MISSISSIPPI LEGISLATURE

2000 Regular Session

To: Ways and Means

By: Representative Flaggs

AN ACT TO REVISE THE MISSISSIPPI MINORITY BUSINESS ENTERPRISE ACT; TO ESTABLISH THE MINORITY BUSINESS ENTERPRISE FINANCE PROGRAM FOR THE PURPOSE OF MAKING LOANS TO QUALIFIED MINORITY BUSINESS ENTERPRISES, IN ORDER TO ENHANCE OPPORTUNITIES FOR PARTICIPATION IN PUBLIC CONTRACTS; TO SET FORTH THE REQUIREMENTS OF THE LOAN PROGRAM; TO AMEND SECTION 57-69-5, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE OFFICE OF MINORITY BUSINESS ENTERPRISES WITHIN THE DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT TO CONDUCT A DISPARITY STUDY OF BARRIERS TO EQUAL PARTICIPATION BY QUALIFIED MINORITY OWNED BUSINESSES IN ALL STATE AGENCY AND EDUCATIONAL INSTITUTION CONTRACTS; TO ALLOW THE EXECUTIVE DIRECTOR OF THE OFFICE TO AUTHORIZE THE MAKING OF LOANS TO QUALIFIED MINORITY BUSINESS ENTERPRISES; TO PROVIDE THAT THE OFFICE SHALL ESTABLISH FIVE REGIONAL BUREAUS THROUGHOUT THE STATE IN LOCATIONS ACCESSIBLE TO RURAL COMMUNITIES, IN ORDER TO MAKE SERVICES PROVIDED BY THE OFFICE AVAILABLE TO ALL RESIDENTS; TO AMEND SECTION 57-69-9, MISSISSIPPI CODE OF 1972, TO CLARIFY THAT REQUIRED ANNUAL REPORTS MADE BY STATE AGENCIES AND EDUCATIONAL INSTITUTIONS, ABOUT THE PARTICIPATION OF MINORITY BUSINESS ENTERPRISES IN THE PUBLIC WORKS AND PROCUREMENT CONTRACTS EXECUTED BY THE AGENCIES AND INSTITUTIONS, BE MADE TO THE GOVERNOR AND THE LEGISLATURE; TO AMEND SECTIONS 57-69-3 AND 57-69-7, MISSISSIPPI CODE OF 1972, TO MAKE NOMENCLATURE CORRECTIONS; TO AUTHORIZE THE ISSUANCE OF GENERAL OBLIGATION BONDS OF THE STATE OF MISSISSIPPI IN THE AMOUNT OF ONE MILLION DOLLARS, FOR THE PURPOSE OF PROVIDING FUNDS FOR THE IMPLEMENTATION OF THE MINORITY BUSINESS ENTERPRISE FINANCE PROGRAM; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 57-69-3, Mississippi Code of 1972, is amended as follows:

57-69-3. Unless the context requires otherwise, the following words shall have the following meanings for the purposes of this chapter:

(a) "Class of contract basis" means an entire group of contracts having a common characteristic.

(b) "Commercially useful function" means being responsible for execution of a contract or a distinct element of the work under a contract by actually performing, managing, and supervising the work involved.

(c) "Contract" means all types of state agreements, regardless of what they may be called, for the purchase of supplies or services or for construction or major repairs. "Contract" includes the following:

(i) Awards and notices of award.

(ii) Contracts of a fixed price, cost, cost-plus-a-fixed-fee, or incentive types.

(iii) Contracts providing for the issuance of job or task orders.

(iv) Leases.

(v) Letter contracts.

(vi) Purchase orders.

(vii) Any supplemental agreements with respect to (i) through (vi) of this subparagraph.

(d) "Contracting base" means the dollar amount of contracts for public works and procurement of goods and services awarded by a state agency or a state educational institution during a fiscal year.

(e) "Contract by contract basis" means a single contract within a specific class of contracts.

(f) "Contractor" means a party who enters into a contract to provide a state or educational institution with goods or services, including construction, or a subcontractor or sublessee of such a party.

(g) "Director" means the Executive Director of the Office of Minority Business Enterprises of the Department of Economic and Community Development.

(h) "Educational institutions" mean the state universities, vocational institutions, and any other state-supported educational institutions.

(i) "Joint venture" means an association of two (2) or more persons or businesses to carry out a single business enterprise for profit for which purpose they combine their property, capital, efforts, skills, and knowledge, and in which they exercise control and share in profits and losses in proportion to their contribution to the enterprise.

(j) "Minority" means a person who is a citizen or lawful permanent resident of the United States and who is:

(i) Black: having origins in any of the black racial groups of Africa.

(ii) Hispanic: of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish or Portuguese culture or origin regardless of race.

(iii) Asian American: having origins in any of the original peoples of the Far East, Southeast Asia, the Indian subcontinent, or the Pacific Islands.

(iv) American Indian or Alaskan Native: having origins in any of the original peoples of North America.

(v) Female.

(k) "Minority business enterprise" or "minority owned business" means a socially and economically disadvantaged small business concern organized for profit performing a commercially useful function which is owned and controlled by one or more individuals or minority business enterprises certified by the office, at least seventy-five percent (75%) of whom are resident citizens of the State of Mississippi. For purposes of this subparagraph, the term "socially and economically disadvantaged small business concern" shall have the meaning ascribed to such term under the Small Business Act (15 USCS, Section 637(a)). Owned and controlled means a business in which one or more minorities or minority business enterprises certified by the office own at least fifty-one percent (51%) or in the case of a corporation at least fifty-one percent (51%) of the voting stock and control at least fifty-one percent (51%) of the management and daily business operations of the business.

(l) "Office" means the Office of Minority Business Enterprises of the Mississippi Department of Economic and Community Development.

(m) "Procurement" means the purchase, lease, or rental of any goods or services.

(n) "Commodities" mean the various items described in Section 31-7-1(e).

(o) "Professional services" mean all personal service contracts utilized by state agencies and institutions.

(p) "Small business" means a small business as defined by the Small Business Administration of the United States Government which for purposes of size eligibility or other factors meets the applicable criteria set forth in Part 121 of Title 13 of the Code of Federal Regulations as amended, and which has its principal place of business in Mississippi.

(q) "State agency" includes the State of Mississippi and all agencies, departments, offices, divisions, boards, commissions, and correctional and other types of institutions. "State agency" does not include the judicial or legislative branches of government except to the extent that procurement or public works for these branches is performed by a state agency.

SECTION 2. Section 57-69-5, Mississippi Code of 1972, is amended as follows:

57-69-5. (1) There is hereby created the Office of Minority Business Enterprises of the Department of Economic and Community Development under the Department of Economic and Community Development. The Executive Director of the Department of Economic and Community Development shall appoint an executive director for the office. The executive director may employ a staff, subject to approval of the Executive Director of the Department of Economic and Community Development, as necessary to carry out the purposes of this office. Further, the executive director may authorize the making of loans to qualified minority business enterprises in accordance with Section 5 of this act.

(2) The office shall perform the following:

(a) Develop, plan and implement programs to provide an opportunity for participation by qualified minority owned businesses in public works and the process by which goods and services are procured by state agencies and educational institutions from the private sector;

(b) Develop a comprehensive plan encouraging that qualified minority owned businesses are provided an opportunity to participate in public contracts for public works and commodities and services;

(c) Identify and research barriers to equal participation by qualified minority owned businesses in all state agency and educational institution contracts, and subject to funding by legislative appropriation, conduct a formal disparity study of those barriers to equal participation;

(d) Develop and maintain a central minority business enterprise certification list for all state agencies and educational institutions. Size of business or length of time in business shall not be considered a prerequisite for inclusion on the certification list;

(e) Adopt rules for the implementation of this chapter;

(f) Develop and maintain a central minority business enterprise certification program;

(g) Submit an annual report to the Governor and the Legislature outlining the progress and economic impact on the public and private sectors of implementing this chapter;

(h) Increase efforts to inform minority businesses of state government procurement procedures and policies;

(i) Serve as the principal advocate in the state on behalf of minority business enterprises and provide advice in the consideration of administrative requirements and legislation that affect minority business enterprises;

(j) Evaluate the effectiveness of efforts of state agencies and other entities to assist minority business enterprises and make appropriate recommendations to assist the development and strengthening of minority business enterprises;

(k) Determine the availability of financial and other resources to minority business enterprises and recommend methods for:

(i) Increasing the availability of equity capital and other forms of financial assistance to minority business enterprises;

(ii) Generating markets for the goods and services of minority business enterprises;

(iii) Providing more effective education, training and management and technical assistance to minority business enterprises; and

(iv) Providing assistance to minority business enterprises in complying with federal, state and local laws;

(l) Serve as a focal point for receiving complaints and suggestions concerning state government policies and activities that affect minority business enterprises;

(m) Develop and advocate proposals for changes in state policies and activities that adversely affect minority business enterprises;

(n) Provide to legislative committees and state agencies information on the effects of proposed policies or actions that affect minority business enterprises;

(o) Enlist the assistance of public and private agencies, businesses and other organizations in disseminating information about state programs and services that benefit minority business enterprises and information regarding means by which minority business enterprises can use those programs and services;

(p) Identify sources of financial assistance for minority business enterprises, match minority business enterprises with sources of financial assistance, and assist minority business enterprises with the preparation of applications for loans from governmental or private sources;

(q) Sponsor meetings, to the extent practicable in cooperation with public and private educational institutions, to provide training and disseminate information beneficial to minority business enterprises;

(r) Assist minority business enterprises in their dealings with federal, state and local governmental agencies and provide information regarding governmental requirements affecting minority business enterprises;

(s) Develop and implement programs to encourage governmental agencies, public sector business associations and other organizations to provide useful services to minority business enterprises;

(t) Use available resources within the state, such as minority business enterprise development centers, educational institutions and nonprofit associations, to coordinate the provision of management and technical assistance to minority business enterprises in a systematic manner;

(u) Publish newsletters, brochures and other documents containing information useful to minority business enterprises;

(v) Identify successful minority business enterprise assistance programs provided by other states and determine the feasibility of adapting those programs for implementation in Mississippi;

(w) Establish an outreach program to make the existence of the office known to minority business enterprises and potential clients throughout the state; and

(x) Identify potential business opportunities for minority business enterprises and develop programs to maximize those opportunities.

(3) The office shall establish five (5) regional bureaus throughout the state in locations that would be easily accessible to predominately rural communities, in order to make all services provided by the Office of Minority Business Enterprises better available to state residents. The executive director of the office shall appoint the chief of each bureau, and each bureau chief may employ a staff as necessary to carry out the purposes of the office, subject to approval of the executive director.

SECTION 3. Section 57-69-7, Mississippi Code of 1972, is amended as follows:

57-69-7. The Executive Director of the Department of Economic and Community Development shall certify minority business enterprises that qualify as such. The director shall establish criteria by which minority business enterprises may qualify for certification.

SECTION 4. Section 57-69-9, Mississippi Code of 1972, is amended as follows:

57-69-9. Each state agency and educational institution shall report the participation of minority business enterprises in the public works and procurement contracts executed by the agency or institution. The reports shall be made to the Governor and the Legislature on an annual basis.

SECTION 5. (1) There is established, under the direction of the Office of Minority Business Enterprises of the Department of Economic and Community Development, a program to be known as the Mississippi Minority Business Enterprise Finance Program for the purpose of making loans to qualified minority business enterprises in order to enhance opportunities for those enterprises to participate in public contracts for public works and commodities and services.

(2) Requisite qualifications of eligible enterprises and criteria for making loans to an individual enterprise shall be developed by the office and approved by the Executive Director of the Department of Economic and Community Development.

(3) No loan made under the provisions of this section shall be in an amount exceeding Fifty Thousand Dollars ($50,000.00), and the maximum loan term shall not exceed twenty (20) years.

(4) The interest rate on such loans shall not be less than the net interest rate on the bonds issued under this section to finance the loan being repaid.

(5) No loan shall be made under this section to finance any existing debt.

SECTION 6. (1) As used in this section, the following words shall have the meanings ascribed herein unless the context clearly requires otherwise:

(a) "Accreted value" of any bond means, as of any date of computation, an amount equal to the sum of (i) the stated initial value of such bond, plus (ii) the interest accrued thereon from the issue date to the date of computation at the rate, compounded semiannually, that is necessary to produce the approximate yield to maturity shown for bonds of the same maturity.

(b) "State" means the State of Mississippi.

(c) "Commission" means the State Bond Commission.

(2) (a) (i) A special fund, to be designated as the "2000 Minority Business Enterprise Finance Fund" is created within the State Treasury. The fund shall be maintained by the State Treasurer as a separate and special fund, separate and apart from the General Fund of the state. 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 or investment earnings on amounts in the fund shall be deposited into such fund.

(ii) Monies deposited into the fund shall be disbursed, in the discretion of the Department of Finance and Administration, to the Office of Minority Business Enterprises of the Department of Economic and Community Development for making loans pursuant to the program established in Section 5 of this act.

(b) Amounts deposited into such special fund shall be disbursed to pay the costs of the program described in paragraph (a) of this subsection. Promptly after the commission has certified, by resolution duly adopted, that the program described in subsection (1) shall have been terminated, abandoned, or has not been utilized in a timely fashion, any amounts remaining in such special fund shall be applied to pay debt service on the bonds issued under this act, in accordance with the proceedings authorizing the issuance of such bonds and as directed by the commission.

(c) The Department of Finance and Administration, acting through the Department of Economic and Community Development, is expressly authorized and empowered to receive and expend any local or other source funds in connection with the expenditure of funds provided for in this subsection. The expenditure of monies deposited into the special fund shall be under the direction of the Department of Finance and Administration, and such funds shall be paid by the State Treasurer upon warrants issued by such department, which warrants shall be issued upon requisitions signed by the Executive Director of the Department of Finance and Administration or his designee. (3) (a) The 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 subsection (2) of this section. Upon the adoption of a resolution by the Department of Finance and Administration, declaring the necessity for the issuance of any part or all of the general obligation bonds authorized by this subsection, the Department of Finance and Administration shall deliver a certified copy of its resolution or resolutions to the commission. Upon receipt of such resolution, the 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 this section shall not exceed One Million Dollars ($1,000,000.00).

(b) Any investment earnings on amounts deposited into the special fund created in subsection (2) of this section shall be used to pay debt service on bonds issued under this section, in accordance with the proceedings authorizing issuance of such bonds.

(4) The principal of and interest on the bonds authorized under this section shall be payable in the manner provided in this subsection. Such bonds shall bear such date or dates, be in such denomination or denominations, bear interest at such rate or rates (not to exceed the limits set forth in Section 75-17-101, Mississippi Code of 1972), be payable at such place or places within or without the State of Mississippi, shall mature absolutely at such time or times not to exceed twenty-five (25) years from date of issue, be redeemable before maturity at such time or times and upon such terms, with or without premium, shall bear such registration privileges, and shall be substantially in such form, all as shall be determined by resolution of the commission.

(5) The bonds authorized by this section shall be signed by the chairman of the commission, or by his facsimile signature, and the official seal of the commission shall be affixed thereto, attested by the secretary of the commission. The interest coupons, if any, to be attached to such bonds may be executed by the facsimile signatures of such officers. Whenever any such bonds shall have been signed by the officials designated to sign the bonds who were in office at the time of such signing but who may have ceased to be such officers before the sale and delivery of such bonds, or who may not have been in office on the date such bonds may bear, the signatures of such officers upon such bonds and coupons shall nevertheless be valid and sufficient for all purposes and have the same effect as if the person so officially signing such bonds had remained in office until their delivery to the purchaser, or had been in office on the date such bonds may bear. However, notwithstanding anything herein to the contrary, such bonds may be issued as provided in the Registered Bond Act of the State of Mississippi.

(6) All bonds and interest coupons issued under the provisions of this section have all the qualities and incidents of negotiable instruments under the provisions of the Mississippi Uniform Commercial Code, and in exercising the powers granted by this section, the commission shall not be required to and need not comply with the provisions of the Mississippi Uniform Commercial Code.

(7) The commission shall act as the issuing agent for the bonds authorized under this section, prescribe the form of the bonds, advertise for and accept bids, issue and sell the bonds so authorized to be sold, pay all fees and costs incurred in such issuance and sale, and do any and all other things necessary and advisable in connection with the issuance and sale of such bonds. The commission is authorized and empowered to pay the costs that are incident to the sale, issuance and delivery of the bonds authorized under this section from the proceeds derived from the sale of such bonds. The commission shall sell such bonds on sealed bids at public sale, and for such price as it may determine to be for the best interest of the State of Mississippi, but no such sale shall be made at a price less than par plus accrued interest to the date of delivery of the bonds to the purchaser. All interest accruing on such bonds so issued shall be payable semiannually or annually; however, the first interest payment may be for any period of not more than one (1) year.

Notice of the sale of any such bonds shall be published at least one (1) time, not less than ten (10) days before the date of sale, and shall be so published in one or more newspapers published or having a general circulation in the City of Jackson, Mississippi, and in one or more other newspapers or financial journals with a national circulation, to be selected by the commission.

The commission, when issuing any bonds under the authority of this section, may provide that bonds, at the option of the State of Mississippi, may be called in for payment and redemption at the call price named therein and accrued interest on such date or dates named therein.

(8) The bonds issued under the provisions of this section are general obligations of the State of Mississippi, and for the payment thereof the full faith and credit of the State of Mississippi is irrevocably pledged. If the funds appropriated by the Legislature are insufficient to pay the principal of and the interest on such bonds as they become due, then the deficiency shall be paid by the State Treasurer from any funds in the State Treasury not otherwise appropriated. All such bonds shall contain recitals on their faces substantially covering the provisions of this section.

(9) Upon the issuance and sale of bonds under the provisions of this section, the commission shall transfer the proceeds of any such sale or sales to the special fund created in subsection (2) of this section. The proceeds of such bonds shall be disbursed solely upon the order of the Department of Finance and Administration under such restrictions, if any, as may be contained in the resolution providing for the issuance of the bonds.

(10) The bonds authorized under this section may be issued without any other proceedings or the happening of any other conditions or things other than those proceedings, conditions and things which are specified or required by this section. Any resolution providing for the issuance of bonds under the provisions of this section shall become effective immediately upon its adoption by the commission, and any such resolution may be adopted at any regular or special meeting of the commission by a majority of its members.

(11) The bonds authorized under the authority of this section may be validated in the Chancery Court of the First Judicial District of Hinds County, Mississippi, in the manner and with the force and effect provided by Chapter 13, Title 31, Mississippi Code of 1972, for the validation of county, municipal, school district and other bonds. The notice to taxpayers required by such statutes shall be published in a newspaper published or having a general circulation in the City of Jackson, Mississippi.

(12) Any holder of bonds issued under the provisions of this section or of any of the interest coupons pertaining thereto may, either at law or in equity, by suit, action, mandamus or other proceeding, protect and enforce any and all rights granted under this section, or under such resolution, and may enforce and compel performance of all duties required by this section to be performed, in order to provide for the payment of bonds and interest thereon.

(13) All bonds issued under the provisions of this section shall be legal investments for trustees and other fiduciaries, and for savings banks, trust companies and insurance companies organized under the laws of the State of Mississippi, and such bonds shall be legal securities which may be deposited with and shall be received by all public officers and bodies of this state and all municipalities and political subdivisions for the purpose of securing the deposit of public funds.

(14) Bonds issued under the provisions of this section and income therefrom shall be exempt from all taxation in the State of Mississippi.

(15) The proceeds of the bonds issued under this section shall be used solely for the purposes herein provided, including the costs incident to the issuance and sale of such bonds.

(16) The State Treasurer is authorized, without further process of law, to certify to the Department of Finance and Administration the necessity for warrants, and the Department of Finance and Administration is authorized and directed to issue such warrants, in such amounts as may be necessary to pay when due the principal of, premium, if any, and interest on, or the accreted value of, all bonds issued under this section; and the State Treasurer shall forward the necessary amount to the designated place or places of payment of such bonds in ample time to discharge such bonds, or the interest thereon, on the due dates thereof.

(17) This section shall be deemed to be full and complete authority for the exercise of the powers herein granted, but this section shall not be deemed to repeal or to be in derogation of any existing law of this state.

SECTION 7. Section 5 of this act shall be codified as a separate code section in Chapter 69, Title 57, Mississippi Code of 1972. Section 6 of this act shall not be codified in the Mississippi Code of 1972.

SECTION 8. This act shall take effect and be in force from and after July 1, 2000.