MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Ways and Means

By: Representatives Wells-Smith, Endt

AN ACT TO AMEND SECTION 27-31-34, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE AD VALOREM TAX EXEMPTION FOR POSSESSORY AND LEASEHOLD INTERESTS OF LESSEES UNDER CERTAIN LEASE CONTRACTS, LEASES OR LEASEHOLDS SHALL NOT APPLY TO ANY AD VALOREM TAX LEVIED UNDER CHAPTER 614, LOCAL AND PRIVATE LAWS OF 1960; TO AMEND SECTIONS 27-31-101 AND 27-31-105, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT FROM AND AFTER JANUARY 1, 2000, A COUNTY MAY NOT EXEMPT NEW ENTERPRISES OR ADDITIONS TO OR EXPANSIONS OF SUCH ENTERPRISES FROM ANY AD VALOREM TAX LEVIED UNDER CHAPTER 614, LOCAL AND PRIVATE LAWS OF 1960; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 27-31-34, Mississippi Code of 1972, is amended as follows:

27-31-34. (1) For purposes of this section, "state" means the State of Mississippi or any county, district, municipality or other political subdivision thereof.

All lease contracts, leases or leaseholds in existence on or before the effective date of this act (a) to which the state is a party, (b) which provide that the leased premises and all facilities and replacements thereof are and shall be the property of the state, and (c) which provide a term or period of time for exemption from ad valorem taxation, shall, along with the possessory and leasehold interests as described under and originally created by such lease contract, lease or leasehold, be exempt from all ad valorem taxation for the term or period of time as stated in such lease contracts, leases or leaseholds and any extension or renewal thereof. Lease contracts, leases, or leaseholds meeting the requirements of subparts (a) and (b) above, which were entered into prior to July 1, 1984, and which do not contain an express term or period for exemption from ad valorem taxation, shall be exempt from all ad valorem taxation for the term of such lease contracts, leases, or leaseholds, including any option periods which may be exercised by the lessee. Any newly created lease contracts, leases or leaseholds created on or after January 18, 1984, shall not be exempt under this section from ad valorem taxes for school district purposes. From and after January 1, 2000, no exemption authorized under this section shall apply to any ad valorem tax levied under Chapter 614, Local and Private Laws of 1960.

(2) It is the sense of the Legislature that the provisions of Section 112, Mississippi Constitution of 1890, allowing the Legislature to exempt, by general laws, particular species of property from taxation, in whole or in part, authorize the enactment of this section. Further, the provisions of this section shall not be construed as the surrender or abridgement by the state of the power to tax the property which is the subject of the contracts, leases or leaseholds referred to in subsection (1) of this section. This section affirms the power of the state to grant such an exemption when it is in the best interests of the state to do so.

(3) The provisions of this section shall not apply to:

(a) A leasehold interest in property belonging to the Pearl River Water Supply District; or

(b) Any civil action filed before April 16, 1993.

SECTION 2. Section 27-31-101, Mississippi Code of 1972, is amended as follows:

27-31-101. County boards of supervisors and municipal authorities are hereby authorized and empowered, in their discretion, to grant exemptions from ad valorem taxation, except state ad valorem taxation. Provided, however, said governing authorities shall not exempt ad valorem taxes for school district purposes on tangible property used in, or necessary to, the operation of the manufacturers and other new enterprises hereinafter enumerated by classes, except to the extent authorized in Sections 27-31-104 and 27-31-105(2), nor shall they exempt from ad valorem taxes the products thereof or automobiles and trucks belonging to the said manufacturers or other new enterprises operating on and over the highways of the State of Mississippi. From and after January 1, 2000, a county board of supervisors may not grant an exemption from any ad valorem tax levied under Chapter 614, Local and Private Laws of 1960, except to the extent authorized in Section 27-31-104. The time of such exemption shall be for a period not to exceed a total of ten (10) years which shall begin on the date of completion of the new enterprise for which the exemption is granted; however, boards of supervisors and municipal authorities, in lieu of granting the exemption for one (1) period of ten (10) years, may grant the exemption in a period of less than ten (10) years. When the initial exemption period granted is less than ten (10) years, the boards of supervisors and municipal authorities may grant a subsequent consecutive period or periods to follow the initial period of exemption, provided that the total of all periods of exemption shall not exceed ten (10) years. The date of completion of the new enterprise, from which the initial period of exemption shall begin, shall be the date on which operations of the new enterprise begin. Any request for an exemption must be made in writing within two hundred seventy (270) days from the date of completion of a new enterprise.

Any board of supervisors and/or municipal governing authorities which has entered into an agreement with an enterprise to grant an exemption for a period of not more than ten (10) years, as this section authorized prior to amendment by Chapter 524, Laws of 1989 (Senate Bill 2925, 1989 Regular Session), may grant the exemption agreed upon provided that proof is presented to the State Tax Commission that the agreement was negotiated and, with respect to which, official action has been taken by the board of supervisors and/or municipal governing authorities, prior to July 1, 1989.

Any exemption from ad valorem taxes heretofore granted to existing enterprises shall continue in full force and effect but only as to tangible property heretofore included in the exemption but not as to tangible property that may be later added as an addition or improvement to the exempt tangible property.

Any board of supervisors or municipal authority which has entered into an agreement prior to July 1, 1989, with a specific and new enterprise authorized to be exempt under the provisions of Section 27-31-101, may grant an exemption under this section provided said agreement is in writing and the date of the agreement is certified by the chancery clerk or municipal clerk of the granting authority. It is the intent of the Legislature to permit an exemption allowed under this section in those instances where the granting authority has in good faith negotiated with the new enterprise as to said exemption, and the agreement is reduced to writing and the date certified as provided in this paragraph, but to prohibit the granting of an exemption after June 30, 1989, under Section 27-31-101 as to ad valorem taxes for school district purposes, except to the extent authorized in Sections 27-31-104 and 27-31-105(2).

Any board of supervisors or municipal authority which has granted an exemption for a period of less than ten (10) years may grant subsequent periods of exemption to run consecutively with the initial exemption period, or a subsequently granted exemption period, but in no case shall the total of the exemption periods granted for a new enterprise exceed ten (10) years. Any consecutive period of exemption shall be granted by entry of an order by the board or the authority granting the consecutive exemption on its minutes, reflecting the granting of the consecutive exemption period and the dates upon which such consecutive exemption period begins and expires. The entry of this order granting the consecutive period of exemption shall be made before the expiration of the exemption period immediately preceding the consecutive exemption period being granted.

The new enterprises which may be exempt are enumerated as and limited to the following, as determined by the State Tax Commission:

Warehouse and/or distribution centers;

Manufacturing, processors and refineries;

Research facilities;

Corporate regional and national headquarters meeting minimum criteria established by the Department of Economic and Community Development;

Movie industry studios meeting minimum criteria established by the Department of Economic and Community Development;

Air transportation and maintenance facilities meeting minimum criteria established by the Department of Economic and Community Development;

Recreational facilities that impact tourism meeting minimum criteria established by the Department of Economic and Community Development; and

Telecommunications enterprises meeting minimum criteria established by the Department of Economic and Community Development. The term "telecommunications enterprises" means entities engaged in the creation, display, management, storage, processing, transmission or distribution for compensation of images, text, voice, video or data by wire or by wireless means, or entities engaged in the construction, design, development, manufacture, maintenance or distribution for compensation of devices, products, software or structures used in the above activities. Companies organized to do business as commercial broadcast radio stations, television stations or news organizations primarily serving in-state markets shall not be included within the definition of the term "telecommunications enterprises."

SECTION 3. Section 27-31-105, Mississippi Code of 1972, is amended as follows:

27-31-105. (1) Any person, firm or corporation who owns or operates a manufacturing or other enterprise of public utility as enumerated in Section 27-31-101 and who makes additions to or expansions of the facilities or properties or replaces equipment used in connection with or necessary to the operation of such enterprise may be granted an exemption from ad valorem taxation, except state ad valorem taxation, upon each such addition to or expansion of the facility or property or replacement of equipment, within the discretion of the county board of supervisors and municipal authorities. Provided, however, said governing authorities shall not exempt ad valorem taxes for school district purposes on such additions or expansions of the facility or property, or replacement of equipment, except that this provision shall not apply to or affect any exemptions from ad valorem taxes for school district purposes which were granted under this section prior to the effective date of this chapter and such exemptions heretofore granted shall continue in force for the period of time for which they were granted, unless the grantor and grantee of the exemption agree otherwise. From and after January 1, 2000, a county board of supervisors may not grant an exemption from any ad valorem tax levied under Chapter 614, Local and Private Laws of 1960, except to the extent authorized in subsection (2) of this section. In order to obtain such exemptions upon additions to or expansions of the facilities or properties, or replacement of equipment, such person, firm or corporation shall follow the same procedure prescribed for obtaining an exemption on a new enterprise, except as otherwise provided herein. For any additions, expansions or replacements with reference to any particular new enterprise, which additions, expansions or replacements have been completed during any calendar year, only one (1) request must be made for the exemptions sought for such additions, expansions or replacements. The request must be made in writing before February 1 of the year immediately following the year for which such exemptions are requested. The time of each such exemption on each addition to or expansion of the facilities or properties or replacement of equipment shall commence from the thirty-first day of December of the year within which the additions, expansions or replacements were completed, and shall extend for a period not to exceed ten (10) years thereafter; however, boards of supervisors and municipal authorities, in lieu of granting the exemption for one (1) period of ten (10) years, may grant the exemption in consecutive periods of five (5) years each, but the total of such consecutive periods shall not exceed ten (10) years.

(2) For expansions of facilities or properties or replacement of equipment, county boards of supervisors and municipal authorities may grant a fee in lieu of taxes in the same manner, to the same extent, and with the same qualifying threshold as provided for projects under Section 27-31-104, Mississippi Code of 1972.

SECTION 4. This act shall take effect and be in force from and after its passage.