The establishment of underground water conservation districts was authorized by the Fifty-First Texas Legislature in 1949. At that time the board of water engineers was responsible for designating the districts to correspond with the boundaries of underground reservoirs. The districts could be established through special legislation or a signed petition from landholders. In 1985 an amendment also allowed the Texas Water Commission and Texas Water Development Board to recommend the formation of a district, however, agency recommendations were also subject to approval by residents of a potential district in an election. Residents could veto a designation, though they risked the withholding of state funds. A district is headed by a board of five directors elected by district voters. The directors can employ an engineer to survey underground reservoirs. Underground water conservation district boundaries must be in accordance with the boundaries of an underground reservoir or districts can constitute a subdivision of a reasonably definable section of the reservoir. Underground water conservation districts are authorized to regulate the use of groundwater and can implement rules providing for the conservation, protection, and control of those resources. It can develop conservation plans and conduct research projects. The district may acquire land to build dams and may call for the installation of pumps for the recharge of an underground reservoir. It also determines and approves permits for large-volume water consumers. In a district most new wells must be cataloged, and drillers logs can be required. In 1990 over half of the water used in the state was groundwater, of which 71 percent was for agricultural use and 21 percent for municipal needs. Water users relied heavily on the state's seven major and sixteen minor aquifers. Districts have substantial limitations and often come in direct conflict with the traditional view of groundwater as private property and its use as a landowner's right. The use of the districts has also been undermined through the practice of establishing dormant districts-ones where no ad valorem taxes are levied-essentially an entity in name only.
In 1992 thirty-four underground water conservation districts were registered with the Texas Water Commission. The High Plains Underground Water Conservation District and North Plains Groundwater Conservation District No. 2 have successfully implemented conservation and educational programs to equalize use of the Ogallala Aquifer. The Edwards Underground Water District, however, has been caught up in a battle of municipal and agricultural interests against conservation of the Edwards Aquifer. Another form of groundwater district is a subsidence district, organized in order to regulate groundwater use to prevent or end subsidence. Into the 1970s the Houston area water table had lowered as much as nine feet, and in 1975 the Texas legislature established the Harris-Galveston Coastal Subsidence District. The district requires far more regulation than underground water conservation districts through issuing well permits and regulating operators. Water amounts are restricted, and pumping fees are levied. The program has successfully reduced subsidence in the Houston area, but many of its effects like increased flooding are irreversible.