This text of Arkansas § 14-362-306 (Special considerations relating to existing municipal debt obligations) is published on Counsel Stack Legal Research, covering Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
(a)If an authority detaches from a municipality that has previously issued and currently has outstanding bonds or other evidences of indebtedness that are secured by or payable from taxes or other revenues relating to the operations of the authority, then the detachment shall not be effective until the authority and the municipality mutually have attempted to agree in writing to a lump-sum payment or recurring or periodic payments in an amount sufficient to avoid impairing the municipality's contractual obligations to the persons or entities to which payment is due.
(b)In reaching the agreement required under subsection (a) of this section, an authority and the municipality may engage with and rely on the opinions and reports of legal and financial professionals to ensure that the agreem
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(a) If an authority detaches from a municipality that has previously issued and currently has outstanding bonds or other evidences of indebtedness that are secured by or payable from taxes or other revenues relating to the operations of the authority, then the detachment shall not be effective until the authority and the municipality mutually have attempted to agree in writing to a lump-sum payment or recurring or periodic payments in an amount sufficient to avoid impairing the municipality's contractual obligations to the persons or entities to which payment is due. (b) In reaching the agreement required under subsection (a) of this section, an authority and the municipality may engage with and rely on the opinions and reports of legal and financial professionals to ensure that the agreement reached by the authority and the municipality does not diminish the prospects of, or adversely interfere with, expected payments to be received by the persons or entities to which payment is due, and therefore does not unconstitutionally impair the contract between the municipality and the persons or entities to which payment is due. (c) (1) If an authority and a municipality cannot reach an agreement, any taxes or other revenues relating to the operations of the authority shall be collected in the same manner and amounts as if the land had not been detached. (2) However, after a petition for detachment has been filed by the authority, the municipality: (A) Shall not take any action to: (i) Increase the taxes assessed or levied; (ii) Lengthen the maturity date of the debt obligations; (iii) Decrease amounts paid by other persons or entities that are contributing to amounts used by the municipality to pay the debt obligations; or (iv) Reallocate available revenues to the detriment of the authority beyond those in existence as of the date of the filing of the petition with the county court; and (B) As permitted by the documents relating to the debt obligations, shall use or escrow all pledged taxes and revenues to pay off or prepay the debt obligations and shall not use the pledged taxes and revenues for any other purpose. (d) (1) An authority and a municipality shall enter into a payment in lieu of taxes agreement, interlocal cooperative agreement, or similar agreement documenting the agreement reached by the authority and the municipality with respect to any taxes collected or payments made by the authority while debt obligations are outstanding. (2) The agreement required under subdivision (d)(1) of this section shall contain terms and conditions permitting the renegotiation or revision of payments in the event of unforeseen force majeure events, including without limitation a global pandemic or population or retail growth, that significantly modify the facts known or assumptions made in calculating the payments agreed upon. (3) The municipality shall provide the certificates and directions to the Department of Finance and Administration that are necessary to effect the agreement between the authority and the municipality. (e) A municipality may refinance existing debt obligations after an authority has filed a petition for detachment to achieve debt service savings so long as the refinancing does not increase annual debt service payments, extend the maturity date, or increase the aggregate amount of principal due with respect to the debt obligation. (f) Upon the payment in full at maturity or optional redemption, other than in connection with a refunding permitted under subsection (e) of this section, the authority's property and operations shall be released and exempt from future tax collections or payments, as applicable. (g) A municipality shall not initiate litigation alleging impairment of contract if the authority and the municipality have entered into a written agreement under subsection (d) of this section or if the county court has entered an order for detachment under § 14-362-305(e) that is consistent with subsection (c) of this section.