[Federal Register Volume 70, Number 210 (Tuesday, November 1, 2005)]
[Rules and Regulations]
[Pages 66070-66113]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-21455]
[[Page 66069]]
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Part III
Environmental Protection Agency
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40 CFR Part 312
Standards and Practices for All Appropriate Inquiries; Final Rule
Federal Register / Vol. 70, No. 210 / Tuesday, November 1, 2005 /
Rules and Regulations
[[Page 66070]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 312
[SFUND-2004-0001; FRL-7989-7]
RIN 2050-AF04
Standards and Practices for All Appropriate Inquiries
AGENCY: Environmental Protection Agency.
ACTION: Final rule.
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SUMMARY: The Environmental Protection Agency (EPA) today is
establishing federal standards and practices for conducting all
appropriate inquiries as required under sections 101(35)(B)(ii) and
(iii) of the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA). Today's final rule establishes specific
regulatory requirements and standards for conducting all appropriate
inquiries into the previous ownership and uses of a property for the
purposes of meeting the all appropriate inquiries provisions necessary
to qualify for certain landowner liability protections under CERCLA.
The standards and practices also will be applicable to persons
conducting site characterization and assessments with the use of grants
awarded under CERCLA section 104(k)(2)(B).
DATES: This final rule is effective November 1, 2006.
ADDRESSES: EPA established a docket for this action under Docket ID No.
SFUND-2004-0001. All documents in the docket are listed in the EDOCKET
index at http://www.epa.gov/edocket. Although listed in the index, some
information is not publicly available, i.e., information labeled
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Certain other material, such as
copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically in EDOCKET or in hard
copy at the EPA Docket Center, EPA West Building, Room B102, 1301
Constitution Ave., NW., Washington, DC. This docket facility is open
from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding Federal
holidays. The telephone number for the Public Reading Room is (202)
566-1744, and the telephone number for the OSWER Docket is (202) 566-
0276.
FOR FURTHER INFORMATION CONTACT: For further information on specific
aspects of today's rule, contact Patricia Overmeyer of EPA's Office of
Brownfields Cleanup and Redevelopment at (202) 566-2774 or at
overmeyer.patricia@epa.gov. Mail inquiries may be directed to the
Office of Brownfields Cleanup and Redevelopment (5105T), 1200
Pennsylvania Ave. NW., Washington, DC 20460.
SUPPLEMENTARY INFORMATION:
I. General Information
A. Who Potentially May be Affected by Today's Rule?
This regulation may affect most directly those persons and
businesses purchasing commercial property or any property that will be
used for commercial or public purposes and who may, after purchasing
the property, seek to claim protection from CERCLA liability for
releases or threatened releases of hazardous substances. Under
section101(35)(B) of CERCLA, as amended by the Small Business Liability
Relief and Brownfields Revitalization Act (Pub. L. 107-118, 115 stat.
2356, ``the Brownfields Amendments'') such persons and businesses are
required to conduct all appropriate inquiries prior to or on the date
on which the property is acquired. Prospective landowners who do not
conduct all appropriate inquiries prior to or on the date of obtaining
ownership of the property may lose their ability to claim protection
from CERCLA liability as an innocent landowner, bona fide prospective
purchaser, or contiguous property owner.
In addition, today's rule will affect any party who receives a
brownfields grant awarded under CERCLA section 104(k)(2)(B) and uses
the grant money to conduct site characterization or assessment
activities. This includes state, local and tribal governments that
receive brownfields site assessment grants for the purpose of
conducting site characterization and assessment activities. Such
parties are required under CERCLA section 104(k)(2)(B)(ii) to conduct
such activities in compliance with the standards and practices
established by EPA for the conduct of all appropriate inquiries. EPA
notes that today's rule also may affect other parties who apply for
brownfields grants under the provisions of CERCLA section 104(k), since
such parties may have to qualify as a bona fide prospective purchaser
to ensure compliance with the statutory prohibitions on the use of
grant funds under Section 104(k)(4)(B)(I). Any party seeking liability
protection as a bona fide prospective purchaser, including eligible
brownfields grantees, must conduct all appropriate inquiries prior to
or on the date of acquiring a property.
The background document, ``Economic Impacts Analysis for the
Proposed All Appropriate Inquiries Final Regulation'' and the Addendum
to this document provide a comprehensive analysis of all potentially
impacted entities. These documents are available in the docket
established for today's rule. A summary of potentially affected
businesses is provided in the table below.
Our aim in the table below is to provide a guide for readers
regarding entities likely to be directly regulated or indirectly
affected by today's action. This action, however, may affect other
entities not listed in the table. To determine whether you or your
business is regulated or affected by this action, you should examine
the regulatory language amending CERCLA. This language is found at the
end of this Federal Register notice. If you have questions regarding
the applicability of this action to a particular entity, consult the
person listed in the preceding section entitled FOR FURTHER INFORMATION
CONTACT.
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NAICS
Industry category code
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Manufacturing................................................. 31-33
Wholesale Trade............................................... 42
Retail Trade.................................................. 44-45
Finance and Insurance......................................... 52
Real Estate................................................... 531
Professional, Scientific and Technical Services............... 541
Accommodation and Food Services............................... 72
Repair and Maintenance........................................ 811
Personal and Laundry Services................................. 812
State, Local and Tribal Government............................ N/A
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B. How Can I Get Copies of This Document and Other Related Information?
1. Docket. EPA established an official public docket for this
action under Docket ID No. SFUND-2004-0001. The official public docket
consists of the documents specifically referenced in this action, any
public comments received, and other information related to today's
action. Although a part of the official docket, the public docket does
not include Confidential Business Information (CBI) or other
information whose disclosure is restricted by statute. Documents in the
official public docket are listed in the index list in EPA's electronic
public docket and comment system, EDOCKET. Documents may be available
either electronically or in hard copy. Electronic documents may be
viewed through EDOCKET. Hard copy
[[Page 66071]]
documents may be viewed at the EPA Docket Center, EPA West, Room B102,
1301 Constitution Avenue, NW., Washington, DC. The EPA Docket Center
Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding Federal holidays. The telephone number for the Public
Reading Room is (202) 566-1744, and the telephone number for the OSWER
Docket is (202) 566-0276.
2. Electronic Access. You may access this Federal Register document
electronically through the EPA Internet under the ``Federal Register''
listings at http://www.epa.gov/fedrgstr.
An electronic version of the public docket also is available
through EPA's electronic public docket and comment system, EDOCKET. You
may use EDOCKET at http://www.epa.gov/edocket/ to view public comments,
access the index listing of the contents of the public docket, and
access those documents in the public docket that are available
electronically. Once in the system, select ``search,'' then key in the
appropriate docket identification number.
Certain types of information will not be placed in EDOCKET.
Information claimed as CBI and other information whose disclosure is
restricted by statute, which is not included in the official public
docket, will not be available for public viewing in EPA's electronic
public docket. EPA's policy is that copyrighted material will not be
placed in EPA's electronic public docket but will be available only in
printed, paper form in the official public docket. Docket materials
that are not available electronically may be viewed at the docket
facility identified above.
Contents of Today's Rule
I. Statutory Authority
II. Background
A. What is the Intent of Today's Rule?
B. What is ``All Appropriate Inquiries?''
C. What were the Previous Standards for All Appropriate
Inquiries?
D. What are the Liability Protections Established Under the
Brownfields Amendments?
E. What Criteria Did Congress Establish for the All Appropriate
Inquiries Standard?
III. Summary of Comments and Changes From Proposed Rule to Final
Rule
IV. Detailed Description of Today's Rule
A. What is the Purpose and Scope of the Rule?
B. To Whom is the Rule Applicable?
C. Does the Final Rule Include Any New Reporting or Disclosure
Obligations?
D. What are the Final Documentation Requirements?
E. What are the Qualifications for an Environmental
Professional?
F. References
G. What is Included in ``All Appropriate Inquiries?''
H. Who is Responsible for Conducting the All Appropriate
Inquiries?
I. When Must All Appropriate Inquiries be Conducted?
J. Can a Prospective Landowner Use Information Collected for
Previous Inquiries Completed for the Same Property?
K. Can All Appropriate Inquiries be Conducted by One Party and
Transferred to Another Party?
L. What Are the Objectives and Performance Factors for the All
Appropriate Inquiries Requirements?
M. What are Institutional Controls?
N. How must Data Gaps Be Addressed in the Conduct of All
Appropriate Inquiries?
O. Do Small Quantities of Hazardous Substances That Do Not Pose
Threats to Human Health and the Environment Have to Be Identified in
the Inquiries?
P. What are the Requirements for Interviewing Past and Present
Owners, Operators, and Occupants?
Q. What are the Requirements for Reviews of Historical Sources
of Information?
R. What are the Requirements for Searching for Recorded
Environmental Cleanup Liens?
S. What are the Requirements for Reviewing Federal, State,
Tribal, and Local Government Records?
T. What are the Requirements for Visual Inspections of the
Subject Property and Adjoining Properties?
U. What are the Requirements for the Inclusion of Specialized
Knowledge or Experience on the Part of the ``Defendant?''
V. What are the Requirements for the Relationship of the
Purchase Price to the Value of the Property, if the Property was not
Contaminated?
W. What are the Requirements for Commonly Known or Reasonably
Ascertainable Information about the Property?
X. What are the Requirements for ``the Degree of Obviousness of
the Presence or Likely Presence of Contamination at the Property,
and the Ability to Detect the Contamination by Appropriate
Investigation?''
V. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination with
Indian Tribal Governments
G. Executive Order 13045: Protection of Children from
Environmental Risks and Safety Risks
H. Executive Order 13211: Actions that Significantly Affect
Energy Supply, Distribution or Use
I. National Technology Transfer Advancement Act
J. Executive Order 12898: Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations
K. Congressional Review Act
I. Statutory Authority
These regulations are promulgated under the authority of Section
101(35)(B) of the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (42 U.S.C. 9601), as amended, most
importantly by the Small Business Liability Relief and Brownfields
Revitalization Act.
II. Background
A. What is the Intent of Today's Rule?
On August 26, 2004, EPA published a notice of proposed rulemaking
outlining proposed standards and practices for the conduct of ``all
appropriate inquiries.'' This regulatory action was initiated in
response to legislative amendments to the Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA). On January 11,
2002, President Bush signed the Small Business Liability Relief and
Brownfields Revitalization Act (Pub. L. 107-118, 115 Stat. 2356, ``the
Brownfields Amendments''). The Brownfields Amendments amend CERCLA by
providing funds to assess and clean up brownfields sites, clarifying
CERCLA liability provisions for certain landowners, and providing
funding to enhance state and tribal cleanup programs. The intent of
today's rule is to finalize regulations setting federal standards and
practices for the conduct of all appropriate inquiries, a key provision
of the Brownfields Amendments. Subtitle B of Title II of the
Brownfields Amendments revises CERCLA section 101(35), clarifying the
requirements necessary to establish the innocent landowner defense. In
addition, the Brownfields Amendments add protections from CERCLA
liability for bona fide prospective purchasers and contiguous property
owners who meet certain statutory requirements.
Each of the CERCLA liability provisions for innocent landowners,
bona fide prospective purchasers, and contiguous property owners,
requires that, among other requirements, persons claiming the liability
protections conduct all appropriate inquiries into prior ownership and
use of a property prior to or on the date a person acquires a property.
The law requires EPA to develop regulations establishing standards and
practices for how to conduct all appropriate inquiries. Congress
included in the Brownfields Amendments a list of criteria that the
Agency must address in the regulations establishing standards and
practices for conducting all appropriate inquiries
[[Page 66072]]
section 101(35)(2)(B)(ii) and (iii). The Brownfields Amendments also
require that parties receiving a federal brownfields grant awarded
under CERCLA section 104(k)(2)(B) to conduct site characterizations and
assessments must conduct these activities in accordance with the
standards and practices for all appropriate inquiries.
The regulations established today only address the all appropriate
inquiries provisions of CERCLA sections 101(35)(B)(i)(I) and
101(35)(B)(ii) and (iii). Today's rule does not address the
requirements of CERCLA section 101(35)(B)(i)(II) for what constitutes
``reasonable steps.''
B. What is ``All Appropriate Inquiries?''
An essential step in real property transactions may be evaluating a
property for potential environmental contamination and assessing
potential liability for contamination present at the property. The
process for assessing properties for the presence or potential presence
of environmental contamination often is referred to as ``environmental
due diligence,'' or ``environmental site assessment.'' The
Comprehensive Environmental Response Compensation and Liability Act
(CERCLA) or Superfund, provides for a similar, but legally distinct,
process referred to as ``all appropriate inquiries.''
Under CERCLA, persons may be held strictly liable for cleaning up
hazardous substances at properties that they either currently own or
operate or owned or operated at the time of disposal. Strict liability
in the context of CERCLA means that a potentially responsible party may
be liable for environmental contamination based solely on property
ownership and without regard to fault or negligence.
In 1986, the Superfund Amendments and Reauthorization Act ( Pub. L.
No. 99-499, 100 stat. 1613, ``SARA'') amended CERCLA by creating an
``innocent landowner'' defense to CERCLA liability. The new section
101(35)(B) of CERCLA provided a defense to CERCLA liability, for those
persons who could demonstrate, among other requirements, that they
``did not know and had no reason to know'' prior to purchasing a
property that any hazardous substance that is the subject of a release
or threatened release was disposed of on, in, or at the property. Such
persons, to demonstrate that they had ``no reason to know'' must have
undertaken, prior to, or on the date of acquisition of the property,
``all appropriate inquiries'' into the previous ownership and uses of
the property consistent with good commercial or customary standards and
practices. The 2002 Brownfields Amendments added potential liability
protections for ``contiguous property owners'' and ``bona fide
prospective purchasers'' who also must demonstrate they conducted all
appropriate inquiries, among other requirements, to benefit from the
liability protection.
C. What Were the Previous Standards for All Appropriate Inquiries?
As part of the Brownfields Amendments to CERCLA, Congress
established interim standards for the conduct of all appropriate
inquiries. The federal interim standards established by Congress became
effective on January 11, 2002. In the case of properties purchased
after May 31, 1997, the interim standards include the procedures of the
ASTM Standard E1527-97 (entitled ``Standard Practice for Environmental
Site Assessments: Phase 1 Environmental Site Assessment Process''). In
the case of persons who purchased property prior to May 31, 1997 and
who are seeking to establish an innocent landowner defense or qualify
as a contiguous property owner, CERCLA provides that such persons must
establish, among other statutory requirements, that at the time they
acquired the property, they did not know and had no reason to know of
releases or threatened releases to the property. To establish they did
not know and had no reason to know of releases or threatened releases,
persons who purchased property prior to May 31, 1997 must demonstrate
that they carried out all appropriate inquiries into the previous
ownership and uses of the property in accordance with generally
accepted good commercial and customary standards and practices.
In the case of property acquired by a non-governmental entity or
non-commercial entity for residential or other similar uses, the
current interim standards for all appropriate inquiries may not be
applicable. For those cases, the Brownfields Amendments to CERCLA
establish that a ``facility inspection and title search that reveal no
basis for further investigation shall be considered to satisfy the
requirements' for all appropriate inquiries. In addition, such
properties are not within the scope of today's rule.
The interim standards remain in effect only until the effective
date of today's rule which promulgates federal regulations establishing
standards and practices for conducting all appropriate inquiries.
On May 9, 2003, EPA published a final rule (68 FR 24888) clarifying
that for the purposes of achieving the all appropriate inquiries
standards of CERCLA section 101(35)(B), and until the effective date of
today's regulation, persons who purchase property on or after May 31,
1997 could use either the procedures provided in ASTM E1527-2000,
entitled ``Standard Practice for Environmental Site Assessments: Phase
I Environmental Site Assessment Process,'' or the earlier standard
cited by Congress in the Brownfields Amendments, ASTM E1527-97.
Today's notice is a final rule and as such replaces the current
interim standards for all appropriate inquiries established by Congress
in the Brownfields Amendments and clarified by EPA in the May 9, 2003
final rule. Since the Agency is promulgating a final rule establishing
federal regulations containing the standards and practices for
conducting all appropriate inquiries, the interim standard will no
longer be the operative standard for conducting all appropriate
inquiries upon November 1, 2006, the effective date of today's rule.
Until November 1, 2006, both the standards and practices included in
today's final regulation and the current interim standards established
by Congress for all appropriate inquiries will be recognized by EPA as
satisfying the statutory requirements for the conduct of all
appropriate inquiries under section 101(35)(B) of CERCLA.
D. What are the Liability Protections Established Under the Brownfields
Amendments?
The Brownfields Amendments provide important liability protections
for landowners who qualify as contiguous property owners, bona fide
prospective purchasers, or innocent landowners. To meet the statutory
requirements for any of these landowner liability protections, a
landowner must meet certain threshold requirements and satisfy certain
continuing obligations. To qualify as a bona fide prospective
purchaser, contiguous property owner, or innocent landowner, a person
must perform ``all appropriate inquiries'' on or before the date on
which the person acquired the property. Bona fide prospective
purchasers and contiguous property owners also must demonstrate that
they are not potentially liable or affiliated with any other person
that is potentially liable for response costs at the property. In the
case of contiguous property owners, the landowner claiming to be a
contiguous property owner also must demonstrate that he did not cause,
contribute, or consent to any release or threatened release of
hazardous substances. To meet the statutory requirements for a bona
fide
[[Page 66073]]
prospective purchaser, a property owner must have acquired a property
subsequent to any disposal activities involving hazardous substances at
the property.
Continuing obligations required under the statute include complying
with land use restrictions and not impeding the effectiveness or
integrity of institutional controls; taking ``reasonable steps'' with
respect to hazardous substances affecting a landowner's property to
prevent releases; providing cooperation, assistance and access to EPA,
a state, or other party conducting response actions or natural resource
restoration at the property; complying with CERCLA information requests
and administrative subpoenas; and providing legally required notices.
For a more detailed discussion of these threshold and continuing
requirements please see EPA, Interim Guidance Regarding Criteria
Landowners Must Meet in Order to Qualify for Bona Fide Prospective
Purchaser, Contiguous Property Owner, or Innocent Landowner Limitations
on CERCLA Liability (Common Elements, 2003). A copy of this document is
available in the docket for today's rule.
EPA notes that, as explained below, persons conducting all
appropriate inquiries in compliance with today's final rule are not
entitled to the CERCLA liability protections provided for innocent
landowners, bona fide prospective purchasers, and contiguous property
owners, unless they also comply with all of the continuing obligations
established under the statute. As explained below, compliance with
today's final rule is only one requirement necessary for CERCLA
liability protection. We also note that the requirements of today's
rule apply to prospective property owners who are seeking protection
from liability under the federal Superfund Law (CERCLA). Prospective
property owners wishing to establish protection from, or a defense to,
liability under state superfund or other related laws must comply with
the all criteria established under state laws, including any criteria
for conducting site assessments or all appropriate inquiries
established under applicable state statutes or regulations.
1. Bona Fide Prospective Purchaser
The Brownfields Amendments added a new bona fide prospective
purchaser provision at CERCLA section 107(r). The provision provides
protection from CERCLA liability, and limits EPA's recourse for
unrecovered response costs to a lien on property for the lesser of the
unrecovered response costs or increase in fair market value
attributable to EPA's response action. To meet the statutory
requirements for a bona fide prospective purchaser, a person must meet
the requirements set forth in CERCLA sections 101(40) and 107(r). A
bona fide prospective purchaser must have bought property after January
11, 2002 (the date of enactment of the Brownfields Amendments). A bona
fide prospective purchaser may purchase property with knowledge of
contamination after performing all appropriate inquiries, provided the
property owner meets or complies with all of the other statutory
requirements set forth in CERCLA section 101(40). Conducting all
appropriate inquiries alone does not provide a landowner with
protection against CERCLA liability. Landowners who want to qualify as
bona fide prospective purchasers must comply with all of the statutory
requirements. The statutory requirements include, without limitation,
that the landowner must:
Have acquired a property after all disposal of hazardous
substances at the property ceased;
Provide all legally required notices with respect to the
discovery or release of any hazardous substances at the property;
Exercise appropriate care by taking reasonable steps to
stop continuing releases, prevent any threatened future release, and
prevent or limit human, environmental, or natural resources exposure to
any previously released hazardous substance;
Provide full cooperation, assistance, and access to
persons that are authorized to conduct response actions or natural
resource restorations;
Comply with land use restrictions established or relied on
in connection with a response action;
Not impede the effectiveness or integrity of any
institutional controls;
Comply with any CERCLA request for information or
administrative subpoena; and
Not be potentially liable, or affiliated with any other
person who is potentially liable for response costs for addressing
releases at the property.
Persons claiming to be bona fide prospective purchasers should keep
in mind that failure to identify an environmental condition or identify
a release or threatened release of a hazardous substance on, at, in or
to a property during the conduct of all appropriate inquiries does not
relieve a landowner from complying with the other post-acquisition
statutory requirements for obtaining the liability protections.
Landowners must comply with all the statutory requirements to obtain
the liability protection. For example, an inability to identify a
release or threatened release during the conduct of all appropriate
inquiries does not negate the landowner's responsibilities under the
statute to take reasonable steps to stop a release, prevent a
threatened release, and prevent exposure to any previous release once
any release is identified. Compliance with the other statutory
requirements for the bona fide prospective purchaser liability
protection is not contingent upon the findings of all appropriate
inquiries.
2. Contiguous Property Owner
The Brownfields Amendments added a new contiguous property owner
provision at CERCLA section 107(q). This provision excludes from the
definition of ``owner'' or ``operator'' under CERCLA section 107(a)(1)
and (2) a person who owns property that is ``contiguous to, or
otherwise similarly situated with respect to, and that is or may be
contaminated by a release or threatened release of a hazardous
substance from'' property owned by someone else. To qualify as a
contiguous property owner, a landowner must have no knowledge or reason
to know of contamination at the time of acquisition, have conducted all
appropriate inquiries, and meet all of the criteria set forth in CERCLA
section 107(q)(1)(A), which include, without limitation:
Not causing, contributing, or consenting to the release or
threatened release;
Not being potentially liable nor affiliated with any other
person who is potentially liable for response costs at the property;
Taking reasonable steps to stop continuing releases,
prevent any threatened release, and prevent or limit human,
environmental, or natural resource exposure to any hazardous substances
released on or from the landowner's property;
Providing full cooperation, assistance, and access to
persons that are authorized to conduct response actions or natural
resource restorations;
Complying with land use restrictions established or relied
on in connection with a response action;
Not impeding the effectiveness or integrity of any
institutional controls;
Complying with any CERCLA request for information or
administrative subpoena;
Providing all legally required notices with respect to
discovery or release of any hazardous substances at the property.
The contiguous property owner liability protection ``protects
parties that
[[Page 66074]]
are essentially victims of pollution incidents caused by their
neighbor's actions.'' S. Rep. No. 107-2, at 10 (2001). Contiguous
property owners must perform all appropriate inquiries prior to
purchasing property. However, performing all appropriate inquiries in
accordance with the regulatory requirements alone is not sufficient to
assert the liability protections afforded under CERCLA. Property owners
must fully comply with all of the statutory requirements to be afforded
the contiguous property owner liability protection. Persons who know,
or have reason to know, that the property is or could be contaminated
at the time of acquisition of a property cannot qualify for the
liability protection as a contiguous property owner, but may be
entitled to bona fide prospective purchaser status.
Persons claiming to be contiguous property owners should keep in
mind that failure to identify an environmental condition or identify a
release or threatened release of a hazardous substance on, at, in or to
a property during the conduct of all appropriate inquiries, does not
relieve a landowner from complying with the other statutory
requirements for obtaining the contiguous landowner liability
limitation. Landowners must comply with all the statutory requirements
to qualify for the liability protections. For example, an inability to
identify a release or threatened release during the conduct of all
appropriate inquiries does not negate the landowner's responsibilities
under the statute to take reasonable steps to stop the release, prevent
a threatened release, and prevent exposure to previous releases once a
release is identified. None of the other statutory requirements for the
contiguous property owner liability protection is contingent upon the
results of the conduct of all appropriate inquiries.
3. Innocent Landowner
The Brownfields Amendments also clarify the innocent landowner
defense. To qualify as an innocent landowner, a person must conduct all
appropriate inquiries and meet all of the statutory requirements. The
requirements include, without limitation:
Having no knowledge or reason to know that any hazardous
substance which is the subject of a release or threatened release was
disposed of on, in, or at the facility;
Providing full cooperation, assistance and access to
persons authorized to conduct response actions at the property;
Complying with any land use restrictions and not impeding
the effectiveness or integrity of any institutional controls;
Taking reasonable steps to stop continuing releases,
prevent any threatened release, and prevent or limit human,
environmental, or natural resource exposure to any previously released
hazardous substances;
To successfully assert an innocent landowner liability defense, a
property owner must demonstrate compliance with CERCLA section
107(b)(3) as well. Such persons must establish, by a preponderance of
the evidence:
That the release or threat of release of hazardous
substances and the resulting damages were caused by an act or omission
of a third party with whom the person does not have employment, agency,
or a contractual relationship;
The person exercised due care with respect to the
hazardous substance concerned, taking into consideration the
characteristics of such hazardous substance, in light of all relevant
facts and circumstances;
Took precautions against foreseeable acts or omissions of
any such third party and the consequences that could foreseeably result
from such acts or omissions.
Like contiguous property owners, innocent landowners must perform
all appropriate inquiries prior to or on the date of acquisition of a
property and cannot know, or have reason to know, of contamination to
qualify for this landowner liability protection. Persons claiming to be
innocent landowners also should keep in mind that failure to identify
an environmental condition or identify a release or threatened release
of a hazardous substance on, at, in or to a property during the conduct
of all appropriate inquiries, does not relieve or exempt a landowner
from complying with the other statutory requirements for asserting the
innocent landowner defense. Landowners must comply with all the
statutory requirements to obtain the defense. For example, an inability
to identify a release or threatened release during the conduct of all
appropriate inquiries does not negate the landowner's responsibilities
under the statute to take reasonable steps to stop the release, prevent
a threatened release, and prevent exposure to a previous release.
Compliance with the other statutory requirements for the innocent
landowner defense is not contingent upon the results of an all
appropriate inquiries investigation.
E. What Criteria Did Congress Establish for the All Appropriate
Inquiries Standard?
Congress included in the Brownfields Amendments a list of criteria
that the Agency must include in the regulations establishing standards
and practices for conducting all appropriate inquiries. In addition to
providing these criteria in the statute, Congress instructed EPA to
develop regulations establishing standards and practices for conducting
all appropriate inquiries in accordance with generally accepted good
commercial and customary standards and practices. The criteria are set
forth in CERCLA section 101(35)(2)(B)(iii) and include:
The results of an inquiry by an environmental
professional.
Interviews with past and present owners, operators, and
occupants of the facility for the purpose of gathering information
regarding the potential for contamination at the facility.
Reviews of historical sources, such as chain of title
documents, aerial photographs, building department records, and land
use records, to determine previous uses and occupancies of the real
property since the property was first developed.
Searches for recorded environmental cleanup liens against
the facility that are filed under federal, state, or local law.
Reviews of federal, state, and local government records,
waste disposal records, underground storage tank records, and hazardous
waste handling, generation, treatment, disposal, and spill records,
concerning contamination at or near the facility.
Visual inspections of the facility and of adjoining
properties.
Specialized knowledge or experience on the part of the
defendant.
The relationship of the purchase price to the value of the
property, if the property was not contaminated.
Commonly known or reasonably ascertainable information
about the property.
The degree of obviousness of the presence or likely
presence of contamination at the property, and the ability to detect
the contamination by appropriate investigation.
III. Summary of Comments and Changes From Proposed Rule to Final Rule
EPA received over 400 public comments in response to the August 26,
2004 proposed rule. Comments were received from environmental
consultants with experience in performing site assessments, trade
[[Page 66075]]
associations, state government agencies, environmental interest groups,
and other public interest associations. Commenters generally supported
the purpose and goals of the proposed rule. Many commenters
complimented the Agency on its decision to develop the proposed rule
using the negotiated rulemaking process. However, commenters had
differing views on certain aspects of the proposed rule. In particular,
the Agency received widely differing views on the proposed definition
of ``environmental professional.'' Although many commenters supported
the definition as proposed, other commenters raised concerns regarding
the stringency of the proposed qualifications. A significant number of
commenters applauded the proposed definition of an environmental
professional and stated that it may increase the rigor and caliber of
environmental site investigations. Commenters who would not qualify as
an environmental professional under the proposed definition raised
concerns with regard to the specific qualifications proposed.
EPA received a significant number of comments regarding the
statutory requirements for qualifying for the CERCLA liability
protections. Several commenters also raised concerns with regard to the
performance-based approach to the all appropriate inquiries
investigation included in the proposed rule. Commenters were concerned
that the proposed performance-based approach would make it more
difficult to qualify for the CERCLA liability protections than an
approach that requires strict adherence to prescriptive data gathering
requirements that do not allow for the application of professional
judgment. However, the vast majority of commenters who commented on the
performance-based nature of the proposed rule supported the proposed
approach.
Other commenters raised concerns with regard to the proposed rule's
requirements to identify and comment upon the significance of ``data
gaps'' where the lack of information may affect the ability of an
environmental professional to render an opinion regarding conditions at
a property that are indicative of releases or threatened releases of
hazardous substances. Commenters were concerned that if any data gaps
exist potential contamination would not be identified, allowing
property owners to escape liability for contamination. Other commenters
supported the proposed requirement to identify data gaps, or missing
information, that may affect the environmental professional's ability
to render an opinion regarding the environmental conditions at a
property and comment on their significance in this regard and stated
that the requirement would lend credibility to the inquiry's final
report.
We received many comments on the proposed provision to compare the
purchase price of a property to the fair market value of the property
(if the property were not contaminated). One concern raised is that
commenters believe that the exact market value of a property is
difficult to determine. Some commenters took exception to the fact that
EPA did not propose that prospective landowners have to conduct formal
real estate appraisals of the property to determine fair market value.
Although this provision has been a statutory requirement for the
conduct of all appropriate inquiries since 1986, some commenters
thought the requirement should not be included within the scope of all
appropriate inquiries. Other commenters stated that the environmental
professional should not be required to undertake the comparison.
We received some comments on the results of the economic impact
analysis that was conducted to assess the potential costs and impacts
of the proposed rule. Many commenters generally agreed with the
Agency's conclusion that the average incremental cost increase
associated with the requirements in the proposed rule over the current
industry standard would be minimal. However, some commenters asserted
that EPA underestimated the incremental costs associated with the
proposed rule. Although a few commenters mentioned particular
activities included as requirements in the proposed rule that would
increase the burdens and costs associated with conducting all
appropriate inquiries, most of these commenters did not provide
specific reasons for claimed cost increases over baseline activities.
Some commenters simply stated that the proposed requirements would
result in an increase in the price of phase I environmental site
assessments. We provide a summary of the comments received on the
economic impact analysis for the proposed rule, our responses to issues
raised by commenters, and the results of some additional analyses
conducted based on some of the issues raised, in an addendum to the
economic impact analysis, which is provided in the docket for today's
final rule.
In section IV of this preamble, we discuss the requirements of the
final rule, including a summary of the provisions included in the
August 26, 2004 proposed rule, the significant comments raised in
response to the proposed provisions, and a summary of our rationale for
the final rule requirements. Generally, the final rule closely
resembles the provisions included in the proposed rule. We adopted
relatively minor changes in response to public comments. For example,
we received a number of comments urging EPA to modify the proposed
definition of environmental professional to allow individuals who have
significant experience in conducting environmental site assessments,
but do not have a Baccalaureate degree, to qualify as environmental
professionals. We were convinced by the arguments presented in many of
these public comments. Therefore, the definition of an environmental
professional included in today's final rule allows individuals with ten
years of relevant full time experience to qualify as an environmental
professional for the purpose of overseeing and performing all
appropriate inquiries.
With respect to the proposed requirements governing the use of
previously-conducted environmental site assessments for a particular
property, we agreed with commenters who pointed out the proposed rule
was unclear. In today's final rule, we modify the proposed rule
language to allow for the use of information contained in previously-
conducted assessments, even if the information was collected more than
a year prior to the date on which the subject property is acquired. The
final rule does require that all aspects of a site assessment, or all
appropriate inquiries investigation, completed more than one year prior
to the date of acquisition of the subject property be updated to
reflect current conditions and current property-specific information.
In the case of all appropriate inquiries investigations completed less
than one year prior to the date of acquisition of the subject property
but more than 180 days before the acquisition date, the final rule
retains the requirements of the proposed rule that only certain aspects
of the all appropriate inquiries must be updated.
In the case of the requirement to search for institutional controls
that was included in the proposed requirements to review federal,
state, tribal and local government records, we agreed with commenters
who pointed out that searching for institutional controls associated
with properties located within a half mile of the subject property is
overly burdensome and without sufficient benefit to the purpose of the
investigation. The final rule
[[Page 66076]]
requires that the search for institutional controls be confined to the
subject property only.
We adopted one other change in the final rule, based upon public
comments. In the proposed rule, we delineated responsibilities for
particular aspects of the all appropriate inquiries investigation
between the environmental professional and the prospective landowner of
the subject property (or grantee). We defined the inquiry of the
environmental professional to include: interviews with past and present
owners, operators and occupants; reviews of historical sources of
information; reviews of federal state tribal and local government
records; visual inspections of the facility and adjoining property;
commonly known or reasonably ascertainable information; and degree of
obviousness of the presence or likely presence of contamination at the
property and the ability to detect the contamination by appropriate
investigation. We also defined ``additional inquiries'' that must be
conducted by the prospective landowner or grantee (or an individual on
the prospective landowner's or grantee's behalf). These ``additional
inquiries'' include: specialized knowledge or experience of the
prospective landowner (or grantee); the relationship of the purchase
price to the fair market value of the property, if the property was not
contaminated; and commonly known or reasonably ascertainable
information. The requirement to search for environmental cleanup liens
was proposed to be the responsibility of the prospective landowner (or
grantee), if the search is not conducted by the environmental
professional. The proposed rule required the prospective landowner (or
grantee) to provide all information collected as part of the
``additional inquiries'' to the environmental professional.
The final rule retains the proposed delineation of
responsibilities. However, based upon the input provided in public
comments, the final rule does not require the prospective landowner (or
grantee) to provide the information collected as part of the
``additional inquiries'' to the environmental professional. Although we
continue to believe that the information collected or held by the
prospective landowner (or grantee) should be provided to the
environmental professional overseeing the other aspects of the all
appropriate inquiries, we agree with commenters who asserted that
prospective landowners and grantees should not be required to provide
this information to the environmental professional. Commenters argued
that property owners (and grantees) may want to hold some information
(e.g., the purchase price of the property) confidential. CERCLA
liability rests with the owner or operator of a property and not with
an environmental professional hired by the prospective landowner and
who is not involved with the ownership or operation of the property.
Since it ultimately is up to the owner or operator of a property to
defend his or herself against any claims to liability, we agree with
commenters that asserted that the regulations should not require that
prospective landowners (or grantees) provide information collected to
comply with the ``additional inquiries'' provisions to the
environmental professional. Should the required information not be
provided to the environmental professional, the environmental
professional should assess the impact that the lack of such information
may have on his or her ability to render an opinion with regard to
conditions indicative of releases or threatened releases of hazardous
substances on, at, in or to the property. If the lack of information
does impact the ability of the environmental professional to render an
opinion with regard to the environmental conditions of the property,
the environmental professional should note the missing information as a
data gap in the written report. We discuss each of the requirements of
the final rule in Section IV of this preamble.
IV. Detailed Description of Today's Rule
A. What Is the Purpose and Scope of the Rule?
The purpose of today's rule is to establish federal standards and
practices for the conduct of all appropriate inquiries. Such inquiries
must be conducted by persons seeking any of the landowner liability
protections under CERCLA prior to acquiring a property (as outlined in
Section II.D. of this preamble). In addition, persons receiving federal
brownfields grants under the authorities of CERCLA section 104(k)(2)(B)
to conduct site characterizations and assessments must conduct such
activities in compliance with the all appropriate inquiries
regulations.
In the case of persons claiming one of the CERCLA landowner
liability protections, the scope of today's rule includes the conduct
of all appropriate inquiries for the purpose of identifying releases
and threatened releases of hazardous substances on, at, in or to the
property that would be the subject of a response action for which a
liability protection would be needed and such a property is owned by
the person asserting protection from liability. CERCLA liability is
limited to releases and threatened releases of hazardous substances
which cause the incurrence of response costs. Therefore, in the case of
all appropriate inquiries conducted for the purpose of qualifying for
protection from CERCLA liability (CERCLA section 107), the scope of the
inquiries is to identify releases and threatened releases of hazardous
substances which cause or threaten to cause the incurrence of response
costs.
In the case of persons receiving Federal brownfields grants to
conduct site characterizations and assessments, the scope of the all
appropriate inquiries standards and practices may be broader. The
Brownfields Amendments include a definition of a ``brownfield site''
that includes properties contaminated or potentially contaminated with
substances not included in the definition of ``hazardous substance'' in
CERCLA section 101(14). Brownfields sites include properties
contaminated with (or potentially contaminated with) hazardous
substances, petroleum and petroleum products, controlled substances,
and pollutants and contaminants (as defined in CERCLA section 101(33)).
Therefore, in the case of persons receiving federal brownfields grant
monies to conduct site assessment and characterization activities at
brownfields sites, the scope of the all appropriate inquiries may
include these other substances, as outlined in Sec. 312.1(c)(2), to
ensure that persons receiving brownfields grants can appropriately and
fully assess the properties as required. It is not the case that every
recipient of a brownfields assessment grant has to include within the
scope of the all appropriate inquiries petroleum and petroleum
products, controlled substances and CERCLA pollutants and contaminants
(as defined in CERCLA section 101(33)). However, in those cases where
the terms and conditions of the grant or the cooperative agreement with
the grantee designate a broader scope to the investigation (beyond
CERCLA hazardous substances), then the scope of the all appropriate
inquiries should include the additional substances or contaminants.
The scope of today's rule does not include property purchased by a
non-governmental entity or non-commercial entity for ``residential use
or other similar uses * * * [where] a facility inspection and title
search * * * reveal no basis for further investigation.'' (Pub. L. 107-
118 Sec. 223). CERCLA section
[[Page 66077]]
101(35)(B)(v) states that in those cases, title search and facility
inspection that reveal no basis for further investigation shall satisfy
the requirements for all appropriate inquiries.
We note that today's rule does not affect the existing CERCLA
liability protections for state and local governments that acquire
ownership to properties involuntarily in their functions as sovereigns,
pursuant to CERCLA sections 101(20)(D) and 101(35)(A)(ii). Involuntary
acquisition of properties by state and local governments fall under
those CERCLA provisions and EPA's policy guidance on those provisions,
not under the all appropriate inquiry provisions of CERCLA section
101(35)(B).
B. To Whom Is the Rule Applicable?
Today's rule applies to any person who may seek the landowner
liability protections of CERCLA as an innocent landowner, contiguous
property owner, or bona fide prospective purchaser. The statutory
requirements to obtain each of these landowner liability protections
include the conduct of all appropriate inquiries. In addition, the rule
applies to individuals receiving Federal grant monies under CERCLA
section 104(k)(2)(B) to conduct site characterization and assessment
activities. Persons receiving such grant monies must conduct the site
characterization and assessment in compliance with the all appropriate
inquiries regulatory requirements.
C. Does the Final Rule Include Any New Reporting or Disclosure
Obligations?
The final rule does not include any new reporting or disclosure
obligations. The rule only applies to those property owners who may
seek the landowner liability protections provided under CERCLA for
innocent landowners, contiguous property owners or bona fide
prospective purchasers. The documentation requirements included in this
rule are primarily intended to enhance the inquiries by requiring the
environmental professional to record the results of the inquiries and
his or her conclusions regarding conditions indicative of releases and
threatened releases on, at, in, or to the property and to provide a
record of the environmental professional's inquiry. Today's rule
contains no new requirements to notify or submit information to EPA or
any other government entity.
Although today's rule does not include any new disclosure
requirements, CERCLA section 103 does require persons in charge of
vessels and facilities, including on-shore and off-shore facilities, to
notify the National Response Center of any release of a hazardous
substance from the vessel or facility in a quantity equal to or greater
than a ``reportable quantity,'' as defined in CERCLA section 102(b).
Today's rule includes no changes to this reporting requirement nor any
changes to any other reporting or disclosure requirements under
federal, tribal, or state law.
D. What Are the Final Documentation Requirements?
The proposed rule required that the environmental professional, on
behalf of the property owner, document the results of the all
appropriate inquiries in a written report. As explained in the preamble
to the proposed rule, the property owner could use this report to
document the results of the inquiries. Such a report can be similar in
nature to the type of report previously provided under generally
accepted commercial practices. We proposed no requirements regarding
the length, structure, or specific format of the written report. In
addition, the proposed rule did not require that a written report of
any kind be submitted to EPA or any other government agency, or that a
written report be maintained on-site at the subject property for any
length of time.
Today's final rule retains the requirements, as proposed, for
documenting the results of the all appropriate inquiries investigation
conducted under the supervision or responsible charge of an
environmental professional. As noted above, the primary purpose of the
documentation requirement is to enhance the inquiry of the
environmental professional by requiring that the environmental
professional record the results of the inquiries and his or her
conclusions. The written report may allow any person claiming one of
the CERCLA landowner liability protections to offer documentation in
support of his or her claim that all appropriate inquiries were
conducted in compliance with the federal regulations.\1\ The Agency
notes that while today's final regulation does not require parties
conducting all appropriate inquiries to retain the written report or
any other documentation discovered, consulted, or created in the course
of conducting the inquiries, the retention of such documentation and
records may be helpful should the property owner need to assert
protection from CERCLA liability after purchasing a property.
---------------------------------------------------------------------------
\1\ Nothing in this regulation or preamble is intended to
suggest that any particular documentation prepared in conducting all
appropriate inquiries will be admissible in court in any litigation
where a party raises one of the liability protections, or will in
any way alter the judicial rules of evidence.
---------------------------------------------------------------------------
The final rule requires that a written report documenting the
results of the all appropriate inquiries include an opinion of an
environmental professional as to whether the all appropriate inquiries
conducted identified conditions indicative of releases or threatened
releases of hazardous substances on, at, in or to the subject property.
The rule also requires that the report identify data gaps in the
information collected that affect the ability of the environmental
professional to render such an opinion and that the environmental
professional comment on the significance of the data gaps.
Several commenters raised issues with regard to the proposed
requirement that the environmental professional document and comment on
the significance of data gaps that affect the ability of the
environmental professional to identify conditions indicative of
releases or threatened releases of hazardous substances on at, in, or
to the subject property. Some commenters stated that the need to
identify data gaps will make it difficult to determine when an all
appropriate inquiries investigation is complete and therefore the
requirement would act as a disincentive to the development of
potentially contaminated properties. Other commenters asserted that the
fact that the regulations recognize data gaps creates a loophole that
would result in property owners claiming to be protected from CERCLA
liability after conducting an incomplete investigation that includes
significant data gaps. These commenters raised concerns that CERCLA
liability protection could be claimed by property owners simply because
they conducted an all appropriate inquiries investigation, even in
those cases where releases on, at, in, or to the property were missed
during the investigation. Other commenters stated their support for the
requirements to document data gaps, as proposed. A summary of EPA's
response to these comments and the requirements for documenting data
gaps included in the final rule is provided below in Section IV.N.
The final rule, at Sec. 312.21(d), retains the proposed
requirement that the environmental professional who conducts or
oversees the all appropriate inquiries sign the written report. There
are two purposes for the requirement to include a signature in the
report. First, the individual signing the report must declare, on the
signature page, that he or she meets the definition of an
[[Page 66078]]
environmental professional, as provided in Sec. 312.10. In addition,
the rule requires that the environmental professional declare that: [I,
We] have developed and performed the all appropriate inquiries in
conformance with the standards and practices set forth in 40 CFR part
312.
Some commenters raised concerns about whether the proposed rule
would require the environmental professional to certify the all
appropriate inquiries report and its findings. Today's final rule does
not require the environmental professional to ``certify'' the results
of the all appropriate inquiries when signing the report. The two
statements or declarations mentioned above and required to be included
in the final written report documenting the conduct of all appropriate
inquiries are meant to document that an individual meeting the
qualifications of an environmental professional was involved in the
conduct of the all appropriate inquiries and that the activities
performed by, or under the supervision or responsible charge of, the
environmental professional were performed in conformance with the
regulations. Reports signed by individuals holding a Professional
Engineer (P.E.) or Professional Geologist (P.G.) license, need not
include the individual's professional seal.
A few commenters requested that EPA include specific requirements
for the content of a final report in the final rule. Given that the
type and extent of information available on a particular property may
vary greatly with its size, type, past uses, and location, and the type
and extent of information necessary for an environmental professional
to render an opinion regarding conditions indicative of releases or
threatened releases of hazardous substances associated with any
property may vary, we decided not to include in the final rule specific
requirements governing the content of all reports.
The provisions of the final rule allow for the property owner (or
grantee) and any environmental professional engaged in the conduct of
all appropriate inquiries for a specific property to design and develop
the format and content of a written report that will meet the
prospective landowner's (or grantee's) objectives and information needs
in addition to providing documentation that all appropriate inquiries
were completed prior to the acquisition of the property, should the
landowner (or grantee) need to assert protection from liability after
purchasing a property.
E. What Are the Qualifications for an Environmental Professional?
Proposed Rule
In the Brownfields Amendments, Congress required that all
appropriate inquiries include ``the results of an inquiry by an
environmental professional'' (CERCLA section 101(35)(B)(iii)(I)). The
proposed rule included minimal qualifications for persons managing or
overseeing all appropriate inquiries. The intent of setting minimum
professional qualifications, is to ensure that all inquiries are
conducted at a high level of professional ability and ensure the
overall quality of both the inquiries conducted and the conclusions or
opinions rendered with regard to conditions indicative of the presence
of a release or threatened release on, at, in, or to a property, based
upon the results of all inquiries. The proposed rule required that an
environmental professional conducting or overseeing all appropriate
inquiries possess sufficient specific education, training, and
experience necessary to exercise professional judgment to develop
opinions and conclusions regarding the presence of releases or
threatened releases of hazardous substances to the surface or
subsurface of a property. In addition, the proposed rule included
minimum qualifications, including minimum levels of education and
experience, that characterize the type of professional who is best
qualified to oversee and direct the development of comprehensive
inquiries and provide the landowner with sound conclusions and opinions
regarding the potential for releases or threatened releases to be
present at the property. The proposed rule allowed for individuals not
meeting the proposed definition of an environmental professional to
contribute to and participate in the all appropriate inquiries on the
condition that such individuals are conducting inquiries activities
under the supervision or responsible charge of an individual that meets
the regulatory definition of an environmental professional.
The proposed rule required that the final review of the all
appropriate inquiries and the conclusions that follow from the
inquiries rest with an individual who qualifies as an environmental
professional, as defined in proposed section Sec. 312.10 of the
proposed rule. The proposed rule also required that in signing the
report, the environmental professional must document that he or she
meets the definition of an ``environmental professional'' included in
the regulations.
The proposed definition first and foremost required that, to
qualify as an environmental professional, a person must ``possess
sufficient specific education, training, and experience necessary to
exercise professional judgment to develop opinions and conclusions
regarding the presence of releases or threatened releases * * * to the
surface or subsurface of a property, sufficient to meet the objectives
and performance factors'' that are provided in the proposed regulation.
The proposed definition of an environmental professional included
individuals who possess the following combinations of education and
experience.
Hold a current Professional Engineer's (P.E.) or
Professional Geologist's (P.G.) license or registration from a state,
tribe, or U.S. territory and have the equivalent of three (3) years of
full-time relevant experience; or
Be licensed or certified by the federal government, a
state, tribe, or U.S. territory to perform environmental inquiries as
defined in Sec. 312.21 and have the equivalent of three (3) years of
full-time relevant experience; or
Have a Baccalaureate or higher degree from an accredited
institution of higher education in a relevant discipline of
engineering, environmental science, or earth science and the equivalent
of five (5) years of full-time relevant experience; or
As of the date of the promulgation of the final rule, have
a Baccalaureate or higher degree from an accredited institution of
higher education and the equivalent of ten (10) years of full-time
relevant experience.
Public Comments
We received a significant number of public comments on the proposed
definition of environmental professional. Many commenters supported the
definition of environmental professional as proposed. However, a
significant number of commenters raised concerns with regard to the
proposed educational requirements. Commenters pointed out that the
proposed minimum qualifications for an environmental professional did
not allow for individuals with many years of relevant experience in
conducting environmental site assessments to qualify as environmental
professionals, if such individuals do not have college degrees. The
proposed rule only allowed for persons with a Baccalaureate degree or
higher in specific disciplines of science and engineering, and a
specific number of years of experience, to qualify as an
[[Page 66079]]
environmental professional, unless an individual was otherwise licensed
as an environmental professional by a state, tribe or the federal
government. Some commenters questioned the Agency's reasoning for
restricting the degree requirements to only certain types of science or
engineering. Commenters requested that EPA provide more specific
definitions of the types of science and engineering degrees that would
be necessary to qualify as an environmental professional.
Commenters also asserted that the proposed ``grandfather clause''
allowing for individuals having a Baccalaureate degree (or higher) and
who accumulated ten years of full time relevant experience on or before
the promulgation date of the final rule to qualify as an environmental
professional was too stringent and provided too small of a window of
opportunity for individuals not otherwise meeting the proposed
definition of environmental professional to qualify.
Some commenters stated that the definition of environmental
professional should not be restricted to those individuals licensed as
P.E.s or P.G.s. A few commenters stated that a licensed professional is
no more qualified to perform all appropriate inquiries investigations
than other individuals with a significant number of years of experience
in conducting such activities. Other commenters asserted that only
licensed P.E.s and P.G.s are qualified to supervise all appropriate
inquiries activities.
EPA also received comments from independent professional
certification organizations and members of these organizations,
including the Academy of Certified Hazardous Materials Managers,
requesting that their organizations' certification programs be named in
the regulatory definition of an environmental professional.
Final Rule
After careful consideration of the issues raised by commenters
regarding the proposed definition of environmental professional, we
made a few modifications to the proposed definition to reduce the
potential burden that the proposed definition may have placed upon
individuals who have significant experience in conducting environmental
site assessments but do not meet the proposed educational, or college
degree, requirements. We agree with those commenters who asserted that
individuals with a significant number of years of experience in
performing environmental site assessments, or all appropriate inquiries
investigations, should qualify as environmental professionals for the
purpose of conducting all appropriate inquiries, even in cases where
such individuals do not have a college degree. Therefore, in the final
rule, persons with ten or more years of full-time relevant experience
in conducting environmental site assessments and related activities may
qualify as environmental professionals, without having received a
college degree.
In addition, we agreed with commenters who pointed out that the
requirement that environmental professionals hold specific types of
science or engineering degrees was too limiting. In the final rule,
persons with any science or engineering degree (regardless of specific
discipline in science or engineering) can qualify as an environmental
professional, if they also meet the other required qualifications,
including the requirement to have five (5) years of full-time relevant
experience.
We also agree with commenters who asserted that the proposed
grandfather clause was too restrictive. As mentioned above, we agree
with commenters who pointed out that individuals with a significant
number of years of experience in conducting environmental site
assessments or all appropriate inquiries investigations should be able
to qualify as environmental professionals, for the purpose of carrying
out the provisions of today's rulemaking. In addition, we agree with
commenters who stated that the ability for experienced professionals to
qualify as an environmental professional should not be limited to those
who meet the threshold qualifications on the effective date of the
final rule. Therefore, the proposed grandfather clause is not included
within the definition of environmental professional in the final rule.
As explained above, in today's final rule, individuals with ten or more
years of full-time relevant experience in conducting environmental site
assessments and related investigations will qualify as environmental
professionals for the purposes of this rulemaking.
The final rule retains the provision recognizing as environmental
professionals those individuals who are licensed by any tribal or state
government as a P.E. or P.G., and have three years of full-time
relevant experience in conducting all appropriate inquiries. We
continue to contend that such individuals have sufficient specific
education, training, and experience necessary to exercise professional
judgment to develop opinions and conclusions regarding conditions
indicative of releases or threatened releases on, at, in, or to a
property, including the presence of releases to the surface or
subsurface of the property, sufficient to meet the objectives and
performance factors provided in the regulation. The rigor of the
tribal- and state-licensed P.E. and P.G. certification processes,
including the educational and training requirements, as well as the
examination requirements, paired with the requirement to have three
years of relevant professional experience conducting all appropriate
inquiries will ensure that all appropriate inquiries are conducted
under the supervision or responsible charge of an individual well
qualified to oversee the collection and interpretation of site-specific
information and render informed opinions and conclusions regarding the
environmental conditions at a property, including opinions and
conclusions regarding conditions indicative of releases or threatened
releases of hazardous substances and other contaminants on, at, in, or
to the property. The Agency's decision to recognize tribal and state-
licensed P.E.s and P.G.s reflects the fact that tribal governments and
state legislatures hold such professionals responsible (legally and
ethically) for safeguarding public safety, public health, and the
environment. To become a P.E. or P.G. requires that an applicant have a
combination of accredited college education followed by approved
professional training and experience. Once a publicly-appointed review
board approves a candidate's credentials, the candidate is permitted to
take a rigorous exam. The candidate must pass the examination to earn a
license, and perform ethically to maintain it. After a state or tribe
grants a license to an individual, and as a condition of maintaining
the license, many states require P.E.s and P.G.s to maintain
proficiency by participating in approved continuing education and
professional development programs. In addition, tribal and state
licensing boards can investigate complaints of negligence or
incompetence on the part of licensed professionals, and may impose
fines and other disciplinary actions such as cease and desist orders or
license revocation.
Although the final rule recognizes tribal and state-licensed P.E.
and P.G.s and other such government licensed environmental
professionals with three years of experience to be environmental
professionals, the rule does not restrict the definition of an
environmental professional to these licensed individuals. The
definition of an
[[Page 66080]]
environmental professional also includes individuals who hold a
Baccalaureate or higher degree from an accredited institution of higher
education in engineering or science and have the equivalent of five (5)
years of full-time relevant experience in conducting environmental site
assessments, or all appropriate inquiries. In addition, individuals
with ten years of full-time relevant experience in conducting
environmental site assessments, or all appropriate inquiries qualify as
environmental professionals for the purpose of conducting all
appropriate inquiries. Individuals with these qualifications most
likely will possess sufficient specific education, training, and
experience necessary to exercise professional judgment to develop
opinions and conclusions regarding conditions indicative of releases or
threatened releases on, at, in, or to a property, sufficient to meet
the objectives and performance factors included in Sec. 312.20(e) and
(f).
In addition to the qualifications for environmental professionals
mentioned above, EPA is retaining the proposed provision to include
within the definition of an environmental professional individuals who
are licensed to perform environmental site assessments or all
appropriate inquiries by the Federal government (e.g., the Bureau of
Indian Affairs) or under a state or tribal certification program,
provided that these individuals also have three years of full-time
relevant experience. We contend that individuals licensed by state and
tribal governments, or by any department or agency within the federal
government, to perform all appropriate inquiries or environmental site
assessments, should be allowed to qualify as an environmental
professional under today's regulation. State and tribal agencies may
best determine the qualifications defining individuals who ``possess
sufficient specific education, training, and experience necessary to
exercise professional judgment to develop opinions and conclusions
regarding conditions indicative of releases or threatened releases on,
at, in, or to a property, sufficient to meet the rule's objectives and
performance factors'' within any particular state or tribal
jurisdiction.
In response to requests from members of independent certification
organizations that EPA recognize in the regulation those organizations
whose certification requirements meet the environmental professional
qualifications included in the final rule, we point out that today's
final rule does not reference any private party professional
certification standards. Such an approach would require that EPA review
the certification requirements of each organization to determine
whether or not each organization's certification requirements meet or
exceed the regulatory qualifications for an environmental professional.
Given that there may be many such organizations and given that each
organization may review and change its certification qualifications on
a frequent or periodic basis, we conclude that such a undertaking is
not practicable. EPA does not have the necessary resources to review
the procedures of each private certification organization and review
and approve each organization's certification qualifications.
Therefore, the final rule includes within the regulatory definition of
an environmental professional, general performance-based standards or
qualifications for determining who may meet the definition of an
environmental professional for the purposes of conducting all
appropriate inquiries. These standards include education and experience
qualifications, as summarized below. The final rule does not recognize,
or reference, any private organization's certification program within
the context of the regulatory language. However, the Agency notes that
any individual with a certification from a private certification
organization where the organization's certification qualifications
include the same or more stringent education and experience
requirements as those included in today's final regulation will meet
the definition of an environmental professional for the purposes of
this regulation.
Based upon the input received from the public commenters, EPA
determined that the definition of environmental professional included
in today's final rule establishes a balance between the merits of
setting a high standard of excellence for the conduct of all
appropriate inquiries through the establishment of stringent
qualifications for environmental professionals and the need to ensure
that experienced and highly competent individuals currently conducting
all appropriate inquiries are not displaced.
Summary of Final Rule's Definition of Environmental Professional
In summary, the definition of environmental professional included
in today's final rule includes individuals who possess the following
qualifications:
Hold a current Professional Engineer's or Professional
Geologist's license or registration from a state, tribe, or U.S.
territory and have the equivalent of three (3) years of full-time
relevant experience; or
Be licensed or certified by the federal government, a
state, tribe, or U.S. territory to perform environmental inquiries as
defined in Sec. 312.21 and have the equivalent of three (3) years of
full-time relevant experience; or
Have a Baccalaureate or higher degree from an accredited
institution of higher education in science or engineering and the
equivalent of five (5) years of full-time relevant experience; or
Have the equivalent of ten (10) years of full-time
relevant experience.
The definition of ``relevant experience'' is ``participation in the
performance of environmental site assessments that may include
environmental analyses, investigations, and remediation which involve
the understanding of surface and subsurface environmental conditions
and the processes used to evaluate these conditions and for which
professional judgment was used to develop opinions regarding conditions
indicative of releases or threatened releases * * * to the subject
property.''
The final rule retains the proposed requirement that environmental
professionals remain current in their field by participating in
continuing education or other activities and be able to demonstrate
such efforts.
The final rule also retains the allowance for individuals not
meeting the definition of an environmental professional to contribute
to and participate in the all appropriate inquiries on the condition
that such individuals are conducting inquiries activities under the
supervision or responsible charge of an individual that meets the
regulatory definition of an environmental professional. This provision
allows for a team of individuals working for the same firm or
organization (e.g., individuals working for the same government agency)
to share the workload for conducting all appropriate inquiries for a
single property, provided that one member of the team meets the
definition of an environmental professional and reviews the results and
conclusions of the inquiries and signs the final report.
The final rule requires that the final review of the all
appropriate inquiries and the conclusions that follow from the
inquiries rest with an individual who qualifies as an environmental
professional, as defined in Sec. 312.10. The final rule also requires
that in signing
[[Page 66081]]
the report, the environmental professional must document that he or she
meets the definition of an ``environmental professional'' included in
the regulations.
F. References
Proposed Rule
In the proposed rule, the Agency reserved a reference section and
stated in the preamble that we may include references to applicable
voluntary consensus standards developed by standards' developing
organizations that are not inconsistent with the final regulatory
requirements for all appropriate inquiries or otherwise impractical.
The Agency requested comments regarding available commercially accepted
voluntary consensus standards that may be applicable to and compliant
with the proposed federal standards for all appropriate inquiries.
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C.
272 note), directs agencies to use technical standards that are
developed or adopted by voluntary consensus standards bodies, unless
their use would be inconsistent with applicable law or otherwise
impractical. Voluntary consensus standards are technical standards
(e.g., materials specifications, test methods, sampling procedures, and
business practices) that are developed or adopted by voluntary
consensus standards bodies. When developing the proposed rule, EPA
considered using an existing voluntary consensus standard developed by
ASTM International as the federal standard for all appropriate
inquiries. This standard is known as the ASTM E1527-2000 standard
(entitled ``Standard Practice for Environmental Site Assessments: Phase
I Environmental Site Assessment Process''). In the preamble to the
proposed rule, we acknowledged the prevalent use of the ASTM E1527-2000
standard and the fact that it generally is recognized as good and
customary commercial practice. However, when we proposed the federal
standards for all appropriate inquiries, EPA determined that the ASTM
E1527-2000 standard is inconsistent with applicable law. As a result,
EPA chose not to reference the ASTM E1527-2000 standard because it was
inconsistent with applicable law.
Public Comments
We received relatively few comments citing available and applicable
voluntary consensus standards for conducting all appropriate inquiries.
Several commenters did argue that the interim standard cited in the
statute, the ASTM E1527-97 Environmental Site Assessments: Phase I
Environmental Site Assessment Process, or the updated ASTM E1527-2000,
is sufficient to meet the statutory criteria. A few commenters stated a
preference for the ASTM E1527-2000 standard over the requirements
included in the proposed rule. ASTM International is a standards
development organization whose committees develop voluntary consensus
standards for a variety of materials, products, systems and services.
ASTM International is the only standards development organization that
submitted a comment requesting that the Agency consider its standard,
the ASTM E1527-2000 Standard Practice for Environmental Site
Assessments: Phase I Environmental Site Assessment Process, as an
equivalent standard to the federal regulations.
Final Rule
Since publication of the proposed rule, ASTM International and its
E50 committee, the committee responsible for the development of the
ASTM E1527-2000 Phase I Environmental Site Assessment Process, has
reviewed and updated the ``2000'' version of the E1527 standard to
address EPA's concerns regarding the differences between the ASTM
E1527-2000 standard and the criteria established by Congress in the
Brownfields Amendments to CERCLA. These activities were conducted
within the normal review and updating process that ASTM International
undertakes for each standard over a five-year cycle.
In today's final rule, EPA is referencing the standards and
practices developed by ASTM International and known as Standard E1527-
05 (entitled ``Standard Practice for Environmental Site Assessments:
Phase I Environmental Site Assessment Process'') and recognizing the
E1527-05 standard as consistent with today's final rule. 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. Persons conducting all appropriate inquiries may
use the procedures included in the ASTM E1527-05 standard to comply
with today's final rule.
It is the Agency's intent to allow for the use of applicable and
compliant voluntary consensus standards when possible to facilitate
implementation of the final regulations and avoid disruption to parties
using voluntary consensus standards that are found to be fully
compliant with the federal regulations.
G. What Is Included in ``All Appropriate Inquiries?''
Proposed Rule
The proposed regulations for conducting all appropriate inquiries
outlined the standards and practices for conducting the activities
included in each of the statutory criterion established by Congress in
the Brownfields Amendments. These criteria are set forth in CERCLA
section 101(35)(B)(iii) and are:
The results of an inquiry by an environmental professional
(proposed Sec. 312.21).
Interviews with past and present owners, operators, and
occupants of the facility for the purpose of gathering information
regarding the potential for contamination at the facility (proposed
Sec. 312.23).
Reviews of historical sources, such as chain of title
documents, aerial photographs, building department records, and land
use records, to determine previous uses and occupancies of the real
property since the property was first developed (proposed Sec.
312.24).
Searches for recorded environmental cleanup liens against
the facility that are filed under Federal, State, or local law
(proposed Sec. 312.25).
Reviews of Federal, State, and local government records,
waste disposal records, underground storage tank records, and hazardous
waste handling, generation, treatment, disposal, and spill records,
concerning contamination at or near the facility (proposed Sec.
312.26).
Visual inspections of the facility and of adjoining
properties (proposed Sec. 312.27).
Specialized knowledge or experience on the part of the
defendant (proposed Sec. 312.28).
The relationship of the purchase price to the value of the
property, if the property was not contaminated (proposed Sec. 312.29).
Commonly known or reasonably ascertainable information
about the property (proposed Sec. 312.30).
The degree of obviousness of the presence or likely
presence of contamination at the property, and the ability to detect
the contamination by appropriate investigation (proposed Sec. 312.31).
Public Comments
We received a few comments addressing the statutory criteria and
the
[[Page 66082]]
inclusion of certain particular criteria within the scope of the
proposed rule. Some commenters requested that EPA not include in the
final rule the criterion to consider the relationship of the purchase
price of the property to the fair market value of the property, if the
property is not contaminated. In addition, a few commenters stated the
final rule should not include within the scope of the all appropriate
inquiries the specialized knowledge or experience on the part of the
prospective landowner.
The Agency notes that both criteria that commenters requested be
removed from the scope of the all appropriate inquiries regulations are
criteria specifically required by Congress to be included in the
regulations. In addition, both criteria have been part of the all
appropriate inquiries provisions under the CERCLA innocent landowner
defense since 1986. The proposed rule included no changes from the
previous statutory provisions.
Final Rule
The final rule retains provisions addressing each of the statutory
criteria for the conduct of all appropriate inquiries included in
CERCLA section 101(35)(B)(iii).
H. Who Is Responsible for Conducting the All Appropriate Inquiries?
The Brownfields Amendments to CERCLA require persons claiming any
of the landowner liability protections to conduct all appropriate
inquiries into the past uses and ownership of the subject property. The
criteria included in the Brownfields Amendments for the regulatory
standards for all appropriate inquiries require that the inquiries
include an inquiry by an environmental professional. The statute does
not require that all criteria or inquiries be conducted by an
environmental professional.
Proposed Rule
The proposed rule required that many, but not all, of the inquiries
activities be conducted by, or under the supervision or responsible
charge of, an individual meeting the qualifications of the proposed
definition of an environmental professional. The proposed rule also
provided that several of the activities included in the inquiries could
be conducted either by the prospective landowner or grantee, and not
have to be conducted under the supervision or responsible charge of the
environmental professional. The proposed rule required that the results
of all activities conducted by the prospective landowner or grantee,
and not conducted by or under the supervision or responsible charge of
the environmental professional, be provided to the environmental
professional to ensure that such information could be fully considered
when the environmental professional develops an opinion, based on the
inquiry activities, as to whether conditions at the property are
indicative of a release or threatened release of a hazardous substance
(or other contaminant) on, at, in, or to the property.
The proposed rule allowed for the following activities to be the
responsibility of, or conducted by, the prospective landowner or
grantee and not necessarily be conducted by the environmental
professional, provided the results of such inquiries or activities are
provided to an environmental professional overseeing the all
appropriate inquiries:
Searches for environmental cleanup liens against the
subject property that are filed or recorded under federal, tribal,
state, or local law, as required by proposed Sec. 312.25.
Assessments of any specialized knowledge or experience on
the part of the landowner, as required by Sec. 312.28.
An assessment of the relationship of the purchase price to
the fair market value of the subject property, if the property was not
contaminated, as required by Sec. 312.29.
An assessment of commonly known or reasonably
ascertainable information about the subject property, as required by
Sec. 312.30.
The proposed rule required that all other required inquiries and
activities, beyond those listed above to be conducted by, or under the
supervision or responsible charge of, an environmental professional.
Public Comments
Several commenters asserted that the mandatory nature of the
proposed provision requiring the prospective landowner to provide
information regarding the four criteria listed above to the
environmental professional is problematic. Particularly with regard to
the requirement to provide ``specialized knowledge or experience of the
defendant,'' commenters pointed out difficulties in a prospective
landowner being able to document such knowledge and experience
sufficiently. Also, with regard to the information related to the
``relationship of the purchase price to the fair market value of the
property, if the property was not contaminated,'' many commenters
pointed out that prospective landowners may not want to divulge
information regarding the price paid for a property. Commenters pointed
out that the requirement to consider ``commonly known or reasonably
ascertainable information'' about a property is implicit to all aspects
of the all appropriate inquiries requirements. In addition, commenters
stated that CERCLA liability lies solely with the owners and operators
of a vessel or property. A decision on the part of a prospective
landowner to not furnish an environmental professional with certain
information related to any of the statutory criteria can only affect
the property owner's ability to claim a liability protection provided
under the statute. In addition, the statute does not mandate that
information deemed to be the responsibility of the prospective
landowner and not part of the ``inquiry of the environment
professional'' be provided to the environmental professional or even be
part of the inquiry of the environmental professional. Some of the
statutory criteria are inherently the responsibility of the prospective
landowner.
Final Rule
We agree with the commenters who asserted that the results and
information related to the criteria identified as being the
responsibility of the prospective landowner should not, as a matter of
law, have to be provided to the environmental professional. The statute
does not mandate that a prospective landowner provide all information
to an environmental professional. Given that the burden of potential
CERCLA liability ultimately falls upon the property owner or operator,
a prospective landowner's decision not to provide the results of an
inquiry or related information to an environmental professional he or
she hired to undertake other aspects of the all appropriate inquiries
investigation can only affect the liability of the property owner. In
addition, we believe that the environmental professional may be able to
develop an opinion with regard to conditions indicative of releases or
threatened releases on, at, in, or to a property based upon the results
of the criteria identified to be part of the ``inquiry of an
environmental professional.'' Any information not furnished to the
environmental professional by the prospective landowner that may affect
the environmental professional's ability to render such an opinion may
be identified by the environmental professional as a ``data gap.'' The
provisions of the final rule (as did the proposed rule) then require
that the environmental professional comment on the significance of the
data gap or missing information on his or her ability to render such an
opinion, in light of all
[[Page 66083]]
other information collected and all other data sources consulted.
As a result of our consideration of the issues raised by
commenters, today's final rule modifies the requirements of Sec.
312.22 ``additional inquiries'' by stating (in paragraph (a)) that
``persons * * * may provide the information associated with such
inquiries [i.e., the information for which the prospective landowner or
brownfields grantee is responsible] to the environmental professional *
* *.'' The proposed rule provided that such information ``must be
provided'' to the environmental professional. Although we expect that
most prospective landowners and grantees will furnish available
information or knowledge about a property to an environmental
professional he or she hired when such information could assist the
environmental professional in ascertaining the environmental conditions
at a property, we affirm that compliance with the statutory criteria
does not require that such information be disclosed. Ultimately, CERCLA
liability rests with the owner or operator of a facility or property
owner and it is the information held by the property owner or operator
that may be reviewed in a court of law when determining an owner or
operator's liability status, regardless of whether all information was
disclosed to an environmental professional during the conduct of all
appropriate inquiries.
I. When Must All Appropriate Inquiries Be Conducted?
CERCLA section 101(40)(B)(i), as amended, requires bona fide
prospective purchasers to conduct all appropriate inquiries into
``previous ownerships and uses of the facility.'' In the case of
contiguous property owners, CERCLA section 107(q)(1)(A)(viii) requires
that a person claiming to be a contiguous property owner conduct all
appropriate inquiries ``at the time at which the person acquired the
property.'' In the case of innocent landowners, section
101(35)(B)(i)(I) of CERCLA requires that the property owner conduct all
appropriate inquiries ``on or before the date on which the defendant
acquired the facility.''
Proposed Rule
Other than to specify that all appropriate inquiries must be
conducted on or prior to the date a person acquires a property, the
statute is silent regarding how close to the actual date of acquisition
the inquiries must be completed. The proposed rule required that all
appropriate inquiries be conducted or updated within one year prior to
taking title to a property. The proposed rule provided that prospective
landowners could use information collected as part of previous
inquiries for the same property, if the inquiries were completed or
updated within one year prior to the date the property is acquired. The
proposed rule required that certain information collected as part of a
previous all appropriate inquiries be updated if it was collected more
than 180 days prior to the date a person purchased the property. In
addition, in the preamble to the proposed rule, Agency defined the date
of acquisition of a property as the date on which the prospective
landowner acquires title to the property.
Public Comments
Commenters generally agreed with the proposed provision to define
the date of acquisition of a property as the date on which a person
acquires title to the property. A few commenters stated that the
requirement for an all appropriate inquiries investigation to be
completed within a year of the date of acquisition of the property is
too stringent and may not allow sufficient time for some property
transactions to be completed. Some commenters also asserted that the
proposed requirement to update certain aspects of the all appropriate
inquiries investigation, if the investigation was conducted more than
180 days prior to the date of the acquisition of the property was too
stringent.
Final Rule
The Agency continues to believe that the event that most closely
reflects the Congressional intent of the date on which the defendant
acquired the property is the date on which a person received title to
the property. As explained in the preamble to the proposed rule, the
Agency considered other dates, such as the date a prospective landowner
signs a purchase or sale agreement. However, it could be burdensome to
require a prospective landowner to have completed the all appropriate
inquiries prior to having an agreement with a seller to complete a
sales transaction. In fact, the time period between the date on which a
sales agreement is signed and the date on which the title to the
property is actually transferred to the prospective landowner may be
the most convenient time for the prospective landowner to obtain access
to the property and undertake the all appropriate inquiries. In
addition, requiring that all appropriate inquiries be completed on some
date prior to the date of title transfer could result in requiring
prospective landowners to undertake all appropriate inquiries so early
in the property acquisition process as to require the inquiries to be
completed prior to the prospective landowner making a final decision on
whether to actually acquire the property.
To increase the potential that the information collected for the
all appropriate inquiries accurately reflects the proposed objectives
and performance factors, as well as to increase the potential that
opinions and judgments regarding the environmental conditions at a
property that are included in an all appropriate inquiries report are
based on current and relevant information, the Agency is retaining the
proposed provision that all appropriate inquiries be conducted within
one year prior to the prospective landowner acquiring the property.
Today's final rule includes regulatory language at Sec. 312.20(a)
clarifying that all appropriate inquiries must be conducted within one
year prior to the date on which a person acquires a property.
All appropriate inquiries may include information collected for
previous inquiries that were conducted or updated within one year prior
to the acquisition date of the property. In addition, as explained in
more detail below, the final rule retains the requirement that several
of the components of the inquiries be updated within 180 days prior to
the date the property is purchased. Today's final rule includes a
definition of the ``date of acquisition,'' or purchase date, of a
property (i.e., the date the landowner obtains title to the property).
Although commenters may be correct in their assertions that some
property transactions may take more than a year to close, we continue
to believe that it is important for the all appropriate inquiries
investigation to be completed within one year prior to the date the
property is acquired. We point out that the final regulation, as did
the proposed regulation, allows for information from an older
investigation to be used in a current investigation. However, if the
prior all appropriate inquiries investigation was completed more than a
year prior to the property acquisition date, all parts of the
investigation must be reviewed and updated for the all appropriate
inquiries to be complete. We believe that a year is sufficient time for
conditions at a property to change. In particular, in cases where there
is a release or threatened release at a property, significant changes
to the environmental conditions of a property could occur during the
course of a year. In addition, depending upon the uses and ownership of
a property during the
[[Page 66084]]
course of a one-year time period, overall conditions at a property
could change and new evidence of a release or threatened release could
appear. Therefore, today's final rule requires that all appropriate
inquiries completed for a particular property more than one year prior
to the date of acquisition of that property, be updated in their
entirety. As summarized below, the final rule does allow for the use of
information contained in previous inquiries, even when the inquiries
were completed more than a year prior to the property acquisition date,
as long as all information was updated within a year and includes any
changes that may have occurred during the interim.
J. Can a Prospective Landowner Use Information Collected for Previous
Inquiries Completed for the Same Property?
Proposed Rule
The proposed rule allowed parties conducting all appropriate
inquiries to use the results of and information from previous inquiries
completed for the same property, under certain conditions. First, the
previous inquiries must have been conducted in compliance with the
proposed rule and with CERCLA sections 101(35)(B), 101(40)(B) and
107(q)(A)(viii). In addition, the information in the previous inquiries
must have been collected or updated within one year prior to the date
of acquisition of the property. Certain types of information collected
more than 180 days prior to the current date of acquisition must be
updated for the current all appropriate inquiries. Also, the
information required under some specific criterion (e.g., relationship
of purchase price to property value, specialized knowledge on part of
defendant) must be collected specifically for the current transaction.
Public Comments
A significant number of commenters pointed out that the regulatory
language in proposed Sec. 312.20(b)(1) of the proposed rule precludes
the use of information contained in assessments or the results of all
appropriate inquiries conducted more than a year prior to the date of
acquisition of a property. Commenters pointed out that since the
language in the proposed rule stated that previously collected
information had to have been collected ``in compliance with the
requirements of * * * 40 CFR Part 312,'' any information included in
all appropriate inquiries reports completed prior to the promulgation
of the final rule could not be used, since compliance with the
regulation could not be achieved prior to its publication.
Final Rule
It is not the Agency's intent to disallow the use of information
contained in previous inquiries, if the environmental professional and
the prospective landowner find the previously collected information to
be accurate and valid. However, EPA continues to believe that
information collected as part of a prior all appropriate inquiries
investigation for the same property should be updated to reflect
current environmental conditions at the property and to include any
specific information or specialized knowledge held by the prospective
landowner. The regulatory language in today's final rule (at Sec.
312.20(c)(1)) allows for the use of information collected as part of
prior all appropriate inquiries investigation for the same property
provided that the prior information was collected ``during the conduct
of all appropriate inquiries in compliance with CERCLA sections
101(35)(B), 101(40)(B) and 107(q)(A)(viii).'' We have deleted the
proposed language that would have required the previously conducted
investigation to have been done in compliance with the final
regulation. This allows for the use of information collected as part of
previous all appropriate inquiries, as long as the information was
collected in compliance with the statutory provisions for all
appropriate inquiries. For property purchased on or after May 31, 1997,
therefore, any information collected as part of an assessment in
compliance with the ASTM E1527-97 standard or the ASTM E1527-2000
standard may be used as part of a current all appropriate inquiries
investigation. For property purchased before May 31, 1997, information
from assessments completed and in compliance with the statutory
provisions at CERCLA section 101(35)(B)(iv)(I) may be used as part of a
current all appropriate inquiries investigation. However, this prior
information may only be used if updated in accordance with Sec. Sec.
312.20(b) and (c) of today's rule.
The final rule continues to recognize that there is value in using
previously collected information when such information was collected in
accordance with the statutory provisions and good customary business
practices, particularly when the use of such previously-collected
information will reduce the need to undertake duplicative efforts.
The final rule also retains the requirement that certain aspects of
the all appropriate inquiries investigation be updated if the
investigation was completed more than 180 days prior to the date of
acquisition of the property (or the date on which the prospective
landowner takes title to the property) to ensure that an all
appropriate inquiries investigation accurately reflects the current
environmental conditions at a property. To increase the potential that
information collected about the conditions of a property is accurate,
as well as increase the potential that opinions and judgments regarding
the environmental conditions at a property that are included in an all
appropriate inquiries report are based on current and relevant
information, the final rule requires that many of the components of the
previous inquiries be updated within 180 days prior to the date of
acquisition of the property. The components of the all appropriate
inquiries that must be updated within 180 days prior to the date on
which the property is acquired are:
Interviews with past and present owners, operators, and
occupants (Sec. 312.23);
Searches for recorded environmental cleanup liens (Sec.
312.25);
Reviews of federal, tribal, state, and local government
records (Sec. 312.26);
Visual inspections of the facility and of adjoining
properties (Sec. 312.27); and
The declaration by the environmental professional (Sec.
312.21(d)).
Also, the final rule retains the proposed requirement that in all
cases where a prospective landowner is using previously collected
information, the all appropriate inquiries for the current purchase
must be updated to include a summary of any relevant changes to the
conditions of the property and any specialized knowledge of the
prospective landowner.
In today's final rule, we continue to recognize that it is not
sufficient to wholly adopt previously conducted all appropriate
inquiries for the same property without any review. Certain aspects of
the all appropriate inquiries investigation are specific to the current
prospective landowner and the current purchase transaction. Therefore,
the final rule requires that each all appropriate inquiries
investigation include current information related to:
Any relevant specialized knowledge held by the current
prospective landowner and the environmental professional responsible
for overseeing and signing the all appropriate inquiries report (i.e.,
requirements of Sec. 312.28);
[[Page 66085]]
The relationship of the current purchase price to the
value of the property, if the property were not contaminated (i.e.,
requirements of Sec. 312.29); and
Commonly known or reasonably ascertainable information
about the property.
K. Can All Appropriate Inquiries Be Conducted by One Party and
Transferred to Another Party?
Proposed Rule
The proposed rule allowed for all appropriate inquiries to be
conducted by one party and transferred to another party, provided that
certain conditions are met. Under certain circumstances, the
prospective landowner, or a grantee, may use a report of all
appropriate inquiries conducted for the property by or for another
party, including the seller of the property or another party. For
example, there are situations where the federal government or a state
government agency may conduct the all appropriate inquiries on behalf
of the local government for a property being purchased by a local
government, such as the ``targeted brownfields assessments'' conducted
on behalf of local governments by EPA. This situation also may occur
when a state government covers the cost of the all appropriate
inquiries for a property owned by a local government or actually
conducts the all appropriate inquiries itself when the local government
does not have access to appropriate staff or capital resources. A local
government may conduct all appropriate inquiries for a third party in
its community, such as a private prospective landowner. In addition,
local redevelopment agencies may locate a contaminated property,
conduct all appropriate inquiries, acquire the property, and then sell
the property to a private developer.
The proposed rule allowed for a person acquiring a property, or a
grantee, to use the results of an all appropriate inquiries report
conducted by or for another party, if the report meets the proposed
rule's objectives and performance factors and the person who is seeking
to use the previously-collected information or report reviews all
information collected and updates the contents of the report as
required by Sec. 312.20(c) and necessary to accurately reflect current
conditions at the property. In addition, the proposed rule required
that the prospective landowner, or grantee, update the inquiries and
the report to include any commonly known and reasonably ascertainable
information, relevant specialized knowledge held by the prospective
landowner and the environmental professional, and the relationship of
the purchase price to the value of the property, if it were not
contaminated.
Public Comments
Commenters generally supported the proposed provision allowing for
all appropriate inquiries investigations conducted by or for one party
to be used by another party.
Final Rule
For the reasons discussed in the preamble to the proposed rule and
summarized above, the final rule retains the provision allowing that
all appropriate inquiries investigations may be conducted by or for one
party and used by another party. In all cases, the all appropriate
inquiries investigation must be updated to include commonly known and
reasonably ascertainable information and any relevant specialized
knowledge held by the prospective landowner and environmental
professional. In addition, the evaluation of the relationship between
the purchase price and the fair market value of the property must
reflect the current sale of the property. In all other aspects of the
investigation, the all appropriate inquiries must be in compliance with
the provisions of the final regulation.
L. What Are the Objectives and Performance Factors for the All
Appropriate Inquiries Requirements?
Proposed Rule
As explained in the preamble to the proposed rule, when developing
the proposed standards, EPA and the Negotiated Rulemaking Committee
structured the proposal around the statutory criteria established by
Congress in section 101(35)(B)(iii) of CERCLA. As development of the
proposed rule progressed, it became apparent that the purposes and
objectives for the individual criterion and the types of information
that must be collected to meet the objectives of each criterion often
overlapped. For example, in developing standards addressing the
criterion requiring a review of historical information, a search for
recorded environmental cleanup liens, and a review of government
records, the Committee concluded that the objectives of each criterion
or activity were similar, which could lead to the collection of the
same information to fulfill each of the criterion's objectives. For
example, a chain of title document is historic information that may
include information on environmental cleanup liens, as well as
information on past owners of the property indicating that previous
owners managed hazardous substances on the property.
To avoid requiring duplicative efforts, but to ensure that the
proposed regulations included standards and practices that result in a
comprehensive assessment of the environmental conditions at a property,
the proposed all appropriate inquiries standards were structured around
a concise set of objectives and performance factors. The proposed
objectives and performance factors applied to the standards
comprehensively. In conducting the inquiries collectively, the
landowner and the environmental professional must seek to achieve the
objectives and performance factors and use the objectives and standards
as guidelines in implementing, in total, all of the other proposed
regulatory standards and practices.
Public Comments
Commenters overwhelmingly supported the proposed approach of
structuring the all appropriate inquiries standards around a definitive
set of performance factors and objectives. Commenters stated that the
establishment of performance factors will improve the quality of
environmental site assessments because the performance factors allow
for the application of professional judgement and provide flexibility.
A few commenters did not support the proposed approach of
structuring the regulations around a set of performance factors and
objectives. These commenters asserted that the objectives and
performance factors made the regulation too vague and open-ended. In
addition, the commenters stated that they want the regulation to be
centered around a ``checklist'' of activities, each of which should be
required to be completed independently and without consideration of a
comprehensive performance approach. Commenters who argued for a
checklist approach said that such an approach would ensure that the
environmental professional only would have to undertake a finite list
of activities and it would be easier (in the commenter's opinion) for
property owners to obtain liability protection if the list of
activities could be completed without regard to performance goals or an
overall objective. These commenters also expressed concern that, if the
regulations are based on performance factors that the all appropriate
inquiries investigation would not have an
[[Page 66086]]
endpoint at which prospective landowners could stop looking for
evidence of releases or threatened releases. The commenters believed
that under a checklist approach liability protection would be awarded
upon completion of all activities on the checklist.
Final Rule
We are retaining the proposed performance factors and objectives in
the final rule. We continue to believe, as did many commenters, that
basing the regulations on a set of overall performance factors and
specific objectives lends clarity and flexibility to the standards.
Such an approach also allows for the application of professional
judgment and expertise to account for site-specific circumstances. The
primary objective of an all appropriate inquiries investigation is to
identify conditions indicative of releases and threatened releases of
hazardous substances on, at, in, or to the subject property. In the
case of recipients of brownfields grants, the objective may be expanded
to include petroleum and petroleum products, pollutants, contaminants,
and controlled substances, depending upon the scope of the grantee's
cooperative agreement.
The performance factors are meant to guide the individual aspects
of the investigation toward meeting both the statutory criteria for all
appropriate inquiries and the regulatory objectives of (1) collecting
necessary information about the uses and ownerships of a property and
(2) identifying, through the collection of this information, conditions
indicative of releases and threatened releases on, at, in, or to the
subject property. By establishing a concise set of objectives and
setting some boundaries on the information collection activities
through the establishment of performance factors, we believe that the
final rule fulfills the statutory objectives, provides for a
comprehensive assessment of the environmental conditions at the
property, and avoids the conduct of duplicative investigations and data
collection efforts.
EPA disagrees with the commenters who argued that the proposed
approach of establishing overall objectives and performance factors for
the all appropriate inquiries standards would result in an approach
that is too vague and open-ended. In fact, by establishing clear
objectives and setting parameters to the investigation through a set of
performance factors that include gathering information that is publicly
available, obtainable from its source within reasonable time and cost
constraints, and which can practicably be reviewed, the approach taken
in the final rule provides reasonable goals and endpoints to the
information collection requirements. The proposed objectives provide a
discrete list of the types of information that must be collected as
part of the all appropriate inquiries investigation. In addition, the
performance factors set boundaries around the efforts that must be
taken and the cost burdens that must be incurred to obtain the required
information. The fact that the rule is framed within a primary
objective, to ``identify conditions indicative of releases and
threatened releases of hazardous substances,'' actually reduces the
open-ended nature of the investigation and establishes an overall goal
for the inquiries.
Commenters who advocated that a checklist approach (or an approach
not based upon overall objectives and performance factors) is superior
because they believe that it would better provide for a stopping point
in the investigation may have misunderstood the statutory requirements
that must be met to obtain a defense to CERCLA liability. These
commenters may have incorrectly assumed that the completion of the all
appropriate inquiries investigation is all that is required to obtain
liability protection. The conduct of all appropriate inquiries is only
one requirement for obtaining relief from CERCLA liability. Prospective
landowners must conduct all appropriate inquiries prior to acquiring a
property to qualify for a defense to CERCLA liability as an innocent
landowner, bona fide prospective purchaser or contiguous landowner.
However, once a property is acquired, the property owner must comply
with all of the other statutory criteria necessary to qualify for the
liability protections. In particular, landowners must undertake
``reasonable steps'' to ``stop any continuing releases.'' Therefore,
the final rule's objective of identifying conditions indicative of
releases and threatened releases of hazardous substances on, at, in, or
to a property links appropriately with the statutory criteria requiring
the landowner to address such releases to qualify for the liability
protections.
Conducting the inquiries merely in compliance with a checklist and
without the purpose of meeting an overall objective could result in an
inability to recognize the value of certain types of information or in
chasing down multiple sources of information that may not have added
value for meeting the overall objective of the investigation. A lack of
information or an inability to obtain information that may affect the
ability of an environmental professional to determine whether or not
there are conditions indicative of a release or threatened release of a
hazardous substance (or other contaminant) on, at, in or to a property
can have significant consequences regarding a prospective landowner's
ultimate ability to claim protection from CERCLA liability. Failure to
identify a release during the conduct of all appropriate inquiries does
not relieve the property owner from the responsibility to take
reasonable steps and address the release. Even if the Agency agreed
with the commenters and adopted a ``checklist'' approach for the
regulation, simply conducting the checklist of activities and ending
the investigation after each activity is conducted would not result in
protection from CERCLA liability (as commenters claimed).
The final rule also establishes that in those cases where certain
information included in the list of regulatory objectives (Sec.
312.20(e)) cannot be found or obtained within the parameters of the
performance factors, such data gaps must be identified and the
significance of the missing information with regard to the
environmental professional's ability to render an opinion on the
presence of conditions indicative of releases and threatened releases
be documented. Exhaustive and costly efforts do not have to be made to
access all available sources of data and find every piece of data and
information about a property. Nor does the rule require that
duplicative information be sought from multiple sources. The inquiries
and the overall investigation must be undertaken to meet the data
collection objectives and primarily determine the environmental
conditions of the property. Structuring the standards around such
objectives will render the results of the investigation more valuable
to a landowner in his or her efforts to comply with the post
acquisition continuing obligations for obtaining the CERCLA liability
protections than an approach framed around a mere checklist of
activities.
In retaining the proposed objectives and performance factors, the
final rule allows that an all appropriate inquiries investigation need
not address each of the regulatory criterion in any particular
sequence. In addition, information relevant to more than one criterion
need not be collected twice, and a single source of information may
satisfy the requirements of more than one criterion and more than one
objective. However, the information required to achieve each
[[Page 66087]]
of the objectives and performance factors must be obtained for the all
appropriate inquiries investigation to be complete. Although compliance
with the all appropriate inquiries requirements ultimately will be
determined in court, the final rule allows the prospective landowner or
grantee and environmental professional to determine the best process
and sequence for collecting and analyzing all required information. The
sequence of activities and the sources of information used to collect
any required information is left to the judgment and expertise of the
environmental professional, provided that the overall objectives and
the performance factors established for the final rule are met.
In performing the inquiries, including but not limited to
conducting interviews, collecting historical data and government
records, and inspecting the subject property and adjoining properties,
all parties undertaking all appropriate inquiries must be attentive to
the fact that the primary objectives of the regulation are to identify
the following types of information about the subject property:
Current and past property uses and occupancies;
Current and past uses of hazardous substances;
Waste management and disposal activities that could have
caused releases or threatened releases of hazardous substances;
Current and past corrective actions and response
activities undertaken to address past and on-going releases of
hazardous substances;
Engineering controls;
Institutional controls; and
Properties adjoining or located nearby the subject
property that have environmental conditions that could have resulted in
conditions indicative of releases or threatened releases of hazardous
substances on, at, in, or to the subject property.
EPA notes that in the case of brownfields grantees, the scope of
each of the activities listed above may be broader if the grant or
cooperative agreement includes within its scope the assessment of a
property for conditions indicative of releases or threatened releases
of petroleum and petroleum products, controlled substances, or other
contaminants.
The final performance factors for achieving the objectives set
forth above are set forth in Sec. 312.20(e) and require the persons
conducting the inquiries to: (1) Gather the information that is
required for each standard and practice that is publicly available,
obtainable from its source within reasonable time and cost constraints,
and which can practicably be reviewed, and (2) review and evaluate the
thoroughness and reliability of the information gathered in complying
with each standard and practice, taking into account information
gathered in the course of complying with the other standards and
practices of this subpart. In complying with Sec. 312.20(f)(2), if the
environmental professional or person conducting the inquiries
determines through such review and evaluation that the information is
either not thorough or not reliable, then further inquiries should be
made to ensure that the information gathered is both thorough and
reliable. The performance factors are provided as guidelines to be
followed in conjunction with the final objectives for the all
appropriate inquiries.
M. What Are Institutional Controls?
The final rule requires the identification of institutional
controls placed on the subject property. As defined in Sec. 312.10,
institutional controls are non-engineered instruments, such as
administrative and legal controls, that among other things, can help to
minimize the potential for human exposure to contamination, and protect
the integrity of a remedy by limiting land or resource use. For
example, an institutional control might prohibit the drilling of a
drinking water well in a contaminated aquifer or disturbing
contaminated soils. Institutional controls also may be referred to as
land use controls, activity and use limitations, etc., depending on the
program under which a response action is conducted or a release is
addressed.
Institutional controls are typically used whenever contamination
precludes unlimited use and unrestricted exposure at the property.
Thus, institutional controls may be needed both before and after
completion of the remedial action or may be employed in place of a
remedial action. Institutional controls often must remain in place for
an indefinite duration and, therefore, generally need to survive
changes in property ownership (i.e., run with the land) to be legally
and practically effective. Some common examples of institutional
controls include zoning restrictions, building or excavation permits,
well drilling prohibitions, easements and covenants.
The importance of identifying institutional controls during all
appropriate inquiries is twofold. First, institutional controls are
usually necessary and important components of a remedy. Failure to
abide by an institutional control may put people at risk of harmful
exposure to hazardous substances. Second, an owner wishing to maintain
protections from CERCLA liability as an innocent landowner, contiguous
property owner, or bona fide prospective purchaser must fulfill ongoing
obligations to: (1) Comply with any land use restrictions established
or relied on in connection with a response action and (2) not impede
the effectiveness or integrity of any institutional control employed in
connection with a response action. For a more detailed discussion of
these requirements please see EPA, Interim Guidance Regarding Criteria
Landowners Must Meet in Order to Qualify for Bona Fide Prospective
Purchaser, Contiguous Property Owner, or Innocent Landowner Limitations
on CERCLA Liability (Common Elements, 2003).
Those persons conducting all appropriate inquiries may identify
institutional controls through several of the standards and practices
set forth in this rule. As noted, implementation of institutional
controls may be accomplished through the use of several administrative
and legal mechanisms, such as zoning restrictions, building permit
requirements, easements, covenants, etc. For example, an easement
implementing an institutional control might be identified through the
review of chain of title documents under Sec. 312.24(a). Furthermore,
interviews with past and present owners, operators, or occupants
pursuant to Sec. 312.23; and reviews of federal, tribal, state, and
local government records under Sec. 312.26, may identify an
institutional control or refer a person to the appropriate source to
find an institutional control. For example, a review of federal
Superfund records, including Records of Decision and Action Memoranda,
as well as other information contained in the CERCLIS database, may
indicate that zoning was selected as an institutional control or an
interview with a current operator may reveal an institutional control
as part of an operating permit.
The final rule requires that all appropriate inquiries include a
search for institutional controls placed upon the subject property as
part of the requirements for reviewing federal, state, tribal, and
local government records. A discussion of these requirements is
provided in section IV.S below.
[[Page 66088]]
N. How Must Data Gaps Be Addressed in the Conduct of All Appropriate
Inquiries?
Proposed Rule
The proposed rule required environmental professionals, prospective
landowners, and brownfields grant recipients to identify data gaps that
affect their ability to identify conditions indicative of releases or
threatened releases of hazardous substances (and, in the case of grant
recipients, pollutants, contaminants, petroleum and petroleum products,
and controlled substances). The proposed rule also required these
persons to identify the sources of information consulted to address, or
fill, the data gaps and then comment upon the significance of the data
gaps with regard to the ability to identify conditions indicative of
releases or threatened releases of hazardous substances on, at, in or
to the subject property. The proposed rule defined a data gap as a lack
of or an inability to obtain information required by the standards and
practices listed in the proposed regulation, despite good faith efforts
by the environmental professional or the prospective landowner or grant
recipient to gather such information.
Public Comments
Some commenters raised concerns that the proposed definition of a
data gap may result in difficulties in determining when an all
appropriate inquiries investigation is complete. These commenters
stated that the need to identify and comment on the significance of
data gaps may render it difficult to complete an investigation, that
could potentially affect a property owner's ability to claim protection
from CERCLA liability. Other commenters asserted that because an
investigation could be considered complete despite the existence of a
data gap, a regulatory loophole exists (in the opinion of the
commenters) that will result in the property owner's being able to
claim protection from CERCLA liability even when the all appropriate
inquiries investigation results in a failure to identify a release or
threatened release at a property.
Some commenters stated that the proposed requirement to identify
data gaps, or missing information, that may affect the environmental
professional's ability to render an opinion regarding the environmental
conditions at a property and comment on their significance in this
regard will lend credibility to the inquiry's final report.
Final Rule
We are retaining the proposed definition of data gap and the
proposed requirements for identifying and commenting on the
significance of data gaps. For the purposes of today's final rule, a
``data gap'' is a lack of or inability to obtain information required
by the standards and practices listed in the regulation, despite good
faith efforts by the environmental professional or the prospective
landowner (or grant recipient) to gather such information pursuant to
the objectives for all appropriate inquiries. In today's final rule,
Sec. 312.20(g) requires environmental professionals, prospective
landowners, and grant recipients to identify data gaps that affect
their ability to identify conditions indicative of releases or
threatened releases of hazardous substances (and in the case of grant
recipients pollutants, contaminants, petroleum and petroleum products,
and controlled substances). The final rule requires such persons to
identify the sources of information consulted to address the data gaps
and comment upon the significance of the data gaps with regard to the
ability to identify conditions indicative of releases or threatened
releases. Section 312.21(c)(2) also requires that the inquiries report
include comments regarding the significance of any data gaps on the
environmental professional's ability to provide an opinion as to
whether the inquiries have identified conditions indicative of releases
or threatened releases.
In response to issues raised by commenters, we point out that the
final regulation, as did the proposal, requires that environmental
professionals document and comment on the significance of only those
data gaps that ``affect the ability of the environmental professional
to identify conditions indicative of releases or threatened releases of
hazardous substances * * * on, at, in, or to the subject property.'' If
certain information included within the objectives and performance
factors for the final rule cannot be found and the lack of certain
information, in light of all other information that was collected about
the property, has no bearing on the environmental professional's
ability to render an opinion regarding the environmental conditions at
the property, the final rule does not require the lack of such
information to be documented in the final report. Given the restriction
on the type of data gaps that must be documented, and given that the
documentation is restricted to instances where the lack of information
hinders the ability of the environmental professional to render an
opinion regarding the environmental conditions at the property, we
disagree with the commenters who assert that the requirement is overly
burdensome or will result in the inability to complete the required
investigations.
Commenters who asserted that the requirement to document data gaps
would result in a ``loophole'' that would allow property owners to
claim protection from CERCLA liability after conducting an incomplete
all appropriate inquiries investigation may have misunderstood the
scope of the rule and the statutory requirements for obtaining the
liability protections. As explained in detail in Section II of this
preamble, the conduct of all appropriate inquiries is only one
requirement necessary for obtaining protection from CERCLA liability.
The mere fact that a prospective landowner conducted all appropriate
inquiries does not provide an individual with protection from CERCLA
liability. To qualify as a bona fide prospective purchaser, innocent
landowner or a contiguous property owner, a person must, in addition to
conducting all appropriate inquiries prior to acquiring a property,
comply with all of the other statutory requirements. These criteria are
summarized in section II.D. of this preamble. The all appropriate
inquiries investigation may provide a prospective landowner with
necessary information to comply with the other post-acquisition
statutory requirements for obtaining liability protections. The conduct
of an incomplete all appropriate inquiries investigation, or the
failure to detect a release during the conduct of all appropriate
inquiries, does not exempt a landowner from his or her post-acquisition
continuing obligations under other provisions of the statute. Failure
to comply with any of the statutory requirements may be problematic in
a claim for protection from liability.
The final rule retains the requirement to identify data gaps,
address them when possible, and document their significance.
Prospective landowners may wish to consider the potential significance
of any data gaps, that may exist after conducting the pre-acquisition
all appropriate inquiries in assessing their obligations to fulfill the
additional statutory requirements after purchasing a property.
If a person properly conducts all appropriate inquiries pursuant to
this rule, including the requirements concerning data gaps at
Sec. Sec. 312.10, 312.20(g) and 312.21(c)(2), the person may fulfill
the all appropriate inquiries requirements of CERCLA sections
[[Page 66089]]
107(q), 107(r), and 101(35), even when there are data gaps in the
inquiries. However, as explained further in this preamble, fulfilling
the all appropriate inquiries requirements does not, by itself, provide
a person with a protection from or defense to CERCLA liability. Failure
to identify a release or threatened release during the conduct of all
appropriate inquiries does not negate the landowner's continuing
responsibilities under the statute, including the requirements to take
reasonable steps to stop the release, prevent a threatened release, and
prevent exposure to the release or threatened release once the
landowner has acquired a property. Also, if an existing institutional
control or land use restriction is not identified during the conduct of
all appropriate inquiries prior to the acquisition of a property, a
landowner is not exempt from complying with the institutional control
or land use restriction after acquiring the property. None of the other
statutory requirements for the liability protections is satisfied by
the results of the all appropriate inquiries.
We emphasize that the mere fact that a prospective landowner
conducted all appropriate inquiries does not provide an individual with
a defense to or limitation from CERCLA liability. To qualify as a bona
fide prospective purchaser, innocent landowner or a contiguous property
owner, a person must, in addition to conducting all appropriate
inquiries prior to acquiring a property, comply with all of the other
statutory requirements. These criteria are summarized in section II.D.
of this preamble. The all appropriate inquiries investigation may
provide a prospective landowner with necessary information to comply
with the other post-acquisition statutory requirements for obtaining
liability protections. The failure to detect a release during the
conduct of all appropriate inquiries does not exempt a landowner from
his or her post-acquisition continuing obligations under other
provisions of the statute.
Section 312.20(g) of the final rule points out that one way to
address data gaps may be to conduct sampling and analysis. The final
regulation does not require that sampling and analysis be conducted to
comply with the all appropriate inquiries requirements. The regulation
only notes that sampling and analysis may be conducted, where
appropriate, to obtain information to address data gaps. The Agency
notes that sampling and analysis may be valuable in determining the
possible presence and extent of potential contamination at a property.
Such information may be valuable for determining how a landowner may
best fulfill his or her post-acquisition continuing obligations
required under the statute for obtaining protection from CERCLA
liability.
O. Do Small Quantities of Hazardous Substances That Do Not Pose Threats
to Human Health and the Environment Have To Be Identified in the
Inquiries?
Proposed Rule
The environmental professional should identify and evaluate all
evidence of releases or threatened releases on, at, in or to the
subject property, in accordance with generally accepted good commercial
and customary standards and practices. However, the proposed rule
provided that the environmental professional need not specifically
identify, in the written report prepared pursuant to Sec. 312.21(c),
extremely small quantities or amounts of contaminants, so long as the
contaminants generally would not pose a threat to human health or the
environment.
Public Comments
EPA received no significant comment on the proposed provision on
the identification of extremely small quantities of contamination.
Final Rule
The final retains the provision that the environmental professional
need not specifically identify, in the written report prepared pursuant
to Sec. 312.21(c), extremely small quantities or amounts of
contaminants, so long as the contaminants generally would not pose a
threat to human health or the environment.
P. What Are the Requirements for Interviewing Past and Present Owners,
Operators, and Occupants?
Proposed Rule
CERCLA section 101(35)(B)(iii)(II) requires EPA to include in the
standards and practices for all appropriate inquiries ``interviews with
past and present owners, operators, and occupants of the facility for
the purpose of gathering information regarding the potential for
contamination at the facility.'' The Agency proposed that the inquiry
of the environmental professional include interviews with the current
owner(s) and occupant(s) of the subject property. In addition, the
proposed rule required that interviews be conducted with current and
past facility managers with relevant knowledge of the property, as well
as past owners, occupants, or operators, and employees of current and
past occupants of the property, as necessary, to meet the proposed
objectives and performance factors. In the case of abandoned
properties, the Agency proposed that the inquiry of the environmental
professional include interviewing one or more owners or occupants of
neighboring or nearby properties to obtain information on current and
past uses of the property and other information necessary to meet the
objectives and performance factors.
Public Comments
Several commenters asserted that the requirement to interview
current and past owners and occupants of a property may be burdensome.
Commenters gave several reasons for asserting that interviews may be
burdensome. Some commenters said it is difficult to locate current and
past owners and occupants. Other commenters questioned the accuracy of
any information that would be provided by a current or past owner or
occupant. One commenter expressed concern that the requirement to
conduct interviews of current and past owners and occupants of a
property could result in the environmental professional divulging
information regarding the sale of the property against the prospective
landowner's wishes.
In the case of the proposed interview requirements for abandoned
properties, some commenters opposed the requirement to interview at
least one owner or occupant of a neighboring property. Commenters
stated that the proposed requirement was unreasonable and that it is
impractical to attempt to find and contact neighboring property owners
and occupants. Some commenters said that neighboring property owners
and occupants can not be relied upon to provide accurate information
about a property.
Final Rule
The requirements for conducting interviews of past and present
owners, operators, and occupants of the subject property are included
in Sec. 312.23. The final rule identifies these interviews as being
within the scope of the inquiry of the environmental professional.
Therefore, all interviews must be conducted by the environmental
professional or by someone under the supervision or responsible charge
of the environmental professional. The intent is that an individual
meeting the definition of an environmental professional (Sec. 312.10)
must oversee the conduct of, or review and approve the results of, the
interviews to ensure the interviews are conducted in compliance with
the objectives and performance
[[Page 66090]]
factors (Sec. 312.20). This is to ensure that the information obtained
from the interviews provides sufficient information, in conjunction
with the results of all other inquiries, to allow the environmental
professional to render an opinion with regard to conditions at the
property that may be indicative of releases or threatened releases of
hazardous substances (and pollutants, contaminants, petroleum and
petroleum products, and controlled substances, if applicable).
The final rule requires the environmental professional's inquiry to
include interviewing the current owner and occupant of the subject
property. In addition, the rule provides that the inquiry of the
environmental professional include interviews of additional
individuals, including current and past facility managers with relevant
knowledge of the property, past owners, occupants, or operators of the
subject property, or employees of current and past occupants of the
subject property, as necessary to meet the rule's objectives and in
accordance with the performance factors. A primary purpose of the
interviews portion of the all appropriate inquiries is to obtain
information regarding the current and past ownership and uses of the
property, and obtain information regarding the potential environmental
conditions of the property. The final rule does not prescribe
particular questions that must be asked during the interview. The type
and content of any questions asked during interviews will depend upon
the site-specific conditions and circumstances and the extent of the
environmental professional's (or other individual's under the
supervision or responsible charge of the environmental professional)
knowledge of the property prior to conducting the interviews.
Therefore, the final rule does not include specific questions for the
interviews, but requires that the interviews be conducted in a manner
that achieves the objectives and performance factors. Interviews with
current and past owners and occupants may provide opportunities to
collect information about a property that was not previously recorded
nor well documented and may provide valuable perspectives on how to
find or interpret information required to complete other aspects of the
all appropriate inquiries. Information gathered during the interview
portion of the all appropriate inquiries may in turn provide valuable
information for the on-site visual inspection. Persons conducting the
interviews of current and past owners and occupants may want to spend
some time during the interviews requesting information on the locations
of operations or units used to store or manage hazardous substances on
the property.
In the case of properties where there may be more than one owner or
occupant, or many owners or occupants, the final rule requires the
inquiry to include interviews of major occupants and those occupants
that are using, storing, treating, handling or disposing (or are likely
to have used, stored, treated, handled or disposed) of hazardous
substances (or pollutants, contaminants, petroleum and petroleum
products, and controlled substances, as applicable) on the property.
The rule does not specify the number of owners and occupants to be
interviewed. The environmental professional must perform this function
in the manner that best fulfills the objectives and performance factors
for the inquiries in Sec. 312.20(e) and (f). Environmental
professionals may use their professional judgment to determine the
specific occupants to be interviewed and the total number of occupants
to be interviewed in seeking to comply with the objectives and
performance factors for the inquiries. Interviews must be conducted
with individuals most likely to be knowledgeable about the current and
past uses of the property, particularly with regard to current and past
uses of hazardous substances on the property.
In response to commenters who asserted that the proposed interview
requirements are burdensome, we point out that the statutory criteria
in CERCLA section 101(35)(B)(iii) include ``interviews with past and
present owners, operators, and occupants of the facility for the
purpose of gathering information regarding the potential for
contamination at the facility.'' EPA asserts that it was clearly
congressional intent that the all appropriate inquiries investigation
include the conduct of interviews with current and past owners and
occupants. We also assert that current and past owners and occupants of
a property may be excellent sources of information regarding past and
on-going uses of the property as well as the types of waste management
activities that were undertaken at the property. Given that the ASTM
E1527 Phase 1 Environmental Site Assessment Process, the interim
standard for the conduct of all appropriate inquiries, includes
requirements for conducting interviews with the current owners and
occupants of a property and provides that other owners and occupants
are good additional sources of information about property uses and
potential contamination at a property, we disagree with commenters who
asserted that the proposed and final requirements for conducting
interviews will be overly burdensome.
In the case of abandoned properties, the final rule requires the
inquiry of the environmental professional to include interviews with
one or more owners or occupants of neighboring or nearby properties. In
the case of abandoned properties, it most likely will be difficult to
identify or interview current or past owners and occupants of the
property. Therefore, the final rule requires that at least one owner or
occupant of a neighboring property be interviewed to obtain information
regarding past owners or uses of the property in cases where the
subject property is abandoned and no current owner is available to be
interviewed. The final rule defines an abandoned property as a
``property that can be presumed to be deserted, or an intent to
relinquish possession or control can be inferred from the general
disrepair or lack of activity thereon such that a reasonable person
could believe that there was an intent on the part of the current owner
to surrender rights to the property.'' As is the case with interviews
conducted with current and past owners and occupants of the property,
interview questions should be developed prior to the conduct of the
interviews, and tailored to gather information to achieve the rule's
objectives and performance factors. The final rule contains no specific
requirements with regard to the type or content of questions that must
be asked during the interviews.
EPA disagrees with commenters who stated that it will be difficult
to locate and contact neighboring property owners and occupants. The
final rule, as did the proposed rule, requires that the environmental
professional only locate and interview one neighboring property owner
or occupant and only in those cases where no owner or occupant of the
subject property can be identified. An environmental professional
should be able to locate one owner or occupant of a neighboring
property when conducting the on-site visual inspection of the property.
If the environmental professional cannot easily locate an owner and
occupant of a neighboring property, he or she may enlist the assistance
of local government officials in identifying a neighboring property
owner or occupant. As is the case with information ascertained from any
interview, the environmental professional must apply his or her
judgment when drawing conclusions
[[Page 66091]]
based on the information provided in interviews with neighboring
property owners and occupants and should attempt to verify any
information provided by reviewing other available sources of
information.
Q. What Are the Requirements for Reviews of Historical Sources of
Information?
Proposed Rule
Historical documents and records may contain information regarding
past ownership and uses of a property that may be essential to
assessing the potential for environmental conditions indicative of
releases or threatened releases of hazardous substances to be present
at the property. Historical documents and records, among others, may
include chain of title documents, land use records, aerial photographs
of the property, fire insurance maps, and records held at local
historical societies. The proposed rule required that the inquiry of
the environmental professional include a review of historical documents
and records for the subject property that document the ownership and
use of the property for a period of time as far back in the history of
the property as it can be shown that the property contained structures,
or from the time the property was first used for residential,
agricultural, commercial, industrial, or governmental purposes.
Public Comments
Some commenters raised concerns regarding the proposed requirements
to review historical records covering ``a period of time as far back in
the history of the subject property as it can be shown that the
property contained structures or from the time the property was first
used for residential, agricultural, commercial, industrial, or
governmental purposes.'' Commenters said that the proposed historical
scope of the records search is too extensive. Some commenters requested
that in the final rule EPA adopt the provisions for historical records
searches provided in the ASTM E1527-2000 standard. Several commenters
requested that EPA explicitly require as part of the review of
historical records a review of chain of title documents. The commenters
asserted that a review of chain of title documents is the only reliable
way to identify previous owners of a property.
Final Rule
The statutory criteria in the Brownfields Amendments require that
reviews of historical sources of information be conducted to
``determine previous uses and occupancies of the real property since
the property was first developed.'' The final rule requires (as did the
proposed rule) that historical records on the subject property be
searched for information on the property covering a time period as far
back in history as there is documentation that the property contained
structures or was placed into use of some form. This provision follows
the statutory language. In addition, the final rule requires that
historical documents and information be reviewed to obtain necessary
information for meeting the objectives and performance factors in Sec.
312.20(e) and (f). If a search of historical sources of information
results in an inability of the environmental professional to document
previous uses and occupancies of the property as far back in history as
it can be shown that the property contained structures or was placed
into use of some form, and such information is not acquired elsewhere
during the investigation then it must be documented as a data gap to
the inquiries. The requirements of Sec. Sec. 312.20(g) and
312.21(c)(2) are applicable to all instances in the all appropriate
inquiries that result in data gaps.
Despite the concerns raised by some commenters regarding the scope
of the historical records review, we assert that the scope of the
requirements in the final rule (as did the scope of the proposed
requirements) reflects the statutory language provided in CERCLA
section 101(35)(B)(iii). The statutory criterion provide that all
appropriate inquiries include ``reviews of historical sources * * * to
determine previous uses and occupancies of the real property since the
property was first developed.'' We point out that the final rule does
allow the environmental professional to exercise his or her
professional judgment ``in context of the facts available at the time
of the inquiry as to how far back in time it is necessary to search
historical records.'' We believe that this provides sufficient
flexibility to allow for any circumstances where, due to the
availability of other information about a property an environmental
professional may conclude that a comprehensive search of historical
records is not necessary to meet the objectives and performance
factors.
In response to commenters that requested that EPA adopt the
provisions of the ASTM E1527-2000 standard for conducting searches of
historical records, we assert that the scope of the historical records
search in today's final rule is very similar to the scope of ASTM E1527
standard. The ASTM E1527 standard, at section 7.3.1, requires that
historical sources of information be searched to identify ``all obvious
uses of the property* * *from the present, back to the property's
obvious first developed use, or back to 1940, whichever is earlier.''
Given that the language of both the ASTM E1527 standard and the
requirements in the final rule for conducting historical records
searches is very similar, we conclude that the intent is the same and
the final rule represents no change from current good customary
business practice. In addition, the final rule provides for sufficient
flexibility both within the application of the performance factors to
the historical records search requirements and in allowing the
environmental professional to apply his or her judgment ``in the
context of the facts available at the time of the inquiry.''
The final rule does not require that any specific type of historic
information be collected. In particular, the rule does not require that
persons obtain a chain of title document for the property. The rule
allows for the environmental professional to use professional judgment
when determining what types of historical documentation may provide the
most useful information about a property's ownership, uses, and
potential environmental conditions when seeking to comply with the
objectives and performance factors for the inquiries. Although we agree
with commenters that chain of title documents may serve as an important
source of information regarding past ownership of a property, it may
not be the only source of this information. To the extent that chain of
title documents are otherwise obtained for other purposes during the
conduct of a property sale or transaction, we believe that these
documents can easily be made available to the environmental
professional by the prospective landowner. Given that the final rule
requires that historical records be searched for information on
previous uses and ownership of a property for as far back in the
history of property as can be shown that the property contained
structures or was first used for residential, agricultural, commercial,
industrial or governmental purposes, if chain of title documents are
the best and most easily attainable source of this information, we
assume that such documents will be obtained and used by the
environmental professional.
Given the wide variety of property types and locations to which the
final rule could apply, any list of specific documents could result in
undue burdens on many prospective
[[Page 66092]]
landowners and grantees due to difficulties in collecting any specific
document for any particular property or property location. Therefore,
the final requirements for reviewing historical documents allow the
prospective landowner or grantee and the environmental professional to
use their judgment, in accordance with generally accepted good
commercial and customary standards and practices, in locating the best
available sources of historical information and reviewing such sources
for information necessary to comply with the rule's objectives and
performance factors.
As explained in section IV.J of this preamble, the prospective
landowner, grantee, or environmental professional may make use of
previously collected information about a property when conducting all
appropriate inquiries. The collection of historical information about a
property may be a particular case where previously collected
information may be valuable, as well as easily accessible. In addition,
nothing in the rule prohibits a person from using secondary sources
(e.g., a previously conducted title search) when gathering information
about historical ownership and usage of a property. As explained in
section IV.J, information must be updated if it was last collected more
than 180 days prior to the date of acquisition of the property.
R. What Are the Requirements for Searching for Recorded Environmental
Cleanup Liens?
For purposes of this rule, recorded environmental cleanup liens are
encumbrances on property for the recovery of incurred cleanup costs on
the part of a state, tribal or federal government agency or other third
party. Recorded environmental cleanup liens often provide an indication
that environmental conditions either currently exist or previously
existed on a property that may include the release or threatened
release of a hazardous substance. The existence of an environmental
cleanup lien should be viewed as an indicator of potential
environmental concerns and as a basis for further investigation into
the potential existence of on-going or continued releases or threatened
releases of hazardous substances on, at, in, or to the subject
property.
Proposed Rule
The proposed rule required that prospective landowners and
grantees, or environmental professionals on their behalf, search for
environmental cleanup liens that are recorded under federal, tribal,
state, or local law. Environmental cleanup liens that are not recorded
by government entities or agencies are not addressed by the language of
the statute (the statute speaks only of ``recorded liens''); therefore,
the proposed rule required that only a search for recorded
environmental liens be included in the all appropriate inquiries
investigation.
Public Comments
Some commenters asked that EPA state more clearly that the
responsibility for searching for environmental cleanup liens rests with
the prospective landowner and not the environmental professional. A few
commenters requested that the Agency provide some guidance on where to
find recorded environmental cleanup liens.
Final Rule
EPA is finalizing the proposed requirements to search for recorded
environmental cleanup liens without changes. The all appropriate
inquiries investigation must include a search for recorded
environmental cleanup liens. The final rule allows that the search for
recorded environmental cleanup liens be performed either by the
prospective landowner or grantee, or through the inquiry of the
environmental professional. The search for such liens may not
necessarily require the expertise of an environmental professional and
therefore may be more efficiently or more cost-effectively performed by
the prospective landowner or grantee, or his or her agent. Such liens
may be included as part of the chain of title documents or may be
recorded in some other manner or format by state or local government
agencies. If such information is collected by the prospective landowner
or grantee, or other agent who is not under the supervision or
responsible charge of the environmental professional, the final rule
allows for, but does not require, the information that is collected by
or on the behalf of the prospective landowner or grantee to be provided
to the environmental professional. If the information is provided to
the environmental professional, he or she can then make use of such
information during the conduct of the all appropriate inquiries and
when rendering conclusions or opinions regarding the environmental
conditions of the property. If such information is not provided to the
environmental professional and the lack of such information affects the
ability of the environmental professional to identify conditions
indicative of releases or threatened releases of hazardous substances
on, at, in or to the property, the lack of information should be noted
as a data gap (per the requirements of Sec. 312.21(b)(2)).
Although some commenters requested that EPA be more explicit in the
final rule in requiring that the search for recorded environmental
cleanup liens be conducted by the prospective landowner (or grantee),
we believe that the decision of who conducts the search may be best
left up to the judgment of the prospective landowner or grantee and
environmental professional. The final rule provides in Sec. 312.22
that the search for recorded environmental cleanup liens can fall
outside the inquiries conducted by the environmental professional. The
search for recorded environmental cleanup liens is not included as part
of the requirements governing the results of an inquiry by an
environmental professional (Sec. 312.21). Therefore, the search may be
conducted by the prospective landowner or grantee, his or her attorney
or agent, or the environmental professional.
We offer one caution about the conclusion that might be drawn if no
recorded environmental cleanup liens are found. If EPA is conducting a
cleanup at site at the time it is transferred or acquired, EPA is able
to record a lien post acquisition. For example, one type of lien, often
referred to as a windfall lien, has no statute of limitations and
arises at the time EPA first spends Superfund money. States and
localities may have similar mechanisms. Therefore, even if a recorded
environmental cleanup lien is not found during the conduct of the all
appropriate inquiries investigation, one may be recorded at a later
date if EPA is undertaking a cleanup or response action at the
property.
With regard to commenters who requested that EPA provide guidance
on where to search for environmental cleanup liens, we advise that
prospective landowners and grantees to seek the advice of a local
realtor, real estate attorney, title company, or other real estate
professional. Environmental cleanup liens may be recorded as part of
the land title records or as part of other state or local government
land or real estate records. Recorded environmental cleanup liens may
be recorded in different places, depending upon the particular state
and particular locality in which the property is located.
S. What Are the Requirements for Reviewing Federal, State, Tribal, and
Local Government Records?
Federal, tribal, state and local government records may contain
[[Page 66093]]
information regarding environmental conditions at a property. In
particular, government records, or data bases of such information, may
include information on previously reported releases of hazardous
substances, pollutants, contaminants, petroleum and petroleum products
and controlled substances. Government records and available databases
can provide valuable information on remedial actions and emergency
response activities that may have been conducted at a particular
property. Government records also may include information on
institutional controls related to a particular property. For example,
in the case of NPL sites, EPA Superfund records, including Action
Memoranda and Records of Decision, may have information on
institutional controls in place at such properties. Government records
also may include information on activities or property uses that could
cause releases or threatened releases to be present at a property.
Proposed Rule
The proposed rule required that federal, state, tribal and local
government records be searched for information necessary to achieve the
objectives and performance factors, including information regarding the
use and occupancy of and the environmental conditions at the subject
property and conditions of nearby or adjoining properties that could
have a impact upon the environmental conditions of the subject
property. The proposed rule included requirements to search federal,
tribal, state, and local government records for information indicative
of environmental conditions at the subject property.
The proposed rule also included requirements to review government
records, or data bases of information contained in government records,
for information about nearby and adjoining properties. Reviews of such
records may provide valuable information regarding the potential impact
to the subject property from hazardous substances and petroleum
contamination migrating from contiguous or nearby properties. The
proposed rule included required minimum search distances for government
records searches of nearby properties.
To account for property-specific and regionally-specific conditions
that can influence the appropriateness of the proposed search distances
for any given type of record and property, the proposed rule allowed
the environmental professional to adjust the applicable search
distances when searching for information about off-site properties by
applying professional judgment. For example, appropriate search
distances for properties located in rural settings may differ from
appropriate search distances for urban settings. In addition, ground
water flow direction, depth to ground water, arid weather conditions,
the types of facilities located on nearby properties, and other factors
may influence the degree of impact to a property from off-site sources.
Therefore, the proposed rule allowed the environmental professional to
adjust any or all of the proposed minimum search distances for any of
the record types, based upon professional judgment and the
consideration of site-specific conditions or circumstances when seeking
to achieve the proposed objectives and performance factors for the
required inquiries.
Public Comments
The Agency received a variety of comments in which commenters
expressed concerns about the applicability or adequacy of specific
types of government records included in the proposed rule (e.g.,
CERCLIS records, information on RCRA facilities, ERNS). A few
commenters raised concerns about the availability of tribal records.
Several commenters raised concerns regarding the availability of
government records on institutional controls. Commenters also pointed
out that, given the lack of available databases and other information
on institutional controls, it may be particularly difficult to search
for institutional controls associated with adjoining and nearby
properties.
Final Rule
We are finalizing the requirements for reviewing federal, state,
tribal, and local government data bases as proposed, with one
exception. The final rule requires that government records and
available lists for institutional and engineering controls be searched
only for information on such controls at the subject property. All
appropriate inquiries investigations do not have to include searches
for institutional and engineering controls in place at nearby and
adjoining properties. We made this change because we agree with
commenters who pointed out that information on institutional and
engineering controls may be difficult to find as there are no available
national sources of this information. Only a few states have available
lists of institutional controls. In addition, the information that may
be inferred from knowledge of institutional and engineering controls
that are in place at adjoining and nearby properties, i.e., that there
was a response action, a remedial action, or corrective action taken at
the site, can be inferred from information obtained from other sources
(e.g., CERCLIS, RCRIS, state records of response actions).
It is important that prospective landowners obtain information on
institutional and engineering controls in place at the property being
acquired. It also may be important to locate information on such
controls in place at nearby properties. To obtain the liability
protections afforded under CERCLA (i.e., innocent landowner, contiguous
property owner, bona fide prospective purchaser), the statute requires,
as part of the ``continuing obligations,'' that the property owner
comply with all land use restrictions and not impede the effectiveness
of institutional controls. Therefore, it is important that information
on institutional and engineering controls be obtained by prospective
landowners, even though information about such controls may not have
been routinely obtained as part of due diligence practices prior to
today's final rule (we note that the current interim standard does
include provisions for searching for ``activity and use limitations'').
Routine ``chain of title'' reports may not always contain
information labeled as institutional or engineering controls. However,
title companies may include, as part of the chain of title reports
``restrictions of record on title'' when such restrictions are recorded
because of underlying environmental conditions at a property.
Therefore, when requesting information on ``institutional controls'' or
``engineering controls'' about a property, prospective landowners,
grantees, and environmental professionals may want to request
information on ``restrictions of record on title'' as well, in case any
available information on institutional or engineering controls is so
labeled in the chain of title records. In addition to chain of title
records, information on institutional controls and engineering controls
may be recorded in local land records. Also, some states are beginning
to create registries to track information on institutional and
engineering controls. Therefore, prospective landowners and grantees
should consider consulting these other sources of information in
addition to chain of title records for information on institutional and
engineering controls.
In response to the commenters who pointed out particular
shortcomings with specific sources of information (e.g., CERCLIS,
RCRIS, ERNS) we point out that the requirement to review government
records explicitly provides
[[Page 66094]]
that the reviews be conducted in compliance with the objectives and
performance standards. If a particular source of information cannot be
accessed within a reasonable time frame or within reasonable costs,
then the information should be sought from other sources. In addition,
if a particular source of information will only provide information
that can more easily or readily be found elsewhere, the particular
source does not have to be obtained or consulted. If application of the
objectives and performance standards to the requirement to review
government records results in an inability to provide necessary
information (or information identified as necessary in the objectives
for the final rule), then the lack of information should be documented
as a data gap in the final report. In addition, the environment
professional should comment on the significance the lack of any
information has on his or her ability to identify conditions at the
property that are indicative of releases or threatened releases of
hazardous substances (in compliance with Sec. 312.21(c)(2)).
In response to commenters who pointed out that it may be difficult
to obtain or gain access to tribal government records, we point out
that such records need only be searched for and reviewed in those
instances where the subject property is located on or near tribal-owned
lands. In these cases, it is important to attempt, within the scope of
the rule's objectives and performance factors, to review such records.
When such records are not available, necessary information should be
sought from other sources. When no information is available and the
objectives and performance factors of the final rule cannot be met and
the result is a lack of information that may affect the environmental
professional's ability to render an opinion regarding the environmental
conditions of a property, the lack of information must be documented as
a data gap in compliance with Sec. 312.21(c)(2).
The final rule requires that the following types of government
records or data bases of government records be reviewed to obtain
information on the subject property and nearby properties necessary to
meet the rule's objectives and performance standards:
1. Government records of reported releases or threatened releases
at the subject property, including previously conducted site
investigation reports.
2. Government records of activities, conditions, or incidents
likely to cause or contribute to releases or threatened releases,
including records documenting regulatory permits that were issued to
current or previous owners or operators at the property for waste
management activities and government records that identify the subject
property as the location of landfills, storage tanks, or as the
location for generating and handling activities for hazardous
substances, pollutants, contaminants, petroleum and petroleum products,
or controlled substances.
3. CERCLIS records--EPA's Comprehensive Environmental Response,
Compensation, and Liability Information System (CERCLIS) database
contains general information on sites across the nation and in the U.S.
territories that have been assessed by EPA, including sites listed on
the National Priorities List (NPL). CERCLIS includes information on
facility location, status, contaminants, institutional controls, and
actions taken at particular sites. CERCLIS also contains information on
sites being assessed under the Superfund Program, hazardous waste sites
and potential hazardous waste sites.
4. Government-maintained records of public risks--the all
appropriate inquiries government records search should include a search
for available records documenting public health threats or concerns
caused by, or related to, activities currently or previously conducted
at the site.
5. Emergency Response Notification System (ERNS) records--ERNS is
EPA's data base of oil and hazardous substance spill reports. The data
base can be searched for information on reported spills of oil and
hazardous substances by state.
6. Government registries, or publicly available lists of
engineering controls, institutional controls, and land use
restrictions. The all appropriate inquiries government records search
must include a search for registries or publicly available lists of
recorded engineering and institutional controls and recorded land use
restrictions. Such records may be useful in identifying past releases
on, at, in, or to the subject property or identifying continuing
environmental conditions at the property.
The final rule requires that government records be searched to
identify information relative to the objectives and in accordance with
the performance factors on: (1) Adjoining and nearby properties for
which there are governmental records of reported releases or threatened
releases (e.g., properties currently listed on the National Priorities
List (NPL), properties subject to corrective action orders under the
Resource Conservation and Recovery Act (RCRA), properties with reported
releases from leaking underground storage tanks); (2) adjoining and
nearby properties previously identified or regulated by a government
entity due to environmental conditions at a site (e.g., properties
previously listed on the NPL, former CERCLIS sites with notices of no
further response actions planned (NFRAP)); and (3) adjoining and nearby
properties that have government-issued permits to conduct waste
management activities (e.g., facilities permitted to manage RCRA
hazardous wastes).
In the case of government records searches for nearby properties,
the final rule includes minimum search distances (e.g., properties
located either within one mile or one-half mile of the subject
property) for obtaining and reviewing records or data bases concerning
activities and facilities located on nearby properties. The search
distances are based upon our best judgment regarding the potential
impacts that incidents or circumstances at an adjoining property may
have on the subject property. With the exception of the required
searches for institutional and engineering controls, the search
distances finalized in today's rule are the search distances that were
proposed in the proposed rule. For example, government records
identifying properties listed on the NPL must be searched to obtain
information on NPL sites located within one mile of the subject
property. NPL sites located beyond one mile of a property most likely
will have little or no impact on the environmental conditions at the
subject property. In the case of two types of records, records of
hazardous waste handler and generator records and permits, records of
registered storage tanks, the final requirements specify that such
records only be searched for information specific to the subject
property and adjoining properties (the rule contains no requirement to
search for these two types of government records for other nearby
properties). The final rule requires that available lists of
institutional controls and engineering controls only be searched for
information on the subject property.
In the case of all the government records listed above and in the
final rule in Sec. 312.26, the requirements of this criterion may be
met by searching data bases containing the same government records
mentioned in the list above that are accessible and available through
government entities or private sources. The review of actual records is
not necessary, provided that the same information contained in the
government records and required to
[[Page 66095]]
meet the requirements of this criterion and achieve the objectives and
performance factors for these regulations is attainable by searching
available data bases.
The final rule allows the environmental professional to adjust the
search distances for reviewing government records of nearby properties
based upon his or her professional judgment. Environmental
professionals may consider one or more of the following factors when
determining an alternative appropriate search distance:
The nature and extent of a release;
Geologic, hydrogeologic, or topographic conditions of the
subject property and surrounding environment;
Land use or development densities;
The property type;
Existing or past uses of surrounding properties;
Potential migration pathways (e.g., groundwater flow
direction, prevalent wind direction); or
Other relevant factors.
The final rule requires environmental professionals to document the
rationale for making any modifications to the required minimum search
distances included in Sec. 312.26 of the regulation.
T. What Are the Requirements for Visual Inspections of the Subject
Property and Adjoining Properties?
Proposed Rule
The proposed rule required that an on-site visual inspection of the
subject property be conducted as part of the all appropriate inquiries
investigations, with one limited exception. The proposed on-site visual
inspection requirements included requirements to inspect any facilities
and improvements on the property as well as all areas where hazardous
substances are or may have been used, stored, treated, handled, or
disposed. In addition, the proposed rule included requirements to
visually inspect adjoining properties. The proposal required that
inspections of adjoining properties be conducted from the property
line, public right-of-way, or other vantage point.
The proposed rule included a limited exception from the requirement
to conduct the visual inspection ``on-site.'' The proposed exception
provided that in unusual circumstances where an on-site visual
inspection cannot be performed because of physical limitations, remote
and inaccessible location, or another inability to obtain access to the
property, provided good faith efforts are taken to obtain such access
and access to the property could not be obtained, a visual inspection
could be conducted from an off-site vantage point (e.g., property-line,
airplane, public right-of-way). To qualify for the exception from the
requirement to conduct the inspection on site, the proposed rule
required that the environmental professional document the good faith
efforts undertaken to gain access to the property and explain why such
efforts were unsuccessful. The proposed rule also required that the
environmental professional document what other sources of information
were consulted to obtain information regarding the potential
environmental conditions at the property and the significance of the
failure to conduct the inspection on site on his or her ability to
identify conditions indicative of releases or threatened releases of
hazardous substances on, at, in, or to the subject property.
In the preamble to the proposed rule, EPA recommended that an
environmental professional conduct the on-site visual inspection.
Public Comments
A few commenters stated that EPA should not recommend, as we did in
the preamble to the proposed rule, that an individual meeting the
definition of environmental professional conduct the on-site visual
inspection. These commenters stated that anyone under the responsible
charge or supervision of an environmental professional should be able
to conduct the on-site visual inspection. Commenters stated, that by
recommending in the preamble that the environmental professional
conduct the on-site visual inspection, the Agency was effectively
requiring an environmental professional to conduct the visual
inspection. Other commenters expressed support for the Agency's
recommendation.
A few other commenters thought the proposed exception from the
requirement to conduct the visual inspection on site was ``broad'' and
``would increase the likelihood of inspections not being performed and
contamination not being detected.'' These commenters expressed a
concern that any exception from the requirement to conduct an on-site
visual inspection could open the door to abuse and result in properties
being transferred without being inspected. Commenters raised concerns
that owners of uninspected properties could obtain liability protection
by claiming to have fulfilled the requirements of all appropriate
inquiries without knowledge of on-going releases at a property.
Final Rule
The final rule, at Sec. 312.27, retains the proposed requirement
that a visual on-site inspection be conducted of the subject property.
The final visual on-site inspection requirements include requirements
to inspect the facilities and any improvements on the property, as well
as visually inspect areas on the property where hazardous substances
may currently be or in the past may have been used, stored, treated,
handled, or disposed of. We continue to assert that, and commenters
agreed, that every all appropriate inquiries investigation must include
an on-site visual inspection of the property. The on-site inspection of
a property most likely will be an excellent source of information
regarding indications of environmental conditions on a property. The
final rule requires that a visual on-site inspection of the subject
property be conducted in all but a few very limited cases. In addition,
the final rule retains the proposed requirement that in those cases
where physical limitations restrict the portions of the property that
may be visually inspected, that the physical limitations encountered
during the visual on-site inspection (e.g., weather conditions,
physical obstructions) must be documented.
We note that persons conducting all appropriate inquiries with
monies provided in a grant awarded under CERCLA section 104(k)(2)(B)
must, depending on the terms and conditions of the grant or cooperative
agreement, include within the scope of the on-site visual inspection an
inspection of the facilities, improvements, and other areas of the
property where pollutants, contaminants, petroleum and petroleum
products, or controlled substances may currently be or in the past may
have been used, stored, treated, handled, or disposed.
The visual on-site inspection of a property during the conduct of
all appropriate inquiries may be the most important aspect of the
inquiries and the primary source of information regarding the
environmental conditions on the property. In all cases, every effort
must be made to conduct an on-site visual inspection of a property when
conducting all appropriate inquiries.
We understand that a prospective landowner, grantee, or
environmental professional, in some limited circumstances, may not be
able to obtain on-site access to a property. Extreme and prolonged
weather conditions and remote locations can impede access to a
property. A prospective landowner, grantee or environmental
professional also could be unable to gain on-site
[[Page 66096]]
access to a property if the owner refuses to provide access to the
party, even after the party exercises all good faith efforts to gain
access to the property (e.g., seeking assistance from state government
officials). Such circumstances may arise in cases where a local
government becomes a last resort purchaser of a potentially-
contaminated property that has little economic value. The unique nature
of such transactions may result in a local government facing an
uncooperative or recalcitrant property owner. Unlike commercial
property transactions between private parties, where the parties'
economic and legal liability interests and the ability to abandon the
transaction can work in favor of the purchasing party's ability to gain
access to a property prior to acquisition, property transactions
between a private party and a local government may not afford the local
government the same leverage, even if it is in the public interest to
attain ownership of the property. This situation may occur when the
local government seeks to assess, clean up, and revitalize an area, but
the owner of the property is unreachable, unavailable, or otherwise
unwilling to provide access to the property. In such limited
circumstances, the public benefit attained from a government entity
gaining ownership of a property may outweigh the need to gain on-site
access to the property prior to the transfer of ownership.
The final rule requires, in unusual circumstances, that the
prospective landowner or grantee make good faith efforts to gain access
to the property. However, the mere refusal of a property owner to allow
the prospective property owner or grantee to have access to the
property does not constitute an unusual circumstance, absent the making
of good faith efforts to otherwise gain access. The final rule, at
Sec. 312.10, defines ``good faith'' as ``the absence of any intention
to seek an unfair advantage or to defraud another party; an honest and
sincere intention to fulfill one's obligations in the conduct or
transaction concerned.''
In those unusual circumstances where a prospective landowner, a
grantee, or an environmental professional, after undertaking good faith
efforts, cannot gain access to a property and therefore cannot conduct
an on-site visual inspection, the final rule requires that the property
be visually inspected, or observed, by another method, such as through
the use of aerial photography, or be inspected, or observed, from the
nearest accessible vantage point, such as the property line or a public
road that runs through or along the property. In addition, the rule
requires that the all appropriate inquiries report include
documentation of efforts undertaken by the prospective landowner,
grantee, or the environmental professional to obtain on-site access to
the subject property and include an explanation of why good faith
efforts to gain access to subject property were unsuccessful. The all
appropriate inquiries report must include documentation of other
sources of information that were consulted to obtain information
necessary to achieve the objectives and performance factors. This
documentation should include comments, from the environmental
professional who signs the report, regarding any significant
limitations on the ability of the environmental professional to
identify conditions indicative of releases or threatened releases on,
at, in, or to the subject property, that may arise due to the inability
of the prospective landowner, grantee, or environmental professional to
obtain on-site access to the property.
In those limited cases where an on-site visual inspection cannot be
conducted prior to the date a property is acquired, we remind
prospective landowners that protection from CERCLA liability depends
upon the prospective landowner complying with all of the post-
acquisition continuing obligations provided in the statute. Therefore,
to ensure that adequate information is attained about a property to
ensure that the property owner can fulfill these obligations, we
recommend that once a property is purchased, the property owner conduct
an on-site visual inspection of the property once the property is
acquired, if it could not be conducted prior to acquisition. Such an
inspection may provide important information necessary for the property
owner to fully comply with the other statutory provisions, including
on-going obligations, governing the CERCLA liability protections.
We disagree with the commenters who argued that the exception from
the requirement to conduct the visual inspection on-site is ``broad.''
We point out that the exception is limited to the requirement that the
visual inspection be conducted on-site. In all cases where the
exception applies, the visual inspection must still be conducted from
another vantage point. In addition, the exception is limited to only
those circumstances where all good faith efforts are made to gain
access the property. The final rule requires that all good faith
efforts to gain access be documented and requires that the
environmental professional comment on the consequences that the
inability to gain access to the property may have on his or her ability
to render an opinion on property conditions that may be indicative of
releases or threatened releases on, at, in, or to the property. The
exception is very limited in scope and the documentation requirements
should limit the use of the exception as well as provide the
prospective landowner with useful information for determining the
potential need for further investigations of the property after
acquisition.
The final rule also requires that the all appropriate inquiries
investigation include visual inspections of properties that adjoin the
subject property. Visual inspections of adjoining properties may
provide excellent information on the potential for the subject property
to be affected by contamination migrating from adjoining properties.
Visual inspections of adjoining properties may be conducted from the
subject property's property line, one or more public rights-of-way, or
other vantage point (e.g., via aerial photography). Where practicable,
a visual on-site inspection is recommended and may provide greater
specificity of information. The visual inspections of adjoining
properties must include observing areas where hazardous substances
currently may be, or previously may have been, stored, treated,
handled, or disposed. Visual inspections of adjoining properties
otherwise also must be conducted to achieve the objectives and
performance goals for all the appropriate inquiries. Physical
limitations to the visual inspections of adjoining properties should be
noted.
As explained in the preamble to the proposed rule, EPA and the
Negotiated Rulemaking Committee considered, when developing the
proposed rule, requiring that all activities in the all appropriate
inquiries investigation to be conducted by persons meeting the proposed
definition of an environmental professional. Requiring that an
environmental professional conduct all activities could ensure that all
data collection and investigations are conducted in a manner and to a
degree of specificity that allows the environmental professional to
make best use of all information in forming opinions and conclusions
regarding the environmental conditions at a property. However, after
careful review of the specific activities included in the statutory
criteria and conducting an assessment of the costs and burdens of such
a requirement, EPA and the Committee concluded that it is not necessary
for each and every regulatory requirement to be conducted by an
environmental professional. As outlined
[[Page 66097]]
in section IV.H of this preamble, today's final rule, as did the
proposed rule, allows for certain aspects of the inquiries to be
conducted solely by the prospective landowner or grantee, while
providing that all other aspects be conducted under the supervision or
responsible charge of the environmental professional. Among the
activities required to be conducted under the supervision or
responsible charge of an environmental professional is the on-site
visual inspection.
It continues to be EPA's recommendation that visual inspections of
the subject property and adjoining properties be conducted by an
individual who meets the regulatory definition of an environmental
professional. Although many other aspects of the all appropriate
inquiries may be conducted sufficiently and accurately by individuals
other than an environmental professional (e.g., a research associate or
librarian may be well qualified to search government records, an
attorney may be well qualified to conduct a search for an environmental
lien), EPA believes that an environmental professional is best
qualified to conduct a visual inspection and locate and interpret
information regarding the physical and geological characteristics of
the property as well as information on the location and condition of
equipment and other resources located on the property. EPA recognizes
that other individuals who do not meet the regulatory definition of an
environmental professional, particularly when these individuals are
conducting such activities under the supervision or responsible charge
of an environmental professional, may have the required skills and
knowledge to conduct an adequate on-site visual inspection. However,
EPA believes that the professional judgment of an individual meeting
the definition of an environmental professional is important to
ensuring that all circumstances at the property that are indicative of
environmental conditions and potential releases or threatened releases
are properly identified and analyzed. An environmental professional is
best qualified for identifying such situations and conditions and
rendering a judgment or opinion regarding the potential existence of
conditions indicative of environmental concerns.
Although some commenters stated that EPA should not recommend that
the visual inspection be conducted by a person meeting the definition
of environmental professional, we point out that other commenters
stated their support for our recommendation and some even stated that
EPA should require in the regulation that the inspection be conducted
by an environmental professional. We remain convinced that the on-site
visual inspection of the property can be the single most important
source of information regarding the environmental conditions of a
property and that an individual meeting the regulatory definition of
environmental professional is best able to interpret such observations
of a property and ascertain the probability of conditions indicative of
releases or threatened releases of hazardous substances being present
at the property. In addition, we point out that the definition of
environmental professional included in the final rule is less stringent
than the proposed definition. Therefore, commenter concerns regarding
any significant cost burdens associated with the environmental
professional conducting the on-site visual inspection may be
alleviated. We emphasize that EPA is recommending that the on-site
visual inspection be conducted by an individual who meets the
definition of environmental professional included in the final rule; it
is not a requirement that the inspection be conducted by an
environmental professional. The rule requires only that the inspection
be conducted by an individual who is under the supervision or
responsible charge of an individual meeting the definition of
environmental professional. EPA agrees that if the final rule required
that the on-site visual inspection be conducted by an individual
meeting the definition of an environmental professional, the
requirement could impose undue burdens in certain circumstances. In
addition, there may be circumstances that in the best professional
judgment of an environmental professional, another person under the
responsible charge of the environmental professional may be more
qualified to conduct the on-site inspection. To allow for flexibility
and the application of professional judgment to specific circumstances,
EPA continues to recommend that an environmental professional conduct
the on-site inspection, but the Agency is not requiring that the
inspection be conducted by an environmental professional.
U. What Are the Requirements for the Inclusion of Specialized Knowledge
or Experience on the Part of the ``Defendant?''
Because the conduct of all appropriate inquiries is one element of
a legal defense to CERCLA liability, the statute refers to the
prospective landowner, or the user of the all appropriate inquiries
investigation, as the ``defendant.'' This ensures that any information
or special knowledge held by the prospective landowner with regard to a
property and its conditions be included in the pre-acquisition
inquiries and be considered, along with all information collected
during the conduct of all appropriate inquiries, when an environmental
professional renders a judgment or opinion regarding conditions
indicative of environmental conditions indicative of releases or
potential releases of hazardous substances on, at, in, or to the
subject property. It is recommended that this information be revealed
to the parties conducting the all appropriate inquiries so that any
specialized knowledge may be taken into account during the conduct of
the required aspects of the all appropriate inquiries.
Congress first added the innocent landowner defense to CERCLA in
the Superfund Amendments and Reauthorization Act (SARA) of 1986. The
Brownfields Amendments amended the innocent landowner defense and added
to CERCLA the bona fide prospective purchaser and the contiguous
property owner liability protections to CERCLA liability. The 1986 SARA
amendments to CERCLA established that among other elements necessary
for a defendant to successfully assert the innocent landowner defense,
a defendant must demonstrate that he or she had, on or before the date
of acquisition of the property in question, made all appropriate
inquiries into previous ownership and uses of the property. Congress
directed courts evaluating a defendant's showing of all appropriate
inquiries to take into account, among other things, ``any specialized
knowledge or experience on the part of the defendant.'' Nothing in
today's rule changes the nature or intent of this requirement as it has
existed in the statute since 1986.
Proposed Rule
The proposed rule retained, as part of the federal all appropriate
inquiries requirements, the consideration of any specialized knowledge
or experience of the prospective landowner (or grantee if the grantee
is or will be the property owner). The proposed rule did not extend
this requirement beyond what already was required under CERCLA and
established through case law. The proposed rule required that all
appropriate inquiries include the consideration of specialized
knowledge held by the prospective landowner or grantee with regard to
the subject property, the area surrounding the subject property, the
conditions of
[[Page 66098]]
adjoining properties, as well as other experience relative to the
inquiries that may be applicable to identifying conditions indicative
of releases or threatened releases at the subject property. The
proposed rule also required that the results of the inquiries take into
account any specialized knowledge related to the property, surrounding
areas, and adjoining properties held by the persons responsible for
undertaking the inquiries, including any specialized knowledge on the
part of the environmental professional.
Public Comments
EPA did not receive significant comment on the proposed
requirements for considering the specialized knowledge or experience on
the part of the defendant. A few commenters mentioned that the proposed
requirements would result in the all appropriate inquiries
investigations having to include interviews with all previous owners
and occupants of the property. These commenters may have mistakenly
interpreted the proposed provisions as requiring that the specialized
knowledge of all current owners and occupants be considered as part of
the all appropriate inquiries investigation. We clarify that only the
specialized knowledge of the prospective landowner or grantee, and the
environmental professional overseeing the conduct of the inquiries need
be considered.
Final Rule
The final rule retains the proposed provisions governing the
consideration of specialized knowledge or experience on the part of the
prospective landowner (or grantee) and the environmental professional
conducting the all appropriate inquiries investigation on the part of
the prospective landowner or grantee.
As provided in the preamble to the proposed rule, existing case law
related to the innocent landowner defense shows that courts appear to
have interpreted the ``specialized knowledge'' factor to mean that the
professional or personal experience of the defendant may be taken into
account when analyzing whether the defendant made all appropriate
inquiries. For example, in Foster v. United States, 922 F. Supp. 642
(D. D.C. 1996), the owner of a property formerly owned by the General
Services Administration and contaminated by, among other things, lead,
mercury and PCBs, brought an action against the United States and
District of Columbia, prior owners or operators of the site. The
plaintiff was a principal in Long & Foster companies and purchased the
property through a general partnership, and received it by quitclaim
deed. The innocent landowner defense requires a property owner to
demonstrate that when he or she purchased a property, he or she did not
know and had no reason to know of contamination at, on, in, or to the
property. The court rejected the plaintiff's claim to the innocent
landowner defense based in part on the plaintiff's specialized
knowledge. The court found that his specialized knowledge included his
position at Long & Foster, which did hundreds of millions of dollars of
commercial real estate transactions, and his position as a partner in
at least 15 commercial real estate partnerships. The partnership was
involved as an investor in a number of real estate transactions, some
of which involved industrial or commercial or mixed-use property. The
court ruled that ``it cannot be said that [the partnership] is a group
unknowledgeable or inexperienced in commercial real estate
transactions.'' Foster, 922 F. Supp. at 656.
In American National Bank and Trust Co. of Chicago v. Harcros
Chemicals, Inc., 1997 WL 281295 (N.D. Ill. 1997), the plaintiff was a
company ``involved in brownfields development, purchasing
environmentally distressed properties at a discount, cleaning them up,
and selling them for a profit.'' American National Bank,1997 WL 281295
at *4. As a counter-claim defendant, the company asserted it was an
innocent landowner and therefore not liable pursuant to CERCLA. The
court found that among other reasons the defense failed because the
company possessed specialized knowledge. The court ruled that the
company was an expert environmental firm and possessed knowledge that
should have alerted it to the potential problems at the site.
The final rule requires that the specialized knowledge of
prospective landowners and the persons responsible for undertaking the
all appropriate inquiries, including grantees, be taken into account
when conducting the all appropriate inquiries for the purposes of
identifying conditions indicative of releases or threatened releases at
a property. However, as evidenced by the case law cited above, the
determination of whether or not the all appropriate inquiries standard
is met with regard to specialized knowledge (as well as in regard to
all the criteria) remains within the discretion of the courts.
V. What Are the Requirements for the Relationship of the Purchase Price
to the Value of the Property, if the Property Was Not Contaminated?
Congress included in the statutory criteria for all appropriate
inquiries a requirement to consider the relationship of the purchase
price of a property to the value of the property, if the property was
not contaminated. The criteria was retained in the criteria included in
the Brownfields Amendments from the all appropriate inquiries
provisions of the innocent landowner defense established by Congress in
the 1986 amendments to CERCLA.
Proposed Rule
The proposed rule required that the prospective landowner or
grantee consider whether or not the purchase price of the property
reflects the fair market value of the property, assuming that the
property is not contaminated. The proposed rule required that the
prospective landowner or grantee consider whether any differential
between the purchase price and the value of the property is due to the
presence of releases or threatened releases of hazardous substances at
the property. There may be many reasons that the price paid for a
particular property is not an accurate reflection of the fair market
value. The all appropriate inquiries investigation need only include a
consideration of whether a significant difference between the price
paid for a property and the fair market value of a property, if the
property were not contaminated, is an indication that the property may
be contaminated.
Public Comments
Many commenters asserted that an environmental professional should
not be required to consider the relationship of the purchase price to
the value of the property as part of the all appropriate inquiries
investigation. Concerns raised by commenters include whether
environmental professionals are qualified to assess the fair market
value of a property. Some commenters thought that a requirement that
prospective landowners or environmental professionals consider the
relationship of the purchase price of property to the value of the
property could violate federal or state laws governing property
appraisals. Some commenters argued that the all appropriate inquiries
investigation should not include the requirement to consider the
relationship of the purchase price to the value of the property because
the fair market value
[[Page 66099]]
is not always easily ascertainable. Other commenters requested that the
preamble to the final rule include a recommendation that an appraisal
be performed to determine a property's fair market value. In addition,
commenters requested that in cases where an appraisal is conducted to
determine the fair market value of a property, the rule should require
that it meet the Uniform Standards of Professional Appraisal Practice.
Still other commenters supported including the requirement in the final
rule, but asked the Agency to require prospective landowners to obtain
a property appraisal conducted by a trained or certified real estate
appraiser. Some commenters stated that prospective landowners should
not be required to divulge information on the price paid for a property
to the environmental professional or other third party.
Final Rule
The final rule retains the requirement to consider the relationship
of the purchase price to the fair market value of the property, if the
property were not contaminated. The requirement is part of the
statutory criteria established by Congress and has been part of the
statutory provisions governing all appropriate inquiries, within the
innocent landowner defense, since 1986. Today's rule does not change
the previously existing provision. As did the proposed rule, today's
final rule allows for this criterion to be conducted by the prospective
landowner or the grantee or undertaken as part of the inquiry by an
environmental professional. If an environmental professional is not
qualified to consider the relationship of the purchase price to the
value of the property, the prospective landowner or grantee may
undertake the task or hire another third party to make the comparison
of price and fair market value and consider whether any differential is
due to potential environmental contamination.
If the relationship of the purchase price to the fair market value
of the property, assuming the property is not contaminated, is
determined by the prospective landowner or grantee, or other agent who
is not under the supervision or responsible charge of the environmental
professional, the final rule allows for, but does not require, the
information that is collected and the determination made by or on the
behalf of the prospective landowner to be provided to the environmental
professional. If the information is provided to the environmental
professional, he or she can then make use of such information during
the conduct of the all appropriate inquiries and when rendering
conclusions or opinions regarding the environmental conditions of the
property. If the information is not provided to the environmental
professional and the environmental professional determines that the
lack of such information affects his or her ability to identify
conditions indicative of releases or threatened releases of hazardous
substances on, at, in, or to the property, then the environmental
professional should identify the lack of information as a data gap and
comment on its significance in the written report for the all
appropriate inquiries investigation.
The rule does not require that a real estate appraisal be conducted
to achieve compliance with this criterion. Although some commenters
requested that the final rule require that a formal appraisal be
conducted and we acknowledge that there may be potential value in
conducting an appraisal, we determined that a formal appraisal is not
necessary for the prospective landowner or grantee to make a general
determination of whether the price paid for a property reflects its
fair market value. In the case of many property transactions, a formal
appraisal may be conducted for other purposes (e.g., to establish the
value of the property for the purposes of establishing the conditions
of a mortgage or to provide information of relevance where a windfall
lien may be filed). In cases where the results of a formal property
appraisal are available, the appraisal results may serve as an
excellent source of information on the fair market value of the
property.
In cases where the results of a formal appraisal are not available,
the determination of fair market value may be made by comparing the
price paid for a particular property to prices paid for similar
properties located in the same vicinity as the subject property, or by
consulting a real estate expert familiar with properties in the general
locality and who may be able to provide a comparability analysis. The
objective is not to ascertain the exact value of the property, but to
determine whether or not the purchase price paid for the property
generally is reflective of its fair market value. Significant
differences in the purchase price and fair market value of a property
should be noted and the reasons for any differences also should be
noted.
Although some commenters requested that EPA be more explicit in the
final rule in requiring that the comparison of the purchase price to
the fair market value of the property be conducted by the prospective
landowner or grantee (and not the environmental professional), we
believe that the decision of who conducts the comparison may be best
left up to the judgment of the individual prospective landowner (or
grantee) and environmental professional. The final rule provides in
Sec. 312.22 that the comparison of the purchase price to the fair
market value of the property, if it were not contaminated, can fall
outside the inquiries conducted by the environmental professional. The
criteria to consider the relationship of the purchase price to the fair
market value of the property, if it was not contaminated is not
included as part of the requirements governing the ``results of an
inquiry by an environmental professional'' (Sec. 312.21). Therefore,
the requirement may be conducted by the prospective landowner or
grantee, his or her attorney or agent, or the environmental
professional. Given that a prospective landowner or grantee can conduct
the comparison of the purchase price and the fair market value of the
property or hire another agent other than the environmental
professional to conduct this task, we conclude that commenter concerns
regarding the prospective landowner (or grantee) having to divulge the
price paid for a property to the environmental professional are
unfounded.
W. What Are the Requirements for Commonly Known or Reasonably
Ascertainable Information About the Property?
Commonly known or reasonably ascertainable information includes
information about a property that generally is known to the public
within the community where the property is located and can be easily
sought and found from individuals familiar with the property or from
easily attainable public sources of information. As mentioned above,
the Brownfields Amendments to CERCLA amended the innocent landowner
defense previously added to CERCLA in 1986. In addition, the
Brownfields Amendments added to CERCLA the bona fide prospective
purchaser and the contiguous property owner liability protections. The
1986 amendments to CERCLA established, that among other elements
necessary for a defendant to successfully assert the innocent landowner
defense, a defendant must take into account commonly known or
reasonably ascertainable information about the property. Congress
retained this criterion as part of the all appropriate inquiries
requirements included in the Brownfields Amendments. Today's rule does
not change the nature or intent of
[[Page 66100]]
this requirement as it has existed in the statute since 1986.
Proposed Rule
The proposed rule required that all appropriate inquiries include
the collection and consideration of commonly known information about
the potential environmental conditions at a property. The proposed rule
required both the prospective landowner or grantee and the
environmental professional obtain and consider commonly known or
reasonably ascertainable information during the conduct of the all
appropriate inquiries investigation. The proposed rule also provided a
list of potential sources of such information.
Public Comments
A few commenters expressed concern that the requirement to consider
commonly known or reasonably ascertainable information about a property
renders the all appropriate inquiries requirements too vague and open-
ended. Commenters stated that the requirement is broad and may result
in the need to interview a large number of people and consult a wide
variety of sources of information. One commenter expressed a preference
that the federal standards include only a checklist of specific sources
of information that must be consulted. A few commenters thought the
list of potential sources of commonly known information included in the
proposed rule was too broad.
Final Rule
The final rule retains the proposed provisions requiring that
prospective landowners and environmental professionals consider
commonly known or reasonably ascertainable information about a property
when conducting all appropriate inquiries. This information may be
ascertained from the owner or occupant of a property, members of the
local community, including owners or occupants of neighboring
properties to the subject property, local or state government
officials, local media sources, and local libraries and historical
societies. In many cases, this information may be incidental to other
information collected during the inquiries, and separate or distinct
efforts to collect the information may not be necessary. Information
about a property, including its ownership and uses, that is commonly
known or reasonably ascertainable within the community or neighborhood
in which a property is located may be valuable to identifying
conditions indicative of releases or threatened releases at the subject
property. Such information, if not collected during the course of
collecting other information necessary to complete the all appropriate
inquiries investigation, may be obtained by interviewing community
officials and other residents of the locality. For example, neighboring
property owners and local community members may have information
regarding undocumented uses of a property during periods when the
property was idle or abandoned. Local community sources may be good
(i.e., reasonably ascertainable) sources of commonly known information
on uses of a property and activities conducted at a property,
particularly in the case of abandoned properties.
The collection and use of commonly known information about a
property may be done in connection with the collection of all other
required information for the purposes of achieving the objectives and
performance factors contained in Sec. 312.20. Persons undertaking the
all appropriate inquiries may collect commonly known or reasonably
ascertainable information on the subject property from a variety of
sources, including sources located in the community in which the
property is located. The opinion provided by an environmental
professional regarding the environmental conditions of a property and
included in the all appropriate inquiries report should be based upon a
balance of all information collected, including commonly known or
reasonably ascertainable information about the property. The potential
sources of commonly known or reasonably ascertainable information
provided in the proposed rule and retained in the final rule are
provided as suggestions for where such information may be found and the
list provided is not meant as an exhaustive list of sources that must
be consulted. Commonly known information may be collected from other
sources and may be most easily collected during the conduct of other
aspects of the all appropriate inquiries investigation (e.g.,
interviews, reviews of historical sources of information, reviews of
governmental records). The requirement is not meant to require
exhaustive data collection efforts, as some commenters asserted. The
intent of the requirement is to establish that a prospective landowner
or grantee and an environmental professional conducting all appropriate
inquiries on his or her behalf must make efforts to collect and
consider information about a property that is commonly known within the
local community or that can be reasonably ascertained.
There is some case law, related to the innocent landowner defense,
that provides guidance on how a court may rule with regard to the need
to consider commonly known or reasonably ascertainable information
about the property. For example, in Wickland Oil Terminals v. Asarco,
Inc., 1988 WL 167247 (N.D. Cal. 1988), the court noted that Wickland
was aware of potential water quality problems at the subject property
due to large piles of mining slag stored at the property, even though
Wickland argued that previous owners withheld such information, because
the information was available from other sources consulted by Wickland
prior to purchasing the property, including the Regional Water Quality
Control Board and a consulting firm hired by Wickland. Such information
was commonly known by local sources and therefore should have been
considered by Wickland during its conduct of all appropriate inquiries.
In Hemingway Transport Inc. v. Kahn, 174 FR 148 (Bankr. D. Mass.
1994), the court ruled against an innocent landowner claim because it
found ``that had [the defendants] exerted a modicum of effort they may
easily have discovered information that at a minimum would have
compelled them to inspect the property further * * * the [defendants]
could have taken a few significant steps, literally, to minimize their
liability and discover information about the property * * *'' The court
noted that one action the defendants should have taken to collect
available information about the property included phone calls to city
officials to inquire about conditions at the property.
X. What Are the Requirements for ``The Degree of Obviousness of the
Presence or Likely Presence of Contamination at the Property, and the
Ability to Detect the Contamination by Appropriate Investigation?''
Proposed Rule
The proposed rule required that the inquiries conducted by a
prospective landowner (or grantee) and environmental professional take
into account all the information collected during the conduct of the
all appropriate inquiries in considering the degree of obviousness of
and ability to detect the presence of a release or threatened release
of hazardous substances at, in, on, or to a property. In addition, the
proposed rule required the environmental professional to provide an
opinion regarding additional appropriate investigation, if any may be
[[Page 66101]]
necessary in his or her opinion to determine the environmental
conditions of the property.
Public Comments
A few commenters asserted that the proposed requirements regarding
the degree of obviousness of the presence or likely presence of
contamination at the property, and the ability to detect the
contamination by appropriate inquiry were too open-ended. Also, a few
commenters suggested that the final rule should include requirements to
conduct sampling and analysis to meet the ``ability to detect
contamination by appropriate investigation'' portion of the statutory
criteria. However, commenters overwhelmingly agreed that the standards
for all appropriate inquiries should not require sampling and analysis.
Final Rule
The final rule requires that persons conducting all appropriate
inquiries consider all the information collected during the conduct of
the inquiries in totality to ascertain the potential presence of a
release or threatened release at the property. Persons conducting all
appropriate inquiries, following the collection of all required
information, must assess whether or not an obvious conclusion may be
drawn that there are conditions indicative of a release or threatened
release of hazardous substances (or other pollutants, contaminants,
petroleum or petroleum products, and controlled substances) on, at, in,
or to the property. In addition, the rule requires parties to consider
whether or not the totality of information collected prior to acquiring
the property indicates that the parties should be able to detect a
release or threatened release on, at, in, or to the property. The final
rule also retains the proposed requirement that the environmental
professional include as part of the results of his or her inquiry an
opinion regarding additional appropriate investigation, if any may be
necessary.
We interpret the statutory criterion to require consideration of
information already obtained during the conduct of all appropriate
inquiries investigation and not as a requirement to collect additional
information. We do not agree with commenters who asserted that the
criterion is open-ended. In fact, we see this criterion as providing
direction on how all of the information collected while carrying out
the other criteria and regulatory requirements must be viewed
comprehensively. After collecting and considering all the information
required to comply with the rule's objectives and performance
standards, all the information should be considered in total to
determine whether or not there are indications of releases or
threatened releases of hazardous substances on, at, in, or to the
property. In addition, the environmental professional should provide an
opinion regarding whether or not additional investigation is necessary
to detect potential contamination at the site, if in his or her opinion
there are conditions indicative of releases or threatened releases of
hazardous substances.
The previous innocent landowner defense (added to CERCLA in 1986)
required a court to consider the degree of obviousness of the presence
or likely presence of contamination at a property, and the ability of
the defendant (i.e., the landowner) to detect the contamination by
appropriate investigation. Nothing in today's rule changes the nature
or intent of this requirement as it has existed in the statute since
1986.
Case law relevant to this criterion indicates that defendants may
not be able to claim an innocent landowner defense if a preponderance
of evidence available to a prospective landowner prior to acquiring the
property indicates that the defendant should have concluded that there
is a high likelihood of contamination at the site. In some cases (e.g.,
Hemingway Transport Inc. v. Kahn, 174 F.R. 148 (Bankr. D. Mass. 1994),
and Foster v. United States, 922 F. Supp. 642 (D.D.C. 1996), courts
have ruled that if a defendant had done a bit more visual inspection or
further investigation, based upon information available to the
defendant prior to acquiring the property, it would have been obvious
that the property was contaminated. In Foster v. United States, the
court determined that the innocent landowner defense was not available
based in part on the fact that the partnership presumed the site was
free of contamination based upon cursory visual inspections despite
evidence in the record that, at the time of the sale, the soil was
visibly stained by PCB-contaminated oil. In addition, although the
property was located in a run-down industrial area, the defendant did
no investigation into the environmental conditions at the site prior to
acquiring the property.
EPA also notes that in U.S. v. Domenic Lombardi Realty, Inc., 290
F. Supp. 2d 198, 211 (D.R.I. 2003), the court held that the defendant
did not qualify for the innocent landowner defense. The defendant could
not show he had ``no reason to know'' of contamination at the property
or that he had performed all appropriate inquiries in accordance with
``good commercial or customary practices.'' The court also found that
the defendant had not performed even a minimal environmental assessment
of the site despite having learned that the property had been used as
an automobile scrapyard. The court noted the distinction between Phase
I and Phase II environmental assessments and credited the testimony of
the United States' expert who concluded that, under the circumstances
of this case, the defendant should have conducted a Phase II
assessment. Id. at 203-04.
With regard to the conduct of sampling and analysis, today's final
rule does not require sampling and analysis as part of the all
appropriate inquiries investigation. However, sampling and analysis may
be valuable in determining the possible presence and extent of
potential contamination at a property. In addition, the fact that the
all appropriate inquiry standards do not require sampling and analysis
does not prevent a court from concluding that, under the circumstances
of a particular case, sampling and analysis should have been conducted
to meet ``the degree of obviousness of the presence or likely presence
of contamination at the property, and the ability to detect the
contamination by appropriate investigation'' criterion and obtain
protection from CERCLA liability. Prospective landowners should keep in
mind that the conduct of all appropriate inquiries prior to acquiring a
property is only one requirement that he or she must comply with to
assert protection from CERCLA liability. The statute requires that
persons, after acquiring a property, comply with continuing obligations
to take reasonable steps to stop on-going releases at the property,
prevent any threatened future releases, and prevent or limit any human,
environmental, or natural resource exposure to any previously released
hazardous substances (these criteria are summarized in detail in
section II.D. of this preamble). In certain instances, depending upon
site-specific circumstances and the totality of the information
collected during the all appropriate inquiries prior to the property
acquisition, it may be necessary to conduct sampling and analysis,
either pre-or post-acquisition, to fully understand the conditions at a
property, and fully comply with the statutory requirements for the
CERCLA liability protections. In addition, sampling and analysis may
help explain existing data gaps. Prospective landowners should be
mindful of all the statutory requirements for obtaining the CERCLA
liability protections when
[[Page 66102]]
considering whether or not to conduct sampling and analysis prior to or
after acquiring a property. Today's final regulation does not require
that sampling and analysis be conducted as part of the all appropriate
inquiries investigation.
V. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
Under Executive Order 12866 (58 FR 51735), the Agency must
determine whether this regulatory action is ``significant'' and
therefore subject to formal review by the Office of Management and
Budget (OMB) and to the requirements of the Executive Order. The
Executive Order defines ``significant regulatory action'' as one that
is likely to result in a rule that may: (1) Have an annual effect on
the economy of $100 million or more or adversely affect in a material
way the economy, a sector of the economy, productivity, competition,
jobs, the environment, public health or safety, or state, local, or
tribal governments or communities; (2) create a serious inconsistency
or otherwise interfere with an action taken or planned by another
agency; (3) materially alter the budgetary impact of entitlements,
grants, user fees, or loan programs or the rights and obligations of
recipients thereof; or (4) raise novel legal or policy issues arising
out of legal mandates, the President's priorities, or the principles
set forth in the Executive Order.
Pursuant to the terms of Executive Order 12866, it has been
determined that today's final rule is a ``significant regulatory
action'' because this rule contains novel policy issues, although it is
not economically significant. As such, this action was submitted to OMB
for review. Changes made in response to OMB suggestions or
recommendations are documented in the docket for today's rule.
To estimate the economic effects of today's final rule, we
conducted an evaluation of the potential effects of this rule on the
universe of prospective landowners who may chose to comply with the
provisions of today's final rule to obtain protection from CERCLA
liability for potential releases and threatened releases of hazardous
substances that may exist at properties they intend to purchase. The
results of this analysis are included in the document titled ``Economic
Impact Analysis for the Final All Appropriate Inquiries Regulation,''
which is included in the docket for today's final rule. Based upon the
results of the Economic Impact Analysis (EIA), EPA has determined that
this final rule will have an annual effect on the economy of less than
$100 million. The annualized benefits associated with the final rule
have not been monetized but are identified and summarized in the EIA
for the all appropriate inquiries rule.\2\
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\2\ The document titled ``The Economic Impact Analysis for the
Final All Appropriate Inquiries Regulation'' includes (1) the EIA
conducted for the proposed rulemaking and (2) the Addendum to the
EIA. The cost estimates presented in the Addendum are the estimated
costs of the final all appropriate inquiries regulation.
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1. Methodology
The value of any regulatory action is traditionally measured by the
net change in social welfare that it generates. The EIA conducted in
support of today's rule examines both costs and qualitative benefits in
an effort to assess the overall net change in social welfare. The
primary focus of the EIA document is on compliance costs and economic
impacts. Below, EPA summarizes the analytical methodology and findings
for the all appropriate inquiries rule. The information presented is
derived from the EIA.
The all appropriate inquiries regulation potentially will apply to
most commercial property transactions. The requirements will be
applicable to any public or private party, who may potentially claim
protection from CERCLA liability as an innocent landowner, a bona fide
prospective purchaser, or a contiguous property owner. However, the
conduct of all appropriate inquiries, also known as environmental due
diligence or Phase I Environmental Site Assessment, is not new to the
commercial property market. Prior to the Brownfields Amendments to
CERCLA, commercial property transactions often included an assessment
of the environmental conditions at properties prior to the closing of
any real estate transaction whereby ownership was transferred for the
purposes of confirming the conditions at the property or to establish
an innocent landowner defense should environmental contamination be
discovered after the property was acquired. The process most
prevalently used for conducting all appropriate inquiries, or
environmental site assessments, is the process developed by ASTM
International (formerly known as the American Society for Testing and
Materials) and entitled ``E1527, Standard Practice for Environmental
Site Assessments: Phase I Environmental Site Assessment Process.'' In
addition, some properties, particularly in cases where the subject
property is assumed not to be contaminated or was never used for
industrial or commercial purposes, were assessed using a less rigorous
process developed by ASTM International, sometimes referred to as a
``transaction screen'' and entitled ``E1528, Standard Practice for
Environmental Site Assessments: Transaction Screen Process.''
Our first step in assessing the economic impacts of the rule was to
establish a baseline to represent the relevant aspects to the
commercial real estate market in the absence of any changes in
regulations. Because under existing conditions almost all commercial
property transactions are accompanied by either an environmental site
assessment (ESA) conducted in accordance with ASTM E1527-2000 or a
transaction screen as specified in ASTM E1528, it was assumed these
practices would continue even in the absence of the all appropriate
inquiries regulation. The numbers of each type of assessment were
estimated on the basis of industry data for recent years, with recent
growth rates in transactions assumed to continue for the 10-year period
covered by the EIA. An adjustment in the relative numbers of ESAs and
transaction screens was made to account for the fact that, under the
rule, an ESA will provide more certain protection from liability. This
adjustment was made by comparing shifts between the two procedures that
occurred when the Brownfields Amendments established the ASTM E1527-
2000 standard as the interim standard for all appropriate inquiries,
and thus as one requirement for qualifying as an innocent landowner,
bona fide prospective purchaser, or contiguous property owner.
We then considered the requirements included in the final rule and
compared them to the requirements for environmental site assessments
conducted under the ASTM E1527-2000 and ASTM E1528 standards.
When compared to the ASTM E1527-2000 standard (i.e., the baseline
standard), today's final rule is expected to result in a reduced burden
for the conduct of interviews in those cases where the subject property
is abandoned; increased burden in those cases where past owners or
occupants need to be interviewed; increased burden associated with
documenting recorded environmental cleanup liens; increased burden for
documenting the reasons for the price and fair market value of a
property in those cases where the purchase price paid for the subject
property is significantly below the fair
[[Page 66103]]
market value of the property; and increased burden for recording
information about the degree of obviousness of contamination at a
property.
To estimate the changes in costs resulting from the rule, we
developed a costing model. This model estimates the total costs of
conducting site assessments as the product of costs per assessment,
numbers of assessments per year, and the number of years in the
analysis. The costs per assessment, in turn, are calculated by dividing
each assessment into individual labor activities, estimating the labor
time associated with each, and assigning a per-hour labor cost to each
activity on the basis of the labor category most appropriate to that
activity. Labor times and categories are assumed to depend on the size
and type of property being assessed, with the nationwide distribution
of properties based on data from industry on environmental sites
assessments and brownfield sites.\3\ The estimates and assignments of
categories are made based on the experience of professionals who have
been involved in large numbers of site assessments, and who are
therefore skilled in cost estimation for the relevant activities. Other
costs, such as reproduction and the purchase of data, are added to the
labor costs to form the estimates of total costs per assessment. These
total costs, stratified by size and type of property, are then
multiplied by estimated numbers of assessments of each size and type to
generate our estimates of total annual costs. The model was tested by
comparing its results to industry-wide estimates of average price of
conducting assessments under baseline conditions, and generally found
to agree. The difference between the estimated cost to comply with the
final rule and the estimated cost in the baseline constitutes our
estimate of the incremental regulatory costs.
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\3\ The distribution of abandoned properties and properties with
known owners, modeled as a range, is based on an estimate of vacant
lands in urban areas and an estimate of abandoned Superfund sites.
---------------------------------------------------------------------------
The EIA provides a qualitative assessment of the benefits of the
all appropriate inquiries rule. The benefits discussed are those that
may be attributed to an increased level of certainty with regard to
CERCLA liability provided to prospective purchasers of potentially
contaminated properties, including brownfields, who comply with the
provisions of the rule and the other statutory provisions associated
with the liability protections. The basic premise for associating
certain benefits to the rule is the expectation that the level of
certainty provided by the liability protections may result in increased
brownfields property transactions. However, it is difficult to predict
how many additional transactions may occur that involve brownfields
properties in direct response to the increased certainty of the
liability protections. It also is difficult to obtain data on changes
in behaviors and practices of prospective landowners in response to the
liability protections. Therefore, EPA made no attempt to quantify
potential benefits or compare the benefits to estimated incremental
costs.
The Agency believes that increasing property transactions involving
brownfields and other contaminated and potentially contaminated
properties and improving information about environmental conditions at
these properties may provide additional indirect benefits such as
increased numbers of cleanups, reduced use of greenfields, potential
increases in property values, and potential increases in quality of
life measures (e.g., decreases in urban blight, reductions in traffic,
congestion, and reduced pollution due to mobile source emissions).
However, as stated above, the benefits of the rule are considered only
qualitatively, due to the difficulty of predicting how many additional
brownfields and contaminated property transactions may occur in
response to the increased certainty of liability protections provided
by the rule, as well as the difficulty in getting data on changes in
behaviors and practices in response to the availability of the
liability protections. EPA is confident that the new liability
protections afforded to prospective landowners, if they comply with the
all appropriate inquiries provisions, will result in increased
benefits. EPA is not able to quantify, with any significant level of
confidence, the exact proportion of the benefits attributed only to the
availability of the liability protections and the all appropriate
inquiries regulations. For these reasons, the costs and benefits could
not be directly compared.
2. Summary of Regulatory Costs in Proposed Rule
For a given property, the costs of compliance with the all
appropriate inquiries rule relative to the baseline depend on whether
that property would have been assessed, in absence of the all
appropriate inquiries regulation, with an ASTM E1527-2000 assessment
process or with the simpler ASTM E1528 transaction screen. EPA
estimated the average incremental cost of the proposed rule relative to
conducting an ASTM E1527-2000 to be between $41 and $47. For the small
percentage of cases for which a transaction screen would have been
preferred to the ASTM E1527-2000 in the baseline, but which would, as a
result of the proposed rule, require an assessment in compliance with
the all appropriate inquiries rule, the average incremental cost was
estimated to be between $1,448 and $1,454. We estimated that
approximately 97 percent of property transactions will bear only the
incremental cost of the rule relative to the ASTM E1527-2000 process.
Therefore, the weighted average incremental cost of the proposed rule,
per transaction, was estimated to be fairly low, between $84 and $89.
3. Public Comments on EIA for Proposed Rule
EPA received a number of public comments on the EIA conducted to
assess the potential costs and impacts of the proposed rule. We
summarized the public comments received related to the cost and
economic impacts in the document titled ``Addendum to Economic Impact
Analysis for the Final All Appropriate Inquiries Regulation'' (Addendum
to the EIA). This document is included in the docket for today's final
rule. The Addendum to the EIA also summarizes EPA's responses to the
comments received that addressed the estimated costs and economic
impacts.
Many commenters generally agreed with EPA's conclusion that the
average incremental cost increase per transaction associated with the
requirements of the proposed rule would be minimal. Some commenters
mentioned that the EIA conducted for the proposed rule underestimated
the incremental costs associated with the proposed rule. However, only
a few commenters provided an explanation as to why they thought our
cost estimates were low or provided information regarding which
particular activities would result in an incremental increase in the
activities and costs associated with conducting an environmental site
assessment, if conducted in compliance with the requirements of the
proposed rule. Most commenters did not provide specific reasons for
their claims of cost increases over the ASTM E1527-2000 standard. A few
commenters suggested that the EIA for the proposed rule underestimated
the level of effort necessary for locating and interviewing past owners
or occupants, with one commenter providing an estimated level of effort
of one to three hours for this task.
[[Page 66104]]
4. Estimate of Costs Associated With the Final Rule
EPA made one revision to the analysis of cost impacts associated
with the requirements of the proposed and final rule in response to
specific issues raised by commenters. EPA agrees with the commenters
who asserted that locating past owners or occupants of a property may
be more time consuming than locating the current owners or occupants,
as was assumed in the analysis of costs conducted for the proposed
rule. Locating past owners or occupants could require as little as one
5-minute phone call (e.g., if the current owner has the contact
information for the past owner) or it could require multiple phone
calls that could take in excess of one hour. For the purpose of
estimating the cost under the final rule, EPA estimates the incremental
burden for locating past owners or occupants to be, on average, 0.5
hours per interview regardless of the property type or size. EPA did
not account for this incremental burden in our analysis of the costs
associated with the proposed rule. EPA also recognizes that in some
cases the environmental professional will need to complete the full
interview with the current owner before determining that it is
necessary to interview a past owner. In other words, the environmental
professional may need to complete the interview with the current owner,
and then perform a more focused interview of a past owner to fill data
gaps. EPA estimates that the incremental burden for interviewing past
owners or occupants will be 0.5 hours for undeveloped and residential
properties, one hour for commercial and industrial properties (of all
sizes except large industrial), and 1.5 hours for large industrial
properties. Therefore, EPA estimates that the total incremental level
of effort for locating and interviewing past property owners or
occupants will range from one hour to two hours depending on the
property type or size.
The additional incremental hour burden, however, will not be
incurred in the case of every site assessment. EPA expects that the
interview with past owners or occupants will be conducted only for
properties with a higher than average owner or occupant turnover rate.
To derive the number of potentially affected properties, we assume that
the environmental professional will interview only the current property
owner if the owner was in the possession of the subject property for
more than two years. We assume that after two years of owning a
property, the current property owner should have a reasonably good
knowledge of its condition. EPA estimates that 19 percent of Phase I
ESAs conducted in a given year are conducted on properties that were
sold at least once in the previous two years (for a detailed
explanation on the derivation of this estimate, see the Addendum to the
EIA). Using the assumption that 15 percent of all properties are
abandoned properties (see Section 5.6.5.2 of EIA) which would not be
affected by the requirement to interview past owners or occupants, we
revised our original cost estimate to account for non-abandoned
properties that were sold over the past two years. Therefore, for the
purpose of our revised cost analysis, we estimate that 16 percent of
properties will require an additional interview with past owners or
occupants.
Except for the increase in the level of effort for the interview
task for non-abandoned properties, all other parameters used in
modeling our cost estimates are the same as presented in the EIA
conducted for the proposed rule. To derive the incremental average cost
per transaction and the total annual cost of the final rule, we
employed the methodology explained in detailed in Chapters 7 and 8 of
the EIA conducted for the proposed rule. Based on our analysis, the
cost of a Phase I ESA under the final regulation will increase, on
average, between $52 and $58. The estimated average cost for a Phase I
ESA thus will range between $2,185 and $2,190.\4\
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\4\ We assumed that the environmental professionals will need to
complete the full interview with the current owner before conducting
an interview with the past owners or occupants. To the extent that
this may not always be the case, the average incremental cost (and
by extension, the average cost for an AAI Phase I ESA) is
overestimated.
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Using our revised incremental cost estimate for conducting
interviews of past owners or occupants, we revised our estimated total
annual cost of the final rule and our incremental total annual cost
estimate. Our revised total annual cost estimate for all activities
included in the all appropriate inquiries investigations conducted
under the final rule is between $693.5 and $695.3 million (calculated
using a discount rate of three percent). Our revised estimate of the
incremental total annual cost of the final rule is between $29.7
million and $31.4 million. A more detailed explanation of our revised
cost estimates, including an additional sensitivity analysis performed
in response to the public comments, is included in the document titled
``Addendum to the Economic Impact Analysis for the Final All
Appropriate Inquiries Regulation.'' This document is in the public
docket for today's final rule.
B. Paperwork Reduction Act
The information collection requirements contained in this final
rule were submitted for approval to the Office of Management and Budget
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The
information collection requirements are not enforceable until OMB
approves them. The Information Collection Request (ICR) document
prepared by EPA has been assigned EPA ICR Number 2144.02.
Under the PRA, EPA is required to estimate the notification,
reporting and recordkeeping costs and burdens associated with the
requirements specified in today's rule. Today's rule will require
persons wanting to assert one of the liability protections under CERCLA
to conduct some activities that go beyond current customary and usual
business practices (i.e., beyond ASTM E1527-2000) and therefore will
impose an information collection burden under the provisions of the
Paperwork Reduction Act. The information collection activities are
associated with the activities mandated in section 101 (35)(B) of
CERCLA for those persons wanting to claim protection from CERCLA
liability. None of the information collection burdens associated with
the provisions of today's rule include requirements to submit the
collected information to EPA or any other government agency.
Information collected by persons affected by today's rule may be useful
to such persons if their potential liability under CERCLA for the
release or threatened release of a hazardous substance is challenged in
a court.
The activities associated with today's rule that go beyond current
customary and usual business practices include interviews with
neighboring property owners and/or occupants in those cases where the
subject property is abandoned, documentation of all environmental
cleanup liens in the Phase I Environmental Site Assessment report,
discussion of the relationship of purchase price to value of the
property in the report, and consideration and discussion of whether
additional environmental investigation is warranted. Paperwork burdens
are estimated to be 546,179 hours annually, with a total cost of
$29,583,206 annually. The estimated average burden hours per response
is estimated to be approximately one hour (or 25 hours per response,
assuming a transition from a transaction screen). The estimated average
cost burden per response is estimated to be either $67 or $1,479,
[[Page 66105]]
depending on whether, under baseline conditions, an ASTM E1527-2000
process or a transaction screen (ASTM E1528) would have been used.
Under the Paperwork Reduction Act, ``burden'' means the total time,
effort, or financial resources expended by persons to generate,
maintain, retain, or disclose or provide information to or for a
Federal agency. This includes the time needed to review instructions;
develop, acquire, install, and utilize technology and systems for the
purposes of collecting, validating, and verifying information,
processing and maintaining information, and disclosing and providing
information; adjust the existing ways to comply with any previously
applicable instructions and requirements; train personnel to be able to
respond to a collection of information; search data sources; complete
and review the collection of information; and transmit or otherwise
disclose the information.
An agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations in 40 CFR are listed in 40 CFR part 9. This ICR is approved
by OMB, and the Agency will publish a technical amendment to 40 CFR
part 9 in the Federal Register to display the OMB control number for
the approved information collection requirements contained in this
final rule.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA), as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C.
601 et. seq., generally requires an agency to prepare a regulatory
flexibility analysis of any rule subject to notice and comment
rulemaking requirements under the Administrative Procedure Act or any
other statute, unless the agency certifies that the rule will not have
a significant economic impact on a substantial number of small
entities. Small entities include small businesses, small organizations,
and small governmental jurisdictions.
For the purposes of assessing the impacts of today's rule on small
entities, small entity is defined as: (1) A small business that is
defined by the Small Business Administration by category of business
using the North American Industrial Classification System (NAICS) and
codified at 13 CFR 121.201; (2) a small governmental jurisdiction that
is a government of a city, county, town, school district or special
district with a population of less than 50,000; and (3) a small
organization that is any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.
Since all non-residential property transactions could be affected
by today's rule, if it is promulgated, large numbers of small entities
could be affected to some degree. However, we estimate that the
effects, on the whole, will not be significant for small entities. We
estimate that, for the majority of small entities, the average
incremental cost of today's rule relative to conducting an ASTM E1527-
2000 Phase I Environmental Site Assessment will be between $52 and $58.
When we annualize the incremental cost of $58 per property transaction
over ten years at a seven percent discount rate, we estimate that the
average annual cost increase per establishment per property transaction
will be $8. Thus, the cost impact to small entities is estimated to not
be significant. A more detailed summary of our analysis of the
potential impacts of today's rule to small entities is included in
``Economic Impacts Analysis of the Final All Appropriate Inquiries
Regulation.'' This document is included in the docket for today's rule.
After considering the economic impacts of today's final rule on
small entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. We estimate
that, on average, 266,000 small entities may purchase commercial real
estate in any given year and therefore could potentially be impacted by
today's final rule. Though large numbers of small entities could be
affected to some degree, we estimated that the effects, on the whole,
would not be significant for small entities. We estimate that, for the
majority of small entities, the average incremental cost of today's
rule relative to conducting an ASTM E1527-2000 will be between $52 and
$58. For the small percentage of cases for which a transaction screen
would have been preferred to the ASTM E1527-2000 in the baseline, but
which now will require an assessment in compliance with the rule, the
average incremental cost of conducting an environmental site assessment
will be between $1,459 and $1,465. When we annualize the incremental
cost per property transaction over ten years at a seven percent
discount rate, we estimate that for the majority of small entities the
average annual cost increase per establishment per property transaction
will be approximately $8. For the small percentage of entities
transitioning from transaction screens to the all appropriate inquiries
requirements of the final rule, the average annual cost increase per
establishment per property transaction will be $209.\5\
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\5\ For a very small percentage of entities transitioning from
transaction screens to the all appropriate inquiries requirements,
the maximum increase per establishment per property transaction is
estimated to be approximately $2,845. When we annualize this
incremental cost per property transaction over ten years at a seven
percent discount rate, we estimate that the maximum annual cost
increase per establishment per property transaction will be $405. We
estimate that approximately one fifth of one percent of the
properties transitioning from a transaction screen to a Phase I ESA
will have an impact of this magnitude each year.
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D. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
must prepare a written statement, including a cost-benefit analysis,
for proposed and final rules with ``Federal mandates'' that may result
in expenditures to State, local, and tribal governments, in the
aggregate, or to the private sector, of $100 million or more in any one
year. Before promulgating an EPA rule for which a written statement is
needed, section 205 of the UMRA generally requires EPA to identify and
consider a reasonable number of regulatory alternatives and adopt the
least costly, most cost-effective, or least burdensome alternative that
achieves the objectives of the rule. The provisions of section 205 do
not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective or least burdensome alternative if the
Administrator publishes with the final rule an explanation of why that
alternative was not adopted.
Before EPA establishes any regulatory requirements that may
significantly or uniquely affect small governments, including tribal
governments, it must have developed under section 203 of the UMRA, a
small government agency plan. The plan must provide for notifying
potentially affected small governments, enabling officials to have
meaningful and timely input in the development of regulatory proposals
with significant federal intergovernmental mandates, and informing,
educating, and advising small governments on compliance with the
regulatory requirements.
Today's rule contains no federal mandates (under the regulatory
provisions of Title II of the UMRA) for
[[Page 66106]]
state, local, or tribal governments or the private sector. The rule
imposes no enforceable duty on any state, local, or tribal governments.
EPA also determined that today's rule contains no regulatory
requirements that might significantly or uniquely affect small
governments. In addition, as discussed above, the private sector is not
expected to incur costs of $100 million or more as a result of today's
rule. Therefore, today's rule is not subject to the requirements of
Sections 202 and 205 of UMRA.
E. Executive Order 13132: Federalism
Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.''
``Policies that have federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the states, on the relationship between the national
government and the states, or on the distribution of power and
responsibilities among the various levels of government.''
Today's rule does not have federalism implications. It will not
have substantial direct effects on the states, on the relationship
between the national government and the states, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. No state and local government
bodies will incur compliance costs as a result of today's rulemaking.
Therefore, Executive Order 13132 does not apply to this rule.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.'' Today's rule does not have
tribal implications, as specified in Executive Order 13175. Today's
rule does not significantly or uniquely affect the communities of
Indian tribal governments, nor would it impose direct compliance costs
on them. Thus, Executive Order 13175 does not apply to this rule.
G. Executive Order 13045: Protection of Children From Environmental
Risks and Safety Risks
Executive Order 13045, entitled ``Protection of Children from
Environmental Health Risks and Safety Risks (62 FR 19885, April 23,
1997) applies to any rule that: (1) Is determined to be ``economically
significant'' as defined under Executive Order 12866, and (2) concerns
an environmental health or safety risk that EPA has reason to believe
may have a disproportionate effect on children. If the regulatory
action meets both criteria, the Agency must evaluate the environmental
health or safety effects of the planned rule on children; and explain
why the planned regulation is preferable to other potentially effective
and reasonably feasible alternatives considered by the Agency.
Today's rule is not subject to the Executive Order because it is
not economically significant as defined in Executive Order 12866.
H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution or Use
Today's final rule is not a ``significant energy action'' as
defined in Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR
28355, May 22, 2001) because it is not likely to have a significantly
adverse effect on the supply, distribution, or use of energy. Further,
we have concluded that this rule is not likely to have any adverse
energy effects.
I. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C.
272 note), directs EPA to use voluntary consensus standards in its
regulatory activities, unless to do so would be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, and business practices) that are developed or
adopted by voluntary consensus standards bodies. The NTTAA directs EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards.
Today's rule involves technical standards. Therefore, the requirements
of section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (15 U.S.C. 272) apply.
Today's final rule is based upon a proposed rule that was developed
with the assistance of a regulatory negotiation committee comprised of
various affected stakeholder groups and modified slightly, based upon
public comments received in response to the proposed rule. When
developing the proposed rule, EPA considered using the existing
standard developed by ASTM International as the federal standard for
all appropriate inquiries. This standard is known as the ASTM E1527-
2000 standard (``Standard Practice for Environmental Site Assessment:
Phase I Environmental Site Assessment Process''). However, when we
proposed the federal standards for all appropriate inquiries, EPA
determined that the ASTM E1527-2000 standard is inconsistent with
applicable law.
In CERCLA section 101(35)(B), Congress included ten specific
criteria to be used in promulgating the all appropriate inquiries rule.
The 2000 version of the ASTM Phase I Environmental Site Assessment
Process does not address all of the required criteria. For example, the
ASTM International standard does not provide for interviews of past
owners, operators, and occupants of a facility. The statute, however,
states that the federally promulgated standard ``shall include * * *
interviews with past and present owners, operators, and occupants of
the facility for the purpose of gathering information regarding the
potential for contamination at the facility.'' CERCLA section
101(35)(B)(iii)(II). In addition, as outlined in the preamble to the
proposed rule (69 FR 52541) the ASTM E1527-2000 standard also does not
meet other statutory requirements. As a result, use of the ASTM E1527-
2000 standard would be inconsistent with applicable law.
In today's final rule, EPA is referencing the updated standards and
practices developed by ASTM International and known as Standard E1527-
05 (entitled ``Standard Practice for Environmental Site Assessments:
Phase I Environmental Site Assessment Process''). The Agency has
determined that this voluntary consensus standard is consistent with
today's final rule and is compliant with the statutory criteria for all
appropriate inquiries. Persons conducting all appropriate inquiries may
use the procedures included in the ASTM E1527-05 standard to comply
with today's final rule.
[[Page 66107]]
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
Executive Order 12898, ``Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations'' (February
11, 1994), is designed to address the environmental and human health
conditions of minority and low-income populations. EPA is committed to
addressing environmental justice concerns and has assumed a leadership
role in environmental justice initiatives to enhance environmental
quality for all citizens of the United States. The Agency's goals are
to ensure that no segment of the population, regardless of race, color,
national origin, income, or net worth bears disproportionately high and
adverse human health and environmental impacts as a result of EPA's
policies, programs, and activities. Our goal is to ensure that all
citizens live in clean and sustainable communities. In response to
Executive Order 12898, and to concerns voiced by many groups outside
the Agency, EPA's Office of Solid Waste and Emergency Response (OSWER)
formed an Environmental Justice Task Force to analyze the array of
environmental justice issues specific to waste programs and to develop
an overall strategy to identify and address these issues (OSWER
Directive No. 9200.3-17). EPA's brownfields program has a particular
emphasis on addressing concerns specific to environmental justices
communities. Many of the communities and neighborhoods that are most
significantly impacted by brownfields are environmental justice
communities. EPA's brownfields program targets such communities for
assessment, cleanup, and revitalization. The brownfields program has a
long history of working with environmental justice communities and
advocates through our technical assistance and grant programs. In
addition to the monies awarded to such communities in the form of
assessment and cleanup grants, the brownfields program also works with
environmental justice communities through our job training grants
program. The job training grants provide money to government entities
to facilitate the training of persons living in or near brownfields
communities to attain skills for conducting site assessments and
cleanups.
Given that environmental justice communities are significantly
impacted by brownfields, and the federal standards for all appropriate
inquiries may play a primary role in encouraging the assessment and
cleanup of brownfields sites, EPA made it a priority to obtain input
from representatives of environmental justice interest groups during
the development of today's rulemaking. The Negotiated Rulemaking
Committee tasked with developing the all appropriate inquiries proposed
rule included three representatives from environmental justice advocacy
groups. Each representative played a significant role in the
negotiations and in the development of the proposed rule. Today's final
rule includes no significant changes to the proposed rule and in
particular, includes no changes that will significantly or
disproportionately impact environmental justice communities.
K. Congressional Review Act
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2). This rule will be effective November 1, 2006.
List of Subjects in 40 CFR Part 312
Environmental protection, Administrative practice and procedure,
Hazardous substances, Intergovernmental relations, Reporting and
recordkeeping requirements.
Dated: October 21, 2005.
Stephen L. Johnson,
Administrator.
0
For reasons set out in the preamble, title 40, chapter I of the Code of
Federal Regulations is amended by revising part 312 as follows:
PART 312--INNOCENT LANDOWNERS, STANDARDS FOR CONDUCTING ALL
APPROPRIATE INQUIRIES
Subpart A--Introduction
Sec.
312.1 Purpose, applicability, scope, and disclosure obligations.
Subpart B--Definitions and References
312.10 Definitions.
312.11 References.
Subpart C--Standards and Practices
312.20 All appropriate inquiries.
312.21 Results of inquiry by an environmental professional.
312.22 Additional inquiries.
312.23 Interviews with past and present owners, operators, and
occupants.
312.24 Reviews of historical sources of information.
312.25 Searches for recorded environmental cleanup liens.
312.26 Reviews of federal, state, tribal and local government
records.
312.27 Visual inspections of the facility and of adjoining
properties.
312.28 Specialized knowledge or experience on the part of the
defendant.
312.29 The relationship of the purchase price to the value of the
property, if the property was not contaminated.
312.30 Commonly known or reasonably ascertainable information about
the property.
312.31 The degree of obviousness of the presence or likely presence
of contamination at the property, and the ability to detect the
contamination by appropriate investigation.
Authority: Section 101(35)(B) of CERCLA, as amended, 42 U.S.C.
9601(35)(B).
PART 312--INNOCENT LANDOWNERS, STANDARDS FOR CONDUCTING ALL
APPROPRIATE INQUIRIES
Subpart A--Introduction
Sec. 312.1 Purpose, applicability, scope and disclosure obligations.
(a) Purpose. The purpose of this section is to provide standards
and practices for ``all appropriate inquiries'' for the purposes of
CERCLA sections 101(35)(B)(i)(I) and 101(35)(B)(ii) and (iii).
(b) Applicability. The requirements of this part are applicable to:
(1) Persons seeking to establish:
(i) The innocent landowner defense pursuant to CERCLA sections
101(35) and 107(b)(3);
(ii) The bona fide prospective purchaser liability protection
pursuant to CERCLA sections 101(40) and 107(r);
(iii) The contiguous property owner liability protection pursuant
to CERCLA section 107(q); and
(2) persons conducting site characterization and assessments with
the use of a grant awarded under CERCLA section 104(k)(2)(B).
(c) Scope. (1) Persons seeking to establish one of the liability
protections under paragraph (b)(1) of this section must conduct
investigations as required in this part, including an inquiry by an
environmental professional, as required under Sec. 312.21, and the
additional inquiries defined in Sec. 312.22, to identify
[[Page 66108]]
conditions indicative of releases or threatened releases, as defined in
CERCLA section 101(22), of hazardous substances, as defined in CERCLA
section 101(14).
(2) Persons identified in paragraph (b)(2) of this section must
conduct investigations required in this part, including an inquiry by
an environmental professional, as required under Sec. 312.21, and the
additional inquiries defined in Sec. 312.22, to identify conditions
indicative of releases and threatened releases of hazardous substances,
as defined in CERCLA section 101(22), and as applicable per the terms
and conditions of the grant or cooperative agreement, releases and
threatened releases of:
(i) Pollutants and contaminants, as defined in CERCLA section
101(33);
(ii) Petroleum or petroleum products excluded from the definition
of ``hazardous substance'' as defined in CERCLA section 101(14); and
(iii) Controlled substances, as defined in 21 U.S.C. 802.
(d) Disclosure obligations. None of the requirements of this part
limits or expands disclosure obligations under any federal, state,
tribal, or local law, including the requirements under CERCLA sections
101(40)(c) and 107(q)(1)(A)(vii) requiring persons, including
environmental professionals, to provide all legally required notices
with respect to the discovery of releases of hazardous substances. It
is the obligation of each person, including environmental
professionals, conducting the inquiry to determine his or her
respective disclosure obligations under federal, state, tribal, and
local law and to comply with such disclosure requirements.
Subpart B--Definitions and References
Sec. 312.10 Definitions.
(a) Terms used in this part and not defined below, but defined in
either CERCLA or 40 CFR part 300 (the National Oil and Hazardous
Substances Pollution Contingency Plan) shall have the definitions
provided in CERCLA or 40 CFR part 300.
(b) When used in this part, the following terms have the meanings
provided as follows:
Abandoned property means: property that can be presumed to be
deserted, or an intent to relinquish possession or control can be
inferred from the general disrepair or lack of activity thereon such
that a reasonable person could believe that there was an intent on the
part of the current owner to surrender rights to the property.
Adjoining properties means: any real property or properties the
border of which is (are) shared in part or in whole with that of the
subject property, or that would be shared in part or in whole with that
of the subject property but for a street, road, or other public
thoroughfare separating the properties.
Data gap means: a lack of or inability to obtain information
required by the standards and practices listed in subpart C of this
part despite good faith efforts by the environmental professional or
persons identified under Sec. 312.1(b), as appropriate, to gather such
information pursuant to Sec. Sec. 312.20(e)(1) and 312.20(e)(2).
Date of acquisition or purchase date means: the date on which a
person acquires title to the property.
Environmental Professional means:
(1) a person who possesses sufficient specific education, training,
and experience necessary to exercise professional judgment to develop
opinions and conclusions regarding conditions indicative of releases or
threatened releases (see Sec. 312.1(c)) on, at, in, or to a property,
sufficient to meet the objectives and performance factors in Sec.
312.20(e) and (f).
(2) Such a person must:
(i) Hold a current Professional Engineer's or Professional
Geologist's license or registration from a state, tribe, or U.S.
territory (or the Commonwealth of Puerto Rico) and have the equivalent
of three (3) years of full-time relevant experience; or
(ii) Be licensed or certified by the federal government, a state,
tribe, or U.S. territory (or the Commonwealth of Puerto Rico) to
perform environmental inquiries as defined in Sec. 312.21 and have the
equivalent of three (3) years of full-time relevant experience; or
(iii) Have a Baccalaureate or higher degree from an accredited
institution of higher education in a discipline of engineering or
science and the equivalent of five (5) years of full-time relevant
experience; or
(iv) Have the equivalent of ten (10) years of full-time relevant
experience.
(3) An environmental professional should remain current in his or
her field through participation in continuing education or other
activities.
(4) The definition of environmental professional provided above
does not preempt state professional licensing or registration
requirements such as those for a professional geologist, engineer, or
site remediation professional. Before commencing work, a person should
determine the applicability of state professional licensing or
registration laws to the activities to be undertaken as part of the
inquiry identified in Sec. 312.21(b).
(5) A person who does not qualify as an environmental professional
under the foregoing definition may assist in the conduct of all
appropriate inquiries in accordance with this part if such person is
under the supervision or responsible charge of a person meeting the
definition of an environmental professional provided above when
conducting such activities.
Relevant experience, as used in the definition of environmental
professional in this section, means: participation in the performance
of all appropriate inquiries investigations, environmental site
assessments, or other site investigations that may include
environmental analyses, investigations, and remediation which involve
the understanding of surface and subsurface environmental conditions
and the processes used to evaluate these conditions and for which
professional judgment was used to develop opinions regarding conditions
indicative of releases or threatened releases (see Sec. 312.1(c)) to
the subject property.
Good faith means: the absence of any intention to seek an unfair
advantage or to defraud another party; an honest and sincere intention
to fulfill one's obligations in the conduct or transaction concerned.
Institutional controls means: non-engineered instruments, such as
administrative and/or legal controls, that help to minimize the
potential for human exposure to contamination and/or protect the
integrity of a remedy.
Sec. 312.11 References.
The following industry standards may be used to comply with the
requirements set forth in Sec. Sec. 312.23 through 312.31:
(a) The procedures of ASTM International Standard E1527-05 entitled
``Standard Practice for Environmental Site Assessments: Phase I
Environmental Site Assessment Process.''
(b) [Reserved]
Subpart C--Standards and Practices
Sec. 312.20 All appropriate inquiries.
(a) ``All appropriate inquiries'' pursuant to CERCLA section
101(35)(B) must be conducted within one year prior to the date of
acquisition of the subject property and must include:
(1) An inquiry by an environmental professional (as defined in
Sec. 312.10), as provided in Sec. 312.21;
(2) The collection of information pursuant to Sec. 312.22 by
persons identified under Sec. 312.1(b); and
[[Page 66109]]
(3) Searches for recorded environmental cleanup liens, as required
in Sec. 312.25.
(b) Notwithstanding paragraph (a) of this section, the following
components of the all appropriate inquiries must be conducted or
updated within 180 days of and prior to the date of acquisition of the
subject property:
(1) Interviews with past and present owners, operators, and
occupants (see Sec. 312.23);
(2) Searches for recorded environmental cleanup liens (see Sec.
312.25);
(3) Reviews of federal, tribal, state, and local government records
(see Sec. 312.26);
(4) Visual inspections of the facility and of adjoining properties
(see Sec. 312.27); and
(5) The declaration by the environmental professional (see Sec.
312.21(d)).
(c) All appropriate inquiries may include the results of and
information contained in an inquiry previously conducted by, or on the
behalf of, persons identified under Sec. 312.1(b) and who are
responsible for the inquiries for the subject property, provided:
(1) Such information was collected during the conduct of all
appropriate inquiries in compliance with the requirements of CERCLA
sections 101(35)(B), 101(40)(B) and 107(q)(A)(viii);
(2) Such information was collected or updated within one year prior
to the date of acquisition of the subject property;
(3) Notwithstanding paragraph (b)(2) of this section, the following
components of the inquiries were conducted or updated within 180 days
of and prior to the date of acquisition of the subject property:
(i) Interviews with past and present owners, operators, and
occupants (see Sec. 312.23);
(ii) Searches for recorded environmental cleanup liens (see Sec.
312.25);
(iii) Reviews of federal, tribal, state, and local government
records (see Sec. 312.26);
(iv) Visual inspections of the facility and of adjoining properties
(see Sec. 312.27); and
(v) The declaration by the environmental professional (see Sec.
312.21(d)).
(4) Previously collected information is updated to include relevant
changes in the conditions of the property and specialized knowledge, as
outlined in Sec. 312.28, of the persons conducting the all appropriate
inquiries for the subject property, including persons identified in
Sec. 312.1(b) and the environmental professional, defined in Sec.
312.10.
(d) All appropriate inquiries can include the results of report(s)
specified in Sec. 312.21(c), that have been prepared by or for other
persons, provided that:
(1) The report(s) meets the objectives and performance factors of
this regulation, as specified in paragraphs (e) and (f) of this
section; and
(2) The person specified in Sec. 312.1(b) and seeking to use the
previously collected information reviews the information and conducts
the additional inquiries pursuant to Sec. Sec. 312.28, 312.29 and
312.30 and the all appropriate inquiries are updated in paragraph
(b)(3) of this section, as necessary.
(e) Objectives. The standards and practices set forth in this part
for All Appropriate Inquiries are intended to result in the
identification of conditions indicative of releases and threatened
releases of hazardous substances on, at, in, or to the subject
property.
(1) In performing the all appropriate inquiries, as defined in this
section and provided in the standards and practices set forth this
subpart, the persons identified under Sec. 312.1(b)(1) and the
environmental professional, as defined in Sec. 312.10, must seek to
identify through the conduct of the standards and practices set forth
in this subpart, the following types of information about the subject
property:
(i) Current and past property uses and occupancies;
(ii) Current and past uses of hazardous substances;
(iii) Waste management and disposal activities that could have
caused releases or threatened releases of hazardous substances;
(iv) Current and past corrective actions and response activities
undertaken to address past and on-going releases of hazardous
substances;
(v) Engineering controls;
(vi) Institutional controls; and
(vii) Properties adjoining or located nearby the subject property
that have environmental conditions that could have resulted in
conditions indicative of releases or threatened releases of hazardous
substances to the subject property.
(2) In the case of persons identified in Sec. 312.1(b)(2), the
standards and practices for All Appropriate Inquiries set forth in this
part are intended to result in the identification of conditions
indicative of releases and threatened releases of hazardous substances,
pollutants, contaminants, petroleum and petroleum products, and
controlled substances (as defined in 21 U.S.C. 802) on, at, in, or to
the subject property. In performing the all appropriate inquiries, as
defined in this section and provided in the standards and practices set
forth in this subpart, the persons identified under Sec. 312.1(b) and
the environmental professional, as defined in Sec. 312.10, must seek
to identify through the conduct of the standards and practices set
forth in this subpart, the following types of information about the
subject property:
(i) Current and past property uses and occupancies;
(ii) Current and past uses of hazardous substances, pollutants,
contaminants, petroleum and petroleum products, and controlled
substances (as defined in 21 U.S.C. 802);
(iii) Waste management and disposal activities;
(iv) Current and past corrective actions and response activities
undertaken to address past and on-going releases of hazardous
substances pollutants, contaminants, petroleum and petroleum products,
and controlled substances (as defined in 21 U.S.C. 802);
(v) Engineering controls;
(vi) Institutional controls; and
(vii) Properties adjoining or located nearby the subject property
that have environmental conditions that could have resulted in
conditions indicative of releases or threatened releases of hazardous
substances, pollutants, contaminants, petroleum and petroleum products,
and controlled substances (as defined in 21 U.S.C. 802) to the subject
property.
(f) Performance factors. In performing each of the standards and
practices set forth in this subpart and to meet the objectives stated
in paragraph (e) of this section, the persons identified under Sec.
312.1(b) or the environmental professional as defined in Sec. 312.10
(as appropriate to the particular standard and practice) must seek to:
(1) Gather the information that is required for each standard and
practice listed in this subpart that is publicly available, obtainable
from its source within reasonable time and cost constraints, and which
can practicably be reviewed; and
(2) Review and evaluate the thoroughness and reliability of the
information gathered in complying with each standard and practice
listed in this subpart taking into account information gathered in the
course of complying with the other standards and practices of this
subpart.
(g) To the extent there are data gaps (as defined in Sec. 312.10)
in the information developed as part of the inquiries in paragraph (e)
of this section that affect the ability of persons (including the
environmental professional) conducting the all
[[Page 66110]]
appropriate inquiries to identify conditions indicative of releases or
threatened releases in each area of inquiry under each standard and
practice such persons should identify such data gaps, identify the
sources of information consulted to address such data gaps, and comment
upon the significance of such data gaps with regard to the ability to
identify conditions indicative of releases or threatened releases of
hazardous substances [and in the case of persons identified in Sec.
312.1(b)(2), hazardous substances, pollutants, contaminants, petroleum
and petroleum products, and controlled substances (as defined in 21
U.S.C. 802)] on, at, in, or to the subject property. Sampling and
analysis may be conducted to develop information to address data gaps.
(h) Releases and threatened releases identified as part of the all
appropriate inquiries should be noted in the report of the inquiries.
These standards and practices however are not intended to require the
identification in the written report prepared pursuant to Sec.
312.21(c) of quantities or amounts, either individually or in the
aggregate, of hazardous substances pollutants, contaminants, petroleum
and petroleum products, and controlled substances (as defined in 21
U.S.C. 802) that because of said quantities and amounts, generally
would not pose a threat to human health or the environment.
Sec. 312.21 Results of inquiry by an environmental professional.
(a) Persons identified under Sec. 312.1(b) must undertake an
inquiry, as defined in paragraph (b) of this section, by an
environmental professional, or conducted under the supervision or
responsible charge of, an environmental professional, as defined in
Sec. 312.10. Such inquiry is hereafter referred to as ``the inquiry of
the environmental professional.''
(b) The inquiry of the environmental professional must include the
requirements set forth in Sec. Sec. 312.23 (interviews with past and
present owners * * *), 312.24 (reviews of historical sources * * *),
312.26 (reviews of government records), 312.27 (visual inspections),
312.30 (commonly known or reasonably ascertainable information), and
312.31 (degree of obviousness of the presence * * * and the ability to
detect the contamination * * *). In addition, the inquiry should take
into account information provided to the environmental professional as
a result of the additional inquiries conducted by persons identified in
Sec. 312.1(b) and in accordance with the requirements of Sec. 312.22.
(c) The results of the inquiry by an environmental professional
must be documented in a written report that, at a minimum, includes the
following:
(1) An opinion as to whether the inquiry has identified conditions
indicative of releases or threatened releases of hazardous substances
[and in the case of inquiries conducted for persons identified in Sec.
312.1(b)(2) conditions indicative of releases and threatened releases
of pollutants, contaminants, petroleum and petroleum products, and
controlled substances (as defined in 21 U.S.C. 802)] on, at, in, or to
the subject property;
(2) An identification of data gaps (as defined in Sec. 312.10) in
the information developed as part of the inquiry that affect the
ability of the environmental professional to identify conditions
indicative of releases or threatened releases of hazardous substances
[and in the case of inquiries conducted for persons identified in Sec.
312.1(b)(2) conditions indicative of releases and threatened releases
of pollutants, contaminants, petroleum and petroleum products, and
controlled substances (as defined in 21 U.S.C. 802)] on, at, in, or to
the subject property and comments regarding the significance of such
data gaps on the environmental professional's ability to provide an
opinion as to whether the inquiry has identified conditions indicative
of releases or threatened releases on, at, in, or to the subject
property. If there are data gaps such that the environmental
professional cannot reach an opinion regarding the identification of
conditions indicative of releases and threatened releases, such data
gaps must be noted in the environmental professional's opinion in
paragraph (c)(1) of this section; and
(3) The qualifications of the environmental professional(s).
(d) The environmental professional must place the following
statements in the written document identified in paragraph (c) of this
section and sign the document:
``[I, We] declare that, to the best of [my, our] professional
knowledge and belief, [I, we] meet the definition of Environmental
Professional as defined in Sec. 312.10 of this part.''
``[I, We] have the specific qualifications based on education,
training, and experience to assess a property of the nature,
history, and setting of the subject property. [I, We] have developed
and performed the all appropriate inquiries in conformance with the
standards and practices set forth in 40 CFR Part 312.''
Sec. 312.22 Additional inquiries.
(a) Persons identified under Sec. 312.1(b) must conduct the
inquiries listed in paragraphs (a)(1) through (a)(4) below and may
provide the information associated with such inquiries to the
environmental professional responsible for conducting the activities
listed in Sec. 312.21:
(1) As required by Sec. 312.25 and if not otherwise obtained by
the environmental professional, environmental cleanup liens against the
subject property that are filed or recorded under federal, tribal,
state, or local law;
(2) As required by Sec. 312.28, specialized knowledge or
experience of the person identified in Sec. 312.1(b);
(3) As required by Sec. 312.29, the relationship of the purchase
price to the fair market value of the subject property, if the property
was not contaminated; and
(4) As required by Sec. 312.30, and if not otherwise obtained by
the environmental professional, commonly known or reasonably
ascertainable information about the subject property.
Sec. 312.23 Interviews with past and present owners, operators, and
occupants.
(a) Interviews with owners, operators, and occupants of the subject
property must be conducted for the purposes of achieving the objectives
and performance factors of Sec. 312.20(e) and (f).
(b) The inquiry of the environmental professional must include
interviewing the current owner and occupant of the subject property. If
the property has multiple occupants, the inquiry of the environmental
professional shall include interviewing major occupants, as well as
those occupants likely to use, store, treat, handle or dispose of
hazardous substances [and in the case of inquiries conducted for
persons identified in Sec. 312.1(b)(2) pollutants, contaminants,
petroleum and petroleum products, and controlled substances (as defined
in 21 U.S.C. 802)], or those who have likely done so in the past.
(c) The inquiry of the environmental professional also must
include, to the extent necessary to achieve the objectives and
performance factors of Sec. 312.20(e) and (f), interviewing one or
more of the following persons:
(1) Current and past facility managers with relevant knowledge of
uses and physical characteristics of the property;
(2) Past owners, occupants, or operators of the subject property;
or
(3) Employees of current and past occupants of the subject
property.
(d) In the case of inquiries conducted at ``abandoned properties,''
as defined in Sec. 312.10, where there is evidence of potential
unauthorized uses of the subject property or evidence of
[[Page 66111]]
uncontrolled access to the subject property, the environmental
professional's inquiry must include interviewing one or more (as
necessary) owners or occupants of neighboring or nearby properties from
which it appears possible to have observed uses of, or releases at,
such abandoned properties for the purpose of gathering information
necessary to achieve the objectives and performance factors of Sec.
312.20(e) and (f).
Sec. 312.24 Reviews of historical sources of information.
(a) Historical documents and records must be reviewed for the
purposes of achieving the objectives and performance factors of Sec.
312.20(e) and (f). Historical documents and records may include, but
are not limited to, aerial photographs, fire insurance maps, building
department records, chain of title documents, and land use records.
(b) Historical documents and records reviewed must cover a period
of time as far back in the history of the subject property as it can be
shown that the property contained structures or from the time the
property was first used for residential, agricultural, commercial,
industrial, or governmental purposes. For the purpose of achieving the
objectives and performance factors of Sec. 312.20(e) and (f), the
environmental professional may exercise professional judgment in
context of the facts available at the time of the inquiry as to how far
back in time it is necessary to search historical records.
Sec. 312.25 Searches for recorded environmental cleanup liens.
(a) All appropriate inquiries must include a search for the
existence of environmental cleanup liens against the subject property
that are filed or recorded under federal, tribal, state, or local law.
(b) All information collected regarding the existence of such
environmental cleanup liens associated with the subject property by
persons to whom this part is applicable per Sec. 312.1(b) and not by
an environmental professional, may be provided to the environmental
professional or retained by the applicable party.
Sec. 312.26 Reviews of Federal, State, Tribal, and local government
records.
(a) Federal, tribal, state, and local government records or data
bases of government records of the subject property and adjoining
properties must be reviewed for the purposes of achieving the
objectives and performance factors of Sec. 312.20(e) and (f).
(b) With regard to the subject property, the review of federal,
tribal, and state government records or data bases of such government
records and local government records and data bases of such records
should include:
(1) Records of reported releases or threatened releases, including
site investigation reports for the subject property;
(2) Records of activities, conditions, or incidents likely to cause
or contribute to releases or threatened releases as defined in Sec.
312.1(c), including landfill and other disposal unit location records
and permits, storage tank records and permits, hazardous waste handler
and generator records and permits, federal, tribal and state government
listings of sites identified as priority cleanup sites, and spill
reporting records;
(3) CERCLIS records;
(4) Public health records;
(5) Emergency Response Notification System records;
(6) Registries or publicly available lists of engineering controls;
and
(7) Registries or publicly available lists of institutional
controls, including environmental land use restrictions, applicable to
the subject property.
(c) With regard to nearby or adjoining properties, the review of
federal, tribal, state, and local government records or databases of
government records should include the identification of the following:
(1) Properties for which there are government records of reported
releases or threatened releases. Such records or databases containing
such records and the associated distances from the subject property for
which such information should be searched include the following:
(i) Records of NPL sites or tribal- and state-equivalent sites (one
mile);
(ii) RCRA facilities subject to corrective action (one mile);
(iii) Records of federally-registered, or state-permitted or
registered, hazardous waste sites identified for investigation or
remediation, such as sites enrolled in state and tribal voluntary
cleanup programs and tribal- and state-listed brownfields sites (one-
half mile);
(iv) Records of leaking underground storage tanks (one-half mile);
and
(2) Properties that previously were identified or regulated by a
government entity due to environmental concerns at the property. Such
records or databases containing such records and the associated
distances from the subject property for which such information should
be searched include the following:
(i) Records of delisted NPL sites (one-half mile);
(ii) Registries or publicly available lists of engineering controls
(one-half mile); and
(iii) Records of former CERCLIS sites with no further remedial
action notices (one-half mile).
(3) Properties for which there are records of federally-permitted,
tribal-permitted or registered, or state-permitted or registered waste
management activities. Such records or data bases that may contain such
records include the following:
(i) Records of RCRA small quantity and large quantity generators
(adjoining properties);
(ii) Records of federally-permitted, tribal-permitted, or state-
permitted (or registered) landfills and solid waste management
facilities (one-half mile); and
(iii) Records of registered storage tanks (adjoining property).
(4) A review of additional government records with regard to sites
identified under paragraphs (c)(1) through (c)(3) of this section may
be necessary in the judgment of the environmental professional for the
purpose of achieving the objectives and performance factors of Sec.
312.20(e) and (f).
(d) The search distance from the subject property boundary for
reviewing government records or databases of government records listed
in paragraph (c) of this section may be modified based upon the
professional judgment of the environmental professional. The rationale
for such modifications must be documented by the environmental
professional. The environmental professional may consider one or more
of the following factors in determining an alternate appropriate search
distance:
(1) The nature and extent of a release;
(2) Geologic, hydrogeologic, or topographic conditions of the
subject property and surrounding environment;
(3) Land use or development densities;
(4) The property type;
(5) Existing or past uses of surrounding properties;
(6) Potential migration pathways (e.g., groundwater flow direction,
prevalent wind direction); or
(7) Other relevant factors.
Sec. 312.27 Visual inspections of the facility and of adjoining
properties.
(a) For the purpose of achieving the objectives and performance
factors of Sec. 312.20(e) and (f), the inquiry of the environmental
professional must include:
(1) A visual on-site inspection of the subject property and
facilities and improvements on the subject property,
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including a visual inspection of the areas where hazardous substances
may be or may have been used, stored, treated, handled, or disposed.
Physical limitations to the visual inspection must be noted.
(2) A visual inspection of adjoining properties, from the subject
property line, public rights-of-way, or other vantage point (e.g.,
aerial photography), including a visual inspection of areas where
hazardous substances may be or may have been stored, treated, handled
or disposed. Physical limitations to the inspection of adjacent
properties must be noted.
(b) Persons conducting site characterization and assessments using
a grant awarded under CERCLA section 104(k)(2)(B) must include in the
inquiries referenced in Sec. 312.27(a) visual inspections of areas
where hazardous substances, and may include, as applicable per the
terms and conditions of the grant or cooperative agreement, pollutants
and contaminants, petroleum and petroleum products, and controlled
substances as defined in 21 U.S.C. 802 may be or may have been used,
stored, treated, handled or disposed at the subject property and
adjoining properties.
(c) Except as noted in this subsection, a visual on-site inspection
of the subject property must be conducted. In the unusual circumstance
where an on-site visual inspection of the subject property cannot be
performed because of physical limitations, remote and inaccessible
location, or other inability to obtain access to the property, provided
good faith (as defined in Sec. 312.10) efforts have been taken to
obtain such access, an on-site inspection will not be required. The
mere refusal of a voluntary seller to provide access to the subject
property does not constitute an unusual circumstance. In such unusual
circumstances, the inquiry of the environmental professional must
include:
(1) Visually inspecting the subject property via another method
(such as aerial imagery for large properties), or visually inspecting
the subject property from the nearest accessible vantage point (such as
the property line or public road for small properties);
(2) Documentation of efforts undertaken to obtain access and an
explanation of why such efforts were unsuccessful; and
(3) Documentation of other sources of information regarding
releases or threatened releases at the subject property that were
consulted in accordance with Sec. 312.20(e). Such documentation should
include comments by the environmental professional on the significance
of the failure to conduct a visual on-site inspection of the subject
property with regard to the ability to identify conditions indicative
of releases or threatened releases on, at, in, or to the subject
property, if any.
Sec. 312.28 Specialized knowledge or experience on the part of the
defendant.
(a) Persons to whom this part is applicable per Sec. 312.1(b) must
take into account, their specialized knowledge of the subject property,
the area surrounding the subject property, the conditions of adjoining
properties, and any other experience relevant to the inquiry, for the
purpose of identifying conditions indicative of releases or threatened
releases at the subject property, as defined in Sec. 312.1(c).
(b) All appropriate inquiries, as outlined in Sec. 312.20, are not
complete unless the results of the inquiries take into account the
relevant and applicable specialized knowledge and experience of the
persons responsible for undertaking the inquiry (as described in Sec.
312.1(b)).
Sec. 312.29 The relationship of the purchase price to the value of
the property, if the property was not contaminated.
(a) Persons to whom this part is applicable per Sec. 312.1(b) must
consider whether the purchase price of the subject property reasonably
reflects the fair market value of the property, if the property were
not contaminated.
(b) Persons who conclude that the purchase price of the subject
property does not reasonably reflect the fair market value of that
property, if the property were not contaminated, must consider whether
or not the differential in purchase price and fair market value is due
to the presence of releases or threatened releases of hazardous
substances.
(c) Persons conducting site characterization and assessments with
the use of a grant awarded under CERCLA section 104(k)(2)(B) and who
know that the purchase price of the subject property does not
reasonably reflect the fair market value of that property, if the
property were not contaminated, must consider whether or not the
differential in purchase price and fair market value is due to the
presence of releases or threatened releases of hazardous substances,
pollutants, contaminants, petroleum and petroleum products, or
controlled substances as defined in 21 U.S.C. 802.
Sec. 312.30 Commonly known or reasonably ascertainable information
about the property.
(a) Throughout the inquiries, persons to whom this part is
applicable per Sec. 312.1(b) and environmental professionals
conducting the inquiry must take into account commonly known or
reasonably ascertainable information within the local community about
the subject property and consider such information when seeking to
identify conditions indicative of releases or threatened releases, as
set forth in Sec. 312.1(c), at the subject property.
(b) Commonly known information may include information obtained by
the person to whom this part applies in Sec. 312.1(b) or by the
environmental professional about releases or threatened releases at the
subject property that is incidental to the information obtained during
the inquiry of the environmental professional.
(c) To the extent necessary to achieve the objectives and
performance factors of Sec. 312.20(e) and (f), persons to whom this
part is applicable per Sec. 312.1(b) and the environmental
professional must gather information from varied sources whose input
either individually or taken together may provide commonly known or
reasonably ascertainable information about the subject property; the
environmental professional may refer to one or more of the following
sources of information:
(1) Current owners or occupants of neighboring properties or
properties adjacent to the subject property;
(2) Local and state government officials who may have knowledge of,
or information related to, the subject property;
(3) Others with knowledge of the subject property; and
(4) Other sources of information (e.g., newspapers, Web sites,
community organizations, local libraries and historical societies).
Sec. 312.31 The degree of obviousness of the presence or likely
presence of contamination at the property, and the ability to detect
the contamination by appropriate investigation.
(a) Persons to whom this part is applicable per Sec. 312.1(b) and
environmental professionals conducting an inquiry of a property on
behalf of such persons must take into account the information collected
under Sec. 312.23 through 312.30 in considering the degree of
obviousness of the presence of releases or threatened releases at the
subject property.
(b) Persons to whom this part is applicable per Sec. 312.1(b) and
[[Page 66113]]
environmental professionals conducting an inquiry of a property on
behalf of such persons must take into account the information collected
under Sec. 312.23 through 312.30 in considering the ability to detect
contamination by appropriate investigation. The inquiry of the
environmental professional should include an opinion regarding
additional appropriate investigation, if any.
[FR Doc. 05-21455 Filed 10-31-05; 8:45 am]
BILLING CODE 6560-50-P