1997 Regular Session
By: Representative Janus
House Bill 1
AN ACT TO AMEND SECTION 21-33-323, MISSISSIPPI CODE OF 1972, TO AUTHORIZE MUNICIPALITIES TO INVEST SURPLUS FUNDS IN CERTAIN DIRECT OBLIGATIONS OF THE UNITED STATES OF AMERICA IN THE FORM OF SECURITIES OF, OR OTHER INTERESTS IN, ANY OPEN-END OR CLOSED-END MANAGEMENT TYPE INVESTMENT OR INVESTMENT COMPANY; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 21-33-323, Mississippi Code of 1972, is amended as follows:
21-33-323. Whenever any municipality shall have on hand any bond and interest funds, any funds derived from the sale of bonds, special funds, or any other funds in excess of the sums which will be required for immediate expenditure and which are not needed or cannot by law be used for the payment of the current obligations or expenses of such municipality, the governing authorities of such municipality shall have the power and authority to invest such excess funds in any bonds or other direct obligations of the United States of America or the State of Mississippi, or of any county or municipality of this state, or of any school district, which such county or municipal or school district bonds have been approved by a reputable bond attorney or have been validated by a decree of the chancery court, or in obligations issued or guaranteed in full as to principal and interest by the United States of America which are subject to a repurchase agreement with a qualified depository. In any event the bonds or obligations in which such funds are invested shall mature or be redeemable prior to the time the funds so invested will be needed for expenditure.
For the purposes of this section, direct obligations issued by the United States of America shall be deemed to include securities of, or other interests in, any open-end or closed-end management type investment company or investment trust registered under the provisions of 15 USCS Section 80(a)-1 et seq., provided that the portfolio of such investment company or investment trust is limited to direct obligations issued by the United States of America, and that such investment company or investment trust takes delivery of the collateral for any repurchase agreement, either directly or through an authorized custodian, or bonds or other direct obligations of the State of Mississippi.
However, such excess funds may first be offered for investment in interest-bearing time certificates of deposit with municipal depositories serving in accordance with Section 27-105-353 at a rate of interest not less than a simple interest rate numerically equal to the average bank discount rate on United States Treasury bills of comparable maturity. The rate of interest established herein shall be the minimum rate of interest and there shall be no maximum rate of interest. Such excess funds may also be invested in time certificates of deposit in state depositories located in such municipality to the same extent as such depositories are eligible for invested state funds. When bonds or other obligations have been so purchased, the same may be sold or surrendered for redemption at any time by order or resolution of the governing authorities of the municipality, and the mayor of the municipality, when authorized by such order or resolution, shall have the power and authority to execute all instruments and take such other action as may be necessary to effectuate the sale or redemption thereof. When such bonds or other obligations are sold or redeemed, the proceeds thereof, including accrued interest thereon, shall be paid into the same fund as that from which the investment was made and shall in all respects be dealt with as are other moneys in such fund. Except as hereinafter provided, any interest derived from the investments authorized in this section may, as an alternative, be deposited into the general fund of the municipality. Any interest derived from the investment of sums received under the terms of the federal State and Local Fiscal Assistance Act of 1972 and any subsequent revisions or reenactments of that act shall be paid into the same fund as that from which the investment was made. Any interest derived from the investment of school bond funds shall be handled as provided in Section 37-59-43. Any interest derived from investment of other bond proceeds or from investment of any bond and interest fund, bond reserve fund or bond redemption sinking fund shall be deposited either in the same fund from which the investment was made or in the bond and interest fund established for payment of the principal or interest on the bonds. Any interest derived from special purpose funds which are outside the function of general municipal government shall be paid into that special purpose fund. The authority granted by this section shall be cumulative and in addition to any other law relating to the investment of funds by municipalities.
SECTION 2. This act shall take effect and be in force from and after July 1, 1997.