Stricken language would be deleted from and underlined language would be added to present law.
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State of Arkansas 1
95th General Assembly A Bill 2
Regular Session, 2025 SENATE BILL 96 3
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By: Senator C. Penzo 5
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For An Act To Be Entitled 8
AN ACT TO AMEND THE LAW CONCERNING DETACHMENT BY A 9
REGIONAL AIRPORT AUTHORITY; TO REPEAL REGIONAL 10
AIRPORT AUTHORITY DETACHMENT; AND FOR OTHER PURPOSES. 11
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Subtitle 14
TO AMEND THE LAW CONCERNING DETACHMENT 15
BY A REGIONAL AIRPORT AUTHORITY; AND TO 16
REPEAL REGIONAL AIRPORT AUTHORITY 17
DETACHMENT. 18
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 20
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SECTION 1. Arkansas Code § 14 -362-132(c), concerning exemptions of 22
regional airports from annexation and municipal regulation, is amended to 23
read as follows: 24
(c) An authority may detach from a municipality upon compliance with 25
the detachment requirements under § 14 -362-301 et seq. If a municipality in 26
which the property of an authority is located merges with, is annexed to, or 27
is consolidated with another municipality, the authority may detach from the 28
municipality upon the approval of a majority vote of the board of directors 29
of the authority. 30
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SECTION 2. Arkansas Code Title 14, Chapter 362, Subchapter 3, is 32
repealed. 33
Subchapter 3 - Annexation and Detachment 34
14-362-301. Legislative findings. 35
(a) The General Assembly finds that: 36 SB96
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(1) The public and governmental functions of an authority 1
required under this chapter are best achieved by giving the authority the 2
discretion to determine whether it is in the best interest of the authority 3
to achieve its mission in conjunction with or separate from a municipality; 4
(2) The requirements of this subchapter are: 5
(A) Supplemental to constitutional or statutory provisions 6
now existing or later adopted which may provide for an authority's annexation 7
or detachment from a municipality; and 8
(B) Intended to: 9
(i) Provide for the orderly detachment of an 10
authority from one (1) or more municipalities in a manner that protects the 11
interests of the authority and the municipality; and 12
(ii) Ensure to the extent a municipality may have 13
issued bonds or other evidences of indebtedness secured by or payable from a 14
tax or other revenue relating to the operations of the authority, that the 15
bonds or other evidences of indebtedness are protected so that the contract 16
for repayment between a municipality and any third party is not impaired. 17
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14-362-302. Involuntary annexation prohibited. 19
Property owned by an authority that is not within the corporate limits 20
of a municipality shall not be annexed by a municipality without a two -thirds 21
(⅔) vote of approval by the members of the board of directors of the 22
authority. 23
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14-362-303. Coordination with Arkansas Geographic Information Systems 25
Office to annex or detach. 26
Before an authority begins an annexation or detachment proceeding under 27
this subchapter, the authority shall coordinate with the Arkansas Geographic 28
Information Systems Office for preparation of legal descriptions and digital 29
mapping for the annexation or detachment areas. 30
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14-362-304. Petition for annexation — Definition. 32
(a) As used in this section, “enclave” means an unincorporated 33
improved or developed area that is enclosed within and bounded on all sides 34
by a single city or incorporated town. 35
(b) Except as provided in subsection (c) of this section, an authority 36 SB96
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may petition a municipality for voluntary annexation in the same manner 1
provided in § 14-40-609. 2
(c)(1) The creation of an enclave owned by an authority is not 3
prohibited under this section. 4
(2) An authority petitioning a municipality to annex land 5
containing an enclave under subdivision (c)(1) of this section shall include 6
the following in the petition: 7
(A) The reason the authority's continued ownership of the 8
enclave is necessary; and 9
(B) The authority's intended use of the enclave. 10
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14-362-305. Petition for detachment. 12
(a) An authority may petition for detachment under this section upon 13
the passing of a resolution by the board of directors of the authority: 14
(1) Recommending the detachment of property owned by the 15
authority from one (1) or more municipalities in which the authority's 16
property is located; and 17
(2) Approved by a vote of at least two -thirds (⅔) of the members 18
of the board. 19
(b)(1) An authority shall file a petition for detachment in the county 20
in which the property the authority is petitioning for detachment is located 21
with the: 22
(A) County court; 23
(B) County assessor; and 24
(C) County clerk. 25
(2) A petition filed under subdivision (b)(1) of this section 26
shall: 27
(A) Be in writing; 28
(B) Name the persons authorized to act on behalf of the 29
authority; 30
(C) Contain an attestation signed before a notary or 31
notaries by a person authorized to sign for the authority as the owner of the 32
property or an agent of the authority confirming the desire to be detached; 33
(D) Contain an accurate description of the relevant 34
property; 35
(E) Contain a letter or title opinion from a certified 36 SB96
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abstractor or title company verifying that the authority is the owner of 1
record of the relevant property; 2
(F) Contain a letter or verification from a certified 3
surveyor or engineer verifying that an enclave that is not owned by the 4
authority will not be created; 5
(G) Include a schedule of services that are currently 6
provided by the municipality to the property being detached; and 7
(H) Identify any special considerations or factors that 8
the authority and municipality should agree to before the detachment is 9
finalized, including without limitation: 10
(i) The negotiation of outstanding debt obligations; 11
and 12
(ii) A determination of all financial matters 13
pertaining to the schedule of services provided by the municipality under 14
subdivision (b)(2)(G) of this section. 15
(c)(1) Within fifteen (15) days from the date the petition is filed 16
under subdivision (b)(1) of this section, the county assessor and the county 17
clerk shall: 18
(A) Determine whether the petition meets the requirements 19
of subdivision (b)(2) of this section; and 20
(B) Report the determination required under subdivision 21
(b)(2) of this section to the county court. 22
(2)(A) If it is determined that the petition does not meet the 23
requirements of subdivision (b)(2) of this section, the county court shall 24
enter a court order identifying the deficiencies in the petition within five 25
(5) business days from the date the determination was reported to the county 26
court under subdivision (c)(1)(B) of this section. 27
(B)(i) An authority may file an amended petition at any 28
time after the county court enters the court order required under subdivision 29
(c)(2)(A) of this section. 30
(ii) The amended petition is required to meet the 31
requirements of subdivision (b)(2) of this section. 32
(3) If a county assessor and a county clerk report that the 33
petition meets the requirements of subdivision (b)(2) of this section, the 34
county court has fifteen (15) business days from the date the determination 35
was reported to: 36 SB96
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(A) Review the petition and records for completeness and 1
accuracy; 2
(B) Determine that the detachment does not create an 3
enclave that is not owned by the authority; 4
(C) Confirm the petition contains the schedule of services 5
required by subdivision (b)(2)(G) of this section; 6
(D) At the discretion of the county judge, determine 7
whether the county will be responsible for the maintenance of dedicated 8
public roads and rights -of-way abutting or traversing the property that is 9
being detached; and 10
(E) Issue an order stating the findings required under 11
this subdivision (c)(3) and provide the: 12
(i) Order to the authority; and 13
(ii) Petition and order to the municipality to which 14
the authority is petitioning for detachment. 15
(d)(1) An order issued under subdivision (c)(3)(E) of this section 16
shall require the municipality being petitioned for detachment to file a 17
response with the county court: 18
(A) Within fifteen (15) business days from the date the 19
court order was received; and 20
(B) That states whether the municipality agrees or does 21
not agree with the special considerations or factors to be addressed before 22
the detachment is finalized under subdivision (b)(2)(H) of this section. 23
(2) A municipality that does not agree with the special 24
considerations or factors stated in the petition under subdivision (b)(2)(H) 25
of this section shall file a response with the county court that: 26
(A) States the reason the municipality disagrees with the 27
special considerations or factors stated in the petition under subdivision 28
(b)(2)(H) of this section; and 29
(B) Includes any additional special considerations or 30
factors the municipality may have. 31
(e)(1) An authority has five (5) business days from the date the 32
municipality files the response required under subdivision (d)(2) of this 33
section to respond to the municipality's additional special considerations or 34
factors under subdivision (d)(2)(B) of this section. 35
(2)(A) If the authority does not agree with the additional 36 SB96
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special considerations or factors, the county court clerk shall set a hearing 1
date to determine the special considerations or factors to be addressed 2
before detachment. 3
(B) The hearing under subdivision (e)(2)(A) of this 4
section shall be set on a date of earliest convenience for both parties but 5
no later than sixty (60) calendar days after the filing of the authority's 6
response under subdivision (e)(1) of this section. 7
(3)(A) If a municipality agrees with the special considerations 8
or factors in the petition required under subdivision (b)(2)(H) of this 9
section, then the county court shall enter an order providing a timeline for 10
the authority and the municipality to negotiate in good faith and to reach an 11
agreement with respect to the special considerations or factors required 12
before detachment is finalized. 13
(B) Unless a different period of time is mutually agreed 14
to by the municipality and the authority, the county court shall require the 15
municipality and the authority to report their agreement to the county court 16
not later than ninety (90) calendar days from the date the order was filed. 17
(C)(i) If an authority and a municipality cannot reach an 18
agreement by the deadline provided under this subdivision (e)(3), the county 19
court shall order the municipality and authority to participate in mediation. 20
(ii) The mediation shall take place not later than 21
sixty (60) calendar days from the date of the order requiring mediation. 22
(iii)(a) The mediator shall file a mediation report 23
with the county court no later than thirty (30) calendar days after the date 24
of the mediation required under subdivision (e)(3)(C)(i) of this section. 25
(b) The mediator's report shall: 26
(1) Contain the agreed -upon terms 27
relating to the special considerations and factors, but only if the mediation 28
is successful; or 29
(2) If the mediation is unsuccessful, 30
state that the parties were unable to come to an agreement relating to the 31
special considerations and factors. 32
(iv)(a) The county court shall enter an order 33
confirming the detachment, and no later than thirty (30) calendar days from 34
the date the mediation report is filed, the county clerk shall forward a copy 35
of the order to the county assessor and to the Secretary of State. 36 SB96
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(b) The order shall contain: 1
(1) The final terms relating to the 2
special considerations and factors, but only if the mediation is successful; 3
or 4
(2) If the mediation is unsuccessful, 5
the order shall only address the matters required under § 14 -362-306. 6
(f) The property shall be detached from the municipality on the date 7
the county court enters the order confirming the detachment and the county 8
clerk forwards a copy of the order as required under subdivision 9
(e)(3)(C)(iv) of this section. 10
(g)(1) This section shall not prevent the municipality and the 11
authority from presenting a joint agreement confirming their mutually agreed -12
upon resolution of special considerations or factors that should be addressed 13
before detachment at any time after the petition for detachment is filed by 14
the authority. 15
(2) Absent a determination by the county court that the mutually 16
agreed-upon resolution under subdivision (g)(1) of this section violates 17
Arkansas law, the county court shall accept the mutually agreed -upon 18
resolution and include it in the order approving detachment. 19
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14-362-306. Special considerations relating to existing municipal debt 21
obligations. 22
(a) If an authority detaches from a municipality that has previously 23
issued and currently has outstanding bonds or other evidences of indebtedness 24
that are secured by or payable from taxes or other revenues relating to the 25
operations of the authority, then the detachment shall not be effective until 26
the authority and the municipality mutually have attempted to agree in 27
writing to a lump-sum payment or recurring or periodic payments in an amount 28
sufficient to avoid impairing the municipality's contractual obligations to 29
the persons or entities to which payment is due. 30
(b) In reaching the agreement required under subsection (a) of this 31
section, an authority and the municipality may engage with and rely on the 32
opinions and reports of legal and financial professionals to ensure that the 33
agreement reached by the authority and the municipality does not diminish the 34
prospects of, or adversely interfere with, expected payments to be received 35
by the persons or entities to which payment is due, and therefore does not 36 SB96
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unconstitutionally impair the contract between the municipality and the 1
persons or entities to which payment is due. 2
(c)(1) If an authority and a municipality cannot reach an agreement, 3
any taxes or other revenues relating to the operations of the authority shall 4
be collected in the same manner and amounts as if the land had not been 5
detached. 6
(2) However, after a petition for detachment has been filed by 7
the authority, the municipality: 8
(A) Shall not take any action to: 9
(i) Increase the taxes assessed or levied; 10
(ii) Lengthen the maturity date of the debt 11
obligations; 12
(iii) Decrease amounts paid by other persons or 13
entities that are contributing to amounts used by the municipality to pay the 14
debt obligations; or 15
(iv) Reallocate available revenues to the detriment 16
of the authority beyond those in existence as of the date of the filing of 17
the petition with the county court; and 18
(B) As permitted by the documents relating to the debt 19
obligations, shall use or escrow all pledged taxes and revenues to pay off or 20
prepay the debt obligations and shall not use the pledged taxes and revenues 21
for any other purpose. 22
(d)(1) An authority and a municipality shall enter into a payment in 23
lieu of taxes agreement, interlocal cooperative agreement, or similar 24
agreement documenting the agreement reached by the authority and the 25
municipality with respect to any taxes collected or payments made by the 26
authority while debt obligations are outstanding. 27
(2) The agreement required under subdivision (d)(1) of this 28
section shall contain terms and conditions permitting the renegotiation or 29
revision of payments in the event of unforeseen force majeure events, 30
including without limitation a global pandemic or population or retail 31
growth, that significantly modify the facts known or assumptions made in 32
calculating the payments agreed upon. 33
(3) The municipality shall provide the certificates and 34
directions to the Department of Finance and Administration that are necessary 35
to effect the agreement between the authority and the municipality. 36 SB96
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(e) A municipality may refinance existing debt obligations after an 1
authority has filed a petition for detachment to achieve debt service savings 2
so long as the refinancing does not increase annual debt service payments, 3
extend the maturity date, or increase the aggregate amount of principal due 4
with respect to the debt obligation. 5
(f) Upon the payment in full at maturity or optional redemption, other 6
than in connection with a refunding permitted under subsection (e) of this 7
section, the authority's property and operations shall be released and exempt 8
from future tax collections or payments, as applicable. 9
(g) A municipality shall not initiate litigation alleging impairment 10
of contract if the authority and the municipality have entered into a written 11
agreement under subsection (d) of this section or if the county court has 12
entered an order for detachment under § 14 -362-305(e) that is consistent with 13
subsection (c) of this section. 14
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SECTION 3. DO NOT CODIFY. Retroactivity — Effect. 16
This act applies retroactively to January 1, 2024, and invalidates any 17
petition to detach filed by a regional airport authority under § 14 -362-301 18
et seq. on or after January 1, 2024. 19
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