With a water contract, it is perfectly legal to pump water from the Highland lakes.

Unless property owners have very old water rights or exemptions dating back into the early 1900's and 1800's, they must purchase water by contract from the State of Texas. For Lake Austin, Lake Travis and all the Highland Lakes, LCRA manages this particular water source for the State of Texas.  The cost of raw water (lake water) purchased from LCRA has been $151 per acre foot, but they keep changing it (in 2010 it was $138 per acre foot). One acre foot of water is 325,851 gallons of water, usually quite enough for irrigation during one growing season for most properties along the lake. To obtain a contract is simple, follow the link below: 

For Lake Austin, Lake Travis, Lake LBJ and all the Highland Lakes:

(Copy / paste the link above into your web browser if it does not click)

Landscape irrigation often requires enormous quantities of water compared to domestic uses inside the home. If you are currently a large user of metered water, or intending to be a user of metered water from a water meter for irrigation, you could be (or will be) paying SEVERAL HUNDREDS of dollars per month for metered water. Lake water is typically <5% the cost of metered water and results in better plant growth and health.  Large users of water can see payback from the installation of a lakewater pump system saving them over what they would have spent on metered water in as short as one year.