BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. This act shall be known and may be cited as the "Mississippi Residential Housing Improvement Project Act."

SECTION 2. For purposes of this act, the following words shall have the meanings ascribed herein unless the context clearly requires otherwise:

(a) "Project" means the Mississippi Residential Housing Improvement Project.

(b) "Municipality" means any municipality in the State of Mississippi which has a population in excess of one hundred fifty thousand (150,000), according to the latest federal decennial census.

(c) "Residential housing" means an owner-occupied residence within the municipality, which shall become the principal residence of the owner within a reasonable time after the financing for the residential housing improvement is provided.

(d) "Residential housing improvement" means a specific work, improvement, renovation, rehabilitation or expansion of residential housing, which shall be made within a reasonable time after the financing is provided.

SECTION 3. (1) There is created the Mississippi Residential Housing Improvement Project.

(2) The project is created with power to: raise funds from private investors in order to make such private funds available to finance the rehabilitation and improvement of residential housing for persons of any income within the municipality; provide financing to individuals for a wide range of loans including, but not limited to, loans for rehabilitation, improvement, renovation or expansion of residential housing; energy conservation loans; make loans to private lenders to finance any of these loans; purchase any of these loans from private lenders; refinance, insure or guarantee any of these loans; provide for temporary or partial financing for any of these purposes; develop, operate and administer programs which further its stated goals of improving residential housing in a municipality; and make grants or loans to private nonprofit developers, local governments or private persons in furtherance of these goals.

(3) The project shall be composed of three (3) members. The Governor, with the advice and consent of the Senate, shall appoint the members of the project, who shall be residents of the municipality. There shall be at least one (1) member who serves as the mayor of a municipality and at least one (1) member who is an employee of the State Department of Economic and Community Development.

(4) Appointments shall be for terms of four (4) years. Each member shall hold office until his successor has been appointed and qualified. Vacancies shall be filled by appointment of the Governor, subject to the advice and consent of the Senate, for the length of the unexpired term only. Any member of the project shall be eligible for reappointment. Any member of the project may be removed by the Governor for misfeasance, malfeasance or willful neglect of duty after reasonable notice and a public hearing, unless the same are expressly waived in writing. Each member of the project shall, before entering upon his duty, take an oath of office to administer the duties of his office faithfully and impartially, and a record of such oath shall be filed in the office of the Secretary of State. The project shall annually elect from its membership a chairman who shall be eligible for reelection. The project shall annually elect from its membership a vice chairman who shall be eligible for reelection. The project shall also elect or appoint, and prescribe the duties of, such other officers (who need not be members) as the project deems necessary or advisable, and the project shall fix the compensation of such officers. The project may delegate to one or more of its members, officers, employees or agents such powers and duties as it may deem proper, not inconsistent with this act or other provisions of law.

(5) In accomplishing its purposes, the project is acting in all respects for the benefit of the people of a municipality and the performance of essential public functions and is serving a vital public purpose in approving and otherwise promoting their health, welfare and prosperity, and the enactment of the provisions hereinafter set forth is for a valid public purpose and is hereby so declared to be such as a matter of express legislative determination.

SECTION 4. The project shall appoint, and prescribe the duties of, such officers as it deems necessary or advisable, including an executive director and a secretary (who may be the same person), and the project shall fix the compensation of such officers. The executive director shall serve at the will and pleasure of the project. The executive director shall administer, manage and direct the affairs and business of the project, subject to the policies, control and direction of the members of the project. The secretary of the project shall keep a record of the proceedings of the project and shall be custodian of all books, documents and papers filed with the project, the minute book or journal of the project, and its official seal. The executive director shall be the custodian of the assets of the project, except for those assets required by contracts with bondholders to be in the custody of the trustee. The members of the project shall set the investment policy for assets, and the executive director shall be responsible for making investments in accordance with such policy.

SECTION 5. (1) The project shall hold regular meetings as set forth in its bylaws. Special meetings of the project shall be held at the call of the chairperson or whenever any member shall so request in writing.

(2) A majority of members then in office shall constitute a quorum for the transaction of any business and for the exercise of any power or function of the project. No vacancy in the membership of the project shall impair the rights of a quorum to exercise all the rights and to perform all the duties of the project.

SECTION 6. The project is not created or organized, and its operations shall not be conducted, for the purpose of making a profit. No part of the revenues or assets of the project shall inure to the benefit of or be distributable to its members or officers or other private persons, except as otherwise provided in this act.

Members of the project shall serve without compensation; provided that all members, except ex officio members, shall receive the per diem established in Section 25-3-69, for their attendance at meetings; and all members shall be entitled to receive reimbursement for any actual and reasonable expenses incurred as a necessary incident to service of the members, including mileage, as provided in Section 25-3-41.

SECTION 7. (1) The project shall have all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this act, including, but not limited to, the power:

(a) To make and alter bylaws for its organization and internal management;

(b) To sue and be sued, have a seal and alter the same at pleasure, and maintain an office at such place or places in the state as it may determine;

(c) To appoint officers, agents and employees, prescribe their duties and qualifications, and fix their compensation;

(d) To acquire real or personal property, or any interest therein, by purchase, exchange, gift, assignment, transfer, foreclosure, lease, condemnation or otherwise, including rights or easements; to hold, manage, operate or improve real or personal property; to sell, assign, exchange, lease, encumber, mortgage or otherwise dispose of any real or personal property, or any interest therein, or deed of trust or mortgage lien interest owned by it or under its control, custody or in its possession and release or relinquish any right, title, claim, lien, interest, easement or demand however acquired, including any equity or right of redemption in property foreclosed by it and to do any of the foregoing by public sale;

(e) To make and execute agreements, contracts and other instruments necessary or convenient to the exercise of the powers and functions of the project under this act;

(f) To employ or contract with architects, engineers, attorneys, accountants, financial experts and other advisors as may be necessary in its judgment and to fix and pay their compensation;

(g) To make and execute contracts for the administration, servicing or collection of any mortgage loan and pay the reasonable value of services rendered to the project pursuant to such contracts;

(h) To contract for the employment of a financial advisor, underwriting attorneys, trustees, paying agents, depositories or any consultants retained in connection with the issuance of any bonds or notes including refunding bonds or notes or dealing with the disposition of any proceeds thereof;

(i) To issue negotiable bonds and notes and to provide for the rights of the holders thereof;

(j) Subject to any agreement with bondholders or noteholders, to sell any loans at public or private sale at fair market value; and

(k) Subject to any agreement with bondholders and noteholders, to make, alter or repeal such rules and regulations with respect to the operations, properties and facilities of the project as are necessary to carry out its functions and duties in the administration of this act.

(2) The project shall also have the power:

(a) To make loans to mortgage lenders for the purpose of making loans for residential housing improvements;

(b) To purchase from mortgage lenders any of the loans enumerated in paragraph (a);

(c) To insure, reinsure or guarantee any of the loans enumerated in paragraph (a); and

(d) To make, in such amounts and upon such terms and conditions as the project shall approve, temporary loans, preconstruction loans and interim financing loans to any qualified applicant.

(3) The project shall also have the power to make loans from funds not otherwise encumbered by pledge or indenture to persons for improving, rehabilitating, renovating and expanding existing residential housing owned and occupied by the owners.

(4) Using funds not otherwise encumbered by pledge or indenture, the project may:

(a) Provide such advisory consultation, training and educational services as will assist in the planning, construction, rehabilitation and operation of improving residential housing, including but not limited to, assistance in community development and organization, home management and advisory services for residents, and in promotion of community organizations and local governments to assist in developing improvements to housing;

(b) Encourage research and demonstration projects to develop new and better methods for increasing the supply, types and financing of improvements to housing and to receive and accept contributions, grants or aid from any source, public or private, including but not limited to the United States of America and this state, for carrying out this purpose; and

(c) Encourage and stimulate cooperatives and other forms of improving residential housing with owner participation.

(5) The project also has the power:

(a) To procure, or require the procurement of, insurance against any loss in connection with its operations, including without limitation the repayment of any mortgage loan or loans, in such amounts and from such insurers, including the federal government, as it may deem necessary or desirable, and to pay any premiums therefor;

(b) Subject to any agreement with bondholders or noteholders: (i) to renegotiate any loan in default; (ii) to waive any default or consent to the modification of the terms of any loan or agreement; (iii) to commence, prosecute and enforce a judgment in any action or proceeding, including without limitation a foreclosure proceeding, to protect or enforce any right conferred upon it by law, mortgage loan agreement, contract or other agreement; and in connection with any such proceeding, to bid for and purchase the property or acquire or take possession thereof and, in such event, complete, administer and pay the principal of and interest on any obligations incurred in connection with such property and dispose of and otherwise deal with such property in such manner as the project may deem advisable to protect its interest therein;

(c) To fix, revise, charge and collect fees and other charges in connection with the making of loans, the purchasing of mortgage loans, and any other services rendered by the project;

(d) To arrange for guarantees of its bonds, notes or other obligations by the federal government or by any private insurer and to pay any premiums therefor;

(e) Notwithstanding any law to the contrary, but subject to any agreement with bondholders or noteholders, to invest money of the project not required for immediate use, including proceeds from the sale of any bonds or notes:

(i) In obligations of any municipality or the state or the United States of America;

(ii) In obligations the principal and interest of which are guaranteed by the state or the United States of America;

(iii) In obligations of any corporation wholly owned by the United States of America;

(iv) In obligations of any corporation sponsored by the United States of America which are, or may become, eligible as collateral for advances to member banks as determined by the Board of Governors of the Federal Reserve System;

(v) In obligations of insurance firms or other corporations whose investments are rated "A" or better by recognized rating companies;

(vi) In certificates of deposit or time deposits of qualified depositories of the state as approved by the State Treasurer, secured in such manner, if any, as the project shall determine;

(vii) In contracts for the purchase and sale of obligations of the type specified in items (i) through (v) above;

(viii) In repurchase agreements secured by obligations specified in items (i) through (v) above; and

(ix) In money market funds, the assets of which are required to be invested in obligations specified in items (i) through (vi) above;

(f) Subject to any agreement with bondholders or noteholders, to purchase, and to agree to purchase, bonds or notes of the project at a price not exceeding: (i) if the bonds or notes are then redeemable, the redemption price then applicable plus accrued interest to the date of purchase; or (ii) if the bonds or notes are not then redeemable, the redemption price applicable on the first date after such purchase upon which the notes or bonds become subject to redemption at the option of the project plus accrued interest to the date of purchase;

(g) Subject to the provisions of this act, to contract for and to accept any gifts, grants or loans of funds or property or financial or other aid in any form from federal, state or local governments, private or public entities, or individuals;

(h) To enter into agreements or other transactions with the federal or state government, any agency thereof or any municipality in furtherance of the purposes of this act; to operate and administer loan programs of the federal government, the State of Mississippi, or any governmental agency thereof; and to operate and administer any program of housing assistance for persons and families of low or moderate income, however funded;

(i) To establish a benevolent loan fund, housing development fund, or such additional and further funds as may be necessary and desirable to accomplish any project purpose or to comply with the provisions of any agreement made by the project or any resolution approved by the project. The resolution establishing such a fund shall specify the source of monies from which it shall be funded and the purposes for which monies held in the fund shall be disbursed;

(j) To accept letters of credit and other credit facilities necessary to make loans authorized herein to repay bonds or notes issued by the project; and

(k) To do any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted in this act.

SECTION 8. (1) In connection with the making of any of the types of loans authorized by this act to any entity the project:

(a) May require that the borrower issue and deliver to the project an evidence of its indebtedness to the project (which evidence shall constitute a general obligation of the borrower as the project shall determine) which shall contain such provisions consistent with this section as the project shall determine, including but not limited to, date, time of maturing and prepayment clause;

(b) May require that the interest rate or rates and other terms of such loans or any collection of such loans made from the proceeds of any issue of bonds or notes of the project shall, together with any other monies available therefor, including reserve funds, be at least sufficient to assure the payment of such bonds or notes and the interest thereon as the same become due;

(c) May require that loans made pursuant to this section be secured as to payment of both principal and interest by a pledge of collateral security of such type and in such amounts as the project shall determine to be useful to assure the payment of such loans and the interest thereon as the same become due, and in the case of loans to institutional lenders, such collateral security shall consist of:

(i) Direct or guaranteed obligations of the United States of America;

(ii) Obligations of any municipality or the state or any state agency;

(iii) Mortgage loans insured by the Federal Housing Administration or guaranteed by the Veterans Administration and such other mortgages insured or guaranteed by the federal government or by a private insurer as to payment of principal and interest as shall be approved by the project; or

(iv) Conventional mortgage loans approved by the project;

(d) May require that any collateral for loans be deposited with a bank or trust company or other financial institution acceptable to the project located in the state and designated by the project as custodian therefor. The project may also require the entity receiving such loan to enter into an agreement with the project containing such provisions as the project shall deem necessary to: (i) adequately identify and maintain such collateral; (ii) service such collateral, if appropriate; and (iii) require such entity to hold such collateral as an agent for the project and be accountable to the project as the trustee of an express trust for the application and disposition thereof and the income therefrom. In the case of loans to institutional lenders, the project shall require the lender to enter into such an agreement;

(e) May also establish such additional requirements as it shall deem necessary with respect to the pledging, assigning, setting aside or holding of such collateral and the making of substitutions therefor or additions thereto and the disposition of income and receipts therefrom;

(f) Shall require as a condition of each loan that the borrower, within a prescribed period after receipt, shall have disbursed or applied the loan proceeds for the purposes for which the loan was made in an aggregate principal amount equal to the amount of such loan;

(g) May require the submission to it by each borrower of evidence satisfactory to the project of compliance with the terms of such loan, and in connection therewith may, through its members, employees or agents, inspect any books and records of any such entity;

(h) May require, as a condition of any loans, representations and warranties deemed necessary to secure the loans and carry out the purpose of this section;

(i) May enforce compliance with the terms of its agreement with any entity by decree of any court of competent jurisdiction. The project may require, as a condition of any loan to any national banking association, the consent of such association to the jurisdiction of courts of this state over any proceeding. The project may also require, as a condition of any such loan, agreement by such entity to the payment of penalties to the project for violation of its undertakings to the project, and such penalties shall be recoverable at the suit of the project; and

(j) To the extent that any provisions of this section may be inconsistent with any provision of law of the state governing the affairs of mortgage lenders, the provisions hereof shall control.

(2) In connection with the purchase from any lender of any of the types of loans authorized by this act, or any portion thereof or any participation therein, the project:

(a) May require as a condition of purchase of such loans either:

(i) That such loans be mortgage loans owned by the mortgage lenders and that such mortgage lenders, within a prescribed period after receipt of the purchase price, shall enter into written commitments to loan and, within a prescribed period thereafter, may loan an amount not to exceed the entire purchase price of such purchased loans on new loans, which new loans shall have such terms and conditions as the project may prescribe by regulation; or

(ii) That such purchased loans qualify as new loans and were originated by the lenders for the purpose of selling them to the project;

(b) Shall require the submission to it, by each mortgage lender from which the project has purchased existing loans, evidence satisfactory to the project of the making of new loans as required by the project, and in connection therewith may, through its members, employees or agents, inspect the books and records of any such mortgage lender;

(c) May enforce compliance by any mortgage lender with the terms of its agreement with or undertaking to the project with respect to the making of any new loans by decree of any court of competent jurisdiction. The project may require as a condition of purchase of loans from any national banking association the consent of such association to the jurisdiction of courts of this state over any such proceeding. The project may also require, as a condition of the project's purchase of loans, agreement by any mortgage lender to the payment of penalties to the project for violation by the mortgage lender of its undertakings to the project, and such penalties shall be recoverable at the suit of the project;

(d) May require as a condition of purchase of any loan from a mortgage lender that the mortgage lender represent and warrant to the project that: (i) the unpaid principal balance of such loan and this interest rate thereon have been accurately stated to the project; (ii) the amount of the unpaid balance is justly due and owing in accordance with the terms thereof; (iii) the mortgage lender has no notice of the existence of any counterclaim, offset or defense asserted by the maker or his successor in interest; (iv) such loan is evidenced by a bond or promissory note and a mortgage which has been properly recorded with the appropriate public official; (v) the mortgage constitutes a valid lien on the real property described to the project subject only to such liens, reservations, exceptions or encumbrances as may be permitted by the rules or regulations of the project; (vi) the maker is not now in default in the payment of any installment of principal or interest, escrow funds, taxes or otherwise in the performance of his obligations under the mortgage or loan documents and has not, to the knowledge of the mortgage lender, been in default in the performance of any such obligations for a period of longer than sixty (60) days during the life thereof; (vii) the improvements to mortgaged real property are permanently affixed thereto and the real property together with improvements thereon are covered by a valid and subsisting policy of insurance issued by a company authorized to issue such policies in this state and providing fire and extended coverage in such amounts as the project may prescribe by regulation; and (viii), in the case of mortgage loans, the mortgage loan meets the prevailing investment quality standards for mortgage loans of that type in the state;

(e) May require that each mortgage lender be liable to the project for any damages suffered by the project by reason of any misrepresentation or the breach of any warranty, and in the event that any representation shall prove to be untrue when made or in the event of any breach of warranty, the mortgage lender shall, at the option of the project, repurchase the loan for the original purchase price adjusted for amounts subsequently paid thereon, as the project may determine; and

(f) Shall not be required to inspect or take possession of the loan mortgage or documents if the mortgage lender from which the loan is purchased by the project shall enter into a contract to service such loan and account to the project therefor.

SECTION 9. The project shall adopt, and may from time to time modify or repeal, rules, regulations, resolutions and bylaws on issues including, but not limited to the following:

(a) The making of loans and the purchase of mortgage loans, to implement the powers authorized and to achieve the purposes set forth in this act;

(b) Setting schedules of any fees and charges to be imposed by the project;

(c) Where intended, assuring that the interest on its bonds or notes qualifies for tax exemption under applicable federal laws; and

(d) Any other matters related to the duties and the exercise of the powers of the project.

SECTION 10. (1) The project may from time to time issue its negotiable bonds and notes in such principal amounts as, in the opinion of the project, shall be necessary to provide sufficient funds for achieving the project purposes thereof, including operating expenses and reserves, the payment of interest on bonds and notes of the project, establishment of reserves to secure such bonds and notes, and all other expenditures of the project incident to and necessary or convenient to carry out its project purposes and powers. Bonds and notes shall not be issued under this act in an aggregate principal amount exceeding Ten Million Dollars ($10,000,000.00), excluding bonds and notes issued to refund outstanding bonds and notes.

(2) The provisions of Section 75-71-101 et seq., Mississippi Code of 1972 (the "Mississippi Securities Act"), shall not apply to bonds and notes issued under the authority of this act, and no application for a formal exemption from the provisions of such act shall be required with respect to such bonds and notes.

(3) Except as may otherwise be expressly provided by the project, all bonds and notes issued by the project shall be general obligations of the project, secured by the full faith and credit of the project and payable out of any monies, assets or revenues of the project, subject only to any agreement with the bondholders or noteholders pledging any particular monies, assets or revenues.

The project may issue bonds or notes to which the principal and interest are payable:

(a) Exclusively from the revenues of the project resulting from the use of the proceeds of such bonds or notes; or

(b) Exclusively from any particular revenues of the project, whether or not resulting from the use of the proceeds of such bonds or notes.

(4) Any bonds or notes issued by the project may be additionally secured:

(a) By private insurance, by a direct pay or standby letter of credit, or by any other credit enhancement facility procured by the project for the payment of any such bonds;

(b) By a pledge of any grant, subsidy or contribution from the United States of America or any agency or instrumentality thereof, or from the state or any agency, instrumentality or political subdivision thereof, or from any person, firm or project; or

(c) By the pledge of any securities, funds or reserves (or earnings thereon) available to the project.

(5) Bonds and notes issued by the project shall be authorized by a resolution or resolutions of the project adopted as provided for by this act; provided, that any such resolution authorizing the issuance of bonds or notes may delegate to an officer or officers of the project the power to issue such bonds or notes from time to time and to fix the details of any such issues of bonds or notes by an appropriate certification of such authorized officer.

(6) Except as specifically provided in this act, no notice, consent or approval by any governmental body or public officer shall be required as a prerequisite to the issuance, sale or delivery of any bonds or notes of the project pursuant to the provisions of this act. However, all bonds or notes issued pursuant to this article may be validated, except as otherwise provided in this section, in accordance with the provisions of Sections 31-13-1 through 31-13-11, Mississippi Code of 1972, in the same manner as provided therein for bonds issued by a municipality. Any such validation proceedings shall be held in the First Judicial District of Hinds County, Mississippi. Notice thereof shall be given by publication in any newspaper published in the City of Jackson, Mississippi, and of general circulation throughout the state.

SECTION 11. Bonds and notes of the project shall:

(a) State on the face thereof that they:

(i) Are payable both as to principal and interest solely out of the assets of the project; and

(ii) Do not constitute an obligation, either general or special, of the state or municipality or any other political subdivision of the state; and

(b) Be:

(i) Either registered, registered as to principal only or in coupon form;

(ii) Issued in such denominations as the project may prescribe;

(iii) Fully negotiable instruments under the laws of the state;

(iv) Signed on behalf of the project with the manual or facsimile signature of the chairman or vice chairman, attested by the manual or facsimile signature of the secretary, and have impressed or imprinted thereon the seal of the project or a facsimile thereof, and the coupons attached thereto shall be signed with the facsimile signature of such chairman or vice chairman. If the officers whose signatures or countersignatures appear on any bonds, notes or coupons shall cease to be such officers before the delivery of such bonds, notes or coupons, such signatures shall nevertheless be valid and sufficient for all purposes, the same as if such officers had remained in office until such delivery;

(v) Payable as to principal at such time or times, at such place or places, and with such reserved rights of prior redemption as the project may determine or provide;

(vi) Payable as to interest at such rate or rates (not to exceed a greater rate to maturity than that established in Section 75-17-103, Mississippi Code of 1972) and at such time or times as the project may determine or provide;

(vii) Sold at such price or prices, at public or private sale, and in such manner as the project may prescribe; and the project may pay all expenses, premiums and commissions which it deems necessary or advantageous in connection with the issuance and sale thereof; and

(viii) Issued under and subject to such terms, conditions and covenants providing for the payment of the principal, redemption premiums, if any, and interest and such other terms, conditions, covenants and protective provisions safeguarding such payment, not inconsistent with this act, as may be found to be necessary by the project for the most advantageous sale thereof, which may include, but not be limited to, covenants with the holders of the bonds or the notes, as to:

1. Pledging or creating a lien, to the extent provided by such resolution or resolutions, on all or any part of any money or property of the project or of any monies held in trust or otherwise by others to secure the payments of such bonds or notes;

2. Otherwise providing for the custody, collection, securing, investment and payment of any money of or due to the project;

3. The setting aside of reserves or sinking funds and the regulation or disposition thereof;

4. Limitations on the purpose to which the proceeds of sale of any issue of such bonds or notes then or thereafter to be issued may be applied;

5. Limitations on the issuance of additional bonds or notes and on the refunding of outstanding or other bonds or notes;

6. The procedure, if any, by which the terms of any contract with the holders of bonds or notes may be amended or abrogated, the amount of bonds or notes the holders of which must consent thereto, and the manner in which such consent may be given;

7. The creation of special funds into which any money of the project may be deposited;

8. Vesting in a trustee or trustees such properties, rights, powers and duties in trust as the project may determine, which may include any or all of the usual and customary rights, powers and duties of the trustee appointed for the holders of any issue of bonds or notes as agreed upon by the project;

9. Defining the acts or omissions to act which shall constitute a default in the obligations and duties of the project and providing for the rights and remedies of the holders of bonds or notes in the event of such default; provided, that such rights and remedies shall not be inconsistent with the general laws of the state and other provisions of this act; and

10. Any other matters of like or different character, which in any way affect the security and protection of the bonds or notes and the rights of the holders thereof.

SECTION 12. The project is authorized to issue its bonds or notes for the purpose of refunding any bonds or notes of the project then outstanding. In addition, the project may issue its bonds or notes for the purpose of refunding any bonds or notes of (a) any local housing authority or authorities, or (b) any regional housing authority or authorities. The project shall have no power or authority to issue its bonds or notes for the purpose of refunding bonds or notes of any local housing authority or any regional housing authority unless the refunding and the project's participation therein are authorized by a resolution or resolutions adopted by the housing authority or authorities whose bonds or notes will be refunded by the bonds or notes issued by the project. The resolution or resolutions shall request the project to issue its bonds or notes for the purpose of refunding bonds or notes of the housing authority or authorities then outstanding and shall contain such other terms and conditions as necessary or appropriate. The total amount of any such refunding bonds or notes shall be an amount sufficient to effect the refunding and may include an amount sufficient to pay (a) the principal amount of the refunded bonds or notes, (b) interest accrued or to accrue to the date of maturity or the date of redemption of the bonds or notes to be refunded which need not necessarily be on the first available redemption date, (c) any redemption premiums to be paid thereon, (d) any reasonable expenses incurred in connection with such refunding, and (e) any other reasonable costs deemed necessary by the project to effect the refunding. The proceeds of such refunding bonds or notes may be applied in the manner determined by the project and may be placed in escrow and invested in the manner and on the terms determined by the project. All such bonds or notes shall be refunded in accordance with the Mississippi Bond Refinancing Act, Section 31-27-1 et seq., Mississippi Code of 1972.

SECTION 13. It is the intention of the Legislature that:

(a) Any pledge of earnings, revenues or other assets consistent with the provisions of this act shall be valid and binding from the time when the pledge is made;

(b) Any earnings, revenues or other assets so pledged and thereafter received by the project shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act;

(c) Such liens shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the project irrespective of whether such parties have notice thereof; and

(d) Neither the resolution nor any other instrument by which a pledge is created need be recorded.

SECTION 14. (1) Any person executing the bonds, notes or other obligations of the project shall not be personally liable for such bonds, notes or other obligations or be subject to any personal liability or accountability by reason of the issuance thereof while acting in the scope of their authority.

(2) The bonds, notes and other obligations of the project shall not be a debt of the state or any agency, instrumentality or political subdivision thereof.

SECTION 15. The project may create and establish one or more reserve funds to be known as "debt service reserve funds" and the project may create and establish such other reserve funds as it shall deem advisable and necessary.

SECTION 16. The state does hereby pledge to and agree with the holders of any bonds or notes issued under this act that the state will not limit or alter the rights hereby vested in the project to fulfill the terms of any agreements made with the holders thereof in keeping with the provisions of this act, or in any way impair the rights and remedies of such holders until such bonds or notes together with the interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceedings by or on behalf of such holders, are fully met and discharged. The project is authorized to include this pledge and agreement of the state in any agreement with the holders of such bonds or notes. The chancery court shall have jurisdiction of any suit, action or proceeding by the trustee on behalf of bondholders or noteholders. The venue of any such suit, action or proceeding shall be in the First Judicial District of Hinds County, Mississippi.

SECTION 17. The state and all public officers, municipal corporations, political subdivisions, and public bodies; all banks, bankers, trust companies, savings banks and institutions, building and loan associations, savings and loan associations, investment companies, and other persons carrying on a banking business; all insurance companies, insurance associations and other persons carrying on an insurance business; and all executors, administrators, guardians, trustees and other fiduciaries and the Mississippi Public Employees' Retirement System may legally invest any sinking funds, monies or other funds belonging to them or within their control in any bonds or notes issued by the project, and such bonds or notes shall be authorized security for all public deposits, it being the purpose of this act to authorize any persons, firms, corporations, associations, political subdivisions, bodies and officers, public or private, to use any funds owned or controlled by them, including, but not limited to, sinking, insurance, investment, retirement, compensation, pension and trust funds, and funds held on deposit, for the purchase of any such bonds or notes, and that any such bonds or notes shall be authorized security for all public deposits. However, nothing contained in this act with regard to legal investments shall be construed as relieving any person, firm or corporation from any duty of exercising reasonable care in selecting securities.

SECTION 18. (1) It is determined that the creation of the project is in all respects for the benefit of the people of the state, for the improvement of their health and welfare and for the protection of the economy, and that such purposes are public purposes and the project will be performing an essential governmental function in the exercise of the powers conferred upon the project by this act. In consideration of the acceptance of and payment for the bonds and notes issued by the project pursuant to this act, the state hereby covenants with the purchasers and all subsequent holders and transferees of such bonds and notes that the income from such bonds and notes shall at all times be free from taxation, except for estate or gift taxes and taxes on transfers.

(2) The project may issue bonds or notes designated as taxable bonds or notes, and any immunity to taxation by the United States Government of income from bonds or notes so designated is hereby waived.

(3) The income and operations of the project shall be exempt from taxation of every kind and nature.

SECTION 19. (1) All money of the project from whatever source derived, except as otherwise authorized or provided in this act, shall be deposited with one or more qualified depositories of the state as approved by the State Treasurer and designated by the project. The money in such accounts shall be withdrawn on the order of such person or persons as the project may authorize. All deposits of such money shall, if required by the project, be secured in such manner as the project may determine. The State Auditor and his legally authorized representatives are authorized and empowered from time to time to examine the accounts and books of the project, including its receipts, disbursements, contracts, leases, sinking funds, investments and any other record and papers relating to its financial standing; at a minimum an audit shall be made annually and a copy thereof shall be filed with the State Treasurer; the project shall pay such reasonable fee for such examination as the State Auditor shall determine.

(2) The project shall have power to contract with holders of any of its bonds or notes as to the custody, collection, securing, investment and payment of any money of the project, of any money held in trust or otherwise for the payment of bonds or notes, and to carry out such contract. Money held in trust or otherwise for the payment of bonds or notes or in any way to secure bonds or notes and deposits of such money may be secured in the same manner as money of the project, and all banks and trust companies are authorized to give such security for such deposits.

(3) Subject to the provisions of any contract with bondholders or noteholders and to the approval of the Department of Audit, the project shall prescribe a system of accounts in accordance with generally accepted accounting principles (GAAP).

(4) The project shall submit to the Governor, State Auditor and both houses of the Legislature, an annual report on the activities of the project and, within thirty (30) days of the receipt thereof by the project, a copy of the report of every external examination of the books and accounts of the project.

SECTION 20. Neither the directors of the project, the advisory board, nor any person or persons acting in their behalf, while acting within the scope of their authority, shall be subject to any personal liability resulting from carrying out any of the powers granted herein in accordance with his or her good faith belief that he or she is acting in the best interests of the project.

SECTION 21. If any member, officer or employee of the project shall be interested either directly or indirectly, or shall be an officer or employee of or have an ownership interest in any firm or corporation interested directly or indirectly, in any contract with the project, including any loan to any sponsor, builder or developer, such interest shall be disclosed to the project and shall be set forth in the minutes of the project, and the member, officer or employee having such interest therein shall not participate on behalf of the project in the authorization of any such contract.

SECTION 22. The project and its existence shall continue until terminated by law, provided that no such law shall take effect so long as the project shall have bonds, notes, or other obligations outstanding, unless adequate provision has been made for the payment thereof. Upon termination of the existence of the project, all of its rights and properties in excess of its obligations shall pass to and be vested in the state as follows:

(a) All excess monies shall be deposited into the General Fund of the State Treasury; and

(b) All of the property shall be vested in the Department of Finance and Administration, or its successor, unless otherwise provided by the Legislature.

SECTION 23. There is created in the State Treasury a special fund to be known as the Mississippi Residential Housing Improvement Fund to be administered as a revolving fund for the purpose of providing funds for residential housing improvement in a municipality as defined in this act. The fund shall be used exclusively to support programs created or administered by the Mississippi Residential Housing Improvement Project under the powers granted to it by law. To this fund shall be deposited all loan repayments, penalties, and other fees and charges accruing to the fund, and any appropriations, donations, gifts, grants or loans which may be made thereto; however, no bond funds shall be deposited into the special fund unless authorized by the Legislature. The interest received on any such investment shall be credited to the fund. Monies remaining in the special fund at the end of a fiscal year shall not lapse into the State General Fund.

The Department of Finance and Administration is authorized and directed to draw warrants upon such funds from time to time upon requisition of the project executed by its executive director, and the State Treasurer is authorized and directed to pay such warrants. The project shall have continuing authority to expend funds up to the maximum amount received into the special fund.

SECTION 24. (1) The governing authority of any municipality, as that term is defined in this act, is authorized, in its discretion, to partially exempt from ad valorem taxation, except ad valorem taxes for school district purposes, the following portion of the value of real property on which any residential housing improvement has been made under the provisions of this act: an amount equal to the increase in the assessed value of the property resulting from the improvements to the real property made under the provisions of this act.

(2) The exemption may commence upon completion of the improvements or on January 1 of the year following completion of the improvements and shall last for a period of time not to exceed five (5) years. Any request for an exemption under this section must be made in writing to the governing authority of the municipality.

(3) Any exemption granted under this section shall be in addition to the exemption provided for in Section 27-31-50, Mississippi Code of 1972, and all other exemptions heretofore granted by the laws of the State of Mississippi.

SECTION 25. This act being necessary for the welfare of the state and its inhabitants shall be liberally construed to effect the purposes thereof. If any section, provision, paragraph, sentence, phrase or word of this act shall be held to be invalid by any court of competent jurisdiction, the remainder of this act shall not be affected thereby.

SECTION 26. This act shall take effect and be in force from and after its passage.