Ad valorem tax; exempt portion of true value of certain land.

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To: Ways and Means
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representative Horan

HOUSE BILL NO. 4068

AN ACT TO PROVIDE THAT IF THE TRUE VALUE OF CERTAIN LAND IS 1
DETERMINED IN A MANNER OTHER THAN THAT FOR AGRICULTURAL LAND, THE 2
AMOUNT EQUAL TO THE DIFFERENCE BETWEEN THE TRUE VALUE DETERMINED 3
FOR THE LAND AND WHAT THE TRUE VALUE OF THE LAND WOULD HAVE BEEN 4
IF DETERMINED FOR AGRICULTURAL LAND, SHALL BE EXEMPT FROM AD 5
VALOREM TAXATION; TO BRING FORWARD SECTION 27-35-50, MISSISSIPPI 6
CODE OF 1972, WHICH PROVIDES FOR THE DETERMINATION OF TRUE VALUE 7
OF PROPERTY FOR PURPOSES OF AD VALOREM TAXATION; AND FOR RELATED 8
PURPOSES. 9
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 10
SECTION 1. From and after January 1, 2027, if the true value 11
of eligible land is determined in a manner other than under 12
Section 27-35-50(4)(b)(i), Mississippi Code of 1972, the amount 13
equal to the difference between the true value so determined for 14
the land and what the true value of the land would have been if 15
determined under Section 27-35-50(4)(b)(i), Mississippi Code of 16
1972, shall be exempt from ad valorem taxation. For the purposes 17
of this section, the term "eligible land" means a parcel of real 18
property, excluding commercial and/or residential structures 19
thereon, consisting of natural areas, waterways, creeks, ponds, 20
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ditches and trees, and areas where sod is capable of being 21
harvested and blended in with other various grasses. 22
SECTION 2. Section 27-35-50, Mississippi Code of 1972, is 23
brought forward as follows: 24
27-35-50. (1) True value shall mean and include, but shall 25
not be limited to, market value, cash value, actual cash value, 26
proper value and value for the purposes of appraisal for ad 27
valorem taxation. 28
(2) With respect to each and every parcel of property 29
subject to assessment, the tax assessor shall, in ascertaining 30
true value, consider whenever possible the income capitalization 31
approach to value, the cost approach to value and the market data 32
approach to value, as such approaches are determined by the 33
Department of Revenue. For differing types of categories of 34
property, differing approaches may be appropriate. The choice of 35
the particular valuation approach or approaches to be used should 36
be made by the assessor upon a consideration of the category or 37
nature of the property, the approaches to value for which the 38
highest quality data is available, and the current use of the 39
property. 40
(3) Except as otherwise provided in subsection (4) of this 41
section, in determining the true value of land and improvements 42
thereon, factors to be taken into consideration are the proximity 43
to navigation; to a highway; to a railroad; to a city, town, 44
village or road; and any other circumstances that tend to affect 45
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its value, and not what it might bring at a forced sale but what 46
the owner would be willing to accept and would expect to receive 47
for it if he were disposed to sell it to another able and willing 48
to buy. 49
(4) (a) In arriving at the true value of all Class I and 50
Class II property and improvements, the appraisal shall be made 51
according to current use, regardless of location. 52
(b) (i) In arriving at the true value of any land used 53
for agricultural purposes, the appraisal shall be made according 54
to its use on January 1 of each year, regardless of its location; 55
in making the appraisal, the assessor shall use soil types, 56
productivity and other criteria set forth in the land appraisal 57
manuals of the Department of Revenue, which criteria shall 58
include, but not be limited to, an income capitalization approach 59
with a capitalization rate of not less than ten percent (10%) and 60
a moving average of not more than ten (10) years; however, for the 61
year 2022 and thereafter, the moving average for such land, except 62
land devoted to the production of timber, shall be as follows: 63
for the year 2022, four (4) years; for the year 2023, five (5) 64
years; for the year 2024, six (6) years; for the year 2025, seven 65
(7) years; for the year 2026, eight (8) years; for the year 2027, 66
nine (9) years; and for the year 2028 and thereafter, ten (10) 67
years. However, for the year 1990, the moving average shall not 68
be more than five (5) years; for the year 1991, not more than six 69
(6) years; for the year 1992, not more than seven (7) years; for 70
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the year 1993, not more than eight (8) years; and for the year 71
1994, not more than nine (9) years; and for the year 1990, the 72
variation up or down from the previous year shall not exceed 73
twenty percent (20%) and thereafter, the variation, up or down, 74
from a previous year shall not exceed ten percent (10%) through 75
the year 2018; and for the year 2019 and thereafter, the 76
variation, up or down, from a previous year shall not exceed four 77
percent (4%). Government payments and crop insurance indemnities 78
shall not be included in determining the true value of such land, 79
and a charge for management of each crop equal to twenty-five 80
percent (25%) of the sum of a crop's estimated variable cost, 81
machinery ownership cost, and general farm overhead cost, shall be 82
deducted in determining the true value of such land. The land 83
shall be deemed to be used for agricultural purposes when it is 84
devoted to the commercial production of crops and other commercial 85
products of the soil, including, but not limited to, the 86
production of fruits and timber or the raising of livestock and 87
poultry; however, enrollment in the federal Conservation Reserve 88
Program or in any other United States Department of Agriculture 89
conservation program or the fact that the land is leased for 90
hunting or fishing purposes shall not preclude land being deemed 91
to be used for agricultural purposes solely on the ground that the 92
land is not being devoted to the production of commercial products 93
of the soil, and income derived from participation in the federal 94
program or income derived from a hunting or fishing lease may be 95
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used in combination with other relevant criteria to determine the 96
true value of such land. The true value of aquaculture shall be 97
determined in the same manner as that used to determine the true 98
value of row crops. 99
(ii) 1. From and after January 1, 2025, the 100
provisions of this subparagraph (ii) shall govern the valuation of 101
rural structures. The true value of any rural structure appraised 102
before January 1, 2025, shall be recalculated for 2025 and 103
subsequent tax years in accordance with this subparagraph (ii), 104
beginning with a reappraisal of the true value as of the year of 105
the initial appraisal. 106
2. For purposes of this subparagraph (ii), 107
"rural structure" means any rural secondary building covered in 108
Chapter V of the Department of Revenue appraisal manual, as 109
revised December 2020. The term "rural structure" includes, but 110
is not limited to, silos, grain storage bins, barns and poultry 111
houses, but does not include rural dwellings. 112
3. In arriving at the true value of a rural 113
structure in operation on or before January 1, 2025, the assessor 114
shall follow the guidelines in the Department of Revenue appraisal 115
manual in use immediately prior to the version revised December 116
2020. In arriving at the true value of a rural structure placed 117
in operation after January 1, 2025, the assessor shall follow the 118
guidelines in the most current version of the Department of 119
Revenue appraisal manual. 120
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4. After the initial appraisal, the true 121
value of a rural structure shall be based solely on depreciation 122
on a straight-line basis at a rate of seven percent (7%) per year. 123
For as long as the poultry house remains usable and in production, 124
net depreciation shall not fall below twenty percent (20%) of the 125
original true value. Once the twenty-percent threshold is 126
reached, no further depreciation shall be applied for the duration 127
of the operational life of the poultry house. 128
5. Starting with land roll 2009, an 129
adjustment of forty-five percent (45%) for economic obsolescence 130
shall be applied to all poultry houses used in commercial farming 131
operations. 132
6. If any provision in this subparagraph (ii) 133
is found to conflict with any other provision in this section, the 134
provision of this subparagraph (ii) shall control. 135
(c) In determining the true value based upon current 136
use, no consideration shall be taken of the prospective value such 137
property might have if it were put to some other possible use. 138
(d) In arriving at the true value of affordable rental 139
housing, the assessor shall use the appraisal procedure set forth 140
in land appraisal manuals of the Department of Revenue. Such 141
procedure shall prescribe that the appraisal shall be made 142
according to actual net operating income attributable to the 143
property, capitalized at a market value capitalization rate 144
prescribed by the Department of Revenue that reflects the 145
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prevailing cost of capital for commercial real estate in the 146
geographical market in which the affordable rental housing is 147
located adjusted for the enhanced risk that any recorded land use 148
regulation places on the net operating income from the property. 149
The owner of affordable rental housing shall provide to the county 150
tax assessor on or before April 1 of each year, an accurate 151
statement of the actual net operating income attributable to the 152
property for the immediately preceding year prepared in accordance 153
with generally acceptable accounting principles. As used in this 154
paragraph: 155
(i) "Affordable rental housing" means residential 156
housing consisting of one or more rental units, the construction 157
and/or rental of which is subject to Section 42 of the Internal 158
Revenue Code (26 USC 42), the Home Investment Partnership Program 159
under the Cranston-Gonzalez National Affordable Housing Act (42 160
USC 12741 et seq.), the Federal Home Loan Banks Affordable Housing 161
Program established pursuant to the Financial Institutions Reform, 162
Recovery and Enforcement Act (FIRREA) of 1989 (Public Law 101-73), 163
or any other federal, state or similar program intended to provide 164
affordable housing to persons of low or moderate income and the 165
occupancy and maximum rental rates of such housing are restricted 166
based on the income of the persons occupying such housing. 167
(ii) "Land use regulation" means a restriction 168
imposed by an extended low-income housing agreement or other 169
covenant recorded in the applicable land records or by applicable 170
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law or regulation restricting the maximum income of residents 171
and/or the maximum rental rate in the affordable rental housing. 172
(e) In arriving at the true value of ground leases on 173
real property leased by the Mississippi State Port at Gulfport, 174
the assessor shall use the appraisal procedure set forth in land 175
appraisal manuals of the Department of Revenue. Such procedure 176
shall prescribe that the appraisal shall be made according to 177
actual net ground rent attributable to the leased premises, 178
capitalized at a market value capitalization rate prescribed by 179
the Department of Revenue that reflects the prevailing cost of 180
capital of commercial real estate in the geographical market in 181
which the Mississippi State Port at Gulfport is located. As used 182
in this paragraph (e): 183
(i) "Ground leases" means those leases of land 184
where the Mississippi State Port at Gulfport is the landlord and a 185
person or business entity is the tenant. 186
(ii) "Ground rent" means the rent paid to the 187
Mississippi State Port at Gulfport in a set amount for a specific 188
length of tenancy where the amount of rent may be adjusted from 189
time to time based upon market indices, such as the consumer price 190
index. Ground rent does not include percentage rent and rent 191
based on improvements or any other type of rental payment. 192
(iii) "Percentage rent" means the rent paid to the 193
Mississippi State Port at Gulfport that is calculated based upon 194
revenue generated by the tenant by virtue of the ground lease. 195
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ST: Ad valorem tax; exempt portion of true
value of certain land.
(iv) "Rent based on improvements" means the rent 196
paid to the Mississippi State Port at Gulfport that is calculated 197
based upon investments in improvements to the leased premises made 198
by tenant. 199
(5) The true value of each class of property shall be 200
determined annually. 201
(6) The Department of Revenue shall have the power to adopt, 202
amend or repeal such rules or regulations in a manner consistent 203
with the Constitution of the State of Mississippi to implement the 204
duties assigned to the department in this section. 205
(7) When promulgating its annual table of inflation factors 206
for industrial property, the Department of Revenue shall include 207
commercial solar and wind facilities as a separate category of 208
industrial property. If Marshall Valuation Service has not 209
provided an inflation factor for commercial solar and wind 210
facilities for a particular year, the department shall set such 211
inflation factor at 1.000. 212
SECTION 3. This act shall take effect and be in force from 213
and after July 1, 2026. 214