Lead Service Line Replacement (LSLR) Program Drinking Water State Revolving Fund (DWSRF)

1. What can the program do for you?

The Drinking Water State Revolving Fund (DWSRF), authorized by the Safe Drinking Water Act, provides low-cost financial assistance for planning, acquisition, design, and construction of water infrastructure.

The Infrastructure Investment and Jobs Act (IIJA) appropriated funds through the DWSRF for Lead Service Line Replacement (LSLR) projects and associated activities directly connected to the identification, planning, design, and replacement of lead service lines.

See the DWSRF Lead Service Line Replacement (LSLR) Program Guidance for more information.

2. Who can borrow?

Eligible applicants for the LSLR program include:

• Existing community Public Water Systems (PWSs), including political subdivisions, nonprofit water supply corporations and privately-owned community water systems
• Non-profit, non-community public water systems
• State agencies

An entity's project must meet the disadvantaged criteria to receive funding under these Intentded Use Plans (IUP). For the SFY 2024, 2025 and 2026 LSLR IUPs, eligible disadvantaged communities have an Annual Median Household Income (AMHI) that is no more than 150% of the State's AMHI.

To review the new disadvantaged criteria specific to the LSLR program, review Appendix D of the 2025 LSLR IUP.

3. What types of projects can I use LSLR funding for?

For a project to be eligible for LSLR funding, it must be otherwise DWSRF eligible, and be a LSLR project or associated activity directly connected to the identification, planning, design, and replacement of lead service lines. Some examples of eligible projects are:

• Development or updating lead service line inventories, including locating and mapping lead service lines.
• Complete removal of lead service lines (public and privately owned portion) and replace with pipe meeting requirements established under 40 CFR 143 and complies with state/local plumbing codes and/or building codes.
• Non-routine lead sampling (not for compliance purposes) as part of the LSLR project.

Entities may also include a request for reimbursement for eligible initial service line inventory activities that were required to comply with the EPA's Lead and Copper Rule Revisions. However, the activities must have been performed in accordance with all DWSRF program requirements to be reimbursed.

For a full list of eligible and ineligible project activities, please see the 2025 LSLR IUP.

4. How much funding is available?

The amount of funding available for projects under the DWSRF LSLR program for SFY 2025 will be approximately $37,432,000.

5. Are loans or grants offered?

All financing will be made at the ratio of 51% principal forgiveness and 49% loan/bond. Principal forgiveness is functionally similar to a grant, the portion of the loan is forgiven upon closing. Loans are offered at below market interest rates.

The loan portion of any project covering service line inventories will be at 0% interest, while the loan/bond financing for any planning, acquisition, design, and/or construction work will be at the DWSRF program's regular reduced interest rate.

All projects funded are considered equivalency projects, which means all federal requirements apply.

6. When can I apply for LSLR financial assistance?

To be invited for future rounds of LSLR funding, entities must submit a completed LSLR PIF no later than the listed deadline. Watch this space for announcements of future solicitations.

Special Requirements

Financial assistance through the DWSRF LSLR program requires compliance with applicable rules, policies, and statutes including:

• Submittal of a Project Information Form (PIF) to the current Intended Use Plan
• 2.0% loan origination fee
• National Environmental Policy Act-type environmental review.
• Projects must be consistent with the current TWDB State Water Plan
• Adoption of a Water Conservation and Drought Contingency Plan for all financial assistance greater than $500,000
• Application of Davis-Bacon wage rate requirements
• Compliance with the EPA's Disadvantaged Business Enterprise program, which requires applicants and prime contractors to follow six affirmative steps in procurement (Guidance and additional information is available)
• Compliance with EPA's American Iron and Steel (AIS) Provisions.
• If invited to submit a Financial Assistance Application, applicants are required to participate in a Financial, Managerial, and Technical (FMT) Capacity Assessment. TCEQ, or a contractor of the TCEQ, will request this information during the application process.
• Compliance with the Build America, Buy America Act (BABA).
• Review of legislative requirements regarding water loss threshold limits

Note: all LSLR projects will be considered "Equivalency" projects, which must follow all federal requirements.

Where Can I Get More Information About...?

Funding

In order to provide you with a single point of contact at the TWDB, our project implementation staff is organized into six regional project implementation teams. Each team is led by a manager that serves as the primary point of contact for both our existing and future customers. For assistance with the application or any questions related to your project, please look up contact information for your Regional Team.

Compliance with the Lead and Copper Rule Revisions

For more information on Lead Service Line Inventory requirements under the Lead and Copper Rule Revisions (LCRR), please visit the TCEQ's webpage.

Outreach and Upcoming Workshops

For more information on Lead Service Line Inventory workshops, please visit the Texas Rural Water Association's webpage.

Also, please visit TWDB's Financial Assistance webpage for updates on our funding assistance workshops.

More TWDB Funding Opportunities

Please sign up for the TWDB Financial Assistance Information email list to be notified of future TWDB funding opportunities.