House Bill 1273

AN ACT TO CREATE NEW SECTIONS 19-9-30, 21-33-324, AND 37-59-44, MISSISSIPPI CODE OF 1972, AND TO AMEND SECTION 31-19-5, MISSISSIPPI CODE OF 1972, TO PROVIDE ADDITIONAL AUTHORITY TO BOARDS OF SUPERVISORS, GOVERNING AUTHORITIES OF MUNICIPALITIES AND BOARDS OF TRUSTEES OF SCHOOL DISTRICTS FOR THE INVESTMENT OF COUNTY, MUNICIPAL AND SCHOOL DISTRICT SURPLUS FUNDS AND FUNDS RECEIVED FROM THE SALE OF BONDS, NOTES OR CERTIFICATES OF INDEBTEDNESS THAT ARE NOT NEEDED FOR DISBURSEMENT FOR THE PURPOSES FOR WHICH ISSUED; AND FOR RELATED PURPOSES.

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

SECTION 1. The following shall be codified as Section 19-9-30, Mississippi Code of 1972:

19-9-30. (1) Notwithstanding the provisions of Sections 19-9-29, 27-105-5 and 25-1-69, or the provisions of any other law, and in addition to other statutory authorization for the investment of county surplus funds, the board of supervisors of a county may invest surplus county funds in accordance with the following conditions:

(a) The board of supervisors invests the funds through a financial institution that is doing business in the county or an adjoining county and that is selected by the board;

(b) The selected financial institution arranges for the investment of the funds in book entry certificates of deposit in one or more banks or savings and loan associations wherever located in the United States, for the account of the county;

(c) The full amount of the principal and accrued interest of each such certificate of deposit is insured by the Federal Deposit Insurance Corporation.

(d) The selected financial institution acts as custodian for the county with respect to the certificates of deposit issued for the county's account; and

(e) At the same time that such certificates of deposit are issued, the selected financial institution receives an amount of deposits from customers of other financial institutions located in the United States equal to or greater than the amount of the funds invested by the board of supervisors through the selected financial institution.

(2) The requirements prescribed in Section 27-105-5 and in any other statutory provision applicable to the deposit or investment of public funds in financial institutions shall not be deemed to apply to investments made in accordance with the conditions in this section.

SECTION 2. The following shall be codified as Section 21-33-324, Mississippi Code of 1972:

21-33-324. (1) Notwithstanding the provisions of Sections 21-33-323, 27-105-5 and 25-1-69, or the provisions of any other law, and in addition to other statutory authorization for the investment of municipal surplus funds, the governing authorities of a municipality may invest surplus municipal funds in accordance with the following conditions:

(a) The governing authorities invest the funds through a financial institution that is doing business in the county in which the municipality is located and that is selected by the governing authorities;

(c) The full amount of the principal and accrued interest of each such certificate of deposit is insured by the Federal Deposit Insurance Corporation;

(d) The selected financial institution acts as custodian for the municipality with respect to the certificates of deposit issued for the municipality's account; and

(e) At the same time that such certificates of deposit are issued, the selected financial institution receives an amount of deposits from customers of other financial institutions located in the United States equal to or greater than the amount of the funds invested by the governing authorities through the selected financial institution.

SECTION 3. The following shall be codified as Section 37-59-44, Mississippi Code of 1972:

21-33-324. (1) Notwithstanding the provisions of Sections 27-105-5 and 25-1-69, or the provisions of any other law, and in addition to the authorization for the investment of school district surplus funds pursuant to Section 37-59-43, the school board may invest excess municipal funds in accordance with the following conditions:

(a) The school board invests the funds through a financial institution that is doing business in the state and that is selected by the school board;

(c) The full amount of the principal and accrued interest of each such certificate of deposit is insured by the Federal Deposit Insurance Corporation;

(d) The selected financial institution acts as custodian for the school board with respect to the certificates of deposit issued for the school board's account; and

(e) At the same time that such certificates of deposit are issued, the selected financial institution receives an amount of deposits from customers of other financial institutions located in the United States equal to or greater than the amount of the funds invested by the school board through the selected financial institution.

SECTION 4. Section 31-19-5, Mississippi Code of 1972, is amended as follows:

31-19-5. (1) Any funds received from the sale of bonds, notes, or certificates of indebtedness heretofore or hereafter sold by the State of Mississippi or any agency or department thereof or by any county, municipality, road district, levee district, development district, utility district, school district, drainage district or other entity authorized by law to issue bonds, notes, or certificates of indebtedness, which are not immediately required for disbursement for the purpose for which issued, may be invested by the proper authorities in any direct obligation issued by or guaranteed in full as to principal and interest by the United States of America or in certificates of deposit issued by a qualified depository of the State of Mississippi as approved by the State Treasurer, maturing or being redeemable by the holder on or prior to the date upon which such funds will be required for disbursement and bearing interest at a rate per annum not less than a simple interest rate numerically equal to the average bank discount rate on United States Treasury bills of comparable maturity or the current rate of interest paid on certificates of deposit or on United States Treasury obligations of comparable maturities, whichever is the higher, provided, however, that the proceeds from the sale of bonds issued pursuant to Sections 57-1-131 through 57-1-145, * * * or Chapter 3 of Title 57, Mississippi Code of 1972, may be invested in certificates of deposit issued by qualified depositories of the State of Mississippi bearing interest at any rate per annum which may be mutually agreed upon, but in no case shall said rate be less than such average bank discount rate.

(2) Funds received pursuant to subsection (1) of this section shall be invested as heretofore described or may be invested, pursuant to rules promulgated by the State Treasurer, in obligations described in Section 27-105-33(d); * * * however, funds described in subsection (1) of this section may not be invested in securities of, or interests in, any open-end or closed-end management type investment company or investment trust, such as those described in Section 27-105-33(e).

(3) In addition to the authority for the investment of funds authorized in subsections (1) and (2) of this section, any funds received from the sale of bonds, notes, or certificates of indebtedness heretofore or hereafter sold by any county, municipality, or school district, which are not immediately required for disbursement for the purposes for which issued, may also be invested in accordance with the following conditions, notwithstanding Sections 27-105-5, 25-1-69, or other provisions of law:

(a) The proper authorities invest the funds through a financial institution that is doing business in the state and that is selected by the proper authorities;

(c) The full amount of the principal and accrued interest of each such certificate of deposit is insured by the Federal Deposit Insurance Corporation;

(d) The selected financial institution acts as custodian for the county, municipality, or school district with respect to the certificates of deposit issued for the county's, municipality's, or school district's account; and

(e) At the same time that such certificates of deposit are issued, the selected financial institution receives an amount of deposits from customers of other financial institutions located in the United States equal to or greater than the amount of the funds invested by the proper authorities through the selected financial institution.

(4) The requirements prescribed in Section 27-105-5 and in any other statutory provision applicable to the deposit or investment of public funds in financial institutions shall not be deemed to apply to investments made in accordance with the conditions in subsection (3) of this section.

SECTION 5. This act shall take effect and be in force from and after July 1, 2007.