Landowner Defenses to Liability Under the Oil Pollution Act of 1990: Standards and Practices for Conducting All Appropriate Inquiries, 2146-2156 [E8-329]

Download as PDF 2146 Federal Register / Vol. 73, No. 9 / Monday, January 14, 2008 / Rules and Regulations 8. Amend § 309.6 by adding the following new sentence at the end of paragraph (b)(3) to read as follows: I § 309.6 Disclosure of exempt records. * * * * * (b) * * * (3) * * * Finally, the Director, or designee, may in his or her discretion and for good cause, disclose reports of examination or other confidential supervisory information concerning any depository institution or other entity examined by the Corporation under authority of Federal law to: any other Federal or State agency or authority with supervisory or regulatory authority over the depository institution or other entity; any officer, director, or receiver of such depository institution or entity; and any other person that the Corporation determines to be appropriate. * * * * * By Order of the Board of Directors. Dated at Washington, DC, the 19th day of December, 2007. Federal Deposit Insurance Corporation. Valerie J. Best, Assistant Executive Secretary. [FR Doc. E8–294 Filed 1–11–08; 8:45 am] BILLING CODE 6714–01–P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 137 [Docket No. USCG–2006–25708] RIN 1625–AB09 Landowner Defenses to Liability Under the Oil Pollution Act of 1990: Standards and Practices for Conducting All Appropriate Inquiries Coast Guard, DHS. Final rule. AGENCY: rmajette on PROD1PC64 with RULES ACTION: SUMMARY: The Coast Guard is establishing standards and practices concerning the ‘‘all appropriate inquiries’’ element of a defense to liability of an owner or operator of a facility that is the source of a discharge or substantial threat of discharge of oil into the navigable waters or adjoining shorelines or the exclusive economic zone. To be entitled to the defense, those persons must show, among other elements not addressed in this rulemaking, that, before acquiring the real property on which the facility is located, they had made all appropriate inquiries into its previous ownership and uses to determine the presence or VerDate Aug<31>2005 15:18 Jan 11, 2008 Jkt 214001 likely presence of oil. This rule is consistent with a final rule on this subject published by the Environmental Protection Agency. DATES: This final rule is effective February 13, 2008. ADDRESSES: Comments and material received from the public, as well as documents mentioned in this preamble as being available in the docket, are part of docket USCG–2006–25708 and are available for inspection or copying at the Docket Management Facility (M–30), U.S. Department of Transportation, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. You may also find this docket on the Internet at www.regulations.gov. FOR FURTHER INFORMATION CONTACT: If you have questions on this rule, call Benjamin White, National Pollution Funds Center, Coast Guard, telephone 202–493–6863. If you have questions on viewing the docket, call Renee V. Wright, Program Manager, Docket Operations, telephone 202–366–9826. SUPPLEMENTARY INFORMATION: Regulatory History On June 12, 2007, we published a notice of proposed rulemaking (NPRM) entitled ‘‘Landowner Defenses to Liability Under the Oil Pollution Act of 1990: Standards and Practices for Conducting All Appropriate Inquiries’’ in the Federal Register (72 FR 32232). We received no comments on the proposed rule. No public meeting was requested and none was held. The Coast Guard is, therefore, adopting the NPRM as published and without change as a final rule. Background and Purpose In general, under the Oil Pollution Act of 1990 (33 U.S.C. 2701, et seq.) (OPA 90), an owner or operator of a facility that is the source of a discharge, or a substantial threat of discharge, of oil into the navigable waters or adjoining shorelines or the exclusive economic zone is liable for damages and removal costs resulting from the discharge or threat. See 33 U.S.C. 2702(a). Under OPA 90, that person is known as a ‘‘responsible party.’’ See 33 U.S.C. 2701(32). The Coast Guard and Maritime Transportation Act of 2004 (Pub. L. 108–293) (the 2004 Act) amended OPA 90, at 33 U.S.C. 2703(d)(4), by creating an ‘‘innocent landowner’’ defense to liability for those persons who could demonstrate, among other requirements, that before acquiring the real property PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 on which the facility is located, they did not know, and had no reason to know that oil that is the subject of the discharge or substantial threat of discharge was located on, in, or at the facility. See 33 U.S.C. 2703(d)(2)(A). This is done by establishing that, before it acquired the real property on which the facility is located, it carried out ‘‘all appropriate inquiries’’ into its previous ownership and uses according to ‘‘generally accepted good commercial and customary standards and practices.’’ See 33 U.S.C. 2703(d)(4)(A)(i). The Coast Guard is required to establish, by regulation, the standards and practices for carrying out all appropriate inquiries (33 U.S.C. 2703(d)(4)(B)), which is the subject of this rulemaking. This rulemaking applies to persons planning to acquire real property on which a facility, as defined under 33 U.S.C. 2701(9), is located who choose to take steps necessary to protect themselves from liability should unknown oil that is the subject of a discharge or substantial threat of discharge be found at the facility after they acquire it. We call these persons ‘‘landowners’’ or ‘‘owners’’ in this preamble. Should prospective landowners opt for this protection, they may find that they have already complied with this rule if they have complied with ASTM International (ASTM) E 1527–05, ‘‘Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.’’ The industry standard ASTM E 1527–05, is consistent with this rule and is compliant with the statutory criteria for all appropriate inquiries. Persons conducting all appropriate inquiries may use the procedures included in the ASTM E 1527–05 standard to comply with this rule. For more information on the ASTM standard, see the ‘‘ASTM Standard E 1527–05’’ section in this preamble. Note that this rule addresses only one of several elements that must be complied with in order to avail oneself of this protection. The element addressed in this rule is called the ‘‘allappropriate-inquiries’’ element found in 33 U.S.C. 2703(d)(4). Scope of the Rule Congress included in the 2004 Act a list of criteria that the Coast Guard must address in their regulations for establishing standards and practices for conducting all appropriate inquiries. The criteria may be found in 33 U.S.C. 2703(d)(4)(C). This rulemaking is limited only to providing those standards and practices relative to the ‘‘all appropriate inquiries’’ element. E:\FR\FM\14JAR1.SGM 14JAR1 Federal Register / Vol. 73, No. 9 / Monday, January 14, 2008 / Rules and Regulations rmajette on PROD1PC64 with RULES This rulemaking does not address the other requirements in 33 U.S.C. 2703 which also must be met to qualify for the innocent-landowner defense. The rule would not apply to real property purchased by a nongovernmental entity or non-commercial entity for residential use or other similar uses where an inspection and a title search of the facility and the real property on which the facility is located reveal no basis for further investigation. In those cases, 33 U.S.C. 2703(d)(4)(E) states that the inspection and title search satisfy the requirements for all appropriate inquiries. Also, the rule would not affect the existing OPA 90 liability protections for State and local governments that acquire a facility involuntarily in their functions as sovereigns under 33 U.S.C. 2701(26)(B)(i) and 33 U.S.C. 2703(d)(2)(B). Involuntary acquisition of facilities by State and local governments do not fall under the all-appropriateinquiries provision of 33 U.S.C. 2703(d)(4). Consultation With Other Agencies Under 33 U.S.C. 2703(d)(4)(B), we are required to consult with the Environmental Protection Agency (EPA) to develop regulations establishing standards and practices for conducting ‘‘all appropriate inquiries.’’ On November 1, 2005, EPA published a final rule in the Federal Register (70 FR 66070) establishing standards and practices for conducting all appropriate inquiries as required by sections 101(35)(B)(ii) and (iii) of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) (42 U.S.C. 9601, et seq.) found at 42 U.S.C. 9601(35)(B)(ii) and (iii). CERCLA’s liability provision applies to releases or threatened releases of ‘‘hazardous substances’’, which is defined to exclude most forms of oil. These regulations are located in 40 CFR part 312. EPA used a negotiated rulemaking process to develop their standards and practices for conducting all appropriate inquiries under CERCLA. EPA’s Negotiated Rulemaking Committee included interested parties from environmental interest groups; the environmental justice community; federal, state, tribal, and local governments; real estate developers, bankers and lenders; and, environmental professionals. The all-appropriate-inquiries provisions of OPA 90 and CERCLA are similar in many respects, but not identical. The CERCLA provision has a broader scope than the OPA provision. It addresses certain liability defense provisions that are unique to CERCLA, VerDate Aug<31>2005 15:18 Jan 11, 2008 Jkt 214001 involving persons who may not be affected by this rule, such as contiguous property owners and bona fide prospective purchasers. While differences between OPA 90 and CERCLA have required certain differences between the Coast Guard’s final rule and EPA’s final rule, we have coordinated with EPA to ensure that the two rules have been rendered as consistent as possible within statutory constraints. Maintaining consistency between the two rules helps standardize practices within the Federal Government. ASTM Standard E 1527–05 ASTM International (ASTM) E 1527– 05, ‘‘Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process,’’ is the current voluntary industry standard that defines good commercial and customary practice in the United States for conducting an environmental site assessment of a parcel of commercial real estate with respect to oil under OPA 90 and hazardous substances under CERCLA. The 2004 Act, at 33 U.S.C. 2703 (d)(4)(D)(ii), refers to ASTM E 1527–97, which is no longer available from ASTM and has been replaced by ASTM E 1527–05. Both the EPA and the Coast Guard agree that the new ASTM E 1527–05 is the active industry standard and is consistent with Congressional intent. Persons conducting all appropriate inquiries are permitted to use the procedures included in the ASTM E 1527–05 standard to comply with this rule, but use of the ASTM is not mandatory. Regulatory Evaluation Executive Order 12866 This rule is not a ‘‘significant regulatory action’’ under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. A final Regulatory Evaluation follows: Compliance with this rule is required only for those persons engaging in a commercial real estate transaction who choose to take steps necessary to protect themselves from liability should unknown oil that is the subject of a discharge or substantial threat of discharge be found at the facility after they acquire it. The following analysis of the economic impacts associated with this rule relies heavily upon the data PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 2147 collected and the assumptions made in the Environmental Impact Analysis of EPA’s final rule, ‘‘Economic Impact Analysis for the Final All Appropriate Inquiries Regulation,’’ Docket ID No. SFUND–2004–0001 found at http:// www.regulations.gov/fdmspublic/ component/main or at EPA Docket Center, EPA West Building, Room B102, 1301 Constitution Avenue, NW., Washington, DC. EPA surveyed all publicly available literature on environmental assessments of sites to determine what standard industry was customarily using. These assessments correspond to the all appropriate inquiries provision being addressed in this rulemaking and are commonly known as Phase I environmental site assessments (Phase I ESAs). EPA determined that the 2000 edition of ASTM E 1527 (i.e., ASTM E 1527–00) would be their regulatory baseline. This baseline represented the ‘‘no action’’ scenario to which all regulatory alternatives were compared and their economic impacts were measured. ASTM E 1527–00 would have been applied by industry absent EPA’s regulation, because this voluntary industry standard represented ‘‘generally accepted good commercial and customary practices.’’ This assumption was confirmed by the members of EPA’s Negotiated Rulemaking Committee (See the ‘‘Consultation with Other Agencies’’ section of this preamble.). To further validate their assumption, EPA received no public comments on this aspect of its Economic Impact Analysis. In addition, ASTM International states that ASTM E 1527–97 (the edition referred to in the 2004 Act) is no longer available because, when a new version of a standard is released, previous versions of the standard are no longer the active industry standard. The Coast Guard, after independently contacting ASTM International, concurs that the ASTM E 1527–00 standard more accurately reflects the current market conditions than the E 1527–97 standard referenced in OPA 90 as the acceptable interim standard (33 U.S.C. 2703(d)(4)(D)(ii)). The Coast Guard therefore uses the ASTM E 1527–00 standard as its regulatory baseline for its analysis of the economic impacts associated with this rule. Historically, Phase I ESAs have been used towards providing liability protection to individuals under CERCLA. A recent survey conducted by Environmental Data Resources, Inc. (EDR) indicates that approximately 55 percent of all Phase I ESAs are driven exclusively by a need for the landowner E:\FR\FM\14JAR1.SGM 14JAR1 rmajette on PROD1PC64 with RULES 2148 Federal Register / Vol. 73, No. 9 / Monday, January 14, 2008 / Rules and Regulations to qualify for protection from CERCLA liability. The remaining 45 percent are driven by a desire to assess other business environmental risk concerns (i.e., asbestos, lead-based paint, oil, etc.). As previously discussed in the ‘‘Consultation with Other Agencies’’ section of this preamble, this rule is consistent with EPA’s final rule. The scope of EPA’s rulemaking however is much larger than this rule. As such, the economic impacts of this rule are a subset of the impacts estimated by EPA’s rulemaking. This reduction in economic impact results primarily from the lower number of Phase I ESAs expected to be conducted annually under this rule compared to EPA’s final rule. As was the case with EPA’s rulemaking, this rule is expected to result in the following economic impacts: (1) A reduced burden for the conduct of interviews in those cases where the facility and the real property on which the facility is located is abandoned. The new requirement requires only that neighboring property owners and occupants be interviewed and not the current owners and occupants of the abandoned property. This burden would range from no change to a decrease of 0.5 hour per Phase I ESA depending on the type and size of the facility and the real property on which the facility is located. (2) An increased burden in those cases where past owners or occupants of the facility and the real property on which the facility is located need to be interviewed. This would involve the additional effort required to locate and interview past owners and occupants. This increased burden would range from 1 hour to 2 hours per Phase I ESA depending on the type and size of the facility and the real property on which the facility is located. (3) An increased burden associated with documenting recorded environmental cleanup liens. This increased burden would involve additional time spent in preparing the Phase I ESA report. This increased burden would range from an additional 0.5 hour to 1 hour per Phase I ESA depending on the size and type of the facility and the real property on which the facility is located. (4) An increased burden for documenting the reasons for the price and fair market value of a facility and the real property on which the facility is located in those cases where the purchase price paid is significantly below its fair market value. This increased burden would involve VerDate Aug<31>2005 15:18 Jan 11, 2008 Jkt 214001 interviews with local government officials and increased time spent in preparing the Phase I ESA report. This increased burden would reflect an additional 0.5 hour per Phase I ESA for all sizes and types of facilities and the real properties on which the facilities are located. (5) An increased burden for recording information about the degree of obviousness of the presence or likely presence of oil at a facility and the real property on which the facility is located. This increased burden would involve additional time spent in preparing the Phase I Environmental report. This increased burden would range from 0.5 hour to 1 hour per Phase I ESA depending on the type and size of the facility and the real property on which the facility is located. Using a weighted labor rate of $51.20/ hour applied to the activities (as outlined above) required as a result of their regulation (as they vary from those required in their regulatory baseline), EPA determined that there would be an incremental cost ranging from $52 to $58 per Phase I ESA (the low end estimate assumes that 15 percent of properties are abandoned, while the high end estimate assumes that 28 percent of properties are abandoned). Our analysis simplifies this range as an average incremental cost of $55 per Phase I ESA. A. Analysis Calculations and Results Using data from EPA’s final rule and extrapolated for the period from 2007 to 2016, there would be an average of 332,038 Phase I ESAs conducted annually. As previously mentioned, the incremental cost of conducting a Phase I ESA to comply with EPA’s rulemaking above and beyond what was required under ASTM E 1527–00 as calculated by EPA’s rulemaking would be approximately $55 per ESA. B. Estimated Annual Number of OPA 90-Related Phase I ESAs This analysis is severely limited by the lack of data available which would allow the number of Phase I ESAs conducted applicable to this rule to be segregated from the total population of Phase I ESAs conducted. In order to put an upward bound on the costs associated with this rule, this analysis first describes the absolute upper bound scenario (i.e., that all commercial real estate transactions not exclusively conducted for CERCLA liability protection requiring a Phase I ESA would be impacted by this rule). Next the Coast Guard developed a more likely scenario that takes into account that Phase I ESAs for certain PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 commercial real estate transactions are outside the scope of this rule. We acknowledge that, of all of the commercial real estate transactions that occur annually, a likely small percentage would involve— 1. A facility and the real property on which the facility is located where a discharge or substantial threat of discharge of oil may impact the navigable waters or exclusive economic zone of the United States; and 2. A Phase I ESA that was conducted for establishment of the innocent landowner liability protection provision under OPA 90 and not to assess environmental risk concerns not related to oil (e.g., lead-based paint contamination, asbestos, CERCLA hazardous substances, etc.). C. Upper Bound Cost Scenario The estimated incremental cost of this scenario, where all future Phase I ESAs not conducted specifically for CERCLA liability protection (i.e., 45 percent as per the results of EDR’s survey mentioned above) are impacted by this rule, would be approximately $8.2 million per year. Cost calculation 1—Estimated Annual Number of Coast Guard related Phase I ESAs 332,038 Phase I ESAs × 0.45 = 149,417 Phase I ESAs Estimated Annual Cost of Coast Guard related Phase I ESAs 149,417 Phase I ESAs × $55/ESA = $8,217,935 per year. D. Most Likely Cost Scenario To more accurately reflect the scope of this rule, certain commercial real estate transactions involving a Phase I ESA from EPA’s analysis would have to be removed from this analysis. Those include transactions where a discharge or substantial threat of discharge of oil from a facility and the real property on which the facility is located would not have the possibility of impacting the navigable waters or exclusive economic zone of the United States and transactions which are conducted for substances other than oil. Absent the data to make more than an approximation, we assumed that five percent of the total number of Phase I ESAs may realistically reflect the number of Phase I ESAs within the scope of this rule. Under this assumption, the estimated cost associated with this rule would be significantly reduced. The estimated incremental cost under this scenario is approximately $913,110 per year. Cost Calculation 2—Estimated Annual Number of Coast Guard related Phase I ESAs. E:\FR\FM\14JAR1.SGM 14JAR1 Federal Register / Vol. 73, No. 9 / Monday, January 14, 2008 / Rules and Regulations rmajette on PROD1PC64 with RULES 332,038 Phase I ESAs × 0.05 = 16,602 Phase I ESAs. Estimated Annual Cost of Coast Guard related Phase I ESAs: 16,602 Phase I ESAs × $55/ESA = $913,110 per year. ASTM International has since updated their ASTM E 1527 standard. Their new standard is ASTM E 1527–05. Both EPA and Coast Guard recognize that this new standard is consistent with their rulemakings on the subject. See the Federal Register (70 FR 66081). Because the new standard is consistent with the EPA final rule, which went into effect on November 1, 2006, and provides documentation for both hazardous substances and oil, it is likely that all prudent prospective commercial landowners will be using the more rigorous ASTM standard for their real estate transactions well before our rule becomes effective. Thus, the possible economic impact attributed to this rule might be reduced to a negligible value. The Coast Guard further notes that there have been no instances to date where a responsible party has attempted to use the interim innocent-landowner defense to liability provision under OPA 90. EPA qualitatively assessed the benefits for their final rule. Of these benefits, only one is applicable to our rule due to our much smaller regulatory scope, namely the increased level of certainty with regard to OPA 90 liability provided to prospective owners of facilities and the real properties on which they are located with potential oil discharges. The Coast Guard, as was the case with EPA’s analysis, is not able to quantify, with any significant level of confidence, the exact proportion of benefits associated with the rule. For these reasons, the costs and benefits can not be directly compared. However, because complying with this rule is required only for those persons who choose to take steps necessary to protect themselves from liability should unknown oil that is the subject of a discharge or substantial threat of discharge be found at the facility after they acquire it, it can be assumed that persons would only do so if the potential benefits to them associated with this protection from liability outweigh their costs of compliance. Small Entities Under the Regulatory Flexibility Act (5 U.S.C. 601–612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term ‘‘small entities’’ comprises small businesses, not-for-profit organizations that are independently owned and operated and are not VerDate Aug<31>2005 15:18 Jan 11, 2008 Jkt 214001 dominant in their fields, and governmental jurisdictions with populations of less than 50,000. As previously stated in the regulatory evaluation section above, compliance with this rule is only required for those entities, regardless of their operations, involved in a real estate transaction who choose to take steps necessary to protect themselves from liability should unknown oil that is the subject of a discharge or substantial threat of discharge be found at the facility after they acquire it. Therefore, it assumed that entities across all industries, as defined by the North American Industry Classification System (NAICS), could potentially be affected. The Regulatory Flexibility Act and the Small Business Regulatory Enforcement Fairness Act of 1996 require Federal agencies to measure the regulatory impacts of the rule to determine whether there will be a significant economic impact on a substantial number of small entities. Entities, however, may operate at multiple physical locations. For example, most family-owned restaurants operate at a single location, while chain restaurants have multiple locations. Thus, the annual number of transactions per entity, and therefore the demand for Phase I ESAs, is a function of the number of establishments an entity owns. According to 2001 U.S. Census data, the distribution of establishments by entity size of the regulated community is as follows: Less than 100 employees: 81% 100 to 499 employees: 5% 500 to 1,499 employees: 2% 1,500 employees or more: 12% According to EPA’s Office of Policy, Economics, and Innovations and EPA’s National Center for Environmental Economics, it is a common practice when a proposed regulation has the potential of affecting all industries to consider all entities with less than 500 employees as small. According to 2001 U.S. Census data, when small entities are defined as entities with less than 500 employees, small entities own 86 percent of all establishments. Using EPA’s assumption that small entities are equally likely to engage in commercial real estate transactions as large ones, we estimate that 86 percent of all commercial real estate transactions completed annually involve small entities. Applying this 86 percent to the ‘‘Most Likely Cost Scenario’’ and the ‘‘Upper Bound Cost Scenario’’ (See ‘‘Regulatory Evaluation’’ in this preamble.) provides a range in the number of potential transactions PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 2149 occurring annually of between 14,278 and 128,499. Based on 2001 Census Bureau data, the average annual revenue per employee for an entity is approximately $24,000. Therefore, even for a small entity receiving the minimum average annual revenue of $24,000 that makes one transaction a year (a very conservative assumption), the annual cost impact of $55 would represent only 0.23 percent of annual revenues. Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that this final rule will not have a significant economic impact on a substantial number of small entities. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104–121), we offered to assist small entities in understanding this rule so they could better evaluate its effects on them and participate in the rulemaking. The Coast Guard received no requests for assistance from small entities concerning this rulemaking and provided none. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency’s responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1–888–REG–FAIR (1–888– 734–3247). Collection of Information This rule calls for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501– 3520). Title: Landowner Defenses to Liability under the Oil Pollution Act of 1990: Standards and Practices for Conducting All Appropriate Inquiries. Summary of the Collection of Information: For landowners choosing to avail themselves of the innocentlandowner defense, they or their environmental professionals must conduct all the appropriate inquiries specified in the rule. Depending upon the particular case, this may involve interviews, research, and reports. Need for Information: This rule is needed to assist prospective landowners in establishing the innocent-landowner defense. Proposed Use of Information: The information could be used by persons if E:\FR\FM\14JAR1.SGM 14JAR1 2150 Federal Register / Vol. 73, No. 9 / Monday, January 14, 2008 / Rules and Regulations their liability under OPA 90 for the discharge or substantial threat of discharge of oil were challenged in a court. Description of the Respondents: The respondents include anyone engaging in a commercial real estate transaction that may desire to assert an innocent landowner defense to liability under OPA 90. Number of Respondents: We estimate that there would be 16,602 respondents. This is based on an estimate made in the ‘‘Regulatory Evaluation’’ section of this preamble. Frequency of Response: 1 hour per response. Burden of Response: $67 per response. Estimate of Total Annual Burden: 16,602 respondents × 1 hour per response × $67 per response = $1,112,334 As required by 44 U.S.C. 3507(d), we submitted a copy of this rule to the Office of Management and Budget (OMB) for its review of the collection of information. OMB has approved the collection effective February 13, 2008. The collection will be added to 33 CFR part 137. The corresponding approval number is OMB Control Number 1625– 0111, which expires on February 13, 2011. You are not required to respond to a collection of information unless it displays a currently valid OMB control number. rmajette on PROD1PC64 with RULES Federalism A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism. Unfunded Mandates Reform Act The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531–1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble. Taking of Private Property This rule would not effect a taking of private property or otherwise have VerDate Aug<31>2005 15:18 Jan 11, 2008 Jkt 214001 taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. Civil Justice Reform This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. Protection of Children We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children. Indian Tribal Governments This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Energy Effects We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a ‘‘significant energy action’’ under that order because it is not a ‘‘significant regulatory action’’ under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211. Technical Standards The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling PO 00000 Frm 00008 Fmt 4700 Sfmt 4700 procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies. This rule uses the following voluntary consensus standard: ASTM E 1527–05, ‘‘Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.’’ The section that references this standard and the location where this standard is available is listed in § 137.15. Persons conducting all appropriate inquiries may use the procedures included in the ASTM E 1527–05 standard to comply with this rule. Environment We have analyzed this rule under Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321–4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2–1, paragraph (34)(a), of the Instruction, from further environmental documentation. This rule concerns inquiries into the previous ownership and uses of facilities and the real property on which they are located, before they are acquired, to determine the presence or likely presence of oil. It has no effect on the environment. A final ‘‘Environmental Analysis Check List’’ and a final ‘‘Categorical Exclusion Determination’’ are available in the docket where indicated under ADDRESSES. List of Subjects in 33 CFR Part 137 Environmental protection, Administrative practice and procedure, Petroleum, Intergovernmental relations, Reporting and recordkeeping requirements. Words of Issuance and Regulatory Text For the reasons set out in the preamble, the Coast Guard adds 33 CFR part 137 to read as follows: I PART 137—OIL SPILL LIABILITY: STANDARDS FOR CONDUCTING ALL APPROPRIATE INQUIRIES UNDER THE INNOCENT LAND-OWNER DEFENSE Subpart A—Introduction Sec. 137.1 Purpose and applicability. 137.5 Disclosure obligations. 137.10 How are terms used in this part defined? E:\FR\FM\14JAR1.SGM 14JAR1 Federal Register / Vol. 73, No. 9 / Monday, January 14, 2008 / Rules and Regulations 137.15 References: Where can I get a copy of the publication mentioned in this part? Subpart B—Standards and Practices 137.18 Duties of persons specified in § 137.1(a). 137.20 May voluntary industry standards be used to comply with this regulation? 137.25 Qualifications of the environmental professional. 137.30 Objectives and performance factors. 137.33 General all appropriate inquiries requirements. 137.35 Inquiries by an environmental professional. 137.40 Additional inquiries. 137.45 Interviews with past and present owners, operators, and occupants. 137.50 Reviews of historical sources of information. 137.55 Searches for recorded environmental cleanup liens. 137.60 Reviews of Federal, State, tribal and local government records. 137.65 Visual inspections of the facility, the real property on which the facility is located, and adjoining properties. 137.70 Specialized knowledge or experience on the part of persons specified in § 137.1(a). 137.75 The relationship of the purchase price to the value of the facility and the real property on which the facility is located, if oil was not at the facility or on the real property. 137.80 Commonly known or reasonably ascertainable information about the facility and the real property on which the facility is located. 137.85 The degree of obviousness of the presence or likely presence of oil at the facility and the real property on which the facility is located and the ability to detect the oil by appropriate investigation. Authority: 33 U.S.C. 2703(d)(4); Department of Homeland Security Delegation No. 14000. appropriate inquiries into the nature of the real property on which the facility is located before acquiring it. The purpose of this part is to prescribe standards and practices for making those inquiries. (b) Under 33 U.S.C. 2703(d)(4)(E), this part does not apply to real property purchased by a non-governmental entity or non-commercial entity for residential use or other similar uses where a property inspection and a title search reveal no basis for further investigation. In those cases, the property inspection and title search satisfy the requirements of this part. (c) This part does not affect the existing OPA 90 liability protections for State and local governments that acquire a property involuntarily in their functions as sovereigns under 33 U.S.C. 2703(d)(2)(B). Involuntary acquisition of properties by State and local governments fall under the provisions of 33 U.S.C. 2703(d)(2)(B), not under the all-appropriate-inquiries provision of 33 U.S.C. 2703(d)(4) and this part. § 137.5 Disclosure obligations. (a) Under 33 U.S.C. 2703(c)(1), persons specified in § 137.1(a), including environmental professionals, must report the incident as required by law if they know or have reason to know of the incident. (b) This part does not limit or expand disclosure obligations under any Federal, State, tribal, or local law. It is the obligation of each person, including environmental professionals, conducting inquiries to determine his or her respective disclosure obligations under Federal, State, tribal, and local law and to comply with them. § 137.10 How are terms used in this part defined? § 137.1 rmajette on PROD1PC64 with RULES Subpart A—Introduction (a) The following terms have the same definitions as in 33 U.S.C. 2701: damages; discharge; incident; liable or liability; oil; owner or operator; and removal costs. (b) As used in this part— Abandoned property means a property that, because of its general disrepair or lack of activity, a reasonable person could believe that there is an intent on the part of the current owners to surrender their rights to the property. Adjoining property means real property the border of which is shared in part or in whole with that of the subject property or that would be shared in part or in whole with that of the property but for a street, road, or other public thoroughfare separating the properties. Data gap means a lack of, or inability to, obtain information required by Purpose and applicability. (a) In general under the Oil Pollution Act of 1990 (33 U.S.C. 2701, et seq.), an owner or operator of a facility (as defined in § 137.10) that is the source of a discharge, or a substantial threat of discharge, of oil into the navigable waters or adjoining shorelines or the exclusive economic zone is liable for damages and removal costs resulting from the discharge or threat. However, if that person can demonstrate, among other criteria not addressed in this part, that they did not know and had no reason to know at the time of their acquisition of the real property on which the facility is located that oil was located on, in, or at the facility, the person may be eligible for the innocent landowner defense to liability under 33 U.S.C. 2703(d)(4). One element of the defense is that the person made all VerDate Aug<31>2005 15:18 Jan 11, 2008 Jkt 214001 PO 00000 Frm 00009 Fmt 4700 Sfmt 4700 2151 subpart B of this part despite good faith efforts by the environmental professional or persons specified in § 137.1(a), as appropriate, to gather the information under § 137.33. Environmental professional means an individual who meets the requirements of § 137.25. Facility means any structure, group of structures, equipment, or device (other than a vessel) which is used for one or more of the following purposes: exploring for, drilling for, producing, storing, handling, transferring, processing, or transporting oil. This term includes any motor vehicle, rolling stock, or pipeline used for one or more of these purposes. Good faith means the absence of any intention to seek an unfair advantage or to defraud another party; an honest and sincere intention to fulfill one’s obligations in the conduct or transaction concerned. Institutional controls means nonengineered instruments, such as administrative and/or legal controls, that help to minimize the potential for human exposure to oil discharge and/or protect the integrity of a removal action. Relevant experience means participation in the performance of allappropriate-inquiries investigations, environmental site assessments, or other site investigations that may include environmental analyses, investigations, and remediation which involve the understanding of surface and subsurface environmental conditions and the processes used to evaluate these conditions and for which professional judgment was used to develop opinions regarding conditions indicative of the presence or likely presence of oil at the facility and the real property on which the facility is located. § 137.15 References: Where can I get a copy of the publication mentioned in this part? Section 137.20 of this part refers to ASTM E 1527–05, Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process. That document is available from ASTM International, 100 Barr Harbor Drive, P.O. Box C700, West Conshohocken, PA 19428–2959. It is also available for inspection at the Coast Guard National Pollution Funds Center, 4200 Wilson Boulevard, Suite 1013, Arlington, VA 22203–1804. Subpart B—Standards and Practices § 137.18 Duties of persons specified in § 137.1(a). In order to make all appropriate inquiries, persons seeking to establish the liability protection under § 137.1(a) E:\FR\FM\14JAR1.SGM 14JAR1 2152 Federal Register / Vol. 73, No. 9 / Monday, January 14, 2008 / Rules and Regulations must conduct the inquiries and investigations as required in this part and ensure that the inquiries and investigations required to be made by environmental professionals are made. § 137.20 May industry standards be used to comply with this regulation? The industry standards in ASTM E 1527–05, (Referenced in § 137.15) may be used to comply with the requirements set forth in §§ 137.45 through 137.85 of this part. Use of ASTM E 1527–05 for this purpose is optional and not mandatory. rmajette on PROD1PC64 with RULES § 137.25 Qualifications of the environmental professional. (a) An environmental professional is an individual who possesses sufficient specific education, training, and experience necessary to exercise professional judgment to develop opinions and conclusions regarding conditions indicative of the presence or likely presence of oil at a facility and the real property on which the facility is located sufficient to meet the objectives and performance factors in § 137.30(a) and (b). (1) Such a person must— (i) Hold a current Professional Engineer’s or Professional Geologist’s license or registration from a State, tribe, or U.S. territory (or the Commonwealth of Puerto Rico) and have the equivalent of 3 years of full-time relevant experience; (ii) Be licensed or certified by the Federal government, a State, tribe, or U.S. territory (or the Commonwealth of Puerto Rico) to perform environmental inquiries under § 137.35 and have the equivalent of 3 years of full-time relevant experience; (iii) Have a Baccalaureate or higher degree from an accredited institution of higher education in a discipline of engineering or science and the equivalent of 5 years of full-time relevant experience; or (iv) Have the equivalent of 10 years of full-time relevant experience. (2) An environmental professional should remain current in his or her field through participation in continuing education or other activities. (3) The requirements for an environmental professional in this section do not preempt State professional licensing or registration requirements, such as those for a professional geologist, engineer, or siteremediation professional. Before commencing work, a person should determine the applicability of State professional licensing or registration laws to the activities to be undertaken as part of an inquiry under § 137.35(b). VerDate Aug<31>2005 15:18 Jan 11, 2008 Jkt 214001 (4) A person who does not qualify as an environmental professional under this section may assist in the conduct of all appropriate inquiries according to this part if the person is under the supervision or responsible charge of an environmental professional meeting the requirements of this section when conducting the inquiries. § 137.30 factors. Objectives and performance (a) Objectives. This part is intended to result in the identification of conditions indicative of the presence or likely presence of oil at the facility and the real property on which the facility is located. In order to meet the objectives of this regulation, persons specified in § 137.1(a) and the environmental professional must seek to identify, through the conduct of the standards and practices in this subpart, the following types of information about the facility and the real property on which the facility is located: (1) Current and past uses and occupancies of the facility and the real property on which the facility is located. (2) Current and past uses of oil. (3) Waste management and disposal activities that indicate presence or likely presence of oil. (4) Current and past corrective actions and response activities that indicate presence or likely presence of oil. (5) Engineering controls. (6) Institutional controls, such as zoning restrictions, building permits, and easements. (7) Properties adjoining or located nearby the facility and the real property on which the facility is located that have environmental conditions that could have resulted in conditions indicative of the presence or likely presence of oil at the facility and the real property on which the facility is located. (b) Performance factors. In order to meet this part and to meet the objectives stated in paragraph (a) of this section, the persons specified in § 137.1(a) or the environmental professional (as appropriate to the particular standard and practice) must— (1) Gather the information that is required for each standard and practice listed in this subpart that is publicly available, is obtainable from its source within a reasonable time and cost, and can be reviewed practicably; and (2) Review and evaluate the thoroughness and reliability of the information gathered in complying with each standard and practice listed in this subpart taking into account information gathered in the course of complying PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 with the other standards and practices of this part. § 137.33 General all appropriate inquiries requirements. (a) All appropriate inquiries must be conducted within 1 year before the date of acquisition of the real property on which the facility is located, as evidenced by the date of receipt of the documentation transferring title to, or possession of, the real property and must include: (1) An inquiry by an environmental professional, as provided in § 137.35. (2) The collection of information under § 137.40 by persons specified in § 137.1(a). (b) The following components of the all appropriate inquiries must be conducted or updated within 180 days before the date of acquisition of the real property on which the facility is located: (1) Interviews with past and present owners, operators, and occupants. See § 137.45. (2) Searches for recorded environmental cleanup liens. See § 137.55. (3) Reviews of Federal, State, tribal, and local government records. See § 137.60. (4) Visual inspections of the facility, the real property on which the facility is located, and adjoining properties. See § 137.65. (5) The declaration by the environmental professional. See § 137.35(d). (c) All appropriate inquiries may include the results of and information contained in an inquiry previously conducted by, or on behalf of, persons specified in § 137.1(a) who are responsible for the inquiries for the facility and the real property on which the facility is located if— (1) The information was collected during the conduct of an allappropriate-inquiries investigation under this part. (2) The information was collected or updated within 1 year before the date of acquisition of the real property on which the facility is located. (3) The following components of the inquiries were conducted or updated within 180 days before the date of acquisition of the real property on which the facility is located: (i) Interviews with past and present owners, operators, and occupants. See § 137.45. (ii) Searches for recorded environmental cleanup liens. See § 137.55. (iii) Reviews of Federal, State, tribal, and local government records. See § 137.60. E:\FR\FM\14JAR1.SGM 14JAR1 Federal Register / Vol. 73, No. 9 / Monday, January 14, 2008 / Rules and Regulations (iv) Visual inspections of the facility, the real property on which the facility is located, and the adjoining properties. See § 137.65. (v) The declaration by the environmental professional. See § 137.35(d). (4) Previously collected information is updated by including relevant changes in the conditions of the facility and the real property on which the facility is located and specialized knowledge, as outlined in § 137.70, of the persons conducting the all appropriate inquiries for the facility and the real property on which the facility is located, including persons specified in § 137.1(a) and the environmental professional. (d) All appropriate inquiries may include the results of an environmental professional’s report under § 137.35(c) that have been prepared by or for other persons if— (1) The reports meet the objectives and performance factors in § 137.30(a) and (b); and (2) The person specified in § 137.1(a) reviews the information and conducts the additional inquiries under §§ 137.70, 137.75, and 137.80 and updates the inquiries requiring an update under paragraph (b) of this section. (e) To the extent there are data gaps that affect the ability of persons specified in § 137.1(a) and environmental professionals to identify conditions indicative of the presence or likely presence of oil, the gaps must be identified in the report under § 137.35(c)(2). In addition, the sources of information consulted to address data gaps should be identified and the significance of the gaps noted. Sampling and analysis may be conducted to develop information to address data gaps. (f) Any conditions indicative of the presence or likely presence of oil identified as part of the all-appropriateinquiries investigation should be noted in the report. rmajette on PROD1PC64 with RULES § 137.35 Inquiries by an environmental professional. (a) Inquiries by an environmental professional must be conducted either by the environmental professional or by a person under the supervision or responsible charge of an environmental professional. (b) The inquiry of the environmental professional must include the requirements in §§ 137.45 (interviews with past and present owners), 137.50 (reviews of historical sources), 137.60 (reviews of government records), 137.65 (visual inspections), 137.80 (commonly known or reasonably ascertainable VerDate Aug<31>2005 15:18 Jan 11, 2008 Jkt 214001 information) and 137.85 (degree of obviousness of the presence or likely presence of oil). In addition, the inquiry should take into account information provided to the environmental professional by the person specified in § 137.1(a) conducting the additional inquiries under § 137.40. (c) The results of the inquiry by an environmental professional must be documented in a written report that, at a minimum, includes the following: (1) An opinion as to whether the inquiry has identified conditions indicative of the presence or likely presence of oil at the facility and the real property on which the facility is located. (2) An identification of data gaps in the information developed as part of the inquiry that affect the ability of the environmental professional to identify conditions indicative of the presence or likely presence of oil at the facility and the real property on which the facility is located. The report must also indicate whether the gaps prevented the environmental professional from reaching an opinion regarding the identification of conditions indicative of the presence or likely presence of oil. (3) The qualifications of the environmental professional. (4) An opinion regarding whether additional appropriate investigation is necessary. (d) The environmental professional must place the following statements in the written document identified in paragraph (c) of this section and sign the document: ‘‘[I, We] declare that, to the best of [my, our] professional knowledge, [I, we] meet the requirements under 33 CFR 137.25 for an environmental professional.’’ and ‘‘[I, We] have the specific qualifications based on education, training, and experience to assess the nature, history, and setting of a facility and the real property on which it is located. [I, We] have developed and conducted all appropriate inquiries according to the standards and practices in 33 CFR part 137.’’ § 137.40 Additional inquiries. (a) Persons specified in § 137.1(a) must conduct inquiries in addition to those conducted by the environmental professional under § 137.35 and may provide the information associated with these additional inquiries to the environmental professional responsible for conducting the activities listed in § 137.35— (1) As required by § 137.55 and if not otherwise obtained by the environmental professional, environmental cleanup liens against the PO 00000 Frm 00011 Fmt 4700 Sfmt 4700 2153 facility and the real property on which it is located that are filed or recorded under Federal, State, tribal, or local law. (2) As required by § 137.70, specialized knowledge or experience of the person specified in § 137.1(a). (3) As required by § 137.75, the relationship of the purchase price to the fair market value of the facility and the real property on which the facility is located if the oil was not at the facility and the real property on which it is located. (4) As required by § 137.80 and if not otherwise obtained by the environmental professional, commonly known or reasonably ascertainable information about the facility and the real property on which it is located. (b) [Reserved] § 137.45 Interviews with past and present owners, operators, and occupants. (a) Interviews with owners, operators, and occupants of the facility and the real property on which the facility is located must be conducted for the purposes of achieving the objectives and performance factors of § 137.30(a) and (b). (b) The inquiry of the environmental professional must include interviewing the current owner and occupant of the facility and the real property on which the facility is located. If the facility and the real property on which the facility is located has multiple occupants, the inquiry of the environmental professional must include interviewing major occupants, as well as those occupants likely to use, store, treat, handle or dispose of oil or those who have likely done so in the past. (c) The inquiry of the environmental professional also must include, to the extent necessary to achieve the objectives and performance factors in § 137.30(a) and (b), interviewing one or more of the following persons: (1) Current and past facility and real property managers with relevant knowledge of uses and physical characteristics of the facility and the real property on which the facility is located. (2) Past owners, occupants, or operators of the facility and the real property on which the facility is located. (3) Employees of current and past occupants of the facility and the real property on which the facility is located. (d) In the case of inquiries conducted at abandoned properties where there is evidence of potential unauthorized uses or evidence of uncontrolled access, the environmental professional’s inquiry must include an interview of at least E:\FR\FM\14JAR1.SGM 14JAR1 2154 Federal Register / Vol. 73, No. 9 / Monday, January 14, 2008 / Rules and Regulations one owner or occupant of a neighboring property from which it appears possible that the owner or occupant of the neighboring property could have observed use or other presence or likely presence of oil. § 137.50 Reviews of historical sources of information. (a) Historical documents and records must be reviewed for the purposes of achieving the objectives and performance factors of § 137.30(a) and (b). Historical documents and records may include, but are not limited to, aerial photographs, fire insurance maps, building department records, chain of title documents, and land use records. (b) Historical documents and records reviewed must cover a period of time as far back in the history of the real property to when the first structure was built or when it was first used for residential, agricultural, commercial, industrial, or governmental purposes. The environmental professional may exercise professional judgment in context of the facts available at the time of the inquiry as to how far back in time it is necessary to search historical records. § 137.55 Searches for recorded environmental cleanup liens. (a) All appropriate inquiries must include a search for the existence of environmental cleanup liens against the facility and the real property on which the facility is located that are filed or recorded under Federal, State, tribal, or local law. (b) All information collected by persons specified in § 137.1(a) rather than an environmental professional regarding the existence of environmental cleanup liens associated with the facility and the real property on which the facility is located may be provided to the environmental professional or retained by the applicable party. rmajette on PROD1PC64 with RULES § 137.60 Reviews of Federal, State, tribal, and local government records. (a) Federal, State, tribal, and local government records or databases of government records of the facility, the real property on which the facility is located, and adjoining properties must be reviewed for the purposes of achieving the objectives and performance factors of § 137.30(a) and (b). (b) With regard to the facility and the property on which the facility is located, the review of Federal, State, and tribal government records or databases of the government records and local government records and databases of the records should include— VerDate Aug<31>2005 15:18 Jan 11, 2008 Jkt 214001 (1) Records of reported oil discharges present, including site investigation reports for the facility and the real property on which the facility is located; (2) Records of activities, conditions, or incidents likely to cause or contribute to discharges or substantial threat of discharges of oil, including landfill and other disposal unit location records and permits, storage tank records and permits, hazardous waste handler and generator records and permits, Federal, tribal and State government listings of sites identified as priority cleanup sites, and spill reporting records; (3) Comprehensive Environmental Response, Compensation, and Liability Information System (CERCLIS) records; (4) Public health records; (5) Emergency Response Notification System records; (6) Registries or publicly available lists of engineering controls; and (7) Registries or publicly available lists of institutional controls, including environmental land use restrictions, applicable to the facility and the real property on which the facility is located. (c) With regard to nearby or adjoining properties, the review of Federal, State, tribal, and local government records or databases of government records should include the identification of the following: (1) Properties for which there are government records of reported discharges or substantial threat of discharges of oil. Such records or databases containing such records and the associated distances from the facility and the real property on which the facility is located for which such information should be searched include the following: (i) Records of National Priorities List (NPL) sites or tribal- and Stateequivalent sites (one mile). (ii) Resource Conservation and Recovery Act (RCRA) properties subject to corrective action (one mile). (iii) Records of Federally-registered, or State-permitted or -registered, hazardous waste sites identified for investigation or remediation, such as sites enrolled in State and tribal voluntary cleanup programs and tribaland State-listed brownfield sites (onehalf mile). (iv) Records of leaking underground storage tanks (one-half mile). (2) Properties that previously were identified or regulated by a government entity due to environmental concerns at the facility and the real property on which the facility is located. The records or databases containing the records and the associated distances PO 00000 Frm 00012 Fmt 4700 Sfmt 4700 from the facility and the real property on which the facility is located for which the information should be searched include the following: (i) Records of delisted NPL sites (onehalf mile). (ii) Registries or publicly available lists of engineering controls (one-half mile). (iii) Records of former CERCLIS sites with no further remedial action notices (one-half mile). (3) Properties for which there are records of Federally-permitted, Statepermitted or -registered, or tribalpermitted or -registered waste management activities. The records or databases that may contain the records include the following: (i) Records of RCRA small quantity and large quantity generators (adjoining properties). (ii) Records of Federally-permitted, State-permitted or -registered, or tribalpermitted landfills and solid waste management facilities (one-half mile). (iii) Records of registered storage tanks (adjoining property). (4) A review of additional government records with regard to sites identified under paragraphs (c)(1) through (c)(3) of this section may be necessary in the judgment of the environmental professional for the purpose of achieving the objectives and performance factors of §§ 137.30(a) and (b). (d) The search distance from the real property boundary for reviewing government records or databases of government records listed in paragraph (c) of this section may be modified based upon the professional judgment of the environmental professional. The rationale for the modifications must be documented by the environmental professional. The environmental professional may consider one or more of the following factors in determining an alternate appropriate search distance— (1) The nature and extent of a discharge. (2) Geologic, hydrogeologic, or topographic conditions of the property and surrounding environment. (3) Land use or development densities. (4) The property type. (5) Existing or past uses of surrounding properties. (6) Potential migration pathways (e.g., groundwater flow direction, prevalent wind direction). (7) Other relevant factors. E:\FR\FM\14JAR1.SGM 14JAR1 Federal Register / Vol. 73, No. 9 / Monday, January 14, 2008 / Rules and Regulations rmajette on PROD1PC64 with RULES § 137.65 Visual inspections of the facility, real property on which the facility is located, and adjoining properties. (a) For the purpose of achieving the objectives and performance factors of § 137.30(a) and (b), the inquiry of the environmental professional must include the following: (1) A visual on-site inspection of the facility and the real property on which the facility is located, and the improvements at the facility and real property, including a visual inspection of the areas where oil may be or may have been used, stored, treated, handled, or disposed. Physical limitations to the visual inspection must be noted. (2) A visual inspection of adjoining properties, from the subject real property line, public rights-of-way, or other vantage point (e.g., aerial photography), including a visual inspection of areas where oil may be or may have been stored, treated, handled or disposed. A visual on-site inspection is recommended, though not required. Physical limitations to the inspection of adjacent properties must be noted. (b) Except as in paragraph (c) of this section, a visual on-site inspection of the facility and the real property on which the facility is located must be conducted. (c) An on-site inspection is not required if an on-site visual inspection of the facility and the real property on which the facility is located cannot be performed because of physical limitations, remote and inaccessible location, or other inability to obtain access to the facility and the real property on which the facility is located after good faith efforts have been taken to obtain access. The mere refusal of a voluntary seller to provide access to the facility and the real property on which the facility is located is not justification for not conducting an on-site inspection. The inquiry of the environmental professional must include— (1) Visually inspecting the facility and the real property on which the facility is located using another method, such as aerial imagery for large properties, or visually inspecting the facility and the real property on which the facility is located from the nearest accessible vantage point, such as the property line or public road for small properties; (2) Documenting the efforts undertaken to obtain access and an explanation of why such efforts were unsuccessful; and (3) Documenting other sources of information regarding the presence or likely presence of oil at the facility and the real property on which the facility is located that were consulted according VerDate Aug<31>2005 15:18 Jan 11, 2008 Jkt 214001 to § 137.30(a). The documentation should include comments, if any, by the environmental professional on the significance of the failure to conduct a visual on-site inspection of the facility and the real property on which the facility is located with regard to the ability to identify conditions indicative of the presence or likely presence of oil at the facility and the real property. § 137.70 Specialized knowledge or experience on the part of persons specified in § 137.1(a). (a) For the purpose of identifying conditions indicative of the presence or likely presence of oil at the facility and the real property on which the facility is located, persons specified in § 137.1(a) must take into account their own specialized knowledge of the facility and the real property on which the facility is located, the area surrounding the facility and the real property on which the facility is located, and the conditions of adjoining properties and their experience relevant to the inquiry. (b) The results of all appropriate inquiries under § 137.33 must take into account the relevant and applicable specialized knowledge and experience of the persons specified in § 137.1(a) responsible for undertaking the inquiry. § 137.75 The relationship of the purchase price to the value of the facility and the real property on which the facility is located, if oil was not at the facility or on the real property. (a) Persons specified in § 137.1(a) must consider whether the purchase price of the facility and the real property on which the facility is located reasonably reflects the fair market value of the facility and real property if oil was not present or likely present. (b) If the persons conclude that the purchase price does not reasonably reflect the fair market value of that facility and real property if oil was not at the facility and the real property, they must consider whether or not the differential in purchase price and fair market value is due to the presence or likely presence of oil. § 137.80 Commonly known or reasonably ascertainable information about the facility and the real property on which the facility is located. (a) Throughout the inquiries, persons specified in § 137.1(a) and environmental professionals conducting the inquiry must take into account commonly known or reasonably ascertainable information within the local community about the facility and the real property on which the facility is located and consider that information PO 00000 Frm 00013 Fmt 4700 Sfmt 4700 2155 when seeking to identify conditions indicative of the presence or likely presence of oil at the facility and the real property. (b) Commonly known information may include information obtained by the person specified in § 137.1(a) or by the environmental professional about the presence or likely presence of oil at the facility and the real property on which the facility is located that is incidental to the information obtained during the inquiry of the environmental professional. (c) To the extent necessary to achieve the objectives and performance factors of § 137.30(a) and (b), the person specified in § 137.1(a) and the environmental professional must gather information from varied sources whose input either individually or taken together may provide commonly known or reasonably ascertainable information about the facility and the real property on which the facility is located; the environmental professional may refer to one or more of the following sources of information: (1) Current owners or occupants of neighboring properties or properties adjacent to the facility and the real property on which the facility is located. (2) Local and state government officials who may have knowledge of, or information related to, the facility and the real property on which the facility is located. (3) Others with knowledge of the facility and the real property on which the facility is located. (4) Other sources of information, such as newspapers, Web sites, community organizations, local libraries, and historical societies. § 137.85 The degree of obviousness of the presence or likely presence of oil at the facility and the real property on which the facility is located and the ability to detect the oil by appropriate investigation. (a) Persons specified in § 137.1(a) and environmental professionals conducting an inquiry of a facility and the real property on which it is located on their behalf must take into account the information collected under §§ 137.45 through 137.80 in considering the degree of obviousness of the presence or likely presence of oil at the facility and the real property on which the facility is located. (b) Persons specified in § 137.1(a) and environmental professionals conducting an inquiry of a facility and the property on which the facility is located on their behalf must take into account the information collected under §§ 137.45 through 137.80 in considering the E:\FR\FM\14JAR1.SGM 14JAR1 2156 Federal Register / Vol. 73, No. 9 / Monday, January 14, 2008 / Rules and Regulations ability to detect the presence or likely presence of oil by appropriate investigation. The report of the environmental professional should include an opinion under § 137.35(c)(4) regarding whether additional appropriate investigation is necessary. I Dated: January 7, 2008. William Grawe, Acting Director, National Pollution Funds Center, United States Coast Guard. [FR Doc. E8–329 Filed 1–11–08; 8:45 am] * BILLING CODE 4910–15–P 781 Payment Required [Add new 781.1 using the current text of 781 as follows:] 39 CFR Part 20 Undeliverable Items Postal Service. Final rule. AGENCY: The Postal ServiceTM has implemented new standards for returned undeliverable-as-addressed items that were posted abroad with a United States return address. When this occurs, the Postal Service provides the return service but currently receives no payment for the services rendered. This final rule implements collection of a fee for returned items. DATES: Effective Date: January 14, 2008. FOR FURTHER INFORMATION CONTACT: Obataiye B. Akinwole, 703–292–5260, Bruce Marsh, 703–292–3570. SUPPLEMENTARY INFORMATION: Article RL 147 of the Letter Post Regulations of the Universal Postal Union (UPU), ‘‘Undeliverable Items,’’ allows all posts to collect handling charges for undeliverable-as-addressed pieces posted abroad by customers residing in their territories. In order to recover costs associated with handling these pieces, the Postal Service will collect the applicable First-Class Mail International postage for each returned item. SUMMARY: List of Subjects in 39 CFR Part 20 Foreign relations, International postal services. Effective the date of this rulemaking the USPS formally adopts the UPU provisions into the Mailing Standards of the United States Postal Service, International Mail Manual (IMM), incorporated by reference in the Code of Federal Regulations. See 39 CFR 20.1. rmajette on PROD1PC64 with RULES I PART 20—[AMENDED] 1. The authority citation for 39 CFR part 20 continues to read as follows: I Authority: 5 U.S.C. 552(a); 39 U.S.C. 401, 404, 407, 408. VerDate Aug<31>2005 15:18 Jan 11, 2008 Jkt 214001 7 Treatment of Inbound Mail * * * * 780 Items Mailed Abroad by or on Behalf of Senders in the United States [Revise the heading of 781 as follows:] POSTAL SERVICE ACTION: 2. Revise the Mailing Standards of the United States Postal Service, International Mail Manual (IMM) as follows: * * * * * 781.1 Postage Payment Required Payment of U.S. Postage is required to secure delivery of mail when the mailing is by or on behalf of a person or firm that is a resident of the United States and the foreign postage rate applied to such items is lower than the comparable U.S. domestic rate. [Add new 781.2 as follows:] 781.2 Handling Charges Undeliverable-as-addressed mail returned to the sender for which outbound postage was not paid to the USPS is subject to the payment of handling charges. On delivery to the sender, the sender may be charged the First-Class Mail International rate for the weight and shape of the returned piece. * * * * * Neva R. Watson, Attorney, Legislative. [FR Doc. E8–392 Filed 1–11–08; 8:45 am] BILLING CODE 7710–12–P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA–R03–OAR–2007–1010; FRL–8515–6] Approval and Promulgation of Air Quality Implementation Plans; West Virginia; Revised Motor Vehicle Emission Budgets for the Charleston 8-Hour Ozone Maintenance Area Environmental Protection Agency (EPA). ACTION: Direct final rule. AGENCY: SUMMARY: EPA is taking direct final action to approve a State Implementation Plan (SIP) revision submitted by the State of West Virginia. The revision amends the 8-hour ozone maintenance plan for the Charleston area. This revision amends the maintenance plans’ 2009 and 2018 PO 00000 Frm 00014 Fmt 4700 Sfmt 4700 motor vehicle emissions budgets (MVEBs) by reallocating a portion of the plans’ safety margins which results in an increase in the MVEBs. The revised plan continues to demonstrate maintenance of the 8-hour national ambient air quality standard (NAAQS) for ozone. EPA is approving this SIP revision to the West Virginia maintenance plan for Charleston in accordance with the requirements of the Clean Air Act (CAA). DATES: This rule is effective on March 14, 2008 without further notice, unless EPA receives adverse written comment by February 13, 2008. If EPA receives such comments, it will publish a timely withdrawal of the direct final rule in the Federal Register and inform the public that the rule will not take effect. ADDRESSES: Submit your comments, identified by Docket ID Number EPA– R03–OAR–2007–1010 by one of the following methods: A. www.regulations.gov. Follow the on-line instructions for submitting comments. B. E-mail: febbo.carol@epa.gov. C. Mail: EPA–R03–OAR–2007–1010, Carol Febbo, Chief, Energy, Radiation and Indoor Environment Branch, Mailcode 3AP23, U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103. D. Hand Delivery: At the previouslylisted EPA Region III address. Such deliveries are only accepted during the Docket’s normal hours of operation, and special arrangements should be made for deliveries of boxed information. Instructions: Direct your comments to Docket ID No. EPA–R03–OAR–2007– 1010. EPA’s policy is that all comments received will be included in the public docket without change, and may be made available online at www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through www.regulations.gov or e-mail. The www.regulations.gov Web site is an ‘‘anonymous access’’ system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through www.regulations.gov, your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the E:\FR\FM\14JAR1.SGM 14JAR1

Agencies

[Federal Register Volume 73, Number 9 (Monday, January 14, 2008)]
[Rules and Regulations]
[Pages 2146-2156]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-329]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 137

[Docket No. USCG-2006-25708]
RIN 1625-AB09


Landowner Defenses to Liability Under the Oil Pollution Act of 
1990: Standards and Practices for Conducting All Appropriate Inquiries

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Coast Guard is establishing standards and practices 
concerning the ``all appropriate inquiries'' element of a defense to 
liability of an owner or operator of a facility that is the source of a 
discharge or substantial threat of discharge of oil into the navigable 
waters or adjoining shorelines or the exclusive economic zone. To be 
entitled to the defense, those persons must show, among other elements 
not addressed in this rulemaking, that, before acquiring the real 
property on which the facility is located, they had made all 
appropriate inquiries into its previous ownership and uses to determine 
the presence or likely presence of oil. This rule is consistent with a 
final rule on this subject published by the Environmental Protection 
Agency.

DATES: This final rule is effective February 13, 2008.

ADDRESSES: Comments and material received from the public, as well as 
documents mentioned in this preamble as being available in the docket, 
are part of docket USCG-2006-25708 and are available for inspection or 
copying at the Docket Management Facility (M-30), U.S. Department of 
Transportation, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., 
Monday through Friday, except Federal holidays. You may also find this 
docket on the Internet at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule, 
call Benjamin White, National Pollution Funds Center, Coast Guard, 
telephone 202-493-6863. If you have questions on viewing the docket, 
call Renee V. Wright, Program Manager, Docket Operations, telephone 
202-366-9826.

SUPPLEMENTARY INFORMATION:

Regulatory History

    On June 12, 2007, we published a notice of proposed rulemaking 
(NPRM) entitled ``Landowner Defenses to Liability Under the Oil 
Pollution Act of 1990: Standards and Practices for Conducting All 
Appropriate Inquiries'' in the Federal Register (72 FR 32232). We 
received no comments on the proposed rule. No public meeting was 
requested and none was held. The Coast Guard is, therefore, adopting 
the NPRM as published and without change as a final rule.

Background and Purpose

    In general, under the Oil Pollution Act of 1990 (33 U.S.C. 2701, et 
seq.) (OPA 90), an owner or operator of a facility that is the source 
of a discharge, or a substantial threat of discharge, of oil into the 
navigable waters or adjoining shorelines or the exclusive economic zone 
is liable for damages and removal costs resulting from the discharge or 
threat. See 33 U.S.C. 2702(a). Under OPA 90, that person is known as a 
``responsible party.'' See 33 U.S.C. 2701(32).
    The Coast Guard and Maritime Transportation Act of 2004 (Pub. L. 
108-293) (the 2004 Act) amended OPA 90, at 33 U.S.C. 2703(d)(4), by 
creating an ``innocent landowner'' defense to liability for those 
persons who could demonstrate, among other requirements, that before 
acquiring the real property on which the facility is located, they did 
not know, and had no reason to know that oil that is the subject of the 
discharge or substantial threat of discharge was located on, in, or at 
the facility. See 33 U.S.C. 2703(d)(2)(A). This is done by establishing 
that, before it acquired the real property on which the facility is 
located, it carried out ``all appropriate inquiries'' into its previous 
ownership and uses according to ``generally accepted good commercial 
and customary standards and practices.'' See 33 U.S.C. 
2703(d)(4)(A)(i). The Coast Guard is required to establish, by 
regulation, the standards and practices for carrying out all 
appropriate inquiries (33 U.S.C. 2703(d)(4)(B)), which is the subject 
of this rulemaking.
    This rulemaking applies to persons planning to acquire real 
property on which a facility, as defined under 33 U.S.C. 2701(9), is 
located who choose to take steps necessary to protect themselves from 
liability should unknown oil that is the subject of a discharge or 
substantial threat of discharge be found at the facility after they 
acquire it. We call these persons ``landowners'' or ``owners'' in this 
preamble. Should prospective landowners opt for this protection, they 
may find that they have already complied with this rule if they have 
complied with ASTM International (ASTM) E 1527-05, ``Standard Practice 
for Environmental Site Assessments: Phase I Environmental Site 
Assessment Process.'' The industry standard ASTM E 1527-05, is 
consistent with this rule and is compliant with the statutory criteria 
for all appropriate inquiries. Persons conducting all appropriate 
inquiries may use the procedures included in the ASTM E 1527-05 
standard to comply with this rule. For more information on the ASTM 
standard, see the ``ASTM Standard E 1527-05'' section in this preamble.
    Note that this rule addresses only one of several elements that 
must be complied with in order to avail oneself of this protection. The 
element addressed in this rule is called the ``all-appropriate-
inquiries'' element found in 33 U.S.C. 2703(d)(4).

Scope of the Rule

    Congress included in the 2004 Act a list of criteria that the Coast 
Guard must address in their regulations for establishing standards and 
practices for conducting all appropriate inquiries. The criteria may be 
found in 33 U.S.C. 2703(d)(4)(C). This rulemaking is limited only to 
providing those standards and practices relative to the ``all 
appropriate inquiries'' element.

[[Page 2147]]

This rulemaking does not address the other requirements in 33 U.S.C. 
2703 which also must be met to qualify for the innocent-landowner 
defense.
    The rule would not apply to real property purchased by a non-
governmental entity or non-commercial entity for residential use or 
other similar uses where an inspection and a title search of the 
facility and the real property on which the facility is located reveal 
no basis for further investigation. In those cases, 33 U.S.C. 
2703(d)(4)(E) states that the inspection and title search satisfy the 
requirements for all appropriate inquiries.
    Also, the rule would not affect the existing OPA 90 liability 
protections for State and local governments that acquire a facility 
involuntarily in their functions as sovereigns under 33 U.S.C. 
2701(26)(B)(i) and 33 U.S.C. 2703(d)(2)(B). Involuntary acquisition of 
facilities by State and local governments do not fall under the all-
appropriate-inquiries provision of 33 U.S.C. 2703(d)(4).

Consultation With Other Agencies

    Under 33 U.S.C. 2703(d)(4)(B), we are required to consult with the 
Environmental Protection Agency (EPA) to develop regulations 
establishing standards and practices for conducting ``all appropriate 
inquiries.'' On November 1, 2005, EPA published a final rule in the 
Federal Register (70 FR 66070) establishing standards and practices for 
conducting all appropriate inquiries as required by sections 
101(35)(B)(ii) and (iii) of the Comprehensive Environmental Response, 
Compensation and Liability Act (CERCLA) (42 U.S.C. 9601, et seq.) found 
at 42 U.S.C. 9601(35)(B)(ii) and (iii). CERCLA's liability provision 
applies to releases or threatened releases of ``hazardous substances'', 
which is defined to exclude most forms of oil. These regulations are 
located in 40 CFR part 312. EPA used a negotiated rulemaking process to 
develop their standards and practices for conducting all appropriate 
inquiries under CERCLA. EPA's Negotiated Rulemaking Committee included 
interested parties from environmental interest groups; the 
environmental justice community; federal, state, tribal, and local 
governments; real estate developers, bankers and lenders; and, 
environmental professionals.
    The all-appropriate-inquiries provisions of OPA 90 and CERCLA are 
similar in many respects, but not identical. The CERCLA provision has a 
broader scope than the OPA provision. It addresses certain liability 
defense provisions that are unique to CERCLA, involving persons who may 
not be affected by this rule, such as contiguous property owners and 
bona fide prospective purchasers. While differences between OPA 90 and 
CERCLA have required certain differences between the Coast Guard's 
final rule and EPA's final rule, we have coordinated with EPA to ensure 
that the two rules have been rendered as consistent as possible within 
statutory constraints. Maintaining consistency between the two rules 
helps standardize practices within the Federal Government.

ASTM Standard E 1527-05

    ASTM International (ASTM) E 1527-05, ``Standard Practice for 
Environmental Site Assessments: Phase I Environmental Site Assessment 
Process,'' is the current voluntary industry standard that defines good 
commercial and customary practice in the United States for conducting 
an environmental site assessment of a parcel of commercial real estate 
with respect to oil under OPA 90 and hazardous substances under CERCLA. 
The 2004 Act, at 33 U.S.C. 2703 (d)(4)(D)(ii), refers to ASTM E 1527-
97, which is no longer available from ASTM and has been replaced by 
ASTM E 1527-05. Both the EPA and the Coast Guard agree that the new 
ASTM E 1527-05 is the active industry standard and is consistent with 
Congressional intent. Persons conducting all appropriate inquiries are 
permitted to use the procedures included in the ASTM E 1527-05 standard 
to comply with this rule, but use of the ASTM is not mandatory.

Regulatory Evaluation

Executive Order 12866

    This rule is not a ``significant regulatory action'' under section 
3(f) of Executive Order 12866, Regulatory Planning and Review, and does 
not require an assessment of potential costs and benefits under section 
6(a)(3) of that Order. The Office of Management and Budget has not 
reviewed it under that Order.
    A final Regulatory Evaluation follows:
    Compliance with this rule is required only for those persons 
engaging in a commercial real estate transaction who choose to take 
steps necessary to protect themselves from liability should unknown oil 
that is the subject of a discharge or substantial threat of discharge 
be found at the facility after they acquire it.
    The following analysis of the economic impacts associated with this 
rule relies heavily upon the data collected and the assumptions made in 
the Environmental Impact Analysis of EPA's final rule, ``Economic 
Impact Analysis for the Final All Appropriate Inquiries Regulation,'' 
Docket ID No. SFUND-2004-0001 found at http://www.regulations.gov/
fdmspublic/component/main or at EPA Docket Center, EPA West Building, 
Room B102, 1301 Constitution Avenue, NW., Washington, DC. EPA surveyed 
all publicly available literature on environmental assessments of sites 
to determine what standard industry was customarily using. These 
assessments correspond to the all appropriate inquiries provision being 
addressed in this rulemaking and are commonly known as Phase I 
environmental site assessments (Phase I ESAs). EPA determined that the 
2000 edition of ASTM E 1527 (i.e., ASTM E 1527-00) would be their 
regulatory baseline. This baseline represented the ``no action'' 
scenario to which all regulatory alternatives were compared and their 
economic impacts were measured. ASTM E 1527-00 would have been applied 
by industry absent EPA's regulation, because this voluntary industry 
standard represented ``generally accepted good commercial and customary 
practices.'' This assumption was confirmed by the members of EPA's 
Negotiated Rulemaking Committee (See the ``Consultation with Other 
Agencies'' section of this preamble.). To further validate their 
assumption, EPA received no public comments on this aspect of its 
Economic Impact Analysis. In addition, ASTM International states that 
ASTM E 1527-97 (the edition referred to in the 2004 Act) is no longer 
available because, when a new version of a standard is released, 
previous versions of the standard are no longer the active industry 
standard. The Coast Guard, after independently contacting ASTM 
International, concurs that the ASTM E 1527-00 standard more accurately 
reflects the current market conditions than the E 1527-97 standard 
referenced in OPA 90 as the acceptable interim standard (33 U.S.C. 
2703(d)(4)(D)(ii)). The Coast Guard therefore uses the ASTM E 1527-00 
standard as its regulatory baseline for its analysis of the economic 
impacts associated with this rule.
    Historically, Phase I ESAs have been used towards providing 
liability protection to individuals under CERCLA. A recent survey 
conducted by Environmental Data Resources, Inc. (EDR) indicates that 
approximately 55 percent of all Phase I ESAs are driven exclusively by 
a need for the landowner

[[Page 2148]]

to qualify for protection from CERCLA liability. The remaining 45 
percent are driven by a desire to assess other business environmental 
risk concerns (i.e., asbestos, lead-based paint, oil, etc.).
    As previously discussed in the ``Consultation with Other Agencies'' 
section of this preamble, this rule is consistent with EPA's final 
rule. The scope of EPA's rulemaking however is much larger than this 
rule. As such, the economic impacts of this rule are a subset of the 
impacts estimated by EPA's rulemaking. This reduction in economic 
impact results primarily from the lower number of Phase I ESAs expected 
to be conducted annually under this rule compared to EPA's final rule.
    As was the case with EPA's rulemaking, this rule is expected to 
result in the following economic impacts:
    (1) A reduced burden for the conduct of interviews in those cases 
where the facility and the real property on which the facility is 
located is abandoned. The new requirement requires only that 
neighboring property owners and occupants be interviewed and not the 
current owners and occupants of the abandoned property. This burden 
would range from no change to a decrease of 0.5 hour per Phase I ESA 
depending on the type and size of the facility and the real property on 
which the facility is located.
    (2) An increased burden in those cases where past owners or 
occupants of the facility and the real property on which the facility 
is located need to be interviewed. This would involve the additional 
effort required to locate and interview past owners and occupants. This 
increased burden would range from 1 hour to 2 hours per Phase I ESA 
depending on the type and size of the facility and the real property on 
which the facility is located.
    (3) An increased burden associated with documenting recorded 
environmental cleanup liens. This increased burden would involve 
additional time spent in preparing the Phase I ESA report. This 
increased burden would range from an additional 0.5 hour to 1 hour per 
Phase I ESA depending on the size and type of the facility and the real 
property on which the facility is located.
    (4) An increased burden for documenting the reasons for the price 
and fair market value of a facility and the real property on which the 
facility is located in those cases where the purchase price paid is 
significantly below its fair market value. This increased burden would 
involve interviews with local government officials and increased time 
spent in preparing the Phase I ESA report. This increased burden would 
reflect an additional 0.5 hour per Phase I ESA for all sizes and types 
of facilities and the real properties on which the facilities are 
located.
    (5) An increased burden for recording information about the degree 
of obviousness of the presence or likely presence of oil at a facility 
and the real property on which the facility is located. This increased 
burden would involve additional time spent in preparing the Phase I 
Environmental report. This increased burden would range from 0.5 hour 
to 1 hour per Phase I ESA depending on the type and size of the 
facility and the real property on which the facility is located.
    Using a weighted labor rate of $51.20/hour applied to the 
activities (as outlined above) required as a result of their regulation 
(as they vary from those required in their regulatory baseline), EPA 
determined that there would be an incremental cost ranging from $52 to 
$58 per Phase I ESA (the low end estimate assumes that 15 percent of 
properties are abandoned, while the high end estimate assumes that 28 
percent of properties are abandoned). Our analysis simplifies this 
range as an average incremental cost of $55 per Phase I ESA.
A. Analysis Calculations and Results
    Using data from EPA's final rule and extrapolated for the period 
from 2007 to 2016, there would be an average of 332,038 Phase I ESAs 
conducted annually. As previously mentioned, the incremental cost of 
conducting a Phase I ESA to comply with EPA's rulemaking above and 
beyond what was required under ASTM E 1527-00 as calculated by EPA's 
rulemaking would be approximately $55 per ESA.
B. Estimated Annual Number of OPA 90-Related Phase I ESAs
    This analysis is severely limited by the lack of data available 
which would allow the number of Phase I ESAs conducted applicable to 
this rule to be segregated from the total population of Phase I ESAs 
conducted.
    In order to put an upward bound on the costs associated with this 
rule, this analysis first describes the absolute upper bound scenario 
(i.e., that all commercial real estate transactions not exclusively 
conducted for CERCLA liability protection requiring a Phase I ESA would 
be impacted by this rule). Next the Coast Guard developed a more likely 
scenario that takes into account that Phase I ESAs for certain 
commercial real estate transactions are outside the scope of this rule. 
We acknowledge that, of all of the commercial real estate transactions 
that occur annually, a likely small percentage would involve--
    1. A facility and the real property on which the facility is 
located where a discharge or substantial threat of discharge of oil may 
impact the navigable waters or exclusive economic zone of the United 
States; and
    2. A Phase I ESA that was conducted for establishment of the 
innocent landowner liability protection provision under OPA 90 and not 
to assess environmental risk concerns not related to oil (e.g., lead-
based paint contamination, asbestos, CERCLA hazardous substances, 
etc.).
C. Upper Bound Cost Scenario
    The estimated incremental cost of this scenario, where all future 
Phase I ESAs not conducted specifically for CERCLA liability protection 
(i.e., 45 percent as per the results of EDR's survey mentioned above) 
are impacted by this rule, would be approximately $8.2 million per 
year.

Cost calculation 1--Estimated Annual Number of Coast Guard related 
Phase I ESAs
    332,038 Phase I ESAs x 0.45 = 149,417 Phase I ESAs
Estimated Annual Cost of Coast Guard related Phase I ESAs
    149,417 Phase I ESAs x $55/ESA = $8,217,935 per year.
D. Most Likely Cost Scenario
    To more accurately reflect the scope of this rule, certain 
commercial real estate transactions involving a Phase I ESA from EPA's 
analysis would have to be removed from this analysis. Those include 
transactions where a discharge or substantial threat of discharge of 
oil from a facility and the real property on which the facility is 
located would not have the possibility of impacting the navigable 
waters or exclusive economic zone of the United States and transactions 
which are conducted for substances other than oil. Absent the data to 
make more than an approximation, we assumed that five percent of the 
total number of Phase I ESAs may realistically reflect the number of 
Phase I ESAs within the scope of this rule. Under this assumption, the 
estimated cost associated with this rule would be significantly 
reduced. The estimated incremental cost under this scenario is 
approximately $913,110 per year.

Cost Calculation 2--Estimated Annual Number of Coast Guard related 
Phase I ESAs.

[[Page 2149]]

    332,038 Phase I ESAs x 0.05 = 16,602 Phase I ESAs.
Estimated Annual Cost of Coast Guard related Phase I ESAs:
    16,602 Phase I ESAs x $55/ESA = $913,110 per year.

    ASTM International has since updated their ASTM E 1527 standard. 
Their new standard is ASTM E 1527-05. Both EPA and Coast Guard 
recognize that this new standard is consistent with their rulemakings 
on the subject. See the Federal Register (70 FR 66081). Because the new 
standard is consistent with the EPA final rule, which went into effect 
on November 1, 2006, and provides documentation for both hazardous 
substances and oil, it is likely that all prudent prospective 
commercial landowners will be using the more rigorous ASTM standard for 
their real estate transactions well before our rule becomes effective. 
Thus, the possible economic impact attributed to this rule might be 
reduced to a negligible value. The Coast Guard further notes that there 
have been no instances to date where a responsible party has attempted 
to use the interim innocent-landowner defense to liability provision 
under OPA 90.
    EPA qualitatively assessed the benefits for their final rule. Of 
these benefits, only one is applicable to our rule due to our much 
smaller regulatory scope, namely the increased level of certainty with 
regard to OPA 90 liability provided to prospective owners of facilities 
and the real properties on which they are located with potential oil 
discharges. The Coast Guard, as was the case with EPA's analysis, is 
not able to quantify, with any significant level of confidence, the 
exact proportion of benefits associated with the rule. For these 
reasons, the costs and benefits can not be directly compared. However, 
because complying with this rule is required only for those persons who 
choose to take steps necessary to protect themselves from liability 
should unknown oil that is the subject of a discharge or substantial 
threat of discharge be found at the facility after they acquire it, it 
can be assumed that persons would only do so if the potential benefits 
to them associated with this protection from liability outweigh their 
costs of compliance.

Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have 
considered whether this rule would have a significant economic impact 
on a substantial number of small entities. The term ``small entities'' 
comprises small businesses, not-for-profit organizations that are 
independently owned and operated and are not dominant in their fields, 
and governmental jurisdictions with populations of less than 50,000.
    As previously stated in the regulatory evaluation section above, 
compliance with this rule is only required for those entities, 
regardless of their operations, involved in a real estate transaction 
who choose to take steps necessary to protect themselves from liability 
should unknown oil that is the subject of a discharge or substantial 
threat of discharge be found at the facility after they acquire it. 
Therefore, it assumed that entities across all industries, as defined 
by the North American Industry Classification System (NAICS), could 
potentially be affected.
    The Regulatory Flexibility Act and the Small Business Regulatory 
Enforcement Fairness Act of 1996 require Federal agencies to measure 
the regulatory impacts of the rule to determine whether there will be a 
significant economic impact on a substantial number of small entities. 
Entities, however, may operate at multiple physical locations. For 
example, most family-owned restaurants operate at a single location, 
while chain restaurants have multiple locations. Thus, the annual 
number of transactions per entity, and therefore the demand for Phase I 
ESAs, is a function of the number of establishments an entity owns.
    According to 2001 U.S. Census data, the distribution of 
establishments by entity size of the regulated community is as follows:

Less than 100 employees: 81%
100 to 499 employees: 5%
500 to 1,499 employees: 2%
1,500 employees or more: 12%

    According to EPA's Office of Policy, Economics, and Innovations and 
EPA's National Center for Environmental Economics, it is a common 
practice when a proposed regulation has the potential of affecting all 
industries to consider all entities with less than 500 employees as 
small. According to 2001 U.S. Census data, when small entities are 
defined as entities with less than 500 employees, small entities own 86 
percent of all establishments. Using EPA's assumption that small 
entities are equally likely to engage in commercial real estate 
transactions as large ones, we estimate that 86 percent of all 
commercial real estate transactions completed annually involve small 
entities. Applying this 86 percent to the ``Most Likely Cost Scenario'' 
and the ``Upper Bound Cost Scenario'' (See ``Regulatory Evaluation'' in 
this preamble.) provides a range in the number of potential 
transactions occurring annually of between 14,278 and 128,499.
    Based on 2001 Census Bureau data, the average annual revenue per 
employee for an entity is approximately $24,000. Therefore, even for a 
small entity receiving the minimum average annual revenue of $24,000 
that makes one transaction a year (a very conservative assumption), the 
annual cost impact of $55 would represent only 0.23 percent of annual 
revenues.
    Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that 
this final rule will not have a significant economic impact on a 
substantial number of small entities.

Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small 
entities in understanding this rule so they could better evaluate its 
effects on them and participate in the rulemaking. The Coast Guard 
received no requests for assistance from small entities concerning this 
rulemaking and provided none. Small businesses may send comments on the 
actions of Federal employees who enforce, or otherwise determine 
compliance with, Federal regulations to the Small Business and 
Agriculture Regulatory Enforcement Ombudsman and the Regional Small 
Business Regulatory Fairness Boards. The Ombudsman evaluates these 
actions annually and rates each agency's responsiveness to small 
business. If you wish to comment on actions by employees of the Coast 
Guard, call 1-888-REG-FAIR (1-888-734-3247).

Collection of Information

    This rule calls for a new collection of information under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
    Title: Landowner Defenses to Liability under the Oil Pollution Act 
of 1990: Standards and Practices for Conducting All Appropriate 
Inquiries.
    Summary of the Collection of Information: For landowners choosing 
to avail themselves of the innocent-landowner defense, they or their 
environmental professionals must conduct all the appropriate inquiries 
specified in the rule. Depending upon the particular case, this may 
involve interviews, research, and reports.
    Need for Information: This rule is needed to assist prospective 
landowners in establishing the innocent-landowner defense.
    Proposed Use of Information: The information could be used by 
persons if

[[Page 2150]]

their liability under OPA 90 for the discharge or substantial threat of 
discharge of oil were challenged in a court.
    Description of the Respondents: The respondents include anyone 
engaging in a commercial real estate transaction that may desire to 
assert an innocent landowner defense to liability under OPA 90.
    Number of Respondents: We estimate that there would be 16,602 
respondents. This is based on an estimate made in the ``Regulatory 
Evaluation'' section of this preamble.
    Frequency of Response: 1 hour per response.
    Burden of Response: $67 per response.
    Estimate of Total Annual Burden: 16,602 respondents x 1 hour per 
response x $67 per response = $1,112,334
    As required by 44 U.S.C. 3507(d), we submitted a copy of this rule 
to the Office of Management and Budget (OMB) for its review of the 
collection of information. OMB has approved the collection effective 
February 13, 2008. The collection will be added to 33 CFR part 137. The 
corresponding approval number is OMB Control Number 1625-0111, which 
expires on February 13, 2011.
    You are not required to respond to a collection of information 
unless it displays a currently valid OMB control number.

Federalism

    A rule has implications for federalism under Executive Order 13132, 
Federalism, if it has a substantial direct effect on State or local 
governments and would either preempt State law or impose a substantial 
direct cost of compliance on them. We have analyzed this rule under 
that Order and have determined that it does not have implications for 
federalism.

Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) 
requires Federal agencies to assess the effects of their discretionary 
regulatory actions. In particular, the Act addresses actions that may 
result in the expenditure by a State, local, or tribal government, in 
the aggregate, or by the private sector of $100,000,000 or more in any 
one year. Though this rule would not result in such an expenditure, we 
do discuss the effects of this rule elsewhere in this preamble.

Taking of Private Property

    This rule would not effect a taking of private property or 
otherwise have taking implications under Executive Order 12630, 
Governmental Actions and Interference with Constitutionally Protected 
Property Rights.

Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2) 
of Executive Order 12988, Civil Justice Reform, to minimize litigation, 
eliminate ambiguity, and reduce burden.

Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection 
of Children from Environmental Health Risks and Safety Risks. This rule 
is not an economically significant rule and does not create an 
environmental risk to health or risk to safety that may 
disproportionately affect children.

Indian Tribal Governments

    This rule does not have tribal implications under Executive Order 
13175, Consultation and Coordination with Indian Tribal Governments, 
because it does not have a substantial direct effect on one or more 
Indian tribes, on the relationship between the Federal Government and 
Indian tribes, or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes.

Energy Effects

    We have analyzed this rule under Executive Order 13211, Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. We have determined that it is not a ``significant 
energy action'' under that order because it is not a ``significant 
regulatory action'' under Executive Order 12866 and is not likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy. The Administrator of the Office of Information and 
Regulatory Affairs has not designated it as a significant energy 
action. Therefore, it does not require a Statement of Energy Effects 
under Executive Order 13211.

Technical Standards

    The National Technology Transfer and Advancement Act (NTTAA) (15 
U.S.C. 272 note) directs agencies to use voluntary consensus standards 
in their regulatory activities unless the agency provides Congress, 
through the Office of Management and Budget, with an explanation of why 
using these standards would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are technical 
standards (e.g., specifications of materials, performance, design, or 
operation; test methods; sampling procedures; and related management 
systems practices) that are developed or adopted by voluntary consensus 
standards bodies.
    This rule uses the following voluntary consensus standard: ASTM E 
1527-05, ``Standard Practice for Environmental Site Assessments: Phase 
I Environmental Site Assessment Process.'' The section that references 
this standard and the location where this standard is available is 
listed in Sec.  137.15. Persons conducting all appropriate inquiries 
may use the procedures included in the ASTM E 1527-05 standard to 
comply with this rule.

Environment

    We have analyzed this rule under Commandant Instruction M16475.lD, 
which guides the Coast Guard in complying with the National 
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and 
have concluded that there are no factors in this case that would limit 
the use of a categorical exclusion under section 2.B.2 of the 
Instruction. Therefore, this rule is categorically excluded, under 
figure 2-1, paragraph (34)(a), of the Instruction, from further 
environmental documentation. This rule concerns inquiries into the 
previous ownership and uses of facilities and the real property on 
which they are located, before they are acquired, to determine the 
presence or likely presence of oil. It has no effect on the 
environment.
    A final ``Environmental Analysis Check List'' and a final 
``Categorical Exclusion Determination'' are available in the docket 
where indicated under ADDRESSES.

List of Subjects in 33 CFR Part 137

    Environmental protection, Administrative practice and procedure, 
Petroleum, Intergovernmental relations, Reporting and recordkeeping 
requirements.

Words of Issuance and Regulatory Text

0
For the reasons set out in the preamble, the Coast Guard adds 33 CFR 
part 137 to read as follows:

PART 137--OIL SPILL LIABILITY: STANDARDS FOR CONDUCTING ALL 
APPROPRIATE INQUIRIES UNDER THE INNOCENT LAND-OWNER DEFENSE

Subpart A--Introduction
Sec.
137.1 Purpose and applicability.
137.5 Disclosure obligations.
137.10 How are terms used in this part defined?

[[Page 2151]]

137.15 References: Where can I get a copy of the publication 
mentioned in this part?
Subpart B--Standards and Practices
137.18 Duties of persons specified in Sec.  137.1(a).
137.20 May voluntary industry standards be used to comply with this 
regulation?
137.25 Qualifications of the environmental professional.
137.30 Objectives and performance factors.
137.33 General all appropriate inquiries requirements.
137.35 Inquiries by an environmental professional.
137.40 Additional inquiries.
137.45 Interviews with past and present owners, operators, and 
occupants.
137.50 Reviews of historical sources of information.
137.55 Searches for recorded environmental cleanup liens.
137.60 Reviews of Federal, State, tribal and local government 
records.
137.65 Visual inspections of the facility, the real property on 
which the facility is located, and adjoining properties.
137.70 Specialized knowledge or experience on the part of persons 
specified in Sec.  137.1(a).
137.75 The relationship of the purchase price to the value of the 
facility and the real property on which the facility is located, if 
oil was not at the facility or on the real property.
137.80 Commonly known or reasonably ascertainable information about 
the facility and the real property on which the facility is located.
137.85 The degree of obviousness of the presence or likely presence 
of oil at the facility and the real property on which the facility 
is located and the ability to detect the oil by appropriate 
investigation.

    Authority: 33 U.S.C. 2703(d)(4); Department of Homeland Security 
Delegation No. 14000.

Subpart A--Introduction


Sec.  137.1  Purpose and applicability.

    (a) In general under the Oil Pollution Act of 1990 (33 U.S.C. 2701, 
et seq.), an owner or operator of a facility (as defined in Sec.  
137.10) that is the source of a discharge, or a substantial threat of 
discharge, of oil into the navigable waters or adjoining shorelines or 
the exclusive economic zone is liable for damages and removal costs 
resulting from the discharge or threat. However, if that person can 
demonstrate, among other criteria not addressed in this part, that they 
did not know and had no reason to know at the time of their acquisition 
of the real property on which the facility is located that oil was 
located on, in, or at the facility, the person may be eligible for the 
innocent landowner defense to liability under 33 U.S.C. 2703(d)(4). One 
element of the defense is that the person made all appropriate 
inquiries into the nature of the real property on which the facility is 
located before acquiring it. The purpose of this part is to prescribe 
standards and practices for making those inquiries.
    (b) Under 33 U.S.C. 2703(d)(4)(E), this part does not apply to real 
property purchased by a non-governmental entity or non-commercial 
entity for residential use or other similar uses where a property 
inspection and a title search reveal no basis for further 
investigation. In those cases, the property inspection and title search 
satisfy the requirements of this part.
    (c) This part does not affect the existing OPA 90 liability 
protections for State and local governments that acquire a property 
involuntarily in their functions as sovereigns under 33 U.S.C. 
2703(d)(2)(B). Involuntary acquisition of properties by State and local 
governments fall under the provisions of 33 U.S.C. 2703(d)(2)(B), not 
under the all-appropriate-inquiries provision of 33 U.S.C. 2703(d)(4) 
and this part.


Sec.  137.5  Disclosure obligations.

    (a) Under 33 U.S.C. 2703(c)(1), persons specified in Sec.  
137.1(a), including environmental professionals, must report the 
incident as required by law if they know or have reason to know of the 
incident.
    (b) This part does not limit or expand disclosure obligations under 
any Federal, State, tribal, or local law. It is the obligation of each 
person, including environmental professionals, conducting inquiries to 
determine his or her respective disclosure obligations under Federal, 
State, tribal, and local law and to comply with them.


Sec.  137.10  How are terms used in this part defined?

    (a) The following terms have the same definitions as in 33 U.S.C. 
2701: damages; discharge; incident; liable or liability; oil; owner or 
operator; and removal costs.
    (b) As used in this part--
    Abandoned property means a property that, because of its general 
disrepair or lack of activity, a reasonable person could believe that 
there is an intent on the part of the current owners to surrender their 
rights to the property.
    Adjoining property means real property the border of which is 
shared in part or in whole with that of the subject property or that 
would be shared in part or in whole with that of the property but for a 
street, road, or other public thoroughfare separating the properties.
    Data gap means a lack of, or inability to, obtain information 
required by subpart B of this part despite good faith efforts by the 
environmental professional or persons specified in Sec.  137.1(a), as 
appropriate, to gather the information under Sec.  137.33.
    Environmental professional means an individual who meets the 
requirements of Sec.  137.25.
    Facility means any structure, group of structures, equipment, or 
device (other than a vessel) which is used for one or more of the 
following purposes: exploring for, drilling for, producing, storing, 
handling, transferring, processing, or transporting oil. This term 
includes any motor vehicle, rolling stock, or pipeline used for one or 
more of these purposes.
    Good faith means the absence of any intention to seek an unfair 
advantage or to defraud another party; an honest and sincere intention 
to fulfill one's obligations in the conduct or transaction concerned.
    Institutional controls means non-engineered instruments, such as 
administrative and/or legal controls, that help to minimize the 
potential for human exposure to oil discharge and/or protect the 
integrity of a removal action.
    Relevant experience means participation in the performance of all-
appropriate-inquiries investigations, environmental site assessments, 
or other site investigations that may include environmental analyses, 
investigations, and remediation which involve the understanding of 
surface and subsurface environmental conditions and the processes used 
to evaluate these conditions and for which professional judgment was 
used to develop opinions regarding conditions indicative of the 
presence or likely presence of oil at the facility and the real 
property on which the facility is located.


Sec.  137.15  References: Where can I get a copy of the publication 
mentioned in this part?

    Section 137.20 of this part refers to ASTM E 1527-05, Standard 
Practice for Environmental Site Assessments: Phase I Environmental Site 
Assessment Process. That document is available from ASTM International, 
100 Barr Harbor Drive, P.O. Box C700, West Conshohocken, PA 19428-2959. 
It is also available for inspection at the Coast Guard National 
Pollution Funds Center, 4200 Wilson Boulevard, Suite 1013, Arlington, 
VA 22203-1804.

Subpart B--Standards and Practices


Sec.  137.18  Duties of persons specified in Sec.  137.1(a).

    In order to make all appropriate inquiries, persons seeking to 
establish the liability protection under Sec.  137.1(a)

[[Page 2152]]

must conduct the inquiries and investigations as required in this part 
and ensure that the inquiries and investigations required to be made by 
environmental professionals are made.


Sec.  137.20  May industry standards be used to comply with this 
regulation?

    The industry standards in ASTM E 1527-05, (Referenced in Sec.  
137.15) may be used to comply with the requirements set forth in 
Sec. Sec.  137.45 through 137.85 of this part. Use of ASTM E 1527-05 
for this purpose is optional and not mandatory.


Sec.  137.25  Qualifications of the environmental professional.

    (a) An environmental professional is an individual who possesses 
sufficient specific education, training, and experience necessary to 
exercise professional judgment to develop opinions and conclusions 
regarding conditions indicative of the presence or likely presence of 
oil at a facility and the real property on which the facility is 
located sufficient to meet the objectives and performance factors in 
Sec.  137.30(a) and (b).
    (1) Such a person must--
    (i) Hold a current Professional Engineer's or Professional 
Geologist's license or registration from a State, tribe, or U.S. 
territory (or the Commonwealth of Puerto Rico) and have the equivalent 
of 3 years of full-time relevant experience;
    (ii) Be licensed or certified by the Federal government, a State, 
tribe, or U.S. territory (or the Commonwealth of Puerto Rico) to 
perform environmental inquiries under Sec.  137.35 and have the 
equivalent of 3 years of full-time relevant experience;
    (iii) Have a Baccalaureate or higher degree from an accredited 
institution of higher education in a discipline of engineering or 
science and the equivalent of 5 years of full-time relevant experience; 
or
    (iv) Have the equivalent of 10 years of full-time relevant 
experience.
    (2) An environmental professional should remain current in his or 
her field through participation in continuing education or other 
activities.
    (3) The requirements for an environmental professional in this 
section do not preempt State professional licensing or registration 
requirements, such as those for a professional geologist, engineer, or 
site-remediation professional. Before commencing work, a person should 
determine the applicability of State professional licensing or 
registration laws to the activities to be undertaken as part of an 
inquiry under Sec.  137.35(b).
    (4) A person who does not qualify as an environmental professional 
under this section may assist in the conduct of all appropriate 
inquiries according to this part if the person is under the supervision 
or responsible charge of an environmental professional meeting the 
requirements of this section when conducting the inquiries.


Sec.  137.30  Objectives and performance factors.

    (a) Objectives. This part is intended to result in the 
identification of conditions indicative of the presence or likely 
presence of oil at the facility and the real property on which the 
facility is located. In order to meet the objectives of this 
regulation, persons specified in Sec.  137.1(a) and the environmental 
professional must seek to identify, through the conduct of the 
standards and practices in this subpart, the following types of 
information about the facility and the real property on which the 
facility is located:
    (1) Current and past uses and occupancies of the facility and the 
real property on which the facility is located.
    (2) Current and past uses of oil.
    (3) Waste management and disposal activities that indicate presence 
or likely presence of oil.
    (4) Current and past corrective actions and response activities 
that indicate presence or likely presence of oil.
    (5) Engineering controls.
    (6) Institutional controls, such as zoning restrictions, building 
permits, and easements.
    (7) Properties adjoining or located nearby the facility and the 
real property on which the facility is located that have environmental 
conditions that could have resulted in conditions indicative of the 
presence or likely presence of oil at the facility and the real 
property on which the facility is located.
    (b) Performance factors. In order to meet this part and to meet the 
objectives stated in paragraph (a) of this section, the persons 
specified in Sec.  137.1(a) or the environmental professional (as 
appropriate to the particular standard and practice) must--
    (1) Gather the information that is required for each standard and 
practice listed in this subpart that is publicly available, is 
obtainable from its source within a reasonable time and cost, and can 
be reviewed practicably; and
    (2) Review and evaluate the thoroughness and reliability of the 
information gathered in complying with each standard and practice 
listed in this subpart taking into account information gathered in the 
course of complying with the other standards and practices of this 
part.


Sec.  137.33  General all appropriate inquiries requirements.

    (a) All appropriate inquiries must be conducted within 1 year 
before the date of acquisition of the real property on which the 
facility is located, as evidenced by the date of receipt of the 
documentation transferring title to, or possession of, the real 
property and must include:
    (1) An inquiry by an environmental professional, as provided in 
Sec.  137.35.
    (2) The collection of information under Sec.  137.40 by persons 
specified in Sec.  137.1(a).
    (b) The following components of the all appropriate inquiries must 
be conducted or updated within 180 days before the date of acquisition 
of the real property on which the facility is located:
    (1) Interviews with past and present owners, operators, and 
occupants. See Sec.  137.45.
    (2) Searches for recorded environmental cleanup liens. See Sec.  
137.55.
    (3) Reviews of Federal, State, tribal, and local government 
records. See Sec.  137.60.
    (4) Visual inspections of the facility, the real property on which 
the facility is located, and adjoining properties. See Sec.  137.65.
    (5) The declaration by the environmental professional. See Sec.  
137.35(d).
    (c) All appropriate inquiries may include the results of and 
information contained in an inquiry previously conducted by, or on 
behalf of, persons specified in Sec.  137.1(a) who are responsible for 
the inquiries for the facility and the real property on which the 
facility is located if--
    (1) The information was collected during the conduct of an all-
appropriate-inquiries investigation under this part.
    (2) The information was collected or updated within 1 year before 
the date of acquisition of the real property on which the facility is 
located.
    (3) The following components of the inquiries were conducted or 
updated within 180 days before the date of acquisition of the real 
property on which the facility is located:
    (i) Interviews with past and present owners, operators, and 
occupants. See Sec.  137.45.
    (ii) Searches for recorded environmental cleanup liens. See Sec.  
137.55.
    (iii) Reviews of Federal, State, tribal, and local government 
records. See Sec.  137.60.

[[Page 2153]]

    (iv) Visual inspections of the facility, the real property on which 
the facility is located, and the adjoining properties. See Sec.  
137.65.
    (v) The declaration by the environmental professional. See Sec.  
137.35(d).
    (4) Previously collected information is updated by including 
relevant changes in the conditions of the facility and the real 
property on which the facility is located and specialized knowledge, as 
outlined in Sec.  137.70, of the persons conducting the all appropriate 
inquiries for the facility and the real property on which the facility 
is located, including persons specified in Sec.  137.1(a) and the 
environmental professional.
    (d) All appropriate inquiries may include the results of an 
environmental professional's report under Sec.  137.35(c) that have 
been prepared by or for other persons if--
    (1) The reports meet the objectives and performance factors in 
Sec.  137.30(a) and (b); and
    (2) The person specified in Sec.  137.1(a) reviews the information 
and conducts the additional inquiries under Sec. Sec.  137.70, 137.75, 
and 137.80 and updates the inquiries requiring an update under 
paragraph (b) of this section.
    (e) To the extent there are data gaps that affect the ability of 
persons specified in Sec.  137.1(a) and environmental professionals to 
identify conditions indicative of the presence or likely presence of 
oil, the gaps must be identified in the report under Sec.  
137.35(c)(2). In addition, the sources of information consulted to 
address data gaps should be identified and the significance of the gaps 
noted. Sampling and analysis may be conducted to develop information to 
address data gaps.
    (f) Any conditions indicative of the presence or likely presence of 
oil identified as part of the all-appropriate-inquiries investigation 
should be noted in the report.


Sec.  137.35  Inquiries by an environmental professional.

    (a) Inquiries by an environmental professional must be conducted 
either by the environmental professional or by a person under the 
supervision or responsible charge of an environmental professional.
    (b) The inquiry of the environmental professional must include the 
requirements in Sec. Sec.  137.45 (interviews with past and present 
owners), 137.50 (reviews of historical sources), 137.60 (reviews of 
government records), 137.65 (visual inspections), 137.80 (commonly 
known or reasonably ascertainable information) and 137.85 (degree of 
obviousness of the presence or likely presence of oil). In addition, 
the inquiry should take into account information provided to the 
environmental professional by the person specified in Sec.  137.1(a) 
conducting the additional inquiries under Sec.  137.40.
    (c) The results of the inquiry by an environmental professional 
must be documented in a written report that, at a minimum, includes the 
following:
    (1) An opinion as to whether the inquiry has identified conditions 
indicative of the presence or likely presence of oil at the facility 
and the real property on which the facility is located.
    (2) An identification of data gaps in the information developed as 
part of the inquiry that affect the ability of the environmental 
professional to identify conditions indicative of the presence or 
likely presence of oil at the facility and the real property on which 
the facility is located. The report must also indicate whether the gaps 
prevented the environmental professional from reaching an opinion 
regarding the identification of conditions indicative of the presence 
or likely presence of oil.
    (3) The qualifications of the environmental professional.
    (4) An opinion regarding whether additional appropriate 
investigation is necessary.
    (d) The environmental professional must place the following 
statements in the written document identified in paragraph (c) of this 
section and sign the document: ``[I, We] declare that, to the best of 
[my, our] professional knowledge, [I, we] meet the requirements under 
33 CFR 137.25 for an environmental professional.'' and ``[I, We] have 
the specific qualifications based on education, training, and 
experience to assess the nature, history, and setting of a facility and 
the real property on which it is located. [I, We] have developed and 
conducted all appropriate inquiries according to the standards and 
practices in 33 CFR part 137.''


Sec.  137.40  Additional inquiries.

    (a) Persons specified in Sec.  137.1(a) must conduct inquiries in 
addition to those conducted by the environmental professional under 
Sec.  137.35 and may provide the information associated with these 
additional inquiries to the environmental professional responsible for 
conducting the activities listed in Sec.  137.35--
    (1) As required by Sec.  137.55 and if not otherwise obtained by 
the environmental professional, environmental cleanup liens against the 
facility and the real property on which it is located that are filed or 
recorded under Federal, State, tribal, or local law.
    (2) As required by Sec.  137.70, specialized knowledge or 
experience of the person specified in Sec.  137.1(a).
    (3) As required by Sec.  137.75, the relationship of the purchase 
price to the fair market value of the facility and the real property on 
which the facility is located if the oil was not at the facility and 
the real property on which it is located.
    (4) As required by Sec.  137.80 and if not otherwise obtained by 
the environmental professional, commonly known or reasonably 
ascertainable information about the facility and the real property on 
which it is located.
    (b) [Reserved]


Sec.  137.45  Interviews with past and present owners, operators, and 
occupants.

    (a) Interviews with owners, operators, and occupants of the 
facility and the real property on which the facility is located must be 
conducted for the purposes of achieving the objectives and performance 
factors of Sec.  137.30(a) and (b).
    (b) The inquiry of the environmental professional must include 
interviewing the current owner and occupant of the facility and the 
real property on which the facility is located. If the facility and the 
real property on which the facility is located has multiple occupants, 
the inquiry of the environmental professional must include interviewing 
major occupants, as well as those occupants likely to use, store, 
treat, handle or dispose of oil or those who have likely done so in the 
past.
    (c) The inquiry of the environmental professional also must 
include, to the extent necessary to achieve the objectives and 
performance factors in Sec.  137.30(a) and (b), interviewing one or 
more of the following persons:
    (1) Current and past facility and real property managers with 
relevant knowledge of uses and physical characteristics of the facility 
and the real property on which the facility is located.
    (2) Past owners, occupants, or operators of the facility and the 
real property on which the facility is located.
    (3) Employees of current and past occupants of the facility and the 
real property on which the facility is located.
    (d) In the case of inquiries conducted at abandoned properties 
where there is evidence of potential unauthorized uses or evidence of 
uncontrolled access, the environmental professional's inquiry must 
include an interview of at least

[[Page 2154]]

one owner or occupant of a neighboring property from which it appears 
possible that the owner or occupant of the neighboring property could 
have observed use or other presence or likely presence of oil.


Sec.  137.50  Reviews of historical sources of information.

    (a) Historical documents and records must be reviewed for the 
purposes of achieving the objectives and performance factors of Sec.  
137.30(a) and (b). Historical documents and records may include, but 
are not limited to, aerial photographs, fire insurance maps, building 
department records, chain of title documents, and land use records.
    (b) Historical documents and records reviewed must cover a period 
of time as far back in the history of the real property to when the 
first structure was built or when it was first used for residential, 
agricultural, commercial, industrial, or governmental purposes. The 
environmental professional may exercise professional judgment in 
context of the facts available at the time of the inquiry as to how far 
back in time it is necessary to search historical records.


Sec.  137.55  Searches for recorded environmental cleanup liens.

    (a) All appropriate inquiries must include a search for the 
existence of environmental cleanup liens against the facility and the 
real property on which the facility is located that are filed or 
recorded under Federal, State, tribal, or local law.
    (b) All information collected by persons specified in Sec.  
137.1(a) rather than an environmental professional regarding the 
existence of environmental cleanup liens associated with the facility 
and the real property on which the facility is located may be provided 
to the environmental professional or retained by the applicable party.


Sec.  137.60  Reviews of Federal, State, tribal, and local government 
records.

    (a) Federal, State, tribal, and local government records or 
databases of government records of the facility, the real property on 
which the facility is located, and adjoining properties must be 
reviewed for the purposes of achieving the objectives and performance 
factors of Sec.  137.30(a) and (b).
    (b) With regard to the facility and the property on which the 
facility is located, the review of Federal, State, and tribal 
government records or databases of the government records and local 
government records and databases of the records should include--
    (1) Records of reported oil discharges present, including site 
investigation reports for the facility and the real property on which 
the facility is located;
    (2) Records of activities, conditions, or incidents likely to cause 
or contribute to discharges or substantial threat of discharges of oil, 
including landfill and other disposal unit location records and 
permits, storage tank records and permits, hazardous waste handler and 
generator records and permits, Federal, tribal and State government 
listings of sites identified as priority cleanup sites, and spill 
reporting records;
    (3) Comprehensive Environmental Response, Compensation, and 
Liability Information System (CERCLIS) records;
    (4) Public health records;
    (5) Emergency Response Notification System records;
    (6) Registries or publicly available lists of engineering controls; 
and
    (7) Registries or publicly available lists of institutional 
controls, including environmental land use restrictions, applicable to 
the facility and the real property on which the facility is located.
    (c) With regard to nearby or adjoining properties, the review of 
Federal, State, tribal, and local government records or databases of 
government records should include the identification of the following:
    (1) Properties for which there are government records of reported 
discharges or substantial threat of discharges of oil. Such records or 
databases containing such records and the associated distances from the 
facility and the real property on which the facility is located for 
which such information should be searched include the following:
    (i) Records of National Priorities List (NPL) sites or tribal- and 
State-equivalent sites (one mile).
    (ii) Resource Conservation and Recovery Act (RCRA) properties 
subject to corrective action (one mile).
    (iii) Records of Federally-registered, or State-permitted or -
registered, hazardous waste sites identified for investigation or 
remediation, such as sites enrolled in State and tribal voluntary 
cleanup programs and tribal- and State-listed brownfield sites (one-
half mile).
    (iv) Records of leaking underground storage tanks (one-half mile).
    (2) Properties that previously were identified or regulated by a 
government entity due to environmental concerns at the facility and the 
real property on which the facility is located. The records or 
databases containing the records and the associated distances from the 
facility and the real property on which the facility is located for 
which the information should be searched include the following:
    (i) Records of delisted NPL sites (one-half mile).
    (ii) Registries or publicly available lists of engineering controls 
(one-half mile).
    (iii) Records of former CERCLIS sites with no further remedial 
action notices (one-half mile).
    (3) Properties for which there are records of Federally-permitted, 
State-permitted or -registered, or tribal-permitted or -registered 
waste management activities. The records or databases that may contain 
the records include the following:
    (i) Records of RCRA small quantity and large quantity generators 
(adjoining properties).
    (ii) Records of Federally-permitted, State-permitted or -
registered, or tribal-permitted landfills and solid waste management 
facilities (one-half mile).
    (iii) Records of registered storage tanks (adjoining property).
    (4) A review of additional government records with regard to sites 
identified under paragraphs (c)(1) through (c)(3) of this section may 
be necessary in the judgment of the environmental professional for the 
purpose of achieving the objectives and performance factors of 
Sec. Sec.  137.30(a) and (b).
    (d) The search distance from the real property boundary for 
reviewing government records or databases of government records listed 
in paragraph (c) of this section may be modified based upon the 
professional judgment of the environmental professional. The rationale 
for the modifications must be documented by the environmental 
professional. The environmental professional may consider one or more 
of the following factors in determining an alternate appropriate search 
distance--
    (1) The nature and extent of a discharge.
    (2) Geologic, hydrogeologic, or topographic conditions of the 
property and surrounding environment.
    (3) Land use or development densities.
    (4) The property type.
    (5) Existing or past uses of surrounding properties.
    (6) Potential migration pathways (e.g., groundwater flow direction, 
prevalent wind direction).
    (7) Other relevant factors.

[[Page 2155]]

Sec.  137.65  Visual inspections of the facility, real property on 
which the facility is located, and adjoining properties.

    (a) For the purpose of achieving the objectives and performance 
factors of Sec.  137.30(a) and (b), the inquiry of the environmental 
professional must include the following:
    (1) A visual on-site inspection of the facility and the real 
property on which the facility is located, and the improvements at the 
facility and real property, including a visual inspection of the areas 
where oil may be or may have been used, stored, treated, handled, or 
disposed. Physical limitations to the visual inspection must be noted.
    (2) A visual inspection of adjoining properties, from the subject 
real property line, public rights-of-way, or other vantage point (e.g., 
aerial photography), including a visual inspection of areas where oil 
may be or may have been stored, treated, handled or disposed. A visual 
on-site inspection is recommended, though not required. Physical 
limitations to the inspection of adjacent properties must be noted.
    (b) Except as in paragraph (c) of this section, a visual on-site 
inspection of the facility and the real property on which the facility 
is located must be conducted.
    (c) An on-site inspection is not required if an on-site visual 
inspection of the facility and the real property on which the facility 
is located cannot be performed because of physical limitations, remote 
and ina