Institutional controls are typically used whenever contamination precludes unlimited use and unrestricted exposure at the property. Thus, institutional controls may be needed both before and after completion of the remedial action. Institutional controls often must remain in place for an indefinite duration and, therefore, generally need to survive changes in property ownership ( i. e., run with the land) to be legally and practically effective. Some common examples of institutional controls include zoning restrictions, building or excavation permits, well drilling prohibitions, easements and covenants.

The importance of identifying institutional controls during all appropriate inquiries is twofold. First, institutional controls are usually necessary and important components of a remedy.

Failure to abide by an institutional control may put people at risk of harmful exposure to hazardous substances. Second, an owner wishing to maintain protections from CERCLA liability as an innocent landowner, contiguous property owner, or bona fide prospective purchaser must fulfill ongoing obligations to comply with any land use restrictions established or relied on in connection with a response action and to not impede the effectiveness or integrity of any institutional control employed in connection with a response action. For a more detailed 73 discussion of these requirements please see EPA, Interim Guidance Regarding Criteria Landowners Must Meet in Order to Quality for Bona Fide Prospective Purchaser, Contiguous Property Owner, or Innocent Landowner Limitations on CERCLA Liability ( Common Elements,

2003).

Those persons conducting all appropriate inquiries may identify institutional controls through several of the standards and practices set forth in this rule. As noted, implementation of institutional controls may be accomplished through the use of several administrative and legal mechanisms, such as zoning, building permit requirements, easements, covenants, etc. Thus, for example, an easement implementing an institutional control might be identified through the review of chain of title documents under § 312.24( a). Furthermore, interviews with past and present owners, operators, or occupants pursuant to § 312.23; and reviews of federal, tribal, state, and local government records under § 312.26, may identify an institutional control or refer a person to the appropriate source to find an institutional control. For example, a review of federal Superfund records, including Records of Decision and Action Memoranda, as well as other information contained in the CERCLIS data base, may indicate that zoning was selected as an institutional control or an interview with a current operator may reveal an institutional control as part of an operating permit.

9. How must data gaps be addressed in the conduct of all appropriate inquiries?

As defined in proposed § 312.10, data gaps are a lack of or inability to obtain information required by the standards and practices listed in the proposed regulation, despite good faith efforts by the environmental professional or the prospective landowner ( or grant recipient) to gather such 74 information pursuant to the proposed objectives for all appropriate inquiries. Proposed § 312.20( f) requires environmental professionals, prospective landowners and grant recipients to identify data gaps that affect their ability to identify conditions indicative of releases or threatened releases of hazardous substances ( and in the case of grant recipients pollutants, contaminants,

petroleum, and controlled substances). In addition, the proposal would require such persons to identify the sources of information consulted to address, or fill, the data gaps, and require such persons to comment upon the significance of the data gaps with regard to the ability to identify conditions indicative of releases or threatened releases in the all appropriate inquiries report. In addition, proposed § 312.21( c)( 2) would require that environmental professionals include in the inquiries report an identification of data gaps that affect the ability of the environmental professional to identify conditions indicative of releases or threatened releases on, at, in, or to the subject property. Proposed § 312.21( c)( 2) also would require that the inquiries report include comments regarding the significance of any data gaps on the environmental professional's ability to provide an opinion as to whether the inquiries have identified conditions indicative of releases or threatened releases.

A lack of information or an inability to obtain information that may affect the ability of an environmental professional to determine whether or not there are conditions indicative of a release or threatened release of a hazardous substance ( or other contaminant) on, at, in or to a property can have significant consequences regarding a prospective landowner's ultimate ability to claim protection from CERCLA liability. A person's inability to obtain information regarding a property's ownership or use prior to acquiring a property can affect the landowner's ability to claim a protection from CERCLA liability after acquiring the property, if a lack of information 75 results in the landowner's inability to comply with any other post acquisition statutory obligations that are necessary to assert protection from CERCLA liability. For example, if a person does not identify, during the all appropriate inquiries prior to acquiring a property, a leaking underground storage tank that exists on the property, the landowner may not have sufficient information to comply with the statutory requirement to take reasonable steps to stop on going releases after acquiring the property. This may result in an inability to claim protection against CERCLA liability for any on going release. The proposed rule states the need to identify data gaps, address them when possible, and document their significance. Prospective landowners must consider the potential significance of any data gaps that may exist after conducting the pre acquisition all appropriate inquiries on the landowner's ability to fulfill the additional statutory requirements after purchasing a property.

If a person properly conducts all appropriate inquiries pursuant to this rule, including the requirements concerning data gaps at proposed § § 312.10, 312.20( f) and 312.21( c)( 2), the person can fulfill the all appropriate inquiries requirements of CERCLA Sections 107( q), 107( r), and 101( 35), even when there are data gaps in the inquiries. However, as explained further in this preamble, a fulfillment of the all appropriate inquiries requirements does not, by itself, provide a person with a protection from or defense to CERCLA liability. An inability to identify a release or threatened release during the conduct of all appropriate inquiries does not negate the landowner's ongoing or continuing responsibilities under the statute, including the requirements to take reasonable steps to stop the release, prevent a threatened release, and prevent exposure to the release or threatened release once the landowner has acquired a property. Also, if an existing institutional control or land use restriction is not identified during the conduct of all appropriate 76 inquiries prior to the acquisition of a property, a landowner is not exempt from complying with the institutional control or land use restriction after acquiring the property. None of the other statutory requirements for the liability protections is satisfied by the results of the all appropriate inquiries.

The Agency notes that the mere fact that a purchaser conducted all appropriate inquiries does not provide any individual with a limitation from CERCLA liability. To qualify as a bona fide prospective purchaser, innocent landowner or a contiguous property owner, a person must, in addition to conducting all appropriate inquiries prior to acquiring a property, comply with all of the other statutory requirements. These criteria are summarized in section II. D. of this preamble.

The all appropriate inquiries investigation may provide a purchaser with necessary information to comply with the other post acquisition statutory requirements for obtaining liability protections.

The failure to detect a release during the conduct of all appropriate inquiries does not exempt a landowner from his or her post acquisition continuing obligations under other provisions of the statute.

Proposed § 312.20( f) points out that one way to address data gaps may be to conduct sampling and analysis. The Agency notes that the proposed regulation does not require that sampling and analysis be conducted to comply with the all appropriate inquiries requirements.

The proposal only notes that sampling and analysis may be conducted, where appropriate, to obtain information to address data gaps.

The Agency requests comments on the proposed provisions addressing data gaps. The Agency also explicitly requests comments on the decision not to require sampling as part of the proposed all appropriate inquiries standards. 77 10. Do small quantities of hazardous substances that do not pose threats to human health and the environment have to be identified in the inquiries?

The environmental professional should identify and evaluate all evidence of releases or threatened releases on, at, in or to the subject property, in accordance with generally accepted good commercial and customary standards and practices. However, as provided in proposed § 312.20( g), the environmental professional need not specifically identify, in the written report prepared pursuant to proposed § 312.21( c), extremely small quantities or amounts of contamination, except as needed to fairly describe the evidence identified by the environmental professional of releases and threatened releases that could pose a threat to human health or the environment.

G. What are the Proposed Requirements for Interviewing Past and Present Owners,

Operators, and Occupants?

CERCLA Section 101( 35)( B)( iii)( II) requires EPA to include in the standards and practices for all appropriate inquiries " interviews with past and present owners, operators, and occupants of the facility for the purpose of gathering information regarding the potential for contamination at the facility." The proposed requirements for conducting interviews of past and present owners, operators, and occupants of the subject property are included in proposed § 312.23. The proposal identifies these interviews as being within the scope of the inquiry of the environmental professional. Therefore, all interviews would either have to be conducted by the environmental professional or within the supervision or responsible charge of the environmental professional. The intent is that an individual meeting the definition of an environmental 78 professional ( § 312.10) must oversee the conduct of, or review and approve the results of, the interviews to ensure the interviews are conducted in compliance with the proposed objectives and performance factors ( § 312.20). EPA also intends this proposed provision be used to help ensure that the information obtained from the interviews provides sufficient information, in conjunction with the results of all other inquiries, to allow the environmental professional to render an opinion with regard to conditions at the property that may be indicative of releases or threatened releases of hazardous substances ( and pollutants, contaminants, petroleum and controlled substances, if applicable).

The proposed rule would require the environmental professional's inquiry to include interviewing the current owner and occupant of the subject property. In addition, the proposal provides that the inquiry of the environmental professional include interviews of additional individuals, including current and past facility managers with relevant knowledge of the property,

past owners, occupants, or operators of the subject property, or employees of current and past occupants of the subject property as necessary to meet the proposed objectives and in accordance with the proposed performance factors. A primary objective of the interviews portion of the all appropriate inquiries is to obtain information regarding the current and past ownership and uses of the property, and obtain information regarding the conditions of the property. The proposed rule does not prescribe particular questions that must be asked during the interview. The Negotiated Rulemaking Committee and EPA concluded that the type and content of any questions asked during interviews will depend upon the site specific conditions and circumstances and the extent of the environmental professional's ( or other individual's under the supervision or responsible charge of the environmental professional) knowledge of the property prior to conducting the 79 interviews. Therefore, the proposed rule does not include specific questions for the interviews,

but requires that the interviews be conducted in a manner that achieves the proposed objectives and performance factors. EPA recommends that the environmental professional, or an individual under the supervision or responsible charge of the environmental professional, develop the interview questions prior to conducting the interview, and tailor the questions to the rule's objectives and performance factors. Interviews with current and past owners and occupants may provide opportunities to collect information about a property that is not previously recorded nor well documented or may provide valuable perspectives on how to find or interpret information required to complete other aspects of the all appropriate inquiries. Information gathered during the interview portion of the all appropriate inquiries may in turn provide valuable information for the on site visual inspection. Persons conducting the interviews of current and past owners and occupants may want to spend some time during the interviews requesting information on the locations of operations or units used to store or manage hazardous substances on the property.

In the case of properties where there may be more than one owner or occupant, or many owners or occupants, the proposed rule would require the inquiry to include interviews of major occupants and those occupants that are using, storing, treating, handling or disposing ( or are likely to have used, stored, treated, handled or disposed) of hazardous substances ( or pollutants,

contaminants, petroleum, and controlled substances, as applicable) on the property. The proposed rule does not specify the number of owners and occupants to be interviewed. The environmental professional must perform this function in the manner that best fulfills the proposed objectives and performance factors for the inquiries in proposed § 312.20( d) and ( e).

Environmental professionals may use their professional judgment to determine the specific 80 occupants to be interviewed and the total number of occupants to be interviewed in seeking to comply with the proposed objectives and performance factors for the inquiries. Interviews must be conducted with individuals most likely to be knowledgeable about the current and past uses of the property, particularly with regard to current and past uses of hazardous substances on the property.

In the case of abandoned properties, the proposed rule would require the inquiry of the environmental professional to include interviews with one or more owners or occupants of neighboring or nearby properties. The Committee recognized that in the case of abandoned properties, it most likely will be difficult to identify or interview current or past owners and occupants of the property. Therefore, the Committee recommended that the conduct of all appropriate inquiries include interviewing at least one owner or occupant of a neighboring property to obtain information regarding past owners or uses of property in cases where the subject property is abandoned. The proposed rule defines an abandoned property as a " property that can be presumed to be deserted, or an intent to relinquish possession or control can be inferred from the general disrepair or lack of activity thereon such that a reasonable person could believe that there was an intent on the part of the current owner to surrender rights to the property." As is the case with interviews conducted with current and past owners and occupants of the property, interview questions should be developed prior to the conduct of the interviews,

and tailored to gather information to achieve the rule's objectives and performance factors.

The Agency requests comments on the proposed standards for conducting interviews of past and present owners and occupants of a property. EPA also requests comments on the 81 proposed requirements to interview owners or occupants of neighboring properties in the case of abandoned properties.

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

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

industrial, or government purposes.

The statutory criteria in the Brownfields Amendments require that reviews of historical sources of information be conducted to " determine previous uses and occupancies of the real property since the property was first developed." The Committee recommended, and EPA is proposing, that records be searched for information on the property covering a time period as far back in history as there is documentation that the property contained structures or was placed into use of some form. The Committee believed, and EPA agrees, that this provision follows Congressional intent. Historical documents and information must be reviewed to obtain 82 information relevant to the proposed objectives and performance factors of proposed § 312.20( d)

and ( e). If a search of historical sources of information results in an inability of the inquiry to document previous uses and occupancies of the property as far back in history as there is documentation that the property contained structures or was placed into use of some form and such information cannot be addressed through the implementation of other inquiries or regulatory criteria, then the unavailable information must be documented as a data gap to the inquiries. The proposed requirements of § § 312.20( f) and 312.21( c)( 2) are applicable to all instances in the all appropriate inquiries that result in data gaps.

The proposed rule would not require that any specific type of historic information be collected. In particular, the proposed rule does not require that persons obtain a chain of title document for the property. The proposed rule provides that the purchaser or environmental professional use professional judgment when determining what types of historical documentation may provide the most useful information about a property's ownership, uses, and potential environmental conditions when seeking to comply with the proposed objectives and performance factors for the inquiries. The Negotiated Rulemaking Committee considered developing a specific list of historical documents that must be reviewed for each property. However, given the wide variety of property types and locations to which this proposed rule could apply, the Committee determined that any list of specific documents could result in undue burdens on many property owners due to difficulties in collecting any specific document for any particular property or property location. Therefore, the Committee recommended, and EPA is proposing, that the review of historical documents requirement allow the purchaser and environmental professional to use their judgment, in accordance with generally accepted good commercial and customary 83 standards and practices, in locating the best available sources of historical information and reviewing such sources for information necessary to comply with the rule's objectives and performance factors.

As explained in section III. E. 2 of this preamble, the purchaser or environmental professional may make use of previously collected information about a property when conducting all appropriate inquiries. The collection of historical information about a property may be a particular case where previously collected information may be valuable, as well as easily accessible. In addition, nothing in the proposed rule prohibits a person from using secondary sources ( e. g., a previously conducted title search) when gathering information about historical ownership and usage of a property. As explained in section III. E. 2, information must be updated if it was last collected more than 180 days prior to the date of acquisition of the property.

The Agency requests comments on the proposed standards for reviews of historical sources of information.

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

For purposes of this rule, recorded environmental cleanup liens are encumbrances on property for the recovery of incurred cleanup costs on the part of a state, tribal or federal government agency or other third party. Recorded environmental cleanup liens often provide an indication that environmental conditions currently or previously existed on a property that may have included the release or threatened release of a hazardous substance. The existence of an environmental cleanup lien should be used as an indicator of potential environmental concerns and 84 as a basis for further investigation into the potential existence of on going or continued releases or threatened releases of hazardous substances on, at, in, or to the subject property.

The Committee recommended, and EPA is proposing at proposed § 312.25, that the search for recorded environmental cleanup liens be performed either by the purchaser or through the inquiry of the environmental professional. The search for such liens may not necessarily require the expertise of an environmental professional and therefore may be more efficiently or more costeffectively performed by the purchaser or an agent of the purchaser. Such liens may be included as part of the chain of title documents or may be recorded in some other format by state or local government agencies. If such information is collected by the purchaser, or other agent of the purchaser who is not under the supervision or responsible charge of the environmental professional, the proposed rule would require that any information on environmental cleanup liens that is collected on the part of the purchaser be provided to the environmental professional. The environmental professional can then make use of such information during the conduct of the all appropriate inquiries and when rendering conclusions or opinions regarding the environmental conditions of the property.

The Committee recommended that the all appropriate inquiries regulation require that purchasers and environmental professionals search for those environmental cleanup liens that are recorded under federal, tribal, state, or local law. Liens that are not recorded by government programs or agencies are not addressed by the language of the statute on the criteria for all appropriate inquiries ( the statute speaks only of recorded liens). One caution about the conclusion one can draw from not finding a recorded environmental cleanup lien is that if EPA is in the process of cleaning up a site at the time of acquisition there is nothing to prevent EPA from 85 recording such a lien post acquisition. This type of lien, a so called windfall lien, has no statute of limitations on it and arises at the time EPA first spends Superfund money. States and localities may have similar mechanisms.

The Agency requests comments on the proposed standards for searching for recorded environmental cleanup liens.

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

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

tribal, state and local government records may contain information regarding environmental conditions at a property. In particular, government records, or data bases of such information,

may include information on previously reported releases of hazardous substances, pollutants,

contaminants, petroleum products and controlled substances. Government records may include information on institutional controls related to a particular property. For example, in the case of NPL sites, EPA Superfund records, including Action Memoranda and Records of Decision, may have information on institutional controls in place at such properties. Government records also may include information on activities or property uses that could cause releases or threatened releases to be present at a property. The proposed rule, at § 312.26( b), requires that federal, 86 tribal, state, and local government records be searched for information indicative of environmental conditions at the subject property. The types of government records or data bases of records searched should include:

11. Government records of reported releases or threatened releases at the subject property,

including previously conducted site investigation reports.

12. Government records of activities, conditions, or incidents likely to cause or contribute to releases or threatened releases, including records documenting regulatory permits that were issued to current or previous owners or operators at the property for waste management activities and government records that identify the subject property as the location of landfills, storage tanks, or as the location for generating and handling activities for hazardous substances, pollutants, contaminants, petroleum or controlled substances.

13. CERCLIS records   EPA's Comprehensive Environmental Response, Compensation, and Liability Information System ( CERCLIS) database contains general information on sites across the nation and in the U. S. territories that have been assessed by EPA, including sites listed on the National Priorities List ( NPL). CERCLIS includes information on facility location, status, contaminants, institutional controls, and actions taken at particular sites. CERCLIS also contains information on sites being assessed under the Superfund Program, hazardous waste sites and potential hazardous waste sites.

14. Government maintained records of public risks ( if available)   the all appropriate inquiries government records search should include a search for available records documenting public health threats or concerns caused by, or related to, activities currently or previously conducted at the site. 87 15. Emergency Response Notification System ( ERNS) records  ERNS is EPA's data base of oil and hazardous substance spill reports. The data base can be searched for information on reported spills of oil and hazardous substances by state.

16. Government registries, or publicly available lists of engineering controls, institutional controls, and land use restrictions. The all appropriate inquiries government records search must include a search for registries or publicly available lists of recorded engineering and institutional controls and recorded land use restrictions. Such records may be useful in identifying past releases on, at, in, or to the subject property or identifying continuing environmental conditions at the property.

In the case of all the government records listed above, the requirements of this criterion may be met by searching data bases containing the same government records mentioned in the list above that are accessible and available through government entities or private sources. The review of actual records is not necessary, provided that the same information contained in the government records and required to meet the requirements of this criterion and achieve the proposed objectives and performance factors for these regulations is attainable by searching available data bases.

In addition to reviewing government records, or data bases of information contained in government records, for information about the subject property, the proposed rule would require that government records for nearby and adjoining properties be reviewed to assess the potential impact to the subject property from hazardous substances and petroleum contamination migrating from contiguous or nearby properties. The proposed rule would require all appropriate inquiries to include a search of government records or data bases for information about nearby or adjoining 88 properties to assess potential impacts to the environmental conditions of the subject property from off site sources of contamination. The proposed rule would require that government records be searched to identify information relative to the proposed objectives and in accordance with the performance factors on: ( 1) adjoining and nearby properties for which there are governmental records of reported releases or threatened releases ( e. g., properties currently listed on the National Priorities List ( NPL), properties subject to corrective action orders under the Resource Conservation and Recovery Act ( RCRA), properties with reported releases from leaking underground storage tanks); ( 2) adjoining and nearby properties previously identified or regulated by a government entity due to environmental conditions at a site ( e. g., properties previously listed on the NPL, former CERCLIS sites with notices of no further response actions planned); and ( 3)

adjoining and nearby properties that have government issued permits to conduct waste management activities ( e. g., facilities permitted to manage RCRA hazardous wastes).

In the case of government records searches for nearby properties, the proposed rule ( at § 312.26( c)) includes minimum search distances for obtaining and reviewing records or data bases concerning activities and facilities located on nearby properties. The minimum search distances proposed are based on the Negotiated Rulemaking Committee's professional judgment regarding the value of obtaining information on potential releases or threatened releases from properties and activities within a given distance from the subject property that could have an impact on the subject property. For example, government records identifying properties listed on the NPL should be searched to obtain information on NPL sites located within one half mile of the subject property. The Committee generally believed that NPL sites located beyond one half mile of a property most likely would have little or no impact on the environmental conditions at the subject 89 property. For nearby properties, the proposed rule includes proposed minimum search distances ( e. g., properties located either within one mile or one half mile of the subject property) for each type of record to be searched to facilitate defining the scope of the records searches. In the case of two types of records, records of RCRA small quantity and large quantity generators and records of registered storage tanks, the all appropriate inquiries search need only identify RCRA generators and storage tanks located on adjoining properties ( the proposal contains no requirement to search for these two types government records for other nearby properties).

EPA and the Negotiated Rulemaking Committee realize that property specific and regional conditions may influence the appropriateness of the proposed search distances for any given type of record and property. Appropriate search distances for properties located in rural settings may differ from appropriate search distances for urban settings. In addition, ground water flow direction, depth to ground water, arid weather conditions, the types of facilities located on nearby properties, as well as other factors may influence the degree of impact to a property from off site sources. Therefore, the proposed rule would allow for the environmental professional to adjust any or all of the proposed minimum search distances for any of the record types, based upon professional judgment and the consideration of site specific conditions or circumstances when seeking to achieve the proposed objectives and performance factors for the required inquiries. The proposed rule provides that the environmental professional may consider one or more of the following factors when determining an alternative appropriate search distance:

° the nature and extent of a release;

° geologic, hydrogeologic, or topographic conditions of the subject property and surrounding environment; 90 ° land use or development densities;

° the property type;

° existing or past uses of surrounding properties;

° potential migration pathways ( e. g., groundwater flow direction, prevalent wind direction);

or ° other relevant factors.

The proposed rule would require environmental professionals to document the rationale for making any modifications to the required minimum search distances included in the proposed regulation.

The Agency requests comments on the proposed standards for reviewing federal, state,

tribal and local government records.

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

1. Visual inspections of the subject property The proposed rule, at § 312.27, would require that a visual on site inspection be conducted of the subject property. The proposed visual on site inspection requirements include inspecting the facilities and any improvements on the property, as well as visually inspecting areas on the property where hazardous substances may currently be or in the past may have been used, stored,

treated, handled, or disposed of. During their deliberations, members of the Negotiated Rulemaking Committee overwhelmingly stressed the need for every all appropriate inquiries investigation to include an on site inspection. Many Committee members pointed out that on site 91 inspections of a property can provide the best source of information regarding indications of environmental conditions on a property. The Committee recommended, and EPA included in today's proposed rule, a requirement that a visual on site inspection of the subject property be conducted in all but a few very limited cases and that physical limitations to the visual on site inspection ( e. g., weather conditions, physical obstructions) be documented.

We note that persons conducting all appropriate inquiries with monies provided in a grant awarded under CERCLA Section 104( k)( 2)( B) must, during the on site visual inspection, inspect the facilities and any improvements on the property, as well as visually inspect any other areas on the property where hazardous substances may currently be or in the past may have been used,

stored, treated, handled, or disposed. In addition, depending on the terms and conditions of the grant or cooperative agreement, the on site visual inspection requirements could include inspecting the facilities, improvements, and other areas of the property where pollutants,

contaminants, petroleum and petroleum products, or controlled substances may currently be or in the past may have been used, stored, treated, handled, or disposed.

The visual on site inspection of a property during the conduct of all appropriate inquiries may be the most important aspect of the inquiries and the primary source of information regarding the environmental conditions on the property. In all cases, every effort must be made to conduct an on site visual inspection of a property when conducting all appropriate inquiries.

Some members of the Committee raised concerns regarding a purchaser's or environmental professional's inability to obtain on site access to a property in limited circumstances. Some members noted that extreme and prolonged weather conditions and remote locations can impede access to a property. Another limited circumstance that could result in a 92 purchaser or environmental professional not being able to gain on site access to a property during the all appropriate inquiries is the situation where a local government, a non profit organization,

or other party seeks to obtain ownership of a property, but the owner refuses to provide access to the local government or non profit organization and the local government or non profit organization exercises all good faith efforts to gain access to the property ( e. g., seeking assistance from state government officials) and remains unable to gain on site access. Such circumstances may arise due to the unique nature of such transactions. Unlike commercial property transactions conducted by two private parties, where the economic and legal liability interests of both parties and the ability of either party to abandon the transaction can work in favor of the purchasing party's ability to gain access to a property prior to acquisition, property transactions between a private party and a local government or non profit organization acting on behalf of the public interest, may not afford the local government or non profit organization the same leverage, even if it is indeed in the public interest to attain ownership of the property. This situation may occur when the local government or non profit association seeks to assess, cleanup, and revitalize an area, but the owner of the property is unreachable, unavailable, or otherwise unwilling to provide access to the property. In such limited circumstances, the public benefit attained from a government entity, or the non profit organization, gaining ownership of a property may outweigh the need to gain on site access to the property prior to the transfer of ownership.

The proposed rule would require, in such unusual circumstances, that the purchaser make good faith efforts to gain access to the property. In addition, the proposal notes that the mere refusal of a property owner to allow the purchaser to have access to the property does not constitute an unusual circumstance, absent the making of good faith efforts to otherwise gain 93 access. The proposed rule, at proposed § 312.10, would define " good faith" as " the absence of any intention to seek an unfair advantage or to defraud another party; an honest and sincere intention to fulfill one's obligations in the conduct or transaction concerned."

In those unusual circumstances where a purchaser or an environmental professional, after good faith efforts, cannot gain access to a property and therefore cannot conduct an on site visual inspection, the proposed rule would require that the property be visually inspected, or observed,

by another method, such as through the use of aerial photography, or be inspected, or observed,

from the nearest accessible vantage point, such as the property line or a public road that runs through or along the property. In addition, the proposed rule would require that the all appropriate inquiries report includes documentation of efforts undertaken by the purchaser or the environmental professional to obtain on site access to the subject property and includes an explanation of why good faith efforts to gain access to subject property were unsuccessful. The proposed rule also would require that the all appropriate inquiries report must include documentation of other sources of information that were consulted to obtain information necessary to achieve the proposed objectives and performance factors. This documentation should include comments, from the environmental professional who signs the report, regarding any significant limitations to the ability of the environmental professional to identify conditions indicative of releases or threatened releases on, at, in, or to the subject property, that may arise due to the inability of the purchaser or environmental professional to obtain on site access to the property.

In addition, in those limited cases where an on site visual inspection cannot be conducted prior to the date a property is acquired, EPA recommends that once a property is purchased, the 94 property owner conduct an on site visual inspection of the property. Such an inspection may provide important information necessary for the property owner to fully comply with the other statutory provisions, including on going obligations, governing the CERCLA liability protections.

2. Visual inspections of adjoining properties The proposed rule, at proposed § 312.27, would require that the all appropriate inquiries investigation include visual inspections or observations of properties that adjoin the subject property. Visual inspections of adjoining properties may provide excellent information on the potential for the subject property to be affected by migrating contamination from adjoining properties. The Negotiated Rulemaking Committee discussed the merits and legalities of requiring parties to conduct on site visual inspections of adjoining properties. Although several Committee members expressed a preference for visual inspections to be conducted on site, the Committee was concerned that requiring purchasers or environmental professionals to gain onsite access to properties adjoined to the subject property would not be practicable. Therefore, the Committee recommended and EPA is proposing that visual observations of adjoining properties be conducted from the subject property's property line, one or more public rights of way, or other vantage point ( e. g., via aerial photography). Where practicable, a visual on site inspection is recommended and may provide greater specificity of information. The proposed rule would require that the visual observations of adjoining properties include observing areas where hazardous substances currently may be, or previously may have been, stored, treated, handled, or disposed. Visual inspections or observations of adjoining properties otherwise also must be conducted to achieve the proposed objectives and performance goals for the all appropriate inquiries. Physical limitations to the visual inspections or observations of adjoining properties 95 should be noted.

The Agency requests comments on the proposed requirements for conducting visual inspections of the subject property and adjoining properties, including the proposed exemption from the on site visual inspection requirement in cases where good faith efforts result in an ability to gain access to a property.

3. Role of the environmental professional in the visual inspection As mentioned in section III. D. 4 of this preamble, EPA and the Negotiated Rulemaking Committee considered proposing to require all activities in the all appropriate inquiries investigation to be conducted by persons meeting the proposed definition of an environmental professional. Requiring that an environmental professional conduct all activities could ensure that all data collection and investigations are conducted in a manner and to a degree of specificity that allows the environmental professional to make best use of all information in forming opinions and conclusions regarding the environmental conditions at a property. However, after careful review of the specific activities included in the statutory criteria and conducting an assessment of the costs and burdens of such a requirement, EPA and the Committee concluded that it is not necessary for each and every regulatory requirement to be conducted by an environmental professional. As outlined in section III. E. 1 of this preamble, the proposed rule would allow for certain aspects of the inquiries to be conducted solely by the purchaser or property owner, while providing that all other aspects be conducted under the supervision or responsible charge of the environmental professional. Among the activities that the proposed rule would require to be conducted under the supervision or responsible charge of an environmental professional is the on 96 site visual inspection.

It is EPA's recommendation that visual inspections of the subject property and adjoining properties be conducted by an individual who meets the proposed regulatory definition of an environmental professional. Although many other aspects of the all appropriate inquiries may be conducted sufficiently and accurately by individuals other than an environmental professional ( e. g., a research associate or librarian may be well qualified to search government records, an attorney may be well qualified to conduct a search for an environmental lien), EPA believes that an environmental professional is best qualified to conduct a visual inspection and locate and interpret information regarding the physical and geological characteristics of the property as well as information on the location and condition of equipment and other resources located on the property. EPA recognizes that other individuals who do not meet the proposed regulatory definition of an environmental professional, particularly when these individuals are conducting such activities under the supervision or responsible charge of an environmental professional, may have the required skills and knowledge to conduct an adequate on site visual inspection.

However, EPA believes that the professional judgment of an individual meeting the proposed definition of an environmental professional is vital to ensuring that all circumstances at the property indicative of environmental conditions and potential releases or threatened releases are properly identified and analyzed. An environmental professional is best qualified for identifying such situations and conditions and rendering a judgment or opinion regarding the potential existence of conditions indicative of environmental concerns.

An environmental professional should, at a minimum, be involved in planning for the onsite visual inspection. Information collected during the conduct of other required activities such 97 as interviews with owners and occupants and reviews of government records should be reviewed in preparing for the on site visual inspection. Although the proposed rule would not require the activities proposed as part of all appropriate inquiries investigation to be done in any particular sequence, EPA recommends that the on site visual inspection occur after many of the other activities are completed to allow the environmental professional or other individuals conducting the inspections to make the best use of available information about the property when preparing for and conducting the on site visual inspection. For example, if during interviews with owners and occupants of the property or during the review of government records, it becomes apparent that a property currently used for general retail purposes once was owned by individuals issued permits for the storage or treatment of hazardous wastes, this could be noted during the preparation for the on site visual inspection and the persons conducting the inspection should be prepared to look for remaining storage units or evidence of conditions caused by past spills or releases from on site management units. In addition, it may be important to consider any specialized knowledge held by the purchaser or the environmental professional regarding current or past uses and ownership of the property prior to conducting the on site visual inspection.

L. What are the Proposed Requirements for the Inclusion of Specialized Knowledge or Experience on the Part of the " Defendant?"

Because the conduct of all appropriate inquiries is one element of a protection against CERCLA liability, and the situation under which a property owner may need to assert that he or she qualifies for liability protection is when the property owner must defend his or her status as an innocent landowner, a contiguous property owner, or a bona fide prospective purchaser, the 98 statute refers to the property owner, or the user of the all appropriate inquiries investigation, as the " defendant." The Committee believed, and EPA agrees, that Congressional intent is to ensure that any information or special knowledge held by the purchaser or property owner with regard to a property and the conditions or situations present at the subject property be included in the preacquisition inquiries and be considered, along with all information collected during the conduct of all appropriate inquiries, when an environmental professional renders a judgment or opinion regarding the presence of environmental conditions indicative of releases or potentials releases of hazardous substances on, at, in, or to the subject property. This information should be revealed to all parties conducting the all appropriate inquiries and considered earlier in the inquiries process so that any specialized knowledge may be taken into account through the conduct of the other required aspects of the all appropriate inquiries.

Congress first added the innocent landowner defense to CERCLA in 1986. The Brownfields Amendments amended the innocent landowner defense and added to CERCLA the bona fide prospective purchaser and the contiguous property owner liability protections to CERCLA liability. The 1986 amendments to CERCLA established that among other elements necessary for a defendant to successfully assert the innocent landowner defense, a defendant must demonstrate that he or she had, at the time of acquisition of the property in question, made all appropriate inquiries into previous ownership and uses of the property. Congress directed courts evaluating a defendant's showing of all appropriate inquiries to take into account, among other things, " any specialized knowledge or experience on the part of the defendant." Nothing in today's proposed rule would change the nature or intent of this requirement as it has existed in the statute since 1986 or in how the courts have interpreted the requirement to date. 99 The Negotiated Rulemaking Committee decided not to extend the proposed requirements for the consideration of any specialized knowledge or experience of the property owner beyond what was previously required under CERCLA and established through case law. The proposed rule, at proposed § 312.28, would require that all appropriate inquiries include specialized knowledge on the part of the prospective property owner of the subject property, the area surrounding the subject property, the conditions of adjoining properties, as well as other experience relative to the inquiries that may be applicable to identifying conditions indicative of releases or threatened releases at the subject property. The proposed rule also would require that the results of the inquiries take into account any specialized knowledge related to the property,

surrounding areas, and adjoining properties held by the persons responsible for undertaking the inquiries, including any specialized knowledge on the part of the environmental professional.

In reviewing existing case law related to the innocent landowner defense, courts appear to have interpreted the " specialized knowledge" factor to mean that the professional or personal experience of the defendant may be taken into account when analyzing whether the defendant made all appropriate inquiries. For example, in Foster v. United States, 922 F. Supp. 642 ( D.

D. C. 1996), the owner of a property formerly owned by the General Services Administration and contaminated by, among other things, lead, mercury and PCBs, brought an action against the United States and District of Columbia, prior owners or operators of the site. The plaintiff was a principal in Long & Foster companies and purchased the property through a general partnership,

and received it by quitclaim deed. The U. S. and D. C. counterclaimed against plaintiff. Foster asserted the innocent landowner defense. The court rejected the plaintiff's claim based in part on the defendant's specialized knowledge. The court found that his specialized knowledge included 100 his position at Long & Foster, which did hundreds of millions of dollars of commercial real estate transactions, and his position as a partner in at least 15 commercial real estate partnerships. The partnership was involved as an investor in a number of real estate transactions, some of which involved industrial or commercial or mixed use property. The court ruled that " it cannot be said that [ the partnership] is a group unknowledgeable or inexperienced in commercial real estate transactions." Foster, 922 F. Supp. at 656.

In American National Bank and Trust Co. of Chicago v. Harcros Chemicals, Inc., 1997 WL 281295 ( N. D. Ill. 1997), the plaintiff was a company " involved in brownfields development,

purchasing environmentally distressed properties at a discount, cleaning them up, and selling them for a profit." American National Bank, 1997 WL 281295 at * 4. As a counter claim defendant,

the company asserted it was an innocent landowner and therefore not liable pursuant to CERCLA. The court found that among other reasons the defense failed because the company possessed specialized knowledge. The court ruled that the company was an expert environmental firm and possessed knowledge that should have alerted it to the potential problems at the site.

EPA points out that the proposed rule requires that the specialized knowledge of prospective landowners and the persons responsible for undertaking the all appropriate inquiries be taken into account when conducting the all appropriate inquiries for the purposes of identifying conditions indicative of releases or threatened releases at a property. However, as evidenced by the case law cited above, the determination of whether or not the all appropriate inquiries standard is met with regard to specialized knowledge remains within the discretion of the courts.

The Agency requests comments on the proposed provisions governing the inclusion of specialized knowledge or experience on the part of the purchaser and the environmental 101 professional.

M. What are the Proposed Requirements for the Relationship of the Purchase Price to the Value of the Property, if the Property was not Contaminated?

The proposed rule, at § 312.29, would require that the purchaser of the property consider whether or not the purchase price paid for the property reflects the fair market value of the property, assuming that the property is not contaminated. There may be many reasons that the price paid for a particular property is not an accurate reflection of the fair market value. The proposed rule would require that the purchaser consider whether any differential between the purchase price and the value of the property is due to the presence of releases or threatened releases of hazardous substances at the property.

The proposed rule does not require that a real estate appraisal be conducted to achieve compliance with this criterion. Although the Negotiated Rulemaking Committee discussed the potential value in requiring that an appraisal be conducted, the Committee determined that a formal appraisal is not necessary for the purchaser to make a general determination of whether the price paid for a property reflects its market value. Such a determination may be made by comparing the price paid for a particular property to prices paid for similar properties located in the same vicinity as the subject property, or by consulting a real estate expert familiar with properties in the general locality and who may be able to provide a comparability analysis. The objective is not to ascertain the exact value of the property, but to determine whether or not the purchase price paid for the property is reflective of its market value. Significant differences in the purchase price and market value of a property should be noted and the reasons for any differences 102 should be noted. The Agency requests comments on these proposed requirements.

N. What are the Proposed Requirements for Commonly Known or Reasonably Ascertainable Information about the Property?

The proposed rule, at proposed § 312.30, would require that landowners, brownfields grantees, and environmental professionals conducting the all appropriate inquiries consider commonly known information about the potential environmental conditions at a property.

Commonly known information generally is information available in the local community that may be ascertained from the owner or occupant of a property, members of the local community,

including owners or occupants of neighboring properties to the subject property, local or state government officials, local media sources, and local libraries and historical societies. Much of this information may be incidental to other information collected during the inquiries, but such information may be valuable to identifying conditions indicative of releases or threatened releases at the subject property. For example, neighboring property owners and local community members may have information regarding undocumented uses of a property during periods when the property was idle or abandoned. Local community sources may be good sources of information for understanding uses of a property and activities conducted at a property in the case of abandoned properties.

The collection and use of commonly known information about a property must be done in connection with the collection of all other required information for the purposes of achieving the proposed objectives and performance factors contained in proposed § 312.20. EPA recommends that persons undertaking the all appropriate inquiries make efforts to collect information on the 103 subject property from a variety of sources, including sources located in the community in which the property is located, to the extent necessary to achieve the objectives and performance factors of § 312.20( d) and ( e). Opinions included in the all appropriate inquiries report should be based upon a balance of all information collected. All information collected, including information available from the local community, should be considered in the final evaluation.

As mentioned above in section III. K., the Brownfields Amendments to CERCLA amended the innocent landowner defense previously added to CERCLA in 1986. In addition, the Brownfields Amendments added to CERCLA the bona fide prospective purchaser and the contiguous property owner liability protections to the statute. The 1986 amendments to CERCLA established that among other elements necessary for a defendant to successfully assert the innocent landowner defense, a defendant must take into account commonly known or reasonably ascertainable information about the property. Nothing in today's proposed rule would change the nature or intent of this requirement as it has existed in the statute since 1986 or in how the courts have interpreted the requirement to date.

There is some case law, related to the innocent landowner defense, that provide guidance for considering commonly known or reasonably ascertainable information about the property. For example, in Wickland Oil Terminals v. Asarco, Inc., 1988 WL 167247 ( N. D. Cal. 1988), the court noted that Wickland was aware of potential water quality problems at the subject property due to large piles of mining slag stored at the property, even though Wickland argued that previous owners withheld such information, because the information was available from other sources consulted by Wickland prior to purchasing the property, including the Regional Water Quality Control Board and a consulting firm hired by Wickland. Such information was commonly known 104 by local sources and therefore should have been considered by Wickland during its conduct of all appropriate inquiries.

In Hemingway Transport Inc. v. Kahn, 174 F. R. 148 ( Bankr. D. Mass. 1994), the court ruled against an innocent landowner claim because it found " that had [ the defendants] exerted a modicum of effort they may easily have discovered information that at a minimum would have compelled them to inspect the property further... the [ defendants] could have taken a few significant steps, literally, to minimize their liability and discover information about the property..." The court cited that one action the defendants should have taken to collect available information about the property is phone calls to city officials to inquire about conditions at the property.

EPA requests comment on the proposed requirements for including within the all appropriate inquiries commonly known or reasonably ascertainable information about the property.

O. What are the Proposed Requirements for " The Degree of Obviousness of the Presence or Likely Presence of Contamination at the Property, and the Ability to Detect the Contamination by Appropriate Investigation?"

The proposed rule, at § 312.31, would require that persons conducting the all appropriate inquiries consider all the information collected during the conduct of the inquiries in totality to ascertain the potential presence of a release or threatened release at the property. Persons conducting all appropriate inquiries, following the collection of all required information, must assess whether or not an obvious conclusion may be drawn that there are conditions indicative of 105 a release or threatened release of hazardous substances ( or other substances, pollutants or contaminants) on, at, in, or to the property. In addition, the proposed rule would require parties to consider whether or not the totality of information collected prior to acquiring the property indicates that the parties should be able to detect a release or threatened release on, at, in, or to the property. Persons should undertake these considerations keeping in mind that ultimately it is for a court to assess the degree of obviousness of contamination.

The previous innocent landowner defense ( added to CERCLA in 1986) required a court to consider the degree of obviousness of the presence or likely presence of contamination at a property, and the ability of the defendant ( i. e., the landowner) to detect the contamination by appropriate investigation. Nothing in today's proposed rule would change the nature or intent of this requirement as it has existed in the statute since 1986 or in how the courts have interpreted the requirement to date. Case law relevant to this criterion indicates that defendants may not be able to claim an innocent landowner defense if a preponderance of information available to a prospective landowner prior to acquiring the property indicates that the defendant should have concluded that there is a high likelihood of contamination at the site. In some cases ( e. g.,

Hemingway Transport Inc. v. Kahn, 174 F. R. 148 ( Bankr. D. Mass. 1994), and Foster v. United States, 922 F. Supp. 642 ( D. D. C. 1996), courts have ruled that if a defendant had done a bit more visual inspection or further investigation, based upon information available to the defendant prior to acquiring the property, it would have been obvious that the property was contaminated. In Foster v. United States, the court determined that the innocent landowner defense was not available based in part on the fact that the partnership presumed the site was free of contamination based upon cursory visual inspections despite evidence in the record that, at the time of the sale, 106 the soil was visibly stained by PCB contaminated oil. In addition, although the property was located in a run down industrial area, the defendant did no investigation into the environmental conditions at the site prior to acquiring the property.

With regard to the conduct of sampling and analysis, today's proposed rule would not require sampling and analysis as part of the all appropriate inquiries investigation. However,

members of the Committee recognized that sampling and analysis may be valuable in determining the possible presence and extent of potential contamination at a property. In addition, the fact that the all appropriate inquiry standards would not require sampling and analysis may not prevent a court from concluding that, under the circumstances of a particular case, sampling and analysis should have been conducted to meet " the degree of obviousness of the presence or likely presence of contamination at the property, and the ability to detect the contamination by appropriate investigation" criterion and obtain protection from CERCLA liability. Prospective landowners should keep in mind that the conduct of all appropriate inquiries prior to purchasing a property is only one requirement to which a purchaser must comply to claim protection from CERCLA liability once the purchase has taken place. The statute requires that persons, after acquiring a property, comply with continuing obligations to take reasonable steps to stop on going releases at the property, prevent any threatened future releases, and prevent or limit any human,

environmental, or natural resource exposure to any previously released hazardous substances ( these criteria are summarized in detail in section II. D. of this preamble). In certain instances,

depending upon site specific circumstances and the totality of the information collected during the all appropriate inquiries prior to the property acquisition, it may be necessary to conduct sampling and analysis, either pre or post acquisition, to fully understand the conditions at a property, and 107 fully comply with the statutory requirements for the CERCLA liability protections. In addition,

sampling and analysis may help explain existing data gaps. Prospective purchasers should be mindful of all the statutory requirements for obtaining the CERCLA liability protections when considering whether or not to conduct sampling and analysis and when determining whether to undertake sampling and analysis prior to or after acquiring a property. Today's proposed regulation does not require that sampling and analysis be conducted as part of the all appropriate inquiries that must be conducted prior to acquiring a property.

The Agency requests comments on the proposed requirements for meeting the statutory provisions for including within the all appropriate inquiries the degree of obviousness of the presence or likely presence of contamination at the property, and the ability to detect the contamination by appropriate investigation. The Agency also specifically requests comments on the decision not to require sampling and analysis as part of the all appropriate inquiries regulations.

IV. Requests for Comments EPA is requesting comment on the standards and practices included as part of today's proposed rule. Public comments may be submitted to the Agency electronically or by mail, as explained in the SUPPLEMENTARY INFORMATION section of this preamble. As explained in that section, the Agency requests that when submitting comments, please state your views as clearly as possible, describe any assumptions applicable to your comments, provide any technical information and data that support your views, and provide specific examples to illustrate your concerns. Specifically, the Agency is interested in receiving public comment on the following: 108 ° The proposed requirements for an all appropriate inquiries report, including the signature requirements for the all appropriate inquiries report.

° The proposed qualifications included in the definition of an environmental professional and the provisions allowing for individuals who do not qualify as environmental professionals to contribute to inquiry activities.

° The proposed division of responsibilities for conducting all appropriate inquiries.

° The proposal to establish the date on which title is transferred on a property as the date on which the property is acquired.

° The proposed provisions for using previously conducted all appropriate inquiries.

° The proposed requirements for using all appropriate inquiries conducted by third parties.

° The proposed objectives and performance factors for the all appropriate inquiries requirements.

° The proposed provisions for addressing data gaps.

° The proposal to not require sampling and analysis as part of the all appropriate inquiries standards.

° The proposed standards for conducting interviews of past and present owners and occupants of a property.

° The proposed requirements to interview owners or occupants of neighboring properties in the case of abandoned properties.

° The proposed standards for reviews of historical sources of information.

° The proposed standards for searching for recorded environmental cleanup liens.

° The proposed standards for reviewing federal, state, tribal and local government records. 109 ° The proposed requirements for conducting visual inspections of the subject property and adjoining properties, including the limited exemption from conducting an on site inspection when good faith efforts result in an inability to obtain access to a property.

° The proposed provisions governing the inclusion of specialized knowledge or experience on the part of the purchaser and the environmental professional.

° The proposed requirements for considering the relationship of the purchase price to the value of a property, if the property was not contaminated.

° The proposed requirements for commonly known or reasonably ascertainable information about the property.

° The proposed requirements for the degree of obviousness of the presence or likely presence of contamination at the property, and the ability to detect the contamination by appropriate investigation.

° The proposed information collection requirements, including the need for such information, the accuracy of the provided burden estimates associated with the requirements, and any suggested methods for minimizing respondent burden, including through the use of automated collection techniques.

° The methodology used to estimate the costs and impacts of today's proposed rule,

including the estimated incremental labor hours used to estimate the incremental cost of the proposed rule.

° The methodology employed to identify impacted small entities and estimating the potential impacts on small entities.

° The identification of voluntary consensus standards that are applicable to and compliant 110 with today's proposed standards and practices for all appropriate inquiries.

V. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review Under Executive Order 12866 ( 58 FR 51735), the Agency must determine whether this regulatory action is " significant'' and therefore subject to formal review by the Office of Management and Budget ( OMB) and to the requirements of the Executive Order. The Executive Order defines " significant regulatory action'' as one that is likely to result in a rule that may: ( 1)

have an annual effect on the economy of $ 100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment,

public health or safety, or state, local, or tribal governments or communities; ( 2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; ( 3)

materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or ( 4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

Pursuant to the terms of Executive Order 12866, it has been determined that today's proposed rule is a " significant regulatory action" because this proposed rule contains novel legal or policy issues.

Based upon the results of its Economic Impacts Analysis ( EIA), EPA has determined that this proposed rule will have an annual effect on the economy of less than $ 100 million. The annualized benefits associated with today's proposed rule have not been monetized but are identified and summarized in the document titled " Economic Impacts Analysis for the Proposed 111 All Appropriate Inquiries Regulation." A copy of the EIA is available in the docket for today's proposed rule. The Agency solicits comment on the methodology and results from the analysis as well as any data that the public believes would be useful in a revised analysis.

24. Methodology The value of any regulatory action is traditionally measured by the net change in social welfare that it generates. The Economic Impacts Analysis ( EIA) conducted in support of today's proposed rule examines both costs and qualitative benefits in an effort to assess the overall net change in social welfare. The primary focus of the EIA document is on compliance costs and economic impacts. Below, EPA summarizes the analytical methodology and findings for the proposed all appropriate inquiries rule. The information presented is derived from the EIA.

The all appropriate inquiries regulation potentially will apply to most commercial property transactions. The requirements will be applicable to any public or private party, who may potentially claim protection from CERCLA liability as an innocent landowner, a bona fide prospective purchaser, or a contiguous property owner. However, the conduct of all appropriate inquiries, or environmental due diligence, is not new to the commercial property market. Prior to the Brownfields Amendments to CERCLA, commercial property transactions often included an assessment of the environmental conditions at properties prior to the closing of any real estate transaction whereby ownership was acquired for the purposes of confirming the conditions at the property or to establish an innocent landowner defense should environmental contamination be discovered after the property was acquired. The process most prevalently used for conducting all appropriate inquiries, or environmental site assessments, is the process developed by the American Society for Testing and Materials ( ASTM) and entitled " E1527, Phase I Environmental 112 Site Assessment Process." In addition, some properties, particularly in cases where the subject property is assumed not to be contaminated or was never used for industrial or commercial purposes, were assessed using another, less rigorous process developed by ASTM, sometimes referred to as a " transaction screen" and entitled " E1528 Standard Practice for Environmental Site Assessments: Transaction Screen Process."

Our first step in assessing the economic impacts of the proposed rule was establishing a baseline to represent the relevant aspects to the commercial real estate market in the absence of any changes in regulations. Because under existing conditions almost all transactions concerning commercial properties are accompanied by either an environmental site assessment ( ESA)

conducted in accordance with ASTM E1527 2000 or a transaction screen as specified in ASTM E1528, these practices were assumed to continue even in the absence of the all appropriate inquiries regulation. The numbers of each type of assessment were estimated on the basis of industry data for recent years, with recent growth rates in transactions assumed to continue for the 10 year period covered by the EIA. An adjustment in the relative numbers of the ESAs and transaction screens was made to account for the fact that, under the proposed rule, an ESA will provide more certain protection from liability. This adjustment was made by comparing shifts between the two procedures that occurred when the Brownfields Amendments established the ASTM E1527 2000 standard as the interim standard for all appropriate inquiries, and thus as one requirement for qualifying as an innocent landowner, bona fide purchaser, or contiguous property owner.

We then considered the requirements included in the recommendation of the Negotiated Rulemaking Committee and those included in a few options that the committee considered but did 113 not adopt, as well as an additional option, at the request of the Office of Management and Budget ( OMB), and compared. We then compared the costs of each alternative option to the requirements for forcosts associated with conducting assessments conducted under using the ASTM E1527 2000 and ASTM E1528. standard.. When We present this cost comparison to comply with current OMB guidance to consider a less stringent alternative than the Agency's preferred alternative when conducting an economic impacts assessment. As explained in section V. I., EPA has determined that the ASTM E1527 2000 standard is inconsistent with applicable law. However, the alternative is included in the economics assessment for cost comparison purposes.

When compared to the ASTM E1527 2000 standard ( i. e., the baseline standard), today's proposed rule is documenting recorded environmental cleanup liens; increased burden for documenting the reasons for the price and market value of a property in those cases where the purchase price paid for the subject property is significantly below the market value of the property; and increased burden for recording information about the degree of obviousness of contamination at a property. The three regulatory options that were considered by the Negotiated Rulemaking Committee but not adopted would have required: ( 1) all non clerical work to be performed by an individual meeting the proposed definition of an environmental professional; ( 2) no requirement to interview owners/ occupants of neighboring properties when the subject property is abandoned; and ( 3)

limited soil or water sampling. An additional option is presented in the EIA for the proposed rule to comply with guidance recently issued by OMB. OMB " Circular A 4" requires that agencies 3 The distribution of abandoned properties and properties with known owners, modeled as a range, is based on an estimate of vacant lands in urban areas and an estimate of abandoned Superfund sites.

114 analyze a continuum of regulatory options, including a regulatory alternative that is less stringent than an agency's preferred alternative. To fully comply with the OMB guidance, and at the request of OMB, the EIA includes a comparison of the cost impacts of our preferred option and the other options considered by the Negotiated Rulemaking Committee to an option that would entail using the ASTM E1527 2000 standard as the federal regulation. As explained in more detail below, it is EPA's opinion that the ASTM E1527 2000 standard is not compliant with the statutory requirements for all appropriate inquires, and therefore if adopted may not provide the benefits of the CERCLA liability protections. However, the option is provided in the EIA for the purposes of a cost comparison.

To estimate the changes in costs resulting from the rule or the regulatory options, we developed a costing model. This model estimates the total costs of conducting site assessments as the product of costs per assessment, numbers of assessments per year, and the number of years in the analysis. The costs per assessment, in turn, are calculated by dividing each assessment into individual labor activities, estimating the labor time associated with each, and assigning a per hour labor cost to each activity on the basis of the labor category most appropriate to that activity.

Labor times and categories are assumed to depend on the size and type of property being assessed, with the nationwide distribution of properties based on data from industry on environmental sites assessments and brownfield sites. 3 The estimates and assignments of categories are made based on the experience of professionals who have been involved in large numbers of site assessments, and who are therefore skilled in cost estimation for the relevant 115 activities. Other costs, such as reproduction and the purchase of data, are added to the labor costs to form the estimates of total costs per assessment. These total costs, stratified by size and type of property, are then multiplied by estimated numbers of assessments of each size and type to generate our estimates of total annual costs. The model was tested by comparing its results to industry wide estimates of average price of conducting assessments under baseline conditions, and found to agree quite well. We also used the model to estimate total costs per year under the proposed rule and each option; the differences between these estimated costs and the estimated costs in the baseline constituted our estimates of the incremental regulatory costs. EPA requests comments on our methodology for estimating the costs and impacts of today's proposed rule,

including comments on our estimates of the incremental labor hours necessary to conduct activities required by the proposed rule but not currently conducted using the baseline standard ( i. e., ASTM E1527 2000).

The EIA provides a qualitative assessment of the benefits of the proposed rule. The benefits discussed are those that may be attributed to an increased level of certainty with regard to CERCLA liability provided to prospective purchasers of potentially contaminated properties,

including brownfields, who comply with the provisions of the proposed rule and comply with the other statutory provisions associated with the liability protections. Our basic premise for associating certain benefits to the proposed rule is that we believe that the level of certainty provided by the liability protections may result in increased brownfields property transactions.

However, it is difficult to predict how many additional transactions may occur that involve brownfields properties in response to the increased certainty of the liability protections. It also is difficult to obtain data on changes in behaviors and practices of prospective property owners in 116 response to the liability protections. Therefore, we made no attempt to quantify potential benefits or compare the benefits to estimated incremental costs.

The Agency believes that the increased level of certainty with regard to CERCLA liability provided by complying with the proposed rule and other statutory requirements may have the affect of increasing property transactions involving brownfields and other contaminated and potentially contaminated properties and improving information about environmental conditions at these properties. The types of indirect benefits that we believe may result from this increase in the number of transactions involving these types of properties include increased numbers of cleanups, reduced use of greenfields, potential increases in property values, and potential increases in quality of life measures ( e. g., decreases in urban blight, reductions in traffic,

congestion, and reduced pollution due to mobile source emissions). However, as stated above,

the benefits of the proposed rule are considered only qualitatively, due to the difficulty of predicting how many additional brownfields and contaminated property transactions may occur in response to the increased certainty of liability protections provided by the proposed rule, as well as the difficulty in getting data on changes in behaviors and practices in response to the availability of the liability protections. EPA is confident that the new liability protections afforded to prospective property owners, if they comply with the all appropriate inquiries provisions, will result in increased benefits. EPA is not able to quantify, with any significant level of confidence,

the exact proportion of the benefits attributed only to the availability of the liability protections and the all appropriate inquiries regulations. For these reasons, the costs and benefits could not be directly compared. 117 25. Summary of Regulatory Costs For a given property, the costs of compliance with the proposed rule relative to the baseline depend on whether that property would have been assessed, in absence of the all appropriate inquiries regulation, with an ASTM E1527 2000 assessment process or with a simpler transaction screen ( ASTM E1528). The table below shows that the average incremental cost of the proposed rule relative to conducting an ASTM E1527 2000 is estimated to be between $ 41 and $ 47. For the small percentage of cases for which a transaction screen would have been preferred to the ASTM E1527 2000 in the baseline, but which now would require an assessment in compliance with the proposed rule, the average incremental cost is estimated to be between $ 1,448 and $ 1,454. We estimate that approximately 97 percent of property transactions will bear only the incremental cost of the proposed rule relative to the ASTM E1527 2000 process.

Therefore, the weighted average incremental cost per transaction is estimated to be fairly low,

between $ 84 and $ 89.

The three regulatory options considered by the Negotiated Rulemaking Committee, but not recommended, would result in higher incremental costs from the base case. Option 1, which would require all of the non clerical tasks in the all appropriate inquiries to be performed by an individual meeting the definition of environmental professional, would add an average of $ 539 per property assessment ( or approximately $ 1,946 per property, assuming a transition from a transaction screen).

EPA estimates that the incremental cost of Option 2, or the incremental cost of incorporating all the additional aspects of 118 the proposed rule, over the baseline, except for the neighboring property owners/ occupants interview requirement for abandoned properties, would be $ 54 per assessment ( or $ 1,460 per property, assuming a transition from a transaction screen). Option 3, which would require the all appropriate inquiries to include limited sampling and analysis, would result in average incremental costs of either $ 1,439 or $ 2,845, depending on whether, under baseline conditions, an ASTM E1527 2000 process or a transaction screen ( ASTM E1528) would have been used. The OMB requested alternative of using the ASTM E1527 2000 standard as the federal regulation would result in no ($ 0) incremental cost per property assessment ( or, on average, $ 1,407 per property, assuming a transition from a transaction screen). We note, however, that EPA has found that the ASTM E1527 2000 standard is inconsistent with the statutory requirements for all appropriate inquiries.

Summary of Incremental Per Assessment Cost Estimates Average Incremental Cost Relative to Phase I ESA under ASTM E1527 2000 ( 97% of transactions) Average Incremental Cost for Transition from Transaction Screen ( under ASTM E1528) ( 3% of transactions) Proposed AAI Rule $ 41  $ 47 $ 1,448  $ 1,454 Option 1   Environmental Professional Only $ 539 $ 1,946 Option 2   Unchanged Interview Requirement $ 54 $ 1,460 Option 3   Limited Sampling $ 1,439 $ 2,845 OMB Option   ASTM E1527 2000 $ 0 $ 1,407 The total annualized costs of the proposed rule and the four additional options considered, in total and relative to the base case, are shown in the exhibit below. The total costs were calculated over a period of ten years from the start of 2004 and then annualized at a three 119 and seven percent discount rate. When a discount rate of three percent is used, the estimated total annual costs for the options considered by the Negotiated Rulemaking Committee range from just under $ 700 million to over $ 1 billion per year, compared to the baseline costs of $ 663.8 million and the costs associated with the option of using the ASTM E1527 2000 standard of over $ 677 million. The proposed regulation adds between $ 26 and $ 28 million per year, while the incremental costs association with the options considered by the Negotiated Rulemaking Committee range from $ 30 million to almost $ 460 million per year. The incremental cost of the OMB alternative of using the ASTM 1527 2000 standard is over $ 13 million. When a discount rate of seven percent is used, the estimated total annual costs for the options considered by the Negotiated Rulemaking Committee range from $ 710 million to over $ 1 billion per year, compared to the baseline costs of $ 683.5 million and the costs associated with using the OMB optionASTM E1527 standard of over $ 697 million. The proposed regulation adds between $ 27 and $ 29 million per year, while the incremental costs association with the options considered by the Negotiated Rulemaking Committee range from $ 31 million to over $ 470 million per year. The incremental cost of the OMB alternative of using the ASTM E1527 2000 standard is close to $ 14 million. 120 Summary of Annual Cost Estimates ( in millions), Discounted at Three Percent Base Case Proposed Rule Option 1 Option 2 Option 3 OMB Option ASTM E1527 Total Annual Cost $ 663.8 $ 690.1  $ 691.9 $ 844.0 $ 693.9 $ 1,122.0 $ 677.3 Incremental Total Annual Cost Relative to the Base Case $ 0 $ 26.3  $ 28 $ 180.2 $ 30.0 $ 458.1 $ 13.5 Summary of Annual Cost Estimates ( in millions), Discounted at Seven Percent Base Case Proposed Rule Option 1 Option 2 Option 3 OMB Option ASTM E1527 Total Annual Cost $ 683.5 $ 710.5  $ 712.3 $ 868.9 $ 714.4 $ 1,155.0 $ 697.3 Incremental Total Annual Cost Relative to the Base Case $ 0 $ 27  $ 28.8 $ 185.4 $ 30.8 $ 471.5 $ 13.8 As shown in the table above, the estimated total annual cost of today's proposed rule,

calculated using a discount rate of seven percent, would be between $ 710.5 and $ 712.3 million and the estimated total annual incremental cost would be between $ 27 and $ 29 million. Thus,

the proposed rule will have an incremental annual effect on the economy of less than $ 100 million per year. 121 B. Paperwork Reduction Act The information collection requirements contained in this proposed rule have been submitted for approval to the Office of Management and Budget under the Paperwork Reduction Act, 44 U. S. C. 3501 et seq. The Information Collection Request ( ICR) document prepared by EPA has been assigned EPA ICR Number 2144.01.

Under the PRA, EPA is required to estimate the notification, reporting and recordkeeping costs and burdens associated with the requirements specified in the proposed rule. This proposed rule, if it is promulgated, will require persons wanting to claim one of the liability protections under CERCLA to conduct some activities that go beyond current customary and usual business practices ( i. e., beyond ASTM E1527 2000) and therefore will impose an information collection burden under the provisions of the Paperwork Reduction Act.

The information collection activities are associated with the activities mandated in Section 101 ( 35)( B) of CERCLA for those persons wanting to claim protection from CERCLA liability.

None of the information collection burdens associated with the provisions of today's rule include requirements to submit the collected information to EPA or any other government agency. Information collected by persons affected by today's proposed rule may be useful to such persons if their liability under CERCLA for the release or threatened release of a hazardous substance is challenged in a court.

The activities associated with today's proposed rule that go beyond current customary and usual business practices include interviews with neighboring property owners and/ or occupants in those cases where the subject property is abandoned, documentation of all environmental cleanup liens in the Phase I Environmental Site Assessment report, discussion of 122 the relationship of purchase price to value of the property in the report, and consideration and discussion of whether additional environmental investigation is warranted. Paperwork burdens are estimated to Under the Paperwork Reduction Act `` burden'' means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop,

acquire, install, and utilize technology and systems for the purposes of collecting, validating,

and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9.

To comment on the Agency's need for this information, the accuracy of the provided burden estimates, and suggested methods for minimizing respondent burden, EPA has 123 established a public docket for this proposed rule, which includes this ICR, under Docket ID Number SFUND 2004 0001. Submit any comments related to the ICR for this proposed rule to EPA and OMB. See ADDRESSES section at the beginning of this document for where to submit comments to EPA. Send comments to OMB at the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, N. W., Washington,

D. C. 20503, Attention: Desk Officer for EPA.

Since OMB is required to make a decision concerning the ICR between 30 and 60 days after [ INSERT DATE OF PUBLICATION OF THIS DOCUMENT], a comment to OMB is best assured of having its full effect if OMB receives it by [ INSERT DATE 30 DAYS AFTER PUBLICATION IN FEDERAL REGISTER]. The final rule will respond to any OMB or public comments on the information collection requirements contained in this proposed rule.

C. Regulatory Flexibility Act The Regulatory Flexibility Act ( RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 ( SBREFA), 5 USC 601 et. seq., generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

For the purposes of assessing the impacts of today's rule on small entities, small entity is defined as: ( 1) A small business that is defined by the Small Business Administration by 124 category of business using the North American Industrial Classification System ( NAICS) and codified at 13 CFR 121.201; ( 2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and ( 3) a small organization that is any not for profit enterprise which is independently owned and operated and is not dominant in its field.

Since all non residential property transactions could be affected by today's proposed rule, if it is promulgated, large numbers of small entities could be affected to some degree.

However, we estimate that the effects, on the whole, will not be significant for small entities.

We estimate that, for the majority of small entities, the average incremental cost of today's proposed rule relative to conducting an ASTM E1527 2000 will be between $ 41 and $ 47.

When we annualize the incremental cost of $ 47 per property transaction over ten years at a seven percent discount rate, we estimate that the average annual cost increase per establishment per property transaction will be us, the cost impact to small entities is estimated to not be significant. A more detailed summary of our analysis of the potential impacts of today's proposed rule to small entities is included in " Economic Impacts Analysis of the Proposed All Appropriate Inquiries Regulation." This document is included in the docket for today's proposed rule.

After considering the economic impacts of today's proposed rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. We estimate that, on average, small entities may purchase commercial real estate in any given year and therefore could potentially be impacted by today's proposed rule. Though large numbers of small entities could be affected to some degree, we estimated 4 For a very small percentage of entities transitioning from transaction screens to the all appropriate inquiries requirements, the maximum increase per establishment per property transaction is estimated to be . When we annualize this incremental cost per property transaction over ten years at a seven percent discount rate, we estimate that the maximum annual cost increase per establishment per property transaction will be We estimate that approximately one fifth of one percent of the properties transitioning from a transaction screen to a Phase I ESA will have an impact of this magnitude each year.

125 that the effects, on the whole, would not be significant for small entities. We estimate that, for the majority of small entities, the average incremental cost of today's proposed rule relative to conducting an ASTM E1527 2000 will be between $ 41 and $ 47. For the small percentage of cases for which a transaction screen would have been preferred to the ASTM E1527 2000 in the baseline, but which now will require an assessment in compliance with the proposed rule,

the average incremental cost of conducting an environmental site assessment will be between $ 1,448 and $ 1,454. When we annualize the incremental cost per property transaction over ten years at a seven percent discount rate, we estimate that for the majority of small entities the average annual cost increase per establishment per property transaction will be the small percentage of entities transitioning from transaction screens to the all appropriate inquiries requirements of the proposed rule, the average annual cost increase per establishment per property transaction will be Although this proposed rule will not have a significant economic impact on a substantial number of small entities, EPA nonetheless considered impacts to small entities in the development of this rule. As described in Section II. F. of this preamble, we developed this proposed rule using a negotiated rulemaking committee. The interests of small entities,

including small businesses and small communities, were represented on the Negotiated Rulemaking Committee for All Appropriate Inquiries. Committee members representing small 126 entities, including representatives from small environmental services firms and representatives from organizations representing small and rural communities, participated in each meeting of the Committee. Today's proposed rule includes provisions that are the direct result of input from these representatives to the Committee.

EPA continues to be interested in the potential impacts of the proposed rule on small entities. EPA welcomes comments on issues related to such impacts. In addition, EPA requests comments on the methodology employed to identify impacted small entities and estimate the potential impacts on small entities.

D. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 ( UMRA), Public Law 104 4,

establishes requirements for federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA,

EPA must prepare a written statement, including a cost benefit analysis, for proposed and final rules with " Federal mandates" that may result in expenditures to State, local, and tribal governments, in the aggregate, or to the private sector, of $ 100 million or more in any one year.

Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost effective or least burdensome alternative if the 127 Administrator publishes with the final rule an explanation of why that alternative was not adopted.

Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA, a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials to have meaningful and timely input in the development of regulatory proposals with significant federal intergovernmental mandates,

and informing, educating, and advising small governments on compliance with the regulatory requirements.

Today's proposed rule contains no federal mandates ( under the regulatory provisions of Title II of the UMRA) for state, local, or tribal governments or the private sector. The proposed rule imposes no enforceable duty on any state, local, or tribal governments. EPA also determined that this proposed rule contains no regulatory requirements that might significantly or uniquely affect small governments. In addition, as discussed above, the private sector is not expected to incur costs of $ 100 million or more as a result of today's proposed rule. Therefore,

today's proposed rule is not subject to the requirements of Sections 202 and 205 of UMRA.

E. Executive Order 13132: Federalism Executive Order 13132, entitled " Federalism" ( 64 FR 43255, August 10, 1999),

requires EPA to develop an accountable process to ensure " meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications." " Policies that have federalism implications" is defined in the Executive Order to 128 include regulations that have " substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government."

This proposal does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. No state and local government bodies will incur compliance costs as a result of today's rulemaking. Therefore, Executive Order 13132 does not apply to this proposed rule.

Although section 6 of Executive Order 13132 does not apply to this rule, EPA did ensure that meaningful and timely input was obtained from state and local government officials when developing the proposed rule. Representatives from two different state agencies participated on the Negotiated Rulemaking Committee. In addition, representatives from three different organizations representing local government officials participated on the Committee. State and local government representatives participated in the Committee negotiations at each meeting of the Committee. Today's proposed rule includes provisions that are the direct result of input from the state and local government representatives to the Committee negotiations.

In the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and state and local governments, EPA specifically solicits comment on this proposed rule from state and local officials.

F. Executive Order 13175: Consultation and Coordination with Indian Tribal 129 Governments Executive Order 13175, entitled " Consultation and Coordination with Indian Tribal Governments" ( 65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure " meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications." This proposed rule does not have tribal implications, as specified in Executive Order 13175. Today's proposed rule does not significantly or uniquely affect the communities of Indian tribal governments, nor would it impose direct compliance costs on them. Thus, Executive Order 13175 does not apply to this rule.

Although Executive Order 13175 does not apply to this proposed rule, EPA did ensure that meaningful and timely input was obtained from tribal officials when developing the proposed rule. Representatives from two different tribal communities participated on the Negotiated Rulemaking Committee. A tribal government representative participated in the Committee negotiations at each meeting of the Committee. Today's proposed rule includes provisions that are the direct result of input from the tribal representatives to the Committee negotiations.

EPA specifically solicits additional comment on this proposed rule from tribal officials.

G. Executive Order 13045: Protection of Children from Environmental Risks and Safety Risks Executive Order 13045, entitled " Protection of Children from Environmental Health Risks and Safety Risks ( 62 FR 19885, April 23, 1997) applies to any rule that: ( 1) is 130 determined to be " economically significant" as defined under Executive Order 12866, and ( 2)

concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children; and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.

This proposal is not subject to the Executive Order because it is not economically significant as defined in Executive Order 12866.

H. Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution or Use This proposed rule is not a " significant energy action" as defined in Executive Order 13211, " Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution,

or Use" ( 66 FR 28355, May 22, 2001) because it is not likely to have a significantly adverse effect on the supply, distribution, or use of energy. Further, we have concluded that this rule is not likely to have any adverse energy effects.

I. National Technology Transfer and Advancement Act Section 12( d) of the National Technology Transfer and Advancement Act of 1995 (" NTTAA"), Public Law No. 104 113, section 12( d) ( 15 U. S. C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities, unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical 131 standards ( e. g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. Today's proposed rule involves technical standards. Therefore, the requirements of section 12( d) of the National Technology Transfer and Advancement Act of 1995 ( 15 U. S. C. 272) apply.

EPA proposes to use the all appropriate inquiries standard developed with the assistance of a regulatory negotiation committee comprised of various affected stakeholder groups. At the request of the Office of Management and Budget, EPA considered using the existing standard developed by ASTM as the federal standard for all appropriate inquiries. This standard is known as the ASTM E1527 2000 standard (" Standard Practice for Environmental Site Assessment: Phase I Environmental Site Assessment Process,"). EPA and OMB estimates that the adoption of the ASTM standard would be less costly than the Agency's preferred option ( the option developed by the Negotiated Rulemaking Committee) or any of the other options considered by the Negotiated Rulemaking Committee and presented in the Economic Impact Analysis. The existing ASTM E1527 2000 standard equates to the base case in the economic impact analysis. The adoption of this alternative would reduce the annual paperwork burden associated with the proposed rule by approximately 236,000 hours. However, for reasons provided below, EPA has determined that the ASTM E1527 2000 standard is inconsistent with applicable law.

In CERCLA Section 101( 35)( B), Congress included ten specific criteria to be used in promulgating the all appropriate inquiries rule. The ASTM standards do not address all of the 132 required criteria. For example, the ASTM standards do not provide for interviews of past owners, operators, and occupants of a facility. The statute, however, states that the promulgated standard " shall include... interviews with past and present owners, operators, and occupants of the facility for the purpose of gathering information regarding the potential for contamination at the facility." CERCLA Section 101( 35)( B)( iii)( II).

In addition, ASTM's existing standard does not meet other statutory requirements.

CERCLA 101( 35)( B)( iii)( III) mandates that EPA shall include in the federal regulations setting standards for all appropriate inquiries: " Reviews of historical sources, such as chain of title documents, aerial photographs, building department records, and land use records, to determine the previous uses and occupancies of the real property since the property was first developed."

ASTM E1527 2000 requires identification of all obvious uses of the property from the present,

back to the property's obvious first developed use or back to 1940, whichever is earlier.

Congress did not qualify the review to obvious uses, and did not give an alternate date regarding the review.

Further, CERCLA 101( 35)( B)( iii)( VI) states that: " Visual inspections of the facility and adjoining properties" shall be included in the inquiry. ASTM E1527 2000 does not mandate visual inspections of adjoining properties. ASTM's standard requires noting any observed past uses, but does not require the conduct of an actual visual inspection of adjoining properties.

This contrasts with the mandatory language Congress required with respect to the intent to conduct visual inspection of adjoining properties.

CERCLA 101( 35)( B)( iii)( VIII) also states that the standards for all appropriate inquiries shall include: " The relationship of the purchase price to the value of the property, if the 133 property was not contaminated." In its E1527 2000 standard, ASTM limits this requirement to actual knowledge by the defendant of a significantly lower price for a property when compared with comparable properties. The statute's criteria does not limit this to actual knowledge.

Finally, CERCLA 101( 35)( B)( iii)( IV) states that the standards for all appropriate inquiries shall include: " Searches for recorded environmental cleanup liens against the facility that are filed under Federal, State, or local law." ASTM's E1527 2000 standard describes a much more limited scope for this search than the statute requires. We are aware that in some instances, liens may be filed in places other than recorded land title records and therefore a more comprehensive standard is necessary to match the scope intended by the statute.

As a result, use of the ASTM standards would be inconsistent with applicable law. We welcome comments on this aspect of the proposed rulemaking. Specifically, we invite the public to comment on our determination that the alternative of adopting the ASTM E1527

2000 standard as the federal standards for conducting all appropriate inquiries would be inconsistent with applicable law. In addition, we invite the public to identify other potentially applicable voluntary consensus standards for conducting all appropriate inquiries and to explain why EPA should use such standards in promulgating this regulation. Prior to promulgating a final regulation setting federal standards and practices for all appropriate inquiries, the Agency will may cite or reference applicable and compliant voluntary consensus standards in the final regulation to facilitate implementation of the final regulations and avoid disruption to parties using voluntary consensus standards that are found to be fully compliant with the federal regulations. 134 J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low Income Populations Executive Order 12898, " Federal Actions to Address Environmental Justice in Minority Populations and Low Income Populations" ( February 11, 1994), is designed to address the environmental and human health conditions of minority and low income populations. EPA is committed to addressing environmental justice concerns and has assumed a leadership role in environmental justice initiatives to enhance environmental quality for all citizens of the United States. The Agency's goals are to ensure that no segment of the population, regardless of race,

color, national origin, income, or net worth bears disproportionately high and adverse human health and environmental impacts as a result of EPA's policies, programs, and activities. Our goal is to ensure that all citizens live in clean and sustainable communities. In response to Executive Order 12898, and to concerns voiced by many groups outside the Agency, EPA's Office of Solid Waste and Emergency Response ( OSWER) formed an Environmental Justice Task Force to analyze the array of environmental justice issues specific to waste programs and to develop an overall strategy to identify and address these issues ( OSWER Directive No.

9200.3 17). EPA's brownfields program has a particular emphasis on addressing concerns specific to environmental justices communities. Many of the communities and neighborhoods that are most significantly impacted by brownfields are environmental justice communities.

EPA's brownfields program targets such communities for assessment, cleanup, and revitalization. The brownfields program has a long history of working with environmental justice communities and advocates through our technical assistance and grant programs. In addition to the monies awarded to such communities in the form of assessment and cleanup 135 grants, the brownfields program also works with environmental justice communities through our job training grants program. The job training grants provide money to government entities to facilitate the training of persons living in or near brownfields communities to attain skills for conducting site assessments and cleanups.

Given that environmental justice communities are significantly impacted by brownfields,

and the federal standards for all appropriate inquiries may play a primary role in encouraging the assessment and cleanup of brownfields sites, EPA made it a priority to obtain input from representatives of environmental justice interest groups during the development of the proposed rulemaking. The Negotiated Rulemaking Committee tasked with developing the all appropriate inquiries proposed rule included three representatives from environmental justice advocacy groups. Each representative played a significant role in the negotiations and in the development of today's proposed rule.

List of Subjects in 40 CFR Part 312 Environmental protection, Administrative practice and procedure, Hazardous substances,

Intergovernmental relations, Reporting and recordkeeping requirements. 136 Dated:

Michael O. Leavitt,

Administrator.

For reasons set out in the preamble, title 40, chapter I of the Code of Federal Regulations is proposed to be amended by revising Part 312 as follows:

PART 312   INNOCENT LANDOWNERS, STANDARDS FOR CONDUCTING ALL APPROPRIATE INQUIRIES Subpart A   Introduction Sec.

312.1 Purpose, applicability, scope, and disclosure obligations.

Subpart B   Definitions and References 312.10 Definitions.

312.11 References.

Subpart C   Standards and Practices 312.20 All appropriate inquiries.

312.21 Results of inquiry by an environmental professional.

312.22 Additional inquiries.

312.23 Interviews with past and present owners, operators, and occupants. 137 312.24 Reviews of historical sources of information.

312.25 Searches for recorded environmental cleanup liens.

312.26 Reviews of federal, state, tribal and local government records.

312.27 Visual inspections of the facility and of adjoining properties.

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

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

312.30 Commonly known or reasonably ascertainable information about the property.

312.31 The degree of obviousness of the presence or likely presence of contamination at the property, and the ability to detect the contamination by appropriate investigation.

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

PART 312   INNOCENT LANDOWNERS, STANDARDS FOR CONDUCTING ALL APPROPRIATE INQUIRIES Subpart A   Introduction § 312.1 Purpose, applicability, scope and disclosure obligations.

( a) Purpose. The purpose of this section is to provide standards and procedures for " all appropriate inquiries" for the purposes of CERCLA Section 101( 35)( B).

( b) Applicability. The requirements of this part are applicable to:

( 1) Persons seeking to qualify for:

( i) The innocent landowner defense pursuant to CERCLA Sections 101( 35) and 107( b)( 3); 138 ( ii) The bona fide prospective purchaser liability protection pursuant to CERCLA Sections 101( 40) and 107( r);

( iii) The contiguous property owner liability protection pursuant to CERCLA Section 107( q); and ( 2) persons conducting site characterization and assessments with the use of a grant awarded under CERCLA Section 104( k)( 2)( B).

( c) Scope. ( 1) Persons seeking to qualify for one of the liability protections under paragraph ( b)( 1) of this section must conduct investigations as required in this part, including an inquiry by an environmental professional, as required under § 312.21, and the additional inquiries defined in § 312.22, to identify conditions indicative of releases or threatened releases,

as defined in CERCLA Section 101( 22), of hazardous substances, as defined in CERCLA Section 101( 14).

( 2) Persons identified in paragraph ( b)( 2) of this section must conduct investigations required in this part, including an inquiry by an environmental professional, as required under § 312.21, and the additional inquiries defined in § 312.22, to identify conditions indicative of releases and threatened releases of hazardous substances, as defined in CERCLA Section 101( 22), and as applicable per the terms and conditions of the grant or cooperative agreement,

releases and threatened releases of:

( i) Pollutants and contaminants, as defined in CERCLA Section 101( 33);

( ii) Petroleum or petroleum products excluded from the definition of " hazardous substance" as defined in CERCLA Section 101( 14); and ( iii) Controlled substances, as defined in 21 U. S. C. 802. 139 ( d) Disclosure obligations. None of the requirements of this part limits or expands disclosure obligations under any federal, state, tribal, or local law, including the requirements under CERCLA Sections 101( 40)( C) and 107( q)( 1)( A)( vii) requiring persons, including environmental professionals, to provide all legally required notices with respect to the discovery of releases of hazardous substances. It is the obligation of each person, including environmental professionals, conducting the inquiry to determine his or her respective disclosure obligations under federal, state, tribal, and local law and to comply with such disclosure requirements.

Subpart B  Definitions § 312.10 Definitions.

( a) Terms used in this part and not defined below, but defined in either CERCLA or 40 CFR Part 300 ( the National Oil and Hazardous Substances Pollution Contingency Plan) shall have the definitions provided in CERCLA or 40 CFR Part 300.

( b) When used in this part, the following terms have the meanings provided as follows:

Abandoned property means: property that can be presumed to be deserted, or an intent to relinquish possession or control can be inferred from the general disrepair or lack of activity thereon such that a reasonable person could believe that there was an intent on the part of the current owner to surrender rights to the property.

Adjoining properties means: any real property or properties the border of which is ( are)

shared in part or in whole with that of the subject property, or that would be shared in part or in 140 whole with that of the subject property but for a street, road, or other public thoroughfare separating the properties.

Data gap means: a lack of or inability to obtain information required by the standards and practices listed in subpart C of this part despite good faith efforts by the environmental professional or persons identified under § 312.1( b), as appropriate, to gather such information pursuant to § § 312.20( d)( 1) and 312.20( d)( 2).

Environmental Professional means:

( 1) a person who possesses sufficient specific education, training, and experience necessary to exercise professional judgment to develop opinions and conclusions regarding the presence of releases or threatened releases ( per § 312.1( c)) to the surface or subsurface of a property, sufficient to meet the objectives and performance factors in § 312.20( d) and ( e).

( 2) Such a person must:

( i) Hold a current Professional Engineer's or Professional Geologist's license or registration from a state, tribe, or U. S. territory ( or the Commonwealth of Puerto Rico) and have the equivalent of three ( 3) years of full time relevant experience; or ( ii) Be licensed or certified by the federal government, a state, tribe, or U. S. territory ( or the Commonwealth of Puerto Rico) to perform environmental inquiries as defined in § 312.21 and have the equivalent of three ( 3) years of full time relevant experience; or ( iii) Have a Baccalaureate or higher degree from an accredited institution of higher education in a relevant discipline of engineering, environmental science, or earth science and the equivalent of five ( 5) years of full time relevant experience; or ( iv) As of the date of the promulgation of this rule, have a Baccalaureate or higher 141 degree from an accredited institution of higher education and the equivalent of ten ( 10) years of full time relevant experience.

( 3) An environmental professional should remain current in his or her field through participation in continuing education or other activities and should be able to demonstrate such efforts.

( 4) The definition of environmental professional provided above does not preempt state professional licensing or registration requirements such as those for a professional geologist,

engineer, or site remediation professional. Before commencing work, a person should determine the applicability of state professional licensing or registration laws to the activities to be undertaken as part of the inquiry identified in § 312.21( b).

( 5) A person who does not qualify as an environmental professional under the foregoing definition may assist in the conduct of all appropriate inquiries in accordance with this part if such person is under the supervision or responsible charge of a person meeting the definition of an environmental professional provided above when conducting such activities.

Relevant experience, as used in the definition of environmental professional in this section, means: participation in the performance of environmental site assessments that may include environmental analyses, investigations, and remediation which involve the understanding of surface and subsurface environmental conditions and the processes used to evaluate these conditions and for which professional judgment was used to develop opinions regarding conditions indicative of releases or threatened releases ( per § 312.1( c)) to the subject property. 142 Good faith means: the absence of any intention to seek an unfair advantage or to defraud another party; an honest and sincere intention to fulfill one's obligations in the conduct or transaction concerned.

Institutional controls means: non engineered instruments, such as administrative and/ or legal controls, that help to minimize the potential for human exposure to contamination and/ or protect the integrity of a remedy.

§ 312.11 References.

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

Subpart C   Standards and Practices § 312.20 All appropriate inquiries.

( a) " All appropriate inquiries" pursuant to CERCLA Section 101( 35)( B) must include:

( 1) An inquiry by an environmental professional ( as defined in § 312.10), as provided in § 312.21;

( 2) The collection of information pursuant to § 312.22 by persons identified under § 312.1( b); and ( 3) Searches for recorded environmental cleanup liens, as required in § 312.25.

( b) All appropriate inquiries may include the results of and information contained in an inquiry previously conducted by, or on the behalf of, persons identified under § 312.1( b) and who are responsible for the inquiries for the subject property, provided: 143 ( 1) Such information was collected during the conduct of all appropriate inquiries in compliance with the requirements of this part ( 40 CFR Part 312) and with CERCLA Sections 101( 35)( B), 101( 40)( B) and 107( q)( A)( viii);

( 2) Such information was collected or updated within one year prior to the date of acquisition of the subject property;

( 3) Not withstanding paragraph ( b)( 2) of this section, the following components of the inquiries were conducted or updated within a 180 days of and prior to the date of purchase of the subject property:

( i) Interviews with past and present owners, operators, and occupants ( see § 312.23);

( ii) Searches for recorded environmental cleanup liens ( see § 312.25);