MISSISSIPPI LEGISLATURE

1998 Regular Session

To: Finance

By: Senator(s) Bryan

AN ACT TO AMEND SECTIONS 41-73-1, 41-73-3, 41-73-5 AND 41-73-7, MISSISSIPPI CODE OF 1972, TO REVISE THE MISSISSIPPI HOSPITAL EQUIPMENT AND FACILITIES ACT TO AUTHORIZE STATE INSTITUTIONS OF HIGHER LEARNING, PUBLIC COMMUNITY OR JUNIOR COLLEGES, AND REGIONALLY ACCREDITED, STATE-APPROVED, NONPROFIT FOUR-YEAR OR TWO-YEAR COLLEGES OR UNIVERSITIES LOCATED IN MISSISSIPPI, THE GULF COAST RESEARCH LABORATORY AND THE UNIVERSITY RESEARCH CENTER, TO UTILIZE THE ACT TO FINANCE THE PURCHASE OF EQUIPMENT AND FACILITIES; TO DEFINE CERTAIN TERMS; TO REVISE THE MEMBERSHIP TO THE GOVERNING BOARD ESTABLISHED UNDER THE ACT BY REMOVING THE MEMBER CHOSEN AT LARGE AND REPLACING THIS POSITION WITH A PERSON WHO POSSESSES NOT LESS THAN 10 YEARS' EXPERIENCE IN THE FIELD OF HIGHER EDUCATION; TO AMEND SECTIONS 41-73-17, 41-73-27, 41-73-29, 41-73-31, 41-73-33, 41-73-37, 41-73-39, 41-73-45 AND 41-73-47, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO. 

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

SECTION 1. Section 41-73-1, Mississippi Code of 1972, is amended as follows:

41-73-1. This chapter shall be known and may be cited as the "Mississippi * * * Equipment and Facilities Authority Act."

SECTION 2. Section 41-73-3, Mississippi Code of 1972, is amended as follows:

41-73-3. The Legislature hereby finds and declares that:

(1) Delivery of quality health care and higher education in Mississippi has in recent years become increasingly dependent upon sophisticated equipment and adequate, modern facilities at a time when the acquisition and financing of such equipment and facilities by health care providers and institutions of higher learning has become increasingly expensive.

(2) It is necessary that Mississippi hospitals be able to obtain the modern equipment and facilities needed to meet the needs of their medical staffs and to improve the quality of medical care provided to Mississippi citizens.

(3) It is necessary that Mississippi institutions of higher learning be able to obtain the modern equipment and facilities needed to meet the needs of their professors, instructors, teachers and administrators and to improve the quality of higher education provided to Mississippi students.

(4) The increased costs of acquiring and financing modern equipment and facilities by Mississippi hospitals is necessarily passed to the patients receiving medical care from the hospitals, resulting in higher medical bills and increased health insurance premiums.

(5) The increased costs of acquiring and financing modern equipment and facilities by Mississippi institutions of higher learning are necessarily passed to the students receiving their higher education from Mississippi institutions of higher learning resulting in higher tuition and fees.

(6) These increased costs discourage Mississippi citizens from obtaining necessary medical care and Mississippi students from obtaining appropriate higher education.

(7) The problems set forth above cannot be remedied solely through the operation of private enterprise or efforts by individual communities, but can be alleviated through the creation of a public body corporate and politic, separate and apart from the State of Mississippi, constituting a governmental instrumentality, to be known as the Mississippi * * * Equipment and Facilities Authority, to encourage the investment of private capital in Mississippi hospitals and institutions of higher learning through the use of public financing as provided in this act for the purpose of financing hospital and institutions of higher learning equipment and * * * facilities at interest rates lower than those available in the conventional credit markets.

(8) Alleviating the conditions and problems set forth above by the encouragement of private investment through a governmental body is a public purpose and use for which public money provided by the sale of revenue bonds may be borrowed, expended, advanced, loaned and granted and is hereby so declared to be such public purpose as a matter of express legislative determination. Such activities shall not be conducted for profit.

SECTION 3. Section 41-73-5, Mississippi Code of 1972, is amended as follows:

41-73-5. When used in this act, unless the context requires a different definition, the following terms shall have the following meanings:

(a) "Act" means the Mississippi * * * Equipment and Facilities Authority Act.

(b) "Authority" means the Mississippi * * * Equipment and Facilities Authority created by this act and any successor to its functions.

(c) "Bonds" means bonds, notes or other evidences of indebtedness of the authority issued pursuant to this act, including refunding bonds.

(d) "Cost" as applied to hospital equipment or institution of higher learning equipment means any and all costs of such * * * equipment and, without limiting the generality of the foregoing, shall include the following:

(i) All costs of the acquisition, repair, restoration, reconditioning, refinancing or installation of any such * * * equipment and all costs incident or related thereto;

(ii) The cost of any property interest in such * * * equipment including an option to purchase or leasehold interest;

(iii) The cost of architectural, engineering, legal and related services; the cost of the preparation of plans, specifications, studies, surveys and estimates of cost and of revenue; and all other expenses necessary or incident to planning, providing or determining the need for or the feasibility and practicability of such * * * equipment; and the cost of providing or establishing a reasonable reserve fund for the payment of principal and interest on bonds;

(iv) The cost of financing charges, including premiums or prepayment penalties, if any, and interest accrued prior to the acquisition and installation or refinancing of such * * * equipment and after such acquisition and installation or refinancing and start-up costs related to * * * the equipment;

(v) Any and all costs paid or incurred in connection with the financing of such * * * equipment, including out-of-pocket expenses, the cost of financing, legal, accounting, financial advisory and consulting fees, expenses and disbursements; the cost of any policy of insurance; the cost of printing, engraving and reproduction services; and the cost of the initial or acceptance fee of any trustee or paying agent;

(vi) All direct or indirect costs of the authority incurred in connection with providing such * * * equipment, including, without limitation, reasonable sums to reimburse the authority for time spent by its agents or employees with respect to providing such * * * equipment and the financing thereof; and

(vii) Any and all costs paid or incurred for the administration of any program for the purchase or lease of or the making of loans for * * * equipment, by the authority and any program for the sale or lease of or the making of loans for such * * * equipment to any participant.

(e) "Cost," as applied to hospital facilities or institution of higher learning facilities, means any and all costs of such * * * facilities and, without limiting the generality of the foregoing, shall include the following:

(i) All costs of the establishment, demolition, site development of new and rehabilitated buildings, rehabilitation, reconstruction repair, erection, building, construction, remodeling, adding to and furnishing of any such * * * facilities and all costs incident or related thereto;

(ii) The cost of acquiring any property interest in such * * * facilities including the purchase thereof, the cost of an option to purchase or the cost of any leasehold interest;

(iii) The cost of architectural, engineering, legal and related services; the cost of the preparation of plans, specifications, studies, surveys and estimates of cost and of revenue; all other expenses necessary or incident to planning, providing or determining the need for or the feasibility and practicability of such * * * facilities or the acquisition thereof; and the cost of providing or establishing a reasonable reserve fund for the payment of principal of and interest on bonds;

(iv) The cost of financing charges, including premiums or prepayment penalties, if any, and interest accrued prior to the acquisition and completion or refinancing of such * * * facilities and after such acquisition and completion or refinancing and start-up costs related to * * * the facilities;

(v) Any and all costs paid or incurred in connection with the financing of such * * * facilities, including out-of-pocket expenses, the cost of financing, legal, accounting, financial advisory and consulting fees, expenses and disbursement; the cost of any policy of insurance; the cost of printing, engraving and reproduction services; and the cost of the initial or acceptance fee of any trustee or paying agent;

(vi) All direct or indirect costs of the authority incurred in connection with providing such * * * facilities, including, without limitation, reasonable sums to reimburse the authority for time spent by its agents or employees with respect to providing such * * * facilities and the financing thereof;

(vii) Any and all costs paid or incurred for the administration of any program for the purchase or lease of or the making of loans for * * * facilities, by the authority and any program for the sale or lease of or the making of loans for such * * * facilities to any participant; and

(viii) The cost of providing for the payment or the making provision for the payment of, by the appropriate escrowing of monies or securities, the principal of and interest on which when due will be adequate to make such payment, any indebtedness encumbering the revenues or property of a participant, whether such payment is to be effected by redemption of such indebtedness prior to maturity or not.

(f) "Equipment" means hospital equipment and/or institution of higher learning equipment, as the context indicates.

(g) "Facility" or "facilities" means hospital facility or facilities and/or institution of higher learning facility or facilities, as the context indicates.

(h) "Hospital equipment" means any personal property which is found and determined by the authority to be required or necessary or helpful for medical care, research, training or teaching, any one (1) or all, in hospital facilities located in the state, irrespective of whether such property is in existence at the time of, or is to be provided after the making of, such finding. Provided further, that major medical equipment as defined in Section 41-7-173(n), shall require a certificate of need prior to the approval of the authority to contract with said hospital.

(i) "Hospital facility" or "hospital facilities" means buildings and structures of any and all types used or useful, in the discretion of the authority, for providing any types of care to the sick, wounded, infirmed, needy, mentally incompetent or elderly and shall include, without limiting the generality of the foregoing, out-patient clinics, laboratories, laundries, nurses', doctors' or interns' residences, administration buildings, office buildings, facilities for research directly involved with hospital care, maintenance, storage or utility facilities, parking lots, and garages and all necessary, useful, or related furnishings, and appurtenances and all lands necessary or convenient as a site for the foregoing.

(j) "Institution of higher learning" means (i) any state institution of higher learning, public community or junior college located in Mississippi, or any regionally accredited, state-approved, nonprofit four- or two-year college or university located in Mississippi, as listed in subsection (d) of Section 37-106-29, Mississippi Code of 1972, (ii) the Gulf Coast Research Laboratory, as identified in Section 37-101-21, Mississippi Code of 1972, and (iii) the University Research Center, created pursuant to Chapter 141 of Title 37, Mississippi Code of 1972.

(k) "Institution of higher learning equipment" means any personal property which is found and determined by the authority to be required or necessary or helpful for higher education, instruction, research, training, teaching, or administration, any one (1) or all, in institutions of higher learning located in the state, irrespective of whether such property is in existence at the time of, or is to be provided after the making of, such finding.

(l) "Institution of higher learning facility" or "institution of higher learning facilities" means buildings and structures of any and all types used or useful, in the discretion of the authority, for providing higher education to students and shall include, without limiting the generality of the foregoing, instructional buildings, administration buildings, libraries, laundries, laboratories, students' residences, office buildings, facilities for research, maintenance, storage or utility facilities, parking lots, and garages and all necessary useful, related furnishings, and appurtenances and all lands necessary or convenient as a site for the foregoing.

(m) "Participant" means participating hospital institution and/or participating institution of higher learning, as the context indicates.

(n) "Participating hospital institution" or "hospital institution" means a public or private corporation, association, foundation, trust, cooperative, agency, body politic, or other person or organization which provides or operates or proposes to provide or operate hospital facilities not for profit, and which, pursuant to the provisions of this act, contracts with the authority for the financing or refinancing of the lease or other acquisition of hospital equipment or hospital facilities, or both.

(o) "State" means the State of Mississippi.

The use of singular terms herein shall also include the plural of such term and the use of a plural term herein shall also include the singular of such term unless the context clearly requires a different connotation.

SECTION 4. Section 41-73-7, Mississippi Code of 1972, is amended as follows:

41-73-7. (1) There is hereby created, with such duties and powers as are set forth in this act, a body politic and corporate, not a state agency, but an independent instrumentality exercising essential public functions, to be known as the Mississippi * * *

Equipment and Facilities Authority.

(2) The authority shall be governed by seven (7) members who shall be appointed by the Governor with the advice and consent of the Senate.

(3) The members shall at all times include the following:

(a) One (1) resident of each of the three (3) Supreme Court districts in the state;

(b) One (1) certified public accountant experienced in hospital finance;

(c) One (1) possessing not less than ten (10) years' experience in hospital management and finance;

(d) One (1) banker with experience in commercial lending or one (1) investment banker with experience in municipal finance;

(e) One (1) possessing not less than ten (10) years' experience in the field of higher education.

(4) All members shall be residents of the state.

SECTION 5. Section 41-73-17, Mississippi Code of 1972, is amended as follows:

41-73-17. The members of the authority may appoint an executive director and/or a secretary who shall be employees of the authority, but not members thereof, and who shall serve at the pleasure of the members and receive such compensation as shall be fixed by the members. The executive director, if appointed, shall attend the meetings of the members of the authority and shall administer, manage and direct the affairs and activities of the authority in accordance with the policies and under the control and direction of the members. The executive director shall approve all accounts for salaries, allowable expenses of the authority or of any employee or consultant thereof, and expenses incidental to the operation of the authority. He shall perform such other duties as may be directed by the members in carrying out the purposes of this chapter. The practices and procedures regarding administrative functions and responsibilities of the authority shall be subject to the approval and review of the director of the State Bond Advisory Division of the Governor's office. In lieu of or in addition to the appointment of an executive director, the authority may contract with the State Bond Advisory Division of the Governor's office to carry out in whole or in part the administrative functions and responsibilities of the authority, but may only pay the actual expenses incurred by such division in performing such functions and responsibilities. The expenses incurred by the authority in contracting for such administrative functions and responsibilities shall be paid by the authority as a qualified cost pursuant to Section 41-73-5(d)(vii) or 41-73-5(e)(vii).

The secretary shall attend the meetings of the members of the authority, shall keep a record of the proceedings of the authority, and shall maintain and be custodian of all books, documents and papers filed with the authority, the minute book or journal of the authority, and its official seal. He may cause copies to be made of all minutes and other records and documents of the authority and may give certificates under seal of the authority to the effect that such copies are true copies, and all persons dealing with the authority may rely upon such certificates. If an executive director and/or secretary are not appointed, the members of the authority may designate from among themselves or the authority's employees the person or persons responsible for carrying out the duties set out in this section.

SECTION 6. Section 41-73-27, Mississippi Code of 1972, is amended as follows:

41-73-27. The authority is hereby granted all powers necessary or appropriate to carry out and effectuate its public and corporate purposes, including but not limited to the following:

(a) To have perpetual succession as a body politic and corporate and an independent instrumentality exercising essential public functions;

(b) To adopt, amend and repeal bylaws, rules and regulations, not inconsistent with this act, to regulate its affairs and to carry into effect the powers and purposes of the authority and conduct its business;

(c) To sue and be sued in its own name;

(d) To have an official seal and alter it at will;

(e) To maintain an office at such place or places within the state as it may designate;

(f) To monitor on a continuing basis the need for hospital equipment financing and hospital facilities financing at interest rates which are consistent with the needs of hospital institutions;

(g) To monitor on a continuing basis the need for institution of higher learning equipment financing and institution of higher learning facilities at interest rates which are consistent with the needs of institutions of higher learning;

(h) To make and execute contracts and all other instruments necessary or convenient for the performance of its duties and the exercise of its powers and functions under this act;

(i) To employ architects, engineers, attorneys, inspectors, accountants and health care experts, education experts and financial advisors, and such other advisors, consultants and agents as may be necessary in its judgment, and to fix their compensation;

(j) To procure insurance against any loss in connection with its property and other assets, in such amounts and from such insurers as it may deem advisable, including the power to pay premiums on any such insurance;

(k) To procure insurance or guarantees from any public or private entities, including any department, agency or instrumentality of the United States of America, to secure payment (i) on a loan, lease or purchase payment owed by a participant to the authority and (ii) of any bonds issued by the authority, including the power to pay premiums on any such insurance or guarantee;

(l) To procure letters of credit from any national or state banking association or other entity authorized to issue a letter of credit to secure the payment of any bonds issued by the authority or to secure the payment of any loan, lease or purchase payment owed by a participant to the authority, including the power to pay the cost of obtaining such letter of credit;

(m) To receive and accept from any source aid or contributions of money, property, labor or other things of value to be held, used and applied to carry out the purposes of this act subject to the conditions upon which the grants or contributions are made, including but not limited to gifts or grants from any department, agency or instrumentality of the United States of America for any purpose consistent with the provisions of this act;

(n) To provide, or cause to be provided by a participant, by acquisition, lease, fabrication, repair, restoration, reconditioning, refinancing or installation, one or more * * * facilities located within the state or items of * * * equipment to be located within a * * * facility in the state;

(o) To lease as lessor any * * * facility or any item of * * * equipment for such rentals and upon such terms and conditions as the authority may deem advisable and as are not in conflict with the provisions of this act;

(p) To sell for installment payments or otherwise, to option or contract for such sale, and to convey all or any part of any * * * facility or any item of * * * equipment for such price and upon such terms and conditions as the authority may deem advisable and as are not in conflict with the provisions of this act;

(q) To make contracts and incur liabilities, borrow money at such rates of interest as the authority may determine, issue its bonds in accordance with the provisions of this act, and secure any of its bonds or obligations by mortgage or pledge of all or any of its property, franchises and income or as otherwise provided in this act;

(r) To make secured or unsecured loans for the purpose of providing temporary or permanent financing or refinancing for the cost of any * * * facility or item of * * * equipment, including the retiring of any outstanding obligations with respect to such * * * facility or * * * equipment, and the reimbursement for the cost of any * * * facility or * * * equipment, purchased within two (2) years immediately preceding the date of the bond issue, made or given by any participant for the cost of any * * * facility or * * * equipment, and to charge and collect interest on such loans for such loan payments and upon such terms and conditions as the authority may deem advisable and as are not in conflict with the provisions of this act;

(s) To invest and reinvest its funds and to take and hold property as security for the investment of such funds as provided in this act;

(t) To purchase, receive, lease (as lessee or lessor), or otherwise acquire, own, hold, improve, use or otherwise deal in and with, * * * facilities and equipment, or any interest therein, wherever situated, as the purposes of the authority shall require;

(u) To sell, convey, mortgage, pledge, assign, lease, exchange, transfer and otherwise dispose of all or any part of its property and assets;

(v) To the extent permitted under its contract with the holders of bonds of the authority, consent to any modification with respect to the rate of interest, time and payment of any installment of principal or interest, or any other term of any contract, loan, loan note, loan note commitment, contract, lease or agreement of any kind to which the authority is a party; and

(w) To assist participants to obtain funds for any purpose by utilizing the value of the receivables of such participants through the making of loans secured by such receivables, by purchasing such receivables, by utilizing such receivables to secure obligations of the authority, or through any combination of the foregoing.

SECTION 7. Section 41-73-29, Mississippi Code of 1972, is amended as follows:

41-73-29. The authority shall have the following duties:

(1) To invest any funds not needed for immediate disbursement, including any funds held in reserve, in one or more of the following:

(a) Obligations of any municipality or the state or the United States of America;

(b) Obligations the principal and interest of which are guaranteed by the state or the United States of America;

(c) Obligations of any corporation wholly owned by the United States of America;

(d) 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;

(e) Certificates or any other evidence of ownership interest in obligations of or obligations unconditionally guaranteed by the United States of America or in specified portions thereof, which may consist of the principal thereof or the interest thereon;

(f) Certificates of deposit or time deposits of qualified depositories of the state as approved by the State Depository Commission, secured in such manner, if any, as the authority shall determine;

(g) Contracts for the purchase and sale of obligations of the type specified in items (a) through (e) above;

(h) Repurchase agreements secured by obligations specified in items (a) through (e) above; or

(i) Money market funds, the assets of which are required to be invested in obligations specified in items (a) through (f) above;

(2) To fix, revise from time to time, charge and collect fees and other charges, as the authority determines to be reasonable, in connection with its loans, leases, sales, advances, insurance, commitments and servicing;

(3) To cooperate with and exchange services, personnel and information with any federal, state or local governmental agency;

(4) To sell, at public or private sale, with or without public bidding, any loan or other obligation held by the authority;

(5) To adopt rules and regulations which enhance the probability that hospital institutions will use for such purposes all bond proceeds which are available to finance hospital equipment and hospital facilities; and

(6) To adopt rules and regulations which enhance the probability that institutions of higher learning will use for such purposes all bond proceeds which are available to finance institution of higher learning equipment and institution of higher learning facilities; and

(7) To do any act necessary or convenient to the exercise of the powers granted by this act or reasonably implied from it.

SECTION 8. Section 41-73-31, Mississippi Code of 1972, is amended as follows:

41-73-31. In addition to the other powers and duties of the authority specified elsewhere in this act, the authority is specifically authorized to initiate a program of providing * * * equipment or * * * facilities located within the state to be operated by participants. In this regard, the authority shall be authorized to exercise the following powers:

(1) To establish eligibility standards for participating hospital institutions and participating institutions of higher learning;

(2) To enter into an agreement with any entity securing the payment of bonds pursuant to Section 41-73-27(k)(l), authorizing said entity to approve the participants that can finance or refinance * * * equipment or * * * facilities with proceeds from the bond issue secured by said entity;

(3) To lease to a participant specific * * * facilities or items of * * * equipment upon such terms and conditions as the authority may deem proper, to charge and collect rents therefor, to terminate any such lease upon the failure of the lessee to comply with any of its obligations thereunder or otherwise as such lease may provide, to include in any such lease provisions that the lessee shall have the option to renew the term of the lease for such period or periods and at such rents as may be determined by the authority or to purchase any or all of the * * * facilities or * * * equipment to which such lease shall apply;

(4) To loan to a participant under an installment purchase contract or loan agreement moneys to finance or refinance the cost of specific * * * facilities or items of * * * equipment and to take back a secured or unsecured promissory note evidencing such loan and a mortgage or security interest in the * * * facilities or * * * equipment financed or refinanced with such loan, upon such terms and conditions as the authority may deem proper;

(5) To sell or otherwise dispose of any or all unneeded or obsolete * * * facilities or * * * equipment under terms and conditions as determined by the authority;

(6) To maintain, repair, replace and otherwise improve or cause to be maintained, repaired, replaced and otherwise improved any * * * facilities or * * * equipment owned by the authority;

(7) To obtain or aid in obtaining property insurance on all * * * facilities or * * * equipment owned or financed by the authority and to enter into any agreement, contract or other instrument with respect to any such insurance to accept payment in the event of damage to or destruction of any * * * equipment; and

(8) To enter into any agreement, contract or other instrument with respect to any insurance or guarantee or letter of credit, accepting payment in such manner and form as provided therein in the event of default by a participant, and to assign any such insurance or guarantee or letter of credit as security for bonds issued by the authority.

SECTION 9. Section 41-73-33, Mississippi Code of 1972, is amended as follows:

41-73-33. The authority shall require that each participant agree to maintain rates sufficient to assure that timely payments are made on any lease, installment purchase contract or loan agreement entered into pursuant to this act and may require any other type of security from the participant that it deems reasonable and necessary. In addition, the authority may require that should there be a deficit in the funds necessary to pay any expenses incurred by the authority in connection with the delivery of the bonds, the hospital institutions or institutions of higher learning receiving funds from such bond issue shall provide the necessary funds to make up for such deficit on a pro rata basis as determined by the authority.

SECTION 10. Section 41-73-37, Mississippi Code of 1972, is amended as follows:

41-73-37. (1) The bonds shall be dated, shall bear interest at such rate or rates (which rate or rates may be fixed or variable), shall mature at such time or times in either serial or term form or both not exceeding thirty (30) years from their date, and may be made redeemable prior to maturity at such price or prices and upon such terms and conditions as may be determined by the authority; however, bonds issued to finance equipment shall mature at such time or times not exceeding the average useful life of such equipment. The bonds shall not bear a greater overall maximum interest rate to maturity than that allowed under Section 75-17-103. The bonds, including any interest coupons to be attached thereto, shall be in such form and denomination or denominations and payable at such place or places, either within the state or without the state, and may be executed or authenticated in such manner, as the authority may determine by resolution. In cases where any officer whose signature or a facsimile of whose signature shall appear on any bonds or coupons shall cease to be such officer before the delivery of and payment for such bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery and payment. The bonds may be issued in coupon book entry or in fully registered form, or any combination, or may be payable to a specific person, as the authority may determine, and provision may be made for the conversion from one form to another. The duty of conversion may be imposed upon a trustee in a trust agreement.

(2) The principal of, redemption premium, if any, and interest on such bonds shall be payable solely from and may be secured by one or more of the following: a pledge of all or any part of the proceeds of bonds, revenues derived from the lease or sale of * * * equipment or * * * facilities or realized from a loan made by the authority to finance or refinance in whole or in part * * * equipment or * * * facilities, revenues derived from operating * * * equipment or * * * facilities, including insurance proceeds or any other revenues provided by a participant.

(3) The authority shall sell the bonds at such price or prices as it shall determine, at public or private sale.

(4) The bonds shall be issued under and subject to such terms, conditions and covenants providing for the payment of the principal, redemption premium, 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 authority for the most advantageous sale thereof, which may include, but not be limited to, covenants with the holders of the bonds, as to:

(a) Pledging or creating a lien on all or any part of any money or property of the authority or of any moneys held in trust or otherwise by others to secure the payment of such bonds or notes;

(b) Otherwise providing for the custody, collection, securing, investment and payment of any money of or due to the authority;

(c) The setting aside of reserves or sinking funds and the regulation or disposition thereof;

(d) Limitations on the purpose to which the proceeds of sale of any issue of such bonds then or thereafter to be issued may be applied;

(e) Limitations on the issuance of additional bonds and on the refunding of outstanding bonds;

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

(g) The creation of special funds into which any money of the authority may be deposited;

(h) Vesting in a trustee or trustees such properties, rights, powers and duties in trust as the authority 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 as agreed upon by the authority;

(i) Defining the acts or omissions to act which shall constitute a default in the obligations and duties of the authority and providing for the rights and remedies of the holders of bonds 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

(j) Any other matters of like or different character which in any way affect the security and protection of the bonds and the rights of the holders thereof.

SECTION 11. Section 41-73-39, Mississippi Code of 1972, is amended as follows:

41-73-39. The proceeds of the bonds of each issue shall be used for the payment of all or part of the cost of or for the making of a loan in the amount of all or part of the cost of the * * * equipment or the * * * facilities for which such bonds have been authorized or for the refunding of outstanding bonds of the authority and, at the option of the authority, for the deposit into a reserve fund or reserve funds for the bonds; provided that the authority shall be paid an amount of money equal to all of the authority's out-of-pocket expenses and costs in connection with the issuance, sale and delivery of such bonds including, without limitation, all financing, legal (including bond and underwriter's counsel), accounting, financial, advisory, blue sky, printing and other expenses and costs in issuing such bonds, including also initial fees paid to the trustee of the bond issue and to any party servicing the leases, installment purchase contracts and loan agreements for the authority, and the costs of obtaining insurance, guarantees and letters of credit securing payment of the bonds and the lease, loan and installment purchase payments, plus an amount of money equal to the compensation paid to any employee of the authority for the time such employee has spent on activities relating to the issuance, sale and delivery of such bonds, utilizing therefor money from the proceeds of the sale and delivery of bonds issued in accordance with this act. Bond proceeds shall be disbursed in such manner and under such restrictions, if any, as may be determined by the authority.

SECTION 12. Section 41-73-45, Mississippi Code of 1972, is amended as follows:

41-73-45. Any bond resolution or related trust agreement, trust indenture, indenture of mortgage or deed of trust may contain provisions, which shall be a part of the contract with the holders of the bonds to be authorized, as to: (i) pledging or assigning the revenues generated by the * * * equipment or * * * facilities, or pledging or assigning the notes and mortgage, lease or other security given by the participants with respect to which such bonds are to be issued, or other specified revenues or property of the authority; (ii) the rentals, fees, interest and other amounts to be charged by the authority, the schedule of principal payments and the sums to be raised in each year thereby, and the use, investment and disposition of such sums; (iii) setting aside any reserves or sinking funds, and the regulation, investment and disposition thereof; (iv) limitations on the use of the * * * equipment or * * * facilities; (v) limitations on the purpose to which or the investments in which the proceeds of sale of any issue or bonds then or thereafter to be issued may be applied; (vi) limitations on the issuance of additional bonds, the terms upon which additional bonds may be issued and secured and the terms upon which additional bonds may rank on a parity with, or be subordinate or superior to, other bonds; (vii) the refunding of outstanding bonds; (viii) the procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amounts of bonds the holders of which must consent thereto, the manner in which such consent may be given and restrictions on the individual rights of action by bondholders; (ix) acts or omissions which shall constitute a default in the duties of the authority to holders of its bonds and providing the rights and remedies of such holders in the event of default; and (x) any other matters relating to the bonds which the authority deems desirable. In addition to the foregoing, bonds of the authority may be secured by and payable from (i) a pooling of leases or of notes and mortgages or other security instruments whereby the authority may assign its rights, as lessor, and pledge rents under two (2) or more leases of hospital equipment or hospital facilities with two (2) or more participating hospital institutions, as lessees, or assign its rights as payee or secured party and pledge the revenues under two (2) or more notes and loan agreements from two (2) or more participating hospital institutions, upon such terms as may be provided for in bond resolutions or other instruments under which such bonds are issued, and (ii) a pooling of leases or of notes or other security instruments whereby the authority may assign its rights, as lessor, and pledge rents under two (2) or more leases of institution of higher learning equipment or institution of higher learning facilities with two (2) or more participating institutions of higher learning, as lessees, or assign its rights as payee or secured party and pledge the revenues under two (2) or more notes in loan agreements from two (2) or more participating institutions of higher learning, upon such terms as may be provided for in bond resolutions or other instruments under which such bonds are issued.

SECTION 13. Section 41-73-47, Mississippi Code of 1972, is amended as follows:

41-73-47. (1) The commissioners or board of trustees of any hospital owned or operated separately or jointly by one or more counties, cities, towns, supervisors districts or election districts, or combination thereof, organized and existing pursuant to Section 41-13-1 et seq., are hereby authorized to enter into a lease, installment purchase contract, sale agreement or loan agreement with the authority and/or with any participating hospital institution, in connection with the financing, refinancing or receiving reimbursement for all or any part of the cost of hospital equipment or hospital facilities, or in order to sell or borrow against receivables, in accordance with the provisions of this chapter, to document any payment obligation or debt thereby acquired by executing one or more notes, bonds or other written evidences of obligation or indebtedness, to secure any such payment obligation or debt by entering into one or more security agreements, indentures or other written pledges of collateral rights or security interests in hospital equipment, hospital facilities or in the revenues of a hospital institution, and to enter into contracts in connection with guarantees and letters of credit issued to secure obligations incurred under such lease, installment purchase contract, sale agreement or loan agreement. Any payments due under such lease, installment purchase contract, sale agreement or loan agreement, and any obligation incurred under such guarantee or letter of credit may be secured by a pledge of the revenues of the participating hospital institution and such pledge, if made, may be on a parity with or subordinate to any present or future indebtedness of the hospital or of the political subdivision or subdivisions which own the participating hospital institution, all as shall be provided in the contract between the authority and the participating hospital. If required to qualify for any program whereby such payments of the participating hospital institution or obligations of the authority backed in whole or in part by such payments will be secured or guaranteed directly or indirectly by the Federal Housing Administration, the Farmers Home Administration or any other agency or instrumentality of the United States Government, the owner or owners of the participating hospital institution may enter into one or more mortgages, deeds of trust or other instruments to grant a security interest in a hospital facility, or any part thereof, or in hospital equipment. No existing indebtedness may be refunded, refinanced or otherwise retired in advance of the due date of such indebtedness pursuant to this section unless such refunding, refinancing or retirement of such indebtedness will result in a net savings to the hospital incurring such indebtedness. Any indebtedness or liability incurred pursuant to this section shall not constitute indebtedness for the purpose of any statutory limitation of indebtedness. Except with regard to refundings or refinancings of existing indebtedness and with regard to obligations subject to unilateral termination by a hospital institution on at least an annual basis, for none of which any such consent shall be required, no payment obligation or debt shall be entered into under authority of this section unless each owner of a hospital institution first has given its written consent to the maximum principal amount of obligation or debt that may be incurred and the maximum time for payment thereof, neither of which maximums may be exceeded.

(2) The board of trustees of (i) any state institution of higher learning as identified in Section 37-101-1 and Section 37-101-21, Mississippi Code of 1972, (ii) the University Research Center created pursuant to Chapter 141 of Title 37, Mississippi Code of 1972, and (iii) any state junior college district created pursuant to Chapter 29 of Title 37, Mississippi Code of 1972, are hereby authorized to enter into a lease, installment purchase contract, sale agreement or loan agreement with the authority and/or with any participating institution of higher learning, in connection with the financing, refinancing or receiving reimbursement for all or any part of the cost of institution of higher learning equipment or institution of higher learning facilities, or in order to sell or borrow against receivables, in accordance with the provisions of this chapter, to document any payment obligation or debt thereby acquired by executing one or more notes, bonds, or other written evidences of obligation or indebtedness, to secure any such payment obligation or debt by entering into one or more security agreements, indentures or other written pledges of collateral rights or security interest in institution of higher learning equipment, institution of higher learning facilities or in the revenues of an institution of higher learning, and to enter into contracts in connection with guarantees and letters of credit issued to secure obligations incurred under such lease, installment purchase contract, sale agreement or loan agreement. Any payments due under such lease, installment purchase contract, sale agreement or loan agreement, and any obligation incurred under such guarantee or letter of credit may be secured by a pledge of the revenues of the participating institution of higher learning and such pledge, if made, may be on a parity with or subordinate to any present or future indebtedness of the institution of higher learning, all as shall be provided in the contract between the authority and the participating institution of higher learning. If required to qualify for any program whereby such payments of the participating institution of higher learning or obligations of the authority backed in whole or in part by such payments will be secured or guaranteed directly or indirectly by the Federal Housing Administration, the Farmers Home Administration or any other agency or instrumentality of the United States Government, the participating institution of higher learning may enter into one or more mortgages, deeds of trust or other instruments to grant a security interest in an institution of higher learning facility, or any part thereof, or in institution of higher learning equipment. No existing indebtedness may be refunded, refinanced or otherwise retired in advance of the due date of such indebtedness pursuant to this section unless such refunding, refinancing or retirement of such indebtedness will result in a net savings to the institution of higher learning incurring such indebtedness. Any indebtedness or liability incurred pursuant to this section shall not constitute indebtedness for the purpose of any statutory limitation of indebtedness. Except with regard to refundings or refinancings of existing indebtedness and with regard to obligations subject to unilateral termination by an institution of higher learning on at least an annual basis, for none of which any such consent shall be required, no payment obligation or debt shall be entered into under authority of this section unless the owner or board of trustees of an institution of higher learning first has given its written consent to the maximum principal amount of obligation or debt that may be incurred and the maximum time for payment thereof, neither of which maximums may be exceeded.

SECTION 14. This act shall take effect and be in force from and after July 1, 1998.