House Bill 533

(As Passed the House)

AN ACT TO AMEND SECTION 31-25-28, MISSISSIPPI CODE OF 1972, TO EXTEND THE DATE OF THE REPEALER ON THE PROVISION THAT AUTHORIZES THE DEPARTMENT OF ENVIRONMENTAL QUALITY TO BORROW FROM THE MISSISSIPPI DEVELOPMENT BANK; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 31-25-28, Mississippi Code of 1972, is amended as follows:

31-25-28. (1) Local governmental units may borrow money or receive grants from the bank for any of the purposes set forth in this section or Section 31-25-20(g) and pay to the bank such fees and charges for services as the bank may prescribe. Whenever any such loan is made to a local governmental unit, such local governmental unit may use available revenues for the repayment of the principal of, premium, if any, and interest on such loan, and pledge such available revenues or monies for the repayment of the principal of, premium, if any, and interest on such loan. It is the intention of the Legislature that any such pledge of revenues or other monies shall be valid and binding from the date the pledge is made; that such revenues or other monies so pledged and thereafter received by the local governmental unit shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and that the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the local governmental unit irrespective of whether such parties have notice thereof; and neither the resolutions, contracts or any other instrument by which a pledge is created need be recorded.

(2) Local governmental units may contract with the bank with respect to any such loan and such contract shall contain such terms and conditions as may be prescribed by the bank.

(3) Local governmental units may in connection with any such loan enter into any covenants and agreements with respect to such local governmental unit's operations, revenues, assets, monies, funds or property, or such loan, as may be prescribed by the bank.

(4) Upon the making of any such loan by the bank to any local governmental unit, such local governmental unit shall be held and be deemed to have agreed that if such governmental unit fails to pay the principal of, premium, if any, and interest on any such loan as when due and payable, such governmental unit shall have waived any and all defenses to such nonpayment, and the bank, upon such nonpayment, shall thereupon avail itself of all remedies, rights and provisions of law applicable in such circumstance, including without limitation, any remedies or rights theretofore agreed to by the local governmental unit, and that such loan shall for all of the purposes of this section, be held and be deemed to have become due and payable and to be unpaid. The bank may carry out the provisions of this section and exercise all of the rights and remedies and provisions of law provided or referred to in this section and of all other applicable laws of the state.

(5) Any local governmental unit that borrows from the bank under this section may agree in writing with the bank that, as provided in this subsection, the State Tax Commission or any state agency, department or commission created pursuant to state law shall (a) withhold all or any part (as agreed by the local governmental unit) of any monies that such local governmental unit is entitled to receive from time to time pursuant to any law and that is in the possession of the State Tax Commission or any state agency, department or commission created pursuant to state law and (b) pay the same over to the bank to satisfy any delinquent payments on any such loan made to such local governmental unit under the provisions of this section and any other delinquent payments due and owing the bank by such local governmental unit, all as the same shall occur. If the bank files a copy of such written agreement, together with a statement of delinquency, with the State Tax Commission or any state agency, department or commission created pursuant to state law, then the State Tax Commission or any state agency, department or commission created pursuant to state law shall immediately make the withholdings provided in such agreement from the amounts due the local governmental unit and shall continue to pay the same over to the bank until all such delinquencies are satisfied.

(6) Before authorizing any loan for any of the purposes enumerated in Section 31-25-20(e), the governing authority of the local governmental unit shall adopt a resolution declaring its intention so to do, stating the amount of the loan proposed to be authorized and the purpose for which the loan is to be authorized, and the date upon which the loan will be authorized. Such resolution shall be published once a week for at least three (3) consecutive weeks in at least one (1) newspaper published in such local governmental unit. The first publication of such resolution shall be made not less than twenty-one (21) days before the date fixed in such resolution for the authorization of the loan and the last publication shall be made not more than seven (7) days before such date. If no newspaper is published in such local governmental unit, then such notice shall be given by publishing the resolution for the required time in some newspaper having a general circulation in such local governmental unit and, in addition, by posting a copy of such resolution for at least twenty-one (21) days next preceding the date fixed therein at three (3) public places in such local governmental unit. If fifteen percent (15%) of the qualified electors of the local governmental unit or fifteen hundred (1500), whichever is the lesser, file a written protest against the authorization of such loan on or before the date specified in such resolution, then an election on the question of the authorization of such loan shall be called and held as otherwise provided for in connection with the issuance of general obligation indebtedness of such local governmental unit. Notice of such election shall be given as otherwise required in connection with the issuance of general obligation indebtedness of such local governmental unit. If three-fifths (3/5) of the qualified electors voting in the election vote in favor of authorizing the loan, then the governing authority of the local governmental unit shall proceed with the loan; however, if less than three-fifths (3/5) of the qualified electors voting in the election vote in favor of authorizing the loan, then the loan shall not be incurred. If no protest be filed, then such loan may be entered into by the local governmental unit without an election on the question of the authorization of such loan, at any time within a period of two (2) years after the date specified in the resolution. However, the governing authority of any local governmental unit in its discretion may nevertheless call an election on such question, in which event it shall not be necessary to publish the resolution declaring its intention to authorize such loan as provided in this subsection.

(7) (a) The Department of Environmental Quality may borrow money from the bank for any purpose as otherwise authorized by this act or for the purpose of funding loan programs (including revolving loan programs) for such local governmental unit, or both. The Department of Environmental Quality may contract with the bank with respect to any loan from the bank to fund such loan programs and such loan from the bank may include any terms and conditions as provided for in this section. If the Department of Environmental Quality borrows funds pursuant to this subsection (7), then such local governmental unit shall certify the following to the bank prior to making the loan from the bank:

(i) The revolving loan program or other program to be funded through the issuance of the bonds;

(ii) Available revenues which such local governmental unit intends to use to repay the loan; and

(iii) That such local governmental unit does not intend to request an additional appropriation from the Legislature to pay debt service on the loan from the bank or for such security.

(b) If such local governmental unit meets the requirements of paragraph (a) of this subsection (7), then such local governmental unit shall not be required to meet the requirements of Section 31-25-27(14). Notwithstanding any other provision of law, including any limitations or restrictions under Section 49-17-81 et seq., such local governmental unit may designate or pledge any funds, revenues or any other amounts received under its loan programs designated under paragraph (a)(i) of this subsection (7) to repay a loan from the bank under this subsection (7). Funds, revenues or any other amounts received under a loan program as provided under this subsection (7) specifically include, but are not limited to, any principal and/or interest loan repayments from any participant under the program, any investment earnings, or other amounts held by the Department of Environmental Quality in connection with the applicable loan program. Any loan program of the Department of Environmental Quality otherwise authorized by law shall be deemed to be a public purpose for purposes of this act which the bank may loan funds under the provisions of this act.

(c) In connection with a loan under this subsection (7), the bank may administer and manage loan programs as provided in the contracts with the bank to loan funds thereunder.

(d) The maximum amount that the Department of Environmental Quality may borrow under this subsection (7) shall not exceed Thirty-five Million Dollars ($35,000,000.00) in the aggregate.

(e) This subsection (7) shall stand repealed on July 1, 2008.

(8) In connection with any refunding of the Ten Million Five Hundred Seventy Thousand Dollars ($10,570,000.00), State of Mississippi, Department of Rehabilitation Services, Certificates of Participation (State of Mississippi, Department of Rehabilitation Services Project) dated August 1, 1993, the bank may issue its bonds to provide for such refunding and the Department of Rehabilitation Services may borrow money from the bank for the purpose of providing for the refunding of such Certificates of Participation. The Department of Rehabilitation Services may contract with the bank with respect to any loan from the bank under this subsection (8), to provide for the refunding of such Certificates of Participation and such loan from the bank may include any terms and conditions as provided for in this section. In connection with the refunding of the Certificates of Participation pursuant to this subsection (8), such refunding shall result in an overall net present value savings to maturity of not less than two percent (2%) of the Certificates of Participation being refunded. In connection with any loan under this subsection (8), the Department of Rehabilitation Services shall not be required to meet the requirements of Section 31-25-27(14).

(9) This section shall be deemed to provide an additional, alternative and complete method for the doing of the things authorized by this section and shall be deemed and construed to be supplemental to any power conferred by other laws on local governmental units and not in derogation of any such powers. Any loan made pursuant to the provisions of this section shall not constitute an indebtedness of the local governmental unit within the meaning of any constitutional or statutory limitation or restriction. In connection with a loan under this chapter, a local governmental unit shall not be required to comply with the provisions of any other law except as provided in this section.

SECTION 2. This act shall take effect and be in force from and after July 1, 2006.