[Federal Register: November 1, 2005 (Volume 70, Number 210)]
[Rules and Regulations]
[Page 66069-66113]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01no05-15]
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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
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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
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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
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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. Th