Approved by the Governor
Senate Bill 2430 would create the Educational Facilities Revolving Loan Fund Program to provide interest-free loans to K-12 public schools as well as public community and junior colleges across Mississippi for the purpose of improving educational facilities. The bill would deposit $200 million in the newly-created Educational Facilities Revolving Loan Fund and task the Department of Finance and Administration (DFA) with administering the program.
Under SB 2430, up to 80% of funds deposited in the Educational Facilities Revolving Loan Fund would be made available to “qualified school districts” for repairs and renovations to existing school facilities. Districts would also be able to use these funds for the construction of new facilities necessary to expand pre-K or career and technical education (CTE) programs. Up to 20% of funds deposited in the Educational Facilities Revolving Loan Fund would be made available to “qualified community and junior college districts” for repairs and renovations to existing school facilities.
DFA would be tasked with setting rules and regulations for administration of the loan program, including an application process, factors to be considered in awarding loans, terms of repayment (SB 2430 stipulates that loans would be interest-free and payable over a term of ten years), and actions to be taken in the event that loan recipients are in arrears. The Mississippi Department of Education and the Community College Board, in conjunction with DFA, would be responsible for setting rules and regulations for participation in the loan program. Once rules and regulations are in place (SB 2430 sets a deadline of October 1, 2022 for setting rules and regulations), DFA would be responsible for administering the loan program.
On March 9, the House passed SB 2430 as previously amended by the House Education Committee. This version of SB 2430 includes a reverse repealer, meaning the bill will require further amendments that will need to be approved by both the Senate and the House before the bill goes to the Governor’s desk. SB 2430 now goes back to the Senate.
On March 16, the Senate voted to invite conference on SB 2424 as amended by the House. This was expected due to the reverse repealer, though it is possible that conferees may make additional changes to the bill.
On March 17, the Senate named Education Committee Chairman Dennis DeBar, Education Committee Vice-Chairman David Blount, and Senator Chris Johnson as conferees. The House has yet to name conferees.
On March 28, conferees for SB 2430 filed a conference report. This final version of the bill, which will now face an up-or-down vote in both the Senate and the House, contains a host of changes from the version that passed out of the House on March 9. The changes are as follows:
Under the conference report for SB 2430, the Educational Facilities Revolving Loan Fund Program will be administered exclusively by the Mississippi Department of Education (MDE). Initially, the program was to be administered primarily by the Department of Finance and Administration (DFA), with MDE and the Community College Board playing a supporting role in setting rules and regulations for participation in the program. MDE is now the sole agency responsible for the program.
Use of Funds
Community colleges are no longer included in the program. Initially, up to 20% of loan funds would be made available to “qualified community and junior college districts” for repairs and renovations to existing school facilities. However, the program is now solely available to K-12 public schools. Now that community colleges are no longer included, up to 95% of loan funds will be made available to K-12 public schools for repairs and renovations to existing school facilities as well as for the construction of new facilities necessary to expand pre-K or career and technical education (CTE) programs. Initially, only up to 80% of loan funds were to be made available to K-12 public schools.
Under the conference report for SB 2430, only up to 3% of loan funds may be expended on “administrative and fiscal management costs.” Under the House-amended version, the figure was 5%.
There is now a cap of $1 million on the amount of loan funds an applicant may receive in a single year or for a single project. Initially there was no cap. There is also a new prohibition on expending loan funds for athletic facilities.
The conference report for SB 2430 contains no appropriation for the loan fund. The House-amended version originally contained a $200 million appropriation to jumpstart the loan fund. This is no longer included. The House and Senate Appropriations Committees must now make a specific line-item for the loan fund in order for it to be operational.
On March 31, conferees for SB 2430 filed a second conference report after the first conference report was recommitted for further conference the previous day. Today, both the Senate and House adopted the new conference report. The bill will now go to the Governor to be signed into law.
The second conference report makes only one substantial change to the mechanics of the Educational Facilities Revolving Loan Fund Program: districts will now be able to use up to $500,000 of loan funds annually to pay off debt related to bonds or notes issued from July 1, 2017 to July 1, 2022. This is in addition to other acceptable uses of loan funds.
The second conference report also makes a substantial change to how the Educational Facilities Revolving Loan Fund is funded: in addition to potential appropriations by the legislature, SB 2430 repeals the State Public School Building Fund—a rarely-used grant program—and transfers all remaining funds of the Building Fund to the Revolving Loan Fund. It is unclear exactly how much funding remains in the Building Fund, though SB 2430 also redirects the monthly $1.67 million the Building Fund receives to the Revolving Loan Fund for the next year until the revenue stream expires completely on July 1, 2023. This means the Revolving Loan Fund will receive at least $20 million in funding for the next year. After that, it is unclear if and how much funding the Revolving Loan Fund will receive.
On April 18, Governor Tate Reeves signed SB 2430 into law. The bill will go into effect on July 1.