For groundwater allocation, Texas employs the Rule of Capture, a common-law rule (judge-made, not legislated). The Rule of Capture provides that the landowners may 'take all the water they can capture under their land and do with it what they please, and they will not be liable to neighboring landowners even if in so doing they deprive their neighbors of the water's use' (Potter, 2004, p. 1). Indeed, Texas landowners own the underlying groundwater (Texas Water Code, 2005, §36-002). Texas is the only western state that follows the Rule of Capture (Potter, 2004, p. 1).

The Texas Supreme Court adopted the Rule of Capture in a 1904 case (Houston and Texas Central Railroad Company v. East, 1904), choosing to apply that rule instead of the Reasonable Use Doctrine, and in doing so cited two public policy considerations - the unknown and uncertain character of groundwater, and the fact that choosing another doctrine would generally interfere with agriculture, industry and hence the development of the state. Thus, the Texas Rule of Capture exists as a common-law rule, and court decisions have modified the Rule of Capture to prevent '(1) willful waste, (2) malicious harm to a neighbor, and (3) subsidence' (Potter, 2004, p. 9). In 1917, Texas amended its constitution to add the following Conservation Amendment:

The conservation and development of all of the natural resources of this state . . . including . . . the conservation and development of its . . . water . . . and the preservation and conservation of all such natural resources . . . are each and all declared public rights and duties; and the Legislature shall pass any such laws as may be appropriate thereto.

By way of this constitutional section, the legislature has the power and duty to change the Rule of Capture if necessary.

The legislature has provided for the creation of groundwater conservation districts (GCDs) to conserve, preserve and protect groundwater (Texas Water Code, 2005, §36-011)8; 87 GCDs have been confirmed or are pending in the state, and 11 GCDs overlie portions of the Ogallala aquifer within the High Plains aquifer system. The GCD legislation, however, expressly recognizes that landowners own the groundwater (Texas Water Code, 2005, §36-002). GCDs are required to adopt management plans to address goals9 and regulate well drilling (Texas Water Code, 2005, §36-113), and are also empowered to enact and enforce rules that regulate well spacing, limit groundwater production and conserve groundwater.

Texas classifies its waters as surface water, diffused surface water and groundwater (Waters and Water Rights, 1991 and 2004 Cumulative Supplement, v. 6, p. 774). Statutes do not expressly cover the interrelationship of surface and groundwaters or provide for the conjunctive use between the two classes. Texas court decisions seem to maintain these two as distinct and separate classes by creating a presumption that groundwater pumped near streams causing an effect on the streams is nonetheless deemed groundwater and thus governed by the Rule of Capture (Waters and Water Rights, 1991 and 2004 Cumulative Supplement, v. 6, p. 774).

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