This bill establishes a framework for the formation and governance of isolated school districts in Arkansas. It introduces a new subchapter to the Arkansas Code, specifically addressing the creation of isolated school districts, which can be formed from existing isolated schools that have been annexed or consolidated with other districts. The bill outlines the criteria for forming such districts, including the requirement that the isolated school must have been operational for K-12 education within two years prior to the application. Additionally, it specifies that the minimum enrollment requirement for establishing a new public school district does not apply in this context.

The governance of isolated school districts will be managed by a board of directors consisting of five members elected by eligible voters within the district. The bill also details the funding mechanisms for these districts, including the establishment of a millage rate and eligibility for state funding based on prior-year average daily membership. Furthermore, it mandates the transfer of ownership of facilities, property, and funds from the local public school district to the newly formed isolated school district. The management of these districts will be overseen by a director hired by the district or appointed by the Division of Elementary and Secondary Education.