House Bill 297

AN ACT TO ESTABLISH A DISASTER HOME FLOOD LOAN PROGRAM TO PROVIDE LOANS TO INDIVIDUALS WHO SUSTAINED PHYSICAL DAMAGE TO HOMES DUE TO FLOODING OR STORM SURGE 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 WAS NOT COVERED BY OTHER INSURANCE OR SOURCE OF REIMBURSEMENT; TO PROVIDE THAT THE DEPARTMENT OF FINANCE AND ADMINISTRATION SHALL ADMINISTER THE LOAN PROGRAM; TO PROVIDE THE MAXIMUM AMOUNT FOR SUCH LOANS; TO ESTABLISH CERTAIN ELIGIBILITY REQUIREMENTS FOR THE RECEIPT OF SUCH LOANS; TO AUTHORIZE THE ISSUANCE OF $250,000,000.00 WORTH OF STATE GENERAL OBLIGATION BONDS FOR THE PURPOSE OF PROVIDING FUNDS FOR THE LOAN PROGRAM; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) The Department of Finance and Administration shall establish a loan program to provide loans to individuals who sustained physical damage to homes due to flooding or storm surge 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 was not covered by other insurance or source of reimbursement. For the purposes of the program authorized under this section, a home shall be the primary homestead of the applicant.

(2) (a) The amount of a loan made under this section shall not exceed Twenty-five Thousand Dollars ($25,000.00); however, loans made under this section shall be made only to the extent that federal or other assistance is not available or does not provide adequate assistance or coverage needed to repair or rebuild a home for which a loan is made under this section. No interest shall be charged on loans made under this section, and the term of any such loans shall not exceed twenty (20) years. The proceeds of the loans authorized under this section shall be used only for the purpose of repairing or rebuilding a home for which a loan is made under this section. An individual receiving a loan to rebuild a home must rebuild the home in the county in which it was located at the time of the damage. All repayments of loans made under this section shall be deposited into the State General Fund. In making loans under this section, the Department of Finance and Administration shall attempt to provide for the equitable distribution of such loans in order to address the housing needs caused as a result of Hurricane Katrina.

(b) To be eligible for a loan under this section, an individual must:

(i) Own or have owned a home that sustained physical damage due to flooding or storm surge 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; and

(iii) Agree to obtain and maintain flood insurance coverage on the property for which assistance is requested.

(3) Any individual who receives a loan under this section and who fails to maintain flood insurance coverage on the property for which assistance is provided as required in this section shall not be eligible for state assistance for any flood damage that occurs after the loan is made.

(4) An individual desiring assistance under this section must submit an application to the Department of Finance and Administration. 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.

(5) The Department of Finance and Administration shall have all powers necessary to implement and administer the program established under this section, and the department shall promulgate rules and regulations, in accordance with the Mississippi Administrative Procedures Law, necessary for the implementation of this section. However, if the Department of Finance and Administration desires to contract with any entity or entities to assist in the administration of the program established under this section, the department shall utilize a request for proposals procedure before awarding any contract for any such assistance purposes.

(6) (a) There is created in the State Treasury a special fund to be designated as the "Mississippi Disaster Home Flood Loan 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 of Finance and Administration for the purposes described in this section.

(b) Monies in the special fund which are derived from proceeds of bonds issued under Sections 2 through 17 of this act may be used to reimburse reasonable actual and necessary costs incurred by the Department of Finance and Administration in administering or providing assistance under the program established in this section. An accounting of actual costs incurred for which reimbursement is sought shall be maintained by the Department of Finance and Administration. Reimbursement of reasonable actual and necessary costs under this paragraph shall not exceed one percent (1%) of the proceeds of bonds issued under Sections 2 through 17 of this act for the program established in this section.

SECTION 2. As used in Sections 2 through 17 of this act, 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.

SECTION 3. (1) 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 1 of this act. Upon the adoption of a resolution by the Department of Finance and Administration, declaring the necessity for the issuance of any part or all of the general obligation bonds authorized by this section, the Department of Finance and Administration 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 Sections 2 through 17 of this act shall not exceed Two Hundred Fifty Million Dollars ($250,000,000.00).

(2) The proceeds of bonds issued pursuant to Sections 2 through 17 of this act shall be deposited into the special fund created in Section 1 of this act. Any investment earnings on bonds issued pursuant to Sections 2 through 17 of this act shall be used to pay debt service on bonds issued under Sections 2 through 17 of this act, in accordance with the proceedings authorizing issuance of such bonds.

SECTION 4. The principal of and interest on the bonds authorized under Sections 2 through 17 of this act 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.

SECTION 5. The bonds authorized by Sections 2 through 17 of 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 herein to the contrary, such bonds may be issued as provided in the Registered Bond Act of the State of Mississippi.

SECTION 6. All bonds and interest coupons issued under the provisions of Sections 2 through 17 of this act have all the qualities and incidents of negotiable instruments under the provisions of the Uniform Commercial Code, and in exercising the powers granted by Sections 2 through 17 of this act, the commission shall not be required to and need not comply with the provisions of the Uniform Commercial Code.

SECTION 7. The commission shall act as the issuing agent for the bonds authorized under Sections 2 through 17 of this act, 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 Sections 2 through 17 of this act 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 Sections 2 through 17 of this act, 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.

SECTION 8. The bonds issued under the provisions of Sections 2 through 17 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 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.

SECTION 9. Upon the issuance and sale of bonds under the provisions of Sections 2 through 17 of this act, the commission shall transfer the proceeds of any such sale or sales to the special fund created in Section 1 of this act. The proceeds of such bonds shall be disbursed solely upon the order of the Department of Finance and Administration under such restrictions, if any, as may be contained in the resolution providing for the issuance of the bonds.

SECTION 10. The bonds authorized under Sections 2 through 17 of 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 Sections 2 through 17 of this act. Any resolution providing for the issuance of bonds under the provisions of Sections 2 through 17 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 11. The bonds authorized under the authority of Sections 2 through 17 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 12. Any holder of bonds issued under the provisions of Sections 2 through 17 of this act 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 Sections 2 through 17 of this act, or under such resolution, and may enforce and compel performance of all duties required by Sections 2 through 17 of this act to be performed, in order to provide for the payment of bonds and interest thereon.

SECTION 13. All bonds issued under the provisions of Sections 2 through 17 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 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.

SECTION 14. Bonds issued under the provisions of Sections 2 through 17 of this act and income therefrom shall be exempt from all taxation in the State of Mississippi.

SECTION 15. The proceeds of the bonds issued under Sections 2 through 17 of this act shall be used solely for the purposes therein provided, including the costs incident to the issuance and sale of such bonds.

SECTION 16. 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, premium, if any, and interest on, or the accreted value of, all bonds issued under Sections 2 through 17 of 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, or the interest thereon, on the due dates thereof.

SECTION 17. Sections 2 through 17 of this act shall be deemed to be full and complete authority for the exercise of the powers therein granted, but Sections 2 through 17 of this act shall not be deemed to repeal or to be in derogation of any existing law of this state.

SECTION 18. This act shall take effect and be in force from and after its passage.