Mississippi Advisory Opinions November 29, 2010: No. 2010-00632 (November 29, 2010)

No. 2010-00632.

Dear Mr. Latimer:

Attorney General Jim Hood received your request and assigned it to me for research and response.

Is it legally permissible, under Home Rule or some other authority, for the City of Starkville to provide tax abatements to business owners to help offset the costs that will result from sign replacement under the City's proposed sign ordinance?

No. The City of Starkville is not authorized under the "home rule" statute or otherwise to provide tax abatements to business owners to help offset costs that will result from compliance with a new sign ordinance.

The City of Starkville is in the process of amending its sign ordinance. The new ordinance would include an amortization schedule for non-conforming signs that would be consistent with the one instituted by the City of Ridgeland and addressed in Red Roof Inns, Inc. v. City of Ridgeland , 797 So. 2d 898 (Miss. 2001). The new ordinance would also include a tax abatement to business owners affected by the amortization schedule to help offset costs incurred from replacing signs that would be non-conforming under the new ordinance.

The Mississippi Legislature has enacted tax abatements and exemptions in other contexts. However, there are no statutory provisions that specifically address the question of whether a municipality can provide a tax abatement to offset the costs of sign replacement.

The municipal "home rule" statute is found in Section 21-17-5, which reads in part:

(1) The governing authorities of every municipality of this state shall have the care, management and control of the municipal affairs and its property and finances. In addition to those powers granted by specific provisions of general law, the governing authorities of municipalities shall have the power to adopt any orders, resolutions or ordinances with respect to such municipal affairs, property and finances which are not inconsistent with the Mississippi Constitution of 1890, the Mississippi Code of 1972, or any other statute or law of the State of Mississippi , and shall likewise have the power to alter, modify and repeal such orders, resolutions or ordinances. Except as otherwise provided in subsection (2) of this section, the powers granted to governing authorities of municipalities in this section are complete without the existence of or reference to any specific authority granted in any other statute or law of the State of Mississippi...

(2) Unless such actions are specifically authorized by another statute or law of the State of Mississippi, this section shall not authorize the governing authorities of municipalities to (a) levy taxes of any kind or increase the levy of any authorized tax , (b) issue bonds of any kind, (c) change the requirements, practices or procedures for municipal elections or establish any new elective office, (d) change the procedure for annexation of additional territory into the municipal boundaries, (e) change the structure or form of the municipal government, (f) permit the sale, manufacture, distribution, possession or transportation of alcoholic beverages, (g) grant any donation, or (h) without prior legislative approval, regulate, directly or indirectly, the amount of rent charged for leasing private residential property in which the municipality does not have a property interest.

We find no provision in Mississippi law specifically authorizing a municipality to grant a tax abatement to businesses to offset costs incurred from replacing signs in order to comply with a new sign ordinance. Therefore, if such a power exists, it must arise from the "home rule" authority quoted above.

The Fifth Circuit Court of Appeals interpreted Mississippi's municipal "home rule" statute in JandB Entertainment , Inc. v. City of Jackson 152 F.3d 362 at 379 (5 th Cir. 1998) stating

The Mississippi Supreme Court has explained on several occasions that an ordinance is "inconsistent" with a state statute only if the two are in direct conflict, as determined by reference to the facts of the case at hand. [citations omitted]. Ordinances that supplement or address a different subject matter than a state statute are not inconsistent with the statute unless the state has explicitly provided that localities cannot further regulate a given area. [citation omitted]. Silence on the part of the state does not give rise to an inference that the state has prohibited localities from enacting ordinances further regulating an area.

The State has a comprehensive statutory taxing scheme which includes specific authority to levy taxes and to grant tax abatements and tax exemptions in certain specified instances. See Section 19-5-99 and Sections 17-21-5 and 21-33-91 referenced in your letter. The businesses at issue herein are subject to taxes that have been levied in accordance with State law and are eligible to seek tax abatements and tax exemptions that are authorized by State law. A municipal tax abatement for compliance with a sign ordinance would have the effect of reducing or nullifying in part a tax levy authorized by State law and would, therefore, in our view be in direct conflict with the statutes authorizing the levy. We see no indication in the "home rule" statute or elsewhere that the Legislature intended to authorize municipalities to grant tax abatements or tax exemptions other than those specifically authorized by State law.

It is the opinion of this office that the City of Starkville is not authorized under the "home rule" statute or otherwise to provide tax abatements to business owners to help offset costs that will result from compliance with a new sign ordinance.

Very truly yours,

JIM HOOD, ATTORNEY GENERAL

By:

Chuck Rubisoff

Special Assistant Attorney General