August 2021 - Alert - New ASTM Phase I ESA Guidelines Expected this Year!

New American Society for Testing and Materials (ASTM) standards for conducting Phase I Environmental Site Assessments (ASTM E1527) are on the way! Phase I Environmental Site Assessments (commonly referred to as Phase Is or ESAs), when performed in accordance with ASTM standards, can provide protection from environmental liabilities to landowners and prospective purchasers (the “innocent landowner” defense) under federal law, specifically the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Landowners and prospective purchasers should be on the lookout for the updated standard (E1527-21) later this year when it is expected to be published pursuant to review by the U.S. Environmental Protection Agency (EPA). The EPA will then provide verification that the revised standard still meets the requirements for conducting “All Appropriate Inquiry” (AAI), which is the EPA regulation (40 CFR Part 312) that enforces evaluating a property's environmental conditions and assessing potential liability for any contamination in order to assert the innocent landowner defense. Performing a Phase I ESA in accordance with the current ASTM standard satisfies the requirements of AAI.

Background

ASTM published the first standard for Phase I Environmental Site Assessments in 1993. Subsequent revisions were published in 1994, 1997, 2000, 2005, and 2013, which is the current standard (E1527-13). A Phase I ESA must be performed in strict accordance with the ASTM Standard to qualify for the innocent landowner, contiguous property owner, or bona fide prospective purchaser limitations on liability under federal regulations. While Phase I ESAs can provide protection at the federal level, it is important to note that some states require additional actions for protection under state law (more on that later).

What You Need to Know

The revisions include both minor, administrative-type changes, as well as larger, more substantive changes. 

Substantive changes include:

• The Phase I ESA must comment specifically on the relevance or significance of each data gap.

• Any new exposure pathways (e.g., vapor intrusion) must be identified and considered for any Historic Recognized Environmental Condition (HREC).

• Ensuring that current onsite conditions satisfy the current regulatory risk-based closure standard for any Controlled Recognized Environmental Condition (CREC) identified onsite.

• Considering a “shelf-life” for title and lien records when included.

 Minor changes include:

• Refining or clarifying various definitions.

• Improving the Physical Setting section (to add site-specific sources when identified).

• Updating or renaming certain state and federal database to review, where applicable (but leaving search distances unchanged).

• Requiring that reports shall include photographs from the site inspection.

• Although they would be included under “non-scope considerations”, the new standard adds the consideration of polychlorinated biphenyls (PCBs) in building materials that are part of the building structure should be discussed with clients who are considering renovation/demolition.

Clarification of Site vs. Subject Property vs. Property. The committee came to the consensus that Subject Property is the appropriate way to reference the target property of the assessment.

Be Aware of State-Specific Requirements!

As mentioned earlier, Phase I ESAs provide liability protection to landowners and prospective purchasers under federal law, specifically the CERCLA. However, states can have their own innocent purchaser/ innocent landowner defense. 

For example, New Jersey requires a property owner to demonstrate that, at the time they acquired the property, they did not know and had no reason to know that any hazardous substance had been discharged at the property. This can only be achieved by performing a Preliminary Assessment, as defined by the New Jersey Department of Environmental Protection (NJDEP), prior to purchase of the property. A Preliminary Assessment is similar to a Phase I ESA in many ways but includes additional requirements and is prepared in a very specific format. 

Maryland law recognizes two types of persons with respect to landowner liability: Responsible Person and Inculpable Person. A Responsible Person means a person who is the owner or operator of a site contaminated by a controlled hazardous substance (i.e., hazardous waste). An Inculpable Person means a person who joins the Maryland Department of the Environment’s (MDE’s) Voluntary Cleanup Program and had no prior or current ownership interest in an eligible property and has not caused or contributed to contamination at the eligible property. One of the main benefits of the Voluntary Cleanup Program is that a prospective purchaser or investor can be considered an Inculpable Person if they demonstrate to MDE that they met all applicable requirements of ASTM/AAI, prior to purchasing the property. Other benefits include a streamlined process for site remediation and access to grants and loans administered through the MDE’s Brownfields Redevelopment Initiative Program (BRIP).

Make Sure You Are Protected!

When you or your client require a Phase I ESA or Preliminary Assessment, make sure you choose a consultant with knowledge and experience. To ensure you are protected from historic environmental liabilities associated with a property, it is important that you obtain a Phase I ESA that adheres to current standards and meet any additional state-specific requirements that may be applicable.

If you have any questions on this article or would like more information related to ASTM or state-specific requirements, please contact Chris Rua, CHMM, CEA, at chrisr@phe.com. 

Mr. Rua is a Senior Scientist with over 20 years of experience in the environmental consulting industry, all of which have been with PHE. Over his career, he has successfully delivered hundreds of due diligence projects such as Phase I ESAs and Preliminary Assessments for private-sector clients across the country. Mr. Rua’s past clients include manufacturers, developers, financial institutions, and other commercial entities, and he has assessed a range of site types including industrial facilities, gas stations, dry cleaners, warehouse complexes, retail developments, agricultural properties, and others. Mr. Rua is a Certified Environmental Auditor and Certified Hazardous Materials Manager.