SEC. 31-25-28. Purpose for which loan may be made.

(1) Local governmental units may borrow money or receive grants from the bank for any of the purposes set forth in this section and pay to the bank such fees and charges for services as the bank may prescribe. Whenever any such loan is made to a local governmental unit, such local governmental unit may use available revenues for the repayment of the principal of, premium, if any, and interest on such loan, and pledge such available revenues or moneys for the repayment of the principal of, premium, if any, and interest on such loan. It is the intention of the Legislature that any such pledge of revenues or other moneys shall be valid and binding from the date the pledge is made; that such revenues or other moneys so pledged and thereafter received by the local governmental unit shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and that the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the local governmental unit irrespective of whether such parties have notice thereof; and neither the resolutions, contracts or any other instrument by which a pledge is created need be recorded.

(2) Local governmental units may contract with the bank with respect to any such loan and such contract shall contain such terms and conditions as may be prescribed by the bank.

(3) Local governmental units may in connection with any such loan enter into any covenants and agreements with respect to such local governmental unit's operations, revenues, assets, moneys, funds or property, or such loan, as may be prescribed by the bank.

(4) Upon the making of any such loan by the bank to any local governmental unit, such local governmental unit shall be held and be deemed to have agreed that if such governmental unit fails to pay the principal of, premium, if any, and interest on any such loan as when due and payable, such governmental unit shall have waived any and all defenses to such nonpayment, and the bank, upon such nonpayment, shall thereupon avail itself of all remedies, rights and provisions of law applicable in such circumstance, including without limitation, any remedies or rights theretofore agreed to by the local governmental unit, and that such loan shall for all of the purposes of this section, be held and be deemed to have become due and payable and to be unpaid. The bank may carry out the provisions of this section and exercise all of the rights and remedies and provisions of law provided or referred to in this section and of all other applicable laws of the state.

(5) Any local governmental unit that borrows from the bank under this section may agree in writing with the bank that, as provided in this subsection, the State Tax Commission or any state agency, department or commission created pursuant to state law shall (a) withhold all or any part (as agreed by the local governmental unit) of any moneys that such local governmental unit is entitled to receive from time to time pursuant to any law and that is in the possession of the State Tax Commission or any state agency, department or commission created pursuant to state law and (b) pay the same over to the bank to satisfy any delinquent payments on any such loan made to such local governmental unit under the provisions of this section and any other delinquent payments due and owing the bank by such local governmental unit, all as the same shall occur. If the bank files a copy of such written agreement, together with a statement of delinquency, with the State Tax Commission or any state agency, department or commission created pursuant to state law, then the State Tax Commission or any state agency, department or commission created pursuant to state law shall immediately make the withholdings provided in such agreement from the amounts due the local governmental unit and shall continue to pay the same over to the bank until all such delinquencies are satisfied.

(6) Before authorizing any loan for any of the purposes enumerated in Section 31-25-20 (e), the governing authority of the local governmental unit shall adopt a resolution declaring its intention so to do, stating the amount of the loan proposed to be authorized and the purpose for which the loan is to be authorized, and the date upon which the loan will be authorized. Such resolution shall be published once a week for at least three (3) consecutive weeks in at least one (1) newspaper published in such local governmental unit. The first publication of such resolution shall be made not less than twenty-one (21) days before the date fixed in such resolution for the authorization of the loan and the last publication shall be made not more than seven (7) days before such date. If no newspaper is published in such local governmental unit, then such notice shall be given by publishing the resolution for the required time in some newspaper having a general circulation in such local governmental unit and, in addition, by posting a copy of such resolution for at least twenty-one (21) days next preceding the date fixed therein at three (3) public places in such local governmental unit. If fifteen percent (15%) of the qualified electors of the local governmental unit or fifteen hundred (1500), whichever is the lesser, file a written protest against the authorization of such loan on or before the date specified in such resolution, then an election on the question of the authorization of such loan shall be called and held as otherwise provided for in connection with the issuance of general obligation indebtedness of such local governmental unit. Notice of such election shall be given as otherwise required in connection with the issuance of general obligation indebtedness of such local governmental unit. If three-fifths (3/5) of the qualified electors voting in the election vote in favor of authorizing the loan, then the governing authority of the local governmental unit shall proceed with the loan; however, if less than three-fifths (3/5) of the qualified electors voting in the election vote in favor of authorizing the loan, then the loan shall not be incurred. If no protest be filed, then such loan may be entered into by the local governmental unit without an election on the question of the authorization of such loan, at any time within a period of two (2) years after the date specified in the resolution. However, the governing authority of any local governmental unit in its discretion may nevertheless call an election on such question, in which event it shall not be necessary to publish the resolution declaring its intention to authorize such loan as provided in this subsection.

(7) This section shall be deemed to provide an additional, alternative and complete method for the doing of the things authorized by this section and shall be deemed and construed to be supplemental to any power conferred by other laws on local governmental units and not in derogation of any such powers. Any loan made pursuant to the provisions of this section shall not constitute an indebtedness of the local governmental unit within the meaning of any constitutional or statutory limitation or restriction. In connection with a loan under this section, a local governmental unit shall not be required to comply with the provisions of any other law except as provided in this section.

SOURCES: Laws, 1996, ch. 470, Sec. 2, eff from and after passage (approved April 3, 1996)

1997 Amendment:

SECTION 6. Section 31-25-28, Mississippi Code of 1972, is amended as follow:

31-25-28. (1) Local governmental units may borrow money or receive grants from the bank for any
of the purposes set forth in this section or Section 31-25-20(g) and pay to the bank such fees and
charges for services as the bank may prescribe. Whenever any such loan is made to a local
governmental unit, such local governmental unit may use available revenues for the repayment of the
principal of, premium, if any, and interest on such loan, and pledge such available revenues or
moneys for the repayment of the principal of, premium, if any, and interest on such loan. It is the
intention of the Legislature that any such pledge of revenues or other moneys shall be valid and
binding from the date the pledge is made; that such revenues or other moneys so pledged and
thereafter received by the local governmental unit shall immediately be subject to the lien of such
pledge without any physical delivery thereof or further act, and that the lien of any such pledge shall
be valid and binding as against all parties having claims of any kind in tort, contract or otherwise
against the local governmental unit irrespective of whether such parties have notice thereof; and
neither the resolutions, contracts or any other instrument by which a pledge is created need be
recorded.

(2) Local governmental units may contract with the bank with respect to any such loan and such
contract shall contain such terms and conditions as may be prescribed by the bank.

(3) Local governmental units may in connection with any such loan enter into any covenants and
agreements with respect to such local governmental unit's operations, revenues, assets, moneys,
funds or property, or such loan, as may be prescribed by the bank.

(4) Upon the making of any such loan by the bank to any local governmental unit, such local
governmental unit shall be held and be deemed to have agreed that if such governmental unit fails to
pay the principal of, premium, if any, and interest on any such loan as when due and payable, such
governmental unit shall have waived any and all defenses to such nonpayment, and the bank, upon
such nonpayment, shall thereupon avail itself of all remedies, rights and provisions of law applicable
in such circumstance, including without limitation, any remedies or rights theretofore agreed to by the
local governmental unit, and that such loan shall for all of the purposes of this section, be held and be
deemed to have become due and payable and to be unpaid. The bank may carry out the provisions
of this section and exercise all of the rights and remedies and provisions of law provided or referred
to in this section and of all other applicable laws of the state.

(5) Any local governmental unit that borrows from the bank under this section may agree in writing
with the bank that, as provided in this subsection, the State Tax Commission or any state agency,
department or commission created pursuant to state law shall (a) withhold all or any part (as agreed
by the local governmental unit) of any moneys that such local governmental unit is entitled to receive
from time to time pursuant to any law and that is in the possession of the State Tax Commission or
any state agency, department or commission created pursuant to state law and (b) pay the same
over to the bank to satisfy any delinquent payments on any such loan made to such local
governmental unit under the provisions of this section and any other delinquent payments due and
owing the bank by such local governmental unit, all as the same shall occur. If the bank files a copy
of such written agreement, together with a statement of delinquency, with the State Tax Commission
or any state agency, department or commission created pursuant to state law, then the State Tax
Commission or any state agency, department or commission created pursuant to state law shall
immediately make the withholdings provided in such agreement from the amounts due the local
governmental unit and shall continue to pay the same over to the bank until all such delinquencies are
satisfied.

(6) Before authorizing any loan for any of the purposes enumerated in Section 31-25-20(e), the
governing authority of the local governmental unit shall adopt a resolution declaring its intention so to
do, stating the amount of the loan proposed to be authorized and the purpose for which the loan is to
be authorized, and the date upon which the loan will be authorized. Such resolution shall be
published once a week for at least three (3) consecutive weeks in at least one (1) newspaper
published in such local governmental unit. The first publication of such resolution shall be made not
less than twenty-one (21) days before the date fixed in such resolution for the authorization of the
loan and the last publication shall be made not more than seven (7) days before such date. If no
newspaper is published in such local governmental unit, then such notice shall be given by publishing
the resolution for the required time in some newspaper having a general circulation in such local
governmental unit and, in addition, by posting a copy of such resolution for at least twenty-one (21)
days next preceding the date fixed therein at three (3) public places in such local governmental unit.
If fifteen percent (15%) of the qualified electors of the local governmental unit or fifteen hundred
(1500), whichever is the lesser, file a written protest against the authorization of such loan on or
before the date specified in such resolution, then an election on the question of the authorization of
such loan shall be called and held as otherwise provided for in connection with the issuance of
general obligation indebtedness of such local governmental unit. Notice of such election shall be
given as otherwise required in connection with the issuance of general obligation indebtedness of
such local governmental unit. If three-fifths (3/5) of the qualified electors voting in the election vote in
favor of authorizing the loan, then the governing authority of the local governmental unit shall proceed
with the loan; however, if less than three-fifths (3/5) of the qualified electors voting in the election
vote in favor of authorizing the loan, then the loan shall not be incurred. If no protest be filed, then
such loan may be entered into by the local governmental unit without an election on the question of
the authorization of such loan, at any time within a period of two (2) years after the date specified in
the resolution. However, the governing authority of any local governmental unit in its discretion may
nevertheless call an election on such question, in which event it shall not be necessary to publish the
resolution declaring its intention to authorize such loan as provided in this subsection.

(7) This section shall be deemed to provide an additional, alternative and complete method for the
doing of the things authorized by this section and shall be deemed and construed to be supplemental
to any power conferred by other laws on local governmental units and not in derogation of any such
powers. Any loan made pursuant to the provisions of this section shall not constitute an indebtedness
of the local governmental unit within the meaning of any constitutional or statutory limitation or
restriction. In connection with a loan under this act, a local governmental unit shall not be required to
comply with the provisions of any other law except as provided in this section.

SOURCE: 1997 Laws, Chapter 302, Sec. 6, HB1633, Effective AP-February 24, 1997.