State Participation
1. What can the program do for you?
The State Participation Program enables the TWDB to provide funding and assume a temporary ownership interest in a regional water, wastewater, or flood control project when the local sponsors are unable to assume debt for an optimally sized facility. The program is intended to encourage the optimum regional development of projects by funding excess capacity for future use where the benefits can be documented, and where such development is unaffordable without state participation. The goal is to allow for the "right sizing" of projects in consideration of future needs.
2. Who can borrow?
Any political subdivision of the state, including a water supply corporation, that can sponsor construction of a regional water or wastewater project may apply to the TWDB for State Participation funding. A project sponsor must meet several requirements in order to be eligible to receive State Participation assistance (See Special Requirements below).
3. What types of projects can I use the loan funding for?
For new water supply and state water plan projects the TWDB can fund as much as 80% of project costs, provided that the local sponsor finances at least 20% of the total project cost from sources other than the State Participation Account and that at least 20% of the total capacity of the proposed project serves existing needs.
On other State Participation projects, the TWDB can fund as much as 50% of costs, provided that the local sponsor finances at least 50% of the total project cost from sources other than the State Participation Account and that at least 50% of the total capacity of the proposed project serves existing needs.
In both cases, State Participation funding is limited to the portion of the project designated as excess capacity.
4. Are loans and grants offered?
The TWDB may acquire ownership interest in the water rights or a co-ownership interest of the property and treatment works. The loan repayments that would have been required, if the assistance had been from a loan, are deferred. Ultimately, however, the cost of the funding is repaid to the TWDB based upon purchase payments, which allows the TWDB to recover its principal and interest costs and issuance expenses. Although it is not required, the local sponsor usually acquires a loan from the TWDB for the local sponsor's portion of the project funding.
Current interest rates are available.
5. What project components can I receive funding to complete?
The program is intended to allow for optimization of regional projects through limited State Participation where the benefits can be documented, and where such development is unaffordable without the program’s assistance. The goal is to allow for the "right sizing" of projects in consideration of future growth.
6. How much funding is available?
State Participation funds are limited in availability both as to the total amount approved by the Legislature each biennium and by limitations to participation in individual projects. Currently, the State Participation program has no available funding until appropriations are received from the Legislature.
The TWDB's participation from this program is limited to a maximum of 80% of costs for projects creating a new water supply, and to 50% of costs for other types of projects. In both cases state participation is limited to the portion of the project designated as excess capacity. The remaining costs of the project may be funded through other TWDB programs. At least 20% of the total capacity of the proposed project must serve existing needs.
7. When can I apply?
The applicant is encouraged to meet with their Regional Project Implementation Team for assistance in preparing the application and to discuss the terms of the funding and project eligibility.
Abridged or complete applications are due August 1 and February 1 of each year. The TWDB will prioritize projects for the available funds in September and March of each year utilizing the criteria in the TWDB Rules at 31 Texas Administrative Code § 363.1007. If a project is prioritized above the funding line, applicants must submit a complete application within 30 days of the Board-approved prioritization.
8. What are the Conditions of Financial Assistance?
For detailed information of the Conditions of Financial Assistance.
Special Requirements
A project sponsor must meet several requirements including:
- Administrative cost recovery fee of 0.77%
- A requirement that the project cannot be reasonably financed without State Participation assistance
- The facility to be constructed contemplates the optimal regional development of the project and cannot be reasonably financed without state participation
- For water supply projects, the project must be in an approved State Water Plan or Regional Water Plan
- Reservoir funding must be segmented or phased; permitting is required prior to a construction commitment
- Entities receiving assistance greater than $500,000 must adopt a water conservation and drought contingency plan
- Review of legislative requirements regarding water loss threshold limits
Loan Process
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.