Water Policy in Texas: Implications for Landowners and Easement Holders

Stacey A. SteinbachTexas Alliance of Groundwater Districts

Texas Land Conservation ConferenceFebruary 27, 2014

GCD Snapshot

Groundwater Ownership

Emerging Issues

Starting Point: Rule of Capture• Adopted as Texas law in 1904 East decision

• Landowners have right to capture an unlimited amount of groundwater beneath their property

• Called “law of non-liability” and “law of the biggest pump”

• Provides little certainty and no protection

Insert the GCD

Conservation, preservation, protection, recharging and prevention of waste of

groundwater and control of subsidence

Highest practicable level of groundwater

production

Source: John Dupnik, BSEACD

History of GCDs

How GCDs Manage Groundwater• Contribute to scientific understanding of aquifers

• Educate and inform the community

• Regulate drilling of wells and production of groundwater

• Participate in joint and regional planning

Joint Planning• DFC = what aquifer will look like in future

• GCDs consider 9 factors (including private property interests), implement balancing test

• GCDs must manage total groundwater production on long-term basis to achieve DFC

• Reviewed every 5 years; public participation

GCD Snapshot

Groundwater Ownership

Emerging Issues

Important Cases• Houston & Tex. Cent. R.R. Co. v. East

• Pecos County WCID No. 1 v. Williams (Comanche Springs)

• Friendswood Development Co. v. Smith-Southwest Industries

• City of Corpus Christi v. City of Pleasanton

• Sipriano v. Great Spring Waters of America, Inc. (Ozarka)

• Barshop v. Medina County UWCD

• City of Del Rio v. the Hamilton Trust

Senate Bill 332 (2011)• Landowners own groundwater below the surface as

real property

• Landowner entitled to drill for and produce groundwater, but not a specific amount

• GCDs may limit or prohibit drilling based on spacing or tract size and regulate production

EAA v. Day (2012)• Well used for farming/recreational use during historic period;

flowed under artesian pressure to tank

• EAA issued permit for 14af rather than 700af

• Issues:

– Did the EAA err in reducing permit?

– Can regulation of groundwater = a taking?

– Did the EAA’s action constitute a taking?

EAA v. Day (2012)• Well used for farming/recreational use during historic period;

flowed under artesian pressure to tank

• EAA issued permit for 14af rather than 700af

• Issues:

– Did the EAA err in reducing permit?

– Can regulation of groundwater = a taking?

– Did the EAA’s action constitute a taking?

No

Yes

???

EAA v. Day (2012)• Rule of capture/ownership in place NOT mutually exclusive

• Property interest in groundwater subject only to rule of capture and GCD regulations

• Penn Central analysis: economic impacts, investment-backed expectations, and nature of the regulation

• EAA acted in accordance with EAA Act; did NOT say whether taking occurred (now settled)

EAA v. Bragg (2013)• Two pecan orchards, only one with historic use

• EAA’s issued one reduced permit and denied other

• Court of Appeals found EAA’s actions to be proper but applied Penn Central and found taking

• Compensation based on value of property immediately before and after decision

What We Know• Land ownership includes a constitutionally-protected interest in

groundwater in place that cannot be taken for public use without adequate compensation

• That interest does not preclude regulation by a GCD in accordance with Chapter 36 of the Water Code

• Some limitation of groundwater production does not constitute a compensable taking

What We Don’t Know• How much regulation is too much?

• Is there a distinction between EAA and Chapter 36 GCDs when it comes to a takings claim?

• How will different “uses” be affected?

• Will there be unintended consequences?

• How are damages are calculated? (but see Bragg)

Private Property Considerations• Penn Central and historic use

• Where does the legacy landowner fit in?

• Surface water / groundwater transfers

• How can/do conservation easements affect groundwater?

• Aquifer Storage and Recovery

GCD Snapshot

Groundwater Ownership

Emerging Issues

Coming Soon – 84th Legislature• Brackish groundwater• Oil and Gas Exemption• Long-term permitting• Aquifer Storage and Recovery• Well drilling and enforcement• New GCDs

Questions?Stacey A. Steinbach

stacey@texasgroundwater.org

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