MISSISSIPPI LEGISLATURE

1998 Regular Session

To: Economic Dev, Tourism and Parks

By: Senator(s) Horhn

AN ACT TO REPEAL THE CHARTER OF INCORPORATION OF THE MAGNOLIA CAPITAL CORPORATION AND THE MAGNOLIA VENTURE CAPITAL CORPORATION; TO PROVIDE THAT ALL OUTSTANDING FUNDS AND OTHER ASSETS OF THE MAGNOLIA CAPITAL CORPORATION AND THE MAGNOLIA VENTURE CAPITAL CORPORATION SHALL BE LIQUIDATED AND PAID INTO THE VENTURE CAPITAL FUND; TO PROVIDE THAT THE MONETARY OBLIGATIONS OF THE MAGNOLIA CAPITAL CORPORATION AND THE MAGNOLIA VENTURE CAPITAL CORPORATION SHALL NOT BE IMPAIRED AND SHALL BE SATISFIED FROM THE VENTURE CAPITAL FUND; TO PROVIDE THAT ALL ZERO COUPON BONDS PURCHASED UNDER THE VENTURE CAPITAL ACT OF 1994 PRIOR TO THE EFFECTIVE DATE OF THIS ACT SHALL BE UNDER THE MANAGEMENT AND CONTROL OF THE STATE TREASURER; TO PROVIDE THAT THE STATE TREASURER SHALL INVEST, LIQUIDATE OR OTHERWISE MANAGE SUCH ZERO COUPON BONDS IN THE MANNER THAT HE FEELS IS IN THE BEST INTEREST OF THE STATE; TO PROVIDE THAT CERTAIN PROCEEDS REALIZED FROM THE MANAGEMENT OF THE ZERO COUPON BONDS SHALL BE DEPOSITED INTO THE VENTURE CAPITAL FUND; TO AMEND SECTION 57-77-29, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT MONEY IN THE VENTURE CAPITAL FUND SHALL BE UTILIZED BY THE STATE TREASURER TO SATISFY ANY VALID MONETARY OBLIGATIONS OF THE MAGNOLIA CAPITAL CORPORATION OR THE MAGNOLIA VENTURE CAPITAL CORPORATION; TO PROVIDE THAT MONEY REMAINING IN THE FUND AFTER THE SATISFACTION OF SUCH MONETARY OBLIGATIONS SHALL BE APPLIED TO PAY THE DEBT SERVICE ON BONDS ISSUED UNDER THE VENTURE CAPITAL ACT OF 1994; TO PROVIDE THAT MONEY REMAINING IN THE FUND AFTER THE PAYMENT OF SUCH OBLIGATIONS OR DEBT SERVICE SHALL BE DEPOSITED INTO THE STATE GENERAL FUND; TO REPEAL SECTIONS 57-77-3, 57-77-5, 57-77-7, 57-77-9, 57-77-11, 57-77-13, 57-77-15, 57-77-17, 57-77-19, 57-77-21, 57-77-23, 57-77-25 AND 57-77-27, MISSISSIPPI CODE OF 1972, WHICH PROVIDE FOR THE FORMATION OF THE MAGNOLIA CAPITAL CORPORATION AND THE MAGNOLIA VENTURE CAPITAL CORPORATION, PROVIDE FOR A CERTAIN LOAN TO THE MAGNOLIA CAPITAL CORPORATION BY THE DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT AND THE TERMS AND CONDITIONS OF SUCH LOAN AND GRANT CERTAIN POWERS TO THE MAGNOLIA CAPITAL CORPORATION AND THE MAGNOLIA VENTURE CAPITAL CORPORATION; TO REPEAL SECTION 27-7-22.11, MISSISSIPPI CODE OF 1972, WHICH PROVIDES FOR AN INCOME TAX CREDIT FOR CERTAIN INVESTMENTS UNDER THE VENTURE CAPITAL ACT OF 1994; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) Pursuant to Section 178 of the Mississippi Constitution of 1890, the Legislature finds that it is in the public interest to repeal the charters of incorporation of the Magnolia Capital Corporation and the Magnolia Venture Capital Corporation which were authorized to be formed under the provisions of the Venture Capital Act of 1994.

(2) The charter of incorporation of the Magnolia Capital Corporation and the charter of incorporation of the Magnolia Venture Capital Corporation are hereby repealed and all outstanding funds and other assets of the Magnolia Capital Corporation and the Magnolia Venture Capital Corporation shall be liquidated and paid into the special fund created pursuant to Section 57-77-29.

(3) Valid monetary obligations of the Magnolia Capital Corporation and the Magnolia Venture Capital Corporation shall not be impaired and shall be satisfied from the special fund created pursuant to Section 57-77-29.

SECTION 2. All zero coupon bonds purchased under the Venture Capital Act of 1994 prior to the effective date of this act shall be under the management and control of the State Treasurer. The State Treasurer shall invest, liquidate or otherwise manage the zero coupon bonds in the manner that in his judgment is in the best interest of the State of Mississippi; provided, however, that any money realized from the liquidation of the zero coupon bonds and any funds realized upon maturity of such bonds shall be deposited into the special fund created pursuant to Section 57-77-29.

SECTION 3. Section 57-77-29, Mississippi Code of 1972, is amended as follows:

57-77-29. (1) There is hereby created a special fund in the State Treasury, to be known as the Venture Capital Fund, * * *.

(2) Any money remaining in the fund after it is utilized as provided for in subsection (1) of this section shall be deposited into the State General Fund.

SECTION 4. Sections 57-77-3, 57-77-5, 57-77-7, 57-77-9, 57-77-11, 57-77-13, 57-77-15, 57-77-17, 57-77-19, 57-77-21, 57-77-23, 57-77-25 and 57-77-27, Mississippi Code of 1972, which provide for the formation of the Magnolia Capital Corporation and the Magnolia Venture Capital Corporation, provide for a certain loan to the Magnolia Capital Corporation by the Department of Economic and Community Development and the terms and conditions of such loan, and grant certain powers to the Magnolia Capital Corporation and the Magnolia Venture Capital Corporation, are hereby repealed.

SECTION 5. Section 27-7-22.11, Mississippi Code of 1972, which provides for an income tax credit for certain investments under the Venture Capital Act of 1994, is hereby repealed.

SECTION 6. Sections 4 and 5 of this act shall take effect and be in force from and after July 1, 1998. The remainder of this act shall take effect and be in force from and after its passage.