Economically Distressed Areas Program 

The Economically Distressed Areas Program (EDAP), administered by the Texas Water Development Board (TWDB), provides financial assistance for water and wastewater projects in residential areas lacking adequate services and where residents face economic hardship. The program aims to address public health and environmental concerns in communities where existing water or sewer systems are insufficient or non-existent. To qualify, projects must be located in areas where the median household income does not exceed 75 percent of the state median, and the residential subdivisions must have existed on or before June 1, 2005. EDAP funding is available to various political subdivisions in Texas, including cities, counties, water districts, and nonprofit water supply corporations. A critical eligibility criterion requires the local government to adopt and enforce TWDB-approved Model Subdivision Rules for regulating subdivisions prior to applying. Additionally, applicants must demonstrate the capacity to maintain and operate the completed system and comply with other regulatory and operational requirements, such as mapping suitable on-site sewage disposal areas and holding necessary permits and certificates. The program offers financial support in a blended format of 70 percent grant and 30 percent loan, with the loan portion capped at 20 years. However, a determination of public health nuisance from the Texas Department of State Health Services is required if the grant component exceeds 50 percent. Funding may be used for planning, land acquisition, design, and construction of first-time service or upgrades to water supply and wastewater systems, strictly for residential projects. EDAP is governed by prioritization criteria introduced by legislation in 2019. These criteria emphasize public health and safety concerns and enforcement actions in the applicant area. As of the current biennium, approximately $100 million has been allocated through appropriations to support project funding, part of a broader authority of up to $200 million approved by Texas voters in 2019. Several recent changes have been made to the EDAP program. These include a formal system for project prioritization, stricter enforcement of Model Subdivision Rules, enhanced application requirements for water quality projects, and limitations on total grant funding. TWDB is now also permitted to support public-private partnerships with EDAP bond proceeds and will implement new program reporting requirements. Applicants or interested parties can find more information and receive guidance through TWDB's regional project implementation teams. The central office is located at 1700 North Congress Avenue, Austin, TX 78701, and can be contacted at 512-463-7847. Eligible applicants for EDAP funding include cities, counties, water districts, nonprofit water supply corporations, and other political subdivisions. One key requirement is that the project must be located in an area where the median household income is no more than 75% of the state median income. Additionally, the residential subdivision in question must have been established on or before June 1, 2005. The city or county must adopt and enforce Model Subdivision Rules to regulate subdivisions before applying for financial assistance. EDAP provides a combination of grants and loans, with 70% of the funding given as a grant and 30% as a loan. Loans under the program are limited to a maximum 20-year term. If a project seeks more than 50% grant funding, a public health nuisance determination from the Texas Department of State Health Services is required. The prioritization of funding is based on legislative criteria, giving preference to projects that address public health and safety concerns or are subject to enforcement actions. The program’s funding is primarily derived from constitutional bonding authority. In 2019, Texas voters approved a proposition authorizing the issuance of up to $200 million in general obligation bonds for EDAP projects. However, actual funding availability is determined through biennial legislative appropriations. For the current biennium, approximately $100 million has been allocated. Applicants must comply with several program requirements, including demonstrating inadequate financial resources to provide water and sewer services, maintaining authorization from the Texas Commission on Environmental Quality (TCEQ) for waste disposal regulation, and securing any necessary permits. Additional obligations may include adopting water conservation and drought contingency plans, ensuring compliance with U.S. Iron and Steel Manufactured Goods requirements, and meeting legislative water loss threshold limits. For more information, applicants can contact their designated TWDB Regional Project Implementation Team. Several resources are available, including the EDAP Intended Use Plan, application materials, model subdivision rules training, and previous funding reports. Workshops and other informational sessions are also available to help applicants navigate the funding process and meet eligibility requirements.

Applicants should ensure compliance with Model Subdivision Rules, confirm eligibility through income and subdivision criteria, and consult regional teams for guidance.