Finance Committee agrees to seek language change on H 398 disaster loan eligibility for businesses

The Finance Committee discussed proposed changes to H 398, a bill that would create a disaster-recovery revolving loan fund administered through VITA, and agreed to ask the House to alter language that would bar businesses from accessing the fund if they had already received state disaster recovery aid.

The change under discussion matters because the bill as amended by the Senate would limit a business’s ability to receive a VITA loan if it previously obtained state disaster financial assistance for the same event, while the committee’s preferred approach would require VITA to consider other aid but not automatically disqualify applicants.

Karen Woods, legislative counsel, outlined the Senate amendment and a further proposed amendment from the House. Woods said one of the larger changes in the Senate version is creation of a disaster recovery revolving loan fund for businesses, and that the Senate added a subsection that would make “a business shall not be eligible for an influence from the disaster recovery loan fund established under this subchapter if the business received disaster recovery financial assistance from the state for the same disaster event.”

Committee members noted the fund as drafted would be seeded with about $2,000,000 and would be intended to serve all businesses, including agricultural and forest-products enterprises. The chair of the Finance Committee expressed concern that a strict prohibition could be “overly punitive,” noting situations such as rapidly localized agricultural losses where businesses might need layered support: “Maybe they’re not the priority, but they had huge losses. Maybe they are the priority,” the chair said, describing why VITA should be allowed discretion.

Members compared H 398 to S 60, a separate bill that creates a farm security fund providing grants that reimburse up to 50% of uninsured or otherwise uncovered losses. Woods said S 60 already factors other sources of recovery into its award calculations and that committee members worried a hard prohibition in H 398 could prevent necessary combinations of loans and grants that together allow recovery.

The committee agreed to request a concurrence with a further proposal of amendment replacing the automatic bar with language directing VITA to consider whether an applicant has received other forms of disaster-related financial assistance before making an award. Committee members indicated a member would stand on the floor the following day to explain the discussion and request the changed language.

The discussion distinguished between the bill’s current strict prohibition language and the committee’s preferred approach to preserve VITA discretion; no formal roll-call vote was recorded in the transcript. The committee’s direction is to seek the amendment that requires consideration of other aid rather than an outright prohibition, and to present that concurrence on the floor the next day.