On December 15, 2022, the United States Environmental Protection Agency (USEPA) published the final amendment to the All Appropriate Inquiry Rule (40 CFR Part 312) (AAI Rule) that establishes the environmental due diligence needed to be eligible for liability protections under the federal superfund law (a.k.a. CERCLA). These include the innocent owner, bona fide prospective purchaser and contiguous property owner exceptions to strict liability under CERCLA.

What You Need to Know:

• USEPA approved the 2021 ASTM Standard (E-1527-21) for Phase I ESA’s as All Appropriate Inquiry (AAI).
• The 2013 ASTM Standard for Phase I ESA’s will no longer satisfy AAI when its grace period expires.
• USEPA granted a one-year grace period beginning February 13, 2023, the effective date of the rule, to continue to use the 2013 ASTM-Standard.

​As always, prospective purchasers and lessees may follow the process described in the AAI Rule. However, it is customary to commission a consultant to prepare a Phase I Environmental Site Assessment (Phase I ESA) scoped to the American Society of Testing and Materials’ (ASTM’s) Standard Practice for Environmental Site Assessments E- 1527. (Note there is a separate ASTM standard for certain forestland/rural land not discussed here.)

As you may recall, ASTM issued a new E-1527 in November of 2021 (ASTM E-1527-21). USEPA then published a direct final amended AAI rule adding the 2021 standard while allowing continued use of former ASTM Standard E-1527-13. Then, USEPA withdrew that rule because substantive comments were received on it. This rule resolves the open issue of which ASTM E-1527 standard to follow.

The rule does two things:

• Establishes ASTM E-1527-21 as a standard that may be followed instead of the process outlined in the AAI Rule.
• Eliminates ASTM E-1527-13 as an option for performing AAI, but allows parties a one-year grace period to continue to use the 2013 standard.

The rule preamble notes that the current industry standard is ASTM E-1527-21.

RECOMMENDATIONS:

• All new Phase I ESA’s should be scoped to the 2021 Standard, ASTM E-1527-21.
• Special note on PFAS (per- and polyfluoroalkyl substances): We recommend that you add an assessment of PFAS to the Phase I scope. PFAS are a family of persistent and bio-accumulative manufactured chemicals that have contaminated many properties and drinking water supplies throughout the country. Numerous states have passed rules with limits for multiple substances within the PFAS family. This year USEPA issued a proposed rule to list two PFAS - - PFOA and PFOS- - as hazardous substances under CERCLA.

Until USEPA’s final rule is passed, all PFAS, including PFOA and PFOS, remain out of scope under ASTM E-1527-2021, and you need to specifically request that the Phase I ESA report include them.

As a reminder, some states (i.e., New Jersey) may have their own laws and rules on what qualifies as AAI under their state law equivalents to CERCLA. Our environmental industry group members are happy to assist you in navigating these issues.