[Federal Register Volume 70, Number 210 (Tuesday, November 1, 2005)]
[Rules and Regulations]
[Pages 66070-66113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-21455]



[[Page 66069]]

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Part III





Environmental Protection Agency





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40 CFR Part 312



Standards and Practices for All Appropriate Inquiries; Final Rule

  Federal Register / Vol. 70, No. 210 / Tuesday, November 1, 2005 / 
Rules and Regulations  

[[Page 66070]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 312

[SFUND-2004-0001; FRL-7989-7]
RIN 2050-AF04


Standards and Practices for All Appropriate Inquiries

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) today is 
establishing 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). Today's final rule establishes specific 
regulatory requirements and standards for conducting all appropriate 
inquiries into the previous ownership and uses 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 also will be applicable to persons 
conducting site characterization and assessments with the use of grants 
awarded under CERCLA section 104(k)(2)(B).

DATES: This final rule is effective November 1, 2006.

ADDRESSES: EPA established a docket for this action under Docket ID No. 
SFUND-2004-0001. 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., information labeled 
Confidential Business Information (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 EDOCKET or in hard 
copy at the EPA Docket Center, EPA West Building, Room B102, 1301 
Constitution Ave., NW., Washington, DC. 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.

FOR FURTHER INFORMATION CONTACT: For further information on specific 
aspects of today's rule, contact Patricia Overmeyer of EPA's Office of 
Brownfields Cleanup and Redevelopment at (202) 566-2774 or at 
[email protected]. Mail inquiries may be directed to the 
Office of Brownfields Cleanup and Redevelopment (5105T), 1200 
Pennsylvania Ave. NW., Washington, DC 20460.

SUPPLEMENTARY INFORMATION:

I. General Information

A. Who Potentially May be Affected by Today's Rule?

    This regulation may affect most directly those persons and 
businesses purchasing commercial property or any property that will be 
used for commercial or public purposes and who may, after purchasing 
the property, seek to claim protection from CERCLA liability for 
releases or threatened releases of hazardous substances. Under 
section101(35)(B) of CERCLA, as amended by the Small Business Liability 
Relief and Brownfields Revitalization Act (Pub. L. 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 
on which the property is acquired. Prospective landowners who do not 
conduct all appropriate inquiries prior to or on the date of 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 rule 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 CERCLA 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 
or on the date of acquiring a property.
    The background document, ``Economic Impacts Analysis for the 
Proposed All Appropriate Inquiries Final Regulation'' and the Addendum 
to this document provide a comprehensive analysis of all potentially 
impacted entities. These documents are available in the docket 
established for today's 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 today's 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 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.

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                                                                  NAICS
                       Industry category                          code
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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
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B. How Can I Get Copies of This Document and Other Related Information?

    1. Docket. EPA 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 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

[[Page 66071]]

documents may be viewed at the EPA Docket Center, EPA West, Room B102, 
1301 Constitution Avenue, NW., Washington, DC. 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 this Federal Register document 
electronically through the EPA Internet under the ``Federal Register'' 
listings at http://www.epa.gov/fedrgstr.
    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 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. 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 above.

Contents of Today's Rule

I. Statutory Authority
II. Background
    A. What is the Intent of Today's Rule?
    B. What is ``All Appropriate Inquiries?''
    C. What were the Previous 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?
III. Summary of Comments and Changes From Proposed Rule to Final 
Rule
IV. Detailed Description of Today's Rule
    A. What is the Purpose and Scope of the Rule?
    B. To Whom is the Rule Applicable?
    C. Does the Final Rule Include Any New Reporting or Disclosure 
Obligations?
    D. What are the Final Documentation Requirements?
    E. What are the Qualifications for an Environmental 
Professional?
    F. References
    G. What is Included in ``All Appropriate Inquiries?''
    H. Who is Responsible for Conducting the All Appropriate 
Inquiries?
    I. When Must All Appropriate Inquiries be Conducted?
    J. Can a Prospective Landowner Use Information Collected for 
Previous Inquiries Completed for the Same Property?
    K. Can All Appropriate Inquiries be Conducted by One Party and 
Transferred to Another Party?
    L. What Are the Objectives and Performance Factors for the All 
Appropriate Inquiries Requirements?
    M. What are Institutional Controls?
    N. How must Data Gaps Be Addressed in the Conduct of All 
Appropriate Inquiries?
    O. Do Small Quantities of Hazardous Substances That Do Not Pose 
Threats to Human Health and the Environment Have to Be Identified in 
the Inquiries?
    P. What are the Requirements for Interviewing Past and Present 
Owners, Operators, and Occupants?
    Q. What are the Requirements for Reviews of Historical Sources 
of Information?
    R. What are the Requirements for Searching for Recorded 
Environmental Cleanup Liens?
    S. What are the Requirements for Reviewing Federal, State, 
Tribal, and Local Government Records?
    T. What are the Requirements for Visual Inspections of the 
Subject Property and Adjoining Properties?
    U. What are the Requirements for the Inclusion of Specialized 
Knowledge or Experience on the Part of the ``Defendant?''
    V. What are the Requirements for the Relationship of the 
Purchase Price to the Value of the Property, if the Property was not 
Contaminated?
    W. What are the Requirements for Commonly Known or Reasonably 
Ascertainable Information about the Property?
    X. What are the 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?''
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
    I. National Technology Transfer Advancement Act
    J. Executive Order 12898: Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Congressional Review Act

I. Statutory Authority

    These regulations are promulgated 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 
Revitalization Act.

II. Background

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

    On August 26, 2004, EPA published a notice of proposed rulemaking 
outlining proposed 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. 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 cleanup programs. The intent of 
today's rule is to finalize regulations setting federal 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 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 on the date a person acquires a property. 
The law requires EPA to develop regulations establishing standards and 
practices for how to conduct all appropriate inquiries. 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

[[Page 66072]]

section 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 established 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 rule does not address the 
requirements of CERCLA section 101(35)(B)(i)(II) for what constitutes 
``reasonable steps.''

B. What is ``All Appropriate Inquiries?''

    An essential step in real property transactions may be 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 or potential 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 at the time of disposal. Strict liability 
in the context of CERCLA means that a potentially responsible party may 
be liable for environmental contamination based solely on property 
ownership and without regard to fault or negligence.
    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 on the date of acquisition of the property, 
``all appropriate inquiries'' into the previous ownership and uses of 
the property consistent with good commercial or customary standards and 
practices. The 2002 Brownfields Amendments added potential liability 
protections for ``contiguous property 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 Were the Previous 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 
ASTM Standard E1527-97 (entitled ``Standard Practice for Environmental 
Site Assessments: 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, CERCLA provides that such persons must 
establish, among other statutory requirements, that at the time they 
acquired the property, they did not know and had no reason to know of 
releases or threatened releases to 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 to satisfy the 
requirements' for all appropriate inquiries. In addition, such 
properties are not within the scope of today's rule.
    The interim standards remain in effect only until the effective 
date of today's rule which 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 effective date of 
today's regulation, persons who purchase property on or after May 31, 
1997 could use either the procedures provided in ASTM E1527-2000, 
entitled ``Standard Practice for Environmental Site Assessments: 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 final rule and as such replaces 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. Since the Agency is promulgating 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 upon November 1, 2006, the effective date of today's rule. 
Until November 1, 2006, both the standards and practices included in 
today's final regulation and the current interim standards established 
by Congress for all appropriate inquiries will be recognized by EPA as 
satisfying the statutory requirements for the conduct of all 
appropriate inquiries under section 101(35)(B) of CERCLA.

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'' on or before the date on 
which the person acquired 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

[[Page 66073]]

prospective purchaser, a property owner must have acquired a property 
subsequent to any disposal activities involving hazardous substances at 
the property.
    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 Qualify for Bona Fide Prospective 
Purchaser, Contiguous Property Owner, or Innocent Landowner Limitations 
on CERCLA Liability (Common Elements, 2003). A copy of this document is 
available in the docket for today's rule.
    EPA notes that, as explained below, persons conducting all 
appropriate inquiries in compliance with today's final rule are not 
entitled to the CERCLA liability protections provided for innocent 
landowners, bona fide prospective purchasers, and contiguous property 
owners, unless they also comply with all of the continuing obligations 
established under the statute. As explained below, compliance with 
today's final rule is only one requirement necessary for CERCLA 
liability protection. We also note that the requirements of today's 
rule apply to prospective property owners who are seeking protection 
from liability under the federal Superfund Law (CERCLA). Prospective 
property owners wishing to establish protection from, or a defense to, 
liability under state superfund or other related laws must comply with 
the all criteria established under state laws, including any criteria 
for conducting site assessments or all appropriate inquiries 
established under applicable state statutes or regulations.
1. Bona Fide Prospective Purchaser
    The Brownfields Amendments added a new 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 lesser of the 
unrecovered response costs or 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 sections 101(40) and 107(r). 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 
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 of hazardous 
substances at the property ceased;
     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 
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 any previous release once 
any release is identified. Compliance with the other statutory 
requirements for the bona fide prospective purchaser liability 
protection is not contingent upon the findings 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 a hazardous 
substance from'' property owned by someone else. To qualify as a 
contiguous property owner, a landowner must have no knowledge or reason 
to know of contamination at the time of acquisition, have conducted all 
appropriate inquiries, 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;
     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

[[Page 66074]]

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 
at the time of acquisition of a property cannot qualify for the 
liability protection as a contiguous property owner, but may be 
entitled to bona fide prospective purchaser status.
    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 previous releases once a 
release is identified. 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 
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 knowledge or 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;
     Taking reasonable steps to stop continuing releases, 
prevent any threatened release, and prevent or limit human, 
environmental, or natural resource exposure to any previously released 
hazardous substances;
    To successfully assert 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 release or threat of release of hazardous 
substances and the resulting damages were caused by an act or omission 
of 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 foreseeably result 
from such acts or omissions.
    Like contiguous property owners, innocent landowners must perform 
all appropriate inquiries prior to or on the date of acquisition of 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 asserting the 
innocent landowner defense. Landowners must 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 a previous release. 
Compliance with the other statutory requirements for the innocent 
landowner defense is not contingent upon the results of an all 
appropriate inquiries investigation.

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. In addition to 
providing these criteria in the statute, Congress instructed EPA to 
develop regulations establishing standards and practices for conducting 
all appropriate inquiries in accordance with generally accepted good 
commercial and customary standards and practices. The criteria are set 
forth in CERCLA section 101(35)(2)(B)(iii) 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.
     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.

III. Summary of Comments and Changes From Proposed Rule to Final Rule

    EPA received over 400 public comments in response to the August 26, 
2004 proposed rule. Comments were received from environmental 
consultants with experience in performing site assessments, trade

[[Page 66075]]

associations, state government agencies, environmental interest groups, 
and other public interest associations. Commenters generally supported 
the purpose and goals of the proposed rule. Many commenters 
complimented the Agency on its decision to develop the proposed rule 
using the negotiated rulemaking process. However, commenters had 
differing views on certain aspects of the proposed rule. In particular, 
the Agency received widely differing views on the proposed definition 
of ``environmental professional.'' Although many commenters supported 
the definition as proposed, other commenters raised concerns regarding 
the stringency of the proposed qualifications. A significant number of 
commenters applauded the proposed definition of an environmental 
professional and stated that it may increase the rigor and caliber of 
environmental site investigations. Commenters who would not qualify as 
an environmental professional under the proposed definition raised 
concerns with regard to the specific qualifications proposed.
    EPA received a significant number of comments regarding the 
statutory requirements for qualifying for the CERCLA liability 
protections. Several commenters also raised concerns with regard to the 
performance-based approach to the all appropriate inquiries 
investigation included in the proposed rule. Commenters were concerned 
that the proposed performance-based approach would make it more 
difficult to qualify for the CERCLA liability protections than an 
approach that requires strict adherence to prescriptive data gathering 
requirements that do not allow for the application of professional 
judgment. However, the vast majority of commenters who commented on the 
performance-based nature of the proposed rule supported the proposed 
approach.
    Other commenters raised concerns with regard to the proposed rule's 
requirements to identify and comment upon the significance of ``data 
gaps'' where the lack of information may affect the ability of an 
environmental professional to render an opinion regarding conditions at 
a property that are indicative of releases or threatened releases of 
hazardous substances. Commenters were concerned that if any data gaps 
exist potential contamination would not be identified, allowing 
property owners to escape liability for contamination. Other commenters 
supported the proposed requirement to identify data gaps, or missing 
information, that may affect the environmental professional's ability 
to render an opinion regarding the environmental conditions at a 
property and comment on their significance in this regard and stated 
that the requirement would lend credibility to the inquiry's final 
report.
    We received many comments on the proposed provision to compare the 
purchase price of a property to the fair market value of the property 
(if the property were not contaminated). One concern raised is that 
commenters believe that the exact market value of a property is 
difficult to determine. Some commenters took exception to the fact that 
EPA did not propose that prospective landowners have to conduct formal 
real estate appraisals of the property to determine fair market value. 
Although this provision has been a statutory requirement for the 
conduct of all appropriate inquiries since 1986, some commenters 
thought the requirement should not be included within the scope of all 
appropriate inquiries. Other commenters stated that the environmental 
professional should not be required to undertake the comparison.
    We received some comments on the results of the economic impact 
analysis that was conducted to assess the potential costs and impacts 
of the proposed rule. Many commenters generally agreed with the 
Agency's conclusion that the average incremental cost increase 
associated with the requirements in the proposed rule over the current 
industry standard would be minimal. However, some commenters asserted 
that EPA underestimated the incremental costs associated with the 
proposed rule. Although a few commenters mentioned particular 
activities included as requirements in the proposed rule that would 
increase the burdens and costs associated with conducting all 
appropriate inquiries, most of these commenters did not provide 
specific reasons for claimed cost increases over baseline activities. 
Some commenters simply stated that the proposed requirements would 
result in an increase in the price of phase I environmental site 
assessments. We provide a summary of the comments received on the 
economic impact analysis for the proposed rule, our responses to issues 
raised by commenters, and the results of some additional analyses 
conducted based on some of the issues raised, in an addendum to the 
economic impact analysis, which is provided in the docket for today's 
final rule.
    In section IV of this preamble, we discuss the requirements of the 
final rule, including a summary of the provisions included in the 
August 26, 2004 proposed rule, the significant comments raised in 
response to the proposed provisions, and a summary of our rationale for 
the final rule requirements. Generally, the final rule closely 
resembles the provisions included in the proposed rule. We adopted 
relatively minor changes in response to public comments. For example, 
we received a number of comments urging EPA to modify the proposed 
definition of environmental professional to allow individuals who have 
significant experience in conducting environmental site assessments, 
but do not have a Baccalaureate degree, to qualify as environmental 
professionals. We were convinced by the arguments presented in many of 
these public comments. Therefore, the definition of an environmental 
professional included in today's final rule allows individuals with ten 
years of relevant full time experience to qualify as an environmental 
professional for the purpose of overseeing and performing all 
appropriate inquiries.
    With respect to the proposed requirements governing the use of 
previously-conducted environmental site assessments for a particular 
property, we agreed with commenters who pointed out the proposed rule 
was unclear. In today's final rule, we modify the proposed rule 
language to allow for the use of information contained in previously-
conducted assessments, even if the information was collected more than 
a year prior to the date on which the subject property is acquired. The 
final rule does require that all aspects of a site assessment, or all 
appropriate inquiries investigation, completed more than one year prior 
to the date of acquisition of the subject property be updated to 
reflect current conditions and current property-specific information. 
In the case of all appropriate inquiries investigations completed less 
than one year prior to the date of acquisition of the subject property 
but more than 180 days before the acquisition date, the final rule 
retains the requirements of the proposed rule that only certain aspects 
of the all appropriate inquiries must be updated.
    In the case of the requirement to search for institutional controls 
that was included in the proposed requirements to review federal, 
state, tribal and local government records, we agreed with commenters 
who pointed out that searching for institutional controls associated 
with properties located within a half mile of the subject property is 
overly burdensome and without sufficient benefit to the purpose of the 
investigation. The final rule

[[Page 66076]]

requires that the search for institutional controls be confined to the 
subject property only.
    We adopted one other change in the final rule, based upon public 
comments. In the proposed rule, we delineated responsibilities for 
particular aspects of the all appropriate inquiries investigation 
between the environmental professional and the prospective landowner of 
the subject property (or grantee). We defined the inquiry of the 
environmental professional to include: interviews with past and present 
owners, operators and occupants; reviews of historical sources of 
information; reviews of federal state tribal and local government 
records; visual inspections of the facility and adjoining property; 
commonly known or reasonably ascertainable information; and degree of 
obviousness of the presence or likely presence of contamination at the 
property and the ability to detect the contamination by appropriate 
investigation. We also defined ``additional inquiries'' that must be 
conducted by the prospective landowner or grantee (or an individual on 
the prospective landowner's or grantee's behalf). These ``additional 
inquiries'' include: specialized knowledge or experience of the 
prospective landowner (or grantee); the relationship of the purchase 
price to the fair market value of the property, if the property was not 
contaminated; and commonly known or reasonably ascertainable 
information. The requirement to search for environmental cleanup liens 
was proposed to be the responsibility of the prospective landowner (or 
grantee), if the search is not conducted by the environmental 
professional. The proposed rule required the prospective landowner (or 
grantee) to provide all information collected as part of the 
``additional inquiries'' to the environmental professional.
    The final rule retains the proposed delineation of 
responsibilities. However, based upon the input provided in public 
comments, the final rule does not require the prospective landowner (or 
grantee) to provide the information collected as part of the 
``additional inquiries'' to the environmental professional. Although we 
continue to believe that the information collected or held by the 
prospective landowner (or grantee) should be provided to the 
environmental professional overseeing the other aspects of the all 
appropriate inquiries, we agree with commenters who asserted that 
prospective landowners and grantees should not be required to provide 
this information to the environmental professional. Commenters argued 
that property owners (and grantees) may want to hold some information 
(e.g., the purchase price of the property) confidential. CERCLA 
liability rests with the owner or operator of a property and not with 
an environmental professional hired by the prospective landowner and 
who is not involved with the ownership or operation of the property. 
Since it ultimately is up to the owner or operator of a property to 
defend his or herself against any claims to liability, we agree with 
commenters that asserted that the regulations should not require that 
prospective landowners (or grantees) provide information collected to 
comply with the ``additional inquiries'' provisions to the 
environmental professional. Should the required information not be 
provided to the environmental professional, the environmental 
professional should assess the impact that the lack of such information 
may have on his or her ability to render an opinion with regard to 
conditions indicative of releases or threatened releases of hazardous 
substances on, at, in or to the property. If the lack of information 
does impact the ability of the environmental professional to render an 
opinion with regard to the environmental conditions of the property, 
the environmental professional should note the missing information as a 
data gap in the written report. We discuss each of the requirements of 
the final rule in Section IV of this preamble.

IV. Detailed Description of Today's Rule

A. What Is the Purpose and Scope of the Rule?

    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.D. 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.
    In the case of persons claiming one of the CERCLA landowner 
liability protections, the scope of today's 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 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 
substances 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, petroleum and petroleum products, 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 substances, as outlined in Sec.  312.1(c)(2), to 
ensure that persons receiving brownfields grants can appropriately and 
fully assess the properties as required. 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 rule does not include property purchased by a 
non-governmental entity or non-commercial entity for ``residential use 
or other similar uses * * * [where] a facility inspection and title 
search * * * reveal no basis for further investigation.'' (Pub. L. 107-
118 Sec.  223). CERCLA section

[[Page 66077]]

101(35)(B)(v) states that in those cases, title search and facility 
inspection that reveal no basis for further investigation shall satisfy 
the requirements for all appropriate inquiries.
    We note that today's rule 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?

    Today's 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 rule 
applies to individuals receiving Federal grant monies under CERCLA 
section 104(k)(2)(B) 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 Final Rule Include Any New Reporting or Disclosure 
Obligations?

    The final rule does not include any new reporting or disclosure 
obligations. The rule only applies 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 
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. Today's rule 
contains no new requirements to notify or submit information to EPA or 
any other government entity.
    Although today's rule does not include any new disclosure 
requirements, CERCLA section 103 does require persons in charge of 
vessels and facilities, including on-shore and off-shore facilities, to 
notify the National Response Center of any release of a hazardous 
substance from the vessel or facility in a quantity equal to or greater 
than a ``reportable quantity,'' as defined in CERCLA section 102(b). 
Today's rule includes no changes to this reporting requirement nor any 
changes to any other reporting or disclosure requirements under 
federal, tribal, or state law.

D. What Are the Final Documentation Requirements?

    The proposed rule required that the environmental professional, on 
behalf of the property owner, document the results of the all 
appropriate inquiries in a written report. As explained in the preamble 
to the proposed rule, the property owner could use this report to 
document the results of the inquiries. Such a report can be similar in 
nature to the type of report previously provided under generally 
accepted commercial practices. We proposed no requirements regarding 
the length, structure, or specific format of the written report. In 
addition, the proposed rule did 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.
    Today's final rule retains the requirements, as proposed, for 
documenting the results of the all appropriate inquiries investigation 
conducted under the supervision or responsible charge of an 
environmental professional. As noted above, the primary purpose of the 
documentation requirement is to enhance the inquiry of the 
environmental professional by requiring that the environmental 
professional record the results of the inquiries and his or her 
conclusions. The written report may allow any person claiming one of 
the CERCLA landowner liability protections to offer documentation in 
support of his or her claim that all appropriate inquiries were 
conducted in compliance with the federal regulations.\1\ The Agency 
notes that while today's final regulation does 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.
---------------------------------------------------------------------------

    \1\ Nothing in this regulation or preamble is intended to 
suggest that any particular 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.
---------------------------------------------------------------------------

    The final rule requires 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 rule also requires that the report identify data gaps in the 
information collected that affect the ability of the environmental 
professional to render such an opinion and that the environmental 
professional comment on the significance of the data gaps.
    Several commenters raised issues with regard to the proposed 
requirement that the environmental professional document and comment on 
the significance of data gaps that affect the ability of the 
environmental professional to identify conditions indicative of 
releases or threatened releases of hazardous substances on at, in, or 
to the subject property. Some commenters stated that the need to 
identify data gaps will make it difficult to determine when an all 
appropriate inquiries investigation is complete and therefore the 
requirement would act as a disincentive to the development of 
potentially contaminated properties. Other commenters asserted that the 
fact that the regulations recognize data gaps creates a loophole that 
would result in property owners claiming to be protected from CERCLA 
liability after conducting an incomplete investigation that includes 
significant data gaps. These commenters raised concerns that CERCLA 
liability protection could be claimed by property owners simply because 
they conducted an all appropriate inquiries investigation, even in 
those cases where releases on, at, in, or to the property were missed 
during the investigation. Other commenters stated their support for the 
requirements to document data gaps, as proposed. A summary of EPA's 
response to these comments and the requirements for documenting data 
gaps included in the final rule is provided below in Section IV.N.
    The final rule, at Sec.  312.21(d), retains the proposed 
requirement that the environmental professional who conducts or 
oversees the all appropriate inquiries sign the written report. There 
are two purposes for the requirement to include a signature in the 
report. First, the individual signing the report must declare, on the 
signature page, that he or she meets the definition of an

[[Page 66078]]

environmental professional, as provided in Sec.  312.10. In addition, 
the rule requires that the environmental professional 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.
    Some commenters raised concerns about whether the proposed rule 
would require the environmental professional to certify the all 
appropriate inquiries report and its findings. Today's final rule does 
not require the environmental professional to ``certify'' the results 
of the all appropriate inquiries when signing the report. The two 
statements or declarations mentioned above and required to be included 
in the final written report documenting the conduct of all appropriate 
inquiries are meant to document that an individual meeting the 
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 
regulations. Reports signed by individuals holding a Professional 
Engineer (P.E.) or Professional Geologist (P.G.) license, need not 
include the individual's professional seal.
    A few commenters requested that EPA include specific requirements 
for the content of a final report in the final rule. Given that the 
type and extent of information available on a particular property may 
vary greatly with its size, type, past uses, and location, and the type 
and extent of information necessary for an environmental professional 
to render an opinion regarding conditions indicative of releases or 
threatened releases of hazardous substances associated with any 
property may vary, we decided not to include in the final rule specific 
requirements governing the content of all reports.
    The provisions of the final rule allow for the property owner (or 
grantee) 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 landowner's (or grantee'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 (or grantee) need to assert protection from liability after 
purchasing a property.

E. What Are the Qualifications for an Environmental Professional?

Proposed Rule
    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 
proposed rule included minimal qualifications for persons managing or 
overseeing all appropriate inquiries. The intent of 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 proposed rule required that an 
environmental professional conducting or overseeing all appropriate 
inquiries 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. In addition, the proposed rule included 
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 allowed 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 required 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 Sec.  312.10 of the 
proposed rule. The proposed rule also required 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 first and foremost required 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 included 
individuals who possess the following combinations of education and 
experience.
     Hold a current Professional Engineer's (P.E.) or 
Professional Geologist's (P.G.) 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 Sec.  312.21 and have the equivalent of three (3) years of 
full-time relevant experience; or
     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.
Public Comments
    We received a significant number of public comments on the proposed 
definition of environmental professional. Many commenters supported the 
definition of environmental professional as proposed. However, a 
significant number of commenters raised concerns with regard to the 
proposed educational requirements. Commenters pointed out that the 
proposed minimum qualifications for an environmental professional did 
not allow for individuals with many years of relevant experience in 
conducting environmental site assessments to qualify as environmental 
professionals, if such individuals do not have college degrees. The 
proposed rule only allowed for persons with a Baccalaureate degree or 
higher in specific disciplines of science and engineering, and a 
specific number of years of experience, to qualify as an

[[Page 66079]]

environmental professional, unless an individual was otherwise licensed 
as an environmental professional by a state, tribe or the federal 
government. Some commenters questioned the Agency's reasoning for 
restricting the degree requirements to only certain types of science or 
engineering. Commenters requested that EPA provide more specific 
definitions of the types of science and engineering degrees that would 
be necessary to qualify as an environmental professional.
    Commenters also asserted that the proposed ``grandfather clause'' 
allowing for individuals having a Baccalaureate degree (or higher) and 
who accumulated ten years of full time relevant experience on or before 
the promulgation date of the final rule to qualify as an environmental 
professional was too stringent and provided too small of a window of 
opportunity for individuals not otherwise meeting the proposed 
definition of environmental professional to qualify.
    Some commenters stated that the definition of environmental 
professional should not be restricted to those individuals licensed as 
P.E.s or P.G.s. A few commenters stated that a licensed professional is 
no more qualified to perform all appropriate inquiries investigations 
than other individuals with a significant number of years of experience 
in conducting such activities. Other commenters asserted that only 
licensed P.E.s and P.G.s are qualified to supervise all appropriate 
inquiries activities.
    EPA also received comments from independent professional 
certification organizations and members of these organizations, 
including the Academy of Certified Hazardous Materials Managers, 
requesting that their organizations' certification programs be named in 
the regulatory definition of an environmental professional.
Final Rule
    After careful consideration of the issues raised by commenters 
regarding the proposed definition of environmental professional, we 
made a few modifications to the proposed definition to reduce the 
potential burden that the proposed definition may have placed upon 
individuals who have significant experience in conducting environmental 
site assessments but do not meet the proposed educational, or college 
degree, requirements. We agree with those commenters who asserted that 
individuals with a significant number of years of experience in 
performing environmental site assessments, or all appropriate inquiries 
investigations, should qualify as environmental professionals for the 
purpose of conducting all appropriate inquiries, even in cases where 
such individuals do not have a college degree. Therefore, in the final 
rule, persons with ten or more years of full-time relevant experience 
in conducting environmental site assessments and related activities may 
qualify as environmental professionals, without having received a 
college degree.
    In addition, we agreed with commenters who pointed out that the 
requirement that environmental professionals hold specific types of 
science or engineering degrees was too limiting. In the final rule, 
persons with any science or engineering degree (regardless of specific 
discipline in science or engineering) can qualify as an environmental 
professional, if they also meet the other required qualifications, 
including the requirement to have five (5) years of full-time relevant 
experience.
    We also agree with commenters who asserted that the proposed 
grandfather clause was too restrictive. As mentioned above, we agree 
with commenters who pointed out that individuals with a significant 
number of years of experience in conducting environmental site 
assessments or all appropriate inquiries investigations should be able 
to qualify as environmental professionals, for the purpose of carrying 
out the provisions of today's rulemaking. In addition, we agree with 
commenters who stated that the ability for experienced professionals to 
qualify as an environmental professional should not be limited to those 
who meet the threshold qualifications on the effective date of the 
final rule. Therefore, the proposed grandfather clause is not included 
within the definition of environmental professional in the final rule. 
As explained above, in today's final rule, individuals with ten or more 
years of full-time relevant experience in conducting environmental site 
assessments and related investigations will qualify as environmental 
professionals for the purposes of this rulemaking.
    The final rule retains the provision recognizing as environmental 
professionals those individuals who are licensed by any tribal or state 
government as a P.E. or P.G., and have three years of full-time 
relevant experience in conducting all appropriate inquiries. We 
continue to contend that such individuals have sufficient specific 
education, training, and experience necessary to exercise professional 
judgment to develop opinions and conclusions regarding conditions 
indicative of releases or threatened releases on, at, in, or to a 
property, including the presence of releases to the surface or 
subsurface of the property, sufficient to meet the objectives and 
performance factors provided in the regulation. 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 conditions indicative of releases or threatened 
releases of hazardous substances and other contaminants on, at, 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, 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.
    Although the final 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 rule does not restrict the definition of an 
environmental professional to these licensed individuals. The 
definition of an

[[Page 66080]]

environmental professional also includes individuals who hold a 
Baccalaureate or higher degree from an accredited institution of higher 
education in engineering or science and have the equivalent of five (5) 
years of full-time relevant experience in conducting environmental site 
assessments, or all appropriate inquiries. In addition, individuals 
with ten years of full-time relevant experience in conducting 
environmental site assessments, or all appropriate inquiries qualify as 
environmental professionals for the purpose of conducting all 
appropriate inquiries. Individuals with these qualifications most 
likely will possess sufficient specific education, training, and 
experience necessary to exercise professional judgment to develop 
opinions and conclusions regarding conditions indicative of releases or 
threatened releases on, at, in, or to a property, sufficient to meet 
the objectives and performance factors included in Sec.  312.20(e) and 
(f).
    In addition to the qualifications for environmental professionals 
mentioned above, EPA is retaining the proposed provision to include 
within the definition of an environmental professional individuals who 
are 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 full-time 
relevant experience. We contend that individuals licensed by state and 
tribal governments, or by any department or agency within the federal 
government, to perform all appropriate inquiries or environmental site 
assessments, should be allowed to qualify as an environmental 
professional under today's regulation. State and tribal agencies may 
best determine the qualifications defining individuals who ``possess 
sufficient specific education, training, and experience necessary to 
exercise professional judgment to develop opinions and conclusions 
regarding conditions indicative of releases or threatened releases on, 
at, in, or to a property, sufficient to meet the rule's objectives and 
performance factors'' within any particular state or tribal 
jurisdiction.
    In response to requests from members of independent certification 
organizations that EPA recognize in the regulation those organizations 
whose certification requirements meet the environmental professional 
qualifications included in the final rule, we point out that today's 
final rule does not reference any private party professional 
certification standards. 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 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, we conclude that such a undertaking is 
not practicable. EPA does not have the necessary resources to review 
the procedures of each private certification organization and review 
and approve each organization's certification qualifications. 
Therefore, the final rule includes within the regulatory definition of 
an environmental professional, general performance-based standards or 
qualifications for determining who may meet the definition of an 
environmental professional for the purposes of conducting all 
appropriate inquiries. These standards include education and experience 
qualifications, as summarized below. The final rule does not recognize, 
or reference, any private organization's certification program within 
the context of the regulatory language. 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 today's final regulation will meet 
the definition of an environmental professional for the purposes of 
this regulation.
    Based upon the input received from the public commenters, EPA 
determined that the definition of environmental professional included 
in today's final rule establishes a balance between 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 and the need to ensure 
that experienced and highly competent individuals currently conducting 
all appropriate inquiries are not displaced.
Summary of Final Rule's Definition of Environmental Professional
    In summary, the definition of environmental professional included 
in today's final rule includes individuals who possess the following 
qualifications:
     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 Sec.  312.21 and have the equivalent of three (3) years of 
full-time relevant experience; or
     Have a Baccalaureate or higher degree from an accredited 
institution of higher education in science or engineering and the 
equivalent of five (5) years of full-time relevant experience; or
     Have the equivalent of ten (10) years of full-time 
relevant experience.
    The 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 final rule retains the proposed requirement that environmental 
professionals remain current in their field by participating in 
continuing education or other activities and be able to demonstrate 
such efforts.
    The final rule also retains the allowance for individuals not 
meeting the 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. This provision 
allows 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 
definition of an environmental professional and reviews the results and 
conclusions of the inquiries and signs the final report.
    The final rule requires 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 Sec.  312.10. The final rule also requires 
that in signing

[[Page 66081]]

the report, the environmental professional must document that he or she 
meets the definition of an ``environmental professional'' included in 
the regulations.

F. References

Proposed Rule
    In the proposed rule, the Agency reserved a reference section and 
stated in the preamble that we may include references to applicable 
voluntary consensus standards developed by standards' developing 
organizations that are not inconsistent with the final regulatory 
requirements for all appropriate inquiries or otherwise impractical. 
The Agency requested comments regarding available commercially accepted 
voluntary consensus standards that may be applicable to and compliant 
with the proposed federal standards for all appropriate inquiries.
    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C. 
272 note), directs agencies to use technical standards that are 
developed or adopted by voluntary consensus standards bodies, unless 
their use would be inconsistent with applicable law or otherwise 
impractical. Voluntary consensus standards are technical standards 
(e.g., materials specifications, test methods, sampling procedures, and 
business practices) that are developed or adopted by voluntary 
consensus standards bodies. When developing the proposed rule, EPA 
considered using an existing voluntary consensus standard developed by 
ASTM International as the federal standard for all appropriate 
inquiries. This standard is known as the ASTM E1527-2000 standard 
(entitled ``Standard Practice for Environmental Site Assessments: Phase 
I Environmental Site Assessment Process''). In the preamble to the 
proposed rule, we acknowledged the prevalent use of the ASTM E1527-2000 
standard and the fact that it generally is recognized as good and 
customary commercial practice. However, when we proposed the federal 
standards for all appropriate inquiries, EPA determined that the ASTM 
E1527-2000 standard is inconsistent with applicable law. As a result, 
EPA chose not to reference the ASTM E1527-2000 standard because it was 
inconsistent with applicable law.
Public Comments
    We received relatively few comments citing available and applicable 
voluntary consensus standards for conducting all appropriate inquiries. 
Several commenters did argue that the interim standard cited in the 
statute, the ASTM E1527-97 Environmental Site Assessments: Phase I 
Environmental Site Assessment Process, or the updated ASTM E1527-2000, 
is sufficient to meet the statutory criteria. A few commenters stated a 
preference for the ASTM E1527-2000 standard over the requirements 
included in the proposed rule. ASTM International is a standards 
development organization whose committees develop voluntary consensus 
standards for a variety of materials, products, systems and services. 
ASTM International is the only standards development organization that 
submitted a comment requesting that the Agency consider its standard, 
the ASTM E1527-2000 Standard Practice for Environmental Site 
Assessments: Phase I Environmental Site Assessment Process, as an 
equivalent standard to the federal regulations.
Final Rule
    Since publication of the proposed rule, ASTM International and its 
E50 committee, the committee responsible for the development of the 
ASTM E1527-2000 Phase I Environmental Site Assessment Process, has 
reviewed and updated the ``2000'' version of the E1527 standard to 
address EPA's concerns regarding the differences between the ASTM 
E1527-2000 standard and the criteria established by Congress in the 
Brownfields Amendments to CERCLA. These activities were conducted 
within the normal review and updating process that ASTM International 
undertakes for each standard over a five-year cycle.
    In today's final rule, EPA is referencing the standards and 
practices developed by ASTM International and known as Standard E1527-
05 (entitled ``Standard Practice for Environmental Site Assessments: 
Phase I Environmental Site Assessment Process'') and recognizing the 
E1527-05 standard as consistent with today's final rule. The Agency 
determined that this voluntary consensus standard is consistent with 
today's final rule and is compliant with the statutory criteria for all 
appropriate inquiries. Persons conducting all appropriate inquiries may 
use the procedures included in the ASTM E1527-05 standard to comply 
with today's final rule.
    It is the Agency's intent to allow for the use of applicable and 
compliant voluntary consensus standards when possible to facilitate 
implementation of the final regulations and avoid disruption to parties 
using voluntary consensus standards that are found to be fully 
compliant with the federal regulations.

G. What Is Included in ``All Appropriate Inquiries?''

Proposed Rule
    The proposed regulations for conducting all appropriate inquiries 
outlined the 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)(B)(iii) and are:
     The results of an inquiry by an environmental professional 
(proposed Sec.  312.21).
     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 
Sec.  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 Sec.  
312.24).
     Searches for recorded environmental cleanup liens against 
the facility that are filed under Federal, State, or local law 
(proposed Sec.  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 Sec.  
312.26).
     Visual inspections of the facility and of adjoining 
properties (proposed Sec.  312.27).
     Specialized knowledge or experience on the part of the 
defendant (proposed Sec.  312.28).
     The relationship of the purchase price to the value of the 
property, if the property was not contaminated (proposed Sec.  312.29).
     Commonly known or reasonably ascertainable information 
about the property (proposed Sec.  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 Sec.  312.31).
Public Comments
    We received a few comments addressing the statutory criteria and 
the

[[Page 66082]]

inclusion of certain particular criteria within the scope of the 
proposed rule. Some commenters requested that EPA not include in the 
final rule the criterion to consider the relationship of the purchase 
price of the property to the fair market value of the property, if the 
property is not contaminated. In addition, a few commenters stated the 
final rule should not include within the scope of the all appropriate 
inquiries the specialized knowledge or experience on the part of the 
prospective landowner.
    The Agency notes that both criteria that commenters requested be 
removed from the scope of the all appropriate inquiries regulations are 
criteria specifically required by Congress to be included in the 
regulations. In addition, both criteria have been part of the all 
appropriate inquiries provisions under the CERCLA innocent landowner 
defense since 1986. The proposed rule included no changes from the 
previous statutory provisions.
Final Rule
    The final rule retains provisions addressing each of the statutory 
criteria for the conduct of all appropriate inquiries included in 
CERCLA section 101(35)(B)(iii).

H. 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 the 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.
Proposed Rule
    The proposed rule required that many, but not all, of the inquiries 
activities be conducted by, or under the supervision or responsible 
charge of, an individual meeting the qualifications of the proposed 
definition of an environmental professional. The proposed rule also 
provided that several of the activities included in the inquiries could 
be conducted either by the prospective landowner or grantee, and not 
have to be conducted under the supervision or responsible charge of the 
environmental professional. The proposed rule required that the results 
of all activities conducted by the prospective landowner or grantee, 
and 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 could be fully considered 
when the environmental professional develops an opinion, based on the 
inquiry activities, 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.
    The proposed rule allowed for the following activities to be the 
responsibility of, or conducted by, the prospective landowner or 
grantee and not necessarily be conducted 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 Sec.  312.25.
     Assessments of any specialized knowledge or experience on 
the part of the landowner, as required by Sec.  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 Sec.  312.29.
     An assessment of commonly known or reasonably 
ascertainable information about the subject property, as required by 
Sec.  312.30.
    The proposed rule required 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.
Public Comments
    Several commenters asserted that the mandatory nature of the 
proposed provision requiring the prospective landowner to provide 
information regarding the four criteria listed above to the 
environmental professional is problematic. Particularly with regard to 
the requirement to provide ``specialized knowledge or experience of the 
defendant,'' commenters pointed out difficulties in a prospective 
landowner being able to document such knowledge and experience 
sufficiently. Also, with regard to the information related to the 
``relationship of the purchase price to the fair market value of the 
property, if the property was not contaminated,'' many commenters 
pointed out that prospective landowners may not want to divulge 
information regarding the price paid for a property. Commenters pointed 
out that the requirement to consider ``commonly known or reasonably 
ascertainable information'' about a property is implicit to all aspects 
of the all appropriate inquiries requirements. In addition, commenters 
stated that CERCLA liability lies solely with the owners and operators 
of a vessel or property. A decision on the part of a prospective 
landowner to not furnish an environmental professional with certain 
information related to any of the statutory criteria can only affect 
the property owner's ability to claim a liability protection provided 
under the statute. In addition, the statute does not mandate that 
information deemed to be the responsibility of the prospective 
landowner and not part of the ``inquiry of the environment 
professional'' be provided to the environmental professional or even be 
part of the inquiry of the environmental professional. Some of the 
statutory criteria are inherently the responsibility of the prospective 
landowner.
Final Rule
    We agree with the commenters who asserted that the results and 
information related to the criteria identified as being the 
responsibility of the prospective landowner should not, as a matter of 
law, have to be provided to the environmental professional. The statute 
does not mandate that a prospective landowner provide all information 
to an environmental professional. Given that the burden of potential 
CERCLA liability ultimately falls upon the property owner or operator, 
a prospective landowner's decision not to provide the results of an 
inquiry or related information to an environmental professional he or 
she hired to undertake other aspects of the all appropriate inquiries 
investigation can only affect the liability of the property owner. In 
addition, we believe that the environmental professional may be able to 
develop an opinion with regard to conditions indicative of releases or 
threatened releases on, at, in, or to a property based upon the results 
of the criteria identified to be part of the ``inquiry of an 
environmental professional.'' Any information not furnished to the 
environmental professional by the prospective landowner that may affect 
the environmental professional's ability to render such an opinion may 
be identified by the environmental professional as a ``data gap.'' The 
provisions of the final rule (as did the proposed rule) then require 
that the environmental professional comment on the significance of the 
data gap or missing information on his or her ability to render such an 
opinion, in light of all

[[Page 66083]]

other information collected and all other data sources consulted.
    As a result of our consideration of the issues raised by 
commenters, today's final rule modifies the requirements of Sec.  
312.22 ``additional inquiries'' by stating (in paragraph (a)) that 
``persons * * * may provide the information associated with such 
inquiries [i.e., the information for which the prospective landowner or 
brownfields grantee is responsible] to the environmental professional * 
* *.'' The proposed rule provided that such information ``must be 
provided'' to the environmental professional. Although we expect that 
most prospective landowners and grantees will furnish available 
information or knowledge about a property to an environmental 
professional he or she hired when such information could assist the 
environmental professional in ascertaining the environmental conditions 
at a property, we affirm that compliance with the statutory criteria 
does not require that such information be disclosed. Ultimately, CERCLA 
liability rests with the owner or operator of a facility or property 
owner and it is the information held by the property owner or operator 
that may be reviewed in a court of law when determining an owner or 
operator's liability status, regardless of whether all information was 
disclosed to an environmental professional during the conduct of all 
appropriate inquiries.

I. When Must All Appropriate Inquiries Be Conducted?

    CERCLA section 101(40)(B)(i), as amended, requires bona fide 
prospective purchasers to conduct all appropriate inquiries into 
``previous ownerships and uses of the facility.'' 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)(i)(I) of CERCLA requires that the property owner conduct all 
appropriate inquiries ``on or before the date on which the defendant 
acquired the facility.''
Proposed Rule
    Other than to specify that all appropriate inquiries must be 
conducted on or prior to the date a person acquires a property, the 
statute is silent regarding how close to the actual date of acquisition 
the inquiries must be completed. The proposed rule required that all 
appropriate inquiries be conducted or updated within one year prior to 
taking title to a property. The proposed rule provided that prospective 
landowners could 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 required that certain information collected as part of a 
previous all appropriate inquiries be updated if it was collected more 
than 180 days prior to the date a person purchased the property. In 
addition, in the preamble to the proposed rule, Agency defined the date 
of acquisition of a property as the date on which the prospective 
landowner acquires title to the property.
Public Comments
    Commenters generally agreed with the proposed provision to define 
the date of acquisition of a property as the date on which a person 
acquires title to the property. A few commenters stated that the 
requirement for an all appropriate inquiries investigation to be 
completed within a year of the date of acquisition of the property is 
too stringent and may not allow sufficient time for some property 
transactions to be completed. Some commenters also asserted that the 
proposed requirement to update certain aspects of the all appropriate 
inquiries investigation, if the investigation was conducted more than 
180 days prior to the date of the acquisition of the property was too 
stringent.
Final Rule
    The Agency continues to believe 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 person received title to 
the property. As explained in the preamble to the proposed rule, the 
Agency considered other dates, such as the date a prospective landowner 
signs a purchase or sale agreement. However, it could be burdensome to 
require a prospective landowner to have completed the all appropriate 
inquiries 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 prospective landowner may be 
the most convenient time for the prospective landowner 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 landowners to undertake all appropriate inquiries so early 
in the property acquisition process as to require the inquiries to be 
completed prior to the prospective landowner making a final decision on 
whether to actually acquire the property.
    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 retaining the 
proposed provision that all appropriate inquiries be conducted within 
one year prior to the prospective landowner acquiring the property. 
Today's final rule includes regulatory language at Sec.  312.20(a) 
clarifying that all appropriate inquiries must be conducted within one 
year prior to the date on which a person acquires a property.
    All appropriate inquiries may include information collected for 
previous 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 final rule retains the requirement that several 
of the components of the inquiries be updated within 180 days prior to 
the date the property is purchased. Today's final rule includes a 
definition of the ``date of acquisition,'' or purchase date, of a 
property (i.e., the date the landowner obtains title to the property).
    Although commenters may be correct in their assertions that some 
property transactions may take more than a year to close, we continue 
to believe that it is important for the all appropriate inquiries 
investigation to be completed within one year prior to the date the 
property is acquired. We point out that the final regulation, as did 
the proposed regulation, allows for information from an older 
investigation to be used in a current investigation. However, if the 
prior all appropriate inquiries investigation was completed more than a 
year prior to the property acquisition date, all parts of the 
investigation must be reviewed and updated for the all appropriate 
inquiries to be complete. We believe that a year is sufficient time for 
conditions at a property to change. In particular, in cases where there 
is a release or threatened release at a property, significant changes 
to the environmental conditions of a property could occur during the 
course of a year. In addition, depending upon the uses and ownership of 
a property during the

[[Page 66084]]

course of a one-year time period, overall conditions at a property 
could change and new evidence of a release or threatened release could 
appear. Therefore, today's final rule requires that all appropriate 
inquiries completed for a particular property more than one year prior 
to the date of acquisition of that property, be updated in their 
entirety. As summarized below, the final rule does allow for the use of 
information contained in previous inquiries, even when the inquiries 
were completed more than a year prior to the property acquisition date, 
as long as all information was updated within a year and includes any 
changes that may have occurred during the interim.

J. Can a Prospective Landowner Use Information Collected for Previous 
Inquiries Completed for the Same Property?

Proposed Rule
    The proposed rule allowed parties conducting all appropriate 
inquiries to use the results of and information from previous inquiries 
completed for the same property, under certain conditions. First, the 
previous inquiries must have been conducted in compliance with the 
proposed rule and with CERCLA sections 101(35)(B), 101(40)(B) and 
107(q)(A)(viii). In addition, the information in the previous inquiries 
must have been collected or updated within one year prior to the date 
of acquisition of 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.
Public Comments
    A significant number of commenters pointed out that the regulatory 
language in proposed Sec.  312.20(b)(1) of the proposed rule precludes 
the use of information contained in assessments or the results of all 
appropriate inquiries conducted more than a year prior to the date of 
acquisition of a property. Commenters pointed out that since the 
language in the proposed rule stated that previously collected 
information had to have been collected ``in compliance with the 
requirements of * * * 40 CFR Part 312,'' any information included in 
all appropriate inquiries reports completed prior to the promulgation 
of the final rule could not be used, since compliance with the 
regulation could not be achieved prior to its publication.
Final Rule
    It is not the Agency's intent to disallow the use of information 
contained in previous inquiries, if the environmental professional and 
the prospective landowner find the previously collected information to 
be accurate and valid. However, EPA continues to believe that 
information collected as part of a prior all appropriate inquiries 
investigation for the same property should be updated to reflect 
current environmental conditions at the property and to include any 
specific information or specialized knowledge held by the prospective 
landowner. The regulatory language in today's final rule (at Sec.  
312.20(c)(1)) allows for the use of information collected as part of 
prior all appropriate inquiries investigation for the same property 
provided that the prior information was collected ``during the conduct 
of all appropriate inquiries in compliance with CERCLA sections 
101(35)(B), 101(40)(B) and 107(q)(A)(viii).'' We have deleted the 
proposed language that would have required the previously conducted 
investigation to have been done in compliance with the final 
regulation. This allows for the use of information collected as part of 
previous all appropriate inquiries, as long as the information was 
collected in compliance with the statutory provisions for all 
appropriate inquiries. For property purchased on or after May 31, 1997, 
therefore, any information collected as part of an assessment in 
compliance with the ASTM E1527-97 standard or the ASTM E1527-2000 
standard may be used as part of a current all appropriate inquiries 
investigation. For property purchased before May 31, 1997, information 
from assessments completed and in compliance with the statutory 
provisions at CERCLA section 101(35)(B)(iv)(I) may be used as part of a 
current all appropriate inquiries investigation. However, this prior 
information may only be used if updated in accordance with Sec. Sec.  
312.20(b) and (c) of today's rule.
    The final rule continues to recognize that there is value in using 
previously collected information when such information was collected in 
accordance with the statutory provisions and good customary business 
practices, particularly when the use of such previously-collected 
information will reduce the need to undertake duplicative efforts.
    The final rule also retains the requirement that certain aspects of 
the all appropriate inquiries investigation be updated if the 
investigation was completed more than 180 days prior to the date of 
acquisition of the property (or the date on which the prospective 
landowner takes title to the property) to ensure that an all 
appropriate inquiries investigation accurately reflects the current 
environmental conditions at a property. To increase the potential that 
information collected about the conditions of a property 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 final rule requires that many of the components of the 
previous 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 on 
which the property is acquired are:
     Interviews with past and present owners, operators, and 
occupants (Sec.  312.23);
     Searches for recorded environmental cleanup liens (Sec.  
312.25);
     Reviews of federal, tribal, state, and local government 
records (Sec.  312.26);
     Visual inspections of the facility and of adjoining 
properties (Sec.  312.27); and
     The declaration by the environmental professional (Sec.  
312.21(d)).
    Also, the final rule retains the proposed requirement that in all 
cases where a prospective landowner is using previously collected 
information, the all appropriate inquiries for the current purchase 
must be updated to include a summary of any relevant changes to the 
conditions of the property and any specialized knowledge of the 
prospective landowner.
    In today's final rule, we continue to recognize 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 
prospective landowner and the current purchase transaction. Therefore, 
the final rule requires that each all appropriate inquiries 
investigation include current information related to:
     Any relevant specialized knowledge held by the current 
prospective landowner and the environmental professional responsible 
for overseeing and signing the all appropriate inquiries report (i.e., 
requirements of Sec.  312.28);

[[Page 66085]]

     The relationship of the current purchase price to the 
value of the property, if the property were not contaminated (i.e., 
requirements of Sec.  312.29); and
     Commonly known or reasonably ascertainable information 
about the property.

K. Can All Appropriate Inquiries Be Conducted by One Party and 
Transferred to Another Party?

Proposed Rule
    The proposed rule allowed for all appropriate inquiries to be 
conducted by one party and transferred to another party, provided that 
certain conditions are met. Under certain circumstances, the 
prospective landowner, or a grantee, may use a report of all 
appropriate inquiries conducted for the property by or for another 
party, including the seller of the property or another party. For 
example, there are situations where the federal government or a state 
government agency may conduct the all appropriate inquiries on behalf 
of the local government for a property being purchased by a local 
government, such as the ``targeted brownfields assessments'' conducted 
on behalf of local governments by EPA. This situation also may occur 
when a state government covers the cost of the all appropriate 
inquiries for a property owned by a local government or actually 
conducts the all appropriate inquiries itself when the local government 
does not have access to appropriate staff or capital resources. A local 
government may conduct all appropriate inquiries for a third party in 
its community, such as a private prospective landowner. In addition, 
local redevelopment agencies may locate a contaminated property, 
conduct all appropriate inquiries, acquire the property, and then sell 
the property to a private developer.
    The proposed rule allowed for a person acquiring a property, or a 
grantee, to use the results of an all appropriate inquiries report 
conducted by or for another party, if the report meets the proposed 
rule's objectives and performance factors and the person who is seeking 
to use the previously-collected information or report reviews all 
information collected and updates the contents of the report as 
required by Sec.  312.20(c) and necessary to accurately reflect current 
conditions at the property. In addition, the proposed rule required 
that the prospective landowner, or grantee, update the inquiries and 
the report to include any commonly known and reasonably ascertainable 
information, relevant specialized knowledge held by the prospective 
landowner and the environmental professional, and the relationship of 
the purchase price to the value of the property, if it were not 
contaminated.
Public Comments
    Commenters generally supported the proposed provision allowing for 
all appropriate inquiries investigations conducted by or for one party 
to be used by another party.
Final Rule
    For the reasons discussed in the preamble to the proposed rule and 
summarized above, the final rule retains the provision allowing that 
all appropriate inquiries investigations may be conducted by or for one 
party and used by another party. In all cases, the all appropriate 
inquiries investigation must be updated to include commonly known and 
reasonably ascertainable information and any relevant specialized 
knowledge held by the prospective landowner and environmental 
professional. In addition, the evaluation of the relationship between 
the purchase price and the fair market value of the property must 
reflect the current sale of the property. In all other aspects of the 
investigation, the all appropriate inquiries must be in compliance with 
the provisions of the final regulation.

L. What Are the Objectives and Performance Factors for the All 
Appropriate Inquiries Requirements?

Proposed Rule
    As explained in the preamble to the proposed rule, when developing 
the proposed standards, EPA and the Negotiated Rulemaking Committee 
structured the proposal around the statutory criteria established by 
Congress in section 101(35)(B)(iii) of CERCLA. As development of the 
proposed rule progressed, it became apparent that the purposes and 
objectives for the individual criterion and the types of information 
that must be collected to meet the objectives of each 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 were similar, which could lead to the collection of the 
same information to fulfill each of the criterion's objectives. For 
example, a chain of title document is historic information that may 
include information on environmental cleanup liens, as well as 
information on past owners of the property indicating that previous 
owners managed hazardous substances on the property.
    To avoid requiring duplicative efforts, but to ensure that the 
proposed regulations included standards and practices that result in a 
comprehensive assessment of the environmental conditions at a property, 
the proposed all appropriate inquiries standards were structured around 
a concise set of objectives and performance factors. The proposed 
objectives and performance factors applied to the standards 
comprehensively. In conducting the inquiries collectively, the 
landowner and the environmental professional must seek to achieve the 
objectives and performance factors and use the objectives and standards 
as guidelines in implementing, in total, all of the other proposed 
regulatory standards and practices.
Public Comments
    Commenters overwhelmingly supported the proposed approach of 
structuring the all appropriate inquiries standards around a definitive 
set of performance factors and objectives. Commenters stated that the 
establishment of performance factors will improve the quality of 
environmental site assessments because the performance factors allow 
for the application of professional judgement and provide flexibility.
    A few commenters did not support the proposed approach of 
structuring the regulations around a set of performance factors and 
objectives. These commenters asserted that the objectives and 
performance factors made the regulation too vague and open-ended. In 
addition, the commenters stated that they want the regulation to be 
centered around a ``checklist'' of activities, each of which should be 
required to be completed independently and without consideration of a 
comprehensive performance approach. Commenters who argued for a 
checklist approach said that such an approach would ensure that the 
environmental professional only would have to undertake a finite list 
of activities and it would be easier (in the commenter's opinion) for 
property owners to obtain liability protection if the list of 
activities could be completed without regard to performance goals or an 
overall objective. These commenters also expressed concern that, if the 
regulations are based on performance factors that the all appropriate 
inquiries investigation would not have an

[[Page 66086]]

endpoint at which prospective landowners could stop looking for 
evidence of releases or threatened releases. The commenters believed 
that under a checklist approach liability protection would be awarded 
upon completion of all activities on the checklist.
Final Rule
    We are retaining the proposed performance factors and objectives in 
the final rule. We continue to believe, as did many commenters, that 
basing the regulations on a set of overall performance factors and 
specific objectives lends clarity and flexibility to the standards. 
Such an approach also allows for the application of professional 
judgment and expertise to account for site-specific circumstances. The 
primary objective of an all appropriate inquiries investigation is to 
identify conditions indicative of releases and threatened releases of 
hazardous substances on, at, in, or to the subject property. In the 
case of recipients of brownfields grants, the objective may be expanded 
to include petroleum and petroleum products, pollutants, contaminants, 
and controlled substances, depending upon the scope of the grantee's 
cooperative agreement.
    The performance factors are meant to guide the individual aspects 
of the investigation toward meeting both the statutory criteria for all 
appropriate inquiries and the regulatory objectives of (1) collecting 
necessary information about the uses and ownerships of a property and 
(2) identifying, through the collection of this information, conditions 
indicative of releases and threatened releases on, at, in, or to the 
subject property. By establishing a concise set of objectives and 
setting some boundaries on the information collection activities 
through the establishment of performance factors, we believe that the 
final rule fulfills the statutory objectives, provides for a 
comprehensive assessment of the environmental conditions at the 
property, and avoids the conduct of duplicative investigations and data 
collection efforts.
    EPA disagrees with the commenters who argued that the proposed 
approach of establishing overall objectives and performance factors for 
the all appropriate inquiries standards would result in an approach 
that is too vague and open-ended. In fact, by establishing clear 
objectives and setting parameters to the investigation through a set of 
performance factors that include gathering information that is publicly 
available, obtainable from its source within reasonable time and cost 
constraints, and which can practicably be reviewed, the approach taken 
in the final rule provides reasonable goals and endpoints to the 
information collection requirements. The proposed objectives provide a 
discrete list of the types of information that must be collected as 
part of the all appropriate inquiries investigation. In addition, the 
performance factors set boundaries around the efforts that must be 
taken and the cost burdens that must be incurred to obtain the required 
information. The fact that the rule is framed within a primary 
objective, to ``identify conditions indicative of releases and 
threatened releases of hazardous substances,'' actually reduces the 
open-ended nature of the investigation and establishes an overall goal 
for the inquiries.
    Commenters who advocated that a checklist approach (or an approach 
not based upon overall objectives and performance factors) is superior 
because they believe that it would better provide for a stopping point 
in the investigation may have misunderstood the statutory requirements 
that must be met to obtain a defense to CERCLA liability. These 
commenters may have incorrectly assumed that the completion of the all 
appropriate inquiries investigation is all that is required to obtain 
liability protection. The conduct of all appropriate inquiries is only 
one requirement for obtaining relief from CERCLA liability. Prospective 
landowners must conduct all appropriate inquiries prior to acquiring a 
property to qualify for a defense to CERCLA liability as an innocent 
landowner, bona fide prospective purchaser or contiguous landowner. 
However, once a property is acquired, the property owner must comply 
with all of the other statutory criteria necessary to qualify for the 
liability protections. In particular, landowners must undertake 
``reasonable steps'' to ``stop any continuing releases.'' Therefore, 
the final rule's objective of identifying conditions indicative of 
releases and threatened releases of hazardous substances on, at, in, or 
to a property links appropriately with the statutory criteria requiring 
the landowner to address such releases to qualify for the liability 
protections.
    Conducting the inquiries merely in compliance with a checklist and 
without the purpose of meeting an overall objective could result in an 
inability to recognize the value of certain types of information or in 
chasing down multiple sources of information that may not have added 
value for meeting the overall objective of the investigation. A lack of 
information or an inability to obtain information that may affect the 
ability of an environmental professional to determine whether or not 
there are conditions indicative of a release or threatened release of a 
hazardous substance (or other contaminant) on, at, in or to a property 
can have significant consequences regarding a prospective landowner's 
ultimate ability to claim protection from CERCLA liability. Failure to 
identify a release during the conduct of all appropriate inquiries does 
not relieve the property owner from the responsibility to take 
reasonable steps and address the release. Even if the Agency agreed 
with the commenters and adopted a ``checklist'' approach for the 
regulation, simply conducting the checklist of activities and ending 
the investigation after each activity is conducted would not result in 
protection from CERCLA liability (as commenters claimed).
    The final rule also establishes that in those cases where certain 
information included in the list of regulatory objectives (Sec.  
312.20(e)) cannot be found or obtained within the parameters of the 
performance factors, such data gaps must be identified and the 
significance of the missing information with regard to the 
environmental professional's ability to render an opinion on the 
presence of conditions indicative of releases and threatened releases 
be documented. Exhaustive and costly efforts do not have to be made to 
access all available sources of data and find every piece of data and 
information about a property. Nor does the rule require that 
duplicative information be sought from multiple sources. The inquiries 
and the overall investigation must be undertaken to meet the data 
collection objectives and primarily determine the environmental 
conditions of the property. Structuring the standards around such 
objectives will render the results of the investigation more valuable 
to a landowner in his or her efforts to comply with the post 
acquisition continuing obligations for obtaining the CERCLA liability 
protections than an approach framed around a mere checklist of 
activities.
    In retaining the proposed objectives and performance factors, the 
final rule allows that 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 one criterion and more than one 
objective. However, the information required to achieve each

[[Page 66087]]

of the objectives and performance factors must be obtained for the all 
appropriate inquiries investigation to be complete. Although compliance 
with the all appropriate inquiries requirements ultimately will be 
determined in court, the final rule allows the prospective landowner or 
grantee and environmental professional to determine the best process 
and sequence for collecting and analyzing all required information. The 
sequence of activities and the sources of information used to collect 
any required information is left to the judgment and expertise of the 
environmental professional, provided that the overall objectives and 
the performance factors established for the final rule are met.
    In performing the inquiries, including but not limited to 
conducting interviews, collecting historical data and government 
records, and inspecting the subject property and adjoining properties, 
all parties undertaking all appropriate inquiries must be attentive to 
the fact that the primary objectives of the regulation are to identify 
the following types of information about the subject 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;
     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.
    EPA notes that in the case of brownfields grantees, the scope of 
each of the activities listed above may be broader if the grant or 
cooperative agreement includes within its scope the assessment of a 
property for conditions indicative of releases or threatened releases 
of petroleum and petroleum products, controlled substances, or other 
contaminants.
    The final performance factors for achieving the objectives set 
forth above are set forth in Sec.  312.20(e) and require the persons 
conducting the inquiries to: (1) Gather the information that is 
required for each standard and practice that is publicly available, 
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. In complying with Sec.  312.20(f)(2), if the 
environmental professional or person conducting the inquiries 
determines through such review and evaluation that the information is 
either not thorough or not reliable, then further inquiries should be 
made to ensure that the information gathered is both thorough and 
reliable. The performance factors are provided as guidelines to be 
followed in conjunction with the final objectives for the all 
appropriate inquiries.

M. What Are Institutional Controls?

    The final rule requires the identification of institutional 
controls placed on the subject property. As defined in Sec.  312.10, 
institutional controls are non-engineered instruments, such as 
administrative and legal controls, that among other things, can help to 
minimize the potential for human exposure to contamination, and protect 
the integrity of a remedy by limiting land or resource use. For 
example, an institutional control might prohibit the drilling of a 
drinking water well in a contaminated aquifer or disturbing 
contaminated soils. Institutional controls also may be referred to as 
land use controls, activity and use limitations, etc., depending on the 
program under which a response action is conducted or a release is 
addressed.
    Institutional controls are typically used whenever contamination 
precludes unlimited use and unrestricted exposure at the property. 
Thus, institutional controls may be needed both before and after 
completion of the remedial action or may be employed in place of a 
remedial action. Institutional controls often must remain in place for 
an indefinite duration and, therefore, generally need to survive 
changes in property ownership (i.e., run with the land) to be legally 
and practically effective. Some common examples of institutional 
controls include zoning restrictions, building or excavation permits, 
well drilling prohibitions, easements and covenants.
    The importance of identifying institutional controls during all 
appropriate inquiries is twofold. First, institutional controls are 
usually necessary and important components of a remedy. Failure to 
abide by an institutional control may put people at risk of harmful 
exposure to hazardous substances. Second, an owner wishing to maintain 
protections from CERCLA liability as an innocent landowner, contiguous 
property owner, or bona fide prospective purchaser must fulfill ongoing 
obligations to: (1) Comply with any land use restrictions established 
or relied on in connection with a response action and (2) not impede 
the effectiveness or integrity of any institutional control employed in 
connection with a response action. For a more detailed discussion of 
these requirements please see EPA, Interim Guidance Regarding Criteria 
Landowners Must Meet in Order to Qualify for Bona Fide Prospective 
Purchaser, Contiguous Property Owner, or Innocent Landowner Limitations 
on CERCLA Liability (Common Elements, 2003).
    Those persons conducting all appropriate inquiries may identify 
institutional controls through several of the standards and practices 
set forth in this rule. As noted, implementation of institutional 
controls may be accomplished through the use of several administrative 
and legal mechanisms, such as zoning restrictions, building permit 
requirements, easements, covenants, etc. For example, an easement 
implementing an institutional control might be identified through the 
review of chain of title documents under Sec.  312.24(a). Furthermore, 
interviews with past and present owners, operators, or occupants 
pursuant to Sec.  312.23; and reviews of federal, tribal, state, and 
local government records under Sec.  312.26, may identify an 
institutional control or refer a person to the appropriate source to 
find an institutional control. For example, a review of federal 
Superfund records, including Records of Decision and Action Memoranda, 
as well as other information contained in the CERCLIS database, may 
indicate that zoning was selected as an institutional control or an 
interview with a current operator may reveal an institutional control 
as part of an operating permit.
    The final rule requires that all appropriate inquiries include a 
search for institutional controls placed upon the subject property as 
part of the requirements for reviewing federal, state, tribal, and 
local government records. A discussion of these requirements is 
provided in section IV.S below.

[[Page 66088]]

N. How Must Data Gaps Be Addressed in the Conduct of All Appropriate 
Inquiries?

Proposed Rule
    The proposed rule required environmental professionals, prospective 
landowners, and brownfields grant recipients to identify data gaps that 
affect their ability to identify conditions indicative of releases or 
threatened releases of hazardous substances (and, in the case of grant 
recipients, pollutants, contaminants, petroleum and petroleum products, 
and controlled substances). The proposed rule also required these 
persons to identify the sources of information consulted to address, or 
fill, the data gaps and then comment upon the significance of the data 
gaps with regard to the ability to identify conditions indicative of 
releases or threatened releases of hazardous substances on, at, in or 
to the subject property. The proposed rule defined a data gap as a lack 
of or an inability to obtain information required by the standards and 
practices listed in the proposed regulation, despite good faith efforts 
by the environmental professional or the prospective landowner or grant 
recipient to gather such information.
Public Comments
    Some commenters raised concerns that the proposed definition of a 
data gap may result in difficulties in determining when an all 
appropriate inquiries investigation is complete. These commenters 
stated that the need to identify and comment on the significance of 
data gaps may render it difficult to complete an investigation, that 
could potentially affect a property owner's ability to claim protection 
from CERCLA liability. Other commenters asserted that because an 
investigation could be considered complete despite the existence of a 
data gap, a regulatory loophole exists (in the opinion of the 
commenters) that will result in the property owner's being able to 
claim protection from CERCLA liability even when the all appropriate 
inquiries investigation results in a failure to identify a release or 
threatened release at a property.
    Some commenters stated that the proposed requirement to identify 
data gaps, or missing information, that may affect the environmental 
professional's ability to render an opinion regarding the environmental 
conditions at a property and comment on their significance in this 
regard will lend credibility to the inquiry's final report.
Final Rule
    We are retaining the proposed definition of data gap and the 
proposed requirements for identifying and commenting on the 
significance of data gaps. For the purposes of today's final rule, a 
``data gap'' is a lack of or inability to obtain information required 
by the standards and practices listed in the regulation, despite good 
faith efforts by the environmental professional or the prospective 
landowner (or grant recipient) to gather such information pursuant to 
the objectives for all appropriate inquiries. In today's final rule, 
Sec.  312.20(g) requires environmental professionals, prospective 
landowners, and grant recipients to identify data gaps that affect 
their ability to identify conditions indicative of releases or 
threatened releases of hazardous substances (and in the case of grant 
recipients pollutants, contaminants, petroleum and petroleum products, 
and controlled substances). The final rule requires such persons to 
identify the sources of information consulted to address the data gaps 
and comment upon the significance of the data gaps with regard to the 
ability to identify conditions indicative of releases or threatened 
releases. Section 312.21(c)(2) also requires that the inquiries report 
include comments regarding the significance of any data gaps on the 
environmental professional's ability to provide an opinion as to 
whether the inquiries have identified conditions indicative of releases 
or threatened releases.
    In response to issues raised by commenters, we point out that the 
final regulation, as did the proposal, requires that environmental 
professionals document and comment on the significance of only those 
data gaps that ``affect the ability of the environmental professional 
to identify conditions indicative of releases or threatened releases of 
hazardous substances * * * on, at, in, or to the subject property.'' If 
certain information included within the objectives and performance 
factors for the final rule cannot be found and the lack of certain 
information, in light of all other information that was collected about 
the property, has no bearing on the environmental professional's 
ability to render an opinion regarding the environmental conditions at 
the property, the final rule does not require the lack of such 
information to be documented in the final report. Given the restriction 
on the type of data gaps that must be documented, and given that the 
documentation is restricted to instances where the lack of information 
hinders the ability of the environmental professional to render an 
opinion regarding the environmental conditions at the property, we 
disagree with the commenters who assert that the requirement is overly 
burdensome or will result in the inability to complete the required 
investigations.
    Commenters who asserted that the requirement to document data gaps 
would result in a ``loophole'' that would allow property owners to 
claim protection from CERCLA liability after conducting an incomplete 
all appropriate inquiries investigation may have misunderstood the 
scope of the rule and the statutory requirements for obtaining the 
liability protections. As explained in detail in Section II of this 
preamble, the conduct of all appropriate inquiries is only one 
requirement necessary for obtaining protection from CERCLA liability. 
The mere fact that a prospective landowner conducted all appropriate 
inquiries does not provide an individual with protection from CERCLA 
liability. To qualify as a bona fide prospective purchaser, innocent 
landowner or a contiguous property owner, a person must, in addition to 
conducting all appropriate inquiries prior to acquiring a property, 
comply with all of the other statutory requirements. These criteria are 
summarized in section II.D. of this preamble. The all appropriate 
inquiries investigation may provide a prospective landowner with 
necessary information to comply with the other post-acquisition 
statutory requirements for obtaining liability protections. The conduct 
of an incomplete all appropriate inquiries investigation, or the 
failure to detect a release during the conduct of all appropriate 
inquiries, does not exempt a landowner from his or her post-acquisition 
continuing obligations under other provisions of the statute. Failure 
to comply with any of the statutory requirements may be problematic in 
a claim for protection from liability.
    The final rule retains the requirement to identify data gaps, 
address them when possible, and document their significance. 
Prospective landowners may wish to consider the potential significance 
of any data gaps, that may exist after conducting the pre-acquisition 
all appropriate inquiries in assessing their obligations to fulfill the 
additional statutory requirements after purchasing a property.
    If a person properly conducts all appropriate inquiries pursuant to 
this rule, including the requirements concerning data gaps at 
Sec. Sec.  312.10, 312.20(g) and 312.21(c)(2), the person may fulfill 
the all appropriate inquiries requirements of CERCLA sections

[[Page 66089]]

107(q), 107(r), and 101(35), even when there are data gaps in the 
inquiries. However, as explained further in this preamble, fulfilling 
the all appropriate inquiries requirements does not, by itself, provide 
a person with a protection from or defense to CERCLA liability. Failure 
to identify a release or threatened release during the conduct of all 
appropriate inquiries does not negate the landowner's continuing 
responsibilities under the statute, including the requirements to take 
reasonable steps to stop the release, prevent a threatened release, and 
prevent exposure to the release or threatened release once the 
landowner has acquired a property. Also, if an existing institutional 
control or land use restriction is not identified during the conduct of 
all appropriate inquiries prior to the acquisition of a property, a 
landowner is not exempt from complying with the institutional control 
or land use restriction after acquiring the property. None of the other 
statutory requirements for the liability protections is satisfied by 
the results of the all appropriate inquiries.
    We emphasize that the mere fact that a prospective landowner 
conducted all appropriate inquiries does not provide an individual with 
a defense to or limitation from CERCLA liability. To qualify as a bona 
fide prospective purchaser, innocent landowner or a contiguous property 
owner, a person must, in addition to conducting all appropriate 
inquiries prior to acquiring a property, comply with all of the other 
statutory requirements. These criteria are summarized in section II.D. 
of this preamble. The all appropriate inquiries investigation may 
provide a prospective landowner with necessary information to comply 
with the other post-acquisition statutory requirements for obtaining 
liability protections. The failure to detect a release during the 
conduct of all appropriate inquiries does not exempt a landowner from 
his or her post-acquisition continuing obligations under other 
provisions of the statute.
    Section 312.20(g) of the final rule points out that one way to 
address data gaps may be to conduct sampling and analysis. The final 
regulation does not require that sampling and analysis be conducted to 
comply with the all appropriate inquiries requirements. The regulation 
only notes that sampling and analysis may be conducted, where 
appropriate, to obtain information to address data gaps. The Agency 
notes that sampling and analysis may be valuable in determining the 
possible presence and extent of potential contamination at a property. 
Such information may be valuable for determining how a landowner may 
best fulfill his or her post-acquisition continuing obligations 
required under the statute for obtaining protection from CERCLA 
liability.

O. Do Small Quantities of Hazardous Substances That Do Not Pose Threats 
to Human Health and the Environment Have To Be Identified in the 
Inquiries?

Proposed Rule
    The environmental professional should identify and evaluate all 
evidence of releases or threatened releases on, at, in or to the 
subject property, in accordance with generally accepted good commercial 
and customary standards and practices. However, the proposed rule 
provided that the environmental professional need not specifically 
identify, in the written report prepared pursuant to Sec.  312.21(c), 
extremely small quantities or amounts of contaminants, so long as the 
contaminants generally would not pose a threat to human health or the 
environment.
Public Comments
    EPA received no significant comment on the proposed provision on 
the identification of extremely small quantities of contamination.
Final Rule
    The final retains the provision that the environmental professional 
need not specifically identify, in the written report prepared pursuant 
to Sec.  312.21(c), extremely small quantities or amounts of 
contaminants, so long as the contaminants generally would not pose a 
threat to human health or the environment.

P. What Are the Requirements for Interviewing Past and Present Owners, 
Operators, and Occupants?

Proposed Rule
    CERCLA section 101(35)(B)(iii)(II) requires EPA to include in the 
standards and practices for all appropriate inquiries ``interviews with 
past and present owners, operators, and occupants of the facility for 
the purpose of gathering information regarding the potential for 
contamination at the facility.'' The Agency proposed that the inquiry 
of the environmental professional include interviews with the current 
owner(s) and occupant(s) of the subject property. In addition, the 
proposed rule required that interviews be conducted with current and 
past facility managers with relevant knowledge of the property, as well 
as past owners, occupants, or operators, and employees of current and 
past occupants of the property, as necessary, to meet the proposed 
objectives and performance factors. In the case of abandoned 
properties, the Agency proposed that the inquiry of the environmental 
professional include interviewing one or more owners or occupants of 
neighboring or nearby properties to obtain information on current and 
past uses of the property and other information necessary to meet the 
objectives and performance factors.
Public Comments
    Several commenters asserted that the requirement to interview 
current and past owners and occupants of a property may be burdensome. 
Commenters gave several reasons for asserting that interviews may be 
burdensome. Some commenters said it is difficult to locate current and 
past owners and occupants. Other commenters questioned the accuracy of 
any information that would be provided by a current or past owner or 
occupant. One commenter expressed concern that the requirement to 
conduct interviews of current and past owners and occupants of a 
property could result in the environmental professional divulging 
information regarding the sale of the property against the prospective 
landowner's wishes.
    In the case of the proposed interview requirements for abandoned 
properties, some commenters opposed the requirement to interview at 
least one owner or occupant of a neighboring property. Commenters 
stated that the proposed requirement was unreasonable and that it is 
impractical to attempt to find and contact neighboring property owners 
and occupants. Some commenters said that neighboring property owners 
and occupants can not be relied upon to provide accurate information 
about a property.
Final Rule
    The requirements for conducting interviews of past and present 
owners, operators, and occupants of the subject property are included 
in Sec.  312.23. The final rule identifies these interviews as being 
within the scope of the inquiry of the environmental professional. 
Therefore, all interviews must be conducted by the environmental 
professional or by someone under the supervision or responsible charge 
of the environmental professional. The intent is that an individual 
meeting the definition of an environmental professional (Sec.  312.10) 
must oversee the conduct of, or review and approve the results of, the 
interviews to ensure the interviews are conducted in compliance with 
the objectives and performance

[[Page 66090]]

factors (Sec.  312.20). This is to ensure that the information obtained 
from the interviews provides sufficient information, in conjunction 
with the results of all other inquiries, to allow the environmental 
professional to render an opinion with regard to conditions at the 
property that may be indicative of releases or threatened releases of 
hazardous substances (and pollutants, contaminants, petroleum and 
petroleum products, and controlled substances, if applicable).
    The final rule requires the environmental professional's inquiry to 
include interviewing the current owner and occupant of the subject 
property. In addition, the rule provides that the inquiry of the 
environmental professional include interviews of additional 
individuals, including current and past facility managers with relevant 
knowledge of the property, past owners, occupants, or operators of the 
subject property, or employees of current and past occupants of the 
subject property, as necessary to meet the rule's objectives and in 
accordance with the performance factors. A primary purpose of the 
interviews portion of the all appropriate inquiries is to obtain 
information regarding the current and past ownership and uses of the 
property, and obtain information regarding the potential environmental 
conditions of the property. The final rule does not prescribe 
particular questions that must be asked during the interview. The type 
and content of any questions asked during interviews will depend upon 
the site-specific conditions and circumstances and the extent of the 
environmental professional's (or other individual's under the 
supervision or responsible charge of the environmental professional) 
knowledge of the property prior to conducting the interviews. 
Therefore, the final rule does not include specific questions for the 
interviews, but requires that the interviews be conducted in a manner 
that achieves the objectives and performance factors. Interviews with 
current and past owners and occupants may provide opportunities to 
collect information about a property that was not previously recorded 
nor well documented and may provide valuable perspectives on how to 
find or interpret information required to complete other aspects of the 
all appropriate inquiries. Information gathered during the interview 
portion of the all appropriate inquiries may in turn provide valuable 
information for the on-site visual inspection. Persons conducting the 
interviews of current and past owners and occupants may want to spend 
some time during the interviews requesting information on the locations 
of operations or units used to store or manage hazardous substances on 
the property.
    In the case of properties where there may be more than one owner or 
occupant, or many owners or occupants, the final rule requires the 
inquiry to include interviews of major occupants and those occupants 
that are using, storing, treating, handling or disposing (or are likely 
to have used, stored, treated, handled or disposed) of hazardous 
substances (or pollutants, contaminants, petroleum and petroleum 
products, and controlled substances, as applicable) on the property. 
The rule does not specify the number of owners and occupants to be 
interviewed. The environmental professional must perform this function 
in the manner that best fulfills the objectives and performance factors 
for the inquiries in Sec.  312.20(e) and (f). Environmental 
professionals may use their professional judgment to determine the 
specific occupants to be interviewed and the total number of occupants 
to be interviewed in seeking to comply with the objectives and 
performance factors for the inquiries. Interviews must be conducted 
with individuals most likely to be knowledgeable about the current and 
past uses of the property, particularly with regard to current and past 
uses of hazardous substances on the property.
    In response to commenters who asserted that the proposed interview 
requirements are burdensome, we point out that the statutory criteria 
in CERCLA section 101(35)(B)(iii) include ``interviews with past and 
present owners, operators, and occupants of the facility for the 
purpose of gathering information regarding the potential for 
contamination at the facility.'' EPA asserts that it was clearly 
congressional intent that the all appropriate inquiries investigation 
include the conduct of interviews with current and past owners and 
occupants. We also assert that current and past owners and occupants of 
a property may be excellent sources of information regarding past and 
on-going uses of the property as well as the types of waste management 
activities that were undertaken at the property. Given that the ASTM 
E1527 Phase 1 Environmental Site Assessment Process, the interim 
standard for the conduct of all appropriate inquiries, includes 
requirements for conducting interviews with the current owners and 
occupants of a property and provides that other owners and occupants 
are good additional sources of information about property uses and 
potential contamination at a property, we disagree with commenters who 
asserted that the proposed and final requirements for conducting 
interviews will be overly burdensome.
    In the case of abandoned properties, the final rule requires the 
inquiry of the environmental professional to include interviews with 
one or more owners or occupants of neighboring or nearby properties. In 
the case of abandoned properties, it most likely will be difficult to 
identify or interview current or past owners and occupants of the 
property. Therefore, the final rule requires that at least one owner or 
occupant of a neighboring property be interviewed to obtain information 
regarding past owners or uses of the property in cases where the 
subject property is abandoned and no current owner is available to be 
interviewed. The final rule defines an abandoned property as a 
``property that can be presumed to be deserted, or an intent to 
relinquish possession or control can be inferred from the general 
disrepair or lack of activity thereon such that a reasonable person 
could believe that there was an intent on the part of the current owner 
to surrender rights to the property.'' As is the case with interviews 
conducted with current and past owners and occupants of the property, 
interview questions should be developed prior to the conduct of the 
interviews, and tailored to gather information to achieve the rule's 
objectives and performance factors. The final rule contains no specific 
requirements with regard to the type or content of questions that must 
be asked during the interviews.
    EPA disagrees with commenters who stated that it will be difficult 
to locate and contact neighboring property owners and occupants. The 
final rule, as did the proposed rule, requires that the environmental 
professional only locate and interview one neighboring property owner 
or occupant and only in those cases where no owner or occupant of the 
subject property can be identified. An environmental professional 
should be able to locate one owner or occupant of a neighboring 
property when conducting the on-site visual inspection of the property. 
If the environmental professional cannot easily locate an owner and 
occupant of a neighboring property, he or she may enlist the assistance 
of local government officials in identifying a neighboring property 
owner or occupant. As is the case with information ascertained from any 
interview, the environmental professional must apply his or her 
judgment when drawing conclusions

[[Page 66091]]

based on the information provided in interviews with neighboring 
property owners and occupants and should attempt to verify any 
information provided by reviewing other available sources of 
information.

Q. What Are the Requirements for Reviews of Historical Sources of 
Information?

Proposed Rule
    Historical documents and records may contain information regarding 
past ownership and uses of a property that may be essential to 
assessing the potential for environmental conditions indicative of 
releases or threatened releases of hazardous substances to be present 
at the property. Historical documents and records, among others, may 
include chain of title documents, land use records, aerial photographs 
of the property, fire insurance maps, and records held at local 
historical societies. The proposed rule required that the inquiry of 
the environmental professional include a review of historical documents 
and records for the subject property that document the ownership and 
use of the property for a period of time as far back in the history of 
the property as it can be shown that the property contained structures, 
or from the time the property was first used for residential, 
agricultural, commercial, industrial, or governmental purposes.
Public Comments
    Some commenters raised concerns regarding the proposed requirements 
to review historical records covering ``a period of time as far back in 
the history of the subject property as it can be shown that the 
property contained structures or from the time the property was first 
used for residential, agricultural, commercial, industrial, or 
governmental purposes.'' Commenters said that the proposed historical 
scope of the records search is too extensive. Some commenters requested 
that in the final rule EPA adopt the provisions for historical records 
searches provided in the ASTM E1527-2000 standard. Several commenters 
requested that EPA explicitly require as part of the review of 
historical records a review of chain of title documents. The commenters 
asserted that a review of chain of title documents is the only reliable 
way to identify previous owners of a property.
Final Rule
    The statutory criteria in the Brownfields Amendments require that 
reviews of historical sources of information be conducted to 
``determine previous uses and occupancies of the real property since 
the property was first developed.'' The final rule requires (as did the 
proposed rule) that historical records on the subject property be 
searched for information on the property covering a time period as far 
back in history as there is documentation that the property contained 
structures or was placed into use of some form. This provision follows 
the statutory language. In addition, the final rule requires that 
historical documents and information be reviewed to obtain necessary 
information for meeting the objectives and performance factors in Sec.  
312.20(e) and (f). If a search of historical sources of information 
results in an inability of the environmental professional to document 
previous uses and occupancies of the property as far back in history as 
it can be shown that the property contained structures or was placed 
into use of some form, and such information is not acquired elsewhere 
during the investigation then it must be documented as a data gap to 
the inquiries. The requirements of Sec. Sec.  312.20(g) and 
312.21(c)(2) are applicable to all instances in the all appropriate 
inquiries that result in data gaps.
    Despite the concerns raised by some commenters regarding the scope 
of the historical records review, we assert that the scope of the 
requirements in the final rule (as did the scope of the proposed 
requirements) reflects the statutory language provided in CERCLA 
section 101(35)(B)(iii). The statutory criterion provide that all 
appropriate inquiries include ``reviews of historical sources * * * to 
determine previous uses and occupancies of the real property since the 
property was first developed.'' We point out that the final rule does 
allow the environmental professional to exercise his or her 
professional judgment ``in context of the facts available at the time 
of the inquiry as to how far back in time it is necessary to search 
historical records.'' We believe that this provides sufficient 
flexibility to allow for any circumstances where, due to the 
availability of other information about a property an environmental 
professional may conclude that a comprehensive search of historical 
records is not necessary to meet the objectives and performance 
factors.
    In response to commenters that requested that EPA adopt the 
provisions of the ASTM E1527-2000 standard for conducting searches of 
historical records, we assert that the scope of the historical records 
search in today's final rule is very similar to the scope of ASTM E1527 
standard. The ASTM E1527 standard, at section 7.3.1, requires that 
historical sources of information be searched to identify ``all obvious 
uses of the property* * *from the present, back to the property's 
obvious first developed use, or back to 1940, whichever is earlier.'' 
Given that the language of both the ASTM E1527 standard and the 
requirements in the final rule for conducting historical records 
searches is very similar, we conclude that the intent is the same and 
the final rule represents no change from current good customary 
business practice. In addition, the final rule provides for sufficient 
flexibility both within the application of the performance factors to 
the historical records search requirements and in allowing the 
environmental professional to apply his or her judgment ``in the 
context of the facts available at the time of the inquiry.''
    The final rule does not require that any specific type of historic 
information be collected. In particular, the rule does not require that 
persons obtain a chain of title document for the property. The rule 
allows for the environmental professional to use professional judgment 
when determining what types of historical documentation may provide the 
most useful information about a property's ownership, uses, and 
potential environmental conditions when seeking to comply with the 
objectives and performance factors for the inquiries. Although we agree 
with commenters that chain of title documents may serve as an important 
source of information regarding past ownership of a property, it may 
not be the only source of this information. To the extent that chain of 
title documents are otherwise obtained for other purposes during the 
conduct of a property sale or transaction, we believe that these 
documents can easily be made available to the environmental 
professional by the prospective landowner. Given that the final rule 
requires that historical records be searched for information on 
previous uses and ownership of a property for as far back in the 
history of property as can be shown that the property contained 
structures or was first used for residential, agricultural, commercial, 
industrial or governmental purposes, if chain of title documents are 
the best and most easily attainable source of this information, we 
assume that such documents will be obtained and used by the 
environmental professional.
    Given the wide variety of property types and locations to which the 
final rule could apply, any list of specific documents could result in 
undue burdens on many prospective

[[Page 66092]]

landowners and grantees due to difficulties in collecting any specific 
document for any particular property or property location. Therefore, 
the final requirements for reviewing historical documents allow the 
prospective landowner or grantee and the environmental professional to 
use their judgment, in accordance with generally accepted good 
commercial and customary standards and practices, in locating the best 
available sources of historical information and reviewing such sources 
for information necessary to comply with the rule's objectives and 
performance factors.
    As explained in section IV.J of this preamble, the prospective 
landowner, grantee, or environmental professional may make use of 
previously collected information about a property when conducting all 
appropriate inquiries. The collection of historical information about a 
property may be a particular case where previously collected 
information may be valuable, as well as easily accessible. In addition, 
nothing in the rule prohibits a person from using secondary sources 
(e.g., a previously conducted title search) when gathering information 
about historical ownership and usage of a property. As explained in 
section IV.J, information must be updated if it was last collected more 
than 180 days prior to the date of acquisition of the property.

R. What Are the Requirements for Searching for Recorded Environmental 
Cleanup Liens?

    For purposes of this rule, recorded environmental cleanup liens are 
encumbrances on property for the recovery of incurred cleanup costs on 
the part of a state, tribal or federal government agency or other third 
party. Recorded environmental cleanup liens often provide an indication 
that environmental conditions either currently exist or previously 
existed on a property that may include the release or threatened 
release of a hazardous substance. The existence of an environmental 
cleanup lien should be viewed as an indicator of potential 
environmental concerns and as a basis for further investigation into 
the potential existence of on-going or continued releases or threatened 
releases of hazardous substances on, at, in, or to the subject 
property.
Proposed Rule
    The proposed rule required that prospective landowners and 
grantees, or environmental professionals on their behalf, search for 
environmental cleanup liens that are recorded under federal, tribal, 
state, or local law. Environmental cleanup liens that are not recorded 
by government entities or agencies are not addressed by the language of 
the statute (the statute speaks only of ``recorded liens''); therefore, 
the proposed rule required that only a search for recorded 
environmental liens be included in the all appropriate inquiries 
investigation.
Public Comments
    Some commenters asked that EPA state more clearly that the 
responsibility for searching for environmental cleanup liens rests with 
the prospective landowner and not the environmental professional. A few 
commenters requested that the Agency provide some guidance on where to 
find recorded environmental cleanup liens.
Final Rule
    EPA is finalizing the proposed requirements to search for recorded 
environmental cleanup liens without changes. The all appropriate 
inquiries investigation must include a search for recorded 
environmental cleanup liens. The final rule allows that the search for 
recorded environmental cleanup liens be performed either by the 
prospective landowner or grantee, or through the inquiry of the 
environmental professional. The search for such liens may not 
necessarily require the expertise of an environmental professional and 
therefore may be more efficiently or more cost-effectively performed by 
the prospective landowner or grantee, or his or her agent. Such liens 
may be included as part of the chain of title documents or may be 
recorded in some other manner or format by state or local government 
agencies. If such information is collected by the prospective landowner 
or grantee, or other agent who is not under the supervision or 
responsible charge of the environmental professional, the final rule 
allows for, but does not require, the information that is collected by 
or on the behalf of the prospective landowner or grantee to be provided 
to the environmental professional. If the information is provided to 
the environmental professional, he or she can then make use of such 
information during the conduct of the all appropriate inquiries and 
when rendering conclusions or opinions regarding the environmental 
conditions of the property. If such information is not provided to the 
environmental professional and the lack of such information affects the 
ability of the environmental professional to identify conditions 
indicative of releases or threatened releases of hazardous substances 
on, at, in or to the property, the lack of information should be noted 
as a data gap (per the requirements of Sec.  312.21(b)(2)).
    Although some commenters requested that EPA be more explicit in the 
final rule in requiring that the search for recorded environmental 
cleanup liens be conducted by the prospective landowner (or grantee), 
we believe that the decision of who conducts the search may be best 
left up to the judgment of the prospective landowner or grantee and 
environmental professional. The final rule provides in Sec.  312.22 
that the search for recorded environmental cleanup liens can fall 
outside the inquiries conducted by the environmental professional. The 
search for recorded environmental cleanup liens is not included as part 
of the requirements governing the results of an inquiry by an 
environmental professional (Sec.  312.21). Therefore, the search may be 
conducted by the prospective landowner or grantee, his or her attorney 
or agent, or the environmental professional.
    We offer one caution about the conclusion that might be drawn if no 
recorded environmental cleanup liens are found. If EPA is conducting a 
cleanup at site at the time it is transferred or acquired, EPA is able 
to record a lien post acquisition. For example, one type of lien, often 
referred to as a windfall lien, has no statute of limitations and 
arises at the time EPA first spends Superfund money. States and 
localities may have similar mechanisms. Therefore, even if a recorded 
environmental cleanup lien is not found during the conduct of the all 
appropriate inquiries investigation, one may be recorded at a later 
date if EPA is undertaking a cleanup or response action at the 
property.
    With regard to commenters who requested that EPA provide guidance 
on where to search for environmental cleanup liens, we advise that 
prospective landowners and grantees to seek the advice of a local 
realtor, real estate attorney, title company, or other real estate 
professional. Environmental cleanup liens may be recorded as part of 
the land title records or as part of other state or local government 
land or real estate records. Recorded environmental cleanup liens may 
be recorded in different places, depending upon the particular state 
and particular locality in which the property is located.

S. What Are the Requirements for Reviewing Federal, State, Tribal, and 
Local Government Records?

    Federal, tribal, state and local government records may contain

[[Page 66093]]

information regarding environmental conditions at a property. In 
particular, government records, or data bases of such information, may 
include information on previously reported releases of hazardous 
substances, pollutants, contaminants, petroleum and petroleum products 
and controlled substances. Government records and available databases 
can provide valuable information on remedial actions and emergency 
response activities that may have been conducted at a particular 
property. Government records also may include information on 
institutional controls related to a particular property. For example, 
in the case of NPL sites, EPA Superfund records, including Action 
Memoranda and Records of Decision, may have information on 
institutional controls in place at such properties. Government records 
also may include information on activities or property uses that could 
cause releases or threatened releases to be present at a property.
Proposed Rule
    The proposed rule required that federal, state, tribal and local 
government records be searched for information necessary to achieve the 
objectives and performance factors, including information regarding the 
use and occupancy of and the environmental conditions at the subject 
property and conditions of nearby or adjoining properties that could 
have a impact upon the environmental conditions of the subject 
property. The proposed rule included requirements to search federal, 
tribal, state, and local government records for information indicative 
of environmental conditions at the subject property.
    The proposed rule also included requirements to review government 
records, or data bases of information contained in government records, 
for information about nearby and adjoining properties. Reviews of such 
records may provide valuable information regarding the potential impact 
to the subject property from hazardous substances and petroleum 
contamination migrating from contiguous or nearby properties. The 
proposed rule included required minimum search distances for government 
records searches of nearby properties.
    To account for property-specific and regionally-specific conditions 
that can influence the appropriateness of the proposed search distances 
for any given type of record and property, the proposed rule allowed 
the environmental professional to adjust the applicable search 
distances when searching for information about off-site properties by 
applying professional judgment. For example, appropriate search 
distances for properties located in rural settings may differ from 
appropriate search distances for urban settings. In addition, ground 
water flow direction, depth to ground water, arid weather conditions, 
the types of facilities located on nearby properties, and other factors 
may influence the degree of impact to a property from off-site sources. 
Therefore, the proposed rule allowed the environmental professional to 
adjust any or all of the proposed minimum search distances for any of 
the record types, based upon professional judgment and the 
consideration of site-specific conditions or circumstances when seeking 
to achieve the proposed objectives and performance factors for the 
required inquiries.
Public Comments
    The Agency received a variety of comments in which commenters 
expressed concerns about the applicability or adequacy of specific 
types of government records included in the proposed rule (e.g., 
CERCLIS records, information on RCRA facilities, ERNS). A few 
commenters raised concerns about the availability of tribal records. 
Several commenters raised concerns regarding the availability of 
government records on institutional controls. Commenters also pointed 
out that, given the lack of available databases and other information 
on institutional controls, it may be particularly difficult to search 
for institutional controls associated with adjoining and nearby 
properties.
Final Rule
    We are finalizing the requirements for reviewing federal, state, 
tribal, and local government data bases as proposed, with one 
exception. The final rule requires that government records and 
available lists for institutional and engineering controls be searched 
only for information on such controls at the subject property. All 
appropriate inquiries investigations do not have to include searches 
for institutional and engineering controls in place at nearby and 
adjoining properties. We made this change because we agree with 
commenters who pointed out that information on institutional and 
engineering controls may be difficult to find as there are no available 
national sources of this information. Only a few states have available 
lists of institutional controls. In addition, the information that may 
be inferred from knowledge of institutional and engineering controls 
that are in place at adjoining and nearby properties, i.e., that there 
was a response action, a remedial action, or corrective action taken at 
the site, can be inferred from information obtained from other sources 
(e.g., CERCLIS, RCRIS, state records of response actions).
    It is important that prospective landowners obtain information on 
institutional and engineering controls in place at the property being 
acquired. It also may be important to locate information on such 
controls in place at nearby properties. To obtain the liability 
protections afforded under CERCLA (i.e., innocent landowner, contiguous 
property owner, bona fide prospective purchaser), the statute requires, 
as part of the ``continuing obligations,'' that the property owner 
comply with all land use restrictions and not impede the effectiveness 
of institutional controls. Therefore, it is important that information 
on institutional and engineering controls be obtained by prospective 
landowners, even though information about such controls may not have 
been routinely obtained as part of due diligence practices prior to 
today's final rule (we note that the current interim standard does 
include provisions for searching for ``activity and use limitations'').
    Routine ``chain of title'' reports may not always contain 
information labeled as institutional or engineering controls. However, 
title companies may include, as part of the chain of title reports 
``restrictions of record on title'' when such restrictions are recorded 
because of underlying environmental conditions at a property. 
Therefore, when requesting information on ``institutional controls'' or 
``engineering controls'' about a property, prospective landowners, 
grantees, and environmental professionals may want to request 
information on ``restrictions of record on title'' as well, in case any 
available information on institutional or engineering controls is so 
labeled in the chain of title records. In addition to chain of title 
records, information on institutional controls and engineering controls 
may be recorded in local land records. Also, some states are beginning 
to create registries to track information on institutional and 
engineering controls. Therefore, prospective landowners and grantees 
should consider consulting these other sources of information in 
addition to chain of title records for information on institutional and 
engineering controls.
    In response to the commenters who pointed out particular 
shortcomings with specific sources of information (e.g., CERCLIS, 
RCRIS, ERNS) we point out that the requirement to review government 
records explicitly provides

[[Page 66094]]

that the reviews be conducted in compliance with the objectives and 
performance standards. If a particular source of information cannot be 
accessed within a reasonable time frame or within reasonable costs, 
then the information should be sought from other sources. In addition, 
if a particular source of information will only provide information 
that can more easily or readily be found elsewhere, the particular 
source does not have to be obtained or consulted. If application of the 
objectives and performance standards to the requirement to review 
government records results in an inability to provide necessary 
information (or information identified as necessary in the objectives 
for the final rule), then the lack of information should be documented 
as a data gap in the final report. In addition, the environment 
professional should comment on the significance the lack of any 
information has on his or her ability to identify conditions at the 
property that are indicative of releases or threatened releases of 
hazardous substances (in compliance with Sec.  312.21(c)(2)).
    In response to commenters who pointed out that it may be difficult 
to obtain or gain access to tribal government records, we point out 
that such records need only be searched for and reviewed in those 
instances where the subject property is located on or near tribal-owned 
lands. In these cases, it is important to attempt, within the scope of 
the rule's objectives and performance factors, to review such records. 
When such records are not available, necessary information should be 
sought from other sources. When no information is available and the 
objectives and performance factors of the final rule cannot be met and 
the result is a lack of information that may affect the environmental 
professional's ability to render an opinion regarding the environmental 
conditions of a property, the lack of information must be documented as 
a data gap in compliance with Sec.  312.21(c)(2).
    The final rule requires that the following types of government 
records or data bases of government records be reviewed to obtain 
information on the subject property and nearby properties necessary to 
meet the rule's objectives and performance standards:
    1. Government records of reported releases or threatened releases 
at the subject property, including previously conducted site 
investigation reports.
    2. Government records of activities, conditions, or incidents 
likely to cause or contribute to releases or threatened releases, 
including records documenting regulatory permits that were issued to 
current or previous owners or operators at the property for waste 
management activities and government records that identify the subject 
property as the location of landfills, storage tanks, or as the 
location for generating and handling activities for hazardous 
substances, pollutants, contaminants, petroleum and petroleum products, 
or controlled substances.
    3. CERCLIS records--EPA's Comprehensive Environmental Response, 
Compensation, and Liability Information System (CERCLIS) database 
contains general information on sites across the nation and in the U.S. 
territories that have been assessed by EPA, including sites listed on 
the National Priorities List (NPL). CERCLIS includes information on 
facility location, status, contaminants, institutional controls, and 
actions taken at particular sites. CERCLIS also contains information on 
sites being assessed under the Superfund Program, hazardous waste sites 
and potential hazardous waste sites.
    4. Government-maintained records of public risks--the all 
appropriate inquiries government records search should include a search 
for available records documenting public health threats or concerns 
caused by, or related to, activities currently or previously conducted 
at the site.
    5. Emergency Response Notification System (ERNS) records--ERNS is 
EPA's data base of oil and hazardous substance spill reports. The data 
base can be searched for information on reported spills of oil and 
hazardous substances by state.
    6. Government registries, or publicly available lists of 
engineering controls, institutional controls, and land use 
restrictions. The all appropriate inquiries government records search 
must include a search for registries or publicly available lists of 
recorded engineering and institutional controls and recorded land use 
restrictions. Such records may be useful in identifying past releases 
on, at, in, or to the subject property or identifying continuing 
environmental conditions at the property.
    The final rule requires that government records be searched to 
identify information relative to the objectives and in accordance with 
the performance factors on: (1) Adjoining and nearby properties for 
which there are governmental records of reported releases or threatened 
releases (e.g., properties currently listed on the National Priorities 
List (NPL), properties subject to corrective action orders under the 
Resource Conservation and Recovery Act (RCRA), properties with reported 
releases from leaking underground storage tanks); (2) adjoining and 
nearby properties previously identified or regulated by a government 
entity due to environmental conditions at a site (e.g., properties 
previously listed on the NPL, former CERCLIS sites with notices of no 
further response actions planned (NFRAP)); and (3) adjoining and nearby 
properties that have government-issued permits to conduct waste 
management activities (e.g., facilities permitted to manage RCRA 
hazardous wastes).
    In the case of government records searches for nearby properties, 
the final rule includes minimum search distances (e.g., properties 
located either within one mile or one-half mile of the subject 
property) for obtaining and reviewing records or data bases concerning 
activities and facilities located on nearby properties. The search 
distances are based upon our best judgment regarding the potential 
impacts that incidents or circumstances at an adjoining property may 
have on the subject property. With the exception of the required 
searches for institutional and engineering controls, the search 
distances finalized in today's rule are the search distances that were 
proposed in the proposed rule. For example, government records 
identifying properties listed on the NPL must be searched to obtain 
information on NPL sites located within one mile of the subject 
property. NPL sites located beyond one mile of a property most likely 
will have little or no impact on the environmental conditions at the 
subject property. In the case of two types of records, records of 
hazardous waste handler and generator records and permits, records of 
registered storage tanks, the final requirements specify that such 
records only be searched for information specific to the subject 
property and adjoining properties (the rule contains no requirement to 
search for these two types of government records for other nearby 
properties). The final rule requires that available lists of 
institutional controls and engineering controls only be searched for 
information on the subject property.
    In the case of all the government records listed above and in the 
final rule in Sec.  312.26, the requirements of this criterion may be 
met by searching data bases containing the same government records 
mentioned in the list above that are accessible and available through 
government entities or private sources. The review of actual records is 
not necessary, provided that the same information contained in the 
government records and required to

[[Page 66095]]

meet the requirements of this criterion and achieve the objectives and 
performance factors for these regulations is attainable by searching 
available data bases.
    The final rule allows the environmental professional to adjust the 
search distances for reviewing government records of nearby properties 
based upon his or her professional judgment. Environmental 
professionals may consider one or more of the following factors when 
determining an alternative appropriate search distance:
     The nature and extent of a release;
     Geologic, hydrogeologic, or topographic conditions of the 
subject property and surrounding environment;
     Land use or development densities;
     The property type;
     Existing or past uses of surrounding properties;
     Potential migration pathways (e.g., groundwater flow 
direction, prevalent wind direction); or
     Other relevant factors.
    The final rule requires environmental professionals to document the 
rationale for making any modifications to the required minimum search 
distances included in Sec.  312.26 of the regulation.

T. What Are the Requirements for Visual Inspections of the Subject 
Property and Adjoining Properties?

Proposed Rule
    The proposed rule required that an on-site visual inspection of the 
subject property be conducted as part of the all appropriate inquiries 
investigations, with one limited exception. The proposed on-site visual 
inspection requirements included requirements to inspect any facilities 
and improvements on the property as well as all areas where hazardous 
substances are or may have been used, stored, treated, handled, or 
disposed. In addition, the proposed rule included requirements to 
visually inspect adjoining properties. The proposal required that 
inspections of adjoining properties be conducted from the property 
line, public right-of-way, or other vantage point.
    The proposed rule included a limited exception from the requirement 
to conduct the visual inspection ``on-site.'' The proposed exception 
provided that in unusual circumstances where an on-site visual 
inspection cannot be performed because of physical limitations, remote 
and inaccessible location, or another inability to obtain access to the 
property, provided good faith efforts are taken to obtain such access 
and access to the property could not be obtained, a visual inspection 
could be conducted from an off-site vantage point (e.g., property-line, 
airplane, public right-of-way). To qualify for the exception from the 
requirement to conduct the inspection on site, the proposed rule 
required that the environmental professional document the good faith 
efforts undertaken to gain access to the property and explain why such 
efforts were unsuccessful. The proposed rule also required that the 
environmental professional document what other sources of information 
were consulted to obtain information regarding the potential 
environmental conditions at the property and the significance of the 
failure to conduct the inspection on site on his or her ability to 
identify conditions indicative of releases or threatened releases of 
hazardous substances on, at, in, or to the subject property.
    In the preamble to the proposed rule, EPA recommended that an 
environmental professional conduct the on-site visual inspection.
Public Comments
    A few commenters stated that EPA should not recommend, as we did in 
the preamble to the proposed rule, that an individual meeting the 
definition of environmental professional conduct the on-site visual 
inspection. These commenters stated that anyone under the responsible 
charge or supervision of an environmental professional should be able 
to conduct the on-site visual inspection. Commenters stated, that by 
recommending in the preamble that the environmental professional 
conduct the on-site visual inspection, the Agency was effectively 
requiring an environmental professional to conduct the visual 
inspection. Other commenters expressed support for the Agency's 
recommendation.
    A few other commenters thought the proposed exception from the 
requirement to conduct the visual inspection on site was ``broad'' and 
``would increase the likelihood of inspections not being performed and 
contamination not being detected.'' These commenters expressed a 
concern that any exception from the requirement to conduct an on-site 
visual inspection could open the door to abuse and result in properties 
being transferred without being inspected. Commenters raised concerns 
that owners of uninspected properties could obtain liability protection 
by claiming to have fulfilled the requirements of all appropriate 
inquiries without knowledge of on-going releases at a property.
Final Rule
    The final rule, at Sec.  312.27, retains the proposed requirement 
that a visual on-site inspection be conducted of the subject property. 
The final visual on-site inspection requirements include requirements 
to inspect the facilities and any improvements on the property, as well 
as visually inspect areas on the property where hazardous substances 
may currently be or in the past may have been used, stored, treated, 
handled, or disposed of. We continue to assert that, and commenters 
agreed, that every all appropriate inquiries investigation must include 
an on-site visual inspection of the property. The on-site inspection of 
a property most likely will be an excellent source of information 
regarding indications of environmental conditions on a property. The 
final rule requires that a visual on-site inspection of the subject 
property be conducted in all but a few very limited cases. In addition, 
the final rule retains the proposed requirement that in those cases 
where physical limitations restrict the portions of the property that 
may be visually inspected, that the physical limitations encountered 
during the visual on-site inspection (e.g., weather conditions, 
physical obstructions) must be documented.
    We note that persons conducting all appropriate inquiries with 
monies provided in a grant awarded under CERCLA section 104(k)(2)(B) 
must, depending on the terms and conditions of the grant or cooperative 
agreement, include within the scope of the on-site visual inspection an 
inspection of the facilities, improvements, and other areas of the 
property where pollutants, contaminants, petroleum and petroleum 
products, or controlled substances may currently be or in the past may 
have been used, stored, treated, handled, or disposed.
    The visual on-site inspection of a property during the conduct of 
all appropriate inquiries may be the most important aspect of the 
inquiries and the primary source of information regarding the 
environmental conditions on the property. In all cases, every effort 
must be made to conduct an on-site visual inspection of a property when 
conducting all appropriate inquiries.
    We understand that a prospective landowner, grantee, or 
environmental professional, in some limited circumstances, may not be 
able to obtain on-site access to a property. Extreme and prolonged 
weather conditions and remote locations can impede access to a 
property. A prospective landowner, grantee or environmental 
professional also could be unable to gain on-site

[[Page 66096]]

access to a property if the owner refuses to provide access to the 
party, even after the party exercises all good faith efforts to gain 
access to the property (e.g., seeking assistance from state government 
officials). Such circumstances may arise in cases where a local 
government becomes a last resort purchaser of a potentially-
contaminated property that has little economic value. The unique nature 
of such transactions may result in a local government facing an 
uncooperative or recalcitrant property owner. Unlike commercial 
property transactions between private parties, where the parties' 
economic and legal liability interests and the ability to abandon the 
transaction can work in favor of the purchasing party's ability to gain 
access to a property prior to acquisition, property transactions 
between a private party and a local government may not afford the local 
government the same leverage, even if it is in the public interest to 
attain ownership of the property. This situation may occur when the 
local government seeks to assess, clean up, and revitalize an area, but 
the owner of the property is unreachable, unavailable, or otherwise 
unwilling to provide access to the property. In such limited 
circumstances, the public benefit attained from a government entity 
gaining ownership of a property may outweigh the need to gain on-site 
access to the property prior to the transfer of ownership.
    The final rule requires, in unusual circumstances, that the 
prospective landowner or grantee make good faith efforts to gain access 
to the property. However, the mere refusal of a property owner to allow 
the prospective property owner or grantee to have access to the 
property does not constitute an unusual circumstance, absent the making 
of good faith efforts to otherwise gain access. The final rule, at 
Sec.  312.10, defines ``good faith'' as ``the absence of any intention 
to seek an unfair advantage or to defraud another party; an honest and 
sincere intention to fulfill one's obligations in the conduct or 
transaction concerned.''
    In those unusual circumstances where a prospective landowner, a 
grantee, or an environmental professional, after undertaking good faith 
efforts, cannot gain access to a property and therefore cannot conduct 
an on-site visual inspection, the final rule requires that the property 
be visually inspected, or observed, by another method, such as through 
the use of aerial photography, or be inspected, or observed, from the 
nearest accessible vantage point, such as the property line or a public 
road that runs through or along the property. In addition, the rule 
requires that the all appropriate inquiries report include 
documentation of efforts undertaken by the prospective landowner, 
grantee, or the environmental professional to obtain on-site access to 
the subject property and include an explanation of why good faith 
efforts to gain access to subject property were unsuccessful. The all 
appropriate inquiries report must include documentation of other 
sources of information that were consulted to obtain information 
necessary to achieve the objectives and performance factors. This 
documentation should include comments, from the environmental 
professional who signs the report, regarding any significant 
limitations on the ability of the environmental professional to 
identify conditions indicative of releases or threatened releases on, 
at, in, or to the subject property, that may arise due to the inability 
of the prospective landowner, grantee, or environmental professional to 
obtain on-site access to the property.
    In those limited cases where an on-site visual inspection cannot be 
conducted prior to the date a property is acquired, we remind 
prospective landowners that protection from CERCLA liability depends 
upon the prospective landowner complying with all of the post-
acquisition continuing obligations provided in the statute. Therefore, 
to ensure that adequate information is attained about a property to 
ensure that the property owner can fulfill these obligations, we 
recommend that once a property is purchased, the property owner conduct 
an on-site visual inspection of the property once the property is 
acquired, if it could not be conducted prior to acquisition. Such an 
inspection may provide important information necessary for the property 
owner to fully comply with the other statutory provisions, including 
on-going obligations, governing the CERCLA liability protections.
    We disagree with the commenters who argued that the exception from 
the requirement to conduct the visual inspection on-site is ``broad.'' 
We point out that the exception is limited to the requirement that the 
visual inspection be conducted on-site. In all cases where the 
exception applies, the visual inspection must still be conducted from 
another vantage point. In addition, the exception is limited to only 
those circumstances where all good faith efforts are made to gain 
access the property. The final rule requires that all good faith 
efforts to gain access be documented and requires that the 
environmental professional comment on the consequences that the 
inability to gain access to the property may have on his or her ability 
to render an opinion on property conditions that may be indicative of 
releases or threatened releases on, at, in, or to the property. The 
exception is very limited in scope and the documentation requirements 
should limit the use of the exception as well as provide the 
prospective landowner with useful information for determining the 
potential need for further investigations of the property after 
acquisition.
    The final rule also requires that the all appropriate inquiries 
investigation include visual inspections of properties that adjoin the 
subject property. Visual inspections of adjoining properties may 
provide excellent information on the potential for the subject property 
to be affected by contamination migrating from adjoining properties. 
Visual inspections of adjoining properties may be conducted from the 
subject property's property line, one or more public rights-of-way, or 
other vantage point (e.g., via aerial photography). Where practicable, 
a visual on-site inspection is recommended and may provide greater 
specificity of information. The visual inspections of adjoining 
properties must include observing areas where hazardous substances 
currently may be, or previously may have been, stored, treated, 
handled, or disposed. Visual inspections of adjoining properties 
otherwise also must be conducted to achieve the objectives and 
performance goals for all the appropriate inquiries. Physical 
limitations to the visual inspections of adjoining properties should be 
noted.
    As explained in the preamble to the proposed rule, EPA and the 
Negotiated Rulemaking Committee considered, when developing the 
proposed rule, requiring that all activities in the all appropriate 
inquiries investigation to be conducted by persons meeting the proposed 
definition of an environmental professional. Requiring that an 
environmental professional conduct all activities could ensure that all 
data collection and investigations are conducted in a manner and to a 
degree of specificity that allows the environmental professional to 
make best use of all information in forming opinions and conclusions 
regarding the environmental conditions at a property. However, after 
careful review of the specific activities included in the statutory 
criteria and conducting an assessment of the costs and burdens of such 
a requirement, EPA and the Committee concluded that it is not necessary 
for each and every regulatory requirement to be conducted by an 
environmental professional. As outlined

[[Page 66097]]

in section IV.H of this preamble, today's final rule, as did the 
proposed rule, allows for certain aspects of the inquiries to be 
conducted solely by the prospective landowner or grantee, while 
providing that all other aspects be conducted under the supervision or 
responsible charge of the environmental professional. Among the 
activities required to be conducted under the supervision or 
responsible charge of an environmental professional is the on-site 
visual inspection.
    It continues to be EPA's recommendation that visual inspections of 
the subject property and adjoining properties be conducted by an 
individual who meets the regulatory definition of an environmental 
professional. Although many other aspects of the all appropriate 
inquiries may be conducted sufficiently and accurately by individuals 
other than an environmental professional (e.g., a research associate or 
librarian may be well qualified to search government records, an 
attorney may be well qualified to conduct a search for an environmental 
lien), EPA believes that an environmental professional is best 
qualified to conduct a visual inspection and locate and interpret 
information regarding the physical and geological characteristics of 
the property as well as information on the location and condition of 
equipment and other resources located on the property. EPA recognizes 
that other individuals who do not meet the regulatory definition of an 
environmental professional, particularly when these individuals are 
conducting such activities under the supervision or responsible charge 
of an environmental professional, may have the required skills and 
knowledge to conduct an adequate on-site visual inspection. However, 
EPA believes that the professional judgment of an individual meeting 
the definition of an environmental professional is important to 
ensuring that all circumstances at the property that are indicative of 
environmental conditions and potential releases or threatened releases 
are properly identified and analyzed. An environmental professional is 
best qualified for identifying such situations and conditions and 
rendering a judgment or opinion regarding the potential existence of 
conditions indicative of environmental concerns.
    Although some commenters stated that EPA should not recommend that 
the visual inspection be conducted by a person meeting the definition 
of environmental professional, we point out that other commenters 
stated their support for our recommendation and some even stated that 
EPA should require in the regulation that the inspection be conducted 
by an environmental professional. We remain convinced that the on-site 
visual inspection of the property can be the single most important 
source of information regarding the environmental conditions of a 
property and that an individual meeting the regulatory definition of 
environmental professional is best able to interpret such observations 
of a property and ascertain the probability of conditions indicative of 
releases or threatened releases of hazardous substances being present 
at the property. In addition, we point out that the definition of 
environmental professional included in the final rule is less stringent 
than the proposed definition. Therefore, commenter concerns regarding 
any significant cost burdens associated with the environmental 
professional conducting the on-site visual inspection may be 
alleviated. We emphasize that EPA is recommending that the on-site 
visual inspection be conducted by an individual who meets the 
definition of environmental professional included in the final rule; it 
is not a requirement that the inspection be conducted by an 
environmental professional. The rule requires only that the inspection 
be conducted by an individual who is under the supervision or 
responsible charge of an individual meeting the definition of 
environmental professional. EPA agrees that if the final rule required 
that the on-site visual inspection be conducted by an individual 
meeting the definition of an environmental professional, the 
requirement could impose undue burdens in certain circumstances. In 
addition, there may be circumstances that in the best professional 
judgment of an environmental professional, another person under the 
responsible charge of the environmental professional may be more 
qualified to conduct the on-site inspection. To allow for flexibility 
and the application of professional judgment to specific circumstances, 
EPA continues to recommend that an environmental professional conduct 
the on-site inspection, but the Agency is not requiring that the 
inspection be conducted by an environmental professional.

U. What Are the Requirements for the Inclusion of Specialized Knowledge 
or Experience on the Part of the ``Defendant?''

    Because the conduct of all appropriate inquiries is one element of 
a legal defense to CERCLA liability, the statute refers to the 
prospective landowner, or the user of the all appropriate inquiries 
investigation, as the ``defendant.'' This ensures that any information 
or special knowledge held by the prospective landowner with regard to a 
property and its conditions be included in the pre-acquisition 
inquiries and be considered, along with all information collected 
during the conduct of all appropriate inquiries, when an environmental 
professional renders a judgment or opinion regarding conditions 
indicative of environmental conditions indicative of releases or 
potential releases of hazardous substances on, at, in, or to the 
subject property. It is recommended that this information be revealed 
to the parties conducting the all appropriate inquiries so that any 
specialized knowledge may be taken into account during the conduct of 
the required aspects of the all appropriate inquiries.
    Congress first added the innocent landowner defense to CERCLA in 
the Superfund Amendments and Reauthorization Act (SARA) of 1986. The 
Brownfields Amendments amended the innocent landowner defense and added 
to CERCLA the bona fide prospective purchaser and the contiguous 
property owner liability protections to CERCLA liability. The 1986 SARA 
amendments to CERCLA established that among other elements necessary 
for a defendant to successfully assert the innocent landowner defense, 
a defendant must demonstrate that he or she had, on or before the date 
of acquisition of the property in question, made all appropriate 
inquiries into previous ownership and uses of the property. Congress 
directed courts evaluating a defendant's showing of all appropriate 
inquiries to take into account, among other things, ``any specialized 
knowledge or experience on the part of the defendant.'' Nothing in 
today's rule changes the nature or intent of this requirement as it has 
existed in the statute since 1986.
Proposed Rule
    The proposed rule retained, as part of the federal all appropriate 
inquiries requirements, the consideration of any specialized knowledge 
or experience of the prospective landowner (or grantee if the grantee 
is or will be the property owner). The proposed rule did not extend 
this requirement beyond what already was required under CERCLA and 
established through case law. The proposed rule required that all 
appropriate inquiries include the consideration of specialized 
knowledge held by the prospective landowner or grantee with regard to 
the subject property, the area surrounding the subject property, the 
conditions of

[[Page 66098]]

adjoining properties, as well as other experience relative to the 
inquiries that may be applicable to identifying conditions indicative 
of releases or threatened releases at the subject property. The 
proposed rule also required that the results of the inquiries take into 
account any specialized knowledge related to the property, surrounding 
areas, and adjoining properties held by the persons responsible for 
undertaking the inquiries, including any specialized knowledge on the 
part of the environmental professional.
Public Comments
    EPA did not receive significant comment on the proposed 
requirements for considering the specialized knowledge or experience on 
the part of the defendant. A few commenters mentioned that the proposed 
requirements would result in the all appropriate inquiries 
investigations having to include interviews with all previous owners 
and occupants of the property. These commenters may have mistakenly 
interpreted the proposed provisions as requiring that the specialized 
knowledge of all current owners and occupants be considered as part of 
the all appropriate inquiries investigation. We clarify that only the 
specialized knowledge of the prospective landowner or grantee, and the 
environmental professional overseeing the conduct of the inquiries need 
be considered.
Final Rule
    The final rule retains the proposed provisions governing the 
consideration of specialized knowledge or experience on the part of the 
prospective landowner (or grantee) and the environmental professional 
conducting the all appropriate inquiries investigation on the part of 
the prospective landowner or grantee.
    As provided in the preamble to the proposed rule, existing case law 
related to the innocent landowner defense shows that courts appear to 
have interpreted the ``specialized knowledge'' factor to mean that the 
professional or personal experience of the defendant may be taken into 
account when analyzing whether the defendant made all appropriate 
inquiries. For example, in Foster v. United States, 922 F. Supp. 642 
(D. D.C. 1996), the owner of a property formerly owned by the General 
Services Administration and contaminated by, among other things, lead, 
mercury and PCBs, brought an action against the United States and 
District of Columbia, prior owners or operators of the site. The 
plaintiff was a principal in Long & Foster companies and purchased the 
property through a general partnership, and received it by quitclaim 
deed. The innocent landowner defense requires a property owner to 
demonstrate that when he or she purchased a property, he or she did not 
know and had no reason to know of contamination at, on, in, or to the 
property. The court rejected the plaintiff's claim to the innocent 
landowner defense based in part on the plaintiff's specialized 
knowledge. The court found that his specialized knowledge included his 
position at Long & Foster, which did hundreds of millions of dollars of 
commercial real estate transactions, and his position as a partner in 
at least 15 commercial real estate partnerships. The partnership was 
involved as an investor in a number of real estate transactions, some 
of which involved industrial or commercial or mixed-use property. The 
court ruled that ``it cannot be said that [the partnership] is a group 
unknowledgeable or inexperienced in commercial real estate 
transactions.'' Foster, 922 F. Supp. at 656.
    In American National Bank and Trust Co. of Chicago v. Harcros 
Chemicals, Inc., 1997 WL 281295 (N.D. Ill. 1997), the plaintiff was a 
company ``involved in brownfields development, purchasing 
environmentally distressed properties at a discount, cleaning them up, 
and selling them for a profit.'' American National Bank,1997 WL 281295 
at *4. As a counter-claim defendant, the company asserted it was an 
innocent landowner and therefore not liable pursuant to CERCLA. The 
court found that among other reasons the defense failed because the 
company possessed specialized knowledge. The court ruled that the 
company was an expert environmental firm and possessed knowledge that 
should have alerted it to the potential problems at the site.
    The final rule requires that the specialized knowledge of 
prospective landowners and the persons responsible for undertaking the 
all appropriate inquiries, including grantees, be taken into account 
when conducting the all appropriate inquiries for the purposes of 
identifying conditions indicative of releases or threatened releases at 
a property. However, as evidenced by the case law cited above, the 
determination of whether or not the all appropriate inquiries standard 
is met with regard to specialized knowledge (as well as in regard to 
all the criteria) remains within the discretion of the courts.

V. What Are the Requirements for the Relationship of the Purchase Price 
to the Value of the Property, if the Property Was Not Contaminated?

    Congress included in the statutory criteria for all appropriate 
inquiries a requirement to consider the relationship of the purchase 
price of a property to the value of the property, if the property was 
not contaminated. The criteria was retained in the criteria included in 
the Brownfields Amendments from the all appropriate inquiries 
provisions of the innocent landowner defense established by Congress in 
the 1986 amendments to CERCLA.
Proposed Rule
    The proposed rule required that the prospective landowner or 
grantee consider whether or not the purchase price of the property 
reflects the fair market value of the property, assuming that the 
property is not contaminated. The proposed rule required that the 
prospective landowner or grantee consider whether any differential 
between the purchase price and the value of the property is due to the 
presence of releases or threatened releases of hazardous substances at 
the property. There may be many reasons that the price paid for a 
particular property is not an accurate reflection of the fair market 
value. The all appropriate inquiries investigation need only include a 
consideration of whether a significant difference between the price 
paid for a property and the fair market value of a property, if the 
property were not contaminated, is an indication that the property may 
be contaminated.
Public Comments
    Many commenters asserted that an environmental professional should 
not be required to consider the relationship of the purchase price to 
the value of the property as part of the all appropriate inquiries 
investigation. Concerns raised by commenters include whether 
environmental professionals are qualified to assess the fair market 
value of a property. Some commenters thought that a requirement that 
prospective landowners or environmental professionals consider the 
relationship of the purchase price of property to the value of the 
property could violate federal or state laws governing property 
appraisals. Some commenters argued that the all appropriate inquiries 
investigation should not include the requirement to consider the 
relationship of the purchase price to the value of the property because 
the fair market value

[[Page 66099]]

is not always easily ascertainable. Other commenters requested that the 
preamble to the final rule include a recommendation that an appraisal 
be performed to determine a property's fair market value. In addition, 
commenters requested that in cases where an appraisal is conducted to 
determine the fair market value of a property, the rule should require 
that it meet the Uniform Standards of Professional Appraisal Practice. 
Still other commenters supported including the requirement in the final 
rule, but asked the Agency to require prospective landowners to obtain 
a property appraisal conducted by a trained or certified real estate 
appraiser. Some commenters stated that prospective landowners should 
not be required to divulge information on the price paid for a property 
to the environmental professional or other third party.
Final Rule
    The final rule retains the requirement to consider the relationship 
of the purchase price to the fair market value of the property, if the 
property were not contaminated. The requirement is part of the 
statutory criteria established by Congress and has been part of the 
statutory provisions governing all appropriate inquiries, within the 
innocent landowner defense, since 1986. Today's rule does not change 
the previously existing provision. As did the proposed rule, today's 
final rule allows for this criterion to be conducted by the prospective 
landowner or the grantee or undertaken as part of the inquiry by an 
environmental professional. If an environmental professional is not 
qualified to consider the relationship of the purchase price to the 
value of the property, the prospective landowner or grantee may 
undertake the task or hire another third party to make the comparison 
of price and fair market value and consider whether any differential is 
due to potential environmental contamination.
    If the relationship of the purchase price to the fair market value 
of the property, assuming the property is not contaminated, is 
determined by the prospective landowner or grantee, or other agent who 
is not under the supervision or responsible charge of the environmental 
professional, the final rule allows for, but does not require, the 
information that is collected and the determination made by or on the 
behalf of the prospective landowner to be provided to the environmental 
professional. If the information is provided to the environmental 
professional, he or she can then make use of such information during 
the conduct of the all appropriate inquiries and when rendering 
conclusions or opinions regarding the environmental conditions of the 
property. If the information is not provided to the environmental 
professional and the environmental professional determines that the 
lack of such information affects his or her ability to identify 
conditions indicative of releases or threatened releases of hazardous 
substances on, at, in, or to the property, then the environmental 
professional should identify the lack of information as a data gap and 
comment on its significance in the written report for the all 
appropriate inquiries investigation.
    The rule does not require that a real estate appraisal be conducted 
to achieve compliance with this criterion. Although some commenters 
requested that the final rule require that a formal appraisal be 
conducted and we acknowledge that there may be potential value in 
conducting an appraisal, we determined that a formal appraisal is not 
necessary for the prospective landowner or grantee to make a general 
determination of whether the price paid for a property reflects its 
fair market value. In the case of many property transactions, a formal 
appraisal may be conducted for other purposes (e.g., to establish the 
value of the property for the purposes of establishing the conditions 
of a mortgage or to provide information of relevance where a windfall 
lien may be filed). In cases where the results of a formal property 
appraisal are available, the appraisal results may serve as an 
excellent source of information on the fair market value of the 
property.
    In cases where the results of a formal appraisal are not available, 
the determination of fair market value may be made by comparing the 
price paid for a particular property to prices paid for similar 
properties located in the same vicinity as the subject property, or by 
consulting a real estate expert familiar with properties in the general 
locality and who may be able to provide a comparability analysis. The 
objective is not to ascertain the exact value of the property, but to 
determine whether or not the purchase price paid for the property 
generally is reflective of its fair market value. Significant 
differences in the purchase price and fair market value of a property 
should be noted and the reasons for any differences also should be 
noted.
    Although some commenters requested that EPA be more explicit in the 
final rule in requiring that the comparison of the purchase price to 
the fair market value of the property be conducted by the prospective 
landowner or grantee (and not the environmental professional), we 
believe that the decision of who conducts the comparison may be best 
left up to the judgment of the individual prospective landowner (or 
grantee) and environmental professional. The final rule provides in 
Sec.  312.22 that the comparison of the purchase price to the fair 
market value of the property, if it were not contaminated, can fall 
outside the inquiries conducted by the environmental professional. The 
criteria to consider the relationship of the purchase price to the fair 
market value of the property, if it was not contaminated is not 
included as part of the requirements governing the ``results of an 
inquiry by an environmental professional'' (Sec.  312.21). Therefore, 
the requirement may be conducted by the prospective landowner or 
grantee, his or her attorney or agent, or the environmental 
professional. Given that a prospective landowner or grantee can conduct 
the comparison of the purchase price and the fair market value of the 
property or hire another agent other than the environmental 
professional to conduct this task, we conclude that commenter concerns 
regarding the prospective landowner (or grantee) having to divulge the 
price paid for a property to the environmental professional are 
unfounded.

W. What Are the Requirements for Commonly Known or Reasonably 
Ascertainable Information About the Property?

    Commonly known or reasonably ascertainable information includes 
information about a property that generally is known to the public 
within the community where the property is located and can be easily 
sought and found from individuals familiar with the property or from 
easily attainable public sources of information. As mentioned above, 
the Brownfields Amendments to CERCLA amended the innocent landowner 
defense previously added to CERCLA in 1986. In addition, the 
Brownfields Amendments added to CERCLA the bona fide prospective 
purchaser and the contiguous property owner liability protections. The 
1986 amendments to CERCLA established, that among other elements 
necessary for a defendant to successfully assert the innocent landowner 
defense, a defendant must take into account commonly known or 
reasonably ascertainable information about the property. Congress 
retained this criterion as part of the all appropriate inquiries 
requirements included in the Brownfields Amendments. Today's rule does 
not change the nature or intent of

[[Page 66100]]

this requirement as it has existed in the statute since 1986.
Proposed Rule
    The proposed rule required that all appropriate inquiries include 
the collection and consideration of commonly known information about 
the potential environmental conditions at a property. The proposed rule 
required both the prospective landowner or grantee and the 
environmental professional obtain and consider commonly known or 
reasonably ascertainable information during the conduct of the all 
appropriate inquiries investigation. The proposed rule also provided a 
list of potential sources of such information.
Public Comments
    A few commenters expressed concern that the requirement to consider 
commonly known or reasonably ascertainable information about a property 
renders the all appropriate inquiries requirements too vague and open-
ended. Commenters stated that the requirement is broad and may result 
in the need to interview a large number of people and consult a wide 
variety of sources of information. One commenter expressed a preference 
that the federal standards include only a checklist of specific sources 
of information that must be consulted. A few commenters thought the 
list of potential sources of commonly known information included in the 
proposed rule was too broad.
Final Rule
    The final rule retains the proposed provisions requiring that 
prospective landowners and environmental professionals consider 
commonly known or reasonably ascertainable information about a property 
when conducting all appropriate inquiries. This information may be 
ascertained from the owner or occupant of a property, members of the 
local community, including owners or occupants of neighboring 
properties to the subject property, local or state government 
officials, local media sources, and local libraries and historical 
societies. In many cases, this information may be incidental to other 
information collected during the inquiries, and separate or distinct 
efforts to collect the information may not be necessary. Information 
about a property, including its ownership and uses, that is commonly 
known or reasonably ascertainable within the community or neighborhood 
in which a property is located may be valuable to identifying 
conditions indicative of releases or threatened releases at the subject 
property. Such information, if not collected during the course of 
collecting other information necessary to complete the all appropriate 
inquiries investigation, may be obtained by interviewing community 
officials and other residents of the locality. For example, neighboring 
property owners and local community members may have information 
regarding undocumented uses of a property during periods when the 
property was idle or abandoned. Local community sources may be good 
(i.e., reasonably ascertainable) sources of commonly known information 
on uses of a property and activities conducted at a property, 
particularly in the case of abandoned properties.
    The collection and use of commonly known information about a 
property may be done in connection with the collection of all other 
required information for the purposes of achieving the objectives and 
performance factors contained in Sec.  312.20. Persons undertaking the 
all appropriate inquiries may collect commonly known or reasonably 
ascertainable information on the subject property from a variety of 
sources, including sources located in the community in which the 
property is located. The opinion provided by an environmental 
professional regarding the environmental conditions of a property and 
included in the all appropriate inquiries report should be based upon a 
balance of all information collected, including commonly known or 
reasonably ascertainable information about the property. The potential 
sources of commonly known or reasonably ascertainable information 
provided in the proposed rule and retained in the final rule are 
provided as suggestions for where such information may be found and the 
list provided is not meant as an exhaustive list of sources that must 
be consulted. Commonly known information may be collected from other 
sources and may be most easily collected during the conduct of other 
aspects of the all appropriate inquiries investigation (e.g., 
interviews, reviews of historical sources of information, reviews of 
governmental records). The requirement is not meant to require 
exhaustive data collection efforts, as some commenters asserted. The 
intent of the requirement is to establish that a prospective landowner 
or grantee and an environmental professional conducting all appropriate 
inquiries on his or her behalf must make efforts to collect and 
consider information about a property that is commonly known within the 
local community or that can be reasonably ascertained.
    There is some case law, related to the innocent landowner defense, 
that provides guidance on how a court may rule with regard to the need 
to consider commonly known or reasonably ascertainable information 
about the property. For example, in Wickland Oil Terminals v. Asarco, 
Inc., 1988 WL 167247 (N.D. Cal. 1988), the court noted that Wickland 
was aware of potential water quality problems at the subject property 
due to large piles of mining slag stored at the property, even though 
Wickland argued that previous owners withheld such information, because 
the information was available from other sources consulted by Wickland 
prior to purchasing the property, including the Regional Water Quality 
Control Board and a consulting firm hired by Wickland. Such information 
was commonly known by local sources and therefore should have been 
considered by Wickland during its conduct of all appropriate inquiries.
    In Hemingway Transport Inc. v. Kahn, 174 FR 148 (Bankr. D. Mass. 
1994), the court ruled against an innocent landowner claim because it 
found ``that had [the defendants] exerted a modicum of effort they may 
easily have discovered information that at a minimum would have 
compelled them to inspect the property further * * * the [defendants] 
could have taken a few significant steps, literally, to minimize their 
liability and discover information about the property * * *'' The court 
noted that one action the defendants should have taken to collect 
available information about the property included phone calls to city 
officials to inquire about conditions at the property.

X. What Are the 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?''

Proposed Rule
    The proposed rule required that the inquiries conducted by a 
prospective landowner (or grantee) and environmental professional take 
into account all the information collected during the conduct of the 
all appropriate inquiries in considering the degree of obviousness of 
and ability to detect the presence of a release or threatened release 
of hazardous substances at, in, on, or to a property. In addition, the 
proposed rule required the environmental professional to provide an 
opinion regarding additional appropriate investigation, if any may be

[[Page 66101]]

necessary in his or her opinion to determine the environmental 
conditions of the property.
Public Comments
    A few commenters asserted that the proposed requirements regarding 
the degree of obviousness of the presence or likely presence of 
contamination at the property, and the ability to detect the 
contamination by appropriate inquiry were too open-ended. Also, a few 
commenters suggested that the final rule should include requirements to 
conduct sampling and analysis to meet the ``ability to detect 
contamination by appropriate investigation'' portion of the statutory 
criteria. However, commenters overwhelmingly agreed that the standards 
for all appropriate inquiries should not require sampling and analysis.
Final Rule
    The final rule requires that persons conducting all appropriate 
inquiries consider all the information collected during the conduct of 
the inquiries in totality to ascertain the potential presence of a 
release or threatened release at the property. Persons conducting all 
appropriate inquiries, following the collection of all required 
information, must assess whether or not an obvious conclusion may be 
drawn that there are conditions indicative of a release or threatened 
release of hazardous substances (or other pollutants, contaminants, 
petroleum or petroleum products, and controlled substances) on, at, in, 
or to the property. In addition, the rule requires parties to consider 
whether or not the totality of information collected prior to acquiring 
the property indicates that the parties should be able to detect a 
release or threatened release on, at, in, or to the property. The final 
rule also retains the proposed requirement that the environmental 
professional include as part of the results of his or her inquiry an 
opinion regarding additional appropriate investigation, if any may be 
necessary.
    We interpret the statutory criterion to require consideration of 
information already obtained during the conduct of all appropriate 
inquiries investigation and not as a requirement to collect additional 
information. We do not agree with commenters who asserted that the 
criterion is open-ended. In fact, we see this criterion as providing 
direction on how all of the information collected while carrying out 
the other criteria and regulatory requirements must be viewed 
comprehensively. After collecting and considering all the information 
required to comply with the rule's objectives and performance 
standards, all the information should be considered in total to 
determine whether or not there are indications of releases or 
threatened releases of hazardous substances on, at, in, or to the 
property. In addition, the environmental professional should provide an 
opinion regarding whether or not additional investigation is necessary 
to detect potential contamination at the site, if in his or her opinion 
there are conditions indicative of releases or threatened releases of 
hazardous substances.
    The previous innocent landowner defense (added to CERCLA in 1986) 
required a court to consider the degree of obviousness of the presence 
or likely presence of contamination at a property, and the ability of 
the defendant (i.e., the landowner) to detect the contamination by 
appropriate investigation. Nothing in today's rule changes the nature 
or intent of this requirement as it has existed in the statute since 
1986.
    Case law relevant to this criterion indicates that defendants may 
not be able to claim an innocent landowner defense if a preponderance 
of evidence available to a prospective landowner prior to acquiring the 
property indicates that the defendant should have concluded that there 
is a high likelihood of contamination at the site. In some cases (e.g., 
Hemingway Transport Inc. v. Kahn, 174 F.R. 148 (Bankr. D. Mass. 1994), 
and Foster v. United States, 922 F. Supp. 642 (D.D.C. 1996), courts 
have ruled that if a defendant had done a bit more visual inspection or 
further investigation, based upon information available to the 
defendant prior to acquiring the property, it would have been obvious 
that the property was contaminated. In Foster v. United States, the 
court determined that the innocent landowner defense was not available 
based in part on the fact that the partnership presumed the site was 
free of contamination based upon cursory visual inspections despite 
evidence in the record that, at the time of the sale, the soil was 
visibly stained by PCB-contaminated oil. In addition, although the 
property was located in a run-down industrial area, the defendant did 
no investigation into the environmental conditions at the site prior to 
acquiring the property.
    EPA also notes that in U.S. v. Domenic Lombardi Realty, Inc., 290 
F. Supp. 2d 198, 211 (D.R.I. 2003), the court held that the defendant 
did not qualify for the innocent landowner defense. The defendant could 
not show he had ``no reason to know'' of contamination at the property 
or that he had performed all appropriate inquiries in accordance with 
``good commercial or customary practices.'' The court also found that 
the defendant had not performed even a minimal environmental assessment 
of the site despite having learned that the property had been used as 
an automobile scrapyard. The court noted the distinction between Phase 
I and Phase II environmental assessments and credited the testimony of 
the United States' expert who concluded that, under the circumstances 
of this case, the defendant should have conducted a Phase II 
assessment. Id. at 203-04.
    With regard to the conduct of sampling and analysis, today's final 
rule does not require sampling and analysis as part of the all 
appropriate inquiries investigation. However, sampling and analysis may 
be valuable in determining the possible presence and extent of 
potential contamination at a property. In addition, the fact that the 
all appropriate inquiry standards do not require sampling and analysis 
does not prevent a court from concluding that, under the circumstances 
of a particular case, sampling and analysis should have been conducted 
to meet ``the degree of obviousness of the presence or likely presence 
of contamination at the property, and the ability to detect the 
contamination by appropriate investigation'' criterion and obtain 
protection from CERCLA liability. Prospective landowners should keep in 
mind that the conduct of all appropriate inquiries prior to acquiring a 
property is only one requirement that he or she must comply with to 
assert protection from CERCLA liability. The statute requires that 
persons, after acquiring a property, comply with continuing obligations 
to take reasonable steps to stop on-going releases at the property, 
prevent any threatened future releases, and prevent or limit any human, 
environmental, or natural resource exposure to any previously released 
hazardous substances (these criteria are summarized in detail in 
section II.D. of this preamble). In certain instances, depending upon 
site-specific circumstances and the totality of the information 
collected during the all appropriate inquiries prior to the property 
acquisition, it may be necessary to conduct sampling and analysis, 
either pre-or post-acquisition, to fully understand the conditions at a 
property, and fully comply with the statutory requirements for the 
CERCLA liability protections. In addition, sampling and analysis may 
help explain existing data gaps. Prospective landowners should be 
mindful of all the statutory requirements for obtaining the CERCLA 
liability protections when

[[Page 66102]]

considering whether or not to conduct sampling and analysis prior to or 
after acquiring a property. Today's final regulation does not require 
that sampling and analysis be conducted as part of the all appropriate 
inquiries investigation.

V. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866 (58 FR 51735), the Agency must 
determine whether this regulatory action is ``significant'' and 
therefore subject to formal review by the Office of Management and 
Budget (OMB) and to the requirements of the Executive Order. The 
Executive Order defines ``significant regulatory action'' as one that 
is likely to result in a rule that may: (1) Have an annual effect on 
the economy of $100 million or more or adversely affect in a material 
way the economy, a sector of the economy, productivity, competition, 
jobs, the environment, public health or safety, or state, local, or 
tribal governments or communities; (2) create a serious inconsistency 
or otherwise interfere with an action taken or planned by another 
agency; (3) materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or (4) raise novel legal or policy issues arising 
out of legal mandates, the President's priorities, or the principles 
set forth in the Executive Order.
    Pursuant to the terms of Executive Order 12866, it has been 
determined that today's final rule is a ``significant regulatory 
action'' because this rule contains novel policy issues, although it is 
not economically significant. As such, this action was submitted to OMB 
for review. Changes made in response to OMB suggestions or 
recommendations are documented in the docket for today's rule.
    To estimate the economic effects of today's final rule, we 
conducted an evaluation of the potential effects of this rule on the 
universe of prospective landowners who may chose to comply with the 
provisions of today's final rule to obtain protection from CERCLA 
liability for potential releases and threatened releases of hazardous 
substances that may exist at properties they intend to purchase. The 
results of this analysis are included in the document titled ``Economic 
Impact Analysis for the Final All Appropriate Inquiries Regulation,'' 
which is included in the docket for today's final rule. Based upon the 
results of the Economic Impact Analysis (EIA), EPA has determined that 
this final rule will have an annual effect on the economy of less than 
$100 million. The annualized benefits associated with the final rule 
have not been monetized but are identified and summarized in the EIA 
for the all appropriate inquiries rule.\2\
---------------------------------------------------------------------------

    \2\ The document titled ``The Economic Impact Analysis for the 
Final All Appropriate Inquiries Regulation'' includes (1) the EIA 
conducted for the proposed rulemaking and (2) the Addendum to the 
EIA. The cost estimates presented in the Addendum are the estimated 
costs of the final all appropriate inquiries regulation.
---------------------------------------------------------------------------

1. Methodology
    The value of any regulatory action is traditionally measured by the 
net change in social welfare that it generates. The EIA conducted in 
support of today's rule examines both costs and qualitative benefits in 
an effort to assess the overall net change in social welfare. The 
primary focus of the EIA document is on compliance costs and economic 
impacts. Below, EPA summarizes the analytical methodology and findings 
for the all appropriate inquiries rule. The information presented is 
derived from the EIA.
    The all appropriate inquiries regulation potentially will apply to 
most commercial property transactions. The requirements will be 
applicable to any public or private party, who may potentially claim 
protection from CERCLA liability as an innocent landowner, a bona fide 
prospective purchaser, or a contiguous property owner. However, the 
conduct of all appropriate inquiries, also known as environmental due 
diligence or Phase I Environmental Site Assessment, is not new to the 
commercial property market. Prior to the Brownfields Amendments to 
CERCLA, commercial property transactions often included an assessment 
of the environmental conditions at properties prior to the closing of 
any real estate transaction whereby ownership was transferred for the 
purposes of confirming the conditions at the property or to establish 
an innocent landowner defense should environmental contamination be 
discovered after the property was acquired. The process most 
prevalently used for conducting all appropriate inquiries, or 
environmental site assessments, is the process developed by ASTM 
International (formerly known as the American Society for Testing and 
Materials) and entitled ``E1527, Standard Practice for Environmental 
Site Assessments: Phase I Environmental Site Assessment Process.'' In 
addition, some properties, particularly in cases where the subject 
property is assumed not to be contaminated or was never used for 
industrial or commercial purposes, were assessed using a less rigorous 
process developed by ASTM International, sometimes referred to as a 
``transaction screen'' and entitled ``E1528, Standard Practice for 
Environmental Site Assessments: Transaction Screen Process.''
    Our first step in assessing the economic impacts of the rule was to 
establish a baseline to represent the relevant aspects to the 
commercial real estate market in the absence of any changes in 
regulations. Because under existing conditions almost all commercial 
property transactions are accompanied by either an environmental site 
assessment (ESA) conducted in accordance with ASTM E1527-2000 or a 
transaction screen as specified in ASTM E1528, it was assumed these 
practices would continue even in the absence of the all appropriate 
inquiries regulation. The numbers of each type of assessment were 
estimated on the basis of industry data for recent years, with recent 
growth rates in transactions assumed to continue for the 10-year period 
covered by the EIA. An adjustment in the relative numbers of ESAs and 
transaction screens was made to account for the fact that, under the 
rule, an ESA will provide more certain protection from liability. This 
adjustment was made by comparing shifts between the two procedures that 
occurred when the Brownfields Amendments established the ASTM E1527-
2000 standard as the interim standard for all appropriate inquiries, 
and thus as one requirement for qualifying as an innocent landowner, 
bona fide prospective purchaser, or contiguous property owner.
    We then considered the requirements included in the final rule and 
compared them to the requirements for environmental site assessments 
conducted under the ASTM E1527-2000 and ASTM E1528 standards.
    When compared to the ASTM E1527-2000 standard (i.e., the baseline 
standard), today's final rule is expected to result in a reduced burden 
for the conduct of interviews in those cases where the subject property 
is abandoned; increased burden in those cases where past owners or 
occupants need to be interviewed; increased burden associated with 
documenting recorded environmental cleanup liens; increased burden for 
documenting the reasons for the price and fair market value of a 
property in those cases where the purchase price paid for the subject 
property is significantly below the fair

[[Page 66103]]

market value of the property; and increased burden for recording 
information about the degree of obviousness of contamination at a 
property.
    To estimate the changes in costs resulting from the rule, we 
developed a costing model. This model estimates the total costs of 
conducting site assessments as the product of costs per assessment, 
numbers of assessments per year, and the number of years in the 
analysis. The costs per assessment, in turn, are calculated by dividing 
each assessment into individual labor activities, estimating the labor 
time associated with each, and assigning a per-hour labor cost to each 
activity on the basis of the labor category most appropriate to that 
activity. Labor times and categories are assumed to depend on the size 
and type of property being assessed, with the nationwide distribution 
of properties based on data from industry on environmental sites 
assessments and brownfield sites.\3\ The estimates and assignments of 
categories are made based on the experience of professionals who have 
been involved in large numbers of site assessments, and who are 
therefore skilled in cost estimation for the relevant activities. Other 
costs, such as reproduction and the purchase of data, are added to the 
labor costs to form the estimates of total costs per assessment. These 
total costs, stratified by size and type of property, are then 
multiplied by estimated numbers of assessments of each size and type to 
generate our estimates of total annual costs. The model was tested by 
comparing its results to industry-wide estimates of average price of 
conducting assessments under baseline conditions, and generally found 
to agree. The difference between the estimated cost to comply with the 
final rule and the estimated cost in the baseline constitutes our 
estimate of the incremental regulatory costs.
---------------------------------------------------------------------------

    \3\ The distribution of abandoned properties and properties with 
known owners, modeled as a range, is based on an estimate of vacant 
lands in urban areas and an estimate of abandoned Superfund sites.
---------------------------------------------------------------------------

    The EIA provides a qualitative assessment of the benefits of the 
all appropriate inquiries rule. The benefits discussed are those that 
may be attributed to an increased level of certainty with regard to 
CERCLA liability provided to prospective purchasers of potentially 
contaminated properties, including brownfields, who comply with the 
provisions of the rule and the other statutory provisions associated 
with the liability protections. The basic premise for associating 
certain benefits to the rule is the expectation that the level of 
certainty provided by the liability protections may result in increased 
brownfields property transactions. However, it is difficult to predict 
how many additional transactions may occur that involve brownfields 
properties in direct response to the increased certainty of the 
liability protections. It also is difficult to obtain data on changes 
in behaviors and practices of prospective landowners in response to the 
liability protections. Therefore, EPA made no attempt to quantify 
potential benefits or compare the benefits to estimated incremental 
costs.
    The Agency believes that increasing property transactions involving 
brownfields and other contaminated and potentially contaminated 
properties and improving information about environmental conditions at 
these properties may provide additional indirect benefits such as 
increased numbers of cleanups, reduced use of greenfields, potential 
increases in property values, and potential increases in quality of 
life measures (e.g., decreases in urban blight, reductions in traffic, 
congestion, and reduced pollution due to mobile source emissions). 
However, as stated above, the benefits of the rule are considered only 
qualitatively, due to the difficulty of predicting how many additional 
brownfields and contaminated property transactions may occur in 
response to the increased certainty of liability protections provided 
by the rule, as well as the difficulty in getting data on changes in 
behaviors and practices in response to the availability of the 
liability protections. EPA is confident that the new liability 
protections afforded to prospective landowners, if they comply with the 
all appropriate inquiries provisions, will result in increased 
benefits. EPA is not able to quantify, with any significant level of 
confidence, the exact proportion of the benefits attributed only to the 
availability of the liability protections and the all appropriate 
inquiries regulations. For these reasons, the costs and benefits could 
not be directly compared.
2. Summary of Regulatory Costs in Proposed Rule
    For a given property, the costs of compliance with the all 
appropriate inquiries rule relative to the baseline depend on whether 
that property would have been assessed, in absence of the all 
appropriate inquiries regulation, with an ASTM E1527-2000 assessment 
process or with the simpler ASTM E1528 transaction screen. EPA 
estimated the average incremental cost of the proposed rule relative to 
conducting an ASTM E1527-2000 to be between $41 and $47. For the small 
percentage of cases for which a transaction screen would have been 
preferred to the ASTM E1527-2000 in the baseline, but which would, as a 
result of the proposed rule, require an assessment in compliance with 
the all appropriate inquiries rule, the average incremental cost was 
estimated to be between $1,448 and $1,454. We estimated that 
approximately 97 percent of property transactions will bear only the 
incremental cost of the rule relative to the ASTM E1527-2000 process. 
Therefore, the weighted average incremental cost of the proposed rule, 
per transaction, was estimated to be fairly low, between $84 and $89.
3. Public Comments on EIA for Proposed Rule
    EPA received a number of public comments on the EIA conducted to 
assess the potential costs and impacts of the proposed rule. We 
summarized the public comments received related to the cost and 
economic impacts in the document titled ``Addendum to Economic Impact 
Analysis for the Final All Appropriate Inquiries Regulation'' (Addendum 
to the EIA). This document is included in the docket for today's final 
rule. The Addendum to the EIA also summarizes EPA's responses to the 
comments received that addressed the estimated costs and economic 
impacts.
    Many commenters generally agreed with EPA's conclusion that the 
average incremental cost increase per transaction associated with the 
requirements of the proposed rule would be minimal. Some commenters 
mentioned that the EIA conducted for the proposed rule underestimated 
the incremental costs associated with the proposed rule. However, only 
a few commenters provided an explanation as to why they thought our 
cost estimates were low or provided information regarding which 
particular activities would result in an incremental increase in the 
activities and costs associated with conducting an environmental site 
assessment, if conducted in compliance with the requirements of the 
proposed rule. Most commenters did not provide specific reasons for 
their claims of cost increases over the ASTM E1527-2000 standard. A few 
commenters suggested that the EIA for the proposed rule underestimated 
the level of effort necessary for locating and interviewing past owners 
or occupants, with one commenter providing an estimated level of effort 
of one to three hours for this task.

[[Page 66104]]

4. Estimate of Costs Associated With the Final Rule
    EPA made one revision to the analysis of cost impacts associated 
with the requirements of the proposed and final rule in response to 
specific issues raised by commenters. EPA agrees with the commenters 
who asserted that locating past owners or occupants of a property may 
be more time consuming than locating the current owners or occupants, 
as was assumed in the analysis of costs conducted for the proposed 
rule. Locating past owners or occupants could require as little as one 
5-minute phone call (e.g., if the current owner has the contact 
information for the past owner) or it could require multiple phone 
calls that could take in excess of one hour. For the purpose of 
estimating the cost under the final rule, EPA estimates the incremental 
burden for locating past owners or occupants to be, on average, 0.5 
hours per interview regardless of the property type or size. EPA did 
not account for this incremental burden in our analysis of the costs 
associated with the proposed rule. EPA also recognizes that in some 
cases the environmental professional will need to complete the full 
interview with the current owner before determining that it is 
necessary to interview a past owner. In other words, the environmental 
professional may need to complete the interview with the current owner, 
and then perform a more focused interview of a past owner to fill data 
gaps. EPA estimates that the incremental burden for interviewing past 
owners or occupants will be 0.5 hours for undeveloped and residential 
properties, one hour for commercial and industrial properties (of all 
sizes except large industrial), and 1.5 hours for large industrial 
properties. Therefore, EPA estimates that the total incremental level 
of effort for locating and interviewing past property owners or 
occupants will range from one hour to two hours depending on the 
property type or size.
    The additional incremental hour burden, however, will not be 
incurred in the case of every site assessment. EPA expects that the 
interview with past owners or occupants will be conducted only for 
properties with a higher than average owner or occupant turnover rate. 
To derive the number of potentially affected properties, we assume that 
the environmental professional will interview only the current property 
owner if the owner was in the possession of the subject property for 
more than two years. We assume that after two years of owning a 
property, the current property owner should have a reasonably good 
knowledge of its condition. EPA estimates that 19 percent of Phase I 
ESAs conducted in a given year are conducted on properties that were 
sold at least once in the previous two years (for a detailed 
explanation on the derivation of this estimate, see the Addendum to the 
EIA). Using the assumption that 15 percent of all properties are 
abandoned properties (see Section 5.6.5.2 of EIA) which would not be 
affected by the requirement to interview past owners or occupants, we 
revised our original cost estimate to account for non-abandoned 
properties that were sold over the past two years. Therefore, for the 
purpose of our revised cost analysis, we estimate that 16 percent of 
properties will require an additional interview with past owners or 
occupants.
    Except for the increase in the level of effort for the interview 
task for non-abandoned properties, all other parameters used in 
modeling our cost estimates are the same as presented in the EIA 
conducted for the proposed rule. To derive the incremental average cost 
per transaction and the total annual cost of the final rule, we 
employed the methodology explained in detailed in Chapters 7 and 8 of 
the EIA conducted for the proposed rule. Based on our analysis, the 
cost of a Phase I ESA under the final regulation will increase, on 
average, between $52 and $58. The estimated average cost for a Phase I 
ESA thus will range between $2,185 and $2,190.\4\
---------------------------------------------------------------------------

    \4\ We assumed that the environmental professionals will need to 
complete the full interview with the current owner before conducting 
an interview with the past owners or occupants. To the extent that 
this may not always be the case, the average incremental cost (and 
by extension, the average cost for an AAI Phase I ESA) is 
overestimated.
---------------------------------------------------------------------------

    Using our revised incremental cost estimate for conducting 
interviews of past owners or occupants, we revised our estimated total 
annual cost of the final rule and our incremental total annual cost 
estimate. Our revised total annual cost estimate for all activities 
included in the all appropriate inquiries investigations conducted 
under the final rule is between $693.5 and $695.3 million (calculated 
using a discount rate of three percent). Our revised estimate of the 
incremental total annual cost of the final rule is between $29.7 
million and $31.4 million. A more detailed explanation of our revised 
cost estimates, including an additional sensitivity analysis performed 
in response to the public comments, is included in the document titled 
``Addendum to the Economic Impact Analysis for the Final All 
Appropriate Inquiries Regulation.'' This document is in the public 
docket for today's final rule.

B. Paperwork Reduction Act

    The information collection requirements contained in this final 
rule were submitted for approval to the Office of Management and Budget 
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The 
information collection requirements are not enforceable until OMB 
approves them. The Information Collection Request (ICR) document 
prepared by EPA has been assigned EPA ICR Number 2144.02.
    Under the PRA, EPA is required to estimate the notification, 
reporting and recordkeeping costs and burdens associated with the 
requirements specified in today's rule. Today's rule will require 
persons wanting to assert one of the liability protections under CERCLA 
to conduct some activities that go beyond current customary and usual 
business practices (i.e., beyond ASTM E1527-2000) and therefore will 
impose an information collection burden under the provisions of the 
Paperwork Reduction Act. The information collection activities are 
associated with the activities mandated in section 101 (35)(B) of 
CERCLA for those persons wanting to claim protection from CERCLA 
liability. None of the information collection burdens associated with 
the provisions of today's rule include requirements to submit the 
collected information to EPA or any other government agency. 
Information collected by persons affected by today's rule may be useful 
to such persons if their potential liability under CERCLA for the 
release or threatened release of a hazardous substance is challenged in 
a court.
    The activities associated with today's rule that go beyond current 
customary and usual business practices include interviews with 
neighboring property owners and/or occupants in those cases where the 
subject property is abandoned, documentation of all environmental 
cleanup liens in the Phase I Environmental Site Assessment report, 
discussion of the relationship of purchase price to value of the 
property in the report, and consideration and discussion of whether 
additional environmental investigation is warranted. Paperwork burdens 
are estimated to be 546,179 hours annually, with a total cost of 
$29,583,206 annually. The estimated average burden hours per response 
is estimated to be approximately one hour (or 25 hours per response, 
assuming a transition from a transaction screen). The estimated average 
cost burden per response is estimated to be either $67 or $1,479,

[[Page 66105]]

depending on whether, under baseline conditions, an ASTM E1527-2000 
process or a transaction screen (ASTM E1528) would have been used.
    Under the Paperwork Reduction Act, ``burden'' means the total time, 
effort, or financial resources expended by persons to generate, 
maintain, retain, or disclose or provide information to or for a 
Federal agency. This includes the time needed to review instructions; 
develop, acquire, install, and utilize technology and systems for the 
purposes of collecting, validating, and verifying information, 
processing and maintaining information, and disclosing and providing 
information; adjust the existing ways to comply with any previously 
applicable instructions and requirements; train personnel to be able to 
respond to a collection of information; search data sources; complete 
and review the collection of information; and transmit or otherwise 
disclose the information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9. This ICR is approved 
by OMB, and the Agency will publish a technical amendment to 40 CFR 
part 9 in the Federal Register to display the OMB control number for 
the approved information collection requirements contained in this 
final rule.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 
601 et. seq., generally requires an agency to prepare a regulatory 
flexibility analysis of any rule subject to notice and comment 
rulemaking requirements under the Administrative Procedure Act or any 
other statute, unless the agency certifies that the rule will not have 
a significant economic impact on a substantial number of small 
entities. Small entities include small businesses, small organizations, 
and small governmental jurisdictions.
    For the purposes of assessing the impacts of today's rule on small 
entities, small entity is defined as: (1) A small business that is 
defined by the Small Business Administration by category of business 
using the North American Industrial Classification System (NAICS) and 
codified at 13 CFR 121.201; (2) a small governmental jurisdiction that 
is a government of a city, county, town, school district or special 
district with a population of less than 50,000; and (3) a small 
organization that is any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.
    Since all non-residential property transactions could be affected 
by today's rule, if it is promulgated, large numbers of small entities 
could be affected to some degree. However, we estimate that the 
effects, on the whole, will not be significant for small entities. We 
estimate that, for the majority of small entities, the average 
incremental cost of today's rule relative to conducting an ASTM E1527-
2000 Phase I Environmental Site Assessment will be between $52 and $58. 
When we annualize the incremental cost of $58 per property transaction 
over ten years at a seven percent discount rate, we estimate that the 
average annual cost increase per establishment per property transaction 
will be $8. Thus, the cost impact to small entities is estimated to not 
be significant. A more detailed summary of our analysis of the 
potential impacts of today's rule to small entities is included in 
``Economic Impacts Analysis of the Final All Appropriate Inquiries 
Regulation.'' This document is included in the docket for today's rule.
    After considering the economic impacts of today's final rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. We estimate 
that, on average, 266,000 small entities may purchase commercial real 
estate in any given year and therefore could potentially be impacted by 
today's final rule. Though large numbers of small entities could be 
affected to some degree, we estimated that the effects, on the whole, 
would not be significant for small entities. We estimate that, for the 
majority of small entities, the average incremental cost of today's 
rule relative to conducting an ASTM E1527-2000 will be between $52 and 
$58. For the small percentage of cases for which a transaction screen 
would have been preferred to the ASTM E1527-2000 in the baseline, but 
which now will require an assessment in compliance with the rule, the 
average incremental cost of conducting an environmental site assessment 
will be between $1,459 and $1,465. When we annualize the incremental 
cost per property transaction over ten years at a seven percent 
discount rate, we estimate that for the majority of small entities the 
average annual cost increase per establishment per property transaction 
will be approximately $8. For the small percentage of entities 
transitioning from transaction screens to the all appropriate inquiries 
requirements of the final rule, the average annual cost increase per 
establishment per property transaction will be $209.\5\
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    \5\ For a very small percentage of entities transitioning from 
transaction screens to the all appropriate inquiries requirements, 
the maximum increase per establishment per property transaction is 
estimated to be approximately $2,845. When we annualize this 
incremental cost per property transaction over ten years at a seven 
percent discount rate, we estimate that the maximum annual cost 
increase per establishment per property transaction will be $405. We 
estimate that approximately one fifth of one percent of the 
properties transitioning from a transaction screen to a Phase I ESA 
will have an impact of this magnitude each year.
---------------------------------------------------------------------------

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
must prepare a written statement, including a cost-benefit analysis, 
for proposed and final rules with ``Federal mandates'' that may result 
in expenditures to State, local, and tribal governments, in the 
aggregate, or to the private sector, of $100 million or more in any one 
year. Before promulgating an EPA rule for which a written statement is 
needed, section 205 of the UMRA generally requires EPA to identify and 
consider a reasonable number of regulatory alternatives and adopt the 
least costly, most cost-effective, or least burdensome alternative that 
achieves the objectives of the rule. The provisions of section 205 do 
not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation of why that 
alternative was not adopted.
    Before EPA establishes any regulatory requirements that may 
significantly or uniquely affect small governments, including tribal 
governments, it must have developed under section 203 of the UMRA, a 
small government agency plan. The plan must provide for notifying 
potentially affected small governments, enabling officials to have 
meaningful and timely input in the development of regulatory proposals 
with significant federal intergovernmental mandates, and informing, 
educating, and advising small governments on compliance with the 
regulatory requirements.
    Today's rule contains no federal mandates (under the regulatory 
provisions of Title II of the UMRA) for

[[Page 66106]]

state, local, or tribal governments or the private sector. The rule 
imposes no enforceable duty on any state, local, or tribal governments. 
EPA also determined that today's rule contains no regulatory 
requirements that might significantly or uniquely affect small 
governments. In addition, as discussed above, the private sector is not 
expected to incur costs of $100 million or more as a result of today's 
rule. Therefore, today's rule is not subject to the requirements of 
Sections 202 and 205 of UMRA.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the states, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government.''
    Today's rule does not have federalism implications. It will not 
have substantial direct effects on the states, on the relationship 
between the national government and the states, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in Executive Order 13132. No state and local government 
bodies will incur compliance costs as a result of today's rulemaking. 
Therefore, Executive Order 13132 does not apply to this rule.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

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

G. Executive Order 13045: Protection of Children From Environmental 
Risks and Safety Risks

    Executive Order 13045, entitled ``Protection of Children from 
Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 
1997) applies to any rule that: (1) Is determined to be ``economically 
significant'' as defined under Executive Order 12866, and (2) concerns 
an environmental health or safety risk that EPA has reason to believe 
may have a disproportionate effect on children. If the regulatory 
action meets both criteria, the Agency must evaluate the environmental 
health or safety effects of the planned rule on children; and explain 
why the planned regulation is preferable to other potentially effective 
and reasonably feasible alternatives considered by the Agency.
    Today's rule is not subject to the Executive Order because it is 
not economically significant as defined in Executive Order 12866.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution or Use

    Today's final rule is not a ``significant energy action'' as 
defined in Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 
28355, May 22, 2001) because it is not likely to have a significantly 
adverse effect on the supply, distribution, or use of energy. Further, 
we have concluded that this rule is not likely to have any adverse 
energy effects.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C. 
272 note), directs EPA to use voluntary consensus standards in its 
regulatory activities, unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. The NTTAA directs EPA 
to provide Congress, through OMB, explanations when the Agency decides 
not to use available and applicable voluntary consensus standards. 
Today's rule involves technical standards. Therefore, the requirements 
of section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (15 U.S.C. 272) apply.
    Today's final rule is based upon a proposed rule that was developed 
with the assistance of a regulatory negotiation committee comprised of 
various affected stakeholder groups and modified slightly, based upon 
public comments received in response to the proposed rule. When 
developing the proposed rule, EPA considered using the existing 
standard developed by ASTM International as the federal standard for 
all appropriate inquiries. This standard is known as the ASTM E1527-
2000 standard (``Standard Practice for Environmental Site Assessment: 
Phase I Environmental Site Assessment Process''). However, when we 
proposed the federal standards for all appropriate inquiries, EPA 
determined that the ASTM E1527-2000 standard is inconsistent with 
applicable law.
    In CERCLA section 101(35)(B), Congress included ten specific 
criteria to be used in promulgating the all appropriate inquiries rule. 
The 2000 version of the ASTM Phase I Environmental Site Assessment 
Process does not address all of the required criteria. For example, the 
ASTM International standard does not provide for interviews of past 
owners, operators, and occupants of a facility. The statute, however, 
states that the federally promulgated standard ``shall include * * * 
interviews with past and present owners, operators, and occupants of 
the facility for the purpose of gathering information regarding the 
potential for contamination at the facility.'' CERCLA section 
101(35)(B)(iii)(II). In addition, as outlined in the preamble to the 
proposed rule (69 FR 52541) the ASTM E1527-2000 standard also does not 
meet other statutory requirements. As a result, use of the ASTM E1527-
2000 standard would be inconsistent with applicable law.
    In today's final rule, EPA is referencing the updated standards and 
practices developed by ASTM International and known as Standard E1527-
05 (entitled ``Standard Practice for Environmental Site Assessments: 
Phase I Environmental Site Assessment Process''). The Agency has 
determined that this voluntary consensus standard is consistent with 
today's final rule and is compliant with the statutory criteria for all 
appropriate inquiries. Persons conducting all appropriate inquiries may 
use the procedures included in the ASTM E1527-05 standard to comply 
with today's final rule.

[[Page 66107]]

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898, ``Federal Actions to Address Environmental 
Justice in Minority Populations and Low-Income Populations'' (February 
11, 1994), is designed to address the environmental and human health 
conditions of minority and low-income populations. EPA is committed to 
addressing environmental justice concerns and has assumed a leadership 
role in environmental justice initiatives to enhance environmental 
quality for all citizens of the United States. The Agency's goals are 
to ensure that no segment of the population, regardless of race, color, 
national origin, income, or net worth bears disproportionately high and 
adverse human health and environmental impacts as a result of EPA's 
policies, programs, and activities. Our goal is to ensure that all 
citizens live in clean and sustainable communities. In response to 
Executive Order 12898, and to concerns voiced by many groups outside 
the Agency, EPA's Office of Solid Waste and Emergency Response (OSWER) 
formed an Environmental Justice Task Force to analyze the array of 
environmental justice issues specific to waste programs and to develop 
an overall strategy to identify and address these issues (OSWER 
Directive No. 9200.3-17). EPA's brownfields program has a particular 
emphasis on addressing concerns specific to environmental justices 
communities. Many of the communities and neighborhoods that are most 
significantly impacted by brownfields are environmental justice 
communities. EPA's brownfields program targets such communities for 
assessment, cleanup, and revitalization. The brownfields program has a 
long history of working with environmental justice communities and 
advocates through our technical assistance and grant programs. In 
addition to the monies awarded to such communities in the form of 
assessment and cleanup grants, the brownfields program also works with 
environmental justice communities through our job training grants 
program. The job training grants provide money to government entities 
to facilitate the training of persons living in or near brownfields 
communities to attain skills for conducting site assessments and 
cleanups.
    Given that environmental justice communities are significantly 
impacted by brownfields, and the federal standards for all appropriate 
inquiries may play a primary role in encouraging the assessment and 
cleanup of brownfields sites, EPA made it a priority to obtain input 
from representatives of environmental justice interest groups during 
the development of today's rulemaking. The Negotiated Rulemaking 
Committee tasked with developing the all appropriate inquiries proposed 
rule included three representatives from environmental justice advocacy 
groups. Each representative played a significant role in the 
negotiations and in the development of the proposed rule. Today's final 
rule includes no significant changes to the proposed rule and in 
particular, includes no changes that will significantly or 
disproportionately impact environmental justice communities.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective November 1, 2006.

List of Subjects in 40 CFR Part 312

    Environmental protection, Administrative practice and procedure, 
Hazardous substances, Intergovernmental relations, Reporting and 
recordkeeping requirements.

    Dated: October 21, 2005.
Stephen L. Johnson,
Administrator.

0
For reasons set out in the preamble, title 40, chapter I of the Code of 
Federal Regulations is amended by revising part 312 as follows:

PART 312--INNOCENT LANDOWNERS, STANDARDS FOR CONDUCTING ALL 
APPROPRIATE INQUIRIES

Subpart A--Introduction
Sec.
312.1 Purpose, applicability, scope, and disclosure obligations.
Subpart B--Definitions and References
312.10 Definitions.
312.11 References.
Subpart C--Standards and Practices
312.20 All appropriate inquiries.
312.21 Results of inquiry by an environmental professional.
312.22 Additional inquiries.
312.23 Interviews with past and present owners, operators, and 
occupants.
312.24 Reviews of historical sources of information.
312.25 Searches for recorded environmental cleanup liens.
312.26 Reviews of federal, state, tribal and local government 
records.
312.27 Visual inspections of the facility and of adjoining 
properties.
312.28 Specialized knowledge or experience on the part of the 
defendant.
312.29 The relationship of the purchase price to the value of the 
property, if the property was not contaminated.
312.30 Commonly known or reasonably ascertainable information about 
the property.
312.31 The degree of obviousness of the presence or likely presence 
of contamination at the property, and the ability to detect the 
contamination by appropriate investigation.

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

PART 312--INNOCENT LANDOWNERS, STANDARDS FOR CONDUCTING ALL 
APPROPRIATE INQUIRIES

Subpart A--Introduction


Sec.  312.1  Purpose, applicability, scope and disclosure obligations.

    (a) Purpose. The purpose of this section is to provide standards 
and practices for ``all appropriate inquiries'' for the purposes of 
CERCLA sections 101(35)(B)(i)(I) and 101(35)(B)(ii) and (iii).
    (b) Applicability. The requirements of this part are applicable to:
    (1) Persons seeking to establish:
    (i) The innocent landowner defense pursuant to CERCLA sections 
101(35) and 107(b)(3);
    (ii) The bona fide prospective purchaser liability protection 
pursuant to CERCLA sections 101(40) and 107(r);
    (iii) The contiguous property owner liability protection pursuant 
to CERCLA section 107(q); and
    (2) persons conducting site characterization and assessments with 
the use of a grant awarded under CERCLA section 104(k)(2)(B).
    (c) Scope. (1) Persons seeking to establish one of the liability 
protections under paragraph (b)(1) of this section must conduct 
investigations as required in this part, including an inquiry by an 
environmental professional, as required under Sec.  312.21, and the 
additional inquiries defined in Sec.  312.22, to identify

[[Page 66108]]

conditions indicative of releases or threatened releases, as defined in 
CERCLA section 101(22), of hazardous substances, as defined in CERCLA 
section 101(14).
    (2) Persons identified in paragraph (b)(2) of this section must 
conduct investigations required in this part, including an inquiry by 
an environmental professional, as required under Sec.  312.21, and the 
additional inquiries defined in Sec.  312.22, to identify conditions 
indicative of releases and threatened releases of hazardous substances, 
as defined in CERCLA section 101(22), and as applicable per the terms 
and conditions of the grant or cooperative agreement, releases and 
threatened releases of:
    (i) Pollutants and contaminants, as defined in CERCLA section 
101(33);
    (ii) Petroleum or petroleum products excluded from the definition 
of ``hazardous substance'' as defined in CERCLA section 101(14); and
    (iii) Controlled substances, as defined in 21 U.S.C. 802.
    (d) Disclosure obligations. None of the requirements of this part 
limits or expands disclosure obligations under any federal, state, 
tribal, or local law, including the requirements under CERCLA sections 
101(40)(c) and 107(q)(1)(A)(vii) requiring persons, including 
environmental professionals, to provide all legally required notices 
with respect to the discovery of releases of hazardous substances. It 
is the obligation of each person, including environmental 
professionals, conducting the inquiry to determine his or her 
respective disclosure obligations under federal, state, tribal, and 
local law and to comply with such disclosure requirements.

Subpart B--Definitions and References


Sec.  312.10  Definitions.

    (a) Terms used in this part and not defined below, but defined in 
either CERCLA or 40 CFR part 300 (the National Oil and Hazardous 
Substances Pollution Contingency Plan) shall have the definitions 
provided in CERCLA or 40 CFR part 300.
    (b) When used in this part, the following terms have the meanings 
provided as follows:
    Abandoned property means: property that can be presumed to be 
deserted, or an intent to relinquish possession or control can be 
inferred from the general disrepair or lack of activity thereon such 
that a reasonable person could believe that there was an intent on the 
part of the current owner to surrender rights to the property.
    Adjoining properties means: any real property or properties the 
border of which is (are) shared in part or in whole with that of the 
subject property, or that would be shared in part or in whole with that 
of the subject property but for a street, road, or other public 
thoroughfare separating the properties.
    Data gap means: a lack of or inability to obtain information 
required by the standards and practices listed in subpart C of this 
part despite good faith efforts by the environmental professional or 
persons identified under Sec.  312.1(b), as appropriate, to gather such 
information pursuant to Sec. Sec.  312.20(e)(1) and 312.20(e)(2).
    Date of acquisition or purchase date means: the date on which a 
person acquires title to the property.
    Environmental Professional means:
    (1) a person who possesses sufficient specific education, training, 
and experience necessary to exercise professional judgment to develop 
opinions and conclusions regarding conditions indicative of releases or 
threatened releases (see Sec.  312.1(c)) on, at, in, or to a property, 
sufficient to meet the objectives and performance factors in Sec.  
312.20(e) and (f).
    (2) Such a person must:
    (i) Hold a current Professional Engineer's or Professional 
Geologist's license or registration from a state, tribe, or U.S. 
territory (or the Commonwealth of Puerto Rico) and have the equivalent 
of three (3) years of full-time relevant experience; or
    (ii) Be licensed or certified by the federal government, a state, 
tribe, or U.S. territory (or the Commonwealth of Puerto Rico) to 
perform environmental inquiries as defined in Sec.  312.21 and have the 
equivalent of three (3) years of full-time relevant experience; or
    (iii) Have a Baccalaureate or higher degree from an accredited 
institution of higher education in a discipline of engineering or 
science and the equivalent of five (5) years of full-time relevant 
experience; or
    (iv) Have the equivalent of ten (10) years of full-time relevant 
experience.
    (3) An environmental professional should remain current in his or 
her field through participation in continuing education or other 
activities.
    (4) The definition of environmental professional provided above 
does not preempt state professional licensing or registration 
requirements such as those for a professional geologist, engineer, or 
site remediation professional. Before commencing work, a person should 
determine the applicability of state professional licensing or 
registration laws to the activities to be undertaken as part of the 
inquiry identified in Sec.  312.21(b).
    (5) A person who does not qualify as an environmental professional 
under the foregoing definition may assist in the conduct of all 
appropriate inquiries in accordance with this part if such person is 
under the supervision or responsible charge of a person meeting the 
definition of an environmental professional provided above when 
conducting such activities.
    Relevant experience, as used in the definition of environmental 
professional in this section, means: participation in the performance 
of all appropriate inquiries investigations, environmental site 
assessments, or other site investigations 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 (see Sec.  312.1(c)) to 
the subject property.
    Good faith means: the absence of any intention to seek an unfair 
advantage or to defraud another party; an honest and sincere intention 
to fulfill one's obligations in the conduct or transaction concerned.
    Institutional controls means: non-engineered instruments, such as 
administrative and/or legal controls, that help to minimize the 
potential for human exposure to contamination and/or protect the 
integrity of a remedy.


Sec.  312.11  References.

    The following industry standards may be used to comply with the 
requirements set forth in Sec. Sec.  312.23 through 312.31:
    (a) The procedures of ASTM International Standard E1527-05 entitled 
``Standard Practice for Environmental Site Assessments: Phase I 
Environmental Site Assessment Process.''
    (b) [Reserved]

Subpart C--Standards and Practices


Sec.  312.20  All appropriate inquiries.

    (a) ``All appropriate inquiries'' pursuant to CERCLA section 
101(35)(B) must be conducted within one year prior to the date of 
acquisition of the subject property and must include:
    (1) An inquiry by an environmental professional (as defined in 
Sec.  312.10), as provided in Sec.  312.21;
    (2) The collection of information pursuant to Sec.  312.22 by 
persons identified under Sec.  312.1(b); and

[[Page 66109]]

    (3) Searches for recorded environmental cleanup liens, as required 
in Sec.  312.25.
    (b) Notwithstanding paragraph (a) of this section, the following 
components of the all appropriate inquiries must be conducted or 
updated within 180 days of and prior to the date of acquisition of the 
subject property:
    (1) Interviews with past and present owners, operators, and 
occupants (see Sec.  312.23);
    (2) Searches for recorded environmental cleanup liens (see Sec.  
312.25);
    (3) Reviews of federal, tribal, state, and local government records 
(see Sec.  312.26);
    (4) Visual inspections of the facility and of adjoining properties 
(see Sec.  312.27); and
    (5) The declaration by the environmental professional (see Sec.  
312.21(d)).
    (c) All appropriate inquiries may include the results of and 
information contained in an inquiry previously conducted by, or on the 
behalf of, persons identified under Sec.  312.1(b) and who are 
responsible for the inquiries for the subject property, provided:
    (1) Such information was collected during the conduct of all 
appropriate inquiries in compliance with the requirements of CERCLA 
sections 101(35)(B), 101(40)(B) and 107(q)(A)(viii);
    (2) Such information was collected or updated within one year prior 
to the date of acquisition of the subject property;
    (3) Notwithstanding paragraph (b)(2) of this section, the following 
components of the inquiries were conducted or updated within 180 days 
of and prior to the date of acquisition of the subject property:
    (i) Interviews with past and present owners, operators, and 
occupants (see Sec.  312.23);
    (ii) Searches for recorded environmental cleanup liens (see Sec.  
312.25);
    (iii) Reviews of federal, tribal, state, and local government 
records (see Sec.  312.26);
    (iv) Visual inspections of the facility and of adjoining properties 
(see Sec.  312.27); and
    (v) The declaration by the environmental professional (see Sec.  
312.21(d)).
    (4) Previously collected information is updated to include relevant 
changes in the conditions of the property and specialized knowledge, as 
outlined in Sec.  312.28, of the persons conducting the all appropriate 
inquiries for the subject property, including persons identified in 
Sec.  312.1(b) and the environmental professional, defined in Sec.  
312.10.
    (d) All appropriate inquiries can include the results of report(s) 
specified in Sec.  312.21(c), that have been prepared by or for other 
persons, provided that:
    (1) The report(s) meets the objectives and performance factors of 
this regulation, as specified in paragraphs (e) and (f) of this 
section; and
    (2) The person specified in Sec.  312.1(b) and seeking to use the 
previously collected information reviews the information and conducts 
the additional inquiries pursuant to Sec. Sec.  312.28, 312.29 and 
312.30 and the all appropriate inquiries are updated in paragraph 
(b)(3) of this section, as necessary.
    (e) Objectives. The standards and practices set forth in this part 
for All Appropriate Inquiries 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.
    (1) In performing the all appropriate inquiries, as defined in this 
section and provided in the standards and practices set forth this 
subpart, the persons identified under Sec.  312.1(b)(1) and the 
environmental professional, as defined in Sec.  312.10, must seek to 
identify through the conduct of the standards and practices set forth 
in this subpart, the following types of information about the subject 
property:
    (i) Current and past property uses and occupancies;
    (ii) Current and past uses of hazardous substances;
    (iii) Waste management and disposal activities that could have 
caused releases or threatened releases of hazardous substances;
    (iv) Current and past corrective actions and response activities 
undertaken to address past and on-going releases of hazardous 
substances;
    (v) Engineering controls;
    (vi) Institutional controls; and
    (vii) 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 to the subject property.
    (2) In the case of persons identified in Sec.  312.1(b)(2), the 
standards and practices for All Appropriate Inquiries set forth in this 
part are intended to result in the identification of conditions 
indicative of releases and threatened releases of hazardous substances, 
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. In performing the all appropriate inquiries, as 
defined in this section and provided in the standards and practices set 
forth in this subpart, the persons identified under Sec.  312.1(b) and 
the environmental professional, as defined in Sec.  312.10, must seek 
to identify through the conduct of the standards and practices set 
forth in this subpart, the following types of information about the 
subject property:
    (i) Current and past property uses and occupancies;
    (ii) Current and past uses of hazardous substances, pollutants, 
contaminants, petroleum and petroleum products, and controlled 
substances (as defined in 21 U.S.C. 802);
    (iii) Waste management and disposal activities;
    (iv) Current and past corrective actions and response activities 
undertaken to address past and on-going releases of hazardous 
substances pollutants, contaminants, petroleum and petroleum products, 
and controlled substances (as defined in 21 U.S.C. 802);
    (v) Engineering controls;
    (vi) Institutional controls; and
    (vii) 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, pollutants, contaminants, petroleum and petroleum products, 
and controlled substances (as defined in 21 U.S.C. 802) to the subject 
property.
    (f) Performance factors. In performing each of the standards and 
practices set forth in this subpart and to meet the objectives stated 
in paragraph (e) of this section, the persons identified under Sec.  
312.1(b) or the environmental professional as defined in Sec.  312.10 
(as appropriate to the particular standard and practice) must seek to:
    (1) Gather the information that is required for each standard and 
practice listed in this subpart that is publicly available, 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 
listed in this subpart taking into account information gathered in the 
course of complying with the other standards and practices of this 
subpart.
    (g) To the extent there are data gaps (as defined in Sec.  312.10) 
in the information developed as part of the inquiries in paragraph (e) 
of this section that affect the ability of persons (including the 
environmental professional) conducting the all

[[Page 66110]]

appropriate inquiries to identify conditions indicative of releases or 
threatened releases in each area of inquiry under each standard and 
practice such persons should identify such data gaps, identify the 
sources of information consulted to address such data gaps, and comment 
upon the significance of such data gaps with regard to the ability to 
identify conditions indicative of releases or threatened releases of 
hazardous substances [and in the case of persons identified in Sec.  
312.1(b)(2), hazardous substances, 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. Sampling and 
analysis may be conducted to develop information to address data gaps.
    (h) Releases and threatened releases identified as part of the all 
appropriate inquiries should be noted in the report of the inquiries. 
These standards and practices however are not intended to require the 
identification in the written report prepared pursuant to Sec.  
312.21(c) of quantities or amounts, either individually or in the 
aggregate, of hazardous substances pollutants, contaminants, petroleum 
and petroleum products, and controlled substances (as defined in 21 
U.S.C. 802) that because of said quantities and amounts, generally 
would not pose a threat to human health or the environment.


Sec.  312.21  Results of inquiry by an environmental professional.

    (a) Persons identified under Sec.  312.1(b) must undertake an 
inquiry, as defined in paragraph (b) of this section, by an 
environmental professional, or conducted under the supervision or 
responsible charge of, an environmental professional, as defined in 
Sec.  312.10. Such inquiry is hereafter referred to as ``the inquiry of 
the environmental professional.''
    (b) The inquiry of the environmental professional must include the 
requirements set forth in Sec. Sec.  312.23 (interviews with past and 
present owners * * *), 312.24 (reviews of historical sources * * *), 
312.26 (reviews of government records), 312.27 (visual inspections), 
312.30 (commonly known or reasonably ascertainable information), and 
312.31 (degree of obviousness of the presence * * * and the ability to 
detect the contamination * * *). In addition, the inquiry should take 
into account information provided to the environmental professional as 
a result of the additional inquiries conducted by persons identified in 
Sec.  312.1(b) and in accordance with the requirements of Sec.  312.22.
    (c) The results of the inquiry by an environmental professional 
must be documented in a written report that, at a minimum, includes the 
following:
    (1) An opinion as to whether the inquiry has identified conditions 
indicative of releases or threatened releases of hazardous substances 
[and in the case of inquiries conducted for persons identified in Sec.  
312.1(b)(2) conditions indicative of releases and threatened releases 
of 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;
    (2) An identification of data gaps (as defined in Sec.  312.10) in 
the information developed as part of the inquiry that affect the 
ability of the environmental professional to identify conditions 
indicative of releases or threatened releases of hazardous substances 
[and in the case of inquiries conducted for persons identified in Sec.  
312.1(b)(2) conditions indicative of releases and threatened releases 
of 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 and comments regarding the significance of such 
data gaps on the environmental professional's ability to provide an 
opinion as to whether the inquiry has identified conditions indicative 
of releases or threatened releases on, at, in, or to the subject 
property. If there are data gaps such that the environmental 
professional cannot reach an opinion regarding the identification of 
conditions indicative of releases and threatened releases, such data 
gaps must be noted in the environmental professional's opinion in 
paragraph (c)(1) of this section; and
    (3) The qualifications of the environmental professional(s).
    (d) The environmental professional must place the following 
statements in the written document identified in paragraph (c) of this 
section and sign the document:

    ``[I, We] declare that, to the best of [my, our] professional 
knowledge and belief, [I, we] meet the definition of Environmental 
Professional as defined in Sec.  312.10 of this part.''
    ``[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] have developed 
and performed the all appropriate inquiries in conformance with the 
standards and practices set forth in 40 CFR Part 312.''


Sec.  312.22  Additional inquiries.

    (a) Persons identified under Sec.  312.1(b) must conduct the 
inquiries listed in paragraphs (a)(1) through (a)(4) below and may 
provide the information associated with such inquiries to the 
environmental professional responsible for conducting the activities 
listed in Sec.  312.21:
    (1) As required by Sec.  312.25 and if not otherwise obtained by 
the environmental professional, environmental cleanup liens against the 
subject property that are filed or recorded under federal, tribal, 
state, or local law;
    (2) As required by Sec.  312.28, specialized knowledge or 
experience of the person identified in Sec.  312.1(b);
    (3) As required by Sec.  312.29, the relationship of the purchase 
price to the fair market value of the subject property, if the property 
was not contaminated; and
    (4) As required by Sec.  312.30, and if not otherwise obtained by 
the environmental professional, commonly known or reasonably 
ascertainable information about the subject property.


Sec.  312.23  Interviews with past and present owners, operators, and 
occupants.

    (a) Interviews with owners, operators, and occupants of the subject 
property must be conducted for the purposes of achieving the objectives 
and performance factors of Sec.  312.20(e) and (f).
    (b) The inquiry of the environmental professional must include 
interviewing the current owner and occupant of the subject property. If 
the property has multiple occupants, the inquiry of the environmental 
professional shall include interviewing major occupants, as well as 
those occupants likely to use, store, treat, handle or dispose of 
hazardous substances [and in the case of inquiries conducted for 
persons identified in Sec.  312.1(b)(2) pollutants, contaminants, 
petroleum and petroleum products, and controlled substances (as defined 
in 21 U.S.C. 802)], or those who have likely done so in the past.
    (c) The inquiry of the environmental professional also must 
include, to the extent necessary to achieve the objectives and 
performance factors of Sec.  312.20(e) and (f), interviewing one or 
more of the following persons:
    (1) Current and past facility managers with relevant knowledge of 
uses and physical characteristics of the property;
    (2) Past owners, occupants, or operators of the subject property; 
or
    (3) Employees of current and past occupants of the subject 
property.
    (d) In the case of inquiries conducted at ``abandoned properties,'' 
as defined in Sec.  312.10, where there is evidence of potential 
unauthorized uses of the subject property or evidence of

[[Page 66111]]

uncontrolled access to the subject property, the environmental 
professional's inquiry must include interviewing one or more (as 
necessary) owners or occupants of neighboring or nearby properties from 
which it appears possible to have observed uses of, or releases at, 
such abandoned properties for the purpose of gathering information 
necessary to achieve the objectives and performance factors of Sec.  
312.20(e) and (f).


Sec.  312.24  Reviews of historical sources of information.

    (a) Historical documents and records must be reviewed for the 
purposes of achieving the objectives and performance factors of Sec.  
312.20(e) and (f). Historical documents and records may include, but 
are not limited to, aerial photographs, fire insurance maps, building 
department records, chain of title documents, and land use records.
    (b) Historical documents and records reviewed must cover a period 
of time as far back in the history of the subject property as it can be 
shown that the property contained structures or from the time the 
property was first used for residential, agricultural, commercial, 
industrial, or governmental purposes. For the purpose of achieving the 
objectives and performance factors of Sec.  312.20(e) and (f), the 
environmental professional may exercise professional judgment in 
context of the facts available at the time of the inquiry as to how far 
back in time it is necessary to search historical records.


Sec.  312.25  Searches for recorded environmental cleanup liens.

    (a) All appropriate inquiries must include a search for the 
existence of environmental cleanup liens against the subject property 
that are filed or recorded under federal, tribal, state, or local law.
    (b) All information collected regarding the existence of such 
environmental cleanup liens associated with the subject property by 
persons to whom this part is applicable per Sec.  312.1(b) and not by 
an environmental professional, may be provided to the environmental 
professional or retained by the applicable party.


Sec.  312.26  Reviews of Federal, State, Tribal, and local government 
records.

    (a) Federal, tribal, state, and local government records or data 
bases of government records of the subject property and adjoining 
properties must be reviewed for the purposes of achieving the 
objectives and performance factors of Sec.  312.20(e) and (f).
    (b) With regard to the subject property, the review of federal, 
tribal, and state government records or data bases of such government 
records and local government records and data bases of such records 
should include:
    (1) Records of reported releases or threatened releases, including 
site investigation reports for the subject property;
    (2) Records of activities, conditions, or incidents likely to cause 
or contribute to releases or threatened releases as defined in Sec.  
312.1(c), including landfill and other disposal unit location records 
and permits, storage tank records and permits, hazardous waste handler 
and generator records and permits, federal, tribal and state government 
listings of sites identified as priority cleanup sites, and spill 
reporting records;
    (3) CERCLIS records;
    (4) Public health records;
    (5) Emergency Response Notification System records;
    (6) Registries or publicly available lists of engineering controls; 
and
    (7) Registries or publicly available lists of institutional 
controls, including environmental land use restrictions, applicable to 
the subject property.
    (c) With regard to nearby or adjoining properties, the review of 
federal, tribal, state, and local government records or databases of 
government records should include the identification of the following:
    (1) Properties for which there are government records of reported 
releases or threatened releases. Such records or databases containing 
such records and the associated distances from the subject property for 
which such information should be searched include the following:
    (i) Records of NPL sites or tribal- and state-equivalent sites (one 
mile);
    (ii) RCRA facilities subject to corrective action (one mile);
    (iii) Records of federally-registered, or state-permitted or 
registered, hazardous waste sites identified for investigation or 
remediation, such as sites enrolled in state and tribal voluntary 
cleanup programs and tribal- and state-listed brownfields sites (one-
half mile);
    (iv) Records of leaking underground storage tanks (one-half mile); 
and
    (2) Properties that previously were identified or regulated by a 
government entity due to environmental concerns at the property. Such 
records or databases containing such records and the associated 
distances from the subject property for which such information should 
be searched include the following:
    (i) Records of delisted NPL sites (one-half mile);
    (ii) Registries or publicly available lists of engineering controls 
(one-half mile); and
    (iii) Records of former CERCLIS sites with no further remedial 
action notices (one-half mile).
    (3) Properties for which there are records of federally-permitted, 
tribal-permitted or registered, or state-permitted or registered waste 
management activities. Such records or data bases that may contain such 
records include the following:
    (i) Records of RCRA small quantity and large quantity generators 
(adjoining properties);
    (ii) Records of federally-permitted, tribal-permitted, or state-
permitted (or registered) landfills and solid waste management 
facilities (one-half mile); and
    (iii) Records of registered storage tanks (adjoining property).
    (4) A review of additional government records with regard to sites 
identified under paragraphs (c)(1) through (c)(3) of this section may 
be necessary in the judgment of the environmental professional for the 
purpose of achieving the objectives and performance factors of Sec.  
312.20(e) and (f).
    (d) The search distance from the subject property boundary for 
reviewing government records or databases of government records listed 
in paragraph (c) of this section may be modified based upon the 
professional judgment of the environmental professional. The rationale 
for such modifications must be documented by the environmental 
professional. The environmental professional may consider one or more 
of the following factors in determining an alternate appropriate search 
distance:
    (1) The nature and extent of a release;
    (2) Geologic, hydrogeologic, or topographic conditions of the 
subject property and surrounding environment;
    (3) Land use or development densities;
    (4) The property type;
    (5) Existing or past uses of surrounding properties;
    (6) Potential migration pathways (e.g., groundwater flow direction, 
prevalent wind direction); or
    (7) Other relevant factors.


Sec.  312.27  Visual inspections of the facility and of adjoining 
properties.

    (a) For the purpose of achieving the objectives and performance 
factors of Sec.  312.20(e) and (f), the inquiry of the environmental 
professional must include:
    (1) A visual on-site inspection of the subject property and 
facilities and improvements on the subject property,

[[Page 66112]]

including a visual inspection of the areas where hazardous substances 
may be or may have been used, stored, treated, handled, or disposed. 
Physical limitations to the visual inspection must be noted.
    (2) A visual inspection of adjoining properties, from the subject 
property line, public rights-of-way, or other vantage point (e.g., 
aerial photography), including a visual inspection of areas where 
hazardous substances may be or may have been stored, treated, handled 
or disposed. Physical limitations to the inspection of adjacent 
properties must be noted.
    (b) Persons conducting site characterization and assessments using 
a grant awarded under CERCLA section 104(k)(2)(B) must include in the 
inquiries referenced in Sec.  312.27(a) visual inspections of areas 
where hazardous substances, and may include, as applicable per the 
terms and conditions of the grant or cooperative agreement, pollutants 
and contaminants, petroleum and petroleum products, and controlled 
substances as defined in 21 U.S.C. 802 may be or may have been used, 
stored, treated, handled or disposed at the subject property and 
adjoining properties.
    (c) Except as noted in this subsection, a visual on-site inspection 
of the subject property must be conducted. In the unusual circumstance 
where an on-site visual inspection of the subject property cannot be 
performed because of physical limitations, remote and inaccessible 
location, or other inability to obtain access to the property, provided 
good faith (as defined in Sec.  312.10) efforts have been taken to 
obtain such access, an on-site inspection will not be required. The 
mere refusal of a voluntary seller to provide access to the subject 
property does not constitute an unusual circumstance. In such unusual 
circumstances, the inquiry of the environmental professional must 
include:
    (1) Visually inspecting the subject property via another method 
(such as aerial imagery for large properties), or visually inspecting 
the subject property from the nearest accessible vantage point (such as 
the property line or public road for small properties);
    (2) Documentation of efforts undertaken to obtain access and an 
explanation of why such efforts were unsuccessful; and
    (3) Documentation of other sources of information regarding 
releases or threatened releases at the subject property that were 
consulted in accordance with Sec.  312.20(e). Such documentation should 
include comments by the environmental professional on the significance 
of the failure to conduct a visual on-site inspection of the subject 
property with regard to the ability to identify conditions indicative 
of releases or threatened releases on, at, in, or to the subject 
property, if any.


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

    (a) Persons to whom this part is applicable per Sec.  312.1(b) must 
take into account, their specialized knowledge of the subject property, 
the area surrounding the subject property, the conditions of adjoining 
properties, and any other experience relevant to the inquiry, for the 
purpose of identifying conditions indicative of releases or threatened 
releases at the subject property, as defined in Sec.  312.1(c).
    (b) All appropriate inquiries, as outlined in Sec.  312.20, are not 
complete unless the results of the inquiries take into account the 
relevant and applicable specialized knowledge and experience of the 
persons responsible for undertaking the inquiry (as described in Sec.  
312.1(b)).


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

    (a) Persons to whom this part is applicable per Sec.  312.1(b) must 
consider whether the purchase price of the subject property reasonably 
reflects the fair market value of the property, if the property were 
not contaminated.
    (b) Persons who conclude that the purchase price of the subject 
property does not reasonably reflect the fair market value of that 
property, if the property were not contaminated, must consider whether 
or not the differential in purchase price and fair market value is due 
to the presence of releases or threatened releases of hazardous 
substances.
    (c) Persons conducting site characterization and assessments with 
the use of a grant awarded under CERCLA section 104(k)(2)(B) and who 
know that the purchase price of the subject property does not 
reasonably reflect the fair market value of that property, if the 
property were not contaminated, must consider whether or not the 
differential in purchase price and fair market value is due to the 
presence of releases or threatened releases of hazardous substances, 
pollutants, contaminants, petroleum and petroleum products, or 
controlled substances as defined in 21 U.S.C. 802.


Sec.  312.30  Commonly known or reasonably ascertainable information 
about the property.

    (a) Throughout the inquiries, persons to whom this part is 
applicable per Sec.  312.1(b) and environmental professionals 
conducting the inquiry must take into account commonly known or 
reasonably ascertainable information within the local community about 
the subject property and consider such information when seeking to 
identify conditions indicative of releases or threatened releases, as 
set forth in Sec.  312.1(c), at the subject property.
    (b) Commonly known information may include information obtained by 
the person to whom this part applies in Sec.  312.1(b) or by the 
environmental professional about releases or threatened releases at the 
subject property that is incidental to the information obtained during 
the inquiry of the environmental professional.
    (c) To the extent necessary to achieve the objectives and 
performance factors of Sec.  312.20(e) and (f), persons to whom this 
part is applicable per Sec.  312.1(b) and the environmental 
professional must gather information from varied sources whose input 
either individually or taken together may provide commonly known or 
reasonably ascertainable information about the subject property; the 
environmental professional may refer to one or more of the following 
sources of information:
    (1) Current owners or occupants of neighboring properties or 
properties adjacent to the subject property;
    (2) Local and state government officials who may have knowledge of, 
or information related to, the subject property;
    (3) Others with knowledge of the subject property; and
    (4) Other sources of information (e.g., newspapers, Web sites, 
community organizations, local libraries and historical societies).


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

    (a) Persons to whom this part is applicable per Sec.  312.1(b) and 
environmental professionals conducting an inquiry of a property on 
behalf of such persons must take into account the information collected 
under Sec.  312.23 through 312.30 in considering the degree of 
obviousness of the presence of releases or threatened releases at the 
subject property.
    (b) Persons to whom this part is applicable per Sec.  312.1(b) and

[[Page 66113]]

environmental professionals conducting an inquiry of a property on 
behalf of such persons must take into account the information collected 
under Sec.  312.23 through 312.30 in considering the ability to detect 
contamination by appropriate investigation. The inquiry of the 
environmental professional should include an opinion regarding 
additional appropriate investigation, if any.

[FR Doc. 05-21455 Filed 10-31-05; 8:45 am]
BILLING CODE 6560-50-P