The IHDA standards for Phase I Environmental Site Assessment include conformance with ASTM Standard E1527-13, EPA’s All Appropriate Inquiry, and the HUD Part 58 NEPA Environmental Review. The IDHA requirements periodically change to reflect best industry practices. The most recent version of the IHDA requirements was released 18 December 2017. It includes minor changes to contact information and references to minor changes at HUD. No substantive changes were made to this protocol with this latest edition.
Recent changes on the HUD Environmental Assessment data form have made their way to the Illinois Housing Development Authority Environmental Requirements for Multifamily Affordable Housing. The IHDA guidance was just updated January 2016.
The new HUD/IHDA Part 58 form is essentially a minor reorganization of the same content with the elimination of some redundancy. The new form requires more information about project funding. It also combines related environmental assessment factors into categorical elements. For example, “Police”, “Fire”, and “Emergency Medical” previously existed as 3 separate factors. On the new form, they are 1 combined factor.
Some new sections of the form (not new to NEPA Environmental Assessment, just new to the HUD/IHDA form) include sections regarding:
- Permits Obtained
- Public Outreach, and
- Cumulative Impact Analysis.
“The Phase I MUST include the HUD Environmental Assessment form.”
Another recent, and significantly more meaningful, change is the requirement that all IHDA Phase I Environmental Site Assessments include a Part 58 Environmental Assessment. In the past, the Part 58 has only been required when HUD funding was proposed as part of the project. Within the last year, however, IHDA began requiring the Part 58 regardless of HUD funding. When scoping a Phase I for IHDA, be sure to specify that a Part 58 Environmental Assessment be included.
The Environmental Protection Agency (EPA) is proposing to amend the standards and practices for conducting all appropriate inquiries under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) to remove the reference to ASTM International’s E1527-05 standard practice. This 2005 standard practice recently was replaced with updated standard E1527-13 by ASTM International, a widely recognized standards development organization. Specifically, EPA is proposing to amend the “All Appropriate Inquiries o remove the reference to ASTM International’s E1527-05 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.”
When the new ASTM standard for Phase I Environmental Site Assessment (E1527-13) came out, EPA’s initial response was to allow either ASTM Standard E1527-05 or E1527-13 to achieve All Appropriate Inquiry. EPA received negative comments on its approach to allow reliance on either standard. Specifically, many of the public comments predicted confusion regarding the applicability of the dual standards and predicted widespread reliance on the older and less stringent (but somewhat less expensive) standard.
In response to the public comments, EPA issued this latest proposed rule to clarify that Phase I Environmental Site Assessments going forward must rely on the newer, more stringent ASTM Standard E1527-13 which requires soil vapor mitigation analysis and new regulatory file review requirements. Once the new rule is adopted, reliance on ASTM Standard E1527-05 will no longer be acceptable under the All Appropriate Inquiries standard.
Requiring exclusive use of ASTM 1527-13 will result in consistent due diligence requirements and expectations.
Yesterday’s Federal Register included an announcement by HUD that the latest ASTM standard for environmental site assessment has been adopted by HUD and is expected for HUD-funded projects.
See the announcement:
We are in the middle of working through a couple Phase I Environmental Site Assessments for the Illinois Housing Development Authority’s Low-Income Housing Tax Credit projects. These ESA’s are not typical; they involve several non-scope investigations. For us, this makes these projects all the more interesting. While looking over the website for anything new in the 2014 requirements, I noticed a link to the HUD resource exchange where they have a very concise comparison of the old ASTM standard for environmental site assessment (ASTM 1527-05) and the current standard (ASTM 1527-13).
If you are interested, link to the fact sheet here: Fact Sheet: Applicability of ASTM E 1527-13 Phase I ESA Standard for HUD Environmental Reviews .
For the past several years, January has begun a season of Phase 1 Environmental Site Assessments for Illinois Housing Development Authority (IHDA) projects throughout the state. IHDA Environmental Site Assessments are not the typical Phase 1; there are several non-scope items that must be addressed. The process is meant to satisfy the needs of both National Environmental Policies Act (NEPA) compliance and CERCLA innocent landowner defense. The IHDA Phase 1 Environmental Site Assessment requires much more than just a cursory knowledge of ASTM Standard 1527 and All-Appropriate Inquiry. Therefore, it’s more important than ever that the company performing your IHDA Phase 1 Environmental Site Assessment be experienced and approved. Specialized Ecological Services is both. We have been on the list of IHDA Approved Environmental Firms since IHDA has had a list!
If you’re working toward IHDA funding for your project, get us involved early and we can help keep your initial project planning costs low and help make certain that your Environmental Review is everything IHDA is expecting.
The USEPA has published a helpful document which summarizes the differences between the old ASTM standard for environmental site assessment and the new. Here’s a direct link to the Regulations.gov page where you can download the pdf summary. Alternatively, click here, for the same document stored on our server (may be faster than Regulations.gov).
On Wednesday, November 6, ASTM International announced that it has officially approved and published the latest revision of its Phase I Environmental Site Assessment Protocol, E 1527-13, Standard Practice for Environmental Assessments: Phase I Environmental Site Assessment Process. USEPA issued both a direct final rule and a back up proposed rule on August 15, 2013, that would add a reference to the expected ASTM E 1527-13 in USEPA’s All Appropriate Inquiries (AAI) regulations at 40 CFR 312.11(c). Approximately forty comments were submitted, including adverse comments and therefore, on October 29, USEPA officially withdrew the direct final rule. USEPA expects the final rule incorporating a reference to the new version to be issued by the end of 2013. Note that E 1527-13 is not officially recognized by USEPA as sufficient to meet AAI until USEPA issues its final rule.
USEPA said conflicting things in the materials associated with the rule, for example it emphasized that approval of an additional version of the ASTM Standard would add flexibility (an additional option to E 1527-05), but it also made references to the greater “validity” of the new version of the standard. ASTM will stop training on the old version and will mark it as “superseded.” E 1527-05 will remain in the AAI Rule as acceptable, but there is a view that E 1527-13 is a clarification by ASTM of what ASTM intended in E 1527-05 all along, and, therefore, that compliance with E 1527-05 might be evaluated in the future by a court (in the inherently-after-the-fact determination characteristic of AAI and the landowner liability protections) through the lens of the more explicit language of E 1527-13.
Changes that appear in E 1527-13 include:
Recognized Environmental Condition and related terms
- Recognized environmental condition was simplified and clarified to help bring greater consistency to the identification of RECs
- Historical REC was clarified to exclude any REC. Under the E 1527-13 version, an HREC is a condition that was in the past, but is not now, a REC.
- Controlled REC definition was developed to categorize certain RECs as currently managed to a regulatory standard that does not permit unrestricted property use. This is designed to replace the use of HREC for conditions that require continued management or restrict possible uses.
- De minimis condition was clarified to make clear that RECs that require management or restrict use are still RECs.
- Release definition was added to support principled application of REC definition consistent with Superfund
- Environment definition was added to support principled application of REC definition consistent with Superfund
Consideration of vapors
- Definition of migrate/migration was added. primarily for reference to vapors
- Indoor air quality non-scope item has been clarified as limited to air quality unrelated to a Superfund release
- References to E 2600-10, Vapor Encroachment Standard Guide were added
- User responsibilities in Section 6 have been clarified to be mandatory — “should” has become “must,” for example, as to:
- Conducting searches for environmental liens and activity and use limitations, including review of recorded land title records and judicial records, where liens and AULs would only be recorded in judicial records
- Consideration of the user’s own specialized knowledge
- Gathering and consideration of commonly known or reasonably ascertainable information within the local community about the property. This vague undertaking may be the source of dispute in the future.
In addition, Section 6 clarifies what information “should” be provided to the EP, including, liens, AULs, specialized knowledge and commonly know information, and any discounted purchase price due to contamination.
In Section 8, prescriptive language has been added for regulatory files reviews
- “If the property or any of the adjoining properties is identified on one or more of the standard environmental records sources [e.g. RCRIS] . . . pertinent regulatory files and/or records associated with the listing should be reviewed . . . to obtain sufficient information . . . in determining if a REC, HREC, CREC or a de minimis condition exists at the property in connection with the listing.”
- “If, in the environmental professional’s opinion, such a review is not warranted, the environmental professional must explain within the report the justification for not conducting the regulatory file review.
- Note: Files accessible within 20 days are considered reasonably accessible.
- Also, the EP shall “consider the possible releases that might have occurred . . . in light of historical uses . . . in identifying” RECs. We have some concern that this will be misused by consultants to identify RECs solely on information related to past uses.
- Flexibility has been added regarding the language of conclusions
- Legal Appendix rewritten
- User Questionnaire updated
- Table of Contents updated
- Business Environmental Risk discussion added
The ASTM E1527 task group has been working through about a dozen negative votes to the most recent ballot and many, many more editorial comments related to an updated standard for Phase 1 Environmental Site Assessment. The task group leadership has made amazing progress to bring the standard very close to completion. The new ASTM E1527-13 standard should stay on track for Spring 2013 publication.
Proposed Changes to ASTM Phase II Due Diligence Standard Would Dramatically Increase the Time and Cost for Completing Environmental Due DiligencePosted: October 5th, 2010 | Author: Bob | Filed under: Phase I ESA | Comments Off on Proposed Changes to ASTM Phase II Due Diligence Standard Would Dramatically Increase the Time and Cost for Completing Environmental Due Diligence
This artical reprinted from Holland & Knight Partner, Amy Edwards. Click to orignal.
ASTM continues to move forward with planned changes to the standard for conducting Phase II Environmental Site Assessments (ESAs) (ASTM E 1903). If approved, these changes would impose drastic new obligations on Users (i.e., the parties commissioning the reports) and likely increase the time and cost for completing environmental due diligence investigations. Parties involved in commercial real estate and M&A transactions need to be aware of, and involved in, these ongoing discussions.
The ASTM Standard Guide on the Phase II Environmental Site Assessment Process was first published in 1997 and reapproved in 2002. The current changes have been underway for a couple of years and are proceeding under the auspices of the ASTM E50.02 Task Group. The Task Group has stated that it hopes to make the Phase II process more transparent and consistent with scientifically sound methods, with the goal of making the process more “objective, representative, reproducible, and defensible” (Section 1.1). While all of this sounds good in theory, it will require dramatic changes in the way in which Phase II ESAs are conducted in order to achieve these lofty goals. The proposed changes will require the Phase II Assessor and the User to examine issues that go well beyond CERCLA liability, including looking for the mere presence (not releases) of substances (not just hazardous substances or petroleum products) on the property. The scope of the Phase II ESA will be directly related to the User’s objectives and may require refinement as the investigation progresses. More than one round of sampling may be required to achieve the User’s objectives. The Phase II process would also become much more prescriptive (in particular, see Sections 5, 6 and 7) than it is at the present time if the proposed changes are adopted.
Nature of the Proposed Changes
The proposed changes to ASTM E1903 would require, among other things, that the User and/or the Phase II Assessor do the following:
- confer before initiating the investigation to determine the “question” to be answered (Section 6.4.1 and Section 7.1); the Standard identifies six potential objectives (Section 1.2) that can be addressed in the assessment:
- to assess whether there has been a release of hazardous substances within the meaning of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), for purposes including the landowner liability protections under CERCLA
- to provide information relevant to identifying, defining and implementing “continuing obligations” for maintaining CERCLA landowner liability protections
- to develop threshold knowledge of the presence of substances on properties defined as brownfields sites as required for qualifying for brownfields remediation grants
- to provide information relevant to identifying property conditions associated with target analytes that may pose a risk to persons on the property
- to provide information relevant to evaluating and allocating business environmental risk in transactional and contractual contexts, and related due diligence
- to provide information to support disclosure of liabilities and contingent liabilities in financial statements and securities reporting
- prepare a written Statement of Objectives (Sections 5.1.1 and 6.4.1), including a statement of the question to be answered and the hypothesis to be confirmed or refuted by the investigation; the statement must be part of the scope of work, contract or similar instrument
- prepare a written scope of work, identifying the methods and tasks to achieve the User’s objectives (Section 5.1.4 and Section 7)
- identify any predetermined limits on the scope of work because of schedule, cost or budget considerations (Section 5.1.2); in other words, if the User is not willing to spend more than $12,000 on the Phase II ESA, and/or needs the results within 45 days, that limitation must be shared with the Phase II Assessor before the work begins, and must be described in the final report
- develop a conceptual model (Sections 6.4.3 and 7.4); the conceptual model must consider each area where target analytes are present or likely present, in light of the environmental behavior, fate and transport characteristics of those target analytes; the Phase II Assessor must determine how the target analytes are likely to have first entered the environment and infer the locations most likely to be impacted by the target analytes (Section 6.4.3)
- develop a written sampling plan after developing the conceptual model (Sections 6.4.4 and 7.5)
- conduct the sampling (Sections 6.4.5 and 7.6)
- include a Quality Assurance/Quality Control Plan (Section 7.5.7)
- validate the conceptual model by evaluating the sampling results to determine whether the available information is consistent with the conceptual model (Sections 6.4.6 and 7.7)
- in the event of deviations (i.e., the results are not consistent or do not support the assumptions of the conceptual model), revise the conceptual model and sampling plan to meet the objectives of the assessment (Sections 6.4.6 and 7.6)
- interpret the sampling results in light of the conceptual model and the objectives of the assessment in order to develop conclusions, either answering the question or stating why the question cannot be answered (Sections 6.4.7 and 8.1)
- prepare a written report (Sections 6.4.8 and 9.2)
If all of the requirements of the Standard have been followed, the Phase II Assessor is required to put the following statement in the final report:
“We have performed a Phase II environmental site assessment at the property at [address] in conformance with the scope and limitations of ASTM E1903-xx and for the following objectives: [list “statement of objectives” developed pursuant to Section 5.1.]”
What Will These Changes Mean in Practice?
For the User, it will no longer be sufficient to simply request that a Phase II ESA be conducted. The User will need to confer with the Phase II Assessor to explain what it hopes to accomplish in the investigation and should share with the Assessor all of the existing environmental information in its possession. Here is an example:
The subject property previously had an auto repair facility on it and there were a number of suspect sources (dry cleaners, gas stations, heating oil tanks, etc.) in the immediate vicinity of the site.
- What does the User want to know, and which of the six identified objectives is relevant?
- Does the User simply want to confirm whether the auto repair facility has had any releases for purposes of establishing a defense to CERCLA liability? For purposes of allocating business environmental risk in the context of a planned transaction? For purposes of reporting contingent liabilities to the Securities and Exchange Commission?
- Does the User want to confirm whether the nearby dry cleaners, gas stations and heating oil tanks have impacted the property? Does the User need to know this with a reasonable degree of certainty, because it plans to redevelop the property, or does it simply want a present/not present determination?
- Are there any limitations that it intends to impose on the Phase II Assessor because of scheduling or cost reasons? Who gets to determine when “enough” investigation has been conducted?
For the Phase II Assessor, he or she must confer with the User to determine the question to be answered and the User’s objectives for the investigation. The Assessor will need to consider what to do if the User fails to cooperate in identifying the question to be answered or in formulating the objectives or in identifying any limitations on the scope because of schedule, cost or budget considerations. It is certainly not uncommon at the present time for the User to fail to provide information required under the ASTM Phase I ESA Standard (E 1527), whether it is title information, environmental liens, activity and use limitations, litigation, or purchase price. The following are some considerations:
- Why should we expect Users to be more cooperative in identifying the objectives of the Phase II assessment?
- What should the Phase II Assessor do if the User is unwilling to disclose its objective(s) for the assessment?
- How can the assessor prepare a conceptual model and written sampling plan if the User is unwilling to identify the question to be answered? Failure to follow the prescriptive requirements in the Phase II Standard may also result in increased liability for the Assessor.
- What will be the consequence for failing to include each of the mandatory tasks identified under Section 6 of the proposed Standard?
- What if the Assessor fails to include one of the areas where target analytes might be present? Or fails to investigate an area that has been identified as a data gap?
The proposed changes would give the Phase II Assessor little discretion in these areas. See, e.g., Sections 6.4.3 and 7.3. The proposed changes to the Phase II Standard also demand that the Assessor’s sampling results be “accurate and reproducible.” What happens if another Assessor is unable to reproduce the Phase II Assessor’s results?
The revised Phase II ESA standard is currently being balloted at the ASTM subcommittee level. An E50 main committee ballot will be required before the proposed changes can be finalized. Users are underrepresented on the E50.02 Task Group and need to make their views known on these important due diligence matters. If you are not already involved in the ASTM standard setting process, now is the time to get involved in the proposed changes to the ASTM Phase II ESA Standard.