on the proposal to r eference the ASTM E1527

- 13 standard, the Agency would withdraw
the direct final rule. EPA received adverse comments on the direct final rule and published a notice of withdrawal of the direct final rule in the Federal Register on October 29, 2013 (78 FR 6 4403). With today’s action, EPA is addressing the comments received in response to the August 15, 2013 , proposed rule and finalizing the amendment to the Appropriate Inquiries Rule referencing the ASTM
E1527

- 13 standard practice.

### 2. Response to Comments

The remainder of this document provides responses to issues raised by commenters on the proposed rulemaking.


### 2.1 EPA Should Amend the All Appropriate Inquiries Rule to Reference ASTM E1527
- 13 as C ompl iant with the All Appropriate Inquiries Rule Summary: Many commenters stated their support for EPA’s proposal to amend the All Appropriate Inquiries Rule at 40 CFR part 312 to reference ASTM International’s E1527

- 13 “Standard Practice for Environmental Site Assessments:
Phase I Environmental Site Assessment Process” and make clear that it may be

use d to comply with the All Appropriate Inquiries Rule . Most of these commenters voiced their support of the revisions included in the updated ASTM standard and stated that their organizations and clients would imple ment the use of
the ASTM E1527

- 13 standard immediately. A few commenters pointed out that their current contracts with existing clients require that the most current version of ASTM E1527 phase I environmental site assessment standard be used when
conduct ing all appropriate inquiries investigations.
Response: EPA agrees with these commenters. EPA believes that ASTM E1527

- 13 improves upon the previous standard and reflects the evolving best practicesand level of rigor that will afford prospective property owners necessary and

essential information when making property transaction decisions and meeting continuing obligations under the CERCLA liability protections. In particular, the
new ASTM E1527

- 13 standard enhances the previous standard with regard to t he delineation of historical releases or recognized environmental conditions at a property and makes important revisions to the standard practice to clarify that all appropriate inquires and phase I environmental site assessments must include,
within the s cope of the investigation, an assessment of the real or potential occurrence of vapor migration and vapor releases on, at, in or to the subject property. EPA views these enhancements and clarifications to the ASTM standard as valuable improvements and str ongly encourages prospective purchasers of real property to use the updated ASTM E1527

- 13 standard when conducting all appropriate inquiries.



### 2.2 The ASTM E1527
- 05 standard is sufficient and the new standard (ASTM E1527
- 13) is unnecessary. Summary: Several commenters stated that the revisions included in the updated ASTM International standard are not necessary and that EPA should only reference the ASTM E1527

- 05 standard in the All Appropriate Inquiries Rule

. A few of these commenters stated that if EPA re ferences both the E1527

- 05 and E1527

- 13 standards, there will be uncertainty regarding the degree of due diligence that is necessary to satisfy all appropriate inquiries.Response: EPA is simply amending the All Appropriate Inquiries Rule to

reference the new ASTM International standard and make clear that persons conducting all appropriate inquiries may use the procedures included in this standard to comply with the All Appropriate Inquiries Rule. Nevert heless, EPA disagrees with the commenters. The newly issued ASTM E1527

- 13 standard includes revisions to the previous ASTM 1527

- 05 standard that EPA views as improvements . These revisions reflect the evolving best practices and level of rigor that will af

ford prospective property owners necessary and essential information when making property transaction decisions. In particular, the new ASTM E1527

- 13 standard enhances the previous standard with regard to the delineation of historical releases or recogniz ed environmental conditions at a property and makes important revisions to the standard practice to clarify that all appropriate inquires and phase I environmental site assessments must include , within the scope of the investigation , an assessment of the r eal or potential occurrence of vapor migration and vapor releases on, at, in or to the subject property. EPA is taking under consideration the concerns raised by commenters who assert that parties will be confused about the level of due diligence require d because EPA in the All Appropriate Inquiries Rule will continue to reference the ASTM E1527

- 05 standard, as well as reference the ASTM E1527

- 13 standard. As an initial matter, the baseline standard for conducting all appropriate inquiries remains the s tandards and practices set forth at 40 CFR Part 312. EPA’s action in this rule simply recognizes that the new ASTM standard may be used to comply with Part 312. EPA notes in this regard that, unlike in certain other regulatory circumstances, these ASTM sta ndards do not comprise a federal regulation or standard, nor are they incorporated by reference into the federal regulation. Section 101(35) of CERCLA authorizes the EPA to promulgate regulations toestablish standards and practices for conducting all appropriate inquiries, and it

does not require that EPA use any industry

- developed standard. EPA has consistently taken the position that the standard for compliance with all appropriate inquiries is Pa rt 312 itself, rather than any private or industry

- developed standard. For instance, in responding to an EPA Office of Inspector General report on compliance with all appropriate inquiries in the context of brownfields assessment grants, the Office of Gene ral Counsel (OGC) explained, “Although the AAI rule provides that certain ASTM standards ‘may be used to comply with’ federal AAI requirements, 40 CFR 312.11, OGC believes this wording makes clear that the standard for compliance remains the AAI rule itsel f .” Memorandum from John Michaud, Deputy Associate General Counsel, to Mathy Stanislaus, Assistant Administrator, at 2 (March 3, 2011) (emphasis added), available at http://ww w.epa.gov/oig/reports/2011/11

- P

- 0107_Agency_Response.pdf

. In 2008, when EPA issued a rule recognizing the ASTM E2247

- 08 “Standard Practice for Environmental Site Assessment Process for Forestland or Rural Property,” EPA similarly understood its action as establishing an additional method of compliance with Part 312 that would “provide additional flexibility” to practitioners. EPA explained that those using ASTM E2247

- 08 “will be conside red to be in compliance with the requirements for all appropriate inquiries” without altering the ability of others to use either ASTM 1527

- 05 or the AAI rule itself. 73 FR 78718 (December 23, 2008). Finally, in 2005, when EPA first issued the AAI rule a nd recognized the ASTM 1527

- 05 standard, EPA stated “The Agency determined that this voluntary consensus standard is consistent with today’s final rule and is compliant with the statutory criteria for all appropriate inquiries.” 70 FR 66081 (Novemb er 1, 20 05). EPA also stated its intent to allow for the use of new “applicable and compliant voluntary consensus standards ” (emphasis on the plural), while avoiding “disruption to parties using voluntary consensus standardsthat are found to be fully compliant w ith the federal regulations

. ” Id. Thus, in

Agency statements from 2005, 2008, and 2011 the Agency took the same position that it maintains today, which is also reflected in the text of 40 CFR 312.11: parties may use industry standards to comply with Part 312, but the standard for compliance is the AAI rule itself

. Today’s regulatory action is therefore more limited in nature than is presumed by these comments: EPA has reviewed the ASTM E1527

- 13 standard, determined that it complies with the AAI rule, and is issuing this rule to amend the references section of Part 312 to make clear that the ASTM E1527

- 13 standard may be used. However, given that ASTM International recently replaced the E1527

- 05 standard with its E1527

- 13 standard for the conduct of Phase I Environmental Site Assessments and now labels the ASTM E1527

- 05 Standard a historical standard and establishes that the revised standard is the only standard reflecting the current consensus of the responsible ASTM International technical committee, EPA is considering removing the reference to the E1527

- 05 standard in the A ll Appropriate Inquiries Rule

. EPA intends to publish a proposed rulemaking in the near future that will reques t comment on a proposal to amend the A ll A ppropriate I nquiries Rule to remove the current reference to the historical standard (ASTM E1527

- 05). Further, m any other commenters point out that the market will quickly transition to use the updated and most recent version of the AST M International standard. EPA anticipates that those conducting or relying on the ASTM International standard for the conduct of All Appropriate Inquiries will generally adjust to using the updated standard, particularly in light of the fact that ASTM International will label the ASTM E1527

- 05 Standard a historical standard and establish that the revised standard, the E1527

- 13 standard, i s the only standardreflecting the current consensus of the responsible ASTM International technical

committee. 

### 2.3 EPA Should Only Reference the ASTM E1527
- 13

Standard and Remove the Reference to the ASTM E1527
- 05 Standard Summary: Some commenters asserted th at EPA should only reference the updated ASTM International standard and remove the reference to the ASTM E1527

- 05 standard in the All Appropriate Inquiries R ule. Commenters stated that referencing both versions of the ASTM standard will create confusion. A few commenters stated that if EPA continues to reference both versions of the standard, prospective purchasers of commercial property will not embrace the transition to the new revised standard. At least one commenter argued that certain enhancements inc luded in the revised ASTM standard E1527

- 13 (e.g., more rigorous file reviews) will increase the cost of conducting an AAI investigation, if the new standard is used. Therefore, the commenter asserts , if EPA continues to allow the use of the ASTM E1527

- 05 standard, practitioners will not use the revised standard . The commenter argues that EPA therefore should remove the reference to the E1527

- 05 standard to ensure that parties only can use the E1527

- 13 standard. Response: EPA disagrees with the premise of these comments for the same reasons given in section 2.2 above in response to those commenters who requested that EPA not recognize the ASTM E1527

- 13 standard at all . EPA’s prior determination to reference the ASTM E1527

- 05 standard was based upon the Agency’s finding that conducting a phase I environmental site assessment using the ASTM E1527

- 05 standard satisfies the requirements for conducting all appropriate inquiries under CERCLA

. Further, EPA’s intent in referencing theASTM E1527 standard s is to allow for the use of applicable and compliant

voluntary consensus standards to facilitate implementation of the A ll Appropriate I nquiries R ule and avoid disruption to parties using voluntary consensus standards that the Agency finds to be compliant with t he federal regulation. See 70 FR 66081 (November 1, 2005). By referencing voluntary consensus standards as compliant, the Agency is not requiring that parties use these standard s . Parties can comply with the standards and practices included in the Appropriate Inquiries Rule at 40 CFR 312 without using either of the currently referenced ASTM standards. Therefore, EPA did not consider differences in implementation costs between the two ASTM standards to be a relevant or legitimate reason for EPA to r eference one standard over the other

. Although EPA is not removing the reference to the ASTM E1527

- 05 standard in the All Appropriate Inquiries Rule , EPA agrees with the commenters’ statements indicating that the revised ASTM standard includes valuable

en hancements and improvements over the 2005 version of the standard. In the preamble to EPA’s final rule, EPA states that it recommends that parties use the newer version of the standard. The newly issued standard includes revisions to the previous standar d that EPA views as improvements as discussed above and in the preamble. EPA has further explained in the preamble that the Agency may, in it s discretion, review the standards and practices for all appropriate inquiries at 40 CFR Part 312, and as it determines appropriate, revise those standards and practices

. However, such a review and revision process is well beyond the scope of today’s action. Although outside the scope of today’s action, the Agency intend s to publish a proposed rule in the near f uture and take public comment on remov ing the current reference in the AAI Rule to the ASTM E1527

- 05 standard. Th e revised ASTM E1527

- 13 standard is now available from ASTM International andASTM International explained that the ASTM E1527

- 13 standard is the only

standard that reflects the consensus of its technical committee. Therefore, EPA will publish a proposed rule to remove the current reference in the Appropriate Inquiries Rule Rule to the historic standard. Such action will remove any confusion promted by the regulatory reference to a standard that does not correspond to ASTM International’s consensus practice. The Agency determined that this would be best done through a separate rulemaking process in order to giv e the public an opportun ity to review and comment on that proposed action.
M any commenters stated that the organizations and companies that they

re present will quickly transition to the new ASTM E1527

- 13 standard when conducting phase I environmental site assessments . The se commenters also asserted that the market will transition smoothly to the new standard without delay. Commenters stated that on

- going contracts for the performance of Phase I environmental assessment services often include clauses requiring the use of the most recent, or latest, industry standard available. EPA intends to monitor the uptake of the new A STM E1527

- 13 across the commercial and industrial real estate sector to see if these expectations are borne out. Finally, to the extent parties are conducting all appropriate inquiries to avail themselves of a CERCLA liability protection, EPA has found tha t courts look to many case
- specific factors in de termining the sufficiency of a site investigation. C ourts have rejected CERCLA defenses where the parties’ alleged ignorance of contamination at a site amounted to “willful or negligent blindness.” See, e.g., United States v. Monsanto , 858 F.2d 160, 169 (4th Cir. 1988) ; Adobe Lumber, Inc. v. Hellman , 658 F. Supp. 2d 1188, 1206

- 07 (E.D. Cal. 2009)

. Courts generally require case

- specific factual evidence in order to make determinations regarding what may b e reasonable to expect a party to know regarding conditions at a site.See Western Props. Serv. Corp. v. Shell Oil Co., 358 F.3d 678, 688 (9th Cir. 2004)

(“Even if [the party] had not known of the acid sludge pits, the statutory requirement that it . . . ‘carr[y] out all appropriate inquiries’ would prevent it from claiming it had no reason to know of the cow

- eating pits.”); accord United States v. Serafini , 706 F. Supp. 346, 353 (M.D. Pa. 1988) (“After analyzing the evidence in the light of [the CERCLA Se ction 101(35)] factors, the court is unable to find that the defendants’ inaction was inappropriate under the facts of this case.”) (emphasis added).
E ven in cases where environmental investigations were performed, courts look to the quality of the investigation and the reasonableness of the conclusions reached as a result of that investigation. At least one court has rejected an innocent landowner defe nse where the party’s environmental consultant , in conducting the site assessment, neglected to review public records and did not recommend further sampling after contamination was found. See 500 Associates v. Vermont American Corp., 768 F. Supp.2d 914, 9 21 (W.D. Ky. 2011) (noting the party’s “unreasonable reliance upon a cursory environmental audit ” and that the party “unwisely chose to rely on its auditor and do nothing further to investigate”). 1
EPA believes that site

- specific circumstances and condit ions will continue to inform the courts’ review of the strength and satisfactoriness of parties’ conduct of all appropriate inquiries , under both the ASTM standard and the all appropriate inquiries rule. Indeed, many aspects of the AAI rule require the ex ercise of professional judgment with respect to site

- specific circumstances

. See, e.g., 40 CFR §§ 312,21(c) (calls for an opinion on whether conditions are indicative of

1 The foregoing case law discussion is not intended to reflect EPA’s agreement or disagreement with the holdings of these cases, and they do not necessarily reflect the policy or lega l views of the Agency. EPA is mindful that these cases generally involved circumstances that arose prior to the 2002 Brownfields Amendments and the issuance of the AAI regulations. This discussion is intended to highlight the general approach that courts h ave taken in applying the “reason to know” standard in CERCLA.releases) , 312.24(b) (calls for professional judgment on how far back to search

historical records) , 312.26(d) (calls for professional judgment in determining the geographic scope of search distance for government records) , 312.27(c)(3) (calls for comments on the significance of inability to conduct visual inspection) , 312.28(b) (takes into account relevant and applicable specialized knowledge and expertise) , 312.30(c) (calls for evaluation of information taken together as a whole) , and 312.31(b) (calls for opinion on whether additional investigation is appropriate)

. B ecause “the burden of potential CERCLA liability ultimately falls upon the property owner or operator” (70 FR at 66082), EPA believes that parties conducting AAI for this purpose have a strong incentive to ensure that the investigation is done thoroughly and properly.



### 2.4 ASTM International’s Process for Reviewing and Updating Previously Issued Standards Summary: A few commenters raised issues related to ASTM International’s process for reviewing and updating its previously issued standards. Commenters raised issues related to the transparency of the process and the membership of the task groups participating in the standards development process. One commenter stated that he was a member of the ASTM task force re sponsible for updated the E1527 phase I environmental site assessment standard and characterized task group discussions as “controversial.” The commenter stated that because the task group discussions included some controversy between task group members, EPA should not characterize the resultant changes to the E1527 phase I environmental si te assessment as clarifications and not significant. Response: EPA is not requiring that the public use ASTM International ’s revised standard to comply with the All Appropriate Inquiries Rule. Instead, EPA is simply amending the rule to reference the revised standard and make clear thatpersons may use it to comply with the standards and procedures set forth in the

rule. Never theless, EPA disagrees with the commenters. EPA staff participating in ASTM International’s standards development process f ound the process of reviewing and updating standards to be very open. During the development of standards and guides, input and com ments are accepted from any member interested in the standard, regardless of the party’s voting status. ASTM International develops all standards via a consensus

- based process. It also is EPA staff experience that ASTM International carefully monitors co mmittee membership for balance among stakeholder groups. Due to this balance, task group discussions related to some proposed changes to any particular provision of a standard may center upon controversies or differences in opinions between members. 

### 2.5 Sp ecific Regulatory Provisions under the All

Appropriate Inquiries Rule (e.g., the definition of environmental professional)
Summary: Some commenters submitted comments related to the specific provisions of the All Appropriate Inquiries Rule. In particular, several parties submitted comments requesting that EPA change the definition of “environmental professional” included in the rule at section 312.10. 

### Response: EPA did not propose any changes to the All Appropriate Inquiries Rule ’s standards an d practices and did not request comment on the content of the All Appropriate Inquiries Rule . Therefore, the comments that were directed toward settled aspects of the All Appropriate Inquiries Rule are outside the scope of this rulemaking and do not call for a response. Today’s action only amends theAll Appropriate Inquiries Rule to reference the ASTM E1527

- 13 standard practice

for the conduct of phase I environmental site assessments.



### 2.6 Specific Provisions of ASTM International’s E1527
- 13 Standard

Summary: Several commenters commented on specific revisions included in the ASTM E1527

- 13 standard. A few co mmenters stated that the revised standard is fundamentally flawed because the task group assigned to review and update the standard “seems to have been dominated by consultants bent on driving the low

cost, high

- volume ‘phase I’ mills out of business ”

. Other commenters indicated that compliance with the ASTM E1527

- 13 standard would result in higher costs than the costs associated with conducting a phase I environmental site assessment using the ASTM E1527

- 05 standard due to the revised standard’s increas ed rigor with regard to the environmental data file review provisions

. Response: EPA only proposed to reference the ASTM E1527

- 13 standard in the All Appropriate Inquiries Rule and therefore make clear that parties may use the standard to comply with th e rule

. Although commenters raised issues with or expressed their dislike with certain provisions of the ASTM E1527

- 13 standard , none of the commenters provide d arguments or evidence indicating that the use of the ASTM E1527

- 13 would result in a party not being in compliance with the All Appropriate Inquiries Rule

. Moreover, t he Agency is not requiring parties to use the ASTM E1527

- 13 standard to comply with the All Appropriate Inquiries Rule

.