1998 Regular Session
To: Local and Private; Finance
By: Senator(s) Minor
Senate Bill 3282
(As Sent to Governor)
AN ACT TO AUTHORIZE THE GOVERNING BODY OF THE CITY OF HOLLY SPRINGS TO LEVY A SPECIAL TAX ON THE GROSS PROCEEDS OF SALES OF HOTELS, MOTELS AND ON THE GROSS PROCEEDS OF SALES OF RESTAURANTS DERIVED FROM SALES OF ALCOHOLIC BEVERAGES SOLD FOR CONSUMPTION ON PREMISES AND FROM SALES OF PREPARED FOODS TO FUND VARIOUS RECREATION AND PUBLIC IMPROVEMENT ACTIVITIES WITHIN THE CITY; TO PROVIDE FOR THE CONSTRUCTION OF FACILITIES IN CONNECTION THEREWITH; TO AUTHORIZE THE ISSUANCE OF BONDS TO DEFRAY THE COST OF SUCH FACILITIES; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. As used in this act, the following words shall have the meanings ascribed to them in this section unless otherwise clearly indicated by the context in which they are used:
(a) "Act" means this act.
(b) "City" means the City of Holly Springs, Mississippi.
(c) "Governing body" means the Mayor and Board of Aldermen of Holly Springs, Mississippi.
(d) "Hotel" or "motel" means any establishment engaged in the business of furnishing or providing rooms intended or designed for dwelling, lodging or sleeping purposes to transient guests and which are known in the trade as such, where the establishment consists of five (5) or more guest rooms. The term "hotel" or "motel" does not include any hospital, convalescent or nursing home or sanitarium, or any hotel-like facility operated by or in connection with a hospital or medical clinic providing rooms exclusively for patients and their families.
(e) "Project" means the establishment and operation of a tourism department; development of the North Memphis project; establishment of a historical district; the construction of a multi-purpose sports complex and related appurtenances within or in close proximity to the corporate limits of the city, and shall include, but not be limited to, the purchase of property for such purposes; construction of an amphitheater and multi-purpose sports structures; construction of and/or resurfacing of tennis courts; construction of and/or improvements to baseball and softball fields; architect, engineering and legal fees associated with the project; road construction for access to facilities; parking areas; utilities; restroom facilities; bleachers or other seating for tennis courts, baseball fields and softball fields; and scoreboards.
(f) "Restaurant" means and includes all places within the city where prepared foods and beverages are sold for consumption whether such food is consumed on the premises or not, and businesses that cater food. "Restaurant" as defined herein does not include any school, hospital, convalescent or nursing home, or any restaurant-like facility operated by or in connection with a school, hospital, medical clinic, convalescent or nursing home, or prison facility providing food for students, patients, inmates, visitors and their families.
SECTION 2. In addition to the powers and authority granted under this act, the governing body shall have jurisdiction and authority over all matters relating to the promotion, establishment, development, construction, furnishing and equipping of the project, including the authority to enter into such contracts and agreements as may be necessary to carry out the intent of this act. In carrying out the provisions of this act, the governing body shall adhere to the provisions of the public purchasing laws, public works contracts laws and public bid laws as provided by the laws of the State of Mississippi, except as may be expressly otherwise provided for herein.
The governing body is further authorized to receive and expend, subject to the provisions of this act, revenues from any source for the purposes enumerated herein.
SECTION 3. (1) For the purpose of providing funds for the promotion, establishment, development, construction, furnishing, equipping, erection, operation and maintenance of the project, there is hereby levied, assessed and shall be collected from every person engaging in or doing business in the city, as provided in subsection (2) of this section, a tax which may be cited as the "recreation and public improvement promotion tax," which shall be in addition to all other taxes now imposed.
(2) Such tax shall be in an amount not to exceed one percent (1%) of the gross proceeds of sales of hotels and motels, and not to exceed one percent (1%) of the gross proceeds of restaurants derived from the sale of beer and alcoholic beverages that are sold for consumption on the premises and from the sale of all prepared foods.
(3) Persons, firms and corporations liable for the tax imposed herein shall add the amount of tax to the sales price of or gross proceeds of sales from the goods, products and services subject to the tax and, in addition thereto, shall collect insofar as practicable the amount of the tax due by them from the person receiving the services or goods at the time of payment therefor.
(4) Such tax shall be collected as set forth in subsection (3) above and paid to the State Tax Commission in the same manner that state sales taxes are computed, collected and paid; and the full enforcement provisions of Chapter 65, Title 27, Mississippi Code of 1972, shall apply as necessary to the implementation and administration of this act.
(5) The proceeds of such tax, less three percent (3%) to be retained by the State Tax Commission to defray the costs of collection, shall be paid to the city on or before the fifteenth day of the month following the month in which they were collected.
(6) The proceeds of the tax shall not be considered by the city as general fund revenues but shall be dedicated solely for the purpose of carrying out the project.
(7) Not more than two (2) months following the time that (a) the project has been completed, and (b)(i) either all principal, interest, costs and other expenses for all bonds, notes or other borrowings under this act have been paid and are completely satisfied, or (ii) there exists in any special account established to retire such bonds, notes or other borrowings an amount on deposit which, together with any earnings on investments to accrue to the account, is equal to or greater than the amount necessary
to pay such indebtedness, then the city may set the tax being levied hereunder at a rate the avails of which will not exceed the amount necessary to pay continuing operation and maintenance costs of the project but in no event to exceed one percent (1%) of the gross proceeds of sales of hotels, motels and restaurants.
SECTION 4. Before the taxes authorized by this act shall be imposed, the governing body of the city shall adopt a resolution declaring its intention to:
(a) Levy the tax, setting forth the amount of such tax and establishing the date on which the tax initially shall be levied and collected; and
(b) Issue bonds of the city to provide funds to defray the cost of the project, setting forth the estimated amount of bonds to be issued and a general description of the project, if the governing body elects to include provisions for issuance of bonds in such resolution.
The resolution shall state the time, date and place upon which the governing body shall take action to authorize and direct levying the tax and, if applicable, the issuance of bonds. The resolution shall be published in a local newspaper at least three (3) times over three (3) consecutive weeks, with the last publication made no less than seven (7) days prior to the date set forth in the resolution on which the governing body would proceed to levy the tax and, if applicable, issue the bonds.
If, after giving notice, twenty percent (20%) or fifteen hundred (1500), whichever is less, of the qualified electors of the city shall file a written petition against the levy of such tax or the issuance of the bonds, or both, at or prior to the time and date set forth in the resolution, then such tax shall not be levied and the bonds shall not be issued unless authorized by a majority of the qualified electors of the city voting at an election to be called and held for such purpose or purposes. The election shall be conducted in the same manner as other city elections, and the governing body shall direct the city election commissioners to conduct such election. The effective date of such tax levy shall not be sooner than the first day of the second month from the date the governing body adjudicated no protest to levying the tax or the date of a favorable election on the question of levying the tax, as the case may be. If no protest or an insufficient protest is presented, the bonds may be issued at any time within two (2) years of the date the governing body adjudicates no protest or, in the alternative, within two (2) years of a favorable election on the issuance of the bonds.
Before the effective date of the tax levy approved herein, the governing body shall furnish a certified copy of the resolution evidencing such tax levy to the Chairman of the State Tax Commission.
SECTION 5. The governing body shall adopt its first budget of receipts and expenditures to cover the period beginning with the effective date of the tax and ending with the end of the city's fiscal year; and, thereafter, the budget shall be on the same fiscal basis as the budget of the city.
SECTION 6. Accounting for receipts and expenditures of the funds herein described shall be made separate from the accounting of receipts and expenditures of the general fund and any other funds of the city. The records reflecting the receipts and expenditures of the funds prescribed herein shall be audited annually as a part of the annual audit of the city or by independent audit if so determined by the governing body. Such audit shall be made and completed as soon as practicable after the close of the fiscal year, and expenses of such audit may be paid from the funds derived pursuant to Section 3 of this act.
SECTION 7. The governing body of the city may borrow money for the purposes set forth in this act in any one or any combination of the following methods: The city is authorized to issue, from time to time, negotiable bonds of the city for the purposes set forth in Section 2 of this act and to pay for costs of issuing the bonds (including bond insurance, credit enhancements, rating agency fees and legal fees and expenses), which bonds may be secured by all or any portion of the tax revenue generated in Section 3 of this act, along with such other security as may be provided by the city. The city is further authorized to incur debt, borrow funds and/or issue bonds for the purposes set forth in Section 2 herein pursuant to Section 31-25-1 et seq., Mississippi Code of 1972. Revenue bonds authorized to be issued or debt incurred under this act shall not be included within the limitation on indebtedness imposed in Section 21-33-303, Mississippi Code of 1972.
The city is hereby further authorized to issue general obligation bonds of the city pursuant to Section 21-33-301 et seq., Mississippi Code of 1972; provided, however, that upon compliance with the requirements set forth in Section 4 of this act, compliance with Sections 21-33-307 through 21-33-311, Mississippi Code of 1972, shall not be required. General obligation bonds issued pursuant to this paragraph shall be exempt from the debt limit imposed by Section 21-33-303, Mississippi Code of 1972, to the extent that such debt is paid with the tax revenues generated pursuant to Section 3 hereof and not with an ad valorem tax levy.
SECTION 8. If the city elects to issue revenue bonds to defray the cost of the project, such bonds may be serial or term; redeemable, with or without premium, or nonredeemable and registered with registration privileges as to principal and interest; shall bear interest at a rate to be determined pursuant to the sale of the bonds; and shall be payable at such time or times as shall be prescribed in the ordinance authorizing them. The bonds shall mature at such time or times, not exceeding the estimated life of the improvements and in no event longer than thirty (30) years from their date, and at such place or places, as shall be prescribed in the ordinance authorizing their issuance. All bonds and interest thereon issued pursuant to the authority granted in this act shall possess all the qualities of negotiable instruments. The bonds shall be executed in such manner and shall be substantially in the form prescribed in the authorizing ordinance. In case any of the officers whose signatures or countersignatures appear on the bonds shall cease to be such officers before delivery of such bonds, such signatures or countersignatures shall nevertheless be valid and sufficient for all purposes the same as if they had remained in office until such delivery. No bond shall bear more than one (1) rate of interest. Each bond shall bear interest from its date to its stated maturity date at the interest rate specified in the bid. All bonds of the same maturity shall bear the same rate of interest from date to maturity. All interest accruing on such bonds so issued shall be payable semiannually or annually, except that the first interest payment on any such bond may be for any period not exceeding two (2) years.
No interest payment shall be evidenced by more than one (1) rate of interest. Such bonds shall be sold in such manner and upon such terms as the governing body of the city shall determine, provided that such bonds shall not bear a greater overall maximum interest rate to maturity than that allowed in Section 75-17-103, Mississippi Code of 1972, and the interest rate on any one (1) interest maturity shall not exceed the maximum interest rate allowed on such bonds. If the bonds are serial bonds, such bonds shall mature annually, and the first maturity date thereof shall not be more than two (2) years from the date of such bonds. Such bonds shall be legal investments for trustees and other fiduciaries, and for savings banks, trust companies and insurance companies organized under the laws of the State of Mississippi. The principal of and interest on such bonds shall be payable solely from the revenues derived from levying the tax described in Section 3 of this act and such other security as may be provided by the city. No bond issued pursuant to the authority granted in this section shall constitute an indebtedness of a municipality within the meaning of any statutory or charter restriction, limitation or provision. It shall be plainly stated on the face of each such bond in substance that the same has been issued pursuant to the authority granted in this act and that the taxing power of the city is not pledged to the payment of such bond or interest thereon, and that such bond and the interest thereon are payable solely from the revenues derived from levying the tax described in Section 3 hereof and such other security as may be provided by the city.
Such bonds shall be sold at public or private sale and, if sold at public sale, shall be sold in the manner provided by Section 31-19-25, Mississippi Code of 1972.
The city is hereby authorized to employ investment bankers, underwriters, financial advisors, legal counsel, bond counsel and such other required professionals and to pay the fees and expenses incidental thereto.
SECTION 9. This act, without reference to any other statute not referred to herein, shall be deemed to be full and complete authority to carry out the activities set forth herein, including levying the tax authorized pursuant to Section 4 hereof, borrowing money and issuing bonds; and this act shall be construed as an additional and alternate method therefor.
SECTION 10. Any bonds issued under the provisions of this act may be validated in the manner provided by law.
SECTION 11. The governing body of the city is further authorized and empowered to adopt any and all lawful resolutions, orders or ordinances; execute and deliver such agreements, contracts, indentures and certificates; and do and perform any and all other acts and things necessary and requisite to levy the tax, issue the bonds and carry out the purposes of this act.
SECTION 12. The governing authorities of the City of Holly Springs, Mississippi, shall submit this act, immediately upon approval by the Governor, or upon approval by the Legislature subsequent to a veto, to the Attorney General of the United States or to the United States District Court for the District of Columbia in accordance with the provisions of the Voting Rights Act of 1965, as amended and extended.
SECTION 13. This act shall take effect and be in force from and after the date it is effectuated under Section 5 of the Voting Rights Act of 1965, as amended and extended.