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Senate adopts conference report increasing disaster trust fund draw limits and creating low-interest revolving loan option
Summary
The Mississippi Senate adopted the conference report on House Bill 1646 to raise per-event and annual draw limits from the disaster trust fund and to create a revolving loan program with a 3% interest cap that becomes payable only after FEMA reimbursements are processed.
The Mississippi Senate on the morning calendar adopted a conference report on House Bill 1646 that raises emergency draw limits from the state disaster trust fund and establishes a revolving loan fund to speed local recovery after disasters.
Senator Delano, who explained the bill on the floor, told colleagues the measure increases the per-event draw limit from $1,000,000 to $2,500,000 and raises the annual cap on amounts the Department of Finance and Administration may pull from stabilization funds from $2,000,000 to $5,000,000. "Originally, the amount was 1,000,000. We're moving that to $2,500,000 for an event, and we've capped the annual expenditures ... from 2,000,000 to $5,000,000," Delano said.
The conference report also creates a revolving loan mechanism intended to get money to cities and counties quickly when federal reimbursement (FEMA) is pending. Delano said the Legislature negotiated a 3% interest rate for loans that become due only if, after reimbursements and appeals, a local jurisdiction still owes on a loan. "This is a 0% interest rate for the time that people are waiting for FEMA to pay back," Delano said. "The only time that we trigger ... this 3% calculation is when after all of the reimbursements are made to the local jurisdiction there may be a loan amount that is outstanding." He added the 3% rate was lower than the 12% proposed by the governor.
Senator Sparks pressed on borrower protections and security. "The borrower has to pledge revenue streams if the payment is not made. Is that correct?" Sparks asked. Delano and staff confirmed that local entities must pledge a revenue source in loan documents — for cities typically a sales tax and for counties often a use tax — as part of the loan agreement.
Senator Whaley asked for an example of a FEMA deobligation that could leave a jurisdiction liable. Delano cited debris-removal paperwork and clerical or documentation errors that can cause FEMA to deny particular costs, triggering the loan fallback and possible appeals.
Senators also asked whether the trust fund contains appropriated money; Delano said the Legislature had previously placed a $20 million appropriation into the fund to ensure availability for matching and response needs and that the bill allows the agency to accelerate up to $2,500,000 per event from working cash stabilization or other DFA-accessible funds.
After extended floor questions and explanations, the Senate adopted the conference report by use of the morning roll call. No detailed roll-call tally was printed on the floor; the chair announced the bill passed by that procedure.
What happens next: the measure returns to its final enrollment steps per legislative procedure. Sponsors said the change is intended to speed relief to local governments during emergency response while limiting the state's exposure with pledged revenue and a capped interest rate.
