The Texas Supreme Court (“TXSC”) recently confirmed what many already know: the Texas Commission on Environmental Quality (“TCEQ”) has only administrative authority related to water rights in Texas. This means that water rights ownership disputes must utilize Texas courts to adjudicate water rights ownership.

In 2014, the Papes purchased a tract of land containing 1,086 acres that included State of Texas Certificates of Adjudication (“COA”) issued as part of a 1986 judgment brought under the Texas Water Rights Adjudication Act. The COAs were later amended to include the authorized use of water for irrigating 250 acres that were subsequently purchased by DRR. In 2015, the Papes attempted to record their purchase of the water rights with TCEQ, who notified other interested landowners that they might own an interest in those rights. One of those interested landowners, DRR, then field a change of ownership form with TCEQ. TCEQ then determined that DRR owned a portion of the water rights and amended its records to reflect DRR’s ownership. The effect of TCEQ’s determination was that the land Pape was authorized to irrigate was reduced from 1,086 to 821 acres. The Papes filed an unsuccessful motion to overturn TCEQ’s determination and later filed suit against DRR seeking a declaration that it was the sole owner of the water rights appurtenant to the 1,086 acre tract.

Background

On May 20, 2022, the TXSC rendered its decision in Pape Partners, Ltd. v. DRR Family Properties, which resolves that in Texas, it is the courts and not TCEQ that determine ownership of water rights. The TXSC decision overruled the Waco Court of Appeals, which held that TCEQ has exclusive jurisdiction to determine water rights because “the regulatory scheme behind surface water permits is pervasive and indicative of the unless the Texas Legislature’s (“Legislature”) intent that jurisdiction over the adjudication of surface water permits is ceded to the TCEQ.”[1] However, the TXSC disagreed, holding that the “power to determine controverted rights to property” has been “vested in the judicial branch.”[2]

TCEQ’s own view of its authority over water rights is that it is ministerial in nature, i.e. a “record-keeping function” that is consistent with the TXSC’s decision.[3] While the agency will review the deeds furnished to it as part of water rights transfers, there is no right to a contested case hearing (which TCEQ does perform for other issues) for change of ownership requests relating to water rights. Section 11.021 gives the TCEQ the right to cancel water rights, which clearly falls within the purview of affecting title to water, but the TXSC nevertheless held that the Section 5.013(a)(1) references Chapter 11 of the Water Rights Adjudication Act and that “[n]othing in that Act gives TCEQ authority to decide conflicting claims to water rights acquired with the title to the land.”[4]

Water law is a unique, challenging, and esoteric field of law. Unless the Legislature amends TCEQ’s enabling language to provide it greater authority to determine water rights, individuals seeking to dispute how water rights are owned will now only be able to pursue relief in Texas Courts. Some argue that the legislature should consider amending TCEQ’s enabling language to vest the agency with greater authority, similar to states like New Mexico and Colorado which have State Engineers who assist in resolving disputes related to water rights, in order to avoid the sometimes significant expenditure of legal fees by those seeking relief on water rights disputes.

The TXSC suggested this is an option by indicating that the Legislature could vest TCEQ with greater authority, citing to the TX Constitution and noting that “Section 59, empowers the Legislature to delegate the resolution of property disputes to TCEQ.”[5] However, for the foreseeable future, courts in Texas will be tasked with determining water rights disputes.

Written with the assistance of Amrine Sultana, a summer associate in the Husch Blackwell LLP Austin, Texas office.

[1] Tex. Const. art. XVI, § 59; Pape Partners, Ltd. v. DRR Fam. Properties LP, 623 S.W.3d 440 (Tex. App. 2020), reh’g denied (Dec. 4, 2020), review granted (Jan. 28, 2022), rev’d, No. 21-0049, 2022 WL 1592723 (Tex. May 20, 2022).

[2] Pape Partners, Ltd. v. DRR Fam. Properties LP, No. 21-0049, 2022 WL 1592723 (Tex. May 20, 2022); Barshop v. Medina Cnty. Underground Water Conservation Dist., 925 S.W.2d 618 (Tex. 1996).

[3] Pape Partners, Ltd., Glenn R. Pape, and Kenneth W. Pape, Petitioners, v. DRR Family Properties, LP and Louise W. Champagne, Respondents., 2021 WL 3916861.

[4] Pape Partners, Ltd, No. 21-0049, 2022 WL 1592723 at 6; Tex. Water Code Ann. § 11.021 (West).

[5] Pape Partners, Ltd. v. DRR Fam. Properties LP, 623 S.W.3d at 441-442.

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