Groundwater supplies a majority of Texas’ water needs. In Texas, groundwater has long been treated as a private property right, and landowners have been able to pump and use groundwater beneath their land with few restrictions. However, drought is no stranger to Texas, and population growth in recent years has outpaced the U.S. This growth in population and industry places ever-increasing demands on Texas’ water resources. As these demands increase, growing efforts to regulate and conserve groundwater result in legal and political conflicts between private property rights and government regulation. How does Texas balance individual ownership with the need to manage a crucial resource?
What is Groundwater?
First, groundwater must be distinguished from surface water. Groundwater means water percolating below the surface of the earth (Tex. Water Code § 36.001). Groundwater does not include the underflow of a stream or underground streams, which are state water (30 Tex. Admin. Code § 297.1). Surface water, once it has entered a watercourse, is generally owned by the state and is regulated separately as “state water” (Tex. Water Code § 11.021). This is true even if the water originated as groundwater. The laws and rules relating to the use of surface water do not apply to groundwater (Tex. Water Code § 35.003).
It is fairly common for owners to refer to their ownership of the groundwater in place as “water rights.” This is not accurate. In Texas, the legal term “water rights” typically refers to rights acquired by law to impound, divert, or use state water (Tex. Water Code § 11.002).
Who Owns Groundwater?
The law makes it abundantly clear that groundwater is real property, and that unless severed from the surface estate, it is owned by the owner of the surface. This ownership was expressly established in Houston & T.C. Ry. Co. v. East, and the Legislature explicitly recognized it in its efforts to regulate groundwater (Tex. Water Code § 36.002). The Texas Supreme Court also reaffirmed this ownership in Edwards Aquifer Auth. v. Day.
Texas follows the rule of capture, borrowed and refined from English common law. A landowner may drill for and produce the groundwater beneath the surface so long as he does so without causing waste or malicious drainage of other property (Sipriano v. Great Spring Waters of Am., Inc. and Tex. Water Code § 36.002(b)).
How is Groundwater Regulated?
Texas has long recognized the state’s rights and duties to conserve and develop its natural resources. In 1917, the Legislature and the voters approved the “Conservation Amendment” to the Texas Constitution, found in Article XVI, Section 59. The Conservation Amendment has been amended six times and is the foundation for groundwater regulation in the state.
Under the authority of the Conservation Amendment, the Legislature has passed statutes authorizing regulation of groundwater. Chapter 36 of the Water Code establishes the laws governing groundwater conservation districts (GCDs), which have the authority to regulate the spacing of wells and the amount of production from the wells. While not every part of Texas is covered by a GCD, there are 98 GCDs covering a large portion of the state.
GCDs are tasked with determining how water should be managed now so there will be enough water later. The plan must be finally approved by the Texas Water Development Board, which is also responsible for water planning and administration of water financing.
The Edwards Aquifer Authority (EAA) was established separately. In response to a federal court order, the Legislature passed the Edwards Aquifer Authority Act (EAA Act) on May 30, 1993 (73d Leg., R.S., ch. 626, as amended). The rules governing the EAA are different and are found in the EAA Act. However, the EAA shares some similarities with GCDs, including the authority to regulate the spacing of wells and the production from the wells.
Importantly, while landowners are entitled to a “fair share,” rules adopted by GCDs do not have to allocate each landowner a proportionate share of available groundwater for production based on the number of acres owned by the landowner (Tex. Water Code § 36.002(d)(3)).
More on GCDs
GCDs are created by a petition to the Texas Commission on Environmental Quality and an election. The process is set forth in Chapter 36 of the Water Code. GCDs “are the state’s preferred method of groundwater management in order to protect property rights, balance the conservation and development of groundwater to meet the needs of this state, and use the best available science in the conservation and development of groundwater through the rules developed, adopted, and promulgated by a district in accordance with [Chapter 36]” (Tex. Water Code § 36.0015). They are granted the authority to limit or prohibit the drilling of a well if it does not comply with minimum well spacing or tract sizing requirements adopted by the district, and may also regulate groundwater production as authorized. GCDs are required to perform studies and work together with other water management
entities to develop a management plan. There are specifi c requirements for the plan, which are designed to provide for effi cient use of groundwater, prevent its waste, prevent subsidence, and address “desired future conditions.” Desired future conditions, or “DFCs,” are quantitative descriptions of groundwater resources in a management area at one or more specified times in the future.
But I Own It
Understandably, many landowners bristle at the thought of restrictions placed on groundwater that they clearly own. A few cases will illustrate how courts have addressed this issue.
In Barshop v. Medina Cnty. Underground Water Conservation Dist., the Texas Supreme Court considered a facial challenge to the constitutionality of regulation under the EAA Act. In rejecting that challenge, the court only held that the Act was not unconstitutional on its face. It left open the possibility that there is a point at which groundwater regulation unconstitutionally intrudes upon landowners’ rights.
The court examined the issue further in Edwards Aquifer Auth. v. Day. Landowner Day applied to the EAA for a permit to withdraw 700 acre-feet of water annually for irrigation, basing his application on his historical use of the water—a statutory basis found in the EAA Act. The application was denied, and an administrative law judge (ALJ) concluded that the proper amount should be 14 acre-feet. The reason was that historically, much of Day’s water use was not groundwater. Instead, the water had been allowed to flow into a lake for recreational use. Because the water had flowed into the lake, it became state water not groundwater. The landowner contested the judge’s finding and contended that the EAA had unconstitutionally taken his property. The court held that the ALJ’s conclusion as to the proper amount was correct, and then addressed the takings claim.
The court noted that the Conservation Amendment gave the Legislature the authority—indeed, the responsibility—to provide for regulation of groundwater. Pursuant to that authority, the Legislature provided for regulation by GCDs and gave them broad authority. The court acknowledged that the landowner owns groundwater in place and further held that property interest is constitutionally protected from a regulatory taking. It acknowledged that “while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.” The court discussed the factors to be considered in evaluating a takings claim but sent the case back to the trial court for consideration of the facts.
In 2024, a federal district court considered the case of BLF Land, LLC v. N. Plains Groundwater Conservation Dist. BLF Land, LLC (“BLF”) took groundwater from their land for irrigation. The GCD notified BLF that they had “overproduced” and sent an invoice for the violations. BLF brought takings claims. First, BLF claimed that the GCD’s regulations prevent them from pumping the full amount of their groundwater rights, based on how many acres they owned. Second, they claimed that the regulations deprive them of their right to exclude others from their groundwater by preventing them from offsetting drainage from neighboring lands.
The court held that the regulation was not a regulatory taking. First, it observed that a “fair share” is not a specific amount and need not be based on the number of acres owned, as outlined in Tex. Water Code § 36.002(b-1)(1). The Legislature has authorized GCDs to apportion a fair share based on other factors, such as drainage and water levels, and the GCD has done so. The court relied on the rule of capture in holding that BLF still has a right to exclude others from groundwater beneath the property, but not a right that can be used to prevent ordinary drainage. BLF had not demonstrated that drainage beyond what is normal has occurred or will occur. The court also considered the “Penn Central factors” and determined that the public-oriented justifications for regulating groundwater production sufficiently justified the GCD’s rules. The Legislature had empowered the district to regulate groundwater to protect the resource, and the district had done just that. An appeal to the Fifth Circuit was filed in May.
To be clear, the courts did not hold that regulation of groundwater can never be an unconstitutional taking. They held that the specific actions in these cases were not unconstitutional. Litigation in Texas over groundwater regulation is by no means over. If anything, the water is heating up.
Citations:
Houston & T.C. Ry. Co. v. East,
81 S.W. 279 (Tex. 1904).
Edwards Aquifer Auth. v. Day,
369 S.W.3d 814 (Tex. 2012).
Sipriano v. Great Spring Waters of Am., Inc.,
1 S.W.3d 75 (Tex. 1999).
Barshop v. Medina Cnty. Underground Water
Conservation Dist., 925 S.W.2d 618 (Tex. 1996).
Edwards Aquifer Auth. v. Day,
369 S.W.3d 814 (Tex. 2012).
BLF Land, LLC v. N. Plains Groundwater Conservation Dist.,
No. 2:23-CV-133-Z, 2024 WL 4795379 (N.D. Tex. Nov. 13, 2024)(appeal filed)
Nothing in Tierra Grande should be considered legal advice. For advice or representation on a specific situation, consult an attorney.
Rusty Adams, J.D. ([email protected]) is a member of the State Bar of Texas and a research attorney for the Texas Real Estate Research Center.
