Administration seeks judicial streamlining, bonding authority for Delta Conveyance in May revision

The Department of Finance and the Department of Water Resources on Wednesday described trailer bill language in the May revision intended to speed review and limit delays on the proposed Delta Conveyance project, a multibillion-dollar upgrade to California's State Water Project.

The administration's May revision includes provisions to shorten some litigation timelines, clarify the project's permitting paths and confirm DWR's authority to issue revenue bonds that would be repaid by water contractors rather than by the state's general fund. "Every year of delay for that project adds around $600,000,000 which ratepayers would have to pay back," Andrew March of the Department of Finance said, arguing the changes reduce future costs for water users.

The proposals would also amend several permitting and judicial processes. "The trailer bill includes 270-day streamlining of litigation," Chris Butcher, Office of General Counsel for the Department of Water Resources, told the committee, describing the proposal as modeled on earlier, project‑specific streamlining statutes. Department officials said the language would cover more than CEQA and would provide a specified standard for courts to consider before enjoining construction.

Karla Namath, identified in the transcript as the director of the Department of Water Resources, told the committee litigation is expected and characterized the trailer bill language as a measure to obtain steady, timely decisions. "The judicial streamlining is really about getting a speedy decision through the courts, more than anything," Namath said, adding DWR is also pursuing an active validation case on its authority to issue revenue bonds.

Several senators pressed DWR and Finance on legal and local impacts. Senator Kevin McNerney (transcript) said the administration's language appears to "end run" a superior court decision and asked why the Legislature should permit changes rather than seek a public vote or a new legislative authorization. DWR attorneys told lawmakers they are appealing a 2020 ruling that the department said only found an earlier project description too broad and that DWR believes its refined December 2023 CEQA project description supports bond authority.

Lawmakers also asked about water rights, whether the bill would alter seniority for existing users, and how courts could enjoin construction if new, unforeseen, or imminent threats to public health and safety emerged. DWR said the water board must still consider petitions to add points of diversion and may impose conditions; the trailer bill is intended to separate overlapping processes, not to replace environmental review. On judicial relief, DWR told the committee a court "could" enjoin construction in cases of imminent threat to health or safety, but otherwise the streamlining language would limit stays of construction.

On financing, DWR explained revenue bonds for the State Water Project have long been issued and stated they are not general obligation bonds. "Under no circumstances would the general fund be used to pay any of the interest or principal on these bonds," Andrew March said, adding DWR has issued revenue bonds since the 1960s and that debt service will be paid by water project contractors.

Opponents and Delta-area lawmakers told the committee that the trailer bill raises constitutional and policy concerns, including whether the Legislature is bypassing deliberative policy debates by placing these changes in a budget vehicle. "It's wholly inappropriate to include this Delta policy in a budget discussion," Senator McNerney said. Delta representatives and other senators said they fear environmental and local impacts and questioned whether less disruptive alternatives such as groundwater recharge, recycling and levee strengthening have received sufficient consideration.

DWR defended the project's reduced size relative to earlier proposals and said extensive environmental review has already been completed. "We have certified environmental document[s]… we are in front of the water board. They will render a decision on this water rights petition and impose environmental conditions," the director said.

What happens next: the trailer bill language is part of the May revision and will be considered as the Legislature develops and negotiates the final budget package. DWR also reported active litigation and a pending appeal in the courts over earlier project descriptions; lawmakers said they intend to read the language closely and press for clarifications.

ACTIONS AND FORMAL VOTES: No formal votes were recorded in the transcript segment reviewed. The committee engaged in Q&A and requested follow-up materials and clarifications from the administration and DWR.