Can a Mississippi urban renewal authority loan state-appropriated funds (like Gulf Coast Restoration Fund money) to a private developer for an urban renewal project?
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This page answers the general question as of 2021. Ezel answers yours: what it means for your facts, under current Mississippi law, with citations.
Plain-English summary
The Pascagoula Redevelopment Authority (PRA) is a city urban renewal agency. It receives money from the State (notably the Gulf Coast Restoration Fund, GCRF) and wanted to loan part of that money to private developers working on urban renewal projects in PRA's project area. The PRA's attorney asked whether the Urban Renewal Law authorized that.
The AG's answer was yes. Section 43-35-15(e) lets the urban renewal agency borrow money or accept advances, loans, grants, or contributions from the State (or other public bodies). Section 43-35-15(f) lets it then make loans from those subsection (e) funds. The text of (f) ties only the first kind of loan, the loans to property-owning individuals under the federal Housing and Community Development Act of 1974, to that federal statute. The second clause of (f), authorizing loans from subsection (e) funds, is not limited to that federal program.
The opinion notes that two earlier opinions, Moran (2015) and Abide (2018), read subsection (f) as applying only to Housing and Community Development Act of 1974 funds. The 2021 opinion expressly modifies those opinions to align with this broader reading.
Practically, this means an urban renewal agency that receives GCRF money or other state assistance can pass that money through to a private developer in the form of a loan, as long as the loan supports an urban renewal project in the urban renewal area. Any GCRF-specific spending restrictions in the appropriations bill or in the GCRF authorizing statute (Section 57-119-1 et seq.) still apply.
What this means for you
For redevelopment and urban renewal authority boards
Under the opinion, an urban renewal agency that has received financial assistance from the State under § 43-35-15(e) may loan those funds to a developer under § 43-35-15(f) for an urban renewal project in an urban renewal area. The AG read the later portion of subsection (f) as a loan authority separate from the federal Housing and Community Development Act of 1974, and modified the earlier Moran (2015) and Abide (2018) opinions to the extent they were inconsistent. The opinion adds that any expenditure of GCRF funds must still follow the restrictions in applicable appropriations bills and § 57-119-1 et seq.
For city attorneys advising redevelopment authorities
The opinion reads § 43-35-15(f) as containing two loan authorities. The first is keyed to the federal Act: grants or loans to individuals who own property in the designated area and qualify under the Housing and Community Development Act of 1974, made from federal funds or from subsection (e) funds. The second authorizes the agency "to make loans from funds derived from subsection (e) of this section or from the proceeds of revenue bonds issued pursuant to the authority of Section 43-35-21." The AG concluded the second authority stands on its own and is not limited to the 1974 Act.
For private developers and contractors
The opinion confirms that an urban renewal agency holding subsection (e) funds may loan them to a developer for an urban renewal project in the urban renewal area. It does not address loan terms, eligibility of particular developers, or any approval process; it resolves only the agency's authority to make such a loan.
For state legislators and appropriations staff
The opinion notes that any expenditure of GCRF funds must be in accordance with restrictions imposed by applicable appropriations bills and by § 57-119-1 et seq., which creates and governs the GCRF. The loan authority the AG recognized under § 43-35-15(f) operates subject to those restrictions.
For Gulf Coast officials
GCRF money is governed by § 57-119-1 et seq. and by the specific appropriations bills. The opinion does not relieve an urban renewal agency of those restrictions; it says GCRF expenditures must comply with them in addition to the Urban Renewal Law authority it recognized.
Common questions
Q: Can a Mississippi urban renewal agency loan state money to a private developer?
A: Yes, under the opinion. The AG concluded the PRA "may loan funds that it receives from the State pursuant to Section 43-35-15(e) to a developer pursuant to Section 43-35-15(f) to be utilized for an urban renewal project in accordance with the Urban Renewal Law."
Q: What kind of "financial assistance from the State" qualifies under subsection (e)?
A: Subsection (e) covers the power "to apply for and accept advances, loans, grants, contributions and any other form of financial assistance from the federal government, the state, county, or other public body, or from any sources, public or private." The request described the PRA receiving GCRF appropriations as financial assistance from the State.
Q: What changed because of the 2021 opinion?
A: The AG noted that two prior opinions (Moran, 2015, and Abide, 2018) analyzed § 43-35-15(f) as allowing only loans tied to the Housing and Community Development Act of 1974. The 2021 opinion focused on the later portion of subsection (f) authorizing loans from subsection (e) funds, found "no requirement" that those funds relate to the 1974 Act, and modified Moran and Abide to conform.
Q: Does the developer need to qualify under the federal Housing and Community Development Act of 1974?
A: Only for the first authority in subsection (f), the loans to qualifying property-owning individuals in the designated area. For loans made from subsection (e) funds under the later portion of (f), the AG found no requirement that they relate to the 1974 Act.
Q: Can the agency loan revenue-bond proceeds to a developer?
A: Subsection (f) authorizes loans "from the proceeds of revenue bonds issued pursuant to the authority of Section 43-35-21" as well as from subsection (e) funds. The opinion quotes that language as part of the loan authority it recognized.
Q: Did the opinion set the loan terms or require security?
A: No. The opinion addressed only the agency's authority to make the loan under §§ 43-35-15(e) and (f). It did not opine on interest rates, repayment, security, or what happens on default.
Q: Does this apply only to Pascagoula?
A: The opinion concerns the Pascagoula Redevelopment Authority, but its reading of the Urban Renewal Law (§ 43-35-1 et seq.) is about the statute that applies to municipal urban renewal agencies generally.
Background and statutory framework
Mississippi's Urban Renewal Law, § 43-35-1 et seq., is the framework under which a municipality organizes an urban renewal agency. The Pascagoula Redevelopment Authority is the urban renewal agency of the City of Pascagoula, organized and existing under that law.
Section 43-35-15 enumerates the agency's powers. Subsection (e) gives the borrowing-and-accepting-money power. Subsection (f) gives two distinct loan-making powers:
The first sentence of subsection (f) is keyed to the federal Housing and Community Development Act of 1974 (P. L. 93-383). It lets the agency accept federal funds under that Act and make grants or loans to property-owning individuals in the designated area who qualify under the federal Act, drawing on either federal funds or subsection (e) funds.
The second part of subsection (f), the part the 2021 opinion focuses on, authorizes the agency "to make loans from funds derived from subsection (e) of this section or from the proceeds of revenue bonds issued pursuant to the authority of Section 43-35-21." That clause stands alone. It is not tied to the 1974 Act, not tied to qualifying individuals, and not tied to the property-owner framework.
The Gulf Coast Restoration Fund (GCRF) is created and governed by § 57-119-1 et seq. The opinion notes that any expenditure of GCRF funds must be in accordance with restrictions imposed by applicable appropriations bills and by that statute.
The 2021 opinion's main legal move is statutory interpretation: read subsection (f) by its plain terms, and the second clause is independent. The opinion expressly modifies Moran and Abide, both of which had read the federal-Act framing as covering all of subsection (f).
Citations and references
Statutes:
- Miss. Code Ann. § 43-35-1 et seq., Urban Renewal Law (general framework)
- Miss. Code Ann. § 43-35-15, powers of urban renewal agencies
- Miss. Code Ann. § 43-35-15(e), borrowing and accepting financial assistance
- Miss. Code Ann. § 43-35-15(f), loan-making authority
- Miss. Code Ann. § 43-35-21, revenue bonds
- Miss. Code Ann. § 57-119-1 et seq., Gulf Coast Restoration Fund
Federal law:
- Housing and Community Development Act of 1974, P. L. 93-383
Prior AG opinions modified:
- MS AG Op., Moran (Apr. 10, 2015), grant program under Section 43-35-15(f)
- MS AG Op., Abide (Oct. 12, 2018), same
Source
- Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
- Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2021/07/A.St_.Pe_June-30-2021-Loans-Made-to-Private-Developers-Pursuant-to-the-Urban-Renewal-Law.pdf
Original opinion text
June 30, 2021
Amy Lassitter St. Pé, Esq.
Pascagoula Redevelopment Authority
2901 Magnolia Street
Pascagoula, Mississippi 39567
Re: Loans Made to Private Developers Pursuant to the Urban Renewal Law
Dear Ms. St. Pé:
The Office of the Attorney General has received your request for an official opinion.
Background
The Pascagoula Redevelopment Authority ("PRA") is the urban renewal agency of the City of Pascagoula, organized and existing under the Urban Renewal Law, Mississippi Code Annotated Section 43-35-1 et seq. According to your request, the PRA has received financial assistance from the State in the form of funds appropriated from the Gulf Coast Restoration Fund ("GCRF") and anticipates receiving additional GCRF funds and other forms of financial assistance from the state.
Question Presented
Does Section 43-35-15, particularly subsection (e) read together with subsection (f), authorize the PRA to loan developers funds that the PRA receives as financial assistance from the State to be utilized on an urban renewal project in an urban renewal area?
Brief Response
Yes, the PRA may loan funds that it receives from the State pursuant to Section 43-35-15(e) to a developer pursuant to Section 43-35-15(f) to be utilized for an urban renewal project in accordance with the Urban Renewal Law.
Applicable Law and Discussion
Section 43-35-15 grants municipalities the powers:
(e) To borrow money and to apply for and accept advances, loans, grants, contributions and any other form of financial assistance from the federal government, the state, county, or other public body, or from any sources, public or private, for the purposes of this article, and to give such security as may be required and to enter into and carry out contracts in connection therewith . . . .
(f) To accept funds under the provisions of the Housing and Community Development Act of 1974, P. L. 93-383, or amendments thereto, and to make grants or loans to individuals who own property in the designated area and who qualify according to the provisions of the act, such grants or loans to be made from funds accepted under the provisions of said P. L. 93-383, as amended, or from the grants and contributions derived under the provisions of subsection (e) of this section; and to make loans from funds derived from subsection (e) of this section or from the proceeds of revenue bonds issued pursuant to the authority of Section 43-35-21, Mississippi Code of 1972.
Miss. Code Ann. § 43-35-15 (emphasis added.) Subsection (f), by its plain terms, grants municipalities the power to make loans from funds derived from subsection (e), which would include funds obtained as advances, loans, grants, contributions, or any other financial assistance from the State, for the purposes of the Urban Renewal Law.1
Notably, any expenditure of GCRF funds must be in accordance with any restrictions imposed by applicable appropriations bills and Section 57-119-1 et seq., which creates and governs the GCRF.
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/ Beebe Garrard
Beebe Garrard
Special Assistant Attorney General
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To the extent that previous opinions of this office have analyzed Section 43-35-15(f), finding that a municipality may only provide loans to individuals who own property in a designated renewal area and qualify under the provisions of the Housing and Community Development Act of 1974, those opinions do not appear to have analyzed the latter portion of subsection (f), which authorizes municipalities "to make loans from funds derived from subsection (e) of this section . . . ." MS AG Op., Moran at 2 (Apr. 10, 2015) (analyzing grant program under Section 43-35-15(f)); MS AG Op., Abide at 3 (Oct. 12, 2018) (same). Reading this language together with subsection (e), we find no requirement that funds acquired under subsection (e) and loaned pursuant to the latter portion of subsection (f) relate to the Housing and Community Development Act of 1974. The phrase "and to make loans from funds derived from subsection (e) of this section" provides authority to loan funds wholly separate from the Housing and Community Development Act of 1974. To the extent Moran and Abide are inconsistent with our findings here, they are modified to conform hereto. ↩
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