ASTM Updates Phase I Standard for Assessing Forestland or Rural Property

January 11, 2017

On Jan. 3, ASTM International released an updated version of its Phase I environmental site assessment standard for assessing rural and forestland properties for potential releases of hazardous substances and petroleum products. The newly updated Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property E 2247-16 (2016 rural property standard) will replace a version released in 2008 with the number E2247-08 (2008 rural property standard). 

The standard has experienced broader use in recent years, with the increase in solar and wind projects on large tracts of rural and farmland property, as it allows for less-rigorous site reconnaissance than do the site visit requirements of the Phase I standard for assessing most smaller commercial and industrial properties (Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process E 1527-13, or E1527-13 standard).

Proposed purchasers seeking to establish the defenses of innocent purchaser, bona fide prospective purchaser or contiguous property owner under the Comprehensive Environmental Response, Compensation and Liability Act need to comply with the Environmental Protection Agency’s (EPA’s) “All Appropriate Inquiries” standard 40 C.F.R. pt. 312 (AAI) prior to the purchase of the property. While purchasers may follow the AAI criteria set forth in the regulations, most purchasers follow either the E1527-13 standard or the 2008 rural property standard when performing pre-purchase Phase I environmental site assessments, as both standards are specifically identified in the regulation as satisfying AAI.

Since Phase I environmental site assessments originated in 1986, the review of large rural and forestland properties has been difficult and time-consuming due to the site reconnaissance requirements alone. The 2008 rural property standard alleviated some of the difficulties of the site reconnaissance requirements in assessing large rural tracts of property, as more particularly described in an earlier summary found here.

The 2016 rural property standard adds updated terminology that is used in the companion E1527-13 standard, but more importantly, changes language that limited its more widespread use. First and foremost, the 2016 rural property standard eliminates the somewhat arbitrary 120-acres-or-more size requirement for use of the assessment and simply requires the property to be “forestland” or “rural property.” The definition of rural property is also much broader, some alternative sourcing for agency records is allowed, and a specific time limit of 20 calendar days for receipt of materials requested by the consultant for review in completing the Phase I is designated. The 20-calendar-days requirement is positive in that it provides an outside time limit, but negative in that it also assures that a Phase I environmental site assessment will take at least 20 days to complete if requested documentation is not received earlier. Some of the site visit criteria also are relaxed in the 2016 rural property standard.

While the 2016 rural property standard appears to have a number of positive changes from the 2008 version, EPA has not yet adopted it by regulation as satisfying AAI so purchasers and proposed tenants are advised to continue to use the 2008 rural property standard or E1527-13 standard in performing Phase I environmental site assessments. EPA adopted the 2008 rural property standard as a direct final rule providing for its immediate use, but with the existing standard in place, the adoption will likely follow the customary process of notice, comment period and finalization. Also, EPA will likely allow a 12-month period for use of the 2008 rural property standard in the regulation when adopting the 2016 version, so as not to adversely affect transactions where a Phase I is recently completed or is in process using the 2008 Rural Property Standard.