House File 271 - Introduced
HOUSE FILE
BY PAULSEN
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act creating an evergreen account in the Iowa economic
2 emergency fund for making loans to governmental subdivisions
3 for payment of disaster=related obligations and expenditures,
4 making an appropriation, and providing effective and
5 applicability date provisions.
6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. Section 8.55, Code 2009, is amended by adding
1 2 the following new subsection:
1 3 NEW SUBSECTION. 3A. a. For the purposes of this
1 4 subsection, "governmental subdivision" means the same as
1 5 defined in section 29C.20.
1 6 b. An evergreen account is created in the Iowa economic
1 7 emergency fund. If approved by the executive council based
1 8 upon the executive council's determination of a statewide need
1 9 for disaster=related loans from the account, not more than one
1 10 hundred fifty million dollars of the unencumbered, unobligated
1 11 balance within the emergency fund may be credited to the
1 12 evergreen account within a fiscal year. Moneys in the account
1 13 are appropriated to the department of management for making
1 14 loans to governmental subdivisions in accordance with this
1 15 subsection.
1 16 c. A loan made to a governmental subdivision from the
1 17 evergreen account must meet one or more of the following
1 18 requirements:
1 19 (1) The governmental subdivision applied for and met the
1 20 requirements to receive a disaster=related loan from the
1 21 contingent fund under section 29C.20, subsection 1, paragraph
1 22 "a", subparagraph (6), but the application was rejected or the
1 23 governmental subdivision elected not to proceed due to one or
1 24 more of the following reasons:
1 25 (a) The aggregate funding limitation on such loans had
1 26 been reached.
1 27 (b) The loan amount applied for was in excess of
1 28 seventy=five percent of the showing of obligations and
1 29 expenditures but the executive council determined that the
1 30 financial circumstances of the governmental subdivision
1 31 justify making an exception.
1 32 (c) The governmental subdivision is not able to repay the
1 33 loan in one year or less by applying the maximum annual
1 34 emergency levy authorized by section 24.6, or by the
1 35 appropriate levy authorized for a governmental subdivision not
2 1 covered by section 24.6. If a loan is authorized under this
2 2 subparagraph subdivision (c), the repayment term shall not
2 3 exceed five years.
2 4 (2) The executive council has determined through
2 5 application information provided by a governmental subdivision
2 6 that there is a disaster=related loss or damage within the
2 7 geographic area encompassed by the governmental subdivision
2 8 that is more than reasonably likely to be mitigated through a
2 9 public or private funding source, that the governmental
2 10 subdivision is able to repay the loan if the anticipated
2 11 funding source becomes unavailable, and that significant costs
2 12 can be avoided by using the loan to mitigate the loss in a
2 13 timely manner rather than waiting until the public or private
2 14 funding source becomes available.
2 15 d. A loan made under this subsection shall be without
2 16 interest. Loan repayment proceeds shall be credited to the
2 17 Iowa economic emergency fund. The executive council shall
2 18 adopt rules establishing procedural requirements for
2 19 administering loans under this subsection.
2 20 Sec. 2. EFFECTIVE AND APPLICABILITY DATE. This Act, being
2 21 deemed of immediate importance, takes effect upon enactment
2 22 and applies to disasters affecting governmental subdivisions,
2 23 as defined by this Act, which occurred on or after May 15,
2 24 2008.
2 25 EXPLANATION
2 26 This bill creates an evergreen account in the Iowa economic
2 27 emergency fund for making loans to governmental subdivisions
2 28 for payment of disaster=related obligations and expenditures.
2 29 Up to $150 million of moneys available in the fund can be
2 30 credited to the account in a fiscal year if the executive
2 31 council determines there is a statewide need for loans from
2 32 the account. The department of management shall receive a
2 33 standing appropriation from the account to make loans to
2 34 governmental subdivisions in accordance with the bill's
2 35 requirements.
3 1 The definition of the term "governmental subdivision" in
3 2 Code section 29C.20, relating to the contingent fund for
3 3 disaster relief, is incorporated by reference. The term is
3 4 defined to mean any political subdivision of this state.
3 5 To be eligible for a loan from the evergreen account, a
3 6 governmental subdivision must have applied for and met the
3 7 requirements under Code section 29C.20, for a loan from the
3 8 contingent fund. These requirements include a showing of
3 9 obligations and expenditures necessitated by an actual or
3 10 potential disaster along with further information the
3 11 executive council requires, approval is at the discretion of
3 12 the executive council, the loan amount is limited to 75
3 13 percent of the showing, and the loan must either be repaid by
3 14 an annual municipality emergency levy or other levy authorized
3 15 for the governmental subdivision.
3 16 Once the contingent fund loan requirements are met,
3 17 evergreen account loan approval is contingent upon the
3 18 contingent fund loan having been rejected because the
3 19 statutory $1 million aggregate loan authority under the
3 20 contingent fund has been reached or the loan amount is more
3 21 than the statutory maximum of 75 percent of the anticipated
3 22 expenditures but the executive council determines that making
3 23 this exception is justified. A third provision is applicable
3 24 when repayment of the loan using emergency levy authority, as
3 25 described in the contingent fund provisions, is anticipated to
3 26 take more than one year.
3 27 The executive council is also authorized to make an
3 28 evergreen account loan when it is determined that there is a
3 29 disaster=related loss or damage within the geographic area
3 30 encompassed by the governmental subdivision that is more than
3 31 reasonably likely to be mitigated through a public or private
3 32 funding source, that the governmental subdivision is able to
3 33 repay the loan if the anticipated funding source becomes
3 34 unavailable, and that significant costs can be avoided by
3 35 proceeding with the loan to mitigate the loss in a timely
4 1 manner rather than waiting until the public or private funding
4 2 source becomes available.
4 3 The loans are to be made without interest (same as provided
4 4 in current law for loans made from the contingent fund). Loan
4 5 repayments are to be credited to the Iowa economic emergency
4 6 fund. The executive council is required to adopt rules
4 7 establishing procedural requirements for loans.
4 8 The bill takes effect upon enactment and applies
4 9 retroactively to disasters affecting governmental
4 10 subdivisions, as defined by the bill, which occurred on or
4 11 after May 15, 2008.
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