State Participation Program 

The Texas Water Development Board (TWDB) administers the State Participation Program to support the development of regional water, wastewater, or flood control projects in Texas. This initiative is specifically designed for circumstances in which local political subdivisions cannot independently finance the construction of optimally sized infrastructure to meet both present and anticipated future needs. Through temporary ownership participation, the TWDB enables such projects to proceed by financing the portion of excess capacity necessary for future use, thereby promoting regional planning and "right sizing" of infrastructure investments. Eligible applicants include any political subdivision of Texas, including water supply corporations, that can sponsor the construction of regional water or wastewater facilities. To qualify, sponsors must demonstrate that the proposed project cannot be reasonably financed without State Participation assistance and that the facility is optimally sized for regional development. Special requirements include compliance with a 0.77% administrative cost recovery fee, proof of inability to independently finance the project, and submission of specific planning and reporting documents such as the Water Use Survey and water conservation plans. For water supply projects, inclusion in an approved State or Regional Water Plan is also necessary. Funding under the State Participation Program varies by project type. For new water supply and state water plan projects, TWDB can fund up to 80% of project costs, with the local sponsor contributing at least 20% from other sources. For other projects, TWDB funding is capped at 50%, with the local sponsor contributing the remainder. In all cases, funding is limited to the portion designated as excess capacity and at least 20% of the project’s capacity must address existing needs. Instead of offering direct loans or grants, TWDB enters a temporary ownership agreement, where it may acquire rights or co-ownership in the infrastructure. This model allows the deferral of repayment, which is eventually made through purchase payments covering TWDB’s costs. While not mandatory, local sponsors often seek loans from TWDB for their share of the project funding. This arrangement helps ensure the long-term financial viability of larger-scale infrastructure projects. Applications for the program are accepted twice yearly, with deadlines on August 1 and February 1. Projects are prioritized in September and March, following the criteria outlined in 31 Texas Administrative Code § 363.1007. If a project is ranked above the funding line, a complete application must be submitted within 30 days of prioritization approval by the TWDB Board. Given that State Participation funds are legislatively appropriated, funding availability may be limited in any given biennium. Interested applicants are encouraged to consult their designated Regional Project Implementation Team for guidance and assistance in navigating the application process. Contact information for TWDB is provided as 1700 North Congress Avenue, Austin, TX 78701, with phone number 512-463-7847. More program details, including current interest rates and survey compliance tools, can be accessed via the TWDB website.

Applicants are encouraged to meet with their Regional Project Implementation Team to confirm eligibility, discuss project sizing and documentation, and ensure all preconditions are met prior to submission.