News Flash: U.S. EPA Proposes to Remove E 1527-05 from AAI Rule

Today, on June 17, 2014, the U.S. Environmental Protection Agency went public with a proposed rule to amend the federal All Appropriate Inquiries rule (40 CFR Part 312) under CERCLA to remove the reference to the historical 2005 ASTM Phase I Environmental Site Assessment Standard.  Back on December 30, 2013, the EPA formally recognized the current ASTM E1527-13 Phase I ESA Standard as an option for conducting AAI under CERCLA. Although the December notice still allowed those conducting ESAs to rely on ASTM E1527-05, EPA did announce its intent to remove the reference to the ASTM E1527-05 standard in the AAI rule at a later date in an effort to reduce “regulatory confusion.” Today was the agency’s first procedural step in that direction. Here’s what you need to know about today’s action:

WHAT YOU NEED TO KNOW

1. In November 2013, ASTM replaced E 1527-05 with the updated E 1527-13 standard, and changed the status of the old standard to “historical.”
2. Today’s action is EPA’s attempt to “promote the use of the standard currently recognized by ASTM as the consensus-based, good customary business standard” and to “reduce any confusion associated with the regulatory reference to a historical standard that is no longer recognized by its own promulgating organization as meeting its standard for good customary business practice.”
3. EPA is not proposing any changes to the standards and practices in the AAI rule other than to remove the E 1527-05 reference.
4. If the proposed rule is finalized, parties seeking CERCLA liability protection (as well as parties receiving federal brownfields grants) would only be able to follow ASTM E 1527-13 or the AAI rule, not E 1527-05.

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NEXT STEPS

To address parties that may still be using the historical standard, EPA anticipates providing for a “delayed effective date of the final action to provide parties with an adequate opportunity to complete AAI investigations that may be ongoing and to become familiar with the updated industry standard (ASTM E1527–13).” This will likely be one year after publication of the final rule.
For properties acquired between November 1, 2005 and the effective date of today’s proposed action, assuming it is finalized, the 2005 ASTM standard (ASTM E1527–05) complies with the AAI rule as it was in effect at the time the property was acquired.
Publication of the proposed rule opens up the requisite 30-day comment period. Anyone wishing to submit comments must do so by July 17, 2014. Details for doing so are within the Federal Register notice.
After considering all public comments received by July 17th, EPA may publish a final rule that will result in the removal of the current reference to the ASTM E1527–05 standard.

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The last time EPA opened a public comment period related to the AAI rule was last summer when it proposed recognizing E 1527-13 as AAI-compliant. EDR Insight’s analysis of the results showed that of the 37 unique comments submitted, the majority were in favor of EPA’s decision. It is worth mentioning here that there were nine commenters who, though they didn’t object to EPA recognizing -13, did voice objections to having both the -05 and -13 standards recognized. Today’s action should put those commenters and other like them to rest.

EDR Insight has been closely tracking the industry’s adoption of the new current standard practice, E 1527-13. Outreach to environmental professionals conducted by EDR Insight show that the majority of due diligence professionals are using the current standard for all of their Phase I ESAs. Based on a survey of EPs in early May, a significant 73% said that all of their Phase Is are done in compliance with -13, an increase over 61% back at the end of January.  (18% now do “some to the -13 standard” and only 9% have not yet transitioned over.) Those that are not yet using E 1527-13 should begin moving in that direction now that EPA has set the wheels in motion to strip the E 1527-05 out of the AAI rule.

FOR MORE INFORMATION

To track the proposed rule, and any public comments submitted, visit the public online docket here. EDR Insight will continue to follow developments related to the AAI rule and ASTM E 1527-13.