Indiana Municipal Law Cities Permitted to Require Permits for Removal of Water Beneath Property Owner’s Land By: Jeremy L. Fetty

The Indiana Supreme Court recently handed down a decision regarding an ordinance requiring property owners to obtain city issued permits prior to the removal and sale of underground water from aquifers (an underground bed or layer of permeable rock, sediment, or soil that yields water) by third-parties. In Town of Avon, both Washington Township (Township) and the West Central Conservancy District (WCCD) owned real property within the Town of Avon (Avon). Town of Avon v. W. Cent. Conservancy Dist., 957 N.E.2d 598, 601 (Ind. 2011). Both properties overlay an underground water supply, White Lick Creek Aquifer (Aquifer), to which Township and WCCD began investigating the possibility of withdrawal and sale of the water to third parties. While Township and WCCD were contemplating the withdrawal, Avon passed an Ordinance which prohibited the taking of water from a watercourse for retail, wholesale, or other mass distribution unless done by or on behalf of Avon. As a result, the Ordinance required Township and WCCD to obtain permits prior to water withdrawal.

In determining that it was within Avon’s authority to require permits prior to water removal, the court held that the phrase “any other body of water” defining watercourse in Indiana’s Transportation and Public Works statute, Ind. Code § 36-9-1-10, satisfied the common-law definition of watercourse. Based on this definition, the court held that the Aquifer was a watercourse, as the aquifer had definable boundaries and depth and was a regular and dependable source of water containing flowing water ordinarily and permanently for substantial periods throughout the year. While not all aquifers will be deemed watercourses, given the Aquifer’s qualities, the Aquifer was considered a watercourse. In answering Township and WCCD assertions that the Ordinance violated the Home Rule Act (Act), the court further held that the Act permitted a town to regulate withdrawal of water by a township or conservancy, as the Act granted the town authority to conduct its affairs, even if such conduct was not expressly granted by statute. Stating that the Act was not a grant of unlimited authority to local governments, the court found that requiring the permit in question was within the town’s authority. Finally, the court held that the Ordinance was not preempted by the Indiana Department of Natural Resources (DNR), as nothing in the DNR statutes indicated that the DNR has exclusive jurisdiction over the withdrawal of groundwater or that such an authority has been expressly granted to the DNR.

Therefore, towns may be permitted to regulate the withdrawal of water beneath real property owned by a township or conservancy, so long as the aquifer or water source is defined as a watercourse.

Jeremy Fetty is a partner in the law firm of Parr Richey Obremskey Frandsen & Patterson with offices in Lebanon and Indianapolis. He often advises businesses and utilities (for profit, non-profit and cooperative) on organizational, human resources, and transactional matters and drafts and reviews commercial contracts.

The statements contained herein are matters of opinion and general information only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have any questions regarding this article, please contact an attorney.