Bill Text: MS HB1496 | 2021 | Regular Session | Introduced
Bill Title: City of Jackson; authorize special sales tax to fund repairs to drinking water, wastewater and stormwater systems infrastructure.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2021-04-01 - Died In Committee [HB1496 Detail]
Download: Mississippi-2021-HB1496-Introduced.html
MISSISSIPPI LEGISLATURE
2021 Regular Session
To: Local and Private Legislation
By: Representative Bell (65th)
SECTION 1. House Bill 1496
AN ACT TO AUTHORIZE THE GOVERNING AUTHORITIES OF THE CITY OF JACKSON, MISSISSIPPI, TO ISSUE BONDS FOR THE PURPOSE OF ACQUIRING, CONSTRUCTING, EQUIPPING, FURNISHING, REPAIRING, REMODELING OR IMPROVING THE CITY OF JACKSON'S DRINKING WATER, WASTEWATER AND STORMWATER SYSTEMS, OTHER TREATMENT FACILITIES OF THE CITY, TRANSMISSION LINES AND RELATED FACILITIES AND ACQUIRING LAND FOR THE FACILITIES AND IMPROVEMENTS; TO AUTHORIZE THE GOVERNING AUTHORITIES, UPON APPROVAL BY THE ELECTORATE OF THE CITY TO LEVY A TAX ON SALES AND SERVICES IN THE CITY TO SECURE THE PAYMENT OF THE PRINCIPAL AND INTEREST ON THE BONDS; TO PROVIDE FOR THE TERMS OF THE BONDS; TO AUTHORIZE THE GOVERNING AUTHORITIES TO ENTER INTO CONTRACTS WITH RESPECT TO THE FACILITIES AND IMPROVEMENTS; AND FOR RELATED PURPOSES.
WHEREAS, the City of Jackson's drinking water, wastewater and stormwater systems are confronting insurmountable challenges, resulting from deferred maintenance combined with the loss of jobs and a shrinking tax base, in meeting the basic infrastructure needs for its citizens; and
WHEREAS, the governing authorities of the city met and authorized a resolution on March 2, 2021, declaring that the city is in a constant state of crisis as a result of the decaying status of its drinking water, wastewater and stormwater systems infrastructure; and
WHEREAS, the governing authorities of the city declared in its resolution the significance of upgrading and stabilizing its drinking water, wastewater and stormwater systems infrastructure noting that it has been failing for years and declaring that it has become the most pressing issue for the city due to endured flooding and the freezing winter storm of 2021; and
WHEREAS, the U.S. Environmental Protection Agency, the Department of Justice, and the Mississippi Department of Environmental Quality have been conducting compliance evaluations of the city's drinking water, wastewater and stormwater systems infrastructure necessary to make improvements to eliminate certain unauthorized overflows; and
WHEREAS, the Legislature feels that the drinking water, wastewater and stormwater systems infrastructure crisis in Jackson, Mississippi, has reached such significant proportions that an emergency situation exists and that special legislation is needed to help solve this critical problem in this area based on the facts presented in this specific case; NOW, THEREFORE,
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Whenever used in this act, unless a different meaning clearly appears in the context, the following terms shall be given the following meanings:
(a) "Bonds" shall include notes, bonds and other obligations authorized to be issued under this act.
(b) "City" means the City of Jackson, Mississippi.
(c) "Cost" as applied to the delivery of water and wastewater service to a governmental entity or water association, means an amount equal to a proportional share of (i) the expenses of construction and acquisition of the project amortized over the term of the bonds issued for construction of the project, (ii) the expenses of construction and acquisition of improvements to the project amortized over the useful life of such improvements, (iii) financing cost for the project and the aforesaid capital improvements including the cost of interest on the bonds and debt obligations issued to finance such improvements, less the annual proceeds of the sales tax provided for in Section 5 of this act, and (iv) operation and maintenance expenses pertaining to the project as it may be improved from time to time, including a reasonably required reserve fund for repair and renovation of the project. The components of cost set forth above shall be determined by a certified public accounting firm designated by the city. There shall be deducted from such components of costs set forth above, the proceeds of the special sales tax which will be used to pay the principal of and interest on the bonds as provided in Section 13 hereof or used to pay any costs in connection with the project.
(d) "County" means Hinds County, Mississippi.
(e) "Governing authorities" means the Mayor and City Council of the City of Jackson, Mississippi.
(f) "Project" means acquiring, constructing, equipping, furnishing, repairing, remodeling or improving the City of Jackson's drinking water, wastewater and stormwater systems infrastructure, other treatment facilities of the city, transmission lines and related facilities and acquiring land for the facilities and improvements.
(g) "System" means the combined drinking water, wastewater and stormwater systems of the city.
SECTION 2. (1) It is hereby determined and declared to be in the best interest of the people of the city, the county and the surrounding area to provide an adequate supply of water both for residential and industrial use. It is in the public interest that the city's water crisis be alleviated. The construction of the project will assure the maintenance and improvement of the living conditions of the people of Central Mississippi, the continuation of industrial, commercial and economic opportunities in the area and the enhancement of the health and welfare of the area's people.
(2) The city shall endeavor to alleviate the water crisis problem through cooperative efforts and agreements for the benefit of communities in the surrounding area.
SECTION 3. The governing body is hereby authorized to issue general obligation bonds of the city in the aggregate principal amount not in excess of an amount for which debt service is capable of being funded by the proceeds of the special sales tax levied under this act, revenues from the system or other funds available to the city exclusive of refunding bonds issued hereunder, to raise money for the construction and acquisition of the project and payment of interest on bonds, funding of capitalized interest, establishment of reserves to secure such bonds and payment of expenses incident to the issuance of such bonds and to the implementation of the project. The bonds shall be general obligations of the city, but shall not be considered when computing any limitation of indebtedness of the city established by law.
SECTION 4. Before any bonds are issued pursuant to this act, the city shall determine that a water infrastructure crisis exists in the city and shall forward notice of such determination to the Governor, Lieutenant Governor and Speaker of the House of Representatives, and the electors of the city shall have approved the imposition of the special sales tax provided for in Section 5 of this act. Any bonds issued pursuant to this act, other than refunding bonds, shall be issued in accordance with the provisions of Title 21, Chapter 33, Article 5, Mississippi Code of 1972, except that if such provisions conflict with the provisions of this act, the provisions of this act shall prevail. The full faith, credit and resources of the city shall be irrevocably pledged for the payment of the principal of and interest on the bonds and the city may also pledge revenues from the system including any grants or funds applicable for the payment of principal and interest on the bonds.
SECTION 5. Before any bonds shall be issued pursuant to this act, the imposition of a special sales tax, in addition to all other taxes now imposed, at the rate of one percent (1%) upon all sales and services within the city which are subject to the general rate of state sales tax, with any exceptions as the city may allow, shall have been approved at an election to be held in the city in the manner now provided by law for the holding of city elections, upon at least three (3) weeks notice thereof by publication of the proposition at least once a week for three (3) consecutive weeks in some newspaper published in the city or having a general circulation therein. At such election, all qualified electors of the city may vote. If a majority of the qualified electors of the city voting in the election vote in favor of the proposition, then the special sales tax may be imposed in accordance with this section to pay for the costs of the project and Section 11 of this act.
SECTION 6. Bonds issued under this act may be issued as registered bonds pursuant to the provisions of Title 31, Chapter 21, Mississippi Code of 1972, or in bearer form either as to principal or interest or both, and may contain such covenants and·provisions, may be issued as term or serial bonds, in one or more series, may be executed and delivered at any time, and from time to time, may be in such form and denomination, may be of such tenor, may be payable in such installments and at such time or times, not exceeding forty (40) years from their date, may be payable at such place or places and evidenced in such manner, may be callable with or without premium, may bear such rate or rates of interest and may contain such other provisions not inconsistent herewith, all as shall be provided in the proceedings of the governing body whereunder the bonds shall be directed to be issued. Bonds issued under this act may be sold either at public sale in the manner provided by Section 31-19-25, Mississippi Code of 1972, or at private sale, in the discretion of the governing body.
SECTION 7. No bond issued under this act shall bear a greater overall maximum interest rate to maturity than that allowed in Section 75-17-101, Mississippi Code of 1972, and no bond may bear more than one (1) rate of interest; each bond shall bear interest from its date to its stated maturity date at the interest rate specified in the bonds; all bonds of the same maturity shall bear the same rate of interest from date to maturity. All interest accruing on bonds issued under this act shall be payable semiannually or annually, except that the first interest payment for any bond may be for any period not exceeding one (1) year. No interest payment shall be evidenced by more than one (1) coupon and neither cancelled nor supplemental coupons shall be permitted.
SECTION 8. Bonds issued under this act shall be executed on behalf of the city by the manual or facsimile signature of the mayor and clerk of the city with the manual or facsimile seal of the city affixed or imprinted thereon. At least one (1) signature on each bond shall be a manual signature, whether of the mayor, city clerk or authenticating agent. If the officers whose signatures or countersignatures appear on the bonds or interest coupons shall cease to be such officers before delivery of the bonds, such signatures or countersignatures shall nevertheless be valid and sufficient for all purposes the same as if they had remained in the office until such delivery.
SECTION 9. Bonds issued under this act and all interest coupons applicable thereto shall be construed to be negotiable instruments, despite the fact that they are payable solely from a specified source, and shall be securities within the meaning of Article 8 of the Mississippi Uniform Commercial Code.
SECTION 10. (1) The principal proceeds received upon the sale of the bonds shall be deposited with a qualified depository of the city in a special fund in the name of the city from which there shall be first paid all expenses, premiums, fees and commissions incurred by the city and deemed necessary or advantageous by the governing body in connection with the authorization, issuance, sale, validation and delivery of the bonds.
(2) The balance of such proceeds shall be paid to the city and deposited with a qualified depository of the city. Such funds shall be held and disbursed for the project and may be used (a) for the project, (b) to pay interest on the bonds while the project is being completed and for a maximum of six (6) months after the estimated date of completion, (c) to pay engineering, fiscal, trustee, printing, accounting, financial advisor, construction manager, feasibility consultant and legal expenses, and development expenses incurred in connection with such project, and related structures and facilities, and the issuance of the bonds, (d) to provide for the establishment of a reasonable reserve fund for the payment of principal of and interest on the bonds in the event of a deficiency in the revenues and receipts available for such payments, including the payment of premiums for and surety policy used in said reserve fund, if such fund is provided for in the proceedings of the governing body in connection with the issuance of bonds, (e) to pay the premium or premiums on any insurance or any form of guarantee obtained from any source to assure the prompt payment of principal and interest when due, (f) to pay start-up costs and costs of operation and maintenance of the project and related structures and facilities while it is being established, erected, built, constructed, replaced, remodeled, renovated, added to, equipped or furnished and for a maximum of thirty-six (36) months after the estimated date of completion, (g) to provide for the payment of interim indebtedness incurred prior to the issuance of any bonds under this act and used for the purposes set forth above and (h) costs related to any suits and proceedings in connection with the project, including any costs of settlement thereof.
SECTION 11. (1) On or before the fifteenth day prior to the imposition of the special sales tax authorized in Section 5 of this act, the governing authorities shall give written notification to the Commissioner of the Mississippi Department of Revenue of the date on which the special sales tax will become effective.
(2) Such tax shall be collected in the same manner as the state sales tax imposed by Title 27, Chapter 65, Mississippi Code of 1972, and shall be accounted for separately from the amount of sales tax collected for the state in the city. All provisions of the State Sales Tax Law applicable to filing of such returns, discounts to the taxpayer, remittances to the Department of Revenue and retainage thereby of sums to defray the costs of collection, collection enforcement, rights of taxpayers, recovery of improper taxes, refunds of overpaid taxes or other provisions of said chapter providing for imposition and collection of the sales tax shall apply to the tax authorized by this act.
(3) On or before the fifteenth day of each month, the revenue from the special sales tax shall be placed into a special city fund apart from the city's general fund and any other funds of the city. If no bonds are issued, the special sales tax revenue may be expended by the city solely for the purposes authorized in this act in connection with the project.
(4) On or before the fifteenth day of each month if and when bonds are issued, the revenue from the special sales tax, necessary to pay the principal and interest on any bonds issued under this act, collected under the provisions of this section during the preceding month shall be paid and distributed from the special city fund to the trustee provided in Section 13 of this act on behalf of the city.
SECTION 12. (1) Bonds issued under this act may be refunded at any time and from time to time by the city pursuant to an authorizing resolution of the governing authorities, directing issuance of refunding bonds in accordance with the "Mississippi Bond Refinancing Act," Section 31-27-1 et seq., Mississippi Code of 1972.
(2) The city shall have authority to enter into an investment agreement with a financial institution incorporated under the laws of the United States or the laws of any state in the United States providing assurances with respect to the return on investment of funds received by the city in connection with the issuance of refunding bonds.
SECTION 13. (1) The bonds shall be secured by a trust agreement by and between the city and a corporate trustee, which may be any trust company or bank incorporated under the laws of the United States or the laws of any state in the United States. Any such trust agreement shall pledge for the payment of the principal of, redemption premium, if any, and interest on the bonds, the proceeds of the special sales tax provided for in this act and may provide for any other source of payment which may from time to time be made available to pay debt service on the bonds, including revenues of the project, subject to the provisions of subsection (3) of this section. The avails of the special sales tax deposed under the trust agreement shall be used solely for the payment of the principal of, redemption premium, if any, and interest on the bonds, and for the payment of expenses of issuance thereof or reserve funds therefor. To the extent the proceeds of the special sales tax and any other amounts which may from time to time be available for the payment of the principal of, redemption premium, if any, and interest on the bonds, including any available revenues of the project, are not sufficient for such purpose, the governing body shall levy a special ad valorem tax upon all of the taxable property within the city which shall be sufficient, together with other monies available for such purpose, to provide for the payment of the principal of, redemption premium, if any, and interest on such bonds according to the terms thereof.
(2) Such trust agreement may provide for the creation and maintenance of such reserve funds as the governing body shall determine are reasonable and proper, including such sinking fund or funds as may be necessary to provide for the payment of the principal of, redemption premium, if any, and interest on the bonds, subject to the provisions of subsection (3) of this section. Any such trust agreement or any resolution directing the issuance of bonds may contain such provisions for protecting and enforcing the rights and remedies of the registered owners thereof as may be reasonable and proper and not in violation of law, including the duties of the city in relation to the acquisition of property and the construction, improvement, equipping, furnishing, maintenance, repair, operation and insurance of the project and the custody, safeguarding and application of all monies.
(3) Such trust agreement may provide for the creation of a fund which is separate and apart from any other fund authorized under this section. The special sales tax revenues deposited into the fund may be invested in the manner as provided for by state law for the investment of public funds. Such special sales tax revenues, including interest earned thereon, may be used to pay the principal of and interest on such bonds as they become due and payable on any payment date.
(4) Any such trust agreement may set forth the rights and remedies of the registered owners of the bonds and of the trustee, and may restrict the individual right of action by such registered owners as is customary in trust agreements or trust indentures securing bonds and debentures of corporations. Further, any such trust agreement may contain such provisions as the city may deem reasonable and proper for the security of such registered owners and may also contain provisions governing the issuance of bonds to replace lost, stolen or mutilated bonds.
(5) Any such trust agreement may contain a provision that, in the event of a default in the payment of the principal of, redemption premium, if any, or the interest on the bonds issued in accordance with or relating to, such agreement or in the performance of any agreement contained in the proceedings, trust agreement or instruments relating to such bonds, such payment and performance may be enforced by mandamus or by the appointment of a receiver in equity.
(6) All expenses incurred by the city in carrying out the provisions of any such trust agreement may be treated as a part of the cost of the operation of the project.
(7) Any surplus funds, excluding special sales tax revenues and interest earned thereon, received by the trustee after payment in full of the principal of, redemption premium, if any, and interest on the bonds, or provision therefor having been made, shall be paid over to the city and expended for improvements, repairs and extensions to the project.
SECTION 14. (1) Bonds issued under this act and the income therefrom shall be exempt from all taxation in the State of Mississippi, excepting inheritance and gift taxes.
(2) Bonds issued under this act shall be legal investments for commercial banks, savings and loan associations and insurance companies organized under the laws of this state.
SECTION 15. Bonds issued under this act shall be submitted to validation as provided by Title 31, Chapter 13, Mississippi Code of 1972, and to that end the city clerk shall be directed to make up a transcript of all legal papers and proceedings relating to the bonds and to certify and forward the same to the state's bond attorney for the institution of validation proceedings.
SECTION 16. The governing authorities are authorized to exercise such powers of eminent domain as are required by the public convenience and necessity to acquire property, or interests therein, whether real, personal or mixed, on which to construct the project.
SECTION 17. (1) The project shall be owned by the city. The city is authorized to contract with any agency, department or other office of government or any individual, partnership, corporation, utility or water management district, county or municipality, and each of those entities are authorized to contract with the city for the acquisition, treatment or furnishing of water or providing of property, equipment or services by or to the city regarding the construction, funding or operation of the project and to contract for the management of the project or any part thereof by any individual, partnership or corporation or governmental entity. The city is further authorized, to the extent that the governing body determines to be in the best interest of the city and the surrounding area, to sell, lease or otherwise convey any of the facilities or property constituting a part of or pertaining to the project and to contract with any of the above entities regarding such sale, lease or conveyance. The authority to levy and collect the special taxes provided for in this act shall not be adversely affected by any such contract, agreement, sale, lease or conveyance.
(2) Such agreement may contain a provision whereby the entity contracting with the city agrees to take an established amount of water at an established rate or to pay an amount if it does not require the established amount or if the project is not able to provide water in such amounts in the applicable time periods. The city is further authorized to lease any of the facilities or property constituting a part of or pertaining to the project and to contract with any of the above entities regarding such lease. The authority to levy and collect the special tax provided for in this act shall not be adversely affected by any agreement entered into pursuant to this section. The revenues and expenses of the project shall be accounted for so that the cost of water service can be determined as provided in this act. The city may sell water from the project to each governmental entity or water association within its purview or jurisdiction at the cost of such water service.
SECTION 18. The city may pledge a sufficient portion of its revenues received from the sale of water from the project after payment of the expense of operation and maintenance of the project, to the payment of principal of and interest on any bonds as the same comes due to the extent the same is not paid with the proceeds of the sales tax referenced in Section 5 herein. The proceedings of the governing body in connection with the issuance of bonds may provide for the payment of a sufficient portion of such revenues to the trustee provided for herein, and may contain such other provision regarding the priority of such pledge as shall be contained therein and in any agreements between the city and any other contracting party including other debt or bondholders of the city.
SECTION 19. This act, without reference to any other statute, shall be deemed to be full and complete authority for the issuance of bonds under this act, and shall be construed as an additional and alternative method therefor, and none of the present restrictions, requirements, conditions or limitations of law applicable to the issuance or sale of bonds, notes or other obligations by municipalities of this state shall apply to the issuance and sale of bonds under this act, and no proceedings shall be required for the issuance of such bonds other than those provided for and required herein. All other powers and authority provided for or granted in this act, other than the levy of taxes authorized under this act, may be exercised whether or not bonds are issued pursuant to this act. All powers necessary to be exercised in order to carry out the provisions of this act are hereby conferred.
SECTION 20. No member of the Legislature, elected official or appointed official, or any partner or associate of any member of the Legislature, elected official or appointed official shall derive any income from the issuance of any bonds under this act.
SECTION 21. This act shall take effect and be in force from and after its passage.
