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EPA Eliminates the Uncertainty Over Which ATSM Standard to Use for Prospective Property Purchasers

Bandza_Alexander_COLORBy Alexander J. Bandza

As previously reported, the US EPA initially issued its direct final rule confirming that the new ASTM E1527-13 standard, in addition to the older ASTM E1527-05 standard, would be acceptable for prospective purchasers of real property to conduct “All Appropriate Inquiries” (AAI) under CERCLA.   On June 17, 2014, EPA published a proposed rule that proposed to amend the AAI Rule to remove the  reference to the older ASTM E1527-05 standard.

According to the US EPA, the Agency took this route “to reduce any confusion associated with the regulatory reference  to a historical standard that is no longer recognized by its originating organization as meeting its standards for good customary business practice.”  Furthermore, the US EPA believed that eliminating the reference to the older ASTM E1527-05 standard would promote the use of a “consensus-based, good customary business standard.”

The clarifications and improvements of the new ASTM E1527-13 standard are as follows:

  • an updated definition of “Recognized Environmental Condition (REC)”;
  • an updated definition of “Historical Recognized Environmental Condition (HREC)”;
  • a new term, “Controlled Recognized Environmental Condition (CREC)”;
  • a clarification to the definition of “de minimis condition”;
  • a revised definition of “migrate/migration’’ to specifically include vapor migration;
  • a revised definition of “release’’ to clarify that the definition has the same meaning as the definition of release in CERCLA; and
  • additional guidance related to the regulatory agency file and records review requirement to provide a standardized framework for verifying agency information obtained from key databases.

The US EPA delayed the effective date of this rule for one year, until October 6, 2015, recognizing that some parties may still be using the older ASTM 1527-05 standard.  The rule will not impact “parties who acquired properties between November 1, 2005 and the effective date of this final rule and used the 2005 ASTM standard (ASTM E1527–05) to comply with the AAI Rule.”

To ensure a smooth transition, practitioners are encouraged to begin using ASTM E1527-13 as soon as practicable.  The final rule is available here.