On November 1st, ASTM International approved its revised standard for Phase I Environmental Site Assessments, the first such update since November 2013.
Phase I Environmental Site Assessments help identify potential environmental issues that may need to be further assessed and to efficiently satisfy the Environmental Protection Agency's All Appropriate Inquiries ("AAI") rule set forth at 40 CFR 312. Satisfaction of the AAI rule avails potential purchasers of real property of certain liability protections available under the Comprehensive Environmental Response, Compensation, and Control Act ("CERCLA") – specifically, Bona Fide Prospective Purchaser protection.
Although the new standard does not break significant new ground, there are several changes with the potential to have an impact on future Phase I findings. The following are the key changes to the Phase I standard:
- Important clarifications to the terms "Recognized
Environmental Condition" ("REC"); "Controlled
Recognized Environmental Condition" ("CREC"); and
"Historical Recognized Environmental Condition
("HREC").
- The term REC has been revised to clarify that the condition in question must be present or threatened at the property that is the subject of the Phase I Environmental Site Assessment. An offsite issue without the potential to impact the site, therefore, cannot be a REC.
- The terms CREC and HREC has been revised to include a discussion of when a condition "has been addressed to the satisfaction of the applicable regulatory authority..." This clarification will be immediately impactful in jurisdictions where agencies do not issue no further action determinations.
- In an effort to reduce misclassifications of RECs, CRECs, or HRECs, the revisions include a new appendix that provides a helpful flow chart that provides a logical decision-making process in evaluating whether a condition is a REC, CREC, or HREC, as well as ten plus example fact patterns to guide the environmental professional.
- The revisions include formal definitions for the terms "Property Use Limitation" and "Significant data gap," terms of art that previously lacked definitions.
- The historical records review section has been revised to reflect common industry practice. The revisions include language that clarifies identification of the subject and adjoining properties, as well as use of those properties.
- The site reconnaissance requirements have been revised to be more streamlined and efficient.
- The revisions also made changes to the required contents of the Phase I Environmental Assessment report, including the requirement that any REC, CREC or significant data gap conclusion should be accompanied by the environmental professional's rationale for such a characterization.
The revised standard is not yet incorporated into EPA's All Appropriate Inquiries rule. Given its past practices, EPA is likely to formally incorporate the revised standard sometime in 2022.
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