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tions, the court held that the Braggs had a reasonable investment-backed expectation that they

would be able to use groundwater from the Edwards Aquifer to maintain a commercial pecan or-

chard on the Home Orchard property because: “Mr. Bragg had an extensive understanding of pecan

crops, no permit was required when they drilled their well, they correctly understood that they owned

the water under the land, and no regulatory entity existed that governed the use of their water.”

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The court also concluded that the Braggs had a reasonable expectation that they would be able to

use groundwater from the Edwards Aquifer to maintain a commercial pecan orchard on the D’Hanis

Orchard property, even though the well was not drilled until 1995, because: “When they purchased

the orchard in 1983, they intended to drill a well because they knew the available drip well was inad-

equate for maturing trees, but for financial reasons could not do so until 1995. Although the Act had

been enacted prior to the completion of the well, the property itself was purchased as an existing

pecan orchard almost ten years before the enactment date. And, of relevance to the Braggs’ expec-

tations, although they were aware of the Act before drilling the well, the Act was not implemented

until 1996.”

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As to the third

Penn Central

factor, the nature of the regulation, the court concluded that this

factor weighed heavily against a finding of compensable taking given the important purposes of the

Act – “to protect terrestrial and aquatic life, domestic and municipal water supplies, the operation

of existing industries, and the economic development of the state.”

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The court then held, without further discussion, that “the record supports the conclusion that the

permitting system imposed under the Act resulted in a regulatory taking of both the Home Place

Orchard and the D’Hanis Orchard.” Although the court noted the Authority’s argument that the Act

actually improved the value of the Bragg’s property by regulating other users’ pumping, thereby

protecting them from the law of the biggest pump, and by creating a piece of property, a permit, that

could be leased or sold, it concluded that it “misconstrues the nature of the takings claims asserted

here and the analysis of whether a taking has occurred.”

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Compensation

.

The court determined that the property time for valuation of the property was

when the taking occurred, which was when the Act was applied to the Home Place Orchard in 2005

and to the D’Hanis Orchard in 2004.