The ABCs of the Texas VCP

By Jay Carsten

The Texas voluntary cleanup program (VCP) is turning 10 years old this year. The VCP provides administrative, technical and legal incentives to encourage the cleanup of contaminated sites in Texas.

The VCP offers an incentive for property owners and developers to clean up property by providing a certificate of completion once remediation is done. This certificate provides a release of liability from the State of Texas for non-responsible parties such as future owners and lenders.

Created by the Texas legislature in 1995, the VCP is run by the Remediation Division of the Texas Commission on Environmental Quality (TCEQ). Since all non-responsible parties, including future lenders and landowners, receive protection from liability to the State of Texas for cleanup after issuance of a certificate, most environmental constraints for completing real estate transactions at sites are eliminated.

Any site not subject to a TCEQ enforcement order or permit is eligible to enter the VCP, provided cleanup has not already been initiated by participants and the site is not under the jurisdiction of the Texas Railroad Commission. Parties entering the VCP must submit an application, a Phase I environmental site assessment describing the contaminated area of concern, and a $1,000 application fee.

Upon acceptance of the application, the applicant must sign a VCP agreement that describes a schedule of report submittals necessary to achieve assessment and cleanup in accordance with all TCEQ rules and requirements. After completion of the assessment and any required cleanup, the parties will receive a certificate of completion from TCEQ, which states that non-responsible parties, including future owners and lenders, are released from all liability to the state for cleanup of areas covered by the certificate.

Through April 2005, the VCP had received 1706 applications representing undeveloped property, office/warehouses, supermarket/retail, commercial development and industrial property. Of these sites, 859 have received final certificates of completion and 106 have received conditional certificates of completion.

Other VCP Programs

Another program administered by the Texas VCP is the Innocent Owner/Operator Program (IOP). The IOP provides a process for current owners and operators of property to be certified as “innocent,” with an Innocent Owner/Operator Certificate (IOC), when they can prove that their property became contaminated from an off-site source.

Unlike the VCP release of liability, the IOC does not carry forward to future owners/operators. Future innocent owners or operators must individually apply and be certified as innocent. A person is only eligible for the certification if they own or operate on the property. Certain rules apply to subdivided properties.
Prospective purchasers can obtain a letter acknowledging TCEQ’s intent to issue an IOC after a demonstration of innocence has been made. An IOC may be issued once the person purchases or begins operation on the property. To be eligible, an applicant must meet the following criteria:
• The subject property must be contaminated.
• The innocent person must be a current owner or operator of the subject property.
• The applicant must not have caused or contributed to the source of contamination.

Through April 2005, the IOP had received 490 applications representing undeveloped property, office/warehouses, supermarket/retail, commercial development and private residences. Of these sites, 391 have received IOCs.

The VCP also administers Texas’ brownfield program. TCEQ administers a grant provided by the U.S. EPA to perform brownfield site assessments for local governments and non-profit organizations that are not responsible parties. In addition, the TCEQ works in close partnership with other state and local redevelopment agencies and stakeholders to facilitate cleanup, transferability and revitalization of brownfields through the development of regulatory, tax and technical assistance tools.

In addition to the specific programs mentioned here, the TCEQ is available at no cost to local governments and non-profit organizations to provide technical advice, education and project partnering for brownfield projects.

Jay Carsten is the manager of the Voluntary Cleanup Section of the Remediation Division of TCEQ.

Read about the American Airlines Center, a Texas VCP success story.

 

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