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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
COMMITTEE SUBSTITUTE
FOR
HOUSE BILL NO. 1438 By: Patzkowsky of the House
and
Frix of the Senate
COMMITTEE SUBSTITUTE
An Act relating to waters and water rights; amending
62 O.S. 2021, Section 2003, which relates to
administration of Rural Economic Action Plan grant
program; modifying monetary cap on the award of
certain funds; amending 82 O.S. 2021, Section
1085.39, which relates t o grant; modifying monetary
cap on certain grants; and providing an effective
date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 62 O.S. 2021 , Section 2003, is
amended to read as follows:
Section 2003. A. Monies appropriated by law to the Oklahoma
Water Resources Board for the purpose of funding the Rural Economic
Action Plan grant program and the Rural Economic Action Plan Water
Projects Fund shall be administered by the Oklahoma Water R esources
Board as provided by this section.
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B. The monies referred to in subsection A of this section shall
be distributed to eligible cities and towns, unincorporated areas or
other qualified entities locate d within the areas represented by the
following organizations:
1. Association of Central Oklahoma Governments (ACOG);
2. Association of South Central Oklahoma Governments (ASCOG);
3. Central Oklahoma Economic Development District (COEDD);
4. Eastern Oklahoma Economic Development District (EOEDD);
5. Grand Gateway Economic Development Association (GGEDA);
6. Indian Nations Council of Governments (INCOG);
7. Kiamichi Economic Development District (KEDDO);
8. Northern Oklahoma Development Association ( NODA);
9. Oklahoma Economic Development Associ ation (OEDA);
10. Southern Oklahoma Development Association (SODA); and
11. South Western Oklahoma Development Authority (SWODA).
C. The monies referred to in subsection A of this section shall
not be expended for the benefit of cities or towns with a p opulation
in excess of seven thousand (7,000) persons according to the latest
Federal Decennial Census. Funds may also be expended for any city
or town with a population below seven thousand (7,000) persons b ased
upon the current population estimate accor ding to the U.S. Census
Bureau. Funds may be expended for such cities and towns until the
next following Federal Decennial Census. Any municipality may enter
into an agreement with an entity described in subsection B of this
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section to apply for availabl e funds described by this section if
the municipality is located within the area served by the entity.
Upon approval of the application, funds shall be paid to the
municipality requesting the funds.
D. An entity described in subsection B of this section may
apply for a grant to be used for the benefit of an unincorporated
area within a county served by that entity if the area benefited
does not contain a population in excess of seven thousand (7,000)
persons. Any county may enter into an agreement with a n entity
described in subsection B of this section if the county is located
within the area served by the entity. Upon approval of the
application, funds shall be paid to the county requesting the funds.
E. The monies referred to in subsection A of this section may
be expended for water quality projects, including but not limited to
sewer line construction or repair and related storm or sanitary
sewer projects, water line construction or repair, water treatment,
water acquisition, distribution or recovery and related projects.
F. Any city or town with a population less than one thousand
seven hundred fifty (1,750) persons according to the latest Federal
Decennial Census shall have a higher priority for funds allocated by
the Oklahoma Water Resources Board from the amount referred to in
subsection A of this section than jurisdictions of greater size.
Among such cities or towns, those municipalities having relatively
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weaker fiscal capacity shall have a priority for project funding in
preference to other mun icipalities.
G. The Oklahoma Water Resources Board shall establish ten
separate accounts containing one -tenth (1/10) of the amount annually
appropriated to the Rural Economic Action Plan Water Projects Fund
per account. Each account shall be available fo r distribution to
qualified entities located within the area served by entities
described in subsection A of Section 2007 of this title or for
distribution to benefit unincorporated areas with the exception of
one account which shall be divided equally int o two subaccounts.
Each one of the two subaccounts shall be available for distribution
to qualified entities located within the respective jurisdiction of
one of the entities described by subsection B of Sect ion 2007 of
this title or for distribution to b enefit unincorporated areas. No
funds deposited into one account or subaccount shall be transferred
to any other account. The total expenditure from any one account or
subaccount for each fiscal year may not exceed the amount of funds
available to each account as may be provided by law.
H. No city, town or other entity to which funds will be awarded
pursuant to this section shall be required to provide any form of
match to obtain the funds, whether through c ash, services or any
other method.
I. The Oklahoma Water Resources Board shall not be allowed to
retain any of the funds referred to in subsection A of this section
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for administration. All such funds shall be distributed to eligible
entities as authorized by law.
J. In order to ensure fair and equit able distribution of the
funds referred to in subsection A of this section, the Oklahoma
Water Resources Board shall promulgate rules for administering,
determining priority of, approving and funding applicati ons for such
funds. The rules shall implement the provisions of this section
including the following:
1. No qualified entity shall be approved nor funded for more
than One Hundred Fifty Thousand Dollars ($150,000.00) Three Hundred
Fifty Thousand Dollars ($350,000.00) from such funds in any twelve -
month period;
2. If a qualified entity has previously been approved for or
received such funds and makes a subsequent application, that
subsequent application may be assigned lower priority than an
application by qualified entities who have not previously be en
approved for or received such funds;
3. In order to prevent substantially the same entity or area
from receiving an undue advantage, a political subdivision and all
its public trusts and similar subordinate entities together shall be
treated as one and the same qualified entity; provided rural water
or sewer districts shall not be construed to be subordinate entities
of counties unless the effect would be to make multiple grants to
substantially the same en tity or service area; and
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4. The Oklahoma Wate r Resources Board may establish limited
time periods for processing applications for available funds.
SECTION 2. AMENDATORY 82 O.S. 2021, Section 1085.39, is
amended to read as follows:
Section 1085.39. In furtherance of the purp oses of Sections
1085.31 through 1085.49 of this title:
1. The Oklahoma Water Resources Board shall administer grants
from any monies which may be available to the Water Resources Fund
for furtherance of the purposes of Sections 1085.31 through 1085.49
of this title to eligible entities of the state with such conditions
as shall in its discretion effectuate these purposes. For purposes
of carrying out and implementing the provisions of this section,
there is hereby created and established within the Water Resources
Fund a grant account which shall contain such monies as may be
available for purposes of carrying out the provisions of this
section. No more than ten percent (10%) of such grants shall be
used for planning purposes. All such eligible entities are hereby
authorized to accept grants from the Board. No grant shall be made
to any single eligible entity during any fiscal year in an amount
exceeding twenty percent (20%) of the funds available for grants to
eligible entities during that fiscal year nor shall such grant
exceed One Hundred Thousand Dollars ($100,000.00) Three Hundred
Thousand Dollars ($300,000.00) . In the case of projects to which
more than one eligible entity is a party, no such grant sh all be
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made exceeding in amount twenty percent (20%) of funds available for
such purposes per participating eligible entity nor shall such grant
exceed One Hundred Thousand Dollars ($100,000.00) Three Hundred
Thousand Dollars ($300,000.00) per participating entity. In making
such grants, the Board sha ll consider: The needs of the area to be
served by the project and the benefit of the project to the area in
relation to the needs of other areas requiring state assistance; the
availability of revenue to the political subdivision, from all
sources, for the ultimate repayment of the cost of the project,
including interest; whether the political subdivision can reasonably
finance the project without assistance from the state; and the
relationship of the project to the overall statewide water and
sewage treatment needs; and whether or not the applicant has taken
all reasonable measures to limit waste and conserve water;
2. The Board shall prescribe such rules and regulations as may
be necessary for determining t he eligibility and priority of
applicants for loans and grants and devise rules and regulations to
insure fair and equitable distribution of said loans and grants; and
promulgate and adopt such rules and regulations as may be necessary
for purposes of expenditures and payments. Provided, no grant of
funds shall be made unless such grant is necessary to assist public
bodies in emergency situations. Provided also priorities for use of
loan and grant money for a particular project shall be established
by the state agency with primary responsibility. Prov ided further,
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that the Board shall not adopt any rule, regulation or condition
requiring that a particular attorney or law firm be employed by any
eligible entity in connection with such entity's grants or loans
from the Board; and
3. The Board is hereby authorized to direct that up to fifty
percent (50%) of the interest income from the investment of monies
in the Statewide Water Development Revolving Fund and the Water
Resources Fund Grant Account accruing fr om and after the date of
this act be deposited in the Statewide Water Development Revolving
Fund created under Section 1085.40 of this title.
The Board may adopt reasonable nondiscriminatory standards for
selection of legal counsel.
SECTION 3. This act shall become effective November 1 , 2025.
COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS AND BUDGET , dated
03/03/2025 - DO PASS, As Amended and Coauthored.