Bill Text: MS HB217 | 2015 | Regular Session | Introduced
Bill Title: Sixteenth section land funds; revise manner by which funds received from the sale of nonrenewable resources are invested.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Failed) 2015-02-03 - Died In Committee [HB217 Detail]
Download: Mississippi-2015-HB217-Introduced.html
MISSISSIPPI LEGISLATURE
2015 Regular Session
To: Education; Appropriations
By: Representative Mims
House Bill 217
AN ACT TO AMEND SECTION 29-3-113, MISSISSIPPI CODE OF 1972, TO REVISE THE MANNER BY WHICH THE STATE TREASURER IS REQUIRED TO INVEST FUNDS RECEIVED FROM NONRENEWABLE RESOURCES EXTRACTED OR HARVESTED FROM SIXTEENTH SECTION LANDS IN ORDER TO BETTER BENEFIT THE SCHOOL DISTRICT OF POSSESSION; TO REQUIRE THE STATE BOARD OF EDUCATION TO KEEP THE PRINCIPAL FUND INVESTED IN DIRECT OBLIGATION OR CERTIFICATES OF DEPOSITS ISSUED BY A QUALIFIED DEPOSITORY OF THE UNITED SATES AS APPROVED BY THE UNITED STATES SECRETARY OF THE TREASURY AND INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC); TO REVISE THE PERIOD OF TIME FOR WHICH SUCH INVESTMENTS MAY BE ALLOWED TO MATURE PROVIDED THAT SUCH MATURITY PERIOD SHALL NOT EXCEED TEN YEARS FROM THE DATE OF PURCHASE; TO AMEND SECTION 27-105-33, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 29-3-113, Mississippi Code of 1972, is amended as follows:
29-3-113. The principal fund shall be a permanent township fund which shall consist of funds heretofore or hereafter derived from certain uses or for certain resources of school trust lands which shall be invested and, except as otherwise provided in this section, only the interest and income derived from such funds shall be expendable by the school district.
The principal fund shall consist of:
(a) Funds received for easements and rights-of-way pursuant to Section 29-3-91;
(b) Funds received for sales of lieu land pursuant to Sections 29-3-15 through 29-3-25;
(c) Funds received from any permanent damage to the school trust land;
(d) Funds received from the sale of nonrenewable resources, including, but not limited to, the sale of sand, gravel, dirt, clays and royalties received from the sale of mineral ores, coal, oil and gas;
(e) Funds received from the sale of buildings pursuant to Section 29-3-77;
(f) Funds received from the sale of timber; and
(g) Funds received pursuant to Section 29-3-23(2).
It shall be the duty of the
Board of Education to keep the principal fund invested in any direct obligation
issued by or guaranteed in full as to principal and interest by the United
States of America or in certificates of deposit issued by a qualified depository
of the * * * United States of
America as approved by the United States Secretary of the Treasury and insured
by the Federal Deposit Insurance Corporation (FDIC). The certificates of
deposit may bear interest at any rate per annum which may be mutually agreed
upon, provided that period of maturity shall not exceed ten (10) years from
the date of purchase, but in no case shall * * * the rate be less than that paid on
passbook savings.
The Board of Education is
authorized to invest the funds in interest bearing deposits or other
obligations of the types described in Section 27-105-33 or in any other type
investment in which any other political subdivision of the State of Mississippi
may invest, except that one hundred percent (100%) of the funds are authorized
to be invested. For the purposes of investment, the principal fund of each
township may be combined into one or more district accounts; however, the
docket book of the county superintendent shall at all times reflect the proper
source of such funds. Provided that funds received from the sale of
nonrenewable resources, as prescribed under paragraph (d), and funds
received from the sale of timber, as prescribed under paragraph (f),
shall be placed in * * *
separate principal fund accounts, and may be expended for any of the
purposes authorized by law.
The Board of Education shall have authority to borrow such funds at a rate of interest not less than four percent (4%) per annum and for a term not exceeding twenty (20) years, for the erection, equipment or repair of said district schools, to provide local funds for any building project approved by the State Board of Education or to provide additional funds for forest stand improvement as set forth in Section 29-3-47. In addition, the board may borrow the funds under the same interest restrictions for a term not exceeding ten (10) years to provide funds for the purchase of school buses. The Board of Education of any school district in any county that has an aggregate amount of assets in its principal fund in excess of Five Million Dollars ($5,000,000.00), may deduct an amount not to exceed Five Hundred Thousand Dollars ($500,000.00) for the purpose of covering the cost of asbestos removal from school district buildings. Such asbestos removal shall be construed to constitute the repair of school district facilities as prescribed in Section 29-3-115.
No school land trust funds may be expended after the annual payment date until the payment is made on such loan. The annual payment can be made from any funds available to the school district except minimum foundation program funds.
It shall be unlawful for the Board of Education to borrow any sixteenth section school funds in any other manner than that prescribed herein, and if any such funds shall be borrowed or invested in any other manner, any officer concerned in making such loan and investment or suffering the same to be made in violation of the provisions of this section, shall be liable personally and on his official bond for the safety of the funds so loaned.
SECTION 2. 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 hereby 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 * * *
among * * *
qualified * * *
depositories of the United States of America as approved by the United
States Secretary of the Treasury and insured by the Federal Deposit Insurance
Corporation (FDIC) which do not have demand accounts in excess of One
Hundred Fifty Thousand Dollars ($150,000.00) until each selected
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 * * *
not less
than the duration mutually agreed upon by the qualified depository and the
beneficiary of the investment account, in consultation with the State
Treasurer, provided that the period of maturity shall not exceed ten (10) years
from the date of purchase, 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 * * * period mutually agreed upon by the qualified depository
and the beneficiary of the investment account, provided that the period of
maturity shall not exceed ten (10) years from the date of purchase, 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.
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 3. Sections 1 and 2 of this act shall stand repealed on July 1, 2018.
SECTION 4. This act shall take effect and be in force from and after July 1, 2015.
