Can the Mississippi Achievement School District issue bonds and other debt for absorbed Yazoo and Humphreys schools, and who authorizes it?

Plain-English summary

When the State Board of Education absorbs a chronically failing school district into the Mississippi Achievement School District (the state's recovery vehicle for "F"-rated districts), the absorbed district stops existing as a separate legal entity. Yazoo City and Humphreys County school districts had been absorbed under § 37-17-17. The Achievement District superintendent asked who could issue bonds, notes, or other debt for facilities, equipment, and operations: the Achievement District itself? Through which body?

The AG worked through the statutory chain. Section 37-17-17 sets out specific funding mechanisms (existing tax levies flow through, the State appropriates start-up funds, donations and grants are allowed) but does not explicitly authorize debt issuance. However, § 37-17-17(5)(d) says that when a district is absorbed, it is "abolished" under § 37-17-13. And § 37-17-13(1) says when a district is abolished, the State Board of Education has "all powers which were held by the previously existing school board." So the State Board inherits the borrowing authority that the former Yazoo and Humphreys boards had.

For the second question, the AG was clear: the State Board of Education, not the superintendent, was the authorizing body. The superintendent has "significant autonomy" and specific delegated powers, but governance ultimately runs through the State Board. Resolutions and findings of fact for debt issuance had to come from the State Board.

The AG also noted (as a threshold matter) that he could not opine on federal tax law issues raised by the request, which involved the Internal Revenue Code and bond regulations. AG opinions are limited to state law.

Currency note

This opinion was issued in 2021. 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 school district restructuring in 2021

When the State Board absorbed a failing district into the Achievement District, the absorbed district did not just keep operating with new oversight. It was legally abolished. All its powers (including borrowing authority, ad valorem tax requests, contract authority) transferred to the State Board, which then exercised them in its capacity as the Achievement District's governing body.

For bond counsel and underwriters working with the Achievement District

In 2021, the takeaway was that the Achievement District could issue debt, but the State Board of Education had to authorize it. Bond opinions, resolutions, and authorizing actions had to be entered through the State Board, not the Achievement District superintendent or any local body. Tax pledges, ad valorem levy requests, and similar mechanisms that pre-existed in Yazoo and Humphreys County had to be reactivated by the State Board.

For local taxpayers in Yazoo City and Humphreys County

The 2021 framework meant the State Board could request continued ad valorem tax effort from the local governing authorities in support of Achievement District operations and debt service. The procedures in § 37-17-17(8)(b) called for public meetings in the affected localities before tax-effort requests were submitted.

For the Achievement District superintendent

The opinion was a partial limit on the superintendent's autonomy. The superintendent had operational authority over schools and "significant autonomy" in day-to-day administration, but big-ticket decisions, especially debt issuance, ran through the State Board.

For other failing or chronically underperforming districts in Mississippi

The opinion clarified that the Achievement District was a working option for state takeover and that borrowing authority would survive the takeover. That mattered for districts contemplating major capital projects or facing existing debt obligations: the legal mechanism existed for the state to step in without losing the financing tools.

Common questions

Q: What is the Mississippi Achievement School District?
A: A statewide special school district authorized under Miss. Code Ann. § 37-17-17. It can absorb local schools or districts that have been rated "F" for two consecutive years or have been "persistently failing and chronically underperforming." It is governed by the State Board of Education and run by a superintendent the State Board selects.

Q: When was the Achievement District created?
A: The Mississippi Legislature enacted § 37-17-17 with effect from 2017. Yazoo City and Humphreys County were among the first districts absorbed.

Q: How does the Achievement District get money?
A: Several streams: (1) ad valorem tax revenue from absorbed districts continues to flow, with payment to the Achievement District; (2) the State Board can request additional ad valorem effort from local governing authorities; (3) state appropriations cover start-up and operational costs; (4) donations and grants from public or private sources; and (5) per the 2021 opinion, debt issuance under the inherited authority of the former school boards.

Q: What kinds of debt could the Achievement District issue?
A: Whatever the former local school boards could issue: bonds for facilities, notes for short-term financing, certificates, leases, and other debt instruments authorized by the Mississippi school finance statutes. The 2021 opinion did not enumerate specific instruments; it pointed to the inherited authority through § 37-17-13(1).

Q: Why couldn't the superintendent authorize the borrowing?
A: Because the State Board of Education, not the superintendent, has the school-board powers under § 37-17-13(1). The superintendent runs operations under the State Board's governance. Big-ticket decisions like debt issuance have to come from the governing body itself.

Q: Did the AG address federal tax law on bond issuance?
A: No. The opinion specifically said it could not opine on federal law, including the Internal Revenue Code and federal bond regulations. The Achievement District would need separate federal tax counsel for IRS-side bond questions.

Background and statutory framework

The Mississippi Achievement School District was created as the state's intervention vehicle for chronically failing schools. The model is loosely analogous to Tennessee's Achievement School District and other state-takeover frameworks. The legislative goal was to provide an alternative to leaving struggling students in local districts that had repeatedly failed to improve.

Section 37-17-17 contains the primary structural provisions. Subsection (5)(d) is the critical link to abolition: once a school or district is absorbed, the State Board of Education "shall abolish the district as prescribed in Section 37-17-13." That triggers § 37-17-13(1), which transfers all former-school-board powers to the State Board.

Section 37-17-13 was originally written for the conservator process under § 37-17-6(15), which lets the State Board take over a single failing district through a court-appointed conservator. The 2015 Pulley AG opinion had applied § 37-17-13 in the conservator context to confirm that the conservator inherited the former board's borrowing authority. The 2021 Wright opinion extends the same logic to the Achievement District absorption pathway.

The financial flows in § 37-17-17(8)(b) are designed to keep local tax money supporting the schools the absorbed district used to serve. A pro-rata calculation moves ad valorem and in-lieu receipts from the local school district to the Achievement District for each student now enrolled in an Achievement District school. When an entire district is absorbed (as in Yazoo and Humphreys), all funds, including bond debt service and vocational levies, transfer.

Citations and references

Statutes:
- Miss. Code Ann. § 7-5-25, AG opinions limited to prospective state law questions
- Miss. Code Ann. § 37-7-301, school board powers (inherited via § 37-17-13)
- Miss. Code Ann. § 37-17-6(15), conservator authority over failing districts
- Miss. Code Ann. § 37-17-13, abolition of school district transfers powers to State Board
- Miss. Code Ann. § 37-17-17, Mississippi Achievement School District statute
- Miss. Code Ann. § 37-57-1, local contribution to education funding program
- Miss. Code Ann. § 37-57-105, school district operational levy

Prior AG opinions cited:
- MS AG Op., Pulley (Nov. 6, 2015), conservator inherits former school board's borrowing authority via § 37-17-13

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2021/01/J.Wright_January-11-2021-Borrowing-Authority-for-the-Achievement-School-District.pdf

Original opinion text

January 11, 2021

Dr. Jermall D. Wright, Superintendent
Mississippi Achievement School District
1133 Calhoun Avenue
Yazoo City, Mississippi 39194

Re: Borrowing Authority for the Achievement School District

Dear Superintendent Wright:

The Office of the Attorney General has received your request for an official opinion.

Background Facts

According to your request, the Yazoo City Municipal School District and the Humphreys County School District have been absorbed into the Mississippi Achievement School District (the "Achievement District") pursuant to Section 37-17-17. You are asking for an official opinion "regarding the governance of the [Achievement District] and the appropriate governing authority, if any, for authorizing the issuance by the [Achievement District] of bonds, notes, certificates, leases, or other debt instruments (the "Debt Obligations") of the [Achievement] District for the financing and the acquisition, construction, or improvement of the facilities of the [Achievement] District and the purchase of equipment for the [Achievement District] ("Authorized Purposes")."

Questions Presented

1) Can the Achievement District issue Debt Obligations, or otherwise borrow money, pursuant to all requirements of the Debt Obligations Act or other borrowing laws of the State, for the Authorized Purposes, based on the underlying and individual assessed valuation, ad valorem tax levies, and overall financial status of the Yazoo District and the Humphreys District?

2) Does the State Board of Education need to make findings of fact and take actions such as adopting resolutions authorizing the issuance of the Debt Obligations, or otherwise borrowing money, or can the Superintendent of the Achievement District make such findings of fact and take such actions, all in compliance with the Debt Obligations Act or other borrowing laws of the State?

Brief Response

In response to your first question, the Achievement District has the same authority as the former school boards and, thus, has authority to issue Debt Obligations or otherwise borrow money in the same manner and to the same extent authorized by the former school boards.

In response to your second question, the State Board of Education is the appropriate body to make any necessary findings of fact and adopt any resolutions necessary to issue Debt Obligations or borrow money.

Applicable Law and Discussion

The Achievement District is "a statewide school district, separate and distinct from all other school districts but not confined to any specified geographic boundaries, and may be comprised of any public schools or school districts in the state which, during two (2) consecutive school years, are designated an 'F' school or district by the State Board of Education under the accountability rating system or which have been persistently failing and chronically underperforming." Miss. Code Ann. § 37-17-17(1). The Achievement District is governed by the State Board of Education. Miss. Code Ann. § 37-17-17(2). The superintendent of the Achievement District is selected by the State Board of Education and "shall exercise powers and duties that would afford significant autonomy but are bound by the governance of the State Board [of education]." Miss. Code Ann. § 37-17-17(4).

As an initial matter, to the extent your request references the Code of Federal Regulations and the Internal Revenue Code of 1986, this office does not interpret or opine upon federal law. Rather, official opinions are limited to prospective issues of state law. Miss. Code Ann. § 7-5-25.

Section 37-17-17 sets forth, in detail, the various ways in which the Achievement District is to obtain funding. Section 37-17-17(8)(b) provides:

(b) Whenever an increase in funding is requested by the school board for the support of schools within a particular school district absorbed into the Mississippi Achievement School District, the State Board of Education and the superintendent for the Mississippi Achievement School District shall hold a public meeting in the local municipality having jurisdiction of the absorbed school district to allow input of local residents on the matter, and subsequent to the conclusion of such meeting, the board of the Mississippi Achievement School District shall submit its request for ad valorem increase in dollars to the local governing authority having jurisdiction over the absorbed school district for approval of the request for increase in ad valorem tax effort. In a district in which a school or schools but not the entire district is absorbed into the Mississippi Achievement School District, the local school district shall pay directly to the Mississippi Achievement School District an amount for each student enrolled in that school equal to the ad valorem tax receipts and in-lieu payments received per pupil for the support of the local school district in which the student resides. The pro rata ad valorem receipts and in-lieu receipts to be transferred to the Mississippi Achievement School District shall include all levies for the support of the local school district under Sections 37-57-1 (local contribution to the education funding program) and 37-57-105 (school district operational levy) and may not include any taxes levied for the retirement of the local school district's bonded indebtedness or short-term notes or any taxes levied for the support of vocational-technical education programs, unless the school or schools absorbed include a high school at which vocational-technical education programs are offered. In no event may the payment exceed the pro rata amount of the local ad valorem payment to the education funding program under Section 37-57-1 for the school district in which the student resides. Payments made under this section by a school district to the Mississippi Achievement School District must be made before the expiration of three (3) business days after the funds are distributed to the local school district by the tax collector.

(c) If an entire school district is absorbed into the Mississippi Achievement School District, the tax collector shall pay the amounts as described in paragraph (b) of this subsection, with the exception that all funds should transfer, including taxes levied for the retirement of the local school district's bonded indebtedness or short-term notes and any taxes levied for the support of vocational-technical education programs. The Mississippi Achievement School District shall pay funds raised to retire the district's debts to the appropriate creditors on behalf of the former district.

Section 37-17-17(9)(a) relates to funding to which the Achievement District is entitled from the State Board of Education. Section 37-17-17(11) authorizes the Achievement District to receive donations or grants from any public or private source, including any federal funding that may be available to the school district or individual schools within the Achievement District. Finally, Section 37-17-17(12) authorized the Legislature to appropriate certain funds to the State Department of Education for the start-up, operational and any other required costs of the Achievement District during the 2017-2018 school year. Conspicuously, in drafting Section 37-17-17, the Legislature did not explicitly authorize the Achievement District to issue Debt Obligations or otherwise borrow money.

However, the Legislature did provide:

Upon completion of the transfer of a school or district to the Mississippi Achievement School District, the school or district shall be governed by the rules, regulations, policies and procedures established by the State Board of Education specifically for the Mississippi Achievement School District, and the school or district shall no longer be under the purview of the school board of the local school district. In the event of the transfer of governance and operations of a school district, the State Board of Education shall abolish the district as prescribed in Section 37-17-13.

Miss. Code Ann. § 37-17-17(5)(d) (emphasis added). In turn, according to Section 37-17-13(1), when a local school district is abolished:

the State Board of Education shall have all powers which were held by the previously existing school board, and the previously existing superintendent of schools or county superintendent of education, including, but not limited to, those enumerated in Section 37-7-301, and the authority to request tax levies from the appropriate governing authorities for the support of the schools and to receive and expend the tax funds as provided by Section 37-57-1 et seq. and Section 37-57-105 et seq.

Miss. Code Ann. § 37-17-13(1) (emphasis added).

The Achievement District's authority resembles, in some respects, that of a conservator appointed pursuant to Section 37-17-6(15). Compare Miss. Code Ann. § 37-17-17, with Miss. Code Ann. § 37-17-17(5)(e), and 37-17-6(15)(a). Under the statutory schemes for both the conservator and the Achievement District, the State Board of Education has authority to "abolish" the local district pursuant to Section 37-17-13. Our office has previously opined that pursuant to Section 37-17-13, a conservator has the same authority as the former school board and, therefore, was authorized to issue a promissory note to cover a revenue shortfall. MS AG Op., Pulley at *1 (Nov. 6, 2015). Similarly, it is the opinion of this office that the State Board of Education, as the governing body of the Achievement District, has the same authority as the former school boards and, thus, may issue Debt Obligations or otherwise borrow money in the same manner and to the same extent as the former school boards were authorized to do so.

Turning to your second question, the State Board of Education is the appropriate body to make any necessary findings of fact and adopt any resolutions necessary to issue Debt Obligations or borrow money. Although the superintendent has "significant autonomy" and has other specific grants of authority, Miss. Code Ann. § 37-17-17(5)(e), the Achievement District is governed by the State Board of Education. Miss. Code Ann. § 37-17-17(2). Furthermore, pursuant to Section 37-17-13(1), it is the State Board of Education that broadly enjoys the powers held by the former school boards.

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/ Kyle Williams
Kyle Williams
Director, Opinions and Policy Division