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quantity of existing claims, and otherfactors.42In the case of nondesignated, non-tributary groundwater, Colorado limits annual pumping to no more than 1 % of water stored under the applicable area.43 The Colorado permit system, however, is very expensive to administer. Socio-Economic Impacts The major economic advantage of permits is to facilitate regulation and management of an aquifer. Whether or not the permit enhances the prospect of an economically efficient allocation of water depends upon the particular substantive rule of law that is incorporated into the permit. Consequently, one cannot determine the efficiency or equity impacts of this alternative other than to say most rules could be improved by a permit that clearly indicates the nature of the right possessed, whatever that right might be. It is difficult to say, however, whether the gains in certainty from the use of permits would result in economic benefits that exceed the administra- tive cost of the permit system. That particular cost-benefit relationship also might vary depend- ing on the substantive rule of law incorporated into the permit system. Physical-Hydrologic and Environmental Impacts The physical-hydrologic and environmental impacts of permit systems cannot be identified apart from the underlying system of property rights and regulations incorporated into a permit system. Permit systems do, however, offer a convenient management vehicle for minimizing the adverse impacts of groundwater use. Alternative #11: Quantify the amount of water hydrologically available beneath particular surface formations and give each landowner a vested right to with- draw a particular quantity of water based on the total number of acres of overlying land owned by the landowner. Description and Methods of Implementation Alternative #11 would fix each claimant's fair share of a common pool of groundwater. The effect of this rule would be to give overlying landowners some ownership of the water while it is still in place beneath the surface of their land. 3-14 Absent formal quantification of rights, state courts uniformly reject "ownership in place" theories as being inconsistent with the fugitive nature of groundwater. Consequently, all of the common law rules require capture of ground- water before significant property interests are created. Quantification of groundwater property rights requires the existence of sophisticated hydro- logic data concerning aquifer boundaries as well as the depth and structure of the aquifer at any particular point in space. Once an apportionment of waters is accomplished, however, landowners become secure in their right to withdraw and use groundwaters upto the maximum limit of their allocation. The state, of course, would not be required to make all water in storage available to overlying owners. It could protect all or a portion of the stock of groundwater found in the aquifer. In any event, an allocation of rights based on the physical characteristics of the underlying aquifer would serve to establish the relative proportion of the available supply that each overlying land- owner was entitled to claim as his own. Schemes that attempt to quantify groundwater rights based on the amount of overlying land may result in situations where the annual amount of water allocated to a particular user is less than the amount of water needed to make extraction economically feasible. Several potential solutions to the problem can be hypothesized, but most have serious limitations. Allowing such landowners to withdraw water only on alternate years is normally not feasible since a fixed in- vestment would be sitting idle a good portion of the time. Granting limited duration permits with a proscribed gap between permits is more feasible, but still suffers from the difficulty of accurately estimating the period of time necessary to fully recover an investment. Furthermore, such a rule might require abandon- ment of a productive asset that could continue to produce income at low cost even where the recovery period was sufficient to encourage the investment initially. Moreover, if no provision is made for the smaller landowner, such owners could be effectively deprived of their fair share of the aquifer yield. In some cases, no single landowner overlying a marginal aquifer may control enough land to make extraction econom- ically feasible. In such an event, the groundwater supply would be effectively wasted through non- use. Two potential solutions appear to have fewer limitations, however. On the one hand, quantified water rights could be made marketable and transferable. Competitive bidding would then determine who gets the water use and who would get alternative compensation in the form of rental