Cal. Water Code § 13604

The state board shall review and approve each waste collection, treatment, and disposal project for which an application for a grant under the Federal Water Pollution Control Act has been made. The state board shall, in reviewing each project, determine whether such project is in conformity with state policy for water quality control and in conformity with water quality control plans adopted by regional boards, and shall certify that such project is entitled to priority over other eligible projects on the basis of financial as well as water pollution control needs.