Can a Mississippi county sell surplus property to a private business below cost, and can it instead donate the property to an economic development district?

Plain-English summary

Walthall County bought a vacant grocery store and parking lot next to the courthouse for $450,000 plus closing and assessment costs (about $472,000 total) during COVID, planning to move county offices in to spread out staff. Those plans never went anywhere. Now the county Industrial Development Authority (IDA) wants to take the property and sell it on to a small private grocery chain. The board's attorney asked three things: (1) can the county sell direct to the grocery chain under the surplus-property statute, (2) can the price be below what the county paid, and (3) can the county simply donate the property to the IDA so the IDA can do the sale.

The AG answered yes, yes (with discretion), and no.

The path forward is a § 19-7-3(3) sale. That statute lets a board of supervisors sell county property without bids if it puts findings on its minutes that the property is no longer needed for county purposes, that an open-bid sale would not serve the county's financial welfare, and that the proposed buyer's use of the property will promote development and the community's welfare. The AG cannot say from afar whether Walthall County can make those findings, but if it can, the sale is authorized.

On price, the AG repeated a long-standing position: § 19-7-3(3) requires "good and valuable consideration," not a particular dollar amount, and what counts is up to the board. Selling below the original purchase price is fine if the board concludes the price is fair given the surrounding circumstances and the public benefit.

On the donation question, the AG said no. The IDA is allowed to receive real estate by gift under § 19-5-99(3)(a). But there is no matching statute that authorizes the board to give it away. Article 4, § 66 of the Mississippi Constitution and § 19-3-40 both forbid a board of supervisors from making donations. A transfer with no consideration is a donation, full stop, and the Mississippi Supreme Court has so defined it (McAdams v. Perkins, 204 So. 3d 1257 (Miss. 2016)). The fact that the receiving entity is allowed to accept gifts does not give the giver authority to make one. Earlier opinions to the contrary are modified to conform.

The AG also flagged a separate question outside its lane: whether using ARPA funds for the original purchase was proper, and what that means for any later sale, are issues the county should run by appropriate federal and audit authorities.

What this means for you

If you are a Mississippi county supervisor

Pull the surplus-property route, not the donation route. Make the three § 19-7-3(3) findings on your minutes in plain, fact-supported language: the property is no longer needed, an advertised sale is not in the county's financial interest, and the buyer's proposed use will benefit the community. If you cannot honestly make all three, the sale fails the statute.

The price you accept does not have to match what the county paid. It has to be "good and valuable consideration" in the board's reasonable judgment. Document why you arrived at the figure: an appraisal, the buyer's reinvestment commitments, time on the market, comparable sales, condition of the building. If the State Auditor or a citizen later asks how you got there, the minutes are your record.

Do not route the deal through the IDA as a gift-then-resale. The AG is explicit that this is a prohibited donation regardless of the IDA's authority to accept real estate. If past opinions told you otherwise, those opinions are now modified.

If you run an economic development district or industrial development authority

You can take real property by gift under § 19-5-99(3)(a), but not from the county board of supervisors. Donations from individuals, private companies, and federal grants are still on the table. Direct conveyances from a county to your district must be sales for consideration, not gifts. If you want to assemble property for a project, plan for a paid acquisition or a structured lease, not a free transfer.

If you are a small business owner trying to buy county property

Ask the board to use § 19-7-3(3). That avoids the bid process. You will need to give the board enough information to support its three findings: how you will use the property, what investment you will make, what jobs or services it will produce, what community benefit it creates. Be ready for the price to reflect the public benefit, and bring documentation an outside auditor would accept.

If you are a citizen of a county selling property like this

The board's minutes must contain specific findings. Ask to see them. Vague boilerplate ("the property is surplus and the sale benefits the community") is not what the statute calls for. Real findings cite real facts. If the board is routing the deal through a development district as a donation, that is the configuration the AG just shut down.

If you are a county attorney advising on ARPA-purchased property

The AG flagged that the original ARPA-funded purchase, and any restrictions ARPA places on later disposition, are outside its opinion authority. Do not assume a clean § 19-7-3(3) sale also clears federal Treasury rules. The U.S. Treasury Final Rule on State and Local Fiscal Recovery Funds and the county's grant agreement may impose use restrictions or revenue-recapture rules on resale.

Common questions

Q: Does the board have to advertise the sale of surplus county property?
A: Not under § 19-7-3(3). That statute lets the board sell without bids if it makes the three required findings on its minutes. Other sale paths in MS law do require bids. Choose the statutory path that fits the facts.

Q: How far below the original purchase price can the board go?
A: Whatever the board can defend as "good and valuable consideration" given the property's current value, condition, and the public benefit of the sale. The AG has consistently said the dollar amount is committed to the board's discretion (citing the Nowak (2013) and Chiles (2019) opinions). Document your math.

Q: What if the IDA pays the county $1 and then resells for $200,000?
A: That is functionally the donation the AG just prohibited. A nominal price designed to dress up a donation does not satisfy "good and valuable consideration." The Mississippi Supreme Court's definition of donation in McAdams (2016) looks at substance, not labels.

Q: Can the board lease the property to the IDA instead?
A: § 19-7-3(3) authorizes leases as well as sales. A lease for fair rent is different from a donation. Same three findings have to be on the minutes.

Q: What about the $22,000 in closing costs and appraisal fees the county spent on top of the purchase price?
A: The opinion treats those as part of the county's "total investment" but does not require recovery of every dollar. The board's discretion on consideration covers the whole investment, not just the purchase price.

Q: Does this opinion override earlier AG opinions that allowed the donation?
A: Yes, expressly. The AG wrote: "To the extent previous opinions of this office are inconsistent with this finding, they are modified to conform hereto."

Q: Can ARPA funds restrict resale of property the county bought with them?
A: Possibly. The AG declined to opine. Read the U.S. Treasury Final Rule and your county's grant agreement, and consult counsel on revenue-recapture or use-restriction provisions before closing.

Background and statutory framework

§ 19-7-3 governs the sale of county-owned real property. Subsection (3) is the surplus-property provision. It authorizes a board of supervisors, by resolution duly adopted and entered on the minutes, to sell, lease, or otherwise dispose of property when the board finds (a) the property is no longer needed for county or related purposes, (b) a sale in the manner otherwise provided by law (advertised sale to the highest bidder) is not necessary or desirable for the county's financial welfare, and (c) the buyer's use will promote the community's civic, social, educational, cultural, moral, economic, or industrial welfare.

§ 19-5-99 creates and governs economic development districts (EDDs) and Industrial Development Authorities (IDAs). Subsection (3)(a) authorizes them to acquire real estate by gift. The statute is silent on whether other governmental units may make those gifts, and the AG reads that silence as not granting affirmative authority to a board of supervisors.

The donation prohibition runs through both the constitution and statute. Article 4, § 66 of the Mississippi Constitution of 1890 forbids the legislature from authorizing donations of public funds. § 19-3-40 forbids a board of supervisors from granting any donation. The Mississippi Supreme Court in McAdams v. Perkins, 204 So. 3d 1257, 1265 (Miss. 2016), defined a donation as the "transfer of money or other things of value from the owner to another without any consideration."

§ 7-5-25 limits the AG's official opinion authority to questions of state law. Factual determinations, federal-law questions, and contract interpretation are outside that authority.

Citations

• Miss. Code Ann. § 19-7-3(3) (surplus county property sale, lease, or other disposition)
• Miss. Code Ann. § 19-5-99(3)(a) (EDD authority to receive real estate by gift)
• Miss. Code Ann. § 19-3-40 (board of supervisors prohibited from making donations)
• Miss. Code Ann. § 7-5-25 (limits on AG opinion authority)
• Miss. Const. Art. 4, § 66 (donation prohibition)
• McAdams v. Perkins, 204 So. 3d 1257 (Miss. 2016) (defining donation)
• MS AG Op., White (Aug. 23, 2013) (sale of surplus property below appraised value)
• MS AG Op., Nowak (Sept. 20, 2013) (board discretion on consideration)
• MS AG Op., Chiles (Dec. 20, 2019) (board discretion on consideration)

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2022/12/C.Mord-December-5-2022-Sale-of-County-Property.pdf

Original opinion text

December 5, 2022
Conrad Mord, Esq.
Attorney, Walthall County Board of Supervisors
Post Office Drawer 311
Tylertown, Mississippi 39667
Re:

Sale of County Property

Dear Mr. Mord:
The Office of the Attorney General has received your request for an official opinion.
Background
According to your request, the Walthall County Board of Supervisors (the "Board") purchased a
vacant grocery store building and adjacent parking lot located next to the county courthouse
property. In addition to paying the purchase price of $450,000.00, the Board has expended
additional sums to pay for the title work, appraisal, environmental assessment, closing costs, and
legal fees. The original purpose for the purchase of the property was moving county offices to
prevent the spread of COVID-19.
The Board has now been approached by the Industrial Development Authority of Walthall County,
an economic development district established under the authority of Mississippi Code Annotated
Section 19-5-99, about the possibility of selling the property to a small, privately-owned grocery
store.
Questions Presented
1. Does the Board have authority to make specific findings of facts as set forth in Section 19-7-3(3) and sell the property to the small, privately-owned grocery store chain?
2. If the answer to the above question is in the affirmative, may the Board sell the property
for less than the purchase price of $450,000.00 or less than the total investment of
$472,397.10?
3. May the Board donate this property to the Industrial Development Authority of Walthall
County, who would, in turn, sell this property to the small, privately-owned grocery store
chain for less than the purchase price of $450,000.00, or less than the total investment of
$472,397.10?
Brief Response
1. If the Board determines based on the facts of your situation that the conditions of Section
19-7-3(3) have been met, then the Board has the authority to sell the property in question
to a small, privately-owned grocery store chain.
2. A county may sell surplus property consistent with Section 19-7-3(3) for good and valuable
consideration, and what suffices as good and valuable consideration is within the Board's
discretion.
3. The Board may not donate real property to an economic development district because doing
so would violate the Constitutional prohibition against donations as well as Section 19-3-40, which prohibits a board of supervisors from granting any donation.
Applicable Law and Discussion
Section 19-7-3(3) of the Mississippi Code requires that a board of supervisors make certain
affirmative findings in order to dispose of particular pieces of real property. Section 19-7-3(3)
states:
Whenever the board of supervisors shall find and determine, by resolution duly and
lawfully adopted and spread upon its minutes (a) that any county-owned property
is no longer needed for county or related purposes and is not to be used in the
operation of the county, (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 county,
and (c) that the use of the county property 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 board of supervisors of such
county shall be authorized and empowered, in its discretion, to sell, convey, lease,
or otherwise dispose of same for any of the purposes set forth herein.
This office is unable to make determinations of fact by way of official opinion. Miss. Code Ann.
§ 7-5-25. For that reason, this office is unable to tell you whether the Board can make the
affirmative findings required by Section 19-7-3. However, if the Board finds that it can satisfy the
requirements of Section 19-7-3(3), it shall spread a lawfully adopted, corresponding resolution on
its minutes and is thereby authorized to sell the property in question without advertising for bids.
You ask whether the Board may sell the property for less than the purchase price of $450,000.00
or less than the total investment of $472,397.10. In response to a similar request regarding the sale
of surplus county-owned property at an amount less than the appraised price and less than the
county's original purchase price, this office opined that under Section 19-7-3(3), a county may
convey such property for good and valuable consideration. MS AG Op., White at 2 (Aug. 23,
2013). "The determination of what suffices as good and valuable consideration for the conveyance
of surplus property under Section 19-7-3 is within the discretionary authority of the Board. . . ."
MS AG Op., Nowak at 2 (Sept. 20, 2013); MS AG Op., Chiles at *2 (Dec. 20, 2019).
Turning to your third question, you ask whether the Board may donate the property to the Industrial
Development Authority of Walthall County ("IDA"), who, in turn, will sell the property to the
privately-owned grocery chain for less than the purchase price of $450,000.00, or less than the
total investment of $472,397.10. While the IDA, an economic development district, is authorized
to acquire real estate by gift, there is no corresponding authority for boards of supervisors to donate
real property to an economic development district. See Miss. Code Ann. § 19-5-99(3)(a) ("Any
economic development district established under this section shall have the authority to acquire by
gift . . . real estate situated within the county . . . comprising such district for the development, use
and operation of industrial parks or other industrial development purposes.") Article 4, Section 66
of the Mississippi Constitution of 1890 and Section 19-3-40 of the Mississippi Code both prohibit
a Board of Supervisors from granting a donation, and conveying real property to an economic
development district ("EDD") without consideration would amount to an unlawful donation. The
Mississippi Supreme Court has defined a donation as "an absence of consideration, i.e., the transfer
of money or other things of value from the owner to another without any consideration." McAdams
v. Perkins, 204 So. 3d 1257, 1265 (Miss. 2016) (internal citation and quotations omitted). Simply
because an EDD is authorized to accept real property by donation does not equate to a Board of
Supervisors having the authority to donate real property under the facts you have presented. To
the extent previous opinions of this office are inconsistent with this finding, they are modified to
conform hereto.
The second part of your third question is premised upon the IDA receiving the property as a
donation from the Board, and in turn, selling it to a private investor. Because the Board may not
donate the property in question to the IDA, this question is moot. Therefore, it is the opinion of
this office that the Board may not donate the property in question to the IDA but may sell it in
accordance with the provisions of Section 19-7-3(3) for good and valuable consideration as
determined by the Board.
Please note that this office is unable to opine on whether the initial purchase was consistent with
the proper use of ARPA funds and any impact that may have on the proposed transaction.
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/ Misty Monroe
Misty Monroe
Assistant Attorney General