Mississippi farmers, schools benefit from new lease law

by Secretary of State Eric Clark

I'm pleased to announce the signing of a new law that gives farmers a better chance at keeping the 16th section land they work, and protects competition in leasing which is essential to getting a good return for the schools of our state. Sixteenth section land provides millions of dollars to local school boards every year, and agricultural leases are the largest single source of surface rental revenue. But sometimes a farmer who's made significant improvements to that land might lose it through the sealed bid process. Now, we've found a way to protect education revenue and allow a farmer a fair shot at continuing to lease land that he's made improvements on.

The bill (HB 499) passed this session. It was written with the assistance of many interested parties including the Mississippi Farm Bureau, the Delta Council, Department of Agriculture and Commerce, Association of School Superintendents, and the Mississippi School Boards Association, and was signed into law by Governor Kirk Fordice. We were able to pass the bill because we had the help of the most respected agricultural and educational groups in the state. We made a commitment after last year's session to bring farming and education groups together to find a way to address farmers' concerns about losing their leases on land where they had made improvements. This new law fulfills that commitment.

Under current law, 16th section agricultural leases are generally awarded to the farmer submitting the highest sealed bid. Farmers who made improvements to the land could lose their lease if they are outbid even by only a few cents. Under the new law, an existing agricultural leaseholder has the right to submit a second bid of at least 105 percent of the highest sealed bid. If the existing leaseholder submits a second bid, an open auction will be held among all who submitted sealed bids. The lease will be awarded to the highest bidder at the open auction. This agricultural reform simply allows a farmer an opportunity to continue to lease land on which he has made improvements, if he is willing to pay for it. Just as important, it protects the revenue for the local school district by keeping the bid process competitive. In 1996, revenue from 16th section land provided more than $40 million to Mississippi public schools. This important new law shows that we can listen to the needs of the agricultural community and fulfill our commitment to education in Mississippi.

For more information on 16th section land procedures, contact our Public Lands Division at (601)359-6373.