Can a Mississippi school district reclassify Sixteenth Section land and lease it to the city as a rubbish (yard waste) site?

Plain-English summary

The Hazlehurst City School District owned a 24-acre tract of Sixteenth Section land classified as agricultural and hunting/fishing land. The land had been leased intermittently between 1986 and 2003. Since 2003, despite advertisement, no lease had been signed. The City of Hazlehurst proposed reclassifying the land as "other land" and leasing it to the City for use as a rubbish site (specifically for leaves and limbs picked up by city sanitation).

The District's attorney asked: can the Board do that?

The AG's answer, in essence: maybe, but it depends on the facts.

The legal framework for Sixteenth Section land is well-developed:

• The school board acts as trustee of school trust lands.
• Land must be classified according to the highest and best use for maximizing revenue.
• The board has a statutory duty to periodically reclassify when conditions change (Section 29-3-39).
• The board cannot lease for substantially less than fair value (Benson, Hill).
• Waste on Sixteenth Section land is forbidden (Section 29-3-85).
• "Waste" is any substantial injury to the inheritance during the limited estate (Moss Point Lumber, 1906).

Applied to the rubbish site scenario:

• A 1993 AG opinion (McCafferty) had categorically held that locating a rubbish site on Sixteenth Section land would inevitably reduce marketability and value, constituting waste, and was not permissible.
• The 2021 opinion modified McCafferty. The categorical rule was replaced with a fact-specific test. Whether THIS particular rubbish-site lease for THIS particular land would constitute waste is a determination the Board must make based on the actual facts.

So the Board can:

1. Survey the conditions of the land
2. Determine that conditions have changed (the land has been unmarketable as agricultural/hunting use for 18+ years)
3. Determine the highest and best use for revenue (which might be rubbish-site use, if no better use exists)
4. Decide whether the rubbish site would constitute waste (substantial injury to the inheritance)
5. If the Board concludes waste would not occur, it can reclassify and lease

Each of those determinations is a fact question the Board makes, not a question the AG can answer. The 2021 opinion gives the Board the legal flexibility to make those calls, while modifying the prior absolute prohibition.

What this means for you

For Mississippi school boards holding Sixteenth Section land

The opinion holds that the Board has authority to reclassify Sixteenth Section land when conditions change, but that reclassification is "limited to the highest and best use for maximizing revenue" (Cheney). Within that limit, the opinion leaves two things to the Board as factual determinations: whether placing storm rubbish on the land would meet the requirements of reclassification, and whether it would reduce the marketability or value of the property (which would be prohibited waste). The opinion does not decide either question for the Hazlehurst tract.

For Mississippi cities and counties seeking to use Sixteenth Section land

The opinion's significance is that it modifies the 1993 McCafferty opinion, which had treated a rubbish site on Sixteenth Section land as categorically impermissible waste. After this opinion, whether a particular rubbish-site lease constitutes waste is a fact question for the school board rather than a categorical bar. The opinion notes that in the short term such a lease "would generate revenue on what is currently a non-revenue producing tract," but it does not endorse any specific lease terms.

For school district attorneys

The opinion identifies the duties that frame any such lease: the trustee's obligation to obtain the highest and best use for maximizing revenue (Cheney; Frierson), the rule that the land cannot be leased "for substantially less than the fair value thereof" (Benson, quoting Hill), and the prohibition on waste under Section 29-3-85, with waste defined as "any substantial injury done to the inheritance, by one having a limited estate, during the continuance of his estate" (Maher, citing Moss Point Lumber). The opinion frames the waste and highest-and-best-use questions as factual determinations the Board must make.

For Sixteenth Section lessees and prospective lessees

Under the framework the opinion restates, any lease must reflect at least fair value, fit the land's classification, and not constitute waste. The opinion does not change those constraints; it only removes the categorical McCafferty bar on rubbish-site use, leaving the waste question to the Board on the facts.

Common questions

Q: What changed in the 2021 opinion?
A: The 1993 McCafferty opinion treated rubbish-site leases on Sixteenth Section land as categorically prohibited because they constituted waste. The 2021 opinion changed that to a fact-specific determination: whether a particular rubbish-site lease constitutes waste is for the Board to decide based on the actual circumstances.

Q: What is "Sixteenth Section land"?
A: Mississippi (and other states) inherited a federal land grant system where the sixteenth section of every six-mile-square township was reserved for the support of public schools. These lands are held in trust for school children. They cannot be sold (with very limited exceptions) and must be managed to produce revenue for the school district.

Q: What is the difference between "classification" and "reclassification"?
A: Sixteenth Section land is classified by use category (agricultural, hunting and fishing, residential, commercial, industrial, "other"). The classification controls how the land can be leased. Reclassification is the process of moving land from one category to another when conditions change.

Q: Why is highest and best use the standard?
A: The school board is a trustee. Trustees have a duty to maximize revenue for the beneficiaries (school children). If land is in a category that produces less revenue than another available category would, the trustee should reclassify.

Q: What is "waste"?
A: In trust law and Mississippi Sixteenth Section law, waste is any substantial injury to the inheritance done during a limited estate. For Sixteenth Section land, the school district has a continuing trust interest in the land's long-term value. A use that permanently degrades the land (or substantially impairs its future value) is waste, even if it produces revenue in the short term.

Q: Does the opinion say leaves and limbs are not "waste"?
A: No. The proposed use was a site for "leaves and limbs picked up by the City," described as "storm rubbish." The opinion does not decide whether that use would constitute waste; it states that "whether a rubbish site would detrimentally harm the land and constitute waste requires a factual determination that must be made by the Board."

Q: Could the Hazlehurst Board approve the City's rubbish lease under this opinion?
A: The Board has authority to consider it. Whether to approve is a Board decision based on the facts (land condition, lease terms, projected revenue, waste analysis). The 2021 opinion neither approves nor disapproves the specific Hazlehurst lease; it gives the Board the legal framework to make the call.

Q: What about the existing classification (agricultural and hunting/fishing)?
A: The tract had been classified as agricultural and hunting/fishing land and, per the request, had gone unleased since 2003 despite advertisement. Reclassifying to "other land" is the step the City's proposal contemplated. The opinion's limit is that any reclassification must reflect the highest and best use for maximizing revenue, which is a determination for the Board.

Q: Does the opinion lay out a reclassification procedure?
A: No. The opinion points to the Board's duty under Section 29-3-39 to "survey periodically the classification" and reclassify "because of changes of conditions," but it does not set out a notice, objection, or appeal process. Its focus is on the substantive limits (highest and best use, no waste), which it leaves to the Board on the facts.

Background and statutory framework

Sixteenth Section land is a unique feature of Mississippi school finance. When Mississippi entered the Union, federal land grants reserved certain sections of land in each township for the support of public schools. School districts hold these lands in trust for the benefit of school children.

The legal framework imposes strict trustee duties:

Highest and best use for revenue. Multiple AG opinions (Cheney 2004, others) and court decisions establish that school trust lands must be classified and used to maximize revenue. The board's duty is to the beneficiaries (school children), not to the convenience of lessees, the public, or other constituents.

No waste. Section 29-3-85 prohibits waste on Sixteenth Section land. Mississippi courts have defined waste as "any substantial injury done to the inheritance, by one having a limited estate, during the continuance of his estate" (Moss Point Lumber, 1906). The injury can be physical (destruction, contamination, alteration) or value-based (substantial reduction in marketability or future use).

Periodic reclassification (Section 29-3-39). As the opinion quotes it, boards have a statutory duty to "survey periodically the classification of all sixteenth section land under [their] jurisdiction and to reclassify that land as it may deem advisable because of changes of conditions." The opinion adds that when reclassification leads to a reduction in annual rent, moving a tract to a classification that is not the highest and best use for maximizing revenue is a breach of the Board's trustee obligation (Frierson).

Fair value leasing. Mississippi courts (Benson v. Neshoba County School District, Hill v. Thompson) hold that the school district cannot lease for "substantially less than the fair value thereof." Below-market leases breach the trust.

The 1993 McCafferty opinion sat in tension with the trustee framework. It treated a specific use (rubbish site) as categorically wasteful, regardless of facts. The 2021 Rhodes opinion brought that line back into the broader fact-specific framework: the board, as trustee, decides what constitutes waste based on the actual facts of each proposed lease. This is more consistent with the rest of Sixteenth Section law, which generally lets the board weigh facts.

The reclassification framework gives the Board:

• A statutory duty to reconsider classification when conditions change
• A duty to find the highest and best use for revenue
• Discretion to weigh the waste implications of any proposed use
• An obligation to document the analysis

Citations and references

Statutes:

• Miss. Code Ann. § 7-5-25, AG opinions limited to prospective state law
• Miss. Code Ann. § 29-3-39, periodic reclassification duty
• Miss. Code Ann. § 29-3-85, prohibition on waste

Cases:

• Benson v. Neshoba Cnty. Sch. Dist., 102 So. 3d 1190 (Miss. Ct. App. 2012), no authority to lease for substantially less than fair value
• Hill v. Thompson, 564 So. 2d 1 (Miss. 1989), same
• Moss Point Lumber Co. v. Board of Supervisors of Harrison County, 42 So. 290 (Miss. 1906), defining waste

Prior AG opinions:

• MS AG Op., Cheney (Sept. 24, 2004), highest and best use for maximizing revenue
• MS AG Op., Frierson (July 18, 1997), trustee duties on Sixteenth Section land
• MS AG Op., Mayfield (Aug. 4, 2000), waste forbidden on Sixteenth Section land
• MS AG Op., Maher (June 19, 1991), waste defined; Moss Point Lumber cited
• MS AG Op., McCafferty (Aug. 18, 1993), prior categorical prohibition on rubbish sites (modified by this opinion)
• MS AG Op., Brock (Nov. 8, 2019), AG cannot validate or invalidate past actions

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2021/10/C.Rhodes-October-1-2021-Reclassification-and-Lease-of-Sixteenth-Section-Land.pdf

Original opinion text

October 1, 2021

Carroll Rhodes, Esq.
Attorney for Hazlehurst City School District
Post Office Box 588
Hazlehurst, Mississippi 39083

Re: Reclassification and Lease of Sixteenth Section Land

Dear Mr. Rhodes:

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

Background

You state that the Hazlehurst City School District ("HCSD") has a 24 acre, more or less, tract of land on Sixteenth Section Land that has been classified as agricultural land and hunting and fishing land. According to your request, since May 13, 1986, the HCSD has leased the tract several times for agricultural or hunting and fishing purposes. The land has not been leased since 2003, although it has been advertised for leasing. The City of Hazlehurst has approached the HCSD about reclassifying the property as "other land" and then leasing it to the City to be used as a rubbish site to dump leaves and limbs picked up by the City.

Question

If the HCSD Board of Trustees (the "Board") has been unable to lease the Sixteenth Section land in question as hunting and fishing land, is it permissible for the Board to reclassify the land as "other land" and lease it to the City of Hazlehurst to be used as a rubbish site?

Brief Response

While the Board has authority to reclassify Sixteenth Section land due to a change in conditions, the reclassification is limited to the highest and best use for maximizing revenue. Whether placing storm rubbish on the land would meet the requirements of reclassification and whether it would reduce the marketability or value of the property are factual determinations that must be made by the Board.

Applicable Law and Discussion

Opinions of this office are limited to prospective questions of state law. Miss. Code Ann. § 7-5-25. This office does not validate nor invalidate past actions. Therefore, to the extent your request deals with a past action, we must decline to respond with an official opinion of this office. MS AG Op., Brock at *1 (Nov. 8, 2019).

"[S]chool trust lands must be classified according to their highest and best use for maximizing revenue." MS AG Op., Cheney at 2 (Sept. 24, 2004). Additionally, "[t]he board of education is under an obligation to obtain the highest return possible from sixteenth section land as a trustee for the school children of that district." Id. (citation omitted). Although Mississippi Code Annotated Section 29-3-39 states that boards of education have a duty to periodically reclassify Sixteenth Section land when conditions change, when a reclassification leads to a reduction in annual rent, reclassification of a tract to a classification that is not the highest and best use for maximizing revenue is a breach of the Board's obligation as trustee of school trust lands. See MS AG Op., Frierson at 2 (July 18, 1997) (outlining duties and obligations of Pearl River County School Board of Trustees).

Mississippi courts have held that the school district, as trustee of the land, does not have "authority to lease real property held in trust for substantially less than the fair value thereof." Benson v. Neshoba Cnty. Sch. Dist., 102 So. 3d 1190, 1193 (Miss. Ct. App. 2012) (quoting Hill v. Thompson, 564 So. 2d 1, 9 (Miss. 1989)). It is well-settled that waste on Sixteenth Section lands is forbidden. See MS AG Op., Mayfield at *1 (Aug. 4, 2000) (quoting Miss. Code Ann. § 29-3-85).

We have also said that:

[A] trustee is held to great strictness in his dealings with the property in his hands, and is required to protect the trust estate from waste." 90 C.J.S. Trusts Sec. 271. The Mississippi Supreme Court has specifically defined "waste" in the context of sixteenth section lands in the following manner:

Waste is defined to be any substantial injury done to the inheritance, by one having a limited estate, during the continuance of his estate .... What constitutes waste is determined by the consideration as to whether or not the act done results in injury to the inheritance.

MS AG Op., Maher at *2 (June 19, 1991) (citing Moss Point Lumber Co. v. Board of Supervisors of Harrison County, 42 So. 290, 300–01 (Miss. 1906)).

As noted in your letter, this office has previously opined that the location of a rubbish site on Sixteenth Section land, where the rubbish site would apparently be the permanent location of waste material, would inevitably result in the reduction in marketability and value of the property and is not permissible. MS AG Op., McCafferty at *1 (Aug. 18, 1993). In the short term, leasing the subject land as a rubbish site would generate revenue on what is currently a non-revenue producing tract of Sixteenth Section land. However, regardless of this office's affirmative finding of waste in McCaffery, whether a rubbish site would detrimentally harm the land and constitute waste requires a factual determination that must be made by the Board. To the extent previous opinions of this office, including McCaffery, are inconsistent with this finding, they are modified to conform hereto.

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