Senate Bill 2367

(COMMITTEE SUBSTITUTE)

AN ACT TO BRING FORWARD SECTION 37-47-24, MISSISSIPPI CODE OF 1972, WHICH IS THE EDUCATION FACILITIES REVOLVING LOAN PROGRAM, FOR THE PURPOSE OF POSSIBLE AMENDMENT; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 37-47-24, Mississippi Code of 1972, is brought forward as follows:

37-47-24. (1) There is established the Educational Facilities Revolving Loan Fund Program to be administered by the State Department of Education for the purpose of improving educational facilities in the State of Mississippi by assisting public schools in procuring funds for making certain capital improvements.

(2) There is created a special fund in the State Treasury designated as the "Educational Facilities Revolving Loan Fund," which shall consist of monies transferred from the State Public School Building Fund and other monies that the Legislature may make available. The revolving loan fund must be maintained in perpetuity for the purposes established in this section. Unexpended amounts remaining in the fund at the end of a fiscal year may not lapse into the State General Fund. Payments on the principal of and, when applicable, interest on loans procured from the fund and any interest earned on amounts in the fund must be deposited to the credit of the fund. Monies in the Educational Facilities Revolving Loan Fund may not be used or expended for any purpose except as authorized under this section.

(3) Of the funds deposited into the Educational Facilities Revolving Loan Fund, up to ninety-five percent (95%) must be made available for the purpose of making interest-free loans to qualified public school districts. The State Department of Education shall accept requests for loans under this subsection for the following purposes:

(a) Repairs and renovations to existing school buildings and related facilities used in the operation of the schools of a public school district;

(b) Construction of new facilities or repairs and renovations to existing school facilities for the purpose of establishing, improving or expanding prekindergarten programs in a public school district; and

(c) Construction of new career and technical education facilities or repairs and renovations to existing school facilities for the purpose of upgrading or expanding a school district's career and technical education program.

(4) An educational entity that receives a loan from the Educational Facilities Revolving Loan Fund shall not use the funds for athletic facilities.

(5) Each fiscal year, the State Department of Education may set aside an amount not to exceed three percent (3%) of the balance of the Educational Facilities Revolving Loan Fund to cover the administrative and fiscal management costs associated with the fund.

(6) The State Department of Education shall accept and make determinations on applications for loans and shall disburse funds and receive repayments on approved loans. Before October 1, 2022, the department shall establish rules and regulations for the implementation and administration of the revolving loan program. The rules and regulations must include, at a minimum, provisions addressing the following:

(a) An application process by which public school districts may request a loan from the Educational Facilities Revolving Loan Fund, including the deadline by which the department must receive applications;

(b) The factors to be considered by the State Department of Education in determining whether an educational entity will be awarded the full or a partial amount of a loan requested. The maximum total amount of outstanding loans an applicant may receive in a fiscal year shall be limited to One Million Dollars ($1,000,000.00). The maximum total amount of a loan an applicant may receive for a single project shall not exceed One Million Dollars ($1,000,000.00) per fiscal year. A loan may not exceed one hundred percent (100%) of the cost of the project for which the loan is requested;

(c) The rates of interest on loans and terms of repayment. Approved loans under this program must be interest free and payable over a term of no more than ten (10) years commencing on the date the loan is received;

(d) A process by which the department determines if an entity receiving a loan is required to pledge monies for the repayment of the loan and sources of revenue that are acceptable whenever the department requires a pledge, which, for a school district receiving a loan, may not include Adequate Education Program funds;

(e) The actions that may be taken if an entity is in arrears on loan repayments, which may include, in the case of a school district, the withholding of future payments of Adequate Education Program funds to the district, the withholding of state funds due to the school or district;

(f) Applicants demonstrating emergency or other critical infrastructure needs, as defined by the State Department of Education, shall receive first priority in receiving loans from the fund; and

(g) All other matters that the State Department of Education determines are necessary to establish and maintain the Educational Facilities Revolving Loan Fund Program as an accessible and perpetual source of funding for making facility improvements at all levels of education in the state.

(7) School districts may use funds from the Educational Facilities Revolving Loan Fund Program to pay the principal and interest of school district indebtedness represented by bonds or notes issued after July 1, 2017, but before July 1, 2022, for capital improvements. School districts shall be limited to a maximum loan amount of Five-hundred Thousand Dollars ($500,000.00) per year from the Educational Facilities Revolving Loan Fund Program for this purpose.

(8) The State Department of Education shall promulgate such rules and regulations as may be necessary for participation in the Educational Facilities Revolving Loan Program by a public educational entity.

SECTION 2. This act shall take effect and be in force from and after July 1, 2023, and shall stand repealed on June 30, 2023.