SB 2191

MISSISSIPPI LEGISLATURE
2026 Regular Session
To: Finance
By: Senator(s) Turner-Ford, Simmons (12th), McMahan, Simmons
(13th)
Senate Bill 2191
(As Passed the Senate)
AN ACT TO AMEND SECTION 27-67-35, MISSISSIPPI CODE OF 1972,
TO REVISE THE PURPOSES FOR WHICH SPECIAL FUND MONIES FROM USE TAX REVENUE DISTRIBUTIONS
TO MUNICIPALITIES MAY BE EXPENDED; AND FOR RELATED PURPOSES.
���� BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF MISSISSIPPI:
���� SECTION 1.� Section
27-67-35, Mississippi Code of 1972, is amended as follows:
���� 27-67-35.� (1)� (a)� There
is hereby created a special fund in the State Treasury.� The fund shall be
maintained by the State Treasurer as a separate and special fund, separate and
apart from the General Fund of the state.� The fund shall consist of monies
deposited therein under Section 27-67-31(e) and monies from any other source
designated for deposit into such fund.� Monies in the fund shall be expended by
the department to provide funds to assist municipalities in this state in
paying costs associated with:
������������� (i)� Repair,
maintenance and/or reconstruction of roads, streets, sidewalks and
bridges, and acquisition, construction and/or rehabilitation of buildings,
in municipalities;
������������� (ii)� Repair,
maintenance and/or other improvements to water infrastructure and sewer
infrastructure, including storm water and drainage
improvements; and/or
������������� (iii) �As a pledge to pay all or a portion of debt service on
debt issued by a municipality for the purposes provided in this subsection
(1)(a).
���� These monies shall not be
used for salaries, benefits or any form of compensation for employees, or for
contract employees, administrative costs, debt service except as provided in
this subsection (1)(a), personal property or equipment except for personal
property or equipment to be used for the purposes allowed in subparagraphs (i)
and (ii) of this subsection (1)(a) * * *, or for the construction or maintenance of public buildings
or other structures that are not integral to the system of roads and bridges.�
Unexpended amounts remaining in the fund at the end of a fiscal year shall not
lapse into the State General Fund, and any interest earned or investment
earnings on amounts in the fund shall be deposited to the credit of the fund.
��������� (b)� (i)� Subject to
the provisions of this paragraph (b) and Section 65-21-31, funds provided to
municipalities under this subsection (1) shall be allocated and distributed to
municipalities as follows:
������������������ 1.� Three
Million Dollars ($3,000,000.00) shall be allocated to all municipalities in
equal shares, and
������������������ 2.� The
remainder of the funds allocated as follows:
����������������������� a.� One-half
(1/2) shall be allocated to municipalities based on the proportion that the
population of a municipality according to the most recent federal decennial
census bears to the total population of all municipalities in the state
according to the most recent federal decennial census, and
����������������������� b.� One-half
(1/2) shall be allocated to municipalities based on the proportion that the
amount of sales tax revenue distributed to a municipality during the preceding
fiscal year under Section 27-65-75(1)(a) bears to the total amount of sales tax
revenue distributed to all municipalities during the preceding fiscal year
under Section 27-65-75(1)(a).� The department shall distribute funds under this
subsection (1) on a semiannual basis with distributions being made in the
months of January and July.
������������� (ii)� In order to
be eligible to receive the full amount of funds allocated for distribution to a
municipality during a year under this subsection (1), the municipality must
have expended an amount not less than the amount of base expenditures during
the previous municipal fiscal year for the purposes described in paragraph (a)
of this subsection (1).� If a municipality fails to expend such required
amount, then the amount of funds allocated for distribution to the municipality
shall be reduced by the percentage by which the municipality failed to expend
the amount of base expenditures.� For the purposes of this subsection (1),
"base expenditures" means the average annual expenditures made by a
municipality for purposes described in paragraph (a) of this subsection (1) for
the two-year period beginning October 1, 2020, and ending September 30, 2022.�
Expenditure of grant proceeds, loan proceeds, or the proceeds of bonds issued
by a municipality for the purposes described in paragraph (a) of this
subsection (1) shall not be considered when calculating the base period.�
Expenditures by a municipality for purposes described in paragraph (a) of this
subsection (1) and for which the municipality may not use monies received from
the department under this subsection (1), may be considered when calculating
the amount of funds expended by the municipality during the previous municipal
fiscal year, provided the expenditures are related to the purposes described in
subparagraphs (i), (ii) and/or (iii) in paragraph (a) of this subsection (1).�
Beginning July 1, 2023, and each succeeding July 1 thereafter, the amount of
the base expenditures shall be adjusted and compounded annually by increasing
or decreasing such amount by a percentage amount that is equal to the lesser of
one-half percent (0.5%) or to the United States inflation rate for the previous
calendar year ending on December 31 as certified by the department and provided
to the municipalities thereby within thirty (30) days of such certification.�
The United States inflation rate for a calendar year shall be the Consumer
Price Index for the calendar year for urban consumers as calculated by the
Bureau of Labor Statistics of the United States Department of Labor.
��������� (c)� The department and
the Office of the State Auditor shall have all powers necessary to ensure the
proper implementation of this subsection (1).
���� (2)� (a)� There is hereby
created a special fund in the State Treasury.� The fund shall be maintained by
the State Treasurer as a separate and special fund, separate and apart from the
General Fund of the state.� The fund shall consist of monies deposited therein
under Section 27-67-31(f) and monies from any other source designated for
deposit into such fund.� Monies in the fund shall be expended by the department
to provide funds to assist counties in this state in paying costs associated
with (i) the repair, maintenance and/or reconstruction of roads, streets and
bridges in counties, and/or (ii) as a pledge to pay all or a portion of debt
service on debt issued by a county for the purposes provided in this subsection
(2)(a).� These monies shall not be used for salaries, benefits or any form of
compensation for employees, or for contract employees, administrative costs,
debt service except as provided in this subsection (2)(a), personal property or
equipment except for personal property or equipment to be used for the purposes
allowed in subparagraph (i) of this subsection (2)(a), or for the construction
or maintenance of public buildings or other structures that are not integral to
the system of roads and bridges.� Unexpended amounts remaining in the fund at
the end of a fiscal year shall not lapse into the State General Fund, and any
interest earned or investment earnings on amounts in the fund shall be
deposited to the credit of the fund.
��������� (b)� (i)� Subject to
the provisions of this paragraph (b) and Section 65-21-31, funds provided to
counties under this subsection (2) shall be allocated and distributed to
counties in the following proportions:
������������������ 1.� One-third
(1/3) shall be allocated to all counties in equal shares,
������������������ 2.� One-third
(1/3) shall be allocated to counties based on the proportion that the total
number of rural road miles in a county bears to the total number of rural road
miles in all counties of the state, and
������������������ 3.� One-third (1/3)
shall be allocated to counties based on the proportion that the rural
population of a county bears to the total rural population in all counties of
the state, according to the latest federal decennial census.�
The department shall distribute
funds under this subsection (2) on a semiannual basis with distributions being
made in the months of January and July.� Rural road miles and rural road
population in the counties shall be determined in the same manner as they are
determined for the purposes of the distribution formula in Section 65-9-3.
������������� (ii)� From and
after July 1, 2020, of the funds allocated for distribution to a county during
a year under this subsection (2), the maximum amount of such funds that may be
distributed to the county during that year shall not exceed the amount of
county funds expended by the county during the previous county fiscal year for
purposes described in paragraph (a) of this subsection (2).� Expenditure of the
proceeds of bonds issued by a county to pay costs associated with the repair,
maintenance and/or reconstruction of roads, streets and bridges shall not be
considered when determining the amount of county funds expended by the county
during the previous county fiscal year.� Expenditures by a county for purposes
described in paragraph (a) of this subsection (2) and for which the county may
not use monies received from the department under this subsection (2), may be
considered when calculating the amount of county funds expended by the county
during the previous county fiscal year, provided the expenditures are related
to purposes described in subparagraphs (i) and/or (ii) in paragraph (a) of this
subsection (2).
��������� (c)� The department and
the Office of the State Auditor shall have all powers necessary to ensure the
proper implementation of this subsection (2).
���� SECTION 2.� This act
shall take effect and be in force from and after July 1, 2026.