MISSISSIPPI LEGISLATURE

2000 Regular Session

To: Finance

By: Senator(s) Minor

AN ACT TO AMEND SECTION 57-1-307, MISSISSIPPI CODE OF 1972, TO INCREASE THE AMOUNT OF GENERAL OBLIGATION BONDS THAT MAY BE ISSUED UNDER THE LOCAL GOVERNMENTS CAPITAL IMPROVEMENTS REVOLVING LOAN PROGRAM FOR PROJECTS THAT WOULD QUALIFY FOR THE ISSUANCE OF BONDS WHOSE INTEREST IS EXEMPT FROM INCOME TAXATION UNDER THE PROVISIONS OF THE INTERNAL REVENUE CODE, FROM $5,000,000.00 TO $13,500,000.00; TO AMEND SECTION 57-61-25, MISSISSIPPI CODE OF 1972, TO INCREASE THE AMOUNT OF GENERAL OBLIGATION BONDS THAT MAY BE ISSUED UNDER THE MISSISSIPPI BUSINESS INVESTMENT ACT FROM $254,750,000.00 TO $256,250,000.00; TO AMEND SECTION 57-61-36, MISSISSIPPI CODE OF 1972, TO INCREASE THE AMOUNT OF GRANTS THAT MAY BE ISSUED BY THE DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT UNDER THE DEVELOPMENT INFRASTRUCTURE GRANT PROGRAM UNDER THE MISSISSIPPI BUSINESS INVESTMENT ACT FROM $9,000,000.00 TO $10,500,000.00; TO AMEND SECTION 65-4-25, MISSISSIPPI CODE OF 1972, TO INCREASE THE AMOUNT OF GENERAL OBLIGATION BONDS THAT MAY BE ISSUED UNDER THE ECONOMIC DEVELOPMENT HIGHWAY ACT FROM $135,000,000.00 TO $150,000,000.00; TO AMEND SECTION 69-2-13, MISSISSIPPI CODE OF 1972, TO EXTEND THE PROGRAM THAT AUTHORIZES THE MISSISSIPPI BUSINESS FINANCE CORPORATION TO LOAN OR GRANT FUNDS TO CERTAIN ENTITIES FOR LOAN REVOLVING FUNDS TO ASSIST IN PROVIDING FINANCING FOR MINORITY ECONOMIC DEVELOPMENT AND TO INCREASE THE AMOUNT THAT MAY BE DRAWN FOR SUCH PURPOSE FROM THE EMERGING CROPS FUND FROM $16,000,000.00 TO $18,000,000.00; TO AUTHORIZE THE PROGRAM THAT GUARANTEES CERTAIN BONDS THAT MINORITY BUSINESSES ARE REQUIRED TO OBTAIN CONTRACTS WITH GOVERNMENTAL ENTITIES TO APPLY TO CONTRACTS WITH FEDERAL AGENCIES; TO EXTEND THE DATE OF THE REPEAL OF PROVISIONS CONCERNING THE SMALL FARM DEVELOPMENT CENTER AT ALCORN STATE UNIVERSITY; TO AMEND SECTION 69-2-19, MISSISSIPPI CODE OF 1972, TO INCREASE THE AMOUNT OF THE BONDS THAT MAY BE ISSUED GENERALLY FOR THE EMERGING CROPS FUND FROM $95,000,000.00 TO $97,000,000.00 AND TO PROVIDE FOR THE ISSUANCE OF GENERAL OBLIGATION BONDS IN THE AMOUNT OF $15,000,000.00 TO PROVIDE FUNDS FOR THE EMERGING CROPS FUND TO BE LOANED FOR THE CONSTRUCTION OF NEW POULTRY HOUSES; TO AMEND SECTION 57-75-15, MISSISSIPPI CODE OF 1972, TO INCREASE THE AMOUNT OF BONDS THAT MAY BE ISSUED UNDER THE MISSISSIPPI MAJOR ECONOMIC IMPACT ACT FOR CERTAIN PROJECTS FROM $62,000,000.00 TO $63,000,000.00; TO BRING FORWARD CHAPTER 967, LOCAL AND PRIVATE LAWS OF 1994, WHICH AUTHORIZES THE CITY OF TUPELO TO LEVY A SALES TAX; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 57-1-307, Mississippi Code of 1972, is amended as follows:

57-1-307. (1) The State Bond Commission, at one time, or from time to time, may declare by resolution the necessity for issuance of general obligation bonds of the State of Mississippi to provide funds for all costs incurred or to be incurred for the purposes described in Section 57-1-303. Upon the adoption of a resolution by the Department of Economic and Community Development, declaring the necessity for the issuance of any part or all of the general obligation bonds authorized by this section, the Department of Economic and Community Development shall deliver a certified copy of its resolution or resolutions to the State Bond Commission. Upon receipt of such resolution, the State Bond Commission, in its discretion, may act as the issuing agent, prescribe the form of the bonds, advertise for and accept bids, issue and sell the bonds so authorized to be sold and do any and all other things necessary and advisable in connection with the issuance and sale of such bonds. The total amount of bonds issued under Sections 57-1-307 through 57-1-335 shall not exceed Ninety-five Million Dollars ($95,000,000.00); provided, however, that an additional amount of bonds may be issued under Sections 57-1-307 and 57-1-335 in an amount not to exceed Thirteen Million Five Hundred Thousand Dollars ($13,500,000.00), and the proceeds of any such additional amount of bonds so issued shall be utilized solely to provide loans for capital improvements that would qualify for the issuance of bonds whose interest is exempt from income taxation under the provisions of the Internal Revenue Code.

(2) Proceeds from the sale of bonds shall be deposited in the special fund created in Section 57-1-303. Any investment earnings on amounts deposited into the special fund created in Section 57-1-303 shall be used to pay debt service on bonds issued under Sections 57-1-307 through 57-1-335, in accordance with the proceedings authorizing issuance of such bonds.

SECTION 2. Section 57-61-25, Mississippi Code of 1972, is amended as follows:

57-61-25. (1) The seller is authorized to borrow, on the credit of the state upon receipt of a resolution from the department requesting the same, money not exceeding the aggregate sum of Two Hundred Fifty-six Million Two Hundred Fifty Thousand Dollars ($256,250,000.00), not including money borrowed to refund outstanding bonds, notes or replacement notes, as may be necessary to carry out the purposes of this chapter. The aggregate amount of bonds issued prior to June 30, 1987, shall not exceed Fifty Million Dollars ($50,000,000.00); provided, however, this Fifty Million Dollar ($50,000,000.00) limitation shall not be construed to limit the aggregate amount of grants which may be awarded prior to June 30, 1987, to less than the full amount authorized under Section 57-61-15(1), Mississippi Code of 1972. The rate of interest on any such bonds or notes which are not subject to taxation shall not exceed the rates set forth in Section 75-17-101, Mississippi Code of 1972, for general obligation bonds.

(2) As evidence of indebtedness authorized in this chapter, general or limited obligation bonds of the state shall be issued from time to time, to provide monies necessary to carry out the purposes of this chapter for such total amounts, in such form, in such denominations payable in such currencies (either domestic or foreign or both) and subject to such terms and conditions of issue, redemption and maturity, rate of interest and time of payment of interest as the seller directs, except that such bonds shall mature or otherwise be retired in annual installments beginning not more than five (5) years from date thereof and extending not more than thirty (30) years from date thereof.

(3) All bonds and notes issued under authority of this chapter shall be signed by the chairman of the seller, or by his facsimile signature, and the official seal of the seller shall be affixed thereto, attested by the secretary of the seller.

(4) All bonds and notes issued under authority of this chapter may be general or limited obligations of the state, and the full faith and credit of the State of Mississippi as to general obligation bonds, or the revenues derived from projects assisted as to limited obligation bonds, are hereby pledged for the payment of the principal of and interest on such bonds and notes.

(5) Such bonds and notes and the income therefrom shall be exempt from all taxation in the State of Mississippi.

(6) The bonds may be issued as coupon bonds or registered as to both principal and interest, as the seller may determine. If interest coupons are attached, they shall contain the facsimile signature of the chairman and secretary of the seller.

(7) The seller is authorized to provide, by resolution, for the issuance of refunding bonds for the purpose of refunding any debt issued under the provision of this chapter and then outstanding, either by voluntary exchange with the holders of the outstanding debt or to provide funds to redeem and the costs of issuance and retirement of the debt, at maturity or at any call date. The issuance of the refunding bonds, the maturities and other details thereof, the rights of the holders thereof and the duties of the issuing officials in respect to the same shall be governed by the provisions of this section, insofar as they may be applicable.

(8) As to bonds issued hereunder and designated as taxable bonds by the seller, any immunity of the state to taxation by the United States government of interest on bonds or notes issued by the state is hereby waived.

SECTION 3. Section 57-61-36, Mississippi Code of 1972, is amended as follows:

57-61-36. (1) Notwithstanding any provision of this chapter to the contrary, the Department of Economic and Community Development shall utilize not more than Ten Million Five Hundred Thousand Dollars ($10,500,000.00) out of the proceeds of bonds authorized to be issued in this chapter for the purpose of making grants to municipalities through a development infrastructure grant fund to complete infrastructure related to new or expanded industry.

(2) Notwithstanding any provision of this chapter to the contrary, the Department of Economic and Community Development may utilize not more than Seven Million Dollars ($7,000,000.00) out of the proceeds of bonds authorized to be issued in this chapter for the purpose of making interest-bearing loans to any agency, department, institution, instrumentality or political subdivision of the state; or any agency, department, institution or instrumentality of any political subdivision of the state; or any business, organization, corporation, association or other legal entity meeting criteria established by the department, through a housing development revolving loan fund, to construct or repair housing for low or moderate income earners; provided, however, that the department may not utilize any bond proceeds authorized under this chapter for the purpose of making any loans to the Mississippi Home Corporation for any purpose whatsoever. No more than forty percent (40%) of the additional bonds authorized by this section in House Bill No. 1694, 1998 Regular Session [Laws, 1998, Chapter 559], may be used for multiple family housing activities. Funds authorized under this subsection may be deposited in the Mississippi Affordable Housing Development Fund authorized in Section 43-33-759 and used for purposes authorized by that section. This subsection (2) shall be repealed from and after July 1, 2001.

(3) Notwithstanding any provision of this chapter to the contrary, the Department of Economic and Community Development shall utilize not more than Five Million Dollars ($5,000,000.00) out of the proceeds of bonds authorized to be issued in this chapter for the purpose of making grants to municipalities through an equipment and public facilities grant fund to aid in infrastructure-related improvements as determined by the Department of Economic and Community Development, the purchase of equipment and in the purchase, construction or repair and renovation of public facilities. Any bonds previously issued for the Development Infrastructure Revolving Loan Program which have not been loaned or applied for are eligible to be administered as grants.

The requirements of Section 57-61-9 shall not apply to any grant made under this subsection. The Department of Economic and Community Development may establish criteria and guidelines to govern grants made pursuant to this subsection.

SECTION 4. Section 65-4-25, Mississippi Code of 1972, is amended as follows:

65-4-25. The Mississippi Department of Economic and Community Development, acting through its executive director, is authorized, at one time or from time to time, to declare by resolution the necessity for issuance of negotiable general obligation bonds of the State of Mississippi to provide funds for the Economic Development Highway Fund established in Section 65-4-15, Mississippi Code of 1972. Upon the adoption of a resolution by the Executive Director of the Mississippi Department of Economic and Community Development, declaring the necessity for the issuance of any part or all of the general obligation bonds authorized by Sections 65-4-25 through 65-4-45, Mississippi Code of 1972, the executive director shall deliver a certified copy of his resolution or resolutions to the State Bond Commission. Upon receipt of same, the State Bond Commission, in its discretion, shall act as the issuing agent, prescribe the form of the bonds, advertise for and accept bids, issue and sell the bonds so authorized to be sold, and do any and all other things necessary and advisable in connection with the issuance and sale of such bonds. The principal amount of bonds issued under Sections 65-4-25 through 65-4-45, Mississippi Code of 1972, shall not exceed One Hundred Fifty Million Dollars ($150,000,000.00) in the aggregate. However, an additional amount of bonds may be issued under Sections 65-4-25 through 65-4-45, Mississippi Code of 1972, in an amount not to exceed Seven Million Dollars ($7,000,000.00), and the proceeds of any such additional bonds issued shall be used to provide funding for a high economic benefit project as defined in Section 65-4-5(1)(c)(vi), Mississippi Code of 1972.

SECTION 5. Section 69-2-13, Mississippi Code of 1972, is amended as follows:

69-2-13 (1) There is hereby established in the State Treasury a fund to be known as the "Emerging Crops Fund," which shall be used to pay the interest on loans made to farmers for nonland capital costs of establishing production of emerging crops on land in Mississippi, and to make loans and grants which are authorized under this section to be made from the fund. The fund shall be administered by the Mississippi Department of Economic and Community Development. A board comprised of the directors of the department, the Mississippi Cooperative Extension Service, the Mississippi Small Farm Development Center and the Mississippi Agricultural and Forestry Experiment Station, or their designees, shall develop definitions, guidelines and procedures for the implementation of this chapter. Funds for the Emerging Crops Fund shall be provided from the issuance of bonds or notes under Sections 69-2-19 through 69-2-37 and from repayment of interest loans made from the fund.

(2) (a) The Mississippi Business Finance Corporation shall develop a program which gives fair consideration to making loans for the processing and manufacturing of goods and services by agribusiness and small business concerns. It is the policy of the State of Mississippi that such corporation shall give due recognition to and shall aid, counsel, assist and protect, insofar as is possible, the interests of agribusiness and small business concerns. To ensure that the purposes of this subsection are carried out, the corporation shall loan not more than One Million Dollars ($1,000,000.00) to finance any single agribusiness or small business concern. Loans made pursuant to this subsection shall be made in accordance with the criteria established in Section 57-71-11.

(b) The Mississippi Business Finance Corporation may, out of the total amount of bonds authorized to be issued under this chapter, make available funds to any planning and development district in accordance with the criteria established in Section 57-71-11. Planning and development districts which receive monies pursuant to this provision shall use such monies to make loans to private companies for purposes consistent with this subsection.

(c) The Mississippi Business Finance Corporation is hereby authorized to engage legal services, financial advisors, appraisers and consultants if needed to review and close loans made hereunder and to establish and assess reasonable fees including, but not limited to, liquidation expenses.

(3) The department shall, in addition to the other programs described in this section, provide for a program of loans to be made to agribusiness enterprises for the purpose of encouraging thereby the extension of conventional financing and the issuance of letters of credit to such agribusiness enterprises by private institutions. Monies to make such loans by the department shall be drawn from the Emerging Crops Fund. The amount of a loan to any single agribusiness enterprise shall not exceed twenty percent (20%) of the total cost of the project for which financing is sought or Two Hundred Thousand Dollars ($200,000.00), whichever is less. No interest shall be charged on such loans, and only the amount actually loaned shall be required to be repaid. Repayments shall be deposited into the Emerging Crops Fund.

(4) Through June 30, 2002, the Mississippi Business Finance Corporation may loan or grant to qualified planning and development districts, and to small business investment corporations, bank-based community development corporations, the Recruitment and Training Program, Inc., the City of Jackson Business Development Loan Fund, the Lorman Southwest Mississippi Development Corporation, the West Jackson Community Development Corporation, the East Mississippi Development Corporation, and other entities meeting the criteria established by the Mississippi Business Corporation (all referred to hereinafter as "qualified entities"), funds for the purpose of establishing loan revolving funds to assist in providing financing for minority economic development. The monies loaned or granted by the Mississippi Business Finance Corporation shall be drawn from the Emerging Crops Fund and shall not exceed Eighteen Million Dollars ($18,000,000.00) in the aggregate. Planning and development districts or qualified entities which receive monies pursuant to this provision shall use such monies to make loans to minority business enterprises consistent with criteria established by the Mississippi Business Finance Corporation. Such criteria shall include, at a minimum, the following:

(a) The business enterprise must be a private, for-profit enterprise.

(b) If the business enterprise is a proprietorship, the borrower must be a resident citizen of the State of Mississippi; if the business enterprise is a corporation or partnership, at least fifty percent (50%) of the owners must be resident citizens of the State of Mississippi.

(c) The borrower must have at least five percent (5%) equity interest in the business enterprise.

(d) The borrower must demonstrate ability to repay the loan.

(e) The borrower must not be in default of any previous loan from the state or federal government.

(f) Loan proceeds may be used for financing all project costs associated with development or expansion of a new small business, including fixed assets, working capital, start-up costs, rental payments, interest expense during construction and professional fees related to the project.

(g) Loan proceeds shall not be used to pay off existing debt for loan consolidation purposes; to finance the acquisition, construction, improvement or operation of real property which is to be held primarily for sale or investment; to provide for, or free funds, for speculation in any kind of property; or as a loan to owners, partners or stockholders of the applicant which do not change ownership interest by the applicant. However, this does not apply to ordinary compensation for services rendered in the course of business.

(h) The maximum amount that may be loaned to any one (1) borrower shall be Two Hundred Fifty Thousand Dollars ($250,000.00).

(i) The Mississippi Business Finance Corporation shall review each loan before it is made, and no loan shall be made to any borrower until the loan has been reviewed and approved by the Mississippi Business Finance Corporation.

For the purpose of this subsection, the term "minority business enterprise" means a socially and economically disadvantaged small business concern, organized for profit, performing a commercially useful function which is owned and controlled by one or more minorities or minority business enterprises certified by the Mississippi Business Finance Corporation, at least fifty percent (50%) of whom are resident citizens of the State of Mississippi. For purposes of this subsection, the term "socially and economically disadvantaged small business concern" shall have the meaning ascribed to such term under the Small Business Act (15 USCS, Section 637(a)), or women, and the term "owned and controlled" means a business in which one or more minorities or minority business enterprises certified by the Mississippi Business Finance Corporation own sixty percent (60%) or, in the case of a corporation, sixty percent (60%) of the voting stock, and control sixty percent (60%) of the management and daily business operations of the business.

From and after July 1, 2002, monies not loaned or granted by the Business Finance Corporation to planning and development districts or qualified entities under this subsection, and monies not loaned by planning and development districts or qualified entities, shall be deposited to the credit of the sinking fund created and maintained in the State Treasury for the retirement of bonds issued under Section 69-2-19.

(5) The Mississippi Business Finance Corporation shall develop a program which will assist minority business enterprises by guaranteeing bid, performance and payment bonds which such minority businesses are required to obtain in order to contract with federal agencies, state agencies or political subdivisions of the state. Monies for such program shall be drawn from the monies allocated under subsection (4) of this section to assist the financing of minority economic development and shall not exceed Two Million Dollars ($2,000,000.00) in the aggregate. The Mississippi Business Finance Corporation may promulgate rules and regulations for the operation of the program established pursuant to this subsection. For the purpose of this subsection (5) the term "minority business enterprise" has the meaning assigned such term in subsection (4) of this section.

(6) The Mississippi Business Finance Corporation may loan or grant to public entities and to nonprofit corporations funds to defray the expense of financing (or to match any funds available from other public or private sources for the expense of financing) projects in this state which are devoted to the study, teaching and/or promotion of regional crafts and which are deemed by the corporation to be significant tourist attractions. The monies loaned or granted shall be drawn from the Emerging Crops Fund and shall not exceed Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate.

(7) Through June 30, 1998, the Mississippi Business Finance Corporation shall make available to the Mississippi Department of Agriculture and Commerce funds for the purpose of establishing loan revolving funds and other methods of financing for agribusiness programs administered under the Mississippi Agribusiness Council Act of 1993. The monies made available by the Mississippi Business Finance Corporation shall be drawn from the Emerging Crops Fund and shall not exceed Seven Hundred Thousand Dollars ($700,000.00) in the aggregate. The Mississippi Department of Agriculture and Commerce shall establish control and auditing procedures for use of these funds. These funds will be used primarily for quick payment to farmers for vegetable and fruit crops processed and sold through vegetable processing plants associated with the Department of Agriculture and Commerce and the Mississippi State Extension Service.

(8) From and after July 1, 1996, the Mississippi Business Finance Corporation shall make available to the Mississippi Small Farm Development Center One Million Dollars ($1,000,000.00) to be used by the center to assist small entrepreneurs as provided in Section 37-101-25, Mississippi Code of 1972. The monies made available by the Mississippi Business Finance Corporation shall be drawn from the Emerging Crops Fund.

(9) The Mississippi Business Finance Corporation shall make available to the Mississippi Department of Agriculture and Commerce for disbursement, upon warrant or warrants issued by the State Fiscal Officer upon requisitions made by the Commissioner of Agriculture and Commerce, or his designee, to the Certified Cotton Growers Organization, as defined in Section 69-37-5, funds on a one-time basis in a lump sum, an amount not to exceed Two Million Dollars ($2,000,000.00) for the purpose of assisting in carrying out the purposes of the Mississippi Boll Weevil Management Act. The monies made available by the Mississippi Business Finance Corporation shall be drawn from the Emerging Crops Fund. This subsection (9) shall be repealed from and after June 30, 1999.

(10) Upon request by resolution of the Board of Directors of the Institute for Technology Development and the Mississippi Agribusiness Council, the Mississippi Business Finance Corporation shall make available to the Institute for Technology Development on a one-time basis, an amount not to exceed Two Hundred Fifty Thousand Dollars ($250,000.00) from the cash balance of the Emerging Crops Fund to support the development of a cooperative program for agribusiness development with the Alternative Agriculture Research and Commercialization Program (AARC) of the United States Department of Agriculture.

(11) The Mississippi Business Finance Corporation shall make available to the Mississippi Forestry Commission on a lump sum amount not to exceed Five Hundred Thousand Dollars ($500,000.00) to be drawn from the Emerging Crops Fund and used for the commission's Reforestation Cost-Share Program. This subsection (11) shall be repealed from and after June 30, 1999.

(12) The Mississippi Business Finance Corporation shall make available to the Mississippi Forestry Commission for fiscal year 1999 a lump sum amount not to exceed Three Million Dollars ($3,000,000.00) to be drawn from the Emerging Crops Fund and used for the purpose of replacing fire fighting units/equipment. This subsection (12) shall be repealed from and after June 30, 1999.

(13) In addition to the amount provided in subsection (11) of this section, the Mississippi Business Finance Corporation shall make available to the Mississippi Forestry Commission for fiscal year 1999 a lump sum amount not to exceed Five Hundred Thousand Dollars ($500,000.00) to be drawn from the Emerging Crops Fund and used for the commission's Reforestation Cost-Share Program. This subsection (13) shall be repealed from and after June 30, 1999.

(14) The Mississippi Business Finance Corporation shall make available to the Small Farm Development Center at Alcorn State University for fiscal year 1999 funds in the amount of Fifty Thousand Dollars ($50,000.00) and for fiscal year 2000 funds in the amount of Fifty Thousand Dollars ($50,000.00) to be drawn from the Emerging Crops Fund to support a cooperative program for agribusiness development in Mississippi. This subsection (14) shall be repealed from and after June 30, 2002.

SECTION 6. Section 69-2-19, Mississippi Code of 1972, is amended as follows:

69-2-19. The State Department of Economic and Community Development is authorized, at one (1) time or from time to time, to declare by resolution the necessity for issuance of negotiable general obligation bonds of the State of Mississippi to provide funds for the Emerging Crops Fund established in Section 69-2-13. Upon the adoption of a resolution by the board, declaring the necessity for the issuance of any part or all of the general obligation bonds authorized by Sections 69-2-19 through 69-2-39, the department shall deliver a certified copy of its resolution or resolutions to the State Bond Commission. Upon receipt of same, the State Bond Commission, in its discretion, shall act as the issuing agent, prescribe the form of the bonds, advertise for and accept bids, issue and sell the bonds so authorized to be sold, and do any and all other things necessary and advisable in connection with the issuance and sale of such bonds. The amount of bonds issued under Sections 69-2-19 through 69-2-39 shall not exceed Ninety-seven Million Dollars ($97,000,000.00) in the aggregate; provided, however, an additional amount of bonds may be issued under Sections 69-2-19 through 69-2-39 in an amount not to exceed Fifteen Million Dollars ($15,000,000.00) to provide funds for loans issued under Section 69-2-13(3) for new construction of poultry houses. No bonds may be issued under Sections 69-2-19 through 69-2-39 after October 1, 2003.

SECTION 7. Section 57-75-15, Mississippi Code of 1972, is amended as follows:

57-75-15. (1) Upon notification to the authority by the enterprise that the state has been finally selected as the site for the project, the State Bond Commission shall have the power and is hereby authorized and directed, upon receipt of a declaration from the authority as hereinafter provided, to borrow money and issue general obligation bonds of the state in one or more series for the purposes herein set out. Upon such notification, the authority may thereafter from time to time declare the necessity for the issuance of general obligation bonds as authorized by this section and forward such declaration to the State Bond Commission, provided that before such notification, the authority may enter into agreements with the United States Government, private companies and others that will commit the authority to direct the State Bond Commission to issue bonds for eligible undertakings set out in subsection (4) of this section, conditioned on the siting of the project in the state.

(2) Upon receipt of any such declaration from the authority, the State Bond Commission shall verify that the state has been selected as the site of the project and shall act as the issuing agent for the series of bonds directed to be issued in such declaration pursuant to authority granted in this section.

(3) (a) Bonds issued under the authority of this section for projects as defined in Section 57-75-5(f)(i) shall not exceed an aggregate principal amount in the sum of Sixty-three Million Dollars ($63,000,000.00).

(b) Bonds issued under the authority of this section for projects as defined in Section 57-75-5(f)(ii) shall not exceed Ninety Million Dollars ($90,000,000.00). The provisions of this paragraph (b) shall be repealed from and after July 1, 1996.

(c) Bonds issued under the authority of this section for projects as defined in Section 57-75-5(f)(iii) shall not exceed Fifty Million Dollars ($50,000,000.00), nor shall the bonds issued for projects related to any single military installation exceed Sixteen Million Six Hundred Sixty-seven Thousand Dollars ($16,667,000.00). If any proceeds of bonds issued for projects related to the Meridian Naval Auxiliary Air Station ("NAAS") are used for the development of a water and sewer service system by the City of Meridian, Mississippi, to serve the NAAS and if the City of Meridian annexes any of the territory served by the water and sewer service system, the city shall repay the State of Mississippi the amount of all bond proceeds expended on any portion of the water and sewer service system project; and if there are any monetary proceeds derived from the disposition of any improvements located on real property in Kemper County purchased pursuant to this act for projects related to the NAAS and if there are any monetary proceeds derived from the disposition of any timber located on real property in Kemper County purchased pursuant to this act for projects related to the NAAS, all of such proceeds (both from the disposition of improvements and the disposition of timber) commencing July 1, 1996, through June 30, 2010, shall be paid to the Board of Education of Kemper County, Mississippi, for expenditure by such board of education to benefit the public schools of Kemper County. No bonds shall be issued under this paragraph (c) until the State Bond Commission by resolution adopts a finding that the issuance of such bonds will improve, expand or otherwise enhance the military installation, its support areas or military operations, or will provide employment opportunities to replace those lost by closure or reductions in operations at the military installation. From and after July 1, 1997, bonds shall not be issued for any projects, as defined in Section 57-75-5(f)(iii), which are not commenced before July 1, 1997. The proceeds of any bonds issued for projects commenced before July 1, 1997, shall be used for the purposes for which the bonds were issued until completion of the projects.

(d) Bonds issued under the authority of this section for projects as defined in Section 57-75-5(f)(iv) shall not exceed Ten Million Dollars ($10,000,000.00). No bonds shall be issued under this paragraph after December 31, 1996.

(e) Bonds issued under the authority of this section for projects defined in Section 57-75-5(f)(v) shall not exceed One Hundred Ten Million Dollars ($110,000,000.00). No bonds shall be issued under this paragraph after June 30, 2001.

(f) Bonds issued under the authority of this section for the project defined in Section 57-75-5(f)(vi) shall not exceed Twenty Million Three Hundred Seventy Thousand Dollars ($20,370,000.00). No bonds shall be issued under this paragraph (f) until the State Bond Commission by resolution adopts a finding that the project has secured wire harness contracts or contracts to manufacture thin film polymer lithium-ion rechargeable batteries, or any combination of such contracts, in the aggregate amount of Twenty Million Dollars ($20,000,000.00), either from the United States Government or the private sector. No bonds shall be issued under this paragraph after June 30, 2001.

(g) Bonds issued under the authority of this section for projects defined in Section 57-75-5(f)(viii) shall not exceed Twenty-six Million Dollars ($26,000,000.00). No bonds shall be issued after June 30, 2001.

(4) The proceeds from the sale of the bonds issued under this section may be applied for the purposes of: (a) defraying all or any designated portion of the costs incurred with respect to acquisition, planning, design, construction, installation, rehabilitation, improvement, relocation and with respect to state-owned property, operation and maintenance of the project and any facility related to the project located within the project area, including costs of design and engineering, all costs incurred to provide land, easements and rights-of-way, relocation costs with respect to the project and with respect to any facility related to the project located within the project area, and costs associated with mitigation of environmental impacts; (b) providing for the payment of interest on the bonds; (c) providing debt service reserves; and (d) paying underwriters' discount, original issue discount, accountants' fees, engineers' fees, attorneys' fees, rating agency fees and other fees and expenses in connection with the issuance of the bonds. Such bonds shall be issued from time to time and in such principal amounts as shall be designated by the authority, not to exceed in aggregate principal amounts the amount authorized in subsection (3) of this section. Proceeds from the sale of the bonds issued under this section may be invested, subject to federal limitations, pending their use, in such securities as may be specified in the resolution authorizing the issuance of the bonds or the trust indenture securing them, and the earning on such investment applied as provided in such resolution or trust indenture.

(5) The principal of and the interest on the bonds shall be payable in the manner hereinafter set forth. The bonds shall bear date or dates; be in such denomination or denominations; bear interest at such rate or rates; be payable at such place or places within or without the state; mature absolutely at such time or times; be redeemable before maturity at such time or times and upon such terms, with or without premium; bear such registration privileges; and be substantially in such form; all as shall be determined by resolution of the State Bond Commission except that such bonds shall mature or otherwise be retired in annual installments beginning not more than five (5) years from the date thereof and extending not more than twenty-five (25) years from the date thereof. The bonds shall be signed by the Chairman of the State Bond Commission, or by his facsimile signature, and the official seal of the State Bond Commission shall be imprinted on or affixed thereto, attested by the manual or facsimile signature of the Secretary of the State Bond Commission. Whenever any such bonds have been signed by the officials herein designated to sign the bonds, who were in office at the time of such signing but who may have ceased to be such officers before the sale and delivery of such bonds, or who may not have been in office on the date such bonds may bear, the signatures of such officers upon such bonds shall nevertheless be valid and sufficient for all purposes and have the same effect as if the person so officially signing such bonds had remained in office until the delivery of the same to the purchaser, or had been in office on the date such bonds may bear.

(6) All bonds issued under the provisions of this section shall be and are hereby declared to have all the qualities and incidents of negotiable instruments under the provisions of the Uniform Commercial Code and in exercising the powers granted by this chapter, the State Bond Commission shall not be required to and need not comply with the provisions of the Uniform Commercial Code.

(7) The State Bond Commission shall sell the bonds on sealed bids at public sale, and for such price as it may determine to be for the best interest of the State of Mississippi, but no such sale shall be made at a price less than par plus accrued interest to date of delivery of the bonds to the purchaser. The bonds shall bear interest at such rate or rates not exceeding the limits set forth in Section 75-17-101 as shall be fixed by the State Bond Commission. All interest accruing on such bonds so issued shall be payable semiannually or annually; provided that the first interest payment may be for any period of not more than one (1) year.

Notice of the sale of any bonds shall be published at least one (1) time, the first of which shall be made not less than ten (10) days prior to the date of sale, and shall be so published in one or more newspapers having a general circulation in the City of Jackson and in one or more other newspapers or financial journals with a large national circulation, to be selected by the State Bond Commission.

The State Bond Commission, when issuing any bonds under the authority of this section, may provide that the bonds, at the option of the state, may be called in for payment and redemption at the call price named therein and accrued interest on such date or dates named therein.

(8) State bonds issued under the provisions of this section shall be the general obligations of the state and backed by the full faith and credit of the state. The Legislature shall appropriate annually an amount sufficient to pay the principal of and the interest on such bonds as they become due. All bonds shall contain recitals on their faces substantially covering the foregoing provisions of this section.

(9) The State Treasurer is authorized to certify to the Department of Finance and Administration the necessity for warrants, and the Department of Finance and Administration is authorized and directed to issue such warrants payable out of any funds appropriated by the Legislature under this section for such purpose, in such amounts as may be necessary to pay when due the principal of and interest on all bonds issued under the provisions of this section. The State Treasurer shall forward the necessary amount to the designated place or places of payment of such bonds in ample time to discharge such bonds, or the interest thereon, on the due dates thereof.

(10) The bonds may be issued without any other proceedings or the happening of any other conditions or things other than those proceedings, conditions and things which are specified or required by this chapter. Any resolution providing for the issuance of general obligation bonds under the provisions of this section shall become effective immediately upon its adoption by the State Bond Commission, and any such resolution may be adopted at any regular or special meeting of the State Bond Commission by a majority of its members.

(11) In anticipation of the issuance of bonds hereunder, the State Bond Commission is authorized to negotiate and enter into any purchase, loan, credit or other agreement with any bank, trust company or other lending institution or to issue and sell interim notes for the purpose of making any payments authorized under this section. All borrowings made under this provision shall be evidenced by notes of the state which shall be issued from time to time, for such amounts not exceeding the amount of bonds authorized herein, in such form and in such denomination and subject to such terms and conditions of sale and issuance, prepayment or redemption and maturity, rate or rates of interest not to exceed the maximum rate authorized herein for bonds, and time of payment of interest as the State Bond Commission shall agree to in such agreement. Such notes shall constitute general obligations of the state and shall be backed by the full faith and credit of the state. Such notes may also be issued for the purpose of refunding previously issued notes; except that no notes shall mature more than three (3) years following the date of issuance of the first note hereunder and provided further, that all outstanding notes shall be retired from the proceeds of the first issuance of bonds hereunder. The State Bond Commission is authorized to provide for the compensation of any purchaser of the notes by payment of a fixed fee or commission and for all other costs and expenses of issuance and service, including paying agent costs. Such costs and expenses may be paid from the proceeds of the notes.

(12) The bonds and interim notes authorized under the authority of this section may be validated in the First Judicial District of the Chancery Court of Hinds County, Mississippi, in the manner and with the force and effect provided now or hereafter by Chapter 13, Title 31, Mississippi Code of 1972, for the validation of county, municipal, school district and other bonds. The necessary papers for such validation proceedings shall be transmitted to the state bond attorney, and the required notice shall be published in a newspaper published in the City of Jackson, Mississippi.

(13) Any bonds or interim notes issued under the provisions of this chapter, a transaction relating to the sale or securing of such bonds or interim notes, their transfer and the income therefrom shall at all times be free from taxation by the state or any local unit or political subdivision or other instrumentality of the state, excepting inheritance and gift taxes.

(14) All bonds issued under this chapter shall be legal investments for trustees, other fiduciaries, savings banks, trust companies and insurance companies organized under the laws of the State of Mississippi; and such bonds shall be legal securities which may be deposited with and shall be received by all public officers and bodies of the state and all municipalities and other political subdivisions thereof for the purpose of securing the deposit of public funds.

(15) The Attorney General of the State of Mississippi shall represent the State Bond Commission in issuing, selling and validating bonds herein provided for, and the bond commission is hereby authorized and empowered to expend from the proceeds derived from the sale of the bonds authorized hereunder all necessary administrative, legal and other expenses incidental and related to the issuance of bonds authorized under this chapter.

(16) There is hereby created a special fund in the State Treasury to be known as the Mississippi Major Economic Impact Authority Fund wherein shall be deposited the proceeds of the bonds issued under this chapter and all monies received by the authority to carry out the purposes of this chapter. Expenditures authorized herein shall be paid by the State Treasurer upon warrants drawn from the fund, and the Department of Finance and Administration shall issue warrants upon requisitions signed by the director of the authority.

(17) (a) There is hereby created the Mississippi Economic Impact Authority Sinking Fund from which the principal of and interest on such bonds shall be paid by appropriation. All monies paid into the sinking fund not appropriated to pay accruing bonds and interest shall be invested by the State Treasurer in such securities as are provided by law for the investment of the sinking funds of the state.

(b) In the event that all or any part of the bonds and notes are purchased, they shall be canceled and returned to the loan and transfer agent as canceled and paid bonds and notes and thereafter all payments of interest thereon shall cease and the canceled bonds, notes and coupons, together with any other canceled bonds, notes and coupons, shall be destroyed as promptly as possible after cancellation but not later than two (2) years after cancellation. A certificate evidencing the destruction of the canceled bonds, notes and coupons shall be provided by the loan and transfer agent to the seller.

(c) The State Treasurer shall determine and report to the Department of Finance and Administration and Legislative Budget Office by September 1 of each year the amount of money necessary for the payment of the principal of and interest on outstanding obligations for the following fiscal year and the times and amounts of the payments. It shall be the duty of the Governor to include in every executive budget submitted to the Legislature full information relating to the issuance of bonds and notes under the provisions of this chapter and the status of the sinking fund for the payment of the principal of and interest on the bonds and notes.

SECTION 8. Chapter 920, Local and Private Laws of 1988, as amended by Chapter 967, Local and Private Laws of 1994, is brought forward as follows:

Section 1. Whenever used in this act, unless a different meaning clearly appears in the context, the following terms shall be given the following meanings:

(a) "Bonds" shall include notes, bonds and other obligations authorized to be issued under this act.

(b) "City" means the City of Tupelo, Mississippi.

(c) "Cost" as applied to the delivery of water service to a governmental entity or water association, means an amount equal to a proportional share of (i) the expenses of construction and acquisition of the project amortized over the term of the bonds issued for construction of the project, (ii) the expenses of construction and acquisition of improvements to the project amortized over the useful life of such improvements, (iii) financing cost for the project and the aforesaid capital improvements including the cost of interest on the bonds and debt obligations issued to finance such improvements, less the annual proceeds of the sales tax provided for in Section 5 of this act, and (iv) operation and maintenance expenses pertaining to the project as it may be improved from time to time, including a reasonably required reserve fund for repair and renovation of the project. The components of cost set forth above shall be determined by a certified public accounting firm designated by the district and acceptable to other users of the project. There shall be deducted from such components of costs set forth above, the proceeds of the special sales tax which will be used to pay the principal of and interest on the bonds as provided in Section 12 hereof.

(d) "County" means Lee County, Mississippi.

(e) "District" means the North East Mississippi Regional Water Supply District created pursuant to Section 51-8-1 et seq., Mississippi Code of 1972, as said district may be constituted from time to time. Local governmental units are entitled to join such district as provided by law.

(f) "Governing body" means the Mayor and Board of Aldermen of the City of Tupelo, Mississippi.

(g) "Project" means an intake facility to obtain water from the Tombigbee River and Tennessee-Tombigbee Waterway, treatment facilities, transmission lines and related facilities, and the land on which such facilities and improvements are located.

(h) "System" means the combined waterworks and sewerage system of the city.

Section 2. (1) It is hereby determined and declared to be in the best interest of the people of the city, the county and the surrounding area to provide an adequate supply of water both for residential and industrial use. It is in the public interest that the city's critical water shortage be eliminated and the water shortage problem which exists in the area be alleviated. The construction of the project will assure the maintenance and improvement of the living conditions of the people of northeast Mississippi, the continuation of industrial, commercial and economic opportunities in the area and the enhancement of the health and welfare of the area's people, particularly its heaviest groundwater users, in the years to come.

(2) The city shall endeavor to alleviate the regional water shortage problem through cooperative efforts and agreements for the benefit of communities in the surrounding area. If any county located in whole or in part in the Eutaw-McShan aquifer is declared by the Department of Environmental Quality to be in an emergency situation as outlined in paragraph (1) above, such county may petition the district for access to the project and shall be granted access by the district. Any additions to the project shall be paid for with user fees which shall be assessed equally in all participating counties.

Section 3. The governing body is hereby authorized to issue general obligation bonds of the city in the aggregate principal amount not to exceed Twenty-three Million Dollars ($23,000,000.00) to raise money for the construction and acquisition of the project and payment of interest on bonds, establishment of reserves to secure such bonds and payment of expenses incident to the issuance of such bonds and to the implementation of the project. The bonds shall be general obligations of the city, but shall not be considered when computing any limitation of indebtedness of the city established by law.

Section 4. Before any bonds are issued pursuant to this act (a) the Mississippi Department of Environmental Quality shall determine that a water crisis exists in the county and shall forward notice of such determination to the city, and (b) the electors of the county shall have approved the imposition of the special sales tax provided for in Section 5 of this act. Any bonds issued pursuant to this act shall be issued in accordance with the provisions of Title 21, Chapter 33, Article 5, Mississippi Code of 1972, except that if such provisions conflict with the provisions of this act, the provisions of this act shall prevail. The full faith, credit and resources of the city shall be irrevocably pledged for the payment of the principal of and interest on the bonds.

Section 5. Before any bonds shall be issued pursuant to this act, the imposition of a special sales tax, in addition to all other taxes now imposed, at the rate of one-quarter of one percent (0.25%) upon all sales and services within the city which are subject to the general rate of state sales tax, which general rate of tax is six percent (6%) on the effective date of this act, shall have been approved at an election to be held in the county in the manner now provided by law for the holding of county elections, upon at least three (3) weeks notice thereof by publication of the proposition at least once a week for three (3) consecutive weeks in some newspaper published in the county or having a general circulation therein. At such election, all qualified electors of the county may vote. If a majority of the qualified electors of the county voting in the election vote in favor of the proposition, then the special sales tax may be imposed in accordance with this section and Section 11 of this act. Fifty percent (50%) of the initial cost of the construction of the project shall come from proceeds received from such special sales tax and fifty percent (50%) of the initial cost of the construction of the project shall come from other sources and user fees. Any bonds issued pursuant to this act shall be issued within two (2) years of the aforesaid election or within two (2) years after the final favorable termination of any litigation affecting the issuance of such bonds.

Section 6. Bonds issued under this act may be issued as registered bonds pursuant to the provisions of Title 31, Chapter 21, Mississippi Code of 1972, or in bearer form either as to principal or interest or both, and may contain such covenants and provisions, may be issued as term or serial bonds, in one or more series, may be executed and delivered at any time, and from time to time, may be in such form and denomination, may be of such tenor, may be payable in such installments and at such time or times, not exceeding twenty-five (25) years from their date, may be payable at such place or places and evidenced in such manner, may be callable with or without premium, may bear such rate or rates of interest and may contain such other provisions not inconsistent herewith, all as shall be provided in the proceedings of the governing body whereunder the bonds shall be directed to be issued. Bonds issued under this act may be sold either at public sale in the manner provided by Section 31-19-25, Mississippi Code of 1972, or at private sale, in the discretion of the governing body.

Section 7. No bond issued under this act shall bear a greater overall maximum interest rate to maturity than that allowed in Section 75-17-101, Mississippi Code of 1972, and no bond may 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 bonds; all bonds of the same maturity shall bear the same rate of interest from date to maturity. All interest accruing on bonds issued under this act shall be payable semiannually or annually, except that the first interest payment for any bond may be for any period not exceeding one (1) year. No interest payment shall be evidenced by more than one (1) coupon and neither cancelled nor supplemental coupons shall be permitted. The lowest interest rate specified for any bonds sold shall not be less than seventy percent (70%) of the highest rate specified for the same bond issue.

Section 8. Bonds issued under this act shall be executed on behalf of the city by the manual or facsimile signature of the mayor and clerk of the city with the manual or facsimile seal of the city affixed or imprinted thereon. At least one (1) signature on each bond shall be a manual signature, whether of the mayor, city clerk or authenticating agent. If the officers whose signatures or countersignatures appear on the bonds or interest coupons shall cease to be such officers before delivery of the bonds, such signatures or countersignatures shall nevertheless be valid and sufficient for all purposes the same as if they had remained in the office until such delivery.

Section 9. Bonds issued under this act and all interest coupons applicable thereto shall be construed to be negotiable instruments, despite the fact that they are payable solely from a specified source, and shall be securities within the meaning of Article 8 of the Mississippi Uniform Commercial Code.

Section 10. (1) The principal proceeds received upon the sale of the bonds shall be deposited with a qualified depository of the city in a special fund in the name of the city from which there shall be first paid all expenses, premiums, fees and commissions incurred by the city and deemed necessary or advantageous by the governing body in connection with the authorization, issuance, sale, validation and delivery of the bonds.

(2) The balance of such proceeds shall be paid to the district and deposited with a qualified depository of the district. Such funds shall be held and disbursed for the project and may be used (a) for the project, (b) to pay interest on the bonds while the project is being completed and for a maximum of six (6) months after the estimated date of completion, (c) to pay engineering, fiscal, trustee, printing, accounting, financial advisor, construction manager, feasibility consultant and legal expenses, and development expenses incurred in connection with such project, and related structures and facilities, and the issuance of the bonds, (d) to provide for the establishment of a reasonable reserve fund for the payment of principal of and interest on the bonds in the event of a deficiency in the revenues and receipts available for such payments, if such fund is provided for in the proceedings of the governing body in connection with the issuance of bonds, (e) to pay the premium or premiums on any insurance or any form of guarantee obtained from any source to assure the prompt payment of principal and interest when due, (f) to pay start-up costs and costs of operation and maintenance of the project and related structures and facilities while it is being established, erected, built, constructed, replaced, remodeled, renovated, added to, equipped or furnished and for a maximum of thirty-six (36) months after the estimated date of completion, (g) to provide for the payment of interim indebtedness incurred prior to the issuance of any bonds under this act and used for the purposes set forth above and (h) costs related to any suits and proceedings in connection with the project, including any costs of settlement thereof.

Section 11. (1) On or before the fifteenth day prior to the imposition of the special sales tax authorized in Section 5 of this act, the governing body shall give written notification to the Chairman of the State Tax Commission of the date on which the special sales tax will become effective.

(2) Such tax shall be collected in the same manner as the state sales tax imposed by Title 27, Chapter 65, Mississippi Code of 1972, and shall be accounted for separately from the amount of sales tax collected for the state in the city. All provisions of the State Sales Tax Law applicable to filing of such returns, discounts to the taxpayer, remittances to the State Tax Commission and retainage thereby of sums to defray the costs of collection, collection enforcement, rights of taxpayers, recovery of improper taxes, refunds of overpaid taxes or other provisions of said chapter providing for imposition and collection of the sales tax shall apply to the tax authorized by this act.

(3) On or before the fifteenth day of each month, the revenue from the special sales tax collected under the provisions of this section during the preceding month shall be paid and distributed to the trustee provided in Section 12 of this act on behalf of the city. Such special sales tax shall stand repealed at the time and in the manner provided in subsection (3) of Section 12 of this act.

(4) If, at any time subsequent to the effective date of this act, the Legislature, by enactment of a general law, authorizes the imposition of a sales tax by municipalities, then the rate of tax authorized thereunder, if imposed by the city, shall be reduced by the rate of tax levied under this act.

Section 12. (1) The bonds shall be secured by a trust agreement by and between the city and a corporate trustee, which may be any trust company or bank incorporated under the laws of the United States or the laws of any state in the United States. Any such trust agreement shall pledge for the payment of the principal of, redemption premium, if any, and interest on the bonds, the proceeds of the special sales tax provided for in this act and may provide for any other source of payment which may from time to time be made available to pay debt service on the bonds, including revenues of the project, subject to the provisions of subsection (3) of this section. The avails of the special sales tax shall be used solely for the payment of the principal of, redemption premium, if any, and interest on the bonds, and for the payment of expenses of issuance thereof or reserve funds therefor and shall not be used to lower or offset any user fees which are required under this act to pay fifty percent (50%) of the initial cost of construction of the project. To the extent the proceeds of the special sales tax and any other amounts which may from time to time be available for the payment of the principal of, redemption premium, if any, and interest on the bonds, including any available revenues of the project, are not sufficient for such purpose, the governing body shall levy a special ad valorem tax upon all of the taxable property within the city which shall be sufficient, together with other monies available for such purpose, to provide for the payment of the principal of, redemption premium, if any, and interest on such bonds according to the terms thereof.

(2) Such trust agreement may provide for the creation and maintenance of such reserve funds as the governing body shall determine are reasonable and proper, including such sinking fund or funds as may be necessary to provide for the payment of the principal of, redemption premium, if any, and interest on the bonds, subject to the provisions of subsection (3) of this section. Any such trust agreement or any resolution directing the issuance of bonds may contain such provisions for protecting and enforcing the rights and remedies of the registered owners thereof as may be reasonable and proper and not in violation of law, including the duties of the city in relation to the acquisition of property and the construction, improvement, equipping, furnishing, maintenance, repair, operation and insurance of the project and the custody, safeguarding and application of all monies.

(3) Such trust agreement shall provide for the creation of a fund which is separate and apart from any other fund authorized under this section. The trustee shall deposit into such fund all special sales tax revenues imposed and collected under this act. The special sales tax revenues deposited into the fund shall be invested in the manner provided by law for the investment of public funds. Such special sales tax revenues, including interest earned thereon, shall be used to pay not more than fifty percent (50%) of the principal of and interest on such bonds as they become due and payable on any payment date. The trustee shall determine when the special sales taxes which it has actually received, together with any income actually realized from the investment of such special sales tax revenues, are sufficient to pay fifty percent (50%) of the principal of and interest on bonds then outstanding, as such bonds and the interest thereon mature and accrue to the final maturity date; and, to the extent not needed for such purposes, the avails of the special sales tax may be used to pay the costs of any additions to the project. The authority to levy such special sales tax shall stand repealed on the first day of the month immediately succeeding the payment in full of the principal of and interest on all bonds issued pursuant to Section 3 of this act. The balance of any funds remaining in the fund described in this subsection after final payment of all principal of and interest on the bonds as herein provided shall be remitted to the district. It is the intent of the Legislature that not more than fifty percent (50%) of the principal of and interest on the bonds issued under this act and any costs incident thereto shall be paid from the special sales tax, and the interest earned thereon.

(4) Any such trust agreement may set forth the rights and remedies of the registered owners of the bonds and of the trustee, and may restrict the individual right of action by such registered owners as is customary in trust agreements or trust indentures securing bonds and debentures of corporations. Further, any such trust agreement may contain such provisions as the city may deem reasonable and proper for the security of such registered owners and may also contain provisions governing the issuance of bonds to replace lost, stolen or mutilated bonds.

(5) Any such trust agreement may contain a provision that, in the event of a default in the payment of the principal of, redemption premium, if any, or the interest on the bonds issued in accordance with or relating to, such agreement or in the performance of any agreement contained in the proceedings, trust agreement or instruments relating to such bonds, such payment and performance may be enforced by mandamus or by the appointment of a receiver in equity.

(6) All expenses incurred by the city in carrying out the provisions of any such trust agreement may be treated as a part of the cost of the operation of the project.

(7) Any surplus funds, excluding special sales tax revenues and interest earned thereon, received by the trustee after payment in full of the principal of, redemption premium, if any, and interest on the bonds, or provision therefor having been made, shall be paid over to the city and expended for improvements, repairs and extensions to the project.

Section 13. (1) Bonds issued under this act and the income therefrom shall be exempt from all taxation in the State of Mississippi, excepting inheritance and gift taxes.

(2) Bonds issued under this act shall be legal investments for commercial banks, savings and loan associations and insurance companies organized under the laws of this state.

Section 14. Bonds issued under this act shall be submitted to validation as provided by Title 31, Chapter 13, Mississippi Code of 1972, and to that end the city clerk shall be directed to make up a transcript of all legal papers and proceedings relating to the bonds and to certify and forward the same to the state's bond attorney for the institution of validation proceedings.

Section 15. The governing body is authorized to exercise such powers of eminent domain as are required by the public convenience and necessity to acquire property, or interests therein, whether real, personal or mixed, on which to construct the project.

Section 16. (1) The project shall be owned by the district. The district is authorized to contract with any agency, department or other office of government or any individual, partnership, corporation, utility or water management district, county or municipality, and each of those entities are authorized to contract with the district for the acquisition, treatment or furnishing of water or providing of property, equipment or services by or to the district regarding the construction, funding or operation of the project and to contract for the management of the project or any part thereof by any individual, partnership or corporation or governmental entity. The district is further authorized, to the extent that the governing body determines to be in the best interest of the city and the surrounding area, to sell, lease or otherwise convey any of the facilities or property constituting a part of or pertaining to the project and to contract with any of the above entities regarding such sale, lease or conveyance. The authority to levy and collect the special taxes provided for in this act shall not be adversely affected by any such contract, agreement, sale, lease or conveyance.

(2) Such agreement may contain a provision whereby the entity contracting with the district agrees to take an established amount of water at an established rate or to pay an amount if it does not require the established amount or if the project is not able to provide water in such amounts in the applicable time periods. The district is further authorized to lease any of the facilities or property constituting a part of or pertaining to the project and to contract with any of the above entities regarding such lease. The authority to levy and collect the special tax provided for in this act shall not be adversely affected by any agreement entered into pursuant to this section. The revenues and expenses of the project shall be accounted for so that the cost of water service can be determined as provided in this act. The district shall sell water from the project to each governmental entity or water association within the district at the cost of such water service.

Section 17. The district shall pledge a sufficient portion of its revenues received from the sale of water from the project after payment of the expense of operation and maintenance of the project, to the payment of principal of and interest on any bonds as the same comes due to the extent the same is not paid with the proceeds of the sales tax referenced in Section 5 herein. The proceedings of the governing body in connection with the issuance of bonds, pursuant to agreement with the district, may provide for the payment of a sufficient portion of such revenues to the trustee provided for herein, and may contain such other provision regarding the priority of such pledge as shall be contained therein and in any agreements between the district and any other contracting party, including the city.

Section 18. This act, without reference to any other statute, shall be deemed to be full and complete authority for the issuance of bonds under this act, and shall be construed as an additional and alternative method therefor, and none of the present restrictions, requirements, conditions or limitations of law applicable to the issuance or sale of bonds, notes or other obligations by municipalities of this state shall apply to the issuance and sale of bonds under this act, and no proceedings shall be required for the issuance of such bonds other than those provided for and required herein. All other powers and authority provided for or granted in this act, other than the levy of taxes authorized under this act, may be exercised whether or not bonds are issued pursuant to this act. All powers necessary to be exercised in order to carry out the provisions of this act are hereby conferred.

Section 19. Nothing in this act shall prohibit other political subdivisions from obtaining water from the Tombigbee River and the Tennessee-Tombigbee Waterway as provided by state law.

Section 20. No member of the Legislature, elected official or appointed official, or any partner or associate of any member of the Legislature, elected official or appointed official shall derive any income from the issuance of any bonds under this act.

SECTION 9. This act shall take effect and be in force from and after July 1, 2000.