USA – TEXAS Law and Practice Contributed by: Gerald J. Pels, Elizabeth E. Mack, Gerald D. Higdon, Susan Rainey, Elizabeth Corey and Brett A. Miller, Troutman Pepper Locke LLP
17.2 Disclosure of Environmental Information Texas law requires disclosure of certain environmental conditions, depending on the nature of the transac- tion. Disclosures required by statute include: • the presence of underground storage tanks; as well as • the presence of a current or prior municipal solid waste landfill. Other, broader disclosures may include information about asbestos, flood zone status, lead paint, soil stability, methamphetamine use, and other risks, depending on the nature of the transaction. In addition to statutory obligations, disclosure obligations should be considered to avert potential fraud claims. Texas has a specific statutory provision authorising statu- tory fraud claims specifically in stock and real estate transactions. The statute is broad and allows for fraud to be alleged in situations where a failure to disclose exists, in addition to a misrepresentation. 17.3 Key Issues in Environmental Due Diligence The most common environmental legal issues arising in transactions in Texas involve: • potential on-site liabilities associated with various pollution programmes and statutes, including the presence of hazardous substances, solid waste, petroleum contaminants, PFAS, asbestos, PCBs, and USTs; and • issues relating to compliance with permits author- ising air emissions, discharges to state water, and waste management activities. Texas has a robust oil and gas exploration and pro- duction industry, particularly in West Texas. Despite the division of authority between the RRC and TCEQ, some operators should place additional focus on TCEQ-related obligations for air emissions.
• excess opacity events where a facility’s emissions of visible particulate matter exceed regulatory standards. 16.2 Public Environmental Information Texas provides a litany of resources where the public can obtain environmental information on regulated operations. State environmental agencies maintain an online database of relevant permitting and other documentation by site or operator. These databases are developing, however, and do not always include all the relevant documents. State environmental agencies are also subject to the Texas Public Information Act, which acts like a state version of the FOIA process. 16.3 Corporate Disclosure Requirement Publicly traded entities are required to disclose envi- ronmental information in accordance with the rules established by the US Securities and Exchange Com- mission (SEC). 16.4 Green Finance Texas does not have traditional state-led “green financing”, but does have programmes such as the Clean Water State Revolving Fund (authorised by the Texas Clean Water Act), which seeks to provide lower- cost financial assistance for the planning, acquisition, design, and construction of wastewater, wastewater reuse, and stormwater infrastructure. Environmental due diligence has a heightened focus in Texas because the state is home to so many industrial concerns. Phase I and Phase II assessments are com- mon. Moreover, because so many transactions involve industrial concerns and Texas has very detailed regu- latory programmes, it is especially important to con- duct additional diligence relating to permitting and regulatory compliance. Furthermore, Texas is home to myriad endangered species, as well as wetlands, and in some areas, coastal-specific issues. These issues are important to consider, particularly regarding pro- ject development. 17. Transactions 17.1 Environmental Due Diligence
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