House Bill 678

AN ACT TO AMEND SECTIONS 17-21-51 AND 17-21-53, MISSISSIPPI CODE OF 1972, TO REVISE THE PURPOSES FOR WHICH COUNTIES AND MUNICIPALITIES LOCATED IN THE SIX MOST SOUTHERN COUNTIES OF THE STATE COVERED BY THE PRESIDENTIAL DECLARATION OF MAJOR DISASTER FOR THE STATE OF MISSISSIPPI DATED AUGUST 29, 2005, AND FORREST AND JONES COUNTY FOR REASONS RELATED TO SUCH DISASTER, MAY ISSUE CERTAIN NEGOTIABLE NOTES AND CERTIFICATES OF INDEBTEDNESS; TO PROVIDE THAT SUCH NOTES AND CERTIFICATES MAY BE OFFERED AT PUBLIC OR PRIVATE SALE; TO INCREASE THE MAXIMUM TOTAL INDEBTEDNESS THAT SUCH COUNTIES AND MUNICIPALITIES MAY INCUR AND TO EXEMPT SUCH NOTES AND CERTIFICATES FROM CERTAIN DEBT LIMITATIONS; TO REVISE THE MAXIMUM MATURITY FOR SUCH NOTES AND CERTIFICATES; TO AMEND SECTIONS 31-15-7, 31-15-9, 31-15-17, 31-15-21 and 31-15-25, MISSISSIPPI CODE OF 1972, TO REVISE THE MAXIMUM INTEREST RATE FOR REFUNDING BONDS ISSUED BY POLITICAL SUBDIVISIONS LOCATED IN ONE OF THE SIX MOST SOUTHERN COUNTIES OF THE STATE; TO REVISE THE TERMS UNDER WHICH REFUNDING BONDS MAY BE ISSUED BY POLITICAL SUBDIVISIONS LOCATED IN ONE OF THE SIX MOST SOUTHERN COUNTIES OF THE STATE COVERED BY THE PRESIDENTIAL DECLARATION OF MAJOR DISASTER FOR THE STATE OF MISSISSIPPI DATED AUGUST 29, 2005, AND FORREST AND JONES COUNTY FOR REASONS RELATED TO SUCH DISASTER; TO PROVIDE THAT ANY SUCH POLITICAL SUBDIVISION THAT HAS ISSUED TAX INCREMENT, SPECIAL ASSESSMENT OR OTHER SPECIAL OR LIMITED OBLIGATION BONDS BEFORE AUGUST 29, 2005, MAY AS AN ALTERNATIVE TO ISSUING REFUNDING BONDS, MAKE PRINCIPAL AND INTEREST PAYMENTS ON SUCH BONDS FROM ANY AVAILABLE FUNDS OF THE POLITICAL SUBDIVISION; TO PROVIDE THAT REFUNDING BONDS OF SUCH COUNTIES AND MUNICIPALITIES MAY BE SECURED BY THE PLEDGE OF THE FULL FAITH, CREDIT AND RESOURCES OF THE COUNTY OR MUNICIPALITY; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 17-21-51, Mississippi Code of 1972, is amended as follows:

17-21-51. (1) The board of supervisors of any county and the governing authorities of any municipality (both referred to in this article as "governing authority") are hereby authorized and empowered, in their discretion, to borrow money, pursuant to the provisions of this article, for the following purposes:

(a) To accomplish any purpose for which such governing authorities are otherwise authorized by law to issue bonds, notes or certificates of indebtedness; and

(b) To provide working capital, fund debt service payments and other expenditures required by law and pay costs incurred by governing authorities as a result of a natural disaster. Such costs shall include, but not be limited to, debris removal and disposal, overtime wages paid to public employees, and the repair or replacement of public streets, roads and bridges, storm drains, water and sewer facilities and other public buildings, facilities and equipment. Money borrowed pursuant to this paragraph (b) may also be utilized as matching funds for federal or state disaster relief assistance.

(2) Except as otherwise provided in subsection (3) of this section, the total outstanding indebtedness incurred by a governing authority under this article at any one time shall not exceed the greater of one percent (1%) of the assessed value of all taxable property located within the governing authority according to the last completed assessment for taxation or Two Hundred Fifty Thousand Dollars ($250,000.00) or, in the case of (a) the governing authorities located in any of the six (6) most southern counties of the state covered by the Presidential Declaration of Major Disaster for the State of Mississippi (FEMA-1604-DR) dated August 29, 2005, and (b) the governing authorities located in Forrest County and/or Jones County for reasons related to such disaster, the greater of two percent (2%) of the assessed value of all the taxable property located within the governing authority according to the last completed assessment for taxation or Two Hundred Fifty Thousand Dollars ($250,000.00), if the governing authorities referred to in (a) and (b) first receive the approval of the State Treasurer based upon written justification therefor. The total outstanding indebtedness incurred by a governing authority as authorized under this subsection shall be included in computing the statutory limitation upon indebtedness which may be incurred by such governing authority.

(3) However, from and after August 29, 2005, through December 31, 2007, any borrowing pursuant to the provisions of this article by governing authorities located in any of the six (6) most southern counties of the state covered by the Presidential Declaration of Major Disaster for the State of Mississippi (FEMA-1604-DR) dated August 29, 2005, and governing authorities located in Forrest County and/or Jones County for reasons related to such disaster, shall not constitute an indebtedness of the governing authority within the meaning of this subsection or any other constitutional, statutory or municipal charter limitation or restriction, if the governing authorities first receive the approval of the State Treasurer based upon written justification therefor.

SECTION 2. Section 17-21-53, Mississippi Code of 1972, is amended as follows:

17-21-53. (1) Before any money is borrowed under the provisions of this article, the governing authority shall adopt a resolution declaring the necessity for such borrowing and specifying the purpose for which the money borrowed is to be expended, the amount to be borrowed, the date or dates of the maturity thereof, and how such indebtedness is to be evidenced. The resolution shall be certified over the signature of the head of the governing authority.

(2) The borrowing shall be evidenced by negotiable notes or certificates of indebtedness of the governing authority which shall be signed by the head and clerk of such governing authority. All such notes or certificates of indebtedness shall be offered at public sale by the governing authority after not less than ten (10) days' advertising in a newspaper having general circulation within the governing authority. Each sale shall be made to the bidder offering the lowest rate of interest or whose bid represents the lowest net cost to the governing authority; however, the rate of interest shall not exceed that now or hereafter authorized in Section 75-17-101, Mississippi Code of 1972. No such notes or certificates of indebtedness shall be issued and sold for less than par and accrued interest. All notes or certificates of indebtedness shall mature in approximately equal installments of principal and interest over a period not to exceed five (5) years from the dates of the issuance thereof. Principal shall be payable annually, and interest shall be payable annually or semiannually; provided, however, that the first payment of principal or interest may be for any period not exceeding one (1) year. Provided, however, if negotiable notes are outstanding from not more than one (1) previous issue authorized under the provisions of this article, then the schedule of payments for a new or supplementary issue may be so adjusted that the schedule of maturities of all notes or series of notes hereunder shall, when combined, mature in approximately equal installments of principal and interest over a period of five (5) years from the date of the new or supplementary issue, or if a lower interest rate will thereby be secured on notes previously issued and outstanding, a portion of the proceeds of any issue authorized hereunder may be used to refund the balance of the indebtedness previously issued under the authority of this article. Such notes or certificates of indebtedness shall be issued in such form and in such denominations as may be determined by the governing authority and may be made payable at the office of any bank or trust company selected by the governing authority. In such case, funds for the payment of principal and interest due thereon shall be provided in the same manner provided by law for the payment of the principal and interest due on bonds issued by the governing authority.

(3) For the prompt payment of notes or certificates of indebtedness at maturity, both principal and interest, the full faith, credit and resources of the issuing entity are pledged. If the issuing entity does not have available funds in an amount sufficient to provide for the payment of principal and interest according to the terms of such notes or certificates of indebtedness, then the governing authority shall annually levy a special tax upon all of its taxable property at a rate the avails of which will be sufficient to provide such payment. Funds derived from any such tax shall be paid into a sinking fund and used exclusively for the payment of principal of and interest on the notes or certificates of indebtedness. Until needed for expenditure, monies in the sinking fund may be invested in the same manner as the governing authority is elsewhere authorized by law to invest surplus funds.

(4) Notwithstanding the provisions of subsection (2) of this section, from and after August 29, 2005, through December 31, 2007, any governing authority located in any of the six (6) most southern counties of the state covered by the Presidential Declaration of Major Disaster for the State of Mississippi (FEMA-1604-DR) dated August 29, 2005, and any governing authority located in Forrest County and/or Jones County for reasons related to such disaster, may offer such notes or certificates of indebtedness at private or public sale at such price or prices, at such interest rate or rates, in such manner and at such times as may be agreed to by the governing authority and purchaser of the notes or certificates, if the governing authorities first receive the approval of the State Treasurer based upon written justification therefor. Such notes or certificates of indebtedness shall mature over a period of not to exceed ten (10) years from the dates of issuance and may be structured to defer payment of principal and interest for a period not to exceed three (3) years.

SECTION 3. Section 31-15-7, Mississippi Code of 1972, is amended as follows:

31-15-7. Such refunding bonds shall bear such rate or rates of interest as may be determined by the governing body * * *; shall be in such denomination or denominations and form as may be determined by resolution or order of the governing authority; and shall be executed in behalf of the subdivision by such officer or officers thereof as may be determined in such resolution or order. The interest to accrue on such refunding bonds shall be represented by coupons to be attached thereto, which may be executed by the facsimile signature of such officer or officers. All such bonds shall be made to mature serially, beginning not more than five (5) years and running not longer than thirty (30) years after their date, with not less than one percent (1%) of the total issue to mature each year during the first six (6) years, beginning in the fifth year, after the date of such bonds; not less than three percent (3%) of the said total issue to mature annually during the next succeeding ten-year period of the life of such bonds; and not less than five percent (5%) of said total issue to mature annually during the next succeeding ten-year period of the life of the bonds. However, from and after August 29, 2005, through December 31, 2007, any political subdivision located in one (1) of the six (6) most southern counties of the state covered by the Presidential Declaration of Major Disaster for the State of Mississippi (FEMA-1604-DR) dated August 29, 2005, and any political subdivision located in Forrest County and/or Jones County for reasons related to such disaster, may, if the political subdivision first receives the approval of the State Treasurer based upon written justification therefor, issue such refunding bonds as term or serial bonds at such price or prices, at such interest rate or rates, in such manner, at such times, and in accordance with such terms and provisions as may be agreed to by the governing authority of the political subdivision and the purchasers of the refunding bonds. Such issue of refunding bonds may provide that no principal or interest may be due for a period not to exceed three (3) years after the issue date.

SECTION 4. Section 31-15-9, Mississippi Code of 1972, is amended as follows:

31-15-9. The resolution or order providing for the issuance of such bonds may reserve unto the governing authority the right to call in, pay, and redeem such bonds in the inverse order of their numbers and maturities, prior to the maturity date or dates thereof on any interest payment date. Whenever it is desired to exercise the aforesaid right, if reserved in such resolution or order, the governing authority shall cause written notice thereof to be delivered to the bank or office at which such bonds are payable. Such notice shall be so delivered not less than thirty (30) days prior to the interest payment date designated for the redemption of such bonds, after which date so designated, no further interest shall accrue on the bonds so called for redemption. Such refunding bonds may be sold for not less than par and accrued interest, or may be exchanged at par for bonds and interest coupons to be refunded thereby.

The board of supervisors may accept county bonds, consolidated school district bonds, rural separate school district bonds or separate road district bonds, as the case may be, at not more than par and interest accruing thereon at the rate fixed in the bonds to be refunded in exchange for said refunding county bonds, consolidated school district bonds, rural separate school district bonds or separate road district bonds, as the case may be. In accepting any bond in exchange for, or in payment of, any such refunding bond, no bond shall be accepted in such exchange or payment that is secured by the property of a smaller or different district, or other subdivision, than that securing the refunding bonds so issued. However, from and after August 29, 2005, through December 31, 2007, refunding bonds issued, sold or exchanged by any political subdivision located in one (1) of the six (6) most southern counties of the state covered by the Presidential Declaration of Major Disaster for the State of Mississippi (FEMA-1604-DR) dated August 29, 2005, and any political subdivision located in Forrest County and/or Jones County for reasons related to such disaster, may be issued, sold or exchanged for any price or prices and accrued interest as determined by any such political subdivision, if the political subdivision first receives the approval of the State Treasurer based upon written justification therefor.

SECTION 5. Section 31-15-17, Mississippi Code of 1972, is amended as follows:

31-15-17. (1) Sections 31-15-1 through 31-15-27, without reference to any other statute, shall be deemed full and complete authority for the issuance of refunding bonds by political subdivisions of the state, and shall be construed as an additional and alternative method therefor. None of the present restrictions, requirements, conditions, or limitations of law applicable to the issuance of bonds by political subdivisions of this state shall apply to the issuance and sale or exchange of bonds under the aforesaid sections, and no proceedings shall be required for the issuance of such bonds other than those provided for and required herein. All powers necessary to be exercised by the governing authority of any such political subdivision in order to carry out the provisions of said sections are hereby conferred.

(2) From and after August 29, 2005, through December 31, 2007, any political subdivision located in any of the six (6) most southern counties of the state covered by the Presidential Declaration of Major Disaster for the State of Mississippi (FEMA-1604-DR) dated August 29, 2005, and any political subdivision located in Forrest County and/or Jones County, which has issued (and there remain outstanding) any tax increment, special assessment or other special or limited obligation bonds prior to August 29, 2005, if the political subdivision first receives the approval of the State Treasurer based upon written justification therefor, may, as an alternative to issuance of refunding bonds pursuant to Sections 31-15-1 through 31-15-27, make principal and interest payments as same accrue and mature on any outstanding tax increment, special assessment or other special or limited obligation bonds issued by such political subdivisions prior to August 29, 2005, from any available funds of the political subdivision, without regard to any limitations and restrictions as to the security and source of payment otherwise imposed by statute or law or that may be provided in the issuing documents of such tax increment, special assessment or other special or limited obligation bonds.

SECTION 6. Section 31-15-21, Mississippi Code of 1972, is amended as follows:

31-15-21. Any bonds heretofore or hereafter issued under authority of Sections 21-27-11, 21-27-23, 21-27-41 through 21-27-43, or revenue bonds payable from funds other than the proceeds of ad valorem taxes heretofore or hereafter issued under authority of any other law of the State of Mississippi may be refunded upon surrender, whether such bonds are due, optional, or not yet matured. Such refunding bonds shall be negotiable, shall be authorized by resolution adopted by the board or governing body which shall have authorized the bonds that are being refunded, and may either be delivered in exchange for the bonds to be refunded or sold at not less than par and the proceeds applied to the retirement of such bonds. However, from and after August 29, 2005, through December 31, 2007, such refunding bonds issued, sold or exchanged by any political subdivision located in one (1) of the six (6) most southern counties of the state covered by the Presidential Declaration of Major Disaster for the State of Mississippi (FEMA-1604-DR) dated August 29, 2005, and any political subdivision located in Forrest County and/or Jones County for reasons related to such disaster, may be issued, sold or exchanged at such price or prices, and accrued interest, as may be determined by any such political subdivision, if the political subdivision first receives the approval of the State Treasurer based upon written justification therefor.

SECTION 7. Section 31-15-25, Mississippi Code of 1972, is amended as follows:

31-15-25. Such refunding bonds shall be payable from the same sources of revenue and so far as possible shall be secured in the same manner and by the same covenants and agreements as were the bonds refunded. All provisions of the law under which the bonds refunded were issued, which provide for the security of such bonds and the requirements for fixing rates sufficient to operate the project acquired or improved and to pay principal of and interest on the bonds, shall remain in effect and shall be fully applicable to the refunding bonds issued hereunder. In no event shall taxes be levied for the payment of such bonds, and they shall recite on their face that they are payable only from revenues. However, from and after August 29, 2005, through December 31, 2007, payment of principal and interest on any refunding bonds issued, sold or exchanged pursuant to Sections 31-15-21 through 31-15-27 by any of the six (6) most southern counties of the state or a municipality located in such a county that are covered by the Presidential Declaration of Major Disaster for the State of Mississippi (FEMA-1604-DR) dated August 29, 2005, and Forrest County and/or Jones County or any municipality located in such a county, if the county or municipality first receives the approval of the State Treasurer based upon written justification therefor, may, in the discretion of the issuing county or municipality, be further secured by the irrevocable pledge of the full faith, credit and resources of the county or municipality, and in such event, the governing body of the county or municipality issuing the refunding bonds, may annually levy a tax upon all taxable property therein sufficient to pay the principal of and the interest on such refunding bonds as the same matures and accrues.

SECTION 8. This act shall take effect and be in force from and after its passage.