When a power company files an apportionment error on its public utility property, can the county tax collector fix the error to redistribute taxes correctly among the taxing districts?

Plain-English summary

Mississippi Power Company filed an apportionment of its public-utility property with the Department of Revenue in June 2022, then discovered in late September that the apportionment was wrong because of a software-conversion error. By that point, taxing districts in Harrison County and elsewhere had already approved budgets based on the bad apportionment. MPC corrected the error and sent updated numbers to DOR. But because the assessment rolls had already been approved and delivered to the counties, DOR's tax collectors faced a problem: they had taxes rolling in based on the wrong apportionment.

The Harrison County Tax Collector asked the AG who could fix this. The AG's answer:

• The tax collector cannot. A county tax collector has no authority to unilaterally substitute an alternate apportionment for the one DOR approved.
• DOR may have authority, because DOR is the state assessor for public-service corporations whose property crosses county lines, and DOR has the power under §§ 27-35-309(2)(b) and 27-35-305 to address a company's failure to render the required apportionment. But whether DOR is obligated to fix this specific error is a fact-and-law mix that the AG declined to opine on.
• A court may have authority through injunctive relief, but again the AG declined to opine on the validity of any particular claim or the appropriateness of injunctive relief in this case.

The bottom line for tax collectors: you administer the rolls you receive. You do not redo the math.

What this means for you

If you're a county tax collector facing a known apportionment error

The opinion holds that, absent a directive from DOR or a judicial determination authorizing it, the county tax collector has no authority to substitute an alternate apportionment for the one DOR approved, even with a corrected version from the utility in hand. The opinion reads the statutes (§§ 27-35-301 et seq.) as providing no mechanism for the collector to independently alter or amend a DOR-approved apportionment.

If you're a board attorney or county counsel

Under § 27-35-313, once the 20-day objection period passes, DOR approves the assessment rolls and sends a certified copy to the clerks of the boards of supervisors, after which (per § 27-35-315) the chancery clerk certifies and delivers the roll to the tax collector with the same force as other certified tax rolls. The opinion holds DOR and a court are the actors with potential authority to change the apportionment, but it expressly declined to opine on DOR's obligations or on whether a court could grant injunctive relief in this situation, both being mixed questions of law and fact.

If you work in the Department of Revenue

This opinion does not say DOR must fix every apportionment error after the assessment rolls have been certified. The AG specifically declined to opine on DOR's obligations because the question crosses into facts (timing, magnitude, equities) and asks about another official's duties. But the opinion confirms DOR's exclusive authority. If DOR receives a credible mid-cycle correction from a public-service corporation, DOR is the only administrative actor that can issue a revised assessment.

If you're a public-service corporation tax manager

Under § 27-35-309(2)(b), the apportionment of assessed value must be filed with DOR on or before the last day of the 20-day objection period set in § 27-35-309(2)(a). The opinion notes that if a company fails, refuses, or neglects to render the apportionment, it is subject to the penalties in § 27-35-305, under which DOR may impose a 10% penalty on the assessment and "make out such schedules from the best information obtainable."

If you're a school district or municipal finance director

The opinion's significance for taxing districts is that the county tax collector cannot unilaterally re-apportion DOR-approved assessed values to change what each district receives. Under the opinion, only DOR (or a court) can change a DOR-approved apportionment.

Common questions

Q: Who assesses public-utility property in Mississippi?
A: The Department of Revenue. Section 27-35-301 et seq. give DOR exclusive authority to assess public-service corporations whose property is located in more than one county. Mississippi Power Co. v. City of Laurel, 28 So. 2d 750 (Miss. 1947).

Q: Who delivers the assessment roll to the tax collector?
A: After the 20-day objection period closes, DOR approves the assessment rolls and sends a certified copy to the clerks of the boards of supervisors of the respective counties. The chancery clerk certifies and delivers the roll to the tax collector.

Q: Can the county tax collector make any corrections to the assessment roll?
A: Not to a DOR-certified apportionment for public-service corporations. The collector administers the roll as delivered.

Q: What if a utility company files inaccurate or incomplete schedules?
A: DOR may impose a 10% penalty on the assessment under § 27-35-305 and "make out such schedules from the best information obtainable."

Q: How long is the objection window?
A: The assessment is open for objections for 20 days in DOR's office under § 27-35-309(2)(a). Objections are filed with the Executive Director of the Board of Tax Appeals.

Q: Can taxing districts sue to recover their shortfall?
A: The opinion does not say. The third question asked whether a court could correct the error through injunctive relief, and the AG declined to opine, calling it a mixed question of law and fact on which it does not opine.

Background and statutory framework

Section 112 of the Mississippi Constitution requires uniform and equal taxation throughout the state but allows the legislature to provide for special valuation methods for corporate property "not situated wholly in one county." Public-utility property is the classic example. A power company's lines, substations, towers, and assets cross many counties and many taxing districts. If each county assessed its own portion, valuations would diverge wildly. To prevent that, the legislature centralized assessment of public-service corporations in DOR.

Section 27-35-309 lays out the apportionment process. The utility files schedules with DOR, DOR computes a total valuation, and then DOR directs the company to apportion that valuation among the counties, municipalities, and taxing districts in proportion to the property located in each. The result is supposed to "fairly equalize the relative value of the property therein located to the whole value thereof."

Errors happen, especially during system migrations. The statutes contemplate this by giving DOR penalty authority under § 27-35-305 and a 20-day objection window under § 27-35-309(2)(a). What the statutes do not contemplate is post-certification self-help by tax collectors. The integrity of the centralized apportionment depends on DOR's exclusive authority being respected at the back end of the process.

Citations and references

Statutes and constitutional provisions:

• Miss. Const. § 112 (uniform and equal taxation; special method for multi-county corporate property)
• Miss. Code Ann. § 27-35-301 (DOR as state assessor for public-service corporations)
• Miss. Code Ann. § 27-35-303 (filing of schedules by utilities)
• Miss. Code Ann. § 27-35-305 (penalties for failure to render schedules)
• Miss. Code Ann. § 27-35-309 (assessment and apportionment process)
• Miss. Code Ann. § 27-35-313 (approval and delivery of assessment rolls to county clerks)
• Miss. Code Ann. § 27-35-315 (delivery to tax collector)
• Miss. Code Ann. § 7-5-25 (AG opinion authority)

Case:

• Mississippi Power Co. v. City of Laurel, 28 So. 2d 750, 752 (Miss. 1947), confirming DOR's exclusive authority to assess public-service corporations whose property is located in more than one county

Prior AG opinions referenced:

• MS AG Op., Criswell (Aug. 26, 2016)
• MS AG Op., Hill (Sept. 30, 2021)

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2022/11/S.Barnett-November-23-2022-Errors-in-the-Apportionment-of-Assessed-Property-Values.pdf

Original opinion text

November 23, 2022

Sharon Nash Barnett
Harrison County Tax Collector
1801 23rd Avenue
Gulfport, Mississippi 39502

Re: Errors in the Apportionment of Assessed Property Values

Dear Ms. Barnett:

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

Background

In your request, you provide the following background:

In June 2022, [the Mississippi Power Company ("MPC")] submitted an assessment, with incorrect apportionment, of its Public Utility Property to [the Department of Revenue ("DOR")]. After review and passage of the 20-day period for objection, DOR approved the assessment rolls and forwarded such to the clerks of the county boards of supervisors, including Harrison County, who then filed the assessment rolls and subsequently delivered the same to tax collectors. [See] Miss. Code Ann. §§ 27-35-313 and 27-35-315.

In late September 2022, and after the taxing districts had approved their individual budgets, MPC discovered it had made an error in its apportionment due to the implementation of a new enterprise-wide software platform. More specifically, while the total assessment of its public utility property within Harrison County was correct, such assessment contained errors in apportioning value between taxing districts within Harrison County . . . [and] across all the counties in which MPC owns property. . . .

Upon learning of this error, MPC notified DOR, which then placed the tax collectors in each county on notice that an error in the apportionment of MPC taxes had occurred and a solution was being sought. MPC, in fact, corrected its error and sent the information to DOR. . . . MPC, with the knowledge of both DOR and the Office of the State Auditor, forwarded the new, corrected apportionment to the counties in which MPC owned property. . . .

Questions Presented

1. Is the Tax Collector authorized to correct known errors in the apportionment of the assessed value of property taxed pursuant to Sections 27-35-301 et seq., so that each municipality and taxing district within Harrison County receives its just share of taxes?

2. If the Tax Collector is not authorized to correct such errors, is the Mississippi Department of Revenue authorized and/or obligated to do so?

3. If such errors cannot be corrected by the tax collector or DOR, is a court of competent jurisdiction authorized to make such correction through injunctive relief?

Brief Response

1. A county tax collector has no authority to unilaterally correct errors in the apportionment of assessed value of property assessed by the Mississippi Department of Revenue and apportioned pursuant to Section 27-35-309.

2. The Mississippi Department of Revenue assesses public service corporations pursuant to Sections 27-35-301 et seq., and has the authority to determine whether a public service company has failed, refused, or neglected to render the required apportionment of assessed values. However, because this is a mixed question of fact and law and asks about the authority of another public official, we cannot opine on the obligations of the Mississippi Department of Revenue.

3. This office does not opine on the validity of a claim or the appropriate relief that should be given. Whether a court of competent jurisdiction has the authority to grant injunctive relief in your particular situation is a mixed question of fact and law on which this office cannot opine.

Applicable Law and Discussion

As an initial matter, Section 7-5-25 authorizes the Attorney General to issue official opinions to various public officials and bodies "upon any question of law relating to their respective offices." Official opinions are not issued to advise one public officer about another public officer's duties and responsibilities. MS AG Op., Criswell at 1 (Aug. 26, 2016). Official opinions neither validate nor invalidate past actions. Id. Further, this office does not interpret or approve local ordinances or agreements. MS AG Op., Hill at 1 (Sept. 30, 2021). Because DOR is the state assessor for public service corporations under Sections 27-35-301 et seq., any discussion of the assessment process necessarily includes the statutory authority of DOR. However, we offer no opinion on the obligations of DOR in your specific situation, the validity of any action previously taken by the County or DOR, or the proposed agreement between the County, municipalities, and taxing districts. We offer the following for future guidance.

Section 112 of the Mississippi Constitution requires taxation to "be uniform and equal throughout the State" and further provides that "[t]he Legislature may provide for a special mode of valuation and assessment for . . . corporate property [and property belonging to corporations] not situated wholly in one county." Based on the facts as provided, we understand that MPC is a public service corporation within the meaning and contemplation of Section 112 of the Mississippi Constitution and its implementing statutes, Sections 27-35-301 et seq., of the Mississippi Code.

DOR is the state assessor for public service corporations and is statutorily required to assess the property of "electric power and light companies and other public service corporations liable to taxation in the state, affixing its value for the purposes of ad valorem taxation so that such property shall bear its just proportion of taxation, taking into consideration the value of the franchise and the capital engaged in the business in this state. . . ." Miss. Code Ann. § 27-35-301. Section 27-35-303 requires owners and operators of public service companies owning property in more than one county to file property schedules with DOR which, in turn, is required to assess all property of these companies in accordance with Section 27-35-309. DOR, previously the State Tax Commission, has the "exclusive authority and power" to assess public service corporations whose property is located in more than one county. Mississippi Power Co. v. City of Laurel, 28 So. 2d 750, 752 (Miss. 1947), sugg. of error overruled, 29 So. 2d 313 (Miss. 1947).

With respect to the assessment process, Section 27-35-309 provides, in part:

(1) The Department of Revenue shall, if practicable, on or before the first Monday of June of each year, make out for each person, firm, company or corporation listed in Section 27-35-303, Mississippi Code of 1972, an assessment of the company's property, both real and personal, tangible and intangible. The Department of Revenue shall apportion the assessment of value of each company's property according to the provisions of this article, except as provided in subsection (3) of this section, as follows:

(a) When the property of such public service company is located in more than one (1) county in this state, the Department of Revenue shall direct the company to apportion the assessed value between the counties and municipalities and all other taxing districts therein, in the proportion which the property located therein bears to the entire value of the property of such company as valued by the department, so that to each county, municipality and taxing district therein, there shall be apportioned such part of the entire valuation as will fairly equalize the relative value of the property therein located to the whole value thereof.

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The assessment roll shall contain all the property of any such public service company, railroad, person, firm or corporation and the value thereof, and so made that each county, municipality, and taxing district shall receive its just share of taxes proportionately to the amount of property therein situated.

(2)(a) The assessment when made shall remain open for twenty (20) days in the Office of the Department of Revenue, and be for such time subject to the objections thereto which may be filed with the Executive Director of the Board of Tax Appeals. . . .

(b) The apportionment of the assessed value as required by this section shall be filed with the Department of Revenue by such public service company on or before the last day of the objection period established in paragraph (a) of this subsection (2). If such company shall fail, refuse or neglect to render the apportionment of assessed value as required by this section, such company shall be subject to the penalties provided for in Section 27-35-305. . . .

Section 27-35-305 provides:

If any company, corporation, firm or person, who is required by law to render schedules of its, their or his property to the Department of Revenue, as provided by Section 27-35-303, Mississippi Code of 1972, for the purposes of assessment for taxation, shall fail, refuse or neglect to render the schedules, as required, the Department of Revenue may impose on such company, corporation, firm or person a penalty of ten percent (10%) of the assessment as computed by the department, and in case of such failure, refusal or neglect, the department shall make out such schedules from the best information obtainable.

As soon as the 20-day deadline for objections has passed and any objections have been disposed of, "the assessment rolls shall be approved by the Department of Revenue, and a certified copy of the assessment rolls shall be sent immediately to the clerks of the board of supervisors of the respective counties, who shall file and preserve it as a record." Miss. Code Ann. § 27-35-313. The chancery clerk, as the clerk of the board of supervisors, then makes a copy of the assessment rolls and must "certify and deliver the same to the tax collector which when done shall have the same force and effect as other certified copies of tax rolls placed in the hands of the tax collector." Miss. Code Ann. § 27-35-315.

In summary, DOR assesses public service corporations pursuant to Sections 27-35-301 et seq., and these assessments must apportion "the entire valuation as will fairly equalize the relative value of the property therein located to the whole value thereof." Miss. Code Ann. § 27-35-309(1)(a). Under Sections 27-35-309(2)(b) and 27-35-305, it is DOR that has the authority to determine whether a public service corporation has failed, refused, or neglected to render the required apportionment of assessed values, and in such cases, DOR may impose a penalty and shall make out such schedules from the best information obtainable. The above cited statutes provide no mechanism for the county tax collector to independently alter or amend the apportionment of the assessed value approved by DOR pursuant to Section 27-35-309. Thus, it is the opinion of this office that absent a directive from DOR or a judicial determination authorizing such, the county tax collector has no authority to substitute an alternate apportionment for the apportionment approved by DOR.

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