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.

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.