The bill establishes a framework for the formation of isolated school districts in Arkansas, detailing the process for detaching an isolated school from a larger district and the requirements for creating a new district. It introduces a new subchapter in the Arkansas Code, specifically addressing the formation, governance, funding, and management of isolated school districts. Key provisions include the requirement for a petition signed by either 350 registered voters or 51% of voters within the isolated school's boundaries to initiate the detachment process. Additionally, the bill mandates that the resulting or receiving school district board of directors must verify the signatures and call for an election to determine the detachment.

The governance of the newly formed isolated school district will be overseen by a board of directors consisting of five members elected by the district's eligible voters. The bill also outlines funding mechanisms, including the establishment of a millage rate and eligibility for state funding based on prior-year average daily membership. Furthermore, it stipulates the transfer of ownership of facilities, property, and equipment from the local public school district to the newly formed isolated school district, ensuring that the isolated school has the necessary resources to operate independently.