THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY BAKER, BOBACK, STEPHENS, KORTZ, MAJOR AND SAINATO, SEPTEMBER 26, 2011

REFERRED TO COMMITTEE ON VETERANS AFFAIRS AND EMERGENCY PREPAREDNESS, SEPTEMBER 26, 2011  

AN ACT

Amending Title 35 (Health and Safety) of the Pennsylvania

Consolidated Statutes, establishing the State Disaster

Assistance Loan Program; providing for powers and duties of

the Pennsylvania Emergency Management Agency and the

Pennsylvania Housing Finance Agency; establishing the State

Disaster Assistance Loan Fund; providing for funding for the

State Disaster Assistance Loan Program; and making an

appropriation.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Chapter 73 of Title 35 of the Pennsylvania

Consolidated Statutes is amended by adding a subchapter to read:

SUBCHAPTER G

DISASTER ASSISTANCE LOANS

Sec.

7391.  Legislative findings and purpose.

7392.  Definitions.

7393.  State Disaster Assistance Loan Program.

7394.  Request for loan authorization.

7395.  Application for and issuance of loan.

7396.  Funding.

§ 7391.  Legislative findings and purpose.

(a)  Findings.--The General Assembly finds as follows:

(1)  This Commonwealth, because of its topography,

development and economic base, is susceptible to a wide range

of disasters and emergencies, including fire, flood and wind

and technological accidents and emergencies, that threaten

public health and safety as well as the economic well-being

of the citizens of this Commonwealth.

(2)  The violent forces of nature and unpredictable man-

made accidents that occur in this Commonwealth cause damage

to public and private property and create conditions that

force families from their homes. These disasters and

emergencies threaten public health, safety and the general

welfare of affected communities.

(3)  Disasters which have impact on a large area and

population often qualify for various forms of aid from the

Federal Government to help repair and replace damaged

residences. More localized disasters create identical serious

hardship and loss for those families directly affected, but

Federal assistance is not made available to help with

recovery.

(4)  As a result of extensive repair costs resulting from

disaster and emergency damages, homeowners without adequate

insurance coverage may be unable to repair their damaged

property.

(5)  Failure to expeditiously repair disaster and

emergency damages may result in a degradation of the quality

of the community and the creation of unsafe conditions.

(b)  Purpose.--It is the purpose of this subchapter to create

a State program to provide limited assistance to homeowners

directly affected by disasters and emergencies. State assistance

will be limited to loans to homeowners to help repair damage to

primary residences. Loans will be made available by the State

when community conditions exceed a clearly established threshold

of loss and impact.

§ 7392.  Definitions.

The following words and phrases when used in this subchapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Fund."  The State Disaster Assistance Loan Fund established

under this subchapter.

"Program."  The State Disaster Assistance Loan Program

establsihed under this subchapter.

§ 7393.  State Disaster Assistance Loan Program.

(a)  Program established.--The State Disaster Assistance Loan

Program is establsihed to provide disaster assistance loans to

homeowners under the provisions of this subchapter.

(b)  Responsibilities of the agency.--The agency is

authorized to do the following:

(1)  Develop the program with the Pennsylvania Housing

Finance Agency and other appropriate State and county

government representatives to provide loans to homeowners

directly affected by disasters and emergencies when the

impact upon the community exceeds an established threshold of

loss and impact.

(2)  Authorize the issuance of State disaster assistance

loans to homeowners after review and approval of the county's

written request, submission of a detailed damage survey

report, compliance with necessary public-funding requirements

and certification that no other public funded program exists

to help affected homeowners.

(3)  Develop and conduct training programs for State and

county officials and staff to implement the State Disaster

Assistance Loan Program. Training shall include program

administration, damage assessment documentation and reporting

and mitigation identification and implementation.

§ 7394.  Request for loan authorization.

(a)  County requests.--County emergency management

coordinators, in coordination with disaster-affected municipal

elected officials and local emergency management coordinators,

shall submit to the agency a request to make State disaster

assistance loans available to disaster-affected homeowners in

the county. As required by section 7504(b) (relating to

coordination, assistance and mutual aid), all requests shall be

based on a finding that the disaster is of such magnitude and

severity that State disaster assistance is necessary to

alleviate the hardships caused to the affected homeowners and

that no other government-funded programs exist or existing

programs have been exhausted.

(b)  Program eligibility threshold.--In order for the agency

to authorize State disaster assistance loans, the county must

submit a detailed written damage survey report which identifies

by name and address each residential homeowner who has suffered

an uninsured loss in excess of 40% of the predisaster fair

market value of the home. In order for the program to be

implemented, there must be within that county at least ten

primary residences of either a single-family residential,

condominium, apartment or mobile home nature which have suffered

damage or loss directly caused by the identified disaster or

emergency. Camps, cottages or other types of secondary

residences are not eligible for disaster loan assistance.

Applicants must show proof that banks and other financial

institutions will not grant a loan for this purpose or that the

loan repayment amount is beyond the capability of the homeowner.

In its written request, the county shall also furnish

information requested by the agency concerning the nature of the

disaster or emergency that impacted the county. The county must

also certify in its report that current county and affected

political subdivision emergency management plans are current and

have been activated in response to the disaster or emergency.

The agency shall review the effectiveness of the plans and

response and may require changes as it deems necessary in plans

and procedures. The changes shall be made by local and county

governments before any loans may be authorized.

§ 7395.  Application for and issuance of loan.

(a)  Review of county requests for assistance.--The agency

shall review and approve all county requests for loan

assistance. The agency shall then notify the Pennsylvania

Housing Finance Agency of all approved county requests. The

Pennsylvania Housing Finance Agency shall then implement the

loan application, review, approval and award process for the

individual residential homeowners identified in the county's

damage survey report.

(b)  Loan application and award.--All loans issued under the

program are supplemental to a homeowner's residential insurance

coverage. This program may be authorized when the magnitude and

severity of the disaster or emergency meets or exceeds program

eligibility standards as set forth in section 7394(b) (relating

to request for loan authorization). All requirements of the loan

application and award process shall be developed by the agency

and the Pennsylvania Housing Finance Agency. The Pennsylvania

Housing Finance Agency shall develop regulations to implement

the loan requirements. All applications for loans must be

received by the Pennsylvania Housing Finance Agency within 60

days after the agency has approved the county damage survey

report and request for assistance.

(c)  Homeowner eligibility.--A homeowner residing within a

county or counties designated by the agency as a State disaster

emergency area who suffered disaster-related damage to a primary

residence in excess of the amount described in section 7394 may

apply for a State disaster assistance loan.

(d)  Interest.--The rate of interest on State disaster

assistance loans shall be set by the Pennsylvania Housing

Finance Agency in its regulations. Loans shall be secured by

mortgages on the real estate and shall be repaid in accordance

with promissory notes which establish monthly loan principal and

interest payments.

(e)  Insurance requirement.--As a condition of eligibility

for a State disaster assistance loan, the loan recipient shall

agree to purchase and maintain insurance coverage in an amount

equal to the value of the rebuilt or replaced primary residence

for which a loan is awarded. The insurance shall include full

protection against all natural hazards, including fire, wind

and, where appropriate, flood damage. All primary residences

located within a designated 100-year flood plain must include

flood insurance. During the term of the loan, each loan

recipient must provide written verification of appropriate and

adequate insurance protection in the form of either premium

statements, policy renewal notices or copies of the actual

insurance policy to the Pennsylvania Housing Finance Agency. The

insurance policy must list the Pennsylvania Housing Finance

Agency as the loss payee of the policy. A homeowner's failure to

maintain appropriate insurance protection shall result in the

loan being declared in default.

(f)  Limitations.--The following limitations shall apply to

the program:

(1)  A loan shall not be made to a homeowner who is

eligible to receive assistance from the Federal Government

under any Federal disaster assistance and recovery program. A

homeowner who has received Federal aid in the maximum amount

allowable under Federal disaster relief law and continues to

have significant disaster-related damage to a primary

residence making the home uninhabitable may be eligible to

apply for a State disaster assistance loan.

(2)  Loans shall be limited to homeowner-occupied primary

residences that are located within a county that the agency

has designated as a disaster emergency area.

(3)  Loans are limited to providing for essential repairs

to the primary residence which are needed to make the

residence safe, sanitary and habitable for occupancy based on

applicable State and local building or occupancy codes. Loans

shall not be authorized for improvements to the value of the

residence or for other purposes not authorized by this

section.

(4)  Repairing or replacing loss or damage to

landscaping, shrubs, trees, out-buildings or any other

nonresidential structures which are not physically attached

to the primary residence are not eligible costs for a State

disaster assistance loan.

(5)  Loans may be provided for disaster mitigation on the

property if approved by the agency.

(6)  A homeowner may only apply for one disaster

assistance loan at a time. While a homeowner's disaster

assistance loan is in effect, the same homeowner shall be

ineligible for another loan under the program. If the

homeowner's primary residence is damaged in a subsequent

disaster while the disaster assistance loan is in effect, the

required insurance coverage shall be considered adequate for

repairs to the residence.

(7)  The maximum amount of a loan is $50,000. The minimum

amount of any loan is $1,000.

§ 7396.  Funding.

(a)  Appropriation.--The sum of $1,000,000 is appropriated to

the Pennsylvania Housing Finance Agency.

(b)  State Disaster Assistance Loan Fund.--The sum

appropriated shall be deposited in a State Disaster Assistance

Loan Fund which is established as a restricted receipts account

in the State Treasury. Moneys in the fund shall be used solely

for the purpose of implementing this subchapter. The first

executive budget submission following the effective date of this

subchapter shall contain the appropriation provided for in

subsection (a). Appropriations to the fund shall not lapse. All

loan payments of principal and interest made to the Pennsylvania

Housing Finance Agency shall be deposited in the fund. Any

amount in the fund in excess of $3,000,000 which remains

unexpended or uncommitted after July 1 of each year, beginning

with the first fiscal year after the enactment of this

subchapter, shall be returned to the General Fund. Sufficient

appropriations shall be made annually in order to maintain a

minimum balance of at least $1,000,000. Should annual program

activity exceed the funds available, the General Assembly may

supplement the fund to restore it to the full annual

appropriation.

(c)  Administrative expenses.--The Pennsylvania Housing

Finance Agency shall annually provide to the Pennsylvania

Emergency Management Agency 10% of the total amount in the fund

in order that the agency may provide for program administration,

State and local damage assessment training and materials, and

operational, mitigation, preparedness, response and recovery

costs.

(d)  Diversion of moneys in fund prohibited.--Moneys in the

fund shall not be diverted to fund other Commonwealth operations

or programs or be transferred to other funds, and shall be used

exclusively for the purposes provided for in this subchapter.

Section 2.  This act shall take effect immediately.