Senate Bill 2757

AN ACT TO REQUIRE THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER OF A GOVERNMENTAL ENTITY TO OBTAIN A BASIC UNDERSTANDING OF THE RISKS AND BENEFITS OF ENTERING INTO AN INTEREST RATE AGREEMENT AND TO AUTHORIZE SUCH OFFICERS TO OBTAIN PROFESSIONAL ADVICE TO HELP ANALYZE SUCH RISKS AND BENEFITS TO THE EXTENT THEY DEEM NECESSARY; TO REQUIRE THE CHIEF EXECUTIVE OFFICERS OR THE CHIEF FINANCIAL OFFICERS TO ATTEND EDUCATIONAL TRAINING COURSES ESTABLISHED BY THE STATE AUDITOR REGARDING INTEREST RATE AGREEMENTS ESTABLISHED BY THE STATE AUDITOR PRIOR TO SUBMITTING A BOND FINANCING REVIEW FORM TO THE STATE AUDITOR'S OFFICE; TO AUTHORIZE THE STATE AUDITOR TO CHARGE AND COLLECT A FEE FROM THE PARTICIPANTS IN THESE COURSES; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) As used in this section, the following words and phrases shall have the following meanings:

(a) "Chief executive officer" means the mayor of a municipality, or the chief elected official of the governing authority, or if there is no such elected official, the chair of the governing authority of the governmental entity.

(b) "Chief financial officer" means the financial director or other comparable official of the governmental entity.

(d) "Governmental entity" means a municipality, county, road district, school district, drainage district, utility district, fire district, solid waste authority, regional solid waste authority, housing authority, regional housing authority, county cooperative service district or other political subdivision or instrumentality of this state.

(e) "Interest rate agreement" means an interest rate swap or exchange agreement, an agreement establishing an interest rate floor or ceiling, or both, and any other interest rate hedging agreement, including options to enter into or cancel such agreements, as well as the reversal or extension thereof.

(2) Any governmental entity proposing to enter into an interest rate agreement is responsible for understanding the risks associated with entering into such an agreement. The chief executive officer and the chief financial officer of a governmental entity must obtain a basic understanding of the risks and benefits of entering into an interest rate agreement and may obtain professional advice to help analyze such risks and benefits to the extent deemed necessary by the chief executive officer and chief financial officer. The State Auditor shall establish training courses on interest rate agreements for chief executive officers and chief financial officers of governmental entities. A chief executive officer or the chief financial officer of a governmental entity shall attend the educational training course established by the State Auditor prior to submitting a bond financing review form to the State Auditor's office. The State Auditor is authorized to charge and collect a fee from the participants in the training courses. The fees shall be deposited into the Department of Audit Special Fund. Governmental entities are authorize the pay the fee and travel expenses out of their general fund or any other available funds from which such a payment is not prohibited by law.

SECTION 2. This act shall take effect and be in force from and after July 1, 2012.