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To: Judiciary, Division A
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026
By: Senator(s) Hill
SENATE BILL NO. 2385
AN ACT ENACT THE MISSISSIPPI TRUST ACT; TO DEFINE TERMS; TO 1
REQUIRE A GOVERNMENTAL ENTITY TO VERIFY THE REGISTRATION OF A 2
CHARITABLE ORGANIZATION, FOREIGN CORPORATION, OR NONPROFIT 3
CORPORATION BEFORE THE DISBURSEMENT OF PUBLIC FUNDS; TO REQUIRE A 4
LINE-ITEM APPROPRIATION BY THE LEGISLATURE, SUBJECT TO THE 5
REQUIREMENTS OF SECTION 27-104-351, BEFORE THE DISBURSEMENT OF 6
PUBLIC FUNDS TO A CHARITABLE ORGANIZATION, NONPROFIT CORPORATION, 7
OR FOREIGN CORPORATION; TO AMEND SECTION 79-11-407, MISSISSIPPI 8
CODE OF 1972, TO REQUIRE NONPROFIT CORPORATIONS AND FOREIGN 9
CORPORATIONS TO REPORT CERTAIN FINANCIAL INFORMATION AND ATTEST TO 10
THE OUTCOMES OF EXPENDITURES RELATED TO PUBLIC FUNDS; TO AMEND 11
SECTION 79-11-507, MISSISSIPPI CODE OF 1972, TO REQUIRE CHARITABLE 12
ORGANIZATIONS TO REPORT CERTAIN FINANCIAL INFORMATION AND ATTEST 13
TO THE OUTCOMES OF EXPENDITURES RELATED TO PUBLIC FUNDS; TO AMEND 14
SECTION 27-104-351, MISSISSIPPI CODE OF 1972, TO CONFORM; AND FOR 15
RELATED PURPOSES. 16
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 17
SECTION 1. This act shall be known and may be cited as the 18
"Mississippi Transparency and Responsibility in Utilizing State 19
and Taxpayer Funds Act" or the "Mississippi TRUST Act." 20
SECTION 2. As used in Sections 1 through 3 of this act, the 21
following terms shall have the meanings herein ascribed unless the 22
context clearly requires otherwise: 23
(a) "Charitable organization" has the meaning as 24
defined in Section 79-11-501(a). 25
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(b) "Foreign corporation" has the meaning as defined in 26
Section 79-11-127(s). 27
(c) "Governmental entity" has the meaning as defined in 28
Section 11-46-1(g). 29
(d) "Nonprofit corporation" has the meaning as defined 30
in Section 79-11-127(z). 31
SECTION 3. (1) Before the distribution of any public funds 32
to a charitable organization, foreign corporation, or nonprofit 33
corporation, a governmental entity shall verify that the 34
charitable organization, foreign corporation, or nonprofit 35
corporation has registered with the Secretary of State and has 36
complied with any obligations imposed by law, including the filing 37
of any required reports. 38
(2) Public funds disbursed to a charitable organization, 39
foreign corporation, or nonprofit corporation shall be authorized 40
by line-item appropriation by the Legislature, subject to the 41
requirements of Section 27-104-351. 42
SECTION 4. Section 79-11-407, Mississippi Code of 1972, is 43
amended as follows: 44
79-11-407. (1) Each nonprofit corporation, as defined in 45
Section 79-11-127(z), shall file an annual report with the 46
Secretary of State Business Services Division before May 15 of 47
each year on a form prescribed by the Secretary of State. 48
(2) Each domestic nonprofit corporation and each foreign 49
nonprofit corporation authorized to transact business in this 50
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state shall deliver an annual report to the Secretary of State for 51
filing, on such date as may be established by the Secretary of 52
State, which provides the following information: 53
(a) The name of the nonprofit corporation and the state 54
or country or other foreign jurisdiction under whose law it is 55
organized; 56
(b) The name, email address and street or physical 57
address of its registered agent in this state; 58
(c) The address of its principal office; 59
(d) The name, titles and business address of its 60
principal officer; 61
(e) A brief description of the nature of its business; 62
and 63
(f) Whether it has received public funds * * *, a 64
listing of any governmental entity that distributed the public 65
funds, the amount of public funds received, a detailed accounting 66
of the public services provided, and a list of any entities with 67
which the nonprofit corporation or foreign corporation entered 68
into subcontract agreements with to provide the public services. 69
The term "public funds" means funds received by the organization 70
during its most recently completed fiscal year which were received 71
from the State of Mississippi or any local governmental authority 72
located within the State of Mississippi. 73
(3) Information in the annual report must be current as of 74
the date the annual report is executed on behalf of the nonprofit 75
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corporation. If the nonprofit corporation or foreign corporation 76
received public funds, a statement shall be signed by the 77
president or other authorized officer of the corporation attesting 78
to the outcomes of the expenditures of the public funds under 79
penalties of perjury to the best of the signer's knowledge. The 80
statement shall be attached to the annual report required by this 81
section. 82
(4) If an annual report does not contain the information 83
required by this section, the Secretary of State shall provide 84
written notice promptly to the reporting nonprofit corporation and 85
return the report for correction. If the report is corrected to 86
contain the information required by this section and delivered to 87
the Secretary of State within thirty (30) days after the effective 88
date of notice, the report is deemed to be timely filed. 89
(5) If the nonprofit corporation fails to file timely or 90
fails to disclose the information required under this section, 91
the corporation may be subject to the penalties of dissolution or 92
disallowance of nonprofit status, or both. 93
(6) The requirements of this section shall not apply to 94
water associations as defined in Section 79-11-394. 95
SECTION 5. Section 79-11-507, Mississippi Code of 1972, is 96
amended as follows: 97
79-11-507. (1) Every charitable organization registered 98
pursuant to Section 79-11-503 that shall receive in any fiscal 99
year contributions in excess of Seven Hundred Fifty Thousand 100
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Dollars ($750,000.00) via monetary donations and all of whose 101
fund-raising functions are carried on by persons who are unpaid 102
for such services, and every charitable organization registered 103
pursuant to Section 79-11-503 whose fund-raising functions are not 104
carried on solely by persons who are unpaid for such services, 105
shall file a financial statement for its most recently completed 106
fiscal year with the Secretary of State. The financial statement 107
shall be filed along with the registration statement required by 108
Section 79-11-503 and any renewals or final report thereafter. 109
The financial statement shall include a balance sheet and 110
statement of income and expense and shall be consistent with forms 111
furnished by the Secretary of State clearly setting forth the 112
following: gross receipts and gross income from all sources, 113
broken down into total receipts and income from each separate 114
solicitation project or source; cost of administration; cost of 115
solicitation; cost of programs designed to inform or educate the 116
public; and total net amount disbursed or dedicated for each major 117
purpose, charitable or otherwise. The statement shall be signed 118
by the president or other authorized officer and the chief fiscal 119
officer of the organization, and shall be accompanied by an 120
opinion signed by an independent certified public accountant that 121
the financial statement therein fairly represents the financial 122
operations of the organization in sufficient detail to permit 123
public evaluation of its operations. The financial statement 124
shall be accompanied by any and all forms required to be filed by 125
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a charitable organization with the United States Internal Revenue 126
Service for the organization's most recent fiscal year end. 127
(2) Every organization registered pursuant to Section 128
79-11-503 that shall receive in any fiscal year contributions of 129
at least Two Hundred Fifty Thousand Dollars ($250,000.00) but not 130
more than Seven Hundred Fifty Thousand Dollars ($750,000.00) via 131
monetary donations and all of whose fund-raising functions are 132
carried on by persons who are unpaid for their services shall file 133
a financial statement reviewed by an independent certified public 134
accountant along with the registration statement required by 135
Section 79-11-503 and any renewals or final report thereafter with 136
the Secretary of State upon forms prescribed by him. The reviewed 137
financial statement shall cover the most recently completed fiscal 138
year and include such information as required by the Secretary of 139
State by rule or otherwise, including, but not limited to, the 140
gross receipts from contributions and the use of the proceeds of 141
such contributions. The statement shall be signed by the 142
president or other authorized officer of the organization who 143
shall certify under penalties of perjury that the statements 144
therein are true and correct to the best of the signer's 145
knowledge. The reviewed financial statement shall be accompanied 146
by any and all forms required to be filed by a charitable 147
organization with the United States Internal Revenue Service for 148
the organization's most recent fiscal year end. 149
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(3) Every organization registered pursuant to Section 150
79-11-503 that shall receive in any fiscal year contributions not 151
in excess of Two Hundred Fifty Thousand Dollars ($250,000.00) and 152
all of whose fund-raising functions are carried on by persons who 153
are unpaid for their services shall file a financial report along 154
with the registration statement required by Section 79-11-503 and 155
any renewals or final report thereafter with the Secretary of 156
State upon forms prescribed by him. Such financial report shall 157
cover the most recently completed fiscal year and include such 158
information as required by the Secretary of State by rule or 159
otherwise, including, but not limited to, the gross receipts from 160
contributions and the use of the proceeds of such contributions. 161
The report shall be signed by the president or other authorized 162
officer of the organization who shall certify under penalties of 163
perjury that the statements therein are true and correct to the 164
best of the signer's knowledge. Such financial report shall be 165
accompanied by any and all forms required to be filed by a 166
charitable organization with the United States Internal Revenue 167
Service for the organization's most recent fiscal year end. 168
(4) Any charitable organization receiving more than 169
Twenty-five Thousand Dollars ($25,000.00) but less than Seven 170
Hundred Fifty Thousand Dollars ($750,000.00) via monetary 171
donations shall, at the request of the Secretary of State, submit 172
additional financial information, including, but not limited to, 173
an audited financial statement prepared in accordance with 174
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generally accepted accounting principles and accompanied by an 175
opinion signed by an independent certified public accountant that 176
the financial statement therein fairly represents the financial 177
operations of the organization in sufficient detail to permit 178
public evaluation of its operations. 179
(5) Every organization registered pursuant to Section 180
79-11-503 receiving public funds shall include within its filed 181
financial statement for its most recently completed fiscal year 182
with the Secretary of State a listing of any governmental entity 183
that distributed the public funds, the amount of public funds 184
received, a detailed accounting of the public services provided, 185
and a listing of any entities with which the nonprofit corporation 186
or foreign corporation entered into subcontract agreements with to 187
provide the public services. For every organization that received 188
public funds, a statement shall be signed by the president or 189
other authorized officer of the organization attesting to the 190
outcomes of the expenditures of the public funds under penalties 191
of perjury to the best of the signer's knowledge. The statement 192
shall be attached to its filed financial statement required by 193
this section. The term "public funds" means funds received by the 194
organization during its most recently completed fiscal year which 195
were received from the State of Mississippi or any local 196
governmental authority located within the State of Mississippi. 197
( * * *6) The Secretary of State, pursuant to Section 198
79-11-509, may promulgate rules to provide for extensions of the 199
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due date for filing of the financial statements required by this 200
chapter and may impose an administrative penalty against any 201
organization which fails to comply with this section within the 202
time prescribed, or fails to furnish such additional information 203
as is requested by the Secretary of State within the required 204
time. 205
SECTION 6. Section 27-104-351, Mississippi Code of 1972, is 206
amended as follows: 207
27-104-351. (1) This section shall be known and may be 208
cited as the "Line-Item Appropriation Transparency Act." 209
(2) As used in this section, unless the context clearly 210
indicates otherwise: 211
(a) "Local government entity" means any county, 212
municipality, school district, public hospital or other political 213
subdivision of the state. 214
(b) "Pass-through funding" means a line-item 215
appropriation by the Legislature to a state agency that is 216
itemized on a separate line in a state agency's appropriation bill 217
and that is intended to be passed through the state agency to one 218
or more: 219
(i) Local government entities; 220
(ii) Private organizations, including 221
not-for-profit organizations; or 222
(iii) Persons in the form of a loan or grant. 223
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"Pass-through funding" may be general funds, dedicated credits, or 224
any combination of state funding sources, and may be ongoing or 225
one-time. 226
(c) "Recipient entity" means a local government entity 227
or private entity, including a nonprofit entity, that receives 228
money by way of pass-through funding from a state agency. 229
(d) "State agency" shall have the same meaning as 230
provided in Section 27-103-103, and shall include any other 231
subagency or board under the supervision of that state agency. 232
The term also includes a governmental entity under Section 3 of 233
this act. 234
(e) "State money" means funds in the State General Fund 235
and all state-support special funds which are in the Budget 236
Contingency Fund, Capital Expense Fund, Working-Cash Stabilization 237
Reserve Fund, Education Enhancement Fund, Healthcare Expendable 238
Fund, Tobacco Control Program Fund, BP Settlement Fund, Gulf Coast 239
Restoration Fund and any other special funds that are determined 240
by the Joint Legislative Budget Committee to be a state-support 241
special fund. "State money" does not include contributions or 242
donations received by a state agency. 243
(f) "Department" means the Department of Finance and 244
Administration. 245
(3) A state agency may not provide a recipient entity state 246
money from pass-through funding unless: 247
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(a) The state agency enters into a written agreement 248
with the recipient entity, which details the criteria and 249
reporting requirements as provided in this section; and 250
(b) The written agreement described in paragraph (a) of 251
this subsection requires the recipient entity to provide to the 252
state agency the following: 253
(i) A written description and an itemized report 254
detailing the expenditure of state money or the intended 255
expenditure of any state money that has not been spent. Such 256
report shall be submitted at least quarterly on dates determined 257
by the department; and 258
(ii) A final written itemized report when all the 259
state money is spent. 260
Disbursements shall only be made after the written agreement 261
described in paragraph (a) of this subsection has been signed and 262
shall be contingent upon the recipient entity complying with the 263
quarterly reporting requirements required by paragraph (b) of this 264
subsection. 265
(4) On or before June 30 of each year or a date determined 266
by the department, a state agency shall provide to the department 267
a copy of the written agreements, written descriptions, and 268
reports of itemized expenditures required under subsection (3) of 269
this section. 270
(5) The department is responsible for obtaining the written 271
agreements, written descriptions, and itemized reports required by 272
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subsection (3) of this section from state agencies. The 273
department is further responsible for consolidating and presenting 274
a report on the previous fiscal year's pass-through expenditures 275
and providing it to the Joint Legislative Budget Committee by 276
October 1 of each year. 277
(6) The department shall create all of the following 278
documents which shall be in such form and contain such information 279
as the department prescribes: 280
(a) Written agreement as described in subsection (3)(a) 281
of this section; 282
(b) Written description and itemized report as 283
described in subsection (3)(b) of this section; and 284
(c) Final itemized report as described in subsection 285
(3)(b) of this section. 286
A state agency shall utilize these documents when complying 287
with the criteria set forth in this section. 288
(7) Notwithstanding subsection (3) of this section, a state 289
agency is not required to comply with this section to the extent 290
that the pass-through funding is issued: 291
(a) Under a competitive award process; 292
(b) In accordance with a formula enacted in statute; 293
(c) In accordance with a state program under parameters 294
in statute or rule that guides the distribution of the 295
pass-through funding; 296
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ST: Mississippi TRUST Act; enact.
(d) Under the authority of Sections 37-151-200 through 297
37-151-215; or 298
(e) In accordance with an appropriations act of the 299
Legislature that specifically provides an exemption from the 300
provisions of this section. 301
(8) Unless a recipient entity is required to comply with 302
Section 31-7-1 et seq. because it is an agency or public body, the 303
fact that it is a recipient entity does not create such an 304
obligation. 305
SECTION 7. This act shall take effect and be in force from 306
and after July 1, 2026. 307