Can a private nonprofit corporation that provides rural water supply in Oklahoma reorganize itself as a public Rural Water District if it was formed on or after December 1, 1988?

Plain-English summary

Oklahoma has two kinds of entities that supply water to rural residents:

1. Rural Water Districts (RWDs). Public nonprofit entities formed under the Rural Water Act. At least two landowners petition the county clerk, and the county board of commissioners holds a hearing. An approved district becomes a body politic and corporate of the State of Oklahoma; the opinion says it can borrow money, apply for grants, set rates, and develop infrastructure.

2. Nonprofit Water Corporations (NWCs). Private nonprofit corporations organized under the Oklahoma General Corporation Act for the same purpose of supplying water. They sprang up in the late 1960s as an alternative to RWDs (in part because a federal loan program for RWDs was discontinued).

In 1989, the Legislature created a procedure for an existing NWC to reorganize as an RWD (codified at 82 O.S. §§ 1324.30 to 1324.35). The NWC's board submits a proposal to its members for a vote. With the required member and secured-creditor approval, it petitions the county board of commissioners.

Representative Gerrid Kendrix asked whether this reorganization process is available to NWCs formed on or after December 1, 1988. The AG's answer: no.

The reasoning is textual. Section 1324.31 says: "Pursuant to the provisions of [the reorganization procedure], any corporation which was formed prior to December 1, 1988, may organize and constitute a district." The "prior to December 1, 1988" language is a date limitation. To read the statute as also applying to corporations formed after that date would render the date limitation meaningless. Under standard Oklahoma statutory construction (Rickard v. Coulimore, 2022 OK 9), every word and sentence must be given effect; date limitations cannot be ignored.

The opinion acknowledges (in footnote 5) that "[i]t is fair to question why the Legislature included this date limitation, and why it selected December 1, 1988 as the appropriate cutoff." But once the statutory language is plain, that question is for the Legislature, not the AG.

What this means for you

If you direct a nonprofit rural water corporation

Check when the corporation was formed. The opinion says only a nonprofit corporation formed before December 1, 1988, and otherwise meeting the definition in 82 O.S. § 1324.30, can use the reorganization procedure in §§ 1324.30 to 1324.35. A corporation formed on or after that date cannot use that procedure. The opinion does not decide whether any other method of creating a water district or transferring a corporation's assets is available.

For an eligible corporation, the board submits a proposal to members. The proposal must cover reasons for reorganization, advantages and disadvantages, territory, and the corporation's voluntary dissolution upon reorganization. After approval by a majority of members and secured creditors, the board petitions the relevant county board of commissioners. The opinion says later steps address corporate property and liabilities; consult the cited statutes for the full procedure.

If you advise a county board of commissioners

The formation date matters when a corporation petitions under the 1989 reorganization provisions. The opinion explains that a district formation petition under the Rural Water Act goes to the relevant county clerk and is set for a hearing before the board of commissioners for the county containing the largest share of the proposed district. It does not decide how to process a particular petition or whether a different formation route is available to a later-formed corporation.

If you are a rural water customer or legislator

The opinion concerns which corporations can use a specific reorganization process. It does not say that a corporation formed after the cutoff must stop providing water. The Attorney General notes in footnote 5 that the Legislature's reason for choosing December 1, 1988 may be unclear, but says the plain statutory cutoff must be applied as written.

Common questions

Q: Does a nonprofit water corporation formed on December 1, 1988 qualify? A: No. The statute and the opinion require formation prior to December 1, 1988. A corporation formed on that date or later cannot use this reorganization procedure.

Q: Is being old enough sufficient to reorganize?
A: No. The opinion's conclusion also requires the corporation to meet 82 O.S. § 1324.30, which defines the eligible nonprofit, nonstock water corporation. The opinion describes a member vote, secured-creditor approval, and a petition to the county board in the ensuing process.

Q: Why did the Legislature choose December 1, 1988?
A: The opinion says the reason may be unclear to readers decades later. Its footnote gives another statute with a date cutoff as an example, then says a plain cutoff must be given effect without searching for a legislative reason.

Q: Can a later-formed corporation create a water district by some other means? A: The opinion does not answer that question. It describes the ordinary district formation process in its background, but its holding addresses only the special reorganization procedure in §§ 1324.30 to 1324.35.

Q: How are rural water districts different from nonprofit water corporations in this opinion? A: A water district is a public body formed with county-board approval under the Rural Water Act. A nonprofit water corporation is a private corporation. The opinion says they serve much the same purpose and recounts several laws that gave the corporations similar treatment, but it does not find them legally identical.

Background and statutory framework

The Rural Water Act permits two or more landowners to petition for creation of a public rural water district. The petition identifies territory, inadequate supply, a proposed infrastructure solution, and an available water source. A county board hears the petition and, if it approves, the district becomes a state body politic and corporate.

Oklahoma also permits private nonprofit corporations to serve rural water users. The opinion traces their formation to a 1968 nonprofit-corporation statute and explains in footnote 1 that the Oklahoma General Corporation Act replaced that framework in 1986. Footnote 3 identifies later laws giving nonprofit water corporations treatment similar to districts in specified respects, including an excise-tax exemption and eminent-domain power.

In 1989, the Legislature enacted §§ 1324.30 to 1324.35 to let qualifying corporations reorganize as districts. Section 1324.31 expressly limits the procedure to corporations formed before December 1, 1988. The Attorney General applies Oklahoma decisions requiring effect be given to every part of an unambiguous statute and concludes that the date cannot be ignored.

Citations and references

Statutes:

• 82 O.S. §§ 1324.1 to 1324.26 (Rural Water Act)
• 82 O.S. §§ 1324.30 to 1324.35 (Reorganization)
• 18 O.S. §§ 1001 to 1144 (Oklahoma General Corporation Act)

Cases:

• Deer Creek Water Corp. v. City of Oklahoma City, 82 F.4th 972 (10th Cir. 2023)
• Rickard v. Coulimore, 2022 OK 9, 505 P.3d 920
• In re Initiative Petition No. 397, 2014 OK 23, 326 P.3d 496

Source

• Landing page: https://oklahoma.gov/oag/opinions/ag-opinions/2025/15.html
• Original PDF: https://oklahoma.gov/content/dam/ok/en/oag/opinions/ag-opinions/2025/AG%20Opinion%202025-15.pdf

Original opinion text

GENTNER DRUMMOND
ATTORNEY GENERAL
ATTORNEY GENERAL OPINION
2025-15

The Honorable Gerrid Kendrix
December 4, 2025
Oklahoma House of Representatives, District 52
2300 N. Lincoln Blvd., Rm. 347
Oklahoma City, OK 73105

Dear Representative Kendrix:

This office has received your request for an Attorney General Opinion in which you ask, in effect, the following question:

May a private nonprofit corporation formed for the purpose of providing water to rural residents in Oklahoma reorganize as a rural water district pursuant to the provisions of title 82, sections 1324.30 – 1324.35 of the Oklahoma Statutes if the corporation was formed on or after December 1, 1988?

I.
SUMMARY

No. Based on the plain language of title 82, section 1324.31 of the Oklahoma Statutes, a private nonprofit corporation formed for the purpose of providing water to rural residents in Oklahoma may use the procedures set forth in title 82, sections 1324.30 – 1324.35 to reorganize as a rural water district only if the corporation was formed prior to December 1, 1988.

II.
BACKGROUND

While the statutory analysis of your question is straightforward, it is helpful to begin with some historical background regarding rural water districts and nonprofit corporations that have been formed to serve a similar function.

A. Rural Water Districts.

In 1963, the Legislature enacted the Rural Water Districts Act to provide a means to establish “[p]ublic nonprofit rural water districts” to develop infrastructure to assure adequate water supply to residents of the district. House Bill 837, 1963 Okla. Sess. Laws ch. 266, § 3. Expanded and

313 N.E. 21ST STREET • OKLAHOMA CITY, OK 73105 • (405) 521-3921 • FAX: (405) 521-6246

The Honorable Gerrid Kendrix
A.G. Opinion
Oklahoma House of Representatives, District 52 Page 2

recodified in 1972 as the Rural Water, Sewer, Gas and Solid Waste Management Districts Act (the “Rural Water Act”), 82 O.S.2021, §§ 1324.1 – 1324.26, the statute sets forth the process to form a rural water district (“District” or “Water District”) beginning with a petition filed with the relevant county clerk by any two or more landowners. Id. § 1324.4. The petition must outline the Water District’s boundaries and state that (1) District residents lack adequate water supply, (2) such deficiency may be addressed through improved infrastructure, and (3) sufficient water is available to the District by private purchase or appropriation by the Oklahoma Water Resources Board (“OWRB”). Id. The petition is then set for a public hearing before the board of county commissioners (“BOCC”) for the county in which the largest portion of the Water District’s territory is located. Id. §§ 1324.5, 1324.6. With BOCC approval, the District is incorporated as “a body politic and corporate and an agency and legally constituted authority of the State of Oklahoma for the public purposes set forth in [the Act].” Id. § 1324.6. Once formally constituted, the Water District may borrow money and apply for grants, adopt a rate structure, construct or improve infrastructure, and obtain water rights. Id. § 1324.10.

B. Nonprofit Rural Water Corporations.

Separately, in 1968, the Legislature enacted a new statutory framework governing nonprofit corporations. See Senate Bill 505, 1968 Okla. Sess. Laws ch. 13 (codified at 18 O.S.1971, §§ 851
– 862). The statute allowed for the formation of nonstock corporations for any lawful purpose “not involving pecuniary gain.” Id. §§ 1, 2. Such an entity could be formed by any three or more natural persons able to enter into contracts, and once formed, the entity had the capacity and powers of any other corporation formed under Oklahoma’s corporation laws. Id. §§ 3, 6. These powers included, among others, the ability to enter into contracts, acquire and convey property, borrow money, and issue bonds and notes. 18 O.S.1981, § 1.19. 1

Given the breadth and flexibility of this statute, it was used by rural residents, or those serving rural residents, to form nonprofit rural water corporations (“Nonprofit Water Corporations”) as an alternative to Water Districts. Based on this office’s review, it appears that Nonprofit Water Corporations began to spring up almost as soon as the nonprofit corporation statute was enacted. 2 For instance, in 1970, this office was asked whether a Nonprofit Water Corporation was subject to the ad valorem assessments required of public service corporations. 1970 OK AG 193. Likewise, beginning in 1970, the Legislature on several occasions passed amendments to ensure that

1
As a historical note, the Oklahoma Business Corporation Act and the provisions related to nonprofit corporations were repealed in 1986 and replaced by the Oklahoma General Corporation Act (“OGCA,” codified at 18 O.S.2021 & Supp.2024, §§ 1001 – 1144). See House Bill 1979, 1986 Okla. Sess. Laws ch. 292. Since the repeal, there is no longer a set of statutory provisions dedicated exclusively to nonprofit corporations. Rather, where the rules for nonprofit corporations diverge from those of for-profit corporations, they are set forth specifically in the OGCA. See 18 O.S.2021, § 1002 (“[The OGCA] shall be applicable to every corporation, whether profit or not for profit, stock or nonstock, existing as of the effective date of this act or thereafter formed…”), id. § 1005(A) (setting forth procedure for formation and lawful purposes), id. §§ 1015 – 1016 (stating general and specific powers of all corporations). As a practical matter, this repeal and replacement had little, if any, effect on the rules governing the formation and operation of nonprofit corporations in Oklahoma.
2
According to one source, this was at least in part due to the discontinuation in the late 1960s of a federal loan program available to Rural Water Districts. NEAL JOHNSON, SHARING THE KNOWLEDGE: HISTORY OF THE OKLAHOMA RURAL WATER ASSOCIATION 8 (1996).

The Honorable Gerrid Kendrix
A.G. Opinion
Oklahoma House of Representatives, District 52 Page 3

Nonprofit Water Corporations received similar treatment to Water Districts. 3 As a result, there evolved over time two separate types of entities—one a public body needing approval by a BOCC, one a private corporation—that serve much the same purpose. See Deer Creek Water Corp. v. City of Oklahoma City, 82 F.4th 972, 988 (10th Cir. 2023); 1984 OK AG 134 (acknowledging the similarity between Water Districts and Nonprofit Water Corporations before opining that only Water Districts were eligible for certain OWRB grants).

III.
DISCUSSION

Your question involves legislation enacted in 1989, codified at title 82, sections 1324.30 – 1324.35. Together, these provisions establish a process by which a Nonprofit Water Corporation may reorganize as a Water District formed under the Rural Water Act. To begin the process, the board of directors of the Nonprofit Water Corporation must submit for a vote of its members a proposal that sets out, among other things, its reasons for reorganizing as a Water District, the advantages and disadvantages of the proposal, the territory involved, and a representation that the corporation will voluntarily dissolve upon reorganization as a Water District. 82 O.S.2021, § 1324.32. If approved by a majority vote of members (and secured creditors), the board then petitions the relevant BOCC to establish the District. Id. The process then proceeds in a manner similar to that of any other Water District, with additional measures to deal with corporate property and liabilities. See id. § 1324.33.

Your question stems from a particular provision in this 1989 enactment:

Pursuant to the provisions of [title 82, sections 1324.30 – 1324.35], any corporation which was formed prior to December 1, 1988, may organize and constitute a district subject to the provisions of the [Rural Water Act].

82 O.S.2021, § 1324.31 (emphasis added). 4 You ask whether this provision disallows Nonprofit Water Corporations formed on or after December 1, 1988 from utilizing the procedures described above to reorganize as a Water District. Based on the plain language of the statute, the answer is yes.

3
For instance, in 1970, the Legislature exempted Nonprofit Water Corporations from excise taxes and other assessments and granted them the power of eminent domain, as it had for Water Districts. Senate Bill 603, 1970 Okla. Sess. Laws ch. 328, § 1 (codified as title 18, section 863). Then, in 1971, the Legislature amended title 17, section 151 to exclude Nonprofit Water Corporations from the definition of “public utility” that would be subject to the jurisdiction of the Oklahoma Corporation Commission. See House Bill 1080, 1971 Okla. Sess. Laws ch. 26. As “bodies politic,” Water Districts were already exempt. Id., see also 82 O.S.2021, § 1324.6. In 1982, the Legislature amended title 46, section 17 to address the mortgage filing requirements for notes issued by both Water Districts and Nonprofit Water Corporations, thus acknowledging the existence of and distinction between the two types of entities. See House Bill 1594, 1982 Okla. Sess. Laws ch. 124. And, in 1990, the Legislature amended title 69, section 1403 to exempt both Water Districts and Nonprofit Water Corporations from the costs of relocating their facilities to accommodate road construction. See House Bill 1975, 1990 Okla. Sess. Laws ch. 137.
4
As used in these provisions, “corporation” is defined to mean a nonprofit nonstock corporation formed pursuant to the OGCA for the purpose of “developing and providing rural water supplies to serve rural residents,” and “district” is defined to mean a Water District created under the Rural Water Act. 82 O.S.2021, § 1324.30.

The Honorable Gerrid Kendrix
A.G. Opinion
Oklahoma House of Representatives, District 52 Page 4

The “primary goal in reviewing a statute is to ascertain legislative intent, if possible, from a reading of the statutory language in its plain and ordinary meaning.” In re Initiative Petition No. 397, State Question No. 767, 2014 OK 23, ¶ 9, 326 P.3d 496, 501. Additionally, “[a] statute must be read to render every part operative and to avoid rendering parts superfluous or useless.” Rickard v. Coulimore, 2022 OK 9, ¶ 12, 505 P.3d 920, 924. Here, the Legislature chose to include a date limitation in the statute: Nonprofit Water Corporations formed before December 1, 1988 may take advantage of these procedures to reorganize as a Water District. To construe the statute as allowing corporations formed after that date to do the same is to ignore the Legislature’s date limitation entirely. Put simply, why include a date limitation if it has no effect? Because this office “must interpret legislation so as to give effect to every word and sentence,” Rickard, 2022 OK 9, ¶ 12, 505 P.3d at 924, the only reasonable conclusion is that the Legislature intended the provisions of title 82, sections 1324.30 – 1324.35 to be available only to Nonprofit Water Corporations formed before December 1, 1988. 5

It is, therefore, the official Opinion of the Attorney General that:

Only a nonprofit corporation formed before December 1, 1988, and otherwise meeting the requirements set forth in 82 O.S.2021, § 1324.30, is eligible to reorganize as a rural water district using the procedures set forth in 82 O.S.2021, §§ 1324.30 – 1324.35.

GENTNER DRUMMOND
ATTORNEY GENERAL OF OKLAHOMA

ETHAN SHANER
DEPUTY GENERAL COUNSEL

5
It is fair to question why the Legislature included this date limitation, and why it selected December 1, 1988 as the appropriate cutoff. However, this practice is not uncommon. See, e.g., 70 O.S.Supp.2025, § 3-132 (allowing certain tribal-sponsored charter schools only where the sponsoring tribe was “operating a high school under the authority of the Bureau of Indian Affairs as of November 1, 2010”). To those reading the statute years or decades later, the Legislature’s rationale for picking a particular date may not be clear. Nevertheless, where the statutory language is plain and unambiguous, the language must be given effect as written and there is no reason to search further for the Legislature’s reasons for choosing it. See Oklahoma City Zoological Tr. v. State ex rel. Pub. Employees Relations Bd., 2007 OK 21, ¶ 6, 158 P.3d 461, 464 (“When the language of a statute is plain, it will be followed without further inquiry.”).