MISSISSIPPI LEGISLATURE
2006 1st Extraordinary Session
To: Ways and Means
By: Representative Watson, Compretta, Dedeaux, Upshaw, Fredericks, Guice, Ishee, Janus, Patterson, Peranich, Simpson, Broomfield, Hamilton (109th), Parker, Read, Wells-Smith, Zuber, Espy, Formby
AN ACT TO AUTHORIZE THE ISSUANCE OF STATE GENERAL OBLIGATION GULF TAX CREDIT BONDS IN A PRINCIPAL AMOUNT NOT TO EXCEED $100,000,000.00 AS AUTHORIZED BY THE GULF OPPORTUNITY ZONE ACT OF 2005 ENACTED BY THE UNITED STATES CONGRESS IN RESPONSE TO HURRICANE KATRINA; TO AUTHORIZE THE USE OF THE PROCEEDS OF SUCH GENERAL OBLIGATION BONDS TO PAY DEBT SERVICE ON ANY OUTSTANDING GENERAL OBLIGATION BONDS OF THE STATE FOR FISCAL YEAR 2007; TO PROVIDE FOR THE TERMS AND PROVISIONS OF SUCH GENERAL OBLIGATION BONDS AND THE IMPLEMENTATION OF CERTAIN PROVISIONS OF THE GULF OPPORTUNITY ZONE ACT OF 2005 RELATED TO SUCH GENERAL OBLIGATION BONDS; TO AMEND SECTION 31-17-123, MISSISSIPPI CODE OF 1972, TO MAKE IT CLEAR THAT INTEREST EARNED ON THE DISASTER RECOVERY FUND SHALL BE DEPOSITED TO THE CREDIT OF SUCH FUND; TO AMEND SECTION 3, CHAPTER 534, LAWS OF 2006, TO PROVIDE THAT THE STATE TREASURER SHALL TRANSFER DURING FISCAL YEARS 2007 AND 2008 INTEREST EARNED OR INVESTMENT EARNINGS ON AMOUNTS IN THE HURRICANE DISASTER ASSISTANCE FUND TO THE EMERGENCY AID TO LOCAL GOVERNMENTS FUND; TO AMEND SECTION 6, CHAPTER 17, LAWS OF 2006, TO REDUCE THE AMOUNT OF FUNDS UTILIZED FROM THE BUDGET CONTINGENCY FUND FOR PAYMENT OF MATURING BONDS AND INTEREST ON THE FULL FAITH AND CREDIT BONDS OF THE STATE OF MISSISSIPPI FALLING DUE DURING FISCAL YEAR 2007; TO PROVIDE THAT $200,000,000.00 SHALL BE UTILIZED FROM THE TAX CREDIT BOND PROCEEDS FUND FOR PAYMENT OF MATURING BONDS AND INTEREST ON THE FULL FAITH AND CREDIT BONDS OF THE STATE OF MISSISSIPPI FALLING DUE DURING FISCAL YEAR 2007; TO REQUIRE THE TRANSFER OF $100,000,000.00 FROM THE BUDGET CONTINGENCY FUND TO THE DISASTER RECOVERY FUND; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. The Legislature hereby finds that Hurricane Katrina resulted in a natural catastrophe severely impacting the State of Mississippi and many of the political subdivisions of the state. The Legislature hereby determines that the issuance of general obligation bonds of the state to provide funds to pay the principal of, interest on and premium, if any, on qualified bonds, notes, certificates of indebtedness, and other debt obligations of the state is in all respects a public and governmental purpose to protect and/or improve the credit rating of the state, that this purpose is a public purpose, that the state will be performing an essential governmental function and meeting a public obligation in the exercise of the powers conferred upon it by this act, is a permitted use of the funds and credit of the state, will result in economic and financial benefits to the state and the political subdivisions of the state, and will provide relief from the consequences of Hurricane Katrina.
SECTION 2. As used in Sections 1 through 16 of this act:
(a) "Bonds" means the gulf tax credit bonds, notes or other evidences of indebtedness of the state issued pursuant to the provisions of Sections 1 through 16 of this act.
(b) "Commission" means the State Bond Commission.
(c) "Debt service" means the payment of principal of, interest on, premium, if any, sinking or reserve funds or other requirements, costs or expenses due and payable on general obligation bonds, notes, certificates of indebtedness, or other written general obligations for the repayment of borrowed money of the state during the state's fiscal year ending June 30, 2007.
(d) "Fund" means the Tax Credit Bond Proceeds Fund.
(e) "Gulf Opportunity Zone Act" means the Gulf Opportunity Zone Act of 2005 enacted by the United States Congress in response to Hurricanes Katrina, Rita and Wilma.
(f) "Gulf tax credit bonds" means general obligation bonds of the state or other general obligations of the state issued pursuant to the provisions of this act and the Gulf Opportunity Zone Act.
(g) "Natural catastrophe" means the consequences of Hurricane Katrina on the state and the resulting fiscal emergency caused to exist in the state.
(h) "Qualified bond" means any general obligation of the State which was outstanding on August 28, 2005, as defined in and subject to the limitations imposed by the Gulf Opportunity Zone Act.
(i) "State" means the State of Mississippi.
(j) "This act" means Sections 1 through 16 of this act.
SECTION 3. (1) (a) A special fund, to be designated as the "Tax Credit Bond Proceeds Fund," is created within the State Treasury. The fund shall be maintained by the State Treasurer
as a separate and special fund, separate and apart from the General Fund of the state. Unexpended amounts remaining in the fund at the end of a fiscal year shall not lapse into the state's General Fund, and any interest earned or investment earnings on amounts in the fund shall be deposited into such fund and used as provided in Section 4 of this act.
(b) There shall be deposited into the fund the proceeds of the bonds issued pursuant to Section 4 of this act and the money pledged to meet the state matching requirement under the Gulf Opportunity Zone Act as provided in Section 5 of this act.
(2) Money deposited into the fund shall be used solely as provided in this act and the Gulf Opportunity Zone Act to make debt service payments on qualified bonds of the state.
(3) All money deposited into the fund shall be expended in accordance with the provisions of this act and the Gulf Opportunity Zone Act.
SECTION 4. (1) The commission, at one time, or from time to time, may declare by resolution the necessity for the issuance of general obligation bonds or other general obligations of the state to provide funds for the relief of a natural catastrophe through the payment of debt service on qualified bonds of the state. The commission shall act as the issuing agent for the bonds authorized under this act, prescribe the form of the bonds, issue and sell the bonds so authorized to be sold, pay all fees and costs incurred in such issuance and sale from the money on deposit in the Tax Credit Bond Proceeds Fund, and do any and all other things necessary and advisable in connection with the issuance and sale of such bonds. The bonds authorized to be issued pursuant hereto shall be issued as gulf tax credit bonds as provided in the Gulf Opportunity Zone Act, shall bear interest at a rate of zero percent (0%), shall mature not more than two (2) years from their date of issuance, shall be issued before January 1, 2007, and shall entitle the owner of the bonds to a credit against federal taxation to the extent allowed by and in accordance with the provisions of the Gulf Opportunity Zone Act. Such bonds may be issued in one or more series, may bear such date or dates, may be in such denominations, may be sold at public or private sale, from time to time, in such manner and at such price as may be determined by the commission to be most advantageous, at par, or at any discount (which sale shall be on such terms and in such manner as the commission shall determine), and may contain such other terms and covenants (including, without limitation, covenants for the security and better marketability of such bonds), as may be provided by resolution of the commission. The commission is authorized and empowered to pay the costs that are incident to the sale, issuance and delivery of the bonds authorized under this act from the proceeds derived from the sale of such bonds or from other lawfully available funds. Pursuant to the provisions of this act, the commission may enter into such agreements as may be necessary in connection with the sale and issuance of such bonds. The total amount of bonds issued under this act shall not exceed One Hundred Million Dollars ($100,000,000.00). No bonds shall be issued under this act from and after January 1, 2007.
(2) Any investment earnings on amounts deposited into the special fund created in Section 3 of this act shall be used to pay debt service or used as otherwise directed by the commission in accordance with applicable federal and state law and in accordance with the proceedings authorizing the issuance of such bonds.
(3) Bonds issued by the commission pursuant to this act must comply with and satisfy the requirements for the issuance of "gulf tax credit bonds" pursuant to the Gulf Opportunity Zone Act.
SECTION 5. To satisfy the state matching requirement of the Gulf Opportunity Zone Act in connection with the gulf tax credit bonds authorized to be issued by this act, the commission is hereby authorized to pledge, as of the date of the issuance of the gulf tax credit bonds, any funds of the state available for debt service or any other available funds of the state to make debt service payments on qualified bonds of the state in an amount equal to the face amount of the gulf tax credit bonds issued pursuant to Section 4 of this act. Upon issuance of the gulf tax credit bonds, the funds of the state pledged to satisfy the state matching requirement of the Gulf Opportunity Zone Act shall be deposited in the fund and used to make debt service payments on qualified bonds of the state in accordance with this act and the Gulf Opportunity Zone Act. The State Treasurer, acting on behalf of the commission, is authorized to use all money on deposit in the fund to make debt service payments in accordance with the provisions of this act and the Gulf Opportunity Zone Act.
SECTION 6. The bonds authorized by this act shall be signed by the chairman of the commission, or by his facsimile signature, and the official seal of the commission shall be affixed thereto, attested by the secretary of the commission. The interest coupons, if any, to be attached to such bonds may be executed by the facsimile signatures of such officers. Whenever any such bonds shall have been signed by the officials designated to sign the bonds who were in office at the time of such signing but who may have ceased to be such officers before the sale and delivery of such bonds, or who may not have been in office on the date such bonds may bear, the signatures of such officers upon such bonds and coupons shall nevertheless be valid and sufficient for all purposes and have the same effect as if the person so officially signing such bonds had remained in office until their delivery to the purchaser, or had been in office on the date such bonds may bear. However, notwithstanding anything in this act to the contrary, such bonds may be issued as provided in the Registered Bond Act.
SECTION 7. All bonds issued under this act shall be fully negotiable in accordance with their terms and shall be "securities" within the meaning of Article 8 of the Uniform Commercial Code, subject to the provisions of such bonds pertaining to registration. It shall not be necessary to file financing statements or continuation statements to protect the lien and pledge granted by the state to the holders of any bonds issued under this act.
SECTION 8. The bonds issued under the provisions of this act are general obligations of the State of Mississippi, and for the payment thereof the full faith and credit of the State of Mississippi is irrevocably pledged. If the funds appropriated by the Legislature are insufficient to pay the principal of such bonds as they become due, then the deficiency shall be paid by the State Treasurer from any funds in the State Treasury not otherwise appropriated. All such bonds shall contain recitals on their faces substantially covering the provisions of this section.
SECTION 9. The bonds authorized under this act may be issued without any other proceedings or the happening of any other conditions or things other than those proceedings, conditions and things which are specified or required by this act. Any resolution providing for the issuance of bonds under the provisions of this act shall become effective immediately upon its adoption by the commission, and any such resolution may be adopted at any regular or special meeting of the commission by a majority of its members.
SECTION 10. The bonds authorized under the authority of this act may be validated in the Chancery Court of the First Judicial District of Hinds County, Mississippi, in the manner and with the force and effect provided by Chapter 13, Title 31, Mississippi Code of 1972, for the validation of county, municipal, school district and other bonds. The notice to taxpayers required by such statutes shall be published in a newspaper published or having a general circulation in the City of Jackson, Mississippi.
SECTION 11. Any holder of bonds issued under the provisions of this act may, either at law or in equity, by suit, action, mandamus or other proceeding, protect and enforce any and all rights granted under this act, or under such resolution, and may enforce and compel performance of all duties required by this act to be performed, in order to provide for the payment of such bonds.
SECTION 12. All bonds issued under the provisions of this act shall be legal investments for trustees and other fiduciaries, and for savings banks, trust companies and insurance companies organized under the laws of the state, and such bonds shall be legal securities which may be deposited with and shall be received by all public officers and bodies of this state and all municipalities and political subdivisions for the purpose of securing the deposit of public funds.
SECTION 13. Bonds issued under the provisions of this act and income, if any, therefrom shall be exempt from all taxation in the State of Mississippi. In addition, the amount of credit determined in accordance with the provisions of the Gulf Opportunity Zone Act and received by a holder of the bonds issued under the provisions of this act shall not be included in the income of such holder for state income tax purposes.
SECTION 14. The proceeds of the bonds issued under this act shall be used solely for the purposes herein provided, including the costs incident to the issuance and sale of such bonds.
SECTION 15. The State Treasurer is authorized, without further process of law, to certify to the Department of Finance and Administration the necessity for warrants, and the Department of Finance and Administration is authorized and directed to issue such warrants, in such amounts as may be necessary to pay when due the principal of all bonds issued under this act; and the State Treasurer shall forward the necessary amount to the designated place or places of payment of such bonds in ample time to discharge such bonds on the due dates thereof.
SECTION 16. This act shall be deemed to be full and complete authority for the exercise of the powers granted in this act, but this act shall not be deemed to repeal or to be in derogation of any existing law of this state.
SECTION 17. Section 31-17-123, Mississippi Code of 1972, is amended as follows:
31-17-123. (1) The intent of the Legislature is to authorize borrowing funds under the provisions of Sections 31-17-101 through 31-17-123 to offset any temporary cash flow deficiencies and should not be construed to authorize the borrowing of any funds in an amount that cannot be repaid during the fiscal year in which the funds are borrowed.
(2) (a) Notwithstanding any provision of this chapter to the contrary, in the event that the State Fiscal Officer and the State Treasurer make a determination that (i) state-source special funds are not sufficient to cover deficiencies in the General Fund, (ii) the State of Mississippi is unable to repay special fund borrowing within the fiscal year in which it was borrowed, or (iii) state-source funds are insufficient for disaster support and/or assistance purposes due to Hurricanes Katrina and/or Rita; and that the State Bond Commission makes a determination that such deficiency, inability to repay, or insufficiency is the result of a state of emergency within the State of Mississippi, the State Bond Commission is authorized to obtain a line of credit, in an amount not to exceed Five Hundred Million Dollars ($500,000,000.00), from a commercial lender, investment banking group or a consortium of either, or both. The length of indebtedness under this subsection shall not extend past three (3) years following the origination of the line of credit. The line of credit shall be authorized and approved by the State Bond Commission and shall have such terms and details as may be provided by resolution of the State Bond Commission. Loan proceeds shall be received and disbursed by the State Treasurer and deposited into the Disaster Recovery Fund, a special fund hereby created in the State Treasury, and shall be used to cover deficiencies in the General Fund, to repay special fund borrowing and/or to cover any insufficiency in disaster support and/or assistance. Monies remaining in the Disaster Recovery Fund at the end of a fiscal year shall not lapse into the State General Fund, but shall remain in the Disaster Recovery Fund and any interest earned or investment earnings on amounts in the Disaster Recovery Fund shall remain in the fund.
(b) As security for the repayment of the principal and interest on the line of credit provided for in paragraph (a) of this subsection, the full faith, credit and resources of the State of Mississippi are hereby irrevocably pledged.
(c) Upon approval of the State Fiscal Officer, the Director of the Mississippi Emergency Management Agency is authorized to use amounts from the line of credit to match federal funds, and for personnel, call-back wages, base and overtime wages, travel, per diem and other out-of-pocket expenses incurred as a result of Hurricanes Katrina and/or Rita.
(d) This subsection (2) shall be complete authority for the borrowing authorized hereunder and shall not be subject to the limitations provided in the other provisions of this chapter or otherwise under state law.
(e) The State Treasurer shall notify the Legislative Budget Office and the State Department of Finance and Administration of each transfer into and out of the Disaster Recovery Fund on a quarterly basis.
SECTION 18. Section 3, Chapter 534, Laws of 2006, is amended as follows:
Section 3. There is hereby created in the State Treasury a special fund, separate and apart from any other special fund, to be designated as the Hurricane Disaster Reserve Fund. The State Fiscal Officer shall transfer from the State General Fund into the Hurricane Disaster Reserve Fund an amount equal to Two Hundred Sixty-eight Million Dollars ($268,000,000.00) during the period beginning July 1, 2006, and ending June 30, 2007.
The funds transferred herein to the Hurricane Disaster Reserve Fund shall be utilized to defray the state's share of any nonfederal matching requirements for Federal Emergency Management Agency grants associated with Hurricane Katrina and other disasters. Unexpended funds remaining in the Hurricane Disaster Reserve Fund at the end of the fiscal year shall not lapse into the State General Fund but shall remain in the fund and any interest earned or investment earnings on amounts in the Hurricane Disaster Reserve Fund shall remain in the fund; however, any interest earned or investment earnings on amounts in the fund during fiscal years 2007 and 2008 shall be transferred by the State Treasurer to the Emergency Aid to Local Governments Fund created in Section 27-107-321.
Funds deposited into the Hurricane Disaster Reserve Fund shall be used only for the purposes specified in this section, and as long as the provisions of this section remain in effect, no other expenditure, appropriation or transfer of funds in the Hurricane Disaster Reserve Fund shall be made except by act of the Legislature making specific reference to the Hurricane Disaster Reserve Fund as the source of those funds.
SECTION 19. Section 6, Chapter 17, Laws of 2006, is amended as follows:
Section 6. Of the funds appropriated under the provisions of Section 2, Two Million Eight Hundred Thirty-nine Thousand Nine Hundred Eight Dollars ($2,839,908.00) shall be derived from the Budget Contingency Fund created in Section 27-103-301, Mississippi Code of 1972, and not more than One Hundred Million Dollars ($100,000,000.00) shall be derived from the proceeds of the sale of the bonds authorized in Sections 1 through 16 of House Bill No. 6, 2006 First Extraordinary Session, and deposited into the Tax Credit Bond Proceeds Fund created in Section 3 of House Bill No. 6, 2006 First Extraordinary Session, for the purpose of paying maturing bonds and interest on the full faith and credit bonds of the State of Mississippi.
SECTION 20. Upon passage of this act, the State Fiscal Officer shall transfer One Hundred Million Dollars ($100,000,000.00) from the Budget Contingency Fund created in Section 27-103-301 to the Disaster Recovery Fund created in Section 31-17-123.
SECTION 21. This act shall take effect and be in force from and after its passage.