Deal teams might be surprised to learn that the U.S. EPA proposed rules permitting Phase I reports to satisfy the All Appropriate Inquiry ("AAI") standard by complying with either the American Society for Testing and Material's ("ASTM") old 1527-13 standard or ASTM's new 1527-21 standard. 

Satisfying the AAI standard is an important legal requirement for buyers seeking to avail themselves of CERCLA's defenses to liability.  Currently, the AAI standard regulations permit Phase Is performed in accordance with ASTM 1527-13 to satisfy AAI.  In November 2021, ASTM updated the standard to ASTM 1527-21.  EPA's proposed rule would include ASTM 1527-21 under the regulations as another method of satisfying AAI, but permit Phase Is to continue complying with ASTM 1527-13 to satisfy AAI, too.  

Assuming EPA receives no adverse comment, this change becomes effective May 13, 2022. The proposed approach provides deal teams more flexibility in structuring deal diligence -- while EPA determined the differences between the standards to be legally insignificant, the standards do contain slight differences, and one standard might fit a client's needs under the transaction better than the other.  Whether the two standard approach will apply to deals in the second half of 2022 remains to be seen, but more answers are expected in the second quarter.