Economically Distressed Areas Program (EDAP)
General Program Information
1. What can the program do for you?
The Economically Distressed Areas Program (EDAP) provides financial assistance for projects serving economically distressed areas where water or sewer services do not exist or systems do not meet minimum state standards.
2. Who can borrow?
Eligible EDAP applicants include cities, counties, water districts, nonprofit water supply corporations, and all other political subdivisions. The city or county where the project is located must adopt and enforce Model Subdivision Rules for the regulation of subdivisions prior to application for financial assistance. Projects must also be located in an economically distressed area where the median household income is not greater than 75 percent of the median state household income. (See Special Requirements below)
3. What types of projects can I use the loan funding for?
EDAP assistance may be utilized for:
- land acquisition;
- design, and
- construction of first-time service or improvements to water supply and wastewater collection and treatment works
4. Does EDAP provide both grants and loans?
Yes. A typical EDAP funding commitment includes both a grant and a loan. The ratio is determined by a calculation that considers the median household income for the proposed project area and the political subdivision’s ability to repay the financial assistance. A public health nuisance determination from the Texas Department of State Health Services is required for grant funding greater than 50 percent.
5. How does TWDB determine which projects receive funding?
The TWDB originally funded EDAP projects on a first-come, first-served basis; however, for State Fiscal Year 2018, the TWDB used a prioritization process to identify projects to be funded from the final $53 million in bonding authority. Legislation passed in 2019 will require formal prioritization criteria for projects in areas that address public health and safety and for projects in areas under enforcement actions.
6. How much funding is available?
Constitutional bonding authority is the primary mechanism for EDAP funding. In November 2019, Texas voters approved a proposition authorizing the TWDB to issue additional general obligation bonds in an amount not to exceed $200 million for EDAP projects. Individual bond issuances depend on biennial legislative appropriations, so the earliest new funds will be available is State Fiscal Year 2022 that begins in September 2021.
7. What other changes have been made recently to EDAP?
Other significant changes include the following:
- Political subdivisions are required to show they are enforcing Model Subdivision Rules;
- Additional application requirements for proposed water quality enhancement projects;
- The TWDB will develop and implement a formal prioritization system for EDAP applications;
- The total amount of grants may not exceed 70 percent of EDAP’s total amount of financial assistance at any time;
- The TWDB is allowed to use EDAP bond proceeds to support public-private partnerships; and
- New program reporting requirements will be established.
EDAP financial assistance requires compliance with applicable rules, policies, and statutes including:
- Projects must be located in economically distressed areas with characteristics including:
- Median household income less than 75 percent of the median state household income
- Present facilities are inadequate to meet residents' minimal needs
- Financial resources are inadequate to provide water supply or sewer services to satisfy minimal needs
- The area was an established residential subdivision as of June 1, 2005
- The city or county where the project is located must adopt and enforce Model Subdivision Rules for regulating subdivisions prior to applying for financial assistance. These rules must be consistent with the model rules adopted by the TWDB.
- The applicant must apply for and maintain a designation by the Texas Commission on Environmental Quality as an authorized agent for regulating onsite waste disposal facilities.
- The county must prepare a map that shows where different types of on-site sewage disposal systems are appropriate.
- The applicant, or its designee, must be capable of maintaining and operating the completed system. The applicant is responsible for securing any necessary water permits or rights, wastewater discharge permits, and any other required licenses.
- If the applicant is required under Chapter 13 of the Water Code to have a Certificate of Convenience and Necessity (CCN) in order to provide service to the proposed project area then to be considered for EDAP funds, the applicant must have or be applying for the CCN.
- Water supply projects must be consistent with the current TWDB State Water Plan
- Entities receiving assistance greater than $500,000 must adopt a water conservation and drought contingency plan.
- U.S. Iron and Steel Manufactured Goods requirements
- Review of legislative requirements regarding water loss threshold limits
Where Can I Get More Information?
In order to provide you with a single point of contact at the Texas Water Development Board (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 contact your Regional Project Implementation Team.