MISSISSIPPI LEGISLATURE
2018 Regular Session
To: Appropriations
By: Representatives Bell (21st), Snowden, Rogers (14th)
AN ACT TO PROHIBIT THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM (PERS) AND THE TREASURER'S OFFICE FROM HAVING DIRECT OR INDIRECT HOLDINGS IN COMPANIES THAT BOYCOTT ISRAEL OR ENGAGE IN A BOYCOTT OF ISRAEL; TO REQUIRE PERS AND THE TREASURER TO IDENTIFY ALL COMPANIES THAT ARE BOYCOTTING ISRAEL OR ARE ENGAGED IN A BOYCOTT OF ISRAEL IN WHICH THEY OWN DIRECT OR INDIRECT HOLDINGS BY A SPECIFIED DATE; TO REQUIRE PERS AND THE TREASURER TO CREATE AND MAINTAIN A LIST OF SCRUTINIZED COMPANIES THAT BOYCOTT ISRAEL THAT NAMES ALL OF THOSE COMPANIES; TO REQUIRE PERS AND THE TREASURER TO PROVIDE WRITTEN NOTICE TO A COMPANY THAT IS IDENTIFIED AS A SCRUTINIZED COMPANY; TO SPECIFY THE CIRCUMSTANCES UNDER WHICH A COMPANY MAY BE REMOVED FROM THE LIST; TO PRESCRIBE CERTAIN REPORTING REQUIREMENTS BY PERS AND THE TREASURER REGARDING THE COMPANIES ON THE LIST; TO AUTHORIZE PERS AND THE TREASURER TO INVEST IN CERTAIN SCRUTINIZED COMPANIES IF THE VALUE OF ALL ASSETS UNDER MANAGEMENT BY THEM BECOMES EQUAL TO OR LESS THAN A SPECIFIED AMOUNT; TO AMEND SECTIONS 25-11-121 AND 27-105-33, MISSISSIPPI CODE OF 1972, TO CONFORM TO THE PRECEDING PROVISIONS; TO PROHIBIT STATE AGENCIES AND LOCAL GOVERNING AUTHORITIES FROM CONTRACTING FOR GOODS AND SERVICES THAT EXCEED A SPECIFIED AMOUNT WITH SCRUTINIZED COMPANIES; TO REQUIRE THE INCLUSION OF A CONTRACT PROVISION THAT AUTHORIZES TERMINATION OF A CONTRACT IF A COMPANY SUBMITS CERTAIN FALSE CERTIFICATION, HAS BEEN PLACED ON THE SCRUTINIZED COMPANIES LIST, OR IS ENGAGED IN A BOYCOTT OF ISRAEL; TO PROVIDE FOR CERTAIN EXCEPTIONS; TO REQUIRE CERTIFICATION UPON SUBMISSION OF A BID OR PROPOSAL FOR CERTAIN CONTRACTS WITH AN AGENCY OR GOVERNING AUTHORITY THAT THE COMPANY IS NOT PARTICIPATING IN A BOYCOTT OF ISRAEL; TO PROVIDE PROCEDURES UPON DETERMINATION THAT A COMPANY HAS SUBMITTED A FALSE CERTIFICATION; TO PROVIDE FOR A CIVIL ACTION AND PENALTIES FOR COMPANIES THAT VIOLATE THE PROVISIONS OF THIS ACT; TO PROVIDE FOR PREEMPTION OF CONFLICTING AGENCY RULES AND GOVERNING AUTHORITY ORDINANCES; TO AMEND SECTIONS 25-53-5 AND 31-7-3, MISSISSIPPI CODE OF 1972, TO CONFORM TO THE PRECEDING PROVISIONS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) Definitions. As used in this section, the following terms shall be defined as provided in this subsection:
(a) "Boycott Israel" or "boycott of Israel" means refusing to deal, terminating business activities, or taking other actions to limit commercial relations with Israel, or persons or entities doing business in Israel or in Israeli-controlled territories, in a discriminatory manner. A statement by a company that it is participating in a boycott of Israel, or that it has initiated a boycott in response to a request for a boycott of Israel or in compliance with, or in furtherance of, calls for a boycott of Israel, may be considered by the public fund to be evidence that a company is participating in a boycott of Israel. The term does not include restrictive trade practices or boycotts fostered or imposed by foreign countries against Israel.
(b) "Company" means a sole proprietorship, organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, limited liability company, or other entity or business association, including all wholly owned subsidiaries, majority-owned subsidiaries, and parent companies, that exists for the purpose of making profit.
(c) "Direct holdings" in a company means all securities of that company that are held directly by the public fund or in an account or fund in which the public fund owns all shares or interests.
(d) "Indirect holdings" in a company means all securities of that company that are held in a commingled fund or other collective investment, such as a mutual fund, in which the public fund owns shares or interests, together with other investors not subject to this section or which are held in an index fund.
(e) "Public fund" means the Public Employees' Retirement System and the Treasurer's office.
(f) "Scrutinized companies" means companies that boycott Israel or engage in a boycott of Israel.
(2) Identification of companies. (a) By August 1, 2018, the public fund shall make its best efforts to identify all scrutinized companies in which the public fund has direct or indirect holdings or could possibly have such holdings in the future. Such efforts include:
(i) To the extent that the public fund finds it appropriate, reviewing and relying on publicly available information regarding companies that boycott Israel, including information provided by nonprofit organizations, research firms, international organizations, and government entities;
(ii) Contacting asset managers contracted by the public fund for information regarding companies that boycott Israel; or
(iii) Contacting other institutional investors that prohibit such investments or that have engaged with companies that boycott Israel.
(b) By the first meeting of the public fund following the identification of scrutinized companies in accordance with paragraph (a) of this subsection, the public fund shall compile and make available the "Scrutinized Companies that Boycott Israel List."
(c) The public fund shall update and make publicly available quarterly the Scrutinized Companies that Boycott Israel List based on evolving information from, among other sources, those listed in paragraph (a) of this subsection.
(3) Required actions. The public fund shall adhere to the following procedures for assembling companies on the Scrutinized Companies that Boycott Israel List:
(a) Engagement.
(i) The public fund shall immediately determine the companies on the Scrutinized Companies that Boycott Israel List in which the public fund owns direct or indirect holdings.
(ii) For each company newly identified under this paragraph after August 1, 2018, the public fund shall send a written notice informing the company of its scrutinized company status and that it may become subject to investment
prohibition by the public fund. The notice must inform the company of the opportunity to clarify its activities regarding the boycott of Israel and encourage the company to cease the boycott of Israel within ninety (90) days in order to avoid qualifying for investment prohibition.
(iii) If, within ninety (90) days after the public fund's first engagement with a company under this paragraph, the company ceases a boycott of Israel, the company shall be removed from the Scrutinized Companies that Boycott Israel List, and the provisions of this section shall cease to apply to that company unless that company resumes a boycott of Israel.
(b) Prohibition. The public fund may not acquire securities of companies on the Scrutinized Companies that Boycott Israel List, except as provided in paragraph (c) of this subsection and subsection (6) of this section.
(c) Excluded securities. Notwithstanding the provisions of this section, paragraph (b) of this subsection does not apply to:
(i) Indirect holdings. However, the public fund shall submit letters to the managers of such investment funds containing companies that boycott Israel requesting that they consider removing such companies from the fund or create a similar fund having indirect holdings devoid of such companies. If the manager creates a similar fund, the public fund shall replace all applicable investments with investments in the similar fund in an expedited timeframe consistent with prudent investing standards. For the purposes of this section, an alternative investment, which means an investment by the public fund in a private equity fund, venture fund, hedge fund or distress fund or a direct investment in a portfolio company through an investment manager, and securities that are not publicly traded are deemed to be indirect holdings.
(ii) Exchange-traded funds.
(4) Reporting. (a) The public fund shall file a report with the President of the Senate and the Speaker of the House of Representatives that includes the Scrutinized Companies that Boycott Israel List within thirty (30) days after the
list is created. This report shall be made available to the public.
(b) Each quarter thereafter, the public fund shall file a report, which shall be made available to the public and to the President of the Senate and the Speaker of the House of Representatives, that includes:
(i) A summary of correspondence with companies engaged by the public fund under subsection (3)(a)(ii);
(ii) All prohibited investments under subsection (3)(b);
(iii) Any progress made under subsection (3)(c); and
(iv) A list of all publicly traded securities held directly by the public fund.
(5) Investment policy statement obligations. The public
fund's actions taken in compliance with this section, including all good faith determinations regarding companies as required by this act, shall be adopted and incorporated into the public fund's investment policy statement.
(6) Investment in certain scrutinized companies. Notwithstanding any other provision of this section, the public fund may invest in certain scrutinized companies if clear and convincing evidence shows that the value of all assets under management by the public fund becomes equal to or less than ninety-nine and fifty one-hundredths percent (99.50%), or fifty (50) basis points, of the hypothetical value of all assets under management by the public fund, assuming no investment prohibition for any company had occurred under subsection (3)(b). Cessation of the investment prohibition and any new investment in a scrutinized company is limited to the minimum steps necessary to avoid the contingency described in this subsection. For any cessation of the investment prohibition and new investment authorized by this subsection, the public fund shall provide a written report to the President of the Senate and the Speaker of the House of Representatives in advance of the new investment, updated semiannually thereafter as applicable, setting forth the reasons and justification, supported by clear and convincing evidence, for its decisions to cease the investment prohibition in scrutinized companies.
SECTION 2. Section 25-11-121, Mississippi Code of 1972, is amended as follows:
25-11-121. (1) The board shall, from time to time, determine the current requirements for benefit payments and administrative expense which shall be maintained as a cash working balance, except that such cash working balance shall not exceed at any time an amount necessary to meet the current obligations of the system for a period of ninety (90) days. Any amounts in excess of such cash working balance shall be invested, as follows:
(a) Funds may be deposited in any institution insured by the Federal Deposit Insurance Corporation that maintains a facility that takes deposits in the State of Mississippi or a custodial bank;
(b) Corporate bonds and taxable municipal bonds; or corporate short-term obligations of corporations or of wholly owned subsidiaries of corporations, whose short-term obligations are rated A-2 or better by Standard and Poor's, rated P-2 or better by Moody's Investment Service, F-2 or better by Fitch Ratings, Ltd., or the equivalent of these ratings if assigned by another United States Securities and Exchange Commission designated Nationally Recognized Statistical Rating Organization;
(c) Agency and nonagency residential and commercial mortgage-backed securities and collateralized mortgage obligations;
(d) Asset-backed securities;
(e) Bank loans;
(f) Convertible bonds;
(g) Bonds of the Tennessee Valley Authority;
(h) Bonds, notes, certificates and other valid obligations of the United States, and other valid obligations of any federal instrumentality that issues securities under authority of an act of Congress and are exempt from registration with the Securities and Exchange Commission;
(i) Bonds, notes, debentures and other securities issued by any federal instrumentality and fully guaranteed by the United States;
(j) Interest-bearing revenue bonds or notes or bonds or notes which are general obligations of any state in the United States or of any city or county therein;
(k) Bonds of established non-United States companies and foreign government securities. The board may take requisite action to effectuate or hedge transactions or invest in currency through foreign or domestic banks, including the purchase and sale, transfer, exchange, or otherwise disposal of, and generally deal in foreign exchange through the use of foreign currency, interbank forward contracts, futures contracts, options contracts, swaps and other related derivative instruments, notwithstanding any other provisions of this article to the contrary;
(l) Shares of stocks, common and/or preferred, of corporations created by or existing under the laws of the United States or any state, district or territory thereof and shares of stocks, common and/or preferred, and convertible securities of non-United States companies; provided:
(i) The maximum investments in stocks shall not exceed eighty percent (80%) of the total book value of the total investment fund of the system;
(ii) The stock of such corporation shall:
1. Be listed on a national stock exchange; or
2. Be traded in the over-the-counter market;
(iii) The outstanding shares of such corporation shall have a total market value of not less than Fifty Million Dollars ($50,000,000.00);
(iv) The amount of investment in any one (1) corporation shall not exceed three percent (3%) of the book value of the assets of the system;
(v) The shares of any one (1) corporation owned by the system shall not exceed five percent (5%) of that corporation's outstanding stock.
The board may take requisite action utilizing foreign currency as an investment vehicle, or to effectuate or hedge transactions for shares of stocks and convertible securities of non-United States companies through foreign or domestic banks, including the purchase and sale, transfer, exchange, or otherwise disposal of, and generally deal in foreign exchange through the use of foreign currency, interbank forward contracts, futures contracts, options contracts, swaps and other related derivative instruments, notwithstanding any other provisions of this article to the contrary;
(m) Covered call and put options on securities or indices traded on one or more of the regulated exchanges;
(n) Pooled or commingled funds managed by a corporate trustee or by a Securities and Exchange Commission registered investment advisory firm retained as an investment manager by the board of trustees, and shares of investment companies and unit investment trusts registered under the Investment Company Act of 1940, where such pooled or commingled funds or shares are comprised of common or preferred stocks, bonds, money market instruments or other investments authorized under this section. Such investment in commingled funds or shares shall be held in trust; provided that the total book value of investments under this paragraph shall at no time exceed five percent (5%) of the total book value of all investments of the system. Any investment manager approved by the board of trustees shall invest such commingled funds or shares as a fiduciary;
(o) Pooled or commingled real estate funds or real estate securities managed by a corporate trustee or by a Securities and Exchange Commission registered investment advisory firm retained as an investment manager by the board of trustees. Such investment in commingled funds or shares shall be held in trust; provided that the total book value of investments under this paragraph shall at no time exceed ten percent (10%) of the total book value of all investments of the system. Any investment manager approved by the board of trustees shall invest such commingled funds or shares as a fiduciary. The ten percent (10%) limitation in this paragraph shall not be subject to the five percent (5%) limitation in paragraph (n) of this subsection;
(p) Types of investments not specifically authorized by this subsection if the investments are in the form of a separate account managed by a Securities and Exchange Commission registered investment advisory firm retained as an investment manager by the board; or a limited partnership or commingled fund approved by the board; provided that the total book value of investments under this paragraph shall at no time exceed ten percent (10%) of the total book value of all investments of the system. Any person or entity who exercises any discretionary authority or discretionary control respecting management of the separate account, limited partnership or commingled fund, or who exercises any authority or control respecting management or disposition of the assets of the separate account, limited partnership or commingled fund, shall exercise such authority or control as a fiduciary.
(2) All investments shall be acquired at prices not exceeding the prevailing market values for such investments.
(3) Any limitations herein set forth shall be applicable only at the time of purchase and shall not require the liquidation of any investment at any time, except as may be required to be in compliance with Section 1 of this act. All investments shall be clearly marked to indicate ownership by the system and to the extent possible shall be registered in the name of the system.
(4) Subject to the above terms, conditions, limitations and restrictions, the board shall have power to sell, assign, transfer and dispose of any of the securities and investments of the system, provided that said sale, assignment or transfer has the majority approval of the entire board. The board may employ or contract with investment managers, evaluation services or other such services as determined by the board to be necessary for the effective and efficient operation of the system.
(5) Except as otherwise provided herein, no trustee and no employee of the board shall have any direct or indirect interest in the income, gains or profits of any investment made by the board, nor shall any such person receive any pay or emolument for his services in connection with any investment made by the board. No trustee or employee of the board shall become an endorser or surety, or in any manner an obligor for money loaned by or borrowed from the system.
(6) All interest derived from investments and any gains from the sale or exchange of investments shall be credited by the board to the account of the system.
(7) The board of trustees shall credit regular interest to the annuity savings account monthly. Regular interest shall mean such per centum rate to be compounded annually as set by the board of trustees through regulation.
(8) The board of trustees shall be the custodian of the funds of the system. All retirement allowance payrolls shall be certified by the executive director who shall furnish the board a surety bond in a company authorized to do business in Mississippi in such an amount as shall be required by the board, the premium to be paid by the board from the expense account.
(9) For the purpose of meeting disbursements for retirement allowances, annuities and other payments, cash may be kept available, not exceeding the requirements of the system for a period of ninety (90) days, on deposit in one or more banks or trust companies organized under the laws of the State of Mississippi or the laws of the United States, provided that the sum on deposit in any one (1) bank or trust company shall not exceed thirty-five percent (35%) of the paid-up capital and regular surplus of such bank or trust company.
(10) The board, the executive director and employees shall discharge their duties with respect to the investments of the system solely for the interest of the system with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent investor acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, including diversifying the investments of the system so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so.
(11) Documentary material or data made or received by the system which consists of trade secrets or commercial or financial information that relates to the investments of the system shall be exempt from the Mississippi Public Records Act of 1983 if the disclosure of the material or data is likely to impair the system's ability to obtain such information in the future, or is likely to cause substantial harm to the competitive position of the person or entity from whom the information was obtained.
(12) The board shall not acquire any securities that are prohibited by Section 1 of this act.
SECTION 3. Section 27-105-33, Mississippi Code of 1972, is amended as follows:
27-105-33. It shall be the duty of the State Treasurer and the Executive Director of the Department of Finance and Administration on or about the tenth day of each month, and in their discretion at any other time, to analyze carefully the amount of cash in the General Fund of the state and in all special funds credited to any special purpose designated by the State Legislature or held to meet the budgets or appropriations for maintenance, improvements and services of the several institutions, boards, departments, commissions, agencies, persons or entities of the state, and to determine in their opinion when the cash in such funds is in excess of the amount required to meet the current needs and demands of no more than seven (7) business days on such funds and report their findings to the Governor. It shall be the duty of the State Treasurer to provide a cash flow model for forecasting revenues and expenditures on a bimonthly basis and providing technical assistance for its operation. The Department of Finance and Administration shall use the cash flow model furnished by the State Treasurer, in analyzing the amount of funds on deposit and available for investment.
The State Treasurer is * * * authorized, empowered and directed to
invest all such excess general and special funds of the state in the following
manner:
(a) Funds shall be allocated equally among all qualified state depositories which do not have demand accounts in excess of One Hundred Fifty Thousand Dollars ($150,000.00) until each qualified depository willing to accept the same shall have on deposit or in security repurchase agreements or in other securities authorized in paragraph (d) of this section at interest the sum of Three Hundred Thousand Dollars ($300,000.00). For the purposes of this subsection, no branch bank or branch office shall be counted as a separate depository.
(b) The balance, if any, of such excess general and special funds shall be offered to qualified depositories of the state on a pro rata basis as provided in Section 27-105-9. For the purposes of this subsection, the pro rata share of each depository shall be reduced by the amount of the average daily collected earning balance of demand deposits maintained by the State Treasurer pursuant to Section 27-105-9 during the preceding calendar year, and such reduction shall be allocated pro rata among other eligible depositories.
(c) Funds offered pursuant to paragraphs (a) and (b) above shall be invested for periods of up to one (1) year, and shall bear interest at an interest rate no less than that numerically equal to the bond equivalent yield on direct obligations of the United States Treasury of comparable maturity, as determined by the State Treasurer. In determining such rate, the State Treasurer shall consider the Legislature's desire to distribute funds equitably throughout the state to the maximum extent possible.
(d) To the extent that the State Treasurer shall find that general and special funds cannot be invested pursuant to paragraphs (a), (b) and (c) of this section for the stated maturity up to one (1) year, the Treasurer may invest such funds, together with any other funds required for current operation, as determined pursuant to this section, in the following:
(i) Time certificates of deposit or interest-bearing accounts with qualified state depositories. For those funds determined under prudent judgment of the State Treasurer to be made available for investment in time certificates of deposit, the rate of interest paid by the depositories shall be determined by rules and regulations adopted and promulgated by the State Treasurer which may include competitive bids. At the time of investment, the interest rate on such certificates of deposit under the provisions of this subparagraph shall be a rate not less than the bond equivalent yield on direct obligations of the United States Treasury with a similar length of maturity.
(ii) Direct United States Treasury obligations, the principal and interest of which are fully guaranteed by the government of the United States.
(iii) United States government agency, United States government instrumentality or United States government sponsored enterprise obligations, the principal and interest of which are fully guaranteed by the government of the United States, such as the Government National Mortgage Association; or United States governmental agency, United States government instrumentality or United States government sponsored enterprise obligations, the principal and interest of which are guaranteed by any United States government agency, United States government instrumentality or United States government sponsored enterprise contained in a list promulgated by the State Treasurer.
(iv) Direct security repurchase agreements and reverse direct security repurchase agreements of any federal book entry of only those securities enumerated in subparagraphs (ii) and (iii) above. "Direct security repurchase agreement" means an agreement under which the state buys, holds for a specified time, and then sells back those securities and obligations enumerated in subparagraphs (ii) and (iii) above. "Reverse direct securities repurchase agreement" means an agreement under which the state sells and after a specified time buys back any of the securities and obligations enumerated in subparagraphs (ii) and (iii) above. At least eighty percent (80%) of the total dollar amount in all repurchase agreements at any one time shall be pursuant to contracts with qualified state depositories.
(e) For the purposes of this section, direct obligations issued by the United States of America shall be deemed to include securities of, or other interests in, any open-end or closed-end management type investment company or investment trust registered under the provisions of 15 USCS Section 80(a)-1 et seq., provided that the portfolio of such investment company or investment trust is limited to direct obligations issued by the United States of America, United States government agencies, United States government instrumentalities or United States government sponsored enterprises, and to repurchase agreements fully collateralized by direct obligations of the United States of America, United States government agencies, United States government instrumentalities or United States government sponsored enterprises, and the investment company or investment trust takes delivery of such collateral for the repurchase agreement, either directly or through an authorized custodian. The State Treasurer and the Executive Director of the Department of Finance and Administration shall review and approve the investment companies and investment trusts in which funds invested under paragraph (d) of this section may be invested. The total dollar amount of funds invested in all open-end and closed-end management type investment companies and investment trusts at any one time shall not exceed twenty percent (20%) of the total dollar amount of funds invested under paragraph (d) of this section.
(f) Investments authorized by subparagraphs (ii) and (iii) of paragraph (d) shall mature on such date or dates as determined by the State Treasurer in the exercise of prudent judgment to generate a favorable return to the state and will allow the monies to be available for use at such time as the monies will be needed for state purposes. However, the maturity of securities purchased as enumerated in subparagraphs (ii) and (iii) shall not exceed ten (10) years from date of purchase. Special funds shall be considered those funds created constitutionally, statutorily or administratively which are not considered general funds. All funds invested for a period of thirty (30) days or longer under paragraph (d) shall bear a rate at least equal to the current established rate under paragraph (c) of this section.
(g) Any interest-bearing deposits or certificates of deposit shall not exceed at any time the amount insured by the Federal Deposit Insurance Corporation in any one (1) banking institution, the Federal Savings and Loan Insurance Corporation in any one (1) savings and loan association, or other deposit insurance corporation approved by the State Treasurer, unless the uninsured portion is collateralized by the pledge of securities in the manner provided by Section 27-105-5.
(h) Unless otherwise provided, income from investments authorized by the provisions of this subsection shall be credited to the State General Fund.
(i) Not more than Five Hundred Thousand Dollars ($500,000.00) of funds may be invested with foreign financial institutions, and the State Treasurer may enter into price contracts for the purchase or exchange of foreign currency or other arrangements for currency exchange in an amount not to exceed Five Hundred Thousand Dollars ($500,000.00) upon specific direction of the Department of Economic and Community Development. The State Treasurer shall promulgate all rules and regulations for applications, qualifications and any other necessary matters for foreign financial institutions.
Any liquidating agent of a depository in liquidation, voluntary or involuntary, shall redeem from the state any bonds and securities which have been pledged to secure state funds and such redemption shall be at the par value or market value thereof, whichever is greater; otherwise, the liquidating agent or receiver may pay off the state in full for its deposits and retrieve the pledged securities without regard to par or market value.
The State Treasurer and the Executive Director of the Department of Finance and Administration shall make monthly reports to the Legislative Budget Office containing a full and complete statement of all funds invested by virtue of the provisions of this section and the revenues derived therefrom and the expenses incurred therewith, together with all such other information as may seem to each of them as being pertinent to inform fully the Mississippi Legislature with reference thereto.
The State Treasurer shall not deposit any funds on demand deposit with any authorized depository, unless such depository has contracted for interest-bearing accounts or time certificates of deposit.
The State Treasurer shall not acquire any securities that are prohibited by Section 1 of this act.
Notwithstanding the foregoing, any financial institution not meeting the prescribed ratio requirement set forth in Section 27-105-5 whose accounts are insured by the Federal Deposit Insurance Corporation, or any successor to that insurance corporation, may receive state funds in an amount not exceeding the amount which is insured by such insurance corporations and may qualify as a state depository to the extent of such insurance for this purpose only. The paid-in and earned capital funds of such financial institution shall not be included in the computations specified in Section 27-105-9(a) and (b).
SECTION 4. (1) As used in this section, the following terms shall be defined as provided in this section:
(a) "Awarding body" means, for purposes of state contracts, an agency, and for purposes of local contracts, the governing authority of the local governmental entity, as those terms are defined in Section 31-7-1.
(b) "Boycott of Israel" has the same meaning as defined in Section 1 of this act.
(2) A company is ineligible to, and may not, bid on, submit a proposal for, or enter into or renew a contract with an agency or governing authority for goods or services of One Million Dollars ($1,000,000.00) or more if, at the time of bidding or
submitting a proposal for a new contract or renewal of an existing contract, the company is on the Scrutinized Companies that Boycott Israel List, created under Section 1 of this act, or is engaged in a boycott of Israel.
(3) Any contract with an agency or governing authority for goods or services of One Million Dollars ($1,000,000.00) or more entered into or renewed on or after October 1, 2018, must contain a provision that allows for the termination of the contract at the option of the awarding body if the company:
(a) Is found to have submitted a false certification as provided under subsection (5) of this section; or
(b) Has been placed on the Scrutinized Companies that Boycott Israel List, or is engaged in a boycott of Israel.
(4) Notwithstanding subsection (2) or subsection (3) of this section, an agency or governing authority, on a case-by-case basis, may permit a company on the Scrutinized Companies that Boycott Israel List to be eligible for, bid on, submit a proposal
for, or enter into or renew a contract for goods or services of One Million Dollars ($1,000,000.00) or more under the conditions set forth in paragraph (a) of this subsection or the conditions set forth in paragraph (b) of this subsection:
(a) All of the following occur:
(i) The boycott of Israel was initiated before October 1, 2018;
(ii) The company certifies in writing that it has ceased its boycott of Israel;
(iii) The agency or governing authority determines that it is in the best interest of the state or local community to contract with the company; and
(iv) The company has adopted, has publicized, and is implementing a formal plan to cease scrutinized business operations and to refrain from engaging in any new scrutinized business operations.
(b) One (1) of the following occurs:
(i) The governing authority makes a public finding that, absent such an exemption, the governing authority would be unable to obtain the goods or services for which the contract is offered;
(ii) For a contract with an executive agency, the Governor makes a public finding that, absent such an exemption, the agency would be unable to obtain the goods or services for which the contract is offered; or
(iii) For a contract with an office of a state constitutional officer other than the Governor, the state constitutional officer makes a public finding that, absent such an exemption, the office would be unable to obtain the goods or
services for which the contract is offered.
(5) At the time a company submits a bid or proposal for a contract or before the company enters into or renews a contract with an agency or governing authority for goods or services of One Million Dollars ($1,000,000.00) or more, the company must certify that the company is not participating in a boycott of Israel.
(a) If, after the agency or the governing authority determines, using credible information available to the public, that the company has submitted a false certification, the agency or governing authority shall provide the company with written notice of its determination. The company shall have ninety (90) days following receipt of the notice to respond in writing and to
demonstrate that the determination of false certification was made in error. If the company does not make such demonstration within ninety (90) days after receipt of the notice, the agency or the governing authority shall bring a civil action against the company. If a civil action is brought and the court determines that the company submitted a false certification, the company shall be subject to the following:
(i) A civil penalty equal to the greater of Two Million Dollars ($2,000,000.00) or twice the amount of the contract for which the false certification was submitted shall be imposed, and the company shall pay the penalty and all reasonable attorney fees and costs, including any costs for investigations that led to the finding of false certification.
(iii) The company is ineligible to bid on any contract with an agency or governing authority for three (3) years after the date the agency or governing authority determined that the company submitted a false certification.
(b) A civil action to collect the penalties described in paragraph (a) of this subsection must brought within three (3) years after the date the false certification is submitted.
(6) Only the agency or governing authority that is a party to the contract may cause a civil action to be brought under this section. This section does not create or authorize a private right of action or enforcement of the penalties provided in this section. An unsuccessful bidder, or any other person other than the agency or governing authority, may not protest the award of a contract or contract renewal on the basis of a false certification.
(7) This section preempts any rule of any agency or an ordinance of any local governmental entity involving public contracts for goods or services of One Million Dollars ($1,000,000.00) or more with a company engaged in scrutinized business operations.
SECTION 5. Section 25-53-5, Mississippi Code of 1972, is amended as follows:
25-53-5. The authority shall have the following powers, duties, and responsibilities:
(a) (i) The authority shall provide for the development of plans for the efficient acquisition and utilization of computer equipment and services by all agencies of state government, and provide for their implementation. In so doing, the authority may use the MDITS' staff, at the discretion of the executive director of the authority, or the authority may contract for the services of qualified consulting firms in the field of information technology and utilize the service of such consultants as may be necessary for such purposes. Pursuant to Section 25-53-1, the provisions of this section shall not apply to the Department of Human Services for a period of three (3) years beginning on July 1, 2016. Pursuant to Section 25-53-1, the provisions of this section shall not apply to the Department of Child Protection Services for a period of three (3) years beginning July 1, 2016.
(ii) Notwithstanding the exemption of the Department of Human Services and the Department of Child Protection Services from the provisions of this section, before the Department of Human Services or the Department of Child Protection Services may take an action that would otherwise be subject to the provisions of this section, the department(s) shall give notice of the proposed action to the MDITS for any recommendations by the MDITS. Upon receipt of the notice, the MDITS shall post the notice on its website and on the procurement portal website established by Sections 25-53-151 and 27-104-165. If the MDITS does not respond to the department(s) within seven (7) calendar days after receiving the notice, the department(s) may take the proposed action. If the MDITS responds to the department(s) within seven (7) calendar days, then the MDITS has seven (7) calendar days from the date of its initial response to provide any additional recommendations. After the end of the second seven-day period, the department(s) may take the proposed action. The MDITS is not authorized to disapprove any proposed actions that would otherwise be subject to the provisions of this section. This subparagraph (ii) shall stand repealed on July 1, 2019.
(b) The authority shall immediately institute procedures for carrying out the purposes of this chapter and supervise the efficient execution of the powers and duties of the office of executive director of the authority. In the execution of its functions under this chapter, the authority shall maintain as a paramount consideration the successful internal organization and operation of the several agencies so that efficiency existing therein shall not be adversely affected or impaired. In executing its functions in relation to the institutions of higher learning and junior colleges in the state, the authority shall take into consideration the special needs of such institutions in relation to the fields of teaching and scientific research.
(c) Title of whatever nature of all computer equipment now vested in any agency of the State of Mississippi is hereby vested in the authority, and no such equipment shall be disposed of in any manner except in accordance with the direction of the authority or under the provisions of such rules and regulations as may hereafter be adopted by the authority in relation thereto.
(d) The authority shall adopt rules, regulations, and procedures governing the acquisition of computer and telecommunications equipment and services which shall, to the fullest extent practicable, insure the maximum of competition between all manufacturers of supplies or equipment or services. In the writing of specifications, in the making of contracts relating to the acquisition of such equipment and services, and in the performance of its other duties the authority shall provide for the maximum compatibility of all information systems hereafter installed or utilized by all state agencies and may require the use of common computer languages where necessary to accomplish the purposes of this chapter. The authority may establish by regulation and charge reasonable fees on a nondiscriminatory basis for the furnishing to bidders of copies of bid specifications and other documents issued by the authority.
(e) The authority shall adopt rules and regulations governing the sharing with, or the sale or lease of information technology services to any nonstate agency or person. Such regulations shall provide that any such sharing, sale or lease shall be restricted in that same shall be accomplished only where such services are not readily available otherwise within the state, and then only at a charge to the user not less than the prevailing rate of charge for similar services by private enterprise within this state.
(f) The authority may, in its discretion, establish a special technical advisory committee or committees to study and make recommendations on technology matters within the competence of the authority as the authority may see fit. Persons serving on the Information Resource Council, its task forces, or any such technical advisory committees shall be entitled to receive their actual and necessary expenses actually incurred in the performance of such duties, together with mileage as provided by law for state employees, provided the same has been authorized by a resolution duly adopted by the authority and entered on its minutes prior to the performance of such duties.
(g) The authority may provide for the development and require the adoption of standardized computer programs and may provide for the dissemination of information to and the establishment of training programs for the personnel of the various information technology centers of state agencies and personnel of the agencies utilizing the services thereof.
(h) The authority shall adopt reasonable rules and regulations requiring the reporting to the authority through the office of executive director of such information as may be required for carrying out the purposes of this chapter and may also establish such reasonable procedures to be followed in the presentation of bills for payment under the terms of all contracts for the acquisition of computer equipment and services now or hereafter in force as may be required by the authority or by the executive director in the execution of their powers and duties.
(i) The authority shall require such adequate documentation of information technology procedures utilized by the various state agencies and may require the establishment of such organizational structures within state agencies relating to information technology operations as may be necessary to effectuate the purposes of this chapter.
(j) The authority may adopt such further reasonable rules and regulations as may be necessary to fully implement the purposes of this chapter. All rules and regulations adopted by the authority shall be published and disseminated in readily accessible form to all affected state agencies, and to all current suppliers of computer equipment and services to the state, and to all prospective suppliers requesting the same. Such rules and regulations shall be kept current, be periodically revised, and copies thereof shall be available at all times for inspection by the public at reasonable hours in the offices of the authority. Whenever possible no rule, regulation or any proposed amendment to such rules and regulations shall be finally adopted or enforced until copies of the proposed rules and regulations have been furnished to all interested parties for their comment and suggestions.
(k) The authority shall establish rules and regulations which shall provide for the submission of all contracts proposed to be executed by the executive director for computer equipment or services to the authority for approval before final execution, and the authority may provide that such contracts involving the expenditure of less than such specified amount as may be established by the authority may be finally executed by the executive director without first obtaining such approval by the authority.
(l) The authority is authorized to purchase, lease, or rent computer equipment or services and to operate that equipment and use those services in providing services to one or more state agencies when in its opinion such operation will provide maximum efficiency and economy in the functions of any such agency or agencies.
(m) Upon the request of the governing body of a political subdivision or instrumentality, the authority shall assist the political subdivision or instrumentality in its development of plans for the efficient acquisition and utilization of computer equipment and services. An appropriate fee shall be charged the political subdivision by the authority for such assistance.
(n) The authority shall adopt rules and regulations governing the protest procedures to be followed by any actual or prospective bidder, offerer or contractor who is aggrieved in connection with the solicitation or award of a contract for the acquisition of computer equipment or services. Such rules and regulations shall prescribe the manner, time and procedure for making protests and may provide that a protest not timely filed shall be summarily denied. The authority may require the protesting party, at the time of filing the protest, to post a bond, payable to the state, in an amount that the authority determines sufficient to cover any expense or loss incurred by the state, the authority or any state agency as a result of the protest if the protest subsequently is determined by a court of competent jurisdiction to have been filed without any substantial basis or reasonable expectation to believe that the protest was meritorious; however, in no event may the amount of the bond required exceed a reasonable estimate of the total project cost. The authority, in its discretion, also may prohibit any prospective bidder, offerer or contractor who is a party to any litigation involving any such contract with the state, the authority or any agency of the state to participate in any other such bid, offer or contract, or to be awarded any such contract, during the pendency of the litigation.
(o) The authority shall make a report in writing to the Legislature each year in the month of January. Such report shall contain a full and detailed account of the work of the authority for the preceding year as specified in Section 25-53-29(3).
All acquisitions of computer equipment and services involving the expenditure of funds in excess of the dollar amount established in Section 31-7-13(c), or rentals or leases in excess of the dollar amount established in Section 31-7-13(c) for the term of the contract, shall be based upon competitive and open specifications, and contracts therefor shall be entered into only after advertisements for bids are published in one or more daily newspapers having a general circulation in the state not less than fourteen (14) days prior to receiving sealed bids therefor. The authority may reserve the right to reject any or all bids, and if all bids are rejected, the authority may negotiate a contract within the limitations of the specifications so long as the terms of any such negotiated contract are equal to or better than the comparable terms submitted by the lowest and best bidder, and so long as the total cost to the State of Mississippi does not exceed the lowest bid. If the authority accepts one (1) of such bids, it shall be that which is the lowest and best. All acquisitions of computer equipment and services under this paragraph are subject to and must be in compliance with the provisions of Section 2 of this act.
(p) When applicable, the authority may procure equipment, systems and related services in accordance with the law or regulations, or both, which govern the Bureau of Purchasing of the Office of General Services or which govern the Mississippi Department of Information Technology Services procurement of telecommunications equipment, software and services.
(q) The authority is authorized to purchase, lease, or rent information technology and services for the purpose of establishing pilot projects to investigate emerging technologies. These acquisitions shall be limited to new technologies and shall be limited to an amount set by annual appropriation of the Legislature. These acquisitions shall be exempt from the advertising and bidding requirement.
(r) All fees collected by the Mississippi Department of Information Technology Services shall be deposited into the Mississippi Department of Information Technology Services Revolving Fund unless otherwise specified by the Legislature.
(s) The authority shall work closely with the council to bring about effective coordination of policies, standards and procedures relating to procurement of remote sensing and geographic information systems (GIS) resources. In addition, the authority is responsible for development, operation and maintenance of a delivery system infrastructure for geographic information systems data. The authority shall provide a warehouse for Mississippi's geographic information systems data.
(t) The authority shall manage one or more State Data Centers to provide information technology services on a cost-sharing basis. In determining the appropriate services to be provided through the State Data Center, the authority should consider those services that:
(i) Result in savings to the state as a whole;
(ii) Improve and enhance the security and reliability of the state's information and business systems; and
(iii) Optimize the efficient use of the state's information technology assets, including, but not limited to, promoting partnerships with the state institutions of higher learning and community colleges to capitalize on advanced information technology resources.
(u) The authority shall increase federal participation in the cost of the State Data Center to the extent provided by law and its shared technology infrastructure through providing such shared services to agencies that receive federal funds. With regard to state institutions of higher learning and community colleges, the authority may provide shared services when mutually agreeable, following a determination by both the authority and the Board of Trustees of State Institutions of Higher Learning or the Mississippi Community College Board, as the case may be, that the sharing of services is mutually beneficial.
(v) The authority, in its discretion, may require new or replacement agency business applications to be hosted at the State Data Center. With regard to state institutions of higher learning and community colleges, the authority and the Board of Trustees of State Institutions of Higher Learning or the Mississippi Community College Board, as the case may be, may agree that institutions of higher learning or community colleges may utilize business applications that are hosted at the State Data Center, following a determination by both the authority and the applicable board that the hosting of those applications is mutually beneficial. In addition, the authority may establish partnerships to capitalize on the advanced technology resources of the Board of Trustees of State Institutions of Higher Learning or the Mississippi Community College Board, following a determination by both the authority and the applicable board that such a partnership is mutually beneficial.
(w) The authority shall provide a periodic update regarding reform-based information technology initiatives to the Chairmen of the House and Senate Accountability, Efficiency and Transparency Committees.
From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law.
From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.
SECTION 6. Section 31-7-3, Mississippi Code of 1972, is amended as follows:
31-7-3. The Department of Finance and Administration shall administer the provisions of this chapter.
The purposes or aims of the Department of Finance and Administration in carrying out said provisions shall be to coordinate and promote efficiency and economy in the purchase of commodities by the agencies of the state.
All purchases made under this chapter by agencies and governing authorities are subject to and must be in compliance with the provisions of Section 2 of this act.
SECTION 7. This act shall take effect and be in force from and after July 1, 2018.