1Providing for small disaster assistance to individuals,
2businesses and municipalities; imposing surcharges on
3insurers; establishing a fund; and conferring powers and
4duties on the Department of Community and Economic
5Development, the Pennsylvania Emergency Management Agency,
6the Department of Public Welfare and the Pennsylvania Housing
7Finance Agency.

8TABLE OF CONTENTS

9Section 1. Short title.

10Section 2. Declaration of policy.

11Section 3. Definitions.

12Section 4. Fund.

13Section 5. Administration.

14Section 6. Declaration.

15Section 7. Low-interest loans to small disaster victims.

16Section 8. Business loans.

17Section 9. Municipal loans.

18Section 10. Residential loans.

19Section 11. Grants.

20Section 12. Training, administration and operations.

1Section 13. Insurance coverage.

2Section 29. Operation.

3Section 30. Effective date.

4The General Assembly of the Commonwealth of Pennsylvania
5hereby enacts as follows:

6Section 1. Short title.

7This act shall be known and may be cited as the Small
8Disaster Assistance Act.

9Section 2. Declaration of policy.

10The General Assembly finds and declares as follows:

11(1) Many communities in this Commonwealth are frequently
12subject to natural and manmade disasters that cause
13significant damage and disruption in the life of the
14community but are not of sufficient magnitude to qualify for
15Federal disaster assistance programs.

16(2) These losses are of considerable importance to those
17directly affected and their communities and to the health and
18welfare of the citizens of this Commonwealth's many small
19communities.

20Section 3. Definitions.

21The following words and phrases when used in this act shall
22have the meanings given to them in this section unless the
23context clearly indicates otherwise:

24"Administering agency." The Commonwealth agency charged with
25administration under section 5(b).

26"Agency." The Pennsylvania Emergency Management Agency.

27"Business." The term includes nonprofit organizations and 
28the nonsectarian portion of religious facilities.

29"Cost-of-living increase." The increase in the Consumer 
30Price Index for All Urban Consumers for the calendar year prior
 

1to the disaster event.

2"Flood plain." A 100-year flood plain, as defined in section
3104 of the act of October 4, 1978 (P.L.851, No.166), known as
4the Flood Plain Management Act.

5"Fund." The Small Disaster Assistance Fund established in 
6section 4.

7"Small disaster." An event which:

8(1) occurred after June 30, 2011;

9(2) results in total uninsured losses, for all affected
10individuals and businesses, of not more than $2,000,000;

11(3) falls below the current Federal guidelines for
12Federal disaster assistance; and

13(4) involves:

14(i) damage exceeding 40% of the total value of a
15structure and contents of each of at least five homes or
16two businesses;

17(ii) loss of life; or

18(iii) total estimated damages of at least $250,000
19to public facilities.

20Section 4. Fund.

21(a) Establishment.--The Small Disaster Assistance Fund is
22established as a separate fund in the State Treasury.

23(b) Purpose.--

24(1) The purpose of the fund is to assist the victims of
25natural and manmade disasters with:

26(i) low-interest loans; and

27(ii) grants.

28(2) Up to one-half of the money in the fund may be used
29to pay the Commonwealth's matching share for any major
30disaster declared eligible for Federal assistance by the

1President of the United States. The need for Federal matching
2funds for any specific major disaster event may not encumber
3fund money in years beyond the year of the major event.

4(3) The fund shall provide for staff under section
512(b). Expenditures under this paragraph shall not exceed 10%
6of the revenue received by the fund in a fiscal year.

7(c) Sources.--The following are the sources of the fund:

8(1) Surcharges under section 5(a)(1).

9(2) Appropriations.

10(3) Loan repayments.

11(4) Return on the money in the fund.

12(5) Funds from sources other than the Commonwealth.

13(d) Administration.--The fund shall be administered under
14section 5.

15(e) Nonlapse.--Money in the fund is continuously
16appropriated into the fund. This appropriation shall not lapse
17at the end of any fiscal year.

18Section 5. Administration.

19(a) Agency.--The agency has the following powers and duties:

20(1) Impose a surcharge on each insurance policy on real
21property in this Commonwealth of $1 per $100,000 of insured
22value.

23(2) Collect 95% of the surcharge from each insurer,
24permitting the insurer to retain 5% to defray administrative
25costs of collection.

26(3) Coordinate the use of the fund.

27(4) Report annually to the Secretary of the Senate and
28the Chief Clerk of the House of Representatives on the
29performance and needs of the fund.

30(b) Administering agencies.--Program elements from the fund

1shall be administered as follows:

2(1) The Department of Community and Economic Development
3shall administer assistance for all of the following:

4(i) Businesses.

5(ii) Municipalities.

6(2) The Pennsylvania Housing Finance Agency shall
7administer assistance for real property aspects of
8residential housing.

9(3) The Department of Public Welfare shall administer
10assistance for personal property.

11Section 6. Declaration.

12(a) Petition.--A county emergency management director must
13petition the agency for a declaration of a small disaster.

14(b) Determination.--The agency's determination on the 
15petition shall be deemed a final order, subject to review under 
162 Pa.C.S. Ch. 7 Subch. A (relating to judicial review of 
17Commonwealth agency action).

18(c) Effect.--A declaration of small disaster shall extend
19the assistance available under this act.

20(d) Eligibility.--

21(1) Except as set forth in paragraph (2), to be eligible
22for assistance under this act, a person must meet all of the
23following:

24(i) Own property in a flood plain.

25(ii) Maintain flood insurance.

26(iii) Be a victim of a small disaster.

27(2) Paragraph (1)(ii) does not apply to a residential
28claimant with a family income of less than 200% of the
29Federal poverty level.

30Section 7. Low-interest loans to small disaster victims.

1(a) Availability.--A low-interest loan may be extended to a
2person eligible under section 6(d) to cover the portion of a
3loss due to a small disaster that is not covered by insurance.
4The loan shall be extended to incorporate existing debt on real
5property and contents.

6(b) Eligibility.--

7(1) Except as set forth in paragraph (2), an individual
8who has lost personal property from a primary residence as
9the result of a small disaster is eligible for a low-interest
10loan.

11(2) This subsection does not apply to the loss of:

12(i) jewelry;

13(ii) art;

14(iii) sports equipment; or

15(iv) an item determined by the administering agency
16to be a luxury item.

17(c) Principal.--

18(1) Except as set forth in paragraph (2), all of the
19following apply:

20(i) The amount of the loan shall not exceed:

21(A) $7,500 per person in multiperson households;
22nor

23(B) $15,000 in single-person households.

24(ii) The total amount of a loan per household shall
25not exceed $35,000.

26(iii) The amount of the loan shall not exceed one-
27third of the estimated market value of the residence
28prior to the small disaster.

29(2) For a documentable loss exceeding the amounts
30specified in paragraph (1)(i) or (ii), the administering

1agency may make loans to individuals at an interest rate
2twice the rate under subsection (d).

3(d) Rate.--Except as set forth in subsection (c)(2), a loan
4under this section shall bear interest for the entire term at a
5rate no greater than the cost-of-living increase.

6Section 8. Business loans.

7(a) Term.--

8(1) Except as set forth in paragraph (2), a business
9loan shall be for a term of no more than 15 years.

10(2) The term of a loan may be:

11(i) extended by hardship suspension of payment; or

12(ii) shortened under section 13(c)(1).

13(b) Security.--A business loan must be secured by:

14(1) a mortgage on real property of the business; or

15(2) other suitable collateral.

16(c) Use.--A business loan may be used to repair or replace
17any of the following when lost or seriously damaged due to a
18small disaster:

19(1) Fixed equipment.

20(2) Major moveable equipment.

21(3) Furnishings.

22(4) Real property.

23(5) A leasehold improvement.

24(6) Inventory, if it can be shown that an insurance
25policy at a reasonable premium in relation to value was not
26available to replace the inventory.

27(d) Principal.--

28(1) At the discretion of the Department of Community and
29Economic Development, an individual business loan may be
30increased up to 150% of eligible repair or replacement costs

1to assist in business retention and recovery.

2(2) The sum of all business loans may not exceed more
3than one-half of all funds available for expenditure in the
4fund in any fiscal year.

5Section 9. Municipal loans.

6(a) Term.--

7(1) Except as set forth in paragraph (2), a municipal
8loan shall be for a term of no more than 15 years.

9(2) The term of a loan may be:

10(i) extended by hardship suspension of payment; or

11(ii) shortened under section 13(c)(1).

12(b) Use.--

13(1) A municipal loan may be used for repairing or
14replacing any of the following when lost or seriously damaged
15due to a small disaster:

16(i) A building.

17(ii) Major equipment other than vehicles, plows,
18backhoes and similar gasoline-powered or diesel-powered
19mobile machinery.

20(iii) Office machinery.

21(iv) A street.

22(v) A water and sewer line.

23(vi) A public utility.

24(vii) A recreational facility.

25(2) A municipality affected by a small disaster may
26apply for a loan to rectify conditions or inadequate public
27facilities that led directly to the small disaster or
28contributed substantially to its occurrence or the inability
29of local officials to bring the damage under control. This
30paragraph includes the following:

1(i) Missing or inadequate storm sewers or other
2water management structures, including work within stream
3channels.

4(ii) Inadequate fire hydrants or related water
5lines.

6(iii) Watershed plans.

7(iv) Engineering studies and designs necessary to
8effect mitigation improvements.

9(c) Limitation.--

10(1) Small-disaster mitigation assistance may be used
11only for municipally owned or controlled improvements.

12(2) Firefighting apparatus and other emergency services
13equipment and vehicles, including trucks, tankers and other
14vehicles, are not eligible for mitigation assistance.

15(d) Chronic flooding.--

16(1) The agency may consult with the Department of
17Environmental Protection to identify areas of chronic
18flooding that result in frequent damage to communities but
19that do not rise to the level of a small disaster.

20(2) The agency, in conjunction with the Department of
21Environmental Protection, may use up to 25% of the annual
22revenue of the fund, exclusive of carryover reserves, to
23provide municipal loans to correct conditions described in
24paragraph (1).

25(e) Hazard mitigation.--Hazard mitigation loans shall be
26subject to the following:

27(1) A low-interest loan shall be available for the
28balance of project work not covered by a grant under section
2911(a). The maximum total assistance of loans and grants shall
30not be more than $10,000,000.

1(2) A hazard mitigation loan shall be for a term of 20
2years.

3(3) The interest rate shall be determined under section
47(d).

5(f) Formula.--

6(1) A municipality shall be eligible for a mitigation
7grant of 50% of total project cost if, for the preceding
8year, its median per capita personal income exceeds the State
9median per capita personal income by more than 20%.

10(2) A municipality shall be eligible for a mitigation
11grant of 60% of total project cost if, for the preceding
12year, its median per capita personal income is in the
13following range:

14(i) Is less than the State median per capita
15personal income by no more than 20%.

16(ii) Exceeds the State median per capita personal
17income by no more than 20%.

18(3) A municipality shall be eligible for a mitigation
19grant of 70% of total project cost if, for the preceding
20year, its median per capita personal income is less than the
21State median per capita personal income by more than 20%.

22Section 10. Residential loans.

23(a) Use.--

24(1) Except as set forth in paragraph (2), a residential
25loan:

26(i) may be made only for the replacement or repair
27of the structure of a primary residence; and

28(ii) may not be made for repairs to landscaping,
29ponds, pools or outbuildings.

30(2) Paragraph (1)(ii) does not apply to a repair

1necessary to respond to serious hazards resulting from small
2disaster damage.

3(3) An individual who has been forced from a primary
4rental residence by a small disaster is eligible for a
5residential loan to purchase a home approximately equivalent
6to the prior residence in size but no smaller than 400 square
7feet per individual of interior living space.

8(b) Security.--A residential loan must be secured by a
9mortgage on the real property that is the subject of the loan.

10(c) Condition.--Section 13(c)(1) applies to a residential
11loan.

12Section 11. Grants.

13(a) Hazard mitigation.--A municipality may receive a grant
14for hazard mitigation work in an amount of no more than
15$5,000,000 per event.

16(b) Conversion.--If individual financial circumstances
17indicate that a person eligible for a loan under this act does
18not reasonably have the ability to repay the loan, the
19administering agency may convert some or all of the amount of
20the loan to a grant.

21Section 12. Training, administration and operations.

22(a) Specialized staff.--The agency and each administering
23agency shall recruit, train and develop staff specializing in
24small disaster assistance in their respective program areas. The
25staff sections shall be deployed by each administering agency in
26response to a declared small disaster, as directed by the
27agency. These personnel shall also be available to the agency at
28the direction of the Governor to respond to any major disaster
29in this Commonwealth.

30(b) Funding for staff.--The agency and each administering

1agency shall receive up to $1,000,000 annually from the fund to
2establish a permanently staffed small disaster response team.
3When the small disaster response team is deployed on assignment,
4the agency shall reimburse the administering agency from the
5fund for standard and necessary travel and living costs for each
6team deployed to the small disaster.

7(c) Authority to approve expenditures.--In response to a
8small disaster, the agency shall have final authority to approve
9expenditures from the fund for additional purposes it deems
10necessary to small disaster recovery unless the uses are
11specifically prohibited by this act.

12Section 13. Insurance coverage.

13(a) Loans.--A loan recipient must maintain adequate property
14insurance coverage for the full value of the subject property
15for the term of the disaster assistance loan, including flood
16insurance coverage, if the property is located within a flood
17plain.

18(b) Grants.--Grant recipients must maintain adequate
19insurance coverage for 20 years.

20(c) Violation.--

21(1) If a recipient violates subsection (a), the
22principal and interest on the loan shall become due
23immediately.

24(2) If a recipient violates subsection (b), the amount
25of the grant shall be repaid to the fund.

26Section 29. Operation.

27(a) Initiation.--The agency may not utilize any of the money
28in the fund for the purposes under section 4(b) until the amount
29of money in the fund meets or exceeds $10,000,000.

30(b) Suspension.--If the agency determines that the amount of

1money in the fund has fallen to a level making the fund
2actuarially unsound, the agency shall suspend using the fund for
3the purposes under section 4(b) and administering the fund under
4section 5 until the amount of money in the fund becomes
5actuarially sound.

6Section 30. Effective date.

7This act shall take effect in 60 days.