Versions with OMB REQUESTED REVISIONS ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 312 [ SFUND 2004 0001; FRL xxxx x]

RIN 2050 AF04 Standards and Practices for All Appropriate Inquiries AGENCY: Environmental Protection Agency.

ACTION: Proposed Rule SUMMARY: The Environmental Protection Agency ( EPA) today is proposing federal standards and practices for conducting all appropriate inquiries, as required under Sections 101( 35)( B)( ii)

and ( iii) of the Comprehensive Environmental Response, Compensation, and Liability Act ( CERCLA). The proposed rule would establish specific regulatory requirements and standards for conducting all appropriate inquiries into the previous ownership, uses, and environmental conditions of a property for the purposes of meeting the all appropriate inquiries provisions necessary to qualify for certain landowner liability protections under CERCLA. The standards and practices proposed today also would be applicable to persons conducting site characterization and assessments with the use of grants awarded under CERCLA Section 104( k)( 2)( B).

DATES: Comments on today's proposed rule must be submitted on or before [ insert date 60 days after publication of the Federal Register]. Comments postmarked after this date will be marked " late" and may not be considered. Any person may request a public hearing on this proposal by filing a request by [ insert date 15 days after date of publication of this document].

ADDRESSES: Submit your comments, identified by Docket ID No. SFUND 2004 0001, by one of the following methods: 2 1. Federal eRulemaking Portal: http:// www. regulations. gov. Follow the on line instructions for submitting comments.

2. Agency Website: http:// www. epa. gov/ edocket. EDOCKET, EPA's electronic public docket and comment system, is EPA's preferred method for receiving comments. Follow the on line instructions for submitting comments.

3. E mail: Comments may be sent by electronic mail to superfund. docket@ epa. gov,

/ Attention Docket ID No. SFUND 2004 0001.

4. Mail: Send comments to: OSWER Docket, Environmental Protection Agency, Mailcode:

5305T, 1200 Pennsylvania Ave. N. W., Washington, D. C. 20460, Attention Docket ID No. SFUND 2004 0001. In addition, please mail a copy of your comments on the information collection provisions to the Office of Information and Regulatory Affairs,

Office of Management and Budget ( OMB), Attn: Desk Officer for EPA, 725 17th St.

NW., Washington, DC 20503."

5. Hand Delivery: Deliver your comments to: EPA Docket Center, EPA West Building,

Room B102, 1301 Constitution Ave. N. W., Washington, D. C., Attention Docket ID No.

SFUND 2004 0001. Such deliveries are only accepted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information.

Instructions: Direct your comments to Docket ID No. SFUND 2004 0001. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at http:// www. epa. gov/ edocket, including any personal information provided, 3 unless the comment includes information claimed to be Confidential Business Information ( CBI)

or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through EDOCKET, regulations. gov, or e mail. The EPA EDOCKET and the federal regulations. gov websites are " anonymous access" systems,

which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e mail comment directly to EPA without going through EDOCKET or regulations. gov, your e mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification,

EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about EPA's public docket visit EDOCKET on line or see the Federal Register of May 31, 2002 ( 67 FR 38102). For additional instructions on submitting comments, go to Unit I. C. of the SUPPLEMENTARY INFORMATION section of this document.

Docket: All documents in the docket are listed in the EDOCKET index at http:// www. epa. gov/ edocket. Although listed in the index, some information is not publicly available, i. e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in 4 EDOCKET or in hard copy at the EPA Docket Center, EPA West Building, Room B102, 1301 Constitution Avenue, N. W., Washington, D. C. This Docket Facility is open from 8: 30 a. m. to 4: 30 p. m., Monday through Friday, excluding Federal holidays. The telephone number for the Public Reading Room is ( 202) 566 1744, and the telephone number for the OSWER Docket is ( 202) 566 0276.

If you would like to file a request for a public hearing on this proposed rule, please submit your request to Ms. Linda Garczynski at: Office of Brownfields Cleanup and Redevelopment ( 5105T), U. S. Environmental Protection Agency, 1200 Pennsylvania Avenue, N. W., Washington,

D. C. 20460, or via email at garczynski. linda@ epa. gov.

FOR FURTHER INFORMATION CONTACT: For general information contact the RCRA/ Superfund/ EPCRA/ UST Call Center at ( 800) 424 9346 ( toll free) or TDD ( 800) 553

7672 ( hearing impaired). In the Washington, D. C. metropolitan area, call ( 703) 412 3323 or TDD ( 703) 412 9810. For detailed information on specific aspects of the proposed rule, contact Patricia Overmeyer of EPA's Office of Brownfields Cleanup and Redevelopment at ( 202) 566

2774 or at overmeyer. patricia@ epa. gov.

SUPPLEMENTARY INFORMATION:

I. General Information A. Who Potentially May be Affected by Today's Proposed Rule?

If promulgated as proposed, this regulation may affect most directly those persons and businesses purchasing commercial property or any property that will be used for commercial purposes and who may, after purchasing the property, seek to claim protection from CERCLA liability for releases or threatened releases of hazardous substances. Under section 101( 35)( B) of 5 CERCLA, as amended by the Small Business Liability Relief and Brownfields Redevelopment Act ( Pub. L. No. 107 118, 115 stat. 2356, " the Brownfields Amendments") such persons and businesses are required to conduct all appropriate inquiries prior to or on the date in which the property is acquired. Prospective property owners who do not conduct all appropriate inquiries prior to obtaining ownership of the property may lose their ability to claim protection from CERCLA liability as an innocent landowner, bona fide prospective purchaser, or contiguous property owner.

In addition, today's proposal will affect any party who receives a brownfields grant awarded under CERCLA Section 104( k)( 2)( B) and uses the grant money to conduct site characterization or assessment activities. This includes state, local and tribal governments that receive brownfields site assessment grants for the purpose of conducting site characterization and assessment activities. Such parties are required under CERCLA Section 104( k)( 2)( B)( ii) to conduct such activities in compliance with the standards and practices established by EPA for the conduct of all appropriate inquiries. EPA notes that today's rule also may affect other parties who apply for brownfields grants under the provisions of Section 104( k), since such parties may have to qualify as a bona fide prospective purchaser to ensure compliance with the statutory prohibitions on the use of grant funds under Section 104( k)( 4)( B)( i). Any party seeking liability protection as a bona fide prospective purchaser, including eligible brownfields grantees, must conduct all appropriate inquiries prior to acquiring a property.

The background document, " Economic Impacts Analysis for the All Appropriate Inquiries Proposed Regulation," presents a comprehensive analysis of all potentially impacted entities. This 6 document is available in the docket established for today's proposed rule. A summary of potentially affected businesses is provided in the table below.

Our aim in the table below is to provide a guide for readers regarding entities likely to be directly regulated or indirectly affected by this action. This action, however, may affect other entities not listed in the table. To determine whether you or your business is regulated or affected by this action, you should examine the proposed regulatory language amending CERCLA. This language is found at the end of this Federal Register notice. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding section entitled FOR FURTHER INFORMATION CONTACT.

Industry Category NAICS Code Manufacturing 31 33 Wholesale Trade 42 Retail Trade 44 45 Finance and Insurance 52 Real Estate 531 Professional, Scientific and Technical Services 541 Accommodation and Food Services 72 Repair and Maintenance 811 Personal and Laundry Services 812 State, Local and Tribal Government N/ A B. How Can I Get Copies of This Document and Other Related Information?

1. Docket. EPA has established an official public docket for this action under Docket ID No. SFUND 2004 0001. The official public docket consists of the documents specifically referenced in this action, any public comments received, and other information related to today's action. Although a part of the official docket, the public docket does not include Confidential 7 Business Information ( CBI) or other information whose disclosure is restricted by statute.

Documents in the official public docket are listed in the index list in EPA's electronic public docket and comment system, EDOCKET. Documents may be available either electronically or in hard copy. Electronic documents may be viewed through EDOCKET. Hard copy documents may be viewed at the EPA Docket Center, EPA West, Room B102, 1301 Constitution Avenue NW, Washington, D. C. The EPA Docket Center Public Reading Room is open from 8: 30 a. m. to 4: 30 p. m., Monday through Friday, excluding Federal holidays. The telephone number for the Public Reading Room is ( 202) 566 1744, and the telephone number for the OSWER Docket is ( 202) 566 0276.

2. Electronic Access. You may access the Federal Register document electronically through the EPA Internet under the " Federal Register" listings at http:// www. epa. gov/ fedrgstr.

Comments on the proposed rule can be submitted through the federal e rulemaking portal,

http:// www. regulations. gov.

An electronic version of the public docket also is available through EPA's electronic public docket and comment system, EDOCKET. You may use EDOCKET at http:// www. epa. gov/ edocket/ to submit or view public comments, access the index listing of the contents of the public docket, and access those documents in the public docket that are available electronically. Once in the system, select " search," then key in the appropriate docket identification number.

Certain types of information will not be placed in EDOCKET. Information claimed as CBI and other information whose disclosure is restricted by statute, which is not included in the official public docket, will not be available for public viewing in EPA's electronic public docket. 8 EPA's policy is that copyrighted material will not be placed in EPA's electronic public docket but will be available only in printed, paper form in the official public docket. Docket materials that are not available electronically may be viewed at the docket facility identified in Section I. B. EPA intends to work toward providing electronic access to all of the publicly available docket materials through EPA's electronic public docket.

For public commenters, it is important to note that EPA's policy is that public comments,

whether submitted electronically or in paper, will be made available for public viewing in EPA's electronic public docket as EPA receives them and without change, unless the comment contains copyrighted material, CBI, or other information whose disclosure is restricted by statute. When EPA identifies a comment containing copyrighted material, EPA will provide a reference to that material in the version of the comment that is placed in EPA's electronic public docket. The entire printed comment, including copyrighted material, will be available in the public docket.

Public comments submitted on computer disks that are mailed or delivered to the docket will be transferred to EPA's electronic public docket. Public comments that are mailed or delivered to the docket will be scanned and placed in EPA's electronic public docket. Where practical, physical objects will be photographed, and the photograph will be placed in EPA's electronic public docket along with a brief description written by the docket staff.

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

a. Submitting Public comments. You may submit comments electronically, by mail, or through hand delivery/ courier, as explained in the ADDRESSES section of this document. To ensure proper receipt by EPA, identify the appropriate docket identification number in the subject line on the first page of your comment. Please ensure that your comments are submitted within 9 the specified comment period. Comments received after the close of the comment period will be marked " late." EPA is not required to consider late comments.

b. Submitting CBI. Do not submit information that you consider to be confidential business information ( CBI) electronically through EPA's electronic public docket or by e mail.

Send or deliver information identified as CBI only to the following address: CERCLA CBI Document Control Officer, Office of Solid Waste and Emergency Response ( 5101T), U. S. EPA,

1200 Pennsylvania Avenue, NW., Washington, DC 20460, Attention Docket ID No.

SFUND 2004 0001. You may claim information that you submit to EPA as CBI by marking any part or all of that information as CBI ( if you submit CBI on disk or CD ROM, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is CBI). Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR, Part 2.

In addition to one complete version of the comment that includes any information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket and EPA's electronic public docket. If you submit the copy that does not contain CBI on disk or CD ROM, mark the outside of the disk or CD ROM clearly that it does not contain CBI. Information not marked as CBI will be included in the public docket and EPA's electronic public docket without prior notice. If you have any questions about CBI or the procedures for claiming CBI, please consult the person identified in the FOR FURTHER INFORMATION CONTACT section.

c. Tips for Preparing Your Comments. You may find the following suggestions helpful for preparing your comments: 10 iii. Identify the rulemaking by docket number and other identifying information ( e. g.,

subject heading, Federal Register date and page number)

iv. Explain your views as clearly as possible.

v. Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.

vi. Describe any assumptions and provide any technical information and/ or data that you used to support your views.

vii. If you estimate potential burden or costs, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

viii. Provide specific examples to illustrate your concerns and suggest alternative.

ix. Make sure to submit your comments by the comment period deadline identified.

Contents of This Proposed Rule III. Statutory Authority IV. Background A. What is the Intent of Today's Proposed Rule?

B. What is " All Appropriate Inquiries?"

C. What are the Current Standards for All Appropriate Inquiries?

D. What are the Liability Protections Established Under the Brownfields Amendments?

E. What Criteria Did Congress Establish for the All Appropriate Inquiries Standard?

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

G. What is Negotiated Rulemaking? 11 H. What was the Process that EPA Followed in Establishing and Conducting the Negotiated Rulemaking Committee?

I. What are the Benefits of Negotiated Rulemaking?

J. Who Was Represented on the Negotiated Rulemaking Committee?

III. Detailed Description of Today's Proposed Rule A. What is the Purpose and Scope of the Proposed Rule?

B. To Whom is the Rule Applicable?

C. Does the Proposed Rule Include New Reporting or Disclosure Obligations?

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

E. References F. What is Included in " All Appropriate Inquiries?"

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

Operators, and Occupants?

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

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

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

K. What are the Proposed Requirements for Visual Inspections of the Subject Property and Adjoining Properties? 12 L. What are the Proposed Requirements for the Inclusion of Specialized Knowledge or Experience on the Part of the " Defendant?"

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

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

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

IV. Requests for Public Comments V. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments G. Executive Order 13045: Protection of Children from Environmental Risks and Safety Risks H. Executive Order 13211: Actions that Significantly Affect Energy Supply,

Distribution or Use 13 I. National Technology Transfer Advancement Act J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low Income Populations I. Statutory Authority These regulations are proposed under the authority of Section 101( 35)( B) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ( 42 U. S. C.

9601), as amended, most importantly by the Small Business Liability Relief and Brownfields Redevelopment Act.

II. Background A. What is the Intent of Today's Proposed Rule?

The intent of today's proposed rule is to propose regulations setting federal standards and practices for the conduct of " all appropriate inquiries." This regulatory action was initiated in response to legislative amendments to the Comprehensive Environmental Response,

Compensation, and Liability Act ( CERCLA). On January 11, 2002, President Bush signed the Small Business Liability Relief and Brownfields Revitalization Act ( Pub. L. No. 107 118, 115 stat. 2356, " the Brownfields Amendments"). The Brownfields Amendments amend CERCLA by providing funds to assess and clean up brownfields sites, clarifying CERCLA liability provisions for certain landowners, and providing funding to enhance state and tribal clean up programs.

Today's regulatory action proposes standards and practices for the conduct of " all appropriate inquiries," a key provision of the Brownfields Amendments. Subtitle B of Title II of the Brownfields Amendments revises CERCLA Section 101( 35), clarifying the requirements 14 necessary to establish the innocent landowner defense. In addition, the Brownfields Amendments add protections from CERCLA liability for bona fide prospective purchasers and contiguous property owners who meet certain statutory requirements.

Each of the CERCLA liability provisions for innocent landowners, bona fide prospective purchasers, and contiguous property owners, requires that, among other requirements, persons claiming the liability protections conduct all appropriate inquiries into prior ownership and use of a property prior to or at the time at which a person acquires a property. The law requires EPA to develop regulations establishing standards and practices for how to conduct all appropriate inquiries and promulgate the standards within two years of enactment of the Amendments.

Congress included in the Brownfields Amendments a list of criteria that the Agency must address in the regulations establishing standards and practices for conducting all appropriate inquiries § 101( 35)( 2)( B)( ii) and ( iii). The Brownfields Amendments also require that parties receiving a federal brownfields grant awarded under CERCLA Section 104( k)( 2)( B) to conduct site characterizations and assessments must conduct these activities in accordance with the standards and practices for all appropriate inquiries.

The regulations proposed today only address the all appropriate inquiries provisions of CERCLA Sections 101( 35)( B)( i)( I) and 101( 35)( B)( ii) and ( iii). Today's proposed rule does not address the requirements of CERCLA Section 101( 35)( B)( i)( I) for what constitutes " reasonable steps." 15 B. What is " All Appropriate Inquiries?"

An essential step in real property transactions is evaluating a property for potential environmental contamination and assessing potential liability for contamination present at the property. The process for assessing properties for the presence of environmental contamination often is referred to as " environmental due diligence," or " environmental site assessment." The Comprehensive Environmental Response Compensation and Liability Act ( CERCLA) or Superfund, provides for a similar, but legally distinct, process referred to as " all appropriate inquiries."

Under CERCLA, persons may be held strictly liable for cleaning up hazardous substances at properties that they either currently own or operate or owned or operated in the past. Strict liability under CERCLA means that liability for environmental contamination could be assigned based solely on property ownership.

In 1986, the Superfund Amendments and Reauthorization Act ( Pub. L. No. 99 499, 100 stat. 1613, " SARA") amended CERCLA by creating an " innocent landowner" defense to CERCLA liability. The new Section 101( 35)( B) of CERCLA provided a defense to CERCLA liability, for those persons who could demonstrate, among other requirements, that they " did not know and had no reason to know" prior to purchasing a property that any hazardous substance that is the subject of a release or threatened release was disposed of on, in, or at the property.

Such persons, to demonstrate that they had " no reason to know" must have undertaken, prior to,

or at the time of acquisition of the property, " all appropriate inquiries" into the previous ownership and uses of the property consistent with good commercial or customary practice. The 2002 Brownfields Amendments added potential liability protections for " contiguous property 16 owners" and " bona fide prospective purchasers" who also must demonstrate they conducted all appropriate inquiries, among other requirements, to benefit from the liability protection.

C. What are the Current Standards for All Appropriate Inquiries?

As part of the Brownfields Amendments to CERCLA, Congress established interim standards for the conduct of all appropriate inquiries. The federal interim standards established by Congress became effective on January 11, 2002. In the case of properties purchased after May 31, 1997, the interim standards include the procedures of the American Society for Testing and Materials ( ASTM) Standard E1527 97 ( entitled " Standard Practice for Environmental Site Assessment: Phase 1 Environmental Site Assessment Process"). In the case of persons who purchased property prior to May 31, 1997 and who are seeking to establish an innocent landowner defense or qualify as a contiguous property owner, the interim standards require that such persons must establish, among other statutory requirements, that they did not know and had no reason to know of releases or threatened releases to the property before the date they acquired the property. To establish they did not know and had no reason to know of releases or threatened releases, persons who purchased property prior to May 31, 1997 must demonstrate that they carried out all appropriate inquiries into the previous ownership and uses of the property in accordance with generally accepted good commercial and customary standards and practices.

In the case of property acquired by a non governmental entity or non commercial entity for residential or other similar uses, the current interim standards for all appropriate inquiries may not be applicable. For those cases, the Brownfields Amendments to CERCLA establish that a " facility inspection and title search that reveal no basis for further investigation shall be considered 17 to satisfy the requirements" for all appropriate inquiries. In addition, such properties are not within the scope of today's proposed rule.

The interim standards remain in effect until EPA promulgates federal regulations establishing standards and practices for conducting all appropriate inquiries.

On May 9, 2003, EPA published a final rule ( 68 FR 24888) clarifying that for the purposes of achieving the all appropriate inquiries standards of CERCLA Section 101( 35)( B), and until the Agency promulgates regulations implementing standards for all appropriate inquiries, the procedures persons who purchase property on or after May 31, 1997 may use include either the procedures provided in ASTM E1527 2000, entitled " Standard Practice for Environmental Site Assessment: Phase I Environmental Site Assessment Process," or the earlier standard cited by Congress in the Brownfields amendments, ASTM E1527 97.

Today's notice is a proposed rule and as such has no effect upon the current interim standards for all appropriate inquiries established by Congress in the Brownfields Amendments and clarified by EPA in the May 9, 2003 final rule. However, once the Agency promulgates a final rule establishing federal regulations containing the standards and practices for conducting all appropriate inquiries, the interim standard will no longer be the operative standard for conducting all appropriate inquiries. Following the effective date of a new final regulation, the standards and practices included as the final regulation will replace the current interim standards for all appropriate inquiries.

The National Technology Transfer and Advancement Act ( NTTAA), directs agencies to use technical standards that are developed or adopted by voluntary consensus standards bodies 18 ( unless their use would be inconsistent with applicable law or otherwise impractical). We considered ASTM E1527 2000, for use in this rule and determined that the standard is inconsistent with applicable law because it does not meet the statutory criteria necessary to achieve the purpose of the rule. Section V. I of today's proposed rule provides additional detail on the basis for our interpretation with respect to this alternative. We invite public comment on our determination that the ASTM E1527 2000 Phase I Environmental Site Assessment Standard is inconsistent with applicable law.

D. What are the Liability Protections Established Under the Brownfields Amendments?

The Brownfields Amendments provide important liability protections for landowners who qualify as contiguous property owners, bona fide prospective purchasers, or innocent landowners.

To meet the statutory requirements for any of these landowner liability protections, a landowner must meet certain threshold requirements and satisfy certain continuing obligations. To qualify as a bona fide prospective purchaser, contiguous property owner, or innocent landowner, a person must perform " all appropriate inquiries" before acquiring the property. Bona fide prospective purchasers and contiguous property owners also must demonstrate that they are not potentially liable or affiliated with any other person that is potentially liable for response costs at the property. In the case of contiguous property owners, the landowner claiming to be a contiguous property owner also must demonstrate that he did not cause, contribute, or consent to any release or threatened release of hazardous substances. To meet the statutory requirements for a bona fide prospective purchaser, a property owner must have acquired a property subsequent to any disposal activities involving hazardous substances at the property. 19 Continuing obligations required under the statute include complying with land use restrictions and not impeding the effectiveness or integrity of institutional controls; taking " reasonable steps" with respect to hazardous substances affecting a landowner's property to prevent releases; providing cooperation, assistance and access to EPA, a state, or other party conducting response actions or natural resource restoration at the property; complying with CERCLA information requests and administrative subpoenas; and providing legally required notices. For a more detailed discussion of these threshold and continuing requirements please see EPA, Interim Guidance Regarding Criteria Landowners Must Meet in Order to Quality for Bona Fide Prospective Purchaser, Contiguous Property Owner, or Innocent Landowner Limitations on CERCLA Liability ( Common Elements, 2003). A copy of this document is available in the docket for today's proposed rule.

1. Bona fide prospective purchaser The Brownfields Amendments added the bona fide prospective purchaser provision at CERCLA Section 107( r). The provision provides protection from CERCLA liability, and limits EPA's recourse for unrecovered response costs to a lien on property for the increase in fair market value attributable to EPA's response action. To meet the statutory requirements for a bona fide prospective purchaser, a person must meet the requirements set forth in CERCLA Section 101( 40). A bona fide prospective purchaser must have bought property after January 11,

2002 ( the date of enactment of the Brownfields Amendments). A bona fide prospective purchaser may purchase property with knowledge of contamination after performing all appropriate inquiries, provided the property owner meets or complies with all of the other statutory 20 requirements set forth in CERCLA Section 101( 40). Conducting all appropriate inquiries alone does not provide a landowner with protection against CERCLA liability. Landowners who want to qualify as bona fide prospective purchasers must comply with all of the statutory requirements.

The statutory requirements include, without limitation, that the landowner must:

° have acquired a property after all disposal activities involving hazardous substances at the property;

° provide all legally required notices with respect to the discovery or release of any hazardous substances at the property;

° exercise appropriate care by taking reasonable steps to stop continuing releases, prevent any threatened future release, and prevent or limit human, environmental, or natural resources exposure to any previously released hazardous substance;

° provide full cooperation, assistance, and access to persons that are authorized to conduct response actions or natural resource restorations;

° comply with land use restrictions established or relied on in connection with a response action;

° not impede the effectiveness or integrity of any institutional controls;

° comply with any CERCLA request for information or administrative subpoena; and ° not be potentially liable, or affiliated with any other person who is potentially liable for response costs for addressing releases at the property.

Persons claiming to be bona fide prospective purchasers should keep in mind that failure to identify an environmental condition or identify a release or threatened release of a hazardous substance on, at, in or to a property during the conduct of all appropriate inquiries does not 21 relieve a landowner from complying with the other post acquisition statutory requirements for obtaining the liability protections. Landowners must comply with all the statutory requirements to obtain the liability protection. For example, an inability to identify a release or threatened release during the conduct of all appropriate inquiries does not negate the landowner's responsibilities under the statute to take reasonable steps to stop a release, prevent a threatened release, and prevent exposure to a release or threatened release. None of the other statutory requirements for the bona fide prospective purchaser liability protection is contingent upon the results of the conduct of all appropriate inquiries.

2. Contiguous property owner The Brownfields Amendments added a new contiguous property owner provision at CERCLA Section 107( q). This provision excludes from the definition of " owner" or " operator"

under CERCLA Section 107( a)( 1) and ( 2) a person who owns property that is " contiguous to, or otherwise similarly situated with respect to, and that is or may be contaminated by a release or threatened release of hazardous substances from" property owned by someone else. To qualify as a contiguous property owner, a landowner must have no knowledge of contamination prior to acquisition and meet all of the criteria set forth in CERCLA Section 107( q)( 1)( A), which include,

without limitation:

° not causing, contributing, or consenting to the release or threatened release;

° not being potentially liable nor affiliated with any other person who is potentially liable for response costs at the property; 22 ° taking reasonable steps to stop continuing releases, prevent any threatened release, and prevent or limit human, environmental, or natural resource exposure to any hazardous substances released on or from the landowner's property;

° providing full cooperation, assistance, and access to persons that are authorized to conduct response actions or natural resource restorations;

° complying with land use restrictions established or relied on in connection with a response action;

° not impeding the effectiveness or integrity of any institutional controls;

° complying with any CERCLA request for information or administrative subpoena;

° providing all legally required notices with respect to discovery or release of any hazardous substances at the property.

The contiguous property owner liability protection " protects parties that are essentially victims of pollution incidents caused by their neighbor's actions." S. Rep. No. 107 2, at 10 ( 2001). Contiguous property owners must perform all appropriate inquiries prior to purchasing property. However, performing all appropriate inquiries in accordance with the regulatory requirements alone is not sufficient to assert the liability protections afforded under CERCLA.

Property owners must fully comply with all of the statutory requirements to be afforded the contiguous property owner liability protection. Persons who know, or have reason to know, that the property is or could be contaminated prior to purchasing a property cannot qualify for the liability protection as a contiguous property owner, but may be entitled to bona fide prospective purchaser status. 23 Persons claiming to be contiguous property owners should keep in mind that failure to identify an environmental condition or identify a release or threatened release of a hazardous substance on, at, in or to a property during the conduct of all appropriate inquiries, does not relieve a landowner from complying with the other statutory requirements for obtaining the contiguous landowner liability limitation. Landowners must comply with all the statutory requirements to qualify for the liability protections. For example, an inability to identify a release or threatened release during the conduct of all appropriate inquiries does not negate the landowner's responsibilities under the statute to take reasonable steps to stop the release, prevent a threatened release, and prevent exposure to the release or threatened release. None of the other statutory requirements for the contiguous property owner liability protection is contingent upon the results of the conduct of all appropriate inquiries.

3. Innocent landowner The Brownfields Amendments also clarify the innocent landowner affirmative defense. To qualify as an innocent landowner, a person must conduct all appropriate inquiries and meet all of the statutory requirements. The requirements include, without limitation:

° having no reason to know that any hazardous substance which is the subject of a release or threatened release was disposed of on, in, or at the facility;

° providing full cooperation, assistance and access to persons authorized to conduct response actions at the property;

° complying with any land use restrictions and not impeding the effectiveness or integrity of any institutional controls; 24 ° taking reasonable steps to stop continuing releases, prevent any threatened release, and prevent or limit human, environmental, or natural resource exposure to any hazardous substances released on or from the landowner's property;

To succeed in an innocent landowner liability defense, a property owner must demonstrate compliance with CERCLA Section 107( b)( 3) as well. Such persons must establish, by a preponderance of the evidence:

° that the act or omission that caused the release or threat of release of hazardous substances and the resulting damages were caused by a third party with whom the person does not have employment, agency, or a contractual relationship;

° the person exercised due care with respect to the hazardous substance concerned, taking into consideration the characteristics of such hazardous substance, in light of all relevant facts and circumstances;

° took precautions against foreseeable acts or omissions of any such third party and the consequences that could foreseeable result from such acts or omissions.

Like contiguous property owners, innocent landowners must perform all appropriate inquiries prior to acquiring a property and cannot know, or have reason to know, of contamination to qualify for this landowner liability protection. Persons claiming to be innocent landowners also should keep in mind that failure to identify an environmental condition or identify a release or threatened release of a hazardous substance on, at, in or to a property during the conduct of all appropriate inquiries, does not relieve or exempt a landowner from complying with the other statutory requirements for making the innocent landowner defense. Landowners must 25 comply with all the statutory requirements to obtain the defense. For example, an inability to identify a release or threatened release during the conduct of all appropriate inquiries does not negate the landowner's responsibilities under the statute to take reasonable steps to stop the release, prevent a threatened release, and prevent exposure to the release or threatened release.

None of the other statutory requirements for the innocent landowner defense is contingent upon the results of the conduct of all appropriate inquiries.

E. What Criteria Did Congress Establish for the All Appropriate Inquiries Standard?

Congress included in the Brownfields Amendments a list of criteria that the Agency must include in the regulations establishing standards and practices for conducting all appropriate inquiries. These criteria are set forth in CERCLA Section 101( 35)( 2)( B)( ii) and include:

° The results of an inquiry by an environmental professional.

° Interviews with past and present owners, operators, and occupants of the facility for the purpose of gathering information regarding the potential for contamination at the facility.

° Reviews of historical sources, such as chain of title documents, aerial photographs,

building department records, and land use records, to determine previous uses and occupancies of the real property since the property was first developed.

° Searches for recorded environmental cleanup liens against the facility that are filed under federal, state, or local law.

° Reviews of federal, state, and local government records, waste disposal records,

underground storage tank records, and hazardous waste handling, generation, treatment,

disposal, and spill records, concerning contamination at or near the facility. 26 ° Visual inspections of the facility and of adjoining properties.

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

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

° Commonly known or reasonably ascertainable information about the property.

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

In addition, Congress instructed EPA, in the Brownfields Amendments to develop regulations establishing standards and practices for conducting all appropriate inquiries in accordance with generally accepted good commercial and customary standards and practices.

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

Consistent with the Negotiated Rulemaking Act of 1996, 5 U. S. C. 561 et seq ( The Negotiated Rulemaking Act), EPA decided to use the negotiated rulemaking process to develop the proposed federal standards for conducting all appropriate inquiries. The most important reason for using the regulatory negotiation process for developing the proposed federal standards is that all stakeholders, when consulted, strongly supported a consensus based negotiated rulemaking effort. In addition, the Agency determined that a negotiated rulemaking committee composed of stakeholders familiar with good commercial and customary standards and practices,

as well as the technical, scientific, and environmental policy issues relevant to environmental due diligence, would provide great benefit to the Agency in its attempt to fulfill the Congressional mandate. EPA also believed that a regulatory negotiation process would be less adversarial than 27 if the Agency were to develop a proposed rule using its internal regulatory development process and that a regulatory negotiation could result in a proposed rule that would effectively reflect Congressional intent.

L. What is Negotiated Rulemaking?

Using negotiated rulemaking to develop the proposed rule is fundamentally different than the Agency's internal rulemaking development process. Negotiated rulemaking is a process in which a proposed rule is developed by a committee composed of representatives of those interests that will be significantly affected by the rule. The process is started by the Agency's careful identification of the interests potentially affected by the rulemaking under consideration. To help in this identification process, the Agency publishes a notice in the Federal Register, that identifies a preliminary list of potentially affected interests and requests public comment on that list.

Following receipt of the comments, the Agency establishes a formal advisory committee under the Federal Advisory Committee Act ( FACA). A balanced membership representing these various interests is invited by the Agency to participate in the advisory committee. Representation on the committee may be direct, that is, each member represents a specific interest, or may be indirect,

through coalitions of parties formed for this purpose. The Agency is a member of the committee representing the interests of all of the federal government.

Meetings of the committee are announced in the Federal Register and are open to observation by members of the public. Decisions of the committee are made by consensus, which generally means an agreement of all committee members that they can accept the provisions of the proposed rule when taken as a whole package. A neutral professional, or facilitator, impartially 28 assists the negotiated rulemaking committee by applying proven consensus building techniques to the committee's activities. This professional facilitator serves several roles, including convening the process, facilitating meetings and mediating committee negotiations.

The negotiated rulemaking process involves a mutual education of the negotiating parties by each other on the practical concerns about the impact of each approach considered by the committee. All committee members participate in seeking to reach a consensus that resolves the concerns of the other members, rather than leaving it up to EPA to bridge different points of view. A key principle of negotiated rulemaking is that agreement is by consensus of all the members. Thus, no one interest or group of interests is able to control the process. The Negotiated Rulemaking Act defines consensus as " the unanimous concurrence among interests represented on a negotiated rulemaking committee, unless the committee itself unanimously agrees to use a different definition." 5 U. S. C. 562( 2).

When a regulatory negotiation advisory committee reaches consensus on the provisions of a proposed rule, the Agency generally uses such consensus language as the basis of its proposed rule, which is published in the Federal Register. This provides the required public notice and allows for a public comment period. Committee members agree to support the proposed rule as published if there are no substantive changes from the consensus provisions. Other interested parties retain their rights to comment, participate in an informal hearing ( if requested) and judicial review. EPA anticipates, however, that the pre proposal consensus agreed upon by a negotiated rulemaking committee will effectively address most major issues prior to publication of a proposed rule. 29 M. What was the Process that EPA Followed in Establishing and Conducting the Negotiated Rulemaking Committee?

During the fall of 2002, EPA initiated the negotiated rulemaking process by identifying appropriate stakeholder groups and soliciting advice and input from experienced public and private sector users of similar standards. EPA retained an expert facilitator to contact parties potentially affected by the all appropriate inquiries rule to determine whether or not stakeholders were interested in participating in a negotiated rulemaking process and determine the potential for stakeholder issues to be successfully addressed through a regulatory negotiation. Following an evaluation of stakeholder interest and input, the facilitator found that there was sufficient enthusiasm among stakeholders for a negotiated rulemaking process and almost all stakeholders that EPA identified and the facilitator interviewed expressed a belief that potential issues and differences between interested parties could be successfully addressed and negotiated through the regulatory negotiation process. A description of the issues raised by identified stakeholders and a list of interested stakeholders, as well as the findings of the facilitator are contained in the final report entitled Convening Assessment Report on the Feasibility of a Negotiated Rulemaking Process to Develop the All Appropriate Inquiry Standard Required under the Small Business Liability Relief and Brownfields Revitalization Act. A copy of this final report is included in the regulatory docket for today's notice.

Following the convening process, the Agency determined that the use of a regulatory negotiation process in this matter was appropriate. The Agency then identified stakeholders and interest groups who potentially would be affected by the rulemaking under consideration. After identifying an initial list of potential interests, the Agency published a " Notice of Intent to 30 Negotiate" in the Federal Register on March 6, 2003 ( 68 FR 10675) which identified the Agency's preliminary list of interests and requested public comment on that list of potential interests or stakeholder groups to include in the negotiated rulemaking process. Following receipt of public comments in response to that notice and the conduct of a public hearing to obtain public input, the Agency established a negotiated rulemaking advisory committee under the provisions of the Federal Advisory Committee Act ( FACA). The advisory committee included a balanced membership representing the various interests identified either by EPA or by public commenters as having a significant stake in the outcome of the rulemaking. The Agency then published in the Federal Register a notice announcing the establishment of the Negotiated Rulemaking Committee on All Appropriate Inquiries ( the Negotiated Rulemaking Committee) on April 7,

2003 ( 68 FR 16747).

The Agency developed a charter for the Negotiated Rulemaking Committee defining the purpose, scope and duration of the committee in accordance with the provisions of the FACA.

The primary purpose of the committee was to negotiate a consensus on the terms of a proposed rule setting standards and practices for the conduct of all appropriate inquiries. The committee was composed of 25 members and each member of the committee represented a specific stakeholder interest. EPA had one seat on the committee. The Agency member on the committee represented the Federal government's own set of interests. A neutral facilitator assisted the Negotiated Rulemaking Committee by applying proven consensus building techniques to the Committee's activities. This facilitator served several roles including convening the process,

facilitating meeting discussions, and mediating Committee negotiations. 31 The Agency's negotiated rulemaking committee for this proposed rule was formed and operated in full compliance with the requirements of the Federal Advisory Committee Act ( FACA) and in a manner consistent with the requirements for the Negotiated Rulemaking Act of 1990. Committee members established formal ground rules for the conduct of their negotiations.

Among other things, the ground rules provide that Committee decisions would be made by consensus, Committee agreements would be tentative until the Committee reached final consensus on regulatory language, and Committee members could not withdraw their consensus once a final consensus was reached by the Committee. All meetings of the Negotiated Rulemaking Committee were open public meetings. Members of the public, including representatives from organizations not represented on the Committee were welcomed to observe Committee discussions during each meeting. All written products developed by the Committee were made available to the public on EPA's website and in the Agency's rulemaking docket. Time was set aside during each meeting of the Committee to hear comments from the public. Members of the public also had the opportunity to provide written comments to the negotiated rulemaking committee on the topics considered and discussed by the Committee. The openness of the negotiated rulemaking process allowed for continued review of the Committee proceedings by the public and allowed the Committee to give full consideration to input offered by the public during its deliberations.

The Negotiated Rulemaking Committee for All Appropriate Inquiries conducted six multiple day meetings over the course of an eight month period, beginning in April 2003. The Committee reached consensus on the provisions of a proposed rule during its meeting in November 2003. The consensus of all Committee members was confirmed in December 2003 32 through approval of the facilitator's summary of that meeting, including the text of the proposed rule. The Agency, consistent with the intent of the Negotiated Rulemaking Act of 1990 and in compliance with the Committee's ground rules, is using the Committee's consensus regulatory language as the basis of today's proposed rule.

N. What are the Benefits of Negotiated Rulemaking?

The regulatory negotiation process allowed EPA to solicit direct input from informed,

interested, and affected parties while drafting the regulation, rather than delay public input until the public comment period provided after publishing a proposed rule; therefore, ensuring that the rule is sensitive to the needs and limitations of both the parties and the Agency. A rule drafted by negotiation with informed and affected parties is expected to be grounded in the practical experiences of the experts on the committee and more easily implemented, thereby providing the public with the benefits of the rule while minimizing the negative impact of a regulation conceived or drafted without the direct input of outside knowledgeable parties. Since a negotiating committee includes representatives from the major stakeholder groups affected by or interested in the rule, the number of public comments on the proposed rule may be reduced and those comments that are received may be more moderate.

Under a traditional rulemaking process, EPA develops a proposed rulemaking using Agency staff and consultant resources. The concerns of affected parties are made known through various informal contacts and through publication of advance notices of proposed rulemaking in the Federal Register. After the notice of proposed rulemaking is published for comment,

affected parties may submit arguments and data defining and supporting their positions with 33 regard to the issues raised in the proposed rule. All communications from affected parties are directed to the Agency. In general, there is not much communication among parties representing different interests. Many times, effective regulations have resulted from such a process.

However, as Congress noted in the Negotiated Rulemaking Act of 1990, such regulatory development procedures " may discourage the affected parties from meeting and communicating with each other, and may cause parties with different interests to assume conflicting and antagonistic positions and to engage in expensive and time consuming litigation * * *'' ( 5 U. S. C.

581( 2), P. L. 101 648). Congress also stated that    adversarial rulemaking deprives the affected parties and the public of the benefits of face to face negotiations and cooperation in developing and reaching agreement on a rule. It also deprives them of the benefits of shared information,

knowledge, expertise, and technical abilities possessed by the affected parties.'' ( Id at 5 U. S. C.

581( 3)). In the case of today's proposed rule, EPA believes that the willingness of the stakeholders to participate in the negotiated rulemaking greatly benefitted the development of the proposed rule.

O. Who Was Represented on the Negotiated Rulemaking Committee?

The Agency initiated the negotiated rulemaking process giving particular attention to ensuring full and adequate representation of those interests that may be significantly affected by the proposed rule setting standards for conducting all appropriate inquiries. The Negotiated Rulemaking Act defines the term " interest" as " with respect to an issue or matter multiple parties which have a similar point of view or which are likely to be affected in a similar manner"

( 5 U. S. C. 562( 5)). Listed below are parties that the Agency identified as being " significantly 34 affected" by the matters that may be included in the proposed rule. The Negotiated Rulemaking Committee consisted of representatives from each of these stakeholder groups.

The Negotiated Rulemaking Committee was composed of 25 members representing parties of interest to the rulemaking. EPA monitored the membership of the Committee carefully to ensure that there was a balanced representation from affected and interested stakeholder groups. The Negotiated Rulemaking Committee included representatives from the following stakeholder groups:

° Environmental Interest Groups ° Environment Justice Community ° Federal Government ° Tribal Governments ° State Governments ° Local Governments ° Real Estate Developers ° Bankers and Lenders ° Environmental Professionals After establishing the above list of stakeholders as the stakeholders representing significant interests in the rulemaking, EPA identified specific organizations that the Agency believed could speak for and represent these interests. After identifying a preliminary list of organizations to invite to participate in the negotiated rulemaking process, publishing the preliminary list in the Federal Register in a Notice of Intent to Negotiate ( 68 FR 10675), and considering public comment on the list of organizations invited to represent each stakeholder group, including 1 EPA notes that after all members of the Negotiated Rulemaking Committee reached consensus on November 14, 2003 and such consensus was confirmed by all Committee members through approval of the final meeting summary, U. S. PIRG submitted a letter, dated December 19, 2003, seeking to withdraw from the Committee. EPA included the letter and its reply in the public docket for the negotiated rulemaking process, SFUND 2003 0006.

35 considering self nominations received from commenters, the Negotiated Rulemaking Committee was formed. The Committee included individuals from the following organizations:

° U. S. Environmental Protection Agency ° Environmental Defense ° Center for Public Environmental Oversight ° Partnership for Sustainable Brownfields Redevelopment ° West Harlem Environmental Action ° U. S. Public Interest Research Group ( US PIRG) 1 ° Association of State and Territorial Solid Waste Management Officials ° Gila River Indian Tribe ° Cherokee Nation ° U. S. Conference of Mayors ° National Association of Local Government Environmental Professionals ° International Municipal Lawyers Association ° National Association of Development Organizations ° National Association of Homebuilders ° The Real Estate Roundtable ° National Association of Industrial and Office Properties ° International Council of Shopping Centers 36 ° Trust for Public Land ° National Brownfields Association ° Mortgage Bankers Association ° Environmental Bankers Association ° National Ground Water Association ° American Society of Civil Engineers ° ASFE ° Wasatch Environmental, Inc.

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

III. Detailed Description of Today's Proposed Rule A. What is the Purpose and Scope of the Proposed Rule?

As outlined in the Brownfields Amendments to CERCLA, the purpose of today's rule is to establish federal standards and practices for the conduct of all appropriate inquiries. Such inquiries must be conducted by persons seeking any of the landowner liability protections under CERCLA prior to acquiring a property ( as outlined in Section II. B. of this preamble). In addition, persons receiving Federal brownfields grants under the authorities of CERCLA Section 104( k)( 2)( B) to conduct site characterizations and assessments must conduct such activities in compliance with the all appropriate inquiries regulations. 37 In the case of persons claiming one of the CERCLA landowner liability protections, the scope of today's proposed rule includes the conduct of all appropriate inquiries for the purpose of identifying releases and threatened releases of hazardous substances on, at, in or to the property that would be the subject of a response action for which a liability protection would be needed and such a property is owned by the person asserting protection from liability. CERCLA liability is limited to releases and threatened releases of hazardous substances which cause the incurrence of response costs. Therefore, in the case of all appropriate inquiries conducted for the purpose of qualifying for protection from CERCLA liability ( CERCLA Section 107), the scope of the inquiries is to identify releases and threatened releases of hazardous substances which cause or threaten to cause the incurrence of response costs.

In the case of persons receiving Federal brownfields grants to conduct site characterizations and assessments, the scope of the proposed all appropriate inquiries standards and practices may be broader. The Brownfields Amendments include a definition of a " brownfield site" that includes properties contaminated or potentially contaminated with pollutants and contaminants not included in the definition of " hazardous substance" in CERCLA Section 101( 14). Brownfields sites include properties contaminated with ( or potentially contaminated with) hazardous substances, as well as petroleum and petroleum substances, controlled substances, and pollutants and contaminants ( as defined in CERCLA Section 101( 33)).

Therefore, in the case of persons receiving federal brownfields grant monies to conduct site assessment and characterization activities at brownfields sites, the scope of the all appropriate inquiries may include these other pollutants and contaminants, as outlined in proposed § 312.1( c)( 2), to ensure that persons receiving brownfields grants can appropriately and fully 38 assess the properties that are owned by grant recipients to the full extent provided by the law. It is not the case that every recipient of a brownfields assessment grant has to include within the scope of the all appropriate inquiries petroleum and petroleum products, controlled substances and CERCLA pollutants and contaminants ( as defined in CERCLA Section 101( 33)). However,

in those cases where the terms and conditions of the grant or the cooperative agreement with the grantee designate a broader scope to the investigation ( beyond CERCLA hazardous substances),

then the scope of the all appropriate inquiries should include the additional substances or contaminants.

The scope of today's proposed rule does not include property purchased by a nongovernmental entity or non commercial entity for " residential or other similar uses where a facility inspection and title search reveal no basis for further investigation." ( Pub. Law 107 118 at Sec.

223). CERCLA Section 101( 35)( B)( v) states that in those cases, the title search and facility inspection shall be considered to satisfy the requirements for all appropriate inquiries.

EPA notes that today's proposed rule also does not affect the existing CERCLA liability protections for state and local governments that acquire ownership to properties involuntarily in their functions as sovereigns, pursuant to CERCLA Sections 101( 20)( D) and 101( 35)( A)( ii).

Involuntary acquisition of properties by state and local governments fall under those CERCLA provisions and EPA's policy guidance on those provisions, not under the all appropriate inquiry provisions of CERCLA Section 101( 35)( B).

B. To Whom is the Rule Applicable? 39 Today's proposed rule applies to any person who may seek the landowner liability protections of CERCLA as an innocent landowner, contiguous property owner, or bona fide prospective purchaser. The statutory requirements to obtain each of these landowner liability protections include the conduct of all appropriate inquiries. In addition, the proposed rule will apply to individuals receiving Federal grant monies under CERCLA Section 104( k)( 2) to conduct site characterization and assessment activities. Persons receiving such grant monies must conduct the site characterization and assessment in compliance with the all appropriate inquiries regulatory requirements.

C. Does the Proposed Rule Include any New Reporting or Disclosure Obligations?

The proposed rule does not include any new reporting or disclosure obligations. The proposed rule only would apply to those property owners who may seek the landowner liability protections provided under CERCLA for innocent landowners, contiguous property owners or bona fide prospective purchasers. The documentation requirements included in this proposed rule are primarily intended to enhance the inquiries by requiring the environmental professional to record the results of the inquiries and his or her conclusions regarding conditions indicative of releases and threatened releases on, at, in, or to the property and to provide a record of the environmental professional's inquiry. There are no proposed requirements to notify or submit information to EPA or any other government entity.

The proposed rule does require, in proposed § 312.21( c), that the environmental professional on behalf of the property owner document the results of the all appropriate inquiries in a written report. The property owner may use this report to document the results of the 2 Nothing in this proposed regulation or preamble is intended to suggest that any documentation prepared in conducting all appropriate inquiries will be admissible in court in any litigation where a party raises one of the liability protections, or will in any way alter the judicial rules of evidence.

40 inquiries. The Agency believes that such a report can be similar in nature to the type of report currently provided under generally accepted commercial practices. Today's proposed rule contains no requirements regarding the length, structure, or specific format of the written report.

In addition, the proposed rule does not require that a written report of any kind be submitted to EPA or any other government agency, or that a written report be maintained on site at the subject property for any length of time. The purpose of the written report is merely to ensure that any person claiming one of the CERCLA landowner liability protections be able to show documentation that all appropriate inquiries were conducted in compliance with the federal regulations, should such documentation be required. 2 The Agency notes, that while this proposed regulation would not require parties conducting all appropriate inquiries to retain the written report or any other documentation discovered, consulted, or created in the course of conducting the inquiries, the retention of such documentation and records may be helpful should the property owner need to assert protection from CERCLA liability after purchasing a property.

The proposed rule would require that a written report documenting the results of the all appropriate inquiries include an opinion of an environmental professional as to whether the all appropriate inquiries conducted identified conditions indicative of releases or threatened releases of hazardous substances on, at, in or to the subject property. The proposed rule also would require that the report identify data gaps in the information collected that affect the ability of the environmental professional to render such an opinion or determine the significance of data gaps. 41 The proposed rule, at proposed § 312.21( d), would require that the environmental professional who conducts or oversees the all appropriate inquiries sign the written report. There are two purposes for the proposed requirement to include a signature in the report. First, the individual signing the report would declare, on the signature page, that he or she meets the definition of an environmental professional, as provided in proposed § 312.10. In addition, the proposed rule would require the environmental professional to declare that: [ I, We] have developed and performed the all appropriate inquiries in conformance with the standards and practices set forth in 40 CFR Part 312.

The Negotiated Rulemaking Committee considered requiring an environmental professional to " certify" the results of the all appropriate inquiries when signing the report.

However, several members of the Committee, members of the public representing organizations of environmental insurance companies, and professional engineers and environmental scientists,

pointed out that requiring the report to include a certification statement could imply a warranty or guarantee of the report results on the part of the environment professional. This in turn could have implications regarding the availability and costs of professional insurance for environmental professionals. Requiring a certification as part of the all appropriate inquiries report also could cause a conflict with current requirements governing the use of professional stamps held by individuals with professional licenses, such as those for professional engineers, issued by states,

tribes, and the federal government. To avoid such implications, the proposed rule does not include a certification requirement. However, the proposed rule would require that each all appropriate inquiries report include a signature of the environmental professional as well as two statements above the signature. One statement would read "[ I, We] declare that, to the best of 42 [ my, our] professional knowledge and belief, [ I, we] meet the definition of Environmental Professional as defined in § 312.21 of 40 CFR Part 312." The proposal also includes a second statement to be included above the signature, stating: "[ I, We] have the specific qualifications based on education, training, and experience to assess a property of the nature, history, and setting of the subject property. [ I, We] developed and performed the all appropriate inquiries in conformance with the standards and practices set forth in 40 CFR Part 312." These statements are meant to document that an individual meeting the proposed qualifications of an environmental professional was involved in the conduct of the all appropriate inquiries and that the activities performed by, or under the supervision or responsible charge of, the environmental professional were performed in conformance with the proposed regulations.

The proposed rule allows for the property owner and any environmental professional engaged in the conduct of all appropriate inquiries for a specific property to design and develop the format and content of a written report that will meet the prospective purchaser's objectives and information needs in addition to providing documentation that all appropriate inquiries were completed prior to the acquisition of the property, should the landowner need to assert protection from liability after purchasing a property.

The Agency requests comment on the proposed requirements for an all appropriate inquiries report. The Agency also requests comments on the signature requirements for the all appropriate inquiries report.

Although today's proposed rule does not include any additional disclosure requirements,

CERCLA Section 103 does require persons in charge of facilities, including on shore and offshore facilities, and persons in charge of vessels to notify the National Response Center of any 43 release of a hazardous substance of a quantity equal to or greater than a " reportable quantity," as defined in CERCLA Section 102( b) from the facility or vessel. Today's proposed rule proposes no changes to this reporting requirement and proposes no changes to any other reporting or disclosure requirements under federal, tribal, or state law.

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

1. What is the intent of the proposed definition of an Environmental Professional?

In the Brownfields Amendments, Congress required that all appropriate inquiries include " the results of an inquiry by an environmental professional" ( CERCLA Section 101( 35)( B)( iii)( I)). The members of the Negotiated Rulemaking Committee determined that it is necessary to establish minimum qualifications for persons managing or overseeing all appropriate inquiries. The Committee's intent, in setting minimum professional qualifications, is to ensure that all inquiries are conducted at a high level of professional ability and ensure the overall quality of both the inquiries conducted and the conclusions or opinions rendered with regard to conditions indicative of the presence of a release or threatened release on, at, in, or to a property, based upon the results of all inquiries. The Committee agreed that an environmental professional conducting or overseeing all appropriate inquiries must possess sufficient specific education, training, and experience necessary to exercise professional judgment to develop opinions and conclusions regarding the presence of releases or threatened releases of hazardous substances to the surface or subsurface of a property. The Committee agreed that an environmental professional must hold a degree in an engineering or scientific field of study and that such individuals also must have a number of years of relevant experience in conducting all appropriate inquiries, or environmental 44 site assessments. The Committee determined that any individual overseeing the conduct of all appropriate inquiries must provide significant information about the environmental conditions at a property to support a purchaser's or property owner's claim with regard to liability protection under CERCLA. Therefore, any individual overseeing the conduct of the all appropriate inquiries must have a significant level of education and experience. In addition, the Committee determined that it is essential for environmental professionals to remain current in their field of practice.

2. What are the minimum qualifications for meeting the definition of an environmental professional?

Today's proposed rule includes a definition of an environmental professional that reflects the Negotiated Rulemaking Committee's extensive efforts to identify a set of minimum qualifications, including minimum levels of education and experience, that characterize the type of professional who is best qualified to oversee and direct the development of comprehensive inquiries and provide the landowner with sound conclusions and opinions regarding the potential for releases or threatened releases to be present at the property. The proposed rule allows for individuals not meeting the proposed definition of an environmental professional to contribute to and participate in the all appropriate inquiries on the condition that such individuals are conducting inquiries activities under the supervision or responsible charge of an individual that meets the regulatory definition of an environmental professional.

The proposed rule would require that the final review of the all appropriate inquiries and the conclusions that follow from the inquiries rest with an individual who qualifies as an environmental professional, as defined in proposed section § 312.10 of the proposed rule. The 45 Negotiated Rulemaking Committee concluded, as reflected in its final consensus document, that it is essential that a person meeting the regulatory definition of an environmental professional sign a report documenting the results and conclusions of the all appropriate inquiries to attest to his or her opinion that the inquiries were conducted in compliance with the regulations. The proposed rule also provides that in signing the report, the environmental professional must document that he or she meets the definition of an " environmental professional" included in the regulations.

The proposed definition of an environmental professional includes minimum educational qualifications and a number of years of full time relevant experience in the conduct of all appropriate inquiries or environmental site assessments. The proposed definition first and foremost requires that to qualify as an environmental professional a person must " possess sufficient specific education, training, and experience necessary to exercise professional judgment to develop opinions and conclusions regarding the presence of releases or threatened releases... to the surface or subsurface of a property, sufficient to meet the objectives and performance factors"

that are provided in the proposed regulation. The proposed definition of an environmental professional includes individuals who possess the following combinations of education and experience.

hold a current Professional Engineer's or Professional Geologist's license or registration from a state, tribe, or U. S. territory and have the equivalent of three ( 3) years of full time relevant experience; or

be licensed or certified by the federal government, a state, tribe, or U. S. territory to perform environmental inquiries as defined in § 312.21 and have the equivalent of three ( 3)

years of full time relevant experience; or 46

have a Baccalaureate or higher degree from an accredited institution of higher education in a relevant discipline of engineering, environmental science, or earth science and the equivalent of five ( 5) years of full time relevant experience; or

as of the date of the promulgation of the final rule, have a Baccalaureate or higher degree from an accredited institution of higher education and the equivalent of ten ( 10) years of full time relevant experience.

Based upon the recommendations of the Negotiated Rulemaking Committee, EPA is proposing to recognize as environmental professionals those individuals who are licensed by any tribal or state government as a professional engineer ( P. E.) or a professional geologist ( P. G.), and have three years of full time relevant experience in conducting all appropriate inquiries. The Agency believes that such individuals have " sufficient specific education, training, and experience necessary to exercise professional judgment to develop opinions and conclusions regarding the presence of releases or threatened releases... to the surface or subsurface of a property, sufficient to meet the objectives and performance factors" provided in the proposed regulation. EPA and the Committee concluded that the rigor of the tribal and state licensed P. E. and P. G. certification processes, including the educational and training requirements, as well as the examination requirements, paired with the requirement to have three years of relevant professional experience conducting all appropriate inquiries will ensure that all appropriate inquiries are conducted under the supervision or responsible charge of an individual well qualified to oversee the collection and interpretation of site specific information and render informed opinions and conclusions regarding the environmental conditions at a property, including opinions and conclusions regarding the presence of releases or threatened releases of hazardous substances and other contaminants on, at, 47 in, or to the property. The Agency's decision to recognize tribal and state licensed P. E. s and P. G. s reflects the fact that tribal governments and state legislatures hold such professionals responsible ( legally and ethically) for safeguarding public safety, public health, and the environment. To become a P. E. or P. G. requires that an applicant have a combination of accredited college education followed by approved professional training and experience. Once a publicly appointed review board approves a candidate's credentials, the candidate is permitted to take a rigorous exam. The candidate must pass the examination to earn a license, and perform ethically to maintain it. After a state or tribe grants a license to an individual, and as a condition of maintaining the license, many states require P. E. s and P. G. s to maintain proficiency by participating in approved continuing education and professional development programs. In addition, members of the Negotiated Rulemaking Committee, including state representatives on the Committee, pointed out that tribal and state licensing boards can investigate complaints of negligence or incompetence on the part of licensed professionals, and may impose fines and other disciplinary actions such as cease and desist orders or license revocation.

The Negotiated Rulemaking Committee also recommended, and EPA is proposing, to include within the proposed definition of an environmental professional individuals who are environmental professionals, or otherwise licensed to perform environmental site assessments or all appropriate inquiries by the Federal government ( e. g., the Bureau of Indian Affairs) or under a state or tribal certification program, provided that these individuals also have three years of relevant experience. It is the Committee's and EPA's opinion that such qualifications define individuals who " possess sufficient specific education, training, and experience necessary to exercise professional judgment to develop opinions and conclusions regarding the presence of 48 releases or threatened releases... to the surface or subsurface of a property, sufficient to meet the [ proposed rule's] objectives and performance factors."

Although the proposed rule recognizes tribal and state licensed P. E. and P. G. s and other such government licensed environmental professionals with three years of experience to be environmental professionals, the proposed rule does not restrict the definition of an environmental professional to these licensed individuals. The proposed definition of an environmental professional also would include individuals who hold a Baccalaureate or higher degree from an accredited institution of higher education in a relevant discipline of engineering, environmental science, or earth science and have the equivalent of five ( 5) years of full time relevant experience in conducting environmental site assessments, or all appropriate inquiries. Again, such individuals most likely will possess sufficient specific education, training, and experience necessary to exercise professional judgment to develop opinions and conclusions regarding the presence of releases or threatened releases to the surface or subsurface of a property, sufficient to meet the proposed objectives and performance factors included in proposed § 312.20( d) and ( e).

A goal of the Negotiated Rulemaking Committee was to establish qualifications for the environmental professional that will ensure that all appropriate inquiries are conducted at a high standard of technical and scientific quality, while not significantly disrupting the current market for professional site assessment services. The Committee debated whether or not to recommend that the definition of an environmental professional be restricted to individuals holding a Professional Engineer or Professional Geologist license, or holding another similar license from a state, tribe, or U. S. territory. Establishing such a requirement could assure that all appropriate inquiries conducted for the purposes of supporting a claim to a CERCLA liability protection 49 would be conducted by highly qualified individuals. However, Committee members recognized that many individuals with appropriate education and training and many years of relevant experience in conducting environmental site assessments ( including non licensed environmental engineers and geologists) may be qualified to conduct all appropriate inquiries, although they do not have a Professional Engineer or Professional Geologist license. The Committee therefore discussed what qualifications are necessary to ensure that an individual is qualified to oversee the conduct of all appropriate inquiries, review the results of all inquiries for a particular property and be capable of assessing this information in light of all other relevant site specific information about a property ( e. g., hydrogeologic setting), and develop sound opinions and conclusions regarding the environmental conditions at a property and the potential presence of a release or threatened release on, at, in or to the property. The Committee determined that the individuals best qualified to review all available and relevant information about a property and render a professional opinion regarding the environmental conditions at a property at a standard of quality necessary that may ensure a valid interpretation of the findings and accurate opinion of the property's environmental conditions, are those with a degree in a relevant field of engineering, environmental science, or earth science and five years of full time relevant experience. The Committee considered many other variants of educational and experience qualifications. Some Committee members preferred proposing qualifications centered more closely around specific education or training criteria.

Other Committee members pointed out that the qualifications should be based primarily on years of relevant experience. After much deliberation and after receiving and considering public comments on the subject, the Committee recommended that the proposed definition of an environmental professional include both educational and experience qualifications. The 50 Committee recommended that the definition of an environmental professional include a requirement that such individuals hold a Baccalaureate or higher degree in a relevant field of science or engineering. Committee members believed that individuals trained in science and engineering are best qualified to understand how to interpret information collected about a property in light of the environmental conditions and site specific situations at the property. In addition, the Committee determined that individuals with such degrees also should have five years of relevant full time experience in conducting all appropriate inquiries prior to meeting the qualifications for an environmental professional. The proposed rule also would require all environmental professionals to remain current in the field of all appropriate inquiries, or environmental site assessments.

During the Committee's deliberations on the definition of an environmental professional,

public commenters raised particular concerns with regard to individuals who currently are employed in the business of conducting all appropriate inquiries or environmental site assessments, but who do not meet the Committee's proposed qualifications of an environmental professional. The Committee gave careful consideration of public comments that pointed out the potential impacts that the proposed definition of an environmental professional may have on the current market for environmental site assessment services and the fact that many practicing professionals without science degrees have substantial investigative and writing skills. Members of the public pointed out in written comments to EPA and the Committee that some practicing professionals have many years of experience in conducting all appropriate inquiries, but do not have the specific educational requirements recommended by the Committee. EPA and the Committee, in considering these comments, wanted to ensure that professionals with extensive 51 experience in conducting all appropriate inquiries and who have built their careers in such a business practice not be put out of business or bear a hardship of having to obtain a degree midcareer However, EPA and the Committee had to balance this concern with the additional concerns of ensuring that all appropriate inquiries are conducted by experienced and well qualified professionals.

The Committee deliberated the merits of setting a high standard of excellence for the conduct of all appropriate inquiries through the establishment of stringent qualifications for environmental professionals against the need to ensure that competent individuals currently conducting all appropriate inquiries are not displaced. After carefully considering these issues, the Committee recommended and EPA is proposing, as part of the proposed definition of an environmental professional, a provision allowing many currently practicing professionals to continue to conduct business in the field of environmental site assessments or all appropriate inquiries, while ensuring a high qualifications standard for future professionals. The Negotiated Rulemaking Committee recommended that the proposed definition of an environmental professional allow for persons that at the time of promulgation of the final rule do not meet the proposed educational or professional licensing qualifications for an environmental professional but have more than ten years of experience in conducting environmental site assessments to be included as environmental professionals. This provision is proposed as a " grandfather" clause and would only apply to those individuals with ten or more years of experience in the field of all appropriate inquiries investigations on the date of promulgation of the final rule. The Committee made this recommendation after careful consideration of public comments and of the potential impacts that the proposed definition of an environmental professional may have on the current 52 market for environmental site assessment services and the fact that many practicing professionals without science degrees have substantial investigative and writing skills.

The proposed definition provides that " as of the date of promulgation of the final rule,

individuals who have a baccalaureate or higher degree from an accredited institution of higher education and the equivalent of ten ( 10) years of full time relevant experience" will meet the proposed definition of an environmental professional. Again, this provision of the proposed definition is a grandfather clause and would apply only to those individuals meeting these qualifications on the date of promulgation of the final rule. Persons not meeting these qualifications on the effective date of the final rule will have to meet the other minimum qualifications included in the proposed definition to qualify as an environmental professional for the purpose of conducting all appropriate inquiries under the federal standards established under the final rule.

EPA is requesting comment on the proposed definition of an environmental professional and the specific minimal qualifications included in the proposed definition.

3. If I am certified as an environmental professional by a private certification association, do I qualify as an environmental professional under the proposed rule?

During the Negotiated Rulemaking Committee's deliberations, the general public had many opportunities to comment on the Committee's draft regulatory language including the opportunity to provide written comment to the Committee and make oral presentations to the Committee during each of the Committee's meetings. Many individuals took advantage of the openness of the negotiated rulemaking process to provide input and comment to the Committee, 53 particularly with regard to the Committee's deliberations on the definition of an environmental professional. The Committee considered restricting the definition of an environmental professional to state licensed certification programs. However, based upon many comments received from the public, as well as the concerns of some members of the Committee, the Committee members concluded that there is a need to recognize individuals who have similar qualifications to P. E. s and P. G. s but do not hold a state issued license or certificate. Therefore,

the Committee recommended, and EPA is proposing, to include within the definition of an environmental professional those individuals who have a baccalaureate or higher degree from an accredited institution of higher education in a relevant discipline of engineering, environmental science, or earth science and the equivalent of five ( 5) years of full time relevant experience in conducting environmental site assessments or all appropriate inquiries. The proposed definition of " relevant experience" is " participation in the performance of environmental site assessments that may include environmental analyses, investigations, and remediation which involve the understanding of surface and subsurface environmental conditions and the processes used to evaluate these conditions and for which professional judgment was used to develop opinions regarding conditions indicative of releases or threatened releases... to the subject property."

The Committee received comments from independent professional certification organizations, including the Certified Hazardous Materials Managers' organization, requesting that their organizations' certification programs be named in the proposed regulatory definition of an environmental professional. The Committee concluded that such an approach would require that EPA review the certification requirements of each organization to determine whether or not each organization's certification requirements meet or exceed the regulatory qualifications 54 proposed for an environmental professional. Given that there may be many such organizations and given that each organization may review and change its certification qualifications on a frequent or periodic basis, EPA concluded that such a undertaking was not practicable. The Agency does not have the necessary resources to review the legitimacy of each private certification organization and review and approve each organization's certification qualifications.

Therefore, the Committee recommended, and EPA is proposing, to include within the regulatory definition of an environmental professional, a generic performance based qualifications standard that includes education and experience qualifications, but does not recognize any private organization's certification program. However, the Agency notes that any individual with a certification from a private certification organization where the organization's certification qualifications include the same or more stringent education and experience requirements as those included in the federal regulation will meet the definition of an environmental professional for the purposes of this regulation. As stated above, the proposed definition of an environmental professional includes individuals who hold a Baccalaureate or higher degree from an accredited institution of higher education in a relevant discipline of engineering, environmental science, or earth science and the equivalent of five ( 5) years of full time relevant experience.

4. Can persons not meeting the proposed definition of an environmental professional contribute to the conduct of all appropriate inquiries?

During the Committee's deliberations on the definition of an environmental professional,

members of the public also raised concerns about restricting the conduct of all appropriate inquiries to only those individuals meeting the definition of an environmental professional. The 55 Negotiated Rulemaking Committee considered requiring that all the activities necessary to complete the all appropriate inquiries investigation be conducted by persons meeting the proposed definition of an environmental professional. Such a requirement could ensure that all of the required activities are conducted at a high standard of quality. In addition, requiring that all activities be conducted by an environmental professional could ensure, to a high level of confidence, the accuracy and reliability of the environmental professional's interpretation of the inquiries results. However, after careful review of specific activities required to complete the all appropriate inquiries, consideration of public comments offered during the Committee's deliberations, and consideration of the costs and impacts to the market for environmental site assessment services, the Committee decided that it is not necessary for an environmental professional to perform all aspects of the all appropriate inquiries.

Therefore, the proposed definition of an environmental professional would allow for many of the individual inquiry activities to be conducted by individuals that may not qualify as an environmental professional per the proposed definition. The proposed rule would allow individuals not meeting the definition of an environmental professional to contribute to the conduct of the all appropriate inquiries, as long as such individuals are working under the supervision or responsible charge of an individual who meets the proposed definition of an environmental professional. This provision would allow for a team of individuals working for the same firm or organization ( e. g., individuals working for the same government agency) to share the workload for conducting all appropriate inquiries for a single property, provided that one member of the team meets the proposed definition of an environmental professional and reviews the results and conclusions of the inquiries and signs the final report. 56 The Agency requests comments on all of the proposed qualifications included in the definition of an environmental professional and the provisions allowing for individuals who do not qualify as environmental professionals to contribute to inquiry activities.

E. References Today's proposed rule includes no references. However, the Agency is reserving a reference section and may include references in the final rule. As explained later in this preamble,

EPA is inviting the public to identify potentially applicable standards developed by standards developing organizations that may be applicable and compliant with the regulations proposed today. Prior to promulgating a final regulation setting federal standards and practices for all appropriate inquiries, the Agency may consider citing or referencing applicable and compliant voluntary consensus standards in the final regulation. This may facilitate implementation of the final regulations and avoid disruption to parties using voluntary consensus standards that are found to be fully compliant with the federal regulations.

F. What is Included in " All Appropriate Inquiries?"

The proposed Federal regulations for conducting all appropriate inquiries include standards and practices for conducting the activities included in each of the statutory criterion established by Congress in the Brownfields Amendments. These criteria are set forth in CERCLA Section 101( 35)( 2)( B)( iii) and are:

° The results of an inquiry by an environmental professional ( proposed § 312.21). 57 ° Interviews with past and present owners, operators, and occupants of the facility for the purpose of gathering information regarding the potential for contamination at the facility ( proposed § 312.23).

° Reviews of historical sources, such as chain of title documents, aerial photographs,

building department records, and land use records, to determine previous uses and occupancies of the real property since the property was first developed ( proposed § 312.24).

° Searches for recorded environmental cleanup liens against the facility that are filed under Federal, State, or local law ( proposed § 312.25).

° Reviews of Federal, State, and local government records, waste disposal records,

underground storage tank records, and hazardous waste handling, generation, treatment,

disposal, and spill records, concerning contamination at or near the facility ( proposed § 312.26).

° Visual inspections of the facility and of adjoining properties ( proposed § 312.27).

° Specialized knowledge or experience on the part of the defendant ( proposed § 312.28).

° The relationship of the purchase price to the value of the property, if the property was not contaminated ( proposed § 312.29).

° Commonly known or reasonably ascertainable information about the property ( proposed § 312.30).

° The degree of obviousness of the presence or likely presence of contamination at the property, and the ability to detect the contamination by appropriate investigation ( proposed § 312.31). 58 1. Who is responsible for conducting the all appropriate inquiries?

The Brownfields Amendments to CERCLA require persons claiming any of the landowner liability protections to conduct all appropriate inquiries into the past uses and ownership of subject property. The criteria included in the Brownfields Amendments for the regulatory standards for all appropriate inquiries require that the inquiries include an inquiry by an environmental professional. The statute does not require that all criteria or inquiries be conducted by an environmental professional. After careful review and consideration of each statutory criterion, the Negotiated Rulemaking Committee determined that many, but not all, of the inquiries activities must be conducted by, or under the supervision or responsible charge of, an individual meeting the qualifications within the proposed definition of an environmental professional.

The Committee recommended, and EPA is proposing, that several of the activities included in the inquiries may be conducted either by the purchaser, or the landowner, and do not have to be conducted under the supervision or responsible charge of the environmental professional. The proposed rule would require that the results of all activities not conducted by or under the supervision or responsible charge of the environmental professional be provided to the environmental professional to ensure that such information may be fully considered when the environmental professional draws conclusions based on the inquiry activities or renders an opinion as to whether conditions at the property are indicative of a release or threatened release of a hazardous substance ( or other contaminant) on, at, in, or to the property which causes the incurrence of response costs. 59 The proposed rule allows for the following activities to be the responsibility of, or conducted by, the purchaser or landowner and not necessarily by the environmental professional,

provided the results of such inquiries or activities are provided to an environmental professional overseeing the all appropriate inquiries:

° searches for environmental cleanup liens against the subject property that are filed or recorded under federal, tribal, state, or local law, as required by proposed § 312.25.

° assessments of any specialized knowledge or experience on the part of the purchaser or landowner, as required by § 312.28.

° an assessment of the relationship of the purchase price to the fair market value of the subject property, if the property was not contaminated, as required by § 312.29.

° an assessment of commonly known or reasonably ascertainable information about the subject property, as required by § 312.30.

The proposed rule would require that all other required inquiries and activities, beyond those listed above to be conducted by, or under the supervision or responsible charge of, an environmental professional. The Agency requests comment on the proposed division of responsibilities.

2. When must all appropriate inquiries be conducted?

CERCLA, as amended, requires innocent landowners, bona fide prospective purchasers,

and contiguous property owners to conduct all appropriate inquiries prior to acquiring a property for the purposes of either establishing that the purchaser " did not know and had no reason to know" of releases or threatened releases of hazardous substances on, at, in, or to the property, or 60 in the case of the bona fide prospective purchaser, to identify environmental conditions indicative of releases or threatened releases at the property prior to taking ownership of the property. In the case of contiguous property owners, CERCLA Section 107( q)( 1)( A)( viii) requires that a person claiming to be a contiguous property owner conduct all appropriate inquiries " at the time at which the person acquired the property." In the case of innocent landowners, Section 101( 35)( B) of CERCLA requires that the property owner conduct all appropriate inquiries " on or before the date on which the defendant acquired the facility."

Other than to specify that all appropriate inquiries must be conducted at or prior to the time a person acquires a property, the statute is silent regarding how close to the actual purchase date the inquiries must be completed. The proposed rule requires that all appropriate inquiries be conducted within one year prior to taking title to a property. As explained below, purchasers may use information collected as part of previous inquiries for the same property, if the inquiries were completed or updated within one year prior to the date the property is acquired. The proposed rule would require that certain information collected as part of the all appropriate inquiries be updated if it was collected more than 180 days prior to the date a purchaser acquires the property.

In addition, the Agency is proposing to define the date of acquisition of a property as the date on which the purchaser acquires title to the property.

The Agency believes that the event that most closely reflects the Congressional intent of the date on which the defendant acquired the property is the date on which a purchaser received title to the property. The Agency considered other dates, such as the date a prospective purchaser signs a purchase or sale agreement. However, EPA believes that it could be burdensome to require a prospective purchaser to have completed the all appropriate inquiries 61 prior to having an agreement with a seller to complete a sales transaction. In fact, the time period between the date on which a sales agreement is signed and the date on which the title to the property is actually transferred to the purchaser may be the most convenient time for the prospective purchaser to obtain access to the property and undertake the all appropriate inquiries.

In addition, requiring that all appropriate inquiries be completed on some date prior to the date of title transfer could result in requiring prospective purchasers to undertake all appropriate inquiries so early in the property acquisition process as to require the inquiries to be completed prior to the purchaser making a final decision on whether to actually acquire the property. EPA requests comment on the proposal to establish the date on which title is transferred as the date on which the property is acquired.

To increase the potential that the information collected for the all appropriate inquiries accurately reflects the proposed objectives and performance factors, as well as to increase the potential that opinions and judgments regarding the environmental conditions at a property that are included in an all appropriate inquiries report are based on current and relevant information,

the Agency is proposing that all appropriate inquiries be conducted within one year prior to the purchaser acquiring the property. Such inquiries may include information collected for previous all appropriate inquiries that were conducted or updated within one year prior to the acquisition date of the property. In addition, as explained in more detail below, the proposed rule would require that several of the components of the inquiries be updated within 180 days prior to the date the property is acquired ( i. e., the date the landowner obtains title to the property). 62 3. Can a purchaser use information collected for previous inquiries completed for the same property?

The proposed rule, at § 312.20( b), would allow parties conducting all appropriate inquiries to use previous inquiries completed for the same property, under certain conditions. First, the previous inquiries must have been conducted in compliance with the regulations applicable at the time the previous all appropriate inquiries investigation was completed. In addition, the previous inquiries must have been completed with information that was collected or updated no longer than a year prior to the current acquisition date for the property. Certain types of information collected more than 180 days prior to the current date of acquisition must be updated for the current all appropriate inquiries. Also, the information required under some specific criterion ( e. g., relationship of purchase price to property value, specialized knowledge on part of defendant) must be collected specifically for the current transaction.

When discussing the issue of whether or not to provide for the use of all appropriate inquiries conducted by a previous owner, or the seller, of a particular property, the Negotiated Rulemaking Committee recognized that there is value in using previously collected information when such information was collected in accordance with the regulatory standards, particularly when the use of such previously collected information will reduce the need to undertake duplicative efforts. In its deliberations, the Committee discussed the potential impacts that allowing the use of all appropriate inquiries conducted by third parties could have upon the legality and legitimacy of the all appropriate inquiries required to be conducted by a purchaser not involved in the collection of the information. The Committee also discussed how often certain information required to be collected as part of the all appropriate inquiries should be updated to 63 ensure its accuracy. A particular focus of the Committee's discussions was the need for information collected and used by an environmental professional to be accurate and current,

therefore allowing the environmental professional to make informed judgments regarding the environmental conditions of the property and provide informed opinions as to the likelihood that conditions are indicative of a release or threatened release of a hazardous substance on, at, in, or to the property.

The Committee recommended, and EPA is proposing, to allow all appropriate inquiries to include information contained in previous inquiries, including inquiries conducted by third parties,

for the same property. However, such information must have been updated or collected within one year prior to the date the current purchaser acquires the property ( the date on which the owner takes title to the property) and collected in compliance with the regulatory requirements that were in effect at the time the previous all appropriate inquiries were conducted. Note that if the previous all appropriate inquiries were conducted prior to the effective date of the final federal standards for all appropriate inquiries, the inquiries must have been conducted in compliance with the either the interim standard established by Congress in the Brownfields Amendments and clarified by EPA on May 9, 2003 ( 68 FR 24888), or in the case of properties purchased prior to May 31, 1997, in compliance with practices consistent with good commercial or customary business practices.

The Committee recognized that it is not sufficient to wholly adopt previously conducted all appropriate inquiries for the same property without any review. Certain aspects of the all appropriate inquiries investigation are specific to the current purchaser and the current purchase 64 transaction. Therefore, the proposed rule would require that each all appropriate inquiries investigation include current information related to:

° any relevant specialized knowledge held by the current purchaser and the environmental professional responsible for overseeing and signing the all appropriate inquiries report ( i. e., requirements of proposed § 312.28); and ° the relationship of the current purchase price to the value of the property, if the property were not contaminated ( i. e., requirements of proposed § 312.29)

In addition, the Committee recommended that certain information be updated if it was not collected within 180 days prior to the date of acquisition of the property ( or the date on which the purchaser takes title to the property) to ensure that an all appropriate inquiries investigation accurately reflects the environmental conditions at a property. To increase the potential that information collected is accurate, as well as increase the potential that opinions and judgments regarding the environmental conditions at a property that are included in an all appropriate inquiries report are based on current and relevant information, the proposed rule would require that many of the components of the inquiries be updated within 180 days prior to the date of acquisition of the property. The components of the all appropriate inquiries that must be updated within 180 days prior to the date of acquisition of the property are:

° interviews with past and present owners, operators, and occupants ( proposed § 312.23);

° searches for recorded environmental cleanup liens ( proposed § 312.25);

° reviews of federal, tribal, state, and local government records ( proposed § 312.26);

° visual inspections of the facility and of adjoining properties ( proposed § 312.27); and ° the declaration by the environmental professional ( proposed § 312.21( d)). 65 An all appropriate inquiries investigation may include the information listed above when previously collected by the purchaser or a third party for the same property, provided that the information was collected no longer than one year prior to the current purchaser's date of acquisition of the property and provided that it is updated for the current all appropriate inquiries investigation, if it was collected more than 180 days prior to the acquisition date. Also, in all cases where a purchaser is using previously collected information, the all appropriate inquiries for the current purchase must include a summary of any changes to the conditions of the property that occurred since the previous inquiries were conducted.

The Agency requests comment on the proposed provisions for using previously conducted all appropriate inquiries.

6. Can all appropriate inquiries be conducted by one party and transferred to another party?

The proposed rule, at proposed § 312.20( c), allows for all appropriate inquiries to be conducted by one party and transferred to another party, provided that certain conditions are met.

It was brought to the attention of the Negotiated Rulemaking Committee that under certain circumstances, the person purchasing a property may obtain a report of all appropriate inquiries conducted for the property from another party, either the seller of the property or another independent party. In particular, the Committee discussed situations where the federal government or a state government agency may conduct the all appropriate inquiries on behalf of the local government on a property being purchased by a local government. For example, the EPA Brownfields program conducts " targeted brownfields assessments" on behalf of local governments. This situation also may occur when a state government is covering the cost of the 66 all appropriate inquiries for a property owned by a local government or in a situation where the local government does not have access to appropriate staff or capital resources to conduct the all appropriate inquiries and it therefore is conducted by a state government agency. Another example is when a local government conducts all appropriate inquiries for a third party in its community, such as a private prospective purchaser. In addition, local brownfields redevelopment agencies that are connected to local government may seek out contaminated property, make all appropriate inquiries about it, acquire it, and then sell the property to a developer.

The proposed rule allows for a person acquiring a property to use the results of inquiries and the inquiries report conducted by another party, if the inquiries and the report meet the proposed objectives and performance factors for the all appropriate inquiries regulations and the purchaser of the property who is seeking to use the previously collected information or report,

reviews all information collected and updates the contents of the report as necessary to accurately reflect current conditions at the property. In addition, the proposed rule would require that the purchaser update the inquiries and the report to include any relevant specialized knowledge held by the current purchaser and the environmental professional. The Agency requests comments on the proposed requirements for using all appropriate inquiries conducted by third parties.

7. What are the objectives and performance factors for the proposed all appropriate inquiries requirements?

The Committee developed its recommendation for proposed regulatory language around the criteria established by Congress in Section 101( 35)( B)( iii) of CERCLA. As the Committee progressed in its efforts to address each criterion, it became apparent that the purposes and 67 objectives for performing many of the inquiries and the types of information that must be collected to meet the objectives of the individual regulatory criterion often overlapped. For example, in developing standards addressing the criterion requiring a review of historical information, a search for recorded environmental cleanup liens, and a review of government records, the Committee concluded that the objectives of each criterion or activity was similar, and in some cases, the same information could be collected independently to satisfy each criterion when conducting activities required to fulfill each of the criterion's objectives. A chain of title document is historic information that may include information on environmental cleanup liens and may include information on past owners of the property that indicates that previous owners managed hazardous substances at the property.

To avoid requiring duplicative efforts, but to ensure that the proposed regulations include standards and practices that result in a comprehensive assessment of the environmental conditions at a property, the Negotiated Rulemaking Committee recommended, and EPA is proposing, that the all appropriate inquiries standards be structured around a concise set of objectives and performance factors. The proposed objectives and performance factors apply to the inquiries comprehensively. In conducting the inquiries collectively, the landowner and the environmental professional must seek to achieve the proposed objectives and performance factors and use these proposed objectives and standards as guidelines in implementing, in total, all of the other proposed regulatory standards and practices.

An all appropriate inquiries investigation need not address each of the regulatory criterion in any particular sequence. In addition, information relevant to more than one criterion need not be collected twice, and a single source of information may satisfy the requirements of more than 68 one criterion and more than one objective. Under the provisions of the proposed rule, the information required to achieve each of the objectives and performance factors must be met for the all appropriate inquiries investigation to be complete. Although compliance with the all appropriate inquiries requirements ultimately will be determined in a court, the proposed rule allows the purchaser and environmental professional to determine the best process and sequence for collecting and analyzing all required information. For example, it may be appropriate in many situations for the historic records search required by proposed § 312.24 and the search of government records required under proposed § 312.26 be conducted prior to conducting interviews of past and present owners, operators, and occupants, as required under proposed § 312.23. This may allow the purchaser or environmental professional to develop a general understanding of past uses and ownership of a property prior to interviewing owners and occupants and therefore make better use of the interviews to obtain information necessary to meet the performance factors or objectives of the overall investigation when conducting interviews of past and present owners or occupants. In addition, it often may be beneficial to conduct the required interviews of owners, operators and occupants prior to conducting an on site visual inspection. Information obtained during the interviews may be useful for locating and inspecting potential sources of environmental concerns during the visual inspection.

As stated in proposed § 312.20( d), the all appropriate inquiries standards, as applicable to landowners seeking CERCLA liability protections as innocent landowners, bona fide prospective purchasers, and contiguous landowners, are intended to result in the identification of conditions indicative of releases and threatened releases of hazardous substances on, at, in, or to the subject property prior to the acquisition of the property. As established in proposed § 312( d)( 2), in the 69 case of persons receiving federal brownfields grant monies under CERCLA Section 104( k) to conduct site characterizations and assessments, the all appropriate inquiries standards are intended to result in the identification of conditions indicative of releases and threatened releases of hazardous substances, as well as pollutants, contaminants, petroleum and petroleum products,

and controlled substances ( as defined in 21 U. S. C. 802) on, at, in, or to the subject property when conducting the assessment or characterization with the use of the grant funds and when the terms and conditions of the grant include such pollutants and contaminants within the scope of the grant. This expanded objective for brownfields grant recipients reflects the broad statutory definition of a " brownfield site" that allows EPA to provide grant monies to eligible entities ( see CERCLA Section 104( k)( 1)) for the assessment and cleanup of real property that is complicated by the presence or potential presences of hazardous substances, pollutants, contaminants,

petroleum and petroleum products, and controlled substances ( see CERCLA Section 101( 39)).

In performing the inquiries, including conducting interviews, collecting historical data and government records, inspecting the subject property and adjoining properties, and carrying out all other inquiries, all parties undertaking all appropriate inquiries must be attentive to the fact that the primary objectives of the proposed regulation are to identify the following types of information about the subject property prior to acquiring the property:

° current and past property uses and occupancies;

° current and past uses of hazardous substances;

° waste management and disposal activities that could have caused releases or threatened releases of hazardous substances; 70 ° current and past corrective actions and response activities undertaken to address past and on going releases of hazardous substances;

° engineering controls;

° institutional controls; and ° properties adjoining or located nearby the subject property that have environmental conditions that could have resulted in conditions indicative of releases or threatened releases of hazardous substances on, at, in, or to the subject property.

The Negotiated Rulemaking Committee also developed a set of performance factors for the conduct and performance of each of the individual proposed standards and practices that make up the proposed rule. These performance factors, which are included in proposed § 312.20( e),

include: ( 1) gather the information that is required for each standard and practice that is publicly available ( or otherwise obtainable), obtainable from its source within reasonable time and cost constraints, and which can practicably be reviewed, and ( 2) review and evaluate the thoroughness and reliability of the information gathered in complying with each standard and practice, taking into account information gathered in the course of complying with the other standards and practices of this subpart. The proposed performance factors are provided as guidelines to be followed in conjunction with the proposed objectives for the all appropriate inquiries. EPA and the Negotiated Rulemaking Committee are not suggesting that the goal of the conduct of the all appropriate inquiries is to identify every available document and piece of information regarding a property and the environmental conditions on the property. Instead, the objective of the conduct of all appropriate inquiries is to develop an understanding of the conditions of the property and determine whether or not there are conditions indicative of releases and threatened releases of 71 hazardous substances ( and pollutants, contaminants, controlled substances, and petroleum and petroleum products, if applicable) on, at, in or to the subject property.

The Agency requests comments on the proposed objectives and performance factors for the all appropriate inquiries requirements.

Persons seeking to establish a basis for one of the CERCLA landowner liability protections also should keep in mind that an objective of the all appropriate inquiries standards and practices is to characterize the environmental conditions at a property that are indicative of releases or threatened releases, prior to acquiring the property. This information may facilitate compliance with the additional statutory requirements applicable for claiming the liability protections after acquiring the property.

Failure to identify an environmental condition or identify a release or threatened release of a hazardous substance on, at, in or to a property during the conduct of all appropriate inquiries,

does not relieve a landowner from complying with the other post acquisition statutory requirements for obtaining the landowner liability protections. Landowners must comply with all the statutory requirements to obtain protection from liability. For example, an inability to identify a release or threatened release during the conduct of all appropriate inquiries does not negate the landowner's post acquisition responsibilities under the statute to take reasonable steps to stop the release, prevent a threatened release, and prevent exposure to the release or threatened release.

8. What are institutional controls?

Under the proposed rule, those performing all appropriate inquiries must seek to identify institutional controls. As defined in proposed § 312.10, institutional controls are non engineered 72 instruments, such as administrative and legal controls, that among other things, can help to minimize the potential for human exposure to contamination, protect the integrity of a remedy by limiting land or resource use, and provide information to modify behavior. For example, an institutional control might prohibit the drilling of a drinking water well in a contaminated aquifer or disturbing contaminated soils. Institutional controls may also be referred to as land use controls, activity and use limitations, etc., depending on the program under which a response action is conducted.