Mississippi Advisory Opinions April 02, 1984: 19840402 (April 02, 1984)

Advisory Opinion Text

Honorable Curtis Breland

Town Attorney

Post Office Box 706

Leakesville, MS 39451

Re: Taxes - Municipal

Dear Mr. Breland:

Attorney General Edwin Lloyd Pittman has received your letter and assigned it to me for research and reply.

Your letter states:

“....A judgment has been rendered against the Town of Leakesville in the United States district Court, Southern District of Mississippi, involving injury to a person by a Leakesville policeman. The Town does not have any available funds with which to pay the judgment.

The judgment and court costs will be approximately $25, 000.00 and the assessed value of the Town, according to the last roll, was $2, 007.922.00. To pay this indebtedness in one year would require a 12.5 mill levy. My question is whether the Town may levy an ad valorem tax for the specific purpose of paying this judgment? If so, could this levy be made regardless of the amount of mills levied for other purposes? If so, what is the citation of the law authorizing such levy?...”

There is no specific statutory authorization for a municipality to levy an ad valorem tax to satisfy such a judgment.

Should funds be available in the Municipal General Fund such funds could be expended for satisfying the judgment. In this connection, reference is made to Section 27-39-307 if the Mississippi Code of 1972 Annotated (the “Code”) which states what ad valorem taxes may be levied by a municipality for general revenue purposes:

§ 27-39-307. Municipal general ad vakiren tax levy.

Municipalities may levy ad valorem taxes upon all taxable property within such municipality for general revenue purposes and for general improvements. Provided, however, the governing authorities of any municipality may make additional levies for special purposes as authorized by law.

This section is a codified act of the General Laws of 1983 which repealed the previous act which limited the municipal levy for general revenue purposes for 15 mills. Therefore, a millage could be increased from 15 mills, subject to the comments below:

Section 27-39-321 of the Code limits the receipts from ad valorem taxes:

With respect to ad valorem taxes levied on or after October 1, 1980, no political subdivision may levy ad valorem taxes in any fiscal year which would render in total receipts from all levies an amount more than the receipts from that source during the next preceding fiscal year, plus, at the option of the tqxing authority, an increase not to exceed ten percent (10%) of such receipts. The additional revenue from the ad valorem tax on any newly constructed properties or any existing properties added to the tax rolls or any properties previously exempt, which were not assessed in the next preceding year and cost incurred and paid in the nest preceding year in connection with reappraisal may be excluded from the ten percent (10%) increase limitation set forth herein....

....Taxes levied for payment of principal of and interest on general obligation bonds issued heretofore or hereafter shall be excluded from the ten percent (10%) increase set forth herein....

....The limitation imposed under this paragraph shall not apply to those mandatory levies enumerated in sections 27-39-320 and 27-39-329....

In this same Section 27-39-321 there are provisions for exceeding the limitation imposed:

....The limitation of this section may be increased only when the governing body of a political subdivison has determined the need for additional revenues, adopts a resolution declaring its intention so to do and has held an election on the question of raising the limitation prescribed in this section. The notice calling for an election shall state the purpose for which the additional revenues shall be used, the amount of the tax levy to be imposed for such purposes and period of time for which such levy shall be made; however, such tax levy shall not be made for more than five (5) successive years. The limitation may be increased only if the proposed increase is approved by a majority of those voting. Subject to specific provisions of this paragraph to the contrary, the publication of notice and manner of holding the election shall be as prescribed by law for the holding of elections for the issuance of bonds by the political subdivision. Revenues derived from any taxes levied pursuant to such election shall be excluded from the tax base for the purpose of determining aggregate receipts for which the ten percent (10%) increase limitation applies.

Aside from proceeding under Section 27-39-321 to increase ad valorem tax receipts which, if available, could be used to satisfy such judgment consideration may be given to the passage of a Local and Private Law to enable the municipality to levy ad valorem taxes for the purpose of satisfying a judgment. For your information there is enclosed a copy of House Bill No. 1402, Chapter No. 827, Local and Private Laws of 1979 which enabled the municipality of Bay St. Louis to issue bonds to pay a judgment and levy a special sales and services tax within the municipality to pay off the bonds.

With kind regards, I am

Very truly yours,

Edwin Lloyd Pittman Attorney General.