MISSISSIPPI LEGISLATURE

2000 Regular Session

To: Ways and Means

By: Representatives Morris, Smith (39th), McCoy, Reynolds

AN ACT TO AMEND SECTION 65-4-25, MISSISSIPPI CODE OF 1972, TO INCREASE THE AMOUNT OF STATE GENERAL OBLIGATION BONDS THAT MAY BE ISSUED UNDER THE ECONOMIC DEVELOPMENT HIGHWAY ACT; TO AMEND SECTION 57-1-307, MISSISSIPPI CODE OF 1972, TO INCREASE FROM $95,000,000.00 TO $103,500,000.00, THE AMOUNT OF BONDS THAT MAY BE ISSUED UNDER THE LOCAL GOVERNMENTS CAPITAL IMPROVEMENTS REVOLVING LOAN PROGRAM; TO AMEND SECTION 57-61-36, MISSISSIPPI CODE OF 1972, TO INCREASE FROM $9,000,000.00 TO $10,500,000.00, THE AMOUNT OF BONDS PROCEEDS THAT THE DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT MAY UTILIZE UNDER THE MISSISSIPPI BUSINESS INVESTMENT ACT FOR THE PURPOSE OF MAKING GRANTS TO COUNTIES AND MUNICIPALITIES UNDER THE DEVELOPMENT INFRASTRUCTURE GRANT PROGRAM; TO REQUIRE THE DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT TO UTILIZE NOT MORE THAN $750,000.00 OF THE BOND PROCEEDS UNDER THE MISSISSIPPI BUSINESS INVESTMENT ACT TO MATCH FEDERAL FUNDS AVAILABLE FROM THE UNITED STATES DEPARTMENT OF AGRICULTURE FOR THE PURPOSE OF ESTABLISHING AN INTERMEDIARY RELENDING PROGRAM TO BE ADMINISTERED BY THE DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT; TO AMEND SECTION 69-2-13, MISSISSIPPI CODE OF 1972, TO INCREASE FROM $16,000,000.00 TO $18,000,000.00, THE AMOUNT OF MONEY THAT MAY BE DRAWN FROM THE EMERGING CROPS FUND BY THE MISSISSIPPI BUSINESS FINANCE CORPORATION TO ASSIST IN PROVIDING FINANCING FOR MINORITY ECONOMIC DEVELOPMENT; TO AUTHORIZE THE MISSISSIPPI BUSINESS FINANCE CORPORATION TO PROVIDE SUCH ASSISTANCE; TO INCLUDE CONTRACTS WITH FEDERAL DEPARTMENTS AND AGENCIES IN THE TYPES OF CONTRACTS FOR WHICH THE MISSISSIPPI BUSINESS FINANCE CORPORATION WILL GUARANTEE BID, PERFORMANCE AND PAYMENT BONDS WHICH MINORITY BUSINESSES ARE REQUIRED TO OBTAIN FOR SUCH CONTRACTS; TO AMEND SECTION 69-2-19, MISSISSIPPI CODE OF 1972, TO INCREASE FROM $95,000,000.00 TO $97,000,000.00, THE AMOUNT OF BONDS THAT MAY BE ISSUED TO PROVIDE FUNDS FOR THE EMERGING CROPS FUND; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 65-4-25, Mississippi Code of 1972, is amended as follows:

65-4-25. The Mississippi Department of Economic and Community Development, acting through its executive director, is authorized, at one time or from time to time, to declare by resolution the necessity for issuance of negotiable general obligation bonds of the State of Mississippi to provide funds for the Economic Development Highway Fund established in Section 65-4-15, Mississippi Code of 1972. Upon the adoption of a resolution by the Executive Director of the Mississippi Department of Economic and Community Development, declaring the necessity for the issuance of any part or all of the general obligation bonds authorized by Sections 65-4-25 through 65-4-45, Mississippi Code of 1972, the executive director shall deliver a certified copy of his resolution or resolutions to the State Bond Commission. Upon receipt of same, the State Bond Commission, in its discretion, shall 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 principal amount of bonds issued under Sections 65-4-25 through 65-4-45, Mississippi Code of 1972, shall not exceed One Hundred Fifty Million Dollars ($150,000,000.00) in the aggregate. However, an additional amount of bonds may be issued under Sections 65-4-25 through 65-4-45, Mississippi Code of 1972, in an amount not to exceed Seven Million Dollars ($7,000,000.00), and the proceeds of any such additional bonds issued shall be used to provide funding for a high economic benefit project as defined in Section 65-4-5(1)(c)(vi), Mississippi Code of 1972.

SECTION 2. 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 One Hundred Three Million Five Hundred Thousand Dollars ($103,500,000.00); provided, however, that an additional amount of bonds may be issued under Sections 57-1-307 and 57-1-335 in an amount not to exceed Five Million Dollars ($5,000,000.00), and the proceeds of any such additional amount of bonds so issued shall be utilized solely 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.

(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 3. Section 57-61-36, Mississippi Code of 1972, is amended as follows:

57-61-36. (1) Notwithstanding any provision of this chapter to the contrary, the Department of Economic and Community Development shall utilize not more than Ten Million Five Hundred Thousand Dollars ($10,500,000.00) out of the proceeds of bonds authorized to be issued in this chapter for the purpose of making grants to municipalities through a development infrastructure grant fund to complete infrastructure related to new or expanded industry.

(2) Notwithstanding any provision of this chapter to the contrary, the Department of Economic and Community Development may utilize not more than Seven Million Dollars ($7,000,000.00) out of the proceeds of bonds authorized to be issued in this chapter for the purpose of making interest-bearing loans to any agency, department, institution, instrumentality or political subdivision of the state; or any agency, department, institution or instrumentality of any political subdivision of the state; or any business, organization, corporation, association or other legal entity meeting criteria established by the department, through a housing development revolving loan fund, to construct or repair housing for low or moderate income earners; provided, however, that the department may not utilize any bond proceeds authorized under this chapter for the purpose of making any loans to the Mississippi Home Corporation for any purpose whatsoever. No more than forty percent (40%) of the additional bonds authorized by this section in House Bill No. 1694, 1998 Regular Session [Laws, 1998, Chapter 559], may be used for multiple family housing activities. Funds authorized under this subsection may be deposited in the Mississippi Affordable Housing Development Fund authorized in Section 43-33-759 and used for purposes authorized by that section. This subsection (2) shall be repealed from and after July 1, 2001.

(3) Notwithstanding any provision of this chapter to the contrary, the Department of Economic and Community Development shall utilize not more than Five Million Dollars ($5,000,000.00) out of the proceeds of bonds authorized to be issued in this chapter for the purpose of making grants to municipalities through an equipment and public facilities grant fund to aid in

infrastructure-related improvements as determined by the Department of Economic and Community Development, the purchase of equipment and in the purchase, construction or repair and renovation of public facilities. Any bonds previously issued for the Development Infrastructure Revolving Loan Program which have not been loaned or applied for are eligible to be administered as grants.

The requirements of Section 57-61-9 shall not apply to any grant made under this subsection. The Department of Economic and Community Development may establish criteria and guidelines to govern grants made pursuant to this subsection.

(4) Notwithstanding any provision of this chapter to the contrary, the Department of Economic and Community Development shall utilize not more than Seven Hundred Fifty Thousand Dollars ($750,000.00) out of the proceeds of bonds authorized to be issued in this chapter in order to match federal funds available from the United States Department of Agriculture for the purpose of establishing an intermediary relending program to be administered by the Department of Economic and Community Development. The Department of Economic and Community Development may establish criteria and guidelines to govern loans made under such program.

SECTION 4. Section 69-2-13, Mississippi Code of 1972, is amended as follows:

69-2-13. (1) There is hereby established in the State Treasury a fund to be known as the "Emerging Crops Fund," which shall be used to pay the interest on loans made to farmers for nonland capital costs of establishing production of emerging crops on land in Mississippi, and to make loans and grants which are authorized under this section to be made from the fund. The fund shall be administered by the Mississippi Department of Economic and Community Development. A board comprised of the directors of the department, the Mississippi Cooperative Extension Service, the Mississippi Small Farm Development Center and the Mississippi Agricultural and Forestry Experiment Station, or their designees, shall develop definitions, guidelines and procedures for the implementation of this chapter. Funds for the Emerging Crops Fund shall be provided from the issuance of bonds or notes under Sections 69-2-19 through 69-2-37 and from repayment of interest loans made from the fund.

(2) (a) The Mississippi Business Finance Corporation shall develop a program which gives fair consideration to making loans for the processing and manufacturing of goods and services by agribusiness and small business concerns. It is the policy of the State of Mississippi that such corporation shall give due recognition to and shall aid, counsel, assist and protect, insofar as is possible, the interests of agribusiness and small business concerns. To ensure that the purposes of this subsection are carried out, the corporation shall loan not more than One Million Dollars ($1,000,000.00) to finance any single agribusiness or small business concern. Loans made pursuant to this subsection shall be made in accordance with the criteria established in Section 57-71-11.

(b) The Mississippi Business Finance Corporation may, out of the total amount of bonds authorized to be issued under this chapter, make available funds to any planning and development district in accordance with the criteria established in Section 57-71-11. Planning and development districts which receive monies pursuant to this provision shall use such monies to make loans to private companies for purposes consistent with this subsection.

(c) The Mississippi Business Finance Corporation is hereby authorized to engage legal services, financial advisors, appraisers and consultants if needed to review and close loans made hereunder and to establish and assess reasonable fees including, but not limited to, liquidation expenses.

(3) The department shall, in addition to the other programs described in this section, provide for a program of loans to be made to agribusiness enterprises for the purpose of encouraging thereby the extension of conventional financing and the issuance of letters of credit to such agribusiness enterprises by private institutions. Monies to make such loans by the department shall be drawn from the Emerging Crops Fund. The amount of a loan to any single agribusiness enterprise shall not exceed twenty percent (20%) of the total cost of the project for which financing is sought or Two Hundred Thousand Dollars ($200,000.00), whichever is less. No interest shall be charged on such loans, and only the amount actually loaned shall be required to be repaid. Repayments shall be deposited into the Emerging Crops Fund.

(4) Through June 30, 2001, the Mississippi Business Finance Corporation may loan or grant to qualified planning and development districts, and to small business investment corporations, bank-based community development corporations, the Recruitment and Training Program, Inc., the City of Jackson Business Development Loan Fund, the Lorman Southwest Mississippi Development Corporation, the West Jackson Community Development Corporation, the East Mississippi Development Corporation, and other entities meeting the criteria established by the Mississippi Business Corporation (all referred to hereinafter as "qualified entities"), funds for the purpose of establishing loan revolving funds to assist in providing financing for minority economic development. The monies loaned or granted by the Mississippi Business Finance Corporation shall be drawn from the Emerging Crops Fund and shall not exceed Eighteen Million Dollars ($18,000,000.00) in the aggregate. Planning and development districts or qualified entities which receive monies pursuant to this provision shall use such monies to make loans to minority business enterprises consistent with criteria established by the Mississippi Business Finance Corporation. Such criteria shall include, at a minimum, the following:

(a) The business enterprise must be a private, for-profit enterprise.

(b) If the business enterprise is a proprietorship, the borrower must be a resident citizen of the State of Mississippi; if the business enterprise is a corporation or partnership, at least fifty percent (50%) of the owners must be resident citizens of the State of Mississippi.

(c) The borrower must have at least five percent (5%) equity interest in the business enterprise.

(d) The borrower must demonstrate ability to repay the loan.

(e) The borrower must not be in default of any previous loan from the state or federal government.

(f) Loan proceeds may be used for financing all project costs associated with development or expansion of a new small business, including fixed assets, working capital, start-up costs, rental payments, interest expense during construction and professional fees related to the project.

(g) Loan proceeds shall not be used to pay off existing debt for loan consolidation purposes; to finance the acquisition, construction, improvement or operation of real property which is to be held primarily for sale or investment; to provide for, or free funds, for speculation in any kind of property; or as a loan to owners, partners or stockholders of the applicant which do not change ownership interest by the applicant. However, this does not apply to ordinary compensation for services rendered in the course of business.

(h) The maximum amount that may be loaned to any one (1) borrower shall be Two Hundred Fifty Thousand Dollars ($250,000.00).

(i) The Mississippi Business Finance Corporation shall review each loan before it is made, and no loan shall be made to any borrower until the loan has been reviewed and approved by the Mississippi Business Finance Corporation.

For the purpose of this subsection, the term "minority business enterprise" 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 minorities or minority business enterprises certified by the Mississippi Business Finance Corporation, at least fifty percent (50%) of whom are resident citizens of the State of Mississippi. For purposes of this subsection, 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)), or women, and the term "owned and controlled" means a business in which one or more minorities or minority business enterprises certified by the Mississippi Business Finance Corporation own sixty percent (60%) or, in the case of a corporation, sixty percent (60%) of the voting stock, and control sixty percent (60%) of the management and daily business operations of the business.

From and after July 1, 1999, monies not loaned or granted by the Business Finance Corporation to planning and development districts or qualified entities under this subsection, and monies not loaned by planning and development districts or qualified entities, shall be deposited to the credit of the sinking fund created and maintained in the State Treasury for the retirement of bonds issued under Section 69-2-19.

(5) The Mississippi Business Finance Corporation shall develop a program which will assist minority business enterprises by guaranteeing bid, performance and payment bonds which such minority businesses are required to obtain in order to contract with state agencies, political subdivisions, federal agencies or federal departments. Monies for such program shall be drawn from the monies allocated under subsection (4) of this section to assist the financing of minority economic development and shall not exceed Two Million Dollars ($2,000,000.00) in the aggregate. The Mississippi Business Finance Corporation may promulgate rules and regulations for the operation of the program established pursuant to this subsection. For the purpose of this subsection (5) the term "minority business enterprise" has the meaning assigned such term in subsection (4) of this section.

(6) The Mississippi Business Finance Corporation may loan or grant to public entities and to nonprofit corporations funds to defray the expense of financing (or to match any funds available from other public or private sources for the expense of financing) projects in this state which are devoted to the study, teaching and/or promotion of regional crafts and which are deemed by the corporation to be significant tourist attractions. The monies loaned or granted shall be drawn from the Emerging Crops Fund and shall not exceed Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate.

(7) Through June 30, 1998, the Mississippi Business Finance Corporation shall make available to the Mississippi Department of Agriculture and Commerce funds for the purpose of establishing loan revolving funds and other methods of financing for agribusiness programs administered under the Mississippi Agribusiness Council Act of 1993. The monies made available by the Mississippi Business Finance Corporation shall be drawn from the Emerging Crops Fund and shall not exceed Seven Hundred Thousand Dollars ($700,000.00) in the aggregate. The Mississippi Department of Agriculture and Commerce shall establish control and auditing procedures for use of these funds. These funds will be used primarily for quick payment to farmers for vegetable and fruit crops processed and sold through vegetable processing plants associated with the Department of Agriculture and Commerce and the Mississippi State Extension Service.

(8) From and after July 1, 1996, the Mississippi Business Finance Corporation shall make available to the Mississippi Small Farm Development Center One Million Dollars ($1,000,000.00) to be used by the center to assist small entrepreneurs as provided in Section 37-101-25, Mississippi Code of 1972. The monies made available by the Mississippi Business Finance Corporation shall be drawn from the Emerging Crops Fund.

(9) The Mississippi Business Finance Corporation shall make available to the Mississippi Department of Agriculture and Commerce for disbursement, upon warrant or warrants issued by the State Fiscal Officer upon requisitions made by the Commissioner of Agriculture and Commerce, or his designee, to the Certified Cotton Growers Organization, as defined in Section 69-37-5, funds on a one-time basis in a lump sum, an amount not to exceed Two Million Dollars ($2,000,000.00) for the purpose of assisting in carrying out the purposes of the Mississippi Boll Weevil Management Act. The monies made available by the Mississippi Business Finance Corporation shall be drawn from the Emerging Crops Fund. This subsection (9) shall be repealed from and after June 30, 1999.

(10) Upon request by resolution of the Board of Directors of the Institute for Technology Development and the Mississippi Agribusiness Council, the Mississippi Business Finance Corporation shall make available to the Institute for Technology Development on a one-time basis, an amount not to exceed Two Hundred Fifty Thousand Dollars ($250,000.00) from the cash balance of the Emerging Crops Fund to support the development of a cooperative program for agribusiness development with the Alternative Agriculture Research and Commercialization Program (AARC) of the United States Department of Agriculture.

(11) The Mississippi Business Finance Corporation shall make available to the Mississippi Forestry Commission on a lump sum amount not to exceed Five Hundred Thousand Dollars ($500,000.00) to be drawn from the Emerging Crop Fund and used for the commission's Reforestation Cost-Share Program. This subsection (11) shall be repealed from and after June 30, 1999.

(12) The Mississippi Business Finance Corporation shall make available to the Mississippi Forestry Commission for fiscal year 1999 a lump sum amount not to exceed Three Million Dollars ($3,000,000.00) to be drawn from the Emerging Crop Fund and used for the purpose of replacing fire fighting units/equipment. This subsection (12) shall be repealed from and after June 30, 1999.

(13) In addition to the amount provided in subsection (11) of this section, the Mississippi Business Finance Corporation shall make available to the Mississippi Forestry Commission for fiscal year 1999 a lump sum amount not to exceed Five Hundred Thousand Dollars ($500,000.00) to be drawn from the Emerging Crop Fund and used for the commission's Reforestation Cost-Share Program. This subsection (13) shall be repealed from and after June 30, 1999.

(14) The Mississippi Business Finance Corporation shall make available to the Small Farm Development Center at Alcorn State University for fiscal year 1999 funds in the amount of Fifty Thousand Dollars ($50,000.00) and for fiscal year 2000 funds in the amount of Fifty Thousand Dollars ($50,000.00) to be drawn from the Emerging Crops Fund to support a cooperative program for agribusiness development in Mississippi. This subsection (14) shall be repealed from and after June 30, 2000.

SECTION 5. Section 69-2-19, Mississippi Code of 1972, is amended as follows:

69-2-19. The State Department of Economic and Community Development is authorized, at one (1) time or from time to time, to declare by resolution the necessity for issuance of negotiable general obligation bonds of the State of Mississippi to provide funds for the Emerging Crops Fund established in Section 69-2-13. Upon the adoption of a resolution by the board, declaring the necessity for the issuance of any part or all of the general obligation bonds authorized by Sections 69-2-19 through 69-2-39, the department shall deliver a certified copy of its resolution or resolutions to the State Bond Commission. Upon receipt of same, the State Bond Commission, in its discretion, shall 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 amount of bonds issued under Sections 69-2-19 through 69-2-39 shall not exceed Ninety-seven Million Dollars ($97,000,000.00) in the aggregate. No bonds may be issued under Sections 69-2-19 through 69-2-39 after October 1, 2003.

SECTION 6. This act shall take effect and be in force from and after July 1, 2000.