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The Texas Supreme Court has issued a somewhat confusing opinion holding that landowners own the groundwater beneath the surface of their land. In Edwards Aquifer Auth. v. Day, No. 08-0964 (Feb.24, 2012), the Texas Supreme Court held that a water regulation commission may have taken an owner’s groundwater rights without just compensation under the Penn Central test when it limited an owner’s groundwater rights to the amounts of water he had historically taken from the land. The court found a state law that defined the amount of groundwater one can withdraw based on historical uses to be a potential taking of property because it believed an owner should not lose the right to withdraw vested rights in groundwater just because the landowner had failed to exercise his right to withdraw it in the past. The court did not overturn the state’s free use or absolute ownership rule for groundwater that allows owners to withdraw water without liability to neighboring owners whose wells are dried up or whose water amounts are reduced. It did hold that the landowner “owns” the groundwater beneath the surface and that use of several factors, including but not limited to historical uses, might constitute a legitimate regulatory measure. The court remanded for a determination of whether the state statutes, as applied to this owner, constituted a taking of property under the multi-factor Penn Central test. The case leaves groundwater regulation in Texas in a state of great uncertainty since the allowable parameters of regulation of groundwater are now in doubt. The Court cautioned that it did not believe its ruling would be disruptive and the legislature remained empowered to enforce environmental laws regulating water withdrawal without violating the takings clause. At the same time, it suggested that environmental regulation of water might require compensation of owners whose rights to withdraw water are restricted.