Cal. Water Code § 12886

If in order to accomplish the objectives of this chapter it is necessary to construct a project that is larger than one which a public agency proposes to construct, the state may participate in planning, designing, constructing, operating and maintaining the project, and in so participating shall finance those costs of the project allocated to the state, on terms agreed upon with the agency, to the end that the project shall accomplish the maximum water development objectives at a minimum total expenditure.