Underground aquifers are “watercourses” as defined by state law and as a result the Indiana Supreme Court says community officials have the ability to reasonably regulate how that water is taken out and used by other local governments.

The justices issued a decision Tuesday in Town of Avon v. West Central Conservancy District, Washington Township, et. al., No. 32S05-1104-PL-217, ruling on a water control case involving an aquifer located in Avon from which a township and conservancy district want to withdraw water.

Avon passed an ordinance in 2008 that exercised the town’s power to “establish, maintain, control, and regulate the taking of water, or causing or permitting water to escape, from a watercourse both inside and within 10 miles of the municipal limits.” The ordinance prohibited anyone from taking water for retail, wholesale or other mass distribution unless done by or on behalf of Avon. Within that definition of “watercourse,” the town included lakes, rivers, aquifers, groundwater and other water bodies above or below ground. Washington Township and the WCCD started exploring in 2005 the possibility of drilling wells into the underground water source known as the White Luck Creek Aquifer and then withdrawing and selling water to third parties. The two entities opposed Avon’s ordinance.

The township and conservancy district argued that Avon’s ordinance is invalid because it conflicts with state statutes that do not include aquifers in the definition of a “watercourse.” Both also contended that Indiana’s Home Rule Act and other state regulations pre-empt the town’s ordinance and that they have the common law right to withdraw the groundwater from the Avon aquifer.

Hendricks Superior Judge Mark Smith denied summary judgment for Avon and found in favor of Washington Township and WCCD, and last year the Indiana Court of Appeals affirmed that judgment. But the Supreme Court disagreed, reversing the trial court’s findings and holding that the Home Rule Act does permit Avon to regulate another political unit’s attempt to withdraw water from an aquifer that is a “watercourse.”

Chief Justice Randall T. Shepard authored the 15-page unanimous ruling, which looked at the critical question of whether an aquifer is a “watercourse.” Indiana Code 36-9-1-10 defines that term as including "lakes, rivers, streams, and any other body of water.”

Shepard wrote that the statutory phrase “any other body water” refers to anything that satisfies the common law definition of a watercourse – specifically a water body that has defined banks, bottom and channel. The court also looked at the fact-specific nature of the particular water source, such as its design, flow and history.

“While we stop short of declaring a bright-line rule that all aquifers are watercourses, we must reject the demand for a bright-line rule to the contrary,” Shepard wrote, saying that the White Lick Creek Aquifer is a watercourse under Indiana law.

Avon argued it has the authority to enact a generally applicable regulation about the aquifer and impose duties through that ordinance on other political subdivisions, and the justices agreed the state’s Home Rule Act doesn’t prevent that. Other state law, known as the Park Resources Statutes, seems to conflict but the justices read them together in order to harmonize the effects of both.

As a result, the township retains the power to sell, lease or enter into a royalty contract with respect to the aquifer as long as it has Avon’s approval, Shepard wrote. Avon has not yet established its permitting process so the court can’t determine whether any additional regulations are reasonable and logically consistent with the rest of the state statutes.

The court also found that state agencies and departments can engage in regional or statewide regulation of water bodies at the same time as local government units have authority over watercourses in their own jurisdictions.