The 2026-27 Budget

Permitting Support at the
State Water Resources Control Board

Summary

The Governor’s budget proposes $2.6 million in 2026-27 and ongoing from the Waste Discharge Permit Fund and 12 permanent positions for the State Water Resources Control Board (SWRCB) to manage increased workload stemming from a recent U.S. Supreme Court decision that had the effect of shifting permitting and regulatory responsibilities from the federal government to the state for some bodies of water. We recommend approving the proposal, which appears justified based on workload data. We suggest the Legislature also consider adopting certain statutory amendments to increase the efficiency of this permitting work and provide SWRCB with improved enforcement tools.

Background

Federal and State Laws Govern Water Quality in California. Water quality is governed by the federal Clean Water Act (CWA) and state Porter-Cologne Water Quality Control Act. Under CWA, the U.S. Environmental Protection Agency (EPA) establishes national standards and delegates authority to SWRCB and its nine regional water boards (collectively referred to as the water boards) to administer federal permitting programs. The water boards also implement and enforce the state Porter-Cologne Act.

Water Quality Permits Required for Projects Affecting California Waters. Projects and activities that involve the release of dredged or fill materials into waters or result in the discharge of pollutants into waters require federal and/or state permits. Figure 1 shows the various types of water quality permits (also called certifications and orders) that project applicants must attain, their purposes, and the issuing agencies. These permits are generally issued as follows:

• For the release of dredged or fill materials, the U.S. Army Corps of Engineers issues a CWA Section 404 permit. A federal dredge/fill permit requires the state to first issue a CWA Section 401 certification indicating that the activities also comply with state water quality standards.

• For pollutant and stormwater discharges, the water boards issue permits on behalf of EPA. These are called National Pollutant Discharge Elimination System (NPDES) permits.

• For either dredge/fill or discharge permits, if the water is not under federal jurisdiction, the water boards issue an order for Waste Discharge Requirements (WDR). These state-only permits typically involve more work for the water boards than either state dredge/fill certifications or federal discharge permits.

Permits can be issued as a “general” order that applies to a whole class of projects, or an individual order tailored to a specific project. Individual orders are more workload-intensive for the water boards.

How Waters Are Defined Affects How They Are Regulated. Federal CWA requirements only apply to “waters of the United States” (WOTUS), so the definition of WOTUS is important. The broader the definition, the more bodies of water will fall under federal jurisdiction—and vice versa. Federal regulations have defined WOTUS differently over the years and the definition has been the subject of extensive litigation.

U.S. Supreme Court Decision in 2023 Narrowed Federal Jurisdiction… A 2023 U.S. Supreme Court decision—Sackett v. U.S. Environmental Protection Agency (Sackett)—narrowed the definition of WOTUS. The ruling limits federal jurisdiction to relatively permanent bodies of water and to wetlands that have a continuous surface connection to WOTUS. California has many wetlands and other ephemeral or seasonal waters that previously were considered WOTUS but now no longer meet the federal definition because they lack a continuous surface connection or are not relatively permanent. The EPA and U.S. Army Corps of Engineers recently released a proposed rule to effectuate the narrowed definition of WOTUS.

…Shifting Regulation of Certain Waters to the State. At the state level, all WOTUS—and many other waters, wetlands, and streams—meet the state statutory definition for “waters of the state” because it is much broader than the federal definition. As a result, under current state law, the narrower definition of WOTUS means that certain waters previously regulated under federal law must now be regulated solely by the state to maintain comparable water quality protections.

Shift in Regulatory Responsibilities Is Increasing Workload for Water Boards. The shift to state regulation for water bodies that are no longer considered WOTUS is leading to an increase in workload for the water boards. For example, SWRCB reports that out of all dredge/fill permit applications received, the share of state-only permit applications increased from about 5 percent before Sackett to about 20 percent after that decision. SWRCB also found that approximately 48 percent of individual state-only permits processed recently could have instead been processed as dredge/fill certifications before Sackett. SWRCB estimates an individual state-only dredge/fill permit requires up to 140 more staff hours than a dredge/fill certification. The water boards also have had to take on certain responsibilities formerly conducted by federal agencies, such as verifying delineations (identification and mapping) for waters that are no longer under federal jurisdiction and conducting certain enforcement-related inspections and complaint response. SWRCB also reports increases in workload to investigate and respond to challenges from regulated entities about which waters are considered WOTUS.

The 2024-25 State Budget Provided Resources to the Water Boards to Respond to New Workload. The 2024-25 budget provided $5 million on an ongoing basis from the Waste Discharge Permit Fund and 26 new positions for the water boards to support the water quality permitting and enforcement work that previously was handled directly by the federal government or under federal authorities. In addition to staffing support, the budget provided $1.1 million (also from the Waste Discharge Permit Fund) in one-time contracting funds for SWRCB to begin design of an electronic application and information technology management system to support this work.

Budget Action Reflected Legislature’s Desire to Gather More Information. The administration had proposed to phase in an additional 12 positions (and $2.1 million) starting in 2025-26. The final budget agreement instead approved only the 26 positions beginning in 2024-25, and the Legislature indicated it desired more information about how specifically the water boards’ workload would change before approving such a large number of ongoing positions and resources. To that end, the 2024-25 budget package included language requiring SWRCB to submit a report to the Legislature by January 2026 on (1) the impacts of the Sackett decision on workload, permitting, and enforcement processes; (2) the nature of any legal challenges to state regulatory authority; and (3) any regulatory limitations it was experiencing under current statute.

Governor’s Proposal

Adds Staff and Funding to Handle Increased Workload. The Governor’s 2026-27 budget proposes $2.6 million from the Waste Discharge Permit Fund on an ongoing basis and 12 permanent positions to manage the additional workload the water boards are experiencing as a result of the 2023 Sackett decision. (This proposal reflects the same augmentation that SWRCB originally proposed in 2024-25 that was not approved, pending additional information.)

Assessment

Proposed Staffing Increases Appear Justified. We find the request for additional positions and associated funding justified and supported by SWRCB’s workload data. The state has a statutory responsibility to regulate waters that were formerly under federal jurisdiction (and has an interest in doing so given the implications for drinking and agricultural water quality and fish and wildlife habitat). Moreover, even if statute were to be amended to make regulatory processes more efficient (as we discuss next), these positions likely still will be needed, at least in the near term. Approving and implementing any statutory amendments could take some time, and the water boards must be adequately staffed to handle the increase in workload under current law in the meantime. In addition, regardless of whether statute is amended or not, state staff will need to conduct certain activities—such as inspections and complaint responses—that were formerly conducted by federal agencies for waters that have shifted to state jurisdiction.

Changes to State Statute Could Improve Permitting Efficiency. The water boards must now rely more heavily on state statute to regulate water quality in California following the Sackett decision. However, current state procedures differ from the federal procedures the water boards were accustomed to using for many of their permitting decisions. Specifically, in comparison, the current-law procedures for state-only permits can increase permit processing times and limit water boards’ enforcement options. In its statutorily required report to the Legislature, SWRCB identified several ways that state law could be amended to increase the efficiency of the state permitting processes and reduce workload while maintaining core environmental protections. These include:

• Aligning State Enforcement More Closely With Federal Requirements. Relative to federal enforcement, state tools are more limited, and the maximum state penalty amounts also are lower than federal equivalents. Both factors reduce the deterrent effect of the water boards’ enforcement efforts and create additional workload. For example, under current state law, the water boards cannot impose an administrative civil liability for violation of state-only permit terms until an actual discharge has already occurred. By contrast, under delegated federal authority, the water boards can proactively assess penalties for violations of federal discharge permit terms to prevent unwanted discharges from happening. In addition, under current state law, the water boards cannot initially cite an illegal discharge (such as illegal dumping) if that type of discharge was not included in a permit. Instead, they must issue a notice and can only cite the illegal discharge the second time it has occurred. Aligning state enforcement more closely with federal requirements would create consistency and equip the water boards with more effective tools to protect water quality.

• Expanding Applicability of Statewide Water Quality Control Plans to Non-WOTUS. SWRCB uses statewide rulemaking authority through water quality control plans to protect wetlands and other waters. However, when issued by the state water board (rather than a regional board), these plans are limited to WOTUS. As such, under current state law, to protect non-WOTUS, each regional board must revise their regional plans to match the statewide plan. Amending statute to extend the rulemaking authority for statewide plans to all waters would reduce workload and processing times.

• Authorizing Regional Water Board Executive Officers to Approve WDRs. Unlike dredge/fill certifications which can be approved by a regional board’s executive officer, under current state law, state-only dredge/fill permits require a public hearing and adoption by the regional board. Allowing executive officers to approve state-only permits would reduce processing times.

• Fully or Partially Exempting State-Only Discharge Permits From the California Environmental Quality Act (CEQA). While issuance of NPDES discharge permits is exempt from CEQA, under current state law, state-only discharge permits are subject to CEQA and often require the water boards to prepare environmental impact reports and economic analyses. Providing a full or partial CEQA exemption or alternative process for these state-only permits would reduce processing times. (SWRCB estimates that exempting state-only permits from having to meet CEQA requirements would shorten their preparation time lines by at least a year.)

• Aligning Public Notification Requirements With Federal Processes. Current state law requires the water boards to provide public notice of draft state-only dredge/fill permits and consider and respond to written comments before adoption. By contrast, dredge/fill certifications only require public notice of an application and do not require responses to comments. SWRCB indicates that the vast majority of dredge/fill projects do not receive public comments. Aligning the state process with the federal process would reduce the time and workload needed to process permits.

Statutory Amendments Identified by SWRCB Would Primarily Affect Procedures, Not Water Quality Standards. In our review, many of the potential statutory revisions identified by SWRCB appear reasonable. They would not change the water quality standards with which permitted activities must comply. That is, activities regulated under either federal or state authorities still would have to comply with the water quality standards in state and regional water quality control plans, just as they do now. Rather, these amendments could potentially increase permitting efficiency, reduce water boards’ workload, and provide water boards with more robust enforcement options. Still, such statutory amendments would have some trade-offs. For example, if these changes were to apply to all state waters, they could potentially reduce existing opportunities for public participation and CEQA environmental review for state waters that were never under federal jurisdiction.

Recommendations

Approve Positions and Funding. We recommend the Legislature approve SWRCB’s proposal for 12 new permanent positions and $2.6 million ongoing from the Waste Discharge Permit Fund. The water boards’ workload has increased and providing additional resources would help prevent unnecessary delays in the permitting process and allow them to better enforce permit requirements.

Consider Amending Statute to Improve Permitting Process. We recommend the Legislature consider some or all of the statutory amendments identified by SWRCB to align state procedures and requirements more closely with the federal approach, while evaluating trade-offs related to public participation and environmental review. (For example, we suggest careful consideration of providing CEQA exemptions to ensure that an adequate amount of environmental review will still occur.) Such amendments offer the potential for the state to increase the efficiency of the permitting and enforcement processes. The Legislature could consider making amendments through the budget trailer bill process or through the policy committee process. However, using the policy process likely would allow for more in-depth consideration of the benefits and trade-offs of each change.