State Capitol Week in Review – April 2, 2021

LITTLE ROCK – The legislature has approved a broad reform of the laws governing water providers, a measure that sponsors have been working on for the past four years.


Many of the provisions in Senate Bill 386 are the result of a task force that looked into the financial status of water systems in Arkansas, as well as the condition of their infrastructure.


The task force’s findings were surprising. For example, a majority of the systems are “upside down” financially. In 2017 a national organization of civil engineers rated the system of Arkansas water providers with a D plus, in part because of the deteriorating state of pipes and distribution lines.


In addition to the safety factor, lack of reliable water service is a potential barrier to economic development.


The need to upgrade our water systems was highlighted recently when hundreds of thousands of Texas residents went without water due to freezing temperatures.


SB 386 designates the state Natural Resources Commission and the Health Departments as the leading state agencies with oversight over the entire state’s water distribution.


Local control is important, but in many cases water systems are too small to act effectively, because they have relatively few ratepayers and the cost of a major project would be unaffordable.


SB 386 defines when a local system is in fiscal distress. It requires all systems to conduct a fiscal audit every five years to accurately determine the true cost of operating the system, including the cost of long-term maintenance and debt service. Systems must set rates high enough to meet those costs.


Local providers in fiscal distress shall submit improvement plans to the Natural Resources Commission, which can modify the plan if necessary.


The bill sets out the procedures for a city to provide water outside its current boundaries, and takes into account the fact that some cities do not wish to do so without annexation.


SB 386 requires a majority of the board members of a water provider to take at least eight hours of training. If they don’t do so the system would face penalties.


Lottery Scholarships

The Senate approved a major reform of the lottery scholarship system, in SB 584. Its goal is to ensure the long-term financial stability of lottery scholarships, so that families can budget for higher education with greater certainty.


It prioritizes which scholarship programs will be funded. It also sets a deadline for the introduction of any future legislation that would add scholarship programs.


They would have to be filed during the first month of the legislative session, in order to give lawmakers sufficient time to gauge their fiscal impact.


Bills that would change eligibility requirements also would have to be filed by the deadline, because they would change the number of students who qualify for a scholarship and thus those bills have a fiscal impact on the lottery scholarship program.


For the first six months of the current fiscal year, the state lottery has generated about $46.7 million for college scholarships. In a typical year, about 30,000 students receive a scholarship.