In the environmental context, remediation means the process of cleaning up environmental contamination. And it is a process. Environmental remediation projects are some of the most challenging legal projects. In Texas, remediation options include:
- Voluntary Cleanup Program
- Innocent Owner/operator Program
- Texas Risk Reduction Program
- Municipal Setting Designation
- Brownfields Site Assessment Programs
Click on the program name above for a brief introduction to that program.
The remediation process chosen must be tailored to the specific contamination, the specific property, and often the intended future use of the contaminated property. Within several of these programs lurks the question “how clean is clean?”, with increasing levels of cleanliness dramatically escalating the costs of remediation.
The remediation process chosen often affects the contaminated property’s fair market value after the remediation. It may be necessary to balance the cost of the remediation with the effect of the chosen remediation on the fair market value of the contaminated property. Mr. McPherson’s history in commercial real estate transactions uniquely qualifies him to help clients understand this relationship and strike the right balance for each particular client and situation.
The Texas Legislature enacted the Texas VCP to provide administrative, technical, and legal incentives to encourage the cleanup of contaminated sites in Texas. Many unused or under used properties may be restored to economically productive or community beneficial use.
All non-responsible parties, including future lenders and landowners, receive protection from liability to the state of Texas for cleanup of sites under the VCP.
Any site is eligible to enter the VCP if it is not subject to response actions under RRC authority or an order or permit from the TCEQ or where TCEQ enforcement action is pending. Parties entering the VCP must submit an application, an Affected Property Assessment Report describing the contaminated area of concern, and a $1,000 application fee. The VCP is a process that usually takes many months to complete, but can positively affect the fair market value and eliminate land use restrictions on a property.
The Texas IOP provides a certificate to an innocent owner or operator if their property is contaminated as a result of a release or migration of contaminants from a source or sources not located on the property, and they did not cause or contribute to the source or sources of contamination. Similar to the Texas Voluntary Cleanup Program discussed above, the IOP can be used to redevelop or add value to a contaminated property by providing an Innocent Owner/Operator Certificate (IOC). However, unlike the VCP release of liability, IOCs are not transferable to future owners/operators. Future innocent owners or operators are eligible to enter the IOP and may receive an IOC only after they become an owner or operator of the site.
TRRP generally regulates the cleanup and management of wastes and substances, referred to as chemicals of concern (COCs), which are released into the environment from regulated commercial and industrial facilities. The TRRP process is also generally available to guide the closure of waste management facility components (e.g., tanks, container storage areas, surface impoundments). The TRRP determines if releases or closures pose unacceptable risk. If they do, it sets out the requirements for what must be done to reduce the risk, prevent pollution, or protect natural resources. The TRRP can be a more cost-effective way to rehabilitate properties, allowing for their return to productive use.
An MSD is an official state designation given to property within a municipality or its extraterritorial jurisdiction that certifies that designated groundwater at the property is not used as potable water, and is prohibited from future use as potable water because that groundwater is contaminated in excess of the applicable potable-water protective concentration level. The prohibition must be in the form of a city ordinance, or a restrictive covenant that is enforceable by the city and filed in the property records. MDSs are authorized by Texas Health and Safety Code Subchapter W.
An MSD is a helpful tool to control the cost of a property cleanup because it limits the scope of, or eliminates the need for, what would otherwise be investigations of or costly response actions addressing contaminant impacts to groundwater that have been restricted from use as potable water by ordinance or restrictive covenant.
In Texas, many former industrial properties lie dormant or underutilized due to liability associated with actual or theoretical contamination. These properties are broadly referred to as “brownfields.” The TCEQ is facilitating cleanup, transferability, and revitalization of brownfields through the development of regulatory, tax, and technical assistance tools. The TCEQ is available at no cost to local governments and will provide technical advice, education, and project partnering for brownfields redevelopment projects.
Local governments can now offer additional ad valorem property tax abatements to attract brownfield cleanup and redevelopment.