Stricken language would be deleted from and underlined language would be added to present law.
Act 736 of the Regular Session
*JMB397* 03-17-2025 10:10:49 JMB397
State of Arkansas As Engrossed: S3/17/25 1
95th General Assembly A Bill 2
Regular Session, 2025 SENATE BILL 420 3
4
By: Senator Hester 5
By: Representatives Beaty Jr., L. Johnson 6
7
For An Act To Be Entitled 8
AN ACT TO EXPAND ELIGIBILITY FOR WATER DEVELOPMENT 9
STATE PROGRAMS; TO AMEND THE WATER AUTHORITY ACT; TO 10
AMEND THE USES OF THE CONSTRUCTION ASSISTANCE 11
REVOLVING LOAN FUND; AND FOR OTHER PURPOSES. 12
13
14
Subtitle 15
TO EXPAND ELIGIBILITY FOR WATER 16
DEVELOPMENT STATE PROGRAMS; TO AMEND THE 17
WATER AUTHORITY ACT; AND TO AMEND THE 18
USES OF THE CONSTRUCTION ASSISTANCE 19
REVOLVING LOAN FUND. 20
21
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 22
23
SECTION 1. Arkansas Code § 4 -35-101 is amended to read as follows: 24
4-35-101. Legislative intent. 25
It is the intent of the General Assembly to provide a means by which a 26
nonprofit corporation qualified corporation involved in the sale, 27
transmission, and distribution of potable water to members of the general 28
public and commercial, industrial, and other users may form or convert its 29
entity status from that of a body corporate to that of a public body politic 30
and governmental entity, thereby allowing the entity the opportunity to 31
access the tax-exempt capital markets and assuring the State of Arkansas and 32
the customers of the entity of the lowest water rates possible to be a water 33
authority. 34
35
SECTION 2. Arkansas Code § 4 -35-103(7), concerning the definition of 36 As Engrossed: S3/17/25 SB420
2 03-17-2025 10:10:49 JMB397
"qualified corporation" within the Water Authority Act, is amended to read as 1
follows: 2
(7)(A) “Qualified corporation” means: 3
(i) any A nonprofit corporation originally formed 4
pursuant to under the Arkansas Nonprofit Corporation Act of 1993, § 4 -33-101 5
et seq., the Arkansas Nonprofit Corporation Act, § 4 -28-201 et seq., or a 6
predecessor statute, which among other things that provides, distributes, 7
transmits, treats, pumps, or stores raw or potable water to or for the 8
benefit of members of the general public and commercial, industrial, and 9
other users or which that proposes to accomplish, develop, or construct any 10
of the foregoing; or 11
(ii) Any governmental entity, municipal nonprofit 12
entity, municipal authority, governmental authority, investor -owned water or 13
wastewater utility, improvement district, or rural development authority that 14
provides, distributes, transmits, treats, pumps, or stores raw or potable 15
water to or for the benefit of members of the general public and commercial, 16
industrial, and other users that proposes to accomplish, develop, or 17
construct any of the foregoing . 18
(B) A qualified corporation "Qualified corporation" 19
includes a nonprofit corporation an entity described under subdivision 20
(7)(A)(i) and (ii) of this section that constructs, expands, operates, or 21
maintains a wastewater project or wastewater treatment plant; 22
23
SECTION 3. Arkansas Code § 4 -35-202(a), concerning the authority and 24
procedure to convert to a water authority under the Water Authority Act, is 25
amended to read as follows: 26
(a) Whenever a qualified corporation desires to convert to and become 27
reconstituted as a water authority under and pursuant to this chapter, the 28
qualified corporation shall present to and file with the Arkansas Natural 29
Resources Commission: 30
(1) A resolution adopted by the board of directors governing 31
body of the qualified corporation and, if the qualified corporation has 32
members, the members of the qualified corporation, which evidences the desire 33
of the qualified corporation to convert to and become reconstituted as a 34
water authority and which shall additionally certify that the qualified 35
corporation:; 36 As Engrossed: S3/17/25 SB420
3 03-17-2025 10:10:49 JMB397
(A) Was initially formed as a nonprofit corporation; 1
(B) Does not have the ability to directly access the tax -2
exempt capital markets other than through a conduit issuer; and 3
(C) Desires to realize interest rate savings as a result 4
of its conversion to and reconstitution as a water authority pursuant to this 5
chapter 6
(2) If the qualified corporation is a public facilities board, 7
an ordinance adopted by the governing body of the county or municipality that 8
formed the public facilities board approving the conversion and 9
reconstitution of the public facilities board into a water authority ; 10
(2)(3) Articles of conversion and reconstitution which that 11
shall be signed by a majority of the water authority's proposed initial board 12
of directors and which shall state and include the following information: 13
(A) The name of the water authority, which shall include 14
the words “public water authority”, it being understood that the water 15
authority may adopt a fictitious operational name upon written request to and 16
approval by the commission and the Secretary of State; 17
(B) The location of the water authority's principal 18
office; 19
(C) The number of directors of the water authority, which 20
number shall be at least five (5) and shall be subject to change as provided 21
in this chapter or in the water authority's bylaws; 22
(D) The names and addresses of the proposed initial board 23
of directors of the water authority; 24
(E) The name and address of the agent for service of 25
process of the water authority; 26
(F) The proposed geographic service area over which the 27
water authority will have jurisdiction; and 28
(G) Any other matters that the proposed initial board of 29
directors of the water authority may deem necessary and appropriate; 30
(3)(4) A copy of the water authority's proposed bylaws along 31
with any other information which the proposed initial board of directors of 32
the water authority may deem necessary and appropriate; 33
(4)(5) A statement and certification from the Secretary of State 34
that the proposed name of the water authority is not identical to that of any 35
other water authority in the state or so nearly similar as to lead to 36 As Engrossed: S3/17/25 SB420
4 03-17-2025 10:10:49 JMB397
confusion and uncertainty; 1
(5)(6) The filing and review fee that the commission may 2
designate and determine from time to time; and 3
(6)(7) Any other information and documents which the commission 4
may designate and require. 5
6
SECTION 4. Arkansas Code § 4 -35-203(a)(2), concerning the effect of 7
formation of a water authority and the filing with the Secretary of State 8
under the Water Authority Act, is amended to read as follows: 9
(2)(A) Contemporaneously therewith, with respect to a 10
conversion, the qualified corporation shall cease to exist and all assets and 11
liabilities of every nature, including, without limitation, all real 12
property, personal property, contractual obligations, lending obligations 13
outstanding, rights afforded borrowers of federal and state funds, and other 14
tangible and intangible assets and liabilities of every nature, without need 15
for further action or approval by any third party, shall be vested in and 16
shall accrue to the benefit of the water authority , unless the articles of 17
conversion and reconstitution filed with the Secretary of State expressly 18
state that the qualified corporation shall continue its corporate or 19
governmental existence and that certain specified assets and liabilities of 20
the qualified corporation shall remain with the qualified corporation. 21
(B) A governmental entity that is converted and 22
reconstituted as a water authority under this chapter is not required to 23
comply with other laws or procedures regarding transfer of property by 24
governmental entities . 25
26
SECTION 5. Arkansas Code § 4 -35-203(b)(2), concerning the effect of 27
formation of a water authority and the filing with the Secretary of State 28
under the Water Authority Act, is amended to read as follows: 29
(2)(A) Except as provided in subdivision (b)(2)(B) of this 30
section, filing Filing a copy of the articles of constitution or articles of 31
conversion and reconstitution, as accepted and approved by the commission, 32
with the Secretary of State shall serve to terminate and dissolve the 33
previous corporate existence of the qualified corporation, effective as of 34
the date of the issuance of the certificate of existence. 35
(B) A qualified corporation may file a copy of the 36 As Engrossed: S3/17/25 SB420
5 03-17-2025 10:10:49 JMB397
articles of constitution or articles of conversion and reconstitution with 1
the Secretary of State that expressly states that the qualified corporation 2
shall continue its corporate or governmental existence. 3
4
SECTION 6. Arkansas Code § 4 -35-203, concerning the effect of 5
formation of a water authority and the filing with the Secretary of State 6
under the Water Authority Act, is amended to add an additional subsection to 7
read as follows: 8
(c) Upon receipt of a certificate of existence from the commission 9
under § 4-35-203(a)(1), the water authority shall be deemed to have complied 10
with all requirements of this subchapter relating to the proper formation or 11
conversion and reconstitution of a water authority, including without 12
limitation all requirements of § 4 -35-202. 13
14
SECTION 7. Arkansas Code § 15 -5-901(a)(3), concerning the 15
establishment and uses of the Construction Assistance Revolving Loan Fund, is 16
amended to read as follows: 17
(3) The commission may deposit loans made to and bonds, notes, 18
and other evidences of indebtedness issued by local governmental entities and 19
other owners of environmental projects in accordance with the Clean Water 20
Act, 33 U.S.C. § 1251 et seq., as existing on January 1, 2025, to finance or 21
refinance the planning, design, acquisition, construction, expansion, 22
equipping, rehabilitation, or consolidation of wastewater systems, water 23
systems, solid and hazardous waste facilities, recycling facilities, nonpoint 24
source management facilities, wetlands conservation and management 25
facilities, and other environmental projects or parts of environmental 26
projects into the Construction Assistance Revolving Loan Fund. 27
28
SECTION 8. Arkansas Code § 15-5-909(8), concerning the definition of 29
"owner" regarding the Construction Assistance Revolving Loan Fund, is amended 30
to read as follows: 31
(8) “Owner” means the owner or prospective owner , whether public 32
or private, of an environmental project, excluding any federal agencies; 33
34
/s/Hester 35
APPROVED: 4/17/25 36