United States: EPA Finalizes All Appropriate Inquiries Rule

ASTM E1527-21 to Replace ASTM E1527-13

On December 15, 2022, U.S. EPA published in the Federal Register its final rule updating its AAI Rule, recognizing ASTM E1527-21 as a method for meeting the AAI requirements for CERCLA landowner liability protection, and withdrawing the reference to ASTM E1527-13. The rule becomes effective 60 days after publication (February 13, 2023).

The final rule was modified as a result of a relatively small number (13) of comments received. The predominant tone of objections centered on EPA's initial proposal to simply recognize ASTM E1527-21 while retaining the recognition of E1527-13. On March 14, 2022, EPA had published both a direct final rule and a proposed rule amending AAI. However, the Agency received comments critical of retaining both ASTM versions of E1527.

Commenters pointed out that the updated standard now represented "good commercial and customary business practice," and therefore should replace ASTM E1527-13, rather than merely being added as an additionally recognized standard. Other commenters stated that EPA's continued acceptance of the 2013 version of the ASTM E1527 standard would create confusion within the marketplace because users would need to unnecessarily compare the costs and benefits of the use of the two standards when receiving multiple bids from potential contractors before environmental site assessment. As a result, EPA published a notification of withdrawal of the direct final rule on May 2, 2022 (87 FR 25572) and thereafter evaluated the comments to the proposed rule.

Under the final rule, EPA agreed to remove its reference to the ASTM E1527-13 Standard Practice for Environmental Site Assessments. However, in order to provide parties with an adequate opportunity to complete AAI investigations that may be ongoing, and to allow all parties sufficient notice to become familiar with the updated industry standard (ASTM E1527-21), EPA is providing for a transition period for the removal of its recognition of the historic standard (ASTM E1527-13) as compliant with all appropriate inquiries. The removal of the reference to the historic standard as compliant with the AAI Rule will take effect one year from the date of publication. A Phase 1 Environmental Site Assessment completed before that date using ASTM E1527-13 will be recognized as compliant with the AAI Rule.

While EPA makes the point that use of the ASTM standard is not required to comply with the AAI Rule, it is the de facto practice of the due diligence industry. Purchasers of potentially contaminated properties intending to satisfy AAI requirements as bona fide prospective purchasers, contiguous property owners, or innocent landowners wishing to establish a limitation on CERCLA liability in conjunction with the purchase, or those conducting a site characterization or assessment on a property with funding from a brownfields grant awarded under CERCLA Section 104(k)(2)(B)(ii), will need to become familiar with the new ASTM E1527-21 standard.

This alert does not purport to be a substitute for advice of counsel on specific matters.

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