H.B. 390

1

STATE DISASTER CONTINGENCY FUNDING
2 2006 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Curtis Oda
5 Senate Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill creates a State Disaster Contingency Fund to be managed by the Division of
10 Emergency Services and Homeland Security.
11 Highlighted Provisions:
12 This bill:
13 . provides that all principal and interest paid by local governments that have received
14 a loan under the state loan program for disasters be paid into the State Disaster
15 Contingency Fund;
16 . removes provisions permitting additional loans under the state loan program for
17 disasters;
18 . establishes the State Disaster Contingency Fund and provides that the fund shall be
19 administered by the Division of Emergency Services and Homeland Security;
20 . provides that the fund may be used for:
21 . state emergencies and disasters; and
22 . loans to counties and municipalities for local emergencies and disasters; and
23 . provides the division with rulemaking power to set the terms, conditions, and
24 interest rates for providing loans from the fund to counties and municipalities.
25 Monies Appropriated in this Bill:
26 None
27 Other Special Clauses:

28 None
29 Utah Code Sections Affected:
30 AMENDS:
31 53-2-102.5, as enacted by Chapter 1, Laws of Utah 2005
32 53-2-104, as last amended by Chapter 214, Laws of Utah 2005
33 ENACTS:
34 53-2-102.7, Utah Code Annotated 1953
35
36 Be it enacted by the Legislature of the state of Utah:
37 Section 1. Section 53-2-102.5 is amended to read:
38 53-2-102.5. Loan program for disasters.
39 (1) The director may make loans to local governments as provided in this section
40 when:
41 (a) the governor has issued a proclamation declaring a state of emergency because of a
42 natural disaster;
43 (b) the Legislature has appropriated monies to the [division explicitly for that purpose]
44 State Disaster Contingency Fund created under Section 53-2-102.7 ; and
45 (c) threats to the public health and safety, or damages to flood control systems or the
46 transportation infrastructure exist.
47 [(2) (a) In order to qualify for loans under this section, the county and each political
48 subdivision within the county shall:]
49 [(i) pass a resolution that:]
50 [(A) requests a loan;]
51 [(B) identifies the loan amount that is requested; and]
52 [(C) describes, in as much detail as possible, how the entity will spend the loan
53 proceeds; and]
54 [(ii) complete the application for funds provided by the director.]
55 [(b) Each political subdivision other than the county shall submit a copy of its
56 resolution and application to the county legislative body.]
57 [(c) The county legislative body shall file with the director:]
58 [(i) a letter identifying the total loan amount sought by the county and its political

59 subdivisions; and]
60 [(ii) a copy of the county's resolution and application and a copy of the resolution and
61 application of each political subdivision seeking loan funds.]
62 [(3) (a) To the extent appropriated funds are available, the director shall prepare a
63 promissory note lending the county the total amount requested by the county for itself and its
64 political subdivisions.]
65 [(b) The director shall ensure that the promissory note contains:]
66 [(i) an annual percentage rate of 2%;]
67 [(ii) a requirement that the principal and interest on the note are due on the May 1 in
68 the calendar year after the year in which the note is signed;]
69 [(iii) terms allowing the county to prepay some or all of the note's principal, interest, or
70 both before the date that the note is due;]
71 [(iv) terms that require repayment]
72 (2) Repayment of the principal and interest on [the] a note issued under this section
73 shall be made to the [General Fund Budget Reserve Account] State Disaster Contingency Fund
74 established [in] under Section [ 63-38-2.5 ; and] 53-2-102.7 .
75 [(v) terms that limit the use of note proceeds to the repair and reconstruction of
76 infrastructures owned by local governments located within the county.]
77 [(c) After an authorized representative of the county signs the promissory note, the
78 director shall disburse the loan funds to the county.]
79 [(4) The] (3) A county and any participating political subdivision that has received
80 loan funds under this section may not use loan proceeds for costs:
81 (a) that could have been paid from other available funding sources if the county or
82 participating political subdivision had applied for those funds; or
83 (b) to compensate private businesses or private persons for damages incurred in the
84 disaster by those private businesses or persons.
85 [(5) After] (4) A county that has received loan funds under this section, shall, after
86 receiving the loan proceeds from the state, [the county shall,] and before disbursing loan
87 proceeds to the other county political subdivisions, obtain signed promissory notes from each
88 participating political subdivision that include terms substantially similar to the terms
89 contained in the promissory note signed by the county.

90 [(6) The] (5) A county that has received loan funds under this section shall, on behalf
91 of itself and any participating political subdivision, file a report with the director every three
92 months, that:
93 (a) specifies each project on which loan funds were expended, classified by the name
94 of the local entity that expended the funds; and
95 (b) identifies the amount expended for that project.
96 [(7)] (6) If the county that has received loan funds under this section, or one of its
97 participating political subdivisions, has not expended or committed the funds by the date that
98 the promissory note is due, the county or participating political subdivision shall return the
99 unused or uncommitted funds to the director for redeposit into the [fund] State Disaster
100 Contingency Fund created under Section 53-2-102.7 .
101 Section 2. Section 53-2-102.7 is enacted to read:
102 53-2-102.7. Establishing the State Disaster Contingency Fund -- Providing for
103 deposits and expenditures from the fund.
104 (1) There is created a restricted special revenue fund to be known as the State Disaster
105 Contingency Fund.
106 (2) The fund shall be administered by the Division of Emergency Services and
107 Homeland Security.
108 (3) The purpose of the fund is to provide:
109 (a) monies to respond to state of emergencies and disasters; and
110 (b) loans, in relation to local emergencies and local disasters, to a county or
111 municipality under the conditions, terms, and interest rates established under this part.
112 (4) The fund shall contain:
113 (a) all monies appropriated to it by the Legislature; and
114 (b) all interest and principal paid in association with repayment of a loan made under
115 this section or Section 53-2-102.5 .
116 (5) All interest generated by the State Disaster Contingency Fund shall be deposited
117 into the fund.
118 (6) Any unallocated balance in the fund at the end of a fiscal year shall be nonlapsing.
119 (7) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
120 Division of Emergency Services and Homeland Security shall make rules for the conditions,

121 terms, and interest rates for loans made from the State Disaster Contingency Fund created
122 under this part.
123 Section 3. Section 53-2-104 is amended to read:
124 53-2-104. Division duties -- Powers.
125 (1) The division shall:
126 (a) respond to the policies of the governor and the Legislature;
127 (b) perform functions relating to emergency services and homeland security matters as
128 directed by the commissioner;
129 (c) prepare, implement, and maintain programs and plans to provide for:
130 (i) prevention and minimization of injury and damage caused by disasters;
131 (ii) prompt and effective response to and recovery from disasters;
132 (iii) identification of areas particularly vulnerable to disasters;
133 (iv) coordination of hazard mitigation and other preventive and preparedness measures
134 designed to eliminate or reduce disasters;
135 (v) assistance to local officials, state agencies, and the business and public sectors, in
136 developing emergency action plans;
137 (vi) coordination of federal, state, and local emergency activities;
138 (vii) coordination of emergency operations plans with emergency plans of the federal
139 government;
140 (viii) coordination of search and rescue activities;
141 (ix) coordination of rapid and efficient communications in times of emergency; and
142 (x) other measures necessary, incidental, or appropriate to this part; [and]
143 (d) coordinate with local officials, state agencies, and the business and public sectors in
144 developing, implementing, and maintaining a state energy emergency plan in accordance with
145 Section 53-2-110 [.]; and
146 (e) manage and administer the State Disaster Contingency Fund established under
147 Section 53-2-102.7 .
148 (2) The division may consult with the Legislative Management Committee, the Judicial
149 Council, and legislative and judicial staff offices to assist them in preparing emergency
150 succession plans and procedures under Title 63, Chapter 5b, Emergency Interim Succession
151 Act.

Legislative Review Note
as of 2-6-06 11:50 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