Changes to Texas Groundwater Rights - Edwards Aquifer Authority v. Day

March 1, 2012

The Texas Supreme Court has previously held that a landowner has a protected property right in groundwater that he brings to the surface, and that a landowner generally has a right to capture as much groundwater as he can beneficially use – even if it deprives his neighbor of water (aka the Rule of Capture). On February 24, 2012, the court issued a unanimous decision in Edwards Aquifer Authority v Day that a landowner has a constitutionally protected property interest in groundwater in place.

The decision opens the door for challenges to the rules adopted by a groundwater district that limit a landowner’s use of the groundwater beneath his land as a taking of private property for which adequate compensation is due. The court identifies three categories of takings analysis developed by the U.S. Supreme Court to determine whether a compensable takings has occurred. The categories are relatively narrow and involve a “fact-sensitive test of reasonableness.”

The decision does not question the authority of the Legislature to adopt laws providing for the conservation of groundwater in the state, which the court notes it has previously encouraged as a limitation on the Rule of Capture. The court appears to speak favorably of the legislation adopted at Chapter 36 of the Texas Water Code, which it notes does not apply to the Edwards Aquifer Authority, requiring districts to consider a broad range of factors before deciding whether to grant or deny an application for a groundwater withdrawal permit. What the court appears to take issue with are governmental regulations such as the Edwards Aquifer Authority Act (EAA Act) that give a narrow category of landowners a preference to all the available water.

Under the EAA Act, only users of the aquifer from June 1, 1972 to May 31, 1993 are entitled to permits, and a landowner is deprived of all use of groundwater beneath his land except minimal amounts if he did not beneficially use groundwater during the historical period. The court rejects the notion that a landowner can forfeit his groundwater rights if he preserves the groundwater for future use, stating that the “use-it-or-lose-it” mentality encourages waste and will not result in the highest and best use of the limited resource.

There are 96 groundwater districts covering all or parts of 173 counties in Texas. The districts are charged with adopting groundwater management plans and rules requiring permits for the production of groundwater. The districts are faced with deciding how to allocate the limited amount of groundwater that is made available for use as between existing and new users.

Access to groundwater is a valuable asset and the Day decision affirms that landowners have an ownership interest in the groundwater beneath their lands, even if they have never before used the water and are in a district that adopts “historical use” as its main permitting criteria.

Contact a member of our Water Practice Group to learn how to enhance and protect your groundwater rights.

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