Law of the Land

Water Law

BY LORIE A. WOODWARD

This is the fourth installment in a six-part series on key laws that Texas landowners need to know. The series is prepared in partnership with Tiffany Dowell Lashmet, Associate Professor and Extension Specialist, Texas A&M AgriLife Extension, who authored Owning Your Piece of Texas: Key Laws Texas Landowners Need to Know. The handbook is available as a free, downloadable PDF file at (https:// agrilifecdn.tamu.edu/texasaglaw/ files/2019/05/Owning-Your-Piece-of-Texas. pdf). Hard copies may be purchased by contacting the author.

Mark Twain famously said, “Whiskey is for drinking, water is for fighting.” And, he made that statement long before Texas’ population boomed and its rainfall became seemingly more erratic.

“Water law is one of the most contentious and frequent legal issues Texas landowners face,” said Tiffany Dowell Lashmet, an attorney with expertise in agricultural law who serves as an Associate Professor and Extension Specialist for Texas A&M AgriLife Extension.

Because of the likelihood for conflict, Texas landowners need to understand the basics of water law and the rights and limitations related to use of water on their property.

“In Texas, water is divided into two broad categories, which are governed by two different legal schemes,” Lashmet said. “As a result, Texas water law is more complex than other states that follow a single legal approach for all waters.”

GROUNDWATER

Groundwater, defined in the Texas Water Code as “water percolating beneath the surface of the earth,” is generally property of the surface owner unless there is an agreement stating otherwise. Groundwater, like other estates, can be severed from the surface estate.

Landowners can convey the groundwater rights and retain the rest of the property. For instance, landowners can sell their groundwater rights to a company that is providing water to a city and still own the surface estate.

In the reverse, landowners can reserve the groundwater rights and sell the rest of the property. If property owners sell their land, but retain the groundwater rights, the buyer will own the surface estate, but not the groundwater. The sellers who reserved that right will own the groundwater.

“Any reservation of groundwater must be expressly stated in the sales contract and in the recorded documents to be effective,” Lashmet said.

If a seller has leased the groundwater rights for potential development that too should be noted in the sales contract and any documentation. Generally, the lease would transfer with the property. If, though, a buyer isn’t notified of the lease, the lease is not recorded, and it would not be obvious that a lease exists, it is questionable whether it could be enforced, Lashmet said.

When the groundwater estate has been severed, it, like oil and gas, is dominant to the surface estate. Unless stated otherwise in writing, this means that the groundwater estate owner can use as much of the surface estate as reasonably necessary to produce the groundwater estate.

For example, Brett owns the surface estate and Amy owns the groundwater estate. If Amy chooses to lease the groundwater rights to Company H2O, the company has the implied right to come on Brett’s land and use as much of the surface as necessary to build roads, pipelines and other infrastructure necessary to develop, produce and transfer the groundwater.

“In cases where the groundwater is separated from the surface estate, it is imperative to properly define the surface rights that provide access to that groundwater,” Lashmet said.

RULE OF CAPTURE AND GCDS

For more than 100 years, the Rule of Capture has governed Texas groundwater law. Under it, landowners have the right to pump water from beneath their property, even at the expense of their neighbor.

Under Rule of Capture there are a few common law limitations that apply statewide. These prohibitions include: maliciously taking groundwater for the sole purpose of injuring a neighbor; willfully or wantonly wasting groundwater; negligently drilling or pumping from a well in a manner that causes subsidence; pumping from a contaminated well; and trespassing to pump groundwater.

“Legal disputes involving the common law limitations are uncommon,” Lashmet said. “Conflicts arise in trying to balance everyone’s interests.”

As an example, Amy owns a ranch in the Hill Country, and neighbor Brett sells his ranch to Company H2O. The company builds a pipeline and begins selling the water to a nearby city. Amy’s well, which taps into the same aquifer, goes dry.

“If Company H2O is following the law, the court will not intervene on Amy’s behalf,” Lashmet said. “The Rule of Capture doesn’t provide any protection for neighboring landowners.”

Through the Texas Constitution, the authority to manage the state’s natural resources rests with the Texas Legislature. When it comes to groundwater, the Legislature determined that allowing local control through Groundwater Conservation Districts (GCD) is the “preferred method of groundwater management in Texas.”

GCDs manage the groundwater within their boundaries by developing plans and implementing rules relating to groundwater production. While not every county is covered by a GCD, there currently are 98 GCDs.

Each GCD has slightly different rules. Generally, though, the GCDs include a permitting process for wells, some form of reporting requirement and production rules such as well spacing, pump size limitations or production limits. In addition to the district rules, a state statute that applies across Texas exempts specific wells including those for domestic and agricultural use that meet certain limiting criteria and those used in oil and gas drilling or exploration from GCD permitting.

“As a first step, all Texas landowners should determine whether their property falls under the jurisdiction of a Groundwater Conservation District, and if so, familiarize themselves with its rules to ensure compliance when drilling a well or producing groundwater,” Lashmet said.

SURFACE WATER

Surface water is defined as “all water under ordinary flow, underflow, and tides of every flowing river, stream, lake, bay, arm of the Gulf of Mexico, and stormwater, floodwater or rainwater of every river, natural stream, canyon, ravine, depression and watershed in the state.”

A sub-category of surface water is diffused surface water, also known as a sheet flow or storm runoff of rain or snow.

“The distinction between surface water and diffused surface water is critical because the law regarding its use is opposite,” Lashmet said.

Surface water is owned and controlled by the state through the auspices of the Texas Commission on Environmental Quality (TCEQ), while diffused surface water is owned and controlled by the landowners for as long as it remains on their property. (Diffused surface water may be captured before it reaches a stateowned watercourse as long as the overflow does not cause damage to neighboring property owners.) The key difference between the two is the presence of a “defined watercourse.”

“A defined watercourse is obvious when we’re talking about the Red, Brazos or Colorado, but under the very liberal interpretation that has been used by the court, this likely also includes smaller creeks, streams, or even some gullies that can be considered a defined watercourse,” Lashmet said.

If the water exists within a defined watercourse and qualifies as surface water, landowners generally must get permission in the form of a permit from the TCEQ to use it. The permit designates a specific amount of water for a specific purpose.

Surface water use is governed by the legal doctrine of prior appropriation, which follows the principle: “first in time, first in right.”

“Essentially, prior appropriations means ‘first come, first served,’” Lashmet said.

TCEQ maintains a database of all water permits granted and their “priority date.” In times of shortage, senior water users— those with the oldest priority dates— receive all of the water they are entitled to before junior users receive any. Senior users, who are concerned that supplies may run out before they get their full share, may contact the TCEQ and request a priority call, which is an order issued to junior water users to stop diverting water.

There are four types of diversions exempt from the TCEQ permitting process. They include certain impoundments for domestic, livestock and wildlife management use as well as petroleum production using water from the Gulf of Mexico and reservoirs used as part of surface mining for coal.

These exemptions apply only to a nonnavigable stream. All navigable streams are subject to TCEQ permitting, regardless of the intended use.

“Two legal tests determine navigability,” Lashmet said. “To be deemed navigable, a watercourse must meet only one.”

First, a watercourse can be “navigable in fact” and used as a “highway for commerce.” Courts have stated that waterways capable of floating logs and travel by any boat are navigable in fact, despite “occasional difficulties in navigation.”

Second, a watercourse can be “navigable in law,” which means it maintains an average width of 30 feet from the gradient boundary line to gradient boundary line.

In addition to water usage, navigable waterways carry import for landowners. Generally, under Texas law, the streambed of a navigable stream is deemed owned by the state of Texas, and, as such, are open to the public.

“If a navigable stream flows across private property, people can travel down the state-owned streambed across the private land,” Lashmet said. “People may not cut across private property to access the stream and they may not get out of the streambed and come onto the private property, but they may use the streambed.”

Because the public can traverse the state-owned streambed, landowners are prohibited from building a fence across the stream or preventing travel down the streambed.

“Legal issues surrounding water and its laws aren’t going to go away anytime soon, so it’s in a landowner’s best interest to be informed and be aware,” Lashmet said.

DISCLAIMER

This column is for educational purposes only, does not create an attorney-client relationship, and is not a substitute for competent legal advice by an attorney licensed in Texas or any other state. The information provided is merely provided for informational purposes.