[Federal Register Volume 72, Number 112 (Tuesday, June 12, 2007)]
[Proposed Rules]
[Pages 32232-32246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-11110]


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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 137

[USCG-2006-25708]
RIN 1625-AB09


Landowner Defenses to Liability Under the Oil Pollution Act of 
1990: Standards and Practices for Conducting All Appropriate Inquiries

AGENCY: Coast Guard, DHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Coast Guard proposes to establish standards and practices

[[Page 32233]]

concerning the ``all appropriate inquiries'' element of a defense to 
liability of an owner or operator of a facility that is the source of a 
discharge or substantial threat of discharge of oil into the navigable 
waters or adjoining shorelines or the exclusive economic zone. To be 
entitled to the defense, those persons must show, among other elements 
not addressed in this rulemaking, that, before acquiring the real 
property on which the facility is located, they had made all 
appropriate inquiries into its previous ownership and uses to determine 
the presence or likely presence of oil. This proposed rule is 
consistent with a final rule on this subject published by the 
Environmental Protection Agency.

DATES: Comments and related material must reach the Docket Management 
Facility on or before September 10, 2007. Comments sent to the Office 
of Management and Budget (OMB) on collection of information must reach 
OMB on or before September 10, 2007.

ADDRESSES: You may submit comments identified by Coast Guard docket 
number USCG-2006-25708 to the Docket Management Facility at the U.S. 
Department of Transportation. Two different locations are listed under 
the mail and delivery options below because the Document Management 
Facility is moving May 30, 2007. To avoid duplication, please use only 
one of the following methods:
    (1) Web Site: http://dms.dot.gov.
    (2) Mail:
     Address mail to be delivered before May 30, 2007, as 
follows: Docket Management Facility, U.S. Department of Transportation, 
400 Seventh Street, SW., Washington, DC 20590-0001.
     Address mail to be delivered on or after May 30, 2007, as 
follows: Docket Management Facility, U.S. Department of Transportation, 
1200 New Jersey Avenue, SE., West Building Ground Floor, Room W12-140, 
Washington, DC 2059.
    (3) Fax: 202-493-2251.
    (4) Delivery:
     Before May 30, 2007, deliver comments to: Room PL-401 on 
the Plaza level of the Nassif Building, 400 Seventh Street, SW., 
Washington, DC 20590.
     On or after May 30, 2007, deliver comments to: Room W12-
140 on the Ground Floor of the West Building, 1200 New Jersey Avenue 
SE., Washington, DC 20590.
    At either location, deliveries may be made between 9 a.m. and 5 
p.m., Monday through Friday, except Federal holidays. The telephone 
number is 202-366-9329.
    (5) Federal eRulemaking Portal: http://www.regulations.gov.
    You must also send comments on collection of information to the 
Office of Information and Regulatory Affairs, Office of Management and 
Budget. To ensure that the comments are received on time, the preferred 
method is by e-mail at [email protected] or fax at 202-395-6566. An 
alternate, though slower, method is by U.S. mail to the Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
725 17th Street, NW., Washington, DC 20503, ATTN: Desk Officer, U.S. 
Coast Guard.
    You may inspect the material referenced in this part at room 1013, 
National Pollution Funds Center, Coast Guard, 4200 Wilson Boulevard, 
Arlington, VA 22203-1804, between 9 a.m. and 3 p.m., Monday through 
Friday, except Federal holidays. The telephone number is 202-493-6863. 
Copies of the material are available as indicated in the ``References'' 
section of this preamble.

FOR FURTHER INFORMATION CONTACT: If you have questions on this proposed 
rule, call Benjamin White, National Pollution Funds Center, Coast 
Guard, telephone 202-493-6863. If you have questions on viewing or 
submitting material to the docket, call Renee V. Wright, Program 
Manager, Docket Operations, telephone 202-493-0402.

Public Participation and Request for Comments

    We encourage you to participate in this rulemaking by submitting 
comments and related materials. All comments received will be posted, 
without change, to http://dms.dot.gov and will include any personal 
information you have provided. We have an agreement with the Department 
of Transportation (DOT) to use the Docket Management Facility. Please 
see DOT's ``Privacy Act'' paragraph below.
    Submitting comments: If you submit a comment, please include your 
name and address, identify the docket number for this rulemaking (USCG-
2006-25708), indicate the specific section of this document to which 
each comment applies, and give the reason for each comment. You may 
submit your comments and material by electronic means, mail, fax, or 
delivery to the Docket Management Facility at the address under 
ADDRESSES; but please submit your comments and material by only one 
means. If you submit them by mail or delivery, submit them in an 
unbound format, no larger than 8\1/2\ by 11 inches, suitable for 
copying and electronic filing. If you submit them by mail and would 
like to know that they reached the Facility, please enclose a stamped, 
self-addressed postcard or envelope. We will consider all comments and 
material received during the comment period. We may change this 
proposed rule in view of them.
    Viewing comments and documents: To view comments, as well as 
documents mentioned in this preamble as being available in the docket, 
go to http://dms.dot.gov at any time, click on ``Simple Search,'' enter 
the last five digits of the docket number for this rulemaking, and 
click on ``Search.'' You may also visit the Docket Management Facility 
in room PL-401 on the Plaza level of the Nassif Building, 400 Seventh 
Street SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through 
Friday, except Federal holidays.
    Privacy Act: Anyone can search the electronic form of all comments 
received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review the 
Department of Transportation's Privacy Act Statement in the Federal 
Register published on April 11, 2000 (65 FR 19477), or you may visit 
http://dms.dot.gov.

Public Meeting

    We do not now plan to hold a public meeting. But you may submit a 
request for one to the Docket Management Facility at the address under 
ADDRESSES explaining why one would be beneficial. If we determine that 
one would aid this rulemaking, we will hold one at a time and place 
announced by a later notice in the Federal Register.

Need for This Rulemaking

    This rulemaking will codify the requirement of 33 U.S.C. 
2703(d)(4)(B). It applies to persons planning to acquire real property 
on which a facility, as defined under 33 U.S.C. 2701(9), is located who 
choose to take steps necessary to protect themselves from liability 
should unknown oil that is the subject of a discharge or substantial 
threat of discharge be found at the facility after they acquire it. We 
call these persons ``landowners'' or ``owners'' in this preamble. 
Should prospective landowners opt for this protection, they may find 
that they have already complied with this proposed rule if they have 
complied with ASTM International (ASTM) E 1527-05, ``Standard Practice 
for Environmental Site Assessments: Phase I Environmental Site 
Assessment Process.'' The industry standard ASTM E 1527-05, is 
consistent with this proposed rule and is compliant with the

[[Page 32234]]

statutory criteria for all appropriate inquiries. Persons conducting 
all appropriate inquiries may use the procedures included in the ASTM E 
1527-05 standard to comply with this proposed rule. For more 
information on the ASTM standard, see the ``ASTM Standard E 1527-05'' 
section in this preamble.
    Note that this proposed rule addresses only one of several elements 
that must be complied with in order to avail oneself of this 
protection. The element addressed in this proposed rule is called the 
``all-appropriate-inquiries'' element found in 33 U.S.C. 2703(d)(4).

Background and Purpose

    In general, under the Oil Pollution Act of 1990 (33 U.S.C. 2701, et 
seq.) (OPA 90), an owner or operator of a facility that is the source 
of a discharge, or a substantial threat of discharge, of oil into the 
navigable waters or adjoining shorelines or the exclusive economic zone 
is liable for damages and removal costs resulting from the discharge or 
threat. See 33 U.S.C. 2702(a). Under OPA 90, that person is known as a 
``responsible party.'' See 33 U.S.C. 2701(32).
    The Coast Guard and Maritime Transportation Act of 2004 (Pub. L. 
108-293) (the 2004 Act) amended OPA 90, at 33 U.S.C. 2703(d)(4), by 
creating an ``innocent landowner'' defense to liability for those 
persons who could demonstrate, among other requirements, that before 
acquiring the real property on which the facility is located, they did 
not know, and had no reason to know that oil that is the subject of the 
discharge or substantial threat of discharge was located on, in, or at 
the facility. See 33 U.S.C. 2703(d)(2)(A). This is done by establishing 
that, before it acquired the real property on which the facility is 
located, it carried out ``all appropriate inquiries'' into its previous 
ownership and uses according to ``generally accepted good commercial 
and customary standards and practices.'' See 33 U.S.C. 
2703(d)(4)(A)(i). The Coast Guard is required to establish, by 
regulation, the standards and practices for carrying out all 
appropriate inquiries (33 U.S.C. 2703(d)(4)(B)), which is the subject 
of this rulemaking.

Scope of the Proposed Rule

    Congress included in the 2004 Act a list of criteria that the Coast 
Guard must address in their regulations for establishing standards and 
practices for conducting all appropriate inquiries. The criteria may be 
found in 33 U.S.C. 2703(d)(4)(C). This rulemaking is limited only to 
providing those standards and practices relative to the ``all 
appropriate inquiries'' element. This rulemaking does not address the 
other requirements in 33 U.S.C. 2703 which also must be met to qualify 
for the innocent-landowner defense.
    The proposed rule would not apply to real property purchased by a 
non-governmental entity or non-commercial entity for residential use or 
other similar uses where an inspection and a title search of the 
facility and the real property on which the facility is located reveal 
no basis for further investigation. In those cases, 33 U.S.C. 
2703(d)(4)(E) states that the inspection and title search satisfy the 
requirements for all appropriate inquiries.
    Also, the proposed rule would not affect the existing OPA 90 
liability protections for State and local governments that acquire a 
facility involuntarily in their functions as sovereigns under 33 U.S.C. 
2701(26)(B)(i) and 33 U.S.C. 2703(d)(2)(B). Involuntary acquisition of 
facilities by State and local governments do not fall under the all-
appropriate-inquiries provision of 33 U.S.C. 2703(d)(4).

Consultation With Other Agencies

    Under 33 U.S.C. 2703(d)(4)(B), we are required to consult with the 
Environmental Protection Agency (EPA) to develop regulations 
establishing standards and practices for conducting ``all appropriate 
inquiries.'' On November 1, 2005, EPA published a final rule in the 
Federal Register (70 FR 66070) establishing standards and practices for 
conducting all appropriate inquiries as required by sections 
101(35)(B)(ii) and (iii) of the Comprehensive Environmental Response, 
Compensation and Liability Act (CERCLA)(42 U.S.C. 9601, et seq.) found 
at 42 U.S.C. 9601(35)(B)(ii) and (iii). CERCLA applies to ``hazardous 
substances'', which is defined to exclude most forms of oil. These 
regulations are located in 40 CFR part 312. EPA used a negotiated 
rulemaking process to develop their standards and practices for 
conducting all appropriate inquiries under CERCLA. EPA's Negotiated 
Rulemaking Committee included interested parties from--
     Environmental interest groups;
     The Environmental Justice Community;
     Federal, State, tribal, and local Governments;
     Real estate developers, bankers and lenders; and
     Environmental professionals.
    The all-appropriate-inquiries provisions of OPA 90 and CERCLA are 
similar in many respects, but not identical. The CERCLA provision has a 
broader scope than the OPA provision. It addresses certain liability 
defense provisions that are unique to CERCLA, involving persons who may 
not be affected by this proposed rule, such as contiguous property 
owners and individuals receiving Federal Brownfield grant monies under 
40 U.S.C. 9604(k)(2)(B). While differences between OPA 90 and CERCLA 
have required certain differences between the Coast Guard's proposed 
rule and EPA's final rule, the two rules have been rendered as 
consistent as possible within statutory constraints. Maintaining 
consistency between the two rules helps standardize practices within 
the Federal Government.

ASTM Standard E 1527-05

    ASTM International (ASTM) E 1527-05, ``Standard Practice for 
Environmental Site Assessments: Phase I Environmental Site Assessment 
Process,'' is the current voluntary industry standard that defines good 
commercial and customary practice in the United States for conducting 
an environmental site assessment of a parcel of commercial real estate 
with respect to oil under OPA 90 and hazardous substances under CERCLA. 
The 2004 Act, at 33 U.S.C. 2703(d)(4)(D)(ii), refers to ASTM E 1527-97, 
which is no longer available from ASTM and has been replaced by ASTM E 
1527-05. Both the EPA and the Coast Guard agree that the new ASTM E 
1527-05 is the active industry standard and is consistent with 
Congressional intent. Persons conducting all appropriate inquiries may 
use the procedures included in the ASTM E 1527-05 standard to comply 
with this proposed rule.

Discussion of the Proposed Rule

    The proposed provisions addressed here warrant further discussion. 
The following discussion is intended to help prospective landowners 
understand and comply with the proposed rule.
    Sections 137.15 and 137.20. These sections concern the reference of 
an industry standard. See the discussion in the ``ASTM Standard E 1527-
05'' section in this preamble.
    Section 137.25. The qualifications for an environmental 
professional in proposed Sec.  137.25 are the same as those published 
in EPA's final rule. See 40 CFR part 312.10(b).
    Section 137.30(a) and (b). We believe that basing the regulations 
on a set of specific objectives and overall performance factors lends 
clarity and flexibility to the standards. Such an approach also allows 
for the application

[[Page 32235]]

of professional judgment and expertise to account for site-specific 
circumstances. In many cases, one piece of documentation may provide 
information satisfying more than one of the statutory criteria. For 
example, a chain of title document is historic documentation that may 
also include information on environmental cleanup liens and past oil 
use at the facility and the real property on which the facility is 
located. To avoid duplication of effort, the parties undertaking all 
appropriate inquiries must keep in mind the primary objectives of the 
proposed rule, as described in proposed Sec.  137.30(a), and the 
performance factors for achieving those objectives, as described in 
proposed Sec.  137.30(b).
    It is important to note that the determination of whether or not 
the all-appropriate-inquiries standard is met remains within the 
discretion of an adjudicator, whether a court or, in the context of a 
claim to the Oil Spill Liability Trust Fund, the NPFC.
    Section 137.30(a)(6). This provision would require the 
identification of institutional controls placed on the facility and the 
real property on which the facility is located. Institutional controls 
(e.g., zoning restrictions, building permits, and easements) are 
typically used whenever the presence of environmental contaminants 
including oil precludes unlimited use of the facility and the real 
property on which the facility is located. Thus, institutional controls 
may have been needed both before and after completion of a past removal 
action or may have been employed in place of a removal action. Because 
institutional controls often must remain in place for an indefinite 
duration and, therefore, generally need to survive ownership changes 
(i.e., run with the land) to be legally and practically effective, they 
can indicate past presence of oil at the facility and the real property 
on which it is located.
    Section 137.33. The proposed rule includes provisions addressing 
each of the 10 statutory criteria for the conduct of all appropriate 
inquiries under 33 U.S.C. 2703(d)(4)(C). The proposed rule and 33 
U.S.C. 2703(d)(4)(C) require that all appropriate inquiries include an 
inquiry by an environmental professional. The statute, however, does 
not require that all of the inquiries be conducted by, or under the 
supervision or responsible charge of, an environmental professional. 
The inquiries in Sec. Sec.  137.55, 137.70, 137.75, and 137.80 must be 
conducted by either the prospective landowner or by, or under the 
supervision or responsible charge of, an environmental professional. 
All other required inquiries (i.e., those in proposed Sec. Sec.  
137.35(c), 137.45, 137.50, 137.60, 137.65, and 137.85) must be 
conducted by, or under the supervision or responsible charge of, an 
environmental professional.
    Under 33 U.S.C. 2703(d)(4)(A), the landowner must conduct all 
appropriate inquiries on or before the date on which the landowner 
acquired the real property on which the facility is located. To most 
closely reflect the intent of Congress, the date on which a person 
received documentation transferring title or possession should be the 
date that the landowner acquired the real property on which the 
facility is located.
    Section 137.33(e). The proposed rule requires prospective 
landowners and environmental professionals to identify data gaps that 
affect their ability to identify conditions indicative of the presence 
or likely presence of oil. While the proposed rule does not require 
sampling and analysis as part of the all-appropriate-inquiries 
investigation, sampling and analysis may be valuable in determining the 
presence or likely presence of oil at a facility and on the real 
property on which the facility is located. In addition, the fact that 
the all-appropriate-inquiry standards do not require sampling and 
analysis does not prevent a court, or in the context of a claim to the 
Oil Spill Liability Trust Fund the NPFC, 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 oil at the facility and on the real property on 
which the facility is located, and the ability to detect the oil by 
appropriate investigation'' criterion and obtain protection from OPA 90 
liability. In addition, sampling and analysis may help explain existing 
data gaps. Prospective landowners should be mindful of all the 
statutory requirements for obtaining the OPA 90 liability protections 
when considering whether or not to conduct sampling and analysis prior 
to or after acquiring the real property on which the facility is 
located.
    Sections 137.35(c). We propose no requirements regarding the format 
of the written report under proposed Sec.  137.35(c). The report may 
use the same format as required under ASTM E 1527-05. In addition, 
there are no requirements that the report be submitted to the Coast 
Guard or other government agency or that the written report be 
maintained on-site for any length of time.
    The written report may allow any person claiming the innocent-
landowner liability protection under OPA 90 to offer documentation in 
support of his or her claim that all appropriate inquiries were 
conducted in compliance with Federal regulations. While the proposed 
rule 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 the documentation may be helpful should the owner need to 
assert protection from OPA 90 liability after acquiring the real 
property on which the facility is located. 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 the innocent-landowner 
liability protection or will in any way alter the judicial rules of 
evidence.
    Section 137.35(c)(2). This paragraph would require that the report 
identify data gaps in the information collected that affect the ability 
of the environmental professional to render the opinion. Given that the 
burden of potential OPA 90 liability ultimately falls upon the person 
specified in Sec.  137.1(a), a prospective landowner does not have to 
provide the results of an inquiry or related information to the 
environmental professional hired to undertake other aspects of the all-
appropriate-inquiries investigation. However, if the lack of this 
information affects the ability of the environmental professional to 
identify conditions that indicate the presence or likely presence of 
oil at the facility and the real property on which the facility is 
located, he or she must note the data gap in their report under Sec.  
137.35(c).
    Section 137.35(d). This provision would require the environmental 
professional, who conducts or oversees all appropriate inquiries, to 
sign the written report. There are two reasons for requiring that the 
report be signed. First, the individual signing the report must 
declare, on the signature page, that he or she meets the requirements 
for an environmental professional in proposed Sec.  137.25. Second, the 
environmental professionals must declare that all appropriate inquiries 
have been developed and performed according to the standards and 
practices in proposed part 137.
    Section 137.45. The primary purpose for the interviews portion of 
all appropriate inquiries is to obtain information regarding the 
current and

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past ownership, current and past uses, and the potential environmental 
conditions at the facility and real property on which the facility is 
located. All interviews must be conducted by the environmental 
professional or by someone under their supervision or responsible 
charge. The intent is that an individual meeting the requirements of an 
environmental professional under proposed Sec.  137.35 must oversee the 
conduct of, or review and approve the results of, the interviews to 
ensure that the interviews are conducted in compliance with the 
objectives and performance factors in proposed Sec.  137.30(a) and (b). 
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 facility and the real property 
on which the facility is located that may be indicative of the presence 
or likely presence of oil.
    The proposed rule does not prescribe particular questions that must 
be asked during the interview. The type and content of any questions 
asked during interviews would depend upon the site-specific conditions 
and circumstances and the extent of the knowledge of the environmental 
professional (or other individual under the supervision or responsible 
charge of the environmental professional) of the facility and the real 
property on which the facility is located before conducting the 
interviews. Interviews with current and past owners and occupants may 
provide opportunities to collect information 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 all the appropriate inquiries.
    In the case of facilities and the real properties on which they are 
located where there may be more than one owner or occupant, the 
proposed rule does not specify the number of owners and occupants to be 
interviewed. Instead, proposed Sec.  137.45 requires that interviews be 
conducted with major occupants, as well as those occupants likely to 
use, store, treat, handle or dispose of oil or those who likely have 
done so in the past. The environmental professional 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. 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 proposed 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 abandoned 
property.
    Section 137.50. The proposed rule requires that historical records 
on the real property on which the facility is located be searched by 
the environmental professional, or by a person under their supervision 
or responsible charge, for information dating as far back in time as 
there is documentation that the real property contained structures or 
was placed into use of some form.
    The proposed 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 real property, an 
environmental professional may conclude that a comprehensive search of 
historical records is not necessary to meet the objectives and 
performance factors in proposed Sec.  137.30(a) and (b).
    The proposed rule also does not require that any specific type of 
historic information be collected. The proposed 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 real property's ownership, uses, and 
potential environmental conditions when seeking to comply with the 
objectives and performance factors for the inquiries. In addition, 
nothing in the proposed rule prohibits the use of secondary sources 
(e.g., a previously conducted title search) when gathering information 
about historical ownership and usage of a real property. Information 
from secondary sources would also be required to be updated if it was 
last collected more than 180 days prior to the date of acquisition 
under proposed Sec.  137.33(b)(3).
    Section 137.55. Searching for recorded environmental cleanup liens 
is required to be conducted by either the environmental professional 
(or a person under their supervision or responsible charge) or by a 
person specified in Sec.  137.1(a). Recorded environmental cleanup 
liens often provide an indication that environmental conditions either 
currently exist or previously existed at a facility and the real 
property on which the facility is located that may include the presence 
or likely presence of oil.
    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 requires that only a search for recorded environmental liens be 
included in the all-appropriate-inquiries investigation.
    Section 137.60. The proposed rule describes, in Sec.  137.60(b), 
the types of Federal, State, tribal, and local government records or 
data bases of governmental records to be reviewed to obtain information 
on the subject facility, the real property on which the facility is 
located, and nearby properties necessary to meet the proposed rule's 
objectives and performance factors in Sec.  137.30(a) and (b). The 
review of actual records is not necessary, provided that the same 
information contained in the government records is attainable by 
searching available data bases.
    The proposed 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 factors in Sec.  
137.60(d)(1) through (d)(7), when determining an alternative 
appropriate search distance. The proposed Sec.  137.60 requires 
environmental professionals to document the rationale for making any 
modifications to the required minimum search distances.
    Section 137.65. The visual on-site inspection of a facility, the 
real property on which the facility is located, and adjoining 
properties during the conduct of all appropriate inquiries may be the 
most important aspect of the inquiries and the primary source of 
information regarding environmental conditions.
    In all cases, every effort must be made to conduct an on-site 
visual inspection of a facility and the real property on which the 
facility is located when conducting all appropriate inquiries. The 
proposed rule requires that the on-site visual inspection be conducted 
by an environmental professional (or by someone under their supervision 
or responsible charge) to achieve the objectives and performance 
factors in Sec.  137.30(a) and (b).
    The proposed rule requires that a visual on-site inspection be 
conducted in all but a few very limited cases. In those cases where 
physical limitations restrict the portions of the facility and the real 
property on which the property is located that may be visually 
inspected, physical limitations encountered during the visual on-site

[[Page 32237]]

inspection (e.g., weather conditions, physical obstructions) must be 
documented.
    We understand that, in some limited circumstances, it may not be 
possible to obtain on-site access to a facility and the real property 
on which the property is located due to extreme and prolonged weather 
conditions, remote locations, or refusal by the owner of the facility 
and the real property on which the facility is located to allow access, 
even after the party exercises all good faith efforts to gain access 
(e.g., by seeking the assistance of government officials). However, the 
mere refusal of an owner to allow access to the facility and the real 
property on which the facility is located does not justify the failure 
to conduct an on-site inspection, where a party has failed to exercise 
all good faith efforts to gain access.
    If on-site access is not possible despite the exercise of good 
faith efforts, the proposed rule requires that the facility and the 
real property on which the facility is located 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 real property. In addition, the proposed rule 
requires that the all-appropriate-inquiries report include 
documentation of efforts undertaken to obtain on-site access to the 
facility and the real property on which the facility is located and 
include an explanation of why good faith efforts to gain access were 
unsuccessful.
    The proposed rule also requires that the all-appropriate-inquiries 
investigation include visual inspections of properties that adjoin the 
subject real property. Visual inspections of adjoining properties may 
provide excellent information on the potential for the facility and the 
real property on which the facility is located to be affected by oil 
migrating from adjoining properties. Visual inspections of adjoining 
properties may be conducted from the real property's property line, one 
or more public rights-of-way, or other vantage point (e.g., by 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 oil currently may be, or previously may have been, stored, 
treated, handled, or disposed and must also be conducted to achieve the 
objectives and performance factors in proposed Sec.  137.30(a) and (b) 
for all the appropriate inquiries. Physical limitations to the visual 
inspections of adjoining properties must be noted in the report.
    Section 137.70. The proposed rule requires that the specialized 
knowledge of prospective landowners and the persons responsible for 
undertaking the all appropriate inquiries be taken into account when 
conducting the all appropriate inquiries for the purposes of 
identifying conditions indicative of the presence or likely presence of 
oil at a facility and the real property on which the facility is 
located to achieve the objectives and performance factors in Sec.  
137.30(a) and (b). Including the specialized knowledge of the 
environmental professional or a person under their supervision or 
responsible charge is not required.
    Section 137.75. Addressing the relationship of the purchase price 
to the value of the facility and the real property on which the 
facility is located if oil was not present is required to be conducted 
by either the environmental professional (or a person under their 
supervision or responsible charge) or by a person specified in Sec.  
137.1(a). There may be many reasons that the price paid for a 
particular facility and the real property on which the facility is 
located 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 and the fair market value is an indication that oil may be at the 
facility and the real property on which the facility is located.
    The proposed rule does not require that a real estate appraisal be 
conducted to achieve compliance with this requirement. The objective is 
not to ascertain the exact value of the facility and the real property 
on which the facility is located, but to determine whether or not the 
purchase price paid generally is reflective of its fair market value.
    In the case of many real estate transactions, a formal appraisal 
may be conducted for other purposes (e.g., to establish the value of 
the facility and the real property on which the facility is located 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 appraisal are available, the appraisal 
results may serve as an excellent source of information on the fair 
market value of the facility and the real property on which the 
facility is located.
    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 facility and the real property on which the 
facility is located to prices paid for similar facilities and real 
properties on which they are located in the same vicinity, or by 
consulting a real estate expert familiar with properties in the general 
locality and who may be able to provide a comparability analysis.
    Section 137.80. The inclusion of commonly known or reasonably 
ascertainable information into the inquiry is required by either the 
environmental professional (or a person under their supervision or 
responsible charge) or by a person specified in Sec.  137.1(a) to 
satisfy objectives and performance factor in proposed Sec.  137.30(a) 
and (b). Information about a facility and the real property on which 
the facility is located, including its ownership and uses, that is 
commonly known or reasonably ascertainable within the community or 
neighborhood may be valuable to identifying conditions indicative of 
the presence or likely presence of oil. Commonly known or reasonably 
ascertainable information includes information about a facility and the 
real property on which the facility is located that generally is known 
to the public within the community and can be easily sought and found 
from individuals familiar with the facility and the real property on 
which the facility is located or from easily attainable public sources 
of information.
    This information may be ascertained from the owner or occupant of a 
facility and the real property on which the facility is located, 
members of the local community, including owners or occupants of 
neighboring properties, 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.
    Section 137.85. The proposed rule requires that persons conducting 
all appropriate inquiries consider all the information collected during 
the conduct of the inquiries in totality to assess whether or not an 
obvious conclusion may be drawn that there are conditions indicative of 
the presence or likely presence of oil at the facility and the real 
property on which the facility is located.
    We interpret the statutory criterion to require the environmental 
professional or a person under their supervision or responsible charge 
to consider information already obtained during the

[[Page 32238]]

conduct of all-appropriate-inquiries investigation which achieves the 
objectives and performance factors in Sec.  137.30(a) and (b) and not 
as a requirement to collect additional information.

References

    Material referenced appears in Sec.  137.15. You may inspect this 
material at the National Pollution Funds Center where indicated under 
ADDRESSES. Copies of the material are available from the sources listed 
in Sec.  137.15.

Regulatory Analysis and Review

    This proposed rule is not a ``significant regulatory action'' under 
section 3(f) of Executive Order 12866, Regulatory Planning and Review, 
and does not require an assessment of potential costs and benefits 
under section 6(a)(3) of that Order. The Office of Management and 
Budget has not reviewed it under that Order.

Draft Regulatory Evaluation

    Compliance with this proposed rule is required only for those 
persons engaging in a commercial real estate transaction who choose to 
take steps necessary to protect themselves from liability should 
unknown oil that is the subject of a discharge or substantial threat of 
discharge be found at the facility after they acquire it.
    The following analysis of the economic impacts associated with this 
proposed rule relies heavily upon the data collected and the 
assumptions made in the Environmental Impact Analysis of EPA's final 
rule, ``Economic Impact Analysis for the Final All Appropriate 
Inquiries Regulation,'' Docket ID No. SFUND-2004-0001 found at http://www.regulations.gov/fdmspublic/component/main or at EPA Docket Center, 
EPA West Building, room B102, 1301 Constitution Avenue, NW., 
Washington, DC. EPA surveyed all publicly available literature on 
environmental assessments of sites to determine what standard industry 
was customarily using. These assessments correspond to the all 
appropriate inquiries provision being addressed in this rulemaking and 
are commonly known as Phase I environmental site assessments (Phase I 
ESAs). EPA determined that the 2000 edition of ASTM E 1527 (i.e., ASTM 
E 1527-00) would be their regulatory baseline. This baseline 
represented the ``no action'' scenario to which all regulatory 
alternatives were compared and their economic impacts were measured. 
ASTM E 1527-00 would have been applied by industry absent EPA's 
regulation, because this voluntary industry standard represented 
``generally accepted good commercial and customary practices.'' This 
assumption was confirmed by the members of EPA's Negotiated Rulemaking 
Committee (See the ``Consultation with Other Agencies'' section of this 
preamble.). To further validate their assumption, EPA received no 
public comments on this aspect of its Economic Impact Analysis. In 
addition, ASTM International states that ASTM E 1527-97 (the edition 
referred to in the 2004 Act) is no longer available because, when a new 
version of a standard is released, previous versions of the standard 
are no longer the active industry standard. The Coast Guard, after 
independently contacting ASTM International, concurs that the ASTM E 
1527-00 standard more accurately reflects the current market conditions 
than the E 1527-97 standard referenced in OPA 90 as the acceptable 
interim standard (33 U.S.C. 2703(d)(4)(D)(ii)). The Coast Guard 
therefore uses the ASTM E 1527-00 standard as its regulatory baseline 
for its analysis of the economic impacts associated with this proposed 
rule.
    Historically, Phase I ESAs have been used towards providing 
liability protection to individuals under CERCLA. A recent survey 
conducted by Environmental Data Resources, Inc. (EDR) indicates that 
approximately 55 percent of all Phase I ESAs are driven exclusively by 
a need for the landowner to qualify for protection from CERCLA 
liability. The remaining 45 percent are driven by a desire to assess 
other business environmental risk concerns (i.e., asbestos, lead-based 
paint, oil, etc.).
    As previously discussed in the ``Consultation with Other Agencies'' 
section of this preamble, this proposed rule is consistent with EPA's 
final rule. The scope of EPA's rulemaking however is much larger than 
this proposed rule. As such, the economic impacts of this proposed rule 
are a subset of the impacts estimated by EPA's rulemaking. This 
reduction in economic impact results primarily from the lower number of 
Phase I ESAs expected to be conducted annually under this proposed rule 
compared to EPA's final rule.
    As was the case with EPA's rulemaking, this proposed rule is 
expected to result in the following economic impacts:
    (1) A reduced burden for the conduct of interviews in those cases 
where the facility and the real property on which the facility is 
located is abandoned. The new requirement requires only that 
neighboring property owners and occupants be interviewed and not the 
current owners and occupants of the abandoned property. This burden 
would range from no change to a decrease of 0.5 hour per Phase I ESA 
depending on the type and size of the facility and the real property on 
which the facility is located.
    (2) An increased burden in those cases where past owners or 
occupants of the facility and the real property on which the facility 
is located need to be interviewed. This would involve the additional 
effort required to locate and interview past owners and occupants. This 
increased burden would range from 1 hour to 2 hours per Phase I ESA 
depending on the type and size of the facility and the real property on 
which the facility is located.
    (3) An increased burden associated with documenting recorded 
environmental cleanup liens. This increased burden would involve 
additional time spent in preparing the Phase I ESA report. This 
increased burden would range from an additional 0.5 hour to 1 hour per 
Phase I ESA depending on the size and type of the facility and the real 
property on which the facility is located.
    (4) An increased burden for documenting the reasons for the price 
and fair market value of a facility and the real property on which the 
facility is located in those cases where the purchase price paid is 
significantly below its fair market value. This increased burden would 
involve interviews with local government officials and increased time 
spent in preparing the Phase I ESA report. This increased burden would 
reflect an additional 0.5 hour per Phase I ESA for all sizes and types 
of facilities and the real properties on which the facilities are 
located.
    (5) An increased burden for recording information about the degree 
of obviousness of the presence or likely presence of oil at a facility 
and the real property on which the facility is located. This increased 
burden would involve additional time spent in preparing the Phase I 
Environmental report. This increased burden would range from 0.5 hour 
to 1 hour per Phase I ESA depending on the type and size of the 
facility and the real property on which the facility is located.
    Using a weighted labor rate of $51.20/hour applied to the 
activities (as outlined above) required as a result of their regulation 
(as they vary from those required in their regulatory baseline), EPA 
determined that there would be an incremental cost ranging from $52 to 
$58 per Phase I ESA (the low end estimate assumes that 15 percent of

[[Page 32239]]

properties are abandoned, while the high end estimate assumes that 28 
percent of properties are abandoned). Our analysis simplifies this 
range as an average incremental cost of $55 per Phase I ESA.
A. Analysis Calculations and Results
    Using data from EPA's final rule and extrapolated for the period 
from 2007 to 2016, there would be an average of 332,038 Phase I ESAs 
conducted annually. As previously mentioned, the incremental cost of 
conducting a Phase I ESA to comply with EPA's rulemaking above and 
beyond what was required under ASTM E 1527-00 as calculated by EPA's 
rulemaking would be approximately $55 per ESA.
B. Estimated Annual Number of OPA 90-Related Phase I ESAs
    This analysis is severely limited by the lack of data available 
which would allow the number of Phase I ESAs conducted applicable to 
this proposed rule to be segregated from the total population of Phase 
I ESAs conducted.
    In order to put an upward bound on the costs associated with this 
proposed rule, this analysis first describes the absolute upper bound 
scenario (i.e., that all commercial real estate transactions not 
exclusively conducted for CERCLA liability protection requiring a Phase 
I ESA would be impacted by this proposed rule). Next the Coast Guard 
attempts to develop a more likely scenario that takes into account that 
Phase I ESAs for certain commercial real estate transactions are 
outside the scope of this proposed rule. We acknowledge that, of all of 
the commercial real estate transactions that occur annually, a likely 
small percentage would involve--
    1. A facility and the real property on which the facility is 
located where a discharge or substantial threat of discharge of oil may 
impact the navigable waters or exclusive economic zone of the United 
States; and
    2. A Phase I ESA that was conducted for establishment of the 
innocent landowner liability protection provision under OPA 90 and not 
to assess environmental risk concerns not related to oil (e.g., lead-
based paint contamination, asbestos, CERCLA hazardous substances, 
etc.).
C. Upper Bound Cost Scenario
    The estimated incremental cost of this scenario, where all future 
Phase I ESAs not conducted specifically for CERCLA liability protection 
(i.e., 45 percent as per the results of EDR's survey mentioned above) 
are impacted by this proposed rule, would be approximately $8.2 Million 
per year.

Cost Calculation 1--Estimated Annual Number of Coast Guard related 
Phase I ESAs
    332,038 Phase I ESAs x 0.45 = 149,417 Phase I ESAs
Estimated Annual Cost of Coast Guard related Phase I ESAs
    149,417 Phase I ESAs x $55/ESA = $8,217,935 per year.
D. Most Likely Cost Scenario
    To more accurately reflect the scope of this proposed rule, certain 
commercial real estate transactions involving a Phase I ESA from EPA's 
analysis would have to be removed from this analysis. Those include 
transactions where a discharge or substantial threat of discharge of 
oil from a facility and the real property on which the facility is 
located would not have the possibility of impacting the navigable 
waters or exclusive economic zone of the United States and transactions 
which are conducted for substances other than oil. Absent the data to 
make more than an approximation, we assumed that five percent of the 
total number of Phase I ESAs may realistically reflect the number of 
Phase I ESAs within the scope of this proposed rule. Under this 
assumption, the estimated cost associated with this proposed rule would 
be significantly reduced. The estimated incremental cost under this 
scenario is approximately $913,110 per year.

Cost Calculation 2--Estimated Annual Number of Coast Guard related 
Phase I ESAs
    332,038 Phase I ESAs x 0.05 = 16,602 Phase I ESAs
Estimated Annual Cost of Coast Guard related Phase I ESAs
    16,602 Phase I ESAs x $55/ESA = $913,110 per year.

    ASTM International has since updated their ASTM E 1527 standard. 
Their new standard is ASTM E 1527-05. Both EPA and Coast Guard 
recognize that this new standard is consistent with their rulemakings 
on the subject. See Federal Register (70 FR 66081). Because the new 
standard is consistent with the EPA final rule, which went into effect 
on November 1, 2006, and provides documentation for both hazardous 
substances and oil, it is likely that all prudent prospective 
commercial landowners will be using the more rigorous ASTM standard for 
their real estate transactions well before our rule becomes effective. 
Thus, the possible economic impact attributed to this proposed rule 
might be reduced to a negligible value. The Coast Guard further notes 
that there have been no instances to date where a responsible party has 
attempted to use the interim innocent-landowner defense to liability 
provision under OPA 90.
    EPA qualitatively assessed the benefits for their final rule. Of 
these benefits, only one is applicable to our proposed rule due to our 
much smaller regulatory scope, namely the increased level of certainty 
with regard to OPA 90 liability provided to prospective owners of 
facilities and the real properties on which they are located with 
potential oil discharges. The Coast Guard, as was the case with EPA's 
analysis, is not able to quantify, with any significant level of 
confidence, the exact proportion of benefits associated with the 
proposed rule. For these reasons, the costs and benefits can not be 
directly compared. However, because complying with this proposed rule 
is required only for those persons who choose to take steps necessary 
to protect themselves from liability should unknown oil that is the 
subject of a discharge or substantial threat of discharge be found at 
the facility after they acquire it, it can be assumed that persons 
would only do so if the potential benefits to them associated with this 
protection from liability outweigh their costs of compliance.

Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have 
considered whether this proposed rule would have a significant economic 
impact on a substantial number of small entities. The term ``small 
entities'' comprises small businesses, not-for-profit organizations 
that are independently owned and operated and are not dominant in their 
fields, and governmental jurisdictions with populations of less than 
50,000.
    As previously stated in the above regulatory evaluation section, 
compliance with this proposed rule is only required for those entities, 
regardless of their operations, involved in a real estate transaction 
who choose to take steps necessary to protect themselves from liability 
should unknown oil that is the subject of a discharge or substantial 
threat of discharge be found at the facility after they acquire it. 
Therefore, it assumed that entities across all industries, as defined 
by the North American Industry Classification System (NAICS), could 
potentially be affected.
    The Regulatory Flexibility Act and the Small Business Regulatory 
Enforcement Fairness Act of 1996 require Federal agencies to measure 
the regulatory impacts of the rule to determine whether there will be a 
significant economic impact on a substantial

[[Page 32240]]

number of small entities. Entities, however, may operate at multiple 
physical locations. For example, most family-owned restaurants operate 
at a single location, while chain restaurants have multiple locations. 
Thus, the annual number of transactions per entity, and therefore the 
demand for Phase I ESAs, is a function of the number of establishments 
an entity owns.
    According to 2001 U.S. Census data, the distribution of 
establishments by entity size of the regulated community is as follows:

Less than 100 employees: 81%.
100 to 499 employees: 5%.
500 to 1,499 employees: 2%.
1,500 employees or more: 12%.

    According to EPA's Office of Policy, Economics, and Innovations and 
EPA's National Center for Environmental Economics, it is a common 
practice when a proposed regulation has the potential of affecting all 
industries to consider all entities with less than 500 employees as 
small. According to 2001 U.S. Census data, when small entities are 
defined as entities with less than 500 employees, small entities own 86 
percent of all establishments. Using EPA's assumption that small 
entities are equally likely to engage in commercial real estate 
transactions as large ones, we estimate that 86 percent of all 
commercial real estate transactions completed annually involve small 
entities. Applying this 86 percent to the ``Most Likely Cost Scenario'' 
and the ``Upper Bound Cost Scenario'' (See ``Regulatory Evaluation'' in 
this preamble.) provides a range in the number of potential 
transactions occurring annually of between 14,278 and 128,499.
    Based on 2001 Census Bureau data, the average annual revenue per 
employee for an entity is approximately $24,000. Therefore, even for a 
small entity receiving the minimum average annual revenue of $24,000 
that makes one transaction a year (a very conservative assumption), the 
annual cost impact of $55 would represent only 0.23 percent of annual 
revenues.
    Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that 
this proposed rule would not have a significant economic impact on a 
substantial number of small entities. If you think that your business, 
organization, or governmental jurisdiction qualifies as a small entity 
and that this rule would have a significant economic impact on it, 
please submit a comment to the Docket Management Facility at the 
address under ADDRESSES. In your comment, explain why you think it 
qualifies and how and to what degree this rule would economically 
affect it.

Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small 
entities in understanding this proposed rule so that they can better 
evaluate its effects on them and participate in the rulemaking. If the 
rule would affect your small business, organization, or governmental 
jurisdiction and you have questions concerning its provisions or 
options for compliance, please consult Benjamin White, National 
Pollution Funds Center, Coast Guard, telephone 202-493-6863. The Coast 
Guard will not retaliate against small entities that question or 
complain about this rule or any policy or action of the Coast Guard.
    Small businesses may send comments on the actions of Federal 
employees who enforce, or otherwise determine compliance with, Federal 
regulations to the Small Business and Agriculture Regulatory 
Enforcement Ombudsman and the Regional Small Business Regulatory 
Fairness Boards. The Ombudsman evaluates these actions annually and 
rates each agency's responsiveness to small business. If you wish to 
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR 
(1-888-734-3247).

Collection of Information

    This proposed rule would call for a collection of information under 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). As defined 
in 5 CFR 1320.3(c), ``collection of information'' comprises reporting, 
recordkeeping, monitoring, posting, labeling, and other, similar 
actions. The title and description of the information collections, a 
description of those who must collect the information, and an estimate 
of the total annual burden follow. The estimate covers the time for 
reviewing instructions, searching existing sources of data, gathering 
and maintaining the data needed, and completing and reviewing the 
collection.
    Title: Landowner Defenses to Liability under the Oil Pollution Act 
of 1990: Standards and Practices for Conducting All Appropriate 
Inquiries.
    Summary of the Collection of Information: For landowners choosing 
to avail themselves of the innocent-landowner defense, they or their 
environmental professionals must conduct the all appropriate inquiries 
specified in the proposed rule. Depending upon the particular case, 
this may involve interviews, research, and reports.
    Need for Information: This proposed rule is needed to assist 
prospective landowners in establishing the innocent-landowner defense.
    Proposed Use of Information: The information could be used by 
persons if their liability under OPA 90 for the discharge or 
substantial threat of discharge of oil were challenged in a court.
    Description of the Respondents: The respondents include anyone 
engaging in a commercial real estate transaction that may desire to 
assert an innocent landowner defense to liability under OPA 90.
    Number of Respondents: We estimate that there would be 16,602 
respondents. This is based on an estimate made in the ``Draft 
Regulatory Evaluation'' section of this preamble.
    Frequency of Response: 1 hour per response.
    Burden of Response: $67 per response.
    Estimate of Total Annual Burden: 16,602 respondents x 1 hour per 
response x $67 per response = $1,112,334.
    As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)), we have submitted a copy of this proposed rule to the Office 
of Management and Budget (OMB) for its review of the collection of 
information.
    We ask for public comment on the proposed collection of information 
to help us determine how useful the information is; whether it is 
readily available elsewhere; how accurate our estimate of the burden of 
collection is; how valid our methods for determining burden are; how we 
can improve the quality, usefulness, and clarity of the information; 
and how we can minimize the burden of collection.
    If you submit comments on the collection of information, submit 
them both to OMB and to the Docket Management Facility where indicated 
under ADDRESSES, by the date under DATES.
    You need not respond to a collection of information unless it 
displays a currently valid control number from OMB. Before the 
requirements for this collection of information become effective, we 
will publish notice in the Federal Register of OMB's decision to 
approve, modify, or disapprove the collection.

Federalism

    A rule has implications for federalism under Executive Order 13132, 
Federalism, if it has a substantial direct effect on State or local 
governments and

[[Page 32241]]

would either preempt State law or impose a substantial direct cost of 
compliance on them. We have analyzed this proposed rule under that 
Order and have determined that it does not have implications for 
federalism.

Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) 
requires Federal agencies to assess the effects of their discretionary 
regulatory actions. In particular, the Act addresses actions that may 
result in the expenditure by a State, local, or tribal government, in 
the aggregate, or by the private sector of $100,000,000 or more in any 
one year. Though this proposed rule would not result in such an 
expenditure, we do discuss the effects of this rule elsewhere in this 
preamble.

Taking of Private Property

    This proposed rule would not effect a taking of private property or 
otherwise have taking implications under Executive Order 12630, 
Governmental Actions and Interference with Constitutionally Protected 
Property Rights.

Civil Justice Reform

    This proposed rule meets applicable standards in sections 3(a) and 
3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize 
litigation, eliminate ambiguity, and reduce burden.

Protection of Children

    We have analyzed this proposed rule under Executive Order 13045, 
Protection of Children from Environmental Health Risks and Safety 
Risks. This rule is not an economically significant rule and would not 
create an environmental risk to health or risk to safety that might 
disproportionately affect children.

Indian Tribal Governments

    This proposed rule does not have tribal implications under 
Executive Order 13175, Consultation and Coordination with Indian Tribal 
Governments, because it would not have a substantial direct effect on 
one or more Indian tribes, on the relationship between the Federal 
Government and Indian tribes, or on the distribution of power and 
responsibilities between the Federal Government and Indian tribes.

Energy Effects

    We have analyzed this proposed rule under Executive Order 13211, 
Actions Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. We have determined that it is not a ``significant 
energy action'' under that order because it is not a ``significant 
regulatory action'' under Executive Order 12866 and is not likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy. The Administrator of the Office of Information and 
Regulatory Affairs has not designated it as a significant energy 
action. Therefore, it does not require a Statement of Energy Effects 
under Executive Order 13211.

Technical Standards

    The National Technology Transfer and Advancement Act (NTTAA) (15 
U.S.C. 272 note) directs agencies to use voluntary consensus standards 
in their regulatory activities unless the agency provides Congress, 
through the Office of Management and Budget, with an explanation of why 
using these standards would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are technical 
standards (e.g., specifications of materials, performance, design, or 
operation; test methods; sampling procedures; and related management 
systems practices) that are developed or adopted by voluntary consensus 
standards bodies.
    This proposed rule references the following voluntary consensus 
standard: ASTM E 1527-05, ``Standard Practice for Environmental Site 
Assessments: Phase I Environmental Site Assessment Process.'' The 
proposed section that references this standard and the location where 
this standard is available is listed in proposed Sec.  137.15. Persons 
conducting all appropriate inquiries may use the procedures included in 
the ASTM E 1527-05 standard to comply with this proposed rule.

Environment

    We have analyzed this proposed rule under Commandant Instruction 
M16475.lD and Department of Homeland Security Management Directive 
5100.1, which guide the Coast Guard in complying with the National 
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and 
have made a preliminary determination that there are no factors in this 
case that would limit the use of a categorical exclusion under section 
2.B.2 of the Instruction. Therefore, we believe that this rule should 
be categorically excluded, under figure 2-1, paragraph (34)(a), of the 
Instruction, from further environmental documentation. This proposed 
rule concerns the making of inquiries into the previous ownership and 
uses of facilities and the real property on which they are located, 
before they are acquired, to determine the presence or likely presence 
of oil. It has no effect on the environment.
    A preliminary ``Environmental Analysis Check List'' is available in 
the docket where indicated under the ``Public Participation and Request 
for Comments'' section of this preamble. Comments on this section will 
be considered before we make the final decision on whether this rule 
should be categorically excluded from further environmental review.

List of Subjects in 33 CFR Part 137

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

    For the reasons set out in the preamble, the Coast Guard proposes 
to add 33 CFR part 137 as follows:
    1. Add part 137 to read as follows:

PART 137--OIL SPILL LIABILITY: STANDARDS FOR CONDUCTING ALL 
APPROPRIATE INQUIRIES UNDER THE INNOCENT LAND-OWNER DEFENSE

Subpart A--Introduction
Sec.
137.1 Purpose and applicability.
137.5 Disclosure obligations.
137.10 How are terms used in this part defined?
137.15 References: Where can I get a copy of the publications 
mentioned in this part?
Subpart B--Standards and Practices
137.18 Duties of persons specified in Sec.  137.1(a).
137.20 May voluntary industry standards be used to comply with this 
regulation?
137.25 Qualifications of the Environmental Professional.
137.30 Objectives and performance factors.
137.33 General All Appropriate Inquiries requirements.
137.35 Inquiries by an environmental professional.
137.40 Additional inquiries.
137.45 Interviews with past and present owners, operators, and 
occupants.
137.50 Reviews of historical sources of information.
137.55 Searches for recorded environmental cleanup liens.
137.60 Reviews of Federal, State, tribal and local government 
records.
137.65 Visual inspections of the facility, the real property on 
which the facility is located, and adjoining properties.
137.70 Specialized knowledge or experience on the part of persons 
specified in Sec.  137.1(a).
137.75 The relationship of the purchase price to the value of the 
facility and the real property on which the facility is located, if 
oil was not at the facility or on the real property.
137.80 Commonly known or reasonably ascertainable information about 
the

[[Page 32242]]

facility and the real property on which the facility is located.
137.85 The degree of obviousness of the presence or likely presence 
of oil at the facility and the real property on which the facility 
is located and the ability to detect the oil by appropriate 
investigation.

    Authority: 33 U.S.C. 2703(d)(4); Department of Homeland Security 
Delegation No. 14000.

Subpart A--Introduction


Sec.  137.1  Purpose and applicability.

    (a) In general under the Oil Pollution Act of 1990 (33 U.S.C. 2701, 
et seq.), an owner or operator of a facility (as defined in Sec.  
137.10) that is the source of a discharge, or a substantial threat of 
discharge, of oil into the navigable waters or adjoining shorelines or 
the exclusive economic zone is liable for damages and removal costs 
resulting from the discharge or threat. However, if that person can 
demonstrate, among other criteria not addressed in this part, that they 
did not know and had no reason to know at the time of their acquisition 
of the real property on which the facility is located that oil was 
located on, in, or at the facility, the person may be eligible for the 
innocent landowner defense to liability under 33 U.S.C. 2703(d)(4). One 
element of the defense is that the person made all appropriate 
inquiries into the nature of the real property on which the facility is 
located before acquiring it. The purpose of this part is to prescribe 
standards and practices for making those inquiries.
    (b) Under 33 U.S.C. 2703(d)(4)(E), this part does not apply to real 
property purchased by a non-governmental entity or non-commercial 
entity for residential use or other similar uses where a property 
inspection and a title search reveal no basis for further 
investigation. In those cases, the property inspection and title search 
satisfy the requirements of this part.
    (c) This part does not affect the existing OPA 90 liability 
protections for State and local governments that acquire a property 
involuntarily in their functions as sovereigns under 33 U.S.C. 
2703(d)(2)(B). Involuntary acquisition of properties by State and local 
governments fall under the provisions of 33 U.S.C. 2703(d)(2)(B), not 
under the all-appropriate-inquiries provision of 33 U.S.C. 2703(d)(4) 
and this part.


Sec.  137.5  Disclosure obligations.

    (a) Under 33 U.S.C. 2703(c)(1), persons specified in Sec.  
137.1(a), including environmental professionals, must report the 
incident as required by law if they know or have reason to know of the 
incident.
    (b) This part does not limit or expand disclosure obligations under 
any Federal, State, tribal, or local law. It is the obligation of each 
person, including environmental professionals, conducting inquiries to 
determine his or her respective disclosure obligations under Federal, 
State, tribal, and local law and to comply with them.


Sec.  137.10  How are terms used in this part defined?

    (a) The following terms have the same definitions as in 33 U.S.C. 
2701: ``damages;'' ``discharge;'' ``incident;'' ``liable'' or 
``liability;'' ``oil;'' ``owner or operator;'' and ``removal costs.''
    (b) As used in this part--
    Abandoned property means a property that, because of its general 
disrepair or lack of activity, a reasonable person could believe that 
there is an intent on the part of the current owners to surrender their 
rights to the property.
    Adjoining property means real property the border of which is 
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 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 subpart B of this part despite good faith efforts by the 
environmental professional or persons specified in Sec.  137.1(a), as 
appropriate, to gather the information under Sec.  137.33.
    Environmental professional means an individual who meets the 
requirements of Sec.  137.25.
    Facility means any structure, group of structures, equipment, or 
device (other than a vessel) which is used for one or more of the 
following purposes: Exploring for, drilling for, producing, storing, 
handling, transferring, processing, or transporting oil. This term 
includes any motor vehicle, rolling stock, or pipeline used for one or 
more of these purposes.
    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 oil discharge and/or protect the 
integrity of a removal action.
    Relevant experience 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 the 
presence or likely presence of oil at the facility and the real 
property on which the facility is located.


Sec.  137.15  References: Where can I get a copy of the publications 
mentioned in this part?

    Section 137.20 of this part refers to ASTM E 1527-05, Standard 
Practice for Environmental Site Assessments: Phase I Environmental Site 
Assessment Process. That document is available from ASTM International, 
100 Barr Harbor Drive, P.O. Box C700, West Conshohocken, PA 19428-2959. 
It is also available for inspection at the Coast Guard National 
Pollution Funds Center, 4200 Wilson Boulevard, Suite 1013, Arlington, 
VA 22203-1804.

Subpart B--Standards and Practices


Sec.  137.18  Duties of persons specified in Sec.  137.1(a).

    In order to make all appropriate inquiries, persons seeking to 
establish the liability protection under Sec.  137.1(a) must conduct 
the inquiries and investigations as required in this part and ensure 
that the inquiries and investigations required to be made by 
environmental professionals are made.


Sec.  137.20  May voluntary industry standards be used to comply with 
this regulation?

    The industry standards in ASTM E 1527-05, (Referenced in Sec.  
137.15) may be used to comply with the requirements set forth in 
Sec. Sec.  137.45 through 137.85 of this part.


Sec.  137.25  Qualifications of the environmental professional.

    (a) An environmental professional is an individual who possesses 
sufficient specific education, training, and experience necessary to 
exercise professional judgment to develop opinions and conclusions 
regarding conditions indicative of the presence or likely presence of 
oil at a facility and the real property on which the facility is 
located sufficient to meet the objectives and performance factors in 
Sec.  137.30(a) and (b).
    (1) 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

[[Page 32243]]

of Puerto Rico) and have the equivalent of 3 years of full-time 
relevant experience;
    (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 under Sec.  137.35 and have the 
equivalent of 3 years of full-time relevant experience;
    (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 5 years of full-time relevant experience; 
or
    (iv) Have the equivalent of 10 years of full-time relevant 
experience.
    (2) An environmental professional should remain current in his or 
her field through participation in continuing education or other 
activities.
    (3) The requirements for an environmental professional in this 
section do 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 an 
inquiry under Sec.  137.35(b).
    (4) A person who does not qualify as an environmental professional 
under this section may assist in the conduct of all appropriate 
inquiries according to this part if the person is under the supervision 
or responsible charge of an environmental professional meeting the 
requirements of this section when conducting the inquiries.


Sec.  137.30  Objectives and performance factors.

    (a) Objectives. This part is intended to result in the 
identification of conditions indicative of the presence or likely 
presence of oil at the facility and the real property on which the 
facility is located. In order to meet the objectives of this 
regulation, persons specified in Sec.  137.1(a) and the environmental 
professional must seek to identify, through the conduct of the 
standards and practices in this subpart, the following types of 
information about the facility and the real property on which the 
facility is located:
    (1) Current and past uses and occupancies of the facility and the 
real property on which the facility is located.
    (2) Current and past uses of oil.
    (3) Waste management and disposal activities that indicate presence 
or likely presence of oil.
    (4) Current and past corrective actions and response activities 
that indicate presence or likely presence of oil.
    (5) Engineering controls.
    (6) Institutional controls, such as zoning restrictions, building 
permits, and easements.
    (7) Properties adjoining or located nearby the facility and the 
real property on which the facility is located that have environmental 
conditions that could have resulted in conditions indicative of the 
presence or likely presence of oil at the facility and the real 
property on which the facility is located.
    (b) Performance factors. In order to meet this part and to meet the 
objectives stated in paragraph (a) of this section, the persons 
specified in Sec.  137.1(a) or the environmental professional (as 
appropriate to the particular standard and practice) must--
    (1) Gather the information that is required for each standard and 
practice listed in this subpart that is publicly available, is 
obtainable from its source within a reasonable time and cost, and can 
be reviewed practicably; 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 
part.


Sec.  137.33  General all appropriate inquiries requirements.

    (a) All appropriate inquiries must be conducted within 1 year 
before the date of acquisition of the real property on which the 
facility is located, as evidenced by the date of receipt of the 
documentation transferring title to, or possession of, the real 
property and must include:
    (1) An inquiry by an environmental professional, as provided in 
Sec.  137.35.
    (2) The collection of information under Sec.  137.40 by persons 
specified in Sec.  137.1(a).
    (b) The following components of the all appropriate inquiries must 
be conducted or updated within 180 days before the date of acquisition 
of the real property on which the facility is located:
    (1) Interviews with past and present owners, operators, and 
occupants. See Sec.  137.45.
    (2) Searches for recorded environmental cleanup liens. See Sec.  
137.55.
    (3) Reviews of Federal, State, tribal, and local government 
records. See Sec.  137.60.
    (4) Visual inspections of the facility, the real property on which 
the facility is located, and adjoining properties. See Sec.  137.65.
    (5) The declaration by the environmental professional. See Sec.  
137.35(d).
    (c) All appropriate inquiries may include the results of and 
information contained in an inquiry previously conducted by, or on 
behalf of, persons specified in Sec.  137.1(a) who are responsible for 
the inquiries for the facility and the real property on which the 
facility is located if--
    (1) The information was collected during the conduct of an all-
appropriate-inquiries investigation under this part.
    (2) The information was collected or updated within 1 year before 
the date of acquisition of the real property on which the facility is 
located.
    (3) The following components of the inquiries were conducted or 
updated within 180 days before the date of acquisition of the real 
property on which the facility is located:
    (i) Interviews with past and present owners, operators, and 
occupants. See Sec.  137.45.
    (ii) Searches for recorded environmental cleanup liens. See Sec.  
137.55.
    (iii) Reviews of Federal, State, tribal, and local government 
records. See Sec.  137.60.
    (iv) Visual inspections of the facility, the real property on which 
the facility is located, and the adjoining properties. See Sec.  
137.65.
    (v) The declaration by the environmental professional. See Sec.  
137.35(d).
    (4) Previously collected information is updated by including 
relevant changes in the conditions of the facility and the real 
property on which the facility is located and specialized knowledge, as 
outlined in Sec.  137.70, of the persons conducting the all appropriate 
inquiries for the facility and the real property on which the facility 
is located, including persons specified in Sec.  137.1(a) and the 
environmental professional.
    (d) All appropriate inquiries may include the results of an 
environmental professional's report under Sec.  137.35(c) that have 
been prepared by or for other persons if--
    (1) The reports meet the objectives and performance factors in 
Sec.  137.30(a) and (b); and
    (2) The person specified in Sec.  137.1(a) reviews the information 
and conducts the additional inquiries under Sec. Sec.  137.70, 137.75, 
and 137.80 and updates the inquiries requiring an update under 
paragraph (b) of this section.

[[Page 32244]]

    (e) To the extent there are data gaps that affect the ability of 
persons specified in Sec.  137.1(a) and environmental professionals to 
identify conditions indicative of the presence or likely presence of 
oil, the gaps must be identified in the report under Sec.  
137.35(c)(2). In addition, the sources of information consulted to 
address data gaps should be identified and the significance of the gaps 
noted. Sampling and analysis may be conducted to develop information to 
address data gaps.
    (f) Any conditions indicative of the presence or likely presence of 
oil identified as part of the all-appropriate-inquiries investigation 
should be noted in the report.


Sec.  137.35  Inquiries by an environmental professional.

    (a) Inquiries by an environmental professional must be conducted 
either by the environmental professional or by a person under the 
supervision or responsible charge of an environmental professional.
    (b) The inquiry of the environmental professional must include the 
requirements in Sec. Sec.  137.45 (interviews with past and present 
owners), 137.50 (reviews of historical sources), 137.60 (reviews of 
government records), 137.65 (visual inspections), 137.80 (commonly 
known or reasonably ascertainable information) and 137.85 (degree of 
obviousness of the presence or likely presence of oil). In addition, 
the inquiry should take into account information provided to the 
environmental professional by the person specified in Sec.  137.1(a) 
conducting the additional inquiries under Sec.  137.40.
    (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 the presence or likely presence of oil at the facility 
and the real property on which the facility is located.
    (2) An identification of data gaps in the information developed as 
part of the inquiry that affect the ability of the environmental 
professional to identify conditions indicative of the presence or 
likely presence of oil at the facility and the real property on which 
the facility is located. The report must also indicate whether the gaps 
prevented the environmental professional from reaching an opinion 
regarding the identification of conditions indicative of the presence 
or likely presence of oil.
    (3) The qualifications of the environmental professional.
    (4) An opinion regarding whether additional appropriate 
investigation is necessary.
    (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, [I, we] meet the requirements under 
33 CFR 137.25 for an environmental professional.'' and ``[I, We] have 
the specific qualifications based on education, training, and 
experience to assess the nature, history, and setting of a facility and 
the real property on which it is located. [I, We] have developed and 
conducted all appropriate inquiries according to the standards and 
practices in 33 CFR part 137.''


Sec.  137.40  Additional inquiries.

    (a) Persons specified in Sec.  137.1(a) must conduct inquiries in 
addition to those conducted by the environmental professional under 
Sec.  137.35 and may provide the information associated with these 
additional inquiries to the environmental professional responsible for 
conducting the activities listed in Sec.  137.35--
    (1) As required by Sec.  137.55 and if not otherwise obtained by 
the environmental professional, environmental cleanup liens against the 
facility and the real property on which it is located that are filed or 
recorded under Federal, State, tribal, or local law.
    (2) As required by Sec.  137.70, specialized knowledge or 
experience of the person specified in Sec.  137.1(a).
    (3) As required by Sec.  137.75, the relationship of the purchase 
price to the fair market value of the facility and the real property on 
which the facility is located if the oil was not at the facility and 
the real property on which it is located.
    (4) As required by Sec.  137.80 and if not otherwise obtained by 
the environmental professional, commonly known or reasonably 
ascertainable information about the facility and the real property on 
which it is located.


Sec.  137.45  Interviews with past and present owners, operators, and 
occupants.

    (a) Interviews with owners, operators, and occupants of the 
facility and the real property on which the facility is located must be 
conducted for the purposes of achieving the objectives and performance 
factors of Sec.  137.30(a) and (b).
    (b) The inquiry of the environmental professional must include 
interviewing the current owner and occupant of the facility and the 
real property on which the facility is located. If the facility and the 
real property on which the facility is located has multiple occupants, 
the inquiry of the environmental professional must include interviewing 
major occupants, as well as those occupants likely to use, store, 
treat, handle or dispose of oil 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 in Sec.  137.30(a) and (b), interviewing one or 
more of the following persons:
    (1) Current and past facility and real property managers with 
relevant knowledge of uses and physical characteristics of the facility 
and the real property on which the facility is located.
    (2) Past owners, occupants, or operators of the facility and the 
real property on which the facility is located.
    (3) Employees of current and past occupants of the facility and the 
real property on which the facility is located.
    (d) In the case of inquiries conducted at abandoned properties 
where there is evidence of potential unauthorized uses or evidence of 
uncontrolled access, the environmental professional's inquiry must 
include an interview of at least one owner or occupant of a neighboring 
property from which it appears possible that the owner or occupant of 
the neighboring property could have observed use or other presence or 
likely presence of oil.


Sec.  137.50  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.  
137.30(a) and (b). 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 real property to when the 
first structure was built or when it was first used for residential, 
agricultural, commercial, industrial, or governmental purposes. 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.

[[Page 32245]]

Sec.  137.55  Searches for recorded environmental cleanup liens.

    (a) All appropriate inquiries must include a search for the 
existence of environmental cleanup liens against the facility and the 
real property on which the facility is located that are filed or 
recorded under Federal, State, tribal, or local law.
    (b) All information collected by persons specified in Sec.  
137.1(a) rather than an environmental professional regarding the 
existence of environmental cleanup liens associated with the facility 
and the real property on which the facility is located may be provided 
to the environmental professional or retained by the applicable party.


Sec.  137.60  Reviews of Federal, State, tribal, and local government 
records.

    (a) Federal, State, tribal, and local government records or data 
bases of government records of the facility, the real property on which 
the facility is located, and adjoining properties must be reviewed for 
the purposes of achieving the objectives and performance factors of 
Sec.  137.30(a) and (b).
    (b) With regard to the facility and the property on which the 
facility is located, the review of Federal, State, and tribal 
government records or data bases of the government records and local 
government records and data bases of the records should include--
    (1) Records of reported oil discharges present, including site 
investigation reports for the facility and the real property on which 
the facility is located;
    (2) Records of activities, conditions, or incidents likely to cause 
or contribute to discharges or substantial threat of discharges of oil, 
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) Comprehensive Environmental Response, Compensation, and 
Liability Information System (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 facility and the real property on which the facility is located.
    (c) With regard to nearby or adjoining properties, the review of 
Federal, State, tribal, 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 
discharges or substantial threat of discharges of oil. Such records or 
databases containing such records and the associated distances from the 
facility and the real property on which the facility is located for 
which such information should be searched include the following:
    (i) Records of National Priorities List (NPL) sites or tribal- and 
state-equivalent sites (one mile).
    (ii) Resource Conservation and Recovery Act (RCRA) properties 
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 brownfield sites (one-
half mile).
    (iv) Records of leaking underground storage tanks (one-half mile).
    (2) Properties that previously were identified or regulated by a 
government entity due to environmental concerns at the facility and the 
real property on which the facility is located. The records or 
databases containing the records and the associated distances from the 
facility and the real property on which the facility is located for 
which the 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).
    (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, 
State-permitted or -registered, or tribal-permitted or -registered 
waste management activities. The records or data bases that may contain 
the records include the following:
    (i) Records of RCRA small quantity and large quantity generators 
(adjoining properties).
    (ii) Records of Federally-permitted, State-permitted or -
registered, or tribal-permitted landfills and solid waste management 
facilities (one-half mile).
    (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. Sec.  137.30 (a) and (b).
    (d) The search distance from the real 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 the 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 discharge.
    (2) Geologic, hydrogeologic, or topographic conditions of the 
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).
    (7) Other relevant factors.


Sec.  137.65  Visual inspections of the facility, real property on 
which the facility is located, and adjoining properties.

    (a) For the purpose of achieving the objectives and performance 
factors of Sec.  137.30(a) and (b), the inquiry of the environmental 
professional must include the following:
    (1) A visual on-site inspection of the facility and the real 
property on which the facility is located, and the improvements at the 
facility and real property, including a visual inspection of the areas 
where oil 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 
real property line, public rights-of-way, or other vantage point (e.g., 
aerial photography), including a visual inspection of areas where oil 
may be or may have been stored, treated, handled or disposed. A visual 
on-site inspection is recommended, though not required. Physical 
limitations to the inspection of adjacent properties must be noted.
    (b) Except as in paragraph (c) of this section, a visual on-site 
inspection of the facility and the real property on which the facility 
is located must be conducted.
    (c) An on-site inspection is not required if an on-site visual 
inspection

[[Page 32246]]

of the facility and the real property on which the facility is located 
cannot be performed because of physical limitations, remote and 
inaccessible location, or other inability to obtain access to the 
facility and the real property on which the facility is located after 
good faith efforts have been taken to obtain access. The mere refusal 
of a voluntary seller to provide access to the facility and the real 
property on which the facility is located is not justification for not 
conducting an on-site inspection. The inquiry of the environmental 
professional must include--
    (1) Visually inspecting the facility and the real property on which 
the facility is located using another method, such as aerial imagery 
for large properties, or visually inspecting the facility and the real 
property on which the facility is located from the nearest accessible 
vantage point, such as the property line or public road for small 
properties;
    (2) Documenting the efforts undertaken to obtain access and an 
explanation of why such efforts were unsuccessful; and
    (3) Documenting other sources of information regarding the presence 
or likely presence of oil at the facility and the real property on 
which the facility is located that were consulted according to Sec.  
137.30(a). The documentation should include comments, if any, by the 
environmental professional on the significance of the failure to 
conduct a visual on-site inspection of the facility and the real 
property on which the facility is located with regard to the ability to 
identify conditions indicative of the presence or likely presence of 
oil at the facility and the real property.


Sec.  137.70  Specialized knowledge or experience on the part of 
persons specified in Sec.  137.1(a).

    (a) For the purpose of identifying conditions indicative of the 
presence or likely presence of oil at the facility and the real 
property on which the facility is located, persons specified in Sec.  
137.1(a) must take into account their own specialized knowledge of the 
facility and the real property on which the facility is located, the 
area surrounding the facility and the real property on which the 
facility is located, and the conditions of adjoining properties and 
their experience relevant to the inquiry.
    (b) The results of all appropriate inquiries under Sec.  137.33 
must take into account the relevant and applicable specialized 
knowledge and experience of the persons specified in Sec.  137.1(a) 
responsible for undertaking the inquiry.


Sec.  137.75  The relationship of the purchase price to the value of 
the facility and the real property on which the facility is located, if 
oil was not at the facility or on the real property.

    (a) Persons specified in Sec.  137.1(a) must consider whether the 
purchase price of the facility and the real property on which the 
facility is located reasonably reflects the fair market value of the 
facility and real property if oil was not present or likely present.
    (b) If the persons conclude that the purchase price does not 
reasonably reflect the fair market value of that facility and real 
property if oil was not at the facility and the real property, they 
must consider whether or not the differential in purchase price and 
fair market value is due to the presence or likely presence of oil.


Sec.  137.80  Commonly known or reasonably ascertainable information 
about the facility and the real property on which the facility is 
located.

    (a) Throughout the inquiries, persons specified in Sec.  137.1(a) 
and environmental professionals conducting the inquiry must take into 
account commonly known or reasonably ascertainable information within 
the local community about the facility and the real property on which 
the facility is located and consider that information when seeking to 
identify conditions indicative of the presence or likely presence of 
oil at the facility and the real property.
    (b) Commonly known information may include information obtained by 
the person specified in Sec.  137.1(a) or by the environmental 
professional about the presence or likely presence of oil at the 
facility and the real property on which the facility is located 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.  137.30(a) and (b), the person specified in 
Sec.  137.1(a) 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 facility and the real property on which the 
facility is located; 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 facility and the real property on which the 
facility is located.
    (2) Local and state government officials who may have knowledge of, 
or information related to, the facility and the real property on which 
the facility is located.
    (3) Others with knowledge of the facility and the real property on 
which the facility is located.
    (4) Other sources of information, such as newspapers, Web sites, 
community organizations, local libraries, and historical societies.


Sec.  137.85  The degree of obviousness of the presence or likely 
presence of oil at the facility and the real property on which the 
facility is located and the ability to detect the oil by appropriate 
investigation.

    (a) Persons specified in Sec.  137.1(a) and environmental 
professionals conducting an inquiry of a facility and the real property 
on which it is located on their behalf must take into account the 
information collected under Sec. Sec.  137.45 through 137.80 in 
considering the degree of obviousness of the presence or likely 
presence of oil at the facility and the real property on which the 
facility is located.
    (b) Persons specified in Sec.  137.1(a) and environmental 
professionals conducting an inquiry of a facility and the property on 
which the facility is located on their behalf must take into account 
the information collected under Sec. Sec.  137.45 through 137.80 in 
considering the ability to detect the presence or likely presence of 
oil by appropriate investigation. The report of the environmental 
professional should include an opinion under Sec.  137.35(c)(4) 
regarding whether additional appropriate investigation is necessary.

    Dated: May 29, 2007.
Thad W. Allen,
Admiral, Commandant, United States Coast Guard.
[FR Doc. E7-11110 Filed 6-11-07; 8:45 am]
BILLING CODE 4910-15-P