RULE OF CAPTURE, WATER RIGHTS VESTING, AND OTHER ISSUES DEALT WITH BY PROPOSED LEGISLATION AND SUPREME COURT OF TEXAS

Senate Bill 332, filed last week by Senator Troy Fraser, would create a vested ownership interest in, and a right to produce, groundwater below the surface of a landowner’s real property.   The bill would also prohibit an aquifer authority from depriving or divesting the landowner or his lessee of that right.  The bill addresses the “rule of capture,” which is an issue that has been making its way through the Texas courts for years.

The rule of capture has been part of Texas groundwater law for decades.  The rule generally holds that a landowner has a right to drill a well and pump groundwater for use on his property, regardless of the amount pumped or the effect on groundwater availability to surrounding landowners. 

The Supreme Court of Texas is currently considering a case regarding the rights of landowners to pump groundwater.  The case, Edwards Aquifer Authority v. Day (274 S.W.3d 742 (Tex.App.—San Antonio 2008, pet. granted)), involves landowners who purchased property within the Edwards Aquifer Authority.  The landowners applied for a permit to pump groundwater, but after a contested hearing were limited by the authority in the amount they could pump. 

The landowners appealed the decision, arguing in part that the limit constituted an unconstitutional taking by the authority.  They argued that their constitutionally-protected, vested interest in pumping groundwater for irrigation (related to the rule of capture) had been taken by the authority without just compensation.  The trial court disagreed and granted summary judgment for the authority. 

The landowners appealed, asking the San Antonio Court of Appeals to “confirm the precedent of groundwater ownership as an unconditional component of land ownership.”  The appeals court agreed in part with the landowners, stating that “[b]ecause Applicants have some ownership rights in the groundwater, they have a vested interest therein,” which is entitled to constitutional protection.

The Supreme Court of Texas’ decision in the case could have far-reaching ramifications, as could the passage of S.B. 332 or similar legislation.  The League will continue to monitor developments in the area and report as needed.

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