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-2- lO. ~ater supply system" shall m~nu n public ~ter supply system consisting of facilities and other works for supplylng, treati~ and distributing pot.~ble water including~ but specifically not limited to, iupound~ents, reservoirs~ wells, intakes, water filtration plants and other trea~,-ent facilities~ ta~ks and other storage facilities, transmission malns~ distribution piping, pumpln8 equipment and all other necessary appurtenances, equipment and structures. 11. Funds available under this act shall be for the constr~ction of ney or the improvement or expansion of existing wastevater treatment vorkss waste~ter collection systems and water supply syst~s. If the purchase or acquisition of real property constitutes a substsntial portion of the necessary construction costs of any project, and if the grant recipient demonstrstes that it is incapable of bearing such costa, the Office of State Budget, in its sole discretion, may authorize the use of grant funds, subject to the fifty percent limitation. 12. Eligible project costs do not include interest on loans, sales tax or the participation in the purchase of easemente. 13. Funds previously awarded as grants under the Clean Water Bo~d program may not be used toward the fifty percent match required under this program. 14. Funds authorized under this act for the fiscal year 1985-86 shall be available July l, 1985 and funds authorized for 1986-87 shall be available July 1, 1986. 15. Grants for water and sewer facilities are subject to the provisions of G.S. 159, the Local Government B~d~et and Fiscal Control Act and funds are subject to the local government's annual audit [Section 5.1l([)]. 16. Grants provided under'this act shall be for matching costs incurred after Suly 1, 1985.