Senate Bill 2322

AN ACT TO AUTHORIZE THE GOVERNING AUTHORITIES OF ANY MUNICIPALITY OR COUNTY TO IMPOSE A SPECIAL SALES TAX OF NOT MORE THAN 1% ON THE GROSS PROCEEDS OF ALL SALES OR THE GROSS INCOME OF BUSINESSES IN THE MUNICIPALITY OR COUNTY DERIVED FROM ACTIVITIES TAXED AT THE RATE OF 7% OR MORE UNDER THE MISSISSIPPI SALES TAX LAW; TO PROVIDE THAT THE SPECIAL SALES TAX SHALL NOT BE LEVIED UNLESS AUTHORIZED BY AT LEAST 3/5 OF THE VOTES CAST AT A REFERENDUM CALLED AND HELD FOR SUCH PURPOSE; TO AUTHORIZE A MUNICIPALITY OR COUNTY TO INCUR INDEBTEDNESS IN AN AMOUNT NOT GREATER THAN AN AMOUNT FOR WHICH DEBT SERVICE IS CAPABLE OF BEING FUNDED BY THE PROCEEDS OF THE SPECIAL SALES TAX; TO PROVIDE THAT THE SPECIAL SALES TAX REVENUE COLLECTED PURSUANT TO SUCH A TAX SHALL BE USED AND EXPENDED BY THE MUNICIPALITY OR COUNTY TO FUND CAPITAL PROJECTS; TO PROVIDE FOR THE DISCONTINUANCE OF THE SPECIAL SALES TAX UPON COMPLETION OF THE FUNDING OF THE PROJECTS FOR WHICH THE TAX WAS LEVIED; TO AMEND SECTION 21-33-303, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; TO AMEND SECTION 19-9-5, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) Subject to the provisions of this section, the governing authorities of any municipality or county may impose upon all persons as a privilege for engaging or continuing in business or doing business within such municipality or county, a special sales tax at the rate of not more than one percent (1%) of the gross proceeds of sales or gross income of the business, as the case may be, derived from any of the activities taxed at the rate of seven percent (7%) or more under the Mississippi Sales Tax Law, Section 27-65-1 et seq. The tax levied under this section shall apply to every person making sales, delivery or installations of tangible personal property or services within any municipality or county which has adopted the levy authorized in this section but shall not apply to sales exempted by Sections 27-65-19, 27-65-101, 27-65-103, 27-65-105, 27-65-107, 27-65-109 and 27-65-111 of the Mississippi Sales Tax Law.

(2) Before any tax authorized under this section may be imposed, the governing authorities of the municipality or county shall adopt a resolution declaring its intention to levy the tax, setting forth the amount of the tax to be imposed, the capital projects for which the revenue collected pursuant to the tax levy may be used and expended, the date upon which the tax shall become effective and calling for a referendum to be held on the question. The date of the referendum shall be set in the resolution. Notice of the referendum shall be published once each week for at least three (3) consecutive weeks in a newspaper published or having a general circulation in the municipality or county, with the first publication of the notice to be made not less than twenty-one (21) days before the date fixed in the resolution for the referendum and the last publication to be made not more than seven (7) days before the referendum. At the referendum, all qualified electors of the municipality or county may vote. The ballots used at the referendum shall have printed thereon a brief description of the sales tax, the amount of the sales tax levy, a description of the projects for which the tax revenue may be used and expended and the words "FOR THE LOCAL SALES TAX" and "AGAINST THE LOCAL SALES TAX," and the voter shall vote by placing a cross (X) or check mark (√) opposite his choice on the proposition. When the results of the referendum have been canvassed by the election commissioners of the municipality or county and certified by them to the governing authorities, it shall be the duty of the governing authorities to determine and adjudicate whether at least three-fifths (3/5) of the qualified electors who voted in the referendum voted in favor of the tax. If at least three-fifths (3/5) of the qualified electors who voted in the referendum voted in favor of the tax, the governing authorities shall adopt a resolution declaring the levy and collection of the tax provided in this section and shall set the first day of the second month following the date of such adoption as the effective date of the tax levy. A certified copy of this resolution, together with the result of the referendum, shall be furnished to the Department of Revenue not less than thirty (30) days before the effective date of the levy.

(3) (a) Subject to the provisions of this section, the capital projects for which the revenue collected pursuant to the tax levy imposed under this section may be used and expended shall include, but not be limited to, the following:

(i) Recreational complexes;

(ii) Senior centers;

(iii) Community centers;

(iv) Auditoriums;

(v) Libraries;

(vi) Major street projects;

(vii) Water and sewage systems;

(viii) Gas lines; and

(ix) Multipurpose buildings.

(b) (i) Upon approval of the expenditure by the Mississippi Development Authority as described below, the revenue collected pursuant to the tax levy imposed under this section may be used and expended to pay the costs reasonably related to the projects described in paragraph (a) of this subsection. The initial construction of any project for which revenue collected pursuant to the special tax is used and expended shall not exceed four (4) years, and the revenue may not be expended for the future maintenance of any such projects for which the revenue was used and expended for the initial construction.

(ii) A municipality or county that levies the special sales tax authorized under this section shall establish a plan for the project or projects for which the revenue collected from the special tax may be used and expended and for the expenditure of revenue. The plan shall include at least the following:

1. A description of the project or projects for which the revenue will be expended, including the projected cost of the project or projects;

2. The projected starting date and completion date for the project or projects;

3. A description of any funds from other sources that may be available to the municipality or county to assist with paying the costs of the project or projects; and

4. Any other information required by the Mississippi Development Authority.

(iii) A municipality or county shall submit a copy of the plan to the Mississippi Development Authority. No expenditure of revenue collected from the special tax authorized by this section may be made by the municipality or county without the approval of the Mississippi Development Authority as being consistent with the provisions of this section. Within forty-five (45) days of its receipt of the plan, the Mississippi Development Authority shall either approve the proposed expenditures or, for any expenditure not approved, explain why the proposed expenditure is not consistent with the provisions of this section and provide instructions to enable the municipality or county to achieve compliance.

(iv) The Mississippi Development Authority shall have all powers necessary to implement and administer the provisions of this section, and the Mississippi Development Authority shall promulgate rules and regulations, in accordance with the Mississippi Administrative Procedures Law, necessary for the implementation of this section.

(4) (a) The special sales tax authorized by this section shall be collected by the Department of Revenue, shall be accounted for separately from the amount of sales tax collected for the state in the municipality or county and shall be paid to the municipality or county in which collected. The Department of Revenue may retain three percent (3%) of the proceeds of the tax for the purpose of defraying the costs incurred by the department in the collection of the tax. Payments to the municipality or county shall be made by the Department of Revenue on or before the fifteenth day of the month following the month in which the tax was collected.

(b) The proceeds of the special sales tax shall be placed into a separate fund apart from the municipal or county general fund and any other funds of the municipality or county, and shall be expended by the municipality or county solely for the purpose of paying any indebtedness or other obligation or cost incurred or that may be incurred by the municipality or county for the capital projects specified in the resolution ordering the referendum.

(c) All provisions of the Mississippi Sales Tax Law applicable to the filing of returns, discounts to the taxpayer, remittances to the Department of Revenue, enforced collection, rights of taxpayers, the recovery of improper taxes, refunds of overpaid taxes or other provisions of law providing for imposition and collection of the state sales tax shall apply to the special sales tax authorized by this section, except where there is a conflict, in which case the provisions of this section shall control. Any damages, penalties or interest collected for the nonpayment of taxes imposed under this section, or for noncompliance with the provisions of this section, shall be paid to the municipality or county in which such damages, penalties or interest were collected on the same basis and in the same manner as the tax proceeds. Any overpayment of tax for any reason that has been disbursed to any municipality or county or any payment of the tax to any municipality or county in error may be adjusted by the Department of Revenue on any subsequent payment to the municipality or county involved pursuant to the provisions of the Mississippi Sales Tax Law. The Department of Revenue may, from time to time, make such rules and regulations not inconsistent with this section as may be deemed necessary to carry out the provisions of this section, and such rules and regulations shall have the full force and effect of law.

(d) Any special tax levied by a municipality or county under this section shall be discontinued by the governing authorities of the municipality or county on the first day of the month immediately succeeding the date of the completion of the project or projects for which the tax was authorized and the retirement and payment in full of any indebtedness or other obligations, if incurred, by the municipality or county for the project or projects, as determined by the Mississippi Development Authority. However, any tax levied by a municipality or county under this section may not continue to be levied more than ten (10) years after the date the tax levy commences unless the continued levy of the tax is approved at an election for that purpose that is called and held as nearly as is practicable in the manner provided in subsection (2) of this section. Any amount remaining in the separate fund containing the proceeds of the special sales tax after the discontinuance of the tax shall be transferred to the municipal or county general fund.

(e) The governing authorities of a municipality or county may not impose a special sales tax under this section on sales that are subject to any tax levied and collected (before the date a resolution is adopted under subsection (2) of this section) under the authority of a local and private law of the State of Mississippi, and which tax is collected and paid to the Department of Revenue in the same or similar manner that state sales taxes are collected and paid.

(f) If a municipality imposing a special sales tax under this section contracts its corporate boundaries, the special sales tax shall continue to be imposed in the area that was in the corporate boundaries of the municipality before the contraction of such boundaries.

(5) The governing authorities of any municipality or county that levies a special sales tax pursuant to this section may incur indebtedness of the municipality or county in an aggregate principal amount that is not in excess of an amount for which debt service is capable of being funded by the proceeds of the special sales tax levied pursuant to this section. The indebtedness authorized by this subsection shall not be considered when computing any limitation of indebtedness of the municipality or county established by law.

SECTION 2. Section 21-33-303, Mississippi Code of 1972, is amended as follows:

21-33-303. No municipality shall hereafter issue bonds secured by a pledge of its full faith and credit for the purposes authorized by law in an amount which, when added to the then outstanding bonded indebtedness of such municipality, shall exceed either (a) fifteen percent (15%) of the assessed value of the taxable property within such municipality, according to the last completed assessment for taxation, or (b) ten percent (10%) of the assessment upon which taxes were levied for its fiscal year ending September 30, 1984, whichever is greater. In computing such indebtedness, there may be deducted all bonds or other evidences of indebtedness, heretofore or hereafter issued, for school, water, sewerage systems, gas, and light and power purposes and for the construction of special improvements primarily chargeable to the property benefited, or for the purpose of paying the municipality's proportion of any betterment program, a portion of which is primarily chargeable to the property benefited. However, in no case shall any municipality contract any indebtedness which, when added to all of the outstanding general obligation indebtedness, both bonded and floating, shall exceed either (a) twenty percent (20%) of the assessed value of all taxable property within such municipality according to the last completed assessment for taxation or (b) fifteen percent (15%) of the assessment upon which taxes were levied for its fiscal year ending September 30, 1984, whichever is greater. Nothing herein contained shall be construed to apply to contract obligations in any form heretofore or hereafter incurred by any municipality which are subject to annual appropriations therefor, or to bonds heretofore issued by any municipality for school purposes, or to contract obligations in any form heretofore or hereafter incurred by any municipality which are payable exclusively from the revenues of any municipally owned utility, or to bonds issued by any municipality under the provisions of Sections 57-1-1 through 57-1-51, or to any special assessment improvement bonds issued by any municipality under the provisions of Sections 21-41-1 through 21-41-53, or to any indebtedness incurred under Section 55-23-8, or to any indebtedness incurred under Section 1 of this act.

All bonds issued prior to July 1, 1990, pursuant to this chapter by any municipality for the purpose of the constructing, replacing, renovating or improving wastewater collection and treatment facilities in order to comply with an administrative order of the Mississippi Department of Natural Resources issued pursuant to the Federal Water Pollution Control Act and amendments thereto, are hereby exempt from the limitation imposed by this section if the governing body of the municipality adopts an order, resolution or ordinance to the effect that the rates paid by the users of such facilities shall be increased to the extent necessary to provide sufficient funds for the payment of the principal of and interest on such bonds as each respectively becomes due and payable as well as the necessary expenses in connection with the operation and maintenance of such facilities.

SECTION 3. Section 19-9-5, Mississippi Code of 1972, is amended as follows:

19-9-5. No county shall hereafter issue bonds secured by a pledge of its full faith and credit for the purposes authorized by law in an amount which, when added to the then outstanding bonds of such county, shall exceed either (a) fifteen percent (15%) of the assessed value of the taxable property within such county according to the last completed assessment for taxation, or (b) fifteen percent (15%) of the assessment upon which taxes were levied for its fiscal year ending September 30, 1984, whichever is greater.

However, any county in the state which shall have experienced washed-out or collapsed bridges on the public roads of the county for any cause or reason may hereafter issue bonds for bridge purposes as now authorized by law in an amount which, when added to the then outstanding general obligation bonds of such county, shall not exceed either (a) twenty percent (20%) of the assessed value of the taxable property within such county according to the last completed assessment for taxation or (b) fifteen percent (15%) of the assessment upon which taxes were levied for its fiscal year ending September 30, 1984, whichever is greater.

Provided further, in computing such indebtedness, there may be deducted all bonds or other evidences of indebtedness heretofore or hereafter issued, for the construction of hospitals, ports or other capital improvements which are payable primarily from the net revenue to be generated from such hospital, port or other capital improvement, which revenue shall be pledged to the retirement of such bonds or other evidences of indebtedness, together with the full faith and credit of the county. However, in no case shall any county contract any indebtedness payable, in whole or in part, from proceeds of ad valorem taxes which, when added to all of the outstanding general obligation indebtedness, both bonded and floating, shall exceed either (a) twenty percent (20%) of the assessed value of all taxable property within such county according to the last completed assessment for taxation, or (b) fifteen percent (15%) of the assessment upon which taxes were levied for its fiscal year ending September 30, 1984, whichever is greater. Nothing herein contained shall be construed to apply to contract obligations in any form heretofore or hereafter incurred by any county which are subject to annual appropriations therefor, or to bonds heretofore or hereafter issued by any county for school purposes, or to bonds issued by any county under the provisions of Sections 57-1-1 through 57-1-51, or to any indebtedness incurred under Section 55-23-8, or to bonds issued under Section 57-75-37 or to any other indebtedness incurred under 57-75-37(4), or to any indebtedness incurred under Section 1 of this act.

SECTION 4. It is the intent of the Legislature that the amount of state general funds appropriated to the Department of Revenue shall not be reduced because of funds collected by the department under this act.

SECTION 5. Section 1 of this act shall be known and may be cited as the "Citizens for Economic Development Act."

SECTION 6. This act shall take effect and be in force from and after July 1, 2020.