Ad valorem tax; extend time for partial exemption and fee-in-lieu of ad valorem tax agreement for certain renewable energy projects.

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To: Ways and Means
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representative Shanks

HOUSE BILL NO. 749

AN ACT TO AMEND SECTION 27-31-46.1, MISSISSIPPI CODE OF 1972, 1
TO EXTEND THE PERIOD IN WHICH CERTAIN RENEWABLE ENERGY PROJECTS 2
MAY BEGIN CONSTRUCTION IN ORDER TO BE ELIGIBLE FOR A PARTIAL AD 3
VALOREM TAX EXEMPTION; TO EXTEND THE TIME PERIOD WITHIN WHICH 4
COUNTY BOARDS OF SUPERVISORS AND MUNICIPAL GOVERNING AUTHORITIES 5
MAY AUTHORIZE A PARTIAL AD VALOREM TAX EXEMPTION FOR CERTAIN 6
RENEWABLE ENERGY PROJECTS; TO AMEND SECTION 27-31-104, MISSISSIPPI 7
CODE OF 1972, WHICH AUTHORIZES COUNTY BOARDS OF SUPERVISORS AND 8
MUNICIPAL GOVERNING AUTHORITIES TO ENTER INTO AGREEMENTS WITH 9
CERTAIN ENTERPRISES GRANTING A FEE-IN-LIEU OF AD VALOREM TAXES, TO 10
EXTEND THE TIME PERIOD WITHIN WHICH COUNTY BOARDS OF SUPERVISORS 11
AND MUNICIPAL GOVERNING AUTHORITIES MAY ENTER INTO SUCH AGREEMENTS 12
WITH CERTAIN RENEWABLE ENERGY PROJECTS; AND FOR RELATED PURPOSES. 13
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 14
SECTION 1. Section 27-31-46.1, Mississippi Code of 1972, is 15
amended as follows: 16
27-31-46.1. A project that is eligible for an ad valorem tax 17
exemption under Section 27-31-46, and for which initial 18
construction begins on or after July 1, 2022, but not later than 19
December 31, * * * 2030, may be allowed an exemption from ad 20
valorem taxation as provided in this section. For such a project, 21
one-half (1/2) of the true value of property of the project that 22
is subject to a fee-in-lieu of ad valorem taxes pursuant to an 23
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agreement under Section 27-31-104 may be exempted by a county 24
board of supervisors and/or municipal governing authorities from 25
ad valorem taxation for a period of ten (10) years from and after 26
the date of the expiration of such fee-in-lieu of ad valorem 27
taxes. Any exemption from ad valorem taxation allowed under this 28
section must be authorized by a county board of supervisors and/or 29
municipal governing authorities before July 1, * * * 2029. 30
SECTION 2. Section 27-31-104, Mississippi Code of 1972, is 31
amended as follows: 32
[Through June 30, 2026, this section shall read as follows:] 33
27-31-104. (1) (a) County boards of supervisors and 34
municipal authorities are each hereby authorized and empowered to 35
enter into an agreement with an enterprise granting, and pursuant 36
to such agreement grant a fee-in-lieu of ad valorem taxes, 37
including ad valorem taxes levied for school purposes, for the 38
following: 39
(i) Projects totaling over Sixty Million Dollars 40
($60,000,000.00) by any new enterprises enumerated in Section 41
27-31-101; 42
(ii) Projects by a private company (as such term 43
is defined in Section 57-61-5) having a minimum capital investment 44
of Sixty Million Dollars ($60,000,000.00); 45
(iii) Projects by a qualified business (as such 46
term is defined in Section 57-117-3) meeting minimum criteria 47
established by the Mississippi Development Authority; 48
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(iv) Projects, in addition to those projects 49
referenced in Section 27-31-105, totaling over Sixty Million 50
Dollars ($60,000,000.00) by an existing enterprise that has been 51
doing business in the county or municipality for twenty-four (24) 52
months. For purposes of this subparagraph (iv), the term 53
"existing enterprise" includes those enterprises enumerated in 54
Section 27-31-101; or 55
(v) A private company (as such term is defined in 56
Section 57-61-5) or entity defined in Section 77-3-3(d)(i) having 57
a minimum capital investment of One Hundred Million Dollars 58
($100,000,000.00) from any source or combination of sources, 59
provided that a majority of the capital investment is from private 60
sources, when such project is located within a geographic area for 61
which a Presidential Disaster Declaration was issued on or after 62
January 1, 2014. 63
County boards of supervisors and municipal authorities may 64
not enter into an agreement with an enterprise that is a medical 65
cannabis establishment, as defined in Section 41-137-3 of the 66
Mississippi Medical Cannabis Act, granting, and pursuant to such 67
agreement grant a fee-in-lieu of ad valorem taxes. 68
(b) A fee-in-lieu of ad valorem taxes granted in 69
accordance with this section may include any or all tangible 70
property, real or personal, including any leasehold interests 71
therein but excluding automobiles and trucks operating on and over 72
the highways of the State of Mississippi, used in connection with, 73
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or necessary to, the operation of any enterprise, private company 74
or business described in paragraph (a) of this subsection (1), as 75
applicable, whether or not such property is owned, leased, 76
subleased, licensed or otherwise obtained by such enterprise, 77
private company or business, as applicable, irrespective of the 78
taxpayer to which any such leased property is assessed for ad 79
valorem tax purposes. If a fee-in-lieu of ad valorem taxes is 80
granted pursuant to this section with respect to any leasehold 81
interest under a lease, sublease or license of tangible property 82
used in connection with, or necessary to, the operation of an 83
enterprise, private company or business described in paragraph (a) 84
of this subsection (1), as applicable, the corresponding ownership 85
interest of the owner, lessor and sublessor of such tangible 86
property shall similarly and automatically be exempt and subject 87
to the fee-in-lieu granted in accordance herewith without any 88
action being required to be taken by such owner, lessor or 89
sublessor. 90
(2) A county board of supervisors may enter into a 91
fee-in-lieu agreement on behalf of the county and any county 92
school district, and a municipality may enter into such a 93
fee-in-lieu agreement on behalf of the municipality and any 94
municipal school district located in the municipality; however, if 95
the project is located outside the limits of a municipality but 96
within the boundaries of the municipal school district, then the 97
county board of supervisors may enter into such a fee-in-lieu 98
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agreement on behalf of the school district granting a fee-in-lieu 99
of ad valorem taxes for school district purposes. 100
(3) Any grant of a fee-in-lieu of ad valorem taxes shall be 101
evidenced by a written agreement negotiated by the enterprise and 102
the county board of supervisors and/or municipal authority, as the 103
case may be, and given final approval by the Mississippi 104
Development Authority as satisfying the requirements of this 105
section. 106
(4) The minimum sum allowable as a fee-in-lieu shall not be 107
less than one-third (1/3), or one-tenth (1/10) if the project is 108
also a project eligible for an ad valorem tax exemption under 109
Section 27-31-46 and a fee-in-lieu agreement is entered into 110
before July 1, * * * 2029, of the ad valorem levy, including ad 111
valorem taxes for school district purposes, and except as 112
otherwise provided, the sum allowed shall be apportioned between 113
the county or municipality, as appropriate, and the school 114
districts in such amounts as may be determined by the county board 115
of supervisors or municipal governing authority, as the case may 116
be, however, except as otherwise provided in this section, from 117
the sum allowed the apportionment to school districts shall not be 118
less than the school districts' pro rata share based upon the 119
proportion that the millage imposed for the school districts by 120
the appropriate levying authority bears to the millage imposed by 121
such levying authority for all other county or municipal purposes. 122
Any fee-in-lieu agreement entered into under this section shall 123
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become a binding obligation of the parties to the agreement, be 124
effective upon its execution by the parties and approval by the 125
Mississippi Development Authority and, except as otherwise 126
provided in Section 17-25-23 or Section 57-75-33, or any other 127
provision of law, continue in effect for a period not to exceed 128
thirty (30) years commencing on the date that the fee-in-lieu 129
granted thereunder begins in accordance with the agreement; 130
however, no particular parcel of land, real property improvement 131
or item of personal property shall be subject to a fee-in-lieu for 132
a duration of more than ten (10) years. Any such agreement shall 133
be binding, according to its terms, on future boards of 134
supervisors of the county and/or governing authorities of a 135
municipality, as the case may be, for the duration of the 136
agreement. 137
(5) The fee-in-lieu may be a stated fraction or percentage 138
of the ad valorem taxes otherwise payable or a stated dollar 139
amount. If the fee is a fraction or percentage of the ad valorem 140
tax levy, it shall be annually computed on all ad valorem taxes 141
otherwise payable, including school taxes, as the same may vary 142
from year to year based upon changes in the millage rate or 143
assessed value and shall not be less than one-third (1/3) of that 144
amount or one-tenth (1/10) of that amount if the project is also a 145
project eligible for an ad valorem tax exemption under Section 146
27-31-46 and a fee-in-lieu agreement is entered into before July 147
1, * * * 2029. If the fee is a stated dollar amount, said amount 148
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shall be the higher of the sum provided for fixed payment or (a) 149
one-third (1/3) of the total of all ad valorem taxes otherwise 150
payable as annually determined during each year of the fee-in-lieu 151
or (b) if the project is also a project eligible for an ad valorem 152
tax exemption under Section 27-31-46 and a fee-in-lieu agreement 153
is entered into before July 1, * * * 2029, one-tenth (1/10) of the 154
total of all ad valorem taxes otherwise payable as annually 155
determined during each year of the fee-in-lieu. 156
(6) Notwithstanding Section 27-31-111, the parties to a 157
fee-in-lieu may agree on terms and conditions providing for the 158
reduction, suspension, termination or reinstatement of a 159
fee-in-lieu agreement or any fee-in-lieu period granted thereunder 160
upon the cessation of operations by project for twelve (12) or 161
more consecutive months or due to other conditions set forth in 162
the agreement. 163
(7) For a project as defined in Section 57-75-5(f)(xxi) and 164
located in a county that is a member of a regional economic 165
development alliance created under Section 57-64-1 et seq., the 166
members of the regional economic development alliance may divide 167
the sum allowed as a fee-in-lieu in a manner as determined by the 168
alliance agreement, and the boards of supervisors of the member 169
counties may then apportion the sum allowed between school 170
district purposes and all other county purposes. 171
(8) For a project as defined in Section 57-75-5(f)(xxvi), 172
the board of supervisors of the county in which the project is 173
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located may negotiate with the school district in which the 174
project is located and apportion to the school district an amount 175
of the fee-in-lieu that is agreed upon in the negotiations 176
different than the amount provided for in subsection (3) of this 177
section. 178
(9) For a project as defined in Section 57-75-5(f)(xxviii), 179
the annual amount of the fee-in-lieu apportioned to the county 180
shall not be less than the amount necessary to pay the debt 181
service on bonds issued by the county pursuant to Section 182
57-75-37(3)(c). 183
(10) For any county and/or municipality that enters into a 184
fee-in-lieu agreement for a project as defined in Section 185
57-75-5(f)(xxxiii), the minimum sum allowable as a fee-in-lieu for 186
the project shall not be less than one-third (1/3); provided that 187
such allowed sum of each annual fee-in-lieu payment may be first 188
apportioned between the county or municipality, as appropriate, 189
and the school districts in any such amounts as may be determined 190
by the county board of supervisors or municipal governing 191
authority, as the case may be, to either: (a) first allocate and 192
remit to the Mississippi Major Economic Impact Authority or the 193
Mississippi Development Authority, as applicable, such portion of 194
each annual fee-in-lieu payment to repay to the Mississippi Major 195
Economic Impact Authority or the Mississippi Development 196
Authority, as applicable, funds advanced thereby to such county 197
and/or municipality or to other public agency, as defined in 198
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Section 57-75-37(7)(a)(ii), to fund public improvements and 199
related costs for the project pursuant to an agreement entered 200
into in accordance with Section 57-75-37(7)(c)(iii); or (b) first 201
allocate and remit to the enterprise owning and/or operating the 202
project such portion of each annual fee-in-lieu payment payable 203
thereto pursuant to an agreement entered into in accordance with 204
Section 57-75-37(7)(d)(iv). The balance of any annual fee-in-lieu 205
amount remaining after such initial allocation and remittance to 206
the Mississippi Major Economic Impact Authority, Mississippi 207
Development Authority or enterprise owning and/or operating the 208
project, as applicable, shall then be apportioned in accordance 209
with subsection (4) of this section or as otherwise authorized by 210
state law. 211
(11) Any fee-in-lieu of ad valorem taxes granted under this 212
section before March 28, 2019, and consistent herewith, is hereby 213
ratified, approved and confirmed. 214
[From and after July 1, 2026, this section shall read as 215
follows:] 216
27-31-104. (1) (a) County boards of supervisors and 217
municipal authorities are each hereby authorized and empowered to 218
enter into an agreement with an enterprise granting, and pursuant 219
to such agreement grant a fee-in-lieu of ad valorem taxes, 220
including ad valorem taxes levied for school purposes, for the 221
following: 222
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(i) Projects totaling over Sixty Million Dollars 223
($60,000,000.00) by any new enterprises enumerated in Section 224
27-31-101; 225
(ii) Projects by a private company (as such term 226
is defined in Section 57-61-5, Mississippi Code of 1972) having a 227
minimum capital investment of Sixty Million Dollars 228
($60,000,000.00); 229
(iii) Projects, in addition to those projects 230
referenced in Section 27-31-105, totaling over Sixty Million 231
Dollars ($60,000,000.00) by an existing enterprise that has been 232
doing business in the county or municipality for twenty-four (24) 233
months. For purposes of this subparagraph (iii), the term 234
"existing enterprise" includes those enterprises enumerated in 235
Section 27-31-101; or 236
(iv) A private company (as such term is defined in 237
Section 57-61-5) or entity defined in Section 77-3-3(d)(i) having 238
a minimum capital investment of One Hundred Million Dollars 239
($100,000,000.00) from any source or combination of sources, 240
provided that a majority of the capital investment is from private 241
sources, when such project is located within a geographic area for 242
which a Presidential Disaster Declaration was issued on or after 243
January 1, 2014. 244
County boards of supervisors and municipal authorities may 245
not enter into an agreement with an enterprise that is a medical 246
cannabis establishment, as defined in Section 41-137-3 of the 247
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Mississippi Medical Cannabis Act, granting, and pursuant to such 248
agreement grant a fee-in-lieu of ad valorem taxes. 249
(b) A fee-in-lieu of ad valorem taxes granted in 250
accordance with this section may include any or all tangible 251
property, real or personal, including any leasehold interests 252
therein but excluding automobiles and trucks operating on and over 253
the highways of the State of Mississippi, used in connection with, 254
or necessary to, the operation of any enterprise, private company 255
or business described in paragraph (a) of this subsection (1), as 256
applicable, whether or not such property is owned, leased, 257
subleased, licensed or otherwise obtained by such enterprise, 258
private company or business, as applicable, irrespective of the 259
taxpayer to which any such leased property is assessed for ad 260
valorem tax purposes. If a fee-in-lieu of ad valorem taxes is 261
granted pursuant to this section with respect to any leasehold 262
interest under a lease, sublease or license of tangible property 263
used in connection with, or necessary to, the operation of an 264
enterprise, private company or business described in paragraph (a) 265
of this subsection (1), as applicable, the corresponding ownership 266
interest of the owner, lessor and sublessor of such tangible 267
property shall similarly and automatically be exempt and subject 268
to the fee-in-lieu granted in accordance herewith without any 269
action being required to be taken by such owner, lessor or 270
sublessor. 271
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(2) A county board of supervisors may enter into a 272
fee-in-lieu agreement on behalf of the county and any county 273
school district, and a municipality may enter into such a 274
fee-in-lieu agreement on behalf of the municipality and any 275
municipal school district located in the municipality; however, if 276
the project is located outside the limits of a municipality but 277
within the boundaries of the municipal school district, then the 278
county board of supervisors may enter into such a fee-in-lieu 279
agreement on behalf of the school district granting a fee-in-lieu 280
of ad valorem taxes for school district purposes. 281
(3) Any grant of a fee-in-lieu of ad valorem taxes shall be 282
evidenced by a written agreement negotiated by the enterprise and 283
the county board of supervisors and/or municipal authority, as the 284
case may be, and given final approval by the Mississippi 285
Development Authority as satisfying the requirements of this 286
section. 287
(4) The minimum sum allowable as a fee-in-lieu shall not be 288
less than one-third (1/3), or one-tenth (1/10) if the project is 289
also a project eligible for an ad valorem tax exemption under 290
Section 27-31-46 and a fee-in-lieu agreement is entered into 291
before July 1, * * * 2029, of the ad valorem levy, including ad 292
valorem taxes for school district purposes, and except as 293
otherwise provided, the sum allowed shall be apportioned between 294
the county or municipality, as appropriate, and the school 295
districts in such amounts as may be determined by the county board 296
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of supervisors or municipal governing authority, as the case may 297
be, however, except as otherwise provided in this section, from 298
the sum allowed the apportionment to school districts shall not be 299
less than the school districts' pro rata share based upon the 300
proportion that the millage imposed for the school districts by 301
the appropriate levying authority bears to the millage imposed by 302
such levying authority for all other county or municipal purposes. 303
Any fee-in-lieu agreement entered into under this section shall 304
become a binding obligation of the parties to the agreement, be 305
effective upon its execution by the parties and approval by the 306
Mississippi Development Authority and, except as otherwise 307
provided in Section 17-25-23 or Section 57-75-33, or any other 308
provision of law, continue in effect for a period not to exceed 309
thirty (30) years commencing on the date that the fee-in-lieu 310
granted thereunder begins in accordance with the agreement; 311
however, no particular parcel of land, real property improvement 312
or item of personal property shall be subject to a fee-in-lieu for 313
a duration of more than ten (10) years. Any such agreement shall 314
be binding, according to its terms, on future boards of 315
supervisors of the county and/or governing authorities of a 316
municipality, as the case may be, for the duration of the 317
agreement. 318
(5) The fee-in-lieu may be a stated fraction or percentage 319
of the ad valorem taxes otherwise payable or a stated dollar 320
amount. If the fee is a fraction or percentage of the ad valorem 321
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tax levy, it shall be annually computed on all ad valorem taxes 322
otherwise payable, including school taxes, as the same may vary 323
from year to year based upon changes in the millage rate or 324
assessed value and shall not be less than one-third (1/3) of that 325
amount or one-tenth (1/10) of that amount if the project is also a 326
project eligible for an ad valorem tax exemption under Section 327
27-31-46 and a fee-in-lieu agreement is entered into before July 328
1, * * * 2029. If the fee is a stated dollar amount, said amount 329
shall be the higher of the sum provided for fixed payment or (a) 330
one-third (1/3) of the total of all ad valorem taxes otherwise 331
payable as annually determined during each year of the fee-in-lieu 332
or (b) if the project is also a project eligible for an ad valorem 333
tax exemption under Section 27-31-46 and a fee-in-lieu agreement 334
is entered into before July 1, * * * 2029, one-tenth (1/10) of the 335
total of all ad valorem taxes otherwise payable as annually 336
determined during each year of the fee-in-lieu. 337
(6) Notwithstanding Section 27-31-111, the parties to a 338
fee-in-lieu may agree on terms and conditions providing for the 339
reduction, suspension, termination or reinstatement of a 340
fee-in-lieu agreement or any fee-in-lieu period granted thereunder 341
upon the cessation of operations by project for twelve (12) or 342
more consecutive months or due to other conditions set forth in 343
the agreement. 344
(7) For a project as defined in Section 57-75-5(f)(xxi) and 345
located in a county that is a member of a regional economic 346
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development alliance created under Section 57-64-1 et seq., the 347
members of the regional economic development alliance may divide 348
the sum allowed as a fee-in-lieu in a manner as determined by the 349
alliance agreement, and the boards of supervisors of the member 350
counties may then apportion the sum allowed between school 351
district purposes and all other county purposes. 352
(8) For a project as defined in Section 57-75-5(f)(xxvi), 353
the board of supervisors of the county in which the project is 354
located may negotiate with the school district in which the 355
project is located and apportion to the school district an amount 356
of the fee-in-lieu that is agreed upon in the negotiations 357
different than the amount provided for in subsection (3) of this 358
section. 359
(9) For a project as defined in Section 57-75-5(f)(xxviii), 360
the annual amount of the fee-in-lieu apportioned to the county 361
shall not be less than the amount necessary to pay the annual debt 362
service on bonds issued by the county pursuant to Section 363
57-75-37(3)(c). 364
(10) For any county and/or municipality that enters into a 365
fee-in-lieu agreement for a project as defined in Section 366
57-75-5(f)(xxxiii), the minimum sum allowable as a fee-in-lieu for 367
the project shall not be less than one-third (1/3); provided that 368
such allowed sum of each annual fee-in-lieu payment may be first 369
apportioned between the county or municipality, as appropriate, 370
and the school districts in any such amounts as may be determined 371
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by the county board of supervisors or municipal governing 372
authority, as the case may be, to either: (a) first allocate and 373
remit to the Mississippi Major Economic Impact Authority or the 374
Mississippi Development Authority, as applicable, such portion of 375
each annual fee-in-lieu payment to repay to the Mississippi Major 376
Economic Impact Authority or the Mississippi Development 377
Authority, as applicable, funds advanced thereby to such county 378
and/or municipality or to other public agency, as defined in 379
Section 57-75-37(7)(a)(ii), to fund public improvements and 380
related costs for the project pursuant to an agreement entered 381
into in accordance with Section 57-75-37(7)(c)(iii); or (b) first 382
allocate and remit to the enterprise owning and/or operating the 383
project such portion of each annual fee-in-lieu payment payable 384
thereto pursuant to an agreement entered into in accordance with 385
Section 57-75-37(7)(d)(iv). The balance of any annual fee-in-lieu 386
amount remaining after such initial allocation and remittance to 387
the Mississippi Major Economic Impact Authority, Mississippi 388
Development Authority or enterprise owning and/or operating the 389
project, as applicable, shall then be apportioned in accordance 390
with subsection (4) of this section or as otherwise authorized by 391
state law. 392
(11) Any fee-in-lieu of ad valorem taxes granted under this 393
section before March 28, 2019, and consistent herewith, is hereby 394
ratified, approved and confirmed. 395
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ST: Ad valorem tax; extend time for partial
exemption and fee-in-lieu of ad valorem tax
agreement for certain renewable energy projects.
SECTION 3. This act shall take effect and be in force from 396
and after July 1, 2026. 397