Rio Rico, Texas

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Rio Rico was a city near the Rio Grande in the U.S. state of Texas (in Hidalgo County). In 1906, the Rio Grande Land and Irrigation Company performed an unauthorized diversion of the Rio Grande (Río Bravo del Norte), which moved a 413-acre (165 ha) tract of land, including Rio Rico, south of the river. The company was later fined, but the diversion of the river was allowed to stand.

Mexican authorities eventually assumed control of the area, which was known as the Horcón Tract. Something of a resort town grew up there during the 1920s and 1930s, with free-flowing liquor and gambling. However, since the course change was due to man-made changes and not natural changes, International Law dictated that the land remained U.S. territory. The U.S. eventually ceded the territory to Mexico with the Boundary Treaty of 1970, and it was formally annexed by the state of Tamaulipas. The handover took place in 1977. After one local resident filed a lawsuit to prevent the United States Immigration and Naturalization Service from deporting him, the U.S. courts ruled that all residents born in the city between 1906 and the 1977 handover could retain their U.S. citizenship.

This was the most recent case of land from the 50 US states being ceded to a foreign country.