DWR defends Delta Conveyance trailer bill; lawmakers press on bonding, CEQA and tribal concerns

The California Department of Water Resources on Tuesday defended trailer bill language tied to the Delta Conveyance project that Department officials say would streamline permitting and shorten litigation timelines, while senators pressed the agency on bond authority, water-rights implications and impacts on Delta communities.

The Delta Conveyance provisions in the governor’s May revision would add judicial "streamlining" rules and clarify revenue-bond authority for the project. "We anticipate litigation on this project," Department of Water Resources Director Carla Namath told the Senate Budget Subcommittee, adding the administration's aim is to secure "a speedy decision through the courts" and reduce delay-related costs.

The issue matters because the project is among the state’s largest planned water infrastructure efforts and has drawn sustained legal challenges. Opponents say the trailer bill uses the budget process to enact major policy changes that merit stand‑alone legislation and public debate.

DWR counsel Chris Butcher told the committee the proposed litigation timeline would mirror earlier state streamlining provisions, noting the trailer language includes a 270‑day timetable for covered litigation. But several senators said the measure reaches further than past streamlining laws and could limit remedies if unforeseen harms emerge. "There is a remedy if there's anything that may be threatening public health or safety," Namath said in response to a question about whether courts could pause construction; when pressed she added that injunctive relief could be considered for "imminent threat to health and safety."

Bonding and ratepayer impact: DWR and Department of Finance staff said the authority clarified in the trailer bill would let the State Water Project issue revenue bonds that are paid by State Water Project contractors, not general‑obligation bonds backed by the state’s full faith and credit. "Under no circumstances would the general fund be used to pay any of the interest or principal on these bonds," Andrew March of the Department of Finance said. Still, senators pressed how ratepayers and water contractors would absorb cost overruns and whether agricultural contract participation is sufficient to cover a project estimated in testimony at roughly $20 billion. Senator Jerry McNerney and other members warned that if agricultural contractors withdraw, the financial burden could shift more heavily onto urban ratepayers.

Water rights and litigation: DWR said it has filed a water‑right petition with the State Water Resources Control Board and will face continued judicial challenges. The department is pursuing an ongoing validation action after a superior court earlier found a project description too broad; DWR has appealed and reported briefing is complete. Namath said the trailer bill language does not attempt to remove the board’s role in evaluating water‑rights impacts but seeks to separate overlapping issues so permitting and other decisions are not delayed.

Tribal and environmental concerns: DWR told the committee it implemented AB 52 tribal outreach earlier in the process and remains engaged with tribes on a resource management plan for construction‑era discoveries. DWR also said it had obtained a California Endangered Species Act permit and that water‑quality conditions would still be set by the water board.

Eminent domain: The department said trailer bill language would allow it to accept a landowner’s appraisal early in negotiations so talks can proceed from that appraisal in the interest of efficiency. Senators expressed concern that the change could disadvantage property owners and urged protections to ensure fair compensation.

What’s next: DWR said local water agencies will decide whether to participate in late 2026; if they vote yes, the department expects to issue revenue bonds and move forward with construction decisions. Committee members repeatedly urged the administration to let the regular legislative policy process address controversial changes and said they would review the trailer bill language closely.

Ending: The committee kept the Delta Conveyance language under close scrutiny. DWR emphasized it expects further litigation and board review; senators warned that legislative and community concerns about authority, environmental protections and compensation for landowners remain unresolved.