House Bill 1649

AN ACT TO REVISE THE PROCESS BY WHICH NONPROFIT, NONSHARE WATER ASSOCIATIONS MAY CONVERT TO PUBLIC WATER DISTRICTS; TO CREATE NEW SECTION 19-5-166, MISSISSIPPI CODE OF 1972, TO PRESCRIBE THE PROCESS BY WHICH THE BOARD OF DIRECTORS OF A NONPROFIT WATER ASSOCIATION MAY CONVERT THE ASSOCIATION INTO A WATER DISTRICT WITHOUT THE NECESSITY OF A PUBLIC HEARING AND PUBLICATION CONCERNING THE CONVERSION; TO AMEND SECTION 19-5-151, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; TO AMEND SECTION 19-5-153, MISSISSIPPI CODE OF 1972, TO DELETE THE REQUIREMENT THAT THE BOARD OF DIRECTORS OF THE NONPROFIT WATER ASSOCIATION MUST PETITION THE BOARD OF SUPERVISORS IN ORDER TO BECOME A WATER DISTRICT; TO AMEND SECTIONS 19-5-165 AND 19-5-167, MISSISSIPPI CODE OF 1972, IN CONFORMITY TO THE PROVISIONS OF THIS ACT; TO AMEND SECTION 19-5-189, MISSISSIPPI CODE OF 1972, TO DELETE THE PROHIBITION AGAINST BOARDS OF SUPERVISORS LEVYING AN AD VALOREM TAX ON BEHALF OF NEWLY CONVERTED WATER DISTRICTS; AND FOR RELATED PURPOSES.

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

SECTION 1. The following shall be codified as Section 19-5-166, Mississippi Code of 1972:

19-5-166. (1) If the board of directors of a nonprofit, nonshare rural waterworks corporation desires to convert into and become reconstituted and reincorporated as a water district under this section, the board of directors shall file the following with the board of supervisors of the county or counties in which the area served by the corporation is situated:

(a) A resolution duly adopted by the board of directors of the nonprofit, nonshare corporation which evidences the desire of the corporation to convert into and become reconstituted and reincorporated as a water district and which certifies that the corporation:

(i) Was formed initially as a nonprofit, nonshare corporation;

(ii) Does not have the ability to directly access the tax exempt capital markets other than through a conduit issuer; and

(iii) Desires to realize interest rate savings as a result of its conversion and reconstitution as a water district under this section;

(b) An application for reconstitution and certificate of incorporation that states and includes the following information:

(i) The proposed name of the water district;

(ii) The location of the water district’s principal office and the number of directors of the water district, which shall be subject to change and modification as provided in the water district’s bylaws;

(iii) The names and addresses of the initial board of directors of the nonprofit, nonshare corporation;

(iv) The name and address of the agent for service of process of the nonprofit, nonshare corporation; and

(v) Any other matters that the initial board of directors of the nonprofit, nonshare corporation deems necessary and appropriate;

(c) A copy of the nonprofit, nonshare corporation’s bylaws along with any other information which the initial board of directors of the nonprofit, nonshare corporation deems necessary and appropriate; and

(d) A statement and certification from the Secretary of State that the proposed name of the water district is not identical with or so similar to the name of any other water district in the state as to lead to confusion and uncertainty.

(2) The application for reconstitution and certificate of incorporation must be signed and acknowledged by a majority of the board of directors of the nonprofit, nonshare corporation.

(3) After the application for reconstitution and certificate of incorporation and other required documents have been filed with the board of supervisors, if the board of supervisors determines that the requirements of this section have been satisfied, the board must spread the same upon the minutes of the board of supervisors, and the water district shall come into existence. The water district shall constitute a body politic and corporate with the power of perpetual succession and a political subdivision of the state under the name set forth in the certificate of incorporation, and the water district shall be vested with the rights and powers granted all other districts in this chapter. At the same time, the nonprofit, nonshare corporation shall cease to exist. A copy of the water district’s application for reconstitution and certificate of incorporation must be filed in the office of the Secretary of State after its receipt and acceptance by the board or boards of supervisors. The Secretary of State may require the payment of a reasonable filing and receipt fee not in excess of the filing fee charged by the Secretary of State in connection with the receipt and filing of a corporation’s articles of incorporation. Filing with the Secretary of State of a copy of the application for reconstitution and certificate of incorporation shall serve to terminate and dissolve the previous corporate existence of the nonprofit, nonshare corporation.

(4) (a) The water district shall have a board of commissioners composed of the number of commissioners provided in the certificate of incorporation. The commissioners must possess those qualifications prescribed in Section 19-5-171. All powers of the water district shall be exercised by the board or pursuant to the board's authorization.

(b) The commissioners must be elected and shall serve in accordance with those procedures that are specified in Section 19-5-171 and in the water district's bylaws. The water district’s bylaws must contain provisions and procedures for the election and appointment of its commissioners that are identical in nature to those same provisions and procedures as contained in the nonprofit, nonshare corporation’s bylaws for the election and appointment of directors unless approval to modify and amend those procedures is expressly granted in writing by the board or boards of supervisors.

(c) A majority of the members of the board shall constitute a quorum for the transaction of business. No vacancy in the membership of the board shall impair the right of a quorum to exercise all the powers and duties of the water district. A commissioner shall continue in office until the commissioner's successor is properly elected and accepts office.

(d) The members of the board and the officers of the water district shall be compensated and reimbursed for actual expenses incurred in the performance of their duties in accordance with Section 19-5-171(4).

(e) All proceedings of the board shall be reduced to writing by the secretary of the water district and appropriately recorded and maintained in a well-bound book. All records of the water district shall be subject to the Mississippi Public Records Act of 1983.

(5) Any water district created under this section may exercise the powers specified in Sections 19-5-175 and 19-5-177, in addition to all other powers granted districts under Sections 19-5-151 through 19-5-207.

SECTION 2. Section 19-5-151, Mississippi Code of 1972, is amended as follows:

19-5-151. (1) Any contiguous area situated within any county of the state, and not being situated within the corporate boundaries of any existing municipality, and having no adequate water system, sewer system, garbage and waste collection and disposal system, or fire protection facilities serving such area, may become incorporated as a water district, as a sewer district, as a garbage and waste collection and disposal district, as a fire protection district, as a combined water and sewer district, as a combined water and garbage and waste collection and disposal district, as a combined water and fire protection district, or as a combined water, sewer, garbage and waste collection and disposal and fire protection district, in the manner set forth in the following sections.

(2) Any contiguous area * * * of the state, not situated within the corporate boundaries of an existing municipality and being served by a nonprofit, nonshare corporation chartered under the Mississippi Nonprofit Corporation Act for the purpose of owning and operating rural waterworks, may convert to a water district in the manner set forth in Section 19-5-166. * * * SECTION 3. Section 19-5-153, Mississippi Code of 1972, is amended as follows:

19-5-153. (1) A petition for the incorporation of a district may be submitted to the board of supervisors of a county, signed by not less than twenty-five (25) owners of real property residing within the boundaries of the proposed district. The petition shall include: (a) a statement of the necessity for the service or services to be supplied by the proposed district; (b) the proposed corporate name for the district; (c) the proposed boundaries of the district; (d) an estimate of the cost of the acquisition or construction of any facilities to be operated by the district, which estimate, however, shall not serve as a limitation upon the financing of improvements or extensions to the facilities; (e) a statement of whether or not the board of supervisors of the county shall exercise the authority to levy the tax outlined in Section 19-5-189; and (f) a statement of whether or not the board of supervisors of the county shall exercise the authority to make assessments as outlined in Section 19-5-191. The petition shall be signed in person by the petitioners, with their respective residence addresses. The petition shall be accompanied by a sworn statement of the person or persons circulating the petition, who shall state under oath that the person or persons witnessed the signature of each petitioner, that each signature is the signature of the person it purports to be, and that, to the best of the person's or persons' knowledge, each petitioner was at the time of signing an owner of real property within and a resident of the proposed district. No individual tract of land containing one hundred sixty (160) acres or more shall be included in any such district unless the owner or owners of said tract is a signer under oath of the petition for the incorporation of such district.

(2) The board of supervisors of a county, in its discretion, may initiate the incorporation of a district under Sections 19-5-151 through 19-5-207 by resolution of the board and presentation of a petition signed by at least twenty-five (25) property owners of the area to be incorporated if at least forty (40) property owners reside within the district. However, no individual tract of land containing one hundred sixty (160) acres or more shall be included in any such district unless the owner or owners of the tract gives written consent for the inclusion of the lands in such district.

* * *

(3) With respect to the incorporation and operation of a fire protection district pursuant to Sections 19-5-151 through 19-5-207, the word "owners" shall include any lessees of real property of a water supply district the term of whose original lease is not less than sixty (60) years and shall also include sublessees if the original lease of which they are subletting is not less than sixty (60) years.

SECTION 4. Section 19-5-165, Mississippi Code of 1972, is amended as follows:

19-5-165. (1) Beginning on the date of the adoption of the resolution creating any district, the district shall be a public corporation in perpetuity under its corporate name and shall, in that name, be a body politic and corporate with power of perpetual succession.

(2) If the creation of a water district is initiated in accordance with Section 19-5-166, all assets and liabilities of the nonprofit, nonshare corporation of every nature, including, but not limited to, all real property, personal property, contractual obligations, rights afforded borrowers of federal and state funds and other tangible and intangible assets and liabilities, shall become the assets and liabilities of the newly organized water district without any further meetings, voting, notice to creditors or actions by members of the board beginning on the date that the conversion to the water district becomes effective.

SECTION 5. Section 19-5-167, Mississippi Code of 1972, is amended as follows:

19-5-167. (1) Except as otherwise provided in * * * Section 19-5-166(4), the powers of each district shall be vested in and exercised by a board of commissioners consisting of five (5) members to be appointed by the board of supervisors. Upon their initial appointment, one (1) of the commissioners shall be appointed for a term of one (1) year; one (1) for a term of two (2) years; one (1) for a term of three (3) years; one (1) for a term of four (4) years; and one (1) for a term of five (5) years; thereafter, each commissioner shall be appointed and shall hold office for a term of five (5) years. Any vacancy occurring on a board of commissioners shall be filled by the board of supervisors at any regular meeting of the board of supervisors, and the board of supervisors shall have the authority to fill all unexpired terms of any commissioner or commissioners. Notwithstanding the appointive authority herein granted to the board of supervisors, its legal and actual responsibilities, authority and function, subsequent to the creation of any district, shall be specifically limited to the appointive function and responsibilities outlined in Sections 19-5-179, 19-5-189 and 19-5-191. The operation, management, abolition or dissolution of such district, and all other matters in connection therewith, shall be vested solely and only in the board of commissioners to the specific exclusion of the board of supervisors, and the abolition, dissolution or termination of any district shall be accomplished only by unanimous resolution of the board of commissioners. The board of commissioners of a fire protection district created under Sections 19-5-151 et seq., by unanimous resolution, may dissolve such district and, under Sections 19-5-215 et seq., may create a fire protection grading district consisting of the same boundaries as the previously existing fire protection district. Petition and election requirements of Sections 19-5-217 through 19-5-227 shall not apply where the board of commissioners dissolves a fire protection district and creates a fire protection grading district under this section. Except as otherwise provided in Sections 19-5-151 through 19-5-207, such board of commissioners shall have no power, jurisdiction or authority to abolish, dissolve or terminate any district while the district has any outstanding indebtedness of any kind or character, unless such dissolution or termination is accomplished under the provisions of Section 19-5-207. If a fire protection district is dissolved in accordance with this subsection, the board of supervisors may continue to levy the same millage as was being levied within the boundaries of the fire protection district before its dissolution provided that a fire protection grading district is created, in accordance with Sections 19-5-215 et seq., with identical boundaries as the previously existing fire protection district.

(2) The board of supervisors of the incorporating county, may upon receipt of a unanimous resolution from two (2) or more boards of commissioners of duly created fire protection districts, may consolidate such districts for administrative purposes. Upon receipt of unanimous resolutions requesting consolidation, the board of supervisors shall conduct a public hearing to determine the public's interest. Following such a hearing, the board may create a consolidated commission consisting of the participating districts for administrative purposes. Such districts then shall dissolve their respective boards of commissioners, transferring all records to the consolidated board of commissioners. A consolidated board of commissioners consisting of not less than five (5) members shall be appointed with equal representation from each participating district. Any commissioners appointed to a consolidated fire protection district commission must comply with eligibility requirements as authorized in Section 19-5-171. In the event that a consolidated fire protection district commission consists of an even number of members, the chairman elected as authorized by Section 19-5-169 shall vote only in the event of a tie. General powers and duties of commissioners and commissions and other related matters as defined in Sections 19-5-151 through 19-5-207 shall apply to the entire area contained in the consolidating fire protection districts as described in the resolutions incorporating the fire protection districts as well as to subsequent annexations.

* * *

SECTION 6. Section 19-5-189, Mississippi Code of 1972, is amended as follows:

19-5-189. (1) (a) Except as otherwise provided in subsection (2) of this section for levies for fire protection purposes * * *, the board of supervisors of the county in which any such district exists may, according to the terms of the resolution, levy a special tax, not to exceed four (4) mills annually, on all of the taxable real property in such district, the avails of which shall be paid over to the board of commissioners of the district to be used either for the operation, support and maintenance of the district or for the retirement of any bonds issued by the district, or for both.

(b) The proceeds derived from two (2) mills of the levy authorized herein shall be included in the ten percent (10%) increase limitation under Section 27-39-321, and the proceeds derived from any additional millage levied under this subsection in excess of two (2) mills shall be excluded from such limitation for the first year of such additional levy and shall be included within such limitation in any year thereafter.

(2) (a) In respect to fire protection purposes, the board of supervisors of the county in which any such district exists on July 1, 1987, may levy a special tax annually, not to exceed the tax levied for such purposes for the 1987 fiscal year on all of the taxable real property in such district, the avails of which shall be paid over to the board of commissioners of the district to be used either for the operation, support and maintenance of the fire protection district or for the retirement of any bonds issued by the district for fire protection purposes, or for both. Any such district for which no taxes have been levied for the 1987 fiscal year may be treated as having been created after July 1, 1987, for the purposes of this subsection.

(b) In respect to fire protection purposes, the board of supervisors of the county in which any such district is created after July 1, 1987, may, according to the terms of the resolution of intent to incorporate the district, levy a special tax not to exceed two (2) mills annually on all of the taxable real property in such district, the avails of which shall be paid over to the board of commissioners of the district to be used either for the operation, support and maintenance of the fire protection district or for the retirement of any bonds issued by the district for fire protection purposes, or for both; however, if the district is created pursuant to a mandatory election called by the board of supervisors, in lieu of a petitioned election under Section 19-5-157, the board of supervisors may levy a special tax annually not to exceed an amount to be determined by the board of supervisors and stated in the notice of such election. The mandatory election authorized herein shall be conducted in accordance with paragraph (c) of this subsection. The special tax may be increased if such increase is authorized by the electorate pursuant to an election conducted in accordance with paragraph (c) of this subsection.

(c) The tax levy under this subsection may be increased only when the board of supervisors has determined the need for additional revenues, adopts a resolution declaring its intention so to do and has held an election on the question of raising the tax levy prescribed in this subsection. The notice calling for an election shall state the purposes for which the additional revenues shall be used and the amount of the tax levy to be imposed for such purposes. The tax levy may be increased only if the proposed increase is approved by a majority of those voting within the district. Subject to specific provisions of this paragraph to the contrary, the publication of notice and manner of holding the election within the district shall be as prescribed by law for the holding of elections for the issuance of bonds by the board of supervisors. The election shall be held only within the district.

(d) Notwithstanding any provisions of this subsection to the contrary, in any county bordering on the Gulf of Mexico and the State of Louisiana, the board of supervisors may levy not to exceed four (4) mills annually on all the taxable real property within any fire protection district, the avails of which shall be paid over to the board of commissioners of the district to be used either for the operation, support and maintenance of the fire protection district or for the retirement of any bonds issued by the district for fire protection purposes, or for both. Prior to levying the tax under this paragraph, the board of supervisors shall adopt a resolution declaring its intention to levy the tax. The resolution shall describe the amount of the tax levy and the purposes for which the proceeds of the tax will be used. The board of supervisors shall have a copy of the resolution published once a week for three (3) consecutive weeks in at least one (1) newspaper published in the county and having a general circulation therein. If no newspaper is published in the county, then notice shall be given by publishing the resolution for the required time in some newspaper having a general circulation in the county. A copy of the resolution shall also be posted at three (3) public places in the county for a period of at least twenty-one (21) days during the time of its publication in a newspaper. If more than twenty percent (20%) of the qualified electors of the district shall file with the clerk of the board of supervisors, within twenty-one (21) days after adoption of the resolution of intent to levy the tax, a petition requesting an election on the question of the levy of such tax, then and in that event such tax levy shall not be made unless authorized by a majority of the votes cast at an election to be called and held for that purpose within the district. Notice of such election shall be given, the election shall be held and the result thereof determined, as far as is practicable, in the same manner as other elections are held in the county. If an election results in favor of the tax levy or if no election is required, the board of supervisors may levy such tax. The board of supervisors, in its discretion, may call an election on such question, in which event it shall not be necessary to publish the resolution declaring its intention to have the tax imposed.

(e) Notwithstanding any provisions of this subsection to the contrary, in any county bordering on the Mississippi River in which legal gaming is conducted and in which U.S. Highway 61 intersects with Highway 4, the board of supervisors may levy a special tax not to exceed five (5) mills annually on all the taxable real and personal property within any fire protection district, except for utilities as defined in Section 77-3-3(d)(i) and (iii), the avails of which shall be paid over to the board of commissioners of the district to be used either for the operation, support and maintenance of the fire protection district or for the retirement of any bonds issued by the district for fire protection purposes, or for both. Before levying the tax under this paragraph, the board of supervisors shall adopt a resolution declaring its intention to levy the tax. The resolution shall describe the amount of the tax levy and the purposes for which the proceeds of the tax will be used. The board of supervisors shall have a copy of the resolution published once a week for three (3) consecutive weeks in at least one (1) newspaper published in the county and having a general circulation therein. If no newspaper is published in the county, then notice shall be given by publishing the resolution for the required time in some newspaper having general circulation in the county. A copy of the resolution shall also be posted at three (3) public places in the county for a period of at least twenty-one (21) days during the time of its publication in a newspaper. If more than twenty percent (20%) of the qualified electors of the district shall file with the clerk of the board of supervisors, within twenty-one (21) days after adoption of the resolution of intent to levy the tax, a petition requesting an election of the questions of the levy of such tax, then and in that event such tax levy shall not be made unless authorized by a majority of the votes cast at an election to be called and held for that purpose within the district. Notice of such election shall be given, the election shall be held and the result thereof determined, as far as is practicable, in the same manner as other elections are held in the county. If an election results in favor of the tax levy or if no election is required, the board of supervisors may levy such tax. The board of supervisors, in its discretion, may call an election on such question, in which event it shall not be necessary to publish the resolution declaring its intention to have the tax imposed.

(f) Any taxes levied under this subsection shall be excluded from the ten percent (10%) increase limitation under Section 27-39-321.

* * *

SECTION 7. The Attorney General of the State of Mississippi shall submit this act, immediately upon approval by the Governor, or upon approval by the Legislature subsequent to a veto, to the Attorney General of the United States or to the United States District Court for the District of Columbia in accordance with the provisions of the Voting Rights Act of 1965, as amended and extended.

SECTION 8. This act shall take effect and be in force from and after July 1, 2002, if it is effectuated on or before that date under Section 5 of the Voting Rights Act of 1965, as amended and extended. If it is effectuated under Section 5 of the Voting Rights Act of 1965, as amended and extended, after July 1, 2002, this act shall take effect and be in force from and after the date it is effectuated under Section 5 of the Voting Rights Act of 1965, as amended and extended.