Bill Text: MS SB2814 | 2014 | Regular Session | Introduced
Bill Title: Sixteenth section land; clarify provisions related to leases of.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2014-02-04 - Died In Committee [SB2814 Detail]
Download: Mississippi-2014-SB2814-Introduced.html
MISSISSIPPI LEGISLATURE
2014 Regular Session
To: Education
By: Senator(s) Fillingane
Senate Bill 2814
AN ACT TO CLARIFY THAT A LEASE OF SIXTEENTH SECTION LANDS THAT IS DULY EXECUTED BY THE APPLICABLE SCHOOL BOARD OF THE SCHOOL DISTRICT IS PRESUMED TO BE VALID; TO CLARIFY THAT THE APPROVAL OF THE SECRETARY OF STATE IS NOT NECESSARY BEFORE THE BOARD MAY ENTER INTO ANY SUCH LEASE; TO PROVIDE THAT THE SECRETARY OF STATE MAY OBJECT TO THE VALIDITY OF SUCH A LEASE BY FILING AN ACTION IN THE APPROPRIATE CHANCERY COURT AND DEMONSTRATING THAT THE LEASE IS UNCONSCIONABLE OR OTHERWISE NOT VALID; TO PROVIDE THAT BOARD MEMBERS ACTING IN GOOD FAITH ARE IMMUNE FROM INDIVIDUAL LIABILITY ASSOCIATED WITH ENTERING INTO THE LEASE; TO AMEND SECTION 29-3-31, MISSISSIPPI CODE OF 1972, TO DELETE CERTAIN STANDARDS REGARDING THE CLASSIFICATION AND RECLASSIFICATION OF SIXTEENTH SECTION LAND; TO AMEND SECTION 29-3-37, MISSISSIPPI CODE OF 1972, TO REQUIRE AN APPRAISAL EVERY 5 YEARS AND TO PROVIDE FOR A CERTAIN 16TH SECTION LAND COMPLAINT TRIBUNAL FOR LEASEHOLDERS; TO AUTHORIZE THE LOCAL SCHOOL BOARD IN ITS DISCRETION TO CHARGE THE LEASEHOLDER FOR THE COST OF THE FIRST APPRAISAL OF SIXTEENTH SECTION LAND; TO AMEND SECTION 29-3-39, MISSISSIPPI CODE OF 1972, TO DELETE THE AUTHORITY OF THE SECRETARY OF STATE TO RECLASSIFY ANY SIXTEENTH SECTION LAND ON HIS OWN MOTION AND LEAVE THAT AUTHORITY WITH THE LOCAL SCHOOL BOARD; TO AMEND SECTION 29-3-57, MISSISSIPPI CODE OF 1972, TO CLARIFY THE RESPONSIBILITY OF SIXTEENTH SECTION LAND MANAGERS; TO AMEND SECTION 29-3-65, MISSISSIPPI CODE OF 1972, TO AUTHORIZE 16TH SECTION LAND LEASEHOLDERS TO ASSIGN OR SUBLEASE THEIR LEASE IN THEIR DISCRETION; TO AMEND SECTIONS 29-3-63 AND 29-3-69, MISSISSIPPI CODE OF 1972, IN CONFORMITY TO THE PROVISIONS OF THIS ACT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) If a lease of sixteenth section lands, or lands granted in lieu thereof, including leases and any renewal, replacement or extension of such leases granted under any provision of this chapter is duly executed by the applicable board of education after approval of the rental value of the land by the applicable board of supervisors, then the lease shall be presumed valid. The board of education must provide the Secretary of State with notice of the execution of such a lease within ten (10) days of its execution. The approval of the Secretary of State is not necessary before the board may enter into any such lease; however, if the secretary objects to the validity of the lease, then he or she must file an action, within thirty (30) days of the notice of the lease's execution, in the chancery court in which the land is located and demonstrate by clear and convincing evidence that the lease is unconscionable or otherwise not valid. Members of the board, acting in good faith and relying on the advice or opinion of the board attorney, shall be immune from individual liability associated with entering into the lease.
(2) The provisions of this section shall be supplemental to the provisions of Section 29-3-52 regarding the prima facie validity of such a lease that is executed and recorded in substantial conformity with the provisions of this chapter.
SECTION 2. Section 29-3-31, Mississippi Code of 1972, is amended as follows:
29-3-31. It is hereby made
the duty of the board of education, using the services of all appropriate
public agencies, to survey and classify all sixteenth section lands in the
Choctaw purchase and lands granted in lieu thereof reserved for the support of
township schools. Said lands shall be classified into eight (8) categories, as
follows: (1) forest land; (2) agricultural land; (3) industrial land; (4)
commercial land; (5) farm-residential land; (6) residential land; (7)
recreational land; and (8) other land. * * *
All sixteenth section lands in the Choctaw purchase and lands granted in lieu thereof, regardless of classification, shall be deemed to contain oil, gas and minerals, including the following: (a) oil, gas, carbon dioxide and other gaseous substances; (b) metals, compounds of metals or metal-bearing ores; (c) coal, including anthracite, bituminous, subbituminous, lignite and their constituent components and products and minerals intermingled or associated therewith; and (d) sulphur, salt, sand, gravel, fill dirt and clay.
Such oil, gas and minerals shall be leased for exploration, mining, production and development as provided for in Section 29-3-99, regardless of the classifications of the lands in, on or under which such oil, gas and minerals are situated. Statutory procedures for the leasing of the surface of the land in such eight (8) classifications shall not apply to such oil, gas and minerals in, on or under such lands.
Such oil, gas and minerals shall be deemed a separate classification of sixteenth section lands for the purpose of Section 211 of the Mississippi Constitution.
SECTION 3. Section 29-3-37, Mississippi Code of 1972, is amended as follows:
29-3-37. An appraisal
will be required to determine the fair market rental value every five (5) years
for lands classified as residential, farm-residential, recreational, catfish
farming and other. At any time when any or all portions of such land lying
in a county shall have been classified as hereinabove required, a
classification report shall be compiled by the board of education and filed
with the Public Lands Division of the Secretary of State who shall provide
forms for such purpose. The board of education shall immediately cause notice
to be given of the completion of such classification, such notice to be
published in a newspaper in said county once each week for three (3)
consecutive weeks, or if no newspaper is published in said county then in a
newspaper having a general circulation therein, listing all lands so classified
and notifying all parties in interest that they will have a right to appeal and
object to the classification as made. If no objections are made as to the
classification of any particular parcel of said land by the Public Lands Division
of the Secretary of State or any other party in interest, which objection must
be reduced to writing and filed with the chancery clerk within thirty (30) days
from the date of the final publication, the classification as to such parcel or
parcels of land shall be final. A copy of such notice shall be mailed by the
Superintendent of Education to each lessee of any part of such lands, such
notice to be so mailed not later than the date of the first publication of the
notice of the classification of such land, which notice shall also set forth
the classification which has been established for all lands under lease by such
lessee. If objections are filed, then the matter shall be heard by * * *
a tribunal consisting of the Attorney General, or his representative, and
the State Auditor, or his representative, with ninety (90) days of the filing
of a complaint, and the * * * tribunal shall either confirm or
modify the classification as the circumstances shall demand. * * * The Public
Lands Division of the Secretary of State and any other person aggrieved by the
order of the * * * tribunal shall have the * * * right of appeal * * *
de novo to the chancery court or the proper jurisdiction, and
such appeal shall be perfected as other appeals are now required to be so
perfected.
The cost of any such classification or reclassification under Section 29-3-39 shall be paid from any available sixteenth section school funds or other school funds of the district, provided that the board of education is authorized, in its discretion, to charge the leaseholder for the cost of the first appraisal of such land however may not charge the leaseholder for subsequent appraisals.
SECTION 4. Section 29-3-39, Mississippi Code of 1972, is amended as follows:
29-3-39. (1) It
shall be the duty of the board of education to survey periodically the
classification of all sixteenth section land under its jurisdiction and to
reclassify that land as it may deem advisable because of changes of conditions,
and when any land is so reclassified, the board of education shall file a
report thereof with the Secretary of State. * * * When any land is
reclassified under this section, notice thereof, rights to object thereto and
rights to appeal therefrom shall be given in the same manner provided in
Section 29-3-37 with reference to the original classification. However, all
sixteenth section land shall be classified, or reclassified as is necessary,
within one (1) year prior to the expiration date of any existing lease, and
within sixty (60) days of the terminating of any lease of sixteenth section
land by final court order. In all litigation which may result from the
classification or reclassification of lands by the Secretary of State under
Sections 29-3-31 through 29-3-39, the Secretary of State shall be represented
by the Attorney General, who shall have control of the litigation except as
otherwise authorized in Section 7-5-39, but it shall be the duty of the various
boards of education to furnish local legal assistance when requested so to do
by the Attorney General.
(2) From and after July 1, 2014, any farm-residential lease that was not renewed or taken from a citizen or leaseholder of farm-residential and reclassified into agriculture or forest lease by charging five percent (5%) of the value of the land to determine the fair market rent will be required to be returned to the leaseholder or the family of the leaseholder, if they agree to pay the fair market rent.
SECTION 5. Section 29-3-57, Mississippi Code of 1972, is amended as follows:
29-3-57. The superintendent of education shall designate an employee of the local board of education to serve as Sixteenth Section Land Manager for the school district, who shall be knowledgeable regarding the statutes providing for the lease of Sixteenth Section land. The superintendent of education, acting through the Sixteenth Section Land Manager, shall keep a current docket as to the expiration date of all leases on sixteenth section lands; likewise, he shall keep a correct current docket upon the existing leases or any extensions thereof as to the amounts and time of payment of rentals provided for by such lease. It shall be the duty of the superintendent of education, acting through the Sixteenth Section Land Manager, to collect promptly all rentals due and all principal and interest due upon loans and investments of sixteenth section funds. Upon a sixty (60) day default in payment of any rentals according to the terms of such lease, the lease shall be declared terminated unless the board of education finds extenuating circumstances were present, and the board shall inaugurate the proper legal proceedings to terminate such lease. The superintendent of education, with the approval of the board of education, may employ an attorney or other person to aid in collecting any such funds when in his opinion the same is necessary, and may pay reasonable compensation therefor out of funds collected, not to exceed in any case twenty-five percent (25%) of the amount actually collected. It shall be the duty of the superintendent of education to supervise generally the administration of all sixteenth section lands within his jurisdiction. In all cases where leases of sixteenth section lands are entered into, it shall be the duty of the superintendent of education to take the notes of the lessees for the rents provided by said lease and turn them over to the county depository and attend to their collection. In the case of the leasing of agricultural lands, the school district shall have the same rights and remedies for the security and collection of such rent as are given by law to agricultural landlords.
SECTION 6. Section 29-3-63, Mississippi Code of 1972, is amended as follows:
29-3-63. (1) The holder of a lease of sixteenth section or lieu land, at the expiration thereof, shall have a prior right, exclusive of all other persons, to re-lease or to extend an existing lease as may be agreed upon between the holder of the lease and board of education subject to the classification of said land. Provided, however, no holder of a lease of sixteenth section land classified as agricultural land shall have any priority rights in extending his lease contract, except as otherwise provided in Section 29-3-81. Provided, however, the compensation on an annual basis shall be the fair market rental of the land excluding buildings and improvements made on such land by the lessee, the title to which is not held in trust for the public schools, but in no event shall the compensation be less than the minimum amounts prescribed in subsection (2) of this section.
(2) The board of education shall not lease or extend a lease on land classified as industrial or commercial at an annual rental less than five percent (5%) of the current market value, exclusive of buildings or improvements not owned by the school district. Such minimum acceptable percentage shall not apply to land classified as farm-residential, residential, recreational and other land; however, fair market rental will apply to those lands as determined by appraisal, comparative analysis or comparison with the private sector.
(3) The prior right to re-lease or extend an existing oil, gas and mineral lease, or any part thereof, granted under this section shall be conditioned upon the existence of production of oil, gas or other minerals thereunder in paying quantities, or the existence of a well capable of such production, or the existence of drilling or reworking operations at the time of lease expiration. Provided, however, that said lease may, in the discretion of the board of education, be extended only as to the lands included in a unit or units as defined by the appropriate agency having jurisdiction over said unit or units. The replacement lease shall be upon such terms and conditions as may be agreed upon between the holder of the lease and the board of education, provided that the rental and royalty provisions shall not be less than the rental and royalty provisions as set out in the expired lease and the primary term shall not exceed the limitations in Section 29-3-99. Bonus payment for the replacement lease shall be consistent with the requirements set out in Section 29-3-65 with respect to oil, gas and mineral leases.
(4) Where used in this section and Section 29-3-65, the term "oil and gas lease" or "oil, gas and mineral lease" shall include all leases originally executed pursuant to Section 29-3-99.
(5) The right to re-lease an oil, gas and mineral lease provided in subsection (3) above extends to oil, gas and mineral leases which have already expired as of the effective date of this section, subject to an accounting for production from the date of lease expiration to the date of the replacement lease authorized herein.
(6) The provisions of Section 1 of this act shall apply to the re-lease of any lands under the provisions of this section.
SECTION 7. Section 29-3-65, Mississippi Code of 1972, is amended as follows:
29-3-65. One (1) year prior to the date, when any such lands, not subject to competitive bid procedures, shall become available for lease, the board of education shall appoint a competent appraiser to appraise the land and report to the board his recommendation for the fair market rental amount. The board of education is authorized, in its discretion, to charge the leaseholder for the cost of the first appraisal of such land, however, the board may not charge the leaseholder for subsequent appraisals. The board shall then determine whether the same be a reasonable amount, and shall grant the lease pursuant to Section 29-3-63. Provided that in the event any such land becomes available for lease prior to July 1, 1979, an appraisal shall be required prior to the granting of said lease.
The board of education may use rent escalation clauses or other such devices to adjust rental amounts during the lease term. Owners of leaseholds under a lease granted prior to July 1, 1978, which have improvements constructed thereon, shall not be charged for such improvements in successive lease periods unless the lease contract clearly specifies otherwise. The cost of the appraisal under this section shall be paid from any available sixteenth section school funds or other school funds of the district.
The appraisal pertaining to renewal oil, gas and mineral leases executed pursuant to Section 29-3-63 may be made either before or after the expiration of the original lease and shall appraise the fair market value for the bonus to be paid for a renewal lease containing the terms and conditions agreed upon by the holder of the lease and the board of education.
SECTION 8. Section 29-3-69, Mississippi Code of 1972, is amended as follows:
29-3-69. The board of education may lease school trust lands classified as industrial, commercial, farm-residential, residential, recreational, catfish farming or other for a term not exceeding forty (40) years for a ground rental, payable annually. All leases, except leases of residential or farm-residential lands, made for a ground rental shall contain rent adjustment clauses or other such provisions requiring that the consideration for every lease of such lands shall be adjusted not less than once every ten (10) years from the date of the lease to reflect the current fair market rental value of the lands, exclusive of any improvements thereon. In leases of lands which are or which are to become residential or farm-residential land, the board of education may require a rent adjustment clause in which rents are to be adjusted, provided that such adjustments will not exceed the fair market rental value of the lands, exclusive of improvements thereon, as of the rental adjustment dates. If a rent adjustment clause is not contained in a lease of lands which are or which are to become residential or farm-residential land, the reasons for not including such clause in the lease shall be stated in the lease and entered on the minutes of the board. In the case of uncleared lands, the board of education may lease them for such short terms as may be deemed proper in consideration of the improvement thereof, with the right thereafter to lease or to hold on payment of a ground rental. The board of education may lease not more than three (3) acres of any such lands for a term not exceeding ninety-nine (99) years for a ground rental, payable annually, to any church having its principal place of worship situated on such lands, which has been in continuous operation at that location for not less than twenty-five (25) years at the time of the lease. The consideration for every lease of such lands to a church shall be renegotiated not less than once every twenty-five (25) years from the date of the lease to reflect the current fair market rental value of the lands, exclusive of any improvements thereon.
The board of education may, at any time, by agreement with any lessee of lands, except for lands classified as forest or agricultural, cancel an existing lease and execute a new lease contract on such land where major capital improvements have been made or for the purpose of facilitating the addition of major capital improvements, provided that the rental amount of such new lease shall not be less than the rental amount in the prior lease. The term of such new lease shall not exceed forty (40) years for a ground rental, payable annually, provided that prior to the execution of such new lease contract, the provisions of all applicable statutes setting forth the procedure and requirements for the execution of a lease for sixteenth section lands or lieu lands have been satisfied.
The board of education may find that in the interest of good trust management it may be necessary to grant in the original lease contract an option to renew any lease not subject to competitive bid procedures, for a term not to exceed twenty-five (25) years. If such a finding be made, it shall be entered on the minutes of the board and the option granted; provided that the execution of a new lease shall be required to effectuate the additional lease period and the provisions of all applicable statutes setting forth the procedure and requirements for the execution of a lease for sixteenth section lands or lieu lands have been satisfied.
Subleasing or assignment of
any lease of school trust lands * * * shall * * * be allowed * * * at the
discretion of the * * * leaseholder.
The provisions of Section 1 of this act shall apply to the lease of any lands under the provisions of this section.
SECTION 9. The provisions of Section 1 of this act shall be codified in Chapter 3, Title 29, Mississippi Code of 1972.
SECTION 10. This act shall take effect and be in force from and after its passage.
