1. (a) General.

   1. (1)

      1. (A) The CWRLF program is funded in part by a capitalization grant from the United States Environmental Protection Agency.
      2. (B) As required by 40 C.F.R. § 35.3100 et seq., State Revolving Fund Program Implementation Regulations, dated March 19, 1990, the Arkansas Natural Resources Commission staff must designate certain projects as equivalency projects.
      3. (C) These projects are subject to the equivalency requirements defined in 40 C.F.R. § 5.3100 et seq., and in the Act.
      4. (D) Equivalency projects are defined as those in Section 212 of the Act, wastewater treatment projects constructed wholly or in part before October 1, 1994, with funds made directly available by the capitalization grant.

   2. (2)

      1. (A) Those projects designated as equivalency projects by the commission staff must comply with Section 602(b)(6) of the Act.
      2. (B) Under Section 602 of the Act, costs such as land for the treatment site (except land application sites), the construction of new collector sewers in existing communities, treatment plant office furnishings, and the cost for treating excessive infiltration and inflow into the sewer system will not be eligible for loan funding.
      3. (C) For equivalency projects, eligibility determinations shall be according to 40 C.F.R. § 35.2000 et seq.

   3. (3)

      1. (A) All funds within the CWRLF must be used solely to provide loans and other forms of assistance that may be authorized by the Act for the construction of publicly owned wastewater facilities or any other activity associated with water quality.
      2. (B) Loans will be made to eligible entities at or below current market interest rates.
      3. (C) The borrower is required to establish a dedicated source of revenue for repayment of loans.
   4. (4) Funds within the CWRLF will also be used for the reasonable costs of administering the Construction Assistance Revolving Loan Fund and conducting activities under Title VI of the Act.

2. (b) Allowable categories of work.

   1. (1) The following categories of work will be allowable for participation in the CWRLF program:

      Category	I	Secondary Treatment
      Category	II A & B	Advanced Treatment
      Category	III A	Infiltration/Inflow Correction
      Category	III B	Major Rehabilitation
      Category	IV A	New Collectors
      Category	IV B	New Interceptors

   2. (2) Funding of new collectors and interceptors will be limited to that necessary to serve residential and commercial facilities in existence at the time of loan closing.
   3. (3) Funds will not be provided for service to uninhabited areas.

3. (c) Additional funds. In the event additional funds become available through deobligations, transfers, additional allotments, etc., the funds will be obligated through the:

   1. (1) Priority system;
   2. (2) Project rankings; and
   3. (3) Applicable intended use plan.

4. (d) Industrial wastewater.

   1. (1) Facilities with the primary purpose of transporting or treating industrial wastewater will not be eligible for participation in the CWRLF program.
   2. (2) The determination of primary purpose will be made by the commission staff considering such factors as:

5. (i) Design capacity population projections;

   1. (ii) Industrial pretreatment facilities availability of CWRLF funds; and

      1. (iii) Pretreatment requirements of the borrower.

6. (e) Pretreatment.

   1. (1) Certain cities may be required to develop a pretreatment program.
   2. (2) The requirements are administered through the NPDES permit program.
   3. (3) Project costs related to pretreatment requirements will not be eligible for CWRLF program funding.

Codification Notes: "NPDES" means National Pollutant Discharge Elimination System.