School districts affected by the Hurricane Katrina Disaster may borrow funds and issue promissory notes to the federal government under the Community Disaster Loan Program. Please refer to MS Code Sections 37-57-108 and 27-39-333.

During a fiscal year, if the Business Administrator estimates that the amount of the ad valorem taxes or other anticipated revenue from local sources to be collected is less than the amount estimated at the time of formulation of its budget for the fiscal year due to circumstances which were unanticipated at the time of formulation of the budget and which will prevent the political subdivision from meeting its financial obligations may recommend to the School Board, with the approval of the levying authority for such political subdivision, the issuance of promissory notes in an amount equal to the estimated shortfall of ad valorem taxes and/or revenue from local sources but in no event to exceed twenty-five percent (25%) of its budget anticipated to be funded from the sources of the shortfall for the fiscal year.

The proceeds of such notes shall be used in the budget or budgets in which the shortfall occurred and shall be used solely to offset the shortfall in such budgets for the fiscal year.  The rate of interest paid shall not exceed that amount set forth in Section 75-17-105, Mississippi Code of 1972.  The indebtedness shall be repaid in full, including interest, in equal installments, during the next three (3) fiscal years succeeding the fiscal year in which the notes were issued.  For the payment of such indebtedness, the levying authority for the political subdivision shall, at its next regular meeting at which ad valorem taxes are lawfully levied, levy an ad valorem tax sufficient to repay the indebtedness in full, including interest.  The proceeds of the notes shall be included as proceeds of ad valorem taxes for the purposes of the limitation on increases in revenue for the next succeeding fiscal year under Section 27-39-305, 27-39-320, 27-39-321 or 37-57-107, Mississippi Code of 1972, whichever is applicable depending upon the purpose for which such proceeds are used.

For the purposes of Sections 27-39-305, 27-39-320, 27-39-321 and 37-57-107, the terms "revenue" and "receipts" when used in connection with the amount of funds generated in a preceding fiscal year shall include excess receipts collected in the next preceding fiscal year and deposited into a special account under Section 27-39-323.

LEGAL REF.: MS CODE as cited

ADOPTED:    12/13/2005

REVISED:     12/12/2006