Can a Mississippi city let private organizations or the chamber of commerce use the municipal auditorium without paying a fee?
Plain-English summary
The City of Okolona's attorney asked two practical questions about the city's auditorium, which doubled as a court and meeting space. Could the city let outside groups use the auditorium without charging a rental fee? And could it specifically waive fees for the local chamber of commerce by recording the waiver in the city's minutes as part of the city's contribution to the chamber?
The AG's answer to the first question was yes-but. Yes, a city is not required to charge a fee, but the city does have to recover whatever direct costs the use generates: cleaning, utilities, staff time. Otherwise, free use becomes an unconstitutional "donation" of public property under Article 4, Section 95 of the Mississippi Constitution, which prohibits municipalities from giving things to private parties without authorizing legislation.
For the chamber of commerce question, the answer was also yes, but with a more careful framing than earlier opinions had used. Mississippi statutes specifically authorize cities to donate funds and in-kind support to chambers of commerce and local economic development organizations. But the city's governing authorities had to make a fact-based finding that the chamber qualified to receive a donation under the relevant statutes. A blanket "chambers of commerce automatically qualify" position from older opinions was modified.
The opinion also reminded cities that whatever rules they adopted had to be uniform: the city could not selectively waive fees for favored organizations and charge others for the same use.
Currency note
This opinion was issued in 2020. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
What the opinion said for each audience, at the time
For Mississippi city attorneys drafting facility-use policies
In 2020, the safe practice was a written, uniform policy on facility use that:
1. Was adopted by ordinance or resolution and recorded in the minutes.
2. Either set a fee schedule covering direct costs (utilities, cleaning, staff time) or, if free use was allowed, required users to pay or perform those direct costs.
3. Treated similarly situated organizations the same.
4. Carved out narrowly drafted exceptions for entities the city was statutorily authorized to subsidize, with documented findings on the record about the qualifying basis.
For mayors and boards of aldermen
Free auditorium use sounds like a goodwill gesture, but the AG warned that without cost recovery, it crosses into an unconstitutional donation. Free events still cost the city for utilities, custodial staff, and wear-and-tear. If the city absorbed those costs, it was effectively making a gift. The Constitution prohibits that without specific authorizing legislation.
For chambers of commerce in 2020
Cities could donate office space, in-kind services, and even waive auditorium fees, but only if the city's governing authorities made a factual finding that the chamber qualified for the donation under § 21-19-44 / § 21-19-44.1 (Main Street and economic development organizations) or § 21-17-1(3) (qualified bona fide not-for-profit civic or eleemosynary corporations). The blanket rule from older AG opinions, that chambers automatically qualified, was no longer the office's position.
For other civic groups, churches, or nonprofits seeking free use
Similar analysis. The city had to find a statutory basis for the donation (e.g., bona fide nonprofit status under § 21-17-1) and document the basis on the record. Without that, the free use risked being challenged as a donation in violation of Article 4, Section 95.
For private commercial users
Cities could rent to commercial users, but most could not give them free use. The donation clause protected against subsidies to for-profit operators using city assets. Cities were also free to limit auditorium rentals to nonprofit purposes, as the AG had previously opined in Hatcher (2001).
Common questions
Q: Did Mississippi cities have to charge fees for facility use in 2020?
A: No. The opinion confirmed a city was not required to charge a fee. But it had to ensure that if no fee was charged, the city did not absorb costs that would amount to a donation of public funds.
Q: What is the "donation clause" in Article 4, Section 95?
A: It bars Mississippi municipalities from donating land or money owned by public entities to private corporations or individuals, unless specifically authorized by law. The classic example is a city building gifted free of charge to a private nonprofit. Without statutory authority, that is constitutionally forbidden.
Q: Why did the AG modify the older opinions on chambers of commerce?
A: Older opinions (Denton 2012, Farmer 2002, Jones 2000) said chambers of commerce qualified, more or less per se, to receive a donation. The 2020 opinion required a fact-based finding by the local governing authority that the specific chamber qualified for the specific donation under the applicable statute. This was a more rigorous, case-by-case approach.
Q: What kind of "uniform policy" does the city need?
A: A written rule, adopted by the governing authority and recorded in the minutes, that applies the same terms to similarly situated users. Selective waivers for favored groups are barred. The policy can be flexible (e.g., different fee tiers for nonprofit vs. commercial), but those tiers must be applied consistently.
Q: Can a Mississippi city give the chamber of commerce free office space?
A: Yes, under § 21-19-44 / § 21-19-44.1, with proper findings. The earlier opinion (Farmer 2002) said this was allowed; the 2020 opinion clarified that the governing authority still had to make a factual determination that the donation was permissible under the statute.
Q: Does the city have to charge for utilities and cleaning?
A: Yes, unless those costs are part of an authorized donation. If the city does not collect those costs, it is donating them, and the donation has to be supported by statutory authority. The fee or other recovery mechanism prevents the city from inadvertently violating Article 4, Section 95.
Background and statutory framework
Article 4, Section 95 of the Mississippi Constitution is the donation clause: "Lands belonging to or under the control of the state shall never be donated, directly or indirectly, to private corporations or individuals…" The Mississippi Supreme Court has read this provision broadly to require that public-property uses by private parties be supported either by fair compensation to the public entity or by specific statutory authorization for the donation.
Sections 21-19-44 and 21-19-44.1 authorize Mississippi municipalities to contribute funds and in-kind support to "Main Street programs" and "local economic development organizations." Chambers of commerce sometimes qualified under these provisions, but the AG's 2020 view was that this qualification could not be assumed across the board: it required a finding by the governing authority specific to the chamber and the donation.
Section 21-17-1(3) authorizes cities to make donations to "bona fide, not-for-profit, civic or eleemosynary corporation[s]" upon a finding that the recipient qualified. This is another route for permissible donations, but again requires a specific finding.
Earlier AG opinions on facility use (Short 2009, Barefield 2003, Baum 2006) had laid out the uniform-policy requirement: any policy regulating facility use must apply equally to similarly situated organizations, must be tied to actual cost recovery, and cannot be used to play favorites among private organizations.
Citations and references
Constitutional provisions:
- Miss. Const. art. 4, § 95, donation clause prohibiting gifts of public lands to private parties without statutory authority
Statutes:
- Miss. Code Ann. § 21-19-44, municipal authority to fund Main Street programs and local economic development organizations
- Miss. Code Ann. § 21-19-44.1, related authority
- Miss. Code Ann. § 21-17-1(3)(a)(1), municipal authority to donate to bona fide nonprofits
- Miss. Code Ann. § 21-17-1(3)(b)(ii), related authority
Prior AG opinions cited and modified:
- MS AG Op., Short (Apr. 24, 2009), uniform-policy requirement
- MS AG Op., Barefield (June 13, 2003), no policy may favor one organization over another
- MS AG Op., Baum (Feb. 17, 2006), fees should compensate for direct costs, waivers require donation-eligibility findings
- MS AG Op., Hatcher (Nov. 16, 2001), city may limit use to nonprofit purposes
- MS AG Op., Manley (May 1, 2015), donation clause analysis
- MS AG Op., Gamble (Feb. 6, 2004), churches must reimburse for utility and custodial costs
- MS AG Op., Jones (Aug. 4, 2000), MS AG Op., Farmer (Dec. 20, 2002), MS AG Op., Denton (Mar. 12, 2012), all modified to require case-by-case finding for chamber donations
Source
- Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
- Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2020/12/G.Barton_October-5-2020-Use-of-municipal-auditorium-by-private-organizations.pdf
Original opinion text
October 5, 2020
Gene Barton, Esquire
City Attorney, City of Okolona
Post Office Box 147
Okolona, Mississippi 38860
Re: Use of municipal auditorium by private organizations
Dear Mr. Barton:
The Office of the Attorney General has received your request for an official opinion.
Background Facts
Your letter states that the City of Okolona (the "City") has an auditorium that is used for municipal court and board meetings. The City's policy in the past has been to allow entities, other than the City, to rent the auditorium on a fee schedule basis.
Questions Presented
You ask the following questions:
- Is it necessary to charge a fee to entities, other than the City, when such entities are not working in concert with the City for the use of the auditorium?
- May a fee be waived with respect to the local chamber of commerce if it is put in the minutes that it is part of the City's contribution to the chamber of commerce?
Brief Response
With respect to your first question, no. A municipality is not required to charge a fee when allowing non-municipal individuals or entities to use municipal property. However, such use must accord with a uniform policy enacted by the municipal governing authorities. Furthermore, the municipality must collect from the user any expenses that the municipality is required to expend as a result of the municipal facility being used, i.e., cleaning fees or charges for utilities; otherwise, such uncompensated use would constitute a donation, which is prohibited by Article 4, Section 95 of the Mississippi Constitution unless explicitly authorized by law.
Turning to your second question, should the City's governing authorities determine, consistent with the facts, that the local chamber of commerce is qualified to receive a donation, the governing authorities may waive any fee charged for using municipal facilities.
Applicable Law and Discussion
"Public entities are authorized to permit the use of [their] facilities, provided that a uniform policy, which passes constitutional muster, is established and implemented for the organizations/individuals using the space in the facility." MS AG Op., Short at 1 (Apr. 24, 2009). A county or municipality may not enact a use policy that favors one organization or individual over another. MS AG Op., Barefield at 1 (June 13, 2003). We have opined that such "[p]olicies may include fees to be charged for the use of the property or facility." MS AG Op., Baum at *1 (Feb. 17, 2006). "Fees which are charged for the use of municipal facilities are not for the purpose of bringing a profit to the municipality, but should be reasonably tailored to compensate the municipality for expenses directly related to the use of the property by the organization, group or individual (use of utilities, municipal personnel, janitorial services, etc.)." Id.
However, we are aware of no requirement that a municipality charge a fee for use of municipal property. See MS AG Op., Hatcher (Nov. 16, 2001) ("Although the governing authorities may adopt a policy of allowing individuals and groups to use the city hall free of charge for commercial ventures, such as insurance sales, the governing authorities may also adopt a policy that individuals, groups and organizations may only use the city hall for nonprofit purposes.").
"As a general rule, a municipality is prohibited from donating land owned or controlled by public entities to private corporations or individuals in accordance with Article 4, Section 95 of the Mississippi Constitution." MS AG Op., Manley at 2 (May 1, 2015). Accordingly, while there is no requirement to charge a fee for using municipal property, such use must not result in an unconstitutional donation. See MS AG Op., Gamble at 1 (Feb. 6, 2004) ("However, it is important to note that the church should reimburse the county for the use of the facility, such as the cost of utilities and custodial services, so that the county is not contributing public funds toward a private purpose.").
Turning to your second question, municipalities are specifically authorized to contribute, donate or appropriate funds from the general funds to Main Street programs and local economic development organizations. Miss. Code Ann. § 21-19-44 to 44.1. We have also opined that municipal governing authorities may, in their discretion, waive all, or part, of the fees charged for use of municipal property, upon a finding that the group, organization or individual is qualified to receive a donation, in accordance with Sections 21-17-1(3)(a)(1) and 21-17-1(3)(b)(ii), relating to a qualified bona fide, not-for-profit, civic or eleemosynary corporation. MS AG Op., Manley at *1 (May 1, 2015).
Citing Section 21-19-44, this office has previously addressed a municipality's authority to provide space within a municipal building to a local chamber of commerce:
We have stated by prior opinion that a municipality may provide space in a municipal building rent free for the Chamber of Commerce pursuant to Section 21-19-44 and 21-19-44.1. MS AG Op., Jones (August 4, 2000). Municipalities may contract to provide office space or in kind services to the Main Street Project or local economic development organizations for consideration. Municipalities may donate to the Main Street Project and local economic development organizations office space and in kind services pursuant to the above statutes.
MS AG Op., Farmer at 2 (Dec. 20, 2002); see also MS AG Op., Jones at 2-3 (Aug. 4, 2000); see also MS AG Op., Denton at *1 (Mar. 12, 2012) ("It is clear that a municipality is authorized to donate office space to the local Chamber of Commerce, in accordance with Mississippi Code Annotated Sections 21-19-44 and 21-19-44.1.").
While the above-cited opinions issued by this office have concluded that a local chamber of commerce is, per se, qualified to receive a donation by a municipality, it is the opinion of this office that the governing authorities of a municipality must determine, consistent with the facts, that the local chamber of commerce may receive a donation pursuant to Sections 21-19-44 to 44.1, Section 21-17-1(3)(a)(1), (3)(b)(ii), or another applicable statute. MS AG Op., Baum at *1 (Feb. 17, 2006) ("On a case-by-case basis, the municipal governing authorities may, in their discretion, entertain a request to waive fees established in a policy providing for use of municipal facilities, and upon a finding that the group, organization or individual is qualified to receive a donation, the governing authority may determine to waive all or a part of the fees."). To the extent this opinion conflicts with our prior opinions, namely, our Denton, Farmer, and Jones opinions cited herein, the conflicting portions of those prior opinions are hereby modified.
Accordingly, should the City's governing authorities determine, consistent with the facts, that the local chamber of commerce is qualified to receive a donation, the governing authorities may waive any fee charged for using municipal facilities.
If this office may be of any further assistance to you, please do not hesitate to contact us.
Sincerely,
LYNN FITCH, ATTORNEY GENERAL
By: /s/ Phil Carter
Phil Carter
Special Assistant Attorney General