Senate Bill 2839

AN ACT TO AUTHORIZE THE STATE BOND COMMISSION TO MAKE TEMPORARY BORROWINGS IN AN AMOUNT NOT TO EXCEED $100,000,000,00 TO PROVIDE FUNDS FOR THE STATE GENERAL FUND IN ORDER TO ALLEVIATE THE DEFICIT; TO AMEND SECTION 27-103-203, MISSISSIPPI CODE OF 1972, TO REMOVE THE PROVISION THAT LIMITS THE AMOUNTS THAT THE GOVERNOR MAY TRANSFER FROM THE WORKING CASH-STABILIZATION RESERVE FUND TO ALLEVIATE THE DEFICIT; TO AMEND SECTION 43-13-405, MISSISSIPPI CODE OF 1972, TO ABOLISH THE HEALTH CARE TRUST FUND AND PROVIDE THAT ALL TOBACCO SETTLEMENT INSTALLMENT PAYMENTS FOR WHICH THE USE OR PURPOSE IS NOT RESTRICTED BY THE TERMS OF THE TOBACCO SETTLEMENT SHALL BE DEPOSITED INTO THE STATE GENERAL FUND; TO AMEND SECTION 43-13-409, MISSISSIPPI CODE OF 1972, TO REQUIRE THE BOARD OF DIRECTORS OF THE HEALTH CARE TRUST FUND AND THE HEALTH CARE EXPENDABLE FUND TO TAKE ANY ACTIONS NECESSARY TO TRANSFER THE ASSETS OF THE HEALTH CARE TRUST FUND AND THE HEALTH CARE EXPENDABLE FUND TO THE STATE GENERAL FUND; TO AMEND SECTION 43-13-403, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; TO REPEAL SECTIONS 43-13-401 AND 43-15-407, MISSISSIPPI CODE OF 1972, WHICH DECLARE LEGISLATIVE INTENT AND ESTABLISH THE HEALTH CARE EXPENDABLE FUND; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) For the purpose of providing funds for the State General Fund in order to avoid deficits, the State Bond Commission is hereby authorized, on the credit of the state, to make temporary borrowings in the aggregate principal amount not to exceed One Hundred Million Dollars ($100,000,000.00) in order to provide funds in such amounts as may, from time to time, be deemed necessary. In order to provide for, and in connection with such temporary borrowings, the State Bond Commission is authorized in the name and on behalf of the state to enter into any purchase, loan or credit agreement, or agreements, or other agreement or agreements with any banks or trust companies or other lending institutions, investment banking firms or persons in the United States having power to enter into the same, which agreements may contain such provisions as may be authorized by the State Bond Commission. It is the intent of the Legislature that the State Bond Commission shall make such temporary borrowings as often and as frequently as may be necessary to insure the availability of sufficient funds in the State General Fund.

(2) All temporary borrowings made under this section shall be evidenced by notes of the state which shall be issued, from time to time, for such amounts not exceeding in the aggregate the applicable statutory and constitutional debt limitation, in such form and in such denominations and subject to terms and conditions of sale and issue, prepayment or redemption and maturity, rate or rates of interest and time of payment of interest as the State Bond Commission shall authorize and direct; however, such notes shall mature not more than three (3) years from the date of issuance.

(3) The proceeds of all such temporary borrowing shall be deposited into the State General Fund.

SECTION 2. Section 27-103-203, Mississippi Code of 1972, is amended as follows:

27-103-203. (1) There is created in the State Treasury a special fund, separate and apart from any other fund, to be designated the Working Cash-Stabilization Reserve Fund.

(2) The Working Cash-Stabilization Reserve Fund shall not be considered as a surplus or available funds when adopting a balanced budget as required by law. The State Treasurer shall invest all sums in the Working Cash-Stabilization Reserve Fund not needed for the purposes provided for in this section in certificates of deposit, repurchase agreements and other securities as authorized in Section 27-105-33(d) or 7-9-103, as the State Treasurer may determine to yield the highest market rate available. If the Ayers Settlement Fund is created under Section 37-101-27(5), the first Five Million Dollars ($5,000,000.00) of interest earned on those sums each fiscal year shall be deposited into that fund until a total of Seventy Million Dollars ($70,000,000.00) has been deposited into the fund. The interest, or the remaining interest if the Ayers Settlement Fund is created, that is earned on those sums shall be deposited in the Working Cash-Stabilization Reserve Fund until the balance of principal and interest in the fund reaches seven and one-half percent (7-1/2%) of the total General Fund appropriations for the current fiscal year, and all interest earned in excess of amounts necessary to maintain the seven and one-half percent (7-1/2%) fund balance requirement shall be deposited by the State Treasurer into the State General Fund.

(3) The Working Cash-Stabilization Reserve Fund, except for Fifteen Million Dollars ($15,000,000.00) and the amount of the interest and income earned on the principal of the Ayers Endowment Trust created by Section 37-101-27, shall be used by the State Treasurer for cash flow needs throughout the year when the Executive Director of the Department of Finance and Administration certifies that in his opinion there will be cash flow deficiencies in the State General Fund. No borrowing of monies from other special funds for such purposes as authorized by Section 31-17-101 et seq. shall be made as long as an unencumbered balance in excess of Fifteen Million Dollars ($15,000,000.00) and the interest and income earned on the principal of the Ayers Endowment Trust created by Section 37-101-27 remains in the fund. The State Treasurer shall reimburse the fund for all sums borrowed for those purposes from General Fund revenues collected during the fiscal year in which those funds are used. The State Treasurer shall immediately notify the Legislative Budget Office and the State Department of Finance and Administration of each transfer into and out of the fund. Fifteen Million Dollars ($15,000,000.00) in the Working Cash-Stabilization Reserve Fund shall remain available for exclusive use of the Ayers Endowment Trust created by Section 37-101-27. If the Ayers Settlement Fund is created under Section 37-101-27(5), beginning when a total of Fifty-five Million Dollars ($55,000,000.00) has been deposited into the fund, for each annual deposit of interest to that fund under subsection (2) of this section, the Ayers Endowment Trust created under Section 37-101-27(1) shall be reduced by an equal amount annually until the Ayers Endowment Trust reaches Zero Dollars ($0.00), at which time any requirements concerning the Ayers Endowment Trust in this section shall be null and void.

(4) The Working Cash-Stabilization Reserve Fund, except for Forty Million Dollars ($40,000,000.00), shall also be used for the purpose of covering any projected deficits that may occur in the General Fund at the end of a fiscal year as a result of revenue shortfalls. If the Governor determines that a deficit in revenues from all sources may occur, it shall be the duty of the Executive Director of the Department of Finance and Administration to transfer such funds as necessary to the General Fund to alleviate the deficit in accordance with Sections 27-104-13 and 31-17-123 * * *.

(5) The Working Cash-Stabilization Reserve Fund also shall be used to provide funds for the Disaster Assistance Trust Fund when those funds are immediately needed to provide for disaster assistance under Sections 33-15-301 through 33-15-317. Any transfer of funds from the Working Cash-Stabilization Reserve Fund to the Disaster Assistance Trust Fund shall be made in accordance with the provisions of subsection (5) of Section 33-15-307.

(6) The Department of Finance and Administration shall immediately send notice of any transfers made, or other action taken under authority of this section, to the Legislative Budget Office.

(7) Funds deposited in the Working Cash-Stabilization 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 Working Cash-Stabilization Reserve Fund shall be made except by act of the Legislature making specific reference to the Working Cash-Stabilization Reserve Fund as the source of those funds.

SECTION 3. Section 43-13-405, Mississippi Code of 1972, is amended as follows:

43-13-405. * * * The Health Care Trust Fund is abolished and * * * all tobacco settlement installment payments made from and after the effective date of this act for which the use or purpose for expenditure is not restricted by the terms of the settlement shall be deposited into the State General Fund. * * *

* * *

SECTION 4. Section 43-13-409, Mississippi Code of 1972, is amended as follows:

43-13-409. (1) There is established a board of directors to invest the funds in the Health Care Trust Fund and the Health Care Expendable Fund. The board of directors shall consist of thirteen (13) members as follows:

(a) Seven (7) voting members as follows: the State Treasurer, or his designee, the Attorney General, or his designee, and one (1) member from each congressional district to be appointed by the Governor with the advice and consent of the Senate. Of the members appointed by the Governor, one (1) member shall be appointed for an initial term that expires on March 1, 2000; one (1) member shall be appointed for an initial term that expires on March 1, 2001; one (1) member shall be appointed for an initial term that expires on March 1, 2002; one (1) member shall be appointed for an initial term that expires on March 1, 2003; and one (1) member shall be appointed for an initial term that expires on March 1, 2004. Upon the expiration of any of the initial terms of office, the Governor shall appoint successors by and with the advice and consent of the Senate for terms of five (5) years from the expiration date of the previous term. Any member appointed by the Governor shall be eligible for reappointment. Each member appointed by the Governor shall possess knowledge, skill and experience in business or financial matters commensurate with the duties and responsibilities of the board of directors in administering the Health Care Trust Fund and the Health Care Expendable Fund.

(b) Two (2) nonvoting, advisory members of the Senate shall be appointed by the Lieutenant Governor, and one (1) nonvoting, advisory representative of the health care community shall be appointed by the Lieutenant Governor, who shall serve for the length of the term of the appointing official and shall be eligible for reappointment.

(c) Two (2) nonvoting, advisory members of the House of Representatives shall be appointed by the Speaker of the House, and one (1) nonvoting, advisory representative of the health care community shall be appointed by the Speaker of the House, who shall serve for the length of the term of the appointing official and shall be eligible for reappointment.

(d) Any person appointed to fill a vacancy on the board of directors shall be appointed in the same manner as for a regular appointment and shall serve for the remainder of the unexpired term only.

(2) Nonlegislative members of the board of directors shall serve without compensation, but shall be reimbursed for each day's official duties of the board at the same per diem as established by Section 25-3-69, and actual travel and lodging expenses as established by Section 25-3-41. Legislative members of the board of directors shall receive the same per diem and expense reimbursement as for attending committee meetings when the Legislature is not in regular session.

(3) The State Treasurer shall be the chairman of the board of directors. The board of directors shall annually elect one (1) member to serve as vice chairman of the board. The vice chairman shall act as chairman in the absence of or upon the disability of the chairman or if there is a vacancy in the office of chairman.

(4) All expenses of the board of directors in carrying out its duties and responsibilities under this article, including the payment of per diem and expenses of the nonlegislative members of the board, shall be paid from funds appropriated to the State Treasurer's office for that purpose.

(5) The board of directors shall invest the funds in the Health Care Trust Fund and the Health Care Expendable Fund in any of the investments authorized for the Mississippi Prepaid Affordable College Tuition Program under Section 37-155-9, and those investments shall be subject to the limitations prescribed by Section 37-155-9.

(6) In furtherance of the powers granted under subsection (5) of this section, the board of directors shall have such powers as necessary or convenient to carry out the purposes and provisions of this article, including, but not limited to, the following express powers:

(a) To contract for necessary goods and services, to employ necessary personnel, and to engage the services of consultants for administrative and technical assistance in carrying out its duties and responsibilities in administering the Health Care Trust Fund and the Health Care Expendable Fund;

(b) To administer the Health Care Trust Fund and the Health Care Expendable Fund in a manner that is sufficiently actuarially sound to meet the obligations of this article and to establish a comprehensive investment plan for the purposes of this article, which shall specify the investment policies to be utilized by the board of directors in administering the funds;

(c) Subject to the terms, conditions, limitations and restrictions specified in Section 37-155-9, the board of directors shall have power to sell, assign, transfer and dispose of any of the securities and investments of the Health Care Trust Fund and the Health Care Expendable Fund, provided that any such sale, assignment or transfer has the majority approval of the entire board; and

(d) To annually prepare or cause to be prepared a report setting forth in appropriate detail an accounting of the Health Care Trust Fund and the Health Care Expendable Fund and a description of the financial condition of the funds at the close of each fiscal year, including any recommendations for legislation regarding the investment authority of the board of directors over the funds. The report shall be submitted to the Governor and the Legislative Budget Office on or before September 1 of each fiscal year.

(7) From and after the effective date of this act, the board of directors shall take any actions necessary to transfer the assets of the Health Care Trust Fund and the Health Care Expendable Fund to the State General Fund. At such time as all the assets of the Health Care Trust Fund and the Health Care Expendable Fund have been transferred to the State General Fund, the board of directors shall be abolished. All records, personnel, property and unexpended balances of appropriations, allocation or other funds of the board of directors shall be transferred under the direction of the State Fiscal Officer to the proper department or agency.

SECTION 5. Section 43-13-403, Mississippi Code of 1972, is amended as follows:

43-13-403. When used in this article, * * * "tobacco settlement" means the settlement of the case of Mike Moore, Attorney General ex rel. State of Mississippi v. The American Tobacco Company et al. (Chancery Court of Jackson County, Mississippi, Cause No. 94-1429) and the settlement of any case brought against tobacco companies by another state.

SECTION 6. Sections 43-13-401 and 43-15-407, Mississippi Code of 1972, which declare legislative intent and establish the Health Care Expendable Fund, are repealed.

SECTION 7. This act shall take effect and be in force from and after its passage.