The State Water Resources Control Board unanimously adopted the Clean Water State Revolving Fund (CWSRF) fiscal-year 2025–26 Intended Use Plan (IUP) on Aug. 5, 2025, approving a fundable list of projects, returning the water-recycling construction grant cap to $15 million per project (pending Proposition 4 appropriations), and allotting funds for small-community wastewater projects, stormwater and technical assistance.

Lisa Hong, division chief who oversees the Clean Water SRF and related funding programs, told the board the draft IUP incorporated an official EPA federal allotment and the May-revised state budget assumptions; staff presented a range of scenarios and recommended a preferred course that assumes $150 million of Proposition 4 funding for water recycling construction grants. Hong said DFA currently has 140 applications requesting roughly $3.8 billion while projected funding capacity is about $1.7 billion for the coming year; staffing constraints and co-funding complexities remain operational limits.

Key board actions and staff proposals included: adding 12 loan projects to the fundable list (a revised “scenario e” after public comment), restoring a $15 million maximum construction grant per project for water recycling projects (and allowing $15M per phase for large projects), allotting $20 million in principal forgiveness for stormwater projects, and supporting small-community wastewater grants of up to $50 million for disadvantaged communities addressing violations or septic-to-sewer conversions. Staff said water recycling depends heavily on Proposition 4 appropriations; if the legislature and administration do not appropriate the projected Prop 4 funds the allocation list would be affected, especially for water recycling construction grants.

Public commenters included municipal utilities, utilities and water agencies, tribes and nonprofit groups. Several speakers urged technical assistance funding and urged support for septic-to-sewer projects and tribal land stewardship projects on the fundable list. The board and staff discussed the administrative allowance and technical assistance: staff explained that federal administrative set-aside funds and interest- or fee-based administrative income support program staffing, and noted that Proposition 4 contains a 10% set-aside for technical assistance for eligible projects; some stakeholders asked staff to consider additional technical assistance funding for septic-to-sewer planning and capacity building.

The resolution the board approved included the change sheet and directed staff to submit the final IUP to US EPA. Board members asked staff to continue outreach to applicants and to coordinate the CalWaters rollout for reporting and compliance required by other board actions. The board’s roll call was unanimous.