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ASTM E2790-20

Standard Guide for Identifying and Complying With Continuing Obligations
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ASTM E2790-20

Standard Guide for Identifying and Complying With Continuing Obligations

PUBLISH DATE 2020
PAGES 53
ASTM E2790-20

1.1Ā  Purpose— The purpose of this guide is to provide information and guidance related to the process of identifying and fulfilling continuing obligations at commercial real estate, and forestland and rural property that is contaminated by hazardous substances within the scope of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) (42 U.S.C. § 9601 et seq.), petroleum products, or other contaminants that require cleanup under federal or state law (collectively hereafter chemicals of concern). Because of the importance of federal law, this guide largely focuses on continuing obligations applicable to the innocent landowner (ILO), the contiguous property owner (CPO), and the bona fide prospective purchaser (BFPP) protections from CERCLA liability (hereinafter, collectively referred to as the ā€œCERCLA Landowner Liability Protections,ā€ or ā€œCERCLA LLPsā€) (see Legal Appendix X1 to Appendix X3 for an outline of CERCLA's liability and defense provisions).

However, the continuing obligations arising from CERCLA LLPs are often very similar to the types of continuing obligations that state laws set as conditions for state liability protections. And, therefore, the purpose of this guide seeks to help users who wish to perform continuing obligations because of concerns over CERCLA liability and also extends to help users who wish to perform continuing obligations because of concerns over state law liability. Similarly, where sound risk management rather than a desire for liability protection is the goal, the procedures recommended in this guide can also prove useful.

1.1.1Ā  Intended Scope of Standard Guide— As a standard guide, this document provides a compendium of information and options but does not recommend a specific course of action. As a guide, the purpose of this standard is to simply increase the awareness of possible techniques or procedures related to continuing obligations and to offer guidance based on a consensus of viewpoints, but not to establish a standard practice to follow in all cases.

1.1.2Ā  Continuing Obligations Under CERCLA— Subsequent to property acquisition, the Small Business Liability Relief and Brownfields Revitalization Act of 2002 (the ā€œBrownfields Amendmentsā€), which amended CERCLA, requires persons (a broad term meant to cover individuals, companies, government agencies, and other entities) seeking to maintain CERCLA LLPs to establish, by a preponderance of the evidence, fulfillment of certain continuing obligations. The continuing obligations set forth in the Brownfields Amendments include:

  • (1) complying with any land use restrictions established or relied upon in connection with a response action at a property;
  • (2) not impeding the effectiveness or integrity of any institutional controls employed at a property in connection with a response action;
  • (3) taking reasonable steps with respect to releases of hazardous substances, including stopping continuing releases, preventing threatened future releases, and preventing or limiting human, environmental or natural resource exposure to prior releases of hazardous substances;
  • (4) providing full cooperation, assistance and access to persons who are authorized to conduct response actions or natural resource restoration at a property;
  • (5) complying with information requests and administrative subpoenas;
  • (6) providing legally required notices with respect to releases of any hazardous substances at a property; and
  • (7) the CERLCA LLPs for BFPPs and ILOs also require that all disposal of hazardous substances at the property occurred prior to property acquisition.4

The BUILD Act further amended CERCLA. Under the BUILD Act, certain tenants qualify for CERCLA’s bona fide prospective purchaser protections if the property owner qualifies as a bona fide prospective purchaser, and certain tenants can qualify as bona fide prospective purchasers only if, among other conditions, the tenants fulfill continuing obligations.

1.1.3Ā  Continuing Obligations at Non-CERCLA Properties— In many cases, liability protections under state law require the performance of the same or similar types of continuing obligations. For example, many states have enacted laws that define bona fide prospective purchaser to read similarly to the CERCLA definition, including BFPP requirements to exercise appropriate care, to comply with land use restrictions or to not impede the effectiveness or integrity of institutional controls. Analogous to CERCLA, some of these state laws may provide state law liability protections for persons who meet the BFPP definition.5

In addition, as described in Guide E2091, several state voluntary cleanup programs provide liability releases within ā€œNo Further Actionā€ (NFA) or ā€œCertificates of Completionā€ documents only if the conditions provided in those documents are complied with.6

These conditions vary but often include requirements to exercise appropriate care with respect to environmental impacts or to comply with activity and use limitations.7 AULs are employed at many properties remediated under state or nonCERCLA federal programs where CERCLA liability may not be of concern but, nonetheless, the AUL and reasonable step procedures recommended by this guide may provide useful procedures for assuring AUL compliance.

For example, Michigan state law sets ā€œdue careā€ requirements for purchasers of contaminated properties, mandating that they perform various post-purchase duties including, among others, complying with and not impeding the effectiveness and integrity of AULs, and preventing exacerbation and mitigating unacceptable exposure of hazardous substances.8 Wisconsin also sets legal rules and administrative guidance covering certain continuing obligations for AULs.9 Additional states similarly impose continuing obligations related to AULs.

1.1.4Ā  Certain Continuing Obligations Not Detailed in this Guide— The procedures recommended in this guide focus on continuing obligations pertaining to land use restrictions, institutional controls, and taking reasonable steps. As noted immediately above, CERCLA and similar state laws or administrative programs require other continuing obligations such as those related to legally required notices, allowing access, and cooperating with government regulators. These ā€œotherā€ continuing obligations are not further discussed in this guide.

The lack of detailed treatment of these other continuing obligations, however, does not intend to suggest that they are less important or less relevant to maintaining CERCLA LLPs or similar state liability protections. The user seeking additional information will find background on these other continuing obligations in Appendix X1 the Legal Appendix to this guide.

1.1.5Ā  Inclusion of Petroleum Products— Petroleum products are included within the scope of this guide because they are often of concern at commercial real estate. Although petroleum products enjoy a limited exclusion from CERCLA liability, current custom and usage generally includes an evaluation of whether petroleum products may be present on commercial real estate during pre-acquisition environmental site assessments. Further, state laws and programs requiring continuing obligations

1.1Ā  Purpose—The purpose of this guide is to provide information and guidance2 related to the process of identifying and fulfilling continuing obligations3 at commercial real estate, and forestland and rural property that is contaminated by hazardous substances within the scope of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) (42 U.S.C. § 9601 et seq.), petroleum products, or other contaminants that require cleanup under federal or state law (collectively hereafter chemicals of concern).

Because of the importance of federal law, this guide largely focuses on continuing obligations applicable to the innocent landowner (ILO), the contiguous property owner (CPO), and the bona fide prospective purchaser (BFPP) protections from CERCLA liability (hereinafter, collectively referred to as the ā€œCERCLA Landowner Liability Protections,ā€ or ā€œCERCLA LLPsā€) (see Legal Appendix X1 to Appendix X3 for an outline of CERCLA's liability and defense provisions).

However, the continuing obligations arising from CERCLA LLPs are often very similar to the types of continuing obligations that state laws set as conditions for state liability protections. And, therefore, the purpose of this guide seeks to help users who wish to perform continuing obligations because of concerns over CERCLA liability and also extends to help users who wish to perform continuing obligations because of concerns over state law liability.

Similarly, where sound risk management rather than a desire for liability protection is the goal, the procedures recommended in this guide can also prove useful.

1.1.1Ā  Intended Scope of Standard Guide—As a standard guide, this document provides a compendium of information and options but does not recommend a specific course of action. As a guide, the purpose of this standard is to simply increase the awareness of possible techniques or procedures related to continuing obligations and to offer guidance based on a consensus of viewpoints, but not to establish a standard practice to follow in all cases.

1.1.2Ā  Continuing Obligations Under CERCLA—Subsequent to property acquisition, the Small Business Liability Relief and Brownfields Revitalization Act of 2002 (the ā€œBrownfields Amendmentsā€), which amended CERCLA, requires persons (a broad term meant to cover individuals, companies, government agencies, and other entities) seeking to maintain CERCLA LLPs to establish, by a preponderance of the evidence, fulfillment of certain continuing obligations.

The continuing obligations set forth in the Brownfields Amendments include:

  • (1) complying with any land use restrictions established or relied upon in connection with a response action at a property;
  • (2) not impeding the effectiveness or integrity of any institutional controls employed at a property in connection with a response action;
  • (3) taking reasonable steps with respect to releases of hazardous substances, including stopping continuing releases, preventing threatened future releases, and preventing or limiting human, environmental or natural resource exposure to prior releases of hazardous substances;
  • (4) providing full cooperation, assistance and access to persons who are authorized to conduct response actions or natural resource restoration at a property;
  • (5) complying with information requests and administrative subpoenas;
  • (6) providing legally required notices with respect to releases of any hazardous substances at a property; and
  • (7) the CERLCA LLPs for BFPPs and ILOs also require that all disposal of hazardous substances at the property occurred prior to property acquisition.4

The BUILD Act further amended CERCLA. Under the BUILD Act, certain tenants qualify for CERCLA’s bona fide prospective purchaser protections if the property owner qualifies as a bona fide prospective purchaser, and certain tenants can qualify as bona fide prospective purchasers only if, among other conditions, the tenants fulfill continuing obligations.

1.1.3Ā  Continuing Obligations at Non-CERCLA Properties—In many cases, liability protections under state law require the performance of the same or similar types of continuing obligations. For example, many states have enacted laws that define bona fide prospective purchaser to read similarly to the CERCLA definition, including BFPP requirements to exercise appropriate care, to comply with land use restrictions or to not impede the effectiveness or integrity of institutional controls.

Analogous to CERCLA, some of these state laws may provide state law liability protections for persons who meet the BFPP definition.5 In addition, as described in Guide E2091, several state voluntary cleanup programs provide liability releases within ā€œNo Further Actionā€ (NFA) or ā€œCertificates of Completionā€ documents only if the conditions provided in those documents are complied with.6

These conditions vary but often include requirements to exercise appropriate care with respect to environmental impacts or to comply with activity and use limitations.7 AULs are employed at many properties remediated under state or nonCERCLA federal programs where CERCLA liability may not be of concern but, nonetheless, the AUL and reasonable step procedures recommended by this guide may provide useful procedures for assuring AUL compliance.

For example, Michigan state law sets ā€œdue careā€ requirements for purchasers of contaminated properties, mandating that they perform various post-purchase duties including, among others, complying with and not impeding the effectiveness and integrity of AULs, and preventing exacerbation and mitigating unacceptable exposure of hazardous substances.8 Wisconsin also sets legal rules and administrative guidance covering certain continuing obligations for AULs.9 Additional states similarly impose continuing obligations related to AULs.

1.1.4Ā  Certain Continuing Obligations Not Detailed in this Guide—The procedures recommended in this guide focus on continuing obligations pertaining to land use restrictions, institutional controls, and taking reasonable steps. As noted immediately above, CERCLA and similar state laws or administrative programs require other continuing obligations such as those related to legally required notices, allowing access, and cooperating with government regulators.

These ā€œotherā€ continuing obligations are not further discussed in this guide. The lack of detailed treatment of these other continuing obligations, however, does not intend to suggest that they are less important or less relevant to maintaining CERCLA LLPs or similar state liability protections. The user seeking additional information will find background on these other continuing obligations in Appendix X1 the Legal Appendix to this guide.

1.1.5Ā  Inclusion of Petroleum Products—

4.1 Uses— This guide is intended for use on a voluntary basis primarily by parties who desire to satisfy continuing obligations at commercial real estate or at forestland or rural properties. As such, this guide provides information and suggested procedures that could be useful to persons who wish to establish one of the CERCLA LLPs or similar liability protections offered under state law. This guide may apply where response actions have already occurred, where response actions remain ongoing, or where response actions may be necessary in the future. As noted in 1.1.2, the use of this guide need not be necessarily limited to CERCLA LLPs.

4.2 Clarifications on Use:Ā 

4.2.1 Use is Property-Specific— Continuing obligations, and the process to identify and implement continuing obligations, is necessarily property-specific. Therefore, this guide includes information to consider when performing a property-specific, fact-based evaluation to determine appropriate continuing obligations.

4.2.2 Partially Addresses Eligibility for CERCLA LLPs— Users wishing to establish CERCLA LLPs should be aware that the continuing obligations covered by this guide comprise only part of CERCLA's statutory eligibility requirements for LLPs. For example, users seeking to qualify for LLPs must perform AAI before property acquisition. Users seeking the BFPP or CPO LLP must also demonstrate that they are not liable or potentially liable or affiliated with any person who is liable or potentially liable for releases of hazardous substances under CERCLA. 42 U.S.C. §9607(q)(1)(A)(ii); 42 U.S.C. §9601(40)(B)(viii). Further, users seeking the BFPP or ILO  LLP must establish that disposal of hazardous substances occurred on the property prior to its acquisition. 42 U.S.C. §9601(40)(B)(i); 42 U.S.C. §9601(35)(A). Users seeking the CPO LLP must establish that they did not cause, contribute or consent to the release of hazardous substances. 42 U.S.C. §9607(q)(A)(i). Finally, users seeking to qualify for the ILO LLP must establish that a third party was the sole cause of the release of hazardous substances and that they held no employment, agency, or contractual relationship with the third party, among other requirements. In addition, users asserting the ILO defense must also establish that they had no knowledge (or reason to know) of any such releases. 42 U.S.C. §§9601(35)(A)(i), 9607(b)(3). The foregoing list is not meant to be exhaustive.

4.2.3 Certain Continuing Obligations Not Detailed in this Guide— As noted in 1.1.13, this guide focuses only on certain continuing obligations, namely those pertaining to land use restrictions, institutional controls, and taking reasonable steps with respect to releases of chemicals of concern.

4.2.4 Use Will Depend on Context— The context for continuing obligations may differ between BFPPs, ILOs and CPOs.

  • 4.2.4.1Ā BFPPs acquire property after performing AAI, and, therefore may have knowledge of the presence or likely presence of chemicals of concern at the property, as well as the potential need for additional appropriate investigation, if any. This knowledge would guide the BFPP as to what measures it may employ in order to satisfy continuing obligations.

Note 4:Ā  The presence of chemicals of concern on the subject property may be the result of historical, area-wide land uses (for example, heavy metals in the soil due to the property being down-wind of smelters or foundries or area-wide ground water contamination) and such area-wide concerns could affect continuing obligations.

  • 4.2.4.2Ā To establish eligibility for CERCLA LLPs as ILOs or CPOs, CERCLA requires, among other things, that, after performing AAI, there was neither knowledge nor a reason to know that any hazardous substances were disposed on, in, or at the property (ILO) or that the property was or could be contaminated by a release (CPO). 42 U.S.C. §9607(q)(1)(A)(viii)(II) (setting CPO standard); 42 U.S.C. §9601(35)(A)(i) (setting ILO standard). Even though ILOs and CPOs would have no knowledge of hazardous substances when they acquired property, compliance with continuing obligations would be triggered if the persons seeking the ILO or CPO protection thereafter learned of hazardous substances on the property due to releases of hazardous substances.

4.3 Who May Conduct— This guide does not suggest minimum qualifications for persons implementing or evaluating the need for continuing obligations. Continuing obligations may, in some cases, require professional judgment. Property owners should closely evaluate whether, under site-specific circumstances, the evaluation of continuing obligations suggested by this guide would benefit from the experience and judgment of an environmental professional with appropriate education and training relevant to the conditions at the property. Similarly (see 1.1.13) continuing obligations issues are likely to warrant legal advice.

4.4 Consultation with Government Agencies— A user may also wish to consult (or may be required by state or local laws to consult) appropriate governmental agencies when implementing continuing obligations.

4.5 Residential Properties— This guide does not cover properties with four or less dwelling units. Rather, this guide covers commercial real estate. Dwelling purchasers and owners should be cautioned, however, that depending on the circumstances, dwellings could qualify as facilities under CERCLA § 101(9) and, therefore, CERCLA liability could exist if hazardous substances were released at dwellings. Thus, purchasers of dwellings that conducted all appropriate inquiries prior to acquiring the property may wish to seek liability protection associated with releases of hazardous substances in some circumstances, and if they do, the recommendations in this guide could be useful.

4.6 Principles:Ā 

SDO ASTM: ASTM International
Document Number E2790
Publication Date Jan. 1, 2020
Language en - English
Page Count 53
Revision Level 20
Supercedes
Committee E50.02
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