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1 State of Arkansas A Bill
2 95th General Assembly
3 Regular Session, 2025 SENATE BILL 96
4
5 By: Senator C. Penzo
6
7
8 For An Act To Be Entitled
9 AN ACT TO AMEND THE LAW CONCERNING DETACHMENT BY A
10 REGIONAL AIRPORT AUTHORITY; TO REPEAL REGIONAL
11 AIRPORT AUTHORITY DETACHMENT; AND FOR OTHER PURPOSES.
12
13
14 Subtitle
15 TO AMEND THE LAW CONCERNING DETACHMENT
16 BY A REGIONAL AIRPORT AUTHORITY; AND TO
17 REPEAL REGIONAL AIRPORT AUTHORITY
18 DETACHMENT.
19
20 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
21
22 SECTION 1. Arkansas Code � 14-362-132(c), concerning exemptions of
23 regional airports from annexation and municipal regulation, is amended to
24 read as follows:
25 (c) An authority may detach from a municipality upon compliance with
26 the detachment requirements under � 14-362-301 et seq. If a municipality in
27 which the property of an authority is located merges with, is annexed to, or
28 is consolidated with another municipality, the authority may detach from the
29 municipality upon the approval of a majority vote of the board of directors
30 of the authority.
31
32 SECTION 2. Arkansas Code Title 14, Chapter 362, Subchapter 3, is
33 repealed.
34 Subchapter 3 - Annexation and Detachment
35 14-362-301. Legislative findings.
36 (a) The General Assembly finds that:
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1 (1) The public and governmental functions of an authority
2 required under this chapter are best achieved by giving the authority the
3 discretion to determine whether it is in the best interest of the authority
4 to achieve its mission in conjunction with or separate from a municipality;
5 (2) The requirements of this subchapter are:
6 (A) Supplemental to constitutional or statutory provisions
7 now existing or later adopted which may provide for an authority's annexation
8 or detachment from a municipality; and
9 (B) Intended to:
10 (i) Provide for the orderly detachment of an
11 authority from one (1) or more municipalities in a manner that protects the
12 interests of the authority and the municipality; and
13 (ii) Ensure to the extent a municipality may have
14 issued bonds or other evidences of indebtedness secured by or payable from a
15 tax or other revenue relating to the operations of the authority, that the
16 bonds or other evidences of indebtedness are protected so that the contract
17 for repayment between a municipality and any third party is not impaired.
18
19 14-362-302. Involuntary annexation prohibited.
20 Property owned by an authority that is not within the corporate limits
21 of a municipality shall not be annexed by a municipality without a two-thirds
22 () vote of approval by the members of the board of directors of the
23 authority.
24
25 14-362-303. Coordination with Arkansas Geographic Information Systems
26 Office to annex or detach.
27 Before an authority begins an annexation or detachment proceeding under
28 this subchapter, the authority shall coordinate with the Arkansas Geographic
29 Information Systems Office for preparation of legal descriptions and digital
30 mapping for the annexation or detachment areas.
31
32 14-362-304. Petition for annexation -- Definition.
33 (a) As used in this section, "enclave" means an unincorporated
34 improved or developed area that is enclosed within and bounded on all sides
35 by a single city or incorporated town.
36 (b) Except as provided in subsection (c) of this section, an authority
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1 may petition a municipality for voluntary annexation in the same manner
2 provided in � 14-40-609.
3 (c)(1) The creation of an enclave owned by an authority is not
4 prohibited under this section.
5 (2) An authority petitioning a municipality to annex land
6 containing an enclave under subdivision (c)(1) of this section shall include
7 the following in the petition:
8 (A) The reason the authority's continued ownership of the
9 enclave is necessary; and
10 (B) The authority's intended use of the enclave.
11
12 14-362-305. Petition for detachment.
13 (a) An authority may petition for detachment under this section upon
14 the passing of a resolution by the board of directors of the authority:
15 (1) Recommending the detachment of property owned by the
16 authority from one (1) or more municipalities in which the authority's
17 property is located; and
18 (2) Approved by a vote of at least two-thirds () of the members
19 of the board.
20 (b)(1) An authority shall file a petition for detachment in the county
21 in which the property the authority is petitioning for detachment is located
22 with the:
23 (A) County court;
24 (B) County assessor; and
25 (C) County clerk.
26 (2) A petition filed under subdivision (b)(1) of this section
27 shall:
28 (A) Be in writing;
29 (B) Name the persons authorized to act on behalf of the
30 authority;
31 (C) Contain an attestation signed before a notary or
32 notaries by a person authorized to sign for the authority as the owner of the
33 property or an agent of the authority confirming the desire to be detached;
34 (D) Contain an accurate description of the relevant
35 property;
36 (E) Contain a letter or title opinion from a certified
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1 abstractor or title company verifying that the authority is the owner of
2 record of the relevant property;
3 (F) Contain a letter or verification from a certified
4 surveyor or engineer verifying that an enclave that is not owned by the
5 authority will not be created;
6 (G) Include a schedule of services that are currently
7 provided by the municipality to the property being detached; and
8 (H) Identify any special considerations or factors that
9 the authority and municipality should agree to before the detachment is
10 finalized, including without limitation:
11 (i) The negotiation of outstanding debt obligations;
12 and
13 (ii) A determination of all financial matters
14 pertaining to the schedule of services provided by the municipality under
15 subdivision (b)(2)(G) of this section.
16 (c)(1) Within fifteen (15) days from the date the petition is filed
17 under subdivision (b)(1) of this section, the county assessor and the county
18 clerk shall:
19 (A) Determine whether the petition meets the requirements
20 of subdivision (b)(2) of this section; and
21 (B) Report the determination required under subdivision
22 (b)(2) of this section to the county court.
23 (2)(A) If it is determined that the petition does not meet the
24 requirements of subdivision (b)(2) of this section, the county court shall
25 enter a court order identifying the deficiencies in the petition within five
26 (5) business days from the date the determination was reported to the county
27 court under subdivision (c)(1)(B) of this section.
28 (B)(i) An authority may file an amended petition at any
29 time after the county court enters the court order required under subdivision
30 (c)(2)(A) of this section.
31 (ii) The amended petition is required to meet the
32 requirements of subdivision (b)(2) of this section.
33 (3) If a county assessor and a county clerk report that the
34 petition meets the requirements of subdivision (b)(2) of this section, the
35 county court has fifteen (15) business days from the date the determination
36 was reported to:
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1 (A) Review the petition and records for completeness and
2 accuracy;
3 (B) Determine that the detachment does not create an
4 enclave that is not owned by the authority;
5 (C) Confirm the petition contains the schedule of services
6 required by subdivision (b)(2)(G) of this section;
7 (D) At the discretion of the county judge, determine
8 whether the county will be responsible for the maintenance of dedicated
9 public roads and rights-of-way abutting or traversing the property that is
10 being detached; and
11 (E) Issue an order stating the findings required under
12 this subdivision (c)(3) and provide the:
13 (i) Order to the authority; and
14 (ii) Petition and order to the municipality to which
15 the authority is petitioning for detachment.
16 (d)(1) An order issued under subdivision (c)(3)(E) of this section
17 shall require the municipality being petitioned for detachment to file a
18 response with the county court:
19 (A) Within fifteen (15) business days from the date the
20 court order was received; and
21 (B) That states whether the municipality agrees or does
22 not agree with the special considerations or factors to be addressed before
23 the detachment is finalized under subdivision (b)(2)(H) of this section.
24 (2) A municipality that does not agree with the special
25 considerations or factors stated in the petition under subdivision (b)(2)(H)
26 of this section shall file a response with the county court that:
27 (A) States the reason the municipality disagrees with the
28 special considerations or factors stated in the petition under subdivision
29 (b)(2)(H) of this section; and
30 (B) Includes any additional special considerations or
31 factors the municipality may have.
32 (e)(1) An authority has five (5) business days from the date the
33 municipality files the response required under subdivision (d)(2) of this
34 section to respond to the municipality's additional special considerations or
35 factors under subdivision (d)(2)(B) of this section.
36 (2)(A) If the authority does not agree with the additional
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1 special considerations or factors, the county court clerk shall set a hearing
2 date to determine the special considerations or factors to be addressed
3 before detachment.
4 (B) The hearing under subdivision (e)(2)(A) of this
5 section shall be set on a date of earliest convenience for both parties but
6 no later than sixty (60) calendar days after the filing of the authority's
7 response under subdivision (e)(1) of this section.
8 (3)(A) If a municipality agrees with the special considerations
9 or factors in the petition required under subdivision (b)(2)(H) of this
10 section, then the county court shall enter an order providing a timeline for
11 the authority and the municipality to negotiate in good faith and to reach an
12 agreement with respect to the special considerations or factors required
13 before detachment is finalized.
14 (B) Unless a different period of time is mutually agreed
15 to by the municipality and the authority, the county court shall require the
16 municipality and the authority to report their agreement to the county court
17 not later than ninety (90) calendar days from the date the order was filed.
18 (C)(i) If an authority and a municipality cannot reach an
19 agreement by the deadline provided under this subdivision (e)(3), the county
20 court shall order the municipality and authority to participate in mediation.
21 (ii) The mediation shall take place not later than
22 sixty (60) calendar days from the date of the order requiring mediation.
23 (iii)(a) The mediator shall file a mediation report
24 with the county court no later than thirty (30) calendar days after the date
25 of the mediation required under subdivision (e)(3)(C)(i) of this section.
26 (b) The mediator's report shall:
27 (1) Contain the agreed-upon terms
28 relating to the special considerations and factors, but only if the mediation
29 is successful; or
30 (2) If the mediation is unsuccessful,
31 state that the parties were unable to come to an agreement relating to the
32 special considerations and factors.
33 (iv)(a) The county court shall enter an order
34 confirming the detachment, and no later than thirty (30) calendar days from
35 the date the mediation report is filed, the county clerk shall forward a copy
36 of the order to the county assessor and to the Secretary of State.
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1 (b) The order shall contain:
2 (1) The final terms relating to the
3 special considerations and factors, but only if the mediation is successful;
4 or
5 (2) If the mediation is unsuccessful,
6 the order shall only address the matters required under � 14-362-306.
7 (f) The property shall be detached from the municipality on the date
8 the county court enters the order confirming the detachment and the county
9 clerk forwards a copy of the order as required under subdivision
10 (e)(3)(C)(iv) of this section.
11 (g)(1) This section shall not prevent the municipality and the
12 authority from presenting a joint agreement confirming their mutually agreed-
13 upon resolution of special considerations or factors that should be addressed
14 before detachment at any time after the petition for detachment is filed by
15 the authority.
16 (2) Absent a determination by the county court that the mutually
17 agreed-upon resolution under subdivision (g)(1) of this section violates
18 Arkansas law, the county court shall accept the mutually agreed-upon
19 resolution and include it in the order approving detachment.
20
21 14-362-306. Special considerations relating to existing municipal debt
22 obligations.
23 (a) If an authority detaches from a municipality that has previously
24 issued and currently has outstanding bonds or other evidences of indebtedness
25 that are secured by or payable from taxes or other revenues relating to the
26 operations of the authority, then the detachment shall not be effective until
27 the authority and the municipality mutually have attempted to agree in
28 writing to a lump-sum payment or recurring or periodic payments in an amount
29 sufficient to avoid impairing the municipality's contractual obligations to
30 the persons or entities to which payment is due.
31 (b) In reaching the agreement required under subsection (a) of this
32 section, an authority and the municipality may engage with and rely on the
33 opinions and reports of legal and financial professionals to ensure that the
34 agreement reached by the authority and the municipality does not diminish the
35 prospects of, or adversely interfere with, expected payments to be received
36 by the persons or entities to which payment is due, and therefore does not
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1 unconstitutionally impair the contract between the municipality and the
2 persons or entities to which payment is due.
3 (c)(1) If an authority and a municipality cannot reach an agreement,
4 any taxes or other revenues relating to the operations of the authority shall
5 be collected in the same manner and amounts as if the land had not been
6 detached.
7 (2) However, after a petition for detachment has been filed by
8 the authority, the municipality:
9 (A) Shall not take any action to:
10 (i) Increase the taxes assessed or levied;
11 (ii) Lengthen the maturity date of the debt
12 obligations;
13 (iii) Decrease amounts paid by other persons or
14 entities that are contributing to amounts used by the municipality to pay the
15 debt obligations; or
16 (iv) Reallocate available revenues to the detriment
17 of the authority beyond those in existence as of the date of the filing of
18 the petition with the county court; and
19 (B) As permitted by the documents relating to the debt
20 obligations, shall use or escrow all pledged taxes and revenues to pay off or
21 prepay the debt obligations and shall not use the pledged taxes and revenues
22 for any other purpose.
23 (d)(1) An authority and a municipality shall enter into a payment in
24 lieu of taxes agreement, interlocal cooperative agreement, or similar
25 agreement documenting the agreement reached by the authority and the
26 municipality with respect to any taxes collected or payments made by the
27 authority while debt obligations are outstanding.
28 (2) The agreement required under subdivision (d)(1) of this
29 section shall contain terms and conditions permitting the renegotiation or
30 revision of payments in the event of unforeseen force majeure events,
31 including without limitation a global pandemic or population or retail
32 growth, that significantly modify the facts known or assumptions made in
33 calculating the payments agreed upon.
34 (3) The municipality shall provide the certificates and
35 directions to the Department of Finance and Administration that are necessary
36 to effect the agreement between the authority and the municipality.
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1 (e) A municipality may refinance existing debt obligations after an
2 authority has filed a petition for detachment to achieve debt service savings
3 so long as the refinancing does not increase annual debt service payments,
4 extend the maturity date, or increase the aggregate amount of principal due
5 with respect to the debt obligation.
6 (f) Upon the payment in full at maturity or optional redemption, other
7 than in connection with a refunding permitted under subsection (e) of this
8 section, the authority's property and operations shall be released and exempt
9 from future tax collections or payments, as applicable.
10 (g) A municipality shall not initiate litigation alleging impairment
11 of contract if the authority and the municipality have entered into a written
12 agreement under subsection (d) of this section or if the county court has
13 entered an order for detachment under � 14-362-305(e) that is consistent with
14 subsection (c) of this section.
15
16 SECTION 3. DO NOT CODIFY. Retroactivity -- Effect.
17 This act applies retroactively to January 1, 2024, and invalidates any
18 petition to detach filed by a regional airport authority under � 14-362-301
19 et seq. on or after January 1, 2024.
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9 01/23/2025 2:52:06 PM ZRC010Every fact on this page links to its source, starting with the official bill record.