Mississippi Farm Bureau Federation members are one step closer to seeing aid to repair the state’s county and city infrastructure. Mississippi lawmakers have agreed on a transportation funding plan that would give cities and counties some of the sales tax money the state collects from people shopping online.

In the third day of a special session, House members accepted changes that senators made in the bill, known as the Mississippi Infrastructure Modernization Act of 2018 on Monday. It will now go to Republican Gov. Phil Bryant, who has signaled that he will sign it into law.

House Speaker Philip Gunn said the plan is “historic.” It is projected to eventually provide $120 million to $130 million a year for infrastructure. Counties could use their share of the money for roads and bridges, while cities could use their share for roads, bridges and water and sewer projects.

“This has been a year and a half of hard work by the House of Representatives to get a plan that provides a steady stream of revenue for roads and bridges. And today we passed it,” Gunn told reporters. “The citizens can know that we did our work.”

Federation President Mike McCormick is pleased at the progress the legislature is making to help farmers and ranchers across the state.

“Roads and bridges across the state have long been an issue for our members and their bottom line,” McCormick said. “The Mississippi Infrastructure Modernization Act of 2018 will deviate a much needed portion of money to counties and cities to fix their roads and bridges, and in return will help farmers get their products to market.”

Use Tax

The Mississippi Infrastructure and Modernization Act of 2018 will divert 35 percent of Use Tax collections – the 7 percent tax paid on products and services purchased out of state – to municipalities, counties and the Local System Bridge Program.

In FY2017, Mississippi collected $320 million in Use Tax. Based on the current collection, $112.7 million will be diverted to the program. The diversion of the funds will be phased in over a four-year period, meaning the program will receive $28.85 million in the first year, $56.35 million in the second year, $84.25 million in the third year, and $112.7 million every year after.

Municipalities

Fifteen percent or $48 million will be the total amount diverted to municipalities after four years. Of that 15 percent, $3 million will be given to the municipalities based on equal shares, which totals approximately $10,000 to each of the 300 municipalities.

The remaining funds will be distributed based on population and sales tax revenue of the municipality. The total funds received by a municipality can be used for streets, water and sewer projects.

In order to receive the funds, cities are required to match the funds being distributed. The match can account for what the cities are already spending on infrastructure. The city’s local infrastructure spending will be calculated on its spending in the last five years. The average of the five years will total what cities will be required to spend to receive state funds. This amount of local match will be indexed for inflation and will rise in future years.

Counties

Fifteen percent or $48 million will be the total amount distributed to counties after four years. The funds will be distributed to counties based on the State Aid Road formula – one-third goes to equal shares, one-third goes to a proportion of rural road miles to total state miles, and one-third to a proportion of rural population to total rural population.

In order to receive the funds, counties are required to match the funds being distributed based on the amount of money they are currently spending.

Local System Bridge Program (LSBP)

Five percent or $16 million will be the total amount diverted to LSBP after four years.

Sports Betting Revenue

The Mississippi Infrastructure Modernization Act of 2018 will divert the estimated $5 million to $15 million collected from sports betting into the State Highway Fund. The funds will be used for the repair and maintenance of state highways and bridges. It will first be used to match Federal Highway Funds for that repair and maintenance.

This diversion will continue through 2028. From there, sports betting revenue will be placed in the State General Fund.

Revenue Bonds

Under the Mississippi Infrastructure Modernization Act of 2018, the legislature will issue $300 million in revenue bonds, paid by gaming taxes, to divert into the Gaming Sinking Fund. Fifty million dollars of the fund will be divided at the discretion of the Legislature.

The remaining $250 million in this fund will be distributed to an emergency fund under the Mississippi Department of Transportation. An advisory council was established to make recommendations to MDOT on where the funds should be used. The current Farm Bureau president will serve on the advisory council.

Fees on Electric and Hybrid Vehicles

The Mississippi Infrastructure Modernization Act of 2018 will impose of fee of $150 per year on electric vehicle owners and $75 per year on hybrid vehicle owners. Those fees – adjusted annually be the Consumer Price Index – will be paid to the county tax collector, effective July 1, 2021.

Upon collecting these fees, county tax collectors will submit the money to the Mississippi Department of Revenue where it will be distributed in the same manner as the gasoline tax.

Environmental Protection Fee

Currently, a 4/10th of cent fee on the purchase of gasoline or diesel is imposed and diverted to the Groundwater Protection Fund when there is less than $6 million in it. When the fund reaches more than $10 million then the fee is dropped. The Mississippi Infrastructure Modernization Act of 2018 would revise this law to make the 4/10th of a cent fee permanent. When the Groundwater Protection Fund is full, the money would be put into the MDOT’s State Highway Fund.

New Fund

The Mississippi Infrastructure Modernization Act of 2018 will create the Emergency Road and Bridge Repair Fund. The Legislature will appropriate money for the fund.

The fund would be used by MDOT for emergency repairs to roads, streets and highways, as well as repairs to bridges receiving a unanimous vote from the Transportation Commission.

Procedures

Use of State Aid Road Funds

If a county’s bridges on the State Aid Road System are in sufficient repair, the State Aid Road funds may be used to repair local system bridges.

Procedures for Closed Bridges

If a city or county closes a bridge under its jurisdiction, MDOT must direct the local governing board to close the bridge to continue receiving federal funds. The local board is responsible for all costs, and the bridge must remain closed until it is repaired to a condition that will not reduce federal funds received by the state or local government. Failure to close the bridge means the local government is ineligible to receive funds under this bill.

Election-Year Prohibition Waived

Currently, county supervisors are prohibited from buying machinery or performing construction in an election. The Mississippi Infrastructure Modernization Act of 2018 waives this law in 2019 for deficient bridges with a rating of less than 50 percent on the State Aid Road System.

Audit

Under this bill, the Legislator authorizes the Mississippi Office of the State Auditor to conduct a performance audit of projects under MDOT. The audit is to be completed Dec. 31, 2019.

Effective Date

The details outlined in the Mississippi Infrastructure Modernization Act of 2018 will be effective when signed by the governor.

On Monday afternoon, Legislators were negotiating on a separate bill to create a state lottery. The Senate and House have passed different versions of a lottery bill, and the two chambers must agree on a single version before it can go to the governor.

Lawmakers pushing for a lottery say it could generate about $40 million the first year and about $80 million in subsequent years.