MISSISSIPPI LEGISLATURE
2017 Regular Session
To: Appropriations; Judiciary A
By: Representative Baria
AN ACT TO CREATE THE "MISSISSIPPI GULF COAST RECOVERY ACT OF 2017," TO DEFINE CERTAIN TERMS FOR THE PURPOSES OF THIS ACT; TO CREATE A NONPROFIT CORPORATION TO BE KNOWN AS MISSISSIPPI GULF COAST RECOVERY, INC., WHICH WILL CREATE AND ADMINISTER THE RECOVERY FUND FOR THE PURPOSE OF ASSISTING COUNTIES, AND OTHER ENTITIES IN SUCH COUNTIES, THAT WERE DISPROPORTIONATELY AFFECTED BY THE DEEPWATER HORIZON OIL SPILL AND OTHER ENTITIES IN SUCH COUNTIES; TO PROVIDE THAT THE RECOVERY FUND SHALL CONSIST OF A PORTION OF CERTAIN FUNDS RECEIVED BY OR ON BEHALF OF THE STATE OF MISSISSIPPI THROUGH A NEGOTIATED SETTLEMENT FOR ECONOMIC DAMAGES IN CONNECTION WITH THE DEEPWATER HORIZON OIL SPILL; TO PROVIDE THE PURPOSES FOR WHICH MONIES IN THE RECOVERY FUND MAY BE USED TO ASSIST COUNTIES, AND OTHER ENTITIES IN SUCH COUNTIES, THAT WERE DISPROPORTIONATELY AFFECTED BY THE DEEPWATER HORIZON OIL SPILL; TO PROVIDE FOR THE COMPOSITION OF THE BOARD OF DIRECTORS OF MISSISSIPPI GULF COAST RECOVERY, INC.; TO PROVIDE THE POWERS AND DUTIES OF MISSISSIPPI GULF COAST RECOVERY, INC.; TO AMEND SECTION 27-103-302, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT A PORTION OF CERTAIN FUNDS RECEIVED BY OR ON BEHALF OF THE STATE OF MISSISSIPPI THROUGH A NEGOTIATED SETTLEMENT FOR ECONOMIC DAMAGES IN CONNECTION WITH THE DEEPWATER HORIZON OIL SPILL SHALL BE DEPOSITED INTO THE RECOVERY FUND; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. This act shall be known and may be cited as the "Mississippi Gulf Coast Recovery Act of 2017."
SECTION 2. The Legislature recognizes that fully supporting areas affected by the Deepwater Horizon disaster to ensure goals for economic recovery and diversification are achieved is in the best interest of the citizens of the state. The Legislature intends to provide a long-term source of funding for efforts of economic recovery and enhancement in the Gulf Coast region. The Legislature finds that it is important to help businesses, individuals, and local governments in the Gulf Coast region recover.
SECTION 3. As used in Sections 3 through 9 of this act, the following words and phrases shall have the meanings ascribed herein unless the context clearly requires otherwise:
(a) "Awardee" means a person, organization, or local government granted an award of funds from the Recovery Fund for a project or program.
(b) "Disproportionately affected county" means Hancock County, Harrison County and/or Jackson County.
(c) "Earnings" means all the income generated by investments and interest.
(d) "Recovery Fund" means a trust account established by Mississippi Gulf Coast Recovery, Inc., for the benefit of the disproportionately affected counties.
SECTION 4. (1) There is created a nonprofit corporation, to be known as Mississippi Gulf Coast Recovery, Inc. (MGCRI), in accordance with Section 79-11-101, et seq., and which is not a unit or entity of state government. MGCRI may receive, hold, invest, and administer the Recovery Fund in support of Sections 3 through 9 of this act. MGCRI is a separate budget entity and is not subject to control, supervision, or direction by the State of Mississippi in any manner, including, but not limited to, personnel, purchasing, transactions involving real or personal property, and budgetary matters.
(2) MGCRI shall create and administer the Recovery Fund for the benefit of the disproportionately affected counties. The principal of the fund shall consist of monies deposited into the fund under Section 27-103-302.
(3) The Recovery Fund shall be maintained as a long-term and stable source of revenue. MGCRI shall establish a trust account at a federally insured financial institution to hold funds and make deposits and payments. Earnings generated by investments and interest of the fund, plus the amount of principal available each year, shall be available to make awards pursuant to Sections 3 through 9 of this act and pay administrative costs. Earnings shall be accounted for separately from principal funds set forth in subsection (2) of this section. Administrative costs cannot exceed two and one-fourths percent (2-1/4%) of the earnings in a calendar year. Administrative costs include payment of investment fees, travel and expenses of board members, audits, salary or other costs for employed or contracted staff, including required staff, and other allowable costs. Any funds remaining in the Recovery Fund after thirty (30) years shall revert to the State General Fund.
(4) (a) MGCRI shall invest and reinvest the principal of the Recovery Fund in such a manner not to subject the funds to state or federal taxes, and consistent with an investment policy statement adopted by the corporation.
(b) The board of directors shall formulate an investment policy governing the investment of the principal of the Recovery Fund. The policy shall pertain to the types, kinds or nature of investment of any of the funds, and any limitations, conditions or restrictions upon the methods, practices or procedures for investment, reinvestments, purchases, sales or exchange transactions, provided such policies shall not conflict with nor be in derogation of any state constitutional provision or law. The policy shall be formulated with the advice of the financial advisor in consultation with the State Treasurer.
(c) MGCRI must competitively procure one or more money managers, under the advice of the financial advisor in consultation with the State Treasurer, to invest the principal of the Recovery Fund. The applicant manager or managers may not include representatives from the financial institution housing the trust account for the Recovery Fund. The applicant manager or managers must present a plan to invest the Recovery Fund to maximize earnings while prioritizing the preservation of principal. Any agreement with a money manager must be reviewed by MGCRI for continuance at least every five (5) years. Plans should include investment in technology and growth businesses domiciled in, or that will be domiciled in, this state or businesses whose principal address is in this state.
(d) Costs and fees for investment services shall be deducted from the earnings as administrative costs. Fees for investment services shall be no greater than one hundred fifty (150) basis points.
(e) Annually, MGCRI shall cause an audit to be conducted of the investment of the Recovery Fund by the independent certified public accountant retained under Section 5 of this act. The expense of such audit shall be paid from earnings for administrative purposes.
(5) MGCRI shall report on June 30 and December 30 each year to the Governor, the Lieutenant Governor and the Speaker of the House of Representatives on the financial status of the Recovery Fund and its investments, the established priorities, the project and program selection process, including a list of all submitted projects and reasons for approval or denial, and the status of all approved awards.
(6) The State Auditor shall conduct an audit of the Recovery Fund and Mississippi Gulf Coast Recovery, Inc., annually. Mississippi Gulf Coast Recovery, Inc., shall provide to the State Auditor any detail or supplemental data required.
SECTION 5. (1) MGCRI shall comply with the requirements for a state agency under Section 31-7-1, et seq. regarding purchases; Section 25-41-1, et seq. regarding open meetings; and the Mississippi Public Records Act of 1983.
(2) MGCRI shall be governed by a five-member board of directors, with one (1) member appointed by the Governor, one (1) member appointed by the Lieutenant Governor, one (1) member appointed by the Speaker of the House of Representatives, one (1) member appointed by the Attorney General and one (1) member appointed by the State Treasurer. The board of directors shall annually elect a chairperson from among the board's members. The chairperson may be removed by a majority vote of the members, and his or her successor shall be elected to serve for the balance of the removed chairperson's term. The chairperson is responsible to ensure records are kept of the proceedings of the board of directors and is the custodian of all books, documents, and papers filed with the board; the minutes of meetings of the board; and the official seal of MGCRI.
(3) Each member of the board of directors shall serve for a term of four (4) years, except that the initial appointments of the Lieutenant Governor, the Speaker of the House and State Treasurer each shall serve a term of two (2) years. A member is not eligible for reappointment to the board; however, any member appointed to a term of two (2) years or less may be reappointed for an additional term of four (4) years. The initial appointments to the board must be made by November 15, 2017. Vacancies on the board of directors shall be filled by the official who originally appointed the member. A vacancy that occurs before the scheduled expiration of the term of the member shall be filled for the remainder of the unexpired term.
(4) Members of the board of directors shall comply with the requirements and be subject to the restrictions of a public servant under Section 25-4-1, et seq.
(5) Members of the board of directors shall serve without compensation, but shall be reimbursed for actual travel and expenses as established by Section 25-3-41 while in the performance of his or her duties.
(6) Each member of the board of directors is accountable for the proper performance of the duties of office, and each member owes a fiduciary duty to the people of the state to ensure that awards provided are disbursed and used, and investments are made, as prescribed by law and contract. An appointed member of the board of directors may be removed by the official that appointed the member for malfeasance, misfeasance, neglect of duty, incompetence, permanent inability to perform official duties, unexcused absence from three (3) consecutive meetings of the board, arrest or indictment for a crime that is a felony or a misdemeanor involving theft or a crime of dishonesty, or pleading nolo contendere to, or being found guilty of, any crime.
(7) The board of directors shall meet at least quarterly, upon the call of the chairperson or at the request of a majority of the membership, to review the Recovery Fund, establish and review priorities for economic recovery in disproportionately affected counties, and determine use of the earnings available. A majority of the members of the board of directors constitutes a quorum. Members may not vote by proxy.
(8) The Executive Director of the Mississippi Development Authority, or his or her designee, and the Executive Director of the Department of Environmental Quality, or his or her designee, shall be available to consult with the board of directors and may be requested to attend meetings of the board of directors. These individuals shall not be permitted to vote on any matter before the board of directors.
(9) (a) MGCRI is authorized to hire or contract for all staff necessary to the proper execution of its powers and duties to implement this act. MCGRI is required to retain:
(i) An independent certified public accountant licensed in this state to inspect the records of and to audit the expenditure of the earnings and available principal disbursed by MGCRI.
(ii) An independent financial advisor to assist MGCRI in the development and implementation of a strategic plan consistent with the requirements of Sections 3 through 9 of this act.
(iii) An economic advisor who will assist in the award process, including the development of priorities, allocation decisions, and the application and process; will assist the board of directors in determining eligibility of award applications and the evaluation and scoring of applications; and will assist in the development of award documentation.
(iv) A legal advisor with expertise in not-for-profit investing and contracting and who is a member of The Mississippi Bar to assist with contracting and carrying out the intent of Sections 3 through 9 of this act.
(b) Employees of MGCRI shall comply with the requirements and be subject to the restrictions of a public servant under Section 25-4-1, et seq.; and in addition, employees of MGCRI also shall refrain from having any direct interest in any contract, franchise, privilege, project, program, or other benefit arising from an award by MGCRI during the term of his or her appointment and for two (2) years after the termination of such appointment.
(c) Staff employed under paragraph (a) of this subsection shall be available to consult with the board of directors and shall attend meetings of the board of directors. These individuals shall not be permitted to vote on any matter before the board of directors.
SECTION 6. (1) In addition to the powers and duties prescribed in Section 79-11-101, et seq., and the articles and bylaws adopted in compliance with such laws, the board of directors may:
(a) Make and enter into contracts and other instruments necessary or convenient for the exercise of its powers and functions;
(b) Make expenditures including any necessary administrative expenditure from earnings consistent with its powers;
(c) Adopt, use, and alter a common corporate seal;
(d) Adopt, amend, and repeal bylaws, not inconsistent with the powers granted to it or the articles of incorporation, for the administration of the activities of MGCRI and the exercise of its corporate powers; and
(e) Use the state seal, when appropriate, for standard corporate identity applications. Use of the state seal is not intended to replace use of a corporate seal as provided in this subsection.
(2) Under no circumstances may the credit of the State of Mississippi be pledged on behalf of MGCRI.
SECTION 7. MGCRI shall have the following duties:
(a) Manage responsibly and prudently all funds received, and ensure that the use of such funds is in accordance with all applicable laws, bylaws, or contractual requirements;
(b) Administer the program created under Sections 3 through 9 of this act;
(c) Monitor, review, and annually evaluate awardees and their projects or programs to determine whether an award should be continued, terminated, reduced, or increased; and
(d) Operate in a transparent manner, providing public access to information, notice of meetings, awards, and the status of projects and programs. MGCRI shall maintain a website that provides public access to this information.
SECTION 8. (1) MGCRI shall make awards from available earnings and principal derived under Section 3 of this act to projects or programs that meet the priorities for economic recovery, diversification, and enhancement of the disproportionately affected counties. Awards may be provided for:
(a) Ad valorem tax reduction within disproportionately affected counties;
(b) Payment of impact fees adopted pursuant to law and imposed within disproportionately affected counties;
(c) Administrative funding for economic development organizations located within the disproportionately affected counties;
(d) Local match requirements for projects in the disproportionately affected counties;
(e) Economic development projects in the disproportionately affected counties;
(f) Infrastructure projects that are shown to enhance economic development in the disproportionately affected counties;
(g) Grants to local governments in the disproportionately affected counties to establish and maintain equipment and trained personnel for local action plans of response to respond to disasters, such as plans created for the Coastal Impact Assistance Program;
(h) Grants to support programs of excellence that prepare students for future occupations and careers at public schools, community and junior colleges and state institutions of higher learning that have home campuses in the disproportionately affected counties. Eligible programs include those that increase students' technology skills and knowledge; encourage industry certifications; provide rigorous, alternative pathways for students to meet high school graduation requirements; strengthen career readiness initiatives; fund high-demand programs of emphasis at the bachelor's and master's level designated by the
Board of Trustees of State Institutions of Higher Learning; and, similar to or the same as talent retention programs created by the Board of Trustees of State Institutions of Higher Learning and the State Board of Education, encourage students with interest or aptitude for science, technology, engineering, mathematics, and medical disciplines to pursue postsecondary education at a state university within the disproportionately affected counties; and
(i) Grants to tourism entities for the purpose of advertising and promoting tourism on behalf of one (1) or all of the disproportionately affected counties.
(2) MGCRI shall establish an application procedure for awards and a scoring process for the selection of projects and programs that have the potential to generate increased economic activity in the disproportionately affected counties, giving priority to projects and programs that:
(a) Generate maximum estimated economic benefits, based on tools and models not generally employed by economic input-output analyses, including cost-benefit, return-on-investment, or dynamic scoring techniques to determine how the long-term economic growth potential of the disproportionately affected counties may be enhanced by the investment.
(b) Increase household income in the disproportionately affected counties above national average household income.
(c) Expand high growth industries or establish new high growth industries in the region. Industries that are supported must have strong growth potential in the disproportionately affected counties. An industry's growth potential is defined based on a detailed review of the current industry trends nationally and the necessary supporting asset base for that industry in the disproportionately affected counties region.
(d) Leverage or further enhance key regional assets, including educational institutions, research facilities, and military bases.
(e) Partner with local governments to provide funds, infrastructure, land, or other assistance for the project.
(f) Have investment commitments from private equity or private venture capital funds.
(g) Provide or encourage seed stage investments in start-up companies.
(h) Provide advice and technical assistance to companies on restructuring existing management, operations, or production to attract advantageous business opportunities.
(i) Benefit the environment in addition to the economy.
(j) Provide outcome measures for programs of excellence support, including terms of intent and metrics.
(k) Partner with public schools, community and junior colleges, state institutions of higher learning or school districts located within the disproportionately affected counties.
(l) Partner with convention and visitor bureaus, tourist development councils or chambers of commerce located within the disproportionately affected counties.
(3) MGCRI may make awards as applications are received or may establish application periods for selection. Awards may not be used to finance one hundred percent (100%) of any project or program. MGCRI may require a one-to-one private-sector match or higher for an award, if applicable and deemed prudent by the board of directors. An awardee may not receive all of the earnings or available principal in any given year.
(4) A contract executed by MGCRI with an awardee must include provisions requiring a performance report on the contracted activities, must account for the proper use of funds provided under the contract, and must include provisions for recovery of awards in the event the award was based upon fraudulent information or the awardee is not meeting the performance requirements of the award. Awardees must regularly report to MGCRI the status of the project or program on a schedule determined by the corporation.
SECTION 9. (1) The scope of a financial audit shall include funds related to any year in which a local government entity receives or expends funds received under Sections 3 through 9 of this act. The scope of review for these funds shall include, but is not limited to, compliance with state and federal laws related to the receipt and expenditure of these funds.
(2) Every two (2) years, the State Auditor shall conduct an operational audit of a local government entity's funds related to Sections 3 through 9 of this act to evaluate the local government entity's performance in administering laws, policies, and procedures governing the expenditure of funds in an efficient and effective manner. The scope of review shall include, but is not limited to, evaluating internal controls, internal audit functions, reporting and performance requirements required for use of the funds, and compliance with state and federal law. The audit shall include any funds the local government entity receives or expends related to Sections 3 through 9 of this act.
(3) In addition to the rules of the State Auditor, the State Auditor shall adopt rules for the form and conduct of all financial audits performed by independent certified public accountants and for audits of local government entities for funds received under Sections 3 through 9 of this act.
(4) The State Auditor may report findings to the Secretary of the Treasury of the United States in addition to the reporting requirements under state law.
SECTION 10. Section 27-103-302, Mississippi Code of 1972, is amended as follows:
27-103-302. All funds
received by or on behalf of the State of Mississippi through a negotiated
settlement for economic damages in connection with the explosion on, and
sinking of, the mobile offshore drilling unit Deepwater Horizon, except for any
funds that are required by the settlement to be paid to any other public
entity, shall be deposited * * * as follows: (a) eighty percent (80%) of such funds
shall be deposited into the
Recovery Fund created by Mississippi Gulf Coast Recovery, Inc., under Section 3 of this act and (b) the remainder of such funds shall be deposited into the Budget Contingency Fund for appropriation by the Legislature.
SECTION 11. This act shall take effect and be in force from and after July 1, 2017.