After a year of uncertainty, on December 15, 2022, the EPA published a final rule amending the All Appropriate Inquiries (AAI) Rule to reference ASTM International's E1527-21, “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process,” and allow for its use to satisfy the requirements for conducting AAIs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Recognition of the previous version of that standard—ASTM E1527-13—as compliant with the AAI rule has been removed.

In March 2022, the EPA issued a direct final rule to amend the AAI Rule to allow the use of ASTM E1527-21, the newer standard, while also still allowing the use of E1527-13, the older standard, to satisfy the CERCLA AAI. That rule was scheduled to go into effect May 13, 2022, unless the EPA received adverse comments, in which case the EPA stated the final rule would be withdrawn, revised to address public comments, and reissued. At that time, the Agency considered the rule to be noncontroversial because of the flexibility offered.

That flexibility proved to be its undoing, as the Agency received multiple comments protesting the use of multiple standards for compliance.

“Our members urge EPA to make the transition to the new 2021 standard and eliminate the flexibility to apply either 2013, 2021, or other standards. The new ASTM standard requires agreed on methods and records to justify the property determination. … Until EPA finalizes the rule designating PFOS and PFOA as hazardous substances under CERCLA, inclusion as part of the ASTM standard, even as a non-scope issue, may lead to additional potential CERCLA liability prematurely for landowners and potential buyers,” wrote the U.S. Chamber of Commerce.

With the recently released final rule, the EPA agreed that only the newer standard should be used. However, users have until February 24, 2025, before being required to use E1527-21.

“The changes in the standard are intended to reflect what industry views to be the current state of ‘good commercial and customary practice’ in preparing Phase I environmental site assessments (ESAs) and to weed out low-cost providers that prepare what many view as deficient reports,” says a Holland & Knight LLP Client Alert. “Other changes were made to provide greater consistency in the language of Phase I ESA reports.”

Background

The Small Business Liability Relief and Brownfields Revitalization Act (the Brownfields Amendments) was signed by President George Bush on January 11, 2002. The CERCLA Brownfields Amendments provide funds to assess and clean up brownfields sites, clarify existing and establish new CERCLA liability provisions related to certain types of owners of contaminated properties, and provide funding to establish or enhance state and tribal cleanup programs.

The amendments also limited liability under Section 107 for bona fide prospective purchasers and contiguous property owners, clarified the requirements necessary to establish the innocent landowner liability protection under CERCLA, and clarified the requirement that parties purchasing potentially contaminated property undertake AAIs into prior ownership and use of property before purchasing the property to qualify for protection from CERCLA liability.

The amendments required the EPA to establish regulations that set standards and practices for ESAs. This resulted in the AAI Rule where ASTM standards were recognized as being compliant with the rule. As ASTM rules have been updated, the AAI Rule has been amended to recognize these updated standards as being in compliance with the rule.