Do you perform Phase I environmental site assessments?
Do you do them for clients seeking CERCLA liability protection?
Ever do any on huge tracts of land?
Answered, 'yes' to all 3? Read on.
The U.S. Environmental Protection Agency just expanded the toolbox for conducting AAI-driven Phase Is for clients purchasing large tracts (greater than 120 acres) of forested land and parties buying large rural properties.
When EPA came out with its All Appropriate Inquiries rule in 2005 (or 40 CFR Part 312
for any legal eagles out there), it specifically referenced the ASTM E 1527-05 standard as acceptable protocol for conducting AAI for the purposes of qualifying for CERCLA liability protection as an innocent purchaser, bona fide prospective purchaser or contiguous property owner. At the time, ASTM's E 1527 task group had been closely watching as every word of the AAI rule came together (Julie Kilgore, the task group chair, was invited to be a member of the EPA committee that wrote the rule). Her task group made play-by-play revisions to it in order to satisfy EPA that E 1527 was at least as stringent as the federal rule. I was lucky enough to have a ringside seat as the AAI rule was written by a regulatory-negotiation committee, and keeping E 1527 in line with the federal rule was no small feat. Negotiations went right down to the wire so ASTM was trying to meet a moving target right down to the finish line! In the end, it got EPA's reference in the AAI rule, leaving the commercial real estate industry with a time-tested alternative for meeting AAI.
At the time, ASTM also had E 2247, first developed in 2002, a Phase I ESA practice based on E 1527, but tailored to the unique aspects of doing environmental due diligence on forestland and rural property. E 2247 did not go through the same hectic revision process as E 1527 when AAI was being written. It therefore became obsolete for the purposes of CERCLA liability protection when the AAI took effect (11/1/06). So the vast majority of AAI-driven Phase Is conducted since then have followed E 1527-05, regardless of property size.
Days before Christmas this past December, that all changed when EPA issued a direct final rule as an amendment to the AAI rule
to recognize a 2008 update to E 2247 as sufficient for meeting AAI. The E 2247 task group basically put its standard through the same rigorous process of revision that E 1527 went through in 2005 in close coordination with EPA for legal and technical review.
I reached out to David Parsonage, the ASTM task group chair for E 2247, and he said that since EPA's obligatory 30-day comment period after the December rule ended with no negative comments, E 2247-08 officially meets AAI as of March 23, 2009.
Does this mean you have to use it? No. It's just another tool in the toolbox. If you're dealing with transactions involving large acreage and remote properties, it may help. Parsonage said one of the main differences between E 2247's specialized approach and the more general E 1527 pertains to site visits. E 2247 acknowledges the challenges and logistical considerations associated with doing a visual inspection on remote or inaccessible parts of large forested and rural properties. These can be very different than what you deal with at your average retail center or office park. E 2247 allows for using remote sensing methods like flyovers and aerial imagery to essenitally screen a property, then conduct ground recon of any suspect areas, in addition to looking at any readily accessible portions of the site.
Other differences noted by Parsonage are:
- a longer list of historical sources
- added detail on uses and environmental concerns typical of large acreage forestland and rural property
- recognition that the timeframes of large acreage acquisitions are typically longer than for commercial/industrial properties
There are others, but they're fairly subtle ones. If you want more detail on the differences between E 2247 and AAI, just go to commonground's home page
and click on the first thing you see in the Downloads box on the lower right or click here
Lastly, you can get a copy of the final E 2247-08 standard directly from ASTM here