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

MISSISSIPPI LEGISLATURE

2026 Regular Session

To: Finance

By: Senator(s) Johnson

Senate Bill 2846

(As Sent to Governor)

AN ACT TO CREATE NEW SECTION 21-45-23, MISSISSIPPI CODE OF
1972, TO AUTHORIZE MUNICIPALITIES TO ENTER INTO VOLUNTARY TAXPAYER AGREEMENTS
IN CONNECTION WITH TAX INCREMENT FINANCING REDEVELOPMENT PROJECTS; TO PROVIDE
FOR OPTIONAL LIEN SECURITY FOR SUCH AGREEMENTS; TO AUTHORIZE CONDUIT BOND
FINANCING SECURED BY TAXPAYER AGREEMENTS; TO PROVIDE THAT SUCH AGREEMENTS DO
NOT CONSTITUTE TAXES, PUBLIC DEBT OR PLEDGES OF GOVERNMENTAL CREDIT; TO AMEND
SECTION 21-45-3, MISSISSIPPI CODE OF 1972, TO DEFINE "TAXPAYER AGREEMENT"
AND REVISE THE DEFINITION OF "REDEVELOPMENT PROJECT" FOR PURPOSES OF
THIS ACT; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1.  The
following shall be codified as Section 21-45-23, Mississippi Code of 1972:

21-45-23.  (1)  As an
alternative financing mechanism for redevelopment projects, a municipality
authorized to undertake a redevelopment project and issue tax increment bonds
or refunding bonds under this chapter may, at its option, enter into a taxpayer
agreement with the owner or developer of real property located within a project
area.  A taxpayer agreement may be used to:

(a)  Guarantee, enhance
or otherwise secure the repayment of bonds, notes or other obligations issued
to finance the costs of a redevelopment project;

(b)  Provide for
payments in lieu of, or in addition to, tax increment revenues; or

(c)  Provide for any
other payment obligation from a municipality or other source, whether public or
private, to support the financing or refinancing of the costs of a
redevelopment project.

(2)  A taxpayer agreement
entered into under this section:

(a)  Constitutes a
voluntary and binding contractual payment obligation of the property owner or
developer in connection with the ad valorem taxes to be paid on a project area;

(b)  Shall not be
considered a tax, fee or assessment imposed by a municipality;

(c)  Shall not
constitute a pledge of the faith, credit or taxing power of the State of
Mississippi or any municipality;

(d)  Shall not
constitute indebtedness of the state or any municipality for purposes of any
constitutional or statutory debt limitation;

(e)  Shall not be
considered a fee-in-lieu agreement or an exemption from taxation under the
Constitution and laws of the state; and

(f)  Shall be for a
term not to exceed thirty (30) years.

(3)  If a taxpayer agreement
provides that payments due under the taxpayer agreement are secured by a lien
on real property:

(a)  The lien shall
arise automatically upon execution and recordation of the taxpayer agreement;

(b)  The lien shall
have parity with ad valorem tax liens, subordinate only to previously filed ad
valorem tax liens;

(c)  The lien shall
take priority over any subsequent mortgage, judgment, lien or other encumbrance
on the property; and

(d)  The lien may be
enforced, collected and foreclosed in the same manner as delinquent ad valorem
taxes under the laws of the state.  A lien created under this section shall
exist only for the duration and to the extent provided in the taxpayer
agreement.

(4)  A taxpayer agreement
creating a lien under this section shall be recorded in the office of the
chancery clerk of the county in which the property is located.  Recordation
shall provide constructive notice and shall perfect the lien without further
action.

(5)  Payments due under a
taxpayer agreement shall be deemed delinquent when unpaid on the date specified
in the taxpayer agreement.  All interest, penalties, fees and collection costs
applicable to delinquent ad valorem taxes shall apply to delinquent taxpayer
agreement payments.

(6)  A municipality may
assign its rights under a taxpayer agreement, including the right to receive
payments, any lien securing such payments, and the rights to enforce such lien,
to a trustee, bondholder or purchaser of bonds issued to finance the costs of a
redevelopment project.  An assignee shall possess all enforcement rights held
by the municipality.

(7)  In addition to any
other authority granted in this chapter, a municipality may issue bonds, notes
or other obligations as a conduit issuer to finance the costs of a
redevelopment project.  Such obligations may be secured by:

(a)  Payments due under
one or more taxpayer agreements;

(b)  Any lien created
by one or more taxpayer agreements;

(c)  Tax increment
revenues; or

(d)  Any combination of
the foregoing or other private security.

The municipality issuing
such bonds shall have no obligation to advance funds, levy taxes (other than in
the ordinary course in connection with the redevelopment project) or
appropriate money for the payment of such obligations.  Bonds issued under this
subsection (7) shall be payable solely from the security pledged and shall not
constitute a general obligation of the municipality or the state.

(8)  Upon full payment of
all obligations secured by a taxpayer agreement, the municipality shall execute
and record a release of lien, which shall extinguish the lien upon recordation.

(9)  Nothing in this section
shall be construed to require a municipality to enter into a taxpayer
agreement.

SECTION 2.  Section
21-45-3, Mississippi Code of 1972, is amended as follows:

21-45-3.  For the purposes
of this chapter, the following terms shall have the meanings given them in this
section unless a different meaning is clearly indicated by the context:

(a)  "Project
area" includes:

(i)  Areas in which
there is a significant amount of buildings or improvements which, by reason of
dilapidation, deterioration, age, obsolescence, inadequate provision for
ventilation, light, air, sanitation or open spaces, high density of population
and overcrowding or the existence of conditions which endanger life or property
by fire and other causes, or any combination of such factors, are conducive to
ill health, transmission of disease, infant mortality, juvenile delinquency or
crime and are detrimental to the public health, safety, morals or welfare;

(ii)  Areas in
which are located a building or buildings that are of important value for
purposes of historical preservation, as designated by the Department of
Archives and History;

(iii)  Areas which
by reason of a significant amount of defective or inadequate street layout,
faulty lot layout in relation to size, adequacy, accessibility or usefulness,
unsanitary or unsafe conditions, deterioration of site improvements, diversity
of ownership, tax delinquency, defective or unusual conditions of title,
improper subdivision or obsolete platting or the existence of conditions which
endanger life or property by fire or other causes, or any combination of such
factors, substantially impair or arrest the sound growth of the community,
retard the provision of housing accommodations or constitute an economic or
social liability and are a menace to the public health, safety, morals or welfare
in their present condition and use;

(iv)  Areas in
which the construction, renovation, repair or rehabilitation of property for
residential, commercial or other uses is in the public interest; or

(v)  A project for
which a certificate of public convenience and necessity has been obtained by
the municipality pursuant to the Regional Economic Development Act.

(b)  A
"redevelopment project" may include any work or undertaking by a
municipality:

(i)  To acquire
project areas or portions thereof, including lands, structures or improvements
the acquisition of which is necessary or incidental to the proper clearance,
development or redevelopment of such areas or to the prevention of the spread
or recurrence of slum conditions or conditions of blight;

(ii)  To clear any
project areas by demolition or removal of existing buildings, structures,
streets, utilities or other improvements thereon and to install, construct or
reconstruct streets, utilities, bulkheads, boat docks and site improvements
essential to the preparation of sites for uses in accordance with the
redevelopment plan and public improvements to encourage private redevelopment
in accordance with the redevelopment plan; or

(iii)  To sell or
lease property acquired by a municipality as part of a redevelopment project
for not less than its fair value for uses in accordance with such redevelopment
plan to retain property or public improvements for public use in accordance
with the redevelopment plan.

"Redevelopment
project" may also include the preparation of a redevelopment plan, the
planning, survey and other work incident to a redevelopment project and the
preparation of all plans and arrangements for carrying out a redevelopment
project, relocation of businesses and families required under applicable law,
and upon a determination, by resolution of the governing body of the
municipality in which such land is located, that the acquisition and
development of additional real property not within a project area is essential
to the proper clearance or redevelopment of a project area or a necessary part
of the general slum clearance program of the municipality, the acquisition,
planning, preparation for development or disposal of such land shall constitute
a redevelopment project.  In connection with a project undertaken by a
developer under Section 21-45-9 or 21-45-23, "redevelopment project"
may include the costs of the acquisition, construction, installation and
equipping of public or private improvements, including, but not limited to,
buildings.

(c)
"Redevelopment plan" means a plan for the acquisition, clearance,
reconstruction, rehabilitation or future use of a redevelopment project area
which shall be sufficiently complete:

(i)  To indicate
its relationship to definite local objectives as to appropriate land uses and
improved traffic, public transportation, public utilities, recreational,
residential, commercial and community facilities and other public improvements;
and

(ii)  To indicate
proposed land uses, waterfront uses, if any, and building requirements in the
area.

A redevelopment plan may
include interlocal cooperation agreements between a municipality and a county
whereby both agree to pledge revenues payable to them to fund the debt of
service of any indebtedness incurred pursuant to this chapter.

(d)  "Governing
body" means the governing body of any municipality or the board of
supervisors of any county.

(e)
"Developer" means any person, firm, corporation, partnership or other
entity which enters into an agreement with a municipality whereby the developer
agrees to construct, operate and maintain or procure the construction,
operation and maintenance of buildings or other facilities or improvements upon
land or waterfront being a part of a redevelopment project.

(f)  "Municipality"
means any city or town incorporated under the laws of the State of Mississippi
or any county.

(g)  "Clerk"
means the municipal clerk or chancery clerk, as the case may be.

(h)  "Taxpayer
agreement" means a voluntary written agreement entered into under Section
21-45-23 between a municipality and the owner or developer of real property
located within a project area.

SECTION 3.  This act
shall take effect and be in force from and after July 1, 2026.