MISSISSIPPI LEGISLATURE
2018 Regular Session
To: Appropriations
By: Representative Baria
AN ACT TO CREATE THE "MISSISSIPPI GULF COAST RESTORATION ACT OF 2018," TO DEFINE CERTAIN TERMS FOR THE PURPOSES OF THIS ACT; TO CREATE A NONPROFIT CORPORATION TO BE KNOWN AS ONE COAST, INC., WHICH WILL CREATE AND ADMINISTER THE GULF COAST RESTORATION FUND FOR THE PURPOSE OF ASSISTING COUNTIES, AND OTHER ENTITIES IN THOSE COUNTIES, THAT WERE DISPROPORTIONATELY AFFECTED BY THE DEEPWATER HORIZON OIL SPILL AND OTHER ENTITIES IN THOSE COUNTIES; TO PROVIDE THAT THE RESTORATION FUND SHALL CONSIST OF A PORTION OF CERTAIN FUNDS RECEIVED BY OR ON BEHALF OF THE STATE OF MISSISSIPPI THROUGH A NEGOTIATED SETTLEMENT FOR ECONOMIC DAMAGES IN CONNECTION WITH THE DEEPWATER HORIZON OIL SPILL; TO PROVIDE THE PURPOSES FOR WHICH MONIES IN THE RESTORATION FUND MAY BE USED TO ASSIST COUNTIES, AND OTHER ENTITIES IN THOSE COUNTIES, THAT WERE DISPROPORTIONATELY AFFECTED BY THE DEEPWATER HORIZON OIL SPILL; TO PROVIDE FOR THE COMPOSITION OF THE BOARD OF DIRECTORS OF ONE COAST, INC.; TO PROVIDE THE POWERS AND DUTIES OF ONE COAST, INC.; TO AMEND SECTION 27-103-302, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT A PORTION OF CERTAIN FUNDS RECEIVED BY OR ON BEHALF OF THE STATE OF MISSISSIPPI THROUGH A NEGOTIATED SETTLEMENT FOR ECONOMIC DAMAGES IN CONNECTION WITH THE DEEPWATER HORIZON OIL SPILL SHALL BE DEPOSITED INTO THE RESTORATION FUND; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. This act shall be known and may be cited as the "Mississippi Gulf Coast Restoration Act of 2018."
SECTION 2. The Legislature recognizes that fully supporting areas affected by the Deepwater Horizon disaster to ensure goals for economic recovery and diversification are achieved is in the best interest of the citizens of the state. The Legislature intends to provide a long-term source of funding for efforts of economic recovery and enhancement in the Gulf Coast region. The Legislature finds that it is important to help businesses, individuals, and local governments in the Gulf Coast region recover.
SECTION 3. As used in Sections 3 through 9 of this act, the following words and phrases shall have the meanings as defined in this section unless the context clearly requires otherwise:
(a) "Awardee" means a person, organization, or local government granted an award of funds from the Gulf Coast Restoration Fund for a project or program.
(b) "Disproportionately affected county" means Hancock County, Harrison County and/or Jackson County.
(c) "Earnings" means all the income generated by investments and interest.
(d) "Gulf Coast Restoration Fund" or "Restoration Fund" means the trust account established by One Coast, Inc., for the benefit of the disproportionately affected counties.
SECTION 4. (1) There is created a nonprofit corporation, to be known as One Coast, Inc. (OCI), in accordance with Section 79-11-101 et seq., which is not a unit or entity of state government. OCI may receive, hold, invest and administer the Gulf Coast Restoration Fund in support of Sections 3 through 9 of this act. OCI is a separate budget entity and is not subject to control, supervision or direction by the State of Mississippi in any manner, including, but not limited to, personnel, purchasing, transactions involving real or personal property, and budgetary matters.
(2) OCI shall create and administer the Gulf coast Restoration Fund for the benefit of the disproportionately affected counties. The principal of the fund shall consist of monies deposited into the fund under Section 27-103-302.
(3) The Restoration Fund shall be maintained as a long-term and stable source of revenue. OCI shall establish a trust account at a federally insured financial institution to hold funds and make deposits and payments. Earnings generated by investments and interest of the fund, plus the amount of principal available each year, shall be available to make awards under Sections 3 through 9 of this act and pay administrative costs. Earnings shall be accounted for separately from principal funds set forth in subsection (2) of this section. Administrative costs cannot exceed two and one-fourth percent (2-1/4%) of the earnings in a calendar year. Administrative costs include payment of investment fees, travel and expenses of board members, audits, salary or other costs for employed or contracted staff, including required staff, and other allowable costs. Any funds remaining in the Restoration Fund after thirty (30) years shall revert to the State General Fund.
(4) (a) OCI shall invest and reinvest the principal of the Restoration Fund in such a manner not to subject the funds to state or federal taxes, and consistent with an investment policy statement adopted by the corporation.
(b) The board of directors shall formulate an investment policy governing the investment of the principal of the Restoration Fund. The policy shall pertain to the types, kinds or nature of investment of any of the funds, and any limitations, conditions or restrictions upon the methods, practices or procedures for investment, reinvestments, purchases, sales or exchange transactions, provided that those policies shall not conflict with nor be in derogation of any state constitutional provision or law. The policy shall be formulated with the advice of the financial advisor in consultation with the State Treasurer.
(c) OCI must competitively procure one or more money managers, under the advice of the financial advisor in consultation with the State Treasurer, to invest the principal of the Restoration Fund. The applicant manager or managers may not include representatives from the financial institution housing the trust account for the Restoration Fund. The applicant manager or managers must present a plan to invest the Restoration Fund to maximize earnings while prioritizing the preservation of principal. Any agreement with a money manager must be reviewed by OCI for continuance at least every five (5) years. Plans should include investment in technology and growth businesses domiciled in, or that will be domiciled in, this state or businesses whose principal address is in this state.
(d) Costs and fees for investment services shall be deducted from the earnings as administrative costs. Fees for investment services shall be no greater than one hundred fifty (150) basis points.
(e) Annually, OCI shall cause an audit to be conducted of the investment of the Restoration Fund by the independent certified public accountant retained under Section 5 of this act. The expense of the audit shall be paid from earnings for administrative purposes.
(5) OCI shall report on June 30 and December 30 each year to the Governor, the Lieutenant Governor and the Speaker of the House of Representatives on the financial status of the Restoration Fund and its investments, the established priorities, the project and program selection process, including a list of all submitted projects and reasons for approval or denial, and the status of all approved awards.
(6) The State Auditor shall conduct an audit of the Restoration Fund and OCI annually. OCI shall provide to the State Auditor any detail or supplemental data required.
SECTION 5. (1) OCI shall comply with the requirements for a state agency under Section 31-7-1 et seq. regarding purchases; Section 25-41-1 et seq. regarding open meetings; and the Mississippi Public Records Act of 1983.
(2) OCI shall be governed by a board of directors consisting of nine (9) members as follows:
(a) Three (3) voting members appointed by the Governor as follows:
(i) One (1) member who is a resident of Hancock County, Mississippi;
(ii) One (1) member who is a resident of Harrison County, Mississippi; and
(iii) One (1) member who is a resident of Jackson County, Mississippi.
A member appointed under this paragraph (a) may be an elected official. Each member appointed under this paragraph (a) shall serve at the will and pleasure of the Governor and may be removed from the board of directors by the Governor. Except as otherwise provided in this paragraph (a), the members shall serve for the length of the term of the Governor and shall be eligible for reappointment.
(b) Three (3) voting members appointed by the Lieutenant Governor as follows:
(i) One (1) member who is a resident of Hancock County, Mississippi;
(ii) One (1) member who is a resident of Harrison County, Mississippi; and
(iii) One (1) member who is a resident of Jackson County, Mississippi.
A member appointed under this paragraph (b) may be an elected official. Each member appointed under this paragraph (b) shall serve at the will and pleasure of the Lieutenant Governor and may be removed from the board of directors by the Lieutenant Governor. Except as otherwise provided in this paragraph (b), the members shall serve for the length of the term of the Lieutenant Governor and shall be eligible for reappointment.
(c) Three (3) voting members representing the following county-designated economic development entity:
(i) One (1) member shall be the executive director of the Hancock County Development Commission;
(ii) One (1) member shall be the executive director of the Harrison County Development Commission; and
(iii) One (1) member shall be the executive director of the Jackson County Economic Development Foundation.
(3) The board of directors shall annually elect one (1) member to serve as chair of the board and one (1) member to serve as vice chair of the board. The vice chair shall act as chair in the absence of or upon the disability of the chair or if there is a vacancy in the office of the chair.
(4) The initial appointments to the board under paragraphs (a) and (b) of subsection (2) of this section must be made by November 15, 2018. Vacancies of appointed members on the board of directors shall be filled by the official who originally appointed the member. A vacancy of an appointed member that occurs before the scheduled expiration of the term of the member shall be filled for the remainder of the unexpired term.
(5) Members of the board of directors shall serve without compensation, but shall be reimbursed for each day's official duties of the board at the same per diem as established by Section 25-3-69, and actual travel and expenses as established by Section 25-3-41.
(6) Members of the board of directors shall comply with the requirements and be subject to the restrictions of a public servant under Section 25-4-1 et seq.
(7) Each member of the board of directors is accountable for the proper performance of the duties of office, and each member owes a fiduciary duty to the people of the state to ensure that awards provided are disbursed and used, and investments are made, as prescribed by law and contract. An appointed member of the board of directors may be removed by the official that appointed the member for malfeasance, misfeasance, neglect of duty, incompetence, permanent inability to perform official duties, unexcused absence from three (3) consecutive meetings of the board, arrest or indictment for a crime that is a felony or a misdemeanor involving theft or a crime of dishonesty, or pleading nolo contendere to, or being found guilty of, any crime.
(8) The board of directors shall meet at least quarterly, upon the call of the chair or at the request of a majority of the membership, to review the Restoration Fund, establish and review priorities for economic recovery in disproportionately affected counties, and determine use of the earnings available. A majority of the members of the board of directors constitutes a quorum. Members may not vote by proxy.
(9) The Executive Director of the Mississippi Development Authority, or his or her designee, and the Executive Director of the Department of Environmental Quality, or his or her designee, shall be available to consult with the board of directors and may be requested to attend meetings of the board of directors. These individuals shall not be permitted to vote on any matter before the board of directors.
(10) (a) OCI is authorized to hire or contract for all staff necessary to the proper execution of its powers and duties to implement this act. OCI is required to retain:
(i) An independent certified public accountant licensed in this state to inspect the records of and to audit the expenditure of the earnings and available principal disbursed by OCI.
(ii) An independent financial advisor to assist OCI in the development and implementation of a strategic plan consistent with the requirements of Sections 3 through 9 of this act.
(iii) An economic advisor who will assist in the award process, including the development of priorities, allocation decisions, and the application and process; will assist the board of directors in determining eligibility of award applications and the evaluation and scoring of applications; and will assist in the development of award documentation.
(iv) A legal advisor with expertise in not-for-profit investing and contracting and who is a member of The Mississippi Bar to assist with contracting and carrying out the intent of Sections 3 through 9 of this act.
(b) Employees of OCI shall comply with the requirements and be subject to the restrictions of a public servant under Section 25-4-1 et seq.; and in addition, employees of OCI also shall refrain from having any direct interest in any contract, franchise, privilege, project, program or other benefit arising from an award by OCI during the term of his or her appointment and for two (2) years after the termination of the appointment.
(c) Staff employed under paragraph (a) of this subsection shall be available to consult with the board of directors and shall attend meetings of the board of directors. These individuals shall not be permitted to vote on any matter before the board of directors.
SECTION 6. (1) In addition to the powers and duties prescribed in Section 79-11-101 et seq. and the articles and bylaws adopted in compliance with those laws, the board of directors may:
(a) Make and enter into contracts and other instruments necessary or convenient for the exercise of its powers and functions;
(b) Make expenditures including any necessary administrative expenditure from earnings consistent with its powers;
(c) Adopt, use, and alter a common corporate seal;
(d) Adopt, amend and repeal bylaws, not inconsistent with the powers granted to it or the articles of incorporation, for the administration of the activities of OCI and the exercise of its corporate powers; and
(e) Use the state seal, when appropriate, for standard corporate identity applications. Use of the state seal is not intended to replace use of a corporate seal as provided in this subsection.
(2) Under no circumstances may the credit of the State of Mississippi be pledged on behalf of OCI.
SECTION 7. OCI shall have the following duties:
(a) Manage responsibly and prudently all funds received, and ensure that the use of those funds is in accordance with all applicable laws, bylaws, or contractual requirements;
(b) Administer the program created under Sections 3 through 9 of this act;
(c) Monitor, review and annually evaluate awardees and their projects or programs to determine whether an award should be continued, terminated, reduced or increased; and
(d) Operate in a transparent manner, providing public access to information, notice of meetings, awards, and the status of projects and programs. OCI shall maintain a website that provides public access to this information.
SECTION 8. (1) OCI shall make awards from available earnings and principal derived under Section 3 of this act to projects or programs that meet the priorities for economic recovery, diversification and enhancement of the disproportionately affected counties. Awards may be provided for:
(a) Ad valorem tax reduction within disproportionately affected counties;
(b) Payment of impact fees adopted pursuant to law and imposed within disproportionately affected counties;
(c) Administrative funding for economic development organizations located within the disproportionately affected counties;
(d) Local match requirements for projects in the disproportionately affected counties;
(e) Economic development projects in the disproportionately affected counties;
(f) Infrastructure projects that are shown to enhance economic development in the disproportionately affected counties;
(g) Grants to local governments in the disproportionately affected counties to establish and maintain equipment and trained personnel for local action plans of response to respond to disasters, such as plans created for the Coastal Impact Assistance Program;
(h) Grants to support programs of excellence that prepare students for future occupations and careers at public schools, community and junior colleges and state institutions of higher learning that have home campuses in the disproportionately affected counties. Eligible programs include those that increase students' technology skills and knowledge; encourage industry certifications; provide rigorous, alternative pathways for students to meet high school graduation requirements; strengthen career readiness initiatives; fund high-demand programs of emphasis at the bachelor's and master's level designated by the
Board of Trustees of State Institutions of Higher Learning; and, similar to or the same as talent retention programs created by the Board of Trustees of State Institutions of Higher Learning and the State Board of Education, encourage students with interest or aptitude for science, technology, engineering, mathematics, and medical disciplines to pursue postsecondary education at a state university within the disproportionately affected counties; and
(i) Grants to tourism entities for the purpose of advertising and promoting tourism on behalf of one (1) or all of the disproportionately affected counties.
(2) OCI shall establish an application procedure for awards and a scoring process for the selection of projects and programs that have the potential to generate increased economic activity in the disproportionately affected counties, giving priority to projects and programs that:
(a) Generate maximum estimated economic benefits, based on tools and models not generally employed by economic input-output analyses, including cost-benefit, return-on-investment, or dynamic scoring techniques to determine how the long-term economic growth potential of the disproportionately affected counties may be enhanced by the investment.
(b) Increase household income in the disproportionately affected counties above national average household income.
(c) Expand high growth industries or establish new high growth industries in the region. Industries that are supported must have strong growth potential in the disproportionately affected counties. An industry's growth potential is defined based on a detailed review of the current industry trends nationally and the necessary supporting asset base for that industry in the disproportionately affected counties region.
(d) Leverage or further enhance key regional assets, including educational institutions, research facilities, and military bases.
(e) Partner with local governments to provide funds, infrastructure, land, or other assistance for the project.
(f) Have investment commitments from private equity or private venture capital funds.
(g) Provide or encourage seed stage investments in start-up companies.
(h) Provide advice and technical assistance to companies on restructuring existing management, operations, or production to attract advantageous business opportunities.
(i) Benefit the environment in addition to the economy.
(j) Provide outcome measures for programs of excellence support, including terms of intent and metrics.
(k) Partner with public schools, community and junior colleges, state institutions of higher learning or school districts located within the disproportionately affected counties.
(l) Partner with convention and visitor bureaus, tourist development councils or chambers of commerce located within the disproportionately affected counties.
(3) OCI may make awards as applications are received or may establish application periods for selection. Awards may not be used to finance one hundred percent (100%) of any project or program. OCI may require a one-to-one private-sector match or higher for an award, if applicable and deemed prudent by the board of directors. An awardee may not receive all of the earnings or available principal in any given year.
(4) A contract executed by OCI with an awardee must include provisions requiring a performance report on the contracted activities, must account for the proper use of funds provided under the contract, and must include provisions for recovery of awards if the award was based upon fraudulent information or the awardee is not meeting the performance requirements of the award. Awardees must regularly report to OCI the status of the project or program on a schedule determined by the corporation.
SECTION 9. (1) The scope of a financial audit shall include funds related to any year in which a local government entity receives or expends funds received under Sections 3 through 9 of this act. The scope of review for these funds shall include, but is not limited to, compliance with state and federal laws related to the receipt and expenditure of these funds.
(2) Every two (2) years, the State Auditor shall conduct an operational audit of a local government entity's funds related to Sections 3 through 9 of this act to evaluate the local government entity's performance in administering laws, policies, and procedures governing the expenditure of funds in an efficient and effective manner. The scope of review shall include, but is not limited to, evaluating internal controls, internal audit functions, reporting and performance requirements required for use of the funds, and compliance with state and federal law. The audit shall include any funds the local government entity receives or expends related to Sections 3 through 9 of this act.
(3) In addition to the rules of the State Auditor, the State Auditor shall adopt rules for the form and conduct of all financial audits performed by independent certified public accountants and for audits of local government entities for funds received under Sections 3 through 9 of this act.
(4) The State Auditor may report findings to the Secretary of the Treasury of the United States in addition to the reporting requirements under state law.
SECTION 10. Section 27-103-302, Mississippi Code of 1972, is amended as follows:
27-103-302. All funds
received by or on behalf of the State of Mississippi through a negotiated
settlement for economic damages in connection with the explosion on, and
sinking of, the mobile offshore drilling unit Deepwater Horizon, except for any
funds that are required by the settlement to be paid to any other public entity,
shall be deposited * * * as
follows: (a) eighty percent (80%) of those funds shall be deposited into the
Gulf Coast Restoration Fund created by One Coast, Inc., under Section 3 of this act and (b) the remainder of those funds shall be deposited into the Budget Contingency Fund for appropriation by the Legislature.
SECTION 11. This act shall take effect and be in force from and after July 1, 2018.