[Federal Register Volume 79, Number 73 (Wednesday, April 16, 2014)]
[Notices]
[Pages 21479-21480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-08629]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5773-N-01]


Adoption of Updated Standard ASTM E 1527-13 Standard Practice for 
Environmental Assessments: Phase I Environmental Site Assessment 
Process

AGENCY: Office of Housing of the Assistant Secretary for Housing--
Federal Housing Commissioner, HUD.

ACTION: Notice.

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SUMMARY: This notice updates guidance documents of HUD's Office of 
Housing and Federal Housing Administration (FHA) that reference the 
ASTM E 1527-05 standard for Phase I Environmental Site Assessments 
(ESAs) to the most recent standard, ASTM E 1527-13.

DATES: Effective Date: May 16, 2014.

FOR FURTHER INFORMATION CONTACT: Hilary Atkin, Housing Environmental 
Officer, Office of Housing, Department of Housing and Urban 
Development, 451 7th Street SW., Room 9132, Washington, DC 20410, 
telephone 202-402-3427 (this is not a toll-free number). Persons with 
hearing or speech impairments may access this number through TTY by 
calling the toll-free Federal Relay Service at 800-877-8339.

SUPPLEMENTARY INFORMATION: 

I. Background

    HUD environmental regulations state that ``[i]t is HUD policy that 
all property proposed for use in HUD programs be free of hazardous 
materials, contamination, toxic chemicals and gasses, and radioactive 
substances, where a hazard could affect the health and safety of 
occupants or conflict with the intended utilization of the property'' 
(24 CFR 50.3(i)(1)). In order to accomplish this policy, ``HUD shall 
require the use of current techniques by qualified professionals. . .'' 
(24 CFR 50.3(i)(4)). Currently, a Phase I ESA in accordance with ASTM E 
1527-05 is required by several guidance documents throughout Office of 
Housing/FHA, including, but not limited to, the Multifamily Accelerated 
Processing (MAP) Guide, the Condominium Project Approval and Processing 
Guide, Handbook 4600.1 REV-1, Section 232 Mortgage Insurance for 
Residential Care Facilities, and Handbook 4615.1, Mortgage Insurance 
for Hospitals.
    In November 2013, ASTM International published ASTM E 1527-13, 
Standard Practice for Environmental Site Assessments: Phase I 
Environmental Site Assessment Process. ASTM E 1527-13 defines good 
commercial and customary practice in the United States for conducting 
an Environmental Site Assessment (ESA) of a parcel of commercial real 
estate with respect to the range of contaminants within the scope of 
the Comprehensive Environmental Response, Compensation and Liability 
Act (CERCLA) (42 U.S.C. 9601) and petroleum products. In order for a 
defendant to limit liability for a release of hazardous substances, 
CERCLA requires that the defendant has ``no reason to know'' that the 
hazardous substance involved in the release or threatened release was 
present. In establishing no reason to know, the defendant must be able 
to show that it carried out, on or before the date on which the 
defendant acquired the facility, all appropriate inquiries into the 
previous ownership and uses of the facility in accordance with 
generally accepted good commercial and customary standards and 
practices, and took other reasonable steps (42 U.S.C. 9601(35)(B)(i)). 
The standards and practices that determine whether all appropriate 
inquiries have been carried out are established by regulation by the 
Environmental Protection Agency (EPA) (42 U.S.C. 9601(35)(B)(ii)). On 
December 30, 2013, the EPA updated these standards, and allowed parties 
to use ASTM E 1527-13 rather than the previous standard, ASTM E 1527-05 
(78 FR 79319).

[[Page 21480]]

    HUD's regulation at 24 CFR 50.3(i)(1) states as a matter of policy 
that all property to be used in HUD programs be free of hazardous 
substances, and Sec.  50.3(i)(2) requires that HUD's environmental 
review include evaluation of previous uses of the site and other 
evidence of contamination on or near the site, ``to assure that 
occupants of proposed sites are not adversely affected'' by hazardous 
substances. Additionally, FHA's General Insurance Fund (GIF) and Mutual 
Mortgage Insurance (MMI) Fund can be at legal risk if HUD acquires a 
property and subsequently a hazardous substance is released or 
threatened to be released. For these reasons, adoption of the updated 
standard protects the GIF and MMI Fund from risks stemming from 
insuring sites with hazardous waste and/or petroleum product 
contamination. The updated standard will better equip HUD's Office of 
Housing/FHA staff to assess such risks as the standard includes updated 
definitions that will more fully inform the Office of Housing/FHA about 
the environmental conditions on the subject property.
    One advantage of ASTM E 1527-13 is that it newly defines Controlled 
Recognized Environmental Conditions (CREC), which must be identified in 
the Phase I ESA. The new CREC definition will result in some 
environmental conditions being listed as CRECs if they have been 
remediated to restricted levels, as opposed to an unrestricted or de 
minimis level, and will be a great tool for Office of Housing/FHA staff 
to assess whether the site is appropriate for residential use. The 
definition does not create new analyses or documentation, as Phase I 
ESAs that were compliant with ASTM E 1527-05 would have discussed CRECs 
in the context of being either a Recognized Environmental Condition 
(REC) or a Historical Recognized Environmental Condition (HREC).
    The ASTM E 1527-13 standard also newly defines migration, which 
includes hazardous waste or petroleum products in vapor form. Previous 
to this definition, it was unclear whether vapors had to be assessed 
under a Phase I ESA, and as a result many Phase I ESA reports did not 
include this analysis. The new definition will generally not change 
Office of Housing/FHA Phase I ESA report requirements, however, as the 
Office of Housing/FHA has required that a Vapor Encroachment Survey 
performed in accordance with ASTM E 2600-10 be incorporated into the 
Phase I ESA report for several years, and will continue to do so.
    Finally, ASTM E 1527-13 modifies the definitions of HREC to require 
evaluation of whether a historical release of a hazardous waste or 
petroleum product that was addressed to the satisfaction of the 
regulatory authority in the past is considered a REC at the time the 
Phase I ESA is prepared because of a change in regulatory criteria. 
Such an analysis was conducted by many Phase I ESA preparers under the 
past standard, but the modification of the definition clarifies this 
requirement.

II. Action

    ASTM E 1527-13 is formally adopted by the Office of Housing/FHA 
through this notice. Wherever ASTM E 1527-05 is referenced in Office of 
Housing/FHA guidance, participants in Office of Housing/FHA programs, 
funding recipients, FHA-insured mortgagees, and contractors must use 
ASTM E 1527-13. The Office of Housing/FHA will update guidance 
documents to reflect the adoption of ASTM E 1527-13 for Phase I ESA 
reports.

    Dated: April 10, 2014.
Carol Galante,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2014-08629 Filed 4-15-14; 8:45 am]
BILLING CODE 4210-67-P