§ 61-35-25 — Alternate operation by nonprofit corporation or cooperative

A nonprofit corporation or cooperative association established under title 10 for the specific
purpose of operating a rural water system may petition the department of water resources to
organize a district, in the manner provided by section 61-35-02. The signatures of the
corporation's or cooperative's officers on the petition and a resolution adopted by the members
in the manner provided in section 10-15-37 for amendments to articles or in the manner
provided in chapter 10-33 for dissolution approving the petition suffice in lieu of signatures of
owners of fifty percent of the real property in the proposed district, if the petition presenter
provides evidence satisfactory to the department that a sufficient number of members of the
proposed district will subscribe or have subscribed to benefit units to make its operation
feasible. The procedure for hearing and determination of disposition of the petition is as
provided by this chapter. In any district organized upon the petition of a nonprofit corporation or
cooperative association, the following procedures apply:
1. After final approval of the petition by the department, the secretary of the corporation
or cooperative shall file a notice with the secretary of state or attorney general, if
applicable, in accordance with title 10.
2. Upon filing of the notice, the nonprofit corporation or cooperative ceases to exist as a
title 10 entity and all assets and liabilities of the nonprofit corporation or cooperative
become the assets and liabilities of the newly organized district without any further
meetings, voting, notice to creditors, or other actions by the members of the board.
3. The officers and board of directors of the corporation or cooperative are the officers
and board of the district.
4. The applicable laws of the state and the articles of incorporation and bylaws of the
corporation or cooperative control the initial size and initial term of office of officers and
the board, in lieu of sections 61-35-08 through 61-35-11.
5. The district shall bring its operation and structure into compliance with the
requirements of section 61-35-08 regarding the number and qualification of directors,
section 61-35-09 regarding new bylaws, section 61-35-10 regarding dividing its
directors into classes, and section 61-35-11 regarding board meetings at the first
annual meeting of the participating members and board. The new district has all the
rights and all the property of the original corporation or cooperative and is responsible
for all its obligations. Title to any property is vested in the new district with no reversion
or impairment of ownership rights caused by the conversion to a district. A water
supply agreement entered by a nonprofit corporation or cooperative association is
binding for its term on a successor district organized by the nonprofit corporation or
cooperative association, unless otherwise agreed in writing by all parties to the
agreement. The right of any creditor may not be impaired by this section without the
creditor's consent.