Application process for projects to improve Texas drinking water begins

The application process for four initiatives designed to help Texas communities improve access to safe drinking water have begun, including some that are eligible for funding through a new dedicated water fund.

Since 1958, the Texas Water Development Board (TWDB) has administered about $36 billion for water infrastructure projects around Texas. That number is set to rise after Texas voters in November approved the Texas Water Fund, which finances specific water projects statewide. Lawmakers created the fund and authorized a one-time, $1 billion supplemental appropriation of general revenue during the 88^th regular legislative session last year.

More than $250 million of the newly created fund is projected to go toward projects that create novel water supply sources.

The state’s next step is figuring out how to spend the money. The TWDB is inviting entities to be included in the following programs’ future intended use plans (IUPs) for 2024and future state fiscal years (SFYs):

The SFY 2025 Clean and Drinking Water State Revolving Funds “General Activities” IUP, which is designed to help communities save money by providing funding for wastewater and water infrastructure projects through loans with below-market interest rates. Projects that qualify as disadvantaged communities, small/rural disadvantaged systems, having green components, very small systems or urgent need situations may be eligible for principal forgiveness. While $435 million is allocated for SFY 2024 projects, the state has not published the amount it anticipates will be available in SFY 2025. Project information forms must be received by March 1 for consideration.
The SFY 2024 Drinking Water State Revolving Lead Service Line Replacement IUP, which helps communities replace lead service lines. Approximately $146.2 million is available. Construction-ready projects may receive a special allocation of the funds available. Construction-ready projects where lead service lines have already been identified and are ready for replacement or where the system is currently replacing lead service lines are given priority. The financing ratio for these projects is 51% principal forgiveness and 49% loan or bond. The loan portion of any project covering service line inventories is 0%, with reduced rates for planning, acquisition, design and construction work. Project information forms are due April 1.
The SFY 2024 Clean and Drinking Water State Revolving Funds Emerging Contaminants IUP, which helps communities with projects that reduce exposure to perfluoroalkyl and polyfluoroalkyl substances (PFAS) and other emerging contaminants through drinking water. About $70 million is available for these projects. All projects funded through this program will receive 100% principal forgiveness, similar to a grant. Project information forms are due April 1.
The SFY 2024-2025 Flood Infrastructure IUP, which makes funding available for a wide range of flood projects, including the planning and design process, traditional methods such as flood control and flood mitigation infrastructure and non-traditional projects like warning systems and crossing barriers. Both 0% loans and grants are available through this program. Project information forms are due April 1.

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