AR
Arkansas Senate Bill SB420

Arkansas 2025 Regular Session

Arkansas Senate Bill SB420 Compare Versions

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11 Stricken language would be deleted from and underlined language would be added to present law.
2-Act 736 of the Regular Session
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5-State of Arkansas As Engrossed: S3/17/25 1
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3+State of Arkansas 1
64 95th General Assembly A Bill 2
75 Regular Session, 2025 SENATE BILL 420 3
86 4
97 By: Senator Hester 5
108 By: Representatives Beaty Jr., L. Johnson 6
119 7
1210 For An Act To Be Entitled 8
1311 AN ACT TO EXPAND ELIGIBILITY FOR WATER DEVELOPMENT 9
1412 STATE PROGRAMS; TO AMEND THE WATER AUTHORITY ACT; TO 10
1513 AMEND THE USES OF THE CONSTRUCTION ASSISTANCE 11
1614 REVOLVING LOAN FUND; AND FOR OTHER PURPOSES. 12
1715 13
1816 14
1917 Subtitle 15
2018 TO EXPAND ELIGIBILITY FOR WATER 16
2119 DEVELOPMENT STATE PROGRAMS; TO AMEND THE 17
2220 WATER AUTHORITY ACT; AND TO AMEND THE 18
2321 USES OF THE CONSTRUCTION ASSISTANCE 19
2422 REVOLVING LOAN FUND. 20
2523 21
2624 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 22
2725 23
2826 SECTION 1. Arkansas Code § 4 -35-101 is amended to read as follows: 24
2927 4-35-101. Legislative intent. 25
3028 It is the intent of the General Assembly to provide a means by which a 26
3129 nonprofit corporation qualified corporation involved in the sale, 27
3230 transmission, and distribution of potable water to members of the general 28
3331 public and commercial, industrial, and other users may form or convert its 29
3432 entity status from that of a body corporate to that of a public body politic 30
3533 and governmental entity, thereby allowing the entity the opportunity to 31
3634 access the tax-exempt capital markets and assuring the State of Arkansas and 32
3735 the customers of the entity of the lowest water rates possible to be a water 33
3836 authority. 34
3937 35
40- SECTION 2. Arkansas Code § 4 -35-103(7), concerning the definition of 36 As Engrossed: S3/17/25 SB420
38+ SECTION 2. Arkansas Code § 4 -35-103(7), concerning the definition of 36 SB420
4139
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43-
44-
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4541 "qualified corporation" within the Water Authority Act, is amended to read as 1
4642 follows: 2
4743 (7)(A) “Qualified corporation” means: 3
4844 (i) any A nonprofit corporation originally formed 4
4945 pursuant to under the Arkansas Nonprofit Corporation Act of 1993, § 4 -33-101 5
5046 et seq., the Arkansas Nonprofit Corporation Act, § 4 -28-201 et seq., or a 6
5147 predecessor statute, which among other things that provides, distributes, 7
5248 transmits, treats, pumps, or stores raw or potable water to or for the 8
5349 benefit of members of the general public and commercial, industrial, and 9
5450 other users or which that proposes to accomplish, develop, or construct any 10
5551 of the foregoing; or 11
5652 (ii) Any governmental entity, municipal nonprofit 12
57-entity, municipal authority, governmental authority, investor -owned water or 13
58-wastewater utility, improvement district, or rural development authority that 14
59-provides, distributes, transmits, treats, pumps, or stores raw or potable 15
60-water to or for the benefit of members of the general public and commercial, 16
61-industrial, and other users that proposes to accomplish, develop, or 17
62-construct any of the foregoing . 18
63- (B) A qualified corporation "Qualified corporation" 19
64-includes a nonprofit corporation an entity described under subdivision 20
65-(7)(A)(i) and (ii) of this section that constructs, expands, operates, or 21
66-maintains a wastewater project or wastewater treatment plant; 22
67- 23
68- SECTION 3. Arkansas Code § 4 -35-202(a), concerning the authority and 24
69-procedure to convert to a water authority under the Water Authority Act, is 25
70-amended to read as follows: 26
71- (a) Whenever a qualified corporation desires to convert to and become 27
72-reconstituted as a water authority under and pursuant to this chapter, the 28
73-qualified corporation shall present to and file with the Arkansas Natural 29
74-Resources Commission: 30
75- (1) A resolution adopted by the board of directors governing 31
76-body of the qualified corporation and, if the qualified corporation has 32
77-members, the members of the qualified corporation, which evidences the desire 33
78-of the qualified corporation to convert to and become reconstituted as a 34
79-water authority and which shall additionally certify that the qualified 35
80-corporation:; 36 As Engrossed: S3/17/25 SB420
53+entity, municipal authority, governmental authority, improvement district, or 13
54+rural development authority that provides, distributes, transmits, treats, 14
55+pumps, or stores raw or potable water to or for the benefit of members of the 15
56+general public and commercial, industrial, and other users that proposes to 16
57+accomplish, develop, or construct any of the foregoing . 17
58+ (B) A qualified corporation "Qualified corporation" 18
59+includes a nonprofit corporation an entity described under subdivision 19
60+(7)(A)(i) and (ii) of this section that constructs, expands, operates, or 20
61+maintains a wastewater project or wastewater treatment plant; 21
62+ 22
63+ SECTION 3. Arkansas Code § 4 -35-202(a), concerning the authority and 23
64+procedure to convert to a water authority under the Water Authority Act, is 24
65+amended to read as follows: 25
66+ (a) Whenever a qualified corporation desires to convert to and become 26
67+reconstituted as a water authority under and pursuant to this chapter, the 27
68+qualified corporation shall present to and file with the Arkansas Natural 28
69+Resources Commission: 29
70+ (1) A resolution adopted by the board of directors governing 30
71+body of the qualified corporation and, if the qualified corporation has 31
72+members, the members of the qualified corporation, which evidences the desire 32
73+of the qualified corporation to convert to and become reconstituted as a 33
74+water authority and which shall additionally certify that the qualified 34
75+corporation:; 35
76+ (A) Was initially formed as a nonprofit corporation; 36 SB420
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79+ (B) Does not have the ability to directly access the tax -1
80+exempt capital markets other than through a conduit issuer; and 2
81+ (C) Desires to realize interest rate savings as a result 3
82+of its conversion to and reconstitution as a water authority pursuant to this 4
83+chapter 5
84+ (2) If the qualified corporation is a public facilities board, 6
85+an ordinance adopted by the governing body of the county or municipality that 7
86+formed the public facilities board approving the conversion and 8
87+reconstitution of the public facilities board into a water authority ; 9
88+ (2)(3) Articles of conversion and reconstitution which that 10
89+shall be signed by a majority of the water authority's proposed initial board 11
90+of directors and which shall state and include the following information: 12
91+ (A) The name of the water authority, which shall include 13
92+the words “public water authority”, it being understood that the water 14
93+authority may adopt a fictitious operational name upon written request to and 15
94+approval by the commission and the Secretary of State; 16
95+ (B) The location of the water authority's principal 17
96+office; 18
97+ (C) The number of directors of the water authority, which 19
98+number shall be at least five (5) and shall be subject to change as provided 20
99+in this chapter or in the water authority's bylaws; 21
100+ (D) The names and addresses of the proposed initial board 22
101+of directors of the water authority; 23
102+ (E) The name and address of the agent for service of 24
103+process of the water authority; 25
104+ (F) The proposed geographic service area over which the 26
105+water authority will have jurisdiction; and 27
106+ (G) Any other matters that the proposed initial board of 28
107+directors of the water authority may deem necessary and appropriate; 29
108+ (3)(4) A copy of the water authority's proposed bylaws along 30
109+with any other information which the proposed initial board of directors of 31
110+the water authority may deem necessary and appropriate; 32
111+ (4)(5) A statement and certification from the Secretary of State 33
112+that the proposed name of the water authority is not identical to that of any 34
113+other water authority in the state or so nearly similar as to lead to 35
114+confusion and uncertainty; 36 SB420
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117+ (5)(6) The filing and review fee that the commission may 1
118+designate and determine from time to time; and 2
119+ (6)(7) Any other information and documents which the commission 3
120+may designate and require. 4
121+ 5
122+ SECTION 4. Arkansas Code § 4 -35-203(a)(2), concerning the effect of 6
123+formation of a water authority and the filing with the Secretary of State 7
124+under the Water Authority Act, is amended to read as follows: 8
125+ (2)(A) Contemporaneously therewith, with respect to a 9
126+conversion, the qualified corporation shall cease to exist and all assets and 10
127+liabilities of every nature, including, without limitation, all real 11
128+property, personal property, contractual obligations, lending obligations 12
129+outstanding, rights afforded borrowers of federal and state funds, and other 13
130+tangible and intangible assets and liabilities of every nature, without need 14
131+for further action or approval by any third party, shall be vested in and 15
132+shall accrue to the benefit of the water authority , unless the articles of 16
133+conversion and reconstitution filed with the Secretary of State expressly 17
134+state that the qualified corporation shall continue its corporate or 18
135+governmental existence and that certain specified assets and liabilities of 19
136+the qualified corporation shall remain with the qualified corporation. 20
137+ (B) A governmental entity that is converted and 21
138+reconstituted as a water authority under this chapter is not required to 22
139+comply with other laws or procedures regarding transfer of property by 23
140+governmental entities . 24
141+ 25
142+ SECTION 5. Arkansas Code § 4 -35-203(b)(2), concerning the effect of 26
143+formation of a water authority and the filing with the Secretary of State 27
144+under the Water Authority Act, is amended to read as follows: 28
145+ (2)(A) Except as provided in subdivision (b)(2)(B) of this 29
146+section, filing Filing a copy of the articles of constitution or articles of 30
147+conversion and reconstitution, as accepted and approved by the commission, 31
148+with the Secretary of State shall serve to terminate and dissolve the 32
149+previous corporate existence of the qualified corporation, effective as of 33
150+the date of the issuance of the certificate of existence. 34
151+ (B) A qualified corporation may file a copy of the 35
152+articles of constitution or articles of conversion and reconstitution with 36 SB420
84153
85- (A) Was initially formed as a nonprofit corporation; 1
86- (B) Does not have the ability to directly access the tax -2
87-exempt capital markets other than through a conduit issuer; and 3
88- (C) Desires to realize interest rate savings as a result 4
89-of its conversion to and reconstitution as a water authority pursuant to this 5
90-chapter 6
91- (2) If the qualified corporation is a public facilities board, 7
92-an ordinance adopted by the governing body of the county or municipality that 8
93-formed the public facilities board approving the conversion and 9
94-reconstitution of the public facilities board into a water authority ; 10
95- (2)(3) Articles of conversion and reconstitution which that 11
96-shall be signed by a majority of the water authority's proposed initial board 12
97-of directors and which shall state and include the following information: 13
98- (A) The name of the water authority, which shall include 14
99-the words “public water authority”, it being understood that the water 15
100-authority may adopt a fictitious operational name upon written request to and 16
101-approval by the commission and the Secretary of State; 17
102- (B) The location of the water authority's principal 18
103-office; 19
104- (C) The number of directors of the water authority, which 20
105-number shall be at least five (5) and shall be subject to change as provided 21
106-in this chapter or in the water authority's bylaws; 22
107- (D) The names and addresses of the proposed initial board 23
108-of directors of the water authority; 24
109- (E) The name and address of the agent for service of 25
110-process of the water authority; 26
111- (F) The proposed geographic service area over which the 27
112-water authority will have jurisdiction; and 28
113- (G) Any other matters that the proposed initial board of 29
114-directors of the water authority may deem necessary and appropriate; 30
115- (3)(4) A copy of the water authority's proposed bylaws along 31
116-with any other information which the proposed initial board of directors of 32
117-the water authority may deem necessary and appropriate; 33
118- (4)(5) A statement and certification from the Secretary of State 34
119-that the proposed name of the water authority is not identical to that of any 35
120-other water authority in the state or so nearly similar as to lead to 36 As Engrossed: S3/17/25 SB420
121-
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123-
124-
125-confusion and uncertainty; 1
126- (5)(6) The filing and review fee that the commission may 2
127-designate and determine from time to time; and 3
128- (6)(7) Any other information and documents which the commission 4
129-may designate and require. 5
130- 6
131- SECTION 4. Arkansas Code § 4 -35-203(a)(2), concerning the effect of 7
132-formation of a water authority and the filing with the Secretary of State 8
133-under the Water Authority Act, is amended to read as follows: 9
134- (2)(A) Contemporaneously therewith, with respect to a 10
135-conversion, the qualified corporation shall cease to exist and all assets and 11
136-liabilities of every nature, including, without limitation, all real 12
137-property, personal property, contractual obligations, lending obligations 13
138-outstanding, rights afforded borrowers of federal and state funds, and other 14
139-tangible and intangible assets and liabilities of every nature, without need 15
140-for further action or approval by any third party, shall be vested in and 16
141-shall accrue to the benefit of the water authority , unless the articles of 17
142-conversion and reconstitution filed with the Secretary of State expressly 18
143-state that the qualified corporation shall continue its corporate or 19
144-governmental existence and that certain specified assets and liabilities of 20
145-the qualified corporation shall remain with the qualified corporation. 21
146- (B) A governmental entity that is converted and 22
147-reconstituted as a water authority under this chapter is not required to 23
148-comply with other laws or procedures regarding transfer of property by 24
149-governmental entities . 25
150- 26
151- SECTION 5. Arkansas Code § 4 -35-203(b)(2), concerning the effect of 27
152-formation of a water authority and the filing with the Secretary of State 28
153-under the Water Authority Act, is amended to read as follows: 29
154- (2)(A) Except as provided in subdivision (b)(2)(B) of this 30
155-section, filing Filing a copy of the articles of constitution or articles of 31
156-conversion and reconstitution, as accepted and approved by the commission, 32
157-with the Secretary of State shall serve to terminate and dissolve the 33
158-previous corporate existence of the qualified corporation, effective as of 34
159-the date of the issuance of the certificate of existence. 35
160- (B) A qualified corporation may file a copy of the 36 As Engrossed: S3/17/25 SB420
161-
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163-
164-
165-articles of constitution or articles of conversion and reconstitution with 1
166-the Secretary of State that expressly states that the qualified corporation 2
167-shall continue its corporate or governmental existence. 3
168- 4
169- SECTION 6. Arkansas Code § 4 -35-203, concerning the effect of 5
170-formation of a water authority and the filing with the Secretary of State 6
171-under the Water Authority Act, is amended to add an additional subsection to 7
172-read as follows: 8
173- (c) Upon receipt of a certificate of existence from the commission 9
174-under § 4-35-203(a)(1), the water authority shall be deemed to have complied 10
175-with all requirements of this subchapter relating to the proper formation or 11
176-conversion and reconstitution of a water authority, including without 12
177-limitation all requirements of § 4 -35-202. 13
178- 14
179- SECTION 7. Arkansas Code § 15 -5-901(a)(3), concerning the 15
180-establishment and uses of the Construction Assistance Revolving Loan Fund, is 16
181-amended to read as follows: 17
182- (3) The commission may deposit loans made to and bonds, notes, 18
183-and other evidences of indebtedness issued by local governmental entities and 19
184-other owners of environmental projects in accordance with the Clean Water 20
185-Act, 33 U.S.C. § 1251 et seq., as existing on January 1, 2025, to finance or 21
186-refinance the planning, design, acquisition, construction, expansion, 22
187-equipping, rehabilitation, or consolidation of wastewater systems, water 23
188-systems, solid and hazardous waste facilities, recycling facilities, nonpoint 24
189-source management facilities, wetlands conservation and management 25
190-facilities, and other environmental projects or parts of environmental 26
191-projects into the Construction Assistance Revolving Loan Fund. 27
192- 28
193- SECTION 8. Arkansas Code § 15-5-909(8), concerning the definition of 29
194-"owner" regarding the Construction Assistance Revolving Loan Fund, is amended 30
195-to read as follows: 31
196- (8) “Owner” means the owner or prospective owner , whether public 32
197-or private, of an environmental project, excluding any federal agencies; 33
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155+the Secretary of State that expressly states that the qualified corporation 1
156+shall continue its corporate or governmental existence. 2
157+ 3
158+ SECTION 6. Arkansas Code § 4 -35-203, concerning the effect of 4
159+formation of a water authority and the filing with the Secretary of State 5
160+under the Water Authority Act, is amended to add an additional subsection to 6
161+read as follows: 7
162+ (c) Upon receipt of a certificate of existence from the commission 8
163+under § 4-35-203(a)(1), the water authority shall be deemed to have complied 9
164+with all requirements of this subchapter relating to the proper formation or 10
165+conversion and reconstitution of a water authority, including without 11
166+limitation all requirements of § 4 -35-202. 12
167+ 13
168+ SECTION 7. Arkansas Code § 15 -5-901(a)(3), concerning the 14
169+establishment and uses of the Construction Assistance Revolving Loan Fund, is 15
170+amended to read as follows: 16
171+ (3) The commission may deposit loans made to and bonds, notes, 17
172+and other evidences of indebtedness issued by local governmental entities and 18
173+other owners of environmental projects in accordance with the Clean Water 19
174+Act, 33 U.S.C. § 1251 et seq., as existing on January 1, 2025, to finance or 20
175+refinance the planning, design, acquisition, construction, expansion, 21
176+equipping, rehabilitation, or consolidation of wastewater systems, water 22
177+systems, solid and hazardous waste facilities, recycling facilities, nonpoint 23
178+source management facilities, wetlands conservation and management 24
179+facilities, and other environmental projects or parts of environmental 25
180+projects into the Construction Assistance Revolving Loan Fund. 26
181+ 27
182+ SECTION 8. Arkansas Code § 15 -5-909(8), concerning the definition of 28
183+"owner" regarding the Construction Assistance Revolving Loan Fund, is amended 29
184+to read as follows: 30
185+ (8) “Owner” means the owner or prospective owner , whether public 31
186+or private, of an environmental project, excluding any federal agencies; 32
187+ 33
198188 34
199-/s/Hester 35
200-APPROVED: 4/17/25 36
189+ 35
190+ 36