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ACA-13 Water infrastructure projects: minimum funding requirement and general obligation bonds.(2021-2022)

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ACA13:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Constitutional Amendment
No. 13

Introduced by Assembly Member Mathis

March 17, 2022

A resolution to propose to the people of the State of California an amendment to the Constitution of the State, by adding Section 2.5 to Article X thereof and by adding Article X C thereto, relating to water.


LEGISLATIVE COUNSEL'S DIGEST


ACA 13, as introduced, Mathis. Water infrastructure projects: minimum funding requirement and general obligation bonds.
The California Constitution declares that the general welfare requires that the water resources of the state be put to beneficial use to the fullest extent of which they are capable, and that the right to the use of water does not extend to the waste or unreasonable use, method of use, or method of diversion of water.
Existing law, the Water Quality, Supply, and Infrastructure Improvement Act of 2014, a bond act approved by the voters as Proposition 1 at the November 4, 2014, statewide general election, authorizes the issuance of general obligation bonds to finance a water quality, supply, and infrastructure improvement program, as specified.
This measure would require the Treasurer to annually transfer an amount equal to 2% of all state revenues from the General Fund to the Water Infrastructure Trust Account, which the measure would create. The measure would continuously appropriate moneys in the account to the California Water Commission for its actual costs of implementing these provisions and for specified water infrastructure projects, and in the amount annually necessary to pay the principal of, and interest on, bonds issued and sold pursuant to the Water Infrastructure Bond Act of 2022 described below. The measure would prescribe requirements for those projects and would require the chair of the commission to annually certify, under the penalty of perjury, the amount, by acre-feet, of additional annual water supply capacity created. The measure would require the commission to establish within the account a continuously appropriated subaccount for the legal defense of the measure and of projects allocated funding pursuant to the measure, as prescribed. The measure would authorize the commission to adopt regulations to implement these provisions and would prohibit the commission from taking certain actions. The measure would make these provisions, including the annual 2% transfer, inoperative once 5,000,000 acre-feet of annual new water storage is created, as certified by the commission and confirmed by the California State Auditor, by those projects, projects funded by the Water Infrastructure Bond Act of 2022, and the drought resiliency projects described below, except as necessary to repay any of those outstanding general obligation bonds.
The measure would enact the Water Infrastructure Bond Act of 2022, which would authorize the issuance of general obligation bonds, equal to an amount wherein principal and interest payments do not exceed 50% of the above-described annual 2% transfer from the General Fund, to finance the construction and acquisition of specified water infrastructure projects. The measure would require proceeds of those bonds to be deposited in the Water Infrastructure Fund, which the measure would create in the State Treasury, moneys in which would be continuously appropriated for purposes of those projects. The measure would prescribe requirements for those projects and would continuously appropriate from the Water Infrastructure Trust Account described above the sum annually necessary to pay the principal of, and interest on, bonds issued and sold pursuant to the Water Infrastructure Bond Act of 2022. If there is insufficient funding in the Water Infrastructure Trust Account to pay those amounts, the measure would continuously appropriate any excess amount from the General Fund.
The measure would require the California State Auditor to annually conduct a programmatic review and an audit of expenditures from the Water Infrastructure Fund and the Water Infrastructure Trust Account and to report those findings, as specified. The measure would provide that the California Environmental Quality Act (CEQA) applies to projects funded by the annual 2% transfer described above, the Water Infrastructure Bond Act of 2022, and prescribed drought resiliency projects, unless a project elects to be subject to streamlined review of an agency’s compliance with CEQA in accordance with specified procedures administered by the California Water Commission.
The measure would authorize the Secretary of the Natural Resources Agency to review, approve, deny, or issue any California Coastal Commission action or inaction for a project allocated funding in whole or in part by the annual 2% transfer described above or the Water Infrastructure Bond Act of 2022 or certified as a drought resiliency project, as specified. The measure would impose related requirements on the California Coastal Commission for permits and appeals for these projects. The measure would designate the Secretary of the Natural Resources Agency as a state agency charged with implementation of a specified provision of the federal Coastal Zone Management Act of 1972 with respect to these projects and would require the Governor to submit a copy of these provisions to the United States Secretary of Commerce for certification as part of the California Coastal Management Program.
The measure would provide that its provisions are severable and would require the Attorney General to defend against any action challenging the validity of the measure.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  
Resolved by the Assembly, the Senate concurring, That the Legislature of the State of California at its 2021–22 Regular Session commencing on the seventh day of December 2020, two-thirds of the membership of each house concurring, hereby proposes to the people of the State of California, that the Constitution of the State be amended as follows:

First—

 This measure shall be known, and may be cited, as the Water Infrastructure Funding Act of 2022.

Second—

 That the People of the State of California find and declare all of the following:
(a) Safe, sufficient, and affordable water is a human right and fundamental to our quality of life and key to the economic development of our community. Previous constitutional amendments in California have prioritized spending for public education, public safety, and transportation.
(b) It is long past time for Californians to prioritize spending to increase California’s storage and supply of clean, safe drinking water for homes and businesses, water for agricultural use, and treatment, purification, and reclamation of stormwater and wastewater, while maintaining protection for the environment. Short-term and long-term drought resiliency requires an increase in the supply of water, through surface and subsurface storage, wastewater treatment and reuse, and desalination, including ocean and inland brackish water.
(c) Water projects take years to permit, and once issued, those permits can be subject to lengthy litigation, delaying the realization of new water supplies.

Third—

 That, therefore, the People of the State of California hereby enact this measure in order to do all of the following:
(a) Require the transfer of 2 percent of the state’s General Fund revenue each and every year into a trust account until the California Water Commission certifies that water projects funded, in whole or in part, have created a minimum increase of 5,000,000 acre-feet of additional annual water supply that can be reliably delivered to Californians every year thereafter.
(b) Provide “pay-as-you-go” funding for certain water projects, including those ready for immediate construction, while also authorizing the issuance of general obligation bonds that may be repaid using the revenue transferred into the trust account each year for larger, longer-term water projects, all for the purpose of creating a minimum of 5,000,000 acre-feet of additional annual water supply.
(c) Require that the projects include new or increased storage capacity in reservoirs and aquifers, desalination, recycling and treatment of wastewater and stormwater, repair and upgrade to water systems for the delivery of clean, safe drinking water for homes and businesses, water for agricultural uses, and other projects designed to increase the safe and affordable supply of water to all Californians.
(d) Except as necessary to repay any outstanding bonds issued pursuant to the Water Infrastructure Bond Act of 2022 (Sections 1 to 17, inclusive, of Article X C of the California Constitution), this annual minimum funding requirement shall become inoperative upon the California State Auditor’s confirmation of the California Water Commission’s certification that a minimum of 5,000,000 acre-feet of additional annual water supply capacity has been created and is being delivered to California’s urban and agricultural consumers.
(e) Provide for streamlined administrative processing and judicial review of water projects funded, in whole or in part, by this measure that would help achieve a minimum of 5,000,000 acre-feet of additional annual water supply capacity.

Fourth—

 That Section 2.5 is added to Article X thereof, to read:

SEC. 2.5.
 (a) The Treasurer shall annually transfer an amount equal to 2 percent of all state revenues eligible to be appropriated pursuant to Article XIII B from the General Fund to the Water Infrastructure Trust Account, which is hereby created in the State Treasury. The first annual transfer shall occur in the first fiscal year following the operative date of this section.
(b) (1) Moneys in the Water Infrastructure Trust Account are hereby continuously appropriated, notwithstanding Section 13340 of the Government Code and without regard to fiscal years, to the California Water Commission for its actual costs of implementing this section, and for allocation for projects that will help achieve the creation of a minimum of 5,000,000 acre-feet of additional annual water supply capacity, including all of the following project categories:
(A) Development or expansion of groundwater aquifer storage, remediation, and recovery projects.
(B) Recycling, purification, and treatment of stormwater and wastewater to water reuse standards, including, but not limited to, current drinking water standards at the time the project is approved.
(C) Expansion, repair, or replacement of existing surface reservoirs, and construction of new surface reservoirs.
(D) Desalination plants.
(E) Water conveyance development, maintenance, or expansion for the delivery of clean, safe drinking water for homes and businesses, and water for agricultural uses, consistent with area of origin water rights.
(F) Other projects designed to increase the clean, safe, and affordable supply of water to all Californians with emphasis on California’s disadvantaged communities, and other projects designed to increase conservation.
(G) Research and development of new technologies designed to increase the clean, safe, and affordable supply of water to all Californians, subject to an annual limit of no more than 2 percent of available funds in the Water Infrastructure Trust Account.
(2) Moneys in the Water Infrastructure Trust Account are also hereby continuously appropriated, notwithstanding Section 13340 of the Government Code and without regard to fiscal years, in an amount that equals the total of both of the following pursuant to Section 11 of Article X C:
(A) The sum annually necessary to pay the principal of, and interest on, bonds issued and sold pursuant to the Water Infrastructure Bond Act of 2022 (Sections 1 to 17, inclusive, of Article X C), as the principal and interest become due and payable.
(B) The sum necessary to carry out Section 13 of Article X C.
(c) The California Water Commission shall allocate and provide funding from the Water Infrastructure Trust Account for part or all of a project, or, where applicable, additional funding in an amount necessary to complete a project, that will begin delivery of water to California’s urban and agricultural consumers, subject to the following order of priority:
(1) The project has been approved by the California Water Commission as submitted pursuant to subdivisions (b) and (c) of Section 79750 of the Water Code on or before July 1, 2021.
(2) The applicant is a public agency, special district, joint powers authority, or a public-private partnership for the entitlement, design, construction, operation, and maintenance of the project, and the project will be owned, in whole or in part, by the applicant.
(3) The applicant is ready and able to commence the project immediately upon issuance of all necessary construction permits and will complete the project and begin delivery of water to California’s urban and agricultural consumers within five years of the allocation.
(4) The applicant is ready and able to commence the project immediately upon issuance of all necessary construction permits and will complete the project and begin delivery of water to California’s urban and agricultural consumers within a reasonable period of time.
(5) All other projects that the California Water Commission reasonably determines are consistent with the categories specified in paragraph (1) of subdivision (b).
(d) Both of the following requirements apply as a condition of allocating funding to a project from the Water Infrastructure Trust Account:
(1) The applicant shall certify, to the California Water Commission’s satisfaction, that one of the following requirements is satisfied:
(A) The project is a public work for which prevailing wages are required to be paid pursuant to Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.
(B) The project is not a public work, but all contractors and subcontractors employing construction workers on the project pay those workers at least the general prevailing rate of per diem wages for the type of work and geographic area, as determined by the Director of Industrial Relations pursuant to Sections 1773 and 1773.9 of the Labor Code, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate.
(2) The applicant shall certify, to the California Water Commission’s satisfaction, that all contractors and subcontractors employing construction workers on the project are required to use a skilled and trained workforce to perform all work on the project or contract that falls within an apprenticeable occupation in the building and construction trades, in accordance with Chapter 2.9 (commencing with Section 2600) of Part l of Division 2 of the Public Contract Code.
(e) The California Water Commission shall not accept a certification pursuant to subdivision (d) unless the applicant demonstrates, to the California Water Commission’s satisfaction, that construction workers or their representatives will have adequate means to monitor and enforce contractors’ and subcontractors’ compliance with the requirements.
(f) The projects wholly or partially funded pursuant to this section, including, but not limited to, projects specified in paragraph (1) of subdivision (c), shall be deemed to be for the reasonable and beneficial use of the State’s water resources and those uses are deemed to be in the interest of the people and for their public welfare as provided in Section 2.
(g) The California Water Commission may adopt regulations pursuant to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) to implement this section.
(h) Notwithstanding any other law, the California Water Commission shall not do any of the following:
(1) Use or develop a beneficial use rating when allocating funding from the Water Infrastructure Trust Account to projects pursuant to this section.
(2) Delegate, assign, partition, or otherwise transfer any responsibilities, duties, or obligations assigned by this section to any other new or existing state department or agency.
(3) Authorize, permit, or encourage any other state department or agency to actively interfere with or otherwise delay projects that qualify for funding pursuant to this section.
(i) This section is intended to supplement, and not supplant, existing funding for water infrastructure projects. Therefore, any funding provided for a project by this section shall not preempt, nullify, or in any way impede any existing funding for these projects, to the extent work has begun or will be performed on the projects on or after the operative date of this section.
(j) On or before June 30 of each fiscal year, the Chair of the California Water Commission shall certify, under the penalty of perjury, the amount, by acre-feet, of additional annual water supply capacity that has been created after the operative date of this section by the projects specified in paragraph (1) of subdivision (b), projects funded by the Water Infrastructure Bond Act of 2022 (Sections 1 to 17, inclusive, of Article X C), and projects otherwise certified by the California Water Commission as drought resiliency projects pursuant to Section 20 of Article X C and is being delivered to California’s urban and agricultural consumers. When the Chair of the California Water Commission determines that a minimum of 5,000,000 acre-feet of additional annual water supply capacity has been created after the operative date of this section by the projects specified in paragraph (1) of subdivision (b), projects funded by the Water Infrastructure Bond Act of 2022 (Sections 1 to 17, inclusive, of Article X C), and projects otherwise certified by the California Water Commission as drought resiliency projects pursuant to Section 20 of Article X C and is being delivered to California’s urban and agricultural consumers, that certification shall be reviewed by the California State Auditor. If the California State Auditor confirms the Chair of the California Water Commission’s certification, the California State Auditor shall publish the confirmation on its internet website, and the Chair of the California Water Commission shall notify the Governor and the Treasurer, and the Legislature, in compliance with Section 9795 of the Government Code, of the certification.
(k) For purposes of this section, additional annual water supply capacity shall be measured as follows:
(1) For water storage projects, including the necessary infrastructure to convey the additional water supply created, the amount of additional annual water supply capacity shall be calculated based on the average annual yield the projects produce instead of their storage capacities.
(2) For water recycling, treatment, purification to reuse standards (including, but not limited to, drinking water standards), desalination, and other related projects, including the necessary infrastructure to convey the additional water supply created, the amount of new annual water supply capacity shall be calculated based on average annual output capacity.
(3) For projects partially funded under this section or the Water Infrastructure Bond Act of 2022 (Sections 1 to 17, inclusive, of Article X C), the amount of new, annual water supply capacity shall be calculated based on their average annual yield without regard to the percent of funding provided compared to total project funding.
(4) For projects designed to increase water conservation, up to 1,000,000 acre-feet of water conserved annually may count toward the 5,000,000 acre-feet of additional annual water supply capacity required pursuant to subdivision (b).
(5) If the State, a public agency, or the federal government eliminates any water-producing infrastructure, or by regulation reduces the supply of water from existing infrastructure, that existed before the operative date of this section and provided water for urban and agricultural consumers, the California Water Commission shall increase the minimum requirement of creating 5,000,000 acre-feet of additional annual water supply capacity by the same amount of water supply reduced by the elimination of that infrastructure or reduction of supply from that infrastructure.
(l) The California Water Commission shall establish within the Water Infrastructure Trust Account a subaccount for the legal defense of this measure and of projects allocated funding pursuant to this measure. The California Water Commission shall transfer moneys in the Water Infrastructure Trust Account to the subaccount, as necessary, and not to exceed 5 percent of the annual revenues in the Water Infrastructure Trust Account. The moneys in the subaccount are hereby continuously appropriated, notwithstanding Section 13340 of the Government Code and without regard to fiscal years, to the California Water Commission to provide to any public agency requesting assistance to reimburse the reasonable, necessary, and actual legal defense costs associated with a project allocated funding pursuant to this measure and to reimburse the Attorney General if the Attorney General undertakes the legal representation of the State or the California Water Commission associated with this measure. This reimbursement shall not include defense costs resulting from willful misconduct.
(m) Nothing in this section diminishes, impairs, or otherwise affects in any manner whatsoever any area of origin, watershed of origin, county of origin, or any other water rights protections, including, but not limited to, rights to water appropriated prior to December 19, 1914, provided under the law.
(n) Except as necessary to repay any outstanding bonds issued pursuant to the Water Infrastructure Bond Act of 2022 (Sections 1 to 17, inclusive, of Article X C), this section shall become inoperative upon the California State Auditor’s confirmation of the California Water Commission’s certification pursuant to subdivision (j).

Fifth—

 That Article X C is added thereto, to read:
Article  X C Water Infrastructure Projects

SECTION 1.
 (a) This section and Sections 2 to 17, inclusive, shall be known, and may be cited, as the Water Infrastructure Bond Act of 2022.
(b) As used in Sections 2 to 17, inclusive, the following definitions apply:
(1) “Committee” means the Water Infrastructure Finance Committee created pursuant to Section 8.
(2) “Fund” means the Water Infrastructure Fund created pursuant Section 2.
(3) “Public agency” means a board, commission, county, city and county, city, regional agency, district, federally recognized Indian tribe, other public entity, or public-private partnership.
(4) “State General Obligation Bond Law” means the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), as it may be amended from time to time.
(5) “Water Infrastructure Trust Account” means the Water Infrastructure Trust Account created pursuant to Section 2.5 of Article X.

SEC. 2.
 The proceeds of bonds, excluding those issued in accordance with Section 15, issued and sold pursuant to Sections 1 to 17, inclusive, shall be deposited in the Water Infrastructure Fund, which is hereby created in the State Treasury. All moneys in the fund, notwithstanding Section 13340 of the Government Code, are hereby continuously appropriated without regard to fiscal years for the purposes of Sections 1 to 17, inclusive.

SEC. 3.
 An eligible applicant that is allocated funds for a water infrastructure project pursuant to Sections 1 to 17, inclusive, shall not use more than 5 percent of the funds allocated for the project to pay the administrative costs of the project.

SEC. 4.
 (a) The bonds issued pursuant to Section 6 shall be available for the construction and acquisition of water infrastructure projects that will help achieve the creation of a minimum of 5,000,000 acre-feet of additional annual water supply, as provided in Section 2.5 of Article X.
(b) Water infrastructure projects eligible for funding pursuant to Sections 1 to 17, inclusive, shall be approved by the California Water Commission based on the priorities specified in subdivision (c) of Section 2.5 of Article X and allocated to eligible projects that will help achieve the creation of a minimum of 5,000,000 acre-feet of additional water supply per year, including all of the following:
(1) Development or expansion of groundwater aquifer storage, remediation, and recovery projects.
(2) Recycling, purification, and treatment of stormwater and wastewater to water reuse standards, including, but not limited to, current drinking water standards at the time the project is approved.
(3) Expansion, repair, or replacement of existing surface reservoirs, and construction of new surface reservoirs.
(4) Desalination plants.
(5) Water conveyance development, maintenance, or expansion for the delivery of clean, safe drinking water for homes and businesses, and water for agricultural uses consistent with area of origin water rights.
(6) Other projects designed to increase the clean, safe, and affordable supply of water to all Californians with emphasis on California’s disadvantaged communities, and other projects designed to increase conservation.
(c) The requirements of subdivisions (d) and (e) of Section 2.5 of Article X shall apply to all projects allocated funding pursuant to Sections 1 to 17, inclusive.

SEC. 5.
 Sections 1 to 17, inclusive, do not diminish, impair, or otherwise affect in any manner whatsoever any area of origin, watershed of origin, county of origin, or any other water rights protections, including, but not limited to, rights to water appropriated prior to December 19, 1914, provided under the law.

SEC. 6.
 (a) Bonds, equal to an amount wherein principal and interest payments do not exceed 50 percent of the amount annually transferred from the General Fund pursuant to Section 2.5 of Article X, not including the amount of any refunding bonds issued in accordance with Section 15, shall be issued and sold for the purposes expressed in Sections 3 and 4, and to reimburse the General Obligation Bond Expense Revolving Fund pursuant to Section 16724.5 of the Government Code. The committee shall annually estimate the allowable amount of bonds that may be issued, and the bonds shall be retired within 50 years of the time of contracting. The bonds, when sold, issued, and delivered, shall be and constitute a valid and binding obligation of the State of California, and the full faith and credit of the State of California is hereby pledged for the punctual payment of both principal of, and interest on, the bonds as the principal and interest become due and payable.
(b) The Treasurer shall issue and sell the bonds authorized in subdivision (a) in the amount determined by the committee pursuant to Section 9. The bonds shall be issued and sold upon the terms and conditions specified in a resolution to be adopted by the committee pursuant to Section 16731 of the Government Code.

SEC. 7.
 (a) The bonds authorized by Sections 1 to 17, inclusive, shall be prepared, executed, issued, sold, paid, and redeemed as provided in the State General Obligation Bond Law, and all of the provisions of that law apply to the bonds and Sections 1 to 17, inclusive, and are hereby incorporated as though set forth in full in Sections 1 to 17, inclusive.
(b) For purposes of Sections 1 to 17, inclusive, the references to “committee” in the State General Obligation Bond Law shall mean the Water Infrastructure Finance Committee created pursuant to Section 8, and the references to “board” in the State General Obligation Bond Law shall mean the California Water Commission.

SEC. 8.
 (a) Solely for the purpose of authorizing the issuance and sale pursuant to the State General Obligation Bond Law of the bonds authorized by Sections 1 to 17, inclusive, the Water Infrastructure Finance Committee is hereby created.
(b) The committee consists of the Controller, the Treasurer, the Director of Finance, and the Chair of the California Water Commission. Notwithstanding any other law, a member may designate a representative to act in the member’s place for all purposes, as though the member were personally present.
(c) The Treasurer shall serve as chairperson of the committee. A majority of the committee may act for the committee.

SEC. 9.
 The committee shall determine by resolution the amount of bonds to be issued and sold. Successive issues of bonds may be authorized and sold to carry out those actions progressively and it is not necessary that all of the bonds authorized to be issued be sold at any one time.

SEC. 10.
 There shall be collected each year and in the same manner and at the same time as other state revenue is collected, in addition to the ordinary revenues of the state, a sum in an amount required to pay the principal of, and interest on, the bonds becoming due each year. It is the duty of all officers charged by law with any duty in regard to the collection of the revenue to do and perform each and every act that is necessary to collect that additional sum.

SEC. 11.
 (a) Notwithstanding Section 13340 of the Government Code, there is hereby continuously appropriated from the Water Infrastructure Trust Account, for the purposes of Sections 1 to 17, inclusive, and without regard to fiscal years, an amount that equals the total of both of the following:
(1) The sum annually necessary to pay the principal of, and interest on, bonds issued and sold pursuant to Sections 1 to 17, inclusive, as the principal and interest become due and payable.
(2) The sum necessary to carry out Section 13.
(b) If there is insufficient funding in the Water Infrastructure Trust Account to pay the amounts described in subdivision (a), any excess amount is, notwithstanding Section 13340 of the Government Code and without regard to fiscal years, hereby continuously appropriated from the General Fund in the State Treasury to pay the amounts described in subdivision (a).

SEC. 12.
 The California Water Commission may request the Pooled Money Investment Board to make a loan from the Pooled Money Investment Account, in accordance with Section 16312 of the Government Code, for the purpose of carrying out Sections 1 to 17, inclusive, less any amount withdrawn pursuant to Section 13 and not yet returned to the Water Infrastructure Trust Account. The amount of the request shall not exceed the amount of the unsold bonds that the committee has, by resolution, authorized to be sold for the purpose of carrying out Sections 1 to 17, inclusive, excluding any refunding bonds authorized pursuant to Section 15, less any amount loaned pursuant to this section and not yet repaid and any amount withdrawn from the Water Infrastructure Trust Account pursuant to Section 13 and not yet returned to the Water Infrastructure Trust Account. The California Water Commission shall execute any documents required by the Pooled Money Investment Board to obtain and repay the loan. Any amounts loaned shall be deposited in the fund to be allocated by the California Water Commission in accordance with Sections 1 to 17, inclusive.

SEC. 13.
 For the purposes of carrying out Sections 1 to 17, inclusive, the Director of Finance may authorize the withdrawal from the Water Infrastructure Trust Account of an amount not to exceed the amount of the unsold bonds that have been authorized by the committee to be sold for the purpose of carrying out Sections 1 to 17, inclusive, excluding any refunding bonds authorized pursuant to Section 15, less any amount loaned pursuant to Section 12 and not yet repaid, and any amount withdrawn from the Water Infrastructure Trust Account pursuant to this section and not yet returned to the Water Infrastructure Trust Account. Any amounts withdrawn shall be deposited in the fund. Any moneys made available under this section shall be returned to the Water Infrastructure Trust Account from proceeds received from the sale of bonds for the purpose of carrying out Sections 1 to 17, inclusive.

SEC. 14.
 All moneys deposited in the fund that are derived from premium and accrued interest on bonds sold pursuant to Sections 1 to 17, inclusive, shall be reserved in the fund and shall be available for transfer to the Water Infrastructure Trust Account as a credit to expenditures for bond interest, except those amounts derived from premium may be reserved and used to pay the cost of bond issuance before any transfer to the Water Infrastructure Trust Account.

SEC. 15.
 The bonds issued and sold pursuant to Sections 1 to 17, inclusive, may be refunded in accordance with Article 6 (commencing with Section 16780) of Chapter 4 of Part 3 of Division 4 of Title 2 of the Government Code, which is a part of the State General Obligation Bond Law. Approval by the voters of the state of the issuance of the bonds described in Sections 1 to 17, inclusive, includes the approval of the issuance of any bonds issued to refund any bonds originally issued under Sections 1 to 17, inclusive, or any previously issued refunding bonds. Any bond refunded with the proceeds of refunding bonds as authorized by this section may be legally defeased to the extent permitted by law in the manner and to the extent set forth in the resolution, as amended from time to time, authorizing that refunded bond.

SEC. 16.
 Notwithstanding any other provision of Sections 1 to 17, inclusive, or of the State General Obligation Bond Law, if the Treasurer sells bonds pursuant to Sections 1 to 17, inclusive, that include a bond counsel opinion to the effect that the interest on the bonds is excluded from gross income for federal tax purposes under designated conditions or is otherwise entitled to any federal tax advantage, the Treasurer may maintain separate accounts for the investment of bond proceeds and for the investment of earnings on those proceeds. The Treasurer may use or direct the use of those proceeds or earnings to pay any rebate, penalty, or other payment required under federal law or take any other action with respect to the investment and use of those bond proceeds or earnings required or desirable under federal law to maintain the tax-exempt status of those bonds and to obtain any other advantage under federal law on behalf of the funds of this state.

SEC. 17.
 The proceeds from the sale of bonds authorized by Sections 1 to 16, inclusive, and this section are not “proceeds of taxes” as that term is used in Article XIII   B, and the disbursement of these proceeds is not subject to the limitations imposed by that article.

SEC. 18.
 (a) Except as provided in Section 19, Division 13 (commencing with Section 21000) of the Public Resources Code applies to water projects allocated funding in whole or in part by Section 2.5 of Article X or Sections 1 to 17, inclusive, or certified as a drought resiliency project pursuant to Section 20.
(b) Notwithstanding subdivision (a), the California Water Commission’s determination to allocate funding pursuant to Section 2.5 of Article X or Sections 1 to 17, inclusive, or to certify a project as a drought resiliency project pursuant to Section 20 shall not constitute a “project” pursuant to Section 21065 of the Public Resources Code and is therefore exempt from Division 13 (commencing with Section 21000) of the Public Resources Code.

SEC. 19.
 (a) Projects allocated funding in whole or in part by Section 2.5 of Article X or Sections 1 to 17, inclusive, or certified as a drought resiliency project pursuant to Section 20 may elect to be subject to streamlined review of an agency’s compliance with Division 13 (commencing with Section 21000) of the Public Resources Code as follows:
(1) For projects electing to be governed by this section, within 10 days of the project’s allocation of funding or certification as described in subdivision (a), the lead agency shall issue a public notice providing the following:

“THE APPLICANT HAS ELECTED TO PROCEED UNDER SECTION 19 OF ARTICLE X C OF THE CALIFORNIA CONSTITUTION, WHICH PROVIDES, AMONG OTHER THINGS, THAT ANY JUDICIAL ACTION CHALLENGING AN AGENCY’S COMPLIANCE WITH CEQA OR THE APPROVAL OF THE PROJECT DESCRIBED IN THE ENVIRONMENTAL DETERMINATION IS SUBJECT TO THE PROCEDURES SET FORTH IN SECTION 19 OF ARTICLE X C OF THE CALIFORNIA CONSTITUTION. A COPY OF SECTION 19 OF ARTICLE X C OF THE CALIFORNIA CONSTITUTION IS INCLUDED BELOW.”

(2) The public notice shall be distributed by the lead agency as required for public notices issued pursuant to paragraph (3) of subdivision (b) of Section 21092 of the Public Resources Code.
(b) Notwithstanding any other law, the procedures set forth in this section shall apply to any action or proceeding brought to attack, review, set aside, void, or annul the certification or approval of any environmental determination or granting of project approvals for a project electing to be governed by this section.
(c) (1) Rules 3.2220 to 3.2237, inclusive, of the California Rules of Court, as may be amended by the Judicial Council, shall apply to an action or proceeding brought to attack, review, set aside, void, or annul the certification or approval of an environmental determination or granting of project approvals for a project electing to be governed by this section, to require the action or proceeding, including any potential appeals therefrom, to be resolved, to the extent feasible, within 270 days of the filing of the certified record of proceedings with the court.
(2) For purposes of Sections 18 to 20, inclusive, “environmental determination” means an environmental impact report, mitigated negative declaration, negative declaration, categorical exclusion, a determination that the project is not subject to Division 13 (commencing with Section 21000) of the Public Resources Code, or a determination that no additional environmental review is required.
(d) Notwithstanding any other law, in connection with any environmental review following allocation of funding or certification for a project electing to be governed by this section, the preparation and certification of the administrative record shall be performed in the following manner at the applicant’s expense:
(1) The lead agency or responsible state agency shall prepare the record of proceedings pursuant to Division 13 (commencing with Section 21000) of the Public Resources Code concurrently with the administrative process.
(2) All documents and other materials placed in the record of proceedings after the project’s allocation of funding under Section 2.5 of Article X or Sections 1 to 17, inclusive, or certification under Section 20 shall be posted on, and be downloadable from, an internet website maintained by the agency commencing with the date of the release of the project’s draft environmental impact report or other environmental determination.
(3) The agency shall make available to the public in a readily accessible electronic format the project’s draft environmental impact report or other environmental determination and all other documents submitted to, or relied on by, the agency in the preparation of the project’s draft environmental impact report or other environmental determination.
(4) A document prepared by the agency or submitted by the applicant after the date of the release of the project’s draft environmental impact report or other environmental determination that is a part of the record of the proceedings shall be made available to the public in a readily accessible electronic format within five business days after the document is released or received by the agency.
(5) The agency shall encourage written comments on the project to be submitted in a readily accessible electronic format, and shall make any comment available to the public in a readily accessible electronic format within five business days of receipt.
(6) Within seven business days of receipt of a comment that is not in an electronic format, the agency shall convert that comment into a readily accessible electronic format and make it available to the public in that format.
(7) Notwithstanding paragraphs (2) to (6), inclusive, documents submitted to or relied on by the agency that were not prepared specifically for the project and are copyright protected are not required to be made readily accessible in an electronic format. For those copyright-protected documents, the agency shall make an index of these documents available in an electronic format no later than the date of the release of the project’s draft environmental impact report or other environmental determination, or within five business days if the document is received or relied on by the agency after the release of the project’s draft environmental impact report or other environmental determination. The index shall specify the libraries or agency offices in which hard copies of the copyrighted materials are available for public review.
(8) The agency shall certify the final record of proceedings within five days of its approval of the project.
(9) Any dispute arising from the record of proceedings shall be resolved by the superior court. Unless the superior court directs otherwise, a party disputing the content of the record shall file a motion to augment the record at the time the party files its initial brief.
(10) The contents of the record of proceedings shall be as set forth in subdivision (e) of Section 21167.6 of the Public Resources Code.
(e) (1) In granting relief in an action or proceeding subject to this section, the court shall not stay or enjoin the construction or operation of a project described in subdivision (a) unless the court finds either that the continued construction or operation of the project presents an imminent threat to public health and safety or that the project site contains unforeseen important Native American artifacts or unforeseen important historical, archaeological, or ecological values that would be materially, permanently, and adversely affected by the continued construction or operation of the project unless the court stays or enjoins the construction or operation of the project.
(2) If the court finds that either condition in paragraph (1) is satisfied, the court shall only enjoin those specific activities associated with the project that present an imminent threat to public health and safety or that materially, permanently, and adversely affect unforeseen important Native American artifacts or unforeseen important historical, archaeological, or ecological values.
(f) With respect to projects described in subdivision (a), for a period of five years after the certification or adoption of the project’s most recent environmental determination, subdivisions (b) and (c) of Section 21166 of the Public Resources Code shall not apply and “substantial changes” as used in subdivision (a) of Section 21166 of the Public Resources Code shall only mean changes to the project that result in more than a 5 percent increase in the project’s total floor area or production capacity, beyond the scope of the project analyzed in the project’s environmental determination.
(g) This section applies prospectively and retroactively to any approvals by a lead agency or a responsible agency for a project electing to proceed pursuant to this section. This section also applies prospectively and retroactively to any such project with any causes of action and claims that are pending as of the operative date of this section and for which no final nonappealable judgment has been entered before the operative date of this section.

SEC. 20.
 (a) A person proposing to construct a water infrastructure project may apply to the California Water Commission for certification that the water infrastructure project is a drought resiliency project eligible for streamlining as provided in Sections 18 and 19 and this section. The person shall supply evidence and materials that the California Water Commission deems necessary to make a decision on the application. The California Water Commission shall make publicly available on its internet website any evidence or materials submitted for certification review at least 15 days before the California Water Commission certifies a project pursuant to Sections 18 and 19 and this section.
(b) Within 60 days of receipt of the evidence and materials described in subdivision (a), the California Water Commission shall certify a project as a drought resiliency project if the evidence and materials provided demonstrate all of the following:
(1) The project falls within one or more of the following project categories:
(A) Development or expansion of groundwater aquifer storage, remediation, and recovery projects.
(B) Recycling, purification, and treatment of stormwater and wastewater to water reuse standards, including, but not limited to, current drinking water standards at the time the project is approved.
(C) Expansion, repair, or replacement of existing surface reservoirs, and construction of new surface reservoirs.
(D) Desalination plants.
(E) Water conveyance development, maintenance, or expansion for the delivery of clean, safe drinking water for homes and businesses, and water for agricultural uses consistent with area of origin water rights.
(F) Other projects designed to increase the clean, safe, and affordable supply of water to all Californians with emphasis on California’s disadvantaged communities, and other projects designed to increase conservation.
(G) Research and development of new technologies designed to increase the clean, safe, and affordable supply of water to all Californians.
(2) The project will help achieve the creation of a minimum of 5,000,000 acre-feet of additional annual water supply capacity.
(3) The project will satisfy the requirements of subdivisions (d) and (e) of Section 2.5 of Article X.
(c) A project is not required to be eligible for or receive funding under Section 2.5 of Article X or Sections 1 to 17, inclusive, in order to be certified as a drought resiliency project pursuant to this section.
(d) The California Water Commission may issue guidelines regarding application and certification of projects under this section. Any guidelines issued under this section are not subject to the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
(e) Sections 18 and 19 and this section shall become inoperative when both of the following have been satisfied:
(1) The California State Auditor confirms and publishes on its internet website the California Water Commission’s certification pursuant to subdivision (j) of Section 2.5 of Article X that a minimum of 5,000,000 acre-feet of additional annual water supply capacity has been created and is being delivered to California’s urban and agricultural consumers.
(2) All projects funded pursuant to Sections 1 to 17, inclusive, have been completed.

SEC. 21.
 (a) (1)   Notwithstanding any other law, with respect to a project allocated funding in whole or in part by Section 2.5 of Article X or Sections 1 to 17, inclusive, or certified as a drought resiliency project pursuant to Section 20, the Secretary of the Natural Resources Agency may review, approve, deny, or issue any commission action or inaction for the project, including, but not limited to, a coastal development permit or denial arising out of an appeal of an approval or a denial by a local government pursuant to a local coastal program certified under Chapter 6 (commencing with Section 30500) of Division 20 of the Public Resources Code, pursuant to the procedures set forth in this section.
(2) For purposes of this section, “eligible water project” means a project allocated funding in whole or in part by Section 2.5 of Article X or Sections 1 to 17, inclusive, or certified as a drought resiliency project pursuant to Section 20.
(3) For purposes of this section, “local coastal program appeal” means an appeal of an approval or a denial by a local government of an eligible water project pursuant to a local coastal program certified under Chapter 6 (commencing with Section 30500) of Division 20 of the Public Resources Code, including all related local implementing ordinances and regulations.
(b) The Secretary of the Natural Resources Agency may review commission action or inaction with respect to an eligible water project in accordance with all of the following:
(1) Notwithstanding Article 5 (commencing with Section 65950) of Chapter 4.5 of Division 1 of Title 7 of the Government Code, the commission shall render a final decision on any coastal development permit application, or local coastal program appeal for an eligible water project, within 90 days after submission of the application or local coastal program appeal or the commission determines the application or local coastal program appeal is complete, whichever may occur first. If the commission fails to act within that 90-day time period, the coastal development permit application or local coastal program appeal shall be transferred to the Secretary of the Natural Resources Agency, who shall render a final decision on the application or local coastal program appeal.
(2) Within 30 days of a decision by the commission on an eligible water project, a project applicant may appeal the commission’s decision to the Secretary of the Natural Resources Agency.
(3) For a commission decision related to an eligible water project issued after September 1, 2021, but before the operative date of this section, the project applicant may appeal the decision to the Secretary of the Natural Resources Agency within 30 days of the operative date of this section.
(4) The Secretary of the Natural Resources Agency may grant or deny an appeal filed pursuant to this subdivision, and shall render a final decision on the appeal within 90 days of the filing of the appeal. If the Secretary of the Natural Resources Agency approves a coastal development permit for the eligible water project, or grants an appeal filed pursuant to this subdivision, the Secretary of the Natural Resources Agency may direct the commission to issue the coastal development permit or take any other action, on terms and conditions that the Secretary of the Natural Resources Agency may determine, in the Secretary of the Natural Resources Agency’s sole discretion, are appropriate. In issuing approval or direction regarding a coastal development permit, the Secretary of the Natural Resources Agency shall rely upon the project’s previous environmental determinations and no further environmental review shall be required under Division 13 (commencing with Section 21000) of the Public Resources Code. The Secretary of the Natural Resources Agency shall adopt findings that reflect the action of the Secretary of the Natural Resources Agency based upon prior environmental review. In reviewing a coastal development permit application or local coastal program appeal, or any other decision, the Secretary of the Natural Resources Agency shall consider the state’s interest in diverse and resilient water supplies and mitigating the effects of drought on those supplies, and may conclude that those interests require modification of any decision of the commission, or any condition imposed by the commission on an eligible water project.
(c) Notwithstanding the Secretary of the Natural Resources Agency’s certification of the regulatory program of the commission dealing with the consideration and granting of coastal development permits pursuant to Section 21080.5 of the Public Resources Code, in assessing the conformity of an eligible water project with Chapter 3 (commencing with Section 30200) of Division 20 of the Public Resources Code and, if applicable, the local government’s certified local coastal program for those portions of the project on appeal to the commission, the commission shall rely exclusively upon any environmental impact report or other environmental review document previously certified or adopted by the lead agency and any responsible state agency, if applicable, pursuant to Division 13 (commencing with Section 21000) of the Public Resources Code, and the commission shall not require any new or revised environmental review pursuant to Division 13 (commencing with Section 21000) of the Public Resources Code before acting.
(d) Notwithstanding any other law, including, but not limited to, Chapter 4 (commencing with Section 30300) of Division 20 of the Public Resources Code, the Secretary of the Natural Resources Agency is designated as a state agency charged with implementation of Section 307 of the federal Coastal Zone Management Act of 1972 (16 U.S.C. Sec. 1456), and any regulations promulgated thereunder, with respect to decisions made by the Secretary of the Natural Resources Agency pursuant to this section. In exercising that authority, the Secretary of the Natural Resources Agency shall interpret and apply the applicable policies set forth in the certified California Coastal Management Program, including, but not limited to, the applicable policies set forth in Chapter 3 (commencing with Section 30200) of Division 20 of the Public Resources Code, and shall determine the consistency of an eligible water project with those policies. The Governor shall submit a copy of this section to the United States Secretary of Commerce for certification as part of the California Coastal Management Program consistent with the requirements of Section 1455(e) of Title 16 of the United States Code and Subpart H (commencing with Section 923.80) of Part 923 of Subchapter B of Chapter IX of Subtitle B of Title 15 of the Code of Federal Regulations.
(e) This section applies prospectively and retroactively to any approvals or denials of permits for an eligible water project under this division or any local coastal program approved by a local government lying, in whole or in part, within the coastal zone and certified under Chapter 6 (commencing with Section 30500) of Division 20 of the Public Resources Code.
(f) The commission may provide comment to the California Water Commission during the California Water Commission’s funding allocation process pursuant to Section 2.5 of Article X or Sections 1 to 17, inclusive.

SEC. 22.
 (a) The California State Auditor shall annually conduct a programmatic review and an audit of expenditures from the Water Infrastructure Fund created pursuant to Section 2 and the Water Infrastructure Trust Account created pursuant to Section 2.5 of Article X.
(b) Notwithstanding Section 10231.5 of the Government Code, the California State Auditor shall report its findings under subdivision (a) annually on or before March 1 to the Governor, and to the Legislature in compliance with Section 9795 of the Government Code, and shall publish the findings publicly on its internet website.
(c) If an audit of an entity that receives funding under Sections 1 to 17, inclusive, or Section 2.5 of Article X is conducted pursuant to state law and reveals any impropriety, the California State Auditor or the Controller may conduct a full audit of any or all of the activities of that entity. If the audit reveals erroneous or inappropriate spending of funding received under Sections 1 to 17, inclusive, or Section 2.5 of Article X by a public agency, the public agency shall, if the California Water Commission determines the erroneous or inappropriate spending was intentional, repay the moneys to the California Water Commission for deposit into the Water Infrastructure Fund created pursuant to Section 2 or the Water Infrastructure Trust Account created pursuant to Section 2.5 of Article X, as applicable.

Sixth—

 (a) The provisions of this measure are severable. If any provision of this measure or its application is for any reason held to be invalid or unconstitutional by a final judgment of a court of competent jurisdiction, that decision shall not affect any other provision or application that can be given effect without the invalid provision or application. The Legislature hereby finds and declares that it would have adopted this measure and each and every portion, section, subdivision, paragraph, clause, sentence, phrase, word, and application not declared invalid or unconstitutional irrespective of whether any portion of this measure, or application thereof, is subsequently declared invalid or unconstitutional.
(b) This measure is intended to be comprehensive. It is the intent of the Legislature that if this measure, and acts relating to the same subject, appear on the same statewide election ballot, the provisions of the other act or acts shall be deemed to be in conflict with this measure. If this measure, and one or more conflicting acts, are adopted by the voters in the same election, and this measure receives a greater number of affirmative votes, the provisions of this measure shall prevail in their entirety, and all provisions of the conflicting acts shall be null and void.
(c) (1) Except as provided in paragraph (2), the Attorney General shall defend against any action challenging, in whole or in part, the validity of this measure, and shall have an unconditional right to intervene in any action to defend the validity of this measure.
(2) If the Attorney General declines to defend the validity of this measure in any action, the Attorney General shall nonetheless file an appeal from, or seek review of, any judgment of any court that determines that this measure is invalid, in whole or in part, if necessary or appropriate to preserve the state’s standing to defend the law in conformity with the Attorney General’s constitutional duty to see that the laws of the state are adequately enforced.
(3) Nothing in this section precludes other public officials from asserting the state’s interest in the validity of this measure.
(4) This measure shall be broadly construed, interpreted, and implemented in order to achieve the purposes set forth in Sections 2 and 3 of this measure.