MISSISSIPPI LEGISLATURE

1998 Regular Session

To: Business and Financial Institutions

By: Senator(s) Posey

AN ACT TO AMEND SECTIONS 25-4-105, 19-9-29, 21-33-323, 37-59-11, MISSISSIPPI CODE OF 1972, AND TO CREATE NEW CODE SECTIONS TO BE CODIFIED AS SECTIONS 27-105-373, 19-9-33, 21-33-331 AND 21-33-527, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT IN THE EVENT ANY MEMBER OF A GOVERNING BODY OF ANY DISTRICT, COUNTY, CITY OR TOWN HAS A DIRECT OR INDIRECT CONFLICT OF INTEREST REGARDING A DECISION OF THAT BODY FOR THE SELECTION OF A DEPOSITORY, THE STATE TREASURER SHALL BE DESIGNATED TO MAKE ALL DECISIONS AND TAKE ANY ACTION WITHIN THE AUTHORITY OF THE GOVERNING BODY RELATED TO SUCH SELECTION; TO PROVIDE THAT IN THE EVENT ANY MEMBER OF A GOVERNING BODY OF ANY DISTRICT, COUNTY, CITY OR TOWN HAS A DIRECT OR INDIRECT CONFLICT OF INTEREST REGARDING A DECISION OF THAT BODY FOR THE SALE OF BONDS, THE STATE BOND COMMISSION SHALL BE DESIGNATED TO MAKE ALL DECISIONS AND TAKE ANY ACTION WITHIN THE AUTHORITY OF THE GOVERNING BODY RELATED TO SUCH SALE; AND FOR RELATED PURPOSES. 

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

SECTION 1. Section 25-4-105, Mississippi Code of 1972, is amended as follows:

25-4-105. (1) No public servant shall use his official position to obtain pecuniary benefit for himself other than that compensation provided for by law, or to obtain pecuniary benefit for any relative or any business with which he is associated.

(2) (a) No public servant shall be interested, directly or indirectly, during the term for which he shall have been chosen, or within one (1) year after the expiration of such term, in any contract with the state, or any district, county, city or town thereof, authorized by any law passed or order made by any board of which he may be or may have been a member.

(b) Notwithstanding the provisions of this subsection, in the event a bank or a financial institution, or any affiliated or subsidiary corporation of a bank or a financial institution, submits a bid or offer to any district, county, city or town of the State of Mississippi to act as a depository or perform related depository or banking functions for such governmental entity and such bid or offer, if accepted, would result in a contract in which a member of the governing body of such governmental entity would have a direct or indirect interest, the governing body shall not open or consider any bids or offers received. The governing body of such governmental entity shall submit the matter to the State Treasurer, who shall have the authority to solicit bids; select a depository or depositories; make all decisions and take any action with the authority of the governing body of such governmental entity relating to the selection of a depository or depositories or related depository or banking functions including, but not limited to, the signing of a contract for and on behalf of such governmental entity, which contract shall be binding on such governmental entity as if the governing body of such governmental entity had taken the action and spread the same upon its minutes. All members of the governing body of such governmental entity shall be prohibited from officially or unofficially influencing, lobbying or otherwise communicating in any way with the State Treasurer, or his designees, regarding the selection of a depository or depositories by the State Treasurer for and on behalf of such governmental entity.

(c) Notwithstanding the provisions of this subsection, in the event a bank or a financial institution submits a bid or offer to any district, county, city or town of the State of Mississippi to purchase bonds or serve as a financial advisor or as escrow agent, fiscal agent, depository agent, paying agent or related agent function or as bond registrar or trustee on any bond of or issued by such governmental entity and such bid or offer, if accepted, would result in a contract in which a member of the governing body of such governmental entity would have a direct or indirect interest, the governing body shall not open or consider any bid or offer received. The governing body of such governmental entity shall submit the matter to the State Bond Commission which shall have the authority to solicit bids or offers; select a financial advisor or an escrow agent, fiscal agent, depository agent, paying agent or related agent function or a bond registrar or trustee; sell the bonds; make all decisions and take any action within the authority of the governing body of such governmental entity relating to the selection of a financial advisor or an escrow agent, fiscal agent, depository agent, paying agent or related agent function or a bond registrar or trustee for such bonds or the sale and/or purchase of such bonds including, but not limited to, the signing of a contract for and on behalf of such governmental entity, which contract shall be binding on such governmental entity as if the governing body of such governmental entity had taken the action and spread the same upon its minutes. All members of the governing body of such governmental entity shall be prohibited from officially or unofficially influencing, lobbying or otherwise communicating in any way with the members of the State Bond Commission, or their designees, regarding the selection of a financial advisor or an escrow agent, fiscal agent, depository agent, paying agent or related agent function or bond registrar or trustee on any bond of or issued by such governmental entity by the State Bond Commission for and on behalf of such governmental entity.

(3) No public servant shall:

(a) Be a contractor, subcontractor or vendor with the governmental entity of which he is a member, officer, employee or agent, other than in his contract of employment, or have a material financial interest in any business which is a contractor, subcontractor or vendor with the governmental entity of which he is a member, officer, employee or agent.

(b) Be a purchaser, direct or indirect, at any sale made by him in his official capacity or by the governmental entity of which he is an officer or employee, except in respect of the sale of goods or services when provided as public utilities or offered to the general public on a uniform price schedule.

(c) Be a purchaser, direct or indirect, of any claim, certificate, warrant or other security issued by or to be paid out of the treasury of the governmental entity of which he is an officer or employee.

(d) Perform any service for any compensation during his term of office or employment by which he attempts to influence a decision of the authority of the governmental entity of which he is a member.

(e) Perform any service for any compensation for any person or business after termination of his office or employment in relation to any case, decision, proceeding or application with respect to which he was directly concerned or in which he personally participated during the period of his service or employment.

(4) Notwithstanding the provisions of subsection (3) of this section, a public servant or his relative:

(a) May be an officer, employee, or stockholder of banks or savings and loan associations or other such financial institutions, or any affiliated or subsidiary corporation of a bank or other such financial institution, bidding for bonds, notes or other evidences of debt; or for the privilege of keeping as depositories the public funds of a governmental entity thereof; or for the privilege of providing related depository or banking functions; or for the privilege of serving as escrow agent, fiscal agent, depository agent, paying agent, or related agent functions; or for the privilege of serving as bond registrar, trustee, financial advisor, or the editor or employee of any newspaper in which legal notices are required to be published in respect to the publication of said legal notices.

(b) May be a contractor or vendor with any authority of the governmental entity other than the authority of the governmental entity of which he is a member, officer, employee or agent or have a material financial interest in a business which is a contractor or vendor with any authority of the governmental entity other than the authority of the governmental entity of which he is a member, officer, employee or agent where such contract is let to the lowest and best bidder after competitive bidding and three (3) or more legitimate bids are received or where the goods or services involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchases laws.

(c) May be a subcontractor with any authority of the governmental entity other than the authority of the governmental entity of which he is a member, officer, employee or agent or have a material financial interest in a business which is a subcontractor with any authority of the governmental entity other than the authority of the governmental entity of which he is a member, officer, employee or agent where the primary contract is let to the lowest and best bidder after competitive bidding or where such goods or services involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchases laws.

(d) May be a contractor, subcontractor or vendor with any authority of the governmental entity of which he is a member, officer, employee or agent or have a material financial interest in a business which is a contractor, subcontractor or vendor with any authority of the governmental entity of which he is a member, officer, employee or agent: (i) where such goods or services involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchases laws; or (ii) where the contractual relationship involves the further research, development, testing, promotion or merchandising of an intellectual property created by the public servant.

(e) May purchase securities issued by the governmental entity of which he is an officer or employee if such securities are offered to the general public and are purchased at the same price as such securities are offered to the general public.

(f) May have an interest less than a material financial interest in a business which is a contractor, subcontractor or vendor with any governmental entity.

(g) May contract with the Mississippi Veteran's Home Purchase Board, Mississippi Housing Finance Corporation, or any other state loan program, for the purpose of securing a loan; however, public servants shall not receive favored treatment.

(h) May be employed by or receive compensation from an authority of the governmental entity other than the authority of the governmental entity of which the public servant is an officer or employee.

(i) If a member of the Legislature or other public servant employed on less than a full-time basis, may represent a person or organization for compensation before an authority of the governmental entity other than an authority of the governmental entity of which he is an officer or employee.

(5) No person may intentionally use or disclose information gained in the course of or by reason of his official position or employment as a public servant in any way that could result in pecuniary benefit for himself, any relative, or any other person, if the information has not been communicated to the public or is not public information.

(6) Any contract made in violation of this section may be declared void by the governing body of the contracting or selling authority of the governmental subdivision or a court of competent jurisdiction and the contractor or subcontractor shall retain or receive only the reasonable value, with no increment for profit or commission, of the property or the services furnished prior to the date of receiving notice that the contract has been voided.

(7) Any person violating the provisions of this section shall be punished as provided for in Sections 25-4-109 and 25-4-111.

SECTION 2. The following provision shall be codified as Section 27-105-373, Mississippi Code of 1972:

27-105-373. Notwithstanding the provisions of this article, in the event a bank or a financial institution, or any affiliated or subsidiary corporation of a bank or a financial institution, submits a bid or offer to any county or municipality of the State of Mississippi or to any community hospital, as defined in Section 27-105-365, Mississippi Code of 1972, to act as a depository or perform related depository or banking functions for such governmental entity and such bid or offer, if accepted, would result in a contract in which a member of the governing body of such governmental entity would have a direct or indirect interest, the governing body shall not open or consider any bids or offers received. The governing body of such governmental entity shall submit the matter to the State Treasurer, who shall have the authority to solicit bids; select a depository or depositories; make all decisions and take any action within the authority of the governing body of such governmental entity relating to the selection of a depository or depositories or related depository or banking functions including, but not limited to, signing a contract for and on behalf of such governmental entity, which contract shall be binding on such governmental entity as if the governing body had taken the action and spread the same upon its minutes.

SECTION 3. Section 19-9-29, Mississippi Code of 1972, is amended as follows:

19-9-29. Whenever any county 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 to meet the current needs and demands of no more than seven (7) business days, the board of supervisors of such county shall invest such excess funds in the following manner:

(a) Such excess funds shall be invested for periods of from fourteen (14) days to one (1) year in interest-bearing time certificates of deposit with county depositories serving in accordance with Section 27-105-303 which are willing to accept the same, at a negotiated rate of interest. The negotiated rate of interest shall be at the highest rate possible at the date of purchase or investment for such time certificates of deposit or interest-bearing accounts, but such rate of interest shall not be less than the rate of interest paid to the general public on passbook savings. The rate of interest established herein shall be the minimum rate of interest and there shall be no maximum rate of interest.

(b) The balance, if any, of such excess funds shall be invested in interest-bearing time certificates of deposit for the same maturity periods and at the same rate of interest as prescribed in paragraph (a) of this section in state depositories located in such county which are willing to accept the same, to the same extent as such depositories are eligible for invested state funds.

(c) To the extent that the board of supervisors finds that such excess funds cannot be invested pursuant to paragraphs (a) and (b) of this section for the stated maturity of from fourteen (14) days to one (1) year, the board of supervisors may invest such funds in any bonds or other direct obligations of the United States of America, the State of Mississippi, or any county, municipality or school district of this state, if such county, 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 the board of supervisors may invest such funds, together with any other funds required for current operation, 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 county or state depository, or the board of supervisors may deposit such funds in interest-bearing accounts with a county or state depository. Such bonds or obligations purchased may have any maturity date, provided that they shall mature or be redeemable prior to the time that the funds so invested will be needed for expenditure.

Any excess funds invested in certificates of deposit or interest-bearing accounts with county or state depositories under this section shall be secured in the manner required by Section 27-105-315. The proceeds of such certificates of deposit shall be immediately reinvested on the date of maturity in accordance with paragraphs (a), (b) and (c) of this section, unless the board of supervisors determines that such funds are required for current operation.

When bonds or other obligations have been purchased, the same may be sold or surrendered for redemption at any time, except certificates of deposit which must mature, by order or resolution of such board of supervisors. The president of the board of supervisors, 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 monies 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 county. 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 county government shall be paid into that special purpose fund. Notwithstanding the provisions of this section, in the event a bank or a financial institution, or any affiliated or subsidiary corporation of a bank or a financial institution, submits a bid or offer to any county to take any action related to the investment of surplus funds of the county including, but not limited to, the sale of bonds or any of the other investment vehicles described herein and such bid or offer, if accepted would result in a contract in which the president or any other member of the board of supervisors would have a direct or indirect interest, the board of supervisors shall not open or consider any bids or offers received. The board of supervisors shall submit the matter to the State Treasurer, who shall have the authority to solicit bids; select an investment vehicle; make all decisions and take any action within the authority of the board of supervisors relating to the selection of an investment vehicle including, but not limited to, the signing of a contract for and on behalf of the county, which contract shall be binding on the county as if the board of supervisors had taken the action and spread the same upon its minutes.

SECTION 4. The following provision shall be codified as Section 19-9-33, Mississippi Code of 1972:

19-9-33. Notwithstanding the provisions of this chapter, in the event a bank or a financial institution, or any affiliated or subsidiary corporation of a bank or a financial institution, submits a bid or offer to any county of the State of Mississippi to purchase bonds or serve as a financial advisor or as escrow agent, fiscal agent, depository agent, paying agent or related agent function, or as bond registrar or trustee on any bond of or issued by such county and such bid or offer, if accepted, would result in a contract in which a member of the board of supervisors would have a direct or indirect interest, the board of supervisors shall not open or consider any bid or offer received. The president of the board of supervisors shall submit the matter to the State Bond Commission which shall have the authority to solicit bids or offers; select a financial advisor or an escrow agent, fiscal agent, depository agent, paying agent or related agent function or a bond registrar or trustee; sell the bonds; make all decisions and take any action within the authority of the board of supervisors relating to the selection of a financial advisor or an escrow agent, fiscal agent, depository agent, paying agent or related agent function or a bond registrar or trustee for such bonds or the sale and/or purchase of such bonds including, but not limited to, the signing of a contract for and on behalf of the county, which contract shall be binding on the county as if the board of supervisors had taken the action and spread the same upon its minutes.

SECTION 5. 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. 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. Notwithstanding the provisions of this section, in the event a bank or a financial institution, or any affiliated or subsidiary corporation of a bank or a financial institution, submits a bid or offer to any municipality to take any action related to the investment of surplus funds of the municipality including, but not limited to, the sale of bonds or any of the other investment vehicles described herein and such bid or offer, if accepted, would result in a contract in which the mayor or other member of the governing body of the municipality would have a direct or indirect interest, the governing body shall not open or consider any bids or offers received. The governing body of the municipality shall submit the matter to the State Treasurer, who shall have the authority to solicit bids; select an investment vehicle; make all decisions and take any action within the authority of the mayor or the governing body of the municipality relating to the selection of an investment vehicle including, but not limited to, the signing of a contract for and on behalf of the municipality, which contract shall be binding on the municipality as if the governing body of the municipality had taken the action and spread the same upon its minutes.

SECTION 6. The following provision shall be codified as Section 21-33-331, Mississippi Code of 1972:

21-33-331. Notwithstanding the provisions of this article, in the event a bank or a financial institution, or any affiliated or subsidiary corporation of a bank or a financial institution, submits a bid or offer to a municipality of the State of Mississippi to purchase bonds or serve as a financial advisor or as escrow agent, fiscal agent, depository agent, paying agent or related agent function or as bond registrar or trustee on any bond of or issued by such municipality and such bid or offer, if accepted, would result in a contract in which a member of the governing body of such municipality would have a direct or indirect interest, the governing body shall not open or consider any bid or offer received. The president of the governing body of such municipality shall submit the matter to the State Bond Commission which shall have the authority to solicit bids or offers; select a financial advisor or an escrow agent, fiscal agent, depository agent, paying agent or related agent function or a bond registrar or trustee; sell the bonds; make all decisions and take any action within the authority of the governing body of such municipality relating to the selection of a financial advisor or an escrow agent, fiscal agent, depository agent, paying agent or related agent function or a bond registrar or trustee for such bonds, or the sale and/or purchase of such bonds including, but not limited to, the signing of a contract for and on behalf of such municipality, which contract shall be binding on such municipality as if the governing body of such municipality had taken the action and spread the same upon its minutes.

SECTION 7. The following provision shall be codified as Section 21-33-527, Mississippi Code of 1972:

21-33-527. Notwithstanding the provisions of this article, in the event a bank or a financial institution, or any affiliated or subsidiary corporation of a bank or a financial institution, submits a bid or offer to any municipality of the State of Mississippi, or to an urban renewal agency thereof, to purchase bonds or serve as a financial advisor or as escrow agent, fiscal agent, depository agent, paying agent or related agent function or as bond registrar or trustee on any bond of or issued by such governmental entity and such bid or offer, if accepted, would result in a contract in which a member of the governing body of such governmental entity would have a direct or indirect interest, the governing body shall not open or consider any bid or offer received. The president of the governing body of such governmental entity shall submit the matter to the State Bond Commission which shall have the authority to solicit bids or offers; select a financial advisor or an escrow agent, fiscal agent, depository agent, paying agent or related agent function or a bond registrar or trustee; sell the bonds; make all decisions and take any action within the authority of the governing body of such governmental entity relating to the selection of a financial advisor or an escrow agent, fiscal agent, depository agent, paying agent or related agent function or a bond registrar or trustee for such bonds, or the sale and/or purchase of such bonds including, but not limited to, the signing of a contract for and on behalf of such governmental entity, which contract shall be binding on such governmental entity as if the governing body of such governmental entity had taken the action and spread the same upon its minutes.

SECTION 8. Section 37-59-11, Mississippi Code of 1972, is amended as follows:

37-59-11. (1) Before any money shall be borrowed under the provisions of this chapter, the school board of the school district shall adopt a resolution declaring the necessity for borrowing such money, declaring its intention to borrow such money and to issue the negotiable bonds of the school district as evidence of same, specifying the approximate amount to be so borrowed, and how such indebtedness is to be evidenced. Such resolution shall also set forth the nature and approximate cost of the alterations, additions and repairs to be made, and shall declare in said resolution that no funds are available in the school funds of the district or from any other source with which to make such repairs, alterations, additions, purchases, erections or improvements.

(2) Whenever a resolution is adopted by the school board as provided in subsection (1), or a petition signed by not less than ten percent (10%) of the qualified electors of a school district, fixing the maximum amount of such school bonds and the purpose or purposes for which they are to be issued, the school board shall adopt a resolution calling an election to be held within such school district for the purpose of submitting to the qualified electors thereof the question of the issuance of bonds in the amount and for the purpose or purposes as set forth in such resolution or petition. The resolution calling such election shall designate the date upon which the election shall be held and the place or places within such district at which such election shall be held, which place or places may or may not be the school house or school houses in such district.

(3) Provided, however, anything herein to the contrary notwithstanding, no election shall be required for approval of bonds issued after July 1, 1987, and prior to July 1, 1988, or within one (1) year after the final favorable termination of any litigation affecting the issuance of such bonds, and as to which the resolution of necessity and intent to issue by the school board of the school district is passed and publication thereof commenced on or before June 30, 1987, unless a petition calling for such election is filed meeting the requirements and within the time provided by this Section 37-59-11 as in effect between April 15, 1986, and June 30, 1987.

(4) Notwithstanding the provisions of this chapter, in the event a bank or a financial institution, or any affiliated or subsidiary corporation of a bank or a financial institution, submits a bid or offer to any school district of the State of Mississippi to purchase bonds or serve as a financial advisor or as escrow agent, fiscal agent, depository agent, paying agent or related agent function or as bond registrar or trustee on any bond of or issued by such school district and such bid or offer, if accepted, would result in a contract in which a member of the school board of such school district would have a direct or indirect interest, the school board shall not open or consider any bid or offer received. The superintendent of such school district shall submit the matter to the State Bond Commission which shall have the authority to solicit bids or offers; select a financial advisor or an escrow agent, fiscal agent, depository agent, paying agent or related agent function or a bond registrar or trustee; sell the bonds; make all decisions and take any action within the authority of the governing body of such governmental entity relating to the selection of a financial advisor or an escrow agent, fiscal agent, depository agent, paying agent or related agent function or a bond registrar or trustee for such bonds, or the sale and/or purchase of such bonds including, but not limited to, the signing of a contract for and on behalf of such school district, which contract shall be binding on such school district as if the school board of such school district had taken the action and spread the same upon its minutes.

SECTION 9. This act shall take effect and be in force from and after July 1, 1998.