Can a Mississippi school district spend public money to fix up school property and then give that property to a nonprofit?
Plain-English summary
The Greene County School District owned a piece of property it was no longer using. A 501(c)(3) nonprofit organization with an educational mission asked the District to (1) make improvements to the property and (2) ultimately transfer the improved property to the nonprofit. The District's attorney asked whether that combined plan was legal.
The AG split the question into its two parts and answered the second part squarely.
Conveying unused property to a nonprofit: Probably permissible. Mississippi Code Section 37-7-471 lets a school board sell, lease, or otherwise dispose of property when the board finds that (a) the property is no longer needed for school purposes, (b) selling in the ordinary way is not necessary or desirable, and (c) the use the property will be put to will promote the community's development. Those findings, recorded on the board's minutes, support a conveyance. The conveyance can be at "nominal" consideration. Reversionary clauses are sometimes required.
Spending public funds to improve the property as part of that conveyance: Not permissible. The opinion explicitly says no. Article 4, Section 66 of the Mississippi Constitution prohibits a "donation or gratuity in favor of any person or object" except by two-thirds vote of each branch of the legislature. The expenditure of public funds to improve property for the purpose of donating it to a private nonprofit is exactly the kind of public-to-private transfer Section 66 prohibits without legislative supermajority approval.
The opinion drew on the 2005 Creekmore opinion, which addressed an analogous situation: could the City of Amory build and lease a building free to the Mississippi Department of Public Safety? The AG said no, even though the city had general authority to lease property. Spending city funds to construct a building specifically to give it away (or give its use away) is an unlawful donation. The same logic applies to a school district improving property to give it away.
The footnote made the scope clear: the opinion is not about the school board's general authority to improve school district property for school purposes. It is specifically about the donation problem: improving property when the purpose is to gift it to a nonprofit.
What this means for you
For Mississippi school boards considering property transfers
You can convey property to nonprofits. You cannot spend public money to fix up the property as part of the gift. Practical sequence:
- Determine the property is no longer needed for school purposes.
- Make the Section 37-7-471 findings on the minutes.
- Decide on a conveyance plan (sale at fair value, lease, gift at nominal consideration with public benefits findings, etc.).
- Convey the property in its current condition.
- The recipient nonprofit can then improve the property at its own expense.
Do not flip steps 4 and 5. Do not spend district funds to upgrade the property and then donate it. Section 66 prohibits that.
For school board attorneys
When advising on a property transfer to a nonprofit:
- Confirm the Section 37-7-471 findings are supportable on the facts.
- Reject any plan where the district spends meaningful public funds to improve the property pre-transfer.
- Distinguish between "improvements to support school purposes" (allowed) and "improvements to enhance the gift" (not allowed). The line is the purpose of the expenditure.
- Build in a reversionary clause if appropriate (Section 37-7-477(1) sometimes requires one).
- Document everything on the minutes.
For Mississippi nonprofit organizations seeking school property
If a school district wants to give you property, you can take it as-is and do your own improvements. You should not ask the district to improve the property before transferring. That request will, if followed, be an unconstitutional donation.
If your organization wants the district to fund improvements, the right path is a separate legislative appropriation: get the legislature to authorize a specific donation by two-thirds vote. That is the constitutional route Section 66 describes.
For school district business managers and superintendents
If a transfer-and-improve plan crosses your desk, flag it. Ask:
- Is the purpose of the improvement to enhance the gift? If yes, stop.
- Is the purpose of the improvement to make the property useful for any school district purpose first? Probably allowed for that purpose, even if the district later decides to convey.
- Are we entering into a binding promise to convey before the improvement? That suggests the improvement is for the donation, not for the district.
The sequence and intent of the actions matters legally.
For Mississippi nonprofits generally
Section 66 is broader than this single school context. It restricts public-to-private donations across state and local government. If a Mississippi government entity is offering you cash, in-kind services, or improved property, ask: is there a specific statute authorizing this transfer? If not, the transfer may be an unlawful donation.
Public-private partnerships, economic development incentives, and nonprofit transfers all have to be structured around Section 66's constraints.
For Mississippi state legislators
If a particular school-to-nonprofit transfer makes good public policy and would benefit from district investment, the constitutional path is a specific legislative authorization by two-thirds vote of each chamber. Section 66 is not absolute; it requires a higher threshold for donations, not a prohibition. The supermajority requirement is the legislature's check on individual project-specific donations.
Common questions
Q: Can the school just sell the property at full market value, with no donation issue?
A: Yes. Section 37-7-471 allows sale at "such consideration, nominal or otherwise." Selling for full value is fine and avoids the donation issue entirely. The donation issue arises when the district transfers for less than value AND spends district money to enhance the value.
Q: What if the school improves the property for school use first, then later decides it is not needed?
A: That is a different situation. The improvements were for school purposes, not to enhance a future gift. After the property is improved, the district can later determine it is no longer needed and convey it (per Section 37-7-471). The donation problem arises when the improvement is undertaken for the purpose of the gift, not when subsequent events lead to a conveyance.
Q: Does this apply to leases too?
A: Yes. The Creekmore opinion the AG relied on involved a no-charge lease. Building (or improving) public property and then leasing it for free is treated the same as building/improving and donating. The constitutional prohibition reaches the substance of the transaction, not its form.
Q: What is the two-thirds legislative authorization mechanism?
A: Article 4, Section 66 says: "No law granting a donation or gratuity in favor of any person or object shall be enacted except by the concurrence of two-thirds of the members elect of each branch of the legislature, nor by any vote for a sectarian purpose or use." If a particular donation is desired, the legislature can authorize it by a bill that passes both chambers with the supermajority.
Q: Does this apply to Sixteenth Section School Trust Lands?
A: Sixteenth Section lands have their own framework. The opinion's footnote noted that Sixteenth Section land "cannot be disposed of except under very limited circumstances" (citing Janus 2006). The donation analysis is mostly moot for Sixteenth Section land because the disposal authority is so narrow.
Q: What if the nonprofit is essentially a school-affiliated group (booster club, foundation)?
A: A school-affiliated nonprofit is still a separate legal entity. The donation analysis still applies. The relationship with the district may make the case for a conveyance under Section 37-7-471 stronger (because it serves the educational community), but does not change the constitutional limit on improving-for-donation.
Q: What about modest improvements like cleaning up the lot, removing debris?
A: The AG opinion does not draw a de minimis line. Strict reading: any spending to enhance the property as part of a donation plan is problematic. Practical advice: if you are going to convey, convey first, then let the recipient handle cleanup and improvements.
Q: Can the district condition the conveyance on the nonprofit's use?
A: Yes. A reversionary clause requiring the property to be used for educational purposes (with reverter to the district if not) is permissible. Section 37-7-477(1) requires reversionary clauses in some conveyances. Restrictions and conditions on use protect the public interest in the conveyance.
Q: What if the improvements are paid for by federal or grant funds, not district funds?
A: That depends on the source. If district funds are not used, the donation analysis under Section 66 may be different (the funds were not "public" district funds). But the source funds may have their own restrictions on use. Do a separate analysis on the grant or federal funding source.
Background and statutory framework
Mississippi's school district property law balances two competing public interests: (1) using school assets efficiently (which sometimes means transferring property to other community uses), and (2) protecting public funds from being given away to private parties.
Section 37-7-471 is the conveyance authority. Its three findings (no longer needed; sale not necessary or desirable; community-benefit purpose) require the school board to make a record case for the transfer. The "consideration, nominal or otherwise" language explicitly allows nominal-consideration conveyances if the public-benefit findings support it. This is how community uses (libraries, recreational facilities, nonprofit education uses) can take school property without paying full market value.
Article 4, Section 66 of the Mississippi Constitution is the donation limit. It dates to the 1890 constitution and was meant to prevent legislative gifts to private parties without supermajority deliberation. The text:
"No law granting a donation or gratuity in favor of any person or object shall be enacted except by the concurrence of two-thirds of the members elect of each branch of the legislature, nor by any vote for a sectarian purpose or use."
The provision applies to laws (legislative grants) and, by extension, to individual public-entity transactions that effectively grant donations without separate legislative authorization. AG opinions have read the provision as restricting state and local government from making donations not specifically authorized by statute (and in some interpretations, requiring two-thirds legislative authorization for the underlying statutory authority).
The interplay: a public entity can transfer property to private hands when there is statutory authority (Section 37-7-471 here), but cannot convert that statutory authority into a vehicle for spending public money on the recipient's benefit. The transfer-with-pre-improvements scheme converts a permissible conveyance into a prohibited donation.
The 2005 Creekmore opinion is the analogous precedent. Amory had general lease authority. It wanted to build a building and lease it free to a state agency. The AG said: building authority does not include free-of-charge construction-for-donation. Same logic in Rimes 2021: school improvement authority does not include improvements-to-donate.
The opinion's footnote about Sixteenth Section land highlights another constraint. Section 16 of every Mississippi township was reserved for the support of public schools at statehood. Those lands have a separate trust framework that limits disposition. The 2006 Janus opinion is the AG's analysis of the limited circumstances. Most school district property is not Section 16 land, but where it is, the donation analysis is layered on top of Section 16 trust limits.
Citations and references
Constitutional provision:
- Miss. Const. art. IV, § 66, prohibition on donations except by two-thirds legislative vote
Statutes:
- Miss. Code Ann. § 37-7-471, school board authority to convey property no longer needed
- Miss. Code Ann. § 37-7-477, terms and conditions on conveyances
- Miss. Code Ann. § 37-7-477(1), reversionary clause requirements
Prior AG opinions:
- MS AG Op., Janus (Oct. 13, 2006), limited circumstances for disposition of Sixteenth Section land
- MS AG Op., Creekmore (Feb. 18, 2005), Amory cannot build building to lease free to state agency; unlawful donation
Source
- Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
- Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2021/07/J.-Rimes-June-28-2021-Authority-to-Improve-School-District-Property-for-the-Ultimate-Purpose-of.pdf
Original opinion text
June 28, 2021
Jeffrey B. Rimes, Esq.
Attorney, Greene County Board of Education
1022 Highland Colony Pkwy, Ste. 101
Ridgeland, Mississippi 39157
Re: Authority to Improve School District Property for the Ultimate Purpose of Conveying the Improved Property to a Non-Profit Organization
Dear Mr. Rimes:
The Office of the Attorney General has received your request for an official opinion.
Background Facts
The Greene County School District (the "District") owns property that, according to your request, is currently serving no need or purpose of the District. The District is considering making improvements to the property so that such property can be used by a non-profit organization that has an educational purpose, and the District has been asked to, ultimately, transfer the property to the non-profit organization.
Question Presented
Would it be legal for the District to make improvements to District property for the ultimate purpose of transferring the property to a 501(c)(3) non-profit organization?
Brief Response
No. Spending public funds to improve school district property for the purpose of transferring the property to a non-profit organization would constitute an unlawful donation under Article 4 Section 66 of the Mississippi Constitution.[^1]
Applicable Law and Discussion
Mississippi law authorizes a school board to donate school district property under certain circumstances. Specifically, Mississippi Code Annotated Section 37-7-471 provides:
Whenever the school board of any school district shall find and determine, by resolution duly and lawfully adopted and spread upon its minutes:
(a) That any school building, land, property or other school facility is no longer needed for school or related purposes and is not to be used in the operation of the schools of the district or that such school building, land, property or other school facility may yield a higher long-term economic value to the district, in the discretion of the local school board;
(b) That the sale of the property in the manner otherwise provided by law is not necessary or desirable for the financial welfare of the school district; and
(c) That the use of the school building, land, property or other school facility for the purpose for which it is to be sold, conveyed or leased will promote and foster the development and improvement of the community in which it is located and the civic, social, educational, cultural, moral, economic or industrial welfare thereof, the school board of such school district shall be authorized and empowered, in its discretion, and upon the terms and conditions set forth in Section 37-7-477, to sell, convey, lease or otherwise dispose of same for any of the purposes set forth herein. Such sale, conveyance, lease or other disposition, including retention of partial interest, or undivided interest or other ownership interest, shall be made upon such terms and conditions and for such consideration, nominal or otherwise, as the school board may, in its discretion, deem proper in consideration of the benefits which will inure to the school district or the community in which the school building, property or other facility is located by the use thereof for the purpose for which it is to be sold, conveyed, leased or otherwise disposed of . . . .
Miss. Code Ann. § 37-7-471 (emphasis added).[^2]
Assuming the land in question is not Sixteenth Section School Trust Lands, which cannot be disposed of except under very limited circumstances, MS AG Op., Janus at *4 (Oct. 13, 2006), the school board may convey District property, by whatever terms are deemed appropriate by the board, in accordance with Section 37-7-471. However, we find no statutory authority that would allow a school board to use public funds to make improvements to school district property if the purpose of making those improvements is to convey the property to a non-profit organization. Doing so without explicit statutory authority would constitute an unlawful donation under Article 4, Section 66 of the Mississippi Constitution, which provides:
No law granting a donation or gratuity in favor of any person or object shall be enacted except by the concurrence of two-thirds of the members elect of each branch of the legislature, nor by any vote for a sectarian purpose or use.
MISS. CONST. art. IV, § 66.
In 2005, our office was asked whether the City of Amory could build and lease, at no charge, a building to the Mississippi Department of Public Safety. MS AG Op., Creekmore (Feb. 18, 2005). In that opinion, we stated:
[A]uthority to convey or lease land would necessarily include any existing structure on that land. However, this authority does not extend to permit the expenditure of county or municipal funds to construct a building for the sole purpose of donating the use of it to the State. As we are aware of no specific statutory authority for a county or municipality to donate cash or in-kind services to the Department of Public Safety, the expenditure of county or municipal funds in this fashion would constitute an unlawful donation.
MS AG Op., Creekmore at *1 (Feb. 18, 2005) (internal citations omitted). This rationale applies to a school board's conveyance of school district property. Notwithstanding a school board's authority to lawfully convey real property pursuant to Section 37-7-471, spending public funds to improve that property for the ultimate purpose of donating it would constitute an unlawful donation.
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/ Abby Cummings
Abby Cummings
Special Assistant Attorney General
[^1]: This opinion does not analyze the school board's general authority to improve school district property. Rather, this opinion specifically responds to the question of whether improvements to school district property for the ultimate purpose of donating the property to a non-profit organization is permissible.
[^2]: Section 37-7-477(1) also requires certain conveyances of school property to include a reversionary clause within the conveying instrument.