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H.B. 240





Sponsor: Ron Bigelow

             6      LONG TITLE
             7      General Description:
             8          This bill establishes a disaster loan program.
             9      Highlighted Provisions:
             10          This bill:
             11          .    authorizes the Division of Emergency Services and Homeland Security to make
             12      loans to counties that are affected by disasters;
             13          .    establishes loan requirements; and
             14          .    establishes a mechanism for requesting the loan and for other political subdivisions
             15      within the county to participate in the loan program.
             16      Monies Appropriated in this Bill:
             17          This bill appropriates $25,000,000 from the General Fund to the Division of Emergency
             18      Services and Homeland Security for fiscal year 2004-05 only, to fund the loan program.
             19      Other Special Clauses:
             20          This bill provides an immediate effective date.
             21      Utah Code Sections Affected:
             22      ENACTS:
             23          53-2-102.5, Utah Code Annotated 1953
             25      Be it enacted by the Legislature of the state of Utah:
             26          Section 1. Section 53-2-102.5 is enacted to read:
             27          53-2-102.5. Loan program for disasters.

             28          (1) The director may make loans to local governments as provided in this section
             29      when:
             30          (a) the governor has issued a proclamation declaring a state of emergency because of a
             31      natural disaster;
             32          (b) the Legislature has appropriated monies to the division explicitly for that purpose;
             33      and
             34          (c) threats to the public health and safety, or damages to flood control systems or the
             35      transportation infrastructure exist.
             36          (2) (a) In order to qualify for loans under this section, the county and each political
             37      subdivision within the county shall:
             38          (i) pass a resolution that:
             39          (A) requests a loan;
             40          (B) identifies the loan amount that is requested; and
             41          (C) describes, in as much detail as possible, how the entity will spend the loan
             42      proceeds; and
             43          (ii) complete the application for funds provided by the director.
             44          (b) Each political subdivision other than the county shall submit a copy of its
             45      resolution and application to the county legislative body.
             46          (c) The county legislative body shall file with the director:
             47          (i) a letter identifying the total loan amount sought by the county and its political
             48      subdivisions; and
             49          (ii) a copy of the county's resolution and application and a copy of the resolution and
             50      application of each political subdivision seeking loan funds.
             51          (3) (a) To the extent appropriated funds are available, the director shall prepare a
             52      promissory note lending the county the total amount requested by the county for itself and its
             53      political subdivisions.
             54          (b) The director shall ensure that the promissory note contains:
             55          (i) an annual percentage rate of 2%;
             56          (ii) a requirement that the principal and interest on the note are due on the May 1 in the
             57      calendar year after the year in which the note is signed;
             58          (iii) terms allowing the county to prepay some or all of the note's principal, interest, or

             59      both before the date that the note is due; and
             60          (iv) terms that limit the use of note proceeds to the repair and reconstruction of
             61      infrastructures owned by local governments located within the county.
             62          (c) After an authorized representative of the county signs the promissory note, the
             63      director shall disburse the loan funds to the county.
             64          (4) The county and any participating political subdivision may not use loan proceeds
             65      for costs:
             66          (a) that could have been paid from other available funding sources if the county or
             67      participating political subdivision had applied for those funds; or
             68          (b) to compensate private businesses or private persons for damages incurred in the
             69      disaster by those private businesses or persons.
             70          (5) After receiving the loan proceeds from the state, the county shall, before disbursing
             71      loan proceeds to the other county political subdivisions, obtain signed promissory notes from
             72      each participating political subdivision that include terms substantially similar to the terms
             73      contained in the promissory note signed by the county.
             74          (6) The county shall, on behalf of itself and any participating political subdivision, file
             75      a report with the director every three months, that:
             76          (a) specifies each project on which loan funds were expended, classified by the name
             77      of the local entity that expended the funds; and
             78          (b) identifies the amount expended for that project.
             79          (7) If the county or one of its participating political subdivisions has not expended or
             80      committed the funds by the date that the promissory note is due, the county or participating
             81      political subdivision shall return the unused or uncommitted funds to the director for redeposit
             82      into the fund.
             83          Section 2. Appropriation.
             84          (1) There is appropriated $25,000,000 from the General Fund, for fiscal year 2004-05
             85      only, to the Division of Emergency Services and Homeland Security for the loan program
             86      created by Section 53-2-102.5 .
             87          (2) It is the intent of the Legislature that, because of the flooding of the Virgin and
             88      Santa Clara rivers in January of 2005, these monies be used for loans to the affected
             89      Washington County entities in order to:

             90          (a) preserve the public health and safety;
             91          (b) reestablish the tourism industry;
             92          (c) repair and stabilize flood control and management systems and facilities;
             93          (d) repair and rebuild the damaged transportation infrastructure; and
             94          (e) ensure that the state complies with national and state environmental standards.
             95          (3) It is the intent of the Legislature that this $25,000,000 appropriation is nonlapsing.
             96          Section 3. Effective date.
             97          If approved by two-thirds of all the members elected to each house, this bill takes effect
             98      upon approval by the governor, or the day following the constitutional time limit of Utah
             99      Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,
             100      the date of veto override.

Legislative Review Note
    as of 1-28-05 9:54 AM

Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.

Office of Legislative Research and General Counsel

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