Who owns the groundwater in Texas? Senate Bill 332, already passed by the Texas Senate and pending in the House, provides an answer.
SB 332 re-affirms and clarifies that the landowner has a vested ownership interest in the water below his land. For more than a century, Texas courts have recognized that ownership of the surface extends to what is in and below the land – including oil, gas, sand, gravel, stone, and groundwater – unless legally severed from the surface.
The question about groundwater ownership only arises now because of the rapid growth of regulation by local groundwater districts, new state law establishing long-term aquifer management, and a few influential voices claiming that landowners never owned groundwater under Texas law. Those who deny the landowner’s real private property right in groundwater might conclude otherwise after reading a century of Texas court decisions.
Since the 1904 case of Houston & Central Pacific Railway v. East, Texas courts have upheld the landowner’s vested right in the groundwater below the land. The Texas Supreme Court reasoned that groundwater “is a part of, and not different from the soil, and that groundwater is the same as the land and cannot be distinguished in law from the soil.”
Accordingly, landowners have assumed they owned the groundwater and have invested in reliance on this property right. Many cities, including San Antonio, Lubbock, Amarillo and El Paso, have spent millions to purchase groundwater rights from landowners for future water supply.
Like the land surface, vested groundwater rights are fully compatible with reasonable regulation. In 1917, the Conservation Amendment to the Texas Constitution established the authority to regulate groundwater. Now 98 local districts regulate groundwater under broad authority granted by the Legislature in Chapter 36 of the Texas Water Code.
A few districts, however, contend that the landowner’s interest in groundwater is not a protected property right under the Texas Constitution. Concerned about liability for a regulation that a court might find an unconstitutional “taking” of private property requiring financial compensation, these districts and some state officials have devised an odd legal theory. They say no one owns the groundwater. And that the landowner’s ownership is triggered only after “capturing” the groundwater.
Critics of SB 332 confuse the “rule of capture” with the landowner’s vested ownership right. The “rule of capture” does not confer a right but describes the method by which a landowner can exercise his ownership right. Limiting a landowner’s groundwater ownership to the “rule of capture” gives local districts unlimited authority, including complete denial of a landowner’s right to extract groundwater.
Clarifying the landowner’s groundwater rights would not, as critics claim, spawn a flood of “takings” litigation against local districts. Re-affirming a fundamental property right does not create a new cause of action to mount constitutional takings claims.
SB 332, indeed, underlines a local district’s broad authority to regulate groundwater. Even under the expansive regulatory authority given by the Texas legislature to the Edwards Aquifer Authority, only three takings claims have arisen over more than 10 years – and none of the landowners won!
In mounting a takings claim, the burden of proof is on – and the odds are against – the landowner. If the landowner loses, Texas law stipulates that the landowner must pay all legal costs, a gamble too risky for all but a few.
Clarification of the landowner’s vested property right may, indeed, reduce takings claims by providing regulators with a legal backstop to balance their authority with the landowner’s rights. And water marketing would be more difficult – not less – because a marketer would have to recognize the vested rights of all the landowners affected by withdrawals from the marketer’s wells.
Texas faces an historic choice. Texas can reaffirm the landowner’s vested ownership with confidence that secure private rights will maximize stewardship, conservation and efficient use of groundwater for all Texans. Or Texas can deny – or remain silent about – a right basic to land ownership for over a century in exchange for greater confidence in government control.
History has shown across the world, in this country and most graphically in Texas, that clear property rights offer the most effective path for achieving not only private goals but also the public good – an abundant and sustainable water supply.
Kathleen Hartnett White is Director of the Armstrong Center for Energy and Environment at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. She was commissioner and chairman of the Texas Commission on Environmental Quality from 2001 to 2007.