Project Compliance with Debt Management Objectives

Project Compliance with Debt Management Objectives Unless otherwise directed by law, the State Bond Commission may only issue general obligation debt on behalf of the State of Mississippi if the project for which the debt is issued meets the following criteria: (1) In the instance of issuance of a tax-exempt bond, the project is for public use and does not meet any of the Private Activity Bond tests specified in 26 U.S. Code § 141, et. seq. (Subpart A – Private Activity Bonds); or, in the instance of issuance of a Private Activity Bond, the Commission has clear and convincing evidence of economic use and benefit, including economic development, job creation, or other improvement of the public welfare; (2) The project asset has a life equal to or longer than the life of its corresponding debt; Page 2 of 38 (3) No expenditures were made before the anticipated delivery date of the bonds, except in situations where the entity obtains a Declaration of Intent from the State Bond Commission; (4) The authorized entity has submitted sufficient information to ensure the project asset is specific, not generic in nature; and (5) The project is not the funding of salaries or other recurring expenses. For purposes of examining projects, the State Bond Commission may use definitions also utilized by the Governmental Accounting Standards Board, or GASB, where appropriate. Members of the Bond Commission may consider the financial impact on taxpayers throughout the state and over the lifetime of the bond repayment. Members of the Bond Commission may also consider whether the benefit of the project is primarily to the state or to the local economy, and whether other state, federal or private funding mechanisms (including but not limited to, local bonds, privilege taxes, grants, loans from the Mississippi Development Bank, Mississippi Development Authority, the Mississippi Department of Environmental Quality, USDA Rural Development, and/or from a direct appropriation) might be available and more appropriate to generate the required funding for the project. The members of the Bond Commission should endeavor to make themselves fully available to the members of the Legislature so that only projects that meet the above criteria are included in bond bills brought before the Legislature for passage. Entities with projects authorized by the Legislature in bond bills are strongly urged not to rely on such funds until such time as the Bond Commission has approved the corresponding debt. The members of the Bond Commission should endeavor to ensure that all projects included in any resolution brought before the Bond Commission meet the above criteria. Entities with projects authorized by the Legislature in bond bills are urged to provide the members of the Bond Commission with any information requested and as necessary to ensure that these guidelines are met. The Department of Finance and Administration shall gather sufficient information from non-State agency entities to allow the members of the Bond Commission to evaluate the project based on these criteria.