Wat. Code, § 12687.5

(a) Notwithstanding Section 12585.7, the state may provide subvention of funds, up to 100 percent of the costs, for the project for flood control on the Pajaro River in the Counties of Monterey and Santa Cruz, authorized by the federal Flood Control Act of 1966 (Public Law 89-789), that is substantially in accordance with the recommendations of the Chief of Engineers of the United States Army Corps of Engineers in House Document 491, 89th Congress, to the Counties of Monterey and Santa Cruz, or to local agencies in those counties, as follows:

(1) At an estimated cost to the state of the sum that may be appropriated for state cooperation by the Legislature upon the recommendations and advice of the department.

(2) Upon a specific written determination by the department that the project meets the requirements of Section 12582.7.

(b) The state assumes no liability for damages that may result from the project by either of the following:

(1) Authorizing the provision of subvention funds in accordance with this section.

(2) The appropriation by the Legislature of these subvention funds upon the recommendations and advice of the department.

(c) The County of Monterey or Santa Cruz, or a local agency in either of those counties, may receive the subvention funds only if it enters into an agreement with the department pursuant to which the county or local agency agrees to indemnify and hold and save harmless the state, its officers, agents, and employees for any and all liability for damages that may result from the project.

(d) State funding, upon appropriation by the Legislature, may be used for planning, engineering, designing, and constructing the project within authorized project boundaries as set forth in the recommendations of the Chief of Engineers of the United States Army Corps of Engineers in House Document 491, 89th Congress, as authorized by the federal Flood Control Act of 1966 (Public Law 89-789). The state, through the Flood Control Subventions Program, may advance funds for the planning, engineering, design, and construction of the authorized project, and the acquisition of required lands, easements, rights-of-way, utility relocations, disposal sites, and borrow areas for, and mitigation of, the authorized project, as specified in the Army Corps of Engineers report entitled Pajaro River Flood Risk Management General Reevaluation Report & Integrated Environmental Assessment. The state shall have the discretion to reduce retention withheld under any cost-share agreement to fund the Pajaro River Flood Risk Management Project to 0 percent and is authorized to advance funding in the absence, in whole or in part, of federal funding, in which case the funding shall not exceed the amount that would be the equivalent nonfederal share if there was federal project funding.

(e) Before any funds appropriated by the Legislature are provided to the flood control project, the Director of Water Resources shall find both of the following:

(1) The project qualifies for greater than a 100 percent state cost share based upon the gross calculation of the cumulative benefits the project provides as described in a nonfederal cost-share report submitted to the department for the project.

(2) The project spans more than one county, contains significant state assets, and widespread economic hardship exists throughout the benefit area of the project, as demonstrated in a nonfederal cost-share report submitted to the department for the project, and the project would aid in the restoration of a groundwater aquifer.

(f) For purposes of this section, “liability for damages” includes, but is not limited to, liability for damages relating to the construction or operation of the project or the failure of the project to operate as intended.