Mississippi Bond Refinancing Act

Miss. Code Ann. tit. 31, ch. 27
in effect

Miss. Code Ann. § 31-27-1 Short title.

This chapter shall be known and may be cited as the “Mississippi Bond Refinancing Act.”

Miss. Code Ann. § 31-27-3 Definitions.

The following terms whenever used or referred to in this chapter shall have the following meaning, unless a different meaning appears from the context: “Bond” or “bonds” means every duly authorized, executed and delivered instrument evidencing an obligation incurred by a governmental unit for the payment or repayment of money, which obligation matures more than one (1) year from the date of said instrument. The terms “bond” or “bonds” shall also include refunding bonds. “Governing body” means the duly elected or appointed legislative body of a political subdivision or such other body which is charged by law with governing the political subdivision. As to the state, the term “governing body” means the State Bond Commission. “Holder of bonds” or “bondholder” or any similar term means any person who shall be the bearer of any bond or bonds registered to bearer or not registered, or the registered owner of any such bond or bonds which shall at the time be registered other than to bearer. “Law” means any act or statute, general, special or local, of this state; “Governmental unit” means the State of Mississippi, any county, municipality, school district, special services district, or any other district, commission, board, corporation, agency, levee district, drainage district, department, authority or political subdivision of this state; “Refunding bonds” means bonds issued under this chapter; “Resolution” means a resolution, ordinance, act, record of minutes, or other appropriate enactment of a governing body; and “State” means the State of Mississippi.

Miss. Code Ann. § 31-27-5 Legislative intent; construction.

The purpose of this chapter is to provide full and complete authority to governmental units for the issuance of refunding bonds. No procedure or proceedings, publications, notices, consents, limitations, approvals, orders, acts or things by any governing body of any governmental unit, other than those required by this chapter, shall be required to issue any refunding bonds or to do any act or perform anything under this law except as may be prescribed herein. The powers conferred by this chapter shall be in addition and supplemental to, and not in substitution for, and the limitations imposed by this chapter shall not affect, the powers conferred by any other law. The principal amount of any bond for which refunding bonds have been issued under this chapter and for which governmental obligations described in Section 31-27-15 have been placed in escrow in an amount sufficient to pay the principal of and interest on such bonds and any redemption premium on such bonds as set forth in Section 31-27-15 shall not be considered outstanding bonded indebtedness for the purpose of determining the debt limitation of the governmental unit. This chapter is remedial in nature and shall be liberally construed.

Miss. Code Ann. § 31-27-7 Issuance of refunding bonds.

Refunding bonds shall be issued pursuant to an authorizing resolution of the governing body of a governmental unit. Refunding bonds may be issued in one or more series, may bear such date or dates, may mature at such time or times (either serially or term or a combination thereof), may bear interest at such rate or rates not to exceed that allowed by law for the class of bonds being used to effect the refunding, may be in such denominations, may be in such form (either coupon or registrable as to principal or fully registered or a combination), may carry such registration and conversion privileges, may have such sinking fund provisions, may be executed in such manner, may be payable in such medium of payment and at such place (either within or without the state) at such time or times, may be subject to such terms of redemption (with or without premium), may be declared or become due prior to the maturity date thereof, may be sold at public or private sale (which sale shall be on such terms and in such manner as the governing body shall determine), may provide for the replacement of mutilated, destroyed, stolen or lost bonds, may be authenticated in such manner and upon compliance with such conditions, and may contain such other terms and covenants (including, without limitation, covenants for the security and better marketability of such refunding bonds), as may be provided by resolution of the governing body of the governmental unit.

Miss. Code Ann. § 31-27-9 Escrow account; banking corporation as trustee for bondholders.

The governing body of any governmental unit may, in addition to the other powers conferred, include provisions in any resolution authorizing the issuance of refunding bonds, which shall be a part of the contract with the holders of the refunding bonds, as to: The establishment of an escrow account in accordance with the provisions of Section 31-27-15; The appointment of a banking corporation or association within or without the state which is a member of the Federal Deposit Insurance Corporation, or any successor thereto, to act as trustee for the bondholders, and the authorization, execution and delivery of an agreement evidencing the contractual relationships among the governmental unit, the trustee and bondholders, which agreement may contain such terms, conditions and covenants as the governing body shall determine; The appointment of a banking corporation or association within or without the state which is a member of the Federal Deposit Insurance Corporation, or any successor thereto, to hold in escrow any escrow account consistent with the provisions of Section 31-27-15, and the authorization, execution and delivery of an agreement relating to such escrow account evidencing the contractual relationships among the governmental unit, such banking corporation or association and related parties, which agreement may contain such terms, conditions and covenants as the governing body shall determine; and The execution of all instruments necessary or convenient in the exercise of the powers granted by this chapter or in the performance of the duties of the governmental unit and the officers, agents and employees thereof.

Miss. Code Ann. § 31-27-11 Security for refunding bonds.

Refunding bonds may be secured by a pledge of: (a) the same source of security as the bonds to be refunded, or (b) such other security as the governing body of the governmental unit may lawfully pledge, or both; all as may be provided by resolution of the governing body of the governmental unit.

Miss. Code Ann. § 31-27-13 Amount of refunding bonds authorized to be issued.

The total amount of refunding bonds to be issued under this chapter shall be an amount sufficient to effect the refunding and may include an amount sufficient to pay (a) the principal amount of the refunded bonds, (b) interest accrued or to accrue to the date of maturity or the date of redemption of the bonds to be refunded (which need not necessarily be on the first available redemption date), (c) any redemption premiums to be paid thereon, (d) any reasonable expenses incurred in connection with such refunding, and (e) any other reasonable costs deemed appropriate by the governing body of the governmental unit, including, without limitation, the expenses of preparing and delivering the refunding bonds, legal fees, financial advisor fees, consultant fees, and other expenses incurred in connection with the issuance, sale and delivery of the refunding bonds. Refunding bonds issued under this chapter shall result in an overall net present value savings to maturity of not less than two percent (2%) of the bonds being refunded.

Miss. Code Ann. § 31-27-15 Sale of refunding bonds and disposition of proceeds.

Refunding bonds may be sold and proceeds thereof may be applied to the payment of the bonds refunded or, as to such bonds as are not yet maturing, such proceeds may be deposited in escrow to be held until such time as the bonds to be refunded become available for payment by maturity, call for redemption in whole or in part (which need not necessarily be on the first available redemption date) or otherwise and during such period of escrow may be invested, without regard to the limitations imposed by any other law, in direct obligations of the United States of America or any of its agencies or in obligations fully guaranteed or insured by the United States of America which bear interest at such rates as to provide funds which, together with any uninvested money placed in such escrow, will be sufficient to pay when due or called for redemption the bonds so refunded, together with interest accrued and to accrue thereon and redemption premiums, if any, and the expenses relating to such escrow, and such refunding bond proceeds or obligations so purchased therewith, together with other funds legally available therefor, may be deposited in escrow with a banking corporation or association which is a member of the Federal Deposit Insurance Corporation, or any successor thereto. Such refunding bonds may also be sold and the proceeds thereof may also be applied to the payment of the bonds refunded in accordance with any method of refunding deemed by the governing body of a governmental unit to be advantageous to the governmental unit, and any escrow established in connection therewith shall be in accordance with the terms and conditions of any related escrow agreement approved and entered into by the governing body of a governmental unit.

Miss. Code Ann. § 31-27-17 Refinancing of outstanding bonds by issuance of refunding bonds.

The governing body of a governmental unit may refinance outstanding bonds through the issuance of refunding bonds and the exchange of such refunding bonds for the bonds to be refunded. Any such refunding may be effected whether or not the bonds to be refunded shall have then matured or shall thereafter mature.

Miss. Code Ann. § 31-27-19 Negotiability of refunding bonds.

All refunding bonds issued under this chapter shall be fully negotiable in accordance with their terms and shall be “securities” within the meaning of Article 8 of the Uniform Commercial Code, subject to the provisions of such bonds pertaining to registration. It shall not be necessary to file financing statements or continuation statements to protect the lien and pledge granted by a governmental unit to the holders of any refunding bonds issued under this chapter.

Miss. Code Ann. § 31-27-21 Tax treatment.

All refunding bonds issued under this chapter, and all interest thereon and income therefrom, shall be exempt from taxation to the same extent that the refunded bonds are exempt from taxation.

Miss. Code Ann. § 31-27-23 Judicial validation and related procedures.

The refunding bonds authorized under authority of this chapter may, in the discretion of the governing body of the governmental unit, be validated in the chancery court of the county in which the governing body resides in the manner and with the force and effect provided now or hereafter by Chapter 13, Title 31, Mississippi Code of 1972, for the validation of municipal bonds. If the governing body is the State Bond Commission, the residence of the commission shall be Hinds County for the purposes of this section. The necessary papers shall be transmitted to the state’s bond attorney by the governing body, and the required notice shall be published in a newspaper having general circulation in the State of Mississippi or the county in which the refunding bonds are to be validated.

Miss. Code Ann. § 31-27-25 Savings clause.

If any one or more sections, clauses, sentences or parts of this chapter shall for any reason be questioned in any court and shall be adjudged unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remaining provisions of this chapter, but shall be confined in its operations to the specific provisions so held invalid, and inapplicability or invalidity of any such section, clause, provision or part shall not be taken to affect or prejudice in any way the remaining part or parts of this chapter.

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