288.330. State liability for benefits limited, authority for application and repayment of federal advances--board of unemployment fund financing created, duties, requirements, powers--disposition of u - Missouri Statutes

State liability for benefits limited, authority for application andrepayment of federal advances--board of unemployment fundfinancing created, duties, requirements, powers--disposition ofunobligated funds.

288.330. 1. Benefits shall be deemed to be due and payable only tothe extent that moneys are available to the credit of the unemploymentcompensation fund and neither the state nor the division shall be liablefor any amount in excess of such sums. The governor is authorized toapply for an advance to the state unemployment fund and to accept theresponsibility for the repayment of such advance in order to secure to thisstate and its citizens the advantages available under the provisions offederal law.

2. (1) The purpose of this subsection is to provide a method ofproviding funds for the payment of unemployment benefits or maintaining anadequate fund balance in the unemployment compensation fund, and as analternative to borrowing or obtaining advances from the federalunemployment trust fund or for refinancing those loans or advances.

(2) For the purposes of this subsection, "credit instrument" meansany type of borrowing obligation issued under this section, including anybonds, commercial line of credit note, tax anticipation note or similarinstrument.

(3) (a) There is hereby created for the purposes of implementing theprovisions of this subsection a body corporate and politic to be known asthe "Board of Unemployment Fund Financing". The powers of the board shallbe vested in five board members who shall be the governor, lieutenantgovernor, attorney general, director of the department of labor, and thecommissioner of administration. The board shall have all powers necessaryto effectuate its purposes including, without limitation, the power toprovide a seal, keep records of its proceedings, and provide forprofessional services. The governor shall serve as chair, the lieutenantgovernor shall serve as vice chair, and the commissioner of administrationshall serve as secretary. Staff support for the board shall be provided bythe commissioner of administration.

(b) Notwithstanding the provisions of any other law to the contrary:

a. No officer or employee of this state shall be deemed to haveforfeited or shall forfeit his or her office or employment by reason of hisor her acceptance of an appointment as a board member or for his or herservice to the board;

b. Board members shall receive no compensation for the performance oftheir duties under this subsection, but each commissioner shall bereimbursed from the funds of the commission for his or her actual andnecessary expenses incurred in carrying out his or her official dutiesunder this subsection.

(c) In the event that any of the board members or officers of theboard whose signatures or facsimile signatures appear on any creditinstrument shall cease to be board members or officers before the deliveryof such credit instrument, their signatures or facsimile signatures shallbe valid and sufficient for all purposes as if such board members orofficers had remained in office until delivery of such credit instrument.

(d) Neither the board members executing the credit instruments of theboard nor any other board members shall be subject to any personalliability or accountability by reason of the issuance of the creditinstruments.

(4) The board is authorized, by offering for public negotiated sale,to issue, sell, and deliver credit instruments, bearing interest at a fixedor variable rate as shall be determined by the board, which shall mature nolater than ten years after issuance, in the name of the board in an amountdetermined by the board. Such credit instruments may be issued, sold, anddelivered for the purposes set forth in subdivision (1) of this subsection.Such credit instrument may only be issued upon the approval of a resolutionauthorizing such issuance by a simple majority of the members of the board,with no other proceedings required.

(5) The board shall provide for the payment of the principal of thecredit instruments, any redemption premiums, the interest on the creditinstruments, and the costs attributable to the credit instruments beingissued or outstanding as provided in this chapter. Unless the boarddirects otherwise, the credit instrument shall be repaid in the same timeframe and in the same amounts as would be required for loans issuedpursuant to 42 U.S.C. Section 1321; however, in no case shall creditinstruments be outstanding for more than ten years.

(6) The board may irrevocably pledge money received from the creditinstrument and financing agreement repayment surcharge under subsection 3of section 288.128, and other money legally available to it, which isdeposited in an account authorized for credit instrument repayment in thespecial employment security fund, provided that the general assembly hasfirst appropriated moneys received from such surcharge and other moneysdeposited in such account for the payment of credit instruments.

(7) Credit instruments issued under this section shall not constitutedebts of this state or of the board or any agency, political corporation,or political subdivision of this state and are not a pledge of the faithand credit of this state, the board or of any of those governmentalentities and shall not constitute an indebtedness within the meaning of anyconstitutional or statutory limitation upon the incurring of indebtedness.The credit instruments are payable only from revenue provided for underthis chapter. The credit instruments shall contain a statement to theeffect that:

(a) Neither the state nor the board nor any agency, politicalcorporation, or political subdivision of the state shall be obligated topay the principal or interest on the credit instruments except as providedby this section; and

(b) Neither the full faith and credit nor the taxing power of thestate nor the board nor any agency, political corporation, or politicalsubdivision of the state is pledged to the payment of the principal,premium, if any, or interest on the credit instruments.

(8) The board pledges and agrees with the owners of any creditinstruments issued under this section that the state will not limit oralter the rights vested in the board to fulfill the terms of any agreementsmade with the owners or in any way impair the rights and remedies of theowners until the credit instruments are fully discharged.

(9) The board may prescribe the form, details, and incidents of thecredit instruments and make such covenants that in its judgment areadvisable or necessary to properly secure the payment thereof. If suchcredit instruments shall be authenticated by the bank or trust companyacting as registrar for such by the manual signature of a duly authorizedofficer or employee thereof, the duly authorized officers of the boardexecuting and attesting such credit instruments may all do so by facsimilesignature provided such signatures have been duly filed as provided in theuniform facsimile signature of public officials law, sections 105.273 to105.278, RSMo, when duly authorized by resolution of the board, and theprovisions of section 108.175, RSMo, shall not apply to such creditinstruments. The board may provide for the flow of funds and theestablishment and maintenance of separate accounts within the specialemployment security fund, including the interest and sinking account, thereserve account, and other necessary accounts, and may make additionalcovenants with respect to the credit instruments in the documentsauthorizing the issuance of credit instruments including refunding creditinstruments. The resolutions authorizing the issuance of creditinstruments may also prohibit the further issuance of credit instruments orother obligations payable from appropriated moneys or may reserve the rightto issue additional credit instruments to be payable from appropriatedmoneys on a parity with or subordinate to the lien and pledge in support ofthe credit instruments being issued and may contain other provisions andcovenants as determined by the board, provided that any terms, provisionsor covenants provided in any resolution of the board shall not beinconsistent with the provisions of this section.

(10) The board may issue credit instruments to refund all or any partof the outstanding credit instruments issued under this section includingmatured but unpaid interest. As with other credit instruments issued underthis section, such refunding credit instruments may bear interest at afixed or variable rate as determined by the board.

(11) The credit instruments issued by the board, any transactionrelating to the credit instruments, and profits made from the sale of thecredit instruments are free from taxation by the state or by anymunicipality, court, special district, or other political subdivision ofthe state.

(12) As determined necessary by the board the proceeds of the creditinstruments less the cost of issuance shall be placed in the state'sunemployment compensation fund and may be used for the purposes for whichthat fund may otherwise be used. If those net proceeds are not placedimmediately in the unemployment compensation fund they shall be held in thespecial employment security fund in an account designated for that purposeuntil they are transferred to the unemployment compensation fund providedthat the proceeds of refunding credit instruments may be placed in anescrow account or such other account or instrument as determined necessaryby the board.

(13) The board may enter into any contract or agreement deemednecessary or desirable to effectuate cost-effective financing hereunder.Such agreements may include credit enhancement, credit support, or interestrate agreements including, but not limited to, arrangements such asmunicipal bond insurance; surety bonds; tax anticipation notes; liquidityfacilities; forward agreements; tender agreements; remarketing agreements;option agreements; interest rate swap, exchange, cap, lock or flooragreements; letters of credit; and purchase agreements. Any fees or costsassociated with such agreements shall be deemed administrative expenses forthe purposes of calculating the credit instrument and financing agreementrepayment surcharge under subsection 3 of section 288.128. The board, withconsideration of all other costs being equal, shall give preference toMissouri-headquartered financial institutions, or those out-of-state-basedfinancial institutions with at least one hundred Missouri employees.

(14) To the extent this section conflicts with other laws theprovisions of this section prevail. This section shall not be subject tothe provisions of sections 23.250 to 23.298, RSMo.

(15) If the United States Secretary of Labor holds that a provisionof this subsection or of any provision related to the levy or use of thecredit instrument and financial agreement repayment surcharge does notconform with a federal statute or would result in the loss to the state ofany federal funds otherwise available to it the board, in cooperation withthe department of labor and industrial relations, may administer thissubsection, and other provisions related to the credit instrument andfinancial agreement repayment surcharge, to conform with the federalstatute until the general assembly meets in its next regular session andhas an opportunity to amend this subsection or other sections, asapplicable.

(16) Nothing in this chapter shall be construed to prohibit theofficials of the state from borrowing from the government of the UnitedStates in order to pay unemployment benefits under subsection 1 of thissection or otherwise.

(17) (a) As used in this subdivision the term "lender" means anystate or national bank.

(b) The board is authorized to enter financial agreements with anylender for the purposes set forth in subdivision (1) of this subsection, orto refinance other financial agreements in whole or in part, upon theapproval of the simple majority of the members of the board of a resolutionauthorizing such financial agreements, with no other proceedings required.In no instance shall the outstanding obligation under any financialagreement continue for more than ten years. Repayment of obligations tolenders shall be made from the special employment security fund, section288.310, subject to appropriation by the general assembly.

(c) Financial agreements entered into under this subdivision shallnot constitute debts of this state or of the board or any agency, politicalcorporation, or political subdivision of this state and are not a pledge ofthe faith and credit of this state, the board or of any of thosegovernmental entities and shall not constitute an indebtedness within themeaning of any constitutional or statutory limitation upon the incurring ofindebtedness. The financial agreements are payable only from revenueprovided for under this chapter. The financial agreements shall contain astatement to the effect that:

a. Neither the state nor the board nor any agency, politicalcorporation, or political subdivision of the state shall be obligated topay the principal or interest on the financial agreements except asprovided by this section; and

b. Neither the full faith and credit nor the taxing power of thestate nor the board nor any agency, political corporation, or politicalsubdivision of the state is pledged to the payment of the principal,premium, if any, or interest on the financial agreements.

(d) Neither the board members executing the financial agreements norany other board members shall be subject to any personal liability oraccountability by reason of the execution of such financial agreements.

(e) The board may prescribe the form, details and incidents of thefinancing agreements and make such covenants that in its judgment areadvisable or necessary to properly secure the payment thereof provided thatany terms, provisions or covenants provided in any such financing agreementshall not be inconsistent with the provisions of this section. If suchfinancing agreements shall be authenticated by the bank or trust companyacting as registrar for such by the manual signature of a duly authorizedofficer or employee thereof, the duly authorized officers of the boardexecuting and attesting such financing agreements may all do so byfacsimile signature provided such signatures have been duly filed asprovided in the uniform facsimile signature of public officials law,sections 105.273 to 105.278, RSMo, when duly authorized by resolution ofthe board and the provisions of section 108.175, RSMo, shall not apply tosuch financing agreements.

(18) The commission may issue credit instruments to refund all or anypart of the outstanding borrowing issued under this section includingmatured but unpaid interest.

(19) The credit instruments issued by the commission, any transactionrelating to the credit instruments, and profits made from the issuance ofcredit are free from taxation by the state or by any municipality, court,special district, or other political subdivision of the state.

3. In event of the suspension of this law, any unobligated funds inthe unemployment compensation fund, and returned by the United StatesTreasurer because such Federal Social Security Act is inoperative, shall beheld in custody by the treasurer and under supervision of the divisionuntil the legislature shall provide for the disposition thereof. In eventno disposition is made by the legislature at the next regular meetingsubsequent to suspension of said law, then all unobligated funds shall bereturned ratably to those who contributed thereto.

4. For purposes of this section, as contained in senate substituteno. 2 for senate committee substitute for house substitute for housecommittee substitute for house bill nos. 1268 and 1211, ninety-secondgeneral assembly, second regular session, the revisor of statutes shallrenumber subdivision (16) of subsection 2 of such section as subdivision(17) of such subsection and renumber subdivision (17) of subsection 2 ofsuch section as subdivision (16) of such subsection.

(L. 1951 p. 564 § 288.210, A.L. 1982 H.B. 1521, A.L. 2004 H.B. 1268 & 1211 and S.B. 966 § 1, A.L. 2006 H.B. 1456, A.L. 2009 H.B. 1075)

Effective 6-12-09