MSD: What’s in Your Groundwater?

A Municipal Setting Designation (a “MSD”) places a limitation on the Texas Commission on Environmental Quality (“TCEQ”) requirements for the investigation or remediation of property parcels containing contaminated groundwater, when that groundwater is not used and will not be used as potable water now or in the future, located within a city or a city’s extraterritorial jurisdiction.

In 2003, the 78th Texas Legislature passed House Bill 3152, effective September 1, 2003, eventually codified as the Texas Solid Waste Disposal Act.

The Texas Solid Waste Disposal Act allows for the designation of a property, within a municipality or its extraterritorial jurisdiction, as an MSD, certifying that the so designated groundwater at the property is not used as potable water and is, furthermore, prohibited from future use as potable water as that groundwater contains contamination more than the applicable potable-water protective concentration level. The property can be a single property, multi-property, or a portion of property. To protect the public, a prohibition is placed on the designated groundwater beneath the MSD, barring its use as potable water and, in most cases, not requiring investigation or remediation.

Any person, including a local government, can apply for an MSD to address groundwater contamination for which the applicant is responsible or for any other property where there is groundwater contamination. To date, there have been 460 MSD applications submitted to TCEQ, with approximately 130 of those applications being generated in Harris County.

To establish an MSD, the Texas Solid Waste Disposal Act requires that:

1. The proposed MSD property must be within the corporate limits or extraterritorial jurisdiction of a municipality authorized by statute, and
2. There must be a public water supply system that meets state requirements that supplies, or is capable of supplying, water to the MSD property and all properties within one-half mile of the MSD property.

Having met the eligibility requirements, the applicant must provide notice that an MSD application is to be submitted to the TCEQ. The applicant must provide notice to:

• Each municipality in which the MSD property is located with a boundary located within one-half mile from the MSD property boundary or that owns or operates a groundwater supply well located within five miles from the MSD property boundary;
• Each owner of a private water well registered with the TCEQ that is located within five miles from the MSD property boundary; and
• Each retail public utility that owns or operates a groundwater supply well located within five miles of the MSD property boundary.

The notice letter must:

1. Identify the location of the proposed MSD property;
2. State the reason for the MSD certification;
3. State that municipalities and retail public utilities can provide comments to the TCEQ;
4. Identify the type of groundwater contaminants;
5. Name the party responsible for the contamination, if known;
6. State the eligibility criteria; and
7. State the time for the TCEQ Executive Director to certify or deny the MSD or to request additional information.

All notified parties have up to 60 days after receipt of the notice letter to file comments with the TCEQ. The TCEQ cannot take action to certify or deny the application until 60 days after those notices are received.

For a proposed MSD located in a municipality with a population of two million of more, the notice letter must also contain a statement that the notified party has 120 days from receipt of the notice letter to pass a resolution opposing the application for the MSD. In this instance, the TCEQ cannot take action to certify or deny the application until 120 days after the notified parties have received their notices. Should a notified party not pass a resolution opposing the application for the MSD, the application process will most likely move forward without any further notice or required involvement from the notified party.

What does a city need to do?

Under the Texas Solid Waste Disposal Act, a city is not required to accept, process, or support an MSD application. The Texas Solid Waste Disposal Act also does not prohibit a city from imposing additional application procedures and requirements on the applicant.

However, the certification of an MSD application does depend on specific action, without which the application could be denied:

• In a city where the proposed MSD property is located and the city has a population of less than two million, an MSD application will only be certified if the governing body of that city supports the MSD application with a resolution and either (1) adopts an ordinance to prohibit potable use of the designation groundwater beneath the MSD property and to appropriately restrict other uses of and contact with the designated groundwater or (2) the MSD property is subject to a restrictive covenant that is enforceable by the municipality to prohibit potable use of designated groundwater beneath the MSD property and to appropriately restrict other uses of and contact with the designated groundwater.
• Where the proposed MSD is in a municipality with a population of two million or more, a city notified of the MSD application is not required to pass a resolution of support, however, if the city opposes the MSD, it must pass a resolution opposing the MSD within 120 days of receiving notice.
• For cities bordering a proposed MSD property boundary or which own or operate a groundwater supply well located within five miles of the proposed MSD property boundary, the applicant must also provide a notice to those cities of the intent to file an MSD application with the TCEQ.

A city not supporting an MSD should directly inform the applicant of nonsupport and should document such a conclusion with the TCEQ.

Please do not rely on this article as legal advice. We can tell you what the law is, but until we know the facts of your given situation, we cannot provide legal guidance. This website is for informational purposes and not for the purposes of providing legal advice. Information about our commercial and business litigation practice can be found here.