MISSISSIPPI LEGISLATURE

1997 Regular Session

To: Ways and Means

By: Representative Williams

AN ACT TO AMEND SECTION 57-1-301, MISSISSIPPI CODE OF 1972, TO INCLUDE PARK AND RECREATIONAL FACILITIES, ROAD CONSTRUCTION AND MAINTENANCE AND CONSTRUCTION OF COMMUNITY HEALTH CENTERS, LOANS TO AID IN RETIRING CERTAIN INTEREST-BEARING LOANS UTILIZED FOR THE PURCHASE OF A MOTION PICTURE SOUND STAGE WITHIN THOSE CAPITAL IMPROVEMENTS FOR WHICH ASSISTANCE IS AVAILABLE UNDER THE LOCAL GOVERNMENTS CAPITAL IMPROVEMENTS REVOLVING LOAN PROGRAM AND PROJECTS TO STABILIZE BLUFFS THAT BORDER THE MISSISSIPPI RIVER; TO AMEND SECTION 57-1-303, MISSISSIPPI CODE OF 1972, TO DIVIDE THE LOCAL GOVERNMENTS CAPITAL IMPROVEMENTS REVOLVING LOAN FUND INTO THE TAXABLE LOCAL GOVERNMENTS CAPITAL IMPROVEMENTS REVOLVING LOAN SUBACCOUNT AND THE NONTAXABLE LOCAL GOVERNMENTS CAPITAL IMPROVEMENTS REVOLVING LOAN SUBACCOUNT; TO SPECIFY THE TYPES OF PROJECTS FOR WHICH LOANS FROM EACH SUBACCOUNT MAY BE UTILIZED; TO PROVIDE THAT OF THE FUNDS DEPOSITED INTO THE LOCAL GOVERNMENTS CAPITAL IMPROVEMENTS REVOLVING LOAN FUND, NOT LESS THAN $25,000,000.00 SHALL BE ALLOCATED TO THE NONTAXABLE LOCAL GOVERNMENTS CAPITAL IMPROVEMENTS REVOLVING LOAN SUBACCOUNT AND THAT THE REMAINDER OF SUCH FUND SHALL BE ALLOCATED TO THE TAXABLE LOCAL GOVERNMENTS CAPITAL IMPROVEMENTS REVOLVING LOAN SUBACCOUNT; TO REVISE THE INTEREST RATE ON LOANS MADE FROM THE LOCAL GOVERNMENTS CAPITAL IMPROVEMENTS REVOLVING LOAN FUND AND TO INCREASE THE PERIOD OF TIME WITHIN WHICH LOANS SHALL BE REPAID; TO AMEND SECTION 57-1-307, MISSISSIPPI CODE OF 1972, TO INCREASE FROM $75,000,000.00 TO $95,000,000.00, THE AMOUNT OF STATE GENERAL OBLIGATION BONDS THAT MAY BE ISSUED UNDER THE LOCAL GOVERNMENTS CAPITAL IMPROVEMENTS REVOLVING LOAN PROGRAM; AND FOR RELATED PURPOSES. 

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

SECTION 1. Section 57-1-301, Mississippi Code of 1972, is amended as follows:

57-1-301. (1) There is established a local governments capital improvements revolving loan program to be administered by the Department of Economic and Community Development for the purpose of assisting counties and municipalities in making capital improvements.

(2) For purposes of Sections 57-1-301 and 57-1-335, "capital improvements" include any combination of the following:

(a) Construction or repair of water and sewer facilities;

(b) Construction or repair of drainage systems for industrial development;

(c) Improvements in fire protection;

(d) Construction of new buildings for economic development purposes;

(e) Renovation or repair of existing buildings for economic development purposes;

(f) Construction or repair of access roads for industrial development;

(g) Purchase of buildings for economic development purposes;

(h) Construction or repair of railroad spurs for industrial development;

(i) Construction of any county or municipally owned health care facilities, excluding any county health departments;

(j) Construction, purchase, renovation or repair of any building to be utilized as an auditorium or convention center; * * *

(k) Construction of multipurpose facilities for tourism development; or

(l) Loans to a county to aid in retiring interest-bearing loans utilized for the purchase of a motion picture sound stage.

SECTION 2. Section 57-1-303, Mississippi Code of 1972, is amended as follows:

57-1-303. (1) (a) There is created a special fund in the State Treasury to be designated as the "Local Governments Capital Improvements Revolving Loan Fund," which fund shall consist of such monies as provided in Sections 57-1-307 through 57-1-335. The fund shall be maintained in perpetuity for the purposes established in Sections 57-1-301 through 57-1-335. Unexpended amounts remaining in the fund at the end of a fiscal year shall not lapse into the State General Fund, and any interest earned on amounts in the fund shall be deposited to the credit of the fund. Monies in the fund may not be used or expended for any purpose

except as authorized under Sections 57-1-301 through 57-1-335.

(b) The Local Governments Capital Improvements Revolving Loan Fund shall be divided into the Taxable Local Governments Capital Improvements Revolving Loan Subaccount and the Nontaxable Local Governments Capital Improvements Revolving Loan Subaccount. Funds allocated to the Nontaxable Local Governments Capital Improvements Revolving Loan Subaccount shall be utilized 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. Funds allocated to the Taxable Local Governments Capital Improvements Revolving Loan Subaccount shall be utilized to provide loans for any eligible capital improvements, including, but not limited to, 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.

(c) Of the funds deposited into the Local Governments Capital Improvements Revolving Loan Fund, not less than Twenty-five Million Dollars ($25,000,000.00) shall be allocated to the Nontaxable Local Governments Capital Improvements Revolving Loan Subaccount, and the remainder of such funds shall be allocated to the Taxable Local Governments Capital Improvements Revolving Loan Subaccount.

(2) A county or an incorporated municipality may apply to the Department of Economic and Community Development for a loan under the local governments capital improvements revolving loan program established under Sections 57-1-301 through 57-1-335.

(3) (a) The Department of Economic and Community Development shall establish a loan program by which loans, at the rate of interest provided for in paragraph (b) of this subsection, may be made available to counties and incorporated municipalities * * * to assist counties and incorporated municipalities in making capital improvements. Loans from the revolving fund may be made to counties and municipalities as set forth in a loan agreement in amounts not to exceed one hundred percent (100%) of eligible project costs as established by the Department of Economic and Community Development. The Department of Economic and Community Development may require county or municipal participation or funding from other sources, or otherwise limit the percentage of costs covered by loans from the revolving fund. The Department of Economic and Community Development may establish a maximum amount for any loan in order to provide for broad and equitable participation in the program.

(b) The rate of interest on loans made from the Local Governments Capital Improvements Revolving Loan Fund 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 shall be at the rate of three percent (3%) per annum, calculated according to the actuarial method. The rate of interest on loans for all other capital improvements shall be at the true interest cost on the most recent issue of twenty-year state general obligation bonds occurring prior to the date such loan is made. Notwithstanding the provisions of this paragraph to the contrary, loans made for the purposes of the capital project described in Section 57-1-301(2)(l) shall bear no interest.

(4) A county that receives a loan from the revolving fund shall pledge for repayment of the loan any part of the homestead exemption annual tax loss reimbursement to which it may be entitled under Section 27-33-77. An incorporated municipality that receives a loan from the revolving fund shall pledge for repayment of the loan any part of the sales tax revenue distribution to which it may be entitled under Section 27-65-75. Each loan agreement shall provide for (i) monthly payments, (ii) semiannual payments, or (iii) other periodic payments, the annual total of which shall not exceed the annual total for any other year of the loan by more than fifteen percent (15%). The loan agreement shall provide for the repayment of all funds received within not more than twenty (20) years from the date of project completion.

(5) The State Auditor, upon request of the Department of Economic and Community Development, shall audit the receipts and expenditures of a county or an incorporated municipality whose loan payments appear to be in arrears, and if he finds that the county or municipality is in arrears in such payments, he shall immediately notify the Executive Director of the Department of Finance and Administration who shall withhold all future payments to the county of homestead exemption reimbursements under Section 27-33-77 and all sums allocated to the county or the municipality under Section 27-65-75 until such time as the county or the municipality is again current in its loan payments as certified by the Department of Economic and Community Development.

(6) Evidences of indebtedness which are issued pursuant to this chapter shall not be deemed indebtedness within the meaning specified in Section 21-33-303 with regard to cities or incorporated towns, and in Section 19-9-5 with regard to counties.

SECTION 3. 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).

(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 4. This act shall take effect and be in force from and after July 1, 1997.