MISSISSIPPI LEGISLATURE

1997 Regular Session

To: Education; Ways and Means

By: Representative Reeves

AN ACT TO CREATE A NEW CODE SECTION TO BE CODIFIED AS SECTION 37-57-106, MISSISSIPPI CODE OF 1972, TO REQUIRE ANY SCHOOL DISTRICT THAT REQUESTS AN INCREASE IN MILLAGE ABOVE THE AMOUNT LEVIED ON OCTOBER 1, 1996, TO HOLD A REFERENDUM ON THE PROPOSED INCREASE; TO PROVIDE THE MANNER OF SUCH REFERENDUM; TO REQUIRE A MAJORITY OF THE REGISTERED, QUALIFIED ELECTORS VOTING IN THE REFERENDUM TO APPROVE THE INCREASE BEFORE IT MAY BE IMPOSED; TO PROVIDE THAT NO SCHOOL DISTRICT SHALL BE REQUIRED TO REDUCE ITS MILLAGE; TO AMEND SECTIONS 37-57-105 AND 37-57-107, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; TO AMEND SECTION 37-57-1, MISSISSIPPI CODE OF 1972, TO LIMIT THE MINIMUM LOCAL AD VALOREM TAX EFFORT REQUIRED OF ANY SCHOOL DISTRICT TO THE MILLAGE RATE LEVIED IN THAT DISTRICT ON OCTOBER 1, 1996; TO AMEND SECTION 37-61-9, MISSISSIPPI CODE OF 1972, TO CLARIFY THE ADVERTISING AND PUBLIC HEARING REQUIREMENTS FOR EACH SCHOOL DISTRICT BUDGETING AN INCREASE IN ITS AD VALOREM TAX EFFORT; TO AMEND SECTION 27-39-207, MISSISSIPPI CODE OF 1972, IN CONFORMITY TO THE PROVISIONS OF THIS ACT AND TO REQUIRE THAT THE NOTICE OF TAX INCREASE BY A SCHOOL DISTRICT SHOW THE PART OF ITS TOTAL BUDGET INCREASE THAT IS ATTRIBUTABLE TO AN INCREASE IN AD VALOREM TAX; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. The following provision shall be codified as Section 37-57-106, Mississippi Code of 1972:

37-57-106. (1) Each school board shall submit to the levying authority for the school district a certified copy of an order adopted by the school board requesting an ad valorem tax effort in dollars for the support of the school district. The copy of the order shall be submitted by the school board when the copies of the school district's budget are filed with the levying authority pursuant to Section 37-61-9. Upon receipt of the school board's order requesting the ad valorem tax effort in dollars, the levying authority shall determine the millage rate necessary to generate funds equal to the dollar amount requested by the school board. For the purpose of calculating this millage rate, the levying authority shall not consider any additional amount that will be levied pursuant to Section 37-57-105(1) to cover anticipated delinquencies and costs of collection or any amount that may be levied for the payment of the principal and interest on school bonds or notes.

(2) If the millage rate necessary to generate funds equal to the dollar amount requested by the school board is greater than the millage rate that was levied to generate the dollar amount requested by the school board for the fiscal year beginning October 1, 1996, then the levying authority shall call a referendum on the question of exceeding the millage rate being levied for school district purposes; however, this subsection shall not apply to any school district required to increase its millage to generate funds equal to the district entitlement pursuant to Section 37-57-105(1).

When a referendum has been called, notice of the referendum shall be published at least five (5) days per week, unless the only newspaper published in the school district is published less than five (5) days per week, for at least three (3) consecutive weeks, in at least one (1) newspaper published in the school district. The notice shall be no less than one-fourth (1/4) page in size, and the type used shall be no smaller than eighteen (18) point and surrounded by a one-fourth-inch solid black border. The notice may not be placed in that portion of the newspaper where legal notices and classified advertisements appear. The first publication of the notice shall be made not less than twenty-one (21) days before the date fixed for the referendum, and the last publication shall be made not more than seven (7) days before that date. If no newspaper is published in the school district, then the notice shall be published in a newspaper having a general circulation in the school district. The referendum shall be held, as far as is practicable, in the same manner as other referendums are held in the county or municipality. At the referendum, all registered, qualified electors of the school district may vote. The ballots used at the referendum shall have printed thereon a brief statement of the amount and purpose of the increased tax levy and the words "FOR INCREASING THE MILLAGE LEVIED FOR SCHOOL DISTRICT PURPOSES FROM (MILLAGE RATE LEVIED ON OCTOBER 1, 1996) MILLS TO (MILLAGE RATE REQUIRED UNDER SCHOOL BOARD'S ORDER) MILLS," and "AGAINST INCREASING THE MILLAGE LEVIED FOR SCHOOL DISTRICT PURPOSES FROM (MILLAGE RATE LEVIED ON OCTOBER 1, 1996) MILLS TO (MILLAGE RATE REQUIRED UNDER SCHOOL BOARD'S ORDER) MILLS." The voter shall vote by placing a cross (X) or check mark (V) opposite his choice on the proposition.

If a majority of the registered, qualified electors of the school district who vote in the referendum vote in favor of the question, then the ad valorem tax effort in dollars requested by the school board shall be approved. However, if a majority of the registered, qualified electors who vote in the referendum vote against the question, the millage rate levied by the levying authority shall not exceed the millage being levied pursuant to the school board's order requesting the ad valorem tax effort for the fiscal year beginning October 1, 1996.

Nothing in this subsection shall be construed to require any school district to decrease its millage rate.

SECTION 2. Section 37-57-105, Mississippi Code of 1972, is amended as follows:

37-57-105. (1) In addition to the taxes levied under Section 37-57-1 and subject to the provisions of Sections 37-57-106 and 37-57-107, the levying authority for the school district * * * shall levy, at the same time and in the same manner as other ad valorem taxes are levied, * * * an annual ad valorem tax for the support of the school district in the amount fixed in the school board's order upon all of the taxable property of the school district. The ad valorem tax levy shall not be less than a millage rate necessary to generate funds equal to the "district entitlement" as defined in Section 37-22-1(2)(e) or the millage rate certified by the State Board of Education as the uniform minimum school district ad valorem tax levy, whichever is less, including the amount of millage levied for the support of the minimum education program in the school district under Section 37-57-1.  * * * However, * * * any school district levying less than the uniform minimum school district ad valorem tax levy on July 1, 1989, or a millage rate necessary to generate funds equal to the "district entitlement" shall * * * be required to increase its local district maintenance levy in four-mill annual increments in order to attain the millage requirements. In making the levy, the levying authority shall levy an additional amount sufficient to cover anticipated delinquencies and costs of collection so that the net amount of money to be produced by the levy shall be equal to the amount that is requested by the school board. The proceeds of the tax levy, excluding levies for the payment of the principal of and interest on school bonds or notes and excluding levies for costs of collection, shall be placed in the school depository to the credit of the school district and shall be expended in the manner provided by law for the purpose of supplementing teachers' salaries, extending school terms, purchasing furniture, supplies and materials, and for all other lawful operating and incidental expenses of the school district, funds for which are not provided by minimum program fund allotments.

The monies authorized to be received by school districts from the School Ad Valorem Tax Reduction Fund pursuant to Section 37-61-35 shall be included as ad valorem tax receipts. The levying authority * * * shall reduce the ad valorem tax levy for the school district in an amount equal to the amount distributed to the school district each calendar year from the School Ad Valorem Tax Reduction Fund pursuant to * * * Section 37-61-35. The reduction shall not be less than the millage rate necessary to generate a reduction in ad valorem tax receipts equal to the funds distributed to the school district from the School Ad Valorem Tax Reduction Fund.  * * * The reduction shall not be deemed to be a reduction in the aggregate amount of support from ad valorem taxation for purposes of Section 37-19-11. The millage levy certified by the State Board of Education as the uniform minimum ad valorem tax levy or the millage levy that would generate funds in an amount equal to a school district's district entitlement * * * shall be subject to the provisions of this paragraph.

In any county where there is located a nuclear generating power plant on which a tax is assessed under Section 27-35-309(3), the required levy and revenue produced thereby may be reduced by the levying authority in an amount in proportion to a reduction in the base revenue of any such county from the previous year. The reduction shall be allowed only if the reduction in base revenue equals or exceeds five percent (5%). "Base revenue" shall mean the revenue received by the county from the ad valorem tax levy plus the revenue received by the county from the tax assessed under Section 27-35-309(3) and authorized to be used for any purposes for which a county is authorized by law to levy an ad valorem tax. For purposes of determining if the reduction equals or exceeds five percent (5%), a levy of millage equal to the prior year's millage shall be hypothetically applied to the current year's ad valorem tax base to determine the amount of revenue to be generated from the ad valorem tax levy. For the purposes of this section and Section 37-57-107, the portion of the base revenue used for the support of any school district shall be deemed to be the aggregate receipts from ad valorem taxes for the support of any school district. This paragraph shall apply to taxes levied for the 1987 fiscal year and for each fiscal year thereafter. If the Mississippi Supreme Court or another court finally adjudicates that the tax levied under Section 27-35-309(3) is unconstitutional, then this paragraph shall stand repealed.

(2) When the tax is levied upon the territory of any school district located in two (2) or more counties, the order of the school board requesting the levying of the tax shall be certified to the levying authority of each of the counties involved, and each of the levying authorities shall levy the tax in the manner specified herein. The taxes so levied shall be collected by the tax collector of the levying authority involved and remitted by the tax collector to the school depository of the home county to the credit of the school district involved as provided above, except that taxes for collection fees may be retained by the levying authority for deposit into its general fund.

SECTION 3. Section 37-57-107, Mississippi Code of 1972, is amended as follows:

37-57-107. In addition to any limitations prescribed in Sections 37-57-105 and 37-57-106 concerning the ad valorem tax effort in dollars requested by the school board in its order submitted to the levying authority, beginning with the tax levy for the 1997 fiscal year and for each fiscal year thereafter, the aggregate receipts from taxes levied for school district purposes pursuant to Sections 37-57-105 and 37-57-1 shall not exceed the aggregate receipts from those sources during any one (1) of the immediately preceding three (3) fiscal years, as determined by the school board, plus an increase not to exceed seven percent (7%). For the purpose of this limitation, the term "aggregate receipts," when used in connection with the amount of funds generated in a preceding fiscal year, shall not include excess receipts required by law to be deposited into a special account, and shall not include amounts received by school districts from the School Ad Valorem Tax Reduction Fund pursuant to Section 37-61-35. The additional revenue from the ad valorem tax on any newly constructed properties or any existing properties added to the tax rolls or any properties previously exempt which were not assessed in the next preceding year may be excluded from the seven percent (7%) increase limitation set forth in this section. Taxes levied for payment of principal of and interest on general obligation school bonds issued heretofore or hereafter shall be excluded from the seven percent (7%) increase limitation set forth in this section. Any additional millage levied to fund any new program mandated by the Legislature shall be excluded from the limitation for the first year of the levy and included within the limitation in any year thereafter. For the purposes of this section, the term "new program" shall include, but shall not be limited to, the following: (a) the Early Childhood Education Program required to commence with the 1986-1987 school year as provided by Section 37-21-7; * * * any additional millage levied and the revenue generated therefrom, which is excluded from the limitation for the first year of the levy, to support the mandated Early Childhood Education Program shall be specified on the minutes of the school board and of the governing body making the tax levy; (b) any additional millage levied and the revenue generated therefrom, which shall be excluded from the limitation for the first year of the levy, for the purpose of generating additional local contribution funds required for the minimum education program for the 1987 fiscal year and for each fiscal year thereafter through the 1996 fiscal year under Section 37-19-35; (c) any additional millage levied and the revenue generated therefrom, which shall be excluded from the limitation for the first and each subsequent year of the levy, for the purpose of generating additional local contributions mandated under Section 37-57-105 requiring the board of trustees of a school district to reach the millage levy certified by the State Board of Education as the uniform minimum school district ad valorem tax levy or the millage levy which would generate funds in an amount equal to a school district's "district entitlement," as defined in Section 37-22-1(2)(e); and (d) any additional millage levied and the revenue generated therefrom, which shall be excluded from the limitation for the first year of the levy, for the purpose of support and maintenance of any agricultural high school which has been transferred to the control, operation and maintenance of the school board by the board of trustees of the community college district under provisions of Section 37-29-272.

The seven percent (7%) increase limitation prescribed in this section may be increased an additional amount only when the school board has determined the need for additional revenues and has held a referendum on the question of raising the limitation prescribed in this section. However, before the referendum, the school board shall advertise its intention to increase the limitation and shall hold a public hearing in accordance with Section 27-39-207. The limitation may be increased only if three-fifths (3/5) of those voting in the referendum shall vote for the proposed increase. The resolution, notice and manner of holding the referendum shall be as prescribed by law for the holding of referendums for the issuance of bonds by the respective school boards. Revenues collected for the fiscal year in excess of the seven percent (7%) increase limitation pursuant to a referendum shall be included in the tax base for the purpose of determining aggregate receipts for which the seven percent (7%) increase limitation applies for subsequent fiscal years.

Except as otherwise provided for excess revenues generated pursuant to a referendum, if revenues collected as the result of the taxes levied for the fiscal year pursuant to this section and Sections 37-57-1 and 37-57-105 exceed the increase limitation, then it shall be the mandatory duty of the school board of the school district to deposit such excess receipts over and above the increase limitation into a special account and credit it to the fund for which the levy was made. It will be the further duty of the board to hold the funds and invest the same as authorized by law. The excess funds shall be calculated in the budgets for the school districts for the purpose for which the levies were made, for the succeeding fiscal year. Taxes imposed for the succeeding year shall be reduced by the amount of excess funds available. Under no circumstances shall the excess funds be expended during the fiscal year in which the excess funds are collected.

For the purposes of determining ad valorem tax receipts for a preceding fiscal year under this section, the term "fiscal year" means the fiscal year beginning October 1 and ending September 30.

SECTION 4. Section 37-57-1, Mississippi Code of 1972, is amended as follows:

37-57-1. (1) (a) The boards of supervisors of the counties shall levy and collect all taxes for and on behalf of all school districts which were within the county school system or designated as special municipal separate school districts before July 1, 1986. Such taxes shall be collected by the county tax collector at the same time and in the same manner as county taxes are collected by him, and the same penalties for delinquency shall be applicable.

The governing authorities of the municipalities shall levy and collect all taxes for and on behalf of all school districts which were designated as municipal separate school districts before July 1, 1986. Such taxes shall be collected by the municipal tax collector at the same time and in the same manner as municipal taxes are collected by him, and the same penalties for delinquency shall be applicable.

The county or municipal tax collector, as the case may be, shall pay such tax collections, except for taxes collected for the payment of the principal of and interest on school bonds or notes and except for taxes collected to defray collection costs, into the school depository and report to the school board of the appropriate school district at the same time and in the same manner as the tax collector makes his payments and reports of other taxes collected by him.

 * * * The State Board of Education shall determine the appropriate levying authority for any school district created or reorganized after July 1, 1987.

(b) For the purposes of this chapter and any other laws pertaining to taxes levied or bonds or notes issued for and on behalf of school districts, the term "levying authority" means the board of supervisors of the county or the governing authorities of the municipality, whichever levies taxes for and on behalf of the particular school district as provided in paragraphs (a) and (b) of this subsection.

(2) On or before September 1 of each year, the State Board of Education shall certify to the levying authority for each school district the amount of the minimum local ad valorem tax effort in dollars required of such school district for the current fiscal year under the provisions of Chapter 19 of this title. The levying authority for the school district shall levy, at the same time and in the same manner as other taxes are levied by the levying authority, * * * a tax for the then current fiscal year for the support of the minimum education program upon all of the taxable property of the school district. Such tax shall be expressed in mills or a decimal fraction of a mill, and shall be at such a rate as will, when applied to the assessed valuation of the school district according to the assessment rolls of the county or municipality, as the case may be, produce a sum of money which is equal to the amount which the school district is required to contribute as its minimum local ad valorem tax effort under the provisions of Chapter 19 of this title. However, in no case shall the minimum local ad valorem tax effort for any school district be equal to an amount that would require a millage rate exceeding the millage that was levied on October 1, 1996, in that school district. In making the levy, the levying authority shall levy an additional amount sufficient to cover anticipated delinquencies and costs of collection so that the net amount of money to be produced by the levy shall be equal to the amount that the school district is required to contribute as its * * * minimum local ad valorem tax effort. The tax * * * levied shall be collected by the tax collector at the same time and in the same manner as other ad valorem taxes are collected by him. The amount of taxes * * * collected as a result of the levy shall be paid into the minimum education program fund of the school district by the tax collector at the same time and in the same manner as reports and payments of other ad valorem taxes are made by the tax collector, except that the amount collected to defray costs of collection may be paid into the county general fund. The levying authority shall have the power and authority to direct and cause warrants to be issued against the fund for the purpose of refunding any amount of taxes erroneously or illegally paid into the fund where the refund has been approved in the manner provided by law.

(3) Any taxes * * * collected before July 1, 1990, to defray the costs of collecting taxes levied under this section and in the hands of the school district on July 1, 1990, may be paid to the levying authority for deposit into its general fund.

SECTION 5. Section 37-61-9, Mississippi Code of 1972, is amended as follows:

37-61-9. (1) On or before the fifteenth day of July of each year, the local school board of each school district, with the assistance of the superintendent of schools or administrative superintendent, shall prepare and file with the levying authority for the school district, as defined in Section 37-57-1, at least two (2) copies of a budget of estimated expenditures for the support, maintenance and operation of the public schools of the school district for the fiscal year commencing on July 1 of that year. The budget shall be prepared on forms prescribed and provided by the State Auditor and shall contain such information as the State Auditor may require.

(2) In addition, on or before the fifteenth day of July of each year, the local school board of each school district, with the assistance of the superintendent of schools or administrative superintendent, shall prepare and file with the State Department of Education such budgetary information as the State Board of Education may require. The State Board of Education shall prescribe and provide forms to each school district for this purpose.

(3) Before the adoption of a budget pursuant to this section, the school board of each school district shall hold at least one (1) public hearing to provide the general public with an opportunity to comment on the taxing and spending plan incorporated in the proposed budget. The public hearing shall be held at least one (1) week before the adoption of the budget with advance notice. If the budget proposes an increase in the ad valorem tax effort in dollars, the school board shall advertise its intent and hold a public meeting for the purpose of hearing comments in the manner required under Section 27-39-207. After final adoption of the budget, a synopsis of such budget in a form prescribed by the State Department of Audit shall be published in a newspaper having general circulation in the school district on a date different from the date on which the county or any municipality therein may publish its budget.

(4) Beginning with the fiscal year 1995-1996, there shall be imposed limitations on budgeted expenditures for certain administration costs, as defined hereinafter, in an amount not greater than One Hundred Fifty Thousand Dollars ($150,000.00) plus four percent (4%) of the expenditures of all school districts each year. For purposes of this subsection, "administration costs" shall be defined as expenditures for salaries and fringe benefits paid for central administration costs from all sources of revenue in the following expenditure functions as defined in the MISSISSIPPI PUBLIC SCHOOL DISTRICT FINANCIAL ACCOUNTING MANUAL:

2300 = Support Services - General Administration

2310 = Board of Education Services

2320 = Executive Administration Services

2330 = Special Area Administration Services

2500 = Business Services

2510 = Fiscal Services

2520 = Purchasing Services

2530 = Warehousing and Distributing Services

2540 = Printing, Publishing and Duplicating Services

2590 = Other Support Services - Business

2800 = Support Services - Central

2810 = Planning, Research, Development and Evaluation

2820 = Information Services

2830 = Staff Services

2840 = Data Processing Services

Any costs classified as "administration costs" for purposes of this subsection which can be demonstrated by the local school district to be an expenditure that results in a net cost savings to the district that may otherwise require budget expenditures for functions not covered under the definition of administration costs herein may be excluded from the limitations imposed herein. The local school board shall make a specific finding of the costs and spread the finding upon its minutes, which shall be subject to the approval of the Office of Educational Accountability of the State Department of Education. Any school district required to make expenditure cuts, as a result of application of this subsection, shall not be required to reduce the expenditures more than twenty-five percent (25%) in any year in order to comply with this mandate.

The State Auditor shall ensure that functions in all expenditure categories to which this administrative limitation applies shall be properly classified.

This section shall not apply to central administration with five (5) or less full-time employees, or to those school districts which can substantiate that comparable reductions have occurred in administrative costs for the five-year period immediately preceding school year 1993-1994. In the event the application of this section may jeopardize the fiscal integrity or operations of the school district, have an adverse impact on the ability of the district to deliver educational services, or otherwise restrict the district from achieving or maintaining a quality education program, the State Board of Education shall be authorized to exempt the application of this section to that school district pursuant to rules and regulations of the State Board of Education consistent with the intent of this section.

Before June 30, 1997, the State Board of Education shall review the definition of "administrative costs" and the results of the limitation prescribed in this subsection. Based upon these results, the State Board of Education shall recommend to the Legislature that this subsection be continued, amended as necessary or repealed.

SECTION 6. Section 27-39-207, Mississippi Code of 1972, is amended as follows:

27-39-207. (1) No school district may budget an increase in an ad valorem tax effort in dollars for support of the school district unless it advertises its intention to do so at the same time that it advertises its intention to fix its budget for the forthcoming fiscal year.

(2) No request for an ad valorem tax effort in dollars for the support of the school district in excess of the certified tax rate pursuant to Sections 37-57-105 through 37-57-107 may be made until an order has been approved by the school board of the school district in accordance with the following procedure:

(a) The school board of the school district shall advertise its intent to exceed the certified tax rate in a newspaper of general circulation in the county. The advertisement shall be no less than one-fourth (1/4) page in size and the type used shall be no smaller than eighteen (18) point and surrounded by a one-fourth-inch solid black border. The advertisement may not be placed in that portion of the newspaper where legal notices and classified advertisements appear. It is the intent of the Legislature that the advertisement appear in a newspaper that is published at least five (5) days a week, unless the only newspaper in the county is published less than five (5) days a week. It is further the intent of the Legislature that the newspaper selected be one of general interest and readership in the community, and not one of limited subject matter. The advertisement shall be run once each week for the two (2) weeks preceding the adoption of the final budget. The advertisement shall state that the school board of the school district will meet on a certain day, time and place fixed in the advertisement, which shall be not less than seven (7) days after the day the first advertisement is published, for the purpose of hearing comments regarding any proposed increase and to explain the reasons for the proposed increase. The meeting on the proposed increase may coincide with the hearing on the proposed budget of the school board of the school district.

(b) The form and content of the notice shall be as follows:

"NOTICE OF TAX INCREASE

The Board of Education of the (name of the school district) has proposed to increase local ad valorem taxes for the current operation of the schools by (estimate of dollars). This amount represents an increase of (percentage of increase) percent over the previous year's budget for ad valorem taxes for current operations.

All concerned citizens are invited to attend a public hearing on the tax increase to be held on (date and time) at (meeting place).

A final decision on the proposed tax increase will be made by the Board of Education at a board meeting to be held on (date and time) * * * at (meeting place), or if the tax increase is required by state law to be approved in a referendum, the decision will be made by a referendum to be held on (date)."

(3) The school board of the school district, after the hearing has been held in accordance with the above procedures and subject to the results of any referendum required under Section 37-57-106, or 37-57-107, may adopt an order requesting the levying of an ad valorem tax effort in dollars in excess of the certified tax rate.

(4) All hearings shall be open to the public. The school board of the school district shall permit all interested parties desiring to be heard an opportunity to present oral testimony within reasonable time limits.

(5) Each school board of a school district shall notify the taxing entity of the date, time and place of its public hearing. No school board of a school district may schedule its hearing at the same time as another overlapping school district in the same county.

SECTION 7. Nothing in this act shall affect or defeat any claim, assessment, appeal, suit, right or cause of action for taxes due or accrued under the school ad valorem tax laws before the date on which this act becomes effective, whether such claims, assessments, appeals, suits or actions have been begun before the date on which this act becomes effective or are begun thereafter; and the provisions of the school ad valorem tax laws are expressly continued in full force, effect and operation for the purpose of the assessment, collection and enrollment of liens for any taxes due or accrued and the execution of any warrant under such laws before the date on which this act becomes effective, and for the imposition of any penalties, forfeitures or claims for failure to comply with such laws.

SECTION 8. This act shall take effect and be in force from and after July 1, 1997.