1998 Regular Session
To: Ways and Means
By: Representative Horne
House Bill 1359
AN ACT TO CREATE NEW CODE SECTION 7-5-6 WHICH ESTABLISHES A DIVISION OF BOND COUNSEL WITHIN THE OFFICE OF THE ATTORNEY GENERAL; TO SET FORTH ITS POWERS AND DUTIES; TO REQUIRE PUBLIC BOND ISSUERS TO UTILIZE EXCLUSIVELY THE SERVICES OF THE STATE ATTORNEY GENERAL AS BOND COUNSEL; TO AMEND SECTIONS 19-3-47, 21-33-301, 31-17-101, 31-25-21, 37-29-109, 41-73-35, 43-33-729 AND 57-10-419, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. The following shall be codified as Section 7-5-6, Mississippi Code of 1972:
7-5-6. The Attorney General shall establish a Division of Bond Counsel which shall have exclusive authority to provide bond and tax counsel to the state and its political subdivisions in all matters related to the issuance of general obligation and revenue bonds.
The state, or a political subdivision thereof, shall not utilize the services of any attorney other than one employed on a full-time basis by the state Attorney General in connection with the issuance of any bonds.
The division shall perform all legal services and duties customarily and usually performed by bond and tax counsel with respect to the issuance of general obligation bonds and revenue bonds of the state and its political subdivisions, including, but not limited to:
(a) Preparation of all resolutions for consideration and adoption by the State Bond Commission or other issuer;
(b) Preparation of all notices of sale, bid forms and other materials necessary to market the bonds;
(c) Assistance in the preparation of the state's preliminary official statement and final official statement including, but not limited to, those sections related to the legality and tax exempt status of the bonds;
(d) Assistance in the structuring of the bonds, such as maturities, terms and related matters;
(e) Delivery of opinions with respect to the bonds to the effect that:
(i) Such bonds constitute valid obligations of the state;
(ii) Interest on the bonds is excluded from gross income for federal income tax purposes under existing statutes, regulations, rulings and court decisions (for tax exempt bonds); and
(iii) In their participation in the preparation of the preliminary official and the final official statement related to the bonds, nothing has come to their attention that would give them a reason to believe that such documents (except for the financial statistical data included therein as to which no view need be expressed) contained any untrue statement of a material fact or omitted to state any material fact that was required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading;
(f) Preparation of the form of the bonds;
(g) Verification of bids and computation of yields;
(h) Preparation of all closing documents, including tax and arbitrage certificates, and assistance in the execution thereof;
(i) Preparation of closing transcripts;
(j) Regular communication with the State Bond Commission, the State Department of Finance and Administration or the governing authority of the political subdivision issuing the bonds, as required both before and following the issuance and sale of the bonds; and
(k) Perform any other act related to the issuance of bonds required or necessarily implied by law.
The Attorney General may charge the issuer a fee for the actual and necessary expense of providing such counsel.
SECTION 2. Section 19-3-47, Mississippi Code of 1972, is amended as follows:
19-3-47. (1) (a) The board of supervisors shall have the power, in its discretion, to employ counsel by the year at an annual salary at an amount that it deems proper, not to exceed the maximum annual amount authorized by law for payment to a member of the board.
(b) The board of supervisors shall have the power, in its discretion, to employ counsel in all civil cases in which the county is interested, including eminent domain proceedings, the examination and certification of title to property the county is acquiring and in criminal cases against a county officer for malfeasance or dereliction of duty in office, when by the criminal conduct of the officer the county may be liable to be affected pecuniarily, with the counsel to conduct the proceeding instead of the district attorney, or in conjunction with him, and to pay the counsel out of the county treasury or the road fund that may be involved reasonable compensation, or if counsel so employed is retained on an annual basis as provided in this subsection, reasonable additional compensation for his services.
(c) In accordance with Section 7-5-6, the board of supervisors shall utilize exclusively the services of the state Attorney General as bond counsel.
* * *
(2) The board of supervisors of any county, in addition to the authority conferred upon it in subsection (1) of this section, may employ, in its discretion, a firm of attorneys to represent it as its regular attorneys on the same terms, conditions and compensation as provided for employment of an attorney as its regular attorney. However, there shall not be both an attorney and a firm of attorneys employed at the same time as the regular attorney for the board.
(3) In any county having a 1980 federal census population in excess of one hundred eighteen thousand (118,000), and in which is located a major refinery for the production of petroleum products and a facility for the construction of ships for the United States Navy; in any county which is traversed by an interstate highway and having a 1980 federal census population in excess of sixty-six thousand (66,000), and in which is located a comprehensive university operated by the Board of Trustees of State Institutions of Higher Learning and a National Guard training base; in any county in which is located the State Capitol and the state's largest municipality; in any county which is traversed by Interstate Highway 55, United States Highway 51 and United States Highway 98; in any county bordering the Gulf of Mexico, having a 1980 federal census population in excess of one hundred fifty-seven thousand (157,000), and in which is located a state-owned port; and in any county which is traversed by Interstate Highway 20, United States Highway 49 and United States Highway 80, and in which is located the State Hospital and an international airport; all of which foregoing criteria the Legislature finds to be conducive to industrial development requiring the issuance of industrial revenue bonds and which counties would gain benefits by employment of counsel in the manner authorized by this subsection, the board of supervisors, as an alternative to the authority conferred upon it in subsections (1) and (2) of this section, may employ annually, in its discretion, an attorney as a full-time employee of the county, subject to the following conditions:
(a) The attorney shall maintain an office in the county courthouse or other county-owned building and shall represent the board of supervisors and all county agencies responsible to the board;
(b) The attorney shall * * * represent the board in all state and federal courts * * *;
(c) During his employment by the county, the attorney shall not engage otherwise in the practice of civil or criminal law and shall not be associated with any other attorney or firm of attorneys;
(d) The board of supervisors shall have the power, in its discretion, to pay the attorney an annual salary not to exceed the maximum annual salary authorized by law to be paid to the county judge of that county; and
(e) The board of supervisors may authorize, in its discretion, the employment of special counsel to assist the counsel employed pursuant to this subsection, provided that the board shall determine and spread on its minutes that the employment of the special counsel is necessary and in the best interest of the county and setting forth the duties or responsibilities assigned to the special counsel.
SECTION 3. Section 21-33-301, Mississippi Code of 1972, is amended as follows:
21-33-301. The governing authorities of any municipality are authorized to issue negotiable bonds of the municipality to raise money for the following purposes:
(a) Erecting municipal buildings, armories, auditoriums, community centers, gymnasiums and athletic stadiums, preparing and equipping athletic fields, and purchasing buildings or land therefor, and for repairing, improving, adorning and equipping the same, and for erecting, equipping and furnishing of buildings to be used as a municipal or civic arts center;
(b) Erecting or purchasing waterworks, gas, electric and other public utility plants or distribution systems or franchises, and repairing, improving and extending the same;
(c) Purchasing or constructing, repairing, improving and equipping buildings for public libraries and for purchasing land, equipment and books therefor, whether the title to same be vested in the municipality issuing such bonds or in some subdivision of the state government other than the municipality, or jointly in such municipality and other such subdivision;
(d) Establishing sanitary, storm, drainage or sewerage systems, and repairing, improving and extending the same;
(e) Protecting a municipality, its streets and sidewalks from overflow, caving banks and other like dangers;
(f) Constructing, improving or paving streets, sidewalks, driveways, parkways, walkways or public parking facilities, and purchasing land therefor;
(g) Purchasing land for parks, cemeteries and public playgrounds, and improving, equipping and adorning the same, including the constructing, repairing and equipping of swimming pools and other recreational facilities;
(h) Constructing bridges and culverts;
(i) Constructing, repairing and improving wharves, docks, harbors and appurtenant facilities, and purchasing land therefor;
(j) Constructing, repairing and improving public slaughterhouses, markets, pest houses, workhouses, hospitals, houses of correction, reformatories and jails in the corporate limits, or within three (3) miles of the corporate limits, and purchasing land therefor;
(k) Altering or changing the channels of streams and water courses to control, deflect or guide the current thereof;
(l) Purchasing fire-fighting equipment and apparatus, and providing housing for same, and purchasing land therefor;
(m) Purchasing or renting voting machines and any other election equipment needed in elections held in the municipality;
(n) Assisting the Board of Trustees of State Institutions of Higher Learning, the Bureau of Building, Grounds and Real Property Management of the Governor's Office of General Services, or any other state agency in acquiring a site for, constructing suitable buildings and runways and equipping an airport for the university or other state-supported four-year college, now or hereafter in existence, in or near which the municipality is located, within not more than ten (10) miles of the municipality;
(o) Acquiring and improving existing mass transit system; however, no municipal governing authorities shall authorize any bonds to be issued for the acquiring and improving of an existing mass transit system unless an election be conducted in said municipality in the same manner provided for general and special elections, and a majority of the qualified electors of the municipality participating in said election approve the bond issuance for the acquiring and improving of an existing mass transit system.
(p) Purchasing machinery and equipment which have an expected useful life in excess of ten (10) years. The life of such bonds shall not exceed the expected useful life of such machinery and equipment. Machinery and equipment shall not include any motor vehicle weighing less than twelve thousand (12,000) pounds.
The word "bonds" as used in this article shall be deemed to mean and include bonds, notes or certificates of indebtedness.
In accordance with Section 7-5-6, the governing authorities shall utilize exclusively the services of the Attorney General as bond counsel.
SECTION 4. Section 31-17-101, Mississippi Code of 1972, is amended as follows:
31-17-101. There is hereby created a commission to be known as the "State Bond Commission" (hereinafter referred to as the "commission"), which shall consist of the Governor, Attorney General and Treasurer of the State of Mississippi. The Governor shall act as chairman of the commission, the Attorney General shall act as secretary of the commission, and the State Treasurer shall be treasurer of the commission. The successive incumbents in the offices of Governor, Attorney General and State Treasurer shall succeed their predecessors as members of the commission upon assumption of their duties and the completion of their oaths of office. The powers of the commission shall be vested in and exercised by a majority of the members of the commission. The commission may delegate to one or more of its members, or to its officers, agents and employees, such powers and duties as it may deem proper, and may adopt rules for the conduct of its business.
In accordance with Section 7-5-6, the State Bond Commission shall utilize exclusively the services of the Attorney General as bond counsel.
SECTION 5. Section 31-25-21, Mississippi Code of 1972, is amended as follows:
31-25-21. The bank is hereby granted, has and may exercise the power to borrow money and issue its bonds in such principal amounts as it shall deem necessary to provide funds to accomplish a public purpose or purposes of the state provided for under this act, including:
(a) The making of loans to local governmental units by the purchase of municipal securities thereof;
(b) The payment, funding, refunding of the principal of, or interest or redemption premiums on, any bonds issued by it whether the bonds have or have not become due or subject to redemption in accordance with their terms;
(c) The establishment or increase of such debt service reserves and capitalized interest accounts to pay bonds or interest thereon as the bank shall consider necessary or advisable in the marketing of such bonds;
(d) The payment of consultant and legal fees and such other costs of issuance and expenses necessary or incidental to such bond issue;
(e) The deposit of funds into reserve funds established by the bank;
(f) The establishment or increase of reserves to pay all other costs and expenses of the bank incident to and necessary or convenient to carrying out its corporate purposes and powers;
(g) The deposit of funds into the Water Pollution Control Revolving Fund and the Water Pollution Control Emergency Loan Fund created pursuant to Sections 49-17-81 through 49-17-89;
(h) The issuance of up to Fifty Million Dollars ($50,000,000.00) in revenue bonds for regional solid waste authorities and county cooperative service districts;
(i) The advance purchase of energy for any municipality that operates a gas producing, generating, transmission or distribution system, or an electric generating, transmission or distribution system under Sections 21-27-11 through 21-27-71;
(j) The issuance of revenue bonds to fund or assist in funding retirement systems established pursuant to Sections 21-29-1 through 21-29-55 and Sections 21-29-101 through 21-29-151. Before any revenue bonds may be issued for this purpose the municipality whose retirement system is being funded by such bonds shall have an actuary perform a study through the Public Employees' Retirement System to determine the amount of revenue bonds that should be issued to make such retirement system actuarially sound;
(k) To issue general obligation bonds of the State of Mississippi for the purposes provided in Section 31-25-20(g), as such section existed on April 3, 1996. The authority to issue such general obligation bonds of the State of Mississippi shall be repealed from and after the date that the bonds have been issued in their entirety;
(l) Any other lawful, corporate purpose.
In accordance with Section 7-5-6, the bank shall utilize exclusively the services of the Attorney General as bond counsel.
SECTION 6. Section 37-29-109, Mississippi Code of 1972, is amended as follows:
37-29-109. The loans authorized by Section 37-29-107 and Sections 37-29-401 to 37-29-437, shall be evidenced by bonds, which shall be authorized by resolution of the boards of trustees. Each such resolution shall describe the land to be acquired, if any, and the said dormitories, dwellings or apartments to be erected, repaired, remodeled, maintained, added to, extended, improved, equipped, or acquired, together with the equipment therefor. A majority vote of all of the members of such boards, respectively, shall be necessary to the adoption of any such resolution. All votes cast on such resolutions shall be by yea and nay vote, duly recorded on the minutes of the proceedings of such boards, respectively.
Such bonds may be issued in one or more series, may bear such date or dates, may be in such denomination or denominations, may mature at such time or times, not exceeding twenty-five (25) years from the respective dates thereof, may mature in such amount or amounts, may bear interest at such rate or rates, not exceeding that allowed in Section 75-17-101, Mississippi Code of 1972, payable semiannually, may be in such forms, either coupon or registered, may carry such registration privileges, may be executed in such manner, may be payable in such medium of payment, at such place or places, and may be subject to such terms of redemption, with or without premium, all as such resolution or other resolutions may provide.
All such bonds shall be sold at public sale pursuant to such notice as such boards shall prescribe by resolution. All such bonds shall be fully negotiable within the meaning and for the purposes of the Uniform Commercial Code. Incidental costs in connection with the issuance of said bonds, the printing thereof, costs of validation proceedings if required by bond resolution, including attorney's fees and other costs directly attributable to the issuance of said bonds, either in one or more series or at one (1) time or various times, may be paid out of the proceeds of the sale of said bonds. In agreements or commitments by or between the boards of trustees and private lenders and/or the U. S. Department of Housing and Urban Development or its successor to make loans or grants in which bonds are to be issued under the provisions of this section, and in which part or all of the principal and/or interest on said bonds is to be paid or guaranteed by the U. S. Department of Housing and Urban Development or its successor, said bonds shall mature at such time or times, not to exceed (40) years, as shall be prescribed in the resolution of the board of trustees authorizing their issuance and shall bear a net interest rate not in excess of that allowed in Section 75-17-101, Mississippi Code of 1972.
Notwithstanding any other provision of law, in any resolution authorizing the issuance of bonds hereunder, including refunding bonds, the boards of trustees, may provide for the initial issuance of one or more bonds (hereinafter sometimes collectively called "bond"), may make such provision for installment payments of the principal amount of any such bond as they may consider desirable, and may provide for the making of any such bond registerable as to principal or as to both principal and interest and, where interest accruing thereon is not represented by interest coupons, for the endorsing of payments of interest on such bond. Such boards may further make provision in any such resolution for the manner and circumstances in and under which any such bond may in the future, at the request of the holder thereof, be converted into bonds of smaller denominations, which bonds of smaller denominations may in turn be either coupon bonds or bonds registerable as to principal or as to principal and interest.
In accordance with Section 7-5-6, the municipalities and municipal school districts shall utilize exclusively the services of the Attorney General as bond counsel.
SECTION 7. Section 41-73-35, Mississippi Code of 1972, is amended as follows:
41-73-35. The authority is hereby authorized to issue, sell and deliver its bonds in accordance with the terms of this chapter, for any of its corporate purposes.
Bonds shall be authorized by a resolution or resolutions of the authority adopted as provided by this act; provided, that any such resolution authorizing the issuance of bonds may delegate to an officer or officers of the authority the power to issue such bonds from time to time and to fix the details of any such issues of bonds by an appropriate certificate of such authorized officer.
In accordance with Section 7-5-6, the authority shall utilize exclusively the services of the Attorney General as bond counsel.
SECTION 8. Section 43-33-729, Mississippi Code of 1972, is amended as follows:
43-33-729. (1) The corporation may from time to time issue its negotiable bonds and notes in such principal amounts as, in the opinion of the corporation, shall be necessary to provide sufficient funds for achieving the corporate purposes thereof, including operating expenses and reserves, the payment of interest on bonds and notes of the corporation, establishment of reserves to secure such bonds and notes, and all other expenditures of the corporation incident to and necessary or convenient to carry out its corporate purposes and powers. Provided, except as otherwise authorized herein, bonds and notes shall not be issued under this article in an aggregate principal amount exceeding One Hundred Ninety Million Dollars ($190,000,000.00), excluding bonds and notes issued to refund outstanding bonds and notes.
(2) The provisions of Sections 75-71-1 through 75-71-57, Mississippi Code of 1972 (the "Mississippi Securities Act"), shall not apply to bonds and notes issued under the authority of this article, 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 corporation, all bonds and notes issued by the corporation shall be general obligations of the corporation, secured by the full faith and credit of the corporation and payable out of any monies, assets or revenues of the corporation, subject only to any agreement with the bondholders or noteholders pledging any particular monies, assets or revenues.
The corporation may issue bonds or notes to which the principal and interest are payable:
(a) Exclusively from the revenues of the corporation resulting from the use of the proceeds of such bonds or notes; or
(b) Exclusively from any particular revenues of the corporation, whether or not resulting from the use of the proceeds of such bonds or notes.
(4) Any bonds or notes issued by the corporation 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 corporation for the payment of any such bonds;
(b) By a pledge of any grant, subsidy or contribution from the United States or any agency or instrumentality thereof, or from the state or any agency, instrumentality or political subdivision thereof, or from any person, firm or corporation; or
(c) By the pledge of any securities, funds or reserves (or earnings thereon) available to the corporation.
(5) Bonds and notes issued by the corporation shall be authorized by a resolution or resolutions of the corporation adopted as provided for by this article; provided, that any such resolution authorizing the issuance of bonds or notes may delegate to an officer or officers of the corporation 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 article, 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 corporation pursuant to the provisions of this article. 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.
(7) It is hereby determined that the corporation is the sole entity in the state authorized to issue bonds or notes for the purposes of financing low and moderate income rental or residential housing as set forth in this article. In addition, the corporation shall have the power to issue mortgage credit certificates, as provided by Section 25 of the Internal Revenue Code of 1954, as amended, and to comply with all of the terms and conditions set forth in Section 25, as the same may be amended from time to time.
(8) In accordance with Section 7-5-6, the corporation shall utilize exclusively the services of the Attorney General as bond counsel.
SECTION 9. Section 57-10-419, Mississippi Code of 1972, is amended as follows:
57-10-419. (1) The corporation may issue in its own name, from time to time, for the purpose of financing the approved costs of an economic development project, its bonds and may pledge for the payment thereof funds derived in respect of any financing agreement or other arrangement entered into by the corporation and an approved company under Sections 57-10-401 through 57-10-445.
(2) In anticipation of the issuance of bonds, the corporation may provide for the issuance, at one (1) time or from time to time, of bond anticipation notes. The principal of and the interest on the notes shall be payable solely from the funds herein provided for the payment. Any notes may be made payable from the proceeds of bonds or renewal notes; or, if bond or renewal note proceeds are not available, the notes may be paid from any available revenues or assets of the corporation.
(3) The bonds issued under Sections 57-10-401 through 57-10-445 shall be authorized by a resolution of the corporation, shall bear such date or dates, and shall mature at such time or times as such resolution may provide, except that no bond shall mature more than twenty-five (25) years from the date of issue. Bonds which are not subject to taxation shall bear interest at such rate or rates, be in such denominations, be in such form, carry such registration privileges, be executed in such manner, be payable in such medium of payment, at such place or places, and be subject to such terms of redemption, including redemption before maturity, as such resolution may provide. Except as expressly provided otherwise in Sections 57-10-401 through 57-10-445, the provisions of other laws of the state relating to the issuance of revenue bonds shall not apply to bonds issued by the corporation. As to bonds issued hereunder and designated as taxable bonds by the corporation, any immunity to taxation by the United States Government of interest on such bonds or notes is hereby waived. Bonds of the corporation may be sold by the corporation at public or private sale, from time to time, and at such price or prices as the corporation shall determine.
(4) The proceeds of any bonds shall be used solely for the purposes for which issued and shall be disbursed in the manner and under the restrictions, if any, that the corporation may provide in the resolution authorizing the issuance of the bonds or in a trust indenture securing the same.
(5) The principal and interest on the bonds issued by the corporation shall be payable solely and only from proceeds derived under a financing agreement and shall be secured solely by the economic development project, the proceeds of the financing agreement, and such other assets as may be available, but not including revenues of the state.
(6) Before the preparation of definitive certificates evidencing the bonds, the corporation may issue, under like restrictions, interim receipts or temporary certificates, with or without coupons, exchangeable for definitive certificates when the certificates have been executed and are available for delivery. The corporation may also provide for the replacement of any certificates which become mutilated or are destroyed or lost.
(7) In accordance with Section 7-5-6, the corporation shall utilize exclusively the services of the Attorney General as bond counsel.
SECTION 10. This act shall take effect and be in force from and after July 1, 1998.