MISSISSIPPI LEGISLATURE
2026 Regular Session
To: Judiciary, Division A
By: Senator(s) Hill
AN ACT ENACT THE MISSISSIPPI TRUST ACT; TO DEFINE TERMS; TO REQUIRE A GOVERNMENTAL ENTITY TO VERIFY THE REGISTRATION OF A CHARITABLE ORGANIZATION, FOREIGN CORPORATION, OR NONPROFIT CORPORATION BEFORE THE DISBURSEMENT OF PUBLIC FUNDS; TO REQUIRE A LINE-ITEM APPROPRIATION BY THE LEGISLATURE, SUBJECT TO THE REQUIREMENTS OF SECTION 27-104-351, BEFORE THE DISBURSEMENT OF PUBLIC FUNDS TO A CHARITABLE ORGANIZATION, NONPROFIT CORPORATION, OR FOREIGN CORPORATION; TO AMEND SECTION 79-11-407, MISSISSIPPI CODE OF 1972, TO REQUIRE NONPROFIT CORPORATIONS AND FOREIGN CORPORATIONS TO REPORT CERTAIN FINANCIAL INFORMATION AND ATTEST TO THE OUTCOMES OF EXPENDITURES RELATED TO PUBLIC FUNDS; TO AMEND SECTION 79-11-507, MISSISSIPPI CODE OF 1972, TO REQUIRE CHARITABLE ORGANIZATIONS TO REPORT CERTAIN FINANCIAL INFORMATION AND ATTEST TO THE OUTCOMES OF EXPENDITURES RELATED TO PUBLIC FUNDS; TO AMEND SECTION 27-104-351, MISSISSIPPI CODE OF 1972, TO CONFORM; 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 Transparency and Responsibility in Utilizing State and Taxpayer Funds Act" or the "Mississippi TRUST Act."
SECTION 2. As used in Sections 1 through 3 of this act, the following terms shall have the meanings herein ascribed unless the context clearly requires otherwise:
(a) "Charitable organization" has the meaning as defined in Section 79-11-501(a).
(b) "Foreign corporation" has the meaning as defined in Section 79-11-127(s).
(c) "Governmental entity" has the meaning as defined in Section 11-46-1(g).
(d) "Nonprofit corporation" has the meaning as defined in Section 79-11-127(z).
SECTION 3. (1) Before the distribution of any public funds to a charitable organization, foreign corporation, or nonprofit corporation, a governmental entity shall verify that the charitable organization, foreign corporation, or nonprofit corporation has registered with the Secretary of State and has complied with any obligations imposed by law, including the filing of any required reports.
(2) Public funds disbursed to a charitable organization, foreign corporation, or nonprofit corporation shall be authorized by line-item appropriation by the Legislature, subject to the requirements of Section 27-104-351.
SECTION 4. Section 79-11-407, Mississippi Code of 1972, is amended as follows:
79-11-407. (1) Each nonprofit corporation, as defined in Section 79-11-127(z), shall file an annual report with the Secretary of State Business Services Division before May 15 of each year on a form prescribed by the Secretary of State.
(2) Each domestic nonprofit corporation and each foreign nonprofit corporation authorized to transact business in this state shall deliver an annual report to the Secretary of State for filing, on such date as may be established by the Secretary of State, which provides the following information:
(a) The name of the nonprofit corporation and the state or country or other foreign jurisdiction under whose law it is organized;
(b) The name, email address and street or physical address of its registered agent in this state;
(c) The address of its principal office;
(d) The name, titles and business address of its principal officer;
(e) A brief description of the nature of its business; and
(f) Whether it has
received public funds * * *, a listing of any governmental entity that distributed
the public funds, the amount of public funds received, a detailed accounting
of the public services provided, and a list of any entities with which the
nonprofit corporation or foreign corporation entered into subcontract
agreements with to provide the public services. The term "public
funds" means funds received by the organization during its most recently
completed fiscal year which were received from the State of Mississippi or any
local governmental authority located within the State of Mississippi.
(3) Information in the annual report must be current as of the date the annual report is executed on behalf of the nonprofit corporation. If the nonprofit corporation or foreign corporation received public funds, a statement shall be signed by the president or other authorized officer of the corporation attesting to the outcomes of the expenditures of the public funds under penalties of perjury to the best of the signer's knowledge. The statement shall be attached to the annual report required by this section.
(4) If an annual report does not contain the information required by this section, the Secretary of State shall provide written notice promptly to the reporting nonprofit corporation and return the report for correction. If the report is corrected to contain the information required by this section and delivered to the Secretary of State within thirty (30) days after the effective date of notice, the report is deemed to be timely filed.
(5) If the nonprofit corporation fails to file timely or fails to disclose the information required under this section, the corporation may be subject to the penalties of dissolution or disallowance of nonprofit status, or both.
(6) The requirements of this section shall not apply to water associations as defined in Section 79-11-394.
SECTION 5. Section 79-11-507, Mississippi Code of 1972, is amended as follows:
79-11-507. (1) Every charitable organization registered pursuant to Section 79-11-503 that shall receive in any fiscal year contributions in excess of Seven Hundred Fifty Thousand Dollars ($750,000.00) via monetary donations and all of whose fund-raising functions are carried on by persons who are unpaid for such services, and every charitable organization registered pursuant to Section 79-11-503 whose fund-raising functions are not carried on solely by persons who are unpaid for such services, shall file a financial statement for its most recently completed fiscal year with the Secretary of State. The financial statement shall be filed along with the registration statement required by Section 79-11-503 and any renewals or final report thereafter. The financial statement shall include a balance sheet and statement of income and expense and shall be consistent with forms furnished by the Secretary of State clearly setting forth the following: gross receipts and gross income from all sources, broken down into total receipts and income from each separate solicitation project or source; cost of administration; cost of solicitation; cost of programs designed to inform or educate the public; and total net amount disbursed or dedicated for each major purpose, charitable or otherwise. The statement shall be signed by the president or other authorized officer and the chief fiscal officer of the organization, and shall be accompanied by an opinion signed by an independent certified public accountant that the financial statement therein fairly represents the financial operations of the organization in sufficient detail to permit public evaluation of its operations. The financial statement shall be accompanied by any and all forms required to be filed by a charitable organization with the United States Internal Revenue Service for the organization's most recent fiscal year end.
(2) Every organization registered pursuant to Section 79-11-503 that shall receive in any fiscal year contributions of at least Two Hundred Fifty Thousand Dollars ($250,000.00) but not more than Seven Hundred Fifty Thousand Dollars ($750,000.00) via monetary donations and all of whose fund-raising functions are carried on by persons who are unpaid for their services shall file a financial statement reviewed by an independent certified public accountant along with the registration statement required by Section 79-11-503 and any renewals or final report thereafter with the Secretary of State upon forms prescribed by him. The reviewed financial statement shall cover the most recently completed fiscal year and include such information as required by the Secretary of State by rule or otherwise, including, but not limited to, the gross receipts from contributions and the use of the proceeds of such contributions. The statement shall be signed by the president or other authorized officer of the organization who shall certify under penalties of perjury that the statements therein are true and correct to the best of the signer's knowledge. The reviewed financial statement shall be accompanied by any and all forms required to be filed by a charitable organization with the United States Internal Revenue Service for the organization's most recent fiscal year end.
(3) Every organization registered pursuant to Section 79-11-503 that shall receive in any fiscal year contributions not in excess of Two Hundred Fifty Thousand Dollars ($250,000.00) and all of whose fund-raising functions are carried on by persons who are unpaid for their services shall file a financial report along with the registration statement required by Section 79-11-503 and any renewals or final report thereafter with the Secretary of State upon forms prescribed by him. Such financial report shall cover the most recently completed fiscal year and include such information as required by the Secretary of State by rule or otherwise, including, but not limited to, the gross receipts from contributions and the use of the proceeds of such contributions. The report shall be signed by the president or other authorized officer of the organization who shall certify under penalties of perjury that the statements therein are true and correct to the best of the signer's knowledge. Such financial report shall be accompanied by any and all forms required to be filed by a charitable organization with the United States Internal Revenue Service for the organization's most recent fiscal year end.
(4) Any charitable organization receiving more than Twenty-five Thousand Dollars ($25,000.00) but less than Seven Hundred Fifty Thousand Dollars ($750,000.00) via monetary donations shall, at the request of the Secretary of State, submit additional financial information, including, but not limited to, an audited financial statement prepared in accordance with generally accepted accounting principles and accompanied by an opinion signed by an independent certified public accountant that the financial statement therein fairly represents the financial operations of the organization in sufficient detail to permit public evaluation of its operations.
(5) Every organization registered pursuant to Section 79-11-503 receiving public funds shall include within its filed financial statement for its most recently completed fiscal year with the Secretary of State a listing of any governmental entity that distributed the public funds, the amount of public funds received, a detailed accounting of the public services provided, and a listing of any entities with which the nonprofit corporation or foreign corporation entered into subcontract agreements with to provide the public services. For every organization that received public funds, a statement shall be signed by the president or other authorized officer of the organization attesting to the outcomes of the expenditures of the public funds under penalties of perjury to the best of the signer's knowledge. The statement shall be attached to its filed financial statement required by this section. The term "public funds" means funds received by the organization during its most recently completed fiscal year which were received from the State of Mississippi or any local governmental authority located within the State of Mississippi.
( * * *6) The Secretary of State, pursuant to
Section 79-11-509, may promulgate rules to provide for extensions of the due
date for filing of the financial statements required by this chapter and may
impose an administrative penalty against any organization which fails to comply
with this section within the time prescribed, or fails to furnish such additional
information as is requested by the Secretary of State within the required time.
SECTION 6. Section 27-104-351, Mississippi Code of 1972, is amended as follows:
27-104-351. (1) This section shall be known and may be cited as the "Line-Item Appropriation Transparency Act."
(2) As used in this section, unless the context clearly indicates otherwise:
(a) "Local government entity" means any county, municipality, school district, public hospital or other political subdivision of the state.
(b) "Pass-through funding" means a line-item appropriation by the Legislature to a state agency that is itemized on a separate line in a state agency's appropriation bill and that is intended to be passed through the state agency to one or more:
(i) Local government entities;
(ii) Private organizations, including not-for-profit organizations; or
(iii) Persons in the form of a loan or grant.
"Pass-through funding" may be general funds, dedicated credits, or any combination of state funding sources, and may be ongoing or one-time.
(c) "Recipient entity" means a local government entity or private entity, including a nonprofit entity, that receives money by way of pass-through funding from a state agency.
(d) "State agency" shall have the same meaning as provided in Section 27-103-103, and shall include any other subagency or board under the supervision of that state agency. The term also includes a governmental entity under Section 3 of this act.
(e) "State money" means funds in the State General Fund and all state-support special funds which are in the Budget Contingency Fund, Capital Expense Fund, Working-Cash Stabilization Reserve Fund, Education Enhancement Fund, Healthcare Expendable Fund, Tobacco Control Program Fund, BP Settlement Fund, Gulf Coast Restoration Fund and any other special funds that are determined by the Joint Legislative Budget Committee to be a state-support special fund. "State money" does not include contributions or donations received by a state agency.
(f) "Department" means the Department of Finance and Administration.
(3) A state agency may not provide a recipient entity state money from pass-through funding unless:
(a) The state agency enters into a written agreement with the recipient entity, which details the criteria and reporting requirements as provided in this section; and
(b) The written agreement described in paragraph (a) of this subsection requires the recipient entity to provide to the state agency the following:
(i) A written description and an itemized report detailing the expenditure of state money or the intended expenditure of any state money that has not been spent. Such report shall be submitted at least quarterly on dates determined by the department; and
(ii) A final written itemized report when all the state money is spent.
Disbursements shall only be made after the written agreement described in paragraph (a) of this subsection has been signed and shall be contingent upon the recipient entity complying with the quarterly reporting requirements required by paragraph (b) of this subsection.
(4) On or before June 30 of each year or a date determined by the department, a state agency shall provide to the department a copy of the written agreements, written descriptions, and reports of itemized expenditures required under subsection (3) of this section.
(5) The department is responsible for obtaining the written agreements, written descriptions, and itemized reports required by subsection (3) of this section from state agencies. The department is further responsible for consolidating and presenting a report on the previous fiscal year's pass-through expenditures and providing it to the Joint Legislative Budget Committee by October 1 of each year.
(6) The department shall create all of the following documents which shall be in such form and contain such information as the department prescribes:
(a) Written agreement as described in subsection (3)(a) of this section;
(b) Written description and itemized report as described in subsection (3)(b) of this section; and
(c) Final itemized report as described in subsection (3)(b) of this section.
A state agency shall utilize these documents when complying with the criteria set forth in this section.
(7) Notwithstanding subsection (3) of this section, a state agency is not required to comply with this section to the extent that the pass-through funding is issued:
(a) Under a competitive award process;
(b) In accordance with a formula enacted in statute;
(c) In accordance with a state program under parameters in statute or rule that guides the distribution of the pass-through funding;
(d) Under the authority of Sections 37-151-200 through 37-151-215; or
(e) In accordance with an appropriations act of the Legislature that specifically provides an exemption from the provisions of this section.
(8) Unless a recipient entity is required to comply with Section 31-7-1 et seq. because it is an agency or public body, the fact that it is a recipient entity does not create such an obligation.
SECTION 7. This act shall take effect and be in force from and after July 1, 2026.