MISSISSIPPI LEGISLATURE
2006 Regular Session
To: Education; Finance
By: Senator(s) Chaney, Albritton, Hewes, Gollott, Moffatt
AN ACT TO AMEND SECTIONS 37-57-108 AND 27-39-333, MISSISSIPPI CODE OF 1972, TO AUTHORIZE SCHOOL DISTRICTS AFFECTED BY THE HURRICANE KATRINA DISASTER TO BORROW FUNDS AND ISSUE PROMISSORY NOTES TO THE FEDERAL GOVERNMENT UNDER THE COMMUNITY DISASTER LOAN PROGRAM; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 37-57-108, Mississippi Code of 1972, is amended as follows:
[From and after October 24, 2005, through June 30, 2007, this act shall read as follows:]
37-57-108. (1) In the event that the amount of revenue collected or estimated to be collected from local sources, on behalf of a school district during a fiscal year, is less than the amount provided for in the duly adopted budget of said school district for the fiscal year, then the school district may issue promissory notes in an amount and in the manner set forth in Section 27-39-333, not to exceed the estimated shortfall of revenue from local sources, but in no event to exceed twenty-five percent (25%) of its budget anticipated to be funded from the sources of the shortfall for the fiscal year. A school district issuing notes under the provisions of this section shall not be required to publish notice of its intention to do so or to secure the consent of the qualified electors or the tax levying authority of such school district.
(2) If the amount of revenue collected or estimated to be collected from local sources, on behalf of a school district during a fiscal year, is less than the amount provided for in the duly adopted budget of the school district for the fiscal year as a result of Hurricane Katrina, then the school district may issue promissory notes in an amount and in the manner set forth in Section 27-39-333, not to exceed the estimated shortfall of revenue from local sources, but in no event to exceed fifty percent (50%) of its budget anticipated to be funded from the sources of the shortfall for the fiscal year. Any school district issuing promissory notes under this subsection may do so only if such school district receives prior approval by the State Superintendent of Education that the school district received damage from Hurricane Katrina. In order for a school district to issue notes under the provisions of this section, the superintendent of the local school district must recommend such action to the school board and the board must duly adopt and enter upon its official minutes a resolution setting forth specific findings as to how the district meets the requirements of this section.
(a) Revenues collected from local sources on behalf of a school district for any fiscal year shall be deemed to include any funds received or anticipated to be received by the school district from the United States federal government or any agency thereof for the purpose of replacing the loss of operating funds that otherwise would have been derived from local sources for that fiscal year.
(b) Any school district may borrow funds from the United States federal government or any agency thereof to compensate for the loss of revenue collected or estimated to be collected on behalf of the school district from local sources during a fiscal year as a result of Hurricane Katrina may issue its promissory note to the United States federal government or any agency thereof, and may comply with and issue the regulations of the United States federal government or agency thereof regarding such promissory note. Provided, however, that this section does not authorize any school district to levy taxes or to pledge collateral for the security of such promissory note not otherwise allowed by law. The State of Mississippi may sign any promissory note as an equal co-obligor on any such note, and in the event the State of Mississippi signs such promissory note as a co-obligor, the full faith and credit of the State of Mississippi shall be pledged for the payment of such promissory note.
[From and after July 1, 2007, this act shall read as follows:]
37-57-108. In the event that the amount of revenue collected or estimated to be collected from local sources, on behalf of a school district during a fiscal year, is less than the amount provided for in the duly adopted budget of said school district for the fiscal year, then the school district may issue promissory notes in an amount and in the manner set forth in Section 27-39-333, not to exceed the estimated shortfall of revenue from local sources, but in no event to exceed twenty-five percent (25%) of its budget anticipated to be funded from the sources of the shortfall for the fiscal year. A school district issuing notes under the provisions of this section shall not be required to publish notice of its intention to do so or to secure the consent of the qualified electors or the tax levying authority of such school district.
SECTION 2. Section 27-39-333, Mississippi Code of 1972, is amended as follows:
[From and after October 24, 2005, through June 30, 2007, this act shall read as follows:]
27-39-333. (1) For purposes of this section, the following terms shall have the meanings ascribed herein:
(a) "Political subdivision" means any political subdivision which receives ad valorem tax revenue.
(b) "Levying authority" means any political subdivision having legal authority to levy ad valorem taxes for its operation or for the operation of another political subdivision.
(2) Any political subdivision which, during a fiscal year, estimates that the amount of the ad valorem taxes or other anticipated revenue from local sources to be collected therein is less than the amount estimated at the time of formulation of its budget for the fiscal year due to circumstances which were unanticipated at the time of formulation of the budget and which will prevent the political subdivision from meeting its financial obligations may, with the approval of the levying authority for such political subdivision, issue promissory notes in an amount equal to the estimated shortfall of ad valorem taxes and/or revenue from local sources but in no event to exceed twenty-five percent (25%) of its budget anticipated to be funded from the sources of the shortfall for the fiscal year. However, if a school district which, during a fiscal year, estimates that the amount of the ad valorem taxes or other anticipated revenue from local sources to be collected therein is less than the amount provided for in the duly adopted budget of the school district for the fiscal year as a result of Hurricane Katrina, then the school district may issue promissory notes in an amount equal to the estimated shortfall of ad valorem taxes and/or revenue from local sources but in no event to exceed fifty percent (50%) of its budget anticipated to be funded from the sources of the shortfall for the fiscal year. Any school district issuing promissory notes under this subsection may do so only if such school district receives prior approval by the State Superintendent of Education that the school district received damage from Hurricane Katrina. In order for a school district to issue notes under the provisions of this section, the superintendent of the local school district must recommend such action to the school board and the board must duly adopt and enter upon its official minutes a resolution setting forth specific findings as to how the district meets the requirements of this section.
(3) The proceeds of such notes shall be used in the budget or budgets in which the shortfall occurred and shall be used solely to offset the shortfall in such budgets for the fiscal year. The rate of interest paid thereon shall not exceed that amount set forth in Section 75-17-105, Mississippi Code of 1972. The indebtedness shall be repaid in full, including interest thereon, in equal installments, during the three (3) fiscal years next succeeding the fiscal year in which the notes were issued. However, the indebtedness of a school district issuing notes as a result of a shortfall in revenues collected from local sources on behalf of the school district for any fiscal year as a result of Hurricane Katrina shall be repaid in full, including interest thereon in the manner authorized by the school board, during the ten (10) fiscal years next succeeding the fiscal year in which the promissory note or notes were issued. For the payment of such indebtedness, the levying authority for the political subdivision shall, at its next regular meeting at which ad valorem taxes are lawfully levied, levy an ad valorem tax sufficient to repay the indebtedness in full, including interest. The proceeds of the notes shall be included as proceeds of ad valorem taxes for the purposes of the limitation on increases in revenue for the next succeeding fiscal year under Section 27-39-305, 27-39-320, 27-39-321 or 37-57-107, Mississippi Code of 1972, whichever is applicable depending upon the purpose for which such proceeds are used.
(4) Any notes issued under this section prior to April 20, 1987, shall be repaid as provided in this section.
(5) For the purposes of Sections 27-39-305, 27-39-320, 27-39-321 and 37-57-107, the terms "revenue" and "receipts" when used in connection with the amount of funds generated in a preceding fiscal year shall include excess receipts collected in the next preceding fiscal year and deposited into a special account under Section 27-39-323.
[From and after July 1, 2007, this act shall read as follows:]
27-39-333. (1) For purposes of this section, the following terms shall have the meanings ascribed herein:
(a) "Political subdivision" means any political subdivision which receives ad valorem tax revenue.
(b) "Levying authority" means any political subdivision having legal authority to levy ad valorem taxes for its operation or for the operation of another political subdivision.
(2) Any political subdivision which, during a fiscal year, estimates that the amount of the ad valorem taxes or other anticipated revenue from local sources to be collected therein is less than the amount estimated at the time of formulation of its budget for the fiscal year due to circumstances which were unanticipated at the time of formulation of the budget and which will prevent the political subdivision from meeting its financial obligations may, with the approval of the levying authority for such political subdivision, issue promissory notes in an amount equal to the estimated shortfall of ad valorem taxes and/or revenue from local sources but in no event to exceed twenty-five percent (25%) of its budget anticipated to be funded from the sources of the shortfall for the fiscal year.
(3) The proceeds of such notes shall be used in the budget or budgets in which the shortfall occurred and shall be used solely to offset the shortfall in such budgets for the fiscal year. The rate of interest paid thereon shall not exceed that amount set forth in Section 75-17-105, Mississippi Code of 1972. The indebtedness shall be repaid in full, including interest thereon, in equal installments, during the three (3) fiscal years next succeeding the fiscal year in which the notes were issued. For the payment of such indebtedness, the levying authority for the political subdivision shall, at its next regular meeting at which ad valorem taxes are lawfully levied, levy an ad valorem tax sufficient to repay the indebtedness in full, including interest. The proceeds of the notes shall be included as proceeds of ad valorem taxes for the purposes of the limitation on increases in revenue for the next succeeding fiscal year under Section 27-39-305, 27-39-320, 27-39-321 or 37-57-107, Mississippi Code of 1972, whichever is applicable depending upon the purpose for which such proceeds are used.
(4) Any notes issued under this section prior to April 20, 1987, shall be repaid as provided in this section.
(5) For the purposes of Sections 27-39-305, 27-39-320, 27-39-321 and 37-57-107, the terms "revenue" and "receipts" when used in connection with the amount of funds generated in a preceding fiscal year shall include excess receipts collected in the next preceding fiscal year and deposited into a special account under Section 27-39-323.
SECTION 3. This act shall take effect and be in force from and after its passage.