(1) The Commission of Budget and Accounting, hereinafter referred to as “commission,” with the concurrence of the state bond commission, is hereby authorized to borrow at one time or as needed the aggregate sum of five million five hundred thousand dollars ($5,500,000.00) from one or multiples of “state general-fund agencies” or “state special-fund agencies” for the purpose of making loans to the eligible counties and municipalities, and said commission is hereby made the loan committee for such purposes as hereinafter provided. In making such loans, the commission is authorized to utilize any of its general powers provided by Sections 27-103-1 through 27-103-75, Mississippi Code of 1972.

(2) Any loan made to a county or municipality under the provisions of this section are hereby made full faith and credit obligations of such counties and municipalities to the State of Mississippi and binding on the governing bodies obtaining such loans and their successors in office until repaid in full as to principal and interest thereon without regard to existing statutory limitations.

(3) The commission shall require a certified copy of a resolution, order, or other appropriate excerpts of the official minutes of the governing board or authorities, to be of such general form and content as the commission may deem appropriate, together with application forms for such state loans.

(4) All loans made under the provisions of this section shall be evidenced by negotiable promissory notes of the county or municipality to be in such standard form and content of acceptable banking standards, shall mature at such times, to bear interest as hereinafter provided, and shall bear the signature of the president or presiding officer and clerk of the board of supervisors and the official seal, or the mayor or presiding officer and city clerk and the official seal.

(5) The loans made hereunder shall bear no interest for the first two (2) years from the date of the loan. However, the loans shall bear the following interest rates thereafter:

(6) The governing authorities, borrowing money under Sections 27-107-1 through 27-107-15, are hereby authorized and empowered to levy not to exceed two mills levy on all of the taxable property of the county or municipality at any time after the loan is made, and said levy is hereby designated to repay the loan and it shall not be charged against the existing general laws as to limitations of millage for local governmental purposes.

(7) In the event that such loan has not been repaid or arrangements satisfactory to the commission have not been made to repay same within five (5) years from the making of such loan, the commission shall determine that there is a default in the terms of the promissory note, including any interest due thereon, shall enter an order to that effect upon its official minutes and send a certified copy of said order by certified mail, postage prepaid, to the chancery clerk or city clerk, as the case may be. If said default is not satisfied in full on or before the first day of August next following a local ad valorem tax of two mills, or so much thereof as may be required to liquidate the entire indebtedness owed the state within a reasonable number of years as determined by the commission, shall be levied by the county or municipality on all the taxable property in said county or city to be collected in the same manner, time and form as the existing local ad valorem tax levies, and shall be paid into the state treasury.

(8) The proceeds of all loans shall be used only for public governmental functions, services, payment of emergency indebtedness incurred as a direct result of Hurricane Camille, and expenditures authorized by general law and for matching federal grants, private gifts and donations, such federal grants, private gifts and donations being hereby authorized to be received and disbursed as public funds.

(9) The Commission of Budget and Accounting in determining the total amount of loan to each qualifying political subdivision shall take into consideration the extent and degree of the damage, destruction or loss to public properties and the dollar value thereof; the reasonable expectation of loss of present and future revenues; the destruction and damages to tax producing real and personal property; and all appropriate economic factors affecting the ability of said political subdivision to provide necessary public functions.