Can a Mississippi regional mental health commission refinance through the state development bank or hospital authority?
Plain-English summary
Mississippi has 13 regional mental health commissions, created under Miss. Code Ann. §§ 41-19-31 et seq., that deliver community mental health and intellectual-disability services. They are state agencies but locally appointed. They have a fairly narrow set of statutory powers, including a specific borrowing authority in § 41-19-33(1)(l): "To borrow money from private lending institutions in order to promote any of the foregoing purposes."
The Hinds County Mental Health Commission had an outstanding loan and wanted to refinance through either the Mississippi Development Bank or the Mississippi Hospital Equipment and Facilities Authority, two state-created entities that issue debt for public-sector borrowers and often offer better rates than private lenders. The commission's attorney asked the AG whether the commission had authority for that.
The AG said no. The borrowing authority in § 41-19-33(1)(l) is express but narrow: only "private lending institutions." Both the Development Bank (an "independent public body corporate and politic") and the Hospital Authority (a "body politic and corporate") are public entities, not private lending institutions. Neither qualifies. The doctrine of express and necessarily-implied powers, traced through Mississippi Milk Commission v. Winn-Dixie and grounded in the principle that administrative agencies have only the powers their enabling statute grants, prevents the commission from borrowing through public-sector channels even if doing so would be financially advantageous.
The opinion's secondary point: county tax levies and municipal contributions collected under § 41-19-39 can be used to repay private-lender loans the commission has authority to take out. So if the commission refinances with another private lender, it can apply local tax revenue to repay that loan.
Currency note
This opinion was issued in 2020. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Background and statutory framework
Mississippi's regional mental health commissions are created under §§ 41-19-31 et seq. as subdivisions of the state. They are governed by commissioners appointed by the boards of supervisors of the counties in their region. Their substantive mission is to administer mental health and intellectual disability programs certified by the State Board of Mental Health.
Their financial authority is limited, as is the case with most administrative agencies. Section 41-19-33 enumerates their powers. Most relevant here:
(l) To borrow money from private lending institutions in order to promote any of the foregoing purposes. A commission may pledge collateral, including real estate, to secure the repayment of money borrowed under the authority of this paragraph. Any such borrowing undertaken by a commission shall be on terms and conditions that are prudent in the sound judgment of the members of the commission, and the interest on any such loan shall not exceed the amount specified in Section 75-17-105. Any money borrowed, debts incurred or other obligations undertaken by a commission, regardless of whether borrowed, incurred or undertaken before or after March 15, 1995, shall be valid, binding and enforceable if it or they are borrowed, incurred or undertaken for any purpose specified in this section and otherwise conform to the requirements of this paragraph.
The phrase is "private lending institutions." The Mississippi Development Bank, created by § 31-25-7 as "an independent public body corporate and politic," is not a private lending institution. The Mississippi Hospital Equipment and Facilities Authority, created by § 41-73-7 as "a body politic and corporate" and "an independent instrumentality exercising essential public functions," is not a private lending institution. So neither vehicle is open to the commission.
The implied-powers analysis closes the door more firmly. The Mississippi Supreme Court in City of Hattiesburg v. Region XII Commission on Mental Health and Retardation, 654 So.2d 516 (Miss. 1995), confirmed that regional mental health commissions are administrative agencies whose powers must come from express grant or necessary implication. The court relied on the long-standing rule from Mississippi Milk Commission v. Winn-Dixie, 235 So. 2d 684, 688 (Miss. 1970): "administrative agencies have only such powers as are expressly granted to them or necessarily implied and any power sought to be exercised must be found within the four corners of the statute under which the agency proceeds."
The "necessarily implied" piece does not save borrowing through public vehicles. The legislature gave the commission a specific borrowing authority and specifically restricted it to private lending institutions. Implying broader borrowing authority would override the legislative restriction, which is the opposite of how implied powers work.
The Section 41-19-39 piece is the practical workaround for repayment. That section provides that county tax levies and municipal contributions, the local funding stream that supports the commission, can also be used to repay loans the commission has lawfully taken from private lending institutions under § 41-19-33(l). So if the commission refinances with another private lender to lower its rate, the local revenues remain available to service the new debt.
Common questions
Q: What if the Development Bank's rates would have saved Hinds County significant money?
A: The opinion does not weigh financial impact. The legal analysis is binary: the commission's borrowing authority is limited to private lenders. Cost savings cannot expand the statutory grant. To use public-sector lending vehicles, the commission would need legislative action expanding its authority.
Q: Could the county itself borrow through the Development Bank and then transfer funds to the commission?
A: That would create a different legal structure (the county as borrower, the commission as recipient). Whether the county could do that, and whether the commission could use the funds to retire its existing private debt, would require separate analysis under county-finance statutes and the commission's authority to receive and apply funds.
Q: What's the difference between "private lending institutions" and the named state entities?
A: Private lending institutions are commercial banks, savings institutions, credit unions, or similar entities operating in the private sector. The Development Bank and Hospital Authority are public entities created by Mississippi statute, even though they engage in lending-like activities. The statute's distinction tracks the public-private divide.
Q: Can the commission default and walk away from the loan if it cannot refinance?
A: The opinion does not address default. As state-created entities with statutory revenue sources, regional mental health commissions are typically expected to honor their debts. Default would have downstream consequences for future borrowing capacity even within the private-lender restriction.
Q: Does this rule apply to other state-created commissions or just mental health?
A: The rule traces from the specific language in § 41-19-33(1)(l) and is specific to regional mental health commissions. Other state-created entities may have different statutory borrowing authority. Each entity's enabling statute controls.
Citations and references
Statutes:
- Miss. Code Ann. § 41-19-31 (Creation of regional mental health districts)
- Miss. Code Ann. § 41-19-33 (Powers of regional mental health commissions)
- Miss. Code Ann. § 41-19-33(1)(l) (Borrowing authority limited to private lending institutions)
- Miss. Code Ann. § 41-19-39 (County tax levies; permissible uses including loan repayment)
- Miss. Code Ann. § 31-25-7 (Mississippi Development Bank creation)
- Miss. Code Ann. § 41-73-7 (Mississippi Hospital Equipment and Facilities Authority creation)
- Miss. Code Ann. § 75-17-105 (Maximum interest rate referenced for commission loans)
Cases:
- City of Hattiesburg v. Region XII Commission on Mental Health and Retardation, 654 So.2d 516 (Miss. 1995)
- Mississippi Milk Commission v. Winn-Dixie, 235 So. 2d 684 (Miss. 1970)
- Golding v. Salter, 107 So. 2d 348 (Miss. 1958)
Prior AG opinions:
- MS AG Op., Beasley (October 27, 2017)
- MS AG Op., Montgomery (August 29, 1990)
Source
- Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
- Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2020/07/D.Turner_May-13-2020-Authority-of-a-Regional-Health-Commission-to-Refinance-a-Loan.pdf
Original opinion text
May 13, 2020
Dorian E. Turner, Esq.
Attorney for the Hinds County Mental Health Commission
1880 Lakeland Drive, Suite D
Jackson, Mississippi 39216
Re: Authority of a Regional Health Commission to Refinance a Loan
Dear Ms. Turner:
The Office of the Attorney General is in receipt of your request for the issuance of an official opinion.
Questions Presented
May the Hinds County Mental Health Commission ("Commission") borrow money from, or issue debt through, the Mississippi Development Bank or the Mississippi Hospital Equipment and Facilities Authority to refinance an outstanding loan?
If yes, may the Commission use its tax revenues from the county to repay such indebtedness?
Brief Response
The Commission may not borrow money through the Mississippi Development Bank or the Mississippi Hospital Equipment and Facilities Authority because it is expressly limited to borrowing money from private institutions in accordance with Miss. Code Ann. Section 41-19-33(1)(l).
The response to your first question renders your second question moot. However, Miss. Code Ann. Section 41-19-39 does authorize county tax levies to be used for repayment of any loans from private lending institutions made by the Commission under Section 41-19-33(l).
Applicable Law and Discussion
Regional mental health commissions, created pursuant to Miss. Code Ann. Sections 41-19-31, et seq., are considered subdivisions and agencies of the state and, therefore, only have those powers which are granted expressly by statute and those which are necessarily implied.
The express authority of regional mental health commissions is found in Section 41-19-33 and generally authorizes commissions to provide facilities and services to those persons with mental illnesses within the established region. The express authority of mental health commissions includes, but is not limited to, the following:
(1) Each region so designated or established under Section 41-19-31 shall establish a regional commission to be composed of members appointed by the boards of supervisors of the various counties in the region. It shall be the duty of such regional commission to administer mental health/intellectual disability programs certified and required by the State Board of Mental Health and as specified in Section 41-4-1(2). In addition, once designated and established as provided hereinabove, a regional commission shall have the following authority and shall pursue and promote the following general purposes:
(l) To borrow money from private lending institutions in order to promote any of the foregoing purposes. A commission may pledge collateral, including real estate, to secure the repayment of money borrowed under the authority of this paragraph. Any such borrowing undertaken by a commission shall be on terms and conditions that are prudent in the sound judgment of the members of the commission, and the interest on any such loan shall not exceed the amount specified in Section 75-17-105. Any money borrowed, debts incurred or other obligations undertaken by a commission, regardless of whether borrowed, incurred or undertaken before or after March 15, 1995, shall be valid, binding and enforceable if it or they are borrowed, incurred or undertaken for any purpose specified in this section and otherwise conform to the requirements of this paragraph.
In response to your first question, a regional mental health commission is limited to the express authority granted pursuant to Section 41-19-33(1)(l) by which to borrow funds or issue debt. It is, therefore, the opinion of this office that the Hinds County Mental Health Commission is not authorized to borrow money from or issue debt through either the Mississippi Development Bank or the Mississippi Hospital Equipment and Facilities Authority in order to refinance its outstanding loan.
Due to our response to your first question, your second question is moot. However, Section 41-19-39 provides, in pertinent part:
In addition to the purposes for which the county tax levies and municipal contributions may be used as authorized under this section, the county tax levies and municipal contributions may also be used for repayment of any loans from private lending institutions made by the commission under the authority of Section 41-19-33(l).
Thus, any revenue anticipated from county tax levies and municipal contributions collected pursuant to Section 41-19-39 may be utilized for the purpose of repaying the financial debt previously incurred.
If this office may be of any further assistance to you, please do not hesitate to contact us.
Sincerely,
LYNN FITCH, ATTORNEY GENERAL
By: /s/ Avery Mounger Lee
Avery Mounger Lee
Special Assistant Attorney General
Footnote 1: The Mississippi Development Bank was created as an independent public body corporate and politic pursuant to Miss. Code Ann. Section 31-25-7.
Footnote 2: The Mississippi Hospital Equipment and Facilities Authority was created as a body politic and corporate, not a state agency, but an independent instrumentality exercising essential public functions pursuant to Miss. Code Ann. Section 41-73-7.
Footnote 3: See MS AG Op., Beasley (October 27, 2017)(citing City of Hattiesburg v. Region XII Commission on Mental Health and Retardation, 654 So.2d 516 (Miss. 1995)).