H.B. 46

1

DISASTER RECOVERY FUNDING
2 2007 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Curtis Oda
5 Senate Sponsor: Sheldon L. Killpack
6 Cosponsors:
7 Jackie Biskupski
8 D. Gregg Buxton
9 David Clark
10 Stephen D. Clark
11 Tim M. Cosgrove
12 James A. DunniganBen C. Ferry
Julie Fisher
Craig A. Frank
James R. Gowans
Wayne A. Harper
Fred R. Hunsaker
Eric K. HutchingsBrad King
Rebecca D. Lockhart
Michael E. Noel
Paul Ray
Aaron Tilton
Scott L Wyatt 13
14 LONG TITLE
15 General Description:
16 This bill modifies provisions related to funding state and local government recovery
17 efforts in cases of declared disasters.
18 Highlighted Provisions:
19 This bill:
20 . addresses emergency expenditures by local governments;
21 . transitions current loan programs for disasters to the Disaster Recovery Funding
22 Act;
23 . modifies the duties of the Division of Emergency Services and Homeland Security;
24 . enacts the Disaster Recovery Funding Act including:
25 . enacting definitions;
26 . creating the State Disaster Recovery Reserve consisting of two funds;
27 . providing for transfers between the funds;
28 . directing the division to address state emergency disaster services;

29 . authorizing local governments to create local disaster funds;

30 . creating the local government disaster recovery loan program; and
31 . requiring reporting;
32 . addresses the governor's powers in cases of emergency;
33 . provides for deposits into the state disaster reserve;
34 . coordinates the state disaster reserve with funds outside the act;
35 . addresses limitations on spending; and
36 . makes technical and conforming amendments.
37 Monies Appropriated in this Bill:
38 None
39 Other Special Clauses:
40 None
41 Utah Code Sections Affected:
42 AMENDS:
43 10-5-118, as enacted by Chapter 34, Laws of Utah 1983
44 10-6-129, as last amended by Chapter 52, Laws of Utah 1981
45 17-36-27, as enacted by Chapter 22, Laws of Utah 1975
46 53-2-102.5, as last amended by Chapter 89, Laws of Utah 2006
47 53-2-104, as last amended by Chapter 214, Laws of Utah 2005
48 63-5a-8, as last amended by Chapter 14, Laws of Utah 2002
49 63-38c-103, as last amended by Chapter 1, Laws of Utah 2005, First Special Session
50 63-38f-904, as renumbered and amended by Chapter 148, Laws of Utah 2005
51 ENACTS:
52 53-2-401, Utah Code Annotated 1953
53 53-2-402, Utah Code Annotated 1953
54 53-2-403, Utah Code Annotated 1953
55 53-2-404, Utah Code Annotated 1953
56 53-2-405, Utah Code Annotated 1953
57 53-2-406, Utah Code Annotated 1953
58 53-2-407, Utah Code Annotated 1953
59 63-38-2.7, Utah Code Annotated 1953
60

61 Be it enacted by the Legislature of the state of Utah:
62 Section 1. Section 10-5-118 is amended to read:
63 10-5-118. Emergency expenditures.
64 (1) The council, on determining that an emergency exists, such as widespread damage
65 from fire, flood, or earthquake, and that the emergency necessitates the expenditure of money
66 in excess of the budget of the general fund, may amend the budget and authorize such
67 expenditures as may be reasonably necessary to meet the emergency.
68 (2) Except to the extent provided for in Title 53, Chapter 2, Part 4, Disaster Recovery
69 Funding Act, a council of a town may not expend monies in the town's local fund for an
70 emergency, if the town creates a local fund under Title 53, Chapter 2, Part 4, Disaster Recovery
71 Funding Act.
72 Section 2. Section 10-6-129 is amended to read:
73 10-6-129. Emergency expenditures.
74 [In the event] (1) If the governing body of a city determines that an emergency exists,
75 such as widespread damage from fire, flood, or earthquake, and that the emergency necessitates
76 the expenditure of money in excess of the budget of the general fund, the governing body may
77 by resolution amend the budget and authorize such expenditures and incur such deficits in the
78 fund balance of the general fund as may be reasonably necessary to meet the emergency.
79 (2) Except to the extent provided for in Title 53, Chapter 2, Part 4, Disaster Recovery
80 Funding Act, the governing body of a city may not expend monies in the city's local fund for an
81 emergency, if the city creates a local fund under Title 53, Chapter 2, Part 4, Disaster Recovery
82 Funding Act.
83 Section 3. Section 17-36-27 is amended to read:
84 17-36-27. Emergency expenditures -- Deficit.
85 (1) If the governing body determines that an emergency exists, such as widespread
86 damage from fire, flood, or earthquake, and that the expenditure of money in excess of the
87 general fund budget is necessary, it may make such expenditures and incur such deficits as
88 reasonably necessary to meet the emergency.
89 (2) Except to the extent provided for in Title 53, Chapter 2, Part 4, Disaster Recovery
90 Funding Act, the governing body of the county may not expend monies in the county's local
91 fund for an emergency, if the county creates a local fund under Title 53, Chapter 2, Part 4,

92 Disaster Recovery Funding Act.
93 Section 4. Section 53-2-102.5 is amended to read:
94 53-2-102.5. Loan program for disasters prior to Disaster Recovery Funding Act.
95 [(1) The director may make loans to local governments as provided in this section
96 when:]
97 [(a) the governor has issued a proclamation declaring a state of emergency because of a
98 natural disaster;]
99 [(b) the Legislature has appropriated monies to the division explicitly for that purpose;
100 and]
101 [(c) threats to the public health and safety, or damages to flood control systems or the
102 transportation infrastructure exist.]
103 [(2) (a) In order to qualify for loans under this section, the county and each political
104 subdivision within the county shall:]
105 [(i) pass a resolution that:]
106 [(A) requests a loan;]
107 [(B) identifies the loan amount that is requested; and]
108 [(C) describes, in as much detail as possible, how the entity will spend the loan
109 proceeds; and]
110 [(ii) complete the application for funds provided by the director.]
111 [(b) Each political subdivision other than the county shall submit a copy of its
112 resolution and application to the county legislative body.]
113 [(c) The county legislative body shall file with the director:]
114 [(i) a letter identifying the total loan amount sought by the county and its political
115 subdivisions; and]
116 [(ii) a copy of the county's resolution and application and a copy of the resolution and
117 application of each political subdivision seeking loan funds.]
118 [(3) (a) To the extent appropriated funds are available, the director shall prepare a
119 promissory note lending the county the total amount requested by the county for itself and its
120 political subdivisions.]
121 [(b) Except as required in Subsections (8) and (9), the director shall ensure that the
122 promissory note contains:]

123 [(i) a requirement that the principal on the note is due on the May 1 in the calendar year
124 two years after the year in which the note is signed;]
125 [(ii) terms that require repayment of the principal on the note be made to the General
126 Fund Budget Reserve Account established in Section 63-38-2.5 ; and]
127 [(iii) terms that limit the use of note proceeds to the repair and reconstruction of
128 infrastructures owned by local governments located within the county.]
129 [(c) After an authorized representative of the county signs the promissory note, the
130 director shall disburse the loan funds to the county.]
131 [(4) The county and any participating political subdivision may not use loan proceeds
132 for costs:]
133 [(a) that could have been paid from other available funding sources if the county or
134 participating political subdivision had applied for those funds; or]
135 [(b) to compensate private businesses or private persons for damages incurred in the
136 disaster by those private businesses or persons.]
137 [(5) After receiving the loan proceeds from the state, the county shall, before
138 disbursing loan proceeds to the other county political subdivisions, obtain signed promissory
139 notes from each participating political subdivision that include terms substantially similar to
140 the terms contained in the promissory note signed by the county.]
141 [(6) The county shall, on behalf of itself and any participating political subdivision, file
142 a report with the director every three months, that:]
143 [(a) specifies each project on which loan funds were expended, classified by the name
144 of the local entity that expended the funds; and]
145 [(b) identifies the amount expended for that project.]
146 [(7) If the county or one of its participating political subdivisions has not expended or
147 committed the funds by the date that the promissory note is due, the county or participating
148 political subdivision shall return the unused or uncommitted funds to the director for redeposit
149 into the fund.]
150 [(8)] (1) (a) For each promissory note issued under this section that is unpaid on May
151 1, 2006, the director shall issue a new promissory note to replace the existing promissory note:
152 [(a)] (i) for the principal amount of the unpaid promissory note without accrued
153 interest, if any;

154 [(b)] (ii) due on or before June 30, 2007; and
155 [(c)] (iii) with no interest rate.
156 (b) For a promissory note issued under this section that is unpaid as of April 30, 2007,
157 the division shall ensure that when the principal on the promissory note is repaid, the
158 repayment is made to the State Disaster Recovery Restricted Account created in Section
159 53-2-403 .
160 [(9)] (2) The director shall ensure that each promissory note issued under this section
161 that is funded by monies appropriated and available for disaster loans as of January 1, 2006, are
162 due on or before June 30, 2007.
163 (3) The Division of Finance shall transfer by no later than June 30, 2007, any monies
164 repaid under this section to the General Fund Budget Reserve Account established in Section
165 63-38-2.5 to the State Disaster Recovery Restricted Account created in Section 53-2-403 .
166 Section 5. Section 53-2-104 is amended to read:
167 53-2-104. Division duties -- Powers.
168 (1) The division shall:
169 (a) respond to the policies of the governor and the Legislature;
170 (b) perform functions relating to emergency services and homeland security matters as
171 directed by the commissioner;
172 (c) prepare, implement, and maintain programs and plans to provide for:
173 (i) prevention and minimization of injury and damage caused by disasters;
174 (ii) prompt and effective response to and recovery from disasters;
175 (iii) identification of areas particularly vulnerable to disasters;
176 (iv) coordination of hazard mitigation and other preventive and preparedness measures
177 designed to eliminate or reduce disasters;
178 (v) assistance to local officials, state agencies, and the business and public sectors, in
179 developing emergency action plans;
180 (vi) coordination of federal, state, and local emergency activities;
181 (vii) coordination of emergency operations plans with emergency plans of the federal
182 government;
183 (viii) coordination of search and rescue activities;
184 (ix) coordination of rapid and efficient communications in times of emergency; and

185 (x) other measures necessary, incidental, or appropriate to this part; [and]
186 (d) coordinate with local officials, state agencies, and the business and public sectors in
187 developing, implementing, and maintaining a state energy emergency plan in accordance with
188 Section 53-2-110 [.]; and
189 (e) administer Part 4, Disaster Recovery Funding Act, in accordance with that part.
190 (2) The division may consult with the Legislative Management Committee, the Judicial
191 Council, and legislative and judicial staff offices to assist them in preparing emergency
192 succession plans and procedures under Title 63, Chapter 5b, Emergency Interim Succession
193 Act.
194 Section 6. Section 53-2-401 is enacted to read:
195 Part 4. Disaster Recovery Funding Act
196 53-2-401. Title.
197 This part is known as the "Disaster Recovery Funding Act."
198 Section 7. Section 53-2-402 is enacted to read:
199 53-2-402. Definitions.
200 (1) Unless otherwise defined in this section, the terms defined in Part 1, Emergency
201 Services and Homeland Security Act, shall have the same meaning for this part.
202 (2) As used in this part:
203 (a) "Average annual deposit" means an amount calculated by a local government as
204 follows:
205 (i) for each fiscal year beginning with the fiscal year the local government creates a
206 local fund, the local government shall:
207 (A) determine the amount transferred to the local fund;
208 (B) determine the total estimated revenues of the local government for that fiscal year
209 that are not restricted or otherwise obligated;
210 (C) divide the amount in Subsection (2)(a)(i)(A) with the amount in Subsection
211 (2)(a)(i)(B); and
212 (D) round the number in Subsection (2)(a)(i)(C) up to the nearest two decimal points;
213 (ii) the local government shall add together the amounts calculated for each fiscal year
214 under Subsection (2)(a)(i) for each fiscal year beginning with the fiscal year the local fund is
215 created and ending with the fiscal year immediately preceding the day on which an application

216 for a loan filed under Section 53-2-406 is submitted; and
217 (iii) the local government shall:
218 (A) divide the number calculated under Subsection (2)(a)(ii) by the number of fiscal
219 years counted;
220 (B) round the number calculated under this Subsection (2)(a)(iii) up to the nearest two
221 decimal points; and
222 (C) convert the number calculated under this Subsection (2)(a)(iii) to a percentage.
223 (b) Subject to Subsections (2)(b)(ii), "declared disaster" means one or more events:
224 (i) within the state;
225 (ii) that occur within a limited period of time;
226 (iii) that involve:
227 (A) a significant number of persons being at risk of bodily harm, sickness, or death; or
228 (B) a significant portion of real property at risk of loss;
229 (iv) that are sudden in nature and generally occur less frequently than every three years;
230 and
231 (v) that results in:
232 (A) the president of the United States declaring an emergency or major disaster in the
233 state;
234 (B) the governor declaring a state of emergency under Title 63, Chapter 5a, Disaster
235 Response and Recovery; or
236 (C) the chief executive officer of a local government declaring a local emergency under
237 Title 63, Chapter 5a, Disaster Response and Recovery.
238 (c) "Disaster recovery fund" means the State Disaster Recovery Restricted Account
239 created in Section 53-2-403 .
240 (d) "Disaster revolving loan fund" means the Local Government Disaster Revolving
241 Loan Fund created in Section 53-2-403 .
242 (e) "Emergency preparedness" means the following done for the purpose of being
243 prepared for an emergency as defined by the division by rule made in accordance with Title 63,
244 Chapter 46a, Utah Administrative Rulemaking Act:
245 (i) the purchase of equipment;
246 (ii) the training of personnel; or

247 (iii) the obtaining of a certification.
248 (f) (i) "Emergency disaster services" means the following that are of a temporary basis:
249 (A) evacuation;
250 (B) shelter;
251 (C) medical triage;
252 (D) emergency transportation;
253 (E) repair of infrastructure;
254 (F) safety services, including fencing or roadblocks;
255 (G) sandbagging;
256 (H) emergency debris removal;
257 (I) temporary bridges;
258 (J) procurement and distribution of food, water, or ice;
259 (K) procurement and deployment of generators;
260 (L) rescue or recovery; or
261 (M) services similar to those described in Subsections (2)(f)(i)(A) through (L), as
262 defined by the division by rule, that are generally required within the first 96 hours of a
263 declared disaster.
264 (ii) "Emergency disaster services" does not include:
265 (A) emergency preparedness; or
266 (B) notwithstanding whether or not a county participates in the Wildland Fire
267 Suppression Fund created in Section 65A-8-6.1 , any fire suppression or presuppression costs
268 that may be paid for from the Wildland Fire Suppression Fund if the county participates in the
269 Wildland Fire Suppression Fund.
270 (g) "Fund," when referring to a fund in the state disaster reserve, means the:
271 (i) disaster recovery fund; and
272 (ii) disaster revolving loan fund.
273 (h) "Local fund" means a local government disaster fund created in accordance with
274 Section 53-2-405 .
275 (i) "Local government" means a county, city, or town.
276 (j) "Percentage of allowed deposit" means a percentage calculated by dividing the
277 average annual deposit by ten.

278 (k) "Special fund" means a fund other than a general fund of a local government that is
279 created for a special purpose established under the uniform system of budgeting, accounting,
280 and reporting.
281 (l) "State disaster reserve" means the State Disaster Recovery Reserve created in
282 Section 53-2-403 .
283 Section 8. Section 53-2-403 is enacted to read:
284 53-2-403. State Disaster Recovery Reserve.
285 (1) (a) There is created a State Disaster Recovery Reserve consisting of the following
286 funds created by this section:
287 (i) the disaster recovery fund; and
288 (ii) the disaster revolving loan fund.
289 (b) The Legislature may, in legislation that includes an appropriation, transfer monies
290 between the funds:
291 (i) notwithstanding any other provision of this part; and
292 (ii) except that it may not transfer monies from the disaster revolving loan fund if it
293 would prevent the division from making payments to a local government under a loan issued
294 under this part before the transfer under this Subsection (1)(b).
295 (2) (a) One fund in the state disaster reserve is known as the "State Disaster Recovery
296 Restricted Account" which is created as a restricted account within the General Fund.
297 (b) The disaster recovery fund shall consist of:
298 (i) monies deposited into the disaster recovery fund in accordance with Section
299 53-2-102.5 ;
300 (ii) monies deposited into the disaster recovery fund in accordance with Section
301 63-38-2.7 ;
302 (iii) monies appropriated to the disaster recovery fund by the Legislature;
303 (iv) any other public or private monies received by the division that are:
304 (A) given to the division for purposes consistent with this Subsection (2); and
305 (B) deposited into the disaster recovery fund at the request of:
306 (I) the division; or
307 (II) the person giving the monies; and
308 (v) interest or other earnings derived from the disaster recovery fund.

309 (c) Monies in the disaster recovery fund may only be used as follows:
310 (i) without the monies being appropriated by the Legislature, in any fiscal year the
311 division may use the lesser of the following to fund, in accordance with Section 53-2-405 , costs
312 to the state of emergency disaster services in response to a declared disaster:
313 (A) $10,000,000;
314 (B) 33.3% of the balance in the disaster recovery fund in the fiscal year immediately
315 preceding that fiscal year; or
316 (C) the balance of disaster recovery fund in the fiscal year in which the monies are
317 used; and
318 (ii) subject to being appropriated by the Legislature, monies not described in
319 Subsection (2)(c)(i) may be used to fund the following related to a declared disaster:
320 (A) costs to the state directly related to a declared disaster that are not costs related to:
321 (I) emergency disaster services;
322 (II) emergency preparedness; or
323 (III) notwithstanding whether or not a county participates in the Wildland Fire
324 Suppression Fund created in Section 65A-8-6.1 , any fire suppression or presuppression costs
325 that may be paid for from the Wildland Fire Suppression Fund if the county participates in the
326 Wildland Fire Suppression Fund; or
327 (B) grants to local governments as provided for under Subsection 53-2-406 (8).
328 (3) (a) One fund in the state disaster reserve is known as the "Local Government
329 Disaster Revolving Loan Fund" which is created as an enterprise fund to operate as a revolving
330 loan fund.
331 (b) The division shall administer the disaster revolving loan fund in accordance with
332 Section 53-2-406 .
333 (c) The disaster revolving loan fund is not subject to Section 63A-3-205 .
334 (d) The disaster revolving loan fund shall consist of:
335 (i) amounts deposited into the disaster revolving loan fund in accordance with Section
336 63-38-2.7 ;
337 (ii) amounts paid into the disaster revolving loan fund by a local government in
338 accordance with Section 53-2-406 , including interest, charges, or penalties;
339 (iii) any monies appropriated to the disaster revolving loan fund by the Legislature;

340 (iv) any other public or private monies received by the division that are:
341 (A) given to the division for purposes consistent with this Subsection (3); and
342 (B) deposited into the disaster revolving loan fund at the request of:
343 (I) the division; or
344 (II) the person giving the monies; and
345 (v) interest or other earnings derived from the disaster revolving loan fund.
346 (e) Monies in the disaster revolving loan fund may only be used to:
347 (i) fund loans as provided in Section 53-2-406 ; and
348 (ii) pay for administrative costs of the Division of Finance in providing for the care,
349 custody, safekeeping, collection, and accounting of loans issued under Section 53-2-406 .
350 (4) The state treasurer shall invest monies in the funds in the state disaster reserve
351 according to Title 51, Chapter 7, State Money Management Act, except that the state treasurer
352 shall deposit all interest or other earnings derived from the funds into the fund that generates
353 the interest or other earnings.
354 (5) (a) Except as provided in Subsection (1), the monies in the state disaster reserve
355 may not be diverted, appropriated, or used for a purpose that is not listed in this section for that
356 fund.
357 (b) Notwithstanding Section 63-38-3.6 , the Legislature may not appropriate monies
358 from the state disaster reserve to eliminate or otherwise reduce an operating deficit if the
359 monies appropriated from the state disaster reserve are used for a purpose other than one listed
360 in this section.
361 (c) The Legislature may not amend the purposes for which monies in the state disaster
362 reserve may be used except by the affirmative vote of two-thirds of all the members elected to
363 each house.
364 Section 9. Section 53-2-404 is enacted to read:
365 53-2-404. Emergency disaster services.
366 (1) Subject to this section and Section 53-2-403 , the division shall use monies
367 described in Subsection 53-2-403 (2)(c)(i) to fund costs to the state of emergency disaster
368 services.
369 (2) Monies may be paid by the division under this section to government entities and
370 private persons providing emergency disaster services are subject to Title 63, Chapter 56, Utah

371 Procurement Code.
372 Section 10. Section 53-2-405 is enacted to read:
373 53-2-405. Local government disaster funds.
374 (1) (a) Subject to this section and notwithstanding anything to the contrary contained in
375 Title 10, Utah Municipal Code, or Title 17, Counties, the legislative body of a local