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TEMA rules to implement $5M resilient Tennessee revolving loan fund advance with positive recommendation
Summary
TEMA described rules to implement the Resilient Tennessee revolving loan fund, capitalized with $5 million and authorized to charge up to 1% interest; the committee gave the rule a positive recommendation after questions about interest, defaults and duplication of federal benefits.
Patrick Sheehan, director for the Department of Military (TEMA), told lawmakers the rules implement the 2024 Resilient Tennessee revolving loan fund and that the General Assembly provided $5,000,000 to capitalize the program. He said the fund is intended as a tool to make capital available to eligible jurisdictions to mitigate disasters and increase resilience.
Members pressed on the fiscal effects: Representative Fritsch asked whether the 1% interest would generate revenue for TEMA and was told interest would return to the fund to support additional loans. When asked what happens if a jurisdiction cannot pay, Deputy General Counsel Dawn Cummings said the review committee can set rates between 0 and 1% and that, if a borrower defaults, the state could withhold tax-revenue sharing. Sheehan described the program as a bridging mechanism used after Hurricane Helene and said the approach was a proposal from the administration to avoid duplication of federal benefits while providing capital quickly.
The committee voted to advance the package with a positive recommendation in both chambers: the senate recorded seven ayes and one no; the house voice vote registered the ayes and the rule moved forward.
