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Committee approves creation of two disaster-recovery funds, including $110M interest-relief proposal and $100M response fund
Summary
Senate Bill 6003 passed the committee to create two new funds—a $110 million interest-repayment fund to help local governments manage recovery loan costs and a $100 million response and recovery fund to be available for future disasters; sponsors said some seed money has already been designated by executive action.
The State and Local Government Committee voted to advance Senate Bill 6003, which would establish two funds to assist local governments with disaster recovery: an interest-repayment fund to subsidize interest on recovery loans and a response-and-recovery fund to provide a standing pool of resources for future disasters.
Leader Johnson told the committee the interest-payment fund would allow the state to assist local governments by covering interest costs on loans (up to 5% for a period of three years) to help manage cash flow while localities await federal reimbursements. "The governor's proposing $110,000,000 in the interest repayment fund," Johnson said. He also described a separate response-and-recovery fund the governor proposes at $100,000,000 to sit indefinitely so that money is available quickly when disasters occur.
Johnson noted the administration had already used $100,000,000 from TennCare reserves by executive order earlier in the fall to create an interest-free revolving loan fund to provide immediate liquidity for water, sewer and debris removal. He said the proposed funds in SB 6003 would create standing resources for current and future disaster response and recovery.
Senator Wally offered an amendment about municipal depreciation and grant use but withdrew it after discussions with administration and comptroller staff who said the bill's language and existing comptroller authority would permit municipalities to manage depreciation questions subject to audit.
The roll-call vote was unanimous; the committee chair announced nine ayes and the bill will move to finance. Sponsors emphasized the need to act quickly to provide liquidity to local governments that face long FEMA reimbursement timelines and significant recovery needs.
Votes at a glance: Senate Bill 6003 — Moved by Chairman Briggs; seconded by Senator Hatcher. Committee vote: 9 ayes, 0 no. Outcome: approved and moved to finance.
