2018 Mississippi Legislative Accomplishment: Fee-in-Lieu Bill Passage and Its Effect on Economic Development
An MMA Priority Bill During the 2018 Legislative Session
May 23, 2018
One of the MMA's continued political priorities is economic development. It is essential that we not only create an environment in Mississippi that will attract new businesses, but that we also provide our current businesses with every opportunity to expand, hire more employees and, in turn, grow Mississippi's economy. Each session, the MMA strives to support legislation that will give Mississippi every advantage when recruiting economic development projects and expansions.
One tool that the cities and counties have to recruit businesses to their area is to grant a company a fee-in-lieu of taxes agreement, which reduces property taxes for a certain period of time. By law, local governing authorities can only enter into a fee-in-lieu agreement with a new project whose aggregate investment is $100 million or more. With several of our surrounding states having a much lower fee-in-lieu threshold, Mississippi has missed out on a number of economic development projects over the years whose investment would have been significant, but did not reach $100 million.
"Economic Development is hyper-competitive. This new legislation will provide local communities the means, should they choose, to support public improvements related to large economic development projects while relying less on diminishing discretionary incentives from the state."
- William "Skip" Scaggs, Executive Director, North Mississippi Industrial Development Association
During the 2018 legislative session, lawmakers, the MMA and other economic development organizations made it a priority to lower the investment amount needed to qualify for a fee-in-lieu agreement. After some debate about what the threshold amount should be, Senate Bill 2479
passed the Legislature lowering the amount to $60 million. Additionally, SB 2479 allows the local governing authorities to enter into fee-in-lieu agreements with existing industries in their area that are looking to expand. These existing companies must have been doing business in the area for at least 24 months and meet the $60 million investment threshold. This legislation is an important step towards giving communities more leverage in recruiting companies to their areas and helping their existing companies grow.
The MMA would like to especially thank Senate Finance Chairman Joey Fillingane and House Ways and Means Chairman Jeff Smith, for championing this effort. It is essential that the Legislature continue to act on legislation that will grow Mississippi businesses, create jobs and bolster the state's economy.