Lead Service Line Replacement (LSLR) Program Drinking Water State Revolving Fund (DWSRF)
Given the timeframes for submitting the Lead Service Line Replacement and Emerging Contaminants Project Information Forms (PIFs), TWDB will accept PIFs over $100,000 that are not sealed by a professional engineer at the time of submittal, with the understanding that a PIF requesting over $100,000 to remain eligible must be sealed by a registered professional engineer not later than the conclusion of the public comment period on the project priority lists that is currently scheduled for mid-July 2023. It is understood that proposed project costs may differ between the original PIF submission and the PIF being sealed by a professional engineer.
Further, entities are encouraged to include this year the potential amount that may ultimately be needed to address any possible lead service line replacement construction. The draft IUP is designed to allow the entity to decide later, after the October 2024 inventory deadline, how much funding is needed. By indicating the full amount that may be required, the TWDB can submit an application to the Environmental Protection Agency with project needs up to the full Texas allotment of this special funding. For all sealed proposed budgets, TWDB understands that the budget is based on certain assumptions and utilizes information that is the best available at the time of the engineer's signature. If preferred, the professional engineer may include language to that effect on the sealed budget.
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.
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
Entities' project areas must also meet new disadvantaged criteria specific to the LSLR program, as outlined in Appendix D of the draft SFY 2023 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.
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 draft SFY 2023 LSLR IUP.
4. How much funding is available?
A total of $213,455,000 is available for projects under the SFY 2023 Lead Service Line Replacement IUP.
5. Are loans or grants offered?
Both below market interest rate loans and principal forgiveness (similar to grants) are offered.
All financing will be made at the ratio of 51% principal forgiveness and 49% loan/bond.
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.
For more information regarding funds available, please see the draft SFY 2023 LSLR IUP.
6. When can I apply for LSLR financial assistance?
TWDB is not able to use the Online Loan Application System (OLA) for these submittals due to the time required for programming OLA. PIFs must be submitted by email using the Microsoft Word version of the form.
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 Provisions
- 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. More information on funding requirements is available in the draft SFY 2023 LSLR IUP.
Where Can I Get More Information About...?
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.