Meridian Star

December 14, 2008

Hosemann proposing business reform laws

By Jennifer Jacob Brown / staff writer

Mississippi Secretary of State Delbert Hosemann made a lot of campaign promises about business law reform last year, and now he's trying to follow through on them. He's commissioned studies and prepared a business agenda for next year's Legislature.

"This is a great year to bring business reform because businesses are suffering and employees are losing their jobs," he said.

Hosemann talked with The Meridian Star last week to tell the public what may be in store for business law, as well as what he's been doing to improve the use of 16th Section Lands.

The Meridian Star: So, tell us what's been going on in the Secretary of State's office lately.

Delbert Hosemann: I've got a list. Mississippi has several things that are really critical to continue employment, and that is the actual business laws of the state... The first one is a business court. There are only three states that have business courts — Maine, Delaware, and North Carolina... The cases that would come forth would be all business cases between businesses... The goal is to reduce the cost of litigation to Mississippi businesses and to give timely, consistent opinions. We believe the cost of trial and lawyers and delay is hurting Mississippi businesses, where they're spending money on that versus hiring new employees or funding their health care plan.

Star: So you believe the business court would be an incentive to draw business into Mississippi?

Hosemann: We do. Our main goal, though, is to protect businesses that are here so that they can resolve disputes between themselves at the least possible cost. Under the business court we would have one year between the time of filing and the time a decision would be rendered... This type of process I think will save Mississippi businesses untold amounts of dollars. And now, Mississippi businesses can't get credit from banks. Some of that has to do with outstanding litigation against them. So there are other aspects to this, to allow businesses to be able to resolve their disputes quickly and then continue to get lines of credit is very important.

Star: Why do only three states have it?

Hosemann: Up until this time, Mississippi like all the other states had two court systems, a circuit court and a chancery court. A chancery court handles divorces and wills and estates, matters of equity, and real property issues. Circuit courts are, under Mississippi's constitution, entitled to handle all other judicial matters... In Mississippi our statistics show that the circuit court has grown significantly from two different areas — one in debt collection... and the second in the criminal docket. The constitution requires if you're criminally charged you have the right to a speedy trial. What's happened is, the circuit court in trying to honor the rights of people charged with crimes necessarily have had to postpone some of the civil cases, which include these business cases. So (business court) allows us to look at business cases on an expedited basis, but it also removes these cases from the circuit court.

Star: Why have a business court, then? If the circuit court is clogged by criminal cases why not have a criminal court?

Hosemann: I think eventually Mississippi and most states will end up with other specialty courts. The business court was an easy one because its a smaller percentage of the overall judiciary. It was easy to be funded by having businesses pay for the business court, and we have some precedent out in North Carolina, Delaware, and Maine of these courts being very successful.

Star: Talk about some of your other business agendas for the Legislature next year.

Hosemann: The Mississippi Securities act is a total repeal of the securities laws in Mississippi. We want to implement total securities law change.

Star: What do securities laws govern?

Hosemann: They govern the buying and selling of any security. Basically anything that sells an interest in something else, like a share of stock, is covered by securities law. They protect the information that has to be disclosed to somebody who buys an interest in a Mississippi company, and that's very important because access to capital in Mississippi is being limited now because the banks are not lending us money like they did before. And so we anticipate people will now start the process of raising capital from individuals

We also want to change trademark and copyright law. We really didn't have any trademark and copyright law to speak of. We're going to adopt the actual trademark association's model state trademark bill. We made changes to it, and it'll be adopted by the Legislature in order to really bring our trademark laws up to speed. You may not think that makes that much difference, but the Meridian newspaper is a trademark. Peavey is a trademark. Every one of the banks up and down here, the hospitals, everybody has something that they need to protect so somebody doesn't say, "I'm Riley Hospital," and take their name away or use it against them.

Star: Wouldn't those things currently be protected by federal law?

Hosemann: They are protected by federal law, and this really brings our state up to equivalent with federal law for the ones who need protection solely in the state. This is a supplement to the federal registration requirements. After the law is passed, everything will be on our Web site and people will be able to protect their trademarks much better.

Star: Would this include intellectual and artistic property as well as brands?

Hosemann: I'm glad you asked. There is something called right of publicity. There is a right of publicity in California, and in Tennessee as you would imagine because of its many artists.

Star: What exactly is right of publicity?

Hosemann: It protects songs and the written words of authors with much stronger protection than just a trade or a copyright. We'd be I think only the third or fourth state that would have a right of publicity, and I think it would encourage our artistic community here.

Another thing we want to reform is non-profit and charitable law. This also is a huge revision from where they've been before. We've raised the threshold from $4,000 a year they have to report to $25,000. This is to protect churches who host an event for someone who got injured or a family who lost their home in a fire, that sort of thing. That would fall underneath the radar for registration.

We've also changed our disclosure guidelines and we're going to put on our Web site the financial information of every one of the non-profits that's formed in Mississippi now. So people can see what their non-profits spend on management as well as on what they're supposed to be doing...

We found ourselves in many instances somewhat toothless in enforcement of charities. We want to grant the Secretary of State subpoena powers to investigate charities (who may have misspent funds).

Star: Now that you've covered your business agenda, can you talk about the work you're doing with 16th Section Land? (16th Section Land is trust land used to make money for schools).

Hosemann: We've put the 16th section land leases online. You can see every lease, when it comes due, how it comes due, and everything else. We then drafted a standard lease for everybody that wanted to use them and sent them to the school boards free.

School boards historically are composed of business men and women whose main interest is school kids... Sometimes they're not necessarily timber experts, for example, and there are over 400,000 acres of timber in Mississippi 16th section lands. And they're personally liable if they make a bad decision about using school funds.

I offered to review leases as they came due, and sign them as secretary of state. And so I do that now. Every single one... We found that this has been very productive for assisting school boards. That they have the financial information on what things are leasing for in the counties surrounding them and the secretary of state helping them with their leases, we're finding that fair value is being achieved more often.

We then signed about a month ago with the state forestry commission a Memorandum of Understanding. In that MOU, which was the first one I think ever between the Secretary of State's office and the forestry commission on the management of 16th Section Lands, basically requiring them to manage them like a business, and then turn them over to the Secretary of State's office and put them on our Web site.

We now intend to go to every school board in the state to work with giving them a timber management plan. It goes through every 16th section in the county — what timber's on there, what management needs to be done...all the management tools that they need...

Our goal is to have 100,000 acres signed up next year out of the 400,000. I'm hopeful that we'll exceed that goal... This is a voluntary thing by each school board, but we've had virtually unanimous positive response from the school boards.

Last year we got $16 million off of our 16th Section Lands. The average in the state was about 25 dollars an acre. We're going to push to achieve $60 per acre, across the board.