All Appropriate Inquiry: Standards and Practices to Provide CERCLA Liability Protections

A Quick Look
All appropriate inquiry refers to the requirements for assessing the environmental conditions of a property prior to its acquisition.
All appropriate inquiry provides CERCLA liability protections for certain landowners and potential property owners.
The Brownfields Law amends Section 101(35)(B) of CERCLA to include an interim standard for conducting all appropriate inquiry.
EPA proposed regulations for standards and practices for all appropriate inquiries on August 26, 2004.

On January 11, 2002, President Bush signed the Small Business Liability Relief and Revitalization Act (“the Brownfields Law”). The Brownfields Law clarifies CERCLA liability provisions for landowners and potential property owners. It provides liability protections for certain property owners, if the property owners comply with specific provisions, including conducting all appropriate inquiry into present and past uses of the property and the potential presence of environmental contamination on the property. The all appropriate inquiry standards and practices are relevant to:

• The innocent landowner defense to CERCLA liability (§101 (35))
• The contiguous property exemption to CERCLA liability (§107 (q))
• The bona fide prospective purchaser exemption to CERCLA liability (§107 (r)(1) and (§101 (40))
• The brownfields site characterization and assessment grant programs (§104 (k)(2))

The Brownfields Law amends Section 101(35)(B) of CERCLA to include an interim standard for conducting all appropriate inquiry and requires EPA to promulgate regulations that establish federal standards and practices for conducting all appropriate inquiries. Congress directed EPA to include, within the standards for all appropriate inquiry, the ten criteria shown below:

• 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 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

EPA’s Proposed Rule: Standards and Practices for All Appropriate Inquiries was signed by the EPA Administrator and published in the Federal Register on August 26, 2004 (69 FR 52542). The proposed rule would establish specific regulatory requirements for conducting all appropriate inquiries into the previous ownership, uses, and environmental conditions of a property for the purposes of qualifying for certain landowner liability protections under CERCLA. EPA developed the proposed rule using a Negotiated Rulemaking process. The proposed rule retains the regulatory language developed by the Negotiated Rulemaking Committee. The public comment period for the proposed rule closed on November 30, 2004. Currently, EPA is reviewing the comments received in response to the proposed rule and considering the issues raised by commenters. After considering all issues raised within the public comments, EPA will respond to the comments and develop a final rulemaking. The interim standard for properties purchased after May 31, 1997, which remains in place until EPA promulgates a final rule establishing federal standards for all appropriate inquiries, is the ASTM E1527-97 or ASTM E1527-00, entitled “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.

Key Resources
Visit the EPA Web site at http://www.epa.gov/brownfields/regneg.htm for copies of the proposed rule, a fact sheet, and supplemental information on all appropriate inquiry. For detailed information on specific aspects of the proposed rule, contact Patricia Overmeyer of EPA’s Office of Brownfields Cleanup and Redevelopment at (202) 566-2774 or at overmeyer.patricia@epa.gov.

Sunday, September 7, 2008