As noted in CSG Law’s recent environmental blog post on January 10, 2023, the USEPA issued a final rule incorporating ASTM International’s E1527-21 Standard for the Phase I site assessment process. The final rule now sets forth an amended and updated set of standards by which Phase I assessments must be conducted and prepared in order to satisfy the All Appropriate Inquiry (“AAI”) requirements under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”).
Among many other changes, the E1527-21 Standard, as now incorporated into EPA’s final rule, includes new, significant considerations for emerging contaminants, such as PFAS compounds. Although PFAS and other emerging contaminants not yet identified as Hazardous Substances under federal law are technically outside of the scope of inquiry for purposes of AAI, the E1527-21 Standard provides that where such substances are defined as hazardous under applicable state laws, the Phase I may address those contaminants as “Non-Scope Considerations.” Notably, New York and Jersey have both designated PFAS compounds as Hazardous Substances, as that phrase is defined in the States’ respective environmental laws. While evaluation of Non-Scope Considerations will not impact whether a prospective purchaser qualifies for CERCLA liability protections under the AAI rule, these considerations are potentially very meaningful, as they can reveal potential future legal and financial liabilities that may otherwise have gone under the radar. That is particularly so in states like New York and New Jersey, which have led the way nationally in the regulation of PFAS compounds.
That said, it is expected that certain PFAS compounds will soon fall within the scope of the amended AAI rule and the E1527-21 Standard. In September 2022, EPA issued a proposed rulemaking which, if ultimately promulgated, will designate PFOA and PFOS as Hazardous Substances under CERCLA. The comment period on that proposed rulemaking has closed, and it is expected that a final rule will be issued in 2023. In that event, prospective purchasers will be required to consider the potential for PFOA and PFOS on or under target properties in order to qualify for the AAI rule’s CERCLA liability protections.