I. Introduction
Water in Texas is generally classified either as "surface water" or "groundwater." Surface water is owned by the State and held in trust for the benefit of all of the people of the State. It is frequently referred to as "state water." Groundwater is found percolating beneath the surface of the land and is privately owned. This article will focus on "surface water" and the general requirements for its use. 2
"Groundwater:" Based upon the theory of private ownership, Texas has developed minimal regulation regarding the use of groundwater. The regulatory focus on groundwater has largely been on water quality issues not production quantities.
In a growing number of areas of the State, groundwater districts do exercise some regulatory control over the production of groundwater. This regulation, however, does not necessarily limit the quantity of water that may be captured, but rather the requirement of permits for wells to produce an "inventory" of groundwater wells rather than a regulatory scheme for withdrawals. One exception has been in the regulation of pumping from the Edwards Aquifer in Central Texas. That effort has largely been driven by the threat of federal regulation of the Edwards Aquifer because of concerns over the welfare of several endangered species.
The primary statutory authority for the regulation of groundwater districts is found in Chapters 35 and 36 of the Texas Water Code. Groundwater districts can enact fairly extensive regulations that may impact a landowner's right to pump groundwater.3 Due to the private property right in groundwater, issues regarding "takings" associated such regulations have not been fully resolved.
B. "Surface Water:" "Surface" or "state water" is defined very broadly by statute to include "water of the ordinary flow, under flow and tides of every flowing river, natural stream, and lake, and of every bay or arm of the Gulf of Mexico, and the storm water, flood water, and rain water of every river, natural stream, canyon, ravine, depression and water shed in the state."4 There is very little water flowing across the surface of the State of Texas that is not presumed to be owned by the State. One exception is the "occasional water" generated by rainfall that flow across an individual's property. These flows can be captured and stored on the property without the necessity of obtaining a permit.
To use "state water" one must obtain a water right from the Texas Natural Resource Conservation Commission ("TNRCC").5 TNRCC is the State's "agent" for water rights matters, including the issuance and regulation of "Permits," "Certificates of Adjudication," or "Certified Filings" authorizing the use of the water. Certificates of Adjudication and Certified Filings are historic evidences of the right to appropriate State water.
Another historically recognized right to use state water is a "riparian right," which allows an owner of real property adjacent to waters of the State to "appropriate" or "use" a reasonable amount of water for domestic and livestock purposes. That right is a "correlative right," which means that the riparian landowner must allow sufficient water to flow past his property after his "use" to satisfy the rights of other riparians downstream both as to the quantity and quality of the water.
In Texas, a water right is treated as a property right. The water right holder, however, does not hold title to the corpus of the water, because "title" remains in the State. As against all other persons, the permit holder possesses a superior property right that can be bought and sold. Permits may be obtained in perpetuity, for a term (a set number of years) or as a "temporary permit." A permit obtained in perpetuity becomes a permanent property right until, or unless, it is sold or canceled for nonuse.6 Specifically, if a water right has not been put to beneficial use during a 10 year period it is subject to cancellation after publication of notice and a hearing.7
Term permits are issued in watersheds that are fully appropriated. Although they are "renewable," a term permit holder is not guaranteed renewal. Temporary permits can be issued for a quantity not to exceed 10 acre-feet per year for a period not to exceed three (3) years. Temporary permits are often used for construction projects.
An individual who wishes to obtain a water right may do so by purchase or lease, or by filing a permit application with TNRCC. Depending on the type of water right sought and the location of its source and use, conditions may be imposed on a water right that limit its use and affect its value. Permits may only be issued after a determination that the water will be used is a "beneficial purpose." By statute, 10 categories of "use" are specifically designated as "beneficial uses." These include domestic and municipal use, industrial use, irrigation use, mining, hydroelectric power generation, navigation, recreation, stock raising, public parks and game preserves. State water may also be used for any other "beneficial use."8
II. Water Rights Application Requirements:
A. General Requirements: Permit applications must be filed on a form developed by the TNRCC and must comply with the applicable rules and regulations.9 Certain types of permits have special requirements. For example, a permit for irrigation must contain a description of the land be irrigated and estimate the total acreage.10 A seasonal permit must identify the months or seasons when water will be used,11 and a temporary permit must state the period of use.12 A term permit must include an expiration date and acknowledge that there is no automatic right to renew the permit.13
Each Application must be accompanied by a map or plat, and a water conservation plan demonstrating "reasonable water conservation measures"14 to reduce the consumption, loss or waste of water, improve the efficiency of its use, or increase recycling and reuse of water so that a water supply is available for the future.15 TNRCC may only grant an application if water is available, and the proposed purpose is a beneficial use that will not impair existing water rights or be detrimental to the public welfare.16
TNRCC must also look at the effect of the permit on water quality within the State.17 For permits located within 200 river miles of the Gulf of Mexico, TNRCC must evaluate its impact on bays and estuaries,18 and for a permit to use more than 5,000 acre-feet TNRCC must assess its effect on fish and wildlife habitats.19 In-stream uses such as recreation are also considered. Environmental and recreational interests have used this issue to argue for the need to require the imposition of stream flow restrictions in permits to protect or maintain river flows at levels that will support recreational interests.
In 1997, the Legislature enacted Senate Bill 1, the "Omnibus Water Bill,"20 which added additional requirements in the permitting process. TNRCC is developing regulations for consideration of factors such as (i) the effect of a permit on any hydrological connection between surface water and groundwater, and (ii) absent a "waiver," whether the application addresses a "water supply need" consistent with both the State Water Plan and an approved regional water plan for the area where the permit is located.21 As of September 1, 2001, TNRCC will not issue a water right for "municipal use" without an approved regional water plan absent a "waiver."22
B. Interbasin Transfers: A major issue in future water rights permitting will involve proposals that would take water out of one river basin and move it to another river basin. Such proposals, known as interbasin transfers, are highly controversial because they usually involve the movement of water out of a "water rich" river basin into a drier basin. To insure that the transferred water is not lost to the originating river basin permanently without some compensation, the Legislature enacted a significant regulatory process in Senate Bill 1 that must be reviewed by TNRCC before granting a permit involving an interbasin transfer. A complete discussion of the process is beyond the scope of this article. In general, for permits for more than 3000 acre-feet of water the process requires the publication of notice in both affected river basins, multiple public hearings, and review by various local governmental entities including the County Judges and Commissioners' Courts of each County in the river basin losing the water.
Before granting an interbasin transfer permit, TNRCC must consider the availability of alternative supplies including the implementation of water conservation strategies in the receiving basin, and the water needs of and economic impact on the originating basin over the next 50 years.23 After consideration of all the statutorily prescribed factors, TNRCC may only grant an interbasin transfer permit to the extent that (i) the detriment to the basin of origin is less than the benefits to the receiving basin, (ii) the applicant has a drought contingency/water conservation plan developed and implemented,24 and (iii) the permit includes specific terms or period of use and with specific conditions under which the transfer of water may occur.25 Violation of the interbasin transfer statute is a misdemeanor. Punishment includes a fine of up to $1,000 a day or confinement in county jail for up to 6 months, and each day that water is illegally diverted is a separate offense.26 Finally, Senate Bill 1 mandates that any permit granted for an interbasin transfer is "junior" in priority to water rights in the originating basin.27
Practice Pointers
A. The Application Form: The "forms" needed to apply for a permit or an amendment are available from TNRCC. They are relatively simple to complete and in most cases the data requested, even for a new water right, is readily available to the applicant. It is what the application forms do not request, however, that can be most important. For example, "What" and "Who" are the potential sources of opposition to the application? Is water available in the "quantity" requested, and what will be the impact on the water "quantity" and "quality" available to existing downstream water rights and riverine ecosystems? What will be the impact on "instream uses," including "recreational interests," if the application is granted? Are there any "Threatened" or "Endangered" species that may be affected in the area of, or downstream from the applicant's proposed point of diversion of water?
The applicant needs to answer these and other questions for the TNRCC Staff during the processing of the application and, if necessary, during the "contested case" hearing if the application is protested. Many of the studies necessary to answer these questions are detailed and time consuming. There is usually little time to conduct thorough studies after an application is challenged. If done "hastily," these studies may be poorly conducted, thereby jeopardizing their credibility and that of the application. They will certainly be more expensive.
B. Pre-filing Meeting: Call the TNRCC Water Rights Permitting Section and set up an appointment for a "Pre-filing" meeting once your application is ready to file. Prior to the meeting send a "DRAFT" of your application to the TNRCC in anticipation of the meeting. At the meeting you will have an opportunity to discuss your application with Staff who will provide you with insights about potential problems, including any deficiencies in its content.
C. Filing the Application: After addressing issues raised by Staff in the "Pre-filing" meeting, file the original and at least two complete copies of the application. Be sure you get a "file marked" copy to retain in your records. Do not be surprised when you get the letter from TNRCC requesting additional information. It is part of the process, even when you have had one or more "pre-filing" meetings with Staff. Be sure to send your "Filing Fee" along with the application. The filing will cost a minimum of One Hundred Dollars ($100.00). Additional fees include: (i) Recording Fees, (ii) "Use" Fees; and (iii) Mailing Notice Fees. Depending upon the type of application filed and the size and purpose of the project associated with the water right sought, fees can run in excess of Fifty Thousand Dollars ($50,000.00).
Calculating the correct amount of the fees at the time the application is filed, however, is often difficult and it is not necessary as the additional fees can be paid later. In the transmittal letter accompanying the application, ask TNRCC to calculate and bill you for any additional fees. TNRCC will calculate the correct fees and send a letter requesting payment of the "mail notice" and "recording" fees and one-half (1/2) of the "Use Fee." The balance of any fees will be due and payable at the time the permit or amendment is issued.
D. TNRCC On-Line: TNRCC's Water Rights Permitting Staff is "On-Line." You can reach the Homepage at www.tnrcc.state.tx.us/water/quantity/wateruses/permits.html. From the Homepage you can access and download information and application forms.
V. Conclusion
As water becomes a more valued commodity in Texas, the demand for, and marketing of "water rights" will increase. A working knowledge of the water rights permitting process will prove to be an invaluable tool for legal practitioners.
EndNotes
1 Mr McCarthy is a Partner in the Austin Office
of the Firm of McGinnis, Lochridge & Kilgore L.L.P. Practicing primarily in water and water related matters, Mr. McCarthy has represented private, corporate and public entities in water rights applications and contested cases before TNRCC. He has also negotiated the sale and transfer of water rights and water supply contracts, and participated in the development and passage of water rights legislation and agency rules and regulations.
2 Publication constraints limit the scope of this article to a broad overview of the topic Persons interested in acquiring or amending a water right should consult with a qualified practitioner. This article does not address all of the issues related to the law of water rights permitting in Texas and is not intended to provide legal advice, and should not be relied upon to provide such advice.
3 Many groundwater districts are created by special legislative act Frequently, the district's enabling legislation will prescribe powers and duties tailored to the needs of the particular district beyond those created pursuant to Chapters 35 and 36 of the Water Code.
4 See Texas Water Code 11021.
5 See id 5.012-5.013.
6 See id 11.173.
7 See id 11.173-11.176; but see id. 15.704 (Exemption for water rights deposited in the "Water Bank").
8 See id 11.023.
9 See id Ch. 11; 30 TAC Chs. 281, 288, 295, 297.
10 See id 11.124(b).
11 See id 11.124(c); 11.137.
12 See id 11.124(d); 11.138.
13 See id 11.124.
14 See id 11.1271.
15 See id 11.002(8)(B); 11.1271.
16 See id 11.134.
17 See id 11.150; 11.1501.
18 See id 11.147; see also id. 11.1491.
19 See id 11152. See id 11.152.
20 See Act of June 1, 1997, 75th Leg, R.S., ch.1010, 1997 Tex. Gen. Laws 3610 (Senate Bill 1); see generally Brown, Senate Bill 1: We've Never Changed Texas Water Law This Way Before, 28 St. B. Tex. Envtl. L.J. 152 (1998).
21 See Texas Water Code 11134(b)(3)(D)-(E).
22 See id 11.134(c); 16.053(i).
23 See id 11.085(k).
24 See id 11.085(l).
25 See id 11.085(m) (n).
26 See id 11.085(q).
27 See id 11.085(s) (t).