AN ACT TO AMEND SECTION 27-7-30, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE INCOME TAX EXEMPTION FOR INCOME ARISING FROM CERTAIN DATA CENTER PROJECTS SHALL NOT APPLY TO ANY CALENDAR YEAR AFTER CALENDAR YEAR 2026; TO AMEND SECTION 57-75-5, MISSISSIPPI CODE OF 1972, TO REVISE THE DEFINITION OF THE TERM PROJECT UNDER THE MISSISSIPPI MAJOR ECONOMIC IMPACT ACT; TO AMEND SECTION 27-31-104, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT FOR ANY PROJECT WITH A CAPITAL INVESTMENT IN EXCESS OF $2,000,000,000.00 FOR WHICH A FEE-IN-LIEU OF AD VALOREM TAX AGREEMENT IS ENTERED INTO AFTER JULY 1, 2026, A PORTION OF THE SUM ALLOWED AS A FEE-IN-LIEU ON THE PORTION OF THE PROJECT IN EXCESS OF $1,000,000,000.00 SHALL BE DEPOSITED INTO THE MISSISSIPPI STRATEGIC DEVELOPMENT FUND CREATED IN THIS ACT; TO EXTEND THE DATE OF THE REVERTER ON THE SECTION OF LAW; TO CREATE THE "MISSISSIPPI STRATEGIC DEVELOPMENT FUND" AS A SPECIAL FUND IN THE STATE TREASURY; TO PROVIDE THE PURPOSES FOR WHICH MONIES IN THE FUND SHALL BE EXPENDED BY THE MISSISSIPPI DEVELOPMENT AUTHORITY, UPON APPROPRIATION BY THE LEGISLATURE TO BRING FORWARD SECTION 27-31-105, MISSISSIPPI CODE OF 1972, WHICH AUTHORIZES COUNTY BOARDS OF SUPERVISORS AND MUNICIPAL AUTHORITIES TO GRANT A FEE-IN-LIEU OF AD VALOREM TAXES FOR EXPANSIONS OF FACILITIES OR PROPERTIES, FOR THE PURPOSES OF POSSIBLE AMENDMENT; TO AMEND SECTION 19-9-151, 19-9-153 AND 19-9-155, MISSISSIPPI CODE OF 1972, TO REVISE THE DISTRIBUTION OF PAYMENTS MADE BY A NUCLEAR GENERATING PLANT IN-LIEU OF AD VALOREM TAXES; TO AMEND SECTION 27-35-309, MISSISSIPPI CODE OF 1972, TO REVISE THE FORMULA PROVIDING FOR THE ALLOCATION OF THE PROCEEDS OF THE NUCLEAR IN-LIEU TAX PAID TO THE DEPARTMENT OF REVENUE BY THE GRAND GULF NUCLEAR POWER PLANT; AND FOR RELATED PURPOSES.
The bill seeks to establish the Mississippi Strategic Development Fund, a special fund in the state treasury that will utilize revenues from fee-in-lieu of ad valorem tax agreements, particularly for significant economic projects. This development fund is intended to allocate resources for various state-directed economic initiatives once these agreements are established, aiming to boost investment and job creation in the state. As part of the restructured incentive framework, there are also provisions that will allow counties and municipalities to enter fee-in-lieu agreements for qualified projects, thus altering the landscape for local economic development.
House Bill 4045 aims to amend various sections of the Mississippi Code of 1972 related to economic development and tax exemptions for data center projects. The bill specifies that the income tax exemption for income derived from certain data center projects will no longer apply after the calendar year 2026. Furthermore, it revises the definition of 'project' under the Mississippi Major Economic Impact Act, adjusting the eligibility criteria for tax incentives that companies may receive for large capital investments. Projects with capital investments exceeding $2 billion are particularly highlighted in this legislation.
Notable points of contention surrounding HB4045 include debates over the expiration of tax exemptions and the implications for local governance and funding. Critics argue that by capping the duration of tax exemptions and specifying deductions from ad valorem taxes, the bill could limit local government revenues, making it more challenging for municipalities to address their individual economic needs. There is concern that the new structure may favor larger corporations and projects, potentially overshadowing smaller, community-based initiatives and altering the balance of economic support across different regions within the state.