Public Meeting Negotiated Rulemaking on All Appropriate Inquiry April 15, 2003

I. Introduction

Linda Garczynski, Director, EPA's Office of Brownfields Cleanup and Redevelopment (OBCR), opened the public meeting by stating that EPA is holding this meeting to listen to comments and questions from the public before the advisory committee charged with establishing the standard for "all appropriate inquiry" convenes April 29–30, 2003. "All Appropriate Inquiry" refers to the requirements for assessing the environmental conditions of a property prior to its acquisition. The Brownfields Law requires EPA to develop regulations establishing standards and practices for assessing the environmental conditions of a property prior to its acquisition by January 2004. The committee has been established under the Federal Advisory Committee Act (FACA) as part of the process to undertake a negotiated rulemaking for "all appropriate inquiry."

Liability Relief and "All Appropriate Inquiry"
Susan Bromm, Director, EPA's Office of Site Remediation Enforcement (OSRE), told the group it is her hope that after a party conducts "all appropriate inquiry" into a site, OSRE staff will not be involved with the party at the site. Currently, the American Society for Testing and Materials (ASTM) standards (E1527-97 and E1527-00) are used to determine environmental conditions at a site. Bona fide prospective purchasers, contiguous property owners, and innocent landowners that want liability limitations under the Brownfields Law are required to undertake "all appropriate inquiry" at a site and exercise "appropriate care" by taking "reasonable steps" at the property. OSRE issued guidance on March 6, 2003 that includes the definition of "reasonable steps." The "Interim Guidance Regarding Criteria Landowners Must Meet in Order to Qualify for the Bona Fide Prospective Purchaser, Contiguous Property Owner, or Innocent Landowner Limitations on CERCLA Liability "Common Elements" can be found on OSRE's website at http://www.epa.gov/Compliance/resources/policies/cleanup/superfund/common-elem-guide.pdf.

Establishing Standards for "All Appropriate Inquiry" under the Federal Brownfields Law
Patricia Overmeyer, OBCR lead and Designated Federal Official on the "all appropriate inquiry" negotiated rulemaking, explained that the law provides protection for the three types of property owners noted above. The law clarifies that these property owners are not liable for contamination at a site if they exercise due care, comply with land use restrictions and institutional controls, and grant access to those performing response actions at the site. In addition, the owner must conduct "all appropriate inquiry" prior to purchasing the property. An innocent purchaser must conduct "all appropriate inquiry" prior to purchasing the property and must also demonstrate that "reasonable steps" were taken to prevent future releases and exposure to releases.

The Brownfields Law also requires that site assessments conducted by entities receiving EPA brownfields grants must comply with the "all appropriate inquiry" requirement of the law. In addition, the law sets forth ten criteria that must be included within the standards for "all appropriate inquiry" and requires that the regulations be developed within two years of the law's enactment (by January 2004).

The law also established interim standards for conducting "all appropriate inquiry," which will remain in effect until EPA promulgates final federal standards. The law requires the use of procedures developed by ASTM, citing the E1527-97 standard. However, ASTM has updated to a 2000 standard. A final rule will be published over the next several weeks recognizing both the 1997 and 2000 ASTM standards as acceptable in meeting the "all appropriate inquiry" requirement.

EPA is proceeding with developing the federal standard on "all appropriate inquiry" through a regulatory negotiation process. All interests will be represented on the FACA committee, and decisions will be made through consensus. EPA will begin the process by identifying issues and following the ten criteria set forth in the law that must be included in the standard developed. However, the FACA committee will be responsible for determining its own schedule and developing the content of the standard. EPA will then use the content agreed upon by the FACA committee when developing its proposed rule and follow any additional administrative procedure requirements.

EPA has hired Susan Podziba as the neutral third party to facilitate the regulatory negotiation. Ms. Podziba began this effort by identifying the issues involved to determine if a regulatory negotiation was the best process for developing the standard. Ms. Podziba conducted interviews with stakeholders to discuss issues related to developing a rule and whether the stakeholders believed a regulatory negotiation would be successful. A convening report was prepared containing these findings.

Overview of the Regulatory Negotiation Process
Deborah Dalton, Director of the Conflict Prevention and Resolution Center within EPA's Office of General Counsel, explained that her office provides coaching to EPA program offices throughout the regulatory negotiation process. EPA has undertaken 20 regulatory negotiations since 1983, and most have been successful.

To date, EPA has conducted the following steps in the negotiated rulemaking process for "all appropriate inquiry," which are typical of those taken in other regulatory negotiations:

1. EPA conducted an internal assessment among its program offices, including OBCR and the Office of Emergency and Remedial Response, to determine its own interest in negotiating a rule.

2. EPA retained a neutral third party facilitator/mediator (Ms. Podziba) to conduct a more rigorous assessment of the feasibility. This assessment included interviews with agency management and staff as well as interviews with external stakeholders who might be affected by the rule.

3. EPA took public comments on whether a regulatory negotiation is the best process to use. Public comments on the "all appropriate inquiry" negotiation were received between March 6 and April 7, 2003. Today's public meeting is the final stage of the comment period.

4. A FACA charter is filed containing information on the organizations and members who will serve on the committee. The FACA committee for "all appropriate inquiry" will be chartered soon. The "Notice of Establishment" was published in the Federal Register during the week of April 7, 2003.

5. Most FACA committees meet five to ten times. The FACA committee for "all appropriate inquiry" will hold its first meeting April 29–30, 2003, and it is expected the group will meet five or six times before the December 30, 2003, deadline for the meetings to conclude.

There are two applicable federal laws for negotiated rulemaking — The Negotiated Rulemaking Act of 1996 and the FACA. The Negotiated Rulemaking Act recommends that a mediator be selected. Ms. Podziba will be the mediator managing the process, dialogue, and negotiations. She is serving as a neutral third party, not as an advocate.

Structure of the FACA Committee Meetings
During the FACA committee meetings, deliberations will occur in open session; however, the public may offer comments only during designated times. Parties are also encouraged to pass issues through FACA committee members. Summaries of all FACA committee meetings are required and will be posted on EPA's Web site. The committee will determine its own protocols at the first meeting including its own definition of the word "consensus." If the group reaches consensus on a proposed rule, the content will be presented as the final rule and comments will be solicited.

Members of the FACA committee are serving without compensation, and EPA appreciates the time members will spend on this effort. Rules generated through negotiated rulemakings are typically clearer, easy to comply with, and protective of the environment.

Summary of Convening Report Findings and Decision to Proceed with Negotiated Rulemaking
Susan Podziba, the neutral facilitator retained for the regulatory negotiation, explained that it is important to conduct internal and stakeholder assessments to determine whether a regulatory negotiation is feasible. Discussions with EPA management and staff were held to define the goal and intent of EPA in going forward with a regulatory negotiation. The goal is to develop a federal standard for "all appropriate inquiry,"and the intent is to promulgate a rule whether or not the regulatory negotiation is successful.

More than 60 stakeholder interviews were conducted with a wide variety of trade associations and practitioners. Stakeholder categories were developed, and a second tier of interviews were conducted as other interests were identified. The diversity of views within each stakeholder category was considered during this interview process. Ms. Podziba identified key issues as well as key dynamics that would affect the process, such as having a December 30, 2003, deadline for reaching consensus. In addition, Ms. Podziba examined whether the agenda of issues involved was complex enough to justify expending resources on a regulatory negotiation.

Summary of the Convening Report
The following stakeholders were interviewed for the convening report:

• Federal, state, tribal and local governments
• Development community (commercial, industrial, residential, and non-profit developers)
• Bankers and lenders
• Environmental justice community
• Environmental organizations
• Environmental professionals

Environmental insurance representatives, brokers, and attorneys were also interviewed; however, these stakeholders will be considered resource participants in the process, not members of the FACA committee. The American Bar Association's Section of Environment, Energy, and Resources is one group that will be a resource participant to the committee.

Issues
All interviewees agreed on the common public goal that brownfields redevelopment should be promoted. Interviewees also agreed that the federal standard for "all appropriate inquiry" should be clear and provide certainty. Those stakeholders interviewed had different opinions on the rigor of the standard, the cost of complying with the standard, the scope of the standard, the standard's shelf life, and timing of public participation requirements.

Feasibility of Success
Ms. Podziba determined that a regulatory negotiation to develop an "all appropriate inquiry"standard has a good chance of success, based on the following criteria:

1. The FACA committee is composed of a manageable number of stakeholders (20–25 individuals will participate).
2. All organizations can be represented on the committee.
3. There are complex issues for discussion.
4. The issue is suitable for decision making because there is a statutory deadline.
5. Those interviewed believe this is a good opportunity to undertake a regulatory negotiation.
6. EPA is willing to participate and sponsor the effort.
7. There are no alternative means to determine a federal standard, and the regulatory negotiation creates a forum to bring the relevant stakeholders together.
8. There is a firm deadline of December 31, 2003, to reach consensus on a standard.

Federal Representation on the FACA Committee
Steve Luftig, EPA's Office of Solid Waste and Emergency Response, is the federal government's representative on the FACA committee. In this role, he represents all EPA offices and also all other federal agency partners. Mr. Luftig is the chair of the FACA committee and will start and end each meeting as well as approve all meeting minutes. The first FACA meeting will be held in EPA East in Washington, D.C., April 29–30, 2003. All FACA meetings are open to the public and will include designated times for public comments.

II. Comments and Questions

Participants raised questions, sought clarification, and offered suggestions regarding the negotiated rulemaking for "all appropriate inquiry." These remarks and EPA's responses (where questions were asked or clarification sought) are summarized below.

FACA Committee Membership and Process

• All meetings will be held in Washington, D.C., because a majority of the committee members are based there and this limits travel time and expenses.