Can the Mississippi Department of Agriculture spend private gifts and naming-rights money on improvements to its property and the Mississippi Agriculture and Forestry Museum?

Plain-English summary

Mississippi's Department of Agriculture and Commerce wanted to use private funds (donations, advertising deals, naming-rights leases) for upgrades to its property and to the Mississippi Agriculture and Forestry Museum. The Commissioner asked the AG three things, and got three answers.

1. Can MDAC accept and spend private funds for departmental property improvements and marketing? Yes. § 69-1-48(2) says the Department "may accept, budget, receive and expend funds from any source for improvements to department property and for marketing and promotion programs." That language is broad: any source, any improvement to department property, plus marketing.

2. Can MDAC do the same for the Mississippi Agriculture and Forestry Museum? Yes, under § 69-1-48(5)(c), with one nuance. Funds received specifically on behalf of the Museum go into a non-budgeted enterprise fund (§ 69-1-48(5)(b)) and can be spent on Museum improvements and marketing in a manner consistent with the Museum's historical purpose. If the Museum is itself "department property," then the broader authority of subsections (2) and (3) also applies.

3. Can MDAC use the standard "federal funds escalation" procedure to bring those funds into its operating budget? Yes, but only for the funds defined in subsection (3) (advertising and naming-rights revenue). § 69-1-48(3)(c) says the Department may accept, budget, receive, and expend "these funds" (referring to advertising and naming-rights funds) "in accordance with rules and regulations of the Department of Finance and Administration in the manner consistent with the escalation of federal funds." The AG read this narrowly: subsection (3)(c)'s escalation authority is tied to the funds described in subsection (3) and does not extend to funds from other sources or for other purposes elsewhere in the statute.

Practical takeaway: MDAC has a flexible toolkit to fund improvements and marketing through private money, but the specific procedural step of "escalating" those funds through DFA is reserved for the narrow advertising/naming-rights category.

What this means for you

MDAC and its staff

The opinion holds that the Department "is authorized to accept, budget, receive and expend funds from any source for improvements to Department property and for marketing and promotion programs" under § 69-1-48(2), and that funds from advertising or naming-rights leases "shall be retained by the Department" for those same purposes under § 69-1-48(3)(b).

Museum administrators

For the Mississippi Agriculture and Forestry Museum, the opinion holds that "[f]unds received on behalf of the Museum may be spent for improvements to the Museum and for marketing and promotion programs for the Museum in a manner consistent with the Museum's historical purpose" under § 69-1-48(5)(c). It adds that "if the Museum is Department property," the subsection (2) and (3) authorities also apply to Museum improvements and marketing.

Department of Finance and Administration

On the escalation question, the opinion holds the Department may escalate "advertisement, publication, and naming rights funds" through DFA "in a manner consistent with the escalation of federal funds" under § 69-1-48(3)(c). It reads that authority narrowly: it "applies only to the funds received for advertisement, publication, and naming rights as authorized in subsection (3) and not funds from other sources or for other purposes as addressed in the statute."

Private donors and sponsors

The opinion reflects that the commissioner may lease naming rights for museum buildings or property "for a term not to exceed twenty (20) years" under § 69-1-48(3)(a), with the lessee paying "the cost of erecting, maintaining and removing signage." Museum funds, under § 69-1-48(5)(b), are transferred into a non-budgeted enterprise fund.

Common questions

Q: What is "fund escalation"?
A: It's a Department of Finance and Administration process that allows a state agency to add unanticipated revenue to its current-year budget without waiting for the next legislative appropriations cycle. Federal grant funds typically use this process. § 69-1-48(3)(c) lets MDAC use the same process for advertising and naming-rights revenue.

Q: Why does the statute limit escalation to advertising and naming-rights funds?
A: That's how the Legislature wrote it. Subsection (2) authorizes acceptance of "funds from any source" without making them subject to escalation. Subsection (3) deals specifically with advertising and naming-rights funds, and (3)(c) plugs those into the escalation process. Funds outside of (3) follow normal budgeting procedures.

Q: How long can a naming-rights lease run?
A: Up to 20 years, per § 69-1-48(3)(a). The lessee pays for signage installation, maintenance, and removal.

Q: Can the Department donate Museum artifacts back to donors?
A: Sort of. § 69-1-48(5)(a) requires the Department to make reasonable attempts to notify donors of donated property or artifacts the Department has determined obsolete, so the donor can retake possession. If the donor cannot be located, the Department may dispose of, auction, or sell obsolete or no-longer-useful Museum property.

Q: Where does the Museum money sit?
A: § 69-1-48(5)(b) requires Museum funds to be transferred into a non-budgeted enterprise fund maintained per generally accepted accounting principles and DFA regulations. Unspent year-end balances do not lapse to the general fund.

Q: What purposes does the opinion tie these funds to?
A: The opinion ties the subsection (2) and (3) authority to "improvements to Department property and for marketing and promotion programs," and the Museum authority under subsection (5)(c) to "improvements to the Museum and for marketing and promotion programs for the Museum in a manner consistent with the Museum's historical purpose." It does not address other uses.

Background and statutory framework

Section 69-1-48 was crafted to give MDAC private-sector fundraising flexibility without making each donation a separate appropriation. The structure:

Subsection (1): Definitions. "Department" means MDAC. "Museum" means the Mississippi Agriculture and Forestry Museum.

Subsection (2): Broad acceptance authority. The Department may accept, budget, receive, and expend funds from any source for property improvements and marketing/promotion.

Subsection (3): Naming rights and advertising. The Department may allow advertising on its property and lease naming rights for up to 20 years. Lessee pays for signage. Funds received are retained by the Department and used for property improvements and marketing. (3)(c) authorizes escalation through DFA in the manner of federal funds.

Subsection (4): Special fund in State Treasury. Year-end balances do not lapse; interest stays in the fund.

Subsection (5): Museum-specific provisions. (a) Donor notification for obsolete artifacts. (b) Museum funds go into a non-budgeted enterprise fund. (c) Museum funds may be spent for Museum improvements and marketing consistent with the Museum's historical purpose.

The opinion answers the Commissioner's three questions in turn:

• Q1: subsection (2) authority to accept and spend at the Department level. Yes.
• Q2: subsection (5)(c) authority for Museum funds. Yes.
• Q3: subsection (3)(c) escalation authority. Yes for advertising/naming-rights funds; the opinion expressly limits it to subsection (3) funds and "not funds from other sources or for other purposes as addressed in the statute."

Citations and references

Statutes:

• Miss. Code Ann. § 69-1-48 (entire section governing MDAC and Museum funding)
• Miss. Code Ann. § 69-1-48(2) (any-source acceptance for department property improvements and marketing)
• Miss. Code Ann. § 69-1-48(3) (advertising and naming-rights authority)
• Miss. Code Ann. § 69-1-48(3)(c) (escalation through DFA in the manner of federal funds)
• Miss. Code Ann. § 69-1-48(5)(c) (Museum-specific spending authority consistent with Museum's historical purpose)

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2024/01/A.Gipson-December-22-2023-Authority-to-Escalate-Funds-Received-Pursuant-to-Mississippi-Code-Annotated-Section-69-1-48.pdf

Original opinion text

December 22, 2023

The Honorable Andy Gipson
Commissioner
Mississippi Department of Agriculture and Commerce
Post Office Box 1609
Jackson, Mississippi 39215-1609

Re: Authority to Escalate Funds Received Pursuant to Mississippi Code Annotated Section 69-1-48

Dear Commissioner Gipson:

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

Background

The Department of Agriculture and Commerce expects to receive private funds for one or more of the purposes outlined in Mississippi Code Annotated Section 69-1-48 and is prepared to request escalation by the Department of Finance and Administration in a manner consistent with rules governing escalation of federal funds as specifically provided in the statute.

Questions Presented

1. Is the Department of Agriculture and Commerce (the "Department") authorized to accept, budget, receive, and expend funds for improvements to Department property and for marketing and promotion programs?

2. Is the Department authorized to accept, budget, receive, and expend funds for Mississippi Agriculture and Forestry Museum ("Museum") improvements and for marketing promotion programs for the Museum?

3. Is the Department authorized to escalate such funds with the Department of Finance and Administration in a manner consistent with the escalation of federal funds?

Brief Response

1. The Department is authorized to accept, budget, receive, and expend funds from any source for improvements to Department property and for marketing and promotion programs. Miss. Code Ann. § 69-1-48(2).

2. Funds received on behalf of the Museum may be spent for improvements to the Museum and for marketing and promotion programs for the Museum in a manner consistent with the Museum's historical purpose. Miss. Code Ann. § 69-1-48(5)(c).

3. The Department is authorized to escalate funds received from advertising or lease of naming rights with the Department of Finance and Administration in a manner consistent with the escalation of federal funds. Miss. Code Ann. § 69-1-48(3)(c).

Applicable Law and Discussion

Mississippi Code Annotated Section 69-1-48 provides:

(1) For purposes of this section, the following words shall have the meanings ascribed herein:

(a) "Department" means the Mississippi Department of Agriculture and Commerce.

(b) "Museum" means the Mississippi Agriculture and Forestry Museum.

(2) The department may accept, budget, receive and expend funds from any source for improvements to department property and for marketing and promotion programs.

(3)(a) The department may allow a federal, state, or local governmental entity or a public, private, commercial or charitable entity to use, publish or advertise the entity's name on department property and in its publications. Furthermore, the commissioner may lease to any public, private, commercial or charitable entity for a term not to exceed twenty (20) years naming rights for museum buildings or property, including, but not limited to, new construction, improvements to existing buildings, grounds and/or objects located on museum property in return for consideration benefitting the department. The lessee shall pay the cost of erecting, maintaining and removing signage related to the property.

(b) Any funds received from the advertising or lease of naming rights shall be retained by the department and expended for improvements to its property, and marketing and promotion programs.

(c) The department may accept, budget, receive and expend these funds in accordance with rules and regulations of the Department of Finance and Administration in the manner consistent with the escalation of federal funds.

(4)(a) There is established in the State Treasury a special fund for the department for the monies collected under this section.

(b) Unexpended monies remaining in the fund at the end of a fiscal year shall not lapse into the State General Fund, and any interest earned or investment earnings on amounts in the fund shall be deposited into the fund.

(5)(a) The department shall make reasonable attempts to notify the donor of any donated property or artifacts determined to be obsolete to allow such donor to retake possession of such item. If efforts to notify the donor prove unsuccessful, then the department may dispose of, auction or sell any property or artifact in the possession of the museum if the department determines that it is obsolete, no longer of value or use to the museum or unclaimed by the donor.

(b) All funds received under this section on behalf of the museum, shall be transferred into the nonbudgeted enterprise fund related to the museum. The enterprise funds shall be maintained in accordance with generally accepted accounting principles and regulations prescribed by the Department of Finance and Administration.

(c) The department may expend these funds for improvements to the museum and for marketing and promotion programs for the museum in a manner consistent with the museum's historical purpose.

In response to your first question, the Department is authorized to accept, budget, receive and expend funds from any source for improvements to its property and for marketing and promotion programs. Miss. Code Ann. § 69-1-48(2). Additionally, funds received for advertising or leasing of naming rights under subsection (3) shall be retained by the Department to be used for improvements to Department property and marketing and promotion programs. Miss. Code Ann. § 69-1-48(3)(b).

In response to your second question, funds received on behalf of the Museum may be spent for improvements to the Museum and for marketing and promotion programs for the Museum in a manner consistent with the Museum's historical purpose. Miss. Code Ann. § 69-1-48(5)(c). Additionally, if the Museum is Department property, funds received from any source, pursuant to subsection (2), or from advertising or lease of naming rights, pursuant to subsections (3)(a) and (b), may be used for improvements to the Museum and marketing and promotion programs.

In response to your third question, pursuant to subsection (3)(c), the Department is authorized to escalate advertisement, publication, and naming rights funds with the Department of Finance and Administration in a manner consistent with the escalation of federal funds. Notably, the escalation authority in subsection (3)(c) applies only to the funds received for advertisement, publication, and naming rights as authorized in subsection (3) and not funds from other sources or for other purposes as addressed in the statute.

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/ Abigail C. Overby
Abigail C. Overby
Special Assistant Attorney General