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Arkansas Senate Bill SB96

Arkansas 2025 Regular Session

Arkansas Senate Bill SB96 Compare Versions

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11 Stricken language would be deleted from and underlined language would be added to present law.
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33 State of Arkansas 1
44 95th General Assembly A Bill 2
55 Regular Session, 2025 SENATE BILL 96 3
66 4
77 By: Senator C. Penzo 5
88 6
99 7
1010 For An Act To Be Entitled 8
1111 AN ACT TO AMEND THE LAW CONCERNING DETACHMENT BY A 9
1212 REGIONAL AIRPORT AUTHORITY; TO REPEAL REGIONAL 10
1313 AIRPORT AUTHORITY DETACHMENT; AND FOR OTHER PURPOSES. 11
1414 12
1515 13
1616 Subtitle 14
1717 TO AMEND THE LAW CONCERNING DETACHMENT 15
1818 BY A REGIONAL AIRPORT AUTHORITY; AND TO 16
1919 REPEAL REGIONAL AIRPORT AUTHORITY 17
2020 DETACHMENT. 18
2121 19
2222 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 20
2323 21
2424 SECTION 1. Arkansas Code § 14 -362-132(c), concerning exemptions of 22
2525 regional airports from annexation and municipal regulation, is amended to 23
2626 read as follows: 24
2727 (c) An authority may detach from a municipality upon compliance with 25
2828 the detachment requirements under § 14 -362-301 et seq. If a municipality in 26
2929 which the property of an authority is located merges with, is annexed to, or 27
3030 is consolidated with another municipality, the authority may detach from the 28
3131 municipality upon the approval of a majority vote of the board of directors 29
3232 of the authority. 30
3333 31
3434 SECTION 2. Arkansas Code Title 14, Chapter 362, Subchapter 3, is 32
3535 repealed. 33
3636 Subchapter 3 - Annexation and Detachment 34
3737 14-362-301. Legislative findings. 35
3838 (a) The General Assembly finds that: 36 SB96
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4141 (1) The public and governmental functions of an authority 1
4242 required under this chapter are best achieved by giving the authority the 2
4343 discretion to determine whether it is in the best interest of the authority 3
4444 to achieve its mission in conjunction with or separate from a municipality; 4
4545 (2) The requirements of this subchapter are: 5
4646 (A) Supplemental to constitutional or statutory provisions 6
4747 now existing or later adopted which may provide for an authority's annexation 7
4848 or detachment from a municipality; and 8
4949 (B) Intended to: 9
5050 (i) Provide for the orderly detachment of an 10
5151 authority from one (1) or more municipalities in a manner that protects the 11
5252 interests of the authority and the municipality; and 12
5353 (ii) Ensure to the extent a municipality may have 13
5454 issued bonds or other evidences of indebtedness secured by or payable from a 14
5555 tax or other revenue relating to the operations of the authority, that the 15
5656 bonds or other evidences of indebtedness are protected so that the contract 16
5757 for repayment between a municipality and any third party is not impaired. 17
5858 18
5959 14-362-302. Involuntary annexation prohibited. 19
6060 Property owned by an authority that is not within the corporate limits 20
6161 of a municipality shall not be annexed by a municipality without a two -thirds 21
6262 (⅔) vote of approval by the members of the board of directors of the 22
6363 authority. 23
6464 24
6565 14-362-303. Coordination with Arkansas Geographic Information Systems 25
6666 Office to annex or detach. 26
6767 Before an authority begins an annexation or detachment proceeding under 27
6868 this subchapter, the authority shall coordinate with the Arkansas Geographic 28
6969 Information Systems Office for preparation of legal descriptions and digital 29
7070 mapping for the annexation or detachment areas. 30
7171 31
7272 14-362-304. Petition for annexation — Definition. 32
7373 (a) As used in this section, “enclave” means an unincorporated 33
7474 improved or developed area that is enclosed within and bounded on all sides 34
7575 by a single city or incorporated town. 35
7676 (b) Except as provided in subsection (c) of this section, an authority 36 SB96
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7979 may petition a municipality for voluntary annexation in the same manner 1
8080 provided in § 14-40-609. 2
8181 (c)(1) The creation of an enclave owned by an authority is not 3
8282 prohibited under this section. 4
8383 (2) An authority petitioning a municipality to annex land 5
8484 containing an enclave under subdivision (c)(1) of this section shall include 6
8585 the following in the petition: 7
8686 (A) The reason the authority's continued ownership of the 8
8787 enclave is necessary; and 9
8888 (B) The authority's intended use of the enclave. 10
8989 11
9090 14-362-305. Petition for detachment. 12
9191 (a) An authority may petition for detachment under this section upon 13
9292 the passing of a resolution by the board of directors of the authority: 14
9393 (1) Recommending the detachment of property owned by the 15
9494 authority from one (1) or more municipalities in which the authority's 16
9595 property is located; and 17
9696 (2) Approved by a vote of at least two -thirds (⅔) of the members 18
9797 of the board. 19
9898 (b)(1) An authority shall file a petition for detachment in the county 20
9999 in which the property the authority is petitioning for detachment is located 21
100100 with the: 22
101101 (A) County court; 23
102102 (B) County assessor; and 24
103103 (C) County clerk. 25
104104 (2) A petition filed under subdivision (b)(1) of this section 26
105105 shall: 27
106106 (A) Be in writing; 28
107107 (B) Name the persons authorized to act on behalf of the 29
108108 authority; 30
109109 (C) Contain an attestation signed before a notary or 31
110110 notaries by a person authorized to sign for the authority as the owner of the 32
111111 property or an agent of the authority confirming the desire to be detached; 33
112112 (D) Contain an accurate description of the relevant 34
113113 property; 35
114114 (E) Contain a letter or title opinion from a certified 36 SB96
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117117 abstractor or title company verifying that the authority is the owner of 1
118118 record of the relevant property; 2
119119 (F) Contain a letter or verification from a certified 3
120120 surveyor or engineer verifying that an enclave that is not owned by the 4
121121 authority will not be created; 5
122122 (G) Include a schedule of services that are currently 6
123123 provided by the municipality to the property being detached; and 7
124124 (H) Identify any special considerations or factors that 8
125125 the authority and municipality should agree to before the detachment is 9
126126 finalized, including without limitation: 10
127127 (i) The negotiation of outstanding debt obligations; 11
128128 and 12
129129 (ii) A determination of all financial matters 13
130130 pertaining to the schedule of services provided by the municipality under 14
131131 subdivision (b)(2)(G) of this section. 15
132132 (c)(1) Within fifteen (15) days from the date the petition is filed 16
133133 under subdivision (b)(1) of this section, the county assessor and the county 17
134134 clerk shall: 18
135135 (A) Determine whether the petition meets the requirements 19
136136 of subdivision (b)(2) of this section; and 20
137137 (B) Report the determination required under subdivision 21
138138 (b)(2) of this section to the county court. 22
139139 (2)(A) If it is determined that the petition does not meet the 23
140140 requirements of subdivision (b)(2) of this section, the county court shall 24
141141 enter a court order identifying the deficiencies in the petition within five 25
142142 (5) business days from the date the determination was reported to the county 26
143143 court under subdivision (c)(1)(B) of this section. 27
144144 (B)(i) An authority may file an amended petition at any 28
145145 time after the county court enters the court order required under subdivision 29
146146 (c)(2)(A) of this section. 30
147147 (ii) The amended petition is required to meet the 31
148148 requirements of subdivision (b)(2) of this section. 32
149149 (3) If a county assessor and a county clerk report that the 33
150150 petition meets the requirements of subdivision (b)(2) of this section, the 34
151151 county court has fifteen (15) business days from the date the determination 35
152152 was reported to: 36 SB96
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155155 (A) Review the petition and records for completeness and 1
156156 accuracy; 2
157157 (B) Determine that the detachment does not create an 3
158158 enclave that is not owned by the authority; 4
159159 (C) Confirm the petition contains the schedule of services 5
160160 required by subdivision (b)(2)(G) of this section; 6
161161 (D) At the discretion of the county judge, determine 7
162162 whether the county will be responsible for the maintenance of dedicated 8
163163 public roads and rights -of-way abutting or traversing the property that is 9
164164 being detached; and 10
165165 (E) Issue an order stating the findings required under 11
166166 this subdivision (c)(3) and provide the: 12
167167 (i) Order to the authority; and 13
168168 (ii) Petition and order to the municipality to which 14
169169 the authority is petitioning for detachment. 15
170170 (d)(1) An order issued under subdivision (c)(3)(E) of this section 16
171171 shall require the municipality being petitioned for detachment to file a 17
172172 response with the county court: 18
173173 (A) Within fifteen (15) business days from the date the 19
174174 court order was received; and 20
175175 (B) That states whether the municipality agrees or does 21
176176 not agree with the special considerations or factors to be addressed before 22
177177 the detachment is finalized under subdivision (b)(2)(H) of this section. 23
178178 (2) A municipality that does not agree with the special 24
179179 considerations or factors stated in the petition under subdivision (b)(2)(H) 25
180180 of this section shall file a response with the county court that: 26
181181 (A) States the reason the municipality disagrees with the 27
182182 special considerations or factors stated in the petition under subdivision 28
183183 (b)(2)(H) of this section; and 29
184184 (B) Includes any additional special considerations or 30
185185 factors the municipality may have. 31
186186 (e)(1) An authority has five (5) business days from the date the 32
187187 municipality files the response required under subdivision (d)(2) of this 33
188188 section to respond to the municipality's additional special considerations or 34
189189 factors under subdivision (d)(2)(B) of this section. 35
190190 (2)(A) If the authority does not agree with the additional 36 SB96
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193193 special considerations or factors, the county court clerk shall set a hearing 1
194194 date to determine the special considerations or factors to be addressed 2
195195 before detachment. 3
196196 (B) The hearing under subdivision (e)(2)(A) of this 4
197197 section shall be set on a date of earliest convenience for both parties but 5
198198 no later than sixty (60) calendar days after the filing of the authority's 6
199199 response under subdivision (e)(1) of this section. 7
200200 (3)(A) If a municipality agrees with the special considerations 8
201201 or factors in the petition required under subdivision (b)(2)(H) of this 9
202202 section, then the county court shall enter an order providing a timeline for 10
203203 the authority and the municipality to negotiate in good faith and to reach an 11
204204 agreement with respect to the special considerations or factors required 12
205205 before detachment is finalized. 13
206206 (B) Unless a different period of time is mutually agreed 14
207207 to by the municipality and the authority, the county court shall require the 15
208208 municipality and the authority to report their agreement to the county court 16
209209 not later than ninety (90) calendar days from the date the order was filed. 17
210210 (C)(i) If an authority and a municipality cannot reach an 18
211211 agreement by the deadline provided under this subdivision (e)(3), the county 19
212212 court shall order the municipality and authority to participate in mediation. 20
213213 (ii) The mediation shall take place not later than 21
214214 sixty (60) calendar days from the date of the order requiring mediation. 22
215215 (iii)(a) The mediator shall file a mediation report 23
216216 with the county court no later than thirty (30) calendar days after the date 24
217217 of the mediation required under subdivision (e)(3)(C)(i) of this section. 25
218218 (b) The mediator's report shall: 26
219219 (1) Contain the agreed -upon terms 27
220220 relating to the special considerations and factors, but only if the mediation 28
221221 is successful; or 29
222222 (2) If the mediation is unsuccessful, 30
223223 state that the parties were unable to come to an agreement relating to the 31
224224 special considerations and factors. 32
225225 (iv)(a) The county court shall enter an order 33
226226 confirming the detachment, and no later than thirty (30) calendar days from 34
227227 the date the mediation report is filed, the county clerk shall forward a copy 35
228228 of the order to the county assessor and to the Secretary of State. 36 SB96
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231231 (b) The order shall contain: 1
232232 (1) The final terms relating to the 2
233233 special considerations and factors, but only if the mediation is successful; 3
234234 or 4
235235 (2) If the mediation is unsuccessful, 5
236236 the order shall only address the matters required under § 14 -362-306. 6
237237 (f) The property shall be detached from the municipality on the date 7
238238 the county court enters the order confirming the detachment and the county 8
239239 clerk forwards a copy of the order as required under subdivision 9
240240 (e)(3)(C)(iv) of this section. 10
241241 (g)(1) This section shall not prevent the municipality and the 11
242242 authority from presenting a joint agreement confirming their mutually agreed -12
243243 upon resolution of special considerations or factors that should be addressed 13
244244 before detachment at any time after the petition for detachment is filed by 14
245245 the authority. 15
246246 (2) Absent a determination by the county court that the mutually 16
247247 agreed-upon resolution under subdivision (g)(1) of this section violates 17
248248 Arkansas law, the county court shall accept the mutually agreed -upon 18
249249 resolution and include it in the order approving detachment. 19
250250 20
251251 14-362-306. Special considerations relating to existing municipal debt 21
252252 obligations. 22
253253 (a) If an authority detaches from a municipality that has previously 23
254254 issued and currently has outstanding bonds or other evidences of indebtedness 24
255255 that are secured by or payable from taxes or other revenues relating to the 25
256256 operations of the authority, then the detachment shall not be effective until 26
257257 the authority and the municipality mutually have attempted to agree in 27
258258 writing to a lump-sum payment or recurring or periodic payments in an amount 28
259259 sufficient to avoid impairing the municipality's contractual obligations to 29
260260 the persons or entities to which payment is due. 30
261261 (b) In reaching the agreement required under subsection (a) of this 31
262262 section, an authority and the municipality may engage with and rely on the 32
263263 opinions and reports of legal and financial professionals to ensure that the 33
264264 agreement reached by the authority and the municipality does not diminish the 34
265265 prospects of, or adversely interfere with, expected payments to be received 35
266266 by the persons or entities to which payment is due, and therefore does not 36 SB96
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269269 unconstitutionally impair the contract between the municipality and the 1
270270 persons or entities to which payment is due. 2
271271 (c)(1) If an authority and a municipality cannot reach an agreement, 3
272272 any taxes or other revenues relating to the operations of the authority shall 4
273273 be collected in the same manner and amounts as if the land had not been 5
274274 detached. 6
275275 (2) However, after a petition for detachment has been filed by 7
276276 the authority, the municipality: 8
277277 (A) Shall not take any action to: 9
278278 (i) Increase the taxes assessed or levied; 10
279279 (ii) Lengthen the maturity date of the debt 11
280280 obligations; 12
281281 (iii) Decrease amounts paid by other persons or 13
282282 entities that are contributing to amounts used by the municipality to pay the 14
283283 debt obligations; or 15
284284 (iv) Reallocate available revenues to the detriment 16
285285 of the authority beyond those in existence as of the date of the filing of 17
286286 the petition with the county court; and 18
287287 (B) As permitted by the documents relating to the debt 19
288288 obligations, shall use or escrow all pledged taxes and revenues to pay off or 20
289289 prepay the debt obligations and shall not use the pledged taxes and revenues 21
290290 for any other purpose. 22
291291 (d)(1) An authority and a municipality shall enter into a payment in 23
292292 lieu of taxes agreement, interlocal cooperative agreement, or similar 24
293293 agreement documenting the agreement reached by the authority and the 25
294294 municipality with respect to any taxes collected or payments made by the 26
295295 authority while debt obligations are outstanding. 27
296296 (2) The agreement required under subdivision (d)(1) of this 28
297297 section shall contain terms and conditions permitting the renegotiation or 29
298298 revision of payments in the event of unforeseen force majeure events, 30
299299 including without limitation a global pandemic or population or retail 31
300300 growth, that significantly modify the facts known or assumptions made in 32
301301 calculating the payments agreed upon. 33
302302 (3) The municipality shall provide the certificates and 34
303303 directions to the Department of Finance and Administration that are necessary 35
304304 to effect the agreement between the authority and the municipality. 36 SB96
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307307 (e) A municipality may refinance existing debt obligations after an 1
308308 authority has filed a petition for detachment to achieve debt service savings 2
309309 so long as the refinancing does not increase annual debt service payments, 3
310310 extend the maturity date, or increase the aggregate amount of principal due 4
311311 with respect to the debt obligation. 5
312312 (f) Upon the payment in full at maturity or optional redemption, other 6
313313 than in connection with a refunding permitted under subsection (e) of this 7
314314 section, the authority's property and operations shall be released and exempt 8
315315 from future tax collections or payments, as applicable. 9
316316 (g) A municipality shall not initiate litigation alleging impairment 10
317317 of contract if the authority and the municipality have entered into a written 11
318318 agreement under subsection (d) of this section or if the county court has 12
319319 entered an order for detachment under § 14 -362-305(e) that is consistent with 13
320320 subsection (c) of this section. 14
321321 15
322322 SECTION 3. DO NOT CODIFY. Retroactivity — Effect. 16
323323 This act applies retroactively to January 1, 2024, and invalidates any 17
324324 petition to detach filed by a regional airport authority under § 14 -362-301 18
325325 et seq. on or after January 1, 2024. 19
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