[Federal Register Volume 72, Number 112 (Tuesday, June 12, 2007)]
[Proposed Rules]
[Pages 32232-32246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-11110]
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DEPARTMENT OF HOMELAND SECURITY
Coast Guard
33 CFR Part 137
[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: Notice of proposed rulemaking.
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SUMMARY: The Coast Guard proposes to establish standards and practices
[[Page 32233]]
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 proposed rule is
consistent with a final rule on this subject published by the
Environmental Protection Agency.
DATES: Comments and related material must reach the Docket Management
Facility on or before September 10, 2007. Comments sent to the Office
of Management and Budget (OMB) on collection of information must reach
OMB on or before September 10, 2007.
ADDRESSES: You may submit comments identified by Coast Guard docket
number USCG-2006-25708 to the Docket Management Facility at the U.S.
Department of Transportation. Two different locations are listed under
the mail and delivery options below because the Document Management
Facility is moving May 30, 2007. To avoid duplication, please use only
one of the following methods:
(1) Web Site: http://dms.dot.gov.
(2) Mail:
Address mail to be delivered before May 30, 2007, as
follows: Docket Management Facility, U.S. Department of Transportation,
400 Seventh Street, SW., Washington, DC 20590-0001.
Address mail to be delivered on or after May 30, 2007, as
follows: Docket Management Facility, U.S. Department of Transportation,
1200 New Jersey Avenue, SE., West Building Ground Floor, Room W12-140,
Washington, DC 2059.
(3) Fax: 202-493-2251.
(4) Delivery:
Before May 30, 2007, deliver comments to: Room PL-401 on
the Plaza level of the Nassif Building, 400 Seventh Street, SW.,
Washington, DC 20590.
On or after May 30, 2007, deliver comments to: Room W12-
140 on the Ground Floor of the West Building, 1200 New Jersey Avenue
SE., Washington, DC 20590.
At either location, deliveries may be made between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays. The telephone
number is 202-366-9329.
(5) Federal eRulemaking Portal: http://www.regulations.gov.
You must also send comments on collection of information to the
Office of Information and Regulatory Affairs, Office of Management and
Budget. To ensure that the comments are received on time, the preferred
method is by e-mail at [email protected] or fax at 202-395-6566. An
alternate, though slower, method is by U.S. mail to the Office of
Information and Regulatory Affairs, Office of Management and Budget,
725 17th Street, NW., Washington, DC 20503, ATTN: Desk Officer, U.S.
Coast Guard.
You may inspect the material referenced in this part at room 1013,
National Pollution Funds Center, Coast Guard, 4200 Wilson Boulevard,
Arlington, VA 22203-1804, between 9 a.m. and 3 p.m., Monday through
Friday, except Federal holidays. The telephone number is 202-493-6863.
Copies of the material are available as indicated in the ``References''
section of this preamble.
FOR FURTHER INFORMATION CONTACT: If you have questions on this proposed
rule, call Benjamin White, National Pollution Funds Center, Coast
Guard, telephone 202-493-6863. If you have questions on viewing or
submitting material to the docket, call Renee V. Wright, Program
Manager, Docket Operations, telephone 202-493-0402.
Public Participation and Request for Comments
We encourage you to participate in this rulemaking by submitting
comments and related materials. All comments received will be posted,
without change, to http://dms.dot.gov and will include any personal
information you have provided. We have an agreement with the Department
of Transportation (DOT) to use the Docket Management Facility. Please
see DOT's ``Privacy Act'' paragraph below.
Submitting comments: If you submit a comment, please include your
name and address, identify the docket number for this rulemaking (USCG-
2006-25708), indicate the specific section of this document to which
each comment applies, and give the reason for each comment. You may
submit your comments and material by electronic means, mail, fax, or
delivery to the Docket Management Facility at the address under
ADDRESSES; but please submit your comments and material by only one
means. If you submit them by mail or delivery, submit them in an
unbound format, no larger than 8\1/2\ by 11 inches, suitable for
copying and electronic filing. If you submit them by mail and would
like to know that they reached the Facility, please enclose a stamped,
self-addressed postcard or envelope. We will consider all comments and
material received during the comment period. We may change this
proposed rule in view of them.
Viewing comments and documents: To view comments, as well as
documents mentioned in this preamble as being available in the docket,
go to http://dms.dot.gov at any time, click on ``Simple Search,'' enter
the last five digits of the docket number for this rulemaking, and
click on ``Search.'' You may also visit the Docket Management Facility
in room PL-401 on the Plaza level of the Nassif Building, 400 Seventh
Street SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays.
Privacy Act: Anyone can search the electronic form of all comments
received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review the
Department of Transportation's Privacy Act Statement in the Federal
Register published on April 11, 2000 (65 FR 19477), or you may visit
http://dms.dot.gov.
Public Meeting
We do not now plan to hold a public meeting. But you may submit a
request for one to the Docket Management Facility at the address under
ADDRESSES explaining why one would be beneficial. If we determine that
one would aid this rulemaking, we will hold one at a time and place
announced by a later notice in the Federal Register.
Need for This Rulemaking
This rulemaking will codify the requirement of 33 U.S.C.
2703(d)(4)(B). It 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 proposed 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 proposed rule and is compliant with the
[[Page 32234]]
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 proposed rule. For more
information on the ASTM standard, see the ``ASTM Standard E 1527-05''
section in this preamble.
Note that this proposed 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 proposed rule is called the
``all-appropriate-inquiries'' element found in 33 U.S.C. 2703(d)(4).
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.
Scope of the Proposed 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. 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 proposed 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 proposed 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 applies to ``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 proposed rule, such as contiguous property
owners and individuals receiving Federal Brownfield grant monies under
40 U.S.C. 9604(k)(2)(B). While differences between OPA 90 and CERCLA
have required certain differences between the Coast Guard's proposed
rule and EPA's final rule, 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 may
use the procedures included in the ASTM E 1527-05 standard to comply
with this proposed rule.
Discussion of the Proposed Rule
The proposed provisions addressed here warrant further discussion.
The following discussion is intended to help prospective landowners
understand and comply with the proposed rule.
Sections 137.15 and 137.20. These sections concern the reference of
an industry standard. See the discussion in the ``ASTM Standard E 1527-
05'' section in this preamble.
Section 137.25. The qualifications for an environmental
professional in proposed Sec. 137.25 are the same as those published
in EPA's final rule. See 40 CFR part 312.10(b).
Section 137.30(a) and (b). We believe that basing the regulations
on a set of specific objectives and overall performance factors lends
clarity and flexibility to the standards. Such an approach also allows
for the application
[[Page 32235]]
of professional judgment and expertise to account for site-specific
circumstances. In many cases, one piece of documentation may provide
information satisfying more than one of the statutory criteria. For
example, a chain of title document is historic documentation that may
also include information on environmental cleanup liens and past oil
use at the facility and the real property on which the facility is
located. To avoid duplication of effort, the parties undertaking all
appropriate inquiries must keep in mind the primary objectives of the
proposed rule, as described in proposed Sec. 137.30(a), and the
performance factors for achieving those objectives, as described in
proposed Sec. 137.30(b).
It is important to note that the determination of whether or not
the all-appropriate-inquiries standard is met remains within the
discretion of an adjudicator, whether a court or, in the context of a
claim to the Oil Spill Liability Trust Fund, the NPFC.
Section 137.30(a)(6). This provision would require the
identification of institutional controls placed on the facility and the
real property on which the facility is located. Institutional controls
(e.g., zoning restrictions, building permits, and easements) are
typically used whenever the presence of environmental contaminants
including oil precludes unlimited use of the facility and the real
property on which the facility is located. Thus, institutional controls
may have been needed both before and after completion of a past removal
action or may have been employed in place of a removal action. Because
institutional controls often must remain in place for an indefinite
duration and, therefore, generally need to survive ownership changes
(i.e., run with the land) to be legally and practically effective, they
can indicate past presence of oil at the facility and the real property
on which it is located.
Section 137.33. The proposed rule includes provisions addressing
each of the 10 statutory criteria for the conduct of all appropriate
inquiries under 33 U.S.C. 2703(d)(4)(C). The proposed rule and 33
U.S.C. 2703(d)(4)(C) require that all appropriate inquiries include an
inquiry by an environmental professional. The statute, however, does
not require that all of the inquiries be conducted by, or under the
supervision or responsible charge of, an environmental professional.
The inquiries in Sec. Sec. 137.55, 137.70, 137.75, and 137.80 must be
conducted by either the prospective landowner or by, or under the
supervision or responsible charge of, an environmental professional.
All other required inquiries (i.e., those in proposed Sec. Sec.
137.35(c), 137.45, 137.50, 137.60, 137.65, and 137.85) must be
conducted by, or under the supervision or responsible charge of, an
environmental professional.
Under 33 U.S.C. 2703(d)(4)(A), the landowner must conduct all
appropriate inquiries on or before the date on which the landowner
acquired the real property on which the facility is located. To most
closely reflect the intent of Congress, the date on which a person
received documentation transferring title or possession should be the
date that the landowner acquired the real property on which the
facility is located.
Section 137.33(e). The proposed rule requires prospective
landowners and environmental professionals to identify data gaps that
affect their ability to identify conditions indicative of the presence
or likely presence of oil. While the proposed rule does not require
sampling and analysis as part of the all-appropriate-inquiries
investigation, sampling and analysis may be valuable in determining the
presence or likely presence of oil at a facility and on the real
property on which the facility is located. In addition, the fact that
the all-appropriate-inquiry standards do not require sampling and
analysis does not prevent a court, or in the context of a claim to the
Oil Spill Liability Trust Fund the NPFC, from concluding that, under
the circumstances of a particular case, sampling and analysis should
have been conducted to meet ``the degree of obviousness of the presence
or likely presence of oil at the facility and on the real property on
which the facility is located, and the ability to detect the oil by
appropriate investigation'' criterion and obtain protection from OPA 90
liability. In addition, sampling and analysis may help explain existing
data gaps. Prospective landowners should be mindful of all the
statutory requirements for obtaining the OPA 90 liability protections
when considering whether or not to conduct sampling and analysis prior
to or after acquiring the real property on which the facility is
located.
Sections 137.35(c). We propose no requirements regarding the format
of the written report under proposed Sec. 137.35(c). The report may
use the same format as required under ASTM E 1527-05. In addition,
there are no requirements that the report be submitted to the Coast
Guard or other government agency or that the written report be
maintained on-site for any length of time.
The written report may allow any person claiming the innocent-
landowner liability protection under OPA 90 to offer documentation in
support of his or her claim that all appropriate inquiries were
conducted in compliance with Federal regulations. While the proposed
rule does not require parties conducting all appropriate inquiries to
retain the written report or any other documentation discovered,
consulted, or created in the course of conducting the inquiries, the
retention of the documentation may be helpful should the owner need to
assert protection from OPA 90 liability after acquiring the real
property on which the facility is located. Nothing in this regulation
or preamble is intended to suggest that any particular documentation
prepared in conducting all appropriate inquiries will be admissible in
court in any litigation where a party raises the innocent-landowner
liability protection or will in any way alter the judicial rules of
evidence.
Section 137.35(c)(2). This paragraph would require that the report
identify data gaps in the information collected that affect the ability
of the environmental professional to render the opinion. Given that the
burden of potential OPA 90 liability ultimately falls upon the person
specified in Sec. 137.1(a), a prospective landowner does not have to
provide the results of an inquiry or related information to the
environmental professional hired to undertake other aspects of the all-
appropriate-inquiries investigation. However, if the lack of this
information affects the ability of the environmental professional to
identify conditions that indicate the presence or likely presence of
oil at the facility and the real property on which the facility is
located, he or she must note the data gap in their report under Sec.
137.35(c).
Section 137.35(d). This provision would require the environmental
professional, who conducts or oversees all appropriate inquiries, to
sign the written report. There are two reasons for requiring that the
report be signed. First, the individual signing the report must
declare, on the signature page, that he or she meets the requirements
for an environmental professional in proposed Sec. 137.25. Second, the
environmental professionals must declare that all appropriate inquiries
have been developed and performed according to the standards and
practices in proposed part 137.
Section 137.45. The primary purpose for the interviews portion of
all appropriate inquiries is to obtain information regarding the
current and
[[Page 32236]]
past ownership, current and past uses, and the potential environmental
conditions at the facility and real property on which the facility is
located. All interviews must be conducted by the environmental
professional or by someone under their supervision or responsible
charge. The intent is that an individual meeting the requirements of an
environmental professional under proposed Sec. 137.35 must oversee the
conduct of, or review and approve the results of, the interviews to
ensure that the interviews are conducted in compliance with the
objectives and performance factors in proposed Sec. 137.30(a) and (b).
This is to ensure that the information obtained from the interviews
provides sufficient information, in conjunction with the results of all
other inquiries, to allow the environmental professional to render an
opinion with regard to conditions at the facility and the real property
on which the facility is located that may be indicative of the presence
or likely presence of oil.
The proposed rule does not prescribe particular questions that must
be asked during the interview. The type and content of any questions
asked during interviews would depend upon the site-specific conditions
and circumstances and the extent of the knowledge of the environmental
professional (or other individual under the supervision or responsible
charge of the environmental professional) of the facility and the real
property on which the facility is located before conducting the
interviews. Interviews with current and past owners and occupants may
provide opportunities to collect information that was not previously
recorded nor well documented and may provide valuable perspectives on
how to find or interpret information required to complete other aspects
of all the appropriate inquiries.
In the case of facilities and the real properties on which they are
located where there may be more than one owner or occupant, the
proposed rule does not specify the number of owners and occupants to be
interviewed. Instead, proposed Sec. 137.45 requires that interviews be
conducted with major occupants, as well as those occupants likely to
use, store, treat, handle or dispose of oil or those who likely have
done so in the past. The environmental professional may use their
professional judgment to determine the specific occupants to be
interviewed and the total number of occupants to be interviewed in
seeking to comply with the objectives and performance factors for the
inquiries. In the case of abandoned properties, it most likely will be
difficult to identify or interview current or past owners and occupants
of the property. Therefore, the proposed rule requires that at least
one owner or occupant of a neighboring property be interviewed to
obtain information regarding past owners or uses of the abandoned
property.
Section 137.50. The proposed rule requires that historical records
on the real property on which the facility is located be searched by
the environmental professional, or by a person under their supervision
or responsible charge, for information dating as far back in time as
there is documentation that the real property contained structures or
was placed into use of some form.
The proposed rule does allow the environmental professional to
exercise his or her 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. We believe that this provides
sufficient flexibility to allow for any circumstances where, due to the
availability of other information about a real property, an
environmental professional may conclude that a comprehensive search of
historical records is not necessary to meet the objectives and
performance factors in proposed Sec. 137.30(a) and (b).
The proposed rule also does not require that any specific type of
historic information be collected. The proposed rule allows for the
environmental professional to use professional judgment when
determining what types of historical documentation may provide the most
useful information about a real property's ownership, uses, and
potential environmental conditions when seeking to comply with the
objectives and performance factors for the inquiries. In addition,
nothing in the proposed rule prohibits the use of secondary sources
(e.g., a previously conducted title search) when gathering information
about historical ownership and usage of a real property. Information
from secondary sources would also be required to be updated if it was
last collected more than 180 days prior to the date of acquisition
under proposed Sec. 137.33(b)(3).
Section 137.55. Searching for recorded environmental cleanup liens
is required to be conducted by either the environmental professional
(or a person under their supervision or responsible charge) or by a
person specified in Sec. 137.1(a). Recorded environmental cleanup
liens often provide an indication that environmental conditions either
currently exist or previously existed at a facility and the real
property on which the facility is located that may include the presence
or likely presence of oil.
Environmental cleanup liens that are not recorded by government
entities or agencies are not addressed by the language of the statute.
The statute speaks only of ``recorded liens.'' Therefore, the proposed
rule requires that only a search for recorded environmental liens be
included in the all-appropriate-inquiries investigation.
Section 137.60. The proposed rule describes, in Sec. 137.60(b),
the types of Federal, State, tribal, and local government records or
data bases of governmental records to be reviewed to obtain information
on the subject facility, the real property on which the facility is
located, and nearby properties necessary to meet the proposed rule's
objectives and performance factors in Sec. 137.30(a) and (b). The
review of actual records is not necessary, provided that the same
information contained in the government records is attainable by
searching available data bases.
The proposed rule allows the environmental professional to adjust
the search distances for reviewing government records of nearby
properties based upon his or her professional judgment. Environmental
professionals may consider one or more of the factors in Sec.
137.60(d)(1) through (d)(7), when determining an alternative
appropriate search distance. The proposed Sec. 137.60 requires
environmental professionals to document the rationale for making any
modifications to the required minimum search distances.
Section 137.65. The visual on-site inspection of a facility, the
real property on which the facility is located, and adjoining
properties during the conduct of all appropriate inquiries may be the
most important aspect of the inquiries and the primary source of
information regarding environmental conditions.
In all cases, every effort must be made to conduct an on-site
visual inspection of a facility and the real property on which the
facility is located when conducting all appropriate inquiries. The
proposed rule requires that the on-site visual inspection be conducted
by an environmental professional (or by someone under their supervision
or responsible charge) to achieve the objectives and performance
factors in Sec. 137.30(a) and (b).
The proposed rule requires that a visual on-site inspection be
conducted in all but a few very limited cases. In those cases where
physical limitations restrict the portions of the facility and the real
property on which the property is located that may be visually
inspected, physical limitations encountered during the visual on-site
[[Page 32237]]
inspection (e.g., weather conditions, physical obstructions) must be
documented.
We understand that, in some limited circumstances, it may not be
possible to obtain on-site access to a facility and the real property
on which the property is located due to extreme and prolonged weather
conditions, remote locations, or refusal by the owner of the facility
and the real property on which the facility is located to allow access,
even after the party exercises all good faith efforts to gain access
(e.g., by seeking the assistance of government officials). However, the
mere refusal of an owner to allow access to the facility and the real
property on which the facility is located does not justify the failure
to conduct an on-site inspection, where a party has failed to exercise
all good faith efforts to gain access.
If on-site access is not possible despite the exercise of good
faith efforts, the proposed rule requires that the facility and the
real property on which the facility is located be visually inspected,
or observed by another method such as through the use of aerial
photography, or be inspected or observed from the nearest accessible
vantage point, such as the property line or a public road that runs
through or along the real property. In addition, the proposed rule
requires that the all-appropriate-inquiries report include
documentation of efforts undertaken to obtain on-site access to the
facility and the real property on which the facility is located and
include an explanation of why good faith efforts to gain access were
unsuccessful.
The proposed rule also requires that the all-appropriate-inquiries
investigation include visual inspections of properties that adjoin the
subject real property. Visual inspections of adjoining properties may
provide excellent information on the potential for the facility and the
real property on which the facility is located to be affected by oil
migrating from adjoining properties. Visual inspections of adjoining
properties may be conducted from the real property's property line, one
or more public rights-of-way, or other vantage point (e.g., by aerial
photography). Where practicable, a visual on-site inspection is
recommended and may provide greater specificity of information. The
visual inspections of adjoining properties must include observing areas
where oil currently may be, or previously may have been, stored,
treated, handled, or disposed and must also be conducted to achieve the
objectives and performance factors in proposed Sec. 137.30(a) and (b)
for all the appropriate inquiries. Physical limitations to the visual
inspections of adjoining properties must be noted in the report.
Section 137.70. The proposed rule requires that the specialized
knowledge of prospective landowners and the persons responsible for
undertaking the all appropriate inquiries be taken into account when
conducting the all appropriate inquiries for the purposes of
identifying conditions indicative of the presence or likely presence of
oil at a facility and the real property on which the facility is
located to achieve the objectives and performance factors in Sec.
137.30(a) and (b). Including the specialized knowledge of the
environmental professional or a person under their supervision or
responsible charge is not required.
Section 137.75. Addressing 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 present is required to be conducted
by either the environmental professional (or a person under their
supervision or responsible charge) or by a person specified in Sec.
137.1(a). There may be many reasons that the price paid for a
particular facility and the real property on which the facility is
located is not an accurate reflection of the fair market value. The
all-appropriate-inquiries investigation need only include a
consideration of whether a significant difference between the price
paid and the fair market value is an indication that oil may be at the
facility and the real property on which the facility is located.
The proposed rule does not require that a real estate appraisal be
conducted to achieve compliance with this requirement. The objective is
not to ascertain the exact value of the facility and the real property
on which the facility is located, but to determine whether or not the
purchase price paid generally is reflective of its fair market value.
In the case of many real estate transactions, a formal appraisal
may be conducted for other purposes (e.g., to establish the value of
the facility and the real property on which the facility is located for
the purposes of establishing the conditions of a mortgage or to provide
information of relevance where a windfall lien may be filed). In cases
where the results of a formal appraisal are available, the appraisal
results may serve as an excellent source of information on the fair
market value of the facility and the real property on which the
facility is located.
In cases where the results of a formal appraisal are not available,
the determination of fair market value may be made by comparing the
price paid for a particular facility and the real property on which the
facility is located to prices paid for similar facilities and real
properties on which they are located in the same vicinity, or by
consulting a real estate expert familiar with properties in the general
locality and who may be able to provide a comparability analysis.
Section 137.80. The inclusion of commonly known or reasonably
ascertainable information into the inquiry is required by either the
environmental professional (or a person under their supervision or
responsible charge) or by a person specified in Sec. 137.1(a) to
satisfy objectives and performance factor in proposed Sec. 137.30(a)
and (b). Information about a facility and the real property on which
the facility is located, including its ownership and uses, that is
commonly known or reasonably ascertainable within the community or
neighborhood may be valuable to identifying conditions indicative of
the presence or likely presence of oil. Commonly known or reasonably
ascertainable information includes information about a facility and the
real property on which the facility is located that generally is known
to the public within the community and can be easily sought and found
from individuals familiar with the facility and the real property on
which the facility is located or from easily attainable public sources
of information.
This information may be ascertained from the owner or occupant of a
facility and the real property on which the facility is located,
members of the local community, including owners or occupants of
neighboring properties, local or state government officials, local
media sources, and local libraries and historical societies. In many
cases, this information may be incidental to other information
collected during the inquiries, and separate or distinct efforts to
collect the information may not be necessary.
Section 137.85. The proposed rule requires that persons conducting
all appropriate inquiries consider all the information collected during
the conduct of the inquiries in totality to assess whether or not an
obvious conclusion may be drawn that there are conditions indicative of
the presence or likely presence of oil at the facility and the real
property on which the facility is located.
We interpret the statutory criterion to require the environmental
professional or a person under their supervision or responsible charge
to consider information already obtained during the
[[Page 32238]]
conduct of all-appropriate-inquiries investigation which achieves the
objectives and performance factors in Sec. 137.30(a) and (b) and not
as a requirement to collect additional information.
References
Material referenced appears in Sec. 137.15. You may inspect this
material at the National Pollution Funds Center where indicated under
ADDRESSES. Copies of the material are available from the sources listed
in Sec. 137.15.
Regulatory Analysis and Review
This proposed 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.
Draft Regulatory Evaluation
Compliance with this proposed 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
proposed 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 proposed
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 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 proposed rule is consistent with EPA's
final rule. The scope of EPA's rulemaking however is much larger than
this proposed rule. As such, the economic impacts of this proposed 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 proposed rule
compared to EPA's final rule.
As was the case with EPA's rulemaking, this proposed 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
[[Page 32239]]
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 proposed 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
proposed 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 proposed rule). Next the Coast Guard
attempts to develop a more likely scenario that takes into account that
Phase I ESAs for certain commercial real estate transactions are
outside the scope of this proposed 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 proposed 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 proposed 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 proposed rule. Under this
assumption, the estimated cost associated with this proposed 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
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 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 proposed 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 proposed 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
proposed rule. For these reasons, the costs and benefits can not be
directly compared. However, because complying with this proposed 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 proposed 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 above regulatory evaluation section,
compliance with this proposed 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
[[Page 32240]]
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 proposed rule would not have a significant economic impact on a
substantial number of small entities. If you think that your business,
organization, or governmental jurisdiction qualifies as a small entity
and that this rule would have a significant economic impact on it,
please submit a comment to the Docket Management Facility at the
address under ADDRESSES. In your comment, explain why you think it
qualifies and how and to what degree this rule would economically
affect it.
Assistance for Small Entities
Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this proposed rule so that they can better
evaluate its effects on them and participate in the rulemaking. If the
rule would affect your small business, organization, or governmental
jurisdiction and you have questions concerning its provisions or
options for compliance, please consult Benjamin White, National
Pollution Funds Center, Coast Guard, telephone 202-493-6863. The Coast
Guard will not retaliate against small entities that question or
complain about this rule or any policy or action of the Coast Guard.
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 proposed rule would call for a collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). As defined
in 5 CFR 1320.3(c), ``collection of information'' comprises reporting,
recordkeeping, monitoring, posting, labeling, and other, similar
actions. The title and description of the information collections, a
description of those who must collect the information, and an estimate
of the total annual burden follow. The estimate covers the time for
reviewing instructions, searching existing sources of data, gathering
and maintaining the data needed, and completing and reviewing the
collection.
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 the all appropriate inquiries
specified in the proposed rule. Depending upon the particular case,
this may involve interviews, research, and reports.
Need for Information: This proposed 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 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 ``Draft
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 the Paperwork Reduction Act of 1995 (44 U.S.C.
3507(d)), we have submitted a copy of this proposed rule to the Office
of Management and Budget (OMB) for its review of the collection of
information.
We ask for public comment on the proposed collection of information
to help us determine how useful the information is; whether it is
readily available elsewhere; how accurate our estimate of the burden of
collection is; how valid our methods for determining burden are; how we
can improve the quality, usefulness, and clarity of the information;
and how we can minimize the burden of collection.
If you submit comments on the collection of information, submit
them both to OMB and to the Docket Management Facility where indicated
under ADDRESSES, by the date under DATES.
You need not respond to a collection of information unless it
displays a currently valid control number from OMB. Before the
requirements for this collection of information become effective, we
will publish notice in the Federal Register of OMB's decision to
approve, modify, or disapprove the collection.
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
[[Page 32241]]
would either preempt State law or impose a substantial direct cost of
compliance on them. We have analyzed this proposed 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 proposed 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 proposed 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 proposed 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 proposed rule under Executive Order 13045,
Protection of Children from Environmental Health Risks and Safety
Risks. This rule is not an economically significant rule and would not
create an environmental risk to health or risk to safety that might
disproportionately affect children.
Indian Tribal Governments
This proposed rule does not have tribal implications under
Executive Order 13175, Consultation and Coordination with Indian Tribal
Governments, because it would 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 proposed 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 proposed rule references the following voluntary consensus
standard: ASTM E 1527-05, ``Standard Practice for Environmental Site
Assessments: Phase I Environmental Site Assessment Process.'' The
proposed section that references this standard and the location where
this standard is available is listed in proposed Sec. 137.15. Persons
conducting all appropriate inquiries may use the procedures included in
the ASTM E 1527-05 standard to comply with this proposed rule.
Environment
We have analyzed this proposed rule under Commandant Instruction
M16475.lD and Department of Homeland Security Management Directive
5100.1, which guide the Coast Guard in complying with the National
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and
have made a preliminary determination 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, we believe that this rule should
be categorically excluded, under figure 2-1, paragraph (34)(a), of the
Instruction, from further environmental documentation. This proposed
rule concerns the making of 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 preliminary ``Environmental Analysis Check List'' is available in
the docket where indicated under the ``Public Participation and Request
for Comments'' section of this preamble. Comments on this section will
be considered before we make the final decision on whether this rule
should be categorically excluded from further environmental review.
List of Subjects in 33 CFR Part 137
Environmental protection, Administrative practice and procedure,
Petroleum, Intergovernmental relations, Reporting and recordkeeping
requirements.
For the reasons set out in the preamble, the Coast Guard proposes
to add 33 CFR part 137 as follows:
1. Add 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?
137.15 References: Where can I get a copy of the publications
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
[[Page 32242]]
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 publications
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) 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 voluntary 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.
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
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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.
(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.
[[Page 32244]]
(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.
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 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.
[[Page 32245]]
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 data
bases 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 data bases of the government records and local
government records and data bases 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 data bases 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.
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
[[Page 32246]]
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 to Sec.
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.
Sec. 137.70 Specialized knowledge or experience on the part of
persons specified in Sec. 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 Sec.
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 Sec. 137.33
must take into account the relevant and applicable specialized
knowledge and experience of the persons specified in Sec. 137.1(a)
responsible for undertaking the inquiry.
Sec. 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 Sec. 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.
Sec. 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 Sec. 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 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 Sec. 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 Sec. 137.30(a) and (b), the person specified in
Sec. 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.
Sec. 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 Sec. 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 Sec. Sec. 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 Sec. 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 Sec. Sec. 137.45 through 137.80 in
considering the ability to detect the presence or likely presence of
oil by appropriate investigation. The report of the environmental
professional should include an opinion under Sec. 137.35(c)(4)
regarding whether additional appropriate investigation is necessary.
Dated: May 29, 2007.
Thad W. Allen,
Admiral, Commandant, United States Coast Guard.
[FR Doc. E7-11110 Filed 6-11-07; 8:45 am]
BILLING CODE 4910-15-P