TO AMEND THE LAW CONCERNING SEWER COLLECTION AND SEWER TREATMENT PROVIDERS AND RELATED SERVICES.

2025 Regular Session Introduced by Justin Gonzales and 2 co-sponsors

Act 925 enhances oversight of Arkansas sewer systems, requiring financial studies and accountability to ensure sustainable, compliant services for communities.

Notification that HB1701 is now Act 925

Overview

House Bill 1701, now enacted as Act 925, amends existing laws concerning sewer collection and treatment providers in Arkansas. The bill aims to enhance oversight and operational efficiency of wastewater and sewer systems, ensuring they are financially sustainable and compliant with state regulations.

Purpose and Intent

The primary intent of HB 1701 is to:
- Improve the operational and infrastructural integrity of wastewater and sewer systems in Arkansas.
- Establish a framework for financial oversight and rate-setting for sewer service providers.
- Align the regulation of sewer systems with reforms previously applied to retail water providers.

Key Provisions

New Oversight Framework

Creation of a New Subchapter: The bill introduces a new subchapter under Arkansas Code Title 14, Chapter 239, focusing on the oversight of wastewater and sewer retail providers.

Definitions

Provider: Defined as any public or private entity offering sewage collection or treatment services.

Provider's Board: Refers to the governing body of the provider.

Rate Studies and Fiscal Management

Rate Study Requirements: Providers must conduct a rate study to assess and recommend rates that cover operational costs, maintenance, debt service, and future capital expenses.

Providers serving 500 or fewer customers must complete a study by July 1, 2028, with subsequent studies every five years.
Providers serving between 501 and 1,000 customers must comply by July 1, 2029, and those serving over 1,000 customers by July 1, 2030.

Implementation of Rate Increases:

Recommended rate increases must be implemented within one year unless they exceed 50% of the previous year's rates, in which case they can be phased in over two years.

Financial Accountability

Fiscal Distress: The Arkansas Natural Resources Commission will maintain a list of providers in fiscal distress, defined by failure to conduct or implement required rate studies or significant noncompliance with commission rules.

Improvement Plans: Providers identified as being in fiscal distress must submit improvement plans to address financial and operational deficiencies.

Additional Requirements

Providers are required to deposit at least 5% of gross revenues into a dedicated refurbishment and replacement account for system upgrades.

Annual filing of the most recent rate study with the Arkansas Legislative Audit is mandated.

Affected Entities

Sewer Collection and Treatment Providers: Both public and private entities providing these services will be directly impacted by the new regulations and requirements.

Arkansas Natural Resources Commission and Division of Environmental Quality: These bodies will oversee compliance and implementation of the new provisions.

Conclusion

House Bill 1701 (Act 925) represents a significant step towards improving the management and sustainability of sewer systems in Arkansas. By instituting rigorous oversight and financial accountability measures, the legislation aims to ensure that providers can meet the needs of their communities effectively and responsibly.

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