ODOT recognizes the challenge EPA faces in drafting the rule in a way that sufficiently covers the interests of the regulated community and is consistent with the goals of CERCLA. The proposed rule, however, fails to address one major area of concern for ODOT. Specifically, the rule could result in inconsistent application of CERCLA exemptions to liability for states conducting property acquisitions. As written, it fails to adequately take into account differing interpretations and legal standards for a state's exercise of eminent domain authority which, in turn, could lead to inconsistent and unfair application of the protections intended to be afforded by the conduct of all appropriate inquiries. ODOT's comments address this one specific, but crucial, aspect of EPA's proposal.

POTENTIAL INCONSISTENCY IN APPLICATION OF THE PROPOSED RULE TO STATES ASSERTING INNOCENT LANDOWNER DEFENSE In 1986, SARA created the " innocent landowner" defense to CERCLA liability, by which persons are not subject to CERCLA liability if they demonstrate they did not have " reason to know," prior to purchasing property, that such property had been the site of the disposal or release of hazardous waste. In order to claim protection under SARA, prior to, or at the time of 779 purchase, a person must have undertaken " all appropriate inquiries" into the previous ownership and usage of the property. The rule currently under consideration would apply to any and all potentially responsible parties hoping to avail themselves of the innocent landowner defense.

Under SARA, 42 U. S. C. § 9607( b), a property owner is immune to " owner" liability when it can prove, inter alia, it was not in a " contractual relationship" with the person who caused the contamination. This section reads in part:

There shall be no liability under subsection ( a) of this section for a person otherwise liable who can establish by a preponderance of the evidence that the release or threat of release of a hazardous substance and the damages resulting there from were caused solely by...

( 3) an act or omission of a third party other than an employee or agent of the defendant, or than one whose act or omission occurs in connection with a contractual relationship, existing directly or indirectly, with the defendant...

The definition of " contractual relationship" excludes situations where ( 1) the property at issue is acquired after the disposal or placement of the hazardous substance on the property, AND ( 2) the defendant can prove that he did not have actual/ constructive knowledge of a release/ threat OR the defendant is a governmental entity which acquired property by eminent domain [ Footnote: The definition of " contractual relationship" actually sets out three mitigating circumstances that cut against such a finding. A defendant must establish that at least one of the three circumstances set out in the definition are met in order to qualify under the SARA exemption. The mitigating circumstances set out in 42 U. S. C. § 9601( 35)( A)( i)( iii) are as follows:( i) At the time the defendant acquired the facility the defendant did not know and had no reason to know that any hazardous substance which is the subject of the release or threatened release was disposed of on, in, or at the facility. ( ii) The defendant is a government entity which acquired the facility by escheat, or through any other involuntary transfer or acquisition, or through the exercise of eminent domain authority by purchase or condemnation. ( iii) The defendant acquired the facility by inheritance or bequest.].

Thus, the duty to conduct all appropriate inquiries is triggered only when a landowner proceeds under the knowledge theory set out at 42 U. S. C. § 9601( A)( 35)( i). The statute clarifies that a governmental entity taking property for public purposes need not conduct all appropriate inquiries because the definition of contractual relationship referenced in Section 9601( 35)( A)( ii) expressly excludes situations where the government entity exercises its eminent domain authority.

A problem arises in the application of the proposed rule because of competing interpretations of the term " eminent domain authority." In particular, a state interpreting the term to include any land acquisitions made on the threat of a state's eminent domain power, would be unaffected by the proposed rule. However, a state interpreting the term to include only situations where the state acquires property by eminent domain through adjudication, would need to proceed under Section 9601( 35)( A)( i) with respect to voluntary property acquisitions and conduct all appropriate inquiries in order to avail themselves of the innocent landowner defense. 780 Some courts ( notably in the Ninth Circuit) read the term " exercise of eminent domain authority" broadly to include property sold under the threat of the government's eminent domain power [ Footnote: In Emeryville v. Elementis Pigments Inc., No. C 99 03719 ( N. D. Cal. 2001), the court held that the " exercise of eminent domain" included land transfers where eminent domain actions were threatened and not filed..]. By contrast, the state of Ohio interprets the term strictly. O. R. C. 163.04 and 163.05 proscribe the method by which an agency in the state of Ohio may exercise its eminent domain power. Section 163.04 states, " appropriations shall be made only after the agency is unable to agree, for any reason, with the owner..."

In City of Toledo v. Beazer Materials & Services, 923 F. Supp. 1013 ( N. D. Ohio 1996), the court interpreted this language to address the situation where a governmental entity coerced a private land owner into selling its land under the threat of eminent domain. The court held that since the parties were able to reach an agreement on the sale of the property, then the state had not " exercised" its eminent domain authority. The court concluded that " only if the parties had been unable to agree would the City have been empowered to exercise its power of eminent domain under O. R. C. Sec. 163.05[ Footnote: Section 163.05 reads: An agency which has met the requirements of section 163.04 of the Revised Code, may commence proceedings in a proper court by filing a petition for appropriation of each parcel or contiguous parcels in a single common ownership, or interest or right therein.]." The court reasoned that since it was unnecessary for the City to takes steps to institute eminent domain proceedings in court, then it could not be held that the property was acquired through the City's " exercise of eminent domain authority." 923 F. Supp. at 1020.

The Beazer court's approach has been followed in other jurisdictions. In City of Wichita v. Aero Holdings, Inc., 177 F. Supp. 2d 1153 ( D. Kan. 2000), a municipality sought to escape CERCLA liability by arguing that it had acquired title to contaminated property involuntarily by virtue of its function as sovereign [ Footnote: CERCLA § 101( 20)( D), 42 U. S. C. § 9601( 20)( D), excludes from the definition of " owner or operator" any " unit of . . . local government which acquired ownership or control involuntarily through bankruptcy, tax delinquency, abandonment, or other circumstances in which the government involuntarily acquires title by virtue of its function as sovereign." The municipality argued that it was excluded from this definition and thereby not liable as a PRP under Section 107( a)( 1).]. Citing Beazer, the court held that while the exercise of eminent domain was a function reserved to the sovereign, a municipality could not place itself beyond CERCLA's reach by " merely threatening the exercise of eminent domain." As in Beazer, the court commented that the municipality must actually institute court proceedings in order to exercise its eminent domain authority. 177 F. Supp. at 1169.

By way of contrast, we understand that the Washington Department of Transportation (" WDOT") subscribes to the notion that transportation departments generally do not need to establish innocent landowner defenses to CERCLA liability because they can avail themselves to a defense under eminent domain for all their takings, whether forced or voluntary. This approach is illustrated in Emeryville v. Elementis Pigments Inc., No. C 99 03719 ( N. D. Cal. 2001). There, the court held that the " exercise of eminent domain" included land transfers where eminent domain actions were threatened and not filed. The California court reasoned that 781 CERCLA was intended to make environmental clean up actions more speedy and efficient, and that limiting the definition of " eminent domain authority" would serve to frustrate that purpose. Requiring the state to file eminent domain proceedings in court before acquiring property that may be contaminated, would ostensibly delay the sale and clean up of contaminated property.

In light of these competing interpretations, the gap in the proposed regulations has the potential to lead to perverse results among agencies in different states acquiring land for the public benefit in virtually the same way. The proposed rule may or may not forgive potential CERCLA liability to state agencies depending on differing interpretations of what constitutes an exercise of eminent domain authority. States subject to judicial interpretations of eminent domain authority like the Northern District of California could avoid undertaking the all appropriate inquiries analysis in making voluntary property acquisitions, while state agencies in jurisdictions like Ohio and Kansas would need to comply with the rule in order to obtain the same stated benefits of the exemption.

IMPLICATIONS OF THE PROPOSED RULE ON ODOT The practical implications of the proposed rule for ODOT are real. ODOT conducts property acquisitions consistent with a careful environmental site assessment program. It clearly wishes to obtain the benefit of the innocent landowner defense. By way of example, however, two ODOT construction projects would face serious cost issues based on the interpretation of eminent domain authority described above.

The Appalachian Corridor D project is a collaborative effort between West Virginia and Ohio on the construction of a new bridge over the Ohio River. The project was initiated by the West Virginia Department of Transportation (" WVDOT"). ODOT's side of this project is dependant on WVDOT's ability to complete the applicable environmental documentation, project plans and to acquire funding. An environmental site assessment was completed in the year 2000 for the project area. Rights of Way (" ROW") could not be acquired for each property until the preferred alignment was chosen by WVDOT and the ROW plans were finalized. The ROW acquisition process was authorized to proceed July 2, 2003. At this time, the ROW acquisition has been completed for five of the seven properties. ODOT has been forced to file eminent domain actions to acquire rights to the two remaining properties. Negotiations for the most recently acquired property ( an industrial property undergoing RCRA cleanup) stalled during the acquisition process. ODOT began coordinating with the industrial owner, Ohio EPA and EPA to ensure that the RCRA cleanup was either completed prior to or incorporated into the transportation project. These negotiations began in 2000 as a result of the environmental site assessment findings. Unlike private land acquisitions, ODOT's negotiations are generally very complex because of the variety of issues that arise such as the loss of utility to adjacent parts of the seller's property, access rights, and fair market value. After negotiations stalled, ODOT began the process of initiating an appropriation through eminent domain. In this case, however, the landowner agreed to a last minute settlement which kept the acquisition out of the appropriations process.

If the proposed rule had been used as a part of this acquisition, in order to obtain an exemption 782 under SARA, ODOT would have been required to conduct all appropriate inquiries for five of the properties but not for two of the last acquisitions, solely because the latter would be viewed as acquisitions under its eminent domain authority. Despite the fact that all of the acquired properties are part of a larger area that has already been subjected to an environmental site assessment under NEPA, ODOT would be required to comply with the proposed rule with respect to five of the seven parcels simply because it did not need to resort to court adjudication in order to acquire rights to these properties. Furthermore, analysis under the all appropriate inquiries rule would be far less comprehensive than the environmental site assessment and any information ODOT gathered through the collaborative effort with USEPA, Ohio EPA and the landowner. Those properties taken by eminent domain benefited from ODOT's approach. As ODOT's appropriation by eminent domain only occurs as a last resort, these properties were subject to the same environmental site assessment studies and cooperative fact gathering efforts as those properties acquired voluntarily.

Another project, the widening of Navarre Avenue ( LUC 2 21.15 PID: 9159), would face significant costs concerns if compelled to meet the all appropriate inquiries standards. This project, the widening of approximately 6 miles of SR 2 within the City of Oregon, Ohio, required 465 property acquisitions. The environmental site assessment studies were completed in November of 1995 with property acquisition beginning in June 1998. Of these 465 parcels, 120 were appropriated through eminent domain proceedings. Under the proposed rule, an additional round of all appropriate inquiries assessments would be required for each of the remaining 345 voluntary acquisitions in order to obtain the benefit of the CERCLA exemption. This effort could add approximately $ 1,207,500 to the project's cost ( assuming that each inquiry cost $ 3500 per property, this figure does not include the cost of the appraisal, title and other real estate information obtained during the acquisition process after the environmental site assessment studies were completed).

CONCLUSION To place the concerns raised in these comments in prospective, only approximately 12% of ODOT's annual property acquisitions are made via eminent domain actions. Yet, ODOT's current approach insures that all of its property acquisitions, both voluntary and involuntary, include a rigorous environment site assessment process.

In recognition of the current inconsistency in application of the proposed rule, ODOT respectfully requests that EPA revise the rule to exclude both voluntary and involuntary property acquisitions from the all appropriate inquiries analysis for government entities. Application of the rule as written has the potential to significantly increase the costs of all transportation projects in Ohio. By amending the rule, EPA would promote consistency among states acquiring property under the SARA exemption. Such an amendment would substantially lower transportation project costs in these states, while not diluting the CERCLA's goals of environmental protection.

Response: Although EPA sympathizes with the commenters concerns, the commenter's request is beyond 783 the scope of the final rule. The statute does not provide an exemption from CERCLA liability for state and local governments that acquire property voluntarily. 784 6.4 Sections of the Rule Should Be Printed in Bold Letters Commenter Organization Name: AZBTR Comment Number: 0338 Excerpt Number: 1 Excerpt Text: The AZBTR strongly agrees with the language of 312( d). It is the responsibility of any person conducting All Appropriate Inquiries to ensure that the work does not constitute the practice of any of the professions regulated by the Board unless that person is registered with the Board. Failure to comply with the regulations and rules of the Board is a violation of Arizona law and subjects the person to penalties and fines.

In order to minimize the potential for a violation of Arizona law the AZBTR suggests that the sentence 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 312.21( b). be printed in bold letters.

Response: The Agency appreciates the commenter's concern. However, EPA does not share the commenter's opinion that any particular section of the regulatory language needs to be, or should be, highlighted through the use of bold font. It is important that persons to whom the rule applies comply with all of the requirements in the final rule. 785 6.5 Post acquisition Statutory Requirements for Obtaining the CERCLA Liability Protections Commenter Organization Name: Rose and Westra Comment Number: 0320 Excerpt Number: 4 Excerpt Text: The Pre Amble indicates that failure to identify an environmental condition or identify a release or threatened release does not relieve landowners from requirements to comply with post acquisition requirements. This does not make any practical sense. If a prospective purchaser follows AAI rules and does not identify these conditions, then how could the landowner be expected to have knowledge to comply with post acquisition requirements? This is the EPA having its cake and eating it too! The EPA creates the AAI rules, but if the inquiry consistent with the rules does not identify conditions, the landowner is required to utilize facts not in their possession. R& W requests the EPA to recognize that people can only act on their knowledge and retract this legislation by rule proposition.

Response: EPA notes that any person may be protected from CERCLA liability as an innocent landowner if that person can demonstrate to a court that the person did not know, " and had no reason to know" of the contamination for which the person may be accused of being liable. The discussion in the preamble to which the commenter is referring is meant to inform the public that failure to identify a release or threatened release during the conduct of all appropriate inquiries may not be an adequate defense to liability if a release or contamination is not addressed by the property owner and is later discovered by a third party, particularly if the property owner cannot demonstrate that all appropriate inquiries were conducted in compliance with the provisions of the regulatory requirements.

Commenter Organization Name: Anonymous Comment Number: 0371 Excerpt Number: 1 Excerpt Text: While I believe the intent of adding categories of protection is a good one, it appears that the bona fide prospective purchaser and contiguous property owner defenses have greater requirements than does the innocent landowner. One of the reasons developers are not developing brownfields is the fear of being held responsible for clean up of the site. I don't see where the bona fide prospective purchaser defense provides them with any relief from liability and appears to place a greater burden on them, due to the statutory requirements, than does the innocent landowner defense.

Each of the defenses requires the property owner to take reasonable steps to stop continuing releases, prevent any threatened releases and prevent or limit human, 786 environmental, or natural resource exposures to any hazardous substances released on or from the property. I can foresee circumstances where buried or subterranean contamination could exist, but not be detected during document reviews and interviews. This requirement would continue to limit purchaser/ developer interest in brownfields sites as they can potentially be held liable for cleaning up contamination that they did not cause or have reason to know about. It would seem that once AAI has been completed for a given property, provided that the AAI did not identify any evidence suggestive of potential subsurface contamination or contain recommendations for Phase II sampling, that the purchaser not be held liable for clean up of the property.

Response: The scope of the final rule is to set federal standards for the conduct of all appropriate inquiries. All appropriate inquiries is just one criteria established by Congress in CERCLA that is necessary for obtaining protection from CERCLA liability. The commenter's request to alter the criteria necessary for obtaining protection from CERCLA liability is beyond the scope of the final rulemaking. In addition, the commenter's request may be beyond EPA's authority, given the statutory requirements.

Commenter Organization Name: Rybak, John Thomas Comment Number: 0412 Excerpt Number: 13 Excerpt Text: Exercise Appropriate Care  what level do you need to go to, to halt the release a) Page # 52546 b) View: The purchaser is required to halt a release, to preserve their AAI. The definition ' Halt the Release' should be further defined.

c) Assumptions: Halt the release should not be defined as remediate the source of release. If contaminated soils and groundwater are present onsite, then halt the source should not constitute remediation of the soils. However, if operations or above ground storage of chemicals are continuing to discharge chemicals and/ or impact the property (' operational releases'), then the purchaser should take necessary steps to limit the ongoing release, contribution to the contamination and/ or protect the environment. These actions should not make them liable for remediation of the whole contamination.

d) Burden: The purchaser will have a burden to demonstrate they have taken proper actions to halt operational releases, and not contributed to the known contamination onsite. They must be careful not to disturb or manage the known contamination. The extent they must exercise appropriate care may affect cash flow and loan repayments.

Response: Continuing obligations required under the statute include: stopping on going releases; complying with land use restrictions and not impeding the effectiveness or integrity of 787 institutional controls; taking Areasonable steps@ with respect to hazardous substances affecting a landowner= s property to prevent future 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 Quality 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 rule.

As explained in more detail in the " Common Elements" guidance, the requirement to stop on going releases ( or " halt" the release, to use the commenter's term) does not necessarily require that the property owner remediate the source of the release or undertake extensive corrective actions. Determining the nature and extent of " reasonable steps" necessary to ensure compliance with the continuing obligations imposed under the statute may entail an assessment of the site specific circumstances at a particular property.

EPA notes that persons conducting all appropriate inquiries in compliance with the final rule are not entitled to the CERCLA liability protections provided for innocent landowners, bona fide prospective purchasers, and contiguous property owners, unless they also comply with all of the continuing obligations established under the statute. Compliance with the final rule is only one requirement necessary for obtaining CERCLA liability protection.

Commenter Organization Name: Thornhill, James Comment Number: 0414 Excerpt Number: 2 Excerpt Text: The underground storage tank example used in the data gap discussion on page 52,560 does not appear to be consistent with the available defenses under CERCLA . The discussion in the preamble provides: " 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 land owner's ultimate ability to claim protection from CERCLA liability. For example, if a person does not identify, during all appropriate inquires prior to acquiring the 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 on going release." The discussion and example appear to miss the fact that CERCLA has an innocent purchaser defense. If a landowner failed to learn of the leaking tank because he or she failed to perform all appropriate inquires, then he or 788 she would be unable to prove the bona fide prospective purchaser defense and the failure to stop an ongoing release would not be an issue. If, on the other hand, the landowner did conduct all appropriate inquiries and did not find the leaking tank, then he or she would attempt to prove the innocent purchaser defense which does not have a requirement to " stop a continuing release" as under 42 U. S. C. § 9601( 40)( D). The discussion and example should be deleted or modified for consistency with the two defenses.

Response: EPA notes that any person may be protected from CERCLA liability as an innocent landowner if that person can demonstrate to a court that the person did not know, " and had no reason to know" of the contamination for which the person may be accused of being liable. The discussion in the preamble to which the commenter is referring is meant to inform the public that failure to identify a release or threatened release during the conduct of all appropriate inquiries may not be an adequate defense to liability if a release or contamination is not addressed by the property owner and is later discovered by a third party, particularly if the property owner cannot demonstrate that all appropriate inquiries were conducted in compliance with the provisions of the regulatory requirements.

EPA also notes for the commenter that the innocent landowner defense under CERCLA, as amended by the Brownfields Amendments ( at Section 101( 35)( B)( i)( II)( aa)) requires the property owner to take reasonable steps to stop any continuing releases. 789 6.6 Impact of the Rule on the Cost of Liability Insurance Commenter Organization Name: Goodman, J. Dwight Comment Number: 0097 Excerpt Number: 2 Other Sections: NEW  3.13.2  AAIs conducted by third parties Excerpt Text: Allowing ( by regs) the transfer or reliance of the original ESA to any person besides the one it was originally prepared for creates an undue liability which will likely be reflected in some companies by increased prices and/ or by the company ceasing to provide this ESA service because of the excessive liability versus revenue the reports generate. Most companies want to reduce liability, but by allowing anyone to use the original ESA.... you increase that liability exposure. Perhaps a re write of the proposed rule that would state it is " allowable under the judgment of the EP to provide reliance" would be more acceptable.

Response: Nothing in the proposed or final rule restricts an environmental professional and a property owner from entering into a contract that includes provisions for restricting the transfer or distribution of information or products development under the terms of the contract. However, the final rule does not prohibit the use of previously conducted all appropriate inquiries investigations or reports or the information contained in such reports. The final rule does require that an all appropriate inquires investigation be conducted or updated with one year of the date of acquisition of the property. In addition, in the case of all appropriate inquiries conducted more than 180 days prior to the date of acquisition of a property, particular elements of the inquiries must be updated.

Commenter Organization Name: ENSR International Comment Number: 0314 Excerpt Number: 11 Other Sections: NEW  3.13.2  AAIs conducted by third parties Excerpt Text: The proposed rule § 312.20 ( c) states that all appropriate inquiries conducted by or for other persons can be used ( which could be interpreted as relied on) in a report for a third party. The preamble ( page 52557, first paragraph under ( 4)) also states that all appropriate inquiries can be conducted by one party and transferred to another.

Comment: While likely not the intent, this language implies that numerous parties can rely on a report prepared by a consultant for their client, without any need to obtain a release from the consultant. This would set an unfortunate precedent in the assessment industry, and increase the overall business risk to consultants as a whole. ( Thereby reducing their willingness to perform this type of work or greatly increasing the price of an assessment to cover the added risk) 790 Response: Nothing in the proposed or final rule restricts an environmental professional and a property owner from entering into a contract that includes provisions for restricting the transfer or distribution of information or products development under the terms of the contract. However, the final rule does not prohibit the use of previously conducted all appropriate inquiries investigations or reports or the information contained in such reports. The final rule does require that an all appropriate inquires investigation be conducted or updated with one year of the date of acquisition of the property. In addition, in the case of all appropriate inquiries conducted more than 180 days prior to the date of acquisition of a property, particular elements of the inquiries must be updated.

Commenter Organization Name: Rose and Westra Comment Number: 0320 Excerpt Number: 5 Other Sections: NEW  4.1  The impact of the rule is underestimated Excerpt Text: The Pre Amble further states that the EP's failure to identify an environmental condition or identify a release or threatened release may invalidate defenses to CERCLA liability. This essentially raises the standard of professional care for the EP to perfection. If any condition is not identified by the EP, the landowner might lose CERCLA defenses, even if the EP strictly followed the AAI Rules. Certainly, the EPA is far from perfect, so how can it expect the EP to be in every case? R& W recommends a specific statement addressing the EP's standard of care be included in the AAI rules. Failure to do so will increase the cost of the inquiries due to the increased cost of liability insurance, and will create a need for EPs to charge a risk premium relative to E 1527 Phase I ESAs due to inevitable increases in litigation. These costs were not addressed in the Economic Impact Analysis and, therefore, must be controlled in the Proposed Rules. R& W requests that the EPA remove this statement from the Pre Amble and specifically address this vital issue in any future Proposed Rules.

Response: EPA notes that any person may be protected from CERCLA liability as an innocent landowner if that person can demonstrate to a court that the person did not know, " and had no reason to know" of the contamination for which the person may be accused of being liable. The discussion in the preamble to which the commenter is referring is meant to inform the public that failure to identify a release or threatened release during the conduct of all appropriate inquiries may not be an adequate defense to liability if a release or contamination is not addressed by the property owner and is later discovered by a third party, particularly if the property owner cannot demonstrate that all appropriate inquiries were conducted in compliance with the provisions of the regulatory requirements.

EPA also notes for the commenter that the innocent landowner defense under CERCLA, as amended by the Brownfields Amendments ( at Section 101( 35)( B)( i)( II)( aa)) requires the property owner to take reasonable steps to stop any continuing releases. The 791 requirements for making the innocent landowner defense, as well as all of the statutory criteria for claiming the bona fide prospective purchaser and contiguous property owner liability protections are statutorily imposed and not within the scope of the final rule. Costs associated with complying with the continuing obligations imposed under the statute therefore are not considered when assessing the cost impacts of the rule.

Commenter Organization Name: Geomatrix Consultants Comment Number: 0433 Excerpt Number: 5 Excerpt Text: Although we support the need for ESA oversight by a professional engineer or geologist, the proposed AAI rules will result in significantly greater liability for EP's. The proposed AAI rules will entail expanded research requirements, less guidance on exercising professional judgment, and more scrutiny on data gaps during the ESA. The lack of detail in the proposed rules will require the EP to justify in writing his or her interpretation of the rules. Most importantly, the proposed AAI rules will be mandated by federal law instead of the current ASTM industry standard. Because the proposed AAI approach relies heavily on the judgment of the EP, EP's will be more exposed to errors and omissions claims until a new standard of care is established. Greater liability will result in increased costs by requiring significantly more time by experienced EP's and increased insurance premiums.

Response: EPA agrees with the commenter that the final rule includes additional requirements for documenting data gaps. Costs associated with the incremental burden of documenting data gaps were including in the economic analysis conducted for the proposed and final rulemaking. A copy of the economic analysis conducted for the proposed and final rulemakings is included in the docket for the final rule.

EPA notes that nothing in the final rule precludes an environmental professional from using any previous guidance available on how best to use his or her judgment in conducting environmental assessments or the all appropriate inquiries investigations. The final rule includes many of the same aspects, with regard to the exercise of professional judgment, as the ASTM E1527 standard. EPA does not agree with the commenter that the final rule will result in environmental professionals having to exercise significantly more judgment than under the ASTM standard. In addition, the final rule requires that the all appropriate inquiries investigation be supervised by an individual who meets the definition of environmental professional, as defined in the final rule. The environmental professional must meet certain education and experience qualifications. Persons meeting the definition of an environmental professional should be capable of exercising the level of professional judgment necessary to perform the activities required by the final rule.

It is not clear that the insurance industry would react to the final rule as the commenter has indicated or that there will be any increase in insurance premiums as a result of the 792 final rule. It is possible, for example, that insurance companies will cut premiums for all policies that might be affected by potential CERCLA liability issues as a result of additional liability protections afforded under the statute as amended by the Brownfields Amendments for those parties who comply with the provisions of the final rule.

Commenter Organization Name: Hearn, J Clark Comment Number: 0434 Excerpt Number: 4 Other Sections: NEW  4.1  The impact of the rule is underestimated Excerpt Text: In addition to the sections discussed above, the interviews, historical sources, and lien search provisions of the new rule all add substantial cost and uncertainty to the conduct of a Phase I site assessment.

The ASTM  1527 2000 protocol serves the private sector efficiently from both the performance and cost perspectives. The proposed AAI rules essentially forces a public sector approach to real estate transactions on a private sector marketplace that operates under strict time and cost constraints. Nonetheless, the overall time and cost ramifications on the private sector marketplace have not been been credibly addressed by ICF in the document issued for the EPA. The zero time and related cost allowances put forth by ICF not only ignore the obvious labor cost burdens but also the related abstract costs such as increased professional liability premiums, more conducted Phase II's to close data gaps, and fewer providers in the marketplace as a result of the proposed stringent Environmental Professional qualifications.

ICF's determinations are arbitrary in nature and may well be based on arbitrarily established foundations. Such arbitrary foundations were voiced by EPA representatives at an AAI workshop held as part of ASTM's meeting in Washington DC on October 5, 2004, " ICF's baseline was E 1527, but that's not being met right now by many poorquality consultants. If the industry was truly following ASTM, the impact wouldn't be as great. Many are claiming their Phase Is are ASTM compliant when in fact they are falling short of the bar." Seems to be a perception among committee members and EPA players here that if you're doing good work now, then there's not a whole lot that's changing.

The base line is, in fact, that the private sector market place is functioning well under E 1527 and that most consultants are doing their jobs in compliance with the protocol. The new rule simply adds a significant amount of work that is not required by current industry practice. The proposed AAI rules significantly expand consultant liability exposure, which will result in higher errors and omissions insurance premiums. The new rule will increase labor costs and associated time dynamics of the due diligence process. In many instances it may be impossible to comply with the new rule within the timeframe that the marketplace allows for closing commercial real estate transactions. 793 Response: With respect to the commenter's remark regarding the incremental burden, the Economic Impact Analysis ( EIA) conducted for the proposed and final rulemaking estimated incremental burden hours for the new or incremental requirements imposed under the final rule that are not required under the ASTM E1527 standard. A copy of the EIA conducted for the proposed and final rules is included in the docket for the final rule.

With respect to the commenter's remark regarding liability insurance, it is not clear that the insurance industry would react to the final rule as the commenter has indicated. It is also possible, for example, that insurance companies will cut premiums for all policies that might be affected by CERCLA as a result of additional liability protection the final rule would offer to prospective landowners who follow the federal standards.

With respect to the commenter's concerns regarding the proposed definition of an environmental professional, EPA has modified the definition in the final rule to allow persons who have 10 years of full time relevant experience, but do not have a Baccalaureate degree, to qualify as environmental professionals. The definition in the final rule is less stringent than the proposed definition, allowing for most people currently practicing as environmental professionals to qualify.

With regard to the commenter's concerns regarding the baseline used for assessing the incremental costs of the final rule, EPA compared the costs associated with the activities required under the final rule with those required under the interim standard, or the ASTM E1527. The Agency did not adjust the estimate of incremental costs based upon antidotal information that some environmental professionals are not complying with the requirements of the interim standard. 794 6.7 Negotiated Rulemaking Committee/ Process Commenter Organization Name: Crocetti, Charles Comment Number: 0110 Excerpt Number: 3 Other Sections: NEW  <IP_ADDRESS>  Adopt the rule as proposed Excerpt Text: The proposed rule was developed based on the work of a Negotiated Rulemaking Committee represented by a wide spectrum of interests, including the. American Society of Civil Engineers, the National Groundwater Association, and ASFE. The latter groups represent, I believe, some of the premiere technical/ trade organizations in the environmental industry, and each serves as a valuable resource for the dissemination of technical information and research relative to environmental work.

In summary, I urge EPA to adopt the All Appropriate Inquiry rule as proposed. I very much appreciate the opportunity to comment on the proposed rule.

Response: EPA thanks the commenter for his stated support of the proposed rule.

Commenter Organization Name: Academy of Certified Hazardous Materials Managers Comment Number: 0140 Excerpt Number: 4 Excerpt Text: In general the Academy agrees with and supports the process and the tenants of the " negotiated rule making process" but EPA must make assurances to the community that an impartial and equal representation of stakeholders are included in all future similar rule proceedings.

Response: EPA thanks the commenter for its stated support of the proposed rule. EPA notes that the Federal Advisory Committee Act and the Negotiated Rulemaking Act require federal government agencies that use the negotiated rulemaking process for the development of proposed rules to assemble committees that have a balanced membership of affected stakeholders. In addition, federal agencies are required to provide public notice of their intent to negotiate a rulemaking and must give public notice of the proposed membership of the committee. The public can then comment on both the proposal to negotiate and the committee membership.

Commenter Organization Name: AIPG Comment Number: 0253 Excerpt Number: 1 795 Excerpt Text: It is not clear why the committee, which consisted of a wide range of stakeholders, did not include AIPG as an invited participant.

Response: EPA notes that the Federal Advisory Committee Act and the Negotiated Rulemaking Act require federal government agencies that use the negotiated rulemaking process for the development of proposed rules to assemble committees that have a balanced membership of affected stakeholders. In addition, federal agencies are required to provide public notice of their intent to negotiate a rulemaking and must give public notice of the proposed membership of the committee. The public can then comment on both the proposal to negotiate and the committee membership. EPA provided public notice of its intent to negotiate the all appropriate inquiries proposed rulemaking in the Federal Register on March 6, 2003. On April 14, 2003 EPA held a public meeting and accepted comment on the Agency's decision to negotiate the proposed rule and on the Agency's proposed membership for the negotiated rulemaking committee.

The requirement to have a balanced committee membership does not require the Agency to invite all interest groups representing a stakeholder group to be members of the negotiated rulemaking committee. Although AIPG was not invited to be a member of the committee, several other organizations representing the environmental professional community were represented on the committee. In addition, at least one member of the negotiated rulemaking committee was a registered professional geologist.

Commenter Organization Name: OSBGE Comment Number: 0291 Excerpt Number: 2 Excerpt Text: Nationwide, many practicing geologists provide environmental services as a full time career. Given that a significant amount of geologic work is conducted as part of environmental services, it is disappointing, and a significant oversight, that no national geology organization was represented, on the Committee that participated in this negotiated rulemaking process.

Response: Several organizations representing the environmental professional community were represented on the negotiated rulemaking committee. In addition, at least one member of the negotiated rulemaking committee was a registered professional geologist.

EPA notes that the Federal Advisory Committee Act and the Negotiated Rulemaking Act require federal government agencies that use the negotiated rulemaking process for the development of proposed rules to assemble committees that have a balanced membership of affected stakeholders. In addition, federal agencies are required to provide public notice of their intent to negotiate a rulemaking and must give public notice of the proposed membership of the committee. The public can then comment on both the proposal to negotiate and the committee membership. EPA provided public notice of its 796 intent to negotiate the all appropriate inquiries proposed rulemaking in the Federal Register on March 6, 2003. On April 14, 2003 EPA held a public meeting and accepted comment on the Agency's decision to negotiate the proposed rule and on the Agency's proposed membership for the negotiated rulemaking committee. EPA also accepted public comment on the on going negotiations of the committee at each meeting of the committee.

Commenter Organization Name: Rose and Westra Comment Number: 0320 Excerpt Number: 1 Other Sections: NEW  6.1  EPA should adopt ASTM standard rather than develop separate regulations Excerpt Text: ASTM E 1527 00 is a consensus Standard developed with input from the EPA, lenders, users and preparers of ESAs. The Pre Amble states that the ASTM E 1527 00 is inconsistent with applicable law . Without commenting on the accuracy of the EPA's contention, R& W notes that the EPA set out to create a duplicative standard through the NRA/ FACA process instead of continuing more than ten years of cooperative effort with the ASTM Committee E 50. The FACA included several interest groups that do not directly use or participate in the Phase I ESA/ AAI process. These include environmental interest groups, the environmental justice community, residential builders, solid waste officials, and the U. S. Conference of Mayors. While these parties have essentially no direct interest in the AAI process, they never the less exerted significant influence on the Proposed Rules. Therefore, the evolution of the Proposed Rules was fundamentally flawed. A more reasonable solution would have been to work with the E 50 Committee to make adjustments to E 1527 00, as opposed to starting over with a flawed FACA. R& W requests the EPA to abandon this redundant effort and work with E 1527 00 to address the perceived deficiencies of E 1527 00.

Response: The commenter confuses the goals of the ASTM International committee and the goals of EPA's rulemaking process. These goals are not the same. Stakeholder groups such as the U. S. Conference of Mayors, the National Association of Homebuilders, the Association of State and Territorial Solid Waste Management Officials, and environmental justice interest groups have a great interest, and an important role to play, in the development of federal regulations setting standards for the conduct of all appropriate inquiries, particularly given that the federal standards are one criteria that prospective landowners must follow to claim protection against Superfund liability. Although the requirements of the final rule are not greatly different than the requirements included in the ASTM E1527 2000 standard, it was not EPA's goal, or the goal of the Negotiated Rulemaking Committee tasked with developing the proposed rule to " create a duplicative standard." The role of the Negotiated Rulemaking Committee was to develop federal standards for all appropriate inquiries that meet the requirements of the CERCLA statute. Each of the stakeholder representatives mentioned by the commenter as having " essentially no direct interest" fully participated in the negotiated rulemaking 797 process, demonstrated that they were very interested in the outcome of the negotiations, and made significant contributions to the process.

EPA notes that the Federal Advisory Committee Act and the Negotiated Rulemaking Act require federal government agencies that use the negotiated rulemaking process for the development of proposed rules to assemble committees that have a balanced membership of affected stakeholders. In addition, federal agencies are required to provide public notice of their intent to negotiate a rulemaking and must give public notice of the proposed membership of the committee. The public can then comment on both the proposal to negotiate and the committee membership. EPA provided public notice of its intent to negotiate the all appropriate inquiries proposed rulemaking in the Federal Register on March 6, 2003. On April 14, 2003 EPA held a public meeting and accepted comment on the Agency's decision to negotiate the proposed rule and on the Agency's proposed membership for the negotiated rulemaking committee. EPA also accepted public comment on the on going negotiations of the committee at each meeting of the committee.

Commenter Organization Name: Greenlining Institute Comment Number: 0354 Excerpt Number: 1 Excerpt Text: We also believe that we provide a perspective that was not adequately represented on the negotiated rulemaking committee. Our mission is to see development go forward. We want retail stores, office buildings, and other commercial establishments to rise in the place of fenced off and litter strewn vacant lots. We also believe that idle brownfield property must be used as the site of affordable housing. We understand that concerns about public health and environmental protection should be addressed as development goes forward. However, we believe that in addressing these interests, the drafting process lost sight of the goal of the Brownfields Revitalization Act of 2001, Pub. Law 107 118 ( codified in scattered sections or 42 U. S. C.): encouraging redevelopment of idle or abandoned property. The process of " negotiating" the rule through a committee has also produced " compromise" language that is vague, overly complicated and confusingadding to uncertainty about liability.

Response: Several stakeholder organizations representing the redevelopment community were represented on the negotiated rulemaking committee. The committee membership included representatives from the National Brownfields Association, the National Association of Homebuilders, the International Council of Shopping Centers, the Real Estate Roundtable and the National Association of Industrial and Office Properties.

EPA notes that the Federal Advisory Committee Act and the Negotiated Rulemaking Act require federal government agencies that use the negotiated rulemaking process for the development of proposed rules to assemble committees that have a balanced membership of affected stakeholders. In addition, federal agencies are required to provide public 798 notice of their intent to negotiate a rulemaking and must give public notice of the proposed membership of the committee. The public can then comment on both the proposal to negotiate and the committee membership. EPA provided public notice of its intent to negotiate the all appropriate inquiries proposed rulemaking in the Federal Register on March 6, 2003. On April 14, 2003 EPA held a public meeting and accepted comment on the Agency's decision to negotiate the proposed rule and on the Agency's proposed membership for the negotiated rulemaking committee. EPA also accepted public comment on the on going negotiations of the committee at each meeting of the committee. EPA notes that the commenter's organization did not provide comment on the issue of adequate representation on the Negotiated Rulemaking Committee or on any aspect of the rulemaking negotiations at any time during the process.

Commenter Organization Name: Greenlining Institute Comment Number: 0354 Excerpt Number: 4 Excerpt Text: III. EPA'S NEGOTIATED RULEMAKING PROCESS In carrying out the Congressional mandate to promulgate clarifying regulations, EPA chose to use the process of negotiated rulemaking, rather than directly applying its own policy and technical expertise to the task of drafting regulations. In negotiated rulemaking, representatives of various non governmental interest groups determine the content of federal regulations.

Negotiated rulemaking is devoted largely to insulating federal administrative agencies from legal challenges to proposed regulations. The theory is that if all those who have a sufficient interest and the means to file a legal challenge are sought out and appointed to a negotiated rulemaking committee, the negotiated rule will probably not be challenged in court. See, e. g., Administrative Conference of the United States, Negotiated Rulemaking Sourcebook 1 ( 1985) ( noting that a negotiated rule reduces " the likelihood of subsequent litigation"); National Research Council, Understanding Risk: Informing Decisions in a Democratic Society 202 ( Paul C. Stern & Harvey V. Fineberg eds., 1996) (" The purpose of regulatory negotiation is to reduce legal challenges to new rules by involving would be adversaries directly in the rule making process"); Patricia M. Wald, Negotiation of Environmental Disputes: A New Role for the Courts?, 10 Colum. J. Envtl. L. 1, 18 ( 1985) ( noting that negotiated rulemaking is designed to " reduce the inevitability of legal challenges to adopted rules").

Negotiated rulemaking is conducted pursuant to the Negotiated Rulemaking Act, 5 U. S. C. § 561 570, however the constitutionality of this statute has never been tested. It may be that the authority exercised by negotiated rulemaking committees treads dangerously close to an unconstitutional delegation of lawmaking authority to private parties. See Schechter Poultry Corp. v. United States, 295 U. S. 495, 537 ( 1935) [ Footnote: We understand that it is not EPA's role to judge the facial constitutionality of federal statutes. However, we know that EPA takes seriously its responsibility to ensure 799 that it in conducting rulemaking it does not violate the Constitution. Here, the process got out of hand and went beyond allowing the rulemaking committee to determine the content of the rule at the negotiated rulemaking stage. This rulemaking also allowed the committee to determine the content of the concise statement of the basis and purpose of the rule. We believe this violates the Administrative Procedure Act, 5 U. S. C. § 553 ( c), which requires the agency to evaluate any proposed rule and state its basis and purpose. This requirement is not only statutory, but we believe that allowing committee members to determine the basis and purpose of an administrative rule would constitutes a delegation of lawmaking authority to private parties in violation of the non delegation doctrine. See U. S. Const. Art. 1 § 1; Schechter Poultry, 295 U. S. at 537. The Supreme Court has rarely struck down acts of Congress on non delegation grounds. However, federal courts have more frequently placed limiting constructions on statutes to preserve their constitutionality. See e. g., Amalgamated Meatcutters v. Connally, 37 F. Supp. 737 ( D. D. C. 1971); Fahey v. Mallonee, 332 U. S. 245 ( 1947). We believe that the Negotiated Rulemaking Act must, at a minimum, be limited to prevent committee members from participating in determining the basis and purpose of administrative rules. We submit with these comments audio recordings of public meetings conducted by EPA in St. Louis, Missouri on September 20 and 21, 2004 as a part of this rulemaking process in which EPA representatives acknowledge the role of committee members in determining the basis and purpose of the rule. The bulk of our comments focus on substantive concerns with the content of the rule in the hopes of eliciting major changes that will make for an effective rule. However, we are also deeply concerned that administrative agencies act in accordance with constitutional and statutory principles of public law. We believe the involvement of committee members crossed the constitutional limit for negotiated rulemaking and was " otherwise not in accordance with law," 5 U. S. C. § 706( 2)( A). We believe that committee members should have no further involvement, unless EPA decides to publicly reconvene the committee to consider changes to the rule. If ex parte contacts are to continue, we request that EPA make public a log of all contacts with negotiated rulemaking committee members after the date of final consensus that provides the date and time of contact and the content of any communication. The ad hoc participation of members of the negotiated rulemaking committee in determining the basis and purpose of the rule runs contrary to the agency's orderly conduct of business. Further, this regulation involves hotly contested claims as to who will profit from the conduct of AAI. As such, it involves competing claims for a valuable privilege and the behind the scenes participation of committee members raises serious questions of fairness. See generally Action for Childrens Television v. FCC, 564 F. 2d 458 ( D. C. Cir. 1977).]. In any event, negotiated rulemaking has received significant criticism. See, e. g., William Funk, Bargaining Toward the New Millennium, 46 Duke L. J. 1351, 1356 ( 1997) ( concluding that the practice of negotiated rulemaking elevates privately bargained interests and subverts " an agency's pursuit of the public interest through law and reasoned decisionmaking"); Cary Coglianese, Assessing Consensus: The Promise And Performance Of Negotiated Rulemaking, 46 Duke L. J. 1255, 1261( 1997) ( concluding that negotiated rulemaking has a " surprisingly weak track record"). Perhaps most significant among the critics of negotiated rulemaking conducted in a way that ties agencies to consensus drafts are the federal courts: " It sounds like an abdication of regulatory authority to the regulated, the full burgeoning of the interest group state, and 800 the final confirmation of the " capture" theory of administrative regulation." U. S. A. Group Loan Services v. Riley, 82 F. 3d 708, 714 ( 7th Cir. 1996) ( Posner, J.). Although the outcome of Group Loan Services did not depend on Judge Posner's assessment of negotiated rulemaking, the views he expressed may ultimately prove important to the future of negotiated rulemaking.

Regardless of the ultimate conclusion that the courts may reach with regard to the fate of negotiated rulemaking, we believe that EPA's choice of negotiated rulemaking in this case has contributed to the use of vague language in the proposed rule. Negotiation of the terms of legal documents by competing interests often results in compromise language that is susceptible to competing interpretations. Crystal clear language, one way or the other, could not garner the agreement necessary to move forward so the parties settle for ambiguity and accept the fact that ultimate resolution of contested issues will be deferred until the terms of the agreement are litigated. This approach may be appropriate for private parties negotiating the terms of a contract when only their own private interests are at stake. Congress, too, may at times produce statutes that are less than a model of legislative clarity, but that is part of the political process inherent in the mechanisms of the elected branch of government vested by the constitution with " All legislative Powers." U. S. Const. art. I, § 1. Federal administrative agencies have neither the freedom of private parties disposing of privately held property to draft intentionally ambiguous documents nor the latitude of the people's elected representatives to make policy choices deemed wise, though perhaps tending toward generalities.

Where, as here, Congress has directed an agency to draft regulations that " increase certainty and provide clarity," S. Rep. 107 2 at 14, the agency may not punt to a negotiated rulemaking committee that produces intentionally vague compromise language that must ultimately be resolved by the courts. This is emphatically so because the point of the All Appropriate Inquiry rule is to " provide protection to persons who wish to purchase contaminated property without incurring liability" by removing uncertainty over potential litigation. Id. at 11. The agency " must give effect to the unambiguously expressed intent of Congress." Chevron U. S. A. v. Natural Resources Defense Council, 467 U. S. 837, 843 ( 1984). Here, the overriding command of Congress is that the rule provide clear and certain liability protection. We begin our detailed textual analysis with that command in mind, as well the baseline of relative certainty that was in place before EPA began this process.

Response: The commenter is incorrect in asserting that members of the negotiated rulemaking committee determined the basis and purpose of the proposed rule. Congress determined the basis and purpose of the rule. EPA and the negotiated rulemaking committee developed the proposed rule around the criteria provided by Congress in the Small Business Liability Relief and Brownfields Revitalization Act. In fact, a review of the minutes of each of the meetings of the Negotiated Rulemaking Committee shows that the agenda and process for the Committee negotiations directly followed the criteria established by Congress. The commenter may be confused with regard to the statutory purpose for the all appropriate inquiries regulation. The commenter states that the 801 purpose of the rulemaking is " to provide protection to persons who wish to purchase contaminated property without incurring liability by removing uncertainty over potential litigation." The final rule on all appropriate inquiries is just one criteria established by Congress that property owners must meet to establish a potential defense against Superfund liability. The conduct of all appropriate inquiries alone does not provide protection from liability or certainty over potential litigation. In fact, nothing in the Small Business Liability Relief and Brownfields Revitalization Act provides protection against potential litigation. The liability protections provided under the statute for bona fide prospective purchasers, innocent landowners, and contiguous property owners establish a number of criteria that if met, may provide a landowner with a defense to liability under CERCLA if the landowner is sued by EPA or a third party to recover costs for clean up and damages associated with a release from a property owned or operated by the landowner.

EPA notes for the commenter that although EPA used the negotiated rulemaking process for the development of the proposed rule, EPA developed the final rule. In addition, EPA is the sole author of the preambles to the proposed and final rules. The final rule was developed by EPA after careful consideration of all public comments received in response to the proposed rule.

EPA notes that during the negotiated rulemaking process for the development of the proposed rule on all appropriate inquiries, EPA provided many opportunities for public comment and input on the content of the proposed rule and the Committee's negotiations. EPA placed all materials developed and used by the Committee in the public docket. EPA announced all meetings of the Committee in the Federal Register and invited the general public to attend each meeting. EPA accepted written public comment on all aspects of the proposed rule and the Committee's proceedings throughout the process. On every day of every Committee meeting, EPA set time aside for the general public to provide comment and input to the Committee members. Once the Committee reached consensus on the proposed rule and EPA developed the preamble to the proposed rule, the proposed rule was published in the Federal Register. EPA provided for a 90 day public comment period and held three public meetings to solicit public comment on the proposed rule. The proposed rule was negotiated by a Committee of 25 members who represented a balance of stakeholders with interest in the outcome of the regulation. However, at all points in the regulatory development process, EPA provided ample opportunity for the members of the general public to provide input and comment.

Commenter Organization Name: USWAG Comment Number: 0367 Excerpt Number: 1 Excerpt Text: Before addressing the substance of the proposed rule, US WAG would like to commend EPA for pursuing the regulatory negotiation (" reg neg") process despite previously unsuccessful reg negs. EPA's reluctance to attempt the reg neg process for most of the past decade has been quite understandable. It therefore took considerable courage on 802 EPA's part to place the fate of this rulemaking in the hands of a diverse and often contentious Reg Neg Committee and then to make unanimity or consensus among the 25 committee members the decision making threshold for each issue under consideration. Without the hard work of the EPA staff from the Office of Brownfields Cleanup & Redevelopment  and in particular, the skill and patience of Patricia Overmeyer  in helping to mold a consensus, there would not have been as well thought out a proposed rule as the one now before the public for comment.

Although most of the Reg Neg Committee's recommendations are sound and merit support, the reg neg process does not trump the provisions of the Administrative Procedure Act (" APA") that assign a crucial role in the rulemaking process to the regulated community and the general public through the notice and comment process. APA, 5 U. S. C. § 553( c). Whether the initial regulatory development occurs in a Reg Neg Committee consisting of a diverse group of interested parties or in an EPA workgroup, once a proposed rule has been published in the Federal Register and public comment has been solicited, the rulemaking process is the same and EPA is obliged to consider serious comment on its proposal.

Response: EPA thanks the commenter for the stated support of the negotiated rulemaking process. The commenter is correct that once a proposed rule is published in the Federal Register, the rulemaking process is governed in the same manner as all other proposed rules under the Administrative Procedures Act. EPA developed the final rule after careful consideration of all public comments received in response to the proposed rule. The Negotiated Rulemaking Committee had no involvement in the development of the final rule.

Commenter Organization Name: Ruffin, Shirley Comment Number: 0372 Excerpt Number: 1 Excerpt Text: We would like to commend the EPA for involving all stakeholders in the process of developing specific regulatory requirements for conducting all appropriate inquiries.

Response: EPA thanks the commenter for the stated support of the negotiated rulemaking process.

Commenter Organization Name: MBA Comment Number: 0401 Excerpt Number: 1 Excerpt Text: The MBA expresses our full support and endorsement of the Environmental Protection Agency's (" EPA") decision to utilize the negotiated rulemaking process to develop AAI. MBA would also like to congratulate the entire advisory committee for reaching a 803 unanimous, consensus based draft regulation.

MBA thanks the EPA for choosing them to participate in the negotiated rulemaking process and encourages EPA to utilize this effective practice in the future, where appropriate.

Response: EPA thanks the commenter for the stated support of the negotiated rulemaking process.

Commenter Organization Name: Freeman & Giler Comment Number: 0417 Excerpt Number: 1 Excerpt Text: We commend the USEPA for its efforts to develop an AAI Rule using the negotiated rule making process, and we believe that our limited number of comments and their narrow focus are a testament to the success of this negotiated process. That being said, we strongly suggest that USEPA consider the following comments:

Response: EPA thanks the commenter for the stated support of the negotiated rulemaking process.

Commenter Organization Name: West Berkeley Association Comment Number: 0430 Excerpt Number: 1 Excerpt Text: We understand that the proposed rule was drafted in conformance with the consensus reached by a negotiated rulemaking committee convened by EPA to represent the various stakeholders that would be affected by the rule. However, not only were the interests of existing small property owners not represented on the committee, the convening report indicates that committee members did not feel that they were obligated to protect the interests of small existing owners: " They do not see the standard as providing a ' pass' to existing owners, but rather immunizing new owners."

At page 8, when discussing the categories of stakeholders who should be represented in the rulemaking process, the convening assessment does not consider the interest of small property owners. The following organizations were given seats on the rulemaking committee to represent private sector commercial development interests: The Real Estate Roundtable, National Association of Industrial and Office Properties, and the International Council of Shopping Centers. However, these organizations are all members of each other and to the extent that they represent the interests of existing owners they are heavily weighted toward large institutional entities.

Response: The all appropriate inquiries regulation sets standards for prospective property owners in 804 assessing the potential environmental conditions at a property prior to purchasing a property. In that sense, the regulations do not affect " existing property owners" ( small or otherwise). Therefore, EPA believes that the commenter may have taken the quoted passage from the convening report out of context. The quote corresponds to a statement regarding the effect of the all appropriate inquiries regulations upon existing property owners, not small businesses that may be purchasing property. None of the members of the Negotiated Rulemaking Committee negotiated with the intent of representing the interests of only large entities. In fact the potential cost impacts upon all business interests were a point of discussion throughout the negotiations. In addition, the Negotiated Rulemaking Committee included representatives from the National Association of Development Organizations and the Center for Public Environmental Oversight who often spoke to the interests and needs of small and rural businesses and organizations.

EPA notes that during the negotiated rulemaking process for the development of the proposed rule on all appropriate inquiries, EPA provided many opportunities for public comment and input on the content of the proposed rule and the Committee's negotiations. EPA placed all materials developed and used by the Committee in the public docket. EPA announced all meetings of the Committee in the Federal Register and invited the general public to attend each meeting. EPA accepted written public comment on all aspects of the proposed rule and the Committee's proceedings throughout the process. On every day of every Committee meeting, EPA set time aside for the general public to provide comment and input to the Committee members. Once the Committee reached consensus on the proposed rule and EPA developed the preamble to the proposed rule, the proposed rule was published in the Federal Register. EPA provided for a 90 day public comment period and held three public meetings to solicit public comment on the proposed rule. The proposed rule was negotiated by a Committee of 25 members who represented a balance of stakeholders with interest in the outcome of the regulation. However, at all points in the regulatory development process, EPA provided ample opportunity for the members of the general public to provide input and comment.

Commenter Organization Name: Fedunyszyn, Zoriana Comment Number: 0443 Excerpt Number: 1 Excerpt Text: First of all, as both a Realtor and an appraiser, I am concerned that the National Association of Realtors( r), REALTORS( r) Commercial Alliance, and the Appraisal Professions ( Appraisal Institute, NAIFA, ASFRMA, ASA) were not included in the Negotiated Rulemaking Commit Response: EPA notes that the National Association of Realtors served as a resource member to the Negotiated Rulemaking Committee and provided valuable input to the Committee negotiations throughout the rulemaking development process. 805 EPA also notes that during the negotiated rulemaking process for the development of the proposed rule on all appropriate inquiries, EPA provided many opportunities for public comment and input on the content of the proposed rule and the Committee's negotiations. EPA placed all materials developed and used by the Committee in the public docket. EPA announced all meetings of the Committee in the Federal Register and invited the general public to attend each meeting. EPA accepted written public comment on all aspects of the proposed rule and the Committee's proceedings throughout the process. On every day of every Committee meeting, EPA set time aside for the general public to provide comment and input to the Committee members. Once the Committee reached consensus on the proposed rule and EPA developed the preamble to the proposed rule, the proposed rule was published in the Federal Register. EPA provided for a 90 day public comment period and held three public meetings to solicit public comment on the proposed rule. The proposed rule was negotiated by a Committee of 25 members who represented a balance of stakeholders with interest in the outcome of the regulation. However, at all points in the regulatory development process, EPA provided ample opportunity for the members of the general public to provide input and comment.

Commenter Organization Name: Brodsky, Michael Comment Number: PM 0127 0004 Excerpt Number: 1 Excerpt Text: Outside of a question about process and not about the substance of the rule, and if you can't answer that today, then perhaps this is just something to think about, this being a negotiated rule, which negotiated rule making is somewhat new, part of the purpose is to solicit input from as many people in the industry knowledgeable as is possible, and part of the purpose is to get the buy in.

EPA, in its literature somewhere, I can't remember exactly where, says that you find that negotiated rules are challenged less often. So if you do, as someone does submit comments with changes that seem to be a good idea, I think you probably have kind of a fine line for them. So you want to keep the committee members who bought in on board, but on the other hand, you want to respond to public comment.

So I'm just wondering if you will reconvene the committee sometime after the comment period closes, or informally pole them, or recirculate, or how you intend to walk that line.

Response: The Negotiated Rulemaking Committee only was involved in the development of the proposed rule. EPA developed the final rule after careful consideration of all public comments received in response to the proposed rule. After the Negotiated Rulemaking Committee reached consensus on recommended regulatory language for the proposed rule, EPA convened no additional meetings of the Committee members. The Committee was not involved in the rulemaking process after publication of the proposed rule. 806 Commenter Organization Name: Greenwood, Harriet Comment Number: PM 0127 0008 Excerpt Number: 3 Excerpt Text: In looking at the makeup of the negotiated rule making committee, it appeared to me that the life science disciplines and toxicology were perhaps under represented. I'm sure it was difficult to represent every possible branch that might be involved, but also, the academic institutions involved in the education of environmental professionals, I think were not at the table, as far as I could see, and I hope that they'll be included in the comment period, because their input on this topic is very important.

Response: Although educators of life science and toxicology disciplines were not identified as one of the stakeholders best representing those constituencies directly affected by the all appropriate inquiries rulemaking, four members of the Negotiated Rulemaking Committee represented the environmental professional business sector. Academic institutions may have a valuable role to play in educating individuals who may choose to become environmental professionals who conduct all appropriate inquiries investigations, however EPA did not identify academic institutions as a primary stakeholder in the regulatory development process.

EPA notes that the Federal Advisory Committee Act and the Negotiated Rulemaking Act require federal government agencies that use the negotiated rulemaking process for the development of proposed rules to assemble committees that have a balanced membership of affected stakeholders. In addition, federal agencies are required to provide public notice of their intent to negotiate a rulemaking and must give public notice of the proposed membership of the committee. The public can then comment on both the proposal to negotiate and the committee membership. EPA provided public notice of its intent to negotiated the all appropriate inquiries proposed rulemaking in the Federal Register on March 6, 2003. On April 14, 2003 EPA held a public meeting and accepted comment on the Agency's decision to negotiated the proposed rule and on the Agency's proposed membership for the negotiated rulemaking committee. EPA also accepted public comment on the on going negotiations of the committee at each meeting of the committee. EPA notes that the commenter's organization did not provide comment on the issue of adequate representation on the Negotiated Rulemaking Committee or on any aspect of the rulemaking negotiations at any time during the process. 807 6.8 EPA Should Perform More Outreach and Education on AAI and the Proposed Rule Commenter Organization Name: Herin Comment Number: 0329 Excerpt Number: 4 Excerpt Text: Most users of environmental due diligence services who I've spoken with in the last year have little to no idea that this AAI rule development process has been going on. In fact, as I review the comments posted on EPA's EDOCKET website, very few users seem to be represented. Given that this AAI rule will profoundly affect property transactions, I suggest the EPA invest more heavily in public outreach/ education ( ongoing, on an annual basis). The goal would be to help ensure that users are informed of the AAI rule and can easily learn more about it, including at a minimum: the protections afforded by AAI; the definition of an EP; and the basic elements of the AAI process.

Response: EPA did announce and hold three public meetings on the proposed rule. In addition, EPA staff attended many conferences and publicly attended meetings to speak about the proposed rule. EPA also announced the availability of the proposed rule on the EPA website and distributed fact sheets on the proposed standards. EPA will continue these public outreach efforts once the final rule is published in the Federal Register.

Commenter Organization Name: FAA Comment Number: 0334 Excerpt Number: 1 Excerpt Text: 1) There is an incorrect citation on page 52545 of the proposed rule's preamble. In the left hand column, EPA states " Today's proposed rule does not address the requirements of CERCLA Section 101( 35)( B)( i)( I) for what constitutes ' reasonable steps.'" The citation should actually read " 101( 35)( B)( i)( II)." As it reads now, EPA is saying that the proposed rule does not address the statutory requirements for standards and practices to demonstrate that a person has performed " all appropriate inquiries," which in fact the rule does address. What the rule actually " does not address" is the continuing obligations of the property owner after purchase, as included in paragraph ( II) of the statutory section.

2) The background section of the preamble to the proposed rule does not adequately or clearly state the difference between AAI and " reasonable steps." Please explain this difference in more detail.

Response: EPA apologizes for the incorrect cite in the preamble to the proposed rule. The citation is corrected in the preamble for the final rule. 808 The preamble to the final rule addresses the differences between the requirement to perform all appropriate inquiries, or an environmental site assessment, prior to purchasing a property and the requirements to conduct reasonable steps to stop on going releases, after purchasing a property, in section II. D. These requirements also were discussed in detail in section II. D. of the preamble to the proposed rule. Additional guidance on the " reasonable steps" and the continuing obligations ( or post ownership requirements) for retaining protection from CERCLA liability is provided in the EPA document titled " 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)." This document is included in the public docket for the final rule and is available on the EPA website.

Commenter Organization Name: FAA Comment Number: 0334 Excerpt Number: 2 Excerpt Text: 1) Will EPA consider leasing a property for a set period of time to be the same as ownership for the purposes of this regulation and the innocent landowner defense? Please provide more information on how this rule will affect leasees in the future.

Response: CERCLA does not afford persons who lease property the same level of defense against liability as it does property owners. In section 101( 40) of CERCLA, a bona fide prospective purchaser is defined as " a person ( or tenant of a person) that acquires ownership of a facility after the date of the enactment  ." [ emphasis added]. To date, EPA has interpreted the definition to mean that a tenant's status with regard to the bona fide prospective purchaser provision is dependent upon the status of the property owner. EPA notes that there is little or no case law with regard to this aspect of the statute.

Commenter Organization Name: McKerr, Thomas Comment Number: 0347 Excerpt Number: 1 Excerpt Text: Section II ( Background), D, 2. Contiguous Property Owner. Section states that " To qualify as a contiguous property owner, a landowner must have no knowledge of contamination ( I assume that this refers to contamination on his contiguous property) prior to acquisition and meet all of the criteria set forth ( in the cite). But what if he does have knowledge of contamination on his Property that originated on a site contiguous this property, i. e. from off site. An explanation of what category does he fit into would be appropriate. Would the landowner qualify as a BFPP? And what standard of " knowledge" is applied. This section will discourage a potential buyer of a contiguous property from performing a Phase II assessment if no liability protection is available for a contiguous 809 property owner that identifies a release. How does the identification of a " threatened release" on an adjoining site affect his status?

Response: The CERCLA statute at section 107( q)( 1)( C) clarifies that any person that does not qualify as a [ contiguous property owner] because the person had, or had reason to have, knowledge at the time of acquisition of the property, that the property was or could be contaminated by a release or threatened release of one or more hazardous substances from other real property not owned or operated by the person, may qualify as a bona fide prospective purchaser under section 101( 40) of CERCLA.

Commenter Organization Name: McLeod, Jeff Comment Number: 0444 Excerpt Number: 1 Excerpt Text: While I believe the intent of adding categories of protection is a good one, it appears that the bona fide prospective purchaser and contiguous property owner defenses have greater requirements than does the innocent landowner. One of the reasons developers are not developing brownfields is the fear of being held responsible for clean up of the site. I don't see where the bona fide prospective purchaser defense provides them with any relief from liability and appears to place a greater burden on them, due to the statutory requirements, than does the innocent landowner defense.

Each of the defenses requires the property owner to take reasonable steps to stop continuing releases, prevent any threatened releases and prevent or limit human, environmental, or natural resource exposures to any hazardous substances released on or from the property. I can foresee circumstances where buried or subterranean contamination could exist, but not be detected during document reviews and interviews. This requirement would continue to limit purchaser/ developer interest in brownfields sites as they can potentially be held liable for cleaning up contamination that they did not cause or have reason to know about. It would seem that once AAI has been completed for a given property, provided that the AAI did not identify any evidence suggestive of potential subsurface contamination or contain recommendations for Phase II sampling, that the purchaser not be held liable for clean up of the property.

Response: It will be up to a court to decide whether or not a party is entitled to a defense to CERCLA liability as an innocent landowner, a bona fide prospective purchaser, or a contiguous landowner. EPA notes that any person may be protected from CERCLA liability as an innocent landowner if that person can demonstrate to a court that the person did not know, " and had no reason to know" of the contamination for which the person may be accused of being liable. Failure to identify a release or threatened release during the conduct of all appropriate inquiries may not be an adequate defense to liability if a release or contamination is not addressed by the property owner and is later discovered by a third party, particularly if the property owner cannot demonstrate that all 810 appropriate inquiries were conducted in compliance with the provisions of the regulatory requirements.

EPA also notes for the commenter that the innocent landowner defense under CERCLA, as amended by the Brownfields Amendments ( at Section 101( 35)( B)( i)( II)( aa)) requires the property owner to take reasonable steps to stop any continuing releases. The requirements for making the innocent landowner defense, as well as all of the statutory criteria for claiming the bona fide prospective purchaser and contiguous property owner liability protections are statutorily imposed and not within the scope of the final rule. 811 6.9 Tribes May Not Have Capacity/ Resources to Meet the AAI Requirements Commenter Organization Name: Cloud, Sharon L. Fire Comment Number: 0108 Excerpt Number: 1 Excerpt Text: On the surface this may seem like a good idea, requiring Tribes to have an " Environmental Professional", however it's unfair. There is only a small percentage of our people who are fortunate enough to attend an institute of higher learning, at that an even smaller percentage who graduate with an Associates Degree, an even smaller percentage who graduate with a Bachelor's Degree. Now, after that imagine the percentage of Native Americans who have graduated with a Bachelor's Degree in the specific fields you would like to require in this amendment. We may not have Degree's, but by no means are we uneducated or incapable of taking inventory of, assessing and clean up of Brownfield sites on our land. I feel this is amendment is not only unfair, it's also discriminating against the people who taught your people land stewardship. We are fully capable of doing the job necessary to complete the projects, without going outside of our tribe for an " Environmental Professional".

Response: In the final rule, the definition of an environmental professional, for the purposes of overseeing the conduct of all appropriate inquiries investigations includes individuals who have ten years of relevant full time experience in carrying out all appropriate inquiries and related activities. Individuals do not have to have a college degree to qualify as an environmental professional if they have ten years of full time relevant experience. In addition, the proposed rule provides that individuals who are trained and certified by the Bureau of Indian Affairs to conduct environmental site assessments and who have three years of relevant full time experience meet the definition of an environmental professional in the final rule.

Commenter Organization Name: Warner, Todd Comment Number: 0312 Excerpt Number: 1 Excerpt Text: Currently KBIC has three environmental staff in the natural resource department. The Realty Department consists of one person. Of these four people, one person will have the qualifications of an Environmental Professional ( EP) as outlined in the proposed rule. Other Tribes I am acquainted with have both fewer staff and/ or staff without the education and/ or experience to qualify as an EP. This situation is different than that of a consulting firm or State government where " teams" of environmental staff with a range of qualification levels are present.

Given the fact that re acquisition of Tribal lands is important to KBIC ( and other Tribal Governments), and, given that purchase agreements that depend upon the results of an 812 environmental assessment often have a 30 60 day time period associated with them, it becomes critical that KBIC be able to complete an AAI with existing staff. Consultants are not reliably available on short notice, and, if available, can add significant cost to a potential land purchase. I have estimated the additional cost to Keweenaw Bay Indian Community for having to hire a consultant to meet the requirements of the proposed AAI rule as approximately $ 2,000  $ 4,000 per property. This is a significant cost for the Community.

Given the above, I would strongly encourage the U. S. EPA to provide assistance to Tribes with no capacity, or limited capacity for meeting AAI requirements. I would like to see some outreach by regional EPA offices to Tribal Governments regarding this issue, and discussions of potential mechanisms for EPA assistance to Tribes to ensure that Tribal Governments are able to fulfill the requirements contained in this proposed rule, and fulfill their own goals of re acquisition of ancestral lands.

Response: In the final rule, the definition of an environmental professional, for the purposes of overseeing the conduct of all appropriate inquiries investigations includes individuals who have ten years of relevant full time experience in carrying out all appropriate inquiries and related activities. Individuals do not have to have a college degree to qualify as an environmental professional if they have ten years of experience. In addition, the proposed rule provides that individuals who are trained and certified by the Bureau of Indian Affairs to conduct environmental site assessments and who have three years of relevant full time experience meet the definition of environmental professional in the final rule.

Commenter Organization Name: Kane Environmental Comment Number: 0317 Excerpt Number: 4 Excerpt Text: We understand that tribal records must be reviewed, but are the tribes being given additional federal funding to establish records centers and staff?

Response: Tribal records must be reviewed if the property being purchased is located on tribal or near tribal owned lands. Under the authorities of section 128 of CERCLA, EPA does provide some funding to recognized Indian tribes to establish or enhance a tribal response program.

If a prospective landowner and the environmental professional acting on behalf of the prospective landowner cannot obtain tribal records even after good faith efforts are made to obtain the records, the missing information should be noted in the all appropriate inquiries report as a data gap. The significance of the missing information on the environmental professional's ability to render an opinion regarding the environmental conditions at a property also must be documented. 813 6.10 Other Commenter Organization Name: Johnson, Robert L Comment Number: 0094 Excerpt Number: 1 Excerpt Text: Some of the premises in the article concerning ' Environmental Professional' ( CE, Oct. 2004) are wrong. The current ATSM Standard on Environmental Site Assessment does not force anyone to " conduct sampling unnecessarily ... simply because the standard calls for them." The Standard does not involved sampling. In fact, Section 11.9 of the Standard specifically states " recommendation for Phase II testing, remediation techniques, etc. are beyond the scope of this practice."

By removing standard practice, the assessment process would literally place the livelihood of the environmental professional responsible for assessment on the line ( in jeopardy). Environmental companies view themselves as " deep pockets" and would be forced to characterize as many properties as possible as being contaminated. Very few environmental companies have been sued for characterizing " clean" properties as " contaminated." Many have been sued for characterizing a site as being clean when later perceived contamination is indicated at the site. PCBs have been detected in the polar ice caps. A single piece of ( petroleum based) asphalt in a sample can give the perception of an entire site being contaminated. Virtually every property can be perceived as being " contaminated."

" More flexible" assessments will not lead environmental companies to generate more professional and higher quality assessments. Assessors are in conflict because any they themselves are in line to implement the additional sampling or remediation to address potential contamination at the site. Even highly regarded professionals can easily rationalize the need for additional sampling, investigation, remediation, etc., so as to err on the side of caution. Rather, in order to protect against potential liability ( and realize increased remediation revenue), the companies will increase effort to find as many properties as possible to be perceived as being contaminated, the very definition of a " brownfield."

A solution might be for the findings of an environmental assessment to be reviewed by a third party Licensed Professional Engineer for compliance to a Standard. ( There is much more to an environmental assessment than geology.) This would relieve the assessor of assuming the liability of possible contamination on the site, accepting only the liability that Standard practice was met. Similarly, the Licensed Professional Engineer would not be held liable for the performance of the assessment or any undetected contamination, only that the assessment was in compliance with the Standard.

Response: EPA agrees with the commenter that the existing ASTM E1527 2000 standard does not require sampling and analysis. The final rule setting federal standards for all appropriate 814 inquiries also does not require sampling and analysis to be conducted as part of the all appropriate inquiries investigation. The final rule does note that sampling and analysis may be helpful in addressing data gaps under certain circumstances. The decision of whether or not to undertake sampling and analysis is up to the prospective property owner and may be based on the advice provided by an environmental professional.

The issue of third party evaluations of property assessments is beyond the scope of the final rule. Property owners should determine their need for additional advice and consultation regarding sampling and analyses or other appropriate investigations in light of the statutory requirements for retaining the CERCLA liability protections after a property is acquired.