MS HB167

Requires the Department of Revenue to withhold 10% of sales tax allocations to municipalities when the State Auditor issues a certificate of noncompliance for failure to meet audit requirements, with withholding ending when the State Auditor cancels the certificate.

Limits recovery of erroneously disbursed sales tax funds to municipalities to three years of erroneous payments, or one year if the municipality provides written notice of the error to the Department of Revenue within that period.

Brings forward Section 21-35-31 requiring municipalities to obtain annual audits or reports of their books in accordance with State Auditor procedures, with failure to comply resulting in issuance of a certificate of noncompliance.

Requires the State Auditor to provide municipalities 30 days written notice before issuing a certificate of noncompliance, allowing time for the municipality to achieve substantial compliance.

Effective date is July 1, 2016.