2023 Appropriations Act Directed Projects

The 2023 Appropriations Act, Session Law (S.L. 2023-134), allocates $2 billion for water and sewer infrastructure, including directed grants for 201 local governments.  Grant funds for the Directed Projects listed in Section 12.2.(e) are administered through the Drinking Water Reserve and the Wastewater Reserve. 

On Feb. 7, the Division of Water Infrastructure presented an informational webinar, with a question-and-answer session, for local governments with 2023 Directed Projects. 

For local governments with a 2023 Directed Project:

The Directed Projects grants will be disbursed as invoices are submitted and reviewed. Costs incurred by the local government related to the specified project and that are eligible under the Drinking Water Reserve and Wastewater Reserve will be paid by DEQ's Division of Water Infrastructure upon invoice, up to the amount available in the grant for the project. 

Per Section 12.2.(k),  1½ (1.5) percent of the appropriated amount of each directed project will be used for departmental administrative costs in lieu of the typical grant fee charged to projects.

Next Steps:

  • Request for Funding Form: The Division sent local governments a "Request for Funding" form (RFF) to gather project information, project budget, and the contact information of local governments.

       Submit the completed Request for Funding Form (RFF).

  •  If your local government has not received an RFF, please email david.smith@deq.nc.gov .
  • Letter of Intent to Fund: After receiving the RFF for an eligible project, the Division will send a "Letter of Intent to Fund" to the Authorized Representative of the local government, providing the project number, required timeline and milestones for project management, and the Division project manager’s contact information.

 

More Information

Tab/Accordion Items

A total of $1,937,499,559 has been directly allocated by the General Assembly to 201 local governments for earmarked water and wastewater construction projects in Section 12.2.(e). The grant funds are administered through the Drinking Water Reserve and the Wastewater Reserve. 

For local governments with a 2023 Directed Project:

The 2023 Directed Projects grants will be disbursed as invoices are submitted. Costs incurred by the local government related to the specified project and that are eligible under the Drinking Water Reserve and Wastewater Reserve will be paid by DEQ's Division of Water Infrastructure upon invoice, up to the amount available in the grant for the project. 

Per Session Law (S.L. 2023-134, 1½ (1.5) percent of the appropriated amount of each directed project will be used for departmental administrative costs in lieu of the typical grant fee charged to projects.

Next Steps:

  1. In Oct. 2023, the Division contacted and requested that local governments with 2023 Directed Projects submit a Request for Funding form (RFF). If you have not received an RFF, please email david.smith@deq.nc.gov .
  2. Local governments will submit one or more Request for Funding forms to provide project information, project budget, and the contact information for the local government. Submit the completed Request for Funding Form (RFF) .
  3. The Division will review the Request for Funding to ensure that the proposed project is eligible.
  4.  The Division will send a Letter of Intent to Fund (LOIF) to the Authorized Representative of the local government, providing the project number, required timeline and milestones for project management, and the Division project manager’s contact information. 
  5. The local government can then proceed with design and planning for the project. The local government will submit plans and specifications, applications for permits, and other required documentation to NC DEQ for approval. The Division will provide an Authorization to Award before the local government executes its construction contracts.
  6. Soon after the Letter of Intent to Fund is sent, the Division will provide a Funding Offer listing the conditions and assurances required of the local government.
  7. The local government’s governing board must pass a Resolution accepting the funding offer with the related conditions and assurances.
  8. During project implementation, the local government will regularly send Invoice Requests to the Division, documenting incurred expenses related to the project. The Division will review the requests and disburse grant funds for eligible costs, up to the funding amount. Up to 15% of the funds available for projects may be disbursed after costs are incurred during the pre-construction stage to cover design and planning costs. The remainder will be disbursed as invoices for incurred pre-construction and construction costs are submitted by the Recipient during construction. Only costs eligible under NC G.S. 159G may be covered by these funds. 

Key Points 

  • There will be no grant fees or cost shares.
  • Funds must be used for Drinking Water Reserve/Wastewater Reserve-eligible costs related to the construction costs of a public water system, wastewater collection system, wastewater treatment works project, and/or stormwater quality project.
  • Some of the 2023 Directed Projects have specific projects identified in S.L. 2023-134, Section 12.2.(e), and the local governments must use the funds for those specified purposes only. 
  • Local governments will be allowed to supplement funding for existing projects using their 2023 Directed Project grant if funding is available.
  •  If project funding is co-mingled with other federal or state funds, all requirements for the other funding program(s) will apply. For example, if S.L. 2023-134 funding is added to a project that is funded through the Division of Water Infrastructure using American Rescue Plan Act (ARPA) grants, all ARPA requirements (except the expenditure deadline) will apply to the S.L. 2023-134 funds, such as compliance with the Uniform Guidance. 
  • Please consider utilizing DEQ permit scoping services to ensure your project has the appropriate environmental permits. 

Per S.L. 2023-134, Section 12.2.(c), funds in excess of the amounts needed for the 2023 Directed Projects will be reverted to the Drinking Water Reserve and/or Wastewater Reserve to be used by DEQ for other water and sewer infrastructure construction and preconstruction projects eligible for funding from the respective Reserve. 

Per S.L. 2023-134, Section 12.2 and the Joint Conference Committee Report on the Current Operations Appropriations Act of 2023, the $2 billion, including three percent administrative costs for NC DEQ, is allocated as follows:

  • $1,937,499,559 to provide construction grants to 201 local governments specified in Section 12.2.(e) for water and wastewater infrastructure. 
  • $10,000,000 to the Viable Utility Reserve (VUR) for grants to utilities identified as distressed by the State Water Infrastructure Authority and the Local Government Commission for the purposes set forth in G.S. 159G-34.5. 
  • $16,169,851 to the Local Assistance for Stormwater Infrastructure Investments (LASII) Fund for stormwater planning grants and stormwater construction grants to local governments to improve or create infrastructure for controlling stormwater quantity and quality, for the purposes set forth in Section 12.14(a) of S.L. 2021-180.
  • $36,330,590 to be transferred to the Office of State Budget and Management (OSBM) to provide grants to 11 entities listed in Section 12.2.(f) of S. L. 2023-134. 

 

$10 million of the funds appropriated for the Viable Utility Reserve and the $16.1 million appropriated for the LASII fund, less three percent for administrative costs, are available for competitive applications. Details on availability of VUR and LASII grant funding will be announced prior to each application funding round. Applications for funding are posted on the Division of Water Infrastructure’s “I Need Funding” webpage.

The Division of Water Infrastructure offers low-interest loans and grant funding for drinking water, wastewater, and stormwater planning and construction projects from multiple federal and state funding sources, including: Community Development Block Grant – Infrastructure, State Revolving Fund low-interest loans, Bipartisan Infrastructure Law funds for emerging contaminants and for lead service line identification and replacement, and $10 million in annual recurring state grants for Asset Inventory and Assessment, Merger/Regionalization Feasibility, and drinking water/wastewater construction grants.

For more information on these funding programs and to apply for funding, visit the I Need Funding” webpage. 

For information on other funding programs administered by NC DEQ, visit the Department’s Grants webpage.

 

Please contact david.smith@deq.nc.gov with questions.