Standards and Practices for All Appropriate Inquiries

Note: EPA no longer updates this information, but it may be useful as a reference or resource.

[Federal Register: August 26, 2004 (Volume 69, Number 165)]
[Proposed Rules]
[Page 52541-52581]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26au04-17]

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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 312
[SFUND-2004-0001; FRL-7806-2]
RIN 2050-AF04

AGENCY: Environmental Protection Agency.
ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) today is proposing
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). The proposed rule would establish specific regulatory
requirements and standards for conducting all appropriate inquiries
into the previous ownership, uses, and environmental conditions 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 proposed today
also would be applicable to persons conducting site characterization
and assessments with the use of grants awarded under CERCLA Section
104(k)(2)(B).

DATES: Comments on today's proposed rule must be submitted on or before
October 25, 2004. Comments postmarked after this date will be marked
``late'' and may not be considered. Any person may request a public
hearing on this proposal by filing a request by September 10, 2004.

ADDRESSES: Submit your comments, identified by Docket ID No. SFUND-
2004-0001, by one of the following methods:
1. Federal eRulemaking Portal: http://www.regulations.gov.
Follow the on-line instructions for submitting comments.
2. Agency Web site: http://www.epa.gov/edocket. EDOCKET, EPA's
electronic public docket and comment system, is EPA's preferred method
for receiving comments. Follow the on-line instructions for submitting
comments.
3. E-mail: Comments may be sent by electronic mail to
superfund.docket@epa.gov, /Attention Docket ID No. SFUND-2004-0001.
4. Mail: Send comments to: OSWER Docket, Environmental Protection
Agency, Mailcode: 5305T, 1200 Pennsylvania Ave., NW., Washington, DC
20460, Attention Docket ID No. SFUND-2004-0001. In addition, please
mail a copy of your comments on the information collection provisions
to the Office of Information and Regulatory Affairs, Office of
Management and Budget (OMB), Attn: Desk Officer for EPA, 725 17th St.
NW., Washington, DC 20503.
5. Hand Delivery: Deliver your comments to: EPA Docket Center, EPA
West Building, Room B102, 1301 Constitution Ave., NW., Washington, DC,
Attention Docket ID No. SFUND-2004-0001. Such deliveries are only
accepted during the Docket's normal hours of operation, and special
arrangements should be made for deliveries of boxed information.
Instructions: Direct your comments to Docket ID No. SFUND-2004-
0001. EPA's policy is that all comments received will be included in
the public docket without change and may be made available online at
http://www.epa.gov/edocket, including any personal information
provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit information that you
consider to be CBI or otherwise protected through EDOCKET,
regulations.gov, or e-mail. The EPA EDOCKET and the Federal
regulations.gov Web sites are ``anonymous access'' systems, which means
EPA will not know your identity or contact information unless you
provide it in the body of your comment. If you send an e-mail comment
directly to EPA without going through EDOCKET or regulations.gov, your
e-mail address will be automatically captured and included as part of
the comment that is placed in the public docket and made available on
the Internet. If you submit an electronic comment, EPA recommends that
you include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses. For additional
information about EPA's public docket visit EDOCKET on-line or see the
Federal Register of May 31, 2002 (67 FR 38102). For additional
instructions on submitting comments, go to Unit I.C. of the
SUPPLEMENTARY INFORMATION section of this document.
Docket: 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., 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 Avenue, 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.
If you would like to file a request for a public hearing on this
proposed rule, please submit your request to Ms. Linda Garczynski at:
Office of Brownfields Cleanup and Redevelopment (5105T), U.S.
Environmental Protection Agency, 1200 Pennsylvania Avenue, NW.,
Washington, DC 20460, or via e-mail at garczynski.linda@epa.gov.

FOR FURTHER INFORMATION CONTACT: For general information contact the
RCRA/Superfund/EPCRA/UST Call Center at (800) 424-9346 (toll free) or
TDD (800) 553-7672 (hearing impaired). In the Washington, DC
Metropolitan area, call (703) 412-3323 or TDD (703) 412-9810. 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.

SUPPLEMENTARY INFORMATION:

I. General Information

A. Who Potentially May Be Affected by Today's Proposed Rule?

If promulgated as proposed, this regulation may affect most
directly those persons and businesses purchasing commercial property or
any property that will be used for commercial purposes and who may,
after purchasing the property, seek to claim protection from CERCLA
liability for releases or threatened releases of hazardous substances.
Under section 101(35)(B) of CERCLA, as amended by the Small Business
Liability Relief and Brownfields Redevelopment 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 in which the property is acquired. Prospective property
owners who do not conduct all

[[Page 52543]]

appropriate inquiries prior to 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 proposal 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 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
acquiring a property.
The background document, ``Economic Impacts Analysis for the All
Appropriate Inquiries Proposed Regulation,'' presents a comprehensive
analysis of all potentially impacted entities. This document is
available in the docket established for today's proposed 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 this 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 proposed 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 has 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 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 the Federal Register document
electronically through the EPA Internet under the ``Federal Register''
listings at http://www.epa.gov/fedrgstr Comments on the proposed
rule can be submitted through the federal e-rulemaking portal,
http://www.regulations.gov.
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.regulations.gov/ to submit or 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 in Section I.B. EPA intends to work toward
providing electronic access to all of the publicly available docket
materials through EPA's electronic public docket.
For public commenters, it is important to note that EPA's policy is
that public comments, whether submitted electronically or in paper,
will be made available for public viewing in EPA's electronic public
docket as EPA receives them and without change, unless the comment
contains copyrighted material, CBI, or other information whose
disclosure is restricted by statute. When EPA identifies a comment
containing copyrighted material, EPA will provide a reference to that
material in the version of the comment that is placed in EPA's
electronic public docket. The entire printed comment, including
copyrighted material, will be available in the public docket.
Public comments submitted on computer disks that are mailed or
delivered to the docket will be transferred to EPA's electronic public
docket. Public comments that are mailed or delivered to the docket will
be scanned and placed in EPA's electronic public docket. Where
practical, physical objects will be photographed, and the photograph
will be placed in EPA's electronic public docket along with a brief
description written by the docket staff.

C. What Should I Consider as I Prepare My Comments for EPA?

a. Submitting Public Comments. You may submit comments
electronically, by mail, or through hand delivery/courier, as explained
in the ADDRESSES section of this document. To ensure proper receipt by
EPA, identify the appropriate docket identification number in the
subject line on the first page of your comment. Please ensure that your
comments are submitted within the specified comment period. Comments
received after the close of the comment period will be marked ``late.''
EPA is not required to consider late comments.

[[Page 52544]]

b. Submitting CBI. Do not submit information that you consider to
be confidential business information (CBI) electronically through EPA's
electronic public docket or by e-mail. Send or deliver information
identified as CBI only to the following address: CERCLA CBI Document
Control Officer, Office of Solid Waste and Emergency Response (5101T),
U.S. EPA, 1200 Pennsylvania Avenue, NW., Washington, DC 20460,
Attention: Docket ID No. SFUND-2004-0001. You may claim information
that you submit to EPA as CBI by marking any part or all of that
information as CBI (if you submit CBI on disk or CD ROM, mark the
outside of the disk or CD ROM as CBI and then identify electronically
within the disk or CD ROM the specific information that is CBI).
Information so marked will not be disclosed except in accordance with
procedures set forth in 40 CFR, Part 2.
In addition to one complete version of the comment that includes
any information claimed as CBI, a copy of the comment that does not
contain the information claimed as CBI must be submitted for inclusion
in the public docket and EPA's electronic public docket. If you submit
the copy that does not contain CBI on disk or CD ROM, mark the outside
of the disk or CD ROM clearly that it does not contain CBI. Information
not marked as CBI will be included in the public docket and EPA's
electronic public docket without prior notice. If you have any
questions about CBI or the procedures for claiming CBI, please consult
the person identified in the FOR FURTHER INFORMATION CONTACT section.
c. Tips for Preparing Your Comments. You may find the following
suggestions helpful for preparing your comments:
i. Identify the rulemaking by docket number and other identifying
information (e.g., subject heading, Federal Register date and page number).
ii. Explain your views as clearly as possible.
iii. Explain why you agree or disagree; suggest alternatives and
substitute language for your requested changes.
iv. Describe any assumptions and provide any technical information
and/or data that you used to support your views.
v. If you estimate potential burden or costs, explain how you
arrived at your estimate in sufficient detail to allow for it to be
reproduced.
vi. Provide specific examples to illustrate your concerns and
suggest alternative.
vii. Make sure to submit your comments by the comment period
deadline identified.

Contents of This Proposed Rule

I. Statutory Authority
II. Background
A. What Is the Intent of Today's Proposed Rule?
B. What Is ``All Appropriate Inquiries?''
C. What Are the Current 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?
F. How Did EPA Go About Developing the Proposed Rule?
G. What Is Negotiated Rulemaking?
H. What Was the Process that EPA Followed in Establishing and
Conducting the Negotiated Rulemaking Committee?
I. What Are the Benefits of Negotiated Rulemaking?
J. Who Was Represented on the Negotiated Rulemaking Committee?
III. Detailed Description of Today's Proposed Rule
A. What Is the Purpose and Scope of the Proposed Rule?
B. To Whom Is the Rule Applicable?
C. Does the Proposed Rule Include New Reporting or Disclosure
Obligations?
D. What Are the Proposed Qualifications for an Environmental
Professional?
E. References
F. What Is Included in ``All Appropriate Inquiries?''
G. What Are the Proposed Requirements for Interviewing Past and
Present Owners, Operators, and Occupants?
H. What Are the Proposed Requirements for Reviews of Historical
Sources of Information?
I. What Are the Proposed Requirements for Searching for Recorded
Environmental Cleanup Liens?
J. What Are the Proposed Requirements for Reviewing Federal,
State, Tribal, and Local Government Records?
K. What Are the Proposed Requirements for Visual Inspections of
the Subject Property and Adjoining Properties?
L. What Are the Proposed Requirements for the Inclusion of
Specialized Knowledge or Experience on the Part of the ``Defendant?''
M. What Are the Proposed Requirements for the Relationship of
the Purchase Price to the Value of the Property, if the Property Was
Not Contaminated?
N. What Are the Proposed Requirements for Commonly Known or
Reasonably Ascertainable Information About the Property?
O. What Are the Proposed 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?'
IV. Requests for Public Comments
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 and Advancement Act
J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income Populations

I. Statutory Authority

These regulations are proposed 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
Redevelopment Act.

II. Background

A. What Is the Intent of Today's Proposed Rule?

The intent of today's proposed rule is to propose regulations
setting federal 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 clean up programs. Today's
regulatory action proposes 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

[[Page 52545]]

claiming the liability protections conduct all appropriate inquiries
into prior ownership and use of a property prior to or at the time at
which a person acquires a property. The law requires EPA to develop
regulations establishing standards and practices for how to conduct all
appropriate inquiries and promulgate the standards within two years of
enactment of the Amendments. 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 Sec. 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) conduct
site characterizations and assessments and must conduct these
activities in accordance with the standards and practices for all
appropriate inquiries.
The regulations proposed 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 proposed rule does not address the
requirements of CERCLA Section 101(35)(B)(i)(I) for what constitutes
``reasonable steps.''

B. What Is ``All Appropriate Inquiries?''

An essential step in real property transactions is 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 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 in the past. Strict liability under CERCLA
means that liability for environmental contamination could be assigned
based solely on property ownership.
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 at the time of acquisition of the property,
``all appropriate inquiries'' into the previous ownership and uses of
the property consistent with good commercial or customary practice. 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 Are the Current 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
American Society for Testing and Materials (ASTM) Standard E1527-97
(entitled ``Standard Practice for Environmental Site Assessment: 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, the interim standards require that such persons must
establish, among other statutory requirements, that they did not know
and had no reason to know of releases or threatened releases to the
property before the date they acquired 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 proposed rule.
The interim standards remain in effect until EPA 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 Agency
promulgates regulations implementing standards for all appropriate
inquiries, the procedures for persons who purchase property on or after
May 31, 1997 may include either the procedures provided in ASTM E1527-
2000, entitled ``Standard Practice for Environmental Site Assessment:
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 proposed rule and as such has no effect upon
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. However, once the Agency promulgates 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. Following the effective date of a new final
regulation, the standards and practices included as the final
regulation will replace the current interim standards for all appropriate
inquiries.
The National Technology Transfer and Advancement Act (NTTAA),
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). We
considered ASTM E1527-2000, for use in this rule and determined that
the standard is inconsistent with applicable law because it does not
meet the statutory criteria necessary to achieve the purpose of the
rule. Section V.I of today's proposed rule provides additional detail
on the basis for our interpretation with respect to this alternative.
We invite public comment on our determination that the ASTM E1527-2000
Phase I Environmental Site Assessment Standard is inconsistent with
applicable law.

[[Page 52546]]

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'' before acquiring 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 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 proposed rule.
1. Bona Fide Prospective Purchaser
The Brownfields Amendments added the 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 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 Section 101(40). 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 activities
involving hazardous substances at the property;
? 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 a release or threatened
release. None of the other statutory requirements for the bona fide
prospective purchaser liability protection is contingent upon the
results of the conduct 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 hazardous substances
from'' property owned by someone else. To qualify as a contiguous
property owner, a landowner must have no knowledge of contamination
prior to acquisition 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.

[[Page 52547]]

The contiguous property owner liability protection ``protects
parties that 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
prior to purchasing 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 the release or threatened
release. 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
affirmative 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 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 hazardous substances
released on or from the landowner's property;
To succeed in 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 act or omission that caused the release or threat
of release of hazardous substances and the resulting damages were
caused by 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 foreseeable result
from such acts or omissions.
Like contiguous property owners, innocent landowners must perform
all appropriate inquiries prior to acquiring 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 making 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 the release or threatened
release. None of the other statutory requirements for the innocent
landowner defense is contingent upon the results of the conduct of all
appropriate inquiries.

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. These criteria
are set forth in CERCLA Section 101(35)(2)(B)(ii) 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.
In addition, Congress instructed EPA, in the Brownfields Amendments
to develop regulations establishing standards and practices for
conducting all appropriate inquiries in accordance with generally
accepted good commercial and customary standards and practices.

F. How Did EPA Go About Developing the Proposed Rule?

Consistent with the Negotiated Rulemaking Act of 1996, 5 U.S.C. 561
et seq. (The Negotiated Rulemaking Act), EPA decided to use the
negotiated rulemaking process to develop the proposed federal standards
for conducting all appropriate inquiries.

[[Page 52548]]

The most important reason for using the regulatory negotiation process
for developing the proposed federal standards is that all stakeholders,
when consulted, strongly supported a consensus-based negotiated
rulemaking effort. In addition, the Agency determined that a negotiated
rulemaking committee composed of stakeholders familiar with good
commercial and customary standards and practices, as well as the
technical, scientific, and environmental policy issues relevant to
environmental due diligence, would provide great benefit to the Agency
in its attempt to fulfill the Congressional mandate. EPA also believed
that a regulatory negotiation process would be less adversarial than if
the Agency were to develop a proposed rule using its internal
regulatory development process and that a regulatory negotiation could
result in a proposed rule that would effectively reflect Congressional
intent.

G. What Is Negotiated Rulemaking?

Using negotiated rulemaking to develop the proposed rule is
fundamentally different than the Agency's internal rulemaking
development process. Negotiated rulemaking is a process in which a
proposed rule is developed by a committee composed of representatives
of those interests that will be significantly affected by the rule. The
process is started by the Agency's careful identification of the
interests potentially affected by the rulemaking under consideration.
To help in this identification process, the Agency publishes a notice
in the Federal Register, that identifies a preliminary list of
potentially affected interests and requests public comment on that
list. Following receipt of the comments, the Agency establishes a
formal advisory committee under the Federal Advisory Committee Act
(FACA). A balanced membership representing these various interests is
invited by the Agency to participate in the advisory committee.
Representation on the committee may be direct, that is, each member
represents a specific interest, or may be indirect, through coalitions
of parties formed for this purpose. The Agency is a member of the
committee representing the interests of all of the federal government.
Meetings of the committee are announced in the Federal Register and
are open to observation by members of the public. Decisions of the
committee are made by consensus, which generally means an agreement of
all committee members that they can accept the provisions of the
proposed rule when taken as a whole package. A neutral professional, or
facilitator, impartially assists the negotiated rulemaking committee by
applying proven consensus building techniques to the committee's
activities. This professional facilitator serves several roles,
including convening the process, facilitating meetings and mediating
committee negotiations.
The negotiated rulemaking process involves a mutual education of
the negotiating parties by each other on the practical concerns about
the impact of each approach considered by the committee. All committee
members participate in seeking to reach a consensus that resolves the
concerns of the other members, rather than leaving it up to EPA to
bridge different points of view. A key principle of negotiated
rulemaking is that agreement is by consensus of all the members. Thus,
no one interest or group of interests is able to control the process.
The Negotiated Rulemaking Act defines consensus as ``the unanimous
concurrence among interests represented on a negotiated rulemaking
committee, unless the committee itself unanimously agrees to use a
different definition.'' 5 U.S.C. 562(2).
When a regulatory negotiation advisory committee reaches consensus
on the provisions of a proposed rule, the Agency generally uses such
consensus language as the basis of its proposed rule, which is
published in the Federal Register. This provides the required public
notice and allows for a public comment period. Committee members agree
to support the proposed rule as published if there are no substantive
changes from the consensus provisions. Other interested parties retain
their rights to comment, participate in an informal hearing (if
requested) and judicial review. EPA anticipates, however, that the pre-
proposal consensus agreed upon by a negotiated rulemaking committee
will effectively address most major issues prior to publication of a
proposed rule.

H. What Was the Process that EPA Followed in Establishing and
Conducting the Negotiated Rulemaking Committee?

During the fall of 2002, EPA initiated the negotiated rulemaking
process by identifying appropriate stakeholder groups and soliciting
advice and input from experienced public and private sector users of
similar standards. EPA retained an expert facilitator to contact
parties potentially affected by the all appropriate inquiries rule to
determine whether or not stakeholders were interested in participating
in a negotiated rulemaking process and determine the potential for
stakeholder issues to be successfully addressed through a regulatory
negotiation. Following an evaluation of stakeholder interest and input,
the facilitator found that there was sufficient enthusiasm among
stakeholders for a negotiated rulemaking process and almost all
stakeholders that EPA identified and the facilitator interviewed
expressed a belief that potential issues and differences between
interested parties could be successfully addressed and negotiated
through the regulatory negotiation process. A description of the issues
raised by identified stakeholders and a list of interested
stakeholders, as well as the findings of the facilitator are contained
in the final report entitled Convening Assessment Report on the
Feasibility of a Negotiated Rulemaking Process to Develop the All
Appropriate Inquiry Standard Required under the Small Business
Liability Relief and Brownfields Revitalization Act. A copy of this
final report is included in the regulatory docket for today's notice.
Following the convening process, the Agency determined that the use
of a regulatory negotiation process in this matter was appropriate. The
Agency then identified stakeholders and interest groups who potentially
would be affected by the rulemaking under consideration. After
identifying an initial list of potential interests, the Agency
published a ``Notice of Intent to Negotiate'' in the Federal Register
on March 6, 2003 (68 FR 10675) which identified the Agency's
preliminary list of interests and requested public comment on that list
of potential interests or stakeholder groups to include in the
negotiated rulemaking process. Following receipt of public comments in
response to that notice and the conduct of a public hearing to obtain
public input, the Agency established a negotiated rulemaking advisory
committee under the provisions of the Federal Advisory Committee Act
(FACA). The advisory committee included a balanced membership
representing the various interests identified either by EPA or by
public commenters as having a significant stake in the outcome of the
rulemaking. The Agency then published in the Federal Register a notice
announcing the establishment of the Negotiated Rulemaking Committee on
All Appropriate Inquiries (the Negotiated Rulemaking Committee) on
April 7, 2003 (68 FR 16747).
The Agency developed a charter for the Negotiated Rulemaking
Committee defining the purpose, scope and duration of the committee in
accordance with the provisions of the FACA. The

[[Page 52549]]

primary purpose of the committee was to negotiate a consensus on the
terms of a proposed rule setting standards and practices for the
conduct of all appropriate inquiries. The committee was composed of 25
members and each member of the committee represented a specific
stakeholder interest. EPA had one seat on the committee. The Agency
member on the committee represented the Federal government's own set of
interests. A neutral facilitator assisted the Negotiated Rulemaking
Committee by applying proven consensus building techniques to the
Committee's activities. This facilitator served several roles including
convening the process, facilitating meeting discussions, and mediating
Committee negotiations.
The Agency's negotiated rulemaking committee for this proposed rule
was formed and operated in full compliance with the requirements of the
Federal Advisory Committee Act (FACA) and in a manner consistent with
the requirements for the Negotiated Rulemaking Act of 1990. Committee
members established formal ground rules for the conduct of their
negotiations. Among other things, the ground rules provide that
Committee decisions would be made by consensus, Committee agreements
would be tentative until the Committee reached final consensus on
regulatory language, and Committee members could not withdraw their
consensus once a final consensus was reached by the Committee. All
meetings of the Negotiated Rulemaking Committee were open public
meetings. Members of the public, including representatives from
organizations not represented on the Committee were welcomed to observe
Committee discussions during each meeting. All written products
developed by the Committee were made available to the public on EPA's
Web site and in the Agency's rulemaking docket. Time was set aside
during each meeting of the Committee to hear comments from the public.
Members of the public also had the opportunity to provide written
comments to the negotiated rulemaking committee on the topics
considered and discussed by the Committee. The openness of the
negotiated rulemaking process allowed for continued review of the
Committee proceedings by the public and allowed the Committee to give
full consideration to input offered by the public during its deliberations.
The Negotiated Rulemaking Committee for All Appropriate Inquiries
conducted six multiple-day meetings over the course of an eight-month
period, beginning in April 2003. The Committee reached consensus on the
provisions of a proposed rule during its meeting in November 2003. The
consensus of all Committee members was confirmed in December 2003
through approval of the facilitator's summary of that meeting,
including the text of the proposed rule. The Agency, consistent with
the intent of the Negotiated Rulemaking Act of 1990 and in compliance
with the Committee's ground rules, is using the Committee's consensus
regulatory language as the basis of today's proposed rule.

I. What Are the Benefits of Negotiated Rulemaking?

The regulatory negotiation process allowed EPA to solicit direct
input from informed, interested, and affected parties while drafting
the regulation, rather than delay public input until the public comment
period provided after publishing a proposed rule; therefore, ensuring
that the rule is sensitive to the needs and limitations of both the
parties and the Agency. A rule drafted by negotiation with informed and
affected parties is expected to be grounded in the practical
experiences of the experts on the committee and more easily
implemented, thereby providing the public with the benefits of the rule
while minimizing the negative impact of a regulation conceived or
drafted without the direct input of outside knowledgeable parties.
Since a negotiating committee includes representatives from the major
stakeholder groups affected by or interested in the rule, the number of
public comments on the proposed rule may be reduced and those comments
that are received may be more moderate.
Under a traditional rulemaking process, EPA develops a proposed
rulemaking using Agency staff and consultant resources. The concerns of
affected parties are made known through various informal contacts and
through publication of advance notices of proposed rulemaking in the
Federal Register. After the notice of proposed rulemaking is published
for comment, affected parties may submit arguments and data defining
and supporting their positions with regard to the issues raised in the
proposed rule. All communications from affected parties are directed to
the Agency. In general, there is not much communication among parties
representing different interests. Many times, effective regulations
have resulted from such a process. However, as Congress noted in the
Negotiated Rulemaking Act of 1990, such regulatory development
procedures ``may discourage the affected parties from meeting and
communicating with each other, and may cause parties with different
interests to assume conflicting and antagonistic positions and to
engage in expensive and time-consuming litigation * * * '' (5 U.S.C.
581(2), Pub. L. 101-648). Congress also stated that ``adversarial
rulemaking deprives the affected parties and the public of the benefits
of face-to-face negotiations and cooperation in developing and reaching
agreement on a rule. It also deprives them of the benefits of shared
information, knowledge, expertise, and technical abilities possessed by
the affected parties.'' (Id at 5 U.S.C. 581(3)). In the case of today's
proposed rule, EPA believes that the willingness of the stakeholders to
participate in the negotiated rulemaking greatly benefitted the
development of the proposed rule.

J. Who Was Represented on the Negotiated Rulemaking Committee?

The Agency initiated the negotiated rulemaking process giving
particular attention to ensuring full and adequate representation of
those interests that may be significantly affected by the proposed rule
setting standards for conducting all appropriate inquiries. The
Negotiated Rulemaking Act defines the term ``interest'' as ``with
respect to an issue or matter, multiple parties which have a similar
point of view or which are likely to be affected in a similar manner''
(5 U.S.C. 562(5)). Listed below are parties that the Agency identified
as being ``significantly affected'' by the matters that may be included
in the proposed rule. The Negotiated Rulemaking Committee consisted of
representatives from each of these stakeholder groups.
The Negotiated Rulemaking Committee was composed of 25 members
representing parties of interest to the rulemaking. EPA monitored the
membership of the Committee carefully to ensure that there was a
balanced representation from affected and interested stakeholder
groups. The Negotiated Rulemaking Committee included representatives
from the following stakeholder groups:

? Environmental Interest Groups
? Environment Justice Community
? Federal Government
? Tribal Governments
? State Governments
? Local Governments
? Real Estate Developers
? Bankers and Lenders
? Environmental Professionals

After establishing the above list of stakeholders as the
stakeholders representing significant interests in the rulemaking, EPA
identified specific organizations that the Agency believed could speak
for and represent these

[[Page 52550]]

interests. After identifying a preliminary list of organizations to
invite to participate in the negotiated rulemaking process, publishing
the preliminary list in the Federal Register in a Notice of Intent To
Negotiate (68 FR 10675), and considering public comment on the list of
organizations invited to represent each stakeholder group, including
considering self-nominations received from commenters, the Negotiated
Rulemaking Committee was formed. The Committee included individuals
from the following organizations:

? U.S. Environmental Protection Agency
? Environmental Defense
? Center for Public Environmental Oversight
? Partnership for Sustainable Brownfields Redevelopment
? West Harlem Environmental Action
? U.S. Public Interest Research Group (U.S. PIRG) \1\
---------------------------------------------------------------------------

\1\ EPA notes that after all members of the Negotiated
Rulemaking Committee reached consensus on November 14, 2003 and such
consensus was confirmed by all Committee members through approval of
the final meeting summary, U.S. PIRG submitted a letter, dated
December 19, 2003, seeking to withdraw from the Committee. EPA
included the letter and its reply in the public docket for the
negotiated rulemaking process, SFUND-2003-0006.
---------------------------------------------------------------------------

? Association of State and Territorial Solid Waste Management Officials
? Gila River Indian Tribe
? Cherokee Nation
? U.S. Conference of Mayors
? National Association of Local Government Environmental Professionals
? International Municipal Lawyers Association
? National Association of Development Organizations
? National Association of Homebuilders
? The Real Estate Roundtable
? National Association of Industrial and Office Properties
? International Council of Shopping Centers
? Trust for Public Land
? National Brownfields Association
? Mortgage Bankers Association
? Environmental Bankers Association
? National Ground Water Association
? American Society of Civil Engineers
? ASFE
? Wasatch Environmental, Inc.

The docket for today's rulemaking includes a list of the
individuals that represented each of these organizations on the
Negotiated Rulemaking Committee. Also included in the docket are the
meeting summaries for each meeting of the Committee and the Committee's
final report.

III. Detailed Description of Today's Proposed Rule

A. What Is the Purpose and Scope of the Proposed Rule?

As outlined in the Brownfields Amendments to CERCLA, 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.B. 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 proposed 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
proposed 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 pollutants and contaminants 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, as well as petroleum and
petroleum substances, 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
pollutants and contaminants, as outlined in proposed Sec. 312.1(c)(2),
to ensure that persons receiving brownfields grants can appropriately
and fully assess the properties that are owned by grant recipients to
the full extent provided by the law. 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 proposed rule does not include property
purchased by a non-governmental entity or non-commercial entity for
``residential or other similar uses where a facility inspection and
title search reveal no basis for further investigation.'' (Pub. Law
107-118 at Sec. 223). CERCLA Section 101(35)(B)(v) states that in those
cases, the title search and facility inspection shall be considered to
satisfy the requirements for all appropriate inquiries.
EPA notes that today's proposed rule also 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 proposed 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 proposed rule will apply to individuals receiving Federal
grant monies under CERCLA Section 104(k)(2) to conduct site
characterization and assessment

[[Page 52551]]

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 Proposed Rule Include Any New Reporting or Disclosure
Obligations?

The proposed rule does not include any new reporting or disclosure
obligations. The proposed rule only would apply 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
proposed 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. There are
no proposed requirements to notify or submit information to EPA or any
other government entity.
The proposed rule does require, in proposed Sec. 312.21(c), that
the environmental professional on behalf of the property owner document
the results of the all appropriate inquiries in a written report. The
property owner may use this report to document the results of the
inquiries. The Agency believes that such a report can be similar in
nature to the type of report currently provided under generally
accepted commercial practices. Today's proposed rule contains no
requirements regarding the length, structure, or specific format of the
written report. In addition, the proposed rule does 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. The purpose of the written report is
merely to ensure that any person claiming one of the CERCLA landowner
liability protections be able to show documentation that all
appropriate inquiries were conducted in compliance with the federal
regulations, should such documentation be required.\2\ The Agency
notes, that while this proposed regulation would 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.
---------------------------------------------------------------------------

\2\ Nothing in this proposed regulation or preamble is intended
to suggest that any 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 proposed rule would require 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 proposed rule also would require that the report identify data gaps
in the information collected that affect the ability of the
environmental professional to render such an opinion or determine the
significance of data gaps.
The proposed rule, at proposed Sec. 312.21(d), would require that
the environmental professional who conducts or oversees the all
appropriate inquiries sign the written report. There are two purposes
for the proposed requirement to include a signature in the report.
First, the individual signing the report would declare, on the
signature page, that he or she meets the definition of an environmental
professional, as provided in proposed Sec. 312.10. In addition, the
proposed rule would require the environmental professional to 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.
The Negotiated Rulemaking Committee considered requiring an
environmental professional to ``certify'' the results of the all
appropriate inquiries when signing the report. However, several members
of the Committee, members of the public representing organizations of
environmental insurance companies, and professional engineers and
environmental scientists, pointed out that requiring the report to
include a certification statement could imply a warranty or guarantee
of the report results on the part of the environment professional. This
in turn could have implications regarding the availability and costs of
professional insurance for environmental professionals. Requiring a
certification as part of the all appropriate inquiries report also
could cause a conflict with current requirements governing the use of
professional stamps held by individuals with professional licenses,
such as those for professional engineers, issued by states, tribes, and
the federal government. To avoid such implications, the proposed rule
does not include a certification requirement. However, the proposed
rule would require that each all appropriate inquiries report include a
signature of the environmental professional as well as two statements
above the signature. One statement would read ``[I, We] declare that,
to the best of [my, our] professional knowledge and belief, [I, we]
meet the definition of Environmental Professional as defined in Sec.
312.21 of 40 CFR part 312.'' The proposal also includes a second
statement to be included above the signature, stating: ``[I, We]
have the specific qualifications based on education, training, and
experience to assess a property of the nature, history, and setting of
the subject property. [I, We] developed and performed the all
appropriate inquiries in conformance with the standards and practices
set forth in 40 CFR part 312.'' These statements are meant to document
that an individual meeting the proposed 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 proposed regulations.
The proposed rule allows for the property owner 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 purchaser'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 need to assert protection from
liability after purchasing a property.
The Agency requests comment on the proposed requirements for an all
appropriate inquiries report. The Agency also requests comments on the
signature requirements for the all appropriate inquiries report.
Although today's proposed rule does not include any additional
disclosure requirements, CERCLA Section 103 does require persons in
charge of facilities, including on-shore and off-shore facilities, and
persons in charge of vessels to notify the National Response Center of
any release of a hazardous substance of a quantity equal to or greater
than a ``reportable quantity,'' as

[[Page 52552]]

defined in CERCLA Section 102(b) from the facility or vessel. Today's
proposed rule proposes no changes to this reporting requirement and
proposes no changes to any other reporting or disclosure requirements
under federal, tribal, or state law.

D. What Are the Proposed Qualifications for an Environmental Professional?

1. What Is the Intent of the Proposed Definition of an Environmental
Professional?
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
members of the Negotiated Rulemaking Committee determined that it is
necessary to establish minimum qualifications for persons managing or
overseeing all appropriate inquiries. The Committee's intent, in
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 Committee agreed
that an environmental professional conducting or overseeing all
appropriate inquiries 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 of hazardous substances to the surface or
subsurface of a property. The Committee agreed that an environmental
professional must hold a degree in an engineering or scientific field
of study and that such individuals also must have a number of years of
relevant experience in conducting all appropriate inquiries, or
environmental site assessments. The Committee determined that any
individual overseeing the conduct of all appropriate inquiries must
provide significant information about the environmental conditions at a
property to support a purchaser's or property owner's claim with regard
to liability protection under CERCLA. Therefore, any individual
overseeing the conduct of the all appropriate inquiries must have a
significant level of education and experience. In addition, the
Committee determined that it is essential for environmental
professionals to remain current in their field of practice.
2. What Are the Minimum Qualifications for Meeting the Definition of an
Environmental Professional?
Today's proposed rule includes a definition of an environmental
professional that reflects the Negotiated Rulemaking Committee's
extensive efforts to identify a set of 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 allows 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 would require 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 Negotiated Rulemaking Committee concluded, as
reflected in its final consensus document, that it is essential that a
person meeting the regulatory definition of an environmental
professional sign a report documenting the results and conclusions of
the all appropriate inquiries to attest to his or her opinion that the
inquiries were conducted in compliance with the regulations. The
proposed rule also provides 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 of an environmental professional includes
minimum educational qualifications and a number of years of full-time
relevant experience in the conduct of all appropriate inquiries or
environmental site assessments. The proposed definition first and
foremost requires 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 includes individuals who possess the
following combinations of education and experience.
? 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 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.
Based upon the recommendations of the Negotiated Rulemaking
Committee, EPA is proposing to recognize as environmental professionals
those individuals who are licensed by any tribal or state government as
a professional engineer (P.E.) or a professional geologist (P.G.), and
have three years of full-time relevant experience in conducting all
appropriate inquiries. The Agency believes that such individuals have
``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'' provided in the proposed regulation. EPA and
the Committee concluded that 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

[[Page 52553]]

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 the presence 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, members
of the Negotiated Rulemaking Committee, including state representatives
on the Committee, pointed out that 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.
The Negotiated Rulemaking Committee also recommended, and EPA is
proposing, to include within the proposed definition of an
environmental professional individuals who are environmental
professionals, or otherwise 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 relevant experience. It is the Committee's and EPA's opinion
that such qualifications define individuals who ``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 [proposed rule's]
objectives and performance factors.''
Although the proposed 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 proposed rule does not restrict the definition of an
environmental professional to these licensed individuals. The proposed
definition of an environmental professional also would include
individuals who hold a Baccalaureate or higher degree from an
accredited institution of higher education in a relevant discipline of
engineering, environmental science, or earth science and have the
equivalent of five (5) years of full-time relevant experience in
conducting environmental site assessments, or all appropriate
inquiries. Again, such individuals most likely will 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 proposed objectives
and performance factors included in proposed Sec. 312.20(d) and (e).
A goal of the Negotiated Rulemaking Committee was to establish
qualifications for the environmental professional that will ensure that
all appropriate inquiries are conducted at a high standard of technical
and scientific quality, while not significantly disrupting the current
market for professional site assessment services. The Committee debated
whether or not to recommend that the definition of an environmental
professional be restricted to individuals holding a Professional
Engineer or Professional Geologist license, or holding another similar
license from a state, tribe, or U.S. territory. Establishing such a
requirement could assure that all appropriate inquiries conducted for
the purposes of supporting a claim to a CERCLA liability protection
would be conducted by highly qualified individuals. However, Committee
members recognized that many individuals with appropriate education and
training and many years of relevant experience in conducting
environmental site assessments (including non-licensed environmental
engineers and geologists) may be qualified to conduct all appropriate
inquiries, although they do not have a Professional Engineer or
Professional Geologist license. The Committee therefore discussed what
qualifications are necessary to ensure that an individual is qualified
to oversee the conduct of all appropriate inquiries, review the results
of all inquiries for a particular property and be capable of assessing
this information in light of all other relevant site-specific
information about a property (e.g., hydrogeologic setting), and develop
sound opinions and conclusions regarding the environmental conditions
at a property and the potential presence of a release or threatened
release on, at, in or to the property. The Committee determined that
the individuals best qualified to review all available and relevant
information about a property and render a professional opinion
regarding the environmental conditions at a property at a standard of
quality necessary that may ensure a valid interpretation of the
findings and accurate opinion of the property's environmental
conditions, are those with a degree in a relevant field of engineering,
environmental science, or earth science and five years of full-time
relevant experience. The Committee considered many other variants of
educational and experience qualifications. Some Committee members
preferred proposing qualifications centered more closely around
specific education or training criteria. Other Committee members
pointed out that the qualifications should be based primarily on years
of relevant experience. After much deliberation and after receiving and
considering public comments on the subject, the Committee recommended
that the proposed definition of an environmental professional include
both educational and experience qualifications. The Committee
recommended that the definition of an environmental professional
include a requirement that such individuals hold a Baccalaureate or
higher degree in a relevant field of science or engineering. Committee
members believed that individuals trained in science and engineering
are best qualified to understand how to interpret information collected
about a property in light of the environmental conditions and site-
specific situations at the property. In addition, the Committee
determined that individuals with such degrees also should have five
years of relevant full-time experience in conducting all appropriate
inquiries prior to meeting the qualifications for an environmental
professional. The proposed rule also would require all environmental
professionals to remain current in the field of all appropriate
inquiries, or environmental site assessments.

[[Page 52554]]

During the Committee's deliberations on the definition of an
environmental professional, public commenters raised particular
concerns with regard to individuals who currently are employed in the
business of conducting all appropriate inquiries or environmental site
assessments, but who do not meet the Committee's proposed
qualifications of an environmental professional. The Committee gave
careful consideration of public comments that pointed out the potential
impacts that the proposed definition of an environmental professional
may have on the current market for environmental site assessment
services and the fact that many practicing professionals without
science degrees have substantial investigative and writing skills.
Members of the public pointed out in written comments to EPA and the
Committee that some practicing professionals have many years of
experience in conducting all appropriate inquiries, but do not have the
specific educational requirements recommended by the Committee. EPA and
the Committee, in considering these comments, wanted to ensure that
professionals with extensive experience in conducting all appropriate
inquiries and who have built their careers in such a business practice
not be put out of business or bear a hardship of having to obtain a
degree mid-career. However, EPA and the Committee had to balance this
concern with the additional concerns of ensuring that all appropriate
inquiries are conducted by experienced and well-qualified professionals.
The Committee deliberated 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 against the need to ensure that competent individuals
currently conducting all appropriate inquiries are not displaced. After
carefully considering these issues, the Committee recommended and EPA
is proposing, as part of the proposed definition of an environmental
professional, a provision allowing many currently practicing
professionals to continue to conduct business in the field of
environmental site assessments or all appropriate inquiries, while
ensuring a high qualifications standard for future professionals. The
Negotiated Rulemaking Committee recommended that the proposed
definition of an environmental professional allow for persons that at
the time of promulgation of the final rule do not meet the proposed
educational or professional licensing qualifications for an
environmental professional but have more than ten years of experience
in conducting environmental site assessments to be included as
environmental professionals. This provision is proposed as a
``grandfather'' clause and would only apply to those individuals with
ten or more years of experience in the field of all appropriate
inquiries investigations on the date of promulgation of the final rule.
The Committee made this recommendation after careful consideration of
public comments and of the potential impacts that the proposed
definition of an environmental professional may have on the current
market for environmental site assessment services and the fact that
many practicing professionals without science degrees have substantial
investigative and writing skills.
The proposed definition provides that ``as of the date of
promulgation of the final rule, individuals who 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''
will meet the proposed definition of an environmental professional.
Again, this provision of the proposed definition is a grandfather
clause and would apply only to those individuals meeting these
qualifications on the date of promulgation of the final rule. Persons
not meeting these qualifications on the effective date of the final
rule will have to meet the other minimum qualifications included in the
proposed definition to qualify as an environmental professional for the
purpose of conducting all appropriate inquiries under the federal
standards established under the final rule.
EPA is requesting comment on the proposed definition of an
environmental professional and the specific minimal qualifications
included in the proposed definition.
3. If I Am Certified as an Environmental Professional by a Private
Certification Association, Do I Qualify as an Environmental
Professional Under the Proposed Rule?
During the Negotiated Rulemaking Committee's deliberations, the
general public had many opportunities to comment on the Committee's
draft regulatory language including the opportunity to provide written
comment to the Committee and make oral presentations to the Committee
during each of the Committee's meetings. Many individuals took
advantage of the openness of the negotiated rulemaking process to
provide input and comment to the Committee, particularly with regard to
the Committee's deliberations on the definition of an environmental
professional. The Committee considered restricting the definition of an
environmental professional to state-licensed certification programs.
However, based upon many comments received from the public, as well as
the concerns of some members of the Committee, the Committee members
concluded that there is a need to recognize individuals who have
similar qualifications to P.E.s and P.G.s but do not hold a state-
issued license or certificate. Therefore, the Committee recommended,
and EPA is proposing, to include within the definition of an
environmental professional those individuals who 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 in conducting environmental site assessments or all
appropriate inquiries. The proposed 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 Committee received comments from independent professional
certification organizations, including the Certified Hazardous
Materials Managers' organization, requesting that their organizations'
certification programs be named in the proposed regulatory definition
of an environmental professional. The Committee concluded that 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
proposed 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, EPA concluded that such a undertaking was not practicable. The
Agency does not have the necessary resources to review the legitimacy
of each private certification organization and review and approve each
organization's certification

[[Page 52555]]

qualifications. Therefore, the Committee recommended, and EPA is
proposing, to include within the regulatory definition of an
environmental professional, a generic performance-based qualifications
standard that includes education and experience qualifications, but
does not recognize any private organization's certification program.
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 the federal
regulation will meet the definition of an environmental professional
for the purposes of this regulation. As stated above, the proposed
definition of an environmental professional includes individuals who
hold 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.
4. Can Persons Not Meeting the Proposed Definition of an Environmental
Professional Contribute to the Conduct of All Appropriate Inquiries?
During the Committee's deliberations on the definition of an
environmental professional, members of the public also raised concerns
about restricting the conduct of all appropriate inquiries to only
those individuals meeting the definition of an environmental
professional. The Negotiated Rulemaking Committee considered requiring
that all the activities necessary to complete the all appropriate
inquiries investigation be conducted by persons meeting the proposed
definition of an environmental professional. Such a requirement could
ensure that all of the required activities are conducted at a high
standard of quality. In addition, requiring that all activities be
conducted by an environmental professional could ensure, to a high
level of confidence, the accuracy and reliability of the environmental
professional's interpretation of the inquiries results. However, after
careful review of specific activities required to complete the all
appropriate inquiries, consideration of public comments offered during
the Committee's deliberations, and consideration of the costs and
impacts to the market for environmental site assessment services, the
Committee decided that it is not necessary for an environmental
professional to perform all aspects of the all appropriate inquiries.
Therefore, the proposed definition of an environmental professional
would allow for many of the individual inquiry activities to be
conducted by individuals that may not qualify as an environmental
professional per the proposed definition. The proposed rule would allow
individuals not meeting the definition of an environmental professional
to contribute to the conduct of the all appropriate inquiries, as long
as such individuals are working under the supervision or responsible
charge of an individual who meets the proposed definition of an
environmental professional. This provision would allow 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 proposed
definition of an environmental professional and reviews the results and
conclusions of the inquiries and signs the final report.
The Agency requests comments on all of the proposed qualifications
included in the definition of an environmental professional and the
provisions allowing for individuals who do not qualify as environmental
professionals to contribute to inquiry activities.

E. References

Today's proposed rule includes no references. However, the Agency
is reserving a reference section and may include references in the
final rule. As explained later in this preamble, EPA is inviting the
public to identify potentially applicable standards developed by
standards developing organizations that may be applicable and compliant
with the regulations proposed today. Prior to promulgating a final
regulation setting federal standards and practices for all appropriate
inquiries, the Agency may consider citing or referencing applicable and
compliant voluntary consensus standards in the final regulation. This
may 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.

F. What Is Included in ``All Appropriate Inquiries?''

The proposed Federal regulations for conducting all appropriate
inquiries include 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)(2)(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).
1. 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 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. After careful review and consideration of
each statutory criterion,

[[Page 52556]]

the Negotiated Rulemaking Committee determined that many, but not all,
of the inquiries activities must be conducted by, or under the
supervision or responsible charge of, an individual meeting the
qualifications within the proposed definition of an environmental
professional.
The Committee recommended, and EPA is proposing, that several of
the activities included in the inquiries may be conducted either by the
purchaser, or the landowner, and do not have to be conducted under the
supervision or responsible charge of the environmental professional.
The proposed rule would require that the results of all activities 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 may be fully considered
when the environmental professional draws conclusions based on the
inquiry activities or renders an opinion 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 which causes the incurrence of response costs.
The proposed rule allows for the following activities to be the
responsibility of, or conducted by, the purchaser or landowner and not
necessarily 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 purchaser or 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 would require 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. The Agency requests comment on the proposed division of
responsibilities.
2. When Must All Appropriate Inquiries Be Conducted?
CERCLA, as amended, requires innocent landowners, bona fide
prospective purchasers, and contiguous property owners to conduct all
appropriate inquiries prior to acquiring a property for the purposes of
either establishing that the purchaser ``did not know and had no reason
to know'' of releases or threatened releases of hazardous substances
on, at, in, or to the property, or in the case of the bona fide
prospective purchaser, to identify environmental conditions indicative
of releases or threatened releases at the property prior to taking
ownership of the property. 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) of CERCLA requires that the
property owner conduct all appropriate inquiries ``on or before the
date on which the defendant acquired the facility.''
Other than to specify that all appropriate inquiries must be
conducted at or prior to the time a person acquires a property, the
statute is silent regarding how close to the actual purchase date the
inquiries must be completed. The proposed rule requires that all
appropriate inquiries be conducted within one year prior to taking
title to a property. As explained below, purchasers may 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 would require that certain
information collected as part of the all appropriate inquiries be
updated if it was collected more than 180 days prior to the date a
purchaser acquires the property. In addition, the Agency is proposing
to define the date of acquisition of a property as the date on which
the purchaser acquires title to the property.
The Agency believes 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 purchaser received title to the
property. The Agency considered other dates, such as the date a
prospective purchaser signs a purchase or sale agreement. However, EPA
believes that it could be burdensome to require a prospective purchaser
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 purchaser may be the most convenient time for the prospective
purchaser 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 purchasers to undertake all
appropriate inquiries so early in the property acquisition process as
to require the inquiries to be completed prior to the purchaser making
a final decision on whether to actually acquire the property. EPA
requests comment on the proposal to establish the date on which title
is transferred as the date on which the property is acquired.
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 proposing that
all appropriate inquiries be conducted within one year prior to the
purchaser acquiring the property. Such inquiries may include
information collected for previous all appropriate 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
proposed rule would require that several of the components of the
inquiries be updated within 180 days prior to the date the property is
acquired (i.e., the date the landowner obtains title to the property).
3. Can a Purchaser Use Information Collected for Previous Inquiries
Completed for the Same Property?
The proposed rule, at Sec. 312.20(b), would allow parties
conducting all appropriate inquiries to use previous inquiries
completed for the same property, under certain conditions. First, the
previous inquiries must have been conducted in compliance with the
regulations applicable at the time the previous all appropriate
inquiries investigation was completed. In addition, the previous
inquiries must have been completed with information that was collected
or updated no longer than a year prior to the current acquisition date
for the property.

[[Page 52557]]

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.
When discussing the issue of whether or not to provide for the use
of all appropriate inquiries conducted by a previous owner, or the
seller, of a particular property, the Negotiated Rulemaking Committee
recognized that there is value in using previously collected
information when such information was collected in accordance with the
regulatory standards, particularly when the use of such previously-
collected information will reduce the need to undertake duplicative
efforts. In its deliberations, the Committee discussed the potential
impacts that allowing the use of all appropriate inquiries conducted by
third parties could have upon the legality and legitimacy of the all
appropriate inquiries required to be conducted by a purchaser not
involved in the collection of the information. The Committee also
discussed how often certain information required to be collected as
part of the all appropriate inquiries should be updated to ensure its
accuracy. A particular focus of the Committee's discussions was the
need for information collected and used by an environmental
professional to be accurate and current, therefore allowing the
environmental professional to make informed judgments regarding the
environmental conditions of the property and provide informed opinions
as to the likelihood that conditions are indicative of a release or
threatened release of a hazardous substance on, at, in, or to the property.
The Committee recommended, and EPA is proposing, to allow all
appropriate inquiries to include information contained in previous
inquiries, including inquiries conducted by third parties, for the same
property. However, such information must have been updated or collected
within one year prior to the date the current purchaser acquires the
property (the date on which the owner takes title to the property) and
collected in compliance with the regulatory requirements that were in
effect at the time the previous all appropriate inquiries were
conducted. Note that if the previous all appropriate inquiries were
conducted prior to the effective date of the final federal standards
for all appropriate inquiries, the inquiries must have been conducted
in compliance with either the interim standard established by Congress
in the Brownfields Amendments and clarified by EPA on May 9, 2003 (68
FR 24888), or in the case of properties purchased prior to May 31,
1997, in compliance with practices consistent with good commercial or
customary business practices.
The Committee recognized 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 purchaser and the current
purchase transaction. Therefore, the proposed rule would require that
each all appropriate inquiries investigation include current
information related to:
? Any relevant specialized knowledge held by the current
purchaser and the environmental professional responsible for overseeing
and signing the all appropriate inquiries report (i.e., requirements of
proposed Sec. 312.28); and
? The relationship of the current purchase price to the
value of the property, if the property were not contaminated (i.e.,
requirements of proposed Sec. 312.29).
In addition, the Committee recommended that certain information be
updated if it was not collected within 180 days prior to the date of
acquisition of the property (or the date on which the purchaser takes
title to the property) to ensure that an all appropriate inquiries
investigation accurately reflects the environmental conditions at a
property. To increase the potential that information collected 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 proposed rule would require that many of the
components of the 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 of acquisition of the property are:
? Interviews with past and present owners, operators, and occupants
(proposed Sec. 312.23);
? Searches for recorded environmental cleanup liens
(proposed Sec. 312.25);
? Reviews of federal, tribal, state, and local government records
(proposed Sec. 312.26);
? Visual inspections of the facility and of adjoining properties
(proposed Sec. 312.27); and
? The declaration by the environmental professional
(proposed Sec. 312.21(d)).
An all appropriate inquiries investigation may include the
information listed above when previously collected by the purchaser or
a third party for the same property, provided that the information was
collected no longer than one year prior to the current purchaser's date
of acquisition of the property and provided that it is updated for the
current all appropriate inquiries investigation, if it was collected
more than 180 days prior to the acquisition date. Also, in all cases
where a purchaser is using previously collected information, the all
appropriate inquiries for the current purchase must include a summary
of any changes to the conditions of the property that occurred since
the previous inquiries were conducted.
The Agency requests comment on the proposed provisions for using
previously conducted all appropriate inquiries.
4. Can All Appropriate Inquiries Be Conducted by One Party and
Transferred to Another Party?
The proposed rule, at proposed Sec. 312.20(c), allows for all
appropriate inquiries to be conducted by one party and transferred to
another party, provided that certain conditions are met. It was brought
to the attention of the Negotiated Rulemaking Committee that under
certain circumstances, the person purchasing a property may obtain a
report of all appropriate inquiries conducted for the property from
another party, either the seller of the property or another independent
party. In particular, the Committee discussed situations where the
federal government or a state government agency may conduct the all
appropriate inquiries on behalf of the local government on a property
being purchased by a local government. For example, the EPA Brownfields
program conducts ``targeted brownfields assessments'' on behalf of
local governments. This situation also may occur when a state
government is covering the cost of the all appropriate inquiries for a
property owned by a local government or in a situation where the local
government does not have access to appropriate staff or capital
resources to conduct the all appropriate inquiries and it therefore is
conducted by a state government agency. Another example is when a local
government conducts all appropriate inquiries for a

[[Page 52558]]

third party in its community, such as a private prospective purchaser.
In addition, local brownfields redevelopment agencies that are
connected to local government may seek out contaminated property, make
all appropriate inquiries about it, acquire it, and then sell the
property to a developer.
The proposed rule allows for a person acquiring a property to use
the results of inquiries and the inquiries report conducted by another
party, if the inquiries and the report meet the proposed objectives and
performance factors for the all appropriate inquiries regulations and
the purchaser of the property who is seeking to use the previously-
collected information or report, reviews all information collected and
updates the contents of the report as necessary to accurately reflect
current conditions at the property. In addition, the proposed rule
would require that the purchaser update the inquiries and the report to
include any relevant specialized knowledge held by the current
purchaser and the environmental professional. The Agency requests
comments on the proposed requirements for using all appropriate
inquiries conducted by third parties.
5. What Are the Objectives and Performance Factors for the Proposed All
Appropriate Inquiries Requirements?
The Committee developed its recommendation for proposed regulatory
language around the criteria established by Congress in Section
101(35)(B)(iii) of CERCLA. As the Committee progressed in its efforts
to address each criterion, it became apparent that the purposes and
objectives for performing many of the inquiries and the types of
information that must be collected to meet the objectives of the
individual regulatory 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 was similar, and in some
cases, the same information could be collected independently to satisfy
each criterion when conducting activities required to fulfill each of
the criterion's objectives. A chain of title document is historic
information that may include information on environmental cleanup liens
and may include information on past owners of the property that
indicates that previous owners managed hazardous substances at the property.
To avoid requiring duplicative efforts, but to ensure that the
proposed regulations include standards and practices that result in a
comprehensive assessment of the environmental conditions at a property,
the Negotiated Rulemaking Committee recommended, and EPA is proposing,
that the all appropriate inquiries standards be structured around a
concise set of objectives and performance factors. The proposed
objectives and performance factors apply to the inquiries
comprehensively. In conducting the inquiries collectively, the
landowner and the environmental professional must seek to achieve the
proposed objectives and performance factors and use these proposed
objectives and standards as guidelines in implementing, in total, all
of the other proposed regulatory standards and practices.
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. Under the
provisions of the proposed rule, the information required to achieve
each of the objectives and performance factors must be met for the all
appropriate inquiries investigation to be complete. Although compliance
with the all appropriate inquiries requirements ultimately will be
determined in a court, the proposed rule allows the purchaser and
environmental professional to determine the best process and sequence
for collecting and analyzing all required information. For example, it
may be appropriate in many situations for the historic records search
required by proposed Sec. 312.24 and the search of government records
required under proposed Sec. 312.26 be conducted prior to conducting
interviews of past and present owners, operators, and occupants, as
required under proposed Sec. 312.23. This may allow the purchaser or
environmental professional to develop a general understanding of past
uses and ownership of a property prior to interviewing owners and
occupants and therefore make better use of the interviews to obtain
information necessary to meet the performance factors or objectives of
the overall investigation when conducting interviews of past and
present owners or occupants. In addition, it often may be beneficial to
conduct the required interviews of owners, operators and occupants
prior to conducting an on-site visual inspection. Information obtained
during the interviews may be useful for locating and inspecting
potential sources of environmental concerns during the visual inspection.
As stated in proposed Sec. 312.20(d), the all appropriate
inquiries standards, as applicable to landowners seeking CERCLA
liability protections as innocent landowners, bona fide prospective
purchasers, and contiguous landowners, are intended to result in the
identification of conditions indicative of releases and threatened
releases of hazardous substances on, at, in, or to the subject property
prior to the acquisition of the property. As established in proposed
Sec. 312(d)(2), in the case of persons receiving federal brownfields
grant monies under CERCLA Section 104(k) to conduct site
characterizations and assessments, the all appropriate inquiries
standards are intended to result in the identification of conditions
indicative of releases and threatened releases of hazardous substances,
as well as pollutants, contaminants, petroleum and petroleum products,
and controlled substances (as defined in 21 U.S.C. 802) on, at, in, or
to the subject property when conducting the assessment or
characterization with the use of the grant funds and when the terms and
conditions of the grant include such pollutants and contaminants within
the scope of the grant. This expanded objective for brownfields grant
recipients reflects the broad statutory definition of a ``brownfield
site'' that allows EPA to provide grant monies to eligible entities
(see CERCLA Section 104(k)(1)) for the assessment and cleanup of real
property that is complicated by the presence or potential presences of
hazardous substances, pollutants, contaminants, petroleum and petroleum
products, and controlled substances (see CERCLA Section 101(39)).
In performing the inquiries, including conducting interviews,
collecting historical data and government records, inspecting the
subject property and adjoining properties, and carrying out all other
inquiries, all parties undertaking all appropriate inquiries must be
attentive to the fact that the primary objectives of the proposed
regulation are to identify the following types of information about the
subject property prior to acquiring the property:
? Current and past property uses and occupancies;
? Current and past uses of hazardous substances;
? Waste management and disposal activities that could have
caused releases or threatened releases of hazardous substances;

[[Page 52559]]

? Current and past corrective actions and response
activities undertaken to address past and on-going releases of
hazardous substances;
? Engineering controls;
? Institutional controls; and
? Properties adjoining or located nearby the subject
property that have environmental conditions that could have resulted in
conditions indicative of releases or threatened releases of hazardous
substances on, at, in, or to the subject property.
The Negotiated Rulemaking Committee also developed a set of
performance factors for the conduct and performance of each of the
individual proposed standards and practices that make up the proposed
rule. These performance factors, which are included in proposed Sec.
312.20(e), include: (1) Gather the information that is required for
each standard and practice that is publicly available (or otherwise
obtainable), obtainable from its source within reasonable time and cost
constraints, and which can practicably be reviewed, and (2) review and
evaluate the thoroughness and reliability of the information gathered
in complying with each standard and practice, taking into account
information gathered in the course of complying with the other
standards and practices of this subpart. The proposed performance
factors are provided as guidelines to be followed in conjunction with
the proposed objectives for the all appropriate inquiries. EPA and the
Negotiated Rulemaking Committee are not suggesting that the goal of the
conduct of the all appropriate inquiries is to identify every available
document and piece of information regarding a property and the
environmental conditions on the property. Instead, the objective of the
conduct of all appropriate inquiries is to develop an understanding of
the conditions of the property and determine whether or not there are
conditions indicative of releases and threatened releases of hazardous
substances (and pollutants, contaminants, controlled substances, and
petroleum and petroleum products, if applicable) on, at, in or to the
subject property.
The Agency requests comments on the proposed objectives and
performance factors for the all appropriate inquiries requirements.
Persons seeking to establish a basis for one of the CERCLA
landowner liability protections also should keep in mind that an
objective of the all appropriate inquiries standards and practices is
to characterize the environmental conditions at a property that are
indicative of releases or threatened releases, prior to acquiring the
property. This information may facilitate compliance with the
additional statutory requirements applicable for claiming the liability
protections after acquiring the property.
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 landowner liability
protections. Landowners must comply with all the statutory requirements
to obtain protection from liability. For example, an inability to
identify a release or threatened release during the conduct of all
appropriate inquiries does not negate the landowner's post-acquisition
responsibilities under the statute to take reasonable steps to stop the
release, prevent a threatened release, and prevent exposure to the
release or threatened release.
6. What Are Institutional Controls?
Under the proposed rule, those performing all appropriate inquiries
must seek to identify institutional controls. As defined in proposed
Sec. 312.10, institutional controls are non-engineered instruments,
such as administrative and legal controls, that among other things, can
help to minimize the potential for human exposure to contamination,
protect the integrity of a remedy by limiting land or resource use, and
provide information to modify behavior. For example, an institutional
control might prohibit the drilling of a drinking water well in a
contaminated aquifer or disturbing contaminated soils. Institutional
controls may also be referred to as land use controls, activity and use
limitations, etc., depending on the program under which a response
action is conducted.
Institutional controls are typically used whenever contamination
precludes unlimited use and unrestricted exposure at the property.
Thus, institutional controls may be needed both before and after
completion of the remedial action. Institutional controls often must
remain in place for an indefinite duration and, therefore, generally
need to survive changes in property ownership (i.e., run with the land)
to be legally and practically effective. Some common examples of
institutional controls include zoning restrictions, building or
excavation permits, well drilling prohibitions, easements and covenants.
The importance of identifying institutional controls during all
appropriate inquiries is twofold. First, institutional controls are
usually necessary and important components of a remedy. Failure to
abide by an institutional control may put people at risk of harmful
exposure to hazardous substances. Second, an owner wishing to maintain
protections from CERCLA liability as an innocent landowner, contiguous
property owner, or bona fide prospective purchaser must fulfill ongoing
obligations to comply with any land use restrictions established or
relied on in connection with a response action and to not impede the
effectiveness or integrity of any institutional control employed in
connection with a response action. For a more detailed discussion of
these requirements please see EPA, Interim Guidance Regarding Criteria
Landowners Must Meet in Order to Quality for Bona Fide Prospective
Purchaser, Contiguous Property Owner, or Innocent Landowner Limitations
on CERCLA Liability (Common Elements, 2003).
Those persons conducting all appropriate inquiries may identify
institutional controls through several of the standards and practices
set forth in this rule. As noted, implementation of institutional
controls may be accomplished through the use of several administrative
and legal mechanisms, such as zoning, building permit requirements,
easements, covenants, etc. Thus, for example, an easement implementing
an institutional control might be identified through the review of
chain of title documents under Sec. 312.24(a). Furthermore, interviews
with past and present owners, operators, or occupants pursuant to Sec.
312.23; and reviews of federal, tribal, state, and local government
records under Sec. 312.26, may identify an institutional control or
refer a person to the appropriate source to find an institutional
control. For example, a review of federal Superfund records, including
Records of Decision and Action Memoranda, as well as other information
contained in the CERCLIS data base, may indicate that zoning was
selected as an institutional control or an interview with a current
operator may reveal an institutional control as part of an operating permit.
7. How Must Data Gaps Be Addressed in the Conduct of All Appropriate
Inquiries?
As defined in proposed Sec. 312.10, data gaps are a lack of or
inability to obtain information required by the standards and practices
listed in the proposed regulation, despite good faith efforts by the
environmental professional or the prospective landowner (or grant

[[Page 52560]]

recipient) to gather such information pursuant to the proposed
objectives for all appropriate inquiries. Proposed Sec. 312.20(f)
requires environmental professionals, prospective landowners and grant
recipients to identify data gaps that affect their ability to identify
conditions indicative of releases or threatened releases of hazardous
substances (and in the case of grant recipients pollutants,
contaminants, petroleum, and controlled substances). In addition, the
proposal would require such persons to identify the sources of
information consulted to address, or fill, the data gaps, and require
such persons to comment upon the significance of the data gaps with
regard to the ability to identify conditions indicative of releases or
threatened releases in the all appropriate inquiries report. In
addition, proposed Sec. 312.21(c)(2) would require that environmental
professionals include in the inquiries report an identification of data
gaps that affect the ability of the environmental professional to
identify conditions indicative of releases or threatened releases on,
at, in, or to the subject property. Proposed Sec. 312.21(c)(2) also
would require that the inquiries report include comments regarding the
significance of any data gaps on the environmental professional's
ability to provide an opinion as to whether the inquiries have
identified conditions indicative of releases or threatened releases.
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. A person's inability to obtain information regarding
a property's ownership or use prior to acquiring a property can affect
the landowner's ability to claim a protection from CERCLA liability
after acquiring the property, if a lack of information results in the
landowner's inability to comply with any other post-acquisition
statutory obligations that are necessary to assert protection from
CERCLA liability. For example, if a person does not identify, during
the all appropriate inquiries prior to acquiring a property, a leaking
underground storage tank that exists on the property, the landowner may
not have sufficient information to comply with the statutory
requirement to take reasonable steps to stop on-going releases after
acquiring the property. This may result in an inability to claim
protection against CERCLA liability for any on-going release. The
proposed rule states the need to identify data gaps, address them when
possible, and document their significance. Prospective landowners must
consider the potential significance of any data gaps that may exist
after conducting the pre-acquisition all appropriate inquiries on the
landowner's ability to fulfill the additional statutory requirements
after purchasing a property.
If a person properly conducts all appropriate inquiries pursuant to
this rule, including the requirements concerning data gaps at proposed
Sec. Sec. 312.10, 312.20(f) and 312.21(c)(2), the person can fulfill
the all appropriate inquiries requirements of CERCLA Sections 107(q),
107(r), and 101(35), even when there are data gaps in the inquiries.
However, as explained further in this preamble, a fulfillment of the
all appropriate inquiries requirements does not, by itself, provide a
person with a protection from or defense to CERCLA liability. An
inability to identify a release or threatened release during the
conduct of all appropriate inquiries does not negate the landowner's
ongoing or continuing responsibilities under the statute, including the
requirements to take reasonable steps to stop the release, prevent a
threatened release, and prevent exposure to the release or threatened
release once the landowner has acquired a property. Also, if an
existing institutional control or land use restriction is not
identified during the conduct of all appropriate inquiries prior to the
acquisition of a property, a landowner is not exempt from complying
with the institutional control or land use restriction after acquiring
the property. None of the other statutory requirements for the
liability protections is satisfied by the results of the all
appropriate inquiries.
The Agency notes that the mere fact that a purchaser conducted all
appropriate inquiries does not provide any individual with a limitation
from CERCLA liability. To qualify as a bona fide prospective purchaser,
innocent landowner or a contiguous property owner, a person must, in
addition to conducting all appropriate inquiries prior to acquiring a
property, comply with all of the other statutory requirements. These
criteria are summarized in section II.D. of this preamble. The all
appropriate inquiries investigation may provide a purchaser with
necessary information to comply with the other post-acquisition
statutory requirements for obtaining liability protections. The failure
to detect a release during the conduct of all appropriate inquiries
does not exempt a landowner from his or her post-acquisition continuing
obligations under other provisions of the statute.
Proposed Sec. 312.20(f) points out that one way to address data
gaps may be to conduct sampling and analysis. The Agency notes that the
proposed regulation does not require that sampling and analysis be
conducted to comply with the all appropriate inquiries requirements.
The proposal only notes that sampling and analysis may be conducted,
where appropriate, to obtain information to address data gaps.
The Agency requests comments on the proposed provisions addressing
data gaps. The Agency also explicitly requests comments on the decision
not to require sampling as part of the proposed all appropriate
inquiries standards.
8. Do Small Quantities of Hazardous Substances That Do Not Pose Threats
to Human Health and the Environment Have To Be Identified in the Inquiries?
The environmental professional should identify and evaluate all
evidence of releases or threatened releases on, at, in or to the
subject property, in accordance with generally accepted good commercial
and customary standards and practices. However, as provided in proposed
Sec. 312.20(g), the environmental professional need not specifically
identify, in the written report prepared pursuant to proposed Sec.
312.21(c), extremely small quantities or amounts of contamination,
except as needed to fairly describe the evidence identified by the
environmental professional of releases and threatened releases that
could pose a threat to human health or the environment.

G. What Are the Proposed Requirements for Interviewing Past and Present
Owners, Operators, and Occupants?

CERCLA Section 101(35)(B)(iii)(II) requires EPA to include in the
standards and practices for all appropriate inquiries ``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.'' The proposed requirements for
conducting interviews of past and present owners, operators, and
occupants of the subject property are included in proposed Sec.
312.23. The proposal identifies these interviews as being within the
scope of the inquiry of the environmental professional. Therefore, all
interviews would either

[[Page 52561]]

have to be conducted by the environmental professional or within the
supervision or responsible charge of the environmental professional.
The intent is that an individual meeting the definition of an
environmental professional (Sec. 312.10) must oversee the conduct of,
or review and approve the results of, the interviews to ensure the
interviews are conducted in compliance with the proposed objectives and
performance factors (Sec. 312.20). EPA also intends this proposed
provision be used to help ensure that the information obtained from the
interviews provides sufficient information, in conjunction with the
results of all other inquiries, to allow the environmental professional
to render an opinion with regard to conditions at the property that may
be indicative of releases or threatened releases of hazardous
substances (and pollutants, contaminants, petroleum and controlled
substances, if applicable).
The proposed rule would require the environmental professional's
inquiry to include interviewing the current owner and occupant of the
subject property. In addition, the proposal provides that the inquiry
of the environmental professional include interviews of additional
individuals, including current and past facility managers with relevant
knowledge of the property, past owners, occupants, or operators of the
subject property, or employees of current and past occupants of the
subject property as necessary to meet the proposed objectives and in
accordance with the proposed performance factors. A primary objective
of the interviews portion of the all appropriate inquiries is to obtain
information regarding the current and past ownership and uses of the
property, and obtain information regarding the conditions of the
property. The proposed rule does not prescribe particular questions
that must be asked during the interview. The Negotiated Rulemaking
Committee and EPA concluded that the type and content of any questions
asked during interviews will depend upon the site-specific conditions
and circumstances and the extent of the environmental professional's
(or other individual's under the supervision or responsible charge of
the environmental professional) knowledge of the property prior to
conducting the interviews. Therefore, the proposed rule does not
include specific questions for the interviews, but requires that the
interviews be conducted in a manner that achieves the proposed
objectives and performance factors. EPA recommends that the
environmental professional, or an individual under the supervision or
responsible charge of the environmental professional, develop the
interview questions prior to conducting the interview, and tailor the
questions to the rule's objectives and performance factors. Interviews
with current and past owners and occupants may provide opportunities to
collect information about a property that is not previously recorded
nor well documented or may provide valuable perspectives on how to find
or interpret information required to complete other aspects of the all
appropriate inquiries. Information gathered during the interview
portion of the all appropriate inquiries may in turn provide valuable
information for the on-site visual inspection. Persons conducting the
interviews of current and past owners and occupants may want to spend
some time during the interviews requesting information on the locations
of operations or units used to store or manage hazardous substances on
the property.
In the case of properties where there may be more than one owner or
occupant, or many owners or occupants, the proposed rule would require
the inquiry to include interviews of major occupants and those
occupants that are using, storing, treating, handling or disposing (or
are likely to have used, stored, treated, handled or disposed) of
hazardous substances (or pollutants, contaminants, petroleum, and
controlled substances, as applicable) on the property. The proposed
rule does not specify the number of owners and occupants to be
interviewed. The environmental professional must perform this function
in the manner that best fulfills the proposed objectives and
performance factors for the inquiries in proposed Sec. 312.20(d) and
(e). Environmental professionals may use their professional judgment to
determine the specific occupants to be interviewed and the total number
of occupants to be interviewed in seeking to comply with the proposed
objectives and performance factors for the inquiries. Interviews must
be conducted with individuals most likely to be knowledgeable about the
current and past uses of the property, particularly with regard to
current and past uses of hazardous substances on the property.
In the case of abandoned properties, the proposed rule would
require the inquiry of the environmental professional to include
interviews with one or more owners or occupants of neighboring or
nearby properties. The Committee recognized that in the case of
abandoned properties, it most likely will be difficult to identify or
interview current or past owners and occupants of the property.
Therefore, the Committee recommended that the conduct of all
appropriate inquiries include interviewing at least one owner or
occupant of a neighboring property to obtain information regarding past
owners or uses of property in cases where the subject property is
abandoned. The proposed rule defines an abandoned property as a
``property that can be presumed to be deserted, or an intent to
relinquish possession or control can be inferred from the general
disrepair or lack of activity thereon such that a reasonable person
could believe that there was an intent on the part of the current owner
to surrender rights to the property.'' As is the case with interviews
conducted with current and past owners and occupants of the property,
interview questions should be developed prior to the conduct of the
interviews, and tailored to gather information to achieve the rule's
objectives and performance factors.
The Agency requests comments on the proposed standards for
conducting interviews of past and present owners and occupants of a
property. EPA also requests comments on the proposed requirements to
interview owners or occupants of neighboring properties in the case of
abandoned properties.

H. What Are the Proposed Requirements for Reviews of Historical Sources
of Information?

Historical documents and records may contain essential information
regarding past ownership and uses of a property that may provide
information regarding the potential for environmental conditions
indicative of releases or threatened releases of hazardous substances
to be present at the property. Historical documents and records, among
others, may include chain of title documents, land use records, aerial
photographs of the property, fire insurance maps, and records held at
local historical societies. The proposed rule, as proposed Sec.
312.24, would require the inquiry of the environmental professional to
include a review of historical documents and records for the subject
property that document the ownership and use of the property for a
period of time as far back in the history of the property as it can be
shown that the property contained structures, or from the time the
property was first used for residential, agricultural, commercial,
industrial, or government purposes.
The statutory criteria in the Brownfields Amendments require that
reviews of historical sources of information be conducted to ``determine

[[Page 52562]]

previous uses and occupancies of the real property since the property
was first developed.'' The Committee recommended, and EPA is proposing,
that records be searched for information on the property covering a
time period as far back in history as there is documentation that the
property contained structures or was placed into use of some form. The
Committee believed, and EPA agrees, that this provision follows
Congressional intent. Historical documents and information must be
reviewed to obtain information relevant to the proposed objectives and
performance factors of proposed Sec. 312.20(d) and (e). If a search of
historical sources of information results in an inability of the
inquiry to document previous uses and occupancies of the property as
far back in history as there is documentation that the property
contained structures or was placed into use of some form and such
information cannot be addressed through the implementation of other
inquiries or regulatory criteria, then the unavailable information must
be documented as a data gap to the inquiries. The proposed requirements
of Sec. Sec. 312.20(f) and 312.21(c)(2) are applicable to all
instances in the all appropriate inquiries that result in data gaps.
The proposed rule would not require that any specific type of
historic information be collected. In particular, the proposed rule
does not require that persons obtain a chain of title document for the
property. The proposed rule provides that the purchaser or
environmental professional use professional judgment when determining
what types of historical documentation may provide the most useful
information about a property's ownership, uses, and potential
environmental conditions when seeking to comply with the proposed
objectives and performance factors for the inquiries. The Negotiated
Rulemaking Committee considered developing a specific list of
historical documents that must be reviewed for each property. However,
given the wide variety of property types and locations to which this
proposed rule could apply, the Committee determined that any list of
specific documents could result in undue burdens on many property
owners due to difficulties in collecting any specific document for any
particular property or property location. Therefore, the Committee
recommended, and EPA is proposing, that the review of historical
documents requirement allow the purchaser and environmental
professional to use their judgment, in accordance with generally
accepted good commercial and customary standards and practices, in
locating the best available sources of historical information and
reviewing such sources for information necessary to comply with the
rule's objectives and performance factors.
As explained in section III.E.2 of this preamble, the purchaser or
environmental professional may make use of previously collected
information about a property when conducting all appropriate inquiries.
The collection of historical information about a property may be a
particular case where previously collected information may be valuable,
as well as easily accessible. In addition, nothing in the proposed rule
prohibits a person from using secondary sources (e.g., a previously
conducted title search) when gathering information about historical
ownership and usage of a property. As explained in section III.E.2,
information must be updated if it was last collected more than 180 days
prior to the date of acquisition of the property.
The Agency requests comments on the proposed standards for reviews
of historical sources of information.

I. What Are the Proposed Requirements for Searching for Recorded
Environmental Cleanup Liens?

For purposes of this rule, recorded environmental cleanup liens are
encumbrances on property for the recovery of incurred cleanup costs on
the part of a state, tribal or federal government agency or other third
party. Recorded environmental cleanup liens often provide an indication
that environmental conditions currently or previously existed on a
property that may have included the release or threatened release of a
hazardous substance. The existence of an environmental cleanup lien
should be used as an indicator of potential environmental concerns and
as a basis for further investigation into the potential existence of
on-going or continued releases or threatened releases of hazardous
substances on, at, in, or to the subject property.
The Committee recommended, and EPA is proposing at proposed Sec.
312.25, that the search for recorded environmental cleanup liens be
performed either by the purchaser or through the inquiry of the
environmental professional. The search for such liens may not
necessarily require the expertise of an environmental professional and
therefore may be more efficiently or more cost-effectively performed by
the purchaser or an agent of the purchaser. Such liens may be included
as part of the chain of title documents or may be recorded in some
other format by state or local government agencies. If such information
is collected by the purchaser, or other agent of the purchaser who is
not under the supervision or responsible charge of the environmental
professional, the proposed rule would require that any information on
environmental cleanup liens that is collected on the part of the
purchaser be provided to the environmental professional. The
environmental professional can then make use of such information during
the conduct of the all appropriate inquiries and when rendering
conclusions or opinions regarding the environmental conditions of the
property.
The Committee recommended that the all appropriate inquiries
regulation require that purchasers and environmental professionals
search for those environmental cleanup liens that are recorded under
federal, tribal, state, or local law. Liens that are not recorded by
government programs or agencies are not addressed by the language of
the statute on the criteria for all appropriate inquiries (the statute
speaks only of recorded liens). One caution about the conclusion one
can draw from not finding a recorded environmental cleanup lien is that
if EPA is in the process of cleaning up a site at the time of
acquisition there is nothing to prevent EPA from recording such a lien
post acquisition. This type of lien, a so-called windfall lien, has no
statute of limitations on it and arises at the time EPA first spends
Superfund money. States and localities may have similar mechanisms.
The Agency requests comments on the proposed standards for
searching for recorded environmental cleanup liens.

J. What Are the Proposed Requirements for Reviewing Federal, State,
Tribal, and Local Government Records?

The proposed rule, at proposed Sec. 312.26, would require that
federal, state, tribal and local government records be searched for
information necessary to achieve the proposed objectives and
performance factors, including information regarding the use and
occupancy of and the environmental conditions at the subject property
and conditions of nearby or adjoining properties that could have a
impact upon the environmental conditions of the subject property.
Federal, tribal, state and local government records may contain
information regarding environmental conditions at a property. In
particular, government records, or data bases of

[[Page 52563]]

such information, may include information on previously reported
releases of hazardous substances, pollutants, contaminants, petroleum
products and controlled substances. Government records may include
information on institutional controls related to a particular property.
For example, in the case of NPL sites, EPA Superfund records, including
Action Memoranda and Records of Decision, may have information on
institutional controls in place at such properties. Government records
also may include information on activities or property uses that could
cause releases or threatened releases to be present at a property. The
proposed rule, at Sec. 312.26(b), requires that federal, tribal,
state, and local government records be searched for information
indicative of environmental conditions at the subject property. The
types of government records or data bases of records searched should
include:
1. Government records of reported releases or threatened releases
at the subject property, including previously conducted site
investigation reports.
2. Government records of activities, conditions, or incidents
likely to cause or contribute to releases or threatened releases,
including records documenting regulatory permits that were issued to
current or previous owners or operators at the property for waste
management activities and government records that identify the subject
property as the location of landfills, storage tanks, or as the
location for generating and handling activities for hazardous
substances, pollutants, contaminants, petroleum or controlled substances.
3. CERCLIS records--EPA's Comprehensive Environmental Response,
Compensation, and Liability Information System (CERCLIS) database
contains general information on sites across the nation and in the U.S.
territories that have been assessed by EPA, including sites listed on
the National Priorities List (NPL). CERCLIS includes information on
facility location, status, contaminants, institutional controls, and
actions taken at particular sites. CERCLIS also contains information on
sites being assessed under the Superfund Program, hazardous waste sites
and potential hazardous waste sites.
4. Government-maintained records of public risks (if available)--
the all appropriate inquiries government records search should include
a search for available records documenting public health threats or
concerns caused by, or related to, activities currently or previously
conducted at the site.
5. Emergency Response Notification System (ERNS) records--ERNS is
EPA's data base of oil and hazardous substance spill reports. The data
base can be searched for information on reported spills of oil and
hazardous substances by state.
6. Government registries, or publicly available lists of
engineering controls, institutional controls, and land use
restrictions. The all appropriate inquiries government records search
must include a search for registries or publicly available lists of
recorded engineering and institutional controls and recorded land use
restrictions. Such records may be useful in identifying past releases
on, at, in, or to the subject property or identifying continuing
environmental conditions at the property.
In the case of all the government records listed above, the
requirements of this criterion may be met by searching data bases
containing the same government records mentioned in the list above that
are accessible and available through government entities or private
sources. The review of actual records is not necessary, provided that
the same information contained in the government records and required
to meet the requirements of this criterion and achieve the proposed
objectives and performance factors for these regulations is attainable
by searching available data bases.
In addition to reviewing government records, or data bases of
information contained in government records, for information about the
subject property, the proposed rule would require that government
records for nearby and adjoining properties be reviewed to assess the
potential impact to the subject property from hazardous substances and
petroleum contamination migrating from contiguous or nearby properties.
The proposed rule would require all appropriate inquiries to include a
search of government records or data bases for information about nearby
or adjoining properties to assess potential impacts to the
environmental conditions of the subject property from off-site sources
of contamination. The proposed rule would require that government
records be searched to identify information relative to the proposed
objectives and in accordance with the performance factors on: (1)
Adjoining and nearby properties for which there are governmental
records of reported releases or threatened releases (e.g., properties
currently listed on the National Priorities List (NPL), properties
subject to corrective action orders under the Resource Conservation and
Recovery Act (RCRA), properties with reported releases from leaking
underground storage tanks); (2) adjoining and nearby properties
previously identified or regulated by a government entity due to
environmental conditions at a site (e.g., properties previously listed
on the NPL, former CERCLIS sites with notices of no further response
actions planned); and (3) adjoining and nearby properties that have
government-issued permits to conduct waste management activities (e.g.,
facilities permitted to manage RCRA hazardous wastes).
In the case of government records searches for nearby properties,
the proposed rule (at Sec. 312.26(c)) includes minimum search
distances for obtaining and reviewing records or data bases concerning
activities and facilities located on nearby properties. The minimum
search distances proposed are based on the Negotiated Rulemaking
Committee's professional judgment regarding the value of obtaining
information on potential releases or threatened releases from
properties and activities within a given distance from the subject
property that could have an impact on the subject property. For
example, government records identifying properties listed on the NPL
should be searched to obtain information on NPL sites located within
one-half mile of the subject property. The Committee generally believed
that NPL sites located beyond one-half mile of a property most likely
would have little or no impact on the environmental conditions at the
subject property. For nearby properties, the proposed rule includes
proposed minimum search distances (e.g., properties located either
within one mile or one-half mile of the subject property) for each type
of record to be searched to facilitate defining the scope of the
records searches. In the case of two types of records, records of RCRA
small quantity and large quantity generators and records of registered
storage tanks, the all appropriate inquiries search need only identify
RCRA generators and storage tanks located on adjoining properties (the
proposal contains no requirement to search for these two types
government records for other nearby properties).
EPA and the Negotiated Rulemaking Committee realize that property-
specific and regional conditions may influence the appropriateness of
the proposed search distances for any given type of record and
property. Appropriate search distances for properties located in rural
settings may differ from appropriate search distances for urban
settings. In addition, ground water flow direction, depth to ground
water, arid weather

[[Page 52564]]

conditions, the types of facilities located on nearby properties, as
well as other factors may influence the degree of impact to a property
from off-site sources. Therefore, the proposed rule would allow for the
environmental professional to adjust any or all of the proposed minimum
search distances for any of the record types, based upon professional
judgment and the consideration of site-specific conditions or
circumstances when seeking to achieve the proposed objectives and
performance factors for the required inquiries. The proposed rule
provides that the environmental professional may consider one or more
of the following factors when determining an alternative appropriate
search distance:
? The nature and extent of a release;
? Geologic, hydrogeologic, or topographic conditions of the
subject property and surrounding environment;
? Land use or development densities;
? The property type;
? Existing or past uses of surrounding properties;
? Potential migration pathways (e.g., groundwater flow
direction, prevalent wind direction); or
? Other relevant factors.
The proposed rule would require environmental professionals to
document the rationale for making any modifications to the required
minimum search distances included in the proposed regulation.
The Agency requests comments on the proposed standards for
reviewing federal, state, tribal and local government records.

K. What Are the Proposed Requirements for Visual Inspections of the
Subject Property and Adjoining Properties?

1. Visual Inspections of the Subject Property
The proposed rule, at Sec. 312.27, would require that a visual on-
site inspection be conducted of the subject property. The proposed
visual on-site inspection requirements include inspecting the
facilities and any improvements on the property, as well as visually
inspecting areas on the property where hazardous substances may
currently be or in the past may have been used, stored, treated,
handled, or disposed of. During their deliberations, members of the
Negotiated Rulemaking Committee overwhelmingly stressed the need for
every all appropriate inquiries investigation to include an on-site
inspection. Many Committee members pointed out that on-site inspections
of a property can provide the best source of information regarding
indications of environmental conditions on a property. The Committee
recommended, and EPA included in today's proposed rule, a requirement
that a visual on-site inspection of the subject property be conducted
in all but a few very limited cases and that physical limitations to
the visual on-site inspection (e.g., weather conditions, physical
obstructions) be documented.
We note that persons conducting all appropriate inquiries with
monies provided in a grant awarded under CERCLA Section 104(k)(2)(B)
must, during the on-site visual inspection, inspect the facilities and
any improvements on the property, as well as visually inspect any other
areas on the property where hazardous substances may currently be or in
the past may have been used, stored, treated, handled, or disposed. In
addition, depending on the terms and conditions of the grant or
cooperative agreement, the on-site visual inspection requirements could
include inspecting the facilities, improvements, and other areas of the
property where pollutants, contaminants, petroleum and petroleum
products, or controlled substances may currently be or in the past may
have been used, stored, treated, handled, or disposed.
The visual on-site inspection of a property during the conduct of
all appropriate inquiries may be the most important aspect of the
inquiries and the primary source of information regarding the
environmental conditions on the property. In all cases, every effort
must be made to conduct an on-site visual inspection of a property when
conducting all appropriate inquiries.
Some members of the Committee raised concerns regarding a
purchaser's or environmental professional's inability to obtain on-site
access to a property in limited circumstances. Some members noted that
extreme and prolonged weather conditions and remote locations can
impede access to a property. Another limited circumstance that could
result in a purchaser or environmental professional not being able to
gain on-site access to a property during the all appropriate inquiries
is the situation where a local government, a non-profit organization,
or other party seeks to obtain ownership of a property, but the owner
refuses to provide access to the local government or non-profit
organization and the local government or non-profit organization
exercises all good faith efforts to gain access to the property (e.g.,
seeking assistance from state government officials) and remains unable
to gain on-site access. Such circumstances may arise due to the unique
nature of such transactions. Unlike commercial property transactions
conducted by two private parties, where the economic and legal
liability interests of both parties and the ability of either party to
abandon the transaction can work in favor of the purchasing party's
ability to gain access to a property prior to acquisition, property
transactions between a private party and a local government or non-
profit organization acting on behalf of the public interest, may not
afford the local government or non-profit organization the same
leverage, even if it is indeed in the public interest to attain
ownership of the property. This situation may occur when the local
government or non-profit association seeks to assess, cleanup, and
revitalize an area, but the owner of the property is unreachable,
unavailable, or otherwise unwilling to provide access to the property.
In such limited circumstances, the public benefit attained from a
government entity, or the non-profit organization, gaining ownership of
a property may outweigh the need to gain on-site access to the property
prior to the transfer of ownership.
The proposed rule would require, in such unusual circumstances,
that the purchaser make good faith efforts to gain access to the
property. In addition, the proposal notes that the mere refusal of a
property owner to allow the purchaser to have access to the property
does not constitute an unusual circumstance, absent the making of good
faith efforts to otherwise gain access. The proposed rule, at proposed
Sec. 312.10, would define ``good faith'' as ``the absence of any
intention to seek an unfair advantage or to defraud another party; an
honest and sincere intention to fulfill one's obligations in the
conduct or transaction concerned.''
In those unusual circumstances where a purchaser or an
environmental professional, after good faith efforts, cannot gain
access to a property and therefore cannot conduct an on-site visual
inspection, the proposed rule would require that the property be
visually inspected, or observed, by another method, such as through the
use of aerial photography, or be inspected, or observed, from the
nearest accessible vantage point, such as the property line or a public
road that runs through or along the property. In addition, the proposed
rule would require that the all appropriate inquiries report includes
documentation of efforts undertaken by the purchaser or the
environmental professional to obtain on-site access to the subject
property and includes an explanation of why good faith efforts to gain
access to subject property were unsuccessful. The proposed rule also

[[Page 52565]]

would require that the all appropriate inquiries report must include
documentation of other sources of information that were consulted to
obtain information necessary to achieve the proposed objectives and
performance factors. This documentation should include comments, from
the environmental professional who signs the report, regarding any
significant limitations to the ability of the environmental
professional to identify conditions indicative of releases or
threatened releases on, at, in, or to the subject property, that may
arise due to the inability of the purchaser or environmental
professional to obtain on-site access to the property.
In addition, in those limited cases where an on-site visual
inspection cannot be conducted prior to the date a property is
acquired, EPA recommends that once a property is purchased, the
property owner conduct an on-site visual inspection of the property.
Such an inspection may provide important information necessary for the
property owner to fully comply with the other statutory provisions,
including on-going obligations, governing the CERCLA liability protections.
2. Visual Inspections of Adjoining Properties
The proposed rule, at proposed Sec. 312.27, would require that the
all appropriate inquiries investigation include visual inspections or
observations of properties that adjoin the subject property. Visual
inspections of adjoining properties may provide excellent information
on the potential for the subject property to be affected by migrating
contamination from adjoining properties. The Negotiated Rulemaking
Committee discussed the merits and legalities of requiring parties to
conduct on-site visual inspections of adjoining properties. Although
several Committee members expressed a preference for visual inspections
to be conducted on-site, the Committee was concerned that requiring
purchasers or environmental professionals to gain on-site access to
properties adjoined to the subject property would not be practicable.
Therefore, the Committee recommended and EPA is proposing that visual
observations of adjoining properties be conducted from the subject
property's property line, one or more public rights-of-way, or other
vantage point (e.g., via aerial photography). Where practicable, a
visual on-site inspection is recommended and may provide greater
specificity of information. The proposed rule would require that the
visual observations of adjoining properties include observing areas
where hazardous substances currently may be, or previously may have
been, stored, treated, handled, or disposed. Visual inspections or
observations of adjoining properties otherwise also must be conducted
to achieve the proposed objectives and performance goals for the all
appropriate inquiries. Physical limitations to the visual inspections
or observations of adjoining properties should be noted.
The Agency requests comments on the proposed requirements for
conducting visual inspections of the subject property and adjoining
properties, including the proposed exemption from the on-site visual
inspection requirement in cases where good faith efforts result in an
ability to gain access to a property.
3. Role of the Environmental Professional in the Visual Inspection
As mentioned in section III.D.4 of this preamble, EPA and the
Negotiated Rulemaking Committee considered proposing to require all
activities in the all appropriate inquiries investigation to be
conducted by persons meeting the proposed definition of an
environmental professional. Requiring that an environmental
professional conduct all activities could ensure that all data
collection and investigations are conducted in a manner and to a degree
of specificity that allows the environmental professional to make best
use of all information in forming opinions and conclusions regarding
the environmental conditions at a property. However, after careful
review of the specific activities included in the statutory criteria
and conducting an assessment of the costs and burdens of such a
requirement, EPA and the Committee concluded that it is not necessary
for each and every regulatory requirement to be conducted by an
environmental professional. As outlined in section III.E.1 of this
preamble, the proposed rule would allow for certain aspects of the
inquiries to be conducted solely by the purchaser or property owner,
while providing that all other aspects be conducted under the
supervision or responsible charge of the environmental professional.
Among the activities that the proposed rule would require to be
conducted under the supervision or responsible charge of an
environmental professional is the on-site visual inspection.
It is EPA's recommendation that visual inspections of the subject
property and adjoining properties be conducted by an individual who
meets the proposed regulatory definition of an environmental
professional. Although many other aspects of the all appropriate
inquiries may be conducted sufficiently and accurately by individuals
other than an environmental professional (e.g., a research associate or
librarian may be well qualified to search government records, an
attorney may be well qualified to conduct a search for an environmental
lien), EPA believes that an environmental professional is best
qualified to conduct a visual inspection and locate and interpret
information regarding the physical and geological characteristics of
the property as well as information on the location and condition of
equipment and other resources located on the property. EPA recognizes
that other individuals who do not meet the proposed regulatory
definition of an environmental professional, particularly when these
individuals are conducting such activities under the supervision or
responsible charge of an environmental professional, may have the
required skills and knowledge to conduct an adequate on-site visual
inspection. However, EPA believes that the professional judgment of an
individual meeting the proposed definition of an environmental
professional is vital to ensuring that all circumstances at the
property indicative of environmental conditions and potential releases
or threatened releases are properly identified and analyzed. An
environmental professional is best qualified for identifying such
situations and conditions and rendering a judgment or opinion regarding
the potential existence of conditions indicative of environmental concerns.
An environmental professional should, at a minimum, be involved in
planning for the on-site visual inspection. Information collected
during the conduct of other required activities such as interviews with
owners and occupants and reviews of government records should be
reviewed in preparing for the on-site visual inspection. Although the
proposed rule would not require the activities proposed as part of all
appropriate inquiries investigation to be done in any particular
sequence, EPA recommends that the on-site visual inspection occur after
many of the other activities are completed to allow the environmental
professional or other individuals conducting the inspections to make
the best use of available information about the property when preparing
for and conducting the on-site visual inspection. For example, if
during interviews with owners and occupants of the property or during
the review of government records, it becomes apparent that a property

[[Page 52566]]

currently used for general retail purposes once was owned by
individuals issued permits for the storage or treatment of hazardous
wastes, this could be noted during the preparation for the on-site
visual inspection and the persons conducting the inspection should be
prepared to look for remaining storage units or evidence of conditions
caused by past spills or releases from on-site management units. In
addition, it may be important to consider any specialized knowledge
held by the purchaser or the environmental professional regarding
current or past uses and ownership of the property prior to conducting
the on-site visual inspection.

L. What Are the Proposed Requirements for the Inclusion of Specialized
Knowledge or Experience on the Part of the ``Defendant?''

Because the conduct of all appropriate inquiries is one element of
a protection against CERCLA liability, and the situation under which a
property owner may need to assert that he or she qualifies for
liability protection is when the property owner must defend his or her
status as an innocent landowner, a contiguous property owner, or a bona
fide prospective purchaser, the statute refers to the property owner,
or the user of the all appropriate inquiries investigation, as the
``defendant.'' The Committee believed, and EPA agrees, that
Congressional intent is to ensure that any information or special
knowledge held by the purchaser or property owner with regard to a
property and the conditions or situations present at the subject
property be included in the pre-acquisition inquiries and be
considered, along with all information collected during the conduct of
all appropriate inquiries, when an environmental professional renders a
judgment or opinion regarding the presence of environmental conditions
indicative of releases or potentials releases of hazardous substances
on, at, in, or to the subject property. This information should be
revealed to all parties conducting the all appropriate inquiries and
considered earlier in the inquiries process so that any specialized
knowledge may be taken into account through the conduct of the other
required aspects of the all appropriate inquiries.
Congress first added the innocent landowner defense to CERCLA in
1986. The Brownfields Amendments amended the innocent landowner defense
and added to CERCLA the bona fide prospective purchaser and the
contiguous property owner liability protections to CERCLA liability.
The 1986 amendments to CERCLA established that among other elements
necessary for a defendant to successfully assert the innocent landowner
defense, a defendant must demonstrate that he or she had, at the time
of acquisition of the property in question, made all appropriate
inquiries into previous ownership and uses of the property. Congress
directed courts evaluating a defendant's showing of all appropriate
inquiries to take into account, among other things, ``any specialized
knowledge or experience on the part of the defendant.'' Nothing in
today's proposed rule would change the nature or intent of this
requirement as it has existed in the statute since 1986 or in how the
courts have interpreted the requirement to date.
The Negotiated Rulemaking Committee decided not to extend the
proposed requirements for the consideration of any specialized
knowledge or experience of the property owner beyond what was
previously required under CERCLA and established through case law. The
proposed rule, at proposed Sec. 312.28, would require that all
appropriate inquiries include specialized knowledge on the part of the
prospective property owner of the subject property, the area
surrounding the subject property, the conditions of adjoining
properties, as well as other experience relative to the inquiries that
may be applicable to identifying conditions indicative of releases or
threatened releases at the subject property. The proposed rule also
would require that the results of the inquiries take into account any
specialized knowledge related to the property, surrounding areas, and
adjoining properties held by the persons responsible for undertaking
the inquiries, including any specialized knowledge on the part of the
environmental professional.
In reviewing existing case law related to the innocent landowner
defense, courts appear to have interpreted the ``specialized
knowledge'' factor to mean that the professional or personal experience
of the defendant may be taken into account when analyzing whether the
defendant made all appropriate inquiries. For example, in Foster v.
United States, 922 F. Supp. 642 (D. D.C. 1996), the owner of a property
formerly owned by the General Services Administration and contaminated
by, among other things, lead, mercury and PCBs, brought an action
against the United States and District of Columbia, prior owners or
operators of the site. The plaintiff was a principal in Long & Foster
companies and purchased the property through a general partnership, and
received it by quitclaim deed. The U.S. and D.C. counterclaimed against
plaintiff. Foster asserted the innocent landowner defense. The court
rejected the plaintiff's claim based in part on the defendant's
specialized knowledge. The court found that his specialized knowledge
included his position at Long & Foster, which did hundreds of millions
of dollars of commercial real estate transactions, and his position as
a partner in at least 15 commercial real estate partnerships. The
partnership was involved as an investor in a number of real estate
transactions, some of which involved industrial or commercial or mixed-
use property. The court ruled that ``it cannot be said that [the
partnership] is a group unknowledgeable or inexperienced in commercial
real estate transactions.'' Foster, 922 F. Supp. at 656.
In American National Bank and Trust Co. of Chicago v. Harcros
Chemicals, Inc., 1997 WL 281295 (N.D. Ill. 1997), the plaintiff was a
company ``involved in brownfields development, purchasing
environmentally distressed properties at a discount, cleaning them up,
and selling them for a profit.'' American National Bank, 1997 WL 281295
at *4. As a counter-claim defendant, the company asserted it was an
innocent landowner and therefore not liable pursuant to CERCLA. The
court found that among other reasons the defense failed because the
company possessed specialized knowledge. The court ruled that the
company was an expert environmental firm and possessed knowledge that
should have alerted it to the potential problems at the site.
EPA points out that the proposed rule requires that the specialized
knowledge of prospective landowners and the persons responsible for
undertaking the all appropriate inquiries be taken into account when
conducting the all appropriate inquiries for the purposes of
identifying conditions indicative of releases or threatened releases at
a property. However, as evidenced by the case law cited above, the
determination of whether or not the all appropriate inquiries standard
is met with regard to specialized knowledge remains within the
discretion of the courts.
The Agency requests comments on the proposed provisions governing
the inclusion of specialized knowledge or experience on the part of the
purchaser and the environmental professional.

[[Page 52567]]

M. What Are the Proposed Requirements for the Relationship of the
Purchase Price to the Value of the Property, if the Property Was Not
Contaminated?

The proposed rule, at Sec. 312.29, would require that the
purchaser of the property consider whether or not the purchase price
paid for the property reflects the fair market value of the property,
assuming that the property is not contaminated. There may be many
reasons that the price paid for a particular property is not an
accurate reflection of the fair market value. The proposed rule would
require that the purchaser consider whether any differential between
the purchase price and the value of the property is due to the presence
of releases or threatened releases of hazardous substances at the property.
The proposed rule does not require that a real estate appraisal be
conducted to achieve compliance with this criterion. Although the
Negotiated Rulemaking Committee discussed the potential value in
requiring that an appraisal be conducted, the Committee determined that
a formal appraisal is not necessary for the purchaser to make a general
determination of whether the price paid for a property reflects its
market value. Such a determination may be made by comparing the price
paid for a particular property to prices paid for similar properties
located in the same vicinity as the subject property, or by consulting
a real estate expert familiar with properties in the general locality
and who may be able to provide a comparability analysis. The objective
is not to ascertain the exact value of the property, but to determine
whether or not the purchase price paid for the property is reflective
of its market value. Significant differences in the purchase price and
market value of a property should be noted and the reasons for any
differences should be noted. The Agency requests comments on these
proposed requirements.

N. What Are the Proposed Requirements for Commonly Known or Reasonably
Ascertainable Information About the Property?

The proposed rule, at proposed Sec. 312.30, would require that
landowners, brownfields grantees, and environmental professionals
conducting the all appropriate inquiries consider commonly known
information about the potential environmental conditions at a property.
Commonly known information generally is information available in the
local community that may be ascertained from the owner or occupant of a
property, members of the local community, including owners or occupants
of neighboring properties to the subject property, local or state
government officials, local media sources, and local libraries and
historical societies. Much of this information may be incidental to
other information collected during the inquiries, but such information
may be valuable to identifying conditions indicative of releases or
threatened releases at the subject property. For example, neighboring
property owners and local community members may have information
regarding undocumented uses of a property during periods when the
property was idle or abandoned. Local community sources may be good
sources of information for understanding uses of a property and
activities conducted at a property in the case of abandoned properties.
The collection and use of commonly known information about a
property must be done in connection with the collection of all other
required information for the purposes of achieving the proposed
objectives and performance factors contained in proposed Sec. 312.20.
EPA recommends that persons undertaking the all appropriate inquiries
make efforts to collect information on the subject property from a
variety of sources, including sources located in the community in which
the property is located, to the extent necessary to achieve the
objectives and performance factors of Sec. 312.20(d) and (e). Opinions
included in the all appropriate inquiries report should be based upon a
balance of all information collected. All information collected,
including information available from the local community, should be
considered in the final evaluation.
As mentioned above in section III.K., the Brownfields Amendments to
CERCLA amended the innocent landowner defense previously added to
CERCLA in 1986. In addition, the Brownfields Amendments added to CERCLA
the bona fide prospective purchaser and the contiguous property owner
liability protections to the statute. The 1986 amendments to CERCLA
established that among other elements necessary for a defendant to
successfully assert the innocent landowner defense, a defendant must
take into account commonly known or reasonably ascertainable
information about the property. Nothing in today's proposed rule would
change the nature or intent of this requirement as it has existed in
the statute since 1986 or in how the courts have interpreted the
requirement to date.
There is some case law, related to the innocent landowner defense,
that provide guidance for considering commonly known or reasonably
ascertainable information about the property. For example, in Wickland
Oil Terminals v. Asarco, Inc., 1988 WL 167247 (N.D. Cal. 1988), the
court noted that Wickland was aware of potential water quality problems
at the subject property due to large piles of mining slag stored at the
property, even though Wickland argued that previous owners withheld
such information, because the information was available from other
sources consulted by Wickland prior to purchasing the property,
including the Regional Water Quality Control Board and a consulting
firm hired by Wickland. Such information was commonly known by local
sources and therefore should have been considered by Wickland during
its conduct of all appropriate inquiries.
In Hemingway Transport Inc. v. Kahn, 174 F.R. 148 (Bankr. D. Mass.
1994), the court ruled against an innocent landowner claim because it
found ``that had [the defendants] exerted a modicum of effort they may
easily have discovered information that at a minimum would have
compelled them to inspect the property further * * * the [defendants]
could have taken a few significant steps, literally, to minimize their
liability and discover information about the property * * *'' The court
cited that one action the defendants should have taken to collect
available information about the property is phone calls to city
officials to inquire about conditions at the property.
EPA requests comment on the proposed requirements for including
within the all appropriate inquiries commonly known or reasonably
ascertainable information about the property.

O. What Are the Proposed 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?'

The proposed rule, at Sec. 312.31, would require that persons
conducting the all appropriate inquiries consider all the information
collected during the conduct of the inquiries in totality to ascertain
the potential presence of a release or threatened release at the
property. Persons conducting all appropriate inquiries, following the
collection of all required information, must assess whether or not an
obvious conclusion may be drawn that there are conditions indicative of
a release or threatened release of hazardous

[[Page 52568]]

substances (or other substances, pollutants or contaminants) on, at,
in, or to the property. In addition, the proposed rule would require
parties to consider whether or not the totality of information
collected prior to acquiring the property indicates that the parties
should be able to detect a release or threatened release on, at, in, or
to the property. Persons should undertake these considerations keeping
in mind that ultimately it is for a court to assess the degree of
obviousness of contamination.
The previous innocent landowner defense (added to CERCLA in 1986)
required a court to consider the degree of obviousness of the presence
or likely presence of contamination at a property, and the ability of
the defendant (i.e., the landowner) to detect the contamination by
appropriate investigation. Nothing in today's proposed rule would
change the nature or intent of this requirement as it has existed in
the statute since 1986 or in how the courts have interpreted the
requirement to date. Case law relevant to this criterion indicates that
defendants may not be able to claim an innocent landowner defense if a
preponderance of information available to a prospective landowner prior
to acquiring the property indicates that the defendant should have
concluded that there is a high likelihood of contamination at the site.
In some cases (e.g., Hemingway Transport Inc. v. Kahn, 174 F.R. 148
(Bankr. D. Mass. 1994), and Foster v. United States, 922 F. Supp. 642
(D.D.C. 1996), courts have ruled that if a defendant had done a bit
more visual inspection or further investigation, based upon information
available to the defendant prior to acquiring the property, it would
have been obvious that the property was contaminated. In Foster v.
United States, the court determined that the innocent landowner defense
was not available based in part on the fact that the partnership
presumed the site was free of contamination based upon cursory visual
inspections despite evidence in the record that, at the time of the
sale, the soil was visibly stained by PCB-contaminated oil. In
addition, although the property was located in a run-down industrial
area, the defendant did no investigation into the environmental
conditions at the site prior to acquiring the property.
With regard to the conduct of sampling and analysis, today's
proposed rule would not require sampling and analysis as part of the
all appropriate inquiries investigation. However, members of the
Committee recognized that sampling and analysis may be valuable in
determining the possible presence and extent of potential contamination
at a property. In addition, the fact that the all appropriate inquiry
standards would not require sampling and analysis may not prevent a
court from concluding that, under the circumstances of a particular
case, sampling and analysis should have been conducted to meet ``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'' criterion and obtain
protection from CERCLA liability. Prospective landowners should keep in
mind that the conduct of all appropriate inquiries prior to purchasing
a property is only one requirement to which a purchaser must comply to
claim protection from CERCLA liability once the purchase has taken
place. The statute requires that persons, after acquiring a property,
comply with continuing obligations to take reasonable steps to stop on-
going releases at the property, prevent any threatened future releases,
and prevent or limit any human, environmental, or natural resource
exposure to any previously released hazardous substances (these
criteria are summarized in detail in section II.D. of this preamble).
In certain instances, depending upon site-specific circumstances and
the totality of the information collected during the all appropriate
inquiries prior to the property acquisition, it may be necessary to
conduct sampling and analysis, either pre-or post-acquisition, to fully
understand the conditions at a property, and fully comply with the
statutory requirements for the CERCLA liability protections. In
addition, sampling and analysis may help explain existing data gaps.
Prospective purchasers should be mindful of all the statutory
requirements for obtaining the CERCLA liability protections when
considering whether or not to conduct sampling and analysis and when
determining whether to undertake sampling and analysis prior to or
after acquiring a property. Today's proposed regulation does not
require that sampling and analysis be conducted as part of the all
appropriate inquiries that must be conducted prior to acquiring a property.
The Agency requests comments on the proposed requirements for
meeting the statutory provisions for including within the all
appropriate inquiries 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. The Agency also
specifically requests comments on the decision not to require sampling
and analysis as part of the all appropriate inquiries regulations.

IV. Requests for Public Comments

EPA is requesting comment on the standards and practices included
as part of today's proposed rule. Public comments may be submitted to
the Agency electronically or by mail, as explained in the SUPPLEMENTARY
INFORMATION section of this preamble. As explained in that section, the
Agency requests that when submitting comments, please state your views
as clearly as possible, describe any assumptions applicable to your
comments, provide any technical information and data that support your
views, and provide specific examples to illustrate your concerns.
Specifically, the Agency is interested in receiving public comment on
the following:
? The proposed requirements for an all appropriate inquiries
report, including the signature requirements for the all appropriate
inquiries report.
? The proposed qualifications included in the definition of
an environmental professional and the provisions allowing for
individuals who do not qualify as environmental professionals to
contribute to inquiry activities.
? The proposed division of responsibilities for conducting
all appropriate inquiries.
? The proposal to establish the date on which title is
transferred on a property as the date on which the property is acquired.
? The proposed provisions for using previously conducted all
appropriate inquiries.
? The proposed requirements for using all appropriate
inquiries conducted by third parties.
? The proposed objectives and performance factors for the
all appropriate inquiries requirements.
? The proposed provisions for addressing data gaps.
? The proposal to not require sampling and analysis as part
of the all appropriate inquiries standards.
? The proposed standards for conducting interviews of past
and present owners and occupants of a property.
? The proposed requirements to interview owners or occupants
of neighboring properties in the case of abandoned properties.
? The proposed standards for reviews of historical sources
of information.

[[Page 52569]]

? The proposed standards for searching for recorded environmental
cleanup liens.
? The proposed standards for reviewing federal, state, tribal and
local government records.
? The proposed requirements for conducting visual
inspections of the subject property and adjoining properties, including
the limited exemption from conducting an on-site inspection when good
faith efforts result in an inability to obtain access to a property.
? The proposed provisions governing the inclusion of
specialized knowledge or experience on the part of the purchaser and
the environmental professional.
? The proposed requirements for considering the relationship
of the purchase price to the value of a property, if the property was
not contaminated.
? The proposed requirements for commonly known or reasonably
ascertainable information about the property.
? The proposed 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.
? The proposed information collection requirements,
including the need for such information, the accuracy of the provided
burden estimates associated with the requirements, and any suggested
methods for minimizing respondent burden, including through the use of
automated collection techniques.
? The methodology used to estimate the costs and impacts of
today's proposed rule, including the estimated incremental labor hours
used to estimate the incremental cost of the proposed rule.
? The methodology employed to identify impacted small
entities and estimating the potential impacts on small entities.
? The identification of voluntary consensus standards that
are applicable to and compliant with today's proposed standards and
practices for all appropriate inquiries.

V. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

Under Executive Order 12866 (58 FR 51735), the Agency must
determine whether this regulatory action is ``significant'' and
therefore subject to formal review by the Office of Management and
Budget (OMB) and to the requirements of the Executive Order. The
Executive Order defines ``significant regulatory action'' as one that
is likely to result in a rule that may: (1) Have an annual effect on
the economy of $100 million or more or adversely affect in a material
way the economy, a sector of the economy, productivity, competition,
jobs, the environment, public health or safety, or state, local, or
tribal governments or communities; (2) create a serious inconsistency
or otherwise interfere with an action taken or planned by another
agency; (3) materially alter the budgetary impact of entitlements,
grants, user fees, or loan programs or the rights and obligations of
recipients thereof; or (4) raise novel legal or policy issues arising
out of legal mandates, the President's priorities, or the principles
set forth in the Executive Order.
Pursuant to the terms of Executive Order 12866, it has been
determined that today's proposed rule is a ``significant regulatory
action'' because this proposed rule contains novel legal or policy issues.
Based upon the results of its Economic Impacts Analysis (EIA), EPA
has determined that this proposed rule will have an annual effect on
the economy of less than $100 million. The annualized benefits
associated with today's proposed rule have not been monetized but are
identified and summarized in the document titled ``Economic Impacts
Analysis for the Proposed All Appropriate Inquiries Regulation.'' A
copy of the EIA is available in the docket for today's proposed rule.
The Agency solicits comment on the methodology and results from the
analysis as well as any data that the public believes would be useful
in a revised analysis.
1. Methodology
The value of any regulatory action is traditionally measured by the
net change in social welfare that it generates. The Economic Impacts
Analysis (EIA) conducted in support of today's proposed rule examines
both costs and qualitative benefits in an effort to assess the overall
net change in social welfare. The primary focus of the EIA document is
on compliance costs and economic impacts. Below, EPA summarizes the
analytical methodology and findings for the proposed all appropriate
inquiries rule. The information presented is derived from the EIA.
The all appropriate inquiries regulation potentially will apply to
most commercial property transactions. The requirements will be
applicable to any public or private party, who may potentially claim
protection from CERCLA liability as an innocent landowner, a bona fide
prospective purchaser, or a contiguous property owner. However, the
conduct of all appropriate inquiries, or environmental due diligence,
is not new to the commercial property market. Prior to the Brownfields
Amendments to CERCLA, commercial property transactions often included
an assessment of the environmental conditions at properties prior to
the closing of any real estate transaction whereby ownership was
acquired for the purposes of confirming the conditions at the property
or to establish an innocent landowner defense should environmental
contamination be discovered after the property was acquired. The
process most prevalently used for conducting all appropriate inquiries,
or environmental site assessments, is the process developed by the
American Society for Testing and Materials (ASTM) and entitled ``E1527,
Phase I Environmental Site Assessment Process.'' In addition, some
properties, particularly in cases where the subject property is assumed
not to be contaminated or was never used for industrial or commercial
purposes, were assessed using another, less rigorous process developed
by ASTM, sometimes referred to as a ``transaction screen'' and entitled
``E1528 Standard Practice for Environmental Site Assessments:
Transaction Screen Process.''
Our first step in assessing the economic impacts of the proposed
rule was establishing a baseline to represent the relevant aspects to
the commercial real estate market in the absence of any changes in
regulations. Because under existing conditions almost all transactions
concerning commercial properties are accompanied by either an
environmental site assessment (ESA) conducted in accordance with ASTM
E1527-2000 or a transaction screen as specified in ASTM E1528, these
practices were assumed to continue even in the absence of the all
appropriate inquiries regulation. The numbers of each type of
assessment were estimated on the basis of industry data for recent
years, with recent growth rates in transactions assumed to continue for
the 10 year period covered by the EIA. An adjustment in the relative
numbers of the ESAs and transaction screens was made to account for the
fact that, under the proposed rule, an ESA will provide more certain
protection from liability. This adjustment was made by comparing shifts
between the two procedures that

[[Page 52570]]

occurred when the Brownfields Amendments established the ASTM E1527-
2000 standard as the interim standard for all appropriate inquiries,
and thus as one requirement for qualifying as an innocent landowner,
bona fide purchaser, or contiguous property owner.
We then considered the requirements included in the recommendation
of the Negotiated Rulemaking Committee and those included in a few
options that the committee considered but did not adopt. We then
compared the costs of each alternative option to costs associated with
conducting assessments using the ASTM E1527-2000 standard. We present
this cost comparison to comply with current OMB guidance to consider a
less stringent alternative than the Agency's preferred alternative when
conducting an economic impacts assessment. As explained in section
V.I., EPA has determined that the ASTM E1527-2000 standard is
inconsistent with applicable law. However, the alternative is included
in the economics assessment for cost comparison purposes.
When compared to the ASTM E1527-2000 standard (i.e., the baseline
standard), today's proposed rule is expected to result in a reduced
burden for the conduct of interviews in those cases where the subject
property is abandoned; increased burden associated with documenting
recorded environmental cleanup liens; increased burden for documenting
the reasons for the price and market value of a property in those cases
where the purchase price paid for the subject property is significantly
below the market value of the property; and increased burden for
recording information about the degree of obviousness of contamination
at a property. The three regulatory options that were considered by the
Negotiated Rulemaking Committee but not adopted would have required:
(1) All non-clerical work to be performed by an individual meeting the
proposed definition of an environmental professional; (2) no
requirement to interview owners/occupants of neighboring properties
when the subject property is abandoned; and (3) limited soil or water
sampling. An additional option is presented in the EIA for the proposed
rule to comply with guidance recently issued by OMB. OMB ``Circular A-
4'' requires that agencies analyze a continuum of regulatory options,
including a regulatory alternative that is less stringent than an
agency's preferred alternative. To fully comply with the OMB guidance,
the EIA includes a comparison of the cost impacts of our preferred
option and the other options considered by the Negotiated Rulemaking
Committee to an option that would entail using the ASTM E1527-2000
standard as the federal regulation. As explained in more detail below,
it is EPA's opinion that the ASTM E1527-2000 standard is not compliant
with the statutory requirements for all appropriate inquires, and
therefore if adopted may not provide the benefits of the CERCLA
liability protections. However, the option is provided in the EIA for
the purposes of a cost comparison.
To estimate the changes in costs resulting from the rule or the
regulatory options, we developed a costing model. This model estimates
the total costs of conducting site assessments as the product of costs
per assessment, numbers of assessments per year, and the number of
years in the analysis. The costs per assessment, in turn, are
calculated by dividing each assessment into individual labor
activities, estimating the labor time associated with each, and
assigning a per-hour labor cost to each activity on the basis of the
labor category most appropriate to that activity. Labor times and
categories are assumed to depend on the size and type of property being
assessed, with the nationwide distribution of properties based on data
from industry on environmental sites assessments and brownfield
sites.\3\ The estimates and assignments of categories are made based on
the experience of professionals who have been involved in large numbers
of site assessments, and who are therefore skilled in cost estimation
for the relevant activities. Other costs, such as reproduction and the
purchase of data, are added to the labor costs to form the estimates of
total costs per assessment. These total costs, stratified by size and
type of property, are then multiplied by estimated numbers of
assessments of each size and type to generate our estimates of total
annual costs. The model was tested by comparing its results to
industry-wide estimates of average price of conducting assessments
under baseline conditions, and found to agree quite well. We also used
the model to estimate total costs per year under the proposed rule and
each option; the differences between these estimated costs and the
estimated costs in the baseline constituted our estimates of the
incremental regulatory costs. EPA requests comments on our methodology
for estimating the costs and impacts of today's proposed rule,
including comments on our estimates of the incremental labor hours
necessary to conduct activities required by the proposed rule but not
currently conducted using the baseline standard (i.e., ASTM E1527-2000).
---------------------------------------------------------------------------

\3\ The distribution of abandoned properties and properties with
known owners, modeled as a range, is based on an estimate of vacant
lands in urban areas and an estimate of abandoned Superfund sites.
---------------------------------------------------------------------------

The EIA provides a qualitative assessment of the benefits of the
proposed rule. The benefits discussed are those that may be attributed
to an increased level of certainty with regard to CERCLA liability
provided to prospective purchasers of potentially contaminated
properties, including brownfields, who comply with the provisions of
the proposed rule and comply with the other statutory provisions
associated with the liability protections. Our basic premise for
associating certain benefits to the proposed rule is that we believe
that the level of certainty provided by the liability protections may
result in increased brownfields property transactions. However, it is
difficult to predict how many additional transactions may occur that
involve brownfields properties in response to the increased certainty
of the liability protections. It also is difficult to obtain data on
changes in behaviors and practices of prospective property owners in
response to the liability protections. Therefore, we made no attempt to
quantify potential benefits or compare the benefits to estimated
incremental costs.
The Agency believes that the increased level of certainty with
regard to CERCLA liability provided by complying with the proposed rule
and other statutory requirements may have the affect of increasing
property transactions involving brownfields and other contaminated and
potentially-contaminated properties and improving information about
environmental conditions at these properties. The types of indirect
benefits that we believe may result from this increase in the number of
transactions involving these types of properties include increased
numbers of cleanups, reduced use of greenfields, potential increases in
property values, and potential increases in quality of life measures
(e.g., decreases in urban blight, reductions in traffic, congestion,
and reduced pollution due to mobile source emissions). However, as
stated above, the benefits of the proposed rule are considered only
qualitatively, due to the difficulty of predicting how many additional
brownfields and contaminated property transactions may occur in
response to the increased certainty of liability protections provided
by the proposed rule, as well as the difficulty in getting data on

[[Page 52571]]

changes in behaviors and practices in response to the availability of
the liability protections. EPA is confident that the new liability
protections afforded to prospective property owners, if they comply
with the all appropriate inquiries provisions, will result in increased
benefits. EPA is not able to quantify, with any significant level of
confidence, the exact proportion of the benefits attributed only to the
availability of the liability protections and the all appropriate
inquiries regulations. For these reasons, the costs and benefits could
not be directly compared.
2. Summary of Regulatory Costs
For a given property, the costs of compliance with the proposed
rule relative to the baseline depend on whether that property would
have been assessed, in absence of the all appropriate inquiries
regulation, with an ASTM E1527-2000 assessment process or with a
simpler transaction screen (ASTM E1528). The table below shows that the
average incremental cost of the proposed rule relative to conducting an
ASTM E1527-2000 is estimated to be between $41 and $47. For the small
percentage of cases for which a transaction screen would have been
preferred to the ASTM E1527-2000 in the baseline, but which now would
require an assessment in compliance with the proposed rule, the average
incremental cost is estimated to be between $1,448 and $1,454. We
estimate that approximately 97 percent of property transactions will
bear only the incremental cost of the proposed rule relative to the
ASTM E1527-2000 process. Therefore, the weighted average incremental
cost per transaction is estimated to be fairly low, between $84 and $89.
The three regulatory options considered by the Negotiated
Rulemaking Committee, but not recommended, would result in higher
incremental costs from the base case. Option 1, which would require all
of the non-clerical tasks in the all appropriate inquiries to be
performed by an individual meeting the definition of environmental
professional, would add an average of $539 per property assessment (or
approximately $1,946 per property, assuming a transition from a
transaction screen). Option 2 would have the same interviewing
requirements as the baseline standard (i.e., ASTM E1527-2000), rather
than require that interviews be conducted with neighboring property
owners in the case of abandoned properties. EPA estimates that the
incremental cost of Option 2, or the incremental cost of incorporating
all the additional aspects of the proposed rule, over the baseline,
except for the neighboring property owners/occupants interview
requirement for abandoned properties, would be $54 per assessment (or
$1,460 per property, assuming a transition from a transaction screen).
Option 3, which would require the all appropriate inquiries to include
limited sampling and analysis, would result in average incremental
costs of either $1,439 or $2,845, depending on whether, under baseline
conditions, an ASTM E1527-2000 process or a transaction screen (ASTM
E1528) would have been used. The alternative of using the ASTM E1527-
2000 standard as the federal regulation would result in no ($0)
incremental cost per property assessment (or, on average, $1,407 per
property, assuming a transition from a transaction screen). We note,
however, that EPA has found that the ASTM E1527-2000 standard is
inconsistent with the statutory requirements for all appropriate inquiries.

Summary of Incremental Per-Assessment Cost Estimates
------------------------------------------------------------------------
Average Average
incremental cost incremental cost
relative to for transition
phase I ESA from transaction
under ASTM E1527- screen (under
2000 (97% of ASTM E1528) (3%
transactions) of transactions)
------------------------------------------------------------------------
Proposed AAI Rule................... $41-$47 $1,448-$1,454
Option 1--Environmental Professional 539 1,946
Only...............................
Option 2--Unchanged Interview 54 1,460
Requirement........................
Option 3--Limited Sampling ASTM 1,439 2,845
E1527-2000......................... 0 1,407
------------------------------------------------------------------------

The total annualized costs of the proposed rule and the four
additional options considered, in total and relative to the base case,
are shown in the exhibit below. The total costs were calculated over a
period of ten years from the start of 2004 and then annualized at a
three and seven percent discount rate. When a discount rate of three
percent is used, the estimated total annual costs for the options
considered by the Negotiated Rulemaking Committee range from just under
$700 million to over $1 billion per year, compared to the baseline
costs of $663.8 million and the costs associated with the option of
using the ASTM E1527-2000 standard of over $677 million. The proposed
regulation adds between $26 and $28 million per year, while the
incremental costs association with the options considered by the
Negotiated Rulemaking Committee range from $30 million to almost $460
million per year. The incremental cost of the alternative of using the
ASTM 1527-2000 standard is over $13 million. When a discount rate of
seven percent is used, the estimated total annual costs for the options
considered by the Negotiated Rulemaking Committee range from $710
million to over $1 billion per year, compared to the baseline costs of
$683.5 million and the costs associated with using the ASTM E1527
standard of over $697 million. The proposed regulation adds between $27
and $29 million per year, while the incremental costs association with
the options considered by the Negotiated Rulemaking Committee range
from $31 million to over $470 million per year. The incremental cost of
using the ASTM E1527-2000 standard is close to $14 million.

[[Page 52572]]

Summary of Annual Cost Estimates (in Millions), Discounted at Three Percent
---------------------------------------------------------------------------------------
Base case Proposed rule Option 1 Option 2 Option 3 ASTM E1527
---------------------------------------------------------------------------------------
Total Annual
Cost....... $663.8 $690.1-$691.9 $844.0 $693.9 $1,122.0 $677.3
Incremental
Total Annual
Cost Relative
to the Base
Case......... 0 26.3-28 180.2 30.0 458.1 13.5
-----------------------------------------------------------------------------------------

Summary of Annual Cost Estimates (in Millions), Discounted at Three Percent
----------------------------------------------------------------------------------------
Base case Proposed rule Option 1 Option 2 Option 3 ASTM E1527
----------------------------------------------------------------------------------------
Total Annual
Cost...... $683.5 $710.5-$712.3 $868.9 $714.4 $1,155.0 $697.3
Incremental
Total Annual
Cost Relative
to the Base
Case......... 0 27-28.8 185.4 30.8 471.5 13.8
------------------------------------------------------------------------------------------

As shown in the table above, the estimated total annual cost of
today's proposed rule, calculated using a discount rate of seven
percent, would be between $710.5 and $712.3 million and the estimated
total annual incremental cost would be between $27 and $29 million.
Thus, the proposed rule will have an incremental annual effect on the
economy of less than $100 million per year.

B. Paperwork Reduction Act

The information collection requirements contained in this proposed
rule have been submitted for approval to the Office of Management and
Budget under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The
Information Collection Request (ICR) document prepared by EPA has been
assigned EPA ICR Number 2144.01.
Under the PRA, EPA is required to estimate the notification,
reporting and recordkeeping costs and burdens associated with the
requirements specified in the proposed rule. This proposed rule, if it
is promulgated, will require persons wanting to claim one of the
liability protections under CERCLA to conduct some activities that go
beyond current customary and usual business practices (i.e., beyond
ASTM E1527-2000) and therefore will impose an information collection
burden under the provisions of the Paperwork Reduction Act. The
information collection activities are associated with the activities
mandated in Section 101(35)(B) of CERCLA for those persons wanting to
claim protection from CERCLA liability. None of the information
collection burdens associated with the provisions of today's rule
include requirements to submit the collected information to EPA or any
other government agency. Information collected by persons affected by
today's proposed rule may be useful to such persons if their liability
under CERCLA for the release or threatened release of a hazardous
substance is challenged in a court.
The activities associated with today's proposed rule that go beyond
current customary and usual business practices include interviews with
neighboring property owners and/or occupants in those cases where the
subject property is abandoned, documentation of all environmental
cleanup liens in the Phase I Environmental Site Assessment report,
discussion of the relationship of purchase price to value of the
property in the report, and consideration and discussion of whether
additional environmental investigation is warranted. Paperwork burdens
are estimated to be 487,676 hours annually, with a total cost of
$26,546,749 annually. The estimated average burden hours per response
is estimated to be approximately one hour (or 25 hours per response,
assuming a transition from a transaction screen). The estimated average
cost burden per response is estimated to be either $56 or $1,456,
depending on whether, under baseline conditions, an ASTM E1527-2000
process or a transaction screen (ASTM E1528) would have been used.
Under the Paperwork Reduction Act ``burden'' means the total time,
effort, or financial resources expended by persons to generate,
maintain, retain, or disclose or provide information to or for a
Federal agency. This includes the time needed to review instructions;
develop, acquire, install, and utilize technology and systems for the
purposes of collecting, validating, and verifying information,
processing and maintaining information, and disclosing and providing
information; adjust the existing ways to comply with any previously
applicable instructions and requirements; train personnel to be able to
respond to a collection of information; search data sources; complete
and review the collection of information; and transmit or otherwise
disclose the information.
An agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations in 40 CFR are listed in 40 CFR part 9.
To comment on the Agency's need for this information, the accuracy
of the provided burden estimates, and suggested methods for minimizing
respondent burden, EPA has established a public docket for this
proposed rule, which includes this ICR, under Docket ID Number SFUND-
2004-0001. Submit any comments related to the ICR for this proposed
rule to EPA and OMB. See ADDRESSES section at the beginning of this
document for where to submit comments to EPA. Send comments to OMB at
the Office of Information and Regulatory Affairs, Office of Management
and Budget, 725 17th Street, NW., Washington, DC 20503, Attention: Desk
Officer for EPA.
Since OMB is required to make a decision concerning the ICR between
30 and 60 days after August 26, 2004, a comment to OMB is best assured
of having its full effect if OMB receives it by September 27, 2004. The
final rule will respond to any OMB or public comments on the
information collection requirements contained in this proposed rule.

C. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA), as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C.
601 et. seq., generally requires an agency to prepare a regulatory
flexibility analysis of any rule subject to notice and comment
rulemaking requirements under the Administrative Procedure Act or any
other statute, unless the agency certifies that the rule will not have
a significant

[[Page 52573]]

economic impact on a substantial number of small entities. Small
entities include small businesses, small organizations, and small
governmental jurisdictions.
For the purposes of assessing the impacts of today's rule on small
entities, small entity is defined as: (1) A small business that is
defined by the Small Business Administration by category of business
using the North American Industrial Classification System (NAICS) and
codified at 13 CFR 121.201; (2) a small governmental jurisdiction that
is a government of a city, county, town, school district or special
district with a population of less than 50,000; and (3) a small
organization that is any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.
Since all non-residential property transactions could be affected
by today's proposed rule, if it is promulgated, large numbers of small
entities could be affected to some degree. However, we estimate that
the effects, on the whole, will not be significant for small entities.
We estimate that, for the majority of small entities, the average
incremental cost of today's proposed rule relative to conducting an
ASTM E1527-2000 will be between $41 and $47. When we annualize the
incremental cost of $47 per property transaction over ten years at a
seven percent discount rate, we estimate that the average annual cost
increase per establishment per property transaction will be $7. Thus,
the cost impact to small entities is estimated to not be significant. A
more detailed summary of our analysis of the potential impacts of
today's proposed rule to small entities is included in ``Economic
Impacts Analysis of the Proposed All Appropriate Inquiries
Regulation.'' This document is included in the docket for today's
proposed rule.
After considering the economic impacts of today's proposed rule on
small entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. We estimate
that, on average, 266,000 small entities may purchase commercial real
estate in any given year and therefore could potentially be impacted by
today's proposed rule. Though large numbers of small entities could be
affected to some degree, we estimated that the effects, on the whole,
would not be significant for small entities. We estimate that, for the
majority of small entities, the average incremental cost of today's
proposed rule relative to conducting an ASTM E1527-2000 will be between
$41 and $47. For the small percentage of cases for which a transaction
screen would have been preferred to the ASTM E1527-2000 in the
baseline, but which now will require an assessment in compliance with
the proposed rule, the average incremental cost of conducting an
environmental site assessment will be between $1,448 and $1,454. When
we annualize the incremental cost per property transaction over ten
years at a seven percent discount rate, we estimate that for the
majority of small entities the average annual cost increase per
establishment per property transaction will be approximately $7. For
the small percentage of entities transitioning from transaction screens
to the all appropriate inquiries requirements of the proposed rule, the
average annual cost increase per establishment per property transaction
will be $207.\4\
---------------------------------------------------------------------------

\4\ For a very small percentage of entities transitioning from
transaction screens to the all appropriate inquiries requirements,
the maximum increase per establishment per property transaction is
estimated to be approximately $2,830. When we annualize this
incremental cost per property transaction over ten years at a seven
percent discount rate, we estimate that the maximum annual cost
increase per establishment per property transaction will be $400. We
estimate that approximately one fifth of one percent of the
properties transitioning from a transaction screen to a Phase I ESA
will have an impact of this magnitude each year.
---------------------------------------------------------------------------

Although this proposed rule will not have a significant economic
impact on a substantial number of small entities, EPA nonetheless
considered impacts to small entities in the development of this rule.
As described in Section II.F. of this preamble, we developed this
proposed rule using a negotiated rulemaking committee. The interests of
small entities, including small businesses and small communities, were
represented on the Negotiated Rulemaking Committee for All Appropriate
Inquiries. Committee members representing small entities, including
representatives from small environmental services firms and
representatives from organizations representing small and rural
communities, participated in each meeting of the Committee. Today's
proposed rule includes provisions that are the direct result of input
from these representatives to the Committee.
EPA continues to be interested in the potential impacts of the
proposed rule on small entities. EPA welcomes comments on issues
related to such impacts. In addition, EPA requests comments on the
methodology employed to identify impacted small entities and estimate
the potential impacts on small entities.

D. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
must prepare a written statement, including a cost-benefit analysis,
for proposed and final rules with ``Federal mandates'' that may result
in expenditures to State, local, and tribal governments, in the
aggregate, or to the private sector, of $100 million or more in any one
year. Before promulgating an EPA rule for which a written statement is
needed, section 205 of the UMRA generally requires EPA to identify and
consider a reasonable number of regulatory alternatives and adopt the
least costly, most cost-effective, or least burdensome alternative that
achieves the objectives of the rule. The provisions of section 205 do
not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective or least burdensome alternative if the
Administrator publishes with the final rule an explanation of why that
alternative was not adopted.
Before EPA establishes any regulatory requirements that may
significantly or uniquely affect small governments, including tribal
governments, it must have developed under section 203 of the UMRA, a
small government agency plan. The plan must provide for notifying
potentially affected small governments, enabling officials to have
meaningful and timely input in the development of regulatory proposals
with significant federal intergovernmental mandates, and informing,
educating, and advising small governments on compliance with the
regulatory requirements.
Today's proposed rule contains no federal mandates (under the
regulatory provisions of Title II of the UMRA) for state, local, or
tribal governments or the private sector. The proposed rule imposes no
enforceable duty on any state, local, or tribal governments. EPA also
determined that this proposed rule contains no regulatory requirements
that might significantly or uniquely affect small governments. In
addition, as discussed above, the private sector is not expected to
incur costs of $100 million or more as a result of today's proposed
rule. Therefore, today's proposed rule is not subject to the
requirements of Sections 202 and 205 of UMRA.

E. Executive Order 13132: Federalism

Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an

[[Page 52574]]

accountable process to ensure ``meaningful and timely input by State
and local officials in the development of regulatory policies that have
federalism implications.'' ``Policies that have federalism
implications'' is defined in the Executive Order to include regulations
that have ``substantial direct effects on the states, on the
relationship between the national government and the states, or on the
distribution of power and responsibilities among the various levels of
government.''
This proposal does not have federalism implications. It will not
have substantial direct effects on the states, on the relationship
between the national government and the states, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. No state and local government
bodies will incur compliance costs as a result of today's rulemaking.
Therefore, Executive Order 13132 does not apply to this proposed rule.
Although section 6 of Executive Order 13132 does not apply to this
rule, EPA did ensure that meaningful and timely input was obtained from
state and local government officials when developing the proposed rule.
Representatives from two different state agencies participated on the
Negotiated Rulemaking Committee. In addition, representatives from
three different organizations representing local government officials
participated on the Committee. State and local government
representatives participated in the Committee negotiations at each
meeting of the Committee. Today's proposed rule includes provisions
that are the direct result of input from the state and local government
representatives to the Committee negotiations.
In the spirit of Executive Order 13132, and consistent with EPA
policy to promote communications between EPA and state and local
governments, EPA specifically solicits comment on this proposed rule
from state and local officials.

F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments

Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (59 FR 22951, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.'' This proposed rule does not
have tribal implications, as specified in Executive Order 13175.
Today's proposed rule does not significantly or uniquely affect the
communities of Indian tribal governments, nor would it impose direct
compliance costs on them. Thus, Executive Order 13175 does not apply to
this rule.
Although Executive Order 13175 does not apply to this proposed
rule, EPA did ensure that meaningful and timely input was obtained from
tribal officials when developing the proposed rule. Representatives
from two different tribal communities participated on the Negotiated
Rulemaking Committee. A tribal government representative participated
in the Committee negotiations at each meeting of the Committee. Today's
proposed rule includes provisions that are the direct result of input
from the tribal representatives to the Committee negotiations.
EPA specifically solicits additional comment on this proposed rule
from tribal officials.

G. Executive Order 13045: Protection of Children From Environmental
Risks and Safety Risks

Executive Order 13045, entitled ``Protection of Children from
Environmental Health Risks and Safety Risks (62 FR 19885, April 23,
1997) applies to any rule that: (1) Is determined to be ``economically
significant'' as defined under Executive Order 12866, and (2) concerns
an environmental health or safety risk that EPA has reason to believe
may have a disproportionate effect on children. If the regulatory
action meets both criteria, the Agency must evaluate the environmental
health or safety effects of the planned rule on children; and explain
why the planned regulation is preferable to other potentially effective
and reasonably feasible alternatives considered by the Agency.
This proposal is not subject to the Executive Order because it is
not economically significant as defined in Executive Order 12866.

H. Executive Order 13211: Actions that Significantly Affect Energy
Supply, Distribution or Use

This proposed rule is not a ``significant energy action'' as
defined in Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355,
May 22, 2001) because it is not likely to have a significantly
adverse effect on the supply, distribution, or use of energy. Further,
we have concluded that this rule is not likely to have any adverse
energy effects.

I. National Technology Transfer and Advancement Act

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 EPA to use voluntary consensus standards in its
regulatory activities, unless to do so 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. The NTTAA directs EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards.
Today's proposed rule involves technical standards. Therefore, the
requirements of section 12(d) of the National Technology Transfer and
Advancement Act of 1995 (15 U.S.C. 272) apply.
EPA proposes to use the all appropriate inquiries standard
developed with the assistance of a regulatory negotiation committee
comprised of various affected stakeholder groups. EPA considered using
the existing standard developed by ASTM as the federal standard for all
appropriate inquiries. This standard is known as the ASTM E1527-2000
standard (``Standard Practice for Environmental Site Assessment: Phase
I Environmental Site Assessment Process''). EPA estimates that the
adoption of the ASTM standard would be less costly than the Agency's
preferred option (the option developed by the Negotiated Rulemaking
Committee) or any of the other options considered by the Negotiated
Rulemaking Committee and presented in the Economic Impact Analysis. The
existing ASTM E1527-2000 standard equates to the base case in the
economic impact analysis. The adoption of this alternative would reduce
the annual paperwork burden associated with the proposed rule by
approximately 236,000 hours. However, for reasons provided below, EPA
has determined that the ASTM E1527-2000 standard is inconsistent with
applicable law.
In CERCLA Section 101(35)(B), Congress included ten specific
criteria to be used in promulgating the all appropriate inquiries rule.
The ASTM standards do not address all of the required criteria. For
example, the ASTM standards do not provide for interviews of past
owners, operators, and occupants of a facility. The statute, however,
states that the promulgated

[[Page 52575]]

standard ``shall include * * * 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.'' CERCLA Section 101(35)(B)(iii)(II).
In addition, ASTM's existing standard does not meet other statutory
requirements. CERCLA 101(35)(B)(iii)(III) mandates that EPA shall
include in the federal regulations setting standards for all
appropriate inquiries: ``Reviews of historical sources, such as chain
of title documents, aerial photographs, building department records,
and land use records, to determine the previous uses and occupancies of
the real property since the property was first developed.'' ASTM E1527-
2000 requires identification of all obvious uses of the property from
the present, back to the property's obvious first developed use or back
to 1940, whichever is earlier. Congress did not qualify the review to
obvious uses, and did not give an alternate date regarding the review.
Further, CERCLA 101(35)(B)(iii)(VI) states that: ``Visual
inspections of the facility and adjoining properties'' shall be
included in the inquiry. ASTM E1527-2000 does not mandate visual
inspections of adjoining properties. ASTM's standard requires noting
any observed past uses, but does not require the conduct of an actual
visual inspection of adjoining properties. This contrasts with the
mandatory language Congress required with respect to the intent to
conduct visual inspection of adjoining properties.
CERCLA 101(35)(B)(iii)(VIII) also states that the standards for all
appropriate inquiries shall include: ``The relationship of the purchase
price to the value of the property, if the property was not
contaminated.'' In its E1527-2000 standard, ASTM limits this
requirement to actual knowledge by the defendant of a significantly
lower price for a property when compared with comparable properties.
The statute's criteria does not limit this to actual knowledge.
Finally, CERCLA 101(35)(B)(iii)(IV) states that the standards for
all appropriate inquiries shall include: ``Searches for recorded
environmental cleanup liens against the facility that are filed under
Federal, State, or local law.'' ASTM's E1527-2000 standard describes a
much more limited scope for this search than the statute requires. We
are aware that in some instances, liens may be filed in places other
than recorded land title records and therefore a more comprehensive
standard is necessary to match the scope intended by the statute.
As a result, use of the ASTM standards would be inconsistent with
applicable law. We welcome comments on this aspect of the proposed
rulemaking. Specifically, we invite the public to comment on our
determination that the alternative of adopting the ASTM E1527-2000
standard as the federal standards for conducting all appropriate
inquiries would be inconsistent with applicable law. In addition, we
invite the public to identify other potentially applicable voluntary
consensus standards for conducting all appropriate inquiries and to
explain why EPA should use such standards in promulgating this
regulation. Prior to promulgating a final regulation setting federal
standards and practices for all appropriate inquiries, the Agency will
cite or reference applicable and compliant voluntary consensus
standards in the final regulation 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.

J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations

Executive Order 12898, ``Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations'' (February
11, 1994), is designed to address the environmental and human health
conditions of minority and low-income populations. EPA is committed to
addressing environmental justice concerns and has assumed a leadership
role in environmental justice initiatives to enhance environmental
quality for all citizens of the United States. The Agency's goals are
to ensure that no segment of the population, regardless of race, color,
national origin, income, or net worth bears disproportionately high and
adverse human health and environmental impacts as a result of EPA's
policies, programs, and activities. Our goal is to ensure that all
citizens live in clean and sustainable communities. In response to
Executive Order 12898, and to concerns voiced by many groups outside
the Agency, EPA's Office of Solid Waste and Emergency Response (OSWER)
formed an Environmental Justice Task Force to analyze the array of
environmental justice issues specific to waste programs and to develop
an overall strategy to identify and address these issues (OSWER
Directive No. 9200.3-17). EPA's brownfields program has a particular
emphasis on addressing concerns specific to environmental justices
communities. Many of the communities and neighborhoods that are most
significantly impacted by brownfields are environmental justice
communities. EPA's brownfields program targets such communities for
assessment, cleanup, and revitalization. The brownfields program has a
long history of working with environmental justice communities and
advocates through our technical assistance and grant programs. In
addition to the monies awarded to such communities in the form of
assessment and cleanup grants, the brownfields program also works with
environmental justice communities through our job training grants
program. The job training grants provide money to government entities
to facilitate the training of persons living in or near brownfields
communities to attain skills for conducting site assessments and cleanups.
Given that environmental justice communities are significantly
impacted by brownfields, and the federal standards for all appropriate
inquiries may play a primary role in encouraging the assessment and
cleanup of brownfields sites, EPA made it a priority to obtain input
from representatives of environmental justice interest groups during
the development of the proposed rulemaking. The Negotiated Rulemaking
Committee tasked with developing the all appropriate inquiries proposed
rule included three representatives from environmental justice advocacy
groups. Each representative played a significant role in the
negotiations and in the development of today's proposed rule.

List of Subjects in 40 CFR Part 312

Environmental protection, Administrative practice and procedure,
Hazardous substances, Intergovernmental relations, Reporting and
recordkeeping requirements.

Dated: August 18, 2004.
Michael O. Leavitt,
Administrator.
For reasons set out in the preamble, title 40, chapter I of the
Code of Federal Regulations is proposed to be amended by revising part
312 as follows:

PART 312--INNOCENT LANDOWNERS, STANDARDS FOR CONDUCTING ALL
APPROPRIATE INQUIRIES

Subpart A--Introduction
Sec.
312.1 Purpose, applicability, scope, and disclosure obligations.
Subpart B--Definitions and References
312.10 Definitions.

[[Page 52576]]

312.11 References.
Subpart C--Standards and Practices
312.20 All appropriate inquiries.
312.21 Results of inquiry by an environmental professional.
312.22 Additional inquiries.
312.23 Interviews with past and present owners, operators, and occupants.
312.24 Reviews of historical sources of information.
312.25 Searches for recorded environmental cleanup liens.
312.26 Reviews of Federal, State, tribal and local government records.
312.27 Visual inspections of the facility and of adjoining properties.
312.28 Specialized knowledge or experience on the part of the defendant.
312.29 The relationship of the purchase price to the value of the
property, if the property was not contaminated.
312.30 Commonly known or reasonably ascertainable information about
the property.
312.31 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.

Authority: Section 101(35)(B) of CERCLA, as amended, 42 U.S.C.
9601(35)(B).

Subpart A--Introduction

Sec. 312.1 Purpose, applicability, scope and disclosure obligations.

(a) Purpose. The purpose of this section is to provide standards
and procedures for ``all appropriate inquiries'' for the purposes of
CERCLA Section 101(35)(B).
(b) Applicability. The requirements of this part are applicable to:
(1) Persons seeking to qualify for:
(i) The innocent landowner defense pursuant to CERCLA Sections
101(35) and 107(b)(3);
(ii) The bona fide prospective purchaser liability protection
pursuant to CERCLA Sections 101(40) and 107(r);
(iii) The contiguous property owner liability protection pursuant
to CERCLA Section 107(q); and
(2) Persons conducting site characterization and assessments with
the use of a grant awarded under CERCLA Section 104(k)(2)(B).
(c) Scope. (1) Persons seeking to qualify for one of the liability
protections under paragraph (b)(1) of this section must conduct
investigations as required in this part, including an inquiry by an
environmental professional, as required under Sec. 312.21, and the
additional inquiries defined in Sec. 312.22, to identify conditions
indicative of releases or threatened releases, as defined in CERCLA
Section 101(22), of hazardous substances, as defined in CERCLA Section
101(14).
(2) Persons identified in paragraph (b)(2) of this section must
conduct investigations required in this part, including an inquiry by
an environmental professional, as required under Sec. 312.21, and the
additional inquiries defined in Sec. 312.22, to identify conditions
indicative of releases and threatened releases of hazardous substances,
as defined in CERCLA Section 101(22), and as applicable per the terms
and conditions of the grant or cooperative agreement, releases and
threatened releases of:
(i) Pollutants and contaminants, as defined in CERCLA Section 101(33);
(ii) Petroleum or petroleum products excluded from the definition
of ``hazardous substance'' as defined in CERCLA Section 101(14); and
(iii) Controlled substances, as defined in 21 U.S.C. 802.
(d) Disclosure obligations. None of the requirements of this part
limits or expands disclosure obligations under any federal, state,
tribal, or local law, including the requirements under CERCLA Sections
101(40)(C) and 107(q)(1)(A)(vii) requiring persons, including
environmental professionals, to provide all legally required notices
with respect to the discovery of releases of hazardous substances. It
is the obligation of each person, including environmental
professionals, conducting the inquiry to determine his or her
respective disclosure obligations under Federal, State, tribal, and
local law and to comply with such disclosure requirements.

Subpart B--Definitions and References

Sec. 312.10 Definitions.

(a) Terms used in this part and not defined below, but defined in
either CERCLA or 40 CFR part 300 (the National Oil and Hazardous
Substances Pollution Contingency Plan) shall have the definitions
provided in CERCLA or 40 CFR part 300.
(b) When used in this part, the following terms have the meanings
provided as follows:
Abandoned property means: property that can be presumed to be
deserted, or an intent to relinquish possession or control can be
inferred from the general disrepair or lack of activity thereon such
that a reasonable person could believe that there was an intent on the
part of the current owner to surrender rights to the property.
Adjoining properties means: any real property or properties the
border of which is (are) shared in part or in whole with that of the
subject property, or that would be shared in part or in whole with that
of the subject property but for a street, road, or other public
thoroughfare separating the properties.
Data gap means: a lack of or inability to obtain information
required by the standards and practices listed in subpart C of this
part despite good faith efforts by the environmental professional or
persons identified under Sec. 312.1(b), as appropriate, to gather such
information pursuant to Sec. Sec. 312.20(d)(1) and 312.20(d)(2).
Environmental Professional means:
(1) A person who possesses sufficient specific education, training,
and experience necessary to exercise professional judgment to develop
opinions and conclusions regarding the presence of releases or
threatened releases (per Sec. 312.1(c)) to the surface or subsurface
of a property, sufficient to meet the objectives and performance
factors in Sec. 312.20(d) and (e).
(2) Such a person must:
(i) Hold a current Professional Engineer's or Professional
Geologist's license or registration from a state, tribe, or U.S.
territory (or the Commonwealth of Puerto Rico) and have the equivalent
of three (3) years of full-time relevant experience; or
(ii) Be licensed or certified by the federal government, a state,
tribe, or U.S. territory (or the Commonwealth of Puerto Rico) to
perform environmental inquiries as defined in Sec. 312.21 and have the
equivalent of three (3) years of full-time relevant experience; or
(iii) 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
(iv) As of the date of the promulgation of this 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.
(3) An environmental professional should remain current in his or
her field through participation in continuing education or other
activities and should be able to demonstrate such efforts.
(4) The definition of environmental professional provided above
does not preempt state professional licensing or registration
requirements such as those for a professional geologist, engineer, or
site remediation professional. Before commencing work, a person should
determine the applicability of state professional licensing or
registration laws to the activities to be undertaken as part of the
inquiry identified in Sec. 312.21(b).
(5) A person who does not qualify as an environmental professional
under the foregoing definition may assist in the conduct of all
appropriate inquiries

[[Page 52577]]

in accordance with this part if such person is under the supervision or
responsible charge of a person meeting the definition of an
environmental professional provided above when conducting such activities.
Good faith means: the absence of any intention to seek an unfair
advantage or to defraud another party; an honest and sincere intention
to fulfill one's obligations in the conduct or transaction concerned.
Institutional controls means: Non-engineered instruments, such as
administrative and/or legal controls, that help to minimize the
potential for human exposure to contamination and/or protect the
integrity of a remedy.
Relevant experience, as used in the definition of environmental
professional in this section, means: 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 (per Sec. 312.1(c)) to
the subject property.

Sec. 312.11 References.

(a) When used in part 312 of this chapter, the following
publications are incorporated by reference:
(1)-(2) [Reserved]
(b) [Reserved]

Subpart C--Standards and Practices

Sec. 312.20 All appropriate inquiries.

(a) ``All appropriate inquiries'' pursuant to CERCLA section
101(35)(B) must include:
(1) An inquiry by an environmental professional (as defined in
Sec. 312.10), as provided in Sec. 312.21;
(2) The collection of information pursuant to Sec. 312.22 by
persons identified under Sec. 312.1(b); and
(3) Searches for recorded environmental cleanup liens, as required
in Sec. 312.25.
(b) All appropriate inquiries may include the results of and
information contained in an inquiry previously conducted by, or on the
behalf of, persons identified under Sec. 312.1(b) and who are
responsible for the inquiries for the subject property, provided:
(1) Such information was collected during the conduct of all
appropriate inquiries in compliance with the requirements of this part
(40 CFR Part 312) and with CERCLA Sections 101(35)(B), 101(40)(B) and
107(q)(A)(viii);
(2) Such information was collected or updated within one year prior
to the date of acquisition of the subject property;
(3) Not withstanding paragraph (b)(2) of this section, the
following components of the inquiries were conducted or updated within
a 180 days of and prior to the date of purchase of the subject property:
(i) Interviews with past and present owners, operators, and
occupants (see Sec. 312.23);
(ii) Searches for recorded environmental cleanup liens (see Sec.
312.25);
(iii) Reviews of federal, tribal, state, and local government
records (see Sec. 312.26);
(iv) Visual inspections of the facility and of adjoining properties
(see Sec. 312.27); and
(v) The declaration by the environmental professional (see Sec.
312.21(d)).
(4) Previously collected information is updated to include relevant
changes in the conditions of the property and specialized knowledge, as
outlined in Sec. 312.28, of the persons conducting the all appropriate
inquiries for the subject property, including persons identified in
Sec. 312.1(b) and the environmental professional, defined in Sec. 312.10.
(c) All appropriate inquiries can include the results of report(s)
specified in Sec. 312.21(c), that have been prepared by or for other
persons, provided that:
(1) The report(s) meets the objectives and performance factors of
this regulation, as specified in paragraphs (d) and (e) of this
section; and
(2) The person specified in Sec. 312.1(b) and seeking to use the
previously collected information reviews the information and conducts
the additional inquiries pursuant to Sec. Sec. 312.28, 312.29 and
312.30 and the all appropriate inquiries are updated per paragraph
(b)(3) of this section, as necessary.
(d) Objectives. The standards and practices set forth in this part
for All Appropriate Inquiries are intended to result in the
identification of conditions indicative of releases and threatened
releases of hazardous substances on, at, in, or to the subject property.
(1) In performing the all appropriate inquiries, as defined in this
section and provided in the standards and practices set forth this
subpart, the persons identified under Sec. 312.1(b)(1) and the
environmental professional, as defined in Sec. 312.10, must seek to
identify through the conduct of the standards and practices set forth
in this subpart, the following types of information about the subject
property:
(i) Current and past property uses and occupancies;
(ii) Current and past uses of hazardous substances;
(iii) Waste management and disposal activities that could have
caused releases or threatened releases of hazardous substances;
(iv) Current and past corrective actions and response activities
undertaken to address past and on-going releases of hazardous substances;
(v) Engineering controls;
(vi) Institutional controls; and
(vii) Properties adjoining or located nearby the subject property
that have environmental conditions that could have resulted in
conditions indicative of releases or threatened releases of hazardous
substances to the subject property.
(2) In the case of persons identified in Sec. 312.1(b)(2), the
standards and practices for All Appropriate Inquiries set forth in this
part are intended to result in the identification of conditions
indicative of releases and threatened releases of hazardous substances,
pollutants, contaminants, petroleum and petroleum products, and
controlled substances (as defined in 21 U.S.C. 802) on, at, in, or to
the subject property. In performing the all appropriate inquiries, as
defined in this section and provided in the standards and practices set
forth in this subpart, the persons identified under Sec. 312.1(b) and
the environmental professional, as defined in Sec. 312.10, must seek
to identify through the conduct of the standards and practices set
forth in this subpart, the following types of information about the
subject property:
(i) Current and past property uses and occupancies;
(ii) Current and past uses of hazardous substances, pollutants,
contaminants, petroleum and petroleum products, and controlled
substances (as defined in 21 U.S.C. 802);
(iii) Waste management and disposal activities;
(iv) Current and past corrective actions and response activities
undertaken to address past and on-going releases of hazardous
substances, pollutants, contaminants, petroleum and petroleum products,
and controlled substances (as defined in 21 U.S.C. 802);
(v) Engineering controls;
(vi) Institutional controls; and
(vii) Properties adjoining or located nearby the subject property
that have environmental conditions that could have resulted in
conditions indicative of releases or threatened releases of hazardous
substances, pollutants, contaminants, petroleum and petroleum products,
and controlled substances (as

[[Page 52578]]

defined in 21 U.S.C. 802) to the subject property.
(e) Performance factors. In performing each of the standards and
practices set forth in this subpart and to meet the objectives stated
in paragraph (d) of this section, the persons identified under Sec.
312.1(b) or the environmental professional as defined in Sec. 312.10
(as appropriate to the particular standard and practice) must seek to:
(1) Gather the information that is required for each standard and
practice listed in this subpart that is publicly available, obtainable
from its source within reasonable time and cost constraints, and which
can practicably be reviewed; and
(2) Review and evaluate the thoroughness and reliability of the
information gathered in complying with each standard and practice
listed in this subpart taking into account information gathered in the
course of complying with the other standards and practices of this subpart.
(f) To the extent there are data gaps (as defined in Sec. 312.10)
in the information developed as part of the inquiries per paragraph (e)
of this section that affect the ability of persons (including the
environmental professional) conducting the all appropriate inquiries to
identify conditions indicative of releases or threatened releases (such
as in the historical record of property uses) in each area of inquiry
under each standard and practice such persons should identify such data
gaps, identify the sources of information consulted to address such
data gaps, and comment upon the significance of such data gaps with
regard to the ability to identify conditions indicative of releases or
threatened releases of hazardous substances [and in the case of persons
identified in Sec. 312.1(b)(2), hazardous substances, pollutants,
contaminants, petroleum and petroleum products, and controlled
substances (as defined in 21 U.S.C. 802)]
on, at, in, or to the subject
property. Sampling and analysis may be conducted to develop information
to address data gaps.
(g) Releases and threatened releases identified as part of the all
appropriate inquiries should be noted in the report of the inquiries.
These standards and practices however are not intended to require the
identification of quantities or amounts, either individually or in the
aggregate, of hazardous substances pollutants, contaminants, petroleum
and petroleum products, and controlled substances (as defined in 21
U.S.C. 802) that because of said quantities and amounts, generally
would not pose a threat to human health or the environment.

Sec. 312.21 Results of inquiry by an environmental professional.

(a) Persons identified under Sec. 312.1(b) must undertake an
inquiry, as defined in paragraph (b) of this section, by an
environmental professional, or conducted under the supervision or
responsible charge of, an environmental professional, as defined in
Sec. 312.10. Such inquiry is hereafter referred to as ``the inquiry of
the environmental professional.''
(b) The inquiry of the environmental professional must include the
requirements set forth in Sec. Sec. 312.23 (interviews with past and
present owners * * *), 312.24 (reviews of historical sources * * *),
312.26 (reviews of government records), 312.27 (visual inspections),
312.30 (commonly known or reasonably attainable information), and
312.31 (degree of obviousness of the presence * * * and the ability to
detect the contamination * * *). In addition, the inquiry should take
into account information provided to the environmental professional as
a result of the additional inquiries conducted by persons identified in
Sec. 312.1(b) and in accordance with the requirements of Sec. 312.22.
(c) The results of the inquiry by an environmental professional
must be documented in a written report that, at a minimum, includes the
following:
(1) An opinion as to whether the inquiry has identified conditions
indicative of releases or threatened releases of hazardous substances
[and in the case of inquiries conducted for persons identified in Sec.
312.1(b)(2) conditions indicative of releases and threatened releases
of pollutants, contaminants, petroleum and petroleum products, and
controlled substances (as defined in 21 U.S.C. 802)] on, at, in, or to
the subject property;
(2) An identification of data gaps (as defined in Sec. 312.10) in
the information developed as part of the inquiry that affect the
ability of the environmental professional to identify conditions
indicative of releases or threatened releases of hazardous substances
[and in the case of inquiries conducted for persons identified in Sec.
312.1(b)(2) conditions indicative of releases and threatened releases
of pollutants, contaminants, petroleum and petroleum products, and
controlled substances (as defined in 21 U.S.C. 802)] on, at, in, or to
the subject property and comments regarding the significance of such
data gaps on the environmental professional's ability to provide an
opinion as to whether the inquiry has identified conditions indicative
of releases or threatened releases on, at, in, or to the subject
property. If there are data gaps such that the environmental
professional cannot reach an opinion regarding the identification of
conditions indicative of releases and threatened releases, such data
gaps must be noted in the environmental professional's opinion per
paragraph (c)(1) of this section; and
(3) The qualifications of the environmental professional(s).
(d) The environmental professional must place the following
statement in the written document identified in paragraph (c) of this
section and sign the document:
[I, We] declare that, to the best of [my, our] professional knowledge
and belief, [I, we] meet the definition of Environmental Professional as
defined in Sec. 312.10 of this part.
[I, We] have the specific qualifications based on education,
training, and experience to assess a property of the nature,
history, and setting of the subject property. [I, We] have developed
and performed the all appropriate inquiries in conformance with the
standards and practices set forth in 40 CFR part 312.

Sec. 312.22 Additional inquiries.

(a) Persons identified under Sec. 312.1(b) must provide the
following information to the environmental professional responsible for
conducting the activities listed in Sec. 312.21:
(1) As required by Sec. 312.25 and if not otherwise obtained by
the environmental professional, environmental cleanup liens against the
subject property that are filed or recorded under Federal, tribal,
State, or local law;
(2) As required by Sec. 312.28, specialized knowledge or
experience of the person identified in Sec. 312.1(b);
(3) As required by Sec. 312.29, the relationship of the purchase
price to the fair market value of the subject property, if the property
was not contaminated; and
(4) As required by Sec. 312.30, commonly known or reasonably
ascertainable information about the subject property.
(b) [Reserved].

Sec. 312.23 Interviews with past and present owners, operators, and
occupants.

(a) Interviews with past and present owners, operators, and
occupants of the subject property must be conducted for the purposes of
achieving the objectives and performance factors of Sec. 312.20(d) and
(e).
(b) The inquiry of the environmental professional must include
interviewing the current owner and occupant of the

[[Page 52579]]

subject property. If the property has multiple occupants, the inquiry
of the environmental professional shall include interviewing major
occupants, as well as those occupants likely to use, store, treat,
handle or dispose of hazardous substances [and in the case of inquiries
conducted for persons identified in Sec. 312.1(b)(2) pollutants,
contaminants, petroleum and petroleum products, and controlled
substances (as defined in 21 U.S.C. 802)], or those who have likely
done so in the past.
(c) The inquiry of the environmental professional also should
include, to the extent necessary to achieve the objectives and
performance factors of Sec. 312.20(d) and (e), interviewing one or
more of the following persons:
(1) Current and past facility managers with relevant knowledge of
uses and physical characteristics of the property;
(2) Past owners, occupants, or operators of the subject property;
or
(3) Employees of current and past occupants of the subject property.
(d) In the case of inquiries conducted at ``abandoned properties,''
as defined in Sec. 312.10, where there is evidence of potential
unauthorized uses of the subject property or evidence of uncontrolled
access to the subject property, the environmental professional's
inquiry must include interviewing one or more (as necessary) owners or
occupants of neighboring or nearby properties from which it appears
possible to have observed uses of, or releases at, such abandoned
properties for the purpose of gathering information necessary to
achieve the objectives and performance factors of Sec. 312.20(d) and (e).

Sec. 312.24 Reviews of historical sources of information.

(a) Historical documents and records must be reviewed for the
purposes of achieving the objectives and performance factors of Sec.
312.20(d) and (e). Historical documents and records may include, but
are not limited to, aerial photographs, fire insurance maps, building
department records, chain of title documents, and land use records.
(b) Historical documents and records reviewed must cover a period
of time as far back in the history of the subject property as it can be
shown that the property contained structures or from the time the
property was first used for residential, agricultural, commercial,
industrial, or governmental purposes. For the purpose of achieving the
objectives and performance factors of Sec. 312.20(d) and (e), the
environmental professional may exercise professional judgment in
context of the facts available at the time of the inquiry as to how far
back in time it is necessary to search historical records.

Sec. 312.25 Searches for recorded environmental cleanup liens.

(a) All appropriate inquiries must include a search for the
existence of environmental cleanup liens against the subject property
that are filed or recorded under federal, tribal, state, or local law.
(b) All information collected regarding the existence of such
environmental cleanup liens associated with the subject property must
be provided to the environmental professional.

Sec. 312.26 Reviews of Federal, State, tribal and local government
records.

(a) Federal, tribal, State, and local government records or data
bases of government records of the subject property and adjoining
properties must be reviewed for the purposes of achieving the
objectives and performance factors of Sec. 312.20(d) and (e).
(b) With regard to the subject property, the review of federal,
tribal, and state government records or data bases of such government
records and local government records and data bases of such records
should include:
(1) Records of reported releases or threatened releases, including
site investigation reports for the subject property;
(2) Records of activities, conditions, or incidents likely to cause
or contribute to releases or threatened releases as defined in Sec.
312.1(c), including landfill and other disposal unit location records
and permits, storage tank records and permits, hazardous waste handler
and generator records and permits, federal, tribal and state government
listings of sites identified as priority cleanup sites, and spill
reporting records;
(3) CERCLIS records;
(4) Public health records;
(5) Emergency Response Notification System records;
(6) Registries or publicly available lists of engineering controls;
and
(7) Registries or publicly available lists of institutional
controls, including environmental land use restrictions, applicable to
the subject property.
(c) With regard to nearby or adjoining properties, the review of
federal, tribal, state, and local government records or databases of
government records should include the identification of the following:
(1) Properties for which there are government records of reported
releases or threatened releases. Such records or databases containing
such records and the associated distances from the subject property for
which such information should be searched include the following:
(i) Records of NPL sites or tribal- and state-equivalent sites (one
mile);
(ii) RCRA facilities subject to corrective action (one mile);
(iii) Records of federally-registered, or state-permitted or
registered, hazardous waste sites identified for investigation or
remediation, such as sites enrolled in state and tribal voluntary
cleanup programs and tribal- and state-listed brownfields sites (one-
half mile);
(iv) Records of leaking underground storage tanks (one-half mile);
and
(2) Properties that previously were identified or regulated by a
government entity due to environmental concerns at the property. Such
records or databases containing such records and the associated
distances from the subject property for which such information should
be searched include the following:
(i) Records of delisted NPL sites (one-half mile);
(ii) Registries or publicly available lists of engineering controls
(one-half mile);
(iii) Registries or publicly available lists of institutional
controls (one-half mile); and
(iv) Records of former CERCLIS sites with no further remedial
action notices (one-half mile).
(3) Properties for which there are records of federally-permitted,
tribal-permitted or registered, or state-permitted or registered waste
management activities. Such records or databases that may contain such
records include the following:
(i) Records of RCRA small quantity and large quantity generators
(adjoining properties)
(ii) Records of federally-permitted, tribal-permitted, or state-
permitted (or registered) landfills and solid waste management
facilities (one-half mile); and
(iii) Records of registered storage tanks (adjoining property).
(4) A review of additional government records with regard to sites
identified under paragraphs (c)(1) through (c)(3) of this section may
be necessary in the judgment of the environmental professional for the
purpose of achieving the objectives and performance factors of Sec.
312.20(d) and (e).
(d) The search distance from the subject property boundary for
reviewing government records or databases of government records listed
in paragraph (c) of this section may be modified based upon the
professional judgment of

[[Page 52580]]

the environmental professional. The rationale for such modifications
must be documented by the environmental professional. The environmental
professional may consider one or more of the following factors in
determining an alternate appropriate search distance:
(1) The nature and extent of a release;
(2) Geologic, hydrogeologic, or topographic conditions of the
subject property and surrounding environment;
(3) Land use or development densities;
(4) The property type;
(5) Existing or past uses of surrounding properties;
(6) Potential migration pathways (e.g., groundwater flow direction,
prevalent wind direction); or
(7) Other relevant factors.

Sec. 312.27 Visual inspections of the facility and of adjoining
properties.

(a) For the purpose of achieving the objectives and performance
factors of Sec. 312.20(d) and (e), the inquiry of the environmental
professional must include:
(1) A visual on-site inspection of the subject property and
facilities and improvements on the subject property, including a visual
inspection of the areas where hazardous substances may be or may have
been used, stored, treated, handled, or disposed. Physical limitations
to the visual inspection must be noted.
(2) A visual inspection of adjoining properties, from the subject
property line, public rights-of-way, or other vantage point (e.g.,
aerial photography), including a visual inspection of areas where
hazardous substances may be or may have been stored, treated, handled
or disposed. Physical limitations to the inspection of adjacent
properties must be noted.
(b) Persons conducting site characterization and assessments using
a grant awarded under CERCLA section 104(k)(2)(B) must include in the
inquiries referenced in Sec. 312.27(a) visual inspections of areas
where hazardous substances, and may include, as applicable per the
terms and conditions of the grant or cooperative agreement, pollutants
and contaminants, petroleum and petroleum products, and controlled
substances as defined in 21 U.S.C. 802 may be or may have been used,
stored, treated, handled or disposed at the subject property and
adjoining properties.
(c) Except as noted in this subsection, a visual on-site inspection
of the subject property must be conducted. In the unusual circumstance
where an on-site visual inspection of the subject property cannot be
performed because of physical limitations, remote and inaccessible
location, or other inability to obtain access to the property, provided
good faith (as defined in Sec. 312.10) efforts have been taken to
obtain such access, an on-site inspection will not be required. (The
mere refusal of a voluntary seller to provide access to the subject
property does not constitute an unusual circumstance.) In such unusual
circumstances, the inquiry of the environmental professional must include:
(1) Visually inspecting the subject property via another method
(such as aerial imagery for large properties), or visually inspecting
the subject property from the nearest accessible vantage point (such as
the property line or public road for small properties);
(2) Documentation of efforts undertaken to obtain access and an
explanation of why such efforts were unsuccessful; and
(3) Documentation of other sources of information regarding
releases or threatened releases at the subject property that were
consulted in accordance with Sec. 312.20(e). Such documentation should
include comments by the environmental professional on the significance
of the failure to conduct a visual on-site inspection of the subject
property with regard to the ability to identify conditions indicative
of releases or threatened releases on, at, in, or to the subject
property, if any.

Sec. 312.28 Specialized knowledge or experience on the part of the
defendant.

(a) Persons to whom this part is applicable per Sec. 312.1(b) must
take into account, their specialized knowledge of the subject property,
the area surrounding the subject property, the conditions of adjoining
properties, and any other experience relevant to the inquiry, for the
purpose of identifying conditions indicative of releases or threatened
releases at the subject property, as defined in Sec. 312.1(c).
(b) All appropriate inquiries, as outlined in Sec. 312.20, are not
complete unless the results of the inquiries take into account the
relevant and applicable specialized knowledge and experience of the
persons responsible for undertaking the inquiry (as described in Sec.
312.1(b)).

Sec. 312.29 The relationship of the purchase price to the value of
the property, if the property was not contaminated.

(a) Persons to whom this part is applicable per Sec. 312.1(b) must
consider whether the purchase price of the subject property reasonably
reflects the fair market value of the property, if the property were
not contaminated.
(b) Persons who conclude that the purchase price of the subject
property does not reasonably reflect the fair market value of that
property, if the property were not contaminated, should consider
whether or not the differential in purchase price and fair market value
is due to the presence of releases or threatened releases of hazardous
substances.
(c) Persons conducting site characterization and assessments with
the use of a grant awarded under CERCLA section 104(k)(2)(B) and who
know that the purchase price of the subject property does not
reasonably reflect the fair market value of that property, if the
property were not contaminated, should consider whether or not the
differential in purchase price and fair market value is due to the
presence of releases or threatened releases of hazardous substances,
pollutants, contaminants, petroleum and petroleum products, and/or
controlled substances as defined in 21 U.S.C. 802.

Sec. 312.30 Commonly known or reasonably ascertainable information
about the property.

(a) Throughout the inquiries, persons to whom this part is
applicable per Sec. 312.1(b) and environmental professionals
conducting the inquiry must take into account commonly known or
reasonably ascertainable information within the local community about
the subject property and consider such information when seeking to
identify conditions indicative of releases or threatened releases, as
set forth in Sec. 312.1(c), at the subject property.
(b) Commonly known information may include information obtained by
the person to whom this part applies per Sec. 312.1(b) or by the
environmental professional about releases or threatened releases at the
subject property that is incidental to the information obtained during
the inquiry of the environmental professional.
(c) To the extent necessary to achieve the objectives and
performance factors of Sec. 312.20(d) and (e), the environmental
professional should gather information from varied sources whose input
either individually or taken together may provide commonly known or
reasonably ascertainable information about the subject property; the
environmental professional may refer to one or more of the following
sources of information:
(1) Current owners or occupants of neighboring properties or
properties adjacent to the subject property;
(2) Local and state government officials who may have knowledge of,
or

[[Page 52581]]

information related to, the subject property;
(3) Others with knowledge of the subject property; and
(4) Other sources of information (e.g., newspapers, websites,
community organizations, local libraries and historical societies).

Sec. 312.31 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.

(a) Persons to whom this part is applicable per Sec. 312.1(b) and
environmental professionals conducting an inquiry of a property on
behalf of such persons must take into account the information collected
under Sec. 312.23 through 312.30 in considering the degree of
obviousness of the presence of releases or threatened releases at the
subject property.
(b) Persons to whom this part is applicable per Sec. 312.1(b) and
environmental professionals conducting an inquiry of a property on
behalf of such persons must take into account the information collected
under Sec. 312.23 through 312.30 in considering the ability to detect
contamination by appropriate investigation. The inquiry of the
environmental professional should include an opinion regarding
additional appropriate investigation, if any.

[FR Doc. 04-19429 Filed 8-25-04; 8:45 am]
BILLING CODE 6560-50-P

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