The bill establishes a new State Treasury account — the Delta Levees and Canal Subsidence Fund — to pay for projects that restore water conveyance capacity lost to land subsidence and to improve Delta and Suisun Marsh levees. The secretary may accept state, federal, and private funds into the account and may set up internal accounts for particular uses.
The law directs the secretary to allocate money between the Department of Water Resources and the Delta Conservancy, requires public transparency around conservancy spending plans, ties project prioritization to groundwater basin sustainability practices, and forbids using the fund to pay for any additional Delta conveyance facilities. It also mandates periodic legislative reporting on expenditures and public benefits.
At a Glance
What It Does
Creates a dedicated fund for canal and levee work, authorizes the secretary to accept various funding sources and to allocate monies to two state entities, and sets prioritization and public‑engagement rules for project selection.
Who It Affects
State and local water infrastructure owners (canal operators, levee districts), the Department of Water Resources, the Delta Conservancy, groundwater sustainability agencies implementing SGMA, and water suppliers that would finance new conveyance projects.
Why It Matters
This targets state investment at subsidence-driven capacity losses and Delta levee resilience while conditioning support on local groundwater management practices and keeping costs for new conveyance projects off the state balance sheet.
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What This Bill Actually Does
The bill creates the Delta Levees and Canal Subsidence Fund in the State Treasury and gives the Natural Resources secretary authority to accept state, federal, and private moneys into it. The secretary can create subaccounts and, for nonstate moneys, makes those funds continuously appropriated to speed their use without being constrained by fiscal-year limits.
The secretary must divide the fund between two recipients. One allocation goes to the Department of Water Resources to pay for capital projects that restore original design conveyance capacity in state water conveyance systems where subsidence has reduced operational capacity.
The other allocation goes to the Delta Conservancy for levee work in the Sacramento–San Joaquin Delta and Suisun Marsh, explicitly allowing multibenefit projects that blend habitat, water quality, and levee safety.Both the department and the conservancy may adopt implementation guidelines outside the full Administrative Procedure Act rulemaking process. The department and conservancy must, however, provide an opportunity for public comment and hold at least one public workshop before adopting or revising those guidelines.
The conservancy must also prepare an annual spending plan, publish it online, solicit at least 45 days of public comment, and hold a community meeting before the conservancy board approves the plan; the board may appoint an advisory committee to help.The bill builds in a fiscal backstop and guardrails: if the fund does not contain enough money to meet the mandates, the secretary must proportionally reduce the specified allocations. It bars any expenditures from the fund to cover design, construction, operation, mitigation, or maintenance of additional Delta conveyance facilities, assigning those obligations to the water agencies that would benefit.
Finally, the secretary must report to the Legislature on expenditures and public benefits by January 1, 2032, and every five years thereafter.
The Five Things You Need to Know
The bill directs an annual allocation of $150,000,000 to the Department of Water Resources, annually through the 2046–47 fiscal year, subject to funding availability, for capital work to restore original conveyance capacity lost to subsidence.
It directs an annual allocation of $150,000,000 to the Delta Conservancy, annually through the 2046–47 fiscal year, subject to funding availability, for levee improvements and multibenefit projects in the Sacramento–San Joaquin Delta and Suisun Marsh.
Nonstate funds deposited into the new fund are continuously appropriated to the secretary without regard to fiscal year, allowing federal or private money to be spent immediately consistent with the statute.
Both the department and the conservancy may adopt implementing guidelines without full APA rulemaking, but must provide opportunity for public comment and hold at least one public workshop; the conservancy must also publish an annual spending plan with at least 45 days for public comment and a community meeting.
Moneys in the fund may not be used to pay for the costs (design, construction, operation, mitigation, maintenance) of any additional Delta conveyance facilities; those costs are expressly the responsibility of the benefiting water agencies.
Section-by-Section Breakdown
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Creation of the Delta Levees and Canal Subsidence Fund
This subsection establishes the fund in the State Treasury and makes moneys available to the Natural Resources secretary upon appropriation by the Legislature. Practically, it creates a distinct pot of money to track and target spending on subsidence and levee work, which helps both transparency and budgeting for these specific risks.
Permitted funding sources, accounts, and continuous appropriation of nonstate funds
The secretary may solicit and accept state, federal, and private funds, including from the General Fund, special funds, the Greenhouse Gas Reduction Fund, or bond proceeds. The secretary can create internal accounts for different programs or donors. Critically, the statute makes nonstate (e.g., federal and private) funds in the account continuously appropriated to the secretary, meaning those dollars can be expended without annual appropriation actions and without regard to fiscal-year timing.
Allocation to the Department of Water Resources for restoring conveyance capacity
The bill directs a fixed annual allocation to the Department of Water Resources for capital projects that restore original design water conveyance capacity where subsidence has reduced operational throughput. The department must prioritize projects that restore the most volume and give preference to projects located in groundwater basins that are implementing best management practices aligned with SGMA (or department‑determined equivalent). The department may set implementation guidelines that are exempt from the APA but still require public comment and at least one workshop; it can also impose extra conditions tied to specific funding sources.
Allocation to the Delta Conservancy for levees and multibenefit projects
A parallel allocation goes to the Delta Conservancy for levee improvements in the Delta and Suisun Marsh, including subsidence-related work and construction of seepage or stability berms. The conservancy must prioritize projects that support sustainable water supplies and habitat improvements. Like the department, the conservancy may adopt APA‑exempt guidelines with public workshops and may impose conditions to satisfy funding source requirements. Before spending, the conservancy must prepare and publish an annual spending plan, allow at least 45 days for public comment, hold a community meeting, and secure board approval; the board can create an advisory committee to help develop the plan.
Shortfalls and exclusion for new conveyance facilities
If the fund lacks sufficient moneys to meet the statutory allocations, the secretary must proportionally reduce the amounts to the department and conservancy. The statute also expressly prohibits using the fund to pay for any costs associated with additional Delta conveyance facilities — design, construction, operation, mitigation, or maintenance — allocating that financial responsibility to the water agencies that would benefit from such new facilities.
Legislative reporting requirement
The secretary must report to the Legislature on fund expenditures and the public benefits delivered by January 1, 2032, and then every five years thereafter, with the report transmitted under the referenced Government Code procedures. This creates periodic accountability checkpoints rather than annual legislative review.
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Explore Environment in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Department of Water Resources — Gains a dedicated revenue stream to fund capital repairs that restore canal and conveyance capacity degraded by land subsidence, enabling projects that directly increase system throughput.
- Delta Conservancy and levee districts — Receive steady, targeted funding for levee improvements and multibenefit habitat projects, plus a structured process (spending plan, public comment) that can align investments with local needs.
- Groundwater Sustainability Agencies (GSAs) in compliant basins — Benefit indirectly because the bill prioritizes projects in basins that implement SGMA-aligned practices, creating an incentive and possible funding leverage for sustainable groundwater management.
- Delta communities and ecosystems — Stand to gain improved levee safety, flood protection, and habitat restoration outcomes from multibenefit projects funded through the conservancy.
Who Bears the Cost
- Local and regional water agencies proposing new Delta conveyance facilities — The bill explicitly assigns the full cost of any additional conveyance design, construction, operation, mitigation, and maintenance to the benefiting water agencies rather than the state fund.
- State budget/funding sources — If the Legislature appropriates General Fund, bond, or GGRF dollars into the new fund, those commitments can divert resources from other priorities; nonstate fund continuous appropriation also reduces annual budgetary control.
- Delta levee districts and project sponsors — Will face administrative conditions and additional requirements attached to some funding sources; meeting those conditions (matching, studies, monitoring) can raise project costs.
- Delta Conservancy and DWR program staff — Must develop spending plans, adopt guidelines under abbreviated procedural rules, and manage public outreach and reporting, increasing administrative workload without separate staffing or funding guarantees.
Key Issues
The Core Tension
The central dilemma is whether the state should use targeted, time‑limited grants to steer both infrastructure repairs and groundwater management behavior (rewarding SGMA‑aligned basins) while simultaneously refusing to fund new conveyance projects — a choice that accelerates repairs in some places but shifts the costs and risks of system expansion to local water agencies and may leave urgent needs in noncompliant basins unaddressed.
The bill uses blunt instruments to accelerate spending and target incentives but leaves several implementation hard questions open. Making nonstate moneys continuously appropriated speeds use of federal and private grants, yet it reduces the Legislature's annual appropriation leverage and complicates cross‑year budgeting and oversight.
The APA exemption for guideline adoption accelerates rulemaking, but it narrows procedural protections and could make substantive choices harder to challenge or revisit through formal rulemaking channels.
Prioritizing projects in basins that implement SGMA aligns incentives toward sustainable groundwater practices, but it also risks deprioritizing critical conveyance or levee work in areas where local SGMA progress lags for institutional, financial, or political reasons. The statutory prohibition on funding any additional conveyance facilities leaves a clear funding boundary, but it creates a cost shift to water agencies — an explicit policy choice that may affect project timelines, regional cost-sharing negotiations, and state–local relations.
Finally, the bill mandates periodic (five‑year) reporting rather than annual performance reviews, which may slow adaptive management in a system where subsidence and infrastructure needs can change rapidly.
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