(a) Eligible costs include:

1. (1) Unless otherwise specified in this part, the costs of meeting specific statutory and regulatory procedures for the project;
2. (2) Costs of royalties for or rights in a patented process or product with the prior approval of the Arkansas Natural Resources Commission staff;

3. (3) Costs of obtaining the CWRLF loan, including the Arkansas Development Finance Authority's:

   1. (A) Application fee;
   2. (B) Issuance costs; and
   3. (C) Loan closing costs; and
4. (4) Capitalized interest during construction.

(b) Ineligible costs include:

1. (1) Ordinary operation expenses of the borrower including salaries and expenses of elected and appointed officials and preparation of routine financial reports and studies;
2. (2) Administrative, engineering, and legal activities associated with the establishment of special departments, agencies, commissions, regions, districts, or other units of government;
3. (3) Approval, preparation, issuance, and sale of bonds or other forms of indebtedness required to finance ineligible project costs and the interest on them;
4. (4) Personal injury compensation of damages arising out of the project;
5. (5) Fines and penalties due to violations of or failure to comply with federal, state, or local laws, regulations, or procedures;
6. (6) Costs outside the scope of the approved project;
7. (7) Costs of wastewater facilities for control of pollutant discharges from a separate storm sewer system; and
8. (8) The costs of preparing a corrective action report required by 15 CAR § 26-702.