MISSISSIPPI LEGISLATURE

1997 Regular Session

To: Education

By: Representative Robinson (84th)

AN ACT TO AMEND SECTIONS 29-3-29, 29-3-41, 29-3-53, 29-3-63, 29-3-69, 29-3-81, 29-3-82 AND 29-3-99, MISSISSIPPI CODE OF 1972, TO PROHIBIT THE LEASING OF SIXTEENTH SECTION LANDS TO PERSONS DOMICILED OUTSIDE THE STATE OF MISSISSIPPI; AND FOR RELATED PURPOSES. 

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

SECTION 1. Section 29-3-29, Mississippi Code of 1972, is amended as follows:

29-3-29. Before any sixteenth section school land or land granted in lieu thereof may be sold or leased for industrial development thereon, therein or thereunder under the provisions of this chapter, the board of education controlling such land shall first determine that such sale or lease will be fair market value. In the determination of the fair market value of the land, the comparative sales method shall be used, and the highest and best use of the sixteenth section lands shall be determined on the basis of finding that the land shall be susceptible to any use that comparative land in private ownership may be used, that there will be prompt and substantial industrial development on, in, or under the land after the sale or lease, that the acreage to be sold or leased is not in excess of the amount of land reasonably required for immediate use and for such future expansion as may be reasonably anticipated, and that such sale or lease will be beneficial to and in the best interest of the schools of the district for which the land is held. All of these findings, including the amount of the sale price or gross rental for the land, shall be spread on the minutes of the board of education. Also, if the board of education proposes to sell the land, the board shall first enter into a contract or obtain a legal option to purchase, for a specified price not in excess of fair market value, other land in the county of acreage of equivalent fair market value, and such contract or option shall be spread on the minutes of the board. However, not more than one hundred (100) acres in any one (1) sixteenth section school lands in any county may be sold under this chapter for the purpose of being made an industrial park or a part of such industrial park, provided the provisions of this section and Sections 57-5-1 and 57-5-23 are fully complied with. If the board of education proposes to lease the land, a finding that the intended lessee is domiciled in the State of Mississippi must be made and spread on the minutes of the board before the land may be leased.

A certified copy of the resolution or order of the board of education, setting out the foregoing findings, together with a certified copy of the order approving and setting out the terms of the contract or option to purchase other lands where a sale of land is proposed and an application to the Mississippi Department of Economic and Community Development for the certificate authorizing the sale or lease, shall be forwarded to the county board of supervisors, which board shall make an independent investigation of the proposed sale or lease and of the proposed purchase of other land.

If the county board of supervisors shall concur in the findings of fact of the board of education, and shall find that it is in the best interest of the schools of the district to enter into such sale or lease, it may enter on its minutes a resolution or order approving the action of the board of education.

If the * * * county board of supervisors shall not concur in the findings of the board of education, or shall find that the proposed sale or lease will not be in the best interest of the schools of the district, then it may, by resolution or order, disapprove the proposed sale or lease, and such action shall be final.

There shall be reserved all minerals in, on, and under any lands conveyed under the provisions hereof.  * * * However, * * * in any county bordering on the State of Alabama, traversed by the Tombigbee River, in which U.S. Highway 82 intersects U.S. Highway 45 and in which is situated a state supported institution of higher learning, upon the sale of any sixteenth section lands for industrial purposes as provided by law, the board of education, the superintendent of education and the Mississippi Department of Economic and Community Development, may sell and convey all minerals except oil, gas, sulphur and casinghead gas on, in and under the * * * sixteenth section lands so sold for industrial purposes. The oil, gas, sulphur and casinghead gas shall be reserved together with such rights of use, ingress and egress as shall not unreasonably interfere with the use of the lands by the purchaser. Prior written approval for such use, ingress and egress, shall be obtained from the surface owner or, if such approval is unreasonably withheld, may be obtained from the chancery court of the county in which the land is located.

Certified copies of the resolutions or orders of the board of supervisors and of the board of education and of the application to the Mississippi Department of Economic and Community Development shall be transmitted to the county superintendent of education, if there be one in the county, who, if he approves the proposed sale or lease, shall so certify and forward same to the Mississippi Department of Economic and Community Development. If there is no county superintendent of education in the county, then the board of education whose district embraces the entire county shall so certify and transmit the copies to the Mississippi Department of Economic and Community Development for further action.

Upon receipt of the aforesaid application and certified copies of the * * * resolution and orders, the Mississippi Department of Economic and Community Development shall make investigation to determine whether or not the proposed sale or lease of the land will promote prompt and substantial industrial development thereon, therein, or thereunder. If the department finds that such sale or lease will promote prompt and substantial industrial development thereon, therein or thereunder, and further finds that the person, firm or corporation who proposes to establish the industry is financially responsible, and that the acreage to be sold or leased is not in excess of the amount of land reasonably required for immediate use and for such future expansion as may be reasonably anticipated, then the department, in its discretion, may issue a certificate to the board of education of the district so certifying, and the certificate shall be the authority for the board of education to enter into the proposed sale or lease. If the Mississippi Department of Economic and Community Development does not so find, then it shall decline to issue the certificate which action shall be final.

The Mississippi Department of Economic and Community Development, when issuing a certificate to the county board of education certifying its findings and authorizing the sale or lease, may, nevertheless, in its discretion, make such sale or lease conditioned on and subject to the vote of the qualified electors of the district. Upon receipt of a certificate so conditioned upon an election, or upon a petition as hereinafter provided for, the board of education, by resolution spread upon its minutes, shall forward a copy of the certificate to the board of supervisors who by resolution upon its minutes, shall call an election to be held in the manner now provided by law for holding county elections, and shall fix in such resolution a date upon which such an election shall be held, of which not less than three (3) weeks notice shall be given by the clerk of the board of supervisors by publishing a notice in a newspaper published in the county once each week for three (3) consecutive weeks preceding the same, or if no newspaper is published in the county, then in a newspaper having a general circulation therein, and by posting a notice for three (3) weeks preceding the election at three (3) public places in the county. At such election, all qualified voters of the county may vote, and the ballots used shall have printed thereon a brief statement of the proposed sale or lease of the land, including the description and price, together with the words "For the proposed sale or lease" and the words "Against the proposed sale or lease," and the voter shall vote by placing a cross (x) or check (v) opposite his choice of the proposition. Should the election provided for herein result in favor of the proposed sale or lease by at least two-thirds (2/3) of the votes cast being in favor of the * * * proposition, the board of supervisors shall notify the board of education who may proceed forthwith to sell or lease the land in accordance with the proposition so submitted to the electors. If less than two-thirds (2/3) of those voting in such special election vote in favor of the * * * sale or lease, then the land shall not be sold or leased.

The board of education shall further be required, prior to passing of a resolution expressing its intent to sell the land, to publish a notice of intent to sell the land for three (3) consecutive weeks in a newspaper published in the county or, if there is none, in a newspaper having a general circulation in the county, and to post three (3) notices thereof in three (3) public places in the county, one (1) of which shall be at the courthouse, for the stated time. If within the period of three (3) weeks following the first publication of the intent, a petition signed by twenty percent (20%) of the qualified electors of the county shall be filed with the board of supervisors requesting an election concerning the sale, then an election shall be called as hereinabove provided.

SECTION 2. Section 29-3-41, Mississippi Code of 1972, is amended as follows:

29-3-41. After any parcels of sixteenth section lands have been classified, * * * all land which has been classified as forest land and which is not now under lease shall hereafter not be leased. The lands classified as forest lands which may be under a lease that has a fixed date of expiration shall not be re-leased when the lease expires; nor shall the lessee be permitted to cut or remove any timber therefrom except according to the terms of his lease. Such lands shall be reserved and kept as forest lands.  * * * The mineral rights in all such lands may be leased to persons domiciled in the State of Mississippi for oil, gas, or mineral purposes, and the board of education may grant leases to the surface of the lands classified as forest, which are limited to hunting and fishing rights and activities in relation thereto, and which shall not extend for a period longer than fifteen (15) years. It shall be the duty of the board of education to lease the hunting and fishing rights at public contract after having advertised same for rent in a newspaper published in the county or, if no newspaper is published in the county, then in a newspaper having a general circulation therein, for two (2) successive weeks, the first being at least ten (10) days before the public contract. The hunting and fishing rights shall be leased to the person offering the highest annual rental; however, the hunting and fishing rights may be leased only to persons domiciled in the State of Mississippi.

 * * * If the board of education receives an acceptable bid, the most recent holder of the hunting and fishing rights, if it shall have made an offer, shall have the final right to extend its lease for the term advertised at the annual rental equal to the highest offer received by the board of education.

If no bid acceptable to the board of education is received after the advertisement, the board of education may, within ninety (90) days, lease same by private contract for an amount greater than the highest bid previously rejected.

If the board of education determines to lease the land by private contract, the most recent holder of the hunting and fishing rights, if it shall have made an offer, shall have the final right to extend its lease on the same terms and conditions as those contained in the private contract proposed to be accepted by the board of education.

SECTION 3. Section 29-3-53, Mississippi Code of 1972, is amended as follows:

29-3-53. Any lease executed pursuant to this chapter shall inure to the benefit of the lessee therein named, his heirs and assigns, and in case the lessee be a corporation, to such lessee and its assigns, if such heirs and assigns are domiciled in the State of Mississippi.

SECTION 4. Section 29-3-63, Mississippi Code of 1972, is amended as follows:

29-3-63. (1) The holder of a lease of sixteenth section or lieu land, at the expiration thereof, shall have a prior right, exclusive of all other persons, to re-lease or to extend an existing lease as may be agreed upon between the holder of the lease and board of education subject to the classification of the land. However, after July 1, 1997, only lessees domiciled in the State of Mississippi shall be eligible to re-lease or to extend an existing lease of sixteenth section or lieu lands.  * * * No holder of a lease of sixteenth section land classified as agricultural land shall have any priority rights in extending his lease contract, except as otherwise provided in Section 29-3-81.  * * * The compensation on an annual basis shall be the fair market rental of the land excluding buildings and improvements made on such land by the lessee, the title to which is not held in trust for the public schools, but in no event shall the compensation be less than the minimum amounts prescribed in subsection (2) of this section.

(2) The board of education shall not lease or extend a lease on land classified as industrial or commercial at an annual rental less than five percent (5%) of the current market value, exclusive of buildings or improvements not owned by the school district. Such minimum acceptable percentage shall not apply to land classified as farm-residential, residential, recreational and other land; however, fair market rental will apply to those lands as determined by appraisal, comparative analysis or comparison with the private sector.

(3) The prior right to re-lease or extend an existing oil, gas and mineral lease, or any part thereof, granted under this section shall be conditioned upon the existence of production of oil, gas or other minerals thereunder in paying quantities, or the existence of a well capable of such production, or the existence of drilling or reworking operations at the time of lease expiration.  * * * However, the lease may, in the discretion of the board of education, be extended only as to the lands included in a unit or units as defined by the appropriate agency having jurisdiction over that unit or units. The replacement lease shall be upon such terms and conditions as may be agreed upon between the holder of the lease and the board of education; however, the rental and royalty provisions shall not be less than the rental and royalty provisions as set out in the expired lease and the primary term shall not exceed the limitations in Section 29-3-99. Bonus payment for the replacement lease shall be consistent with the requirements set out in Sections 29-3-65 with respect to oil, gas and mineral leases.

(4) Where used in this section and Section 29-3-65, the term "oil and gas lease" or "oil, gas and mineral lease" shall include all leases originally executed pursuant to Section 29-3-99.

(5) The right to re-lease an oil, gas and mineral lease provided in subsection (3) above extends to oil, gas and mineral leases which have already expired as of the effective date of this section, subject to an accounting for production from the date of lease expiration to the date of the replacement lease authorized herein.

SECTION 5. Section 29-3-69, Mississippi Code of 1972, is amended as follows:

29-3-69. The board of education may lease school trust lands classified as industrial, commercial, farm-residential, residential, recreational, catfish farming or other for a term not exceeding forty (40) years for a ground rental, payable annually, to persons domiciled in the State of Mississippi. All leases, except leases of residential or farm-residential lands, made for a ground rental shall contain rent adjustment clauses or other such provisions requiring that the consideration for every lease of such lands shall be adjusted not less than once every ten (10) years from the date of the lease to reflect the current fair market rental value of the lands, exclusive of any improvements thereon. In leases of lands which are or which are to become residential or farm-residential land, the board of education may require a rent adjustment clause in which rents are to be adjusted, provided that such adjustments will not exceed the fair market rental value of the lands, exclusive of improvements thereon, as of the rental adjustment dates. If a rent adjustment clause is not contained in a lease of lands which are or which are to become residential or farm-residential land, the reasons for not including such clause in the lease shall be stated in the lease and entered on the minutes of the board. In the case of uncleared lands, the board of education may lease them for such short terms as may be deemed proper in consideration of the improvement thereof, with the right thereafter to lease or to hold on payment of a ground rental. The board of education may lease not more than three (3) acres of any such lands for a term not exceeding ninety-nine (99) years for a ground rental, payable annually, to any church having its principal place of worship situated on such lands, which has been in continuous operation at that location for not less than twenty-five (25) years at the time of the lease. The consideration for every lease of such lands to a church shall be renegotiated not less than once every twenty-five (25) years from the date of the lease to reflect the current fair market rental value of the lands, exclusive of any improvements thereon.

The board of education may, at any time, by agreement with any lessee of lands domiciled in the State of Mississippi, except for lands classified as forest or agricultural, cancel an existing lease and execute a new lease contract on such land where major capital improvements have been made or for the purpose of facilitating the addition of major capital improvements, provided that the rental amount of such new lease shall not be less than the rental amount in the prior lease. The term of such new lease shall not exceed forty (40) years for a ground rental, payable annually, if before the execution of such new lease contract, the provisions of all applicable statutes setting forth the procedure and requirements for the execution of a lease for sixteenth section lands or lieu lands have been satisfied.

The board of education may find that in the interest of good trust management it may be necessary to grant in the original lease contract an option to renew any lease not subject to competitive bid procedures, for a term not to exceed twenty-five (25) years. If such a finding is made, it shall be entered on the minutes of the board and the option granted; however, the execution of a new lease shall be required to effectuate the additional lease period, and the provisions of all applicable statutes setting forth the procedure and requirements for the execution of a lease for sixteenth section lands or lieu lands must have been satisfied.

Subleasing or assignment of any lease of school trust lands executed after July 1, 1978, shall only be allowed when provided in the lease contract or at the discretion of the board of education; however, permission to sublease or assign shall not be arbitrarily withheld. A lease of sixteenth section or lieu lands may not be sublet to any person not domiciled in the State of Mississippi.

SECTION 6. Section 29-3-81, Mississippi Code of 1972, is amended as follows:

29-3-81. Sixteenth section lands, or any lands granted in lieu of sixteenth section lands, classified as agricultural may be leased to persons domiciled in the State of Mississippi. Sixteenth section or lieu lands shall not be leased for a longer term than five (5) years; * * * however, such lands may be leased for the cultivation of rice, or pasturage, for a term not to exceed ten (10) years, and the lessee of same shall be granted no preference. In such event it shall be the duty of the board of education to lease the sixteenth section or lieu lands at public contract after having advertised same for rent in a newspaper published in the county or, if no newspaper is published in the county, then in a newspaper having a general circulation therein, for two (2) successive weeks, the first being at least ten (10) days before the public contract. If no bid acceptable to the board of education is received after the advertisement, the board of education may, within ninety (90) days, lease same by private contract for an amount greater than the highest bid previously rejected in order to acquire a fair rental value for the lands, and shall take the notes for the rent and attend to their collection. The board shall have the right and remedies for the security and collection of such rents given by law to the agricultural landlords.

 * * * Owners of leaseholds of any lands in any county not lying wholly within a levee district leased for pasturage purposes prior to July 1, 1978, who are domiciled in the State of Mississippi and who have improvements constructed thereon by the owner, shall have a final right, exclusive of all other persons, to renew or extend an existing lease for one (1) term only, not to exceed ten (10) years, for an annual rental equal to the highest offer.

SECTION 7. Section 29-3-82, Mississippi Code of 1972, is amended as follows:

29-3-82. The following procedure shall be followed for the leasing of sixteenth section school lands or lands granted in lieu thereof which are not classified as agricultural land:

(a) Any person domiciled in the State of Mississippi who is a present leaseholder * * * desiring to renew his lease or a person * * * desiring to lease sixteenth section or lieu lands shall make application to the superintendent of education.

(b) Upon receipt of an application for the lease of such lands, the superintendent of education shall promptly give consideration to the application and he shall record his recommendation in writing and present it to the board of education at the next regular meeting of the board.

(c) The board of education, at its meeting, shall consider the application and recommendation of the superintendent of education and may receive any other information which it considers bearing upon the approval of the application and lease of such land. Within thirty (30) days of the receipt of an application, the board shall act on the application and if such action is favorable, the board of education shall submit to the superintendent of education a suggested lease agreement.

(d) The superintendent of education shall then present the lease to the board of supervisors of the county where such land is located. Within thirty (30) days of the receipt of the lease, the board of supervisors shall accept or reject the proposed rental amount.

(e) If the board of supervisors accepts the lease as proposed by the board of education, the superintendent of education shall execute the lease to the applicant under the terms and conditions set forth in the lease.

(f) If the board of supervisors refuses to accept the rental value set by the board of education in the proposed lease, the rental value of the lease shall be determined under the provisions set forth in Section 29-3-1(2).

(g) All sixteenth section or lieu land leases shall be reduced to writing and signed in triplicate by the president of the board of supervisors, the president of the board of education and the superintendent of education. The chancery clerk shall certify one (1) copy of the lease to the superintendent of education and one (1) copy to the Secretary of State, and shall record the original on the deed records of the county, abstract the lease as a mesne conveyance, and record it on the minutes of the board of supervisors. The chancery clerk shall charge and collect from the lessee the full recording fees.

SECTION 8. Section 29-3-99, Mississippi Code of 1972, is reenacted as follows:

29-3-99. The board of education is hereby authorized and empowered, in its discretion, to let, demise and lease sixteenth section lands, included in the Choctaw Purchase, or the lands held in lieu of same whether located therein or elsewhere, reserved for the support of township schools, to persons domiciled in the State of Mississippi for exploration, mining, production and development by any method of oil, gas, and minerals, including: (a) oil, gas, carbon dioxide and other gaseous substances; (b) metals, compounds of metals, or metal-bearing ores; (c) coal, including anthracite, bituminous, subbituminous, lignite and their constituent components and products and minerals intermingled or associated therewith; and (d) sulphur, salt, sand, gravel, fill dirt and clay, upon such terms and conditions and for such consideration as the board of education, in its discretion, shall deem proper and advisable. Such leasing shall, except as hereinafter provided, be done by competitive bids only, made upon at least three (3) weeks public notice given by advertisement in a newspaper published in the county wherein such lands are situated, or if no newspaper is published in the county, then in a newspaper having general circulation therein. Such advertisement shall give an accurate legal description of the lands to be leased, inviting sealed proposals thereon to be filed with the superintendent of education. Before bids are requested, the board shall prescribe the form of the lease and shall prescribe the royalty to be retained by the lessor, the annual rental to be paid by the lessee during the primary term of the lease, and shall have as subject to bid only the bonus to be paid by lessee, and, for leases of coal, the bonus to be paid by lessee for any renewal term as hereinafter provided. The lease form and the terms so prescribed shall be on file and available for inspection in the office of the superintendent from and after the public notice by advertisement and until finally accepted by the board. The board of education shall award the lease to the highest bidder in the manner provided by law. The school lands shall not be leased for oil, gas, and minerals, including metals, compounds of metals, or metal-bearing ores, coal and clay, exploration, mining, production, and development for a bonus of less than One Dollar ($1.00) per acre and a renewal rental or renewal bonus of less than One Dollar ($1.00) per acre per annum during the primary term. Such lands shall not be leased for oil, gas, and other minerals for a primary term of more than five (5) years and so long thereafter as oil, gas or other minerals are being produced and mined from the lands, or so long as the lease is being maintained by other lease provisions, except that a lease shall in no event extend longer than permitted by Section 211 of the Mississippi Constitution. Such lands shall not be leased for coal for a primary term of more than twenty (20) years and so long thereafter as coal is being mined and sold or utilized by lessee from such lands or from adjoining lands within a mine plan which includes such lands or so long as mining operations are being prosecuted on such lands on a continuous basis; * * * however, * * * any lease of coal may provide for one (1) renewal term of not more than twenty (20) years from and after expiration of the initial term upon payment by lessee of a renewal bonus of not less than One Dollar ($1.00) per acre. Any mine plan referred to in this paragraph shall not contain more than five thousand (5,000) acres. The royalties to be paid shall not be less than: (a) on oil, one-eighth (1/8) of that produced and saved from said lands; (b) on gas, including casinghead gas or other gaseous substances produced from the land and sold or used off the premises or in the manufacture of gasoline or other products therefrom, the market value at the well of one-eighth (1/8) of the amount realized from such sale; (c) on coal mined on such land and sold or utilized by lessee, one-twentieth (1/20) of the market value at the mine of each ton of two thousand (2,000) pounds; and (d) on all other minerals produced, mined and marketed, one-sixteenth (1/16) either in kind or value at the well or mine at lessor's election, except that on sulphur mined and marketed, the royalty shall be not less than Fifty Cents (504) per long ton, except, further, that on salt the royalty shall be not less than Five Cents (54) per ton mined. Lessee shall have free use of oil, gas, coal, and water from the land, except water from lessor's wells, unless lessor shall agree in writing to the use of water from lessor's wells, for all operations hereunder, and the royalty on oil, gas, and coal shall be computed after deducting any so used. In leasing the lands for the mining and removal of clay, sand, gravel and fill dirt, the bid shall be by the cubic yard truck measure and to the highest and best bidder, provided that these materials shall not be sold therefrom for less than the regular market price thereof, such price to include the value of the royalty provided for herein. The board of education shall not lease any sixteenth section land that was sold and conveyed in fee simple forever by a board of supervisors prior to 1890.

It is further specifically provided that such leases shall not be let at a special meeting of the board of education.

Leases for metals, coals, sand, gravel, fill dirt or clay may be executed covering land upon which leases are outstanding for the exploration, mining, and development of oil, gas, and other minerals, provided proper safeguards are incorporated in the lease for the protection of the other leaseholders. All such leases shall contain suitable provisions for adequate compensation to the surface lessee, if any, for any damage done to the leasehold estate in such lands and for the use of a substantial portion of the surface thereof for such mining and/or developing or processing purposes, and for rights of ingress and egress, and all such leases shall further contain suitable provisions for adequate compensation to the board of education for any permanent damage done to the surface of the land or any timber thereon. Any future lease of the land after expiration of the present lease thereon will be subject to the rights of any lessee under provisions hereof.

If the lessor commits any error in the leasing procedure which renders the lease void or voidable, the lessee shall be entitled to recover the consideration paid to secure the lease.

No clay shall be leased nor removed within the boundary of any incorporated municipality as such boundary existed on January 1, 1964, nor within one hundred fifty (150) feet of any dwelling house which is either occupied or has been vacant less than ninety (90) days, without the written consent of the leaseholder of the surface from which such clay is to be leased or removed, regardless of classification of such lands.

SECTION 9. This act shall take effect and be in force from and after July 1, 1997.