Utility districts; authorize to dissolve by chancery court order of dissolution.

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To: Judiciary A
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representative Wallace

HOUSE BILL NO. 1452

AN ACT TO AMEND SECTION 19-5-151, MISSISSIPPI CODE OF 1972, 1
TO AUTHORIZE CERTAIN UTILITY DISTRICTS TO DISSOLVE WHENEVER A 2
MAJORITY OF THE LANDOWNERS OF ANY SUCH DISTRICT SIGN AND FILE WITH 3
THE CLERK OF THE CHANCERY COURT BY WHICH SUCH DISTRICT WAS 4
ORGANIZED, OR IN THE COUNTY IN WHICH SUCH DISTRICT WAS ORGANIZED, 5
A PETITION FOR THE DISSOLUTION OF SUCH DISTRICT; TO PROVIDE THAT 6
IF THE COMMISSIONERS OF A WATER DISTRICT WISH TO ESTABLISH A WATER 7
ASSOCIATION, THE COURT ORDER OF DISSOLUTION SHALL ALSO DECREE THAT 8
COMMISSIONERS INCORPORATE AS A WATER ASSOCIATION UNDER THE 9
MISSISSIPPI NONPROFIT CORPORATION ACT; TO BRING FORWARD SECTION 10
19-5-165, MISSISSIPPI CODE OF 1972, WHICH RELATES TO NEWLY FORMED 11
WATER DISTRICT ASSETS AND LIABILITIES, FOR PURPOSES OF POSSIBLE 12
AMENDMENT; AND FOR RELATED PURPOSES. 13
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 14
SECTION 1. Section 19-5-151, Mississippi Code of 1972, is 15
amended as follows: 16
19-5-151. (1) Any contiguous area situated within any 17
county of the state, and not being situated within the corporate 18
boundaries of any existing municipality, and having no adequate 19
water system, sewer system, garbage and waste collection and 20
disposal system, or fire protection facilities serving such area, 21
may become incorporated as a water district, as a sewer district, 22
as a garbage and waste collection and disposal district, as a fire 23
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protection district, as a combined water and sewer district, as a 24
combined water and garbage and waste collection and disposal 25
district, as a combined water and fire protection district, or as 26
a combined water, sewer, garbage and waste collection and disposal 27
and fire protection district, in the manner set forth in the 28
following sections. 29
(2) If the certificated area of a nonprofit, nonshare 30
corporation chartered under the Mississippi Nonprofit Corporation 31
Act for the purpose of owning and operating rural waterworks lies 32
in one (1) county, the corporation may become incorporated as a 33
water district in the manner set forth in Section 19-5-153(3). If 34
the nonprofit, nonshare corporation's certificated area lies in 35
more than one (1) county, the procedure in Section 19-5-164 shall 36
be used. 37
(3) (a) Whenever a majority of the landowners of any such 38
district, excluding lands owned by the state, shall sign and file 39
with the clerk of the chancery court by which such district was 40
organized, or in the county in which such district was organized, 41
a petition for the dissolution of such district, it shall be the 42
duty of the clerk to give notice thereof by publishing the notice 43
for three (3) consecutive weeks in a newspaper published in the 44
county, or in each of the counties in which lands of the district 45
lie. 46
Such notice shall be addressed to all persons interested in 47
the district and shall command them to appear before the chancery 48
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court at a place named within the chancery court district on a day 49
certain in term time, or before the chancellor in vacation, not 50
earlier than twenty (20) days nor more than sixty (60) days after 51
the date of the first publication of the notice, and show cause, 52
if any they can, why the district should not be dissolved. Upon 53
the first publication of such notice, all proceedings of every 54
kind of the district and of the commissioners of the district 55
shall be discontinued until the hearing of such cause as herein 56
provided. 57
Such chancery court, or the chancellor thereof in vacation, 58
shall take jurisdiction of such cause and shall hear the same on 59
the return day thereof in the same manner as other causes in 60
chancery. 61
If upon the hearing of such cause it appears that it is to 62
the best interests of the landowners of the district that such 63
district be dissolved, such court or chancellor shall enter an 64
order dissolving the district, decreeing that no further expenses 65
or indebtedness be incurred or contracted by the commissioners of 66
such district. 67
The commissioners of such district shall immediately and 68
within ten (10) days thereafter deposit with the clerk of the 69
court in which the proceedings are pending all papers, records, 70
and documents of the district. 71
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If it appears that it is not to the best interests of the 72
landowners of the such district that it be dissolved, the 73
chancellor or chancery court shall so decree. 74
If it appears to the chancery court or chancellor that it is 75
to the best interests of the district that it be dissolved and the 76
decree is entered accordingly, the costs of the proceeding, 77
including solicitors fees as might be allowed by the court, shall 78
be assessed and taxed by the court to be collected on an acreage 79
basis on the lands within the district; and thereafter the 80
district shall be dissolved and shall have no further powers or 81
authorities under the law whatsoever. 82
If such district is not dissolved, such costs, attorneys 83
fees, and expenses as may be involved shall be assessed against 84
the petitioners; and the district shall be absolved from any 85
liability on account thereof. 86
Nothing contained in this act shall be construed to impair or 87
affect any contract or other obligation of any such district, but 88
persons holding claims against such district shall, on notice of 89
the dissolution thereof as provided herein, file any such claims 90
as they may have against such district. If the court should decree 91
that such district should be liquidated, all of the claims shall 92
be passed upon by the chancery court or chancellor, as the case 93
may be, and if found just, a levy shall be made upon the lands 94
upon an acreage basis as hereinabove provided, in order to 95
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ST: Utility districts; authorize to dissolve by
chancery court order of dissolution.
liquidate and pay such indebtedness as may be found due and owing 96
by the district. 97
(b) If the commissioners of the water district wish to 98
establish a water association, the court order of dissolution 99
shall also decree that commissioners incorporate as a water 100
association under Sections 79-11-101 through 79-11-407 of the 101
Mississippi Nonprofit Corporation Act. 102
SECTION 2. Section 19-5-165, Mississippi Code of 1972, is 103
brought forward as follows: 104
19-5-165. (1) Beginning on the date of the adoption of the 105
resolution creating any district, the district shall be a public 106
corporation in perpetuity under its corporate name and shall, in 107
that name, be a body politic and corporate with power of perpetual 108
succession. 109
(2) If the creation of the district is initiated in 110
accordance with Section 19-5-153(3), all assets and liabilities of 111
the nonprofit, nonshare corporation shall become the assets and 112
liabilities of the newly organized district without any further 113
meetings, voting, notice to creditors or actions by members of the 114
board beginning on the date of adoption of the resolution of the 115
board of supervisors creating the district. 116
SECTION 3. This act shall take effect and be in force from 117
and after its passage. 118