Pub. 3 2013 Issue 2

28 www.azbankers.org Phase I Environmental Site Assessments BY JULIE M. POWERS, CARDNO ATC T HIS EDITORIAL IS MEANT TO PRO ͳ VIDE A GENERAL UNDERSTANDING OF WHY PHASE I ENVIRONMENTAL SITE ASSESSMENTS Έ ESA Ή ARE OR ͳ dered, who can perform Phase Is and items that must be covered in the Phase I report. Ordering a Phase I satisfies a federal regulation to perform “All Appropri- ate Inquiries” (AAI) into the prior ownership and use of a property. This allows the user to be eligible for cer- tain defenses from liability known as “Landowner Liability Protection” also known as the Comprehensive Environ- mental Response, Compensation and Liability Act (CERCLA) defenses. The three CERCLA defenses are the In- nocent Owner Defense, the Migration Defense and the Bona Fide Prospective Purchaser Defense. The only way to ensure that AAI is being performed is by ordering a Phase I that follows the current American Society for Test- ing and Materials (ASTM) standard E1527-05, which is the “Standard Practice for Environmental Site As- sessments: Phase I Environmental Site Assessment Process.” The AAI must be conducted by an Environmental Professional (EP). The definition of an EP is a person who has sufficient specific education, training, and relevant experience to exercise pro- fessional judgment to develop opinions and conclusions regarding the presence of releases or threatened releases of haz- ardous substances; 1. and holds a professional engineer (PE) or professional/registered geologist (PG/RG) license, or other state, federal, or tribal certification or environmental professional license and has 3 years of relevant full-time experience; 2. or has a degree in science or engineering and 5 years of relevant full-time experience; 3. or has 10 years of relevant full-time experience. Relevant experience means participa- tion in the performance of at least one of the following: Phase Is; other site investigations that may include envi- ronmental analyses or investigations known as Phase IIs; or participation in remediation, which involves the understanding of surface and subsur- face environmental conditions and the process used to evaluate these condi- tions known as Phase IIIs. At a minimum the scope of a Phase I must include the following items. An interview must be conducted with the current owner and current occupant, and if the EP feels it is necessary an interview with current and past manag- ers and employees. An interview must be conducted with the past owner, occupant and operator. At least one interview must be conducted in person or by telephone with a local govern- mental official. Historical sources must be reviewed back to 1940 or the first use of the property for residential, agricultural, commercial industrial or governmental purposes, whichever is earlier; and the EP has some discretion on how far back they need to go. The regulations make some allowances for the availability of records that are “reasonably ascertainable.” There must be a review of Federal, State, Tribal and Local records, which is typically accomplished by ordering an environ- mental database search, in accordance with specific search radii noted in the ASTM standard. A site reconnaissance must be performed, which includes walking the site, viewing the interior of buildings or other structures, viewing adjacent properties and surrounding areas from right-of-ways, and the list- ing of limitations encountered in the Phase I, such as excessive vegetation, roaming dogs, safety considerations or other factors. There must be a review of environmental liens and use restric- tions. Information that the prospective purchaser also known as the “User” must provide to the EP includes the completion of a User questionnaire. The EP statement taken directly from the ASTM standard must be included in the report. Lastly, the identification of data gaps must be discussed in the report as well. An example of a data gap, for instance, would be when any of the must include items discussed above were not completed. Z For more informa Ɵ on, contact Julie Powers at Cardno ATC at 480-355-4620 or julie.powers@cardno.com . Cardno ATC is a na Ɵ onal fi rm with a local Arizona presence that provides environmental and engineering services ap- proved by over 160 lenders. Julie Powers is currently the Due Diligence Division Manager at Cardno ATC, Tempe, Arizona branch.