When a sewer utility asks a public water utility for customer billing information in Arkansas, does the water utility have to comply, and can it charge a fee?

Plain-English summary

Senator Ricky Hill asked the AG sixteen questions about the Sewer Utility Collection Act, Ark. Code Ann. §§ 14-234-701 through -704. The Act lets a sewer utility ask its corresponding water utility for ongoing notice of changes to shared customers' billing information, so the sewer utility can collect unpaid bills and, when needed, ask the water utility to terminate water service for non-payment.

The AG worked through each question. The headline answers:

• No residency requirement. A sewer utility does not have to be Arkansas-based to invoke the statute. Section 14-234-702(2) says nothing about residency, and statutes are read just as they read.
• No defined "proof of maintenance" standard. The statute uses the word "maintains" without defining it, so common-usage meaning controls.
• Out-of-state sewer utilities qualify. Same reasoning as the residency answer.
• Multi-LLC questions are factual. The AG does not act as a fact-finder, so questions about which LLC structure (operating company versus holding company) qualifies cannot be answered in an opinion.
• Fees are probably permitted, but the statute is unclear. Section 14-234-703(d) prohibits charging a sewer utility for terminating or reestablishing water service. By implication, other charges may be authorized. Legislative clarification would help.
• The request is ongoing, not one-shot. The 15-day deadline ties to the change in customer information, not the date of the original request. Treating it as one-shot would force endless re-requests.
• No constitutional bar. Article 12, section 5 prohibits municipal corporations from giving money or stock to private entities. Providing customer information to a sewer utility under § 14-234-703 is not that, and § 14-42-108 (charging public utility customers at usual rates) does not apply.
• FOIA is not implicated. Customer information shared between utilities under § 14-234-703 is statutorily separate from FOIA's public-records framework.
• No statutory penalty. The Sewer Utility Collection Act does not contain a specific penalty for water-utility noncompliance, but enforcement actions might still be available.

Currency note

This opinion was issued in 2019. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: What does the Sewer Utility Collection Act actually do?
A: It gives a sewer utility a way to collect unpaid sewer bills when the customer is also a water utility customer. The water utility must (1) provide ongoing notice of customer billing changes, and (2) terminate water service to a customer more than 15 days past due on the sewer bill once the sewer utility provides a signed statement and termination notice.

Q: Why was this Act passed?
A: The 2013 legislative intent statement said it was "to assist a sewer utility that does not control its customers' water service by providing a mechanism to collect unpaid sewer utility service fees from its customers and requiring cooperation from the provider of its customers' water service." Many Arkansas towns have separate sewer and water utilities, and the sewer utility had no leverage to force payment without water-side cooperation.

Q: Can a water utility charge the sewer utility for the customer-info searches?
A: Probably yes, by negative implication. Section 14-234-703(d)(2) says a water utility "shall not" charge a sewer utility for terminating or reestablishing water service, which signals that other fees might be permissible. The AG flagged this as needing legislative clarification.

Q: How often does the water utility have to update the sewer utility?
A: Continuously. The 15-day clock in § 14-234-703(a)(2) starts at "the change in customer information," not at the request. So every time a billing address changes, a new connection happens, or service is disconnected, the water utility must notify the sewer utility within 15 days.

Q: Does Arkansas FOIA cover the customer information shared this way?
A: No. Inter-utility sharing under § 14-234-703 is distinct from public access under FOIA, Ark. Code Ann. §§ 25-19-105 and -106. The sewer utility's access channel is separate from a member of the public's right to inspect records.

Q: What if the water utility just refuses to comply?
A: The Act does not specify a penalty. The AG observed that "the water utility might be subject to some sort of action to enforce compliance with the Act," but did not identify a specific cause of action.

Background and statutory framework

The Sewer Utility Collection Act, Ark. Code Ann. §§ 14-234-701 through -704, defines two key terms in § 14-234-702. A "corresponding water utility" is "an individual or entity that owns or operates in this state equipment or facilities for diverting, developing, pumping, impounding, distributing, or furnishing water to or for the public for compensation." A "sewer utility" is "an individual or entity that maintains a sewage collection system or a sewage treatment plant, intercepting sewers, outfall sewers, force mains, pumping stations, ejector stations, and other appurtenances necessary or useful for the collection or treatment, purification, and disposal of liquid and solid waste, sewage, or wastewater."

Section 14-234-703(a)(1) authorizes a sewer utility to request notification "of any change to customer information, including without limitation a change: (A) To a billing address; and (B) In service, including a new or additional connection or a disconnection." Subsection (a)(2) requires the water utility to "provide the customer information requested to the sewer utility within fifteen (15) days of the change in customer information."

Section 14-234-703(b) deals with termination. When a sewer customer is more than 15 days past due, the water utility must terminate water service if the sewer utility provides "a signed statement" documenting the unpaid bill and the customer-facing termination notice required by § 14-234-703(b)(2)(C).

The AG construed silence about residency as silence: under Brock v. Townsell, 2009 Ark. 224, statutes are read just as they read, and Friar v. Erwin, 2014 Ark. 487, prevents reading in unstated requirements. Ghegan v. Weiss, 338 Ark. 9 (1999), supplied the rule that undefined statutory words are given their common meanings.

The constitutional analysis in Question 11-13 considered Ark. Const. art. 12, § 5(a), which prohibits a municipal corporation from becoming a stockholder or appropriating money for a private entity. The AG read this as a prohibition on transfers of public funds to private entities and concluded that providing information about customers does not amount to such a transfer.

Citations

• Ark. Code Ann. §§ 14-234-701 to -704 (Sewer Utility Collection Act)
• Ark. Code Ann. § 14-234-702(1), (2) (definitions)
• Ark. Code Ann. § 14-234-703(a), (b), (d) (notification, termination, fee provisions)
• Ark. Code Ann. § 14-42-108(a)(1), (b)(1) (free or below-cost utility services prohibited)
• Ark. Code Ann. §§ 25-19-105, -106 (FOIA exemptions and procedures)
• Ark. Const. art. 12, § 5(a) (no public funds for private entities)
• 2013 Ark. Acts, No. 1210, § 1 (uncodified intent statement)
• Brock v. Townsell, 2009 Ark. 224, 309 S.W.3d 179
• Thompson v. Younts, 282 Ark. 524, 669 S.W.2d 471 (1984)
• Friar v. Erwin, 2014 Ark. 487, 450 S.W.3d 666
• Green v. Mills, 339 Ark. 200, 4 S.W.3d 493 (1999)
• Chism v. Phelps, 228 Ark. 936, 311 S.W.2d 297 (1958)
• Ghegan v. Weiss, 338 Ark. 9, 991 S.W.2d 536 (1999)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2019-029
July 8, 2019

The Honorable Ricky Hill
State Senator
P. O. Box 177
Cabot, AR 72023

Dear Senator Hill:

You have requested my opinion on a number of questions concerning the Sewer Utility Collection Act (Ark. Code Ann. §§ 14-234-701 – 704 (Supp. 2017) ("the Act"). I will restate and address your questions in the order posed, but some initial information regarding the Act will be helpful.

Your questions mainly relate to Ark. Code Ann. § 14-234-703(a), regarding "change[s] to customer information":

(1) A sewer utility may request notification from a corresponding water utility of any change to customer information, including without limitation a change:
(A) To a billing address; and
(B) In service, including a new or additional connection or a disconnection.
(2) A corresponding water utility shall provide the customer information requested to the sewer utility within fifteen (15) days of the change in customer information.

This notification requirement is plainly intended to aid a "sewer utility" in its effort to collect unpaid service fees. If a sewer utility customer who is also a corresponding water utility customer is more than fifteen days past-due on his sewer utility bill, the water utility must terminate the customer's water service when it receives a "signed statement" from the sewer utility documenting the unpaid bill.

Question 1: Does an individual or entity have to be an Arkansas "resident" to be a "sewer utility" for purposes of Ark. Code Ann. § 14-234-702(2)?

The answer to this question is "no," in my opinion, based on a plain reading of section 14-234-702(2). A statute must be construed "just as it reads," without restricting or expanding the plain meaning of its text. Statutory interpretation, therefore, should not include implying provisions that simply are not present in the statutory language.

Here, section 14-234-702(2)'s definition of "sewer utility" plainly includes no residency requirement. Under the established rules of statutory interpretation stated above, we cannot read such a requirement into the statute.

Question 2: What proof of "maintenance" under this statute can be required before a public water utility is bound by the requirements of this statute?

As set out above, section 14-234-703 requires a corresponding water utility to provide customer information to a sewer utility, and I gather your reference to "maintenance" is based on section 14-234-702(2)'s definition of sewer utility as "an individual or entity that maintains a sewage collection system or a sewage treatment plant...."

The term "maintains" here is not defined. And the Act is otherwise silent on your question about proof of maintenance to establish that an individual or entity meets section 14-234-702(2)'s "sewer utility" definition. Accordingly, I can only note that the word "maintains" commonly means "cause or enable to continue" or "keep in good condition or in working order by checking or repairing it regularly." There is no indication in the context of the Act that the General Assembly meant anything other than the common-usage meaning of "maintains."

Question 3: If the "sewer utility" requestor of information pursuant to Ark. Code Ann. § 14-234-703 is an out-of-state entity not registered within the State of Arkansas, can it be an "individual or entity that maintains a sewage collection system" within the state?

As noted in response to Question 1, there is no residency requirement in section 14-234-702(2)'s definition of "sewer utility." And I have found no relevant residency requirement under any other statute. Accordingly, the answer to this question is, generally, "yes," in my opinion.

Question 4: If there are separate for-profit LLCs that apparently own and operate in different communities by way of separately formed "operating company LLC" and "holding company LLC," which of these for-profit entities, if any, are entitled to the benefits of Ark. Code Ann. § 14-234-703?

I cannot opine on this question because it undoubtedly requires factual determinations related to the business, purposes, or activities of the entities at issue. This office has a long-standing policy of declining to make factual determinations in the context of rendering official opinions.

Question 5: In order to fulfill a request of "any change to customer information" as provided in Ark. Code Ann. § 14-234-703, a "corresponding water entity" must review all of its customers' records, no matter the sheer volume of customers it may have, in order to establish the initial customer information. Is the public water provider entitled to charge a fee for this initial review and supply of information?

In my opinion, the answer to this question is likely "yes." But legislative clarification may be necessary to definitively resolve the matter.

Section 14-234-703(a) does not explicitly authorize a water utility to charge a fee in connection with a sewer utility's request for notification of changes to customer information. This absence of express authority arguably invites comparison with section 14-234-703(d)(1), which plainly authorizes a water utility to "charge the customer a fee to reestablish water service" when water service has been terminated, pursuant to section 14-234-703(b), because of unpaid sewer service. It might be contended that had the General Assembly intended to include a fee under subsection (a) of section 14-234-703, that intent could easily have been clearly expressed, as it was under subdivision (d)(1).

However, subdivision (d)(1) addresses customers. Another subdivision of subsection (d) regarding fees addresses sewer utilities and identifies the fees that may not be charged:

A corresponding water utility shall not:
(A) Charge a sewer utility a fee for:
(i) Terminating water service under subsection (b) of this section; or
(ii) Reestablishing water service under subdivision (d)(1) of this section[.]

By proscribing certain fees, this provision recognizes that a water utility might charge fees to a sewer utility. The proscription would be unnecessary otherwise.

It is, therefore, my opinion that a water utility likely has implicit authority under section 14-234-703 to charge a fee or fees in connection with a sewer utility's request for notification of changes to customer information. Because the statute is not entirely clear in this regard, however, legislative clarification would be helpful.

Question 6: Similarly, in order to provide information "of any change to customer information," the public water provider must review every customer to ascertain whether there is information that is required under this statute. Is the public water provided entitled to charge a fee for this information?

In my opinion, likely "yes." See my response to Question 5.

Question 7: Is the fee based upon the review of all accounts and the disclosure of the "information changed" or is it to be based strictly upon the "information changed," if any, for each particular request?

The statute offers no indication or guidance as to the basis for any such fee. Consequently, I am unable to opine on this question.

Question 8: Is a request made under Ark. Code Ann. § 14-234-703 an ongoing perpetually endless request?

Question 9: Alternatively, are requests under this statute single, at time of receipt, requests for purposes of the public water provider fulfilling such?

The Act doesn't specifically address these questions concerning the timing or frequency of a sewer utility's "request [for] notification from a corresponding water utility of any change to customer information...." But when construing this language in section 14-234-703(a)(1), we must "look to the language under discussion in the context of the statute as a whole, reading "each section ... in light of every other section."

When these precepts are applied, it seems evident that the sewer utility's request for changes to customer information isn't a single, limited-in-time request. The water utility is required, under section 14-234-703(a)(2), to provide the sewer utility with the information "within fifteen (15) days of the change in customer information." (Emphasis added). By tying the water utility's obligation to the change in customer information, this language indicates that the request is ongoing and applies any time there is a change. To conclude otherwise would mean the sewer utility must continually make requests and the 15-day requirement would make no sense. If the request were a single, time-of-receipt request, the statute would need to read "within fifteen (15) days of the request for the change in customer information."

Having the water utility provide the notification about customer information on an ongoing basis is also consistent with the Act's purpose to assist the sewer utility in collecting its customers' unpaid bills. Armed with updated customer information, the sewer utility will be better-positioned to provide the notice that is a prerequisite to the termination of water service for nonpayment.

Question 10: How much may a water utility charge for the services and information provided to a sewer utility under Ark. Code Ann. § 14-234-703?

See my response to Question 7. As stated therein, I am unable to opine as to the basis for such a fee, absent some language in the statute offering guidance in this regard.

Question 11: If the water utility is not authorized to charge a fee to the requester and/or is prohibited from collecting a fee from the requestor, is not the providing of the time, resources and information of a public utility without compensation or consideration a violation of Article 12, Section 5 of the Arkansas Constitution and of Ark. Code Ann. § 14-42-108?

Question 12: Which entity, the "corresponding water utility" or the "sewer utility," would be held legally responsible and liable for violations of Article 12, Section 5 of the Arkansas Constitution and Ark. Code Ann. § 14-42-108?

Question 13: Knowing of these constitutional and statutory prohibitions, is there immunity or indemnity for a public water utility acting pursuant to this statute?

Article 12, section 5 to the Arkansas Constitution prohibits municipal corporations from becoming stockholders in, or obtaining or appropriating money for, private entities. As I have previously noted, this constitutional provision essentially prohibits private individuals or entities from receiving donations of municipal property. I do not believe it stands as a barrier to the actions required of a water utility by section 14-234-703.

Nor, in my opinion, does Ark. Code Ann. § 14-42-108 have any application here. This statute makes it unlawful "to furnish or give ... service from any public utility ... unless payment is made therefor to the municipal corporation at the usual and regular rates ...." A water utility's actions pursuant to section 14-234-703 do not amount to the giving of "service" under this statute, which plainly deals with the service that is ordinarily provided by a public utility, i.e., water, gas, electricity, etc.

It is, therefore, my opinion in response to Questions 11, 12, and 13 that neither Art. Const. art. 12, § 5, nor Ark. Code Ann. § 14-42-108 is applicable.

Question 14: Similarly, which entity, the "corresponding water utility" or the "sewer utility," would be held legally responsible and liable for violations of the Arkansas Freedom of Information Act ("FOIA")?

Question 15: "Change in customer information" is likely to include personal information that may not be otherwise accessible to the public under the FOIA. Knowing of these statutory prohibitions, is there immunity or indemnity for a public water utility acting in violation of the FOIA pursuant to this statute?

In my opinion, the Arkansas Freedom of Information Act (FOIA) is not implicated when a water utility gives customer information to a sewer utility pursuant to section 14-234-703. This access to customer information by a sewer utility is clearly distinct from the public's access to records (and meetings) pursuant to FOIA.

Question 16: The Sewer Utility Collection Act does not contain a penalty provision for noncompliance. What are the penalties and/or sanctions for an inability of a "corresponding water utility" to meet the requirements of Ark. Code Ann. § 14-234-703, or any other provision of Subchapter 7?

I cannot speculate in response to this question, beyond observing that the water utility might be subject to some sort of action to enforce compliance with the Act.

Sincerely,

LESLIE RUTLEDGE
Attorney General