Can a Mississippi city give its share of jointly owned surplus property to the county for free so the county can pass it to a nonprofit?

Plain-English summary

The City of Batesville and Panola County jointly own (as tenants in common) the former National Guard Armory building and grounds. Neither the city nor the county is using the property for public purposes; it's surplus. The county wants to give the property to the local Boy Scouts. To do that cleanly, the city would need to first give its co-ownership interest to the county at no cost. The city attorney asked the AG whether that donation is legal.

The AG's answer: not as a straight donation. Mississippi cities are broadly prohibited from making donations unless a specific statute authorizes it. Miss. Code Ann. § 21-17-5(2)(g) prohibits municipal donations absent specific statutory authority. The general municipal disposal statutes (§ 21-17-1 and § 17-25-25) require some form of consideration when disposing of municipal property.

There is one workaround: § 17-25-25(5). If the city's governing authority determines that its ownership interest has a fair market value of zero, and enters that finding on its minutes, the city can dispose of the property "in the manner it deems appropriate and in its best interest," with the caveat that no city official or employee can derive any personal economic benefit. Whether the interest actually has zero fair market value is a factual call for the city, not the AG.

If the zero-FMV finding is not credible, the city has to charge consideration for the conveyance.

What this means for you

If you are a Mississippi city attorney facing a similar disposal request

Walk through the analytic steps:

1. Is there a specific statute authorizing the donation? Most likely no. Without specific authority, the donation is prohibited under § 21-17-5(2)(g).
2. Can the city sell the property for any reasonable consideration? Even nominal consideration ($1, plus assumed maintenance liability, plus title cleanup costs) typically satisfies the consideration requirement and avoids the donation problem. This is often the cleanest path.
3. Does the city's interest plausibly have zero fair market value? If it does, § 17-25-25(5) gives flexibility, but the finding has to be in good faith. A city's interest in a usable building is rarely zero. A city's interest in an isolated, encumbered, or remote parcel might be. Be prepared to defend the finding with comparable sales, appraisals, or market evidence.
4. Document everything. Whatever path you take, the minutes need to clearly explain the basis for the disposal. State auditors review these.

If you sit on a board of aldermen or city council

You cannot vote to give away city property to a private entity without statutory authority. Even if the recipient is a charity. Even if everyone agrees it is a good cause. Mississippi treats this as a constitutional and statutory restriction on municipal generosity. The workarounds (consideration in some form, or zero-FMV finding) exist for legitimate edge cases. They do not create a backdoor for donations the Legislature prohibited.

If you represent a nonprofit hoping to receive surplus public property

Don't expect a free transfer from a Mississippi city. The county may have more flexibility than the city in some circumstances, but city donation is legally constrained. Better paths include:

1. Negotiate a long-term lease at nominal rent, with a maintenance obligation that approximates consideration.
2. Pay nominal consideration ($1 plus assumption of liabilities).
3. Help build a credible zero-FMV record if the property has truly minimal value (deferred maintenance exceeding value, severe encumbrances, environmental issues).
4. Coordinate a county-only transfer if the county can legally donate or sell at nominal value while the city cannot.

If you are a county attorney for a co-owning local government

The county and city have to align on how to dispose of jointly owned property. If the city can only convey for consideration, structure the transaction so the city receives what it needs to legally part with its interest, then the county takes possession of the whole and proceeds with its own disposal authority (which is governed by other statutes).

If you are a Batesville resident or a Boy Scout supporter

The AG opinion does not tell the city it cannot help. It tells the city it cannot give the property away without statutory authority. The path forward is for the city and county to find a structure that respects state law: nominal sale, lease, or a justified zero-FMV finding. Public meetings on this kind of disposal are open; you can attend and weigh in.

Common questions

Q: Why are Mississippi cities barred from donating?
A: § 21-17-5(2)(g) is the express statutory prohibition: "this section shall not authorize the governing authorities of municipalities to . . . grant any donation" unless specifically authorized elsewhere. The underlying principle is that public funds and public property exist for public purposes, and the Legislature has reserved to itself the power to authorize specific exceptions.

Q: What about charitable purposes? Doesn't a public benefit count?
A: Not for the donation analysis. The fact that a recipient is a charitable organization does not by itself satisfy Mississippi's requirement of specific statutory authority for a donation.

Q: What is "consideration"?
A: Any value that flows back to the city: money, services, assumption of liabilities, agreement to maintain the property, or other tangible benefit. The amount does not have to be market value, but there has to be something. Pure donation has nothing.

Q: How does § 17-25-25(5)'s zero-FMV finding work in practice?
A: The governing authority finds, on the basis of evidence, that the property's fair market value is zero. The finding goes in the minutes. The finding must be made in good faith; rubber-stamping a zero finding to circumvent the donation rule risks state auditor scrutiny.

Q: Can a city official benefit personally from this kind of disposal?
A: No. § 17-25-25(5) explicitly says "no official or employee of the governing authority shall derive any personal economic benefit from such disposal."

Q: What if the property has a value but is encumbered by liens or environmental issues?
A: Net of liens and remediation costs, a property's effective value to the city can in fact be zero or negative. A finding to that effect, supported by evidence, can be credible. Document the encumbrances.

Q: Can the city sell for $1?
A: Yes, in principle, although a $1 sale risks being characterized as a sham donation. A sale for nominal consideration paired with assumption of obligations or other practical benefits is more defensible.

Background and statutory framework

Mississippi has a layered framework governing municipal property disposal:

• § 21-17-1 governs the sale, conveyance, or lease of surplus municipal property.
• § 17-25-25 gives municipalities general authority to dispose of real property.
• § 21-17-5(2)(g) bars donations unless specifically authorized.
• § 17-25-25(5) provides a narrow zero-FMV path: when a city finds its interest has no value, it can dispose of the property in whatever way serves its interests.

The default rule, then, is consideration. Donations require statutory authorization. The zero-FMV path is the small valve that lets cities offload genuinely valueless property without artificially manufacturing consideration.

The AG noted that the city and county hold the property as tenants in common. That co-ownership doesn't change the donation rules; the city still has to dispose of its interest under one of the recognized paths. If the city sells its interest to the county at fair value or with credible zero-FMV justification, the county then has unified ownership and can pursue whatever disposal path its own statutes allow.

This kind of question is recurring in Mississippi, and the AG's office has been consistent: no donations from city governments without statutory authority, period.

Citations and references

Statutes:
- Miss. Code Ann. § 17-25-25 (general municipal authority to dispose of real property)
- Miss. Code Ann. § 17-25-25(5) (zero fair market value finding allows disposal "in the manner it deems appropriate")
- Miss. Code Ann. § 21-17-1 (sale, conveyance, or lease of surplus municipal property)
- Miss. Code Ann. § 21-17-5(2) (limits on municipal home rule, including § 21-17-5(2)(g) prohibition on donations)

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2023/09/C.Mitchell-September-14-2023-Conveyance-of-City-Surplus-Property.pdf

Original opinion text

September 14, 2023

Colmon S. Mitchell, Esq.
Attorney, City of Batesville
Post Office Drawer 1586
Batesville, Mississippi 38606

Re: Conveyance of City Surplus Property

Dear Mr. Mitchell:

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

Background

The City of Batesville ("City") and Panola County ("County") own, as tenants in common, the former National Guard Armory building and its grounds. This real property is not being used for municipal purposes and is surplus property. The County wants to convey the real property to the local Boy Scouts.

Questions Presented

1. May the City convey its interest in this real property to the County as a donation with no consideration for the conveyance?
2. If the answer to Question 1 is yes, must the conveyance be subject to any conditions or reservations?

Brief Response

1. While there is no explicit authority for the City to donate its ownership interest in the real property to the County without consideration, Mississippi Code Annotated Section 17-25-25 may provide a method of disposal at no cost if the City makes the requisite finding of zero fair market value and enters such finding on its minutes.
2. Please see our response to Question 1.

Applicable Law and Discussion

Although Section 21-17-1 governs the sale, conveyance, or lease of surplus municipal property, and Section 17-25-25 gives municipalities general authority to dispose of real property, a municipality is generally prohibited from granting donations unless such action is "specifically authorized by another statute or law of the State of Mississippi. . . ." Miss. Code Ann. § 21-17-5(2). Except in extremely limited circumstances, which do not apply to your set of facts, Sections 21-17-1 and 17-25-25 require some type of consideration when disposing of municipal property. However, Section 17-25-25(5) does state that if the governing authority of a municipality determines that real property belonging to the municipality has a fair market value of zero, "and this finding is entered on the minutes of the authority, then the governing authority may dispose of such property in the manner it deems appropriate and in its best interest, but no official or employee of the governing authority shall derive any personal economic benefit from such disposal." Whether the fair market value of its ownership interest in the real property in question is zero, which could facilitate the City's conveyance of its property interest to the County pursuant to Section 17-25-25(5), is a determination of fact to be made by the governing authorities.

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/ Gregory Alston
Gregory Alston
Special Assistant Attorney General