Water policy in Texas is based on a complicated system of private property rights

If you live in Texas now or are looking to buy rural property there in the future, you may need to know about how water rights work in Texas.

In this state, the rules governing water rights depend on whether the water is defined as groundwater or surface water.

But don’t worry, it’s not as confusing as it sounds.

This blog will dive into water ownership in Texas, and the top things you must know before you become a landowner.

1. Why are water rights in Texas different?

Water rights differ in Texas because of how groundwater and surface water are owned.

In Texas, groundwater belongs to the landowner.

Thus, the right to them is governed by the “Rule of Capture.”

On the other hand, the surface water is owned by the State.

This means that land ownership is irrelevant in determining what right a person has to use surface water.

The doctrine that governs the surface rights is “first in time, first in right,” which means that the State (who holds the oldest rights) takes priority over any newer landowner.

In the following sections, we’ll discuss each type of water right in-depth.

 2. What are surface water rights in Texas?

Surface water is defined as “water under ordinary flow, underflow, and tides of every flowing river, natural stream, lake, bay, arm of the Gulf of Mexico, and stormwater, floodwater, or rainwater of every river, natural stream, canyon, ravine, depression, and watershed in the state.”

This definition is straight from Texas Water Code Section 11.021.

In Texas, surface water is owned by the state and is held by the state in trust for the public.

There are only a handful of exceptions.

In some cases, a person may file a permit and obtain a “water right” from the Texas Commission on Environmental Quality.

This water right does not grant the holder ownership, but rather allows a non-possessory right of use.

Ownership always remains with the State of Texas.

In short, Texas surface water is governed by the doctrine of prior appropriation.

It is followed by most western states, and it is defined as “first in time, first in right.”

The first person to receive a permit to put water to beneficial use has the “senior water right,” which remains superior to all junior water rights holders from that point forward.

So, what does “first in time, first in right” actually mean?

You can think of it like the modern saying “first come, first serve.”

Even in a water shortage, the senior water rights holder would be entitled to all the water they are entitled to before anyone else (a junior user) could receive what they need.

However, in Texas, the senior water rights holder is and always will be the State of Texas.

There is one subcategory of surface water that is treated differently under Texas law: diffused water.

This type of water is water on the surface that has not yet entered the “watercourse.”

You can think of diffused water as water flowing over the ground from falling rain or melting snow.

Once diffused water reaches a watercourse, it becomes state-owned surface water.

This blog will focus primarily on surface water and groundwater (not diffused water).

3. Can individual users never gain rights to surface water?

As we mentioned above, just because the State of Texas holds rights to surface water does not mean that individuals cannot gain a permit.

Surface water can be appropriated by an individual for the following uses:

The preferences for permits shall be given to each of these uses in the order listed.

You can see Texas Water Code Sections 11.023 and 11.024 for more information.

4. What is the permitting process for surface water rights?

If you’re looking to apply for a permit to appropriate surface water rights, then you should file with the Texas Commission on Environmental Quality (TCEQ).

The TCEQ will review the application for administrative completeness and complete a technical evaluation.

Following this, a notice will be given to the public via the local newspaper and written notice to water right holders in the same supply/river basin.

Then, a 30-day protest period begins.

If any person files a protest within these 30 days, an administrative hearing is held before an Administrative Law Judge from the State Office of Administrative Hearings.

The judge will hear all the evidence and make a recommendation to the TCEQ to determine whether the permit should be granted.

If a protest is not filed, then the TCEQ will determine whether the permit should be granted.

If the permit is denied, then the applicant may appeal the decision to the court system. 

5. Under what conditions will the TCEQ grant a surface water permit?

A permit to appropriate surface water will only be granted if the TCEQ finds the following six conditions.

If a permit is granted, then there may also be specific parameters that must be followed by the water right holder in using the surface water.

These parameters and limitations may include…

For more information, see Texas Water Code Section 11.134.

6. What are the different types of permits available for surface water?

There are various types of permits that the State of Texas may offer.

Depending on which you apply for or are granted, each may impose its own temporal limitation.

Here are the different types:

7. Can you transfer a surface water permit?

A surface water right (via permit) is recognized as a property right in Texas.

The permit holder does not have a title to the water, but he/she does have an interest in the right to use the water.

As such, the water right may be sold, leased, or transferred to another person.

This can occur automatically with a land transfer or separately from the land.

If a water right is sold, the deed should record it as with any other property deed.

With that said, the TCEQ does impose certain limits on the transfer of water rights.

If the sale does not involve a change in the purpose of use, amount of use, or place of use, then the party needs only file a simple notice of change of ownership with the TCEQ.

However, these types of transfers are unlikely, and if your transfer includes any of the changes listed above, then a permit amendment is required and should be approved by the TCEQ.

 8. What are groundwater rights in Texas?

Groundwater is water found below the Earth’s surface in the crevices of soil and rocks.

The Texas groundwater law is a judge-made law derived from the English common law rule of “absolute ownership.”

Under this law, groundwater belongs to the owners of the land above it.

As such, it may be used and sold as private property.

What’s interesting about Texas’s groundwater rule is that landowners have a right to pump all the water they can from beneath their land.

This so-called “law of the biggest pump” can have disastrous effects on the wells of adjacent owners, but the presumption is that all sources of groundwater are percolating waters from the land above (rather than subterranean rivers).

Until the source of the water beneath land is shown to be a subterranean river — and thus your neighbors could stake a claim as well — landowners are presumed to own underground water conclusively.

9. Are there any exceptions to the absolute owner rule?

The absolute ownership rule can sound pretty extreme.

However, here are five situations in which a Texas landowner can take legal action for interference with their groundwater rights.

In addition, the state legislature created a number of Groundwater Conservation Districts to regulate the drilling and pumping of groundwater.

These districts develop water management plans that are approved by the Texas Water Development Board as a way to prevent waste and encourage water conservation.

The Groundwater Conservation Districts grant well permits to those who have an interest in the groundwater (i.e. the owner of the land above the groundwater) based on the Texas Water Development Board’s determination of how much groundwater is available.

10. How have Texas’s water rights evolved?

Texas has a complicated water rights system because it combines Spanish elements with traditional English common law.

While scientists regard all water as part of the endless hydrologic cycle, Texas’s courts decided to divide water into unrelated legal classes with different rules based on the unique context of the state.

Originally, surface water law in Texas was based on the common law concept of riparian rights.

This system was developed in the context of rainy England and eventually became problematic in the arid regions of Texas, resulting in the overuse of natural springs.

Thus, Texas moved to its current system of prior appropriation for surface rights as a way to help conserve water.

11. Is Texas the only state with this type of water rights?

No, Texas is one of several dual-doctrine states that recognize both riparian and prior appropriation doctrines.

This doctrine accords water rights to those who own riparian land.

As we mentioned above, it was the original doctrine that cover surface water rights in the state and was introduced to Texas over 200 years ago when the Spanish settled in San Antonio.

It is based on English common law.

It uses court-developed rules to decide cases that involve water use conflicts.

The basic concept is that private water rights are tied to ownership of land bordering a natural river or stream.

Thus, it draws the conclusion that water rights are controlled by land ownership.

Riparian owners retain the right to use water as long as they own the land adjacent to the water.

As applied in western states, prior appropriation is not related to land ownership.

Instead, water rights are acquired by compliance with statutory requirements.

In 1967, The Texas Legislature merged the riparian system with the prior appropriation system.

They did this using the Water Rights Adjudication Act, which stated that any person claiming a riparian water right must file a claim for the right with the Texas Water Commission.

Then, Texas consolidated the allocation of surface water into a unified water permit system with the passage of the 1967 act.

Anyone who wished to use surface water (not including drainage water) must receive permission from the state in the form of a “water right.”

Today, the TCEQ is responsible for awarding permits for these water rights.

12. What are the forms of water transfer?

Here are the different types of water transfer:

This may be conducted between a willing seller and a willing buyer by arranging a contract for sale. 

The vast majority of water in Texas is sold by wholesale contract.

These sales are made separately from the transfer of any interest in the water right itself.

Often, such purchases occur when a group or entity develops a water supply, such as a reservoir or well field, and then leases the water, but not the underlying water right.

This is a transaction in which a willing lessor and a willing lessee agree to a short or long-term transfer of a surface water right for financial or other considerations.

This describes a man-made conveyance scheme that moves water from one river basin to another basin where water is less available or could be better utilized for human development. 

This option is used by municipalities to secure reliable sources of additional water to augment their existing supplies during times of drought.

In various parts of the state, water conservation districts and strategies may have been implemented and now that water may want to be used.

This kind of conveyance is often used by municipalities or industries when they finance improvements to irrigation systems.

In exchange for financing, the company or municipality will transfer the right to some of the water that is conserved by the new system

Rights to groundwater may be severed from the land and made available for sale in the state of Texas.

It is also possible to purchase a lease for the right to withdraw groundwater. 

13. What are some important sale and purchase considerations?

There are certain complications that come with buying and selling surface water rights.

Before you decide whether it’s the right decision for you, you should keep the following core sale and purchase conditions in mind:

Ownership is the most important question when buying or selling a water right.

Will you have a clear title to this right?

The 1967 Water Rights Adjudication Act defines all non-domestic and livestock water rights by a piece of paper — either a permit or a certificate of adjudication.

However, determining whether a seller owns a certificate or permit authorizing irrigation is somewhat different than determining whether they own a certificate or permit authorizing a use other than irrigation.

For irrigation rights, the TCEQ maintains a separate file on every certificate or permit that has been issued.

These files contain information regarding the history of the certificate or permit from the time it was issued (including whether it has been amended).

Certificates of adjudication and permits that authorize irrigation describe the particular land that can be irrigated.

Before purchasing a property, it is important that you do research.

Irrigation water rights are attached to the land, and they pass with the land in sale unless expressly reserved.

To be sure that the seller still owns all of the irrigation water rights, conduct a thorough title search.

You can conduct this search yourself in the country deeds record or engage a title company to search on your behalf.

Most surface water rights sold in the Texas water market today are irrigation rights.

Still, there are some water rights with purposes other than irrigation that are also being sold.

Because these water rights are not attached to the land (unlike irrigation water rights), it can be easier to determine if the seller has the title and the TCEQ records may be more accurate.

The certificate of adjudication or permit should indicate:

1. The number of acre-feet authorized to be diverted
2. The purpose of the water use
3. The diversion point
4. The diverse rate
5. A description of the land to be irrigated, in the case of an irrigation permit not held by a supplier
6. The priority date
7. The amount, purpose, place of use, and diversion
8. Special conditions/limitations
9. Priority date

Every conveyance of a surface water right should be by an instrument that will be recorded in the county records.

TCEQ should also be informed of the transfer of ownership.

You can do this with a simple change-of-ownership form that must be completed and submitted along with a specified fee.

These negotiations may include due diligence, warranty, date-of-closure, and other considerations.

Consider using a legal professional if you require assistance.

Final thoughts

The water rights and laws in Texas are complex.

If you’re looking to purchase land in the state, you’ll want to understand what your rights are, especially as the population of Texas grows and the demands on the state’s limited water supplies increase.

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Disclaimer: we are not lawyers, accountants or financial advisors and the information in this article is for informational purposes only. This article is based on our own research and experience and we do our best to keep it accurate and up-to-date, but it may contain errors. Please be sure to consult a legal or financial professional before making any investment decisions.

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