Arkansas Administrative Code
Agency 138 - Arkansas Natural Resources Commission
Rule 138.00.03-001 - Title XVII: Rules Governing Public Water Authorities
Universal Citation: AR Admin Rules 138.00.03-001
Current through Register Vol. 49, No. 2, February 2024
TITLE XVIIRULES GOVERNING WATER AUTHORITIES Effective date: September 17, 2003
SUBTITLE I.
GENERAL
PROVISIONS
Section 1701.1.
PURPOSE AND ENABLING LEGISLATION. This title
implements Title Four, Chapter Thirty Five, Subchapters One and Two of the
Arkansas Code Annotated, by establishing a procedure by which two or more
persons or a Qualified Corporation involved in the sale, transmission, and
distribution of potable water to members of the public and others may form or
convert.
Section 1701.2
DEFINITIONS.
A.
Applicant: Two or more persons or a Qualified Corporation seeking to form or
convert to a Water Authority to provide, distribute, transmit, treat, pump, or
store raw or potable water to or for the benefit of the general public and
commercial, industrial, and other water users.
B. Application: All documents submitted by
the Applicant to the Executive Director as required in Sections
1702.1
and
1703.1.
C. Certificate of Existence: The document
issued by the Executive Director which brings a Water Authority into
existence.
D. Commission: The
Arkansas Soil and Water Conservation Commission.
E. Executive Director: The Executive
Director/Ex-Officio Secretary of the Commission.
F. Geographic Service Area: The area
currently provided water service by a public water system or an area in which a
public water system is constructing facilities for service.
G. Qualified Corporation: Any nonprofit
corporation originally formed pursuant to the Arkansas Nonprofit Corporation
Act of 1993, codified at §
4-28-201 et seq., or a
predecessor statute, which provides, distributes, transmits, treats, pumps, or
stores raw or potable water to or for the benefit of members of the general
public and commercial, industrial, and other users or which proposes to
accomplish, develop, or construct any of the foregoing.
H. Water Authority: A public body politic and
governmental entity organized pursuant to Ark. Code Ann. §
4-35-101 et
seq.
I. Water Users: Members of the
public and commercial, industrial, and other users who purchase their raw or
potable drinking water directly from the Water Authority.
Section 1701.3
HEARING.
The Executive Director at his or her discretion may conduct a
hearing with respect to any application or amendment under this
Title.
SUBTITLE II.
FORMATION OF A WATER AUTHORITY
Section 1702.1
FORMATION OF WATER
AUTHORITY- APPLICATION. Two or more persons, which may include
cities, counties, or other public bodies, may apply to form a Water Authority
by presenting to and filing the following with the Executive Director:
A. Articles of formation and constitution
which shall state and include the following information:
1. The name of the Water Authority, which
shall be
"The ____________ Public Water Authority of the State of Arkansas," or similar name;
2. The location of the Water Authority's
principal office;
3. The number of
directors of the Water Authority, which shall be at least five (5) and shall be
subject to change and modification as provided in its bylaws;
4. The names and addresses of the proposed
initial board of directors of the Water Authority;
5. The name and address of the Water
Authority's agent for service of process;
6. The proposed geographic service area over
which the Water Authority will have jurisdiction;
7. A brief statement describing the water
source from which the water authority plans to obtain its water;
8. A brief statement showing the necessity
for forming the proposed water district and describing the benefits to be
received by the residents and property owners in the authority's geographic
service area; and
9. If the purpose
of the Water Authority is to provide potable water for sale to retail
customers:
(a) a certification by Applicant
that the proposed geographic service area is not within five miles of another
public water system's current retail water service, or
(b) a certification and proof that a copy of
the Application was provided to all public water systems within five miles of
Applicant's proposed geographic service area prior to submission to the
Executive Director; and
B. A copy of the Applicant's proposed
bylaws.
C. A statement and
certification from the Secretary of State that the name of the proposed Water
Authority is not identical with that of any other Water Authority, or so nearly
similar thereto as to lead to confusion and uncertainty.
D. A filing and review fee of $750, which
shall be deposited in the Water Development Fund as provided in Ark. Code Ann.
§
15-20-209
and §
15-22-514.
E. Any other information that the initial
board of directors may deem necessary and appropriate, and
F. Any other information and documents which
the Executive Director may designate and require.
Section 1702.2
REVIEW
PROCEDURE.
A. When the Executive
Director receives an application, the Executive Director shall review it to
ascertain its completeness and accuracy.
B. The Applicant shall provide any additional
items or information requested by the Executive Director.
Section 1702.3
PUBLIC
NOTICE.
A. When the Executive
Director receives an application, the Executive Director will cause public
notice to be published two times, at least one week apart, in a newspaper
having general circulation in the county where the Applicant's principal office
is to be located.
B. The notice
shall contain the name of the Applicant, the name of the Water Authority, its
address, and proposed geographic service area.
Section 1702.4
APPROVAL OF
FORMATION.
A. Based upon the
application, information provided by persons responding to public notice of the
application within ten days of the last publication, and any information deemed
pertinent by the Executive Director, the Director will determine whether to
issue a Certificate of Existence.
B. The Executive Director may consider any of
the following in making his or her decision:
1. location of the project,
2. source of water for the project,
3. applicant's water source on the date of
application,
4. benefits and
necessity of formation, and
5.
anticipated date of commencement of water service construction, including dates
of any phases of construction.
C. The Executive Director will approval or
disapprove formation and will state reasons for disapproval in
writing.
D. The Executive Director
shall have the power to approve the whole application or a portion of the
application.
E. The Executive
Director may make approval conditional upon the commencement of construction or
operation within a specified timeframe to prevent water authorities from
claiming jurisdiction over areas that will not immediately receive
service.
F. The Water Authority may
request a hearing regarding an unfavorable determination in accordance with
Commission rules, Title 1, Rules of Organization and General
Operation.
SUBTITLE
III.
CONVERSION OF EXISTING QUALIFIED
CORPORATIONS
Section 1703.1
CONVERSION TO A WATER AUTHORITY-APPLICATION. Whenever
a Qualified Corporation desires to convert to and become reconstituted as a
Water Authority, the Qualified Corporation shall present to and file with the
Executive Director:
A. A resolution duly
adopted by the Applicant's board of directors evidencing the desire to convert
to and become reconstituted as a Water Authority and certifying that the
Applicant:
1. Was initially formed as a
non-profit corporation;
2. Cannot
directly access the tax-exempt capital markets other than through a conduit
issuer; and
3. Desires to realize
interest rate savings as a result of its conversion and reconstitution as a
Water Authority.
B.
Articles of conversion and reconstitution which shall be signed by a majority
of the Water Authority's proposed initial board of directors and which shall
state the following information:
1. The name
of the Water Authority, which shall be
"The ____________ Public Water Authority of the State of Arkansas," or similar name;
2. The location of the Water Authority's
principal office;
3. The number of
directors of the Water Authority, which number shall be at least five (5) and
shall be subject to change and modification as provided in its
bylaws;
4. The names and addresses
of the proposed initial board of directors of the Water Authority;
5. The name and address of the Water
Authority's agent for service of process;
6. The Qualified Corporation's existing
geographic service area;
7. A brief
statement describing the water source from which the water authority plans to
obtain its water or currently obtains its water; and
C. A copy of the Water Authority's proposed
bylaws along with any other information which the proposed initial board of
directors may deem necessary and appropriate.
D. A statement and certification from the
Secretary of State that the name of the proposed Public Water Authority is not
identical with that of any other Water Authority, or so nearly similar thereto
as to lead to confusion and uncertainty.
E. A filing and review fee of $750, which
shall be deposited in the Water Development Fund as provided in Ark. Code Ann.
§
15-20-209
and §
15-22-514.
F. Any other information that the proposed
initial board of directors may deem necessary and appropriate, and
G. Any other information and documents which
the Executive Director may designate and require.
Section 1703.2
NO
MEMBERS.
A. In addition to the
requirements of 1703.1, if the qualified corporation seeking to become a Water
Authority has members, the qualified corporation must also submit a resolution
approved by the members that conforms to the requirements of 1703.1 A.
1. Membership approval of conversion must be
obtained in the manner determined prior to conversion under the qualified
corporation's articles, bylaws, or applicable statutes.
2. After conversion, the Water Authority
shall have no members.
B.
Any entity that converted to a Water Authority according to the Commission's
rules and existing law prior to Act 1330_of 2003 shall be deemed to have
complied with this title.
Section
1703.3
REVIEW PROCEDURE.
A. When the Executive Director receives an
application, the Executive Director shall review it to ascertain its
completeness and accuracy.
B. The
Applicant shall provide any additional items or information requested by the
Executive Director.
Section
1703.4
APPROVAL OF CONVERSION.
A. Based upon the application and any
information deemed pertinent by the Executive Director, the Director will
determine whether to issue a Certificate of Existence.
B. The Executive Director may consider any of
the following in making his or her decision:
1. location of the project,
2. source of water for the project,
3. applicant's water source on the date of
application,
4. benefits and
necessity of formation, and
5.
anticipated date of commencement of water service construction, including dates
of any phases of construction.
C. The Executive Director will approval or
disapprove conversion and will state reasons for disapproval in
writing.
D. The Water Authority may
request a hearing regarding an unfavorable determination in accordance with
Commission rules, Title 1, Rules of Organization and General
Operation.
Section 1703.5
PUBLIC NOTICE.
A. If
the Executive Director approves conversion, the Executive Director will cause a
public notice to be published two times, at least one week apart, in a
newspaper having general circulation in the county where the Applicant's
principal office is located.
B. The
notice shall contain the name of the Applicant, the name of the Water
Authority, its address, and shall state that a Certificate of Existence has
been issued and the effect of its issuance.
SUBTITLE IV.
CERTIFICATE OF
EXISTENCE
Section 1704.1
ISSUANCE OF CERTIFICATE OF EXISTENCE.
A. If the application is found by the
Executive Director to be complete and accurate, the Executive Director will
issue a Certificate of Existence. The Water Authority referred to therein shall
come into existence as a public body politic and governmental entity of the
state under the name set forth in the Certificate of Existence.
B. The Water Authority shall then be vested
with the rights and powers granted in Title Four, Chapter Thirty Five,
Subchapter One of the Arkansas Code Annotated.
Section 1704.2
FILING WITH
SECRETARY OF STATE. After issuance of the Certificate of
Existence, the Commission will file the Water Authority's articles of
constitution or articles of conversion and reconstitution in the office of the
Secretary of State. In cases of conversion, filing with the Secretary of State
shall serve to terminate and dissolve the previous corporate existence of the
qualified corporation effective as of the date of the issuance of the
Certificate of Existence.
SUBTITLE
V.
AMENDMENT TO ARTICLES OR BYLAWS
Section 1705.1
AMENDMENT TO
ARTICLES.
A. Any amendment to
articles must be filed with the Executive Director along with the following
information:
1. The name of the Water
Authority,
2. The text of the
amendment adopted,
3. The date of
each amendment's adoption, and
4. A
statement that the amendment was approved by a sufficient vote of the board of
directors.
B. If the
amendment concerns a change to the Water Authority's geographic service area,
the Executive Director will follow the procedure in Subtitle
VI.
Section 1705.2
AMENDMENTS TO BYLAWS.
A. With the exception of the amendments
listed below, bylaws may be amended without the Executive Director's notice or
approval.
B. If the proposed
amendment to bylaws changes the number of directors or procedure for nominating
or electing directors, then the Water Authority must receive written approval
from the Executive Director.
1. The Executive
Director will review the proposed amendment and will give the Water Authority
written notice of the decision.
2.
If the Executive Director disapproves the proposed amendment, the Executive
Director will issue the reason or reasons for his decision in
writing.
3. The Water Authority may
request a hearing regarding an unfavorable determination in accordance with
Commission rules, Title 1, Rules of Organization and General
Operation.
C. If the
water authority intends to limit or expand its geographic service area, the
Executive Director will follow the procedure in Subtitle
VI.
SUBTITLE
VI.
CHANGES TO GEOGRAPHIC SERVICE AREA
Section 1706.1.
EXECUTIVE
DIRECTOR APPROVAL REQUIRED. Any water authority intending to
expand or limit its geographic service area, must file required documentation
with the Executive Director before expanding or limiting geographic service
area. Applicant must also submit a filing and review fee of $250, which shall
be deposited in the Water Development Fund as provided in Ark. Code Ann. §
15-20-209
and §
15-22-514.
Section 1706.2.
CERTIFICATION OF
NOTICE TO AFFECTED ENTITIES. The Water Authority must provide the
Executive Director with
(1) certification that
the proposed change to geographic service area is not within five miles of
another public water system's current retail water service or
(2) certification and proof that a copy of
the proposed geographic service area was provided to all public water systems
within five miles of Applicant's proposed geographic service area prior to
submission to the Executive Director.
Section 1706.3.
DESCRIPTION OF
GEOGRAPHIC SERVICE AREA.
A. The
Water Authority must submit a map, legal description, or other description
satisfactory to the Executive Director describing the proposed geographic
service area change.
B. If the
Director approves the description as adequate to place public systems within
the five mile vicinity on notice of the location of the proposed change, the
Director will cause notice of the description and proposed change to be
published two times, at least one week apart, in a newspaper having general
circulation in the county where the Applicant's proposed change is to be
located.
1. The notice shall contain the name
of the Applicant, the name of the Water Authority, its address, and proposed
geographic service area.
Section 1706.4
APPROVAL OF
GEOGRAPHIC SERVICE AREA CHANGE.
A. Based upon evidence submitted by
Applicant, information provided by persons responding to public notice of the
application within ten days of the last publication, and any information deemed
pertinent by the Executive Director, the Director will determine whether to
approve the change to geographic service area.
B. The Executive Director may consider any of
the following in making his or her decision:
1. with regard to expansion, whether the area
to be added is already served by another public water system,
2. source of water for the project,
3. benefits and necessity of change,
and
4. anticipated date of
commencement of water service to new area.
C. The Executive Director will review the
proposed geographic service area change and will give the Water Authority
written notice of the decision.
1. If the
Executive Director disapproves the proposed change, the Executive Director will
issue the reason or reasons for his decision in writing.
2. The Water Authority may request a hearing
regarding an unfavorable determination in accordance with Commission rules,
Title 1, Rules of Organization and General Operation.
D. The Executive Director may make approval
conditional upon the commencement of construction or operation within a
specified timeframe to prevent water authorities from claiming jurisdiction
over areas that will not immediately receive
service.
SUBTITLE
VII.
DISSOLUTION
Section 1707.1
ARTICLES OF
DISSOLUTION. Any water authority that intends to transfer, merge,
consolidate, or otherwise dissolve its existence, must file Articles of
Dissolution with the Executive Director.
Section
1707.2
DISPOSAL OF ASSETS. Upon
dissolution, any assets of a water authority remaining after payment of claims
and liabilities of the water authority shall be transferred to the successor
water authority, if applicable, or to the
Commission.
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