OPINION
We withdraw our opinion and judgment issued on August 29, 2003, and substitute this one in its place, and the Court overrules the motion for rehearing en banc.
Appellee Texas Commission on Environmental Quality 1 (“the Commission”) ac *266 cepted an administrative law judge’s (ALJ) proposal to grant appellant City of San Marcos (“the City”) a permit to convey discharged wastewater effluent in the San Marcos River and to divert water from the river at a point approximately three miles downstream from the discharge point. The Commission imposed certain limiting conditions on the permit in a final order. Appellants San Marcos River Foundation and Dr. Jack Fairchild (collectively “the Foundation”) sought judicial review of the Commission’s final order, as well as an interim order, in the district court. See Tex. Gov’t Code Ann. § 2001.171 (West 2000); Tex. Water Code Ann. § 5.351 (West 2000). The City sought judicial review of the final order’s imposition of limiting conditions on the permit. The district court affirmed the Commission’s orders in all respects. On appeal, the Foundation argues that the district court erred because no legal authority permits the City to divert state water without an approved appropriative right; in the alternative, the Foundation argues that the Edwards Aquifer Authority Act nullifies the Commission’s authority to grant the permit in the first place. 2 The City asserts various issues challenging the special conditions imposed on the permit. Because we conclude that there is no common-law right by which the City can retain ownership over its wastewater effluent after discharging it into a state watercourse, we will reverse and render judgment for the Foundation.
FACTUAL AND PROCEDURAL BACKGROUND
The City obtains its municipal water supply from wells drilled into a groundwater formation known as the Edwards Aquifer. In 1995, the City submitted to the Commission an application for a permit to use the bed and banks of the San Marcos River to convey treated sewage effluent, created by the City’s municipal use of groundwater from the Edwards Aquifer, from the discharge point at the City’s wastewater treatment plant to a downstream diversion point. The City sought to divert an amount of water slightly less than the volume of sewage effluent it had discharged. The diverted water would be transported to a new water treatment plant, where it would be treated to drinking water standards and then returned to the City’s potable water supply system. According to the City, it embarked on this reuse project “in order to facilitate the City’s efforts to reduce its dependence on the Edwards Aquifer.”
The water code requires that no person may appropriate or divert state water without first obtaining a permit from the Commission to make the appropriation. Tex. Water Code Ann. § 11.121 (West 2000). The City’s application did not seek such an appropriation permit because, as the Commission stated when it issued notice of the City’s application later that year, “all of the water to be conveyed and used is the city’s private water.” Thus, from the beginning, the City believed that the Commission was to have only a ministerial role in the application process; the Commission’s duty would be to merely monitor the transportation of the effluent and ensure that the City diverted only its private wastewater, minus estimated losses due to evaporation and seepage.
However, after notice of the application was published pursuant to the water code, see id. § 11.132, a number of affected downstream property owners notified the *267 Commission that they opposed the City’s reuse project for a variety of reasons, primarily because it would reduce the flow of the river. Requesting a hearing, the Foundation opposed the assumption that the water to be diverted would be the City’s private water. The Foundation’s letter stated:
[T]he city is exchanging its low quality sewage for high quality and state-owned water out of the San Marcos and Blanco Rivers under this permit and should not be allowed. If the City wants to reuse its wastewater, it should use it directly rather than unnecessarily mixing it with the pure river water. 3
The Commission referred the City’s application to the State Office of Administrative Hearings (SOAH) for a hearing on the merits. 4 One of the principal issues for determination was whether the City would be diverting its private water or state water. The ALJ submitted a certified question and a recommendation for disposition to the Commission, in which it recognized that the “most crucial issue in determining the nature of the case is defining the legal character of the City’s wastewater after it is discharged into the San Marcos River.”
In response to the ALJ’s certified question, the Commission issued an interim order on July 2, 1998. Because the water code did not explicitly provide for the type of permit for which the City applied, the Commission concluded that it had authority to evaluate and approve the City’s application pursuant to sections 5.012 and 5.102(a) of the water code. See id. §§ 5.012, .102(a) (West 2000). 5 The Commission concluded that it possessed the authority to determine the legal character of the water at issue and then determined that the City’s discharged effluent remained its private groundwater. The Commission also concluded that, if the ALJ proposed that the Commission approve the City’s application, the approval should contain special conditions based on factual determinations regarding historical and future discharge rates, transportation measurements, diversion rates, and other conditions designed to protect downstream water rights as well as environmental uses. Following an evidentiary hearing on remand, the ALJ submitted its Proposal for Decision (“PFD”) in which it recommended that the City’s application be granted, subject to appropriate conditions, “based upon the City’s ‘historical’ discharges of effluent, to protect downstream water rights and environmental uses of the river.” The Commission accepted the PFD and issued a final order granting the permit on May 11,1999.
In its final order, the Commission made findings of fact and conclusions of law. Among other things, the Commission found:
*268 • The City has discharged effluent at or near the present discharge point ... for several decades, without seeking or intending to retrieve such effluent for reuse; however, the City now intends within approximately the next two years to begin recycling such effluent by diverting it into a pipeline that will be constructed across the San Marcos River at Westerfield Crossing. The pipeline will transport both the recycled effluent, as well as surface water imported from the Guadalupe River, to a raw water treatment facility that is presently under construction north of the San Marcos River.
• Slightly less than one percent of the effluent discharged by the City will be lost from the bed and banks of the river during transport from the point of discharge to the point of diversion at Westerfield Crossing.
• Proper monitoring of (1) the quantity of Edwards Aquifer-derived groundwater discharged into the San Marcos River by the City; (2) the time of transport for such groundwater within the river to the point of 'diversion at Westerfield Crossing; (3) transportation losses of such groundwater; (4) potential measurement errors, exceeding industry and TNRCC standards, in the discharge or diversion of such groundwater; and (5) the rates at which such groundwater is discharged and diverted, collectively, will allow the City to divert volumes of water that, on a continuing basis, reasonably correspond with and are attributable to the City’s prior discharges of Edwards Aquifer-derived groundwater.
• Owners of rights to use surface water in the San Marcos and Guadalupe River Basins downstream of Westerfield Crossing have relied on the historical presence in the river system of water currently discharged as effluent by the City.
The Commission also found that certain special conditions were necessary to protect downstream water rights and environmental uses. The final order adopted the legal conclusions set out in the July 2,1998 interim order and then set out, among others, the following conclusions of law:
• [Measuring the quantity of effluent discharged by the City during one calendar day that is attributable to Edwards Aquifer groundwater and then limiting the quantity of such groundwater that can be diverted at Westerfield Crossing during the next calendar day to 94 percent of that measured portion of discharges will assure ... that no net quantity of state-owned water will be removed from the San Marcos River through the exercise of the City’s authorization to recover the groundwater it conveys via the river.
• Limiting the City’s Westerfield Crossing diversion rate to the maximum discharge rate authorized [by the Commission] will contribute to assurance that no improper diversion of state water occurs and will protect environmental uses by preventing excessive, sudden disruptions in the natural flow regime of the San Marcos River.
The final order also concluded that the imposition of special conditions upon the proposed diversion would be necessary to protect downstream water rights and environmental uses. The Foundation and the City sued the Commission, seeking judicial review of the final order. The district court affirmed the final order in all respects and, to the extent not subsumed by the final order, the interim order. 6 This appeal followed.
*269 For further background purposes, it is necessary to point out that in 1997, while the City’s application was pending before the SOAH, the Texas Legislature passed the comprehensive statewide water plan known as Senate Bill 1. See Act of June 1, 1997, 75th Leg., R.S., ch. 1010, 1997 Tex. Gen. Laws 3610 (codified throughout the Texas Water Code). It contains several key provisions on the deliverance of water down banks and beds, including one that provides for the type of reuse project developed by the City in this case:
A person who wishes to discharge and then subsequently divert and reuse the person’s existing return flows derived from privately owned groundwater must obtain prior authorization from the commission for the diversion and the reuse of these return flows. The authorization may allow for the diversion and reuse by the discharger of existing return flows, less carriage losses, and shall be subject to special conditions if necessary to protect an existing water right that was granted based on the use or availability of these return flows. Special conditions may also be provided to help maintain instream uses and freshwater inflows to bays and estuaries. A person wishing to divert and reuse future increases of return flows derived from privately owned groundwater must obtain authorization to reuse increases in return flows before the increase.
Tex. Water Code Ann. § 11.042(b) (West 2000).
Although it would seem that the permit granted by the Commission, with the attached special conditions, is specifically designed to track this legislative authority, all parties acknowledge that Senate Bill 1 can have no effect on the City’s application because of its grandfather clause. Section 2.18(b) of the Act states that the article “does not apply to an application for an interbasin transfer or reuse project using privately owned groundwater received and pending before March 2,1997. Any subsequent renewals of such applications shall be subject to the provisions of this Act.” Act of June 1, 1997, 75th Leg., R.S., ch. 1010, § 2.18(b), 1997 Tex. Gen. Laws 3610, 3627 (emphasis added). The Foundation argues that there is no direct statutory authority for the City’s proposed reuse project because the City applied for the permit to convey and divert in 1995, and it was still pending before the Commission as of March 2, 1997. The Commission agrees that the specific procedures prescribed by Senate Bill 1 are inapplicable to the City’s application. The City also acknowledges that Senate Bill 1 does not apply to its application, and argues that as a result the Commission’s imposition of the special conditions exceeded its statutory authority and violated the City’s common-law rights over its captured groundwater. 7
DISCUSSION
Because all parties agree that Senate Bill 1 has no bearing on whether the
*270
Commission properly granted the City’s application in this case, the question for this Court is whether the Commission properly relied on pre-1997 law as its basis to grant the permit. Specifically, we must decide whether the Commission correctly concluded that the City’s discharged effluent remains private groundwater that can be diverted without an appropriation permit. The orders of an administrative agency are “deemed to be prima facie valid and subject to review under the substantial evidence rule.”
Imperial Am. Res. Fund v. Railroad Comm’n, 557
S.W.2d 280, 284 (Tex.1977);
see
Tex. Gov’t Code Ann. § 2001.174 (West 2000);
see also H. G. Sledge, Inc. v. Prospective Inv. & Trading Co.,
In its first issue, the Foundation attacks the validity of the permit on the grounds that “the water it authorizes the City to withdraw from the river at the diversion point is not the City’s water but, instead, the state’s water, to which the City has no right absent a surface water-right appropriation.” The Commission and the City respond that the discharged effluent is derived from groundwater pumped, or “captured,” from the Edwards Aquifer and therefore the City has the unrestricted right to transport it to its place of beneficial use by any reasonable means, including by flowing it down a state-owned water course. According to the Commission and the City, the City retains absolute ownership over the discharged effluent so long as it demonstrates an intent to reuse it and not abandon it. Because this case turns on the proper legal characterization of the City’s discharged effluent, we will begin with a brief summary of pertinent principles of Texas water law.
Texas has long recognized that a landowner can assert absolute ownership over groundwater by drilling a water well and capturing it. The common-law rule of capture is based on the concept that ownership of a migratory resource occurs when one exerts control over it and reduces it to possession.
See, e.g., Pierson v. Post,
[TJhat person who owns the surface may-dig therein, and apply all that is there found to his own purposes at his free will and pleasure; and that if, in the exercise of such right, he intercepts or drains off the water collected from underground springs in his neighbor’s well, this inconvenience to his neighbor falls within the description damnum absque injuria [an injury without a remedy] which cannot become the ground of an action.
152 Eng. Rep. 1223, 1235 (Ex. Ch. 1843). Citing
Acton,
and specifically relying on the above passage, the Texas Supreme Court adopted the rule of capture for groundwater in
Houston & Texas Central Railway Co. v. East,
The rule of capture for use of groundwater no longer exists in any state except Texas; because it allows a landowner to pump as much groundwater as the landowner chooses, despite the drain on an increasingly scarce resource, the retention of the rule in this state has been the subject of much comment and controversy. Nevertheless, the rule of capture has been reaffirmed by this state’s supreme court as recently as 1999. In
Sipriano v. Great Spring Waters of America,
the court refused to abandon the rule of capture for the rule of reasonable use.
Texas law categorizes surface water into one of two general types: diffuse surface water and water in a watercourse.
Domel v. City of Georgetown,
6
*272
S.W.3d 349, 353 (Tex.App.-Austin 1999, pet. denied). Diffuse surface water belongs to the owner of the land on which it gathers, so long as it remains on that land prior to its passage into a natural watercourse.
Id.
(citing
Turner v. Big Lake Oil Co.,
The City and the Commission argue that the rule of capture clearly includes the right to convey captured groundwater down a state watercourse to the diversion point. In its interim order, the Commission concluded:
[The City]’s discharged effluent remains private groundwater when it is discharged. City of Corpus Christi v. City of Pleasanton,154 Tex. 289 ,276 S.W.2d 798 (1955); Denis v. Kickapoo Land Co.,771 S.W.2d 235 (Tex.App.-Austin 1989, writ denied). This conclusion has two assumptions: (1) [the CityJ’s effluent in fact derives from private groundwater, and (2) when any particular effluent is discharged at a given time [the City] then intends to reuse the effluent.
On appeal, the Commission continues to rely on this conclusion as the basis for its decision to grant the permit to the City. The Foundation does not dispute that the effluent is derived from the City’s private groundwater. But the Foundation argues that the Commission misplaces its reliance on City of Corpus Christi and Denis. The Foundation also argues that the City’s intent to reuse its effluent is a false assumption. We will address City of Corpus Christi and Denis in detail.
In
City of Corpus Christi,
the supreme court was called on to construe a statute that recognized the common-law right to use artesian water off the premises and to transport it in any of several enumerated ways, including by “river, creek or other natural water course or drain, superficial or underground channel, bayou, ... sewer, street, road, [or] highway.”
In
Denis,
the defendant drilled into springs situated on his ranch.
Having carefully considered the facts and holdings of City of Corpus Christi and Denis, we agree with the Foundation that these cases will not support the City’s reuse project. In City of Corpus Christi, the transportation of the artesian well water was challenged as wasteful; and in Denis, the downstream landowners argued that the percolating groundwater was nonetheless state water because it contributed perceptibly to the flow of a creek. Both cases considered percolating or arte-sian water not subject to use before being transported down a natural waterway. But in neither case was the appropriation challenged on the grounds that, once discharged into a state watercourse, the *274 groundwater became state water. 12 To the extent that the holdings in these cases compel an interpretation of the rule of capture that gives the owner of the captured groundwater the right to freely flow it down a state watercourse and then subsequently divert the water without obtaining an appropriation permit, we believe that this right must be construed narrowly. 13
If the City in this case were immediately discharging or channeling its captured groundwater into the river after pumping it from the aquifer, and then releasing it downstream to be diverted at a point where the water would be directed to its place of beneficial use,
City of Corpus Christi
and
Denis
would likely preclude any cause of complaint by the holders of downstream riparian rights. This is because the City would specifically be exercising its right to transport its captured groundwater to the place of use.
See City of Corpus Christi,
The Commission and the City argue that there is no principled distinction between transporting captured groundwater to its place of use, and transporting groundwater-derived effluent to its place of reuse, because in both instances there is an expressed intent not to abandon the groundwater at the moment of discharge into the state watercourse. It is undisputed that, once captured and reduced to possession, the groundwater becomes the City’s exclusive property, with all the rights incident to it that one might have as to any other species of property.
See Burkett,
In
Domel v. City of Georgetown,
this Court held in part that because the State had a right to use a watercourse to transport water without seeking permission from downstream landowners, the City of Georgetown’s discharge of treated waste-water into the watercourse did not constitute a taking of the plaintiffs property so long as pursuant to a state permit.
Although neither
Domel
nor
Bieri
involved a declaration of intent to retain ownership of groundwater-derived effluent after discharge, we believe that those cases are nonetheless guided by the principle that, as the Foundation succinctly states in its brief, “[ijntent does not trump physical reality in water law.” The Foundation argues that, unlike in
City of Corpus Christi
and
Denis,
where unused groundwater water was delivered downstream to a location where the owner sought to use it, the City in this case is flowing its previously-used groundwater into a river essentially for “cleaning” purposes. The administrative record is replete with expert testimony that the effluent loses its independent characteristics, separate from the state river water, by the time water is diverted three miles downstream from the discharge point. In other words, once the effluent is permitted to flow into the stream, it intermingles with the waters of the stream and loses its distinctive characteristics.
See Bieri,
The Commission’s final order contains findings that the diversion of water would correspond in quantity to the amount of effluent discharged, taking into account transportation losses. But the Commission did not make specific findings that could rebut the allegation that the quality of the water being diverted possessed no characteristics of sewage effluent. Nor does the City attempt to deny on appeal that the primary purpose of diverting water three miles downstream from the discharge point is to divert water that is cleaner and, consequently, easier to treat than its used wastewater. It is therefore clear from the record that the City’s reuse project depends on mixing its effluent with the spring-fed waters of the San Marcos River.
The Commission and the City respond that the City’s manner of using the river in this case has no bearing on whether the City should be permitted to divert the approximate quantity of water that it put into the river because water is fungible. Thus, they argue that the legal character of the City’s groundwater does not automatically change from private property to state-owned water upon discharge into the river. For support, they rely on this Court’s opinion in
Texas Rivers Protection Association v. Texas Natural Resource Conservation Commission,
We need not determine whether the finding of limited mixing is supported by substantial evidence because such a finding is irrelevant to the Commission’s ultimate finding. Water is a fungible commodity. UGRA need not extract from the aquifer the very same water molecules that it injected into the aquifer. The relevant legal requirement is that the water be put to a beneficial use. This, in turn, requires a determination that the quantity of water put into the aquifer can be recovered and put to such use.
Id. at 155.
Although we continue to adhere to the proposition that water is a fungible commodity, the City’s reuse project belies its position that its effluent is freely exchangeable with the water flowing in the San Marcos River. In Texas Rivers, the quality of water that had been diverted from the Guadalupe River and injected into the aquifer was of unquestioned quality. See generally id. at 150, 154-55. In contrast, at the administrative hearing the City acknowledged that its plan was not viable unless the effluent adequately mixed with the river water while flowing downstream. The Commission never found otherwise. Thus, as the Foundation aptly puts it, “[tjhat’s the opposite of fungibility.” Furthermore, although the effluent has been treated prior to discharge in accordance with state standards, it is undisputed that it is “municipal waste” which the water code defines as “waterborne liquid, gaseous, or solid substances that result from any discharge from a publicly owned sewer system, treatment facility, or disposal system.” Tex. Water Code Ann. § 26.001(8) (West Supp.2003). The water code’s definition of “water,” on the other hand, includes groundwater and surface water but makes no mention of effluent or municipal waste. See id. § 26.001(5). We conclude that the City’s effluent is not fungible with the State’s water in the San Marcos River. 14
We agree that to abandon its ownership rights over the effluent, the City must do so voluntarily and intentionally; however, abandonment need not be proved by express declaration, but may be inferred from the surrounding circumstances.
See Raulston v. Everett,
Indeed, the common-law right to transport captured groundwater, as illustrated in City of Corpus Christi and Denis, must be based on the physical control of the captured property rather than on subjective intent to maintain ownership over it. 15 As the Commission itself once concluded:
Private, percolating spring water which is allowed to enter into a watercourse and commingle with State water retains its private property characteristic only if the landowner maintains control over the spring water and can identify it both as to amount and location in the watercourse. In the absence of this evidence, the private spring water which has been allowed to enter a State watercourse and commingle with State water therein will be presumed to have become State water....
Tex. Water Comm’n,
In the Matter of the Adjudication of the Salt Fork and Double Mountain Fork Watersheds of the Brazos I Segment in the Brazos River Basin,
(Feb. 10, 1981) (emphasis added). Thus, unless the owner of discharged effluent can identify the location of the effluent in the watercourse — and divert it before it commingles with state water — it is presumed to become state water. The Commission emphasizes that this is a re-buttable presumption. However, the Commission does not point to any findings that explicitly rebut the presumption in this case. Rather, the Commission only found that the
amount
of the discharged effluent could be tracked and identified as it flowed down the San Marcos River to the proposed diversion point.
16
In contrast, there was no ques
*278
tion in
City of Corpus Christi
and
Denis
that the groundwater being transported via bed and banks had not been used, was of the purest quality, and entirely fungible with the water in the respective watercourses. Taking on the function of a pipeline, the bed and banks of the watercourses in
City of Corpus Christi
and
Denis
served as an inexpensive means for the owner of the captured groundwater to maintain control over a quantity of private property during transportation.
See City of Corpus Christi,
The administrative record reflects that for many years the City’s discharged sewage effluent has been a source of the “ordinary flow” of the river and therefore property of the State.
See
Tex. Water Code Ann. § 11.021;
see also Domel,
In regard to the disposition of this appeal, we observe that it is undisputed that the findings and conclusions of the final order granting the City a permit to convey and divert water depended on the Commission’s error of law. After an examination of the record as a whole, it is our view that the substantial rights of the Founda
*279
tion were prejudiced because the riparian rights of its members would be affected by the City’s unlawful diversion of water from the San Marcos River. As a result, we must reverse the judgment of the district court and render judgment that the order of the Commission granting the permit be vacated.
See
Tex. Gov’t Code Ann. § 2001.174;
H.G. Sledge,
Furthermore, we order that the City’s application to convey and divert water be denied. At the time that the City filed its application, there was no explicit statutory authority on which the Commission could rely in granting the permit. Rather, the Commission implied its authority from its general powers as provided in sections 5.012 and 5.102(a) of the water code.
See
Tex. Water Code Ann. §§ 5.012, .102(a). Although the Foundation and the City both challenge the Commission’s reliance on these provisions, albeit for different reasons, we reserve that question because there now exists an explicit statutory mechanism by which the Commission can grant a bed and banks permit for a reuse project using privately owned groundwater.
See id.
§ 11.042(b). Thus, we believe it more prudent that, should it pursue a reuse project, the City do so within the framework of Senate Bill 1 rather than attempting to rely on an interpretation of the rule of capture as it existed before that legislative enactment.
See Sipriano,
CONCLUSION
We hold that the Commission erred in its interim order by concluding that the City’s effluent remains private groundwater when it is discharged into a state watercourse. The City’s common-law rights over its captured groundwater, as they existed prior to the enactment of Senate Bill 1 in 1997, cannot be expanded to permit the City to discharge its effluent into the San Marcos River and then divert water downstream without having obtained an appropriative right over that state water. It is unnecessary to consider the other issues raised by the appealing parties. Accordingly, we reverse the judgment of the district court and render judgment that the order of the Commission granting the permit be vacated and the City’s application be denied.
Notes
. By statute effective September 1, 2001, the legislature changed the name of the Texas Natural Resource Conservation Commission (TNRCC) to the Texas Commission on Environmental Quality, to be effective January 1, 2004. The statute granted the TNRCC authority to adopt a timetable for phasing in the change of the agency’s name, so that until January 1, 2004, the agency may perform any act authorized by law under either title. See Act of April 20, 2001, 77th Leg., R.S., ch. 965, § 18.01, 2001 Tex. Gen. Laws 1985. On September 1, 2002, the agency began using its *266 new name, while continuing to recognize the former.
. In the event that this Court overrules the Foundation’s appeal, the Foundation supports all of the conditions imposed on the permit.
. According to a letter sent by other property owners, “[t]he seeming obvious intent now of the City is to dilute their own private effluent with State water rather than to recycle their wastewater at the treatment plant.”
. Appellants in this case were designated as parties to the proceeding.
. Section 5.012 of the water code provides:
The commission is the agency of the state given primary responsibility for implementing the constitution and laws of this state relating to the conservation of natural resources and the protection of the environment.
Tex. Water Code Ann. § 5.012 (West 2000). Section 5.102(a) provides:
The commission has the powers to perform any acts whether specifically authorized by this code or other law or implied by this code or other law, necessary and convenient to the exercise of its jurisdiction and powers as provided by this code and other laws.
Id. § 5.102(a) (West 2000).
. Shortly after the Commission issued its July 2, 1998 interim order, the Foundation sought *269 judicial review and a declaratory judgment that the Commission's conclusion as to the legal character of the effluent after being discharged was erroneous as a matter of law, in violation of the water code, and made in excess of the Commission’s statutory authority. The district court took no action on this cause while the permit proceeding was still being pursued to administrative completion. This lawsuit was eventually consolidated with the lawsuits challenging the final order.
. In its motion for rehearing, the City argues that our holding in this case "guts the State’s water policy articulated in Senate Bill 1.” We emphasize that Senate Bill 1 does not affect our analysis in this case because the City applied for the permit to convey and divert in 1995, and it was still pending before the Commission as of March 2, 1997. See Act of June 1, 1997, 75th Leg., R.S., ch. 1010, § 2.18(b), 1997 Tex. Gen. Laws 3610, 3627.
. Section 2001.174(2) requires a court to reverse or remand a case for further proceedings
if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
(A) in violation of a constitutional or statutory provision;
(B) in excess of the agency's statutory authority;
(C) made through unlawful procedure;
(D) affected by other error of law;
(E) not reasonably supported by substantial evidence considering the reliable and probative evidence in the record as a whole; or
(F) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.
Tex. Gov’t Code Ann. § 2001.174(2) (West 2000). Each of these grounds for reversal presents a question of law, which we review
de novo. See Texas Dep’t of Transp.
v.
Jones Bros. Dirt & Paving Contractors,
. The court reasoned that there was no need for it to adopt the rale of reasonable use because in 1917, after Texas had adopted the rule of capture for groundwater, the Texas Constitution was amended to place the duty to preserve Texas's natural resources, including its groundwater, in the hands of the Texas Legislature.
Sipriano v. Great Spring Waters of Am.,
. Section. 11.021(a) of the water code provides:
The water of the ordinary flow, underflow, 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, floodwater, and rainwater of every river, natural stream, canyon, ravine, depression, and watershed in the state is the property of the state.
Tex. Water Code Ann. § 11.021(a) (West 2000).
. Although we acknowledged that the supreme court seemed to suggest in an earlier case that the rule of capture might not apply where spring waters "added perceptibly to the general volume of water in the bed of the stream.” we dismissed that statement as
obiter dicta
that was contrary to established Texas law.
Denis v. Kickapoo Land Co., 771
S.W.2d 235, 238 (Tex.App.-Austin 1989, writ denied) (quoting
Texas Co. v. Burkett,
. At least one commentator has expressed surprise with the result in City of Corpus Christi because “the court did not address the character of the water once it entered the Nueces River System.” Kevin Smith, Comment, Texas Municipalities' Thirst for Water: Acquisition Methods for Water Planning, 45 Baylor L.Rev. 685, 711-12 (1993). “Arguably, diversion of groundwater into the river bed created a flowing river in an amount sufficient for irrigation and thus, the groundwater became state water subject to prior appropriation.” Mat712.
. Again, we note that in
Sipriano,
the supreme court stated that the discussion of the rule of capture in
City of Corpus Christi
was "incidental to the issue we decided,” which specifically dealt with whether flowing the water down the river constituted waste.
Si-priano,
. In the chapter of the administrative code pertaining to substantive water rights, the Commission's definition of "baseline or normal flow” notes that "[a]ccountable effluent discharges from municipal, industrial, irrigation or other uses of ground or surface waters may be included at times.” 30 Tex. Admin. Code § 297.1(6) (West 2003);
see also Domel v. City of Georgetown,
. The common law has long recognized that continued ownership rights over property acquired by capture depends on maintaining a degree of control. According to the Supreme Court of Pennsylvania:
Water and oil, and still more strongly gas, may be classed by themselves, if the analogy be not too fanciful, as minerals ferae naturae. In common with animals, and unlike other minerals, they have the power and the tendency to escape without the volition of the owner.... They belong to the owner of the land, are part of it, so long as they are on or in it, and are subject to his control; but when they escape, and go into other land, or come under another’s control, the title of the former owner is gone.
Westmoreland & Cambria Natural Gas Co. v. DeWitt,130 Pa. 235 ,18 A. 724 , 725 (1889); cf. Pierson v. Post,3 Cai. R. 175 , 178 (N.Y.Sup.Ct.1805) (possession established by "certain control”).
. The Commission explicitly stated in its findings that the monitoring of the effluent in the river was intended "to allow the City to divert volumes of water that, on a continuing basis, reasonably correspond with and are attributable to the City's prior discharges of Edwards Aquifer-derived groundwater.” (Emphasis added.)
We also note that the Director of the Commission’s Water Policy and Regulations Division, specifically referencing the City’s application, concluded that effluent, once *278 discharged and commingled with river water, becomes state water. He stated that “the water was not put into the stream with the initial intent to maintain control and for reuse by the City” and thus
it is questionable whether to treat this as a “bed and banks” application as a matter of law and policy. Since reclassifying the discharged water from state water to privately-owned developed water would be inconsistent with the agency’s past decisions in granting water rights on the San Marcos River ... it is recommended it be reconsidered as an application for a new appropriation of state water.
The Commission cautions us from giving too much weight to this unofficial “opinion.”
See City of Frisco v. Texas Water Rights Comm’n,
. On its motion for rehearing, the City argues that this holding allows an impermissible collateral attack on the Commission’s discharge permit.
See Friends of Canyon Lake, Inc. v. Guadalupe-Bianco River Auth.,