2007 Regular Session
To: Local and Private; Finance
By: Senator(s) Nunnelee, Browning, Bryan, Gordon, Little, Pickering
AN ACT TO AMEND CHAPTER 920, LOCAL AND PRIVATE LAWS OF 1988, AS AMENDED BY CHAPTER 967, LOCAL AND PRIVATE LAWS OF 1994, TO AUTHORIZE THE ISSUANCE OF ADDITIONAL BONDS FOR USE BY THE NORTH EAST MISSISSIPPI REGIONAL WATER SUPPLY DISTRICT; TO AUTHORIZE THE PROCEEDS OF BONDS ISSUED PURSUANT TO THIS CHAPTER BE UTILIZED BY THE DISTRICT TO PAY THE COST OF FACILITIES NECESSARY TO SERVE THE WELLSPRING PROJECT AND FOR CERTAIN OTHER PURPOSES; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Chapter 920, Local and Private Laws of 1988, as amended by Chapter 967, Local and Private Laws of 1994, is amended 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 City Council 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, including, but not limited to, those facilities necessary to serve the Wellspring Project. The term "project" shall include any drainage, wastewater treatment or disposal facilities. The term "project" may include multiple separate projects.
(h) "System" means the combined waterworks and sewerage system of the city.
(i) "Wellspring Project" means the industrial development site established by Pontotoc, Union and Lee Counties, Mississippi, consisting of approximately one thousand seven hundred (1,700) acres adjacent to Interstate 22 (U.S. Highway 78) near the Blue Springs interchange and the improvement and development of such site for industrial and commercial purposes.
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 that 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, including, but not limited to, the Wellspring Project, 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) prior to March 2, 2007, and not to exceed an additional Thirty Million Dollars ($30,000,000.00) thereafter 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. Bonds that are issued under the provisions of this act after March 2, 2007, other than refunding bonds, shall be issued at one or more times and may be issued on a parity with any other bonds issued under the provisions of this act, so long as the first series of such bonds is issued no later than the later of:
(a) Two (2) years after the effective date of this act; (b) Two (2) years after the current City of Tupelo Water Bonds issued under the authority of Chapter 967, Local and Private Laws of 1994, mature and are paid; or
(c) Two (2) years after the final termination of any litigation affecting the issuance of the bonds.
Section 4. * * * 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. * * * Fifty percent (50%) of the * * * cost * * * of any project or projects shall come from proceeds received from such special sales tax and fifty percent (50%) of the * * * cost * * * of any project or projects shall come from other sources and user fees. * * * 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, * * * 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 of issuance, 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) to pay 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 Mississippi 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 13 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 13 of this act.
* * *
Section 12. (1) Bonds issued under this act may be refunded at any time and from time to time by the city pursuant to an authorizing resolution of the governing body, directing the issuance of refunding bonds in accordance with the Mississippi Bond Refinancing Act, Section 31-27-1 et seq.
(2) The city shall have the authority to enter into an investment agreement with a financial institution incorporated under the laws of the United States or the laws of any state in the United States providing assurances with respect to the return on investment of funds received by the city in connection with the issuance of refunding bonds.
Section 13. (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, including any bonds issued prior to March 2, 2007, 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 subject, however, to any pledge of such revenues made as security for bonds issued by the city prior to March 2, 2007. 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 or projects. 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 14. (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 15. 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 16. The governing body, the board of supervisors of any county or the governing authorities of any city in which a part of the project or projects are located are 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 or any part thereof.
Section 17. (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 18. 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 19. 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 20. 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 21. Nothing contained in this act (Senate Bill No. 3214, 2007 Regular Session) shall affect any bonds issued by the city prior to March 2, 2007, or the security pledged therefor or any agreement entered into with respect to the security for such bonds.
Section 22. 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 2. This act shall take effect and be in force from and after its passage.