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Committee advances $50 million water and sewer grant program bill aimed at small systems
Summary
House Bill 16 81 would establish a 10-year Water and Sewer Treatment Plant Facilities Grant Program funded from unobligated interest in a state reserve; the committee voted to pass the bill after multiple municipal water leaders urged passage to address failing rural infrastructure.
State Representative Dan Vaught told the committee House Bill 16 81 would create a Water and Sewer Treatment Plant Facilities Grant Program to help small and rural systems fix aging and failing water and wastewater infrastructure.
Under the bill as presented, the program would use up to $50 million of interest swept from the state security reserve after other obligations are met; 80% of funds would target systems serving more than 1,200 people and require matching funds, while 20% would serve systems under 1,200 without a match requirement. Projects would generally need to be shovel-ready and start within one year of award; the program would sunset after 10 years.
Vaught said the measure is intended to supplement federal funding and to reach communities that cannot otherwise capture federal loans or grants. “This is not a red issue, a blue issue,” he said, urging the committee to support the bill. He said rules would be set by the Arkansas Natural Resources Commission with approvals by the Arkansas Legislative Council.
Department officials described a range of existing state and federal programs, and said availability varies by eligibility. A department representative told the committee there are multiple loan and principal-forgiveness programs already in place, and that the governor is prioritizing water needs through a state water plan.
Mayors, utilities directors and industry groups testified in favor. Steve Dufresne, director of utilities for Van Buren Municipal Utilities and a member of the Arkansas Water and Wastewater Managers Association, told lawmakers his system recently received a multi-million-dollar loan and supported the proposed grant program as an important supplement. Lance McAvoy, director of water utilities for Fort Smith, described small systems in the Fort Smith service area and said the state-wide infrastructure need far exceeds $50 million but called the bill a good start. Daniel Dawson, general manager for Searcy Water Utilities, said many small communities in White County could benefit from a program designed as Vaught described.
Representatives asked how smaller systems without engineering plans would compete; the sponsor said the bill creates two funding buckets so smaller systems would not be disadvantaged and that some funds would be available without matching requirements. Committee members also discussed whether the $50 million source—a residual interest sweep—would be consistently available and emphasized that the program would not tap general revenue.
Outcome: Committee voted to pass the bill.
Why it matters: Local officials and utilities described urgent public health, economic development and emergency-services risks tied to failing water systems; the bill aims to create a state-level grant program targeted to projects that fall through gaps in federal programs.
