MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Ways and Means

By: Representative Endt

AN ACT TO AMEND SECTIONS 43-33-703, 43-33-704, 43-33-717, 43-33-729 AND 43-33-759, MISSISSIPPI CODE OF 1972, TO PROHIBIT THE MISSISSIPPI HOME CORPORATION FROM MAKING LOANS OR PROVIDING ANY FORM OF ASSISTANCE FOR THE ACQUISITION OR CONSTRUCTION OF APARTMENTS; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 43-33-703, Mississippi Code of 1972, is amended as follows:

43-33-703. For the purposes of this article, the following words shall have the meanings ascribed herein unless the context clearly requires otherwise:

(a) "Bonds" or "notes" means the bonds or notes, respectively, issued by the corporation pursuant to this article;

(b) "Corporation" means the Mississippi Home Corporation;

(c) "Energy conservation loan" means a mortgage loan made to a person of low or moderate income to finance improvements made or to be made to the residential housing owned and occupied by such person for the purposes of conserving energy and reducing the energy costs attributable to such residential housing, and containing such terms and conditions as the corporation may require;

(d) "Housing development mortgage loan" means a mortgage loan made to finance or refinance the acquisition, construction or substantial rehabilitation of a housing development, including both construction loans and permanent loans;

(e) "Housing development" means any specific work located within the state and made available to persons of low or moderate income for rental or residential housing purposes, including any building, land, equipment, facility or other real or personal property which may be necessary, convenient or desirable in connection therewith including streets, sewers, water and utility services;

(f) "Mortgage" means a mortgage, mortgage deed or deed of trust on a fee interest in residential housing or a rental housing development or, on real property in which the fee interest is owned without limitation by a unit of government or other entity created by statute, a leasehold on such a fee interest of a duration satisfactory to the corporation, which shall in all events exceed the term of the security interest created by the mortgagee;

(g) "Mortgage lender" means any bank, bank or trust company, trust company, mortgage company, mortgage banker, national banking association, savings bank, savings and loan association, building and loan association, and any other lending institution; provided that such lender is domiciled or qualified to do business in this state;

(h) "Mortgage loan" means a financial obligation secured by a mortgage, including any portion thereof or participation therein in any new or existing mortgage loan;

(i) "Municipality" means any county, city, town or village of the state;

(j) "Persons of low or moderate income" means persons or families, irrespective of race, color, national origin, sex, religion, age or handicap, within the state, who are determined by the corporation to require such assistance as is made available pursuant to this article on account of insufficient personal or family income to reasonably afford decent, safe and sanitary residential or rental housing, taking into consideration, without limitation, such factors as the following: (i) the amount of the total income of such persons and families available for housing needs; (ii) the size of the family; (iii) the cost and condition of residential or rental housing facilities in their locality or in an area reasonably accessible to such locality; (iv) the ability of such persons and families to compete successfully in the normal, private residential or rental housing market and to pay the amounts for which private enterprise is providing sanitary, decent and safe residential or rental housing in their locality or in an area reasonably accessible to such locality; (v) the standards established by various programs of the federal government for determining eligibility based on income of such persons and families and, in the case of projects with respect to which income limits have been established by any agency of the federal government having jurisdiction thereover for the purpose of defining eligibility of low and moderate income families, the corporation may determine that the limits so established shall govern; in all other cases income limits for the purpose of defining low or moderate income persons shall be established by the corporation in its rules and regulations;

(k) "Qualified sponsors" means any person, corporation, partnership or association, profit or nonprofit, public or private, which provides or develops residential or rental housing for low and moderate income families;

(l) "Residential housing" means a specific work or improvement undertaken to provide an owner-occupied residence within the state, which shall become the principal residence of the owner within a reasonable time after the financing is provided;

(m) "State" means the State of Mississippi;

(n) "State agency" means any board, authority, agency, department, commission, public corporation, body politic or instrumentality of the state;

(o) "Local housing authority" or "regional housing authority" means a public body corporate and politic organized and operating pursuant to Title 43, Chapter 33, Mississippi Code of 1972, as amended, or a nonprofit corporation organized under the laws of the State of Mississippi and designated by the United States Department of Housing and Urban Development as a public housing agency within the meaning of Section 3(6) of the United States Housing Act of 1937, as amended.

(p) "Apartment" means rooms with space and facilities for sleeping and with space and facilities, or equipment, for preparing and serving meals, which equipment is supplied by the owner or tenant, or both, in a building constructed as a dwelling for two (2) or more families and rented or leased or available for rent or lease.

SECTION 2. Section 43-33-704, Mississippi Code of 1972, is amended as follows:

43-33-704. (1) There is created by this article the Mississippi Home Corporation, which shall be a continuation of the corporate existence of the Mississippi Housing Finance Corporation and (a) all property, rights and powers of the Mississippi Housing Finance Corporation are vested in, and shall be exercised by, the corporation, subject, however, to all pledges, covenants, agreements, undertakings and trusts made or created by the Mississippi Housing Finance Corporation; (b) all references to the Mississippi Housing Finance Corporation in any other law or regulation shall be deemed to refer to and apply to the corporation; and (c) all regulations of the Mississippi Housing Finance Corporation shall continue to be in effect as the regulations of the corporation until amended, supplemented or rescinded by the corporation in accordance with law.

(2) The corporation is created with power to: raise funds from private investors in order to make such private funds available to finance the acquisition, construction, rehabilitation and improvement of residential and rental housing for persons of low or moderate income within the state; provide financing to qualified sponsors or individuals for a wide range of loans including, but not limited to, housing development, mortgage, rehabilitation or energy conservation loans; make loans to private lenders to finance any of these loans; purchase any of these loans from private lenders; refinance, insure or guarantee any of these loans; provide for temporary or partial financing for any of these purposes; develop, operate and administer housing programs which further its stated goals of improving the availability, affordability and quality of low and moderate income housing in the state; and make grants or loans to private nonprofit developers, local governments or private persons in furtherance of these goals. From and after July 1, 1999, the corporation shall not make loans or provide any form of assistance for the acquisition or construction of apartments.

(3) The corporation shall be composed of thirteen (13) members. The Governor, with the advice and consent of the Senate, shall appoint the members of the corporation, who shall be residents of the state and shall not hold other public office. There shall be at least one (1) member and not more than three (3) members appointed from each of the five (5) congressional districts in existence on January 1, 1989, and, in addition, (a) from and after September 1, 1980, (i) at least one (1) member shall have at least three (3) years' experience and background in the savings and loan association business, the commercial banking business or the mortgage banking business, (ii) at least one (1) member shall have at least three (3) years' experience and background in the residential housing construction industry, (iii) at least one (1) member shall have at least three (3) years' experience and background in the licensed residential housing brokerage business, and (iv) at least one (1) member shall be a member of the general public not engaged in any business, industry or activity described in clauses (i) through (iii) of this subparagraph; from and after September 1, 1989, (i) at least one (1) member shall have at least three (3) years' experience and background in the manufactured housing business; (ii) at least one (1) member shall have at least three (3) years' experience and background in nonprofit housing development in a Metropolitan Statistical Area (MSA); (iii) at least one (1) member shall have at least three (3) years' experience and background in nonprofit housing development outside a MSA; and (iv) at least (1) member shall be a low or moderate income person qualified for assistance under this article.

(4) Appointments shall be for terms of four (4) years. Each member shall hold office until his successor has been appointed and qualified. Vacancies shall be filled by appointment of the Governor, subject to the advice and consent of the Senate, for the length of the unexpired term only. Any member of the corporation shall be eligible for reappointment. Any member of the corporation may be removed by the Governor for misfeasance, malfeasance or willful neglect of duty after reasonable notice and a public hearing, unless the same are expressly waived in writing. Each member of the corporation shall before entering upon his duty take an oath of office to administer the duties of his office faithfully and impartially, and a record of such oath shall be filed in the office of the Secretary of State. The corporation shall annually elect from its membership a chairman who shall be eligible for reelection. The corporation shall annually elect from its membership a vice chairman who shall be eligible for reelection. The corporation shall also elect or appoint, and prescribe the duties of, such other officers (who need not be members) as the corporation deems necessary or advisable, and the corporation shall fix the compensation of such officers. The corporation may delegate to one or more of its members, officers, employees or agents such powers and duties as it may deem proper, not inconsistent with this article or other provisions of law.

(5) The Executive Director of the Department of Economic Development, the Director of the Veterans' Home Purchase Board and the State Treasurer shall serve as ex officio members of the corporation.

(6) In accomplishing its purposes, the corporation is acting in all respects for the benefit of the people of the state and the performance of essential public functions and is serving a vital public purpose in approving and otherwise promoting their health, welfare and prosperity, and the enactment of the provisions hereinafter set forth is for a valid public purpose and is hereby so declared to be such as a matter of express legislative determination.

(7) It is the intention of the Legislature by the enactment of this Section 43-33-704 to effect a recodification of the substance of the provisions of Section 43-33-507 as such section existed prior to its repeal by Laws, 1991, Chapter 528; and the creation of this new Section 43-33-704 shall not be construed to require that members of the corporation serving on June 30, 1991, who were appointed and confirmed under Section 43-33-507, be reappointed and reconfirmed in order to continue to serve out the remainder of their terms.

SECTION 3. Section 43-33-717, Mississippi Code of 1972, is amended as follows:

43-33-717. (1) The corporation shall have all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this article, including, but without limiting the generality of the foregoing, the power:

(a) To make and alter bylaws for its organization and internal management;

(b) To sue and be sued, have a seal and alter the same at pleasure, and maintain an office at such place or places in the state as it may determine;

(c) To appoint officers, agents and employees, prescribe their duties and qualifications, and fix their compensation;

(d) To acquire real or personal property, or any interest therein, by purchase, exchange, gift, assignment, transfer, foreclosure, lease, condemnation or otherwise, including rights or easements; to hold, manage, operate or improve real or personal property; to sell, assign, exchange, lease, encumber, mortgage or otherwise dispose of any real or personal property, or any interest therein, or deed of trust or mortgage lien interest owned by it or under its control, custody or in its possession and release or relinquish any right, title, claim, lien, interest, easement or demand however acquired, including any equity or right of redemption in property foreclosed by it and to do any of the foregoing by public sale;

(e) To make and execute agreements, contracts and other instruments necessary or convenient to the exercise of the powers and functions of the corporation under this article;

(f) To employ or contract with architects, engineers, attorneys, accountants, financial experts and other advisors as may be necessary in its judgment and to fix and pay their compensation;

(g) To make and execute contracts for the administration, servicing or collection of any mortgage loan and pay the reasonable value of services rendered to the corporation pursuant to such contracts;

(h) To contract for the employment of a financial advisor, underwriting attorneys, trustees, paying agents, depositories or any consultants retained in connection with the issuance of any bonds or notes including refunding bonds or notes or dealing with the disposition of any proceeds thereof;

(i) To issue negotiable bonds and notes and to provide for the rights of the holders thereof;

(j) Subject to any agreement with bondholders or noteholders, to sell any mortgage loans at public or private sale at the fair market value for such a mortgage; and

(k) Subject to any agreement with bondholders and noteholders, to make, alter or repeal such rules and regulations with respect to the operations, properties and facilities of the corporation as are necessary to carry out its functions and duties in the administration of this article.

(2) Subject to the provisions of subsection (6) of this section, the corporation shall also have the power:

(a) To make loans to mortgage lenders for the purpose of:

(i) Making housing development mortgage loans to qualified sponsors for low and moderate income rental or residential housing;

(ii) Making loans to low and moderate income purchasers of residential housing with preference to those who are displaced from adequate housing as a result of a major disaster, whether it be a man-made, technological or natural disaster, upon a declaration by the Governor that a major disaster exists in the state;

(b) To purchase from mortgage lenders any of the loans enumerated in subparagraphs (i) and (ii);

(c) To insure, reinsure or guarantee any of the types of loans enumerated in subparagraphs (i) and (ii);

(d) To make, in such amounts and upon such terms and conditions as the corporation shall approve, temporary loans, preconstruction loans, interim financing loans to any qualified sponsor and permanent financing to any qualified sponsor of multifamily housing.

(3) The corporation shall also have the power to make loans from funds not otherwise encumbered by pledge or indenture to low and moderate income persons for the following purposes:

(a) Purchasing, improving or rehabilitating existing residential housing and occupied by the owners;

(b) Making loans to qualified nonprofit sponsors, to local housing authorities and to owners of residential housing for the development, construction, purchase, rehabilitation, weatherization or maintenance of residential housing.

(4) Using funds not otherwise encumbered by pledge or indenture, the corporation may:

(a) Establish a rental assistance program;

(b) Provide such advisory consultation, training and educational services as will assist in the planning, construction, rehabilitation and operation of housing, including but not limited to, assistance in community development and organization, home management and advisory services for residents, and in promotion of community organizations and local governments to assist in developing housing;

(c) Encourage research and demonstration projects to develop new and better methods for increasing the supply, types and financing of housing and to receive and accept contributions, grants or aid from any source, public or private, including but not limited to the United States and this state, for carrying out this purpose;

(d) Encourage and stimulate cooperatives and other forms of housing with tenant participation;

(e) Promote innovative programs for home ownership, including but not limited to lease-purchase programs, employer-sponsored housing programs, tenant cooperatives and nonprofit associations;

(f) Design and support programs to address special needs groups including, but not limited to, handicapped, disabled, elderly, homeless, HIV/AIDS carriers and families with children;

(g) Develop a comprehensive plan for, and engage in a yearly planning process for, addressing the housing needs of low and moderate income persons in Mississippi.

(5) The corporation also has the power:

(a) To procure, or require the procurement of, insurance against any loss in connection with its operations, including without limitation the repayment of any mortgage loan or loans, in such amounts and from such insurers, including the federal government, as it may deem necessary or desirable, and to pay any premiums therefor;

(b) Subject to any agreement with bondholders or noteholders: (i) to renegotiate any loan in default; (ii) to waive any default or consent to the modification of the terms of any loan or agreement; (iii) to commence, prosecute and enforce a judgment in any action or proceeding, including without limitation a foreclosure proceeding, to protect or enforce any right conferred upon it by law, mortgage loan agreement, contract or other agreement; and in connection with any such proceeding, to bid for and purchase the property or acquire or take possession thereof and, in such event, complete, administer and pay the principal of and interest on any obligations incurred in connection with such property and dispose of and otherwise deal with such property in such manner as the corporation may deem advisable to protect its interest therein;

(c) To fix, revise, charge and collect fees and other charges in connection with the making of loans, the purchasing of mortgage loans, and any other services rendered by the corporation;

(d) To arrange for guarantees of its bonds, notes or other obligations by the federal government or by any private insurer and to pay any premiums therefor;

(e) Notwithstanding any law to the contrary, but subject to any agreement with bondholders or noteholders, to invest money of the corporation not required for immediate use, including proceeds from the sale of any bonds or notes;

(i) In obligations of any municipality or the state or the United States of America;

(ii) In obligations the principal and interest of which are guaranteed by the state or the United States of America;

(iii) In obligations of any corporation wholly owned by the United States of America;

(iv) In obligations of any corporation sponsored by the United States of America which are, or may become, eligible as collateral for advances to member banks as determined by the Board of Governors of the Federal Reserve System;

(v) In obligations of insurance firms or other corporations whose investments are rated "A" or better by recognized rating companies;

(vi) In certificates of deposit or time deposits of qualified depositories of the state as approved by the State Depository Commission, secured in such manner, if any, as the corporation shall determine;

(vii) In contracts for the purchase and sale of obligations of the type specified in items (i) through (v) above;

(viii) In repurchase agreements secured by obligations specified in items (i) through (v) above;

(ix) In money market funds, the assets of which are required to be invested in obligations specified in items (i) through (vi) above;

(f) Subject to any agreement with bondholders or noteholders, to purchase, and to agree to purchase, bonds or notes of the corporation at a price not exceeding: (i) if the bonds or notes are then redeemable, the redemption price then applicable plus accrued interest to the date of purchase; or (ii) if the bonds or notes are not then redeemable, the redemption price applicable on the first date after such purchase upon which the notes or bonds become subject to redemption at the option of the corporation plus accrued interest to the date of purchase;

(g) Subject to the provisions of this article, to contract for and to accept any gifts, grants or loans of funds or property or financial or other aid in any form from federal, state or local governments, private or public entities, or individuals;

(h) To enter into agreements or other transactions with the federal or state government, any agency thereof or any municipality in furtherance of the purposes of this article; to operate and administer loan programs of the federal government, the State of Mississippi, or any governmental agency thereof; and to operate and administer any program of housing assistance for persons and families of low or moderate income, however funded;

(i) To establish a benevolent loan fund, housing development fund, or such additional and further funds as may be necessary and desirable to accomplish any corporate purpose or to comply with the provisions of any agreement made by the corporation or any resolution approved by the corporation. The resolution establishing such a fund shall specify the source of monies from which it shall be funded and the purposes for which monies held in the fund shall be disbursed;

(j) In carrying out the provisions of this article, the corporation shall cooperate with the housing authorities created under Sections 43-33-1 through 43-33-69 and Sections 43-33-101 through 43-33-137, Mississippi Code of 1972;

(k) To accept letters of credit and other credit facilities necessary to make loans authorized herein to repay bonds or notes issued by the corporation;

(l) To do any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted in this article.

(6) From and after July 1, 1999, the corporation shall not make loans or provide any form of assistance for the acquisition or construction of apartments.

SECTION 4. Section 43-33-729, Mississippi Code of 1972, is amended as follows:

43-33-729. (1) The corporation may from time to time issue its negotiable bonds and notes in such principal amounts as, in the opinion of the corporation, shall be necessary to provide sufficient funds for achieving the corporate purposes thereof, including operating expenses and reserves, the payment of interest on bonds and notes of the corporation, establishment of reserves to secure such bonds and notes, and all other expenditures of the corporation incident to and necessary or convenient to carry out its corporate purposes and powers. From and after July 1, 1999, the corporation shall not issue bonds for the purpose of making loans or providing any form of assistance for the acquisition or construction of apartments. Provided, except as otherwise authorized herein, bonds and notes shall not be issued under this article in an aggregate principal amount exceeding One Hundred Ninety Million Dollars ($190,000,000.00), excluding bonds and notes issued to refund outstanding bonds and notes.

(2) The provisions of Sections 75-71-1 through 75-71-57, Mississippi Code of 1972 (the "Mississippi Securities Act"), shall not apply to bonds and notes issued under the authority of this article, and no application for a formal exemption from the provisions of such act shall be required with respect to such bonds and notes.

(3) Except as may otherwise be expressly provided by the corporation, all bonds and notes issued by the corporation shall be general obligations of the corporation, secured by the full faith and credit of the corporation and payable out of any monies, assets or revenues of the corporation, subject only to any agreement with the bondholders or noteholders pledging any particular monies, assets or revenues.

The corporation may issue bonds or notes to which the principal and interest are payable:

(a) Exclusively from the revenues of the corporation resulting from the use of the proceeds of such bonds or notes; or

(b) Exclusively from any particular revenues of the corporation, whether or not resulting from the use of the proceeds of such bonds or notes.

(4) Any bonds or notes issued by the corporation may be additionally secured:

(a) By private insurance, by a direct pay or standby letter of credit, or by any other credit enhancement facility procured by the corporation for the payment of any such bonds;

(b) By a pledge of any grant, subsidy or contribution from the United States or any agency or instrumentality thereof, or from the state or any agency, instrumentality or political subdivision thereof, or from any person, firm or corporation; or

(c) By the pledge of any securities, funds or reserves (or earnings thereon) available to the corporation.

(5) Bonds and notes issued by the corporation shall be authorized by a resolution or resolutions of the corporation adopted as provided for by this article; provided, that any such resolution authorizing the issuance of bonds or notes may delegate to an officer or officers of the corporation the power to issue such bonds or notes from time to time and to fix the details of any such issues of bonds or notes by an appropriate certification of such authorized officer.

(6) Except as specifically provided in this article, no notice, consent or approval by any governmental body or public officer shall be required as a prerequisite to the issuance, sale or delivery of any bonds or notes of the corporation pursuant to the provisions of this article. However, all bonds or notes issued pursuant to this article may be validated, except as otherwise provided in this section, in accordance with the provisions of Sections 31-13-1 through 31-13-11, Mississippi Code of 1972, in the same manner as provided therein for bonds issued by a municipality. Any such validation proceedings shall be held in the First Judicial District of Hinds County, Mississippi. Notice thereof shall be given by publication in any newspaper published in the City of Jackson, Mississippi, and of general circulation throughout the state.

(7) It is hereby determined that the corporation is the sole entity in the state authorized to issue bonds or notes for the purposes of financing low and moderate income rental or residential housing as set forth in this article. In addition, the corporation shall have the power to issue mortgage credit certificates, as provided by Section 25 of the Internal Revenue Code of 1954, as amended, and to comply with all of the terms and conditions set forth in Section 25, as the same may be amended from time to time.

SECTION 5. Section 43-33-759, Mississippi Code of 1972, is amended as follows:

43-33-759. There is hereby created in the State Treasury a special fund to be known as the Mississippi Affordable Housing Development Fund to be administered as a revolving fund for the provision of affordable housing to very low income, low income, and moderate income persons. The fund shall be used exclusively to support programs created or administered by the Mississippi Home Corporation under the powers granted to it by law. To this fund shall be deposited all loan repayments, penalties, and other fees and charges accruing to the fund, and any appropriations, donations, gifts, grants or loans which may be made thereto; however, no bond funds shall be deposited into the special fund unless authorized by the Legislature. From and after July 1, 1999, monies in the fund shall not be used for the purpose of making loans or providing any form of assistance for the acquisition or construction of apartments. Monies in the fund which are not currently needed for the programs of the Home Corporation shall be invested by the State Treasurer in such securities as are authorized for the investment of funds of the Home Corporation in Section 43-33-717(3)(e). The interest received on any such investment shall be credited to the fund. Monies remaining in the special fund at the end of a fiscal year shall not lapse into the state General Fund.

The State Fiscal Management Board is authorized and directed to draw warrants upon such funds from time to time upon requisition of the Home Corporation executed by its executive director, and the State Treasurer is hereby authorized and directed to pay such warrants. The Home Corporation shall have continuing authority to expend funds up to the maximum amount received into the special fund.

SECTION 6. This act shall take effect and be in force from and after July 1, 1999.