Senate Bill 2787

AN ACT TO AMEND SECTION 29-3-37, MISSISSIPPI CODE OF 1972, TO REQUIRE AN APPRAISAL OF SIXTEENTH SECTION LANDS EVERY FIVE YEARS, TO ESTABLISH A SIXTEENTH SECTION LAND COMPLAINT TRIBUNAL TO HEAR OBJECTIONS TO THE CLASSIFICATION OF SIXTEENTH SECTION LANDS AND TO AUTHORIZE THE LOCAL SCHOOL BOARD TO CHARGE THE LEASEHOLDER FOR THE COST OF THE FIRST APPRAISAL ONLY; TO AMEND SECTION 29-3-69, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE ANNUAL RENTAL FOR SIXTEENTH SECTION SCHOOL LAND CLASSIFIED AS RESIDENTIAL OR FARM-RESIDENTIAL SHALL NOT BE INCREASED TO AN AMOUNT EXCEEDING THE INCREASE IN THE CONSUMER PRICE INDEX (CPI) COMPOUNDED EACH YEAR FOR A FIVE-YEAR TERM; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 29-3-37, Mississippi Code of 1972, is amended as follows:

29-3-37. An appraisal is required to determine the fair market rental value every five (5) years for lands classified as residential, farm-residential, recreational, catfish farming and other. At any time when any or all portions of such land lying in a county shall have been classified as hereinabove required, a classification report shall be compiled by the board of education and filed with the Public Lands Division of the Secretary of State who shall provide forms for such purpose. The board of education shall immediately cause notice to be given of the completion of such classification, such notice to be published in a newspaper in said county once each week for three (3) consecutive weeks, or if no newspaper is published in said county then in a newspaper having a general circulation therein, listing all lands so classified and notifying all parties in interest that they will have a right to appeal and object to the classification as made. If no objections are made as to the classification of any particular parcel of said land by the Public Lands Division of the Secretary of State or any other party in interest, which objection must be reduced to writing and filed with the chancery clerk within thirty (30) days from the date of the final publication, the classification as to such parcel or parcels of land shall be final. A copy of such notice shall be mailed by the Superintendent of Education to each lessee of any part of such lands, such notice to be so mailed not later than the date of the first publication of the notice of the classification of such land, which notice shall also set forth the classification which has been established for all lands under lease by such lessee. If objections are filed, then the matter shall be heard by * * * a tribunal consisting of the Attorney General, or his representative, and the State Auditor, or his representative, within ninety (90) days of the filing of a complaint, and the * * * ~~court~~ tribunal shall either confirm or modify the classification as the circumstances shall demand. * * * The Public Lands Division of the Secretary of State and any other person aggrieved by the order of the * * * ~~chancery court~~ tribunal shall have the * * * ~~same rights~~ right of appeal * * * de novo to the chancery court in the proper jurisdiction, and such appeal shall be perfected as other appeals are now required to be so perfected.

The cost of any such classification or reclassification under Section 29-3-39 shall be paid from any available sixteenth section school funds or other school funds of the district; however, the board of education, in its discretion, may charge the leaseholder for the cost of the first appraisal of the land. The leaseholder may not be charged for any subsequent appraisal.

SECTION 2. 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. 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 (a) the fair market rental value of the lands, exclusive of improvements thereon, as of the rental adjustment dates, and (b) in no event shall the rent increase for any five-year term exceed an amount equal to the national Consumer Price Index (CPI) compounded annually and multiplied by the amount of the rent for the applicable five-year term, as verified by the Secretary of State. 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, 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, provided that prior to 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 be made, it shall be entered on the minutes of the board and the option granted; provided that 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 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; provided that permission to sublease or assign shall not be arbitrarily withheld.

SECTION 3. This act shall take effect and be in force from and after July 1, 2019.