Cal. Water Code § 11983

The department and the State Water Resources Control Board shall only approve for funding by the state under this chapter those projects which result in a net increase in the amount of water available for use and which do not interfere with an established right to use of water by any other person or entity. Any agreement between parties for a conservation or reclamation project not using state financing shall not require approval by the department or the State Water Resources Control Board under this chapter but shall comply with the criteria adopted under Section 11981 or 11982.