Ad valorem tax assessment; revise provision concerning inflation factor for commercial and solar wind facilities.

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To: Finance
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Senator(s) Younger

SENATE BILL NO. 3312

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