The following words and terms, when used in this part, shall have the following meanings, unless the context clearly indicates otherwise:

1. (1) “Act” means the Federal Water Pollution Control Act of 1972, as amended, 33 U.S.C. § 1251 et seq.;

2. (2)

   1. (A) “Administration fee” means a fee charged to the borrower at loan closing.
   2. (B) The administration fee is used to cover the costs of the program for both the Arkansas Development Finance Authority and the Arkansas Natural Resources Commission.
   3. (C) The amount of the fee will be what is in effect at the time the memorandum of agreement is executed by both parties.
   4. (D) The Director of the Arkansas Natural Resources Commission will be responsible for setting the administration fee;
3. (3) “Administrator of the United States Environmental Protection Agency” means the chief officer of the United States Environmental Protection Agency appointed by the President of the United States;
4. (4) “Arkansas Clean Water Revolving Loan Fund program (CWRLF)” means the program created pursuant to Arkansas Code § 15-5-901 et seq., in accordance with the Federal Water Pollution Control Act of 1972, as amended by Public Law 100-4, February 4, 1987;
5. (5) “Authority” means the Arkansas Development Finance Authority;

6. (6)

   1. (A) “Best practicable waste treatment technologies” means the cost-effective technology that can treat wastewater, combined sewer overflows, and nonexcessive infiltration and inflow in publicly owned or individual wastewater facilities.
   2. (B) These technologies must meet the applicable provisions of federal and state effluent limitations, groundwater protection, or other applicable standards;

7. (7)

   1. (A) “Binding commitment” means a legal obligation, enforceable under state law, specifying the terms and schedules under which assistance is provided.
   2. (B) For the purpose of this program, the bond purchase agreement will normally be used as the binding commitment;
8. (8) “Bond” means the bond, note, renewal note, refunding bond, interim certificate, certification of indebtedness, debenture, warrant, commercial paper, or other obligation or evidence of indebtedness authorized to be issued by the State of Arkansas;
9. (9) “Bond purchase agreement” means a legal agreement specifying the terms and schedules under which the Arkansas Natural Resources Commission and Arkansas Development Finance Authority will purchase bonds issued by the borrower for financing the cost of construction;

10. (10) “Borrower” means a city, town, district, county, or public body created and recognized under state law having jurisdiction over transport, treatment, and/or disposal of:

    1. (A) Sewage;
    2. (B) Industrial waste; or
    3. (C) Other waste;
11. (11) “Building” means the erection, acquisition, alteration, remodeling, improvement, or extension of wastewater facilities;
12. (12) “Capitalization grant” means federal grant assistance awarded to the state for the establishment of the Arkansas Clean Water Revolving Loan Fund program;

13. (13)

    1. (A) “Change order” means the documents issued by the borrower upon recommendation of the consulting engineer and with the approval of the Arkansas Natural Resources Commission staff.
    2. (B) The change order authorizes a change, alteration, or variance in previously approved engineering plans and specifications for construction.

    3. (C) This includes, but is not limited to:

       1. (i) Additions or deletions of work to be performed pursuant to the contract;
       2. (ii) A change in the completion time of the contract; or
       3. (iii) A change in costs for work done pursuant to the contract;

14. (14)

    1. (A) “Clean Water Act” means the Federal Water Pollution Control Act of 1972, Pub. L. No. 92-500 as amended in 1977 (Pub. L. No. 95-217), 1981 (Pub. L. No. 97-117), and 1987 (Pub. L. No. 100-4).
    2. (B) The purpose of the Act is to restore and maintain the chemical, physical, and biological integrity of the nation's water;
15. (15) “Collector sewer” means the common lateral sewers within a publicly owned treatment system that are primarily installed to receive wastewater directly from facilities that convey wastewater from individual systems or from private property;
16. (16) “Commission” means the Arkansas Natural Resources Commission;
17. (17) “Commission staff” means the staff of the Arkansas Natural Resources Commission Water Resources Development Division responsible for administering the Arkansas Clean Water Revolving Loan Fund program under the supervision of the Director of the Arkansas Natural Resources Commission;

18. (18) “Construction” means any one (1) or more of the following:

    1. (A) Preliminary planning to decide the feasibility of wastewater facilities;
    2. (B) Engineering, architectural, environmental, legal, title, fiscal, or economic studies;
    3. (C) Surveys, designs, plans, working drawings, or specifications; or
    4. (D) Erection, building, acquisition, alteration, remodeling, improvement, or extension of wastewater facilities or the inspection or supervision of any of these items;
19. (19) “Consulting engineer” means the engineer or engineering firm retained by the borrower to provide professional engineering services during the planning, design, and/or construction of a project;

20. (20)

    1. (A) “Cost-effectiveness analysis” means an analysis done to decide which waste treatment management system or component part will result in the minimum total monetary costs (resources) over time.
    2. (B) This analysis is done with consideration given to overriding nonmonetary costs needed to meet federal, state, and local requirements;

21. (21) “Default” means one (1) of several possible events:

    1. (A) An event that, if not corrected immediately or within a stated period, becomes an event of default under a loan agreement;
    2. (B) Failure to pay principal, financing fees, and interest promptly when due; or
    3. (C) A breach of certain covenants made in respect to an agreement or debt;
22. (22) “Designated management agency” or “waste treatment management agency” means a community/municipality of the state that is designated by the governor and approved by the United States Environmental Protection Agency to receive federal assistance pursuant to Section 208 and Section 303(e) of the Act;
23. (23) “Director” means the Director of the Arkansas Natural Resources Commission;

24. (24)

    1. (A) “Disadvantaged community/system” means a community/system that:

       1. (i) Is below the state’s average median household income (MHI) level in accordance with the latest United States Bureau of the Census data; or

       2. (ii)

          1. (a) (a) The system’s user charge ratio is equal to or greater than 1.0%.
          2. (b) (b) The user charge ratio is the projected system's average yearly residential water user charge rate for four thousand (4,000) gallons of water divided by the system’s MHI.

    2. (B) Note.

       1. (i) The projected average yearly residential water user charge rate will include all applicable sewer costs after the project is completed.

       2. (ii) Sewer costs include:

          1. (a) (a) All operations, maintenance, and replacement costs;
          2. (b) (b) Debt service;
       3. (c) (c) Debt service reserve;

       4. (d) (d) Required coverage; and

          1. (e) (e) Any other legal obligations/costs.
    3. (C) Note. The Director of the Arkansas Natural Resources Commission may adjust the term, conditions, and interest rate for a disadvantaged community/system bond;
25. (25) “Disbursement” means the transfer of cash from the Clean Water Revolving Loan Fund to the borrower;
26. (26) “Effluent limitation” means any restriction established by the state or the Administrator of the United States Environmental Protection Agency on quantities, rates, and concentrations of chemical, physical, biological, and other constituents that are discarded from a point source into waters of the state;

27. (27) “Eligible costs” means those project costs that the Arkansas Natural Resources Commission staff shall participate in that are:

    1. (A) Reasonable, necessary, and allocable to the project; and
    2. (B) Approved in the loan agreement;

28. (28)

    1. (A) “Enforceable requirements of the Act” means those conditions and limitations of permits issued pursuant to Sections 402 and 404 of the Act that, if violated, could result in issuance of a compliance order or initiation of a civil or criminal action under Section 309 of the Act.
    2. (B) Where a permit has not been issued, but issuance is anticipated, the term means any requirement that will be in the permit when issued.
    3. (C) Where no permit is applicable, the term means any requirement that is necessary to meet applicable criteria for best practicable waste treatment technology;

29. (29)

    1. (A) “Environmental determination” means a finding by the Arkansas Natural Resources Commission regarding the potential environmental impacts of a proposed project.
    2. (B) This determination would also describe what mitigative measures, if any, the borrower will be required to do as a condition of financial assistance;

30. (30)

    1. (A) “Environmental impact statement” means a disclosure document setting forth impacts on the environment of a proposed course of action.
    2. (B) The document will include recommendations to mitigate or minimize any adverse impacts;

31. (31)

    1. (A) “Environmental information document” means a written analysis prepared by the borrower.
    2. (B) The document describes the potential environmental impacts of a proposed project.
    3. (C) The document must be sufficient in scope to enable the Arkansas Natural Resources Commission staff to prepare an environmental assessment to allow an environmental determination to be made by the Arkansas Natural Resources Commission;

32. (32)

    1. (A) “Environmental review” means the process used to decide whether a proposed project may have significant impacts on the environment and therefore require the preparation of an environmental impact statement.
    2. (B) The evaluation is undertaken by the Arkansas Natural Resources Commission, consistent with the National Environmental Policy Act, 42 U.S.C. § 4321 et seq., and other federal, state, and local laws and requirements;

33. (33)

    1. (A) “Financing fee” means a fee charged to the borrower used to cover the administrative costs of the program for both the Arkansas Development Finance Authority and the Arkansas Natural Resources Commission.
    2. (B) The fee will be charged as part of each repayment the borrower makes to the Arkansas Development Finance Authority.
    3. (C) The amount of the fee will be what is in effect at the time the memorandum of agreement is executed by both parties.
    4. (D) The Director of the Arkansas Natural Resources Commission will be responsible for setting the financing fee.
    5. (E) The portion of this fee that the Arkansas Natural Resources Commission receives is called the servicing fee;
34. (34) “Force account” means the provision of labor necessary to design or construct the project by the borrower;

35. (35)

    1. (A) “Fund” means the Construction Assistance Revolving Loan Fund.
    2. (B) The General Assembly at its 1987 session enacted Acts 1987, No. 1030, which was superseded at its 1991 session by Acts 1991, No. 718, Arkansas Code §§ 15-5-901 – 15-5-906, establishing the Construction Assistance Revolving Loan Fund;

36. (36)

    1. (A) “Infiltration” means water other than wastewater that enters a sewer system, including sewer service connections and foundation drains, from the ground through such means as defective:

       1. (i) Pipes;
       2. (ii) Pipe joints;
       3. (iii) Connections; or
       4. (iv) Manholes.
    2. (B) Infiltration does not include, and is distinguished from, inflow;

37. (37)

    1. (A) “Inflow” means water other than wastewater that enters a sewer system including sewer service connections.

    2. (B) Inflow can be from sources such as, but not limited to:

       1. (i) Roof leaders;
       2. (ii) Cellar drains;
       3. (iii) Yard drains;
       4. (iv) Area drains;
       5. (v) Drains from springs and swampy areas;
       6. (vi) Manhole covers;
       7. (vii) Cross connections between storm sewers and sanitary sewers;
       8. (viii) Catch basins;
       9. (ix) Cooling towers;
       10. (x) Storm waters;
       11. (xi) Surface runoff;
       12. (xii) Street wash waters; or
       13. (xiii) Drainage.
    3. (C) Inflow does not include, and is distinguished from, infiltration;
38. (38) “Intended use plan” means a plan identifying the intended uses of the funds available for loans in the Arkansas Clean Water Revolving Loan Fund for each fiscal year as described in Section 606(c) of the Act;

39. (39) “Interceptor sewer” means a sewer that is designed for one (1) or more of the following purposes:

    1. (A) To intercept wastewater from a final point in a collector sewer and convey such wastes directly to a treatment facility or another interceptor;
    2. (B) To replace an existing wastewater treatment facility and transport the wastes to an adjoining interceptor sewer for conveyance to a treatment plant;
    3. (C) To transport wastewater from one (1) or more municipal collector sewers to another municipality or to a regional facility for treatment; or
    4. (D) To intercept an existing major discharge of raw or inadequately treated wastewater for transport directly to another interceptor or to a treatment plant;

40. (40)

    1. (A) “Interest rate” means that annual percentage of interest that is in effect at the time the memorandum of agreement is executed by both parties.
    2. (B) The Director of the Arkansas Natural Resources Commission will be responsible for setting the interest rate;

41. (41)

    1. (A) “Lending rate” means the combination of the interest rate and the financing fee in effect at the time the memorandum of agreement is executed by both parties.
    2. (B) The lending rate is associated with a specific loan repayment period;

42. (42)

    1. (A) “Loan agreement” means a contractual arrangement (bond purchase agreement) by and between a borrower and the state acting by and through the Arkansas Natural Resources Commission and the Arkansas Development Finance Authority.
    2. (B) The loan agreement sets forth the conditions and obligations for loans to the borrower for paying the eligible costs of construction of wastewater facilities;
43. (43) “Loan closing” means the execution of the loan, the date to be decided by the Arkansas Natural Resources Commission staff;

44. (44)

    1. (A) “Operation and maintenance” means those functions that result in expenditures during the useful life of the wastewater facilities for:

       1. (i) Materials;
       2. (ii) Labor;
       3. (iii) Utilities; and
       4. (iv) Other items.
    2. (B) The functions must be necessary for managing and maintaining the sewage works to achieve the capacity and performance for which they were designed and constructed;

45. (45)

    1. (A) “Planning” means those necessary reports and studies that directly relate to wastewater facilities needed to comply with enforceable requirements of the Act and state statutes.
    2. (B) Planning consists of a systematic evaluation of alternatives that are feasible considering the unique demographic, topographic, hydrologic, and institutional characteristics of the area.
    3. (C) Planning will show the selected alternative is the most cost effective;
46. (46) “Plans and specifications” means the engineering description of the proposed construction project including engineering drawings, maps, technical specifications, design reports, and construction contract documents in sufficient detail to allow contractors to bid on the work;

47. (47)

    1. (A) “Point source” means any discernible, confined, and discrete conveyance from which pollutants are or may be discharged.
    2. (B) This would include but not be limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container, rolling stock, vessel, or other floating craft or concentrated animal feeding operation.
    3. (C) This term does not include agricultural stormwater discharges and return flows from irrigated agriculture;

48. (48)

    1. (A) “Pollution” means the discharge, release, escape, deposit, or disposition, directly or indirectly, of treated or untreated sewage, industrial wastes, or other wastes, of whatever kind or character, in or near any waters of the state.
    2. (B) Any discharge in such condition, manner, or quantity that does, will, or is likely to contaminate or substantially contribute to the alteration of the physical, chemical, or biological properties of any such waters.

    3. (C) A discharge will be considered pollution if such contamination or alteration is to such an extent as to make the waters:

       1. (i) Directly or indirectly harmful, detrimental, or injurious to the public:

          1. (a) (a) Health;
          2. (b) (b) Safety; and
       2. (c) (c) Welfare;
       3. (ii) Directly or indirectly detrimental to existing animal, bird, fish, aquatic, or plant life;
       4. (iii) Unsuitable for present or future domestic, commercial, industrial, agricultural, recreational, scenic, or other legitimate uses; or
       5. (iv) Lower the quality of the waters of the state below the standards established therefore by the United States or any department, agency, board, or commission of this state authorized to establish such standards;
49. (49) “Priority list” means a list of projects that is used to allocate the funds in the Arkansas Clean Water Revolving Loan Fund account;
50. (50) “Priority system” means a system for ranking all entities eligible for funding under the Arkansas Clean Water Revolving Loan Fund program;

51. (51)

    1. (A) “Professional services” means any service provided to the borrower concerning the project.

    2. (B) These services include:

       1. (i) Consulting engineers;
       2. (ii) Bond counsel;
       3. (iii) Accounting or bookkeeping;
       4. (iv) Legal;
       5. (v) Financial;
       6. (vi) Testing; or
       7. (vii) Any other service the borrower decides is needed;
52. (52) “Project” means the scope of work for which a loan is awarded under the Arkansas Clean Water Revolving Loan Fund;
53. (53) “Project completion” means the date operations of the wastewater facilities are initiated or can be initiated, as decided by the Arkansas Natural Resources Commission staff;

54. (54)

    1. (A) “Replacement” means expenditures for obtaining and installing:

       1. (i) Equipment;
       2. (ii) Accessories; or
       3. (iii) Appurtenances.
    2. (B) Replacement expenditures are necessary to maintain the capacity and performance of the wastewater facilities during their useful life;
55. (55) “Revolving loan fund” means the Arkansas Clean Water Revolving Loan Fund, created pursuant to the Federal Water Control Act of 1972, as amended by Public Law 100-4, February 4, 1987;
56. (56) “State” means the State of Arkansas or any agency or instrumentality thereof;
57. (57) “Subagreement” means a contractual agreement between a borrower and a contractor;

58. (58)

    1. (A) “Submittal date penalty” means the penalty that may be assessed for not meeting the terms of the memorandum of agreement.
    2. (B) The submittal date penalty is that in effect at the time the memorandum of agreement is executed by both parties.
    3. (C) The Director of the Arkansas Natural Resources Commission will be responsible for setting the submittal date penalty;

59. (59)

    1. (A) “User charge” means a charge levied on users of wastewater facilities for the cost of debt service, operation and maintenance, including replacement.
    2. (B) Adequate revenues must be generated to provide the debt service either through the user charge or another dedicated source.
    3. (C) All revenues needed for operation and maintenance, including replacement, must come from revenues collected from user charges;

60. (60)

    1. (A) “Value engineering” means a specialized cost control technique.
    2. (B) Value engineering uses a systematic and creative approach to identify and to focus on unnecessarily high costs in a project.
    3. (C) The goal is to arrive at a cost saving without sacrificing the reliability or efficiency of the project;

61. (61)

    1. (A) “Wastewater” means any water containing sewage, industrial wastes, or other wastes or contaminants derived from the prior use of such water.
    2. (B) “Wastewater” shall also include surface water collected by storm sewers;

62. (62)

    1. (A) “Wastewater facilities” means any devices and systems that are used in the storage, treatment, recycling, and reclamation of waste.
    2. (B) In addition, any facilities that are necessary to recycle or reuse water at the most economical cost over the estimated life of the works.

    3. (C) These facilities would include:

       1. (i) Intercepting sewers, outfall sewers, sewage collection systems, pumping, power, and other equipment and their appurtenances;
       2. (ii) Extensions, improvements, remodeling, additions, and alterations thereof;
       3. (iii) Elements essential to provide a reliable recycled supply such as standby treatment units and clear well facilities;

       4. (iv) Any works, including site acquisition, of the land that:

          1. (a) (a) Will be an integral part of or used with the treatment process, including land used for the storage of treated water in land treatment systems before land application; or
          2. (b) (b) Is used for ultimate disposal of residues resulting from such treatment;
       5. (v) Any plant, disposal field, lagoon, canal, incinerator, area devoted to sanitary landfills, or other facilities installed for treating, neutralizing, or stabilizing waste; or
       6. (vi) Facilities to provide for the collection, control, and disposal of waste; and

63. (63)

    1. (A) “Water quality management plan” means a plan prepared and updated annually by the state and approved by the United States Environmental Protection Agency.
    2. (B) The plan determines the nature, extent, and causes of water quality problems in various areas of the state.
    3. (C) It also identifies cost-effective and locally acceptable facility and nonpoint measures to meet and maintain water quality standards.