Arkansas Code
Subchapter 2 - Allocation and Use Generally
§ 15-22-223. Protection of service areas

(a) It is unlawful for a person to provide water or wastewater services to an area where such services are being provided by the current provider that has pledged or utilizes revenue derived from services within the area to repay financial assistance provided by the Arkansas Natural Resources Commission, unless approval for such activity has been given by the commission and the new provider has received approval under the Arkansas Water Plan established in § 15-22-503, if applicable.
(b)
(1) As a condition of its approval, the commission may require the payment of an equitable portion of the outstanding financial assistance provided.
(2)
(A) Any payment made shall reduce the outstanding balance of the financial assistance provided by the commission to the current provider.
(B) To determine the amount of payment, the commission shall base its approval on the following factors:
(i) The impact of the transfer of the area on the current provider's existing indebtedness and its ability to repay the debt;
(ii) The value, including depreciation, of the current provider's facilities in the area to be transferred;
(iii) The amount of any expenditures by the current provider for planning, design, or construction of service facilities outside the area, including without limitation treatment, transmission, and storage facilities, that are directly and reasonably allocable to the area to be transferred;
(iv) Any demonstrated impairment of service or increase in cost, including without limitation operation and maintenance, to consumers of the current provider remaining after the transfer of the area;
(v) The impact of future lost revenues from the current provider's existing consumers in the area to be transferred, but only until the indebtedness is retired;
(vi) Necessary and reasonable legal expenses and professional fees; and
(vii) Other relevant factors as determined by the commission.

(3) Upon enactment of this section, financial assistance provided by the commission for potable water or wastewater projects shall be provided only to:
(A) The state, counties, cities, towns, or their agencies or instrumentalities; and
(B) Nonprofit corporations existing on August 1, 1997.

(c) The commission or other parties may institute a civil action in the circuit court of the county where the unlawful activities have or will likely occur to:
(1) Restrain such activities;
(2) Compel compliance with the provisions of this section; and
(3) Recover all costs and expenses incurred as a result of violations of this section.

(d) Nothing in this subchapter limits the applicable federal law.
(e)
(1) The state may require that if a borrower of water loans or wastewater loans is able to refinance the amount of the indebtedness to any government lender then outstanding, in whole or in part, by obtaining a loan for the same purpose from a responsible cooperative or private source at a reasonable rate and under reasonable terms for similar loans, then the borrower shall:
(A) Apply for and accept the loan in sufficient amount to repay the government lender; and
(B) Take all actions required in connection with the loan.

(2) Subdivision (e)(1) of this section shall also apply if a borrower seeks financing from the state for any water project or wastewater project that is not currently funded by a government lender.