Tax Increment Financing Act; authorize optional taxpayer agreements to provide additional security for obligations under.

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To: Finance
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Senator(s) Johnson

COMMITTEE SUBSTITUTE
FOR
SENATE BILL NO. 2846

AN ACT TO CREATE NEW SECTION 21-45-23, MISSISSIPPI CODE OF 1
1972, TO AUTHORIZE MUNICIPALITIES TO ENTER INTO VOLUNTARY TAXPAYER 2
AGREEMENTS IN CONNECTION WITH TAX INCREMENT FINANCING 3
REDEVELOPMENT PROJECTS; TO PROVIDE FOR OPTIONAL LIEN SECURITY FOR 4
SUCH AGREEMENTS; TO AUTHORIZE CONDUIT BOND FINANCING SECURED BY 5
TAXPAYER AGREEMENTS; TO PROVIDE THAT SUCH AGREEMENTS DO NOT 6
CONSTITUTE TAXES, PUBLIC DEBT OR PLEDGES OF GOVERNMENTAL CREDIT; 7
TO AMEND SECTION 21-45-3, MISSISSIPPI CODE OF 1972, TO DEFINE 8
"TAXPAYER AGREEMENT" AND REVISE THE DEFINITION OF "REDEVELOPMENT 9
PROJECT" FOR PURPOSES OF THIS ACT; AND FOR RELATED PURPOSES. 10
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 11
SECTION 1. The following shall be codified as Section 12
21-45-23, Mississippi Code of 1972: 13
21-45-23. (1) As an alternative financing mechanism for 14
redevelopment projects, a municipality authorized to undertake a 15
redevelopment project and issue tax increment bonds or refunding 16
bonds under this chapter may, at its option, enter into a taxpayer 17
agreement with the owner or developer of real property located 18
within a project area. A taxpayer agreement may be used to: 19
(a) Guarantee, enhance or otherwise secure the 20
repayment of bonds, notes or other obligations issued to finance 21
the costs of a redevelopment project; 22
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(b) Provide for payments in lieu of, or in addition to, 23
tax increment revenues; or 24
(c) Provide for any other payment obligation from a 25
municipality or other source, whether public or private, to 26
support the financing or refinancing of the costs of a 27
redevelopment project. 28
(2) A taxpayer agreement entered into under this section: 29
(a) Constitutes a voluntary and binding contractual 30
payment obligation of the property owner or developer in 31
connection with the ad valorem taxes to be paid on a project area; 32
(b) Shall not be considered a tax, fee or assessment 33
imposed by a municipality; 34
(c) Shall not constitute a pledge of the faith, credit 35
or taxing power of the State of Mississippi or any municipality; 36
(d) Shall not constitute indebtedness of the state or 37
any municipality for purposes of any constitutional or statutory 38
debt limitation; 39
(e) Shall not be considered a fee-in-lieu agreement or 40
an exemption from taxation under the Constitution and laws of the 41
state; and 42
(f) Shall be for a term not to exceed thirty (30) 43
years. 44
(3) If a taxpayer agreement provides that payments due under 45
the taxpayer agreement are secured by a lien on real property: 46
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(a) The lien shall arise automatically upon execution 47
and recordation of the taxpayer agreement; 48
(b) The lien shall have parity with ad valorem tax 49
liens, subordinate only to previously filed ad valorem tax liens; 50
(c) The lien shall take priority over any subsequent 51
mortgage, judgment, lien or other encumbrance on the property; and 52
(d) The lien may be enforced, collected and foreclosed 53
in the same manner as delinquent ad valorem taxes under the laws 54
of the state. A lien created under this section shall exist only 55
for the duration and to the extent provided in the taxpayer 56
agreement. 57
(4) A taxpayer agreement creating a lien under this section 58
shall be recorded in the office of the chancery clerk of the 59
county in which the property is located. Recordation shall 60
provide constructive notice and shall perfect the lien without 61
further action. 62
(5) Payments due under a taxpayer agreement shall be deemed 63
delinquent when unpaid on the date specified in the taxpayer 64
agreement. All interest, penalties, fees and collection costs 65
applicable to delinquent ad valorem taxes shall apply to 66
delinquent taxpayer agreement payments. 67
(6) A municipality may assign its rights under a taxpayer 68
agreement, including the right to receive payments, any lien 69
securing such payments, and the rights to enforce such lien, to a 70
trustee, bondholder or purchaser of bonds issued to finance the 71
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costs of a redevelopment project. An assignee shall possess all 72
enforcement rights held by the municipality. 73
(7) In addition to any other authority granted in this 74
chapter, a municipality may issue bonds, notes or other 75
obligations as a conduit issuer to finance the costs of a 76
redevelopment project. Such obligations may be secured by: 77
(a) Payments due under one or more taxpayer agreements; 78
(b) Any lien created by one or more taxpayer 79
agreements; 80
(c) Tax increment revenues; or 81
(d) Any combination of the foregoing or other private 82
security. 83
The municipality issuing such bonds shall have no obligation 84
to advance funds, levy taxes (other than in the ordinary course in 85
connection with the redevelopment project) or appropriate money 86
for the payment of such obligations. Bonds issued under this 87
subsection (7) shall be payable solely from the security pledged 88
and shall not constitute a general obligation of the municipality 89
or the state. 90
(8) Upon full payment of all obligations secured by a 91
taxpayer agreement, the municipality shall execute and record a 92
release of lien, which shall extinguish the lien upon recordation. 93
(9) Nothing in this section shall be construed to require a 94
municipality to enter into a taxpayer agreement. 95
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SECTION 2. Section 21-45-3, Mississippi Code of 1972, is 96
amended as follows: 97
21-45-3. For the purposes of this chapter, the following 98
terms shall have the meanings given them in this section unless a 99
different meaning is clearly indicated by the context: 100
(a) "Project area" includes: 101
(i) Areas in which there is a significant amount 102
of buildings or improvements which, by reason of dilapidation, 103
deterioration, age, obsolescence, inadequate provision for 104
ventilation, light, air, sanitation or open spaces, high density 105
of population and overcrowding or the existence of conditions 106
which endanger life or property by fire and other causes, or any 107
combination of such factors, are conducive to ill health, 108
transmission of disease, infant mortality, juvenile delinquency or 109
crime and are detrimental to the public health, safety, morals or 110
welfare; 111
(ii) Areas in which are located a building or 112
buildings that are of important value for purposes of historical 113
preservation, as designated by the Department of Archives and 114
History; 115
(iii) Areas which by reason of a significant 116
amount of defective or inadequate street layout, faulty lot layout 117
in relation to size, adequacy, accessibility or usefulness, 118
unsanitary or unsafe conditions, deterioration of site 119
improvements, diversity of ownership, tax delinquency, defective 120
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or unusual conditions of title, improper subdivision or obsolete 121
platting or the existence of conditions which endanger life or 122
property by fire or other causes, or any combination of such 123
factors, substantially impair or arrest the sound growth of the 124
community, retard the provision of housing accommodations or 125
constitute an economic or social liability and are a menace to the 126
public health, safety, morals or welfare in their present 127
condition and use; 128
(iv) Areas in which the construction, renovation, 129
repair or rehabilitation of property for residential, commercial 130
or other uses is in the public interest; or 131
(v) A project for which a certificate of public 132
convenience and necessity has been obtained by the municipality 133
pursuant to the Regional Economic Development Act. 134
(b) A "redevelopment project" may include any work or 135
undertaking by a municipality: 136
(i) To acquire project areas or portions thereof, 137
including lands, structures or improvements the acquisition of 138
which is necessary or incidental to the proper clearance, 139
development or redevelopment of such areas or to the prevention of 140
the spread or recurrence of slum conditions or conditions of 141
blight; 142
(ii) To clear any project areas by demolition or 143
removal of existing buildings, structures, streets, utilities or 144
other improvements thereon and to install, construct or 145
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reconstruct streets, utilities, bulkheads, boat docks and site 146
improvements essential to the preparation of sites for uses in 147
accordance with the redevelopment plan and public improvements to 148
encourage private redevelopment in accordance with the 149
redevelopment plan; or 150
(iii) To sell or lease property acquired by a 151
municipality as part of a redevelopment project for not less than 152
its fair value for uses in accordance with such redevelopment plan 153
to retain property or public improvements for public use in 154
accordance with the redevelopment plan. 155
"Redevelopment project" may also include the preparation of a 156
redevelopment plan, the planning, survey and other work incident 157
to a redevelopment project and the preparation of all plans and 158
arrangements for carrying out a redevelopment project, relocation 159
of businesses and families required under applicable law, and upon 160
a determination, by resolution of the governing body of the 161
municipality in which such land is located, that the acquisition 162
and development of additional real property not within a project 163
area is essential to the proper clearance or redevelopment of a 164
project area or a necessary part of the general slum clearance 165
program of the municipality, the acquisition, planning, 166
preparation for development or disposal of such land shall 167
constitute a redevelopment project. In connection with a project 168
undertaken by a developer under Section 21-45-9 or 21-45-23, 169
"redevelopment project" may include the costs of the acquisition, 170
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construction, installation and equipping of public or private 171
improvements, including, but not limited to, buildings. 172
(c) "Redevelopment plan" means a plan for the 173
acquisition, clearance, reconstruction, rehabilitation or future 174
use of a redevelopment project area which shall be sufficiently 175
complete: 176
(i) To indicate its relationship to definite local 177
objectives as to appropriate land uses and improved traffic, 178
public transportation, public utilities, recreational, 179
residential, commercial and community facilities and other public 180
improvements; and 181
(ii) To indicate proposed land uses, waterfront 182
uses, if any, and building requirements in the area. 183
A redevelopment plan may include interlocal cooperation 184
agreements between a municipality and a county whereby both agree 185
to pledge revenues payable to them to fund the debt of service of 186
any indebtedness incurred pursuant to this chapter. 187
(d) "Governing body" means the governing body of any 188
municipality or the board of supervisors of any county. 189
(e) "Developer" means any person, firm, corporation, 190
partnership or other entity which enters into an agreement with a 191
municipality whereby the developer agrees to construct, operate 192
and maintain or procure the construction, operation and 193
maintenance of buildings or other facilities or improvements upon 194
land or waterfront being a part of a redevelopment project. 195
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ST: Tax Increment Financing Act; authorize
optional taxpayer agreements to provide
additional security for obligations under.
(f) "Municipality" means any city or town incorporated 196
under the laws of the State of Mississippi or any county. 197
(g) "Clerk" means the municipal clerk or chancery 198
clerk, as the case may be. 199
(h) "Taxpayer agreement" means a voluntary written 200
agreement entered into under Section 21-45-23 between a 201
municipality and the owner or developer of real property located 202
within a project area. 203
SECTION 3. This act shall take effect and be in force from 204
and after July 1, 2026. 205