ACA 11 (California Water Resiliency Act) proposes adding Section 8 to Article X of the California Constitution to create a new Water Conveyance and Capacity Infrastructure Fund and require an annual transfer equal to 1 percent of state revenues from the General Fund into that fund. The measure declares those amounts continuously appropriated to the California Water Commission to administer grants for entitlement, repair, design, and construction of water conveyance and capacity projects that preserve or expand supplies for drinking water and agricultural uses.
The amendment also carves out two constraints: it preserves the state’s constitutional obligation to fund public education and ties funded projects to consistency with area of origin water rights. The ballot change would make funding automatic, outside the ordinary annual budget process, and limits grant eligibility to public agencies, special districts, joint powers authorities, or public‑private partnerships that own the project in whole or in part.
At a Glance
What It Does
Creates a constitutionally established fund in the State Treasury and directs an annual transfer from the General Fund equal to 1 percent of state revenues subject to Article XIII B. It designates the California Water Commission as the administrator of continuously appropriated grant funds for specified water infrastructure activities.
Who It Affects
The State Treasurer (responsible for the transfers), the California Water Commission (grant administrator), public water agencies, special districts, joint powers authorities, and public‑private partnerships that build or own conveyance and capacity projects; agriculture and communities dependent on local water supplies will be primary beneficiaries.
Why It Matters
By enshrining a dedicated, recurring revenue stream in the Constitution the measure changes long‑term budget priorities and bypasses the annual appropriations process, shifting oversight and funding stability onto the Water Commission and reducing the Legislature’s discretionary control over those dollars.
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What This Bill Actually Does
ACA 11 adds a new, constitutionally protected funding mechanism for water conveyance and capacity projects. It requires the State Treasurer to calculate an annual transfer equal to a fixed percentage of state revenues as defined under Article XIII B and deposit that amount into a newly created Water Conveyance and Capacity Infrastructure Fund in the State Treasury.
The text specifies that the first transfer happens in the first fiscal year after the provision becomes operative.
Once deposited, the measure makes the money continuously available to the California Water Commission: the commission may use funds both to cover its actual implementation costs and to award grants. The statute defines grant-eligible activities to include entitlement, repair, design, and construction work on projects intended to maintain or expand clean, safe drinking water for homes and businesses and water for agricultural use.
It also includes an explicit consistency requirement with area of origin water rights, which constrains where and how funds may be deployed.Grant applicants are limited: only public agencies, special districts, joint powers authorities, or public‑private partnerships may apply, and any project that receives a grant must be owned, wholly or partially, by the applicant. The measure also protects the state’s constitutional obligation to fund public education by stating the transfers will not reduce the amounts required for that purpose under Article XVI, Section 8.
Finally, the continuous appropriation clause bypasses annual budget windows and certain Government Code restrictions, meaning the Water Commission can obligate and spend these funds without returning to the Legislature for each fiscal year.
The Five Things You Need to Know
The new constitutional Section 8 directs the Treasurer to transfer annually an amount equal to 1 percent of state revenues eligible under Article XIII B into the Water Conveyance and Capacity Infrastructure Fund.
The fund is continuously appropriated to the California Water Commission, and the commission may use money for its actual costs of administration as well as grants.
Grants may be used for entitlement, repair, design, and construction of conveyance and capacity projects that support drinking water and agricultural supplies.
Only public agencies, special districts, joint powers authorities, or public‑private partnerships may apply for grants, and any grant recipient must own the project in whole or in part.
The transfers are explicitly subordinated to the state’s constitutional school funding obligation and must be consistent with area of origin water rights.
Section-by-Section Breakdown
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Purpose and policy rationale
This prefatory section lays out the Legislature’s reasons for the amendment: prioritizing long‑term water supply, storage, treatment, and reclamation, and emphasizing drought resiliency. It also flags the practical challenge that water projects take years to permit and can be delayed by litigation—an implicit rationale for a steady funding stream. For implementers, the findings signal the legislative intent to favor capacity and conveyance projects while acknowledging environmental and legal constraints.
Creation of the Water Conveyance and Capacity Infrastructure Fund and the transfer rule
Subsection (a) creates the fund in the State Treasury and obligates the Treasurer to make the annual transfer equal to 1 percent of state revenues eligible to be appropriated under Article XIII B, starting in the first fiscal year after the section becomes operative. Practically, that ties the transfer calculation to the same revenue base and constitutional calculations that govern Gann‑limit accounting, which may require technical coordination between the Treasurer, Department of Finance, and Controller to determine the exact transfer each year.
Protection for constitutionally required education funding
Subsection (b) clarifies that the new transfers must not reduce the amounts the State is required to apply to K‑14 and higher education under Article XVI, Section 8 (the state’s school funding guarantee). This provision aims to blunt the political opposition that often arises when new dedicated streams compete with Prop 98, but it also raises implementation questions about which portion of the General Fund will absorb the transfer in tight budget years.
Continuous appropriation to the California Water Commission
Subsection (c) makes the fund continuously appropriated to the California Water Commission, notwithstanding Section 13340 of the Government Code and without regard to fiscal years. That means the Commission need not wait for the Legislature’s annual budget to obligate or spend funds, and it can budget across fiscal years. The subsection also authorizes the Commission to use money for its actual implementation costs and to administer grants, effectively vesting the Commission with both funding and programmatic control.
Eligibility and ownership requirements for grant recipients
Subsection (d) restricts grant eligibility to public entities and public‑private partnerships and requires that granted projects be owned in whole or in part by the applicant. This narrows the universe of beneficiaries to public or quasi‑public actors, excludes purely private developers, and ties public financing to public ownership or control—an explicit attempt to ensure public stewardship of funded infrastructure.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- California Water Commission — Gains a dedicated funding stream and expanded programmatic authority to direct grants and to cover its administrative costs.
- Public water agencies and special districts — Improve access to capital for conveyance, capacity, repair, and design projects that increase local supply reliability and reduce deferred maintenance.
- Rural and agricultural communities — Stand to receive funding for projects that preserve agricultural water supplies and local drinking water systems that may otherwise lack capital.
- Construction and engineering sectors active in water projects — Expect increased contract opportunities from a steady, constitutionally backed funding source.
Who Bears the Cost
- State General Fund — Will transfer a constitutionally mandated share (1 percent of eligible revenues) annually, reducing discretionary resources available for other priorities.
- Other non‑education budget areas — Because transfers cannot reduce constitutional school funding, programs outside Prop 98 (e.g., health, social services, housing) are more likely to absorb budget pressure in lean years.
- Private developers — Are effectively excluded from direct grant eligibility, losing a potential financing pathway unless they form a public‑private partnership with public ownership.
- Legislature and budget oversight bodies — Experience reduced annual control over these dollars because of the continuous appropriation and constitutional dedication, complicating fiscal planning and oversight.
Key Issues
The Core Tension
The amendment confronts a central trade‑off: it locks in steady, long‑term funding for slow‑moving, capital‑intensive water projects—addressing a chronic underinvestment problem—while simultaneously removing a slice of the General Fund from annual legislative discretion, which reduces flexibility to respond to other urgent needs and complicates fiscal oversight. Reasonable stakeholders can agree that water needs reliable funding, but they will disagree about the proper balance between constitutional dedication and preserving the Legislature’s budgetary control and accountability.
The amendment dedicates a predictable revenue stream to water infrastructure, but it leaves several implementation questions unresolved. Tying the annual transfer to revenues "eligible to be appropriated pursuant to Article XIII B" will require precise yearly calculations and could invite disputes over what revenues are included or excluded under existing Gann‑limit rules.
The continuous appropriation language gives the California Water Commission significant spending autonomy, but the measure does not prescribe clear prioritization criteria, performance metrics, or auditing requirements for grant awards—weakening legislative and public oversight unless the Commission adopts rigorous processes.
The applicant and ownership restrictions steer funds toward public control, but allowing public‑private partnerships creates a compliance and procurement grey area: the text does not define governance, partner selection, or limits on private returns. The consistency requirement with area of origin water rights protects historic source communities but could restrict where projects proceed, potentially concentrating investments in certain geographies and prompting legal challenges if stakeholders disagree on what constitutes "consistency." Finally, the amendment focuses on capital activities (entitlement, repair, design, construction) but is ambiguous on operations, maintenance, and lifecycle funding—raising the risk of funded projects entering service without secured long‑term O&M funding.
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