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EPA Revises All Appropriate Inquiry Rule

EPA recently published notice in the Federal Register of its intent to amend its All Appropriate Inquiry (“AAI”) Rule by including a reference to the revised ASTM Standard E2247-16 – “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property.” The proposed amendment updates the existing AAI Rule, which currently references an earlier, 2008 version of the E2247 Standard. The AAI Rule, as amended, reflects that parties can meet the AAI requirement – one of the necessary components to qualify for CERCLA’s Bona Fide Prospective Purchaser (“BFPP”) defense --  by conducting an environmental investigation in accordance with the regulatory requirements for AAI contained in 40 CFR Part 312, the ASTM Standard E1527-13 (Standard Practice for Phase I Environmental Site Assessments), or the revised ASTM Standard E2247-16. 

EPA amended the AAI Rule in 2008 to add a reference to E2247-08, as a recognition that the level of inquiry appropriate for rural and forestland tracts could be different from that appropriate for developed urban property. ASTM’s 2016 revisions to E2247 were largely made in order to make the Standard more consistent with some of the new terms and definitions that were added by ASTM to the E1527 Standard in 2013. The revisions to E2247 also help to clarify when the E2247-16 Standard should be used instead of E1537-13, as well as clarifying several provisions that address the proper scope of an investigation of rural or forested lands.

EPA does not view the proposed amendment as controversial, and does not anticipate receiving any comments, and has therefore opted to publish the amendment as a direct final rule announcement. As such, the amended rule will go into effect on September 18, 2017, unless EPA receives adverse comments by July 20, 2017.

Going forward, property purchasers and/or lessees seeking to qualify for BFPP protection should ensure that consultants are conforming their Phase I assessments of rural or forested land to the new E2247-16 Standard.

Attorneys in Beveridge & Diamond’s robust and diverse Transactions and Brownfields practice groups serve as regulatory, transactional, insurance and land use counsel for buyers and sellers of commercial real estate and Brownfields properties nationwide, and routinely advise clients with respect to the unique environmental considerations associated with those deals. For more information, please contact the authors.