MISSISSIPPI LEGISLATURE
2006 1st Extraordinary Session
To: Ways and Means
By: Representative Franks, Reynolds, Guice, Patterson, Fredericks, Peranich, Upshaw, Dedeaux, Broomfield, Bailey, Moak
AN ACT TO AMEND SECTION 27-107-321, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE DEPARTMENT OF FINANCE AND ADMINISTRATION TO MAKE GRANTS TO LOCAL GOVERNMENTS FROM THE EMERGENCY AID TO LOCAL GOVERNMENTS FUND; TO PROVIDE THAT INTEREST EARNED OR INVESTMENT EARNINGS ON AMOUNTS IN THE FUND SHALL BE DEPOSITED TO THE CREDIT OF THE FUND AND TO PROVIDE THAT GRANTS FROM THE FUND MAY NOT EXCEED $3,000,000.00 AND THAT THE TOTAL AGGREGATE AMOUNT OF ALL GRANTS SHALL NOT EXCEED $25,000,000.00; TO ESTABLISH A GRANT PROGRAM TO PROVIDE FUNDS TO CERTAIN COUNTIES AND MUNICIPALITIES FOR THE PURPOSE OF MAKING GRANTS TO INDIVIDUALS WHO SUSTAINED PHYSICAL DAMAGE TO HOMES DUE TO FLOODING, STORM SURGE OR OTHER CATEGORIES OF DAMAGE SET FORTH IN RULES AND REGULATIONS OF THE DEPARTMENT OF FINANCE AND ADMINISTRATION, AS A RESULT OF HURRICANE KATRINA, WHO HAD NO FLOOD INSURANCE OR OTHER INSURANCE PROVIDING COVERAGE FOR SUCH DAMAGE OR HAD FLOOD INSURANCE BUT HAD A FLOOD LOSS THAT EXCEEDED SUCH INSURANCE, AND WHO WERE NOT COVERED BY OTHER INSURANCE OR SOURCE OF REIMBURSEMENT; TO PROVIDE THAT THE DEPARTMENT OF FINANCE AND ADMINISTRATION SHALL ADMINISTER THE PROGRAM; TO PROVIDE THE MAXIMUM AMOUNT FOR SUCH GRANTS; TO ESTABLISH CERTAIN ELIGIBILITY REQUIREMENTS FOR THE RECEIPT OF SUCH GRANTS; TO AUTHORIZE THE ISSUANCE OF STATE GENERAL OBLIGATION BONDS FOR THE PURPOSE OF PROVIDING FUNDS FOR THE GRANT PROGRAM; TO REQUIRE NOTICE TO BE GIVEN TO CERTAIN MEMBERS OF THE LEGISLATURE BEFORE A PUBLIC CEREMONY TO ANNOUNCE THE AWARD OF A GRANT UNDER THIS ACT; TO REQUIRE THAT CERTAIN DOCUMENTS PREPARED IN CONNECTION WITH A GRANT MADE UNDER THIS ACT CONTAIN LANGUAGE THAT THE GRANT FUNDS WERE MADE AVAILABLE BY THE LEGISLATURE; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 27-107-321, Mississippi Code of 1972, is amended as follows:
27-107-321. (1) (a) There are established two (2) emergency aid to local governments loan and grant programs to be administered by the Department of Finance and Administration, referred to in this section as "department," for the purposes of (i) assisting counties, incorporated municipalities and public school districts that suffer revenue losses as a result of a natural disaster for which a state of emergency has been duly proclaimed, and (ii) providing funds to counties and municipalities for the purposes of making grants available to individuals who reside in Hancock, Harrison, Jackson, Pearl River, Stone and George Counties and municipalities located in such counties, who sustained physical damage to homes due to flooding, storm surge or other categories of damage set forth in rules and regulations promulgated by the department, as a result of Hurricane Katrina, and who had no flood insurance or other insurance providing coverage for such damage or had flood insurance but had a flood loss that exceeded such insurance, and who were not covered by other insurance or source of reimbursement, as attested to by the homeowner. For the purposes of the program authorized under this subparagraph (ii), a home shall be the primary homestead of the applicant.
(b) The department may contract for facilities and staff needed to administer this section, including routine management, as it deems necessary. The department may advertise for or solicit proposals from public or private sources, or both, for administration of this section or any services required for administration of this section or any portion thereof. It is the intent of the Legislature that the department endeavor to ensure that the costs of administration of this section are as low as possible.
(c) The provisions of subsections (2) through (5) of this section shall apply to the program described in paragraph (a)(i) of this subsection, and the provisions of subsections (6) through (11) of this section shall apply to the program described in paragraph (a)(ii) of this subsection. The provisions of subsections (12) and (14) of this section shall apply to both programs described in paragraph (a) of this subsection, and the provisions of subsection (13) of this section shall apply to the program described in paragraph (a)(i) of this subsection.
(2) (a) There is created a special fund in the State Treasury to be designated as the "Emergency Aid to Local Governments Fund," referred to in this section as "fund," which fund shall consist of money transferred from the Disaster Recovery Fund created in Section 31-17-123 and money designated for deposit therein from any other source, public or private, including, but not limited to, appropriations, bond proceeds, grants, gifts or donations. The fund shall be credited with all repayments of principal and interest derived from loans made from the fund. Unexpended amounts remaining in the fund at the end of a fiscal year shall not lapse into the State General Fund, and any interest earned or investment earnings on amounts in the fund shall be deposited to the credit of the Emergency Aid to Local Governments Fund. Monies in the fund may not be used or expended for any purpose except as authorized under subsections (2) through (5) of this section.
(b) The department shall establish a loan and grant program by which loans and grants may be made available to counties, incorporated municipalities and public school districts, to assist those counties, incorporated municipalities and public school districts. Loan and grant proceeds distributed to counties, incorporated municipalities and public school districts shall be considered to be, and shall be utilized by recipient in the same manner as, governmental, enterprise or internal service fund type revenues, specifically for essential government services, including the payment of debt service. Any governmental entity in the current fiscal year that demonstrates a projected revenue loss equal to or exceeding twenty-five percent (25%) of its governmental fund type revenues in the fiscal year prior to the occurrence of the natural disaster eligible under subsections (2) through (5) this section may qualify for a loan and/or grant. The interest rate on loans made under this section may vary from time to time and from loan to loan, and shall be at or below market interest rates as determined by the department. The department shall act as quickly as is practicable and prudent in deciding on any loan or grant request that it receives. No loan or grant shall be approved under subsections (2) through (5) of this section unless the county, municipality or public school district requesting the loan or grant has exhausted all other available public or private programs to obtain funds for the revenue loss that it is projected to suffer. Such public or private programs shall include, but not be limited to, loans, grants and donations.
(c) The aggregate amount of any loans or grants received under subsections (2) through (5) of this section by a county, incorporated municipality or public school district shall not exceed one hundred percent (100%) of the difference between the revenue received by a county, incorporated municipality or public school district from governmental fund type revenues that are used to fund essential services in the fiscal year prior to the occurrence of the natural disaster and the estimated revenue from such sources after the occurrence of the natural disaster plus available cash reserves or fund balances at the fiscal year end, as determined by the department. The State Bond Commission shall set the maximum amount of any loan or grant made under subsections (2) through (5) of this section at an amount that will ensure the equitable distribution of the amounts available for loans and grants to the eligible governmental entities affected by the natural disaster, but in no event shall a grant exceed Three Million Dollars ($3,000,000.00) or the total aggregate amount of all grants exceed Twenty-five Million Dollars ($25,000,000.00).
(d) A county or public school district that receives a loan from the fund shall pledge for repayment of the loan any part of the homestead exemption annual tax loss reimbursement to which it may be entitled under Section 27-33-77, as may be required by the department. An incorporated municipality that receives a loan from the fund or the emergency fund shall pledge for repayment of the loan any part of the sales tax revenue distribution to which it may be entitled under Section 27-65-75 or any part of the homestead exemption annual tax loss reimbursement to which it may be entitled under Section 27-33-77, as may be required by the department. All recipients of such loans shall establish a dedicated source of revenue for repayment of the loan. Before any county, incorporated municipality or public school district shall receive any loan, it shall have executed with the department a loan agreement evidencing that loan, a copy of which shall be filed by the department with the State Tax Commission. The loan agreement shall not be construed to prohibit any recipient from prepaying any part or all of the funds received. The repayment schedule in each loan agreement shall provide for (i) monthly payments, (ii) semiannual payments or (iii) other periodic payments. The loan agreement shall provide for the repayment of all funds received from the fund within not more than three (3) years. The State Tax Commission shall, at the direction of the department, withhold semiannually from counties, incorporated municipalities and public school districts and monthly from incorporated municipalities, from the amount to be remitted to the county, municipality or public school district, the sum necessary to pay all or a portion of the periodic payments for the loan.
(e) Any county, incorporated municipality or public school district which receives a loan from the state for that purpose but which is not eligible to pledge for repayment under the provisions of paragraph (d) of this subsection, shall repay that loan by making payments each month to the State Treasurer through the Department of Finance and Administration for and on behalf of the department according to Section 7-7-15, to be credited to the fund in lieu of pledging homestead exemption annual tax loss reimbursement or sales tax revenue distribution.
Loan repayments shall be according to a repayment schedule contained in each loan agreement as provided in paragraph (d) of this subsection.
(f) Evidences of indebtedness which are issued pursuant to subsections (2) through (5) of this section shall not be deemed indebtedness within the meaning specified in Section 21-33-303 with regard to cities and incorporated towns, in Section 19-9-5 with regard to counties and in Section 37-59-5 with regard to public school districts.
(g) The State Auditor, upon request of the department, shall audit the receipts and expenditures of acounty, an incorporated municipality or a public school district if loan repayments appear to be in arrears, and if the Auditor finds that the county, incorporated municipality or public school district is in arrears in those repayments, the Auditor shall immediately notify the executive director of the department who may take any action as may be necessary to enforce the terms of the loan agreement, including liquidation and enforcement of the security given for repayment of the loan, and the executive director of the department may, in his discretion, notify the State Tax Commission to withhold all future payments to the county, incorporated municipality or school district of homestead exemption annual tax loss reimbursements under Section 27-33-77 and/or all sums allocated to the incorporated municipality under Section 27-65-75, until such time as the county, incorporated municipality or public school district is again current in its loan repayments as certified by the department.
(h) All monies deposited in the fund shall be used only for providing the loans and grants authorized under subsections (2) through (5) of this section. In addition, any amounts in the fund may be used to defray the reasonable costs of administering the fund; however, no monies in the fund which are to be used for grant purposes may be used to defray any costs of administering the fund or program. The department is authorized to use amounts available to it from the fund to contract for those facilities and staff needed to administer and provide routine management for the funds and loan program.
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(3) The State Bond Commission, at one time, or from time to time, may declare the necessity for funds for the purposes provided in subsections (2) through (5) of this section, including the costs incident to the administration of the loan and grant program described under subsection (1)(a)(i). Upon approval by the State Bond Commission, the department is authorized to transfer any necessary amount from the Disaster Recovery Fund created in Section 31-17-123 to the fund in ample time to discharge such loans, grants and incidental costs.
(4) The department is authorized, without further process of law, to certify the necessity for warrants and is authorized and directed to issue such warrants, in such amounts as may be necessary to make loans and grants under the program described under subsection (1)(a)(i).
(5) After any state funds in the fund are no longer needed for the particular purpose for which they were appropriated, deposited or transferred into the fund, the department shall transfer those state funds back to the particular fund or funds in the State Treasury from which they were appropriated or transferred into the fund, upon certification of the State Fiscal Officer that the state funds are not currently needed.
(6) A county or municipality desiring funds under subsections (6) through (11) of this section must submit an application to the department that contains the amount of funds requested and any other information required by the department. A county or municipality receiving funds under subsections (6) through (11) of this section may contract with the local planning and development district in which the county or municipality is located or other entity approved by the department for the administration of grant funds to individuals. A county or municipality that contracts with a planning and development district or other entity for such purposes may use part of the funds received from the department for the purpose of defraying the costs of such a contract.
(7) (a) The amount of a grant made by a county or municipality, or both, under subsections (6) through (11) of this section shall not exceed Fifty Thousand Dollars ($50,000.00) in the aggregate; however, grants made under subsections (6) through (11) of this section shall be made only to the extent that federal or other assistance is not available to an individual or does not provide adequate assistance or coverage needed to repair or rebuild a home for which a grant is made under subsections (6) through (11) of this section. The proceeds of the grants authorized under subsections (6) through (11) of this section shall be used only for the purpose of repairing or rebuilding a home for which a grant is made under subsections (6) through (11) of this section. An individual receiving a grant to rebuild a home must rebuild the home in the county in which it was located at the time of the damage. In making funds available to counties and municipalities under subsections (6) through (11) of this section, the department shall attempt to provide for the equitable distribution of such funds in order to address the housing needs caused as a result of Hurricane Katrina.
(b) To be eligible for a grant under subsections (6) through (11) of this section, an individual must:
(i) Own or have owned a home that sustained physical damage due to flooding, storm surge or other categories of damage set forth in rules and regulations promulgated by the department, as a result of Hurricane Katrina;
(ii) Not have had flood insurance or other insurance providing coverage for such damage, or had flood insurance but had a flood loss that exceeded such insurance, and was not covered by other insurance or source of reimbursement;
(iii) Agree to obtain and maintain flood insurance coverage on the property for which assistance is requested; and
(iv) Have an aggregate household income that does not exceed three hundred percent (300%) of the United States poverty level.
(8) Any individual who receives a grant under subsections (6) through (11) of this section and who fails to maintain flood insurance coverage on the property for which assistance is provided as required in subsections (6) through (11) of this section shall not be eligible for state assistance for any flood damage that occurs after the grant is made.
(9) An individual desiring assistance under subsections (6) through (11) of this section must submit an application to the department. The application must include a description of the property and the purpose for which assistance is requested, the cost of the project for which assistance is requested and any other information required by the department.
(10) The department shall have all powers necessary to implement and administer the program established under subsections (6) through (11) of this section, and the department shall promulgate rules and regulations, in accordance with the Mississippi Administrative Procedures Law, necessary for the implementation of subsections (6) through (11) of this section. However, if the department desires to contract with any entity or entities to assist in the administration of the program established under subsections (6) through (11) of this section, the department shall utilize a request for proposals procedure before awarding any contract for any such assistance purposes.
(11) (a) There is created in the State Treasury a special fund to be designated as the "Mississippi Disaster Home Flood Grant Fund," which shall consist of funds appropriated or otherwise made available by the Legislature in any manner and funds from any other source designated for deposit into such fund. Unexpended amounts remaining in the fund at the end of a fiscal year shall not lapse into the State General Fund, and any investment earnings or interest earned on amounts in the fund shall be deposited to the credit of the fund. Monies in the fund shall be used by the department for the purposes described in subsections (6) through (11) of this section.
(12) In administering this section the department shall have the following powers and duties:
(a) To supervise the use of all funds made available under this section;
(b) To promulgate rules and regulations, to make variances and exceptions thereto, and to establish procedures in accordance with this section for the implementation of the loan and grant programs described in subsection (1)(a);
(c) To requisition monies in the appropriate special fund and distribute those monies in accordance with this section;
(d) To maintain, in accordance with generally accepted government accounting standards, an accurate record of all monies in each special fund made available to counties, incorporated municipalities and public school districts under this section; and
(e) To file annually with the Legislature a report detailing how monies in each special fund were distributed during the preceding fiscal year to each county, incorporated municipality and public school district.
(13) At least five (5) days before any public ceremony to announce the award of a grant to a county, municipality or public school district under subsections (2) through (5) of this section, the department shall notify all of the members of the Mississippi House of Representatives and Mississippi Senate whose districts include any portion of the county, municipality or school district to which the grant is being made.
(14) The department shall include the following language at a prominent location on any documents prepared by the department in connection with a grant made under this section that are to be provided to the county, municipality or school district to which the grant is made or to the public: "The funds for this grant were made available by the Mississippi Legislature."
SECTION 2. (1) As used in this section, the following words shall have the meanings ascribed herein unless the context clearly requires otherwise:
(a) "Accreted value" of any bonds means, as of any date of computation, an amount equal to the sum of (i) the stated initial value of such bond, plus (ii) the interest accrued thereon from the issue date to the date of computation at the rate, compounded semiannually, that is necessary to produce the approximate yield to maturity shown for bonds of the same maturity.
(b) "State" means the State of Mississippi.
(c) "Commission" means the State Bond Commission.
(d) "Department" means the Department of Finance and Administration.
(2) (a) The commission, at one time, or from time to time, may declare by resolution the necessity for issuance of general obligation bonds of the State of Mississippi to provide funds for the program authorized in Section 27-107-321(1)(a)(ii), Mississippi Code of 1972. Upon the adoption of a resolution by the department, declaring the necessity for the issuance of any part or all of the general obligation bonds authorized by this section, the department shall deliver a certified copy of its resolution or resolutions to the commission. Upon receipt of such resolution, the commission, in its discretion, may act as the issuing agent, prescribe the form of the bonds, advertise for and accept bids, issue and sell the bonds so authorized to be sold and do any and all other things necessary and advisable in connection with the issuance and sale of such bonds. The total amount of bonds issued under this section shall not exceed One Hundred Million Dollars ($100,000,000.00).
(b) The proceeds of bonds issued pursuant to this section shall be deposited into the special fund created in Section 27-107-321(11), Mississippi Code of 1972. Any investment earnings on bonds issued pursuant to this section shall be used to pay debt service on bonds issued under this section, in accordance with the proceedings authorizing issuance of such bonds.
(3) The principal of and interest on the bonds authorized under this section shall be payable in the manner provided in this section. Such bonds shall bear such date or dates, be in such denomination or denominations, bear interest at such rate or rates (not to exceed the limits set forth in Section 75-17-101, Mississippi Code of 1972), be payable at such place or places within or without the State of Mississippi, shall mature absolutely at such time or times not to exceed twenty-five (25) years from date of issue, be redeemable before maturity at such time or times and upon such terms, with or without premium, shall bear such registration privileges, and shall be substantially in such form, all as shall be determined by resolution of the commission.
(4) The bonds authorized by this section 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 herein to the contrary, such bonds may be issued as provided in the Registered Bond Act of the State of Mississippi.
(5) All bonds and interest coupons issued under the provisions of this section have all the qualities and incidents of negotiable instruments under the provisions of the Uniform Commercial Code, and in exercising the powers granted by this section, the commission shall not be required to and need not comply with the provisions of the Uniform Commercial Code.
(6) The commission shall act as the issuing agent for the bonds authorized under this section, prescribe the form of the bonds, advertise for and accept bids, issue and sell the bonds so authorized to be sold, pay all fees and costs incurred in such issuance and sale, and do any and all other things necessary and advisable in connection with the issuance and sale of such bonds. 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 section from the proceeds derived from the sale of such bonds. The commission shall sell such bonds on sealed bids at public sale, and for such price as it may determine to be for the best interest of the State of Mississippi, but no such sale shall be made at a price less than par plus accrued interest to the date of delivery of the bonds to the purchaser. All interest accruing on such bonds so issued shall be payable semiannually or annually; however, the first interest payment may be for any period of not more than one (1) year.
Notice of the sale of any such bonds shall be published at least one time, not less than ten (10) days before the date of sale, and shall be so published in one or more newspapers published or having a general circulation in the City of Jackson, Mississippi, and in one or more other newspapers or financial journals with a national circulation, to be selected by the commission.
The commission, when issuing any bonds under the authority of this section, may provide that bonds, at the option of the State of Mississippi, may be called in for payment and redemption at the call price named therein and accrued interest on such date or dates named therein.
(7) The bonds issued under the provisions of this section 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 and the interest on 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.
(8) Upon the issuance and sale of bonds under the provisions of this section, the commission shall transfer the proceeds of any such sale or sales to the special fund created in Section 27-107-321(11), Mississippi Code of 1972. The proceeds of such bonds shall be disbursed solely upon the order of the department under such restrictions, if any, as may be contained in the resolution providing for the issuance of the bonds.
(9) The bonds authorized under this section 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 section. Any resolution providing for the issuance of bonds under the provisions of this section 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.
(10) The bonds authorized under the authority of this section 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.
(11) Any holder of bonds issued under the provisions of this section or of any of the interest coupons pertaining thereto may, either at law or in equity, by suit, action, mandamus or other proceeding, protect and enforce any and all rights granted under this section, or under such resolution, and may enforce and compel performance of all duties required by this section to be performed, in order to provide for the payment of bonds and interest thereon.
(12) All bonds issued under the provisions of this section 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 of Mississippi, 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.
(13) Bonds issued under the provisions of this section and income therefrom shall be exempt from all taxation in the State of Mississippi.
(14) The proceeds of the bonds issued under this section shall be used solely for the purposes therein provided, including the costs incident to the issuance and sale of such bonds.
(15) The State Treasurer is authorized, without further process of law, to certify to the department the necessity for warrants, and the department is authorized and directed to issue such warrants, in such amounts as may be necessary to pay when due the principal of, premium, if any, and interest on, or the accreted value of, all bonds issued under this section; 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, or the interest thereon, on the due dates thereof.
(16) This section shall be deemed to be full and complete authority for the exercise of the powers therein granted, but this section shall not be deemed to repeal or to be in derogation of any existing law of this state.
SECTION 3. This act shall take effect and be in force from and after its passage.