Mississippi special local improvement assessment districts.
A homeowners' association can ask its city to tax the property in its own boundaries and hand the money back for improvements. The price of that arrangement is the most owner-friendly transparency rule in Mississippi HOA law — an independent annual audit, filed with the city and open to public inspection.
What this is
Buried in the chapter on municipal taxation and finance — not in the property title, and not anywhere near the condominium law — is a mechanism that lets a homeowners' association fund improvements through the tax roll.
In outline: the owners petition, the district is put to a vote of the electors in it, the city creates the special local improvement assessment district over the association's own area, levies additional millage on the taxable real property inside it, collects the money, and disburses it to the association to spend on “local improvements.”
Two gates, and most associations do not get through them
§ 21-33-551 defines the terms , expressly for the purposes of §§ 21-33-551 through 561 and unless the context clearly indicates otherwise, and the definitions do the real work:
- “Homeowners' Association” means one “duly organized as a nonprofit organization with tax-exempt status under Section 501(c)(3) of the Internal Revenue Code.” Most community associations are not 501(c)(3) organisations.
- “Municipality” means one incorporated under state law with a population of 150,000 or more according to the 2010 federal decennial census.
Both gates are in the definitions rather than in the operative sections, which is exactly where a reader is least likely to look for them. If either is unmet, none of what follows is available. The statute also refers repeatedly to the Capitol Complex Improvement District in § 21-33-553, and gives that district's advisory committee a role in delivering the petition.
How a district is created
Under § 21-33-553(1), the proposed district's boundaries must sit within the boundaries of the homeowners' association representing that area. Creation starts with a petition delivered to the municipal clerk, signed by the owners of at least sixty percent (60%) of the taxable real property in the association's area. On delivery, the municipality shall begin efforts to establish the district.
The association then files a strategic plan specifying the improvements proposed for the coming fiscal year and the total to be spent (§ 21-33-553(2)). The city sets the additional millage based on that plan — not to exceed six (6) mills. That cap is the only ceiling on what an owner inside the district can be taxed under these sections.
Nothing happens without an election
The petition does not create the district. Within ninety days of receiving the strategic plan the municipality must prepare a notice calling an election in the proposed district on whether to establish it, fixing the date, time and voting location (§ 21-33-553(3)). The notice is published once a week for three consecutive weeks, the first publication not less than twenty-one days before the election and the last not more than seven days before it. All qualified electors of the proposed district may vote.
§ 21-33-553(4): once the results are canvassed and certified, the municipality adopts a resolution creating the district if at least sixty percent (60%) of the qualified electors who vote in the election vote in favour of it.
Two different sixty-percent thresholds sit in this one section and they measure different things: the petition needs owners of 60% of the taxable real property; the election needs 60% of the qualified electors voting. Clearing the first does not clear the second.
What the money may be spent on
“Local improvements” is defined broadly in § 21-33-551(b): parks and related facilities, sidewalks, streets, curbing, medians, planting areas, walls, lighting, fountains and flagpoles; trees, shrubs, flowers and other vegetation; security enhancements including cameras, radios and monitors; private patrol services; the acquisition, rehabilitation and sale of property in the district; and associated costs such as relocating utility service or removing signs.
§ 21-33-555(1) gives the association the powers to do it — planning and design, purchasing and constructing the improvements, acquiring easements and other interests in land, providing maintenance and services, and contracting the work out to a Mississippi nonprofit. Under § 21-33-555(2) the district dissolves once every improvement in the strategic plan is complete and all indebtedness satisfied — “However, the district may be continued in effect by following the petition and ballot procedures provided for the establishment of the district.” It can be renewed indefinitely, by going back through the petition and the election. § 21-33-559 lets the association accept and spend contributions from other sources for the same purposes.
The accountability that comes with it — § 21-33-557
This is the provision most worth knowing about, and it has no equivalent anywhere else in Mississippi's HOA law.
The municipality holds the assessment proceeds and disburses them to the association. From that point:
- The association shall keep the proceeds separate and apart from its other funds, and account for their receipt and expenditure separately from its other accounting.
- The association shall have its books and records audited annually by an independent certified public accountant.
- It shall file a written report of that audit with the clerk of the municipality.
- The clerk shall make the audit report available for public review.
- An association whose area of coverage is an operating district shall post online notice of its annual meeting; at that meeting it must provide an update on the status and use of the money collected, and shall hold elections for officers and board members. On dissolution of the district, officers' and board members' terms revert to the length the bylaws specify.
An independently audited account of association spending, filed with a public official and open to inspection, is a level of transparency Mississippi imposes nowhere else. It is the trade the statute makes: the association gets to use the tax roll, and in exchange its handling of that money stops being private. The district also runs on the same fiscal year as the municipality.
Overlapping associations
§ 21-33-561 handles the case of a parcel that falls under more than one homeowners' association where each set of owners petitions. Such a parcel may not be assessed under these sections more than once at any given time. It is assessed by whichever district was first approved by the electors; when that district dissolves, the next one approved becomes the taxing district.
§§ 21-33-501 through 21-33-525 — the older Local Improvement Taxing Districts subarticle that opened this article — were repealed by operation of law on 1 July 2001. One catchline covers all thirteen, which is why those numbers have no separate text below.
Contents · 7 sections ▾
- § 21-33-501 Repealed
- § 21-33-551 Definitions
- § 21-33-553 Creation of special local improvement assessment districts under certain circumstances; procedure for establishment of districts
- § 21-33-555 Powers of homeowners’ associations representing property in special local improvement assessment districts; dissolution of districts
- § 21-33-557 Use of proceeds of special assessments levied on real property located in districts
- § 21-33-559 Acceptance and expenditure of contributions from other sources
- § 21-33-561 Assessment of taxable property falling under more than one homeowners’ association
This repeal covers a range. One notice repeals §§ 21-33-501 through 21-33-525 together, so the sections numbered between them have no separate entry anywhere in the chapter. They are repealed too.
Repealed by operation of law on July 1, 2001, by Laws 1998, ch. 502, § 14.
§ 21-33-501. [Laws, 1993, ch. 573, § 1; Laws, 2000, ch. 459, § 1, eff from and after February 12, 2001(the date the United States Attorney General interposed no objection under Section 5 of the Voting Rights Act of 1965 to the amendment of this section.)]
§ 21-33-503. [Laws, 1993, ch. 573, § 2; Laws, 2000, ch. 459, § 2, eff from and after February 12, 2001(the date the United States Attorney General interposed no objection under Section 5 of the Voting Rights Act of 1965 to the amendment of this section).]
§ 21-33-505. [Laws, 1993, ch. 573, § 3; Laws, 2000, ch. 459, § 3, eff from and after February 12, 2001(the date the United States Attorney General interposed no objection under Section 5 of the Voting Rights Act of 1965 to the amendment of this section).]
§ 21-33-507. [Laws, 1993, ch. 573, § 4; Laws, 2000, ch. 459, § 4, eff from and after February 12, 2001(the date the United States Attorney General interposed no objection under Section 5 of the Voting Rights Act of 1965 to the amendment of this section).]
§ 21-33-509. [Laws, 1993, ch. 573, § 5; Laws, 2000, ch. 459, § 5, eff from and after February 12, 2001(the date the United States Attorney General interposed no objection under Section 5 of the Voting Rights Act of 1965 to the amendment of this section).]
§ 21-33-511. [Laws, 1993, ch. 573, § 6; Laws, 2000, ch. 459, § 6, eff from and after February 12, 2001 (the date the United States Attorney General interposed no objection under Section 5 of the Voting Rights Act of 1965 to the amendment of this section).]
§ 21-33-513. [Laws, 1993, ch. 573, § 7; Laws, 2000, ch. 459, § 7, eff from and after February 12, 2001 (the date the United States Attorney General interposed no objection under Section 5 of the Voting Rights Act of 1965 to the amendment of this section).]
§ 21-33-515. [Laws, 1993, ch. 573, § 8; reenacted without change, 1998, ch. 502, § 8; brought forward without change, Laws, 2000, ch. 459, § 10, eff from and after February 12, 2001 (the date the United States Attorney General interposed no objection under Section 5 of the Voting Rights Act of 1965 to the amendment of this section).]
§ 21-33-517. [Laws, 1993, ch. 573, § 9; Laws, 2000, ch. 459, § 8, eff from and after February 12, 2001 (the date the United States Attorney General interposed no objection under Section 5 of the Voting Rights Act of 1965 to the amendment of this section).]
§ 21-33-519. [Laws, 1993, ch. 573, § 10; Laws, 2000, ch. 459, § 9, eff from and after February 12, 2001 (the date the United States Attorney General interposed no objection under Section 5 of the Voting Rights Act of 1965 to the amendment of this section).]
§ 21-33-521. [Laws, 1993, ch. 573, § 11; reenacted without change, 1998, ch. 502, § 11; brought forward without change, Laws, 2000, ch. 459, § 11, eff from and after February 12, 2001 (the date the United States Attorney General interposed no objection under Section 5 of the Voting Rights Act of 1965 to the amendment of this section).]
§ 21-33-523. [Laws, 1993, ch. 573, § 12; reenacted without change, 1998, ch. 502, § 12; brought forward without change, Laws, 2000, ch. 459, § 12, eff from and after February 12, 2001 (the date the United States Attorney General interposed no objection under Section 5 of the Voting Rights Act of 1965 to the amendment of this section).]
§ 21-33-525. [Laws, 1993, ch. 573, § 13; reenacted without change, 1998, ch. 502, § 13; brought forward without change, Laws, 2000, ch. 459, § 13, eff from and after February 12, 2001 (the date the United States Attorney General interposed no objection under Section 5 of the Voting Rights Act of 1965 to the amendment of this section).]
For the purposes of Sections 21-33-551 through 21-33-561, the following words and phrases shall have the meanings ascribed herein unless the context clearly indicates otherwise:
(a) “Homeowners’ Association” means a homeowners’ association duly organized as a nonprofit organization with tax-exempt status under Section 501(c)(3) of the Internal Revenue Code.
(b) “Local improvements” means (i) any improvements constructed within a special local improvement assessment district or services established under Sections 21-33-551 through 21-33-561 to improve the appearance or functioning of property located within the district including, but not limited to, parks and related facilities, sidewalks, streets, street curbing, street medians, planting areas, walls, lighting equipment, fountains and flagpoles; (ii) trees, shrubs, flowers and other vegetation; (iii) security enhancements including, but not limited to, cameras, radios, monitors and related equipment; (iv) private patrol services; (v) the acquisition, rehabilitation and sale of property in a special local improvement assessment district; and (vi) any expenditures made in conjunction with the improvements set forth above such as the removal and relocation of utility service or purchase and removal of signs.
(c) “Municipality” means any municipality incorporated under the laws of the state with a population of one hundred fifty thousand (150,000) or more according to the 2010 federal decennial census.
(d) “Special local improvement assessment district” or “district” means a district established pursuant to Section 21-33-553 and may be comprised of either residential or nonresidential real property. Nonresidential real property located within or immediately adjacent to a special local improvement assessment district comprised of residential real property may be included within such special local improvement assessment district by a request submitted in writing by the owner of such nonresidential property to the governing authorities of the municipality. Residential real estate property located within or immediately adjacent to a special local improvement assessment district comprised of nonresidential real property may be included within such special local improvement assessment district by a request submitted in writing by the owner of such residential property to the governing authorities of the municipality.
(e) “State” means the State of Mississippi.
Laws, 2019, ch. 437, § 1, eff from and after July 1, 2019.
(1) A special local improvement assessment district may be created under this section if the boundaries of the proposed special local improvement assessment district are within the boundaries of the homeowners’ association representing that area. Upon delivery of a petition to the clerk of the municipality in which the proposed district is located, signed by the owners of at least sixty percent (60%) of the taxable real property in the homeowners’ association representing the area in the proposed district, the municipality shall begin efforts to establish the district; however, if the boundaries of the proposed special local improvement assessment district are located, in whole or in part, within the boundaries of the Capitol Complex Improvement District, or a portion of the proposed district adjoins the boundaries of the Capitol Complex Improvement District, the petition may be delivered to the Capitol Complex Improvement District Project Advisory Committee, and the committee shall deliver the petition to the clerk of the municipality.
(2) The homeowners’ association representing the property owners in the proposed special local improvement assessment district shall submit a strategic plan to the municipality specifying the local improvements proposed for the district during the municipality’s upcoming fiscal year and the total amount proposed to be expended for the improvements. Based on the strategic plan, the governing authorities of the municipality shall determine the additional millage to be levied upon all taxable real property in the district, not to exceed six (6) mills, needed in order to provide funds for the local improvements as proposed in the strategic plan.
(3) Within ninety (90) days of receipt of the strategic plan, the municipality shall prepare a notice calling for an election to be held in the proposed district on the question of whether to establish the special local improvement assessment district. The date and time of the election and the voting location shall be fixed in the notice. The municipality shall publish the notice of the election once each week for at least three
(3) consecutive weeks in a newspaper published or having a general circulation in the town, with the first publication of the notice to be made not less than twenty-one (21) days before the date fixed in the notice of the election and the last publication to be made not more than seven (7) days before the election. At the election, all qualified electors of the proposed special local improvement assessment district may vote, which qualified electors shall be determined by use of the voter rolls of all municipal voting precincts containing any property in the proposed special local improvement assessment district. The ballots prepared by the municipality and used in the election shall have printed thereon the additional millage to be assessed, a brief statement of the purposes of the proposed special local improvement assessment district and the words “FOR THE SPECIAL IMPROVEMENT ASSESSMENT DISTRICT” and, on a separate line, “AGAINST THE SPECIAL IMPROVEMENT ASSESSMENT DISTRICT,” and the voters shall vote by placing a cross (X) or check (✓) opposite their choice on the proposition.
(4) When the results of the election shall have been canvassed and certified by the municipality, the governing authorities of the municipality shall adopt a resolution creating the special local improvement assessment district if at least sixty percent (60%) of the qualified electors in the proposed special local improvement assessment district who vote in the election vote in favor of creating the district. The resolution shall contain a description of the boundaries of the district and shall specify the millage rate to be levied upon taxable real property in the district for the municipality’s fiscal year. At least thirty (30) days before the effective date of the tax, the governing authorities shall furnish to the Department of Revenue a certified copy of the resolution evidencing the tax.
(5) The procedures required in this section for the establishment of a district shall be used for the modification of the boundaries of a district.
Laws, 2019, ch. 437, § 2, eff from and after July 1, 2019.
(1) Upon the adoption of a resolution establishing a special local improvement assessment district as set forth under Section 21-33-553, the homeowners’ association representing the property area in the district shall be authorized to exercise the following powers within the special local improvement assessment district:
(a) To provide for the planning and design of local improvements and the coordination of landscape design on different parcels of property, including the preparation of working drawings for the construction, acquisition and installation of local improvements;
(b) To purchase, acquire, install and construct local improvements;
(c) To purchase and acquire easements, air rights, scenic rights-of-way and other interests in land on which local improvements can be placed and which are necessary or desirable in connection with any local improvements;
(d) To provide for the management of local improvements, including, but not limited to, providing maintenance and services within the district; and
(e) To contract with a nonprofit local association duly incorporated under the laws of the State of Mississippi to undertake all or a portion of the activities within the district.
(2) A special local improvement assessment district established under Section 21-33-553 shall be dissolved upon completion of all improvements in the district’s strategic plan and satisfaction of all indebtedness incurred in connection with the district’s activities. However, the district may be continued in effect by following the petition and ballot procedures provided for the establishment of the district in Section 21-33-553.
Laws, 2019, ch. 437, § 3, eff from and after July 1, 2019.
(1) The proceeds of any special assessment levied on real property located within a special local improvement assessment district under Section 21-33-553 may be used to pay costs including administrative costs of and relating to exercising the powers set forth in Section 21-33-555. The municipality shall hold the proceeds of the special assessment until disbursing the proceeds to the homeowners’ association representing the area in a district created under Section 21-33-553. A homeowners’ association shall keep the proceeds of such assessment separate and apart from other funds of the association. Accounting for receipts and expenditures of proceeds from the assessment shall be made separately and apart from the accounting of receipts and expenditures of the homeowners’ association for other funds of the district. The homeowners’ association shall have its books and records audited annually by an independent certified public accountant and shall file a written report of the audit with the clerk of the municipality. The clerk of the municipality shall make the report of the audit available for public review. A special local improvement assessment district shall operate on the same fiscal year as the municipality.
(2) Any homeowners’ association whose area of coverage is an operating special assessment local improvement assessment district shall post online notice of its annual meeting. At each annual meeting, the homeowners’ association shall provide an update regarding the status and use of the monies collected under the special assessment imposed pursuant to Sections 21-33-551 through 21-33-561 and shall hold elections for officers and board members. Upon dissolution of the special local improvement assessment district under Section 21-33-555(2), the term of service of the homeowners’ association officers and board members shall resume the length specified in the bylaws of the homeowners’ association.
(3) Nothing in this section shall prevent the use of such special assessment for the purpose of planning and design of local improvements for any property located within a district and the coordination of landscape design on different parcels of property.
Laws, 2019, ch. 437, § 4, eff from and after July 1, 2019.
Any homeowners’ association representing the area in a district established under Section 21-33-553 may accept and expend contributions from any other sources and apply such contributions to any of the purposes set forth in Sections 21-33-551 through 21-33-561.
Laws, 2019, ch. 437, § 5, eff from and after July 1, 2019.
In the event any parcel of taxable property falls under the purview of more than one homeowners’ association, each of whose property owners petition to create a special local improvement assessment district under Section 21-33-553, such parcel may not be assessed pursuant to Sections 21-33-551 through 21-33-561 more than once at any given time. The parcel shall be assessed by the special local improvement assessment district first approved by the electors pursuant to Section 21-33-553. Following the dissolution of the taxing special local improvement assessment district under Section 21-33-555(2), the next special local improvement assessment district to have been approved by the electors pursuant to Section 21-33-553 shall become the taxing district.
Laws, 2019, ch. 437, § 6, eff from and after July 1, 2019.
General information, not legal advice. Statutory text is reproduced from the Mississippi Code of 1972 and may not reflect the most recent amendments.