PRINTER'S NO. 997
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
829
Session of
2015
INTRODUCED BY P. DALEY, V. BROWN, KOTIK, THOMAS, COHEN,
CALTAGIRONE, READSHAW, D. COSTA, MAHONEY, KINSEY, SCHWEYER
AND MURT, MARCH 24, 2015
REFERRED TO COMMITTEE ON VETERANS AFFAIRS AND EMERGENCY
PREPAREDNESS, MARCH 24, 2015
AN ACT
Providing for small disaster assistance to individuals,
businesses and municipalities; imposing surcharges on
insurers; establishing a fund; and conferring powers and
duties on the Department of Community and Economic
Development, the Pennsylvania Emergency Management Agency,
the Department of Human Services and the Pennsylvania Housing
Finance Agency.
TABLE OF CONTENTS
Section 1. Short title.
Section 2. Declaration of policy.
Section 3. Definitions.
Section 4. Fund.
Section 5. Administration.
Section 6. Declaration.
Section 7. Low-interest loans to victims of small disaster.
Section 8. Business loans.
Section 9. Municipal loans.
Section 10. Residential loans.
Section 11. Grants.
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Section 12. Training, administration and operations.
Section 13. Insurance coverage.
Section 14. Operation.
Section 15. Effective date.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Small
Disaster Assistance Act.
Section 2. Declaration of policy.
The General Assembly finds and declares as follows:
(1) Many communities in this Commonwealth are frequently
subject to natural and manmade disasters that cause
significant damage and disruption in the life of the
community but are not of sufficient magnitude to qualify for
Federal disaster assistance programs.
(2) These losses are of considerable importance to those
directly affected and their communities and to the health and
welfare of the citizens of this Commonwealth's many small
communities.
Section 3. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Administering agency." The Commonwealth agency charged with
administration under section 5(b).
"Agency." The Pennsylvania Emergency Management Agency.
"Business." The term includes nonprofit organizations and
the nonsectarian portion of religious facilities.
"Cost-of-living increase." The increase in the Consumer
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Price Index for All Urban Consumers for the calendar year prior
to the disaster event.
"Flood plain." A 100-year flood plain, as defined in section
104 of the act of October 4, 1978 (P.L.851, No.166), known as
the Flood Plain Management Act.
"Fund." The Small Disaster Assistance Fund established in
section 4.
"Small disaster." An event which:
(1) occurred after June 30, 2013;
(2) results in total uninsured losses, for all affected
individuals and businesses, of not more than $2,000,000;
(3) falls below the current Federal guidelines for
Federal disaster assistance; and
(4) involves:
(i) damage exceeding 40% of the total value of a
structure and contents of each of at least five homes or
two businesses;
(ii) loss of life; or
(iii) total estimated damages of at least $250,000
to public facilities.
Section 4. Fund.
(a) Establishment.--The Small Disaster Assistance Fund is
established as a separate fund in the State Treasury.
(b) Purpose.--
(1) The purpose of the fund is to assist the victims of
natural and manmade disasters with:
(i) low-interest loans; and
(ii) grants.
(2) Up to one-half of the money in the fund may be used
to pay the Commonwealth's matching share for any major
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disaster declared eligible for Federal assistance by the
President of the United States. The need for Federal matching
funds for any specific major disaster event may not encumber
fund money in years beyond the year of the major event.
(3) The fund shall provide for staff under section
12(b). Expenditures under this paragraph shall not exceed 10%
of the revenue received by the fund in a fiscal year.
(c) Sources.--The following are the sources of the fund:
(1) Surcharges under section 5(a)(1).
(2) Appropriations.
(3) Loan repayments.
(4) Return on the money in the fund.
(5) Funds from sources other than the Commonwealth.
(d) Administration.--The fund shall be administered under
section 5.
(e) Nonlapse.--Money in the fund is continuously
appropriated into the fund. This appropriation shall not lapse
at the end of any fiscal year.
Section 5. Administration.
(a) Agency.--The agency has the following powers and duties:
(1) To impose a surcharge on each insurance policy on
real property in this Commonwealth of $1 per $100,000 of
insured value.
(2) To collect 95% of the surcharge from each insurer,
permitting the insurer to retain 5% to defray administrative
costs of collection.
(3) To coordinate the use of the fund.
(4) To report annually to the Secretary of the Senate
and the Chief Clerk of the House of Representatives on the
performance and needs of the fund.
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(b) Administering agencies.--Program elements from the fund
shall be administered as follows:
(1) The Department of Community and Economic Development
shall administer assistance for all of the following:
(i) Businesses.
(ii) Municipalities.
(2) The Pennsylvania Housing Finance Agency shall
administer assistance for real property aspects of
residential housing.
(3) The Department of Human Services shall administer
assistance for personal property.
Section 6. Declaration.
(a) Petition.--A county emergency management director must
petition the agency for a declaration of a small disaster.
(b) Determination.--The agency's determination on the
petition shall be deemed a final order, subject to review under
2 Pa.C.S. Ch. 7 Subch. A (relating to judicial review of
Commonwealth agency action).
(c) Effect.--A declaration of small disaster shall extend
the assistance available under this act.
(d) Eligibility.--
(1) Except as set forth in paragraph (2), to be eligible
for assistance under this act, a person must meet all of the
following:
(i) Own property in a flood plain.
(ii) Maintain flood insurance.
(iii) Be a victim of a small disaster.
(2) Paragraph (1)(ii) does not apply to a residential
claimant with a family income of less than 200% of the
Federal poverty level.
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Section 7. Low-interest loans to victims of small disaster.
(a) Availability.--A low-interest loan may be extended to a
person eligible under section 6(d) to cover the portion of a
loss due to a small disaster that is not covered by insurance.
The loan shall be extended to incorporate existing debt on real
property and contents.
(b) Eligibility.--
(1) Except as set forth in paragraph (2), an individual
who has lost personal property from a primary residence as
the result of a small disaster is eligible for a low-interest
loan.
(2) This subsection does not apply to the loss of:
(i) jewelry;
(ii) art;
(iii) sports equipment; or
(iv) an item determined by the administering agency
to be a luxury item.
(c) Principal.--
(1) Except as set forth in paragraph (2), all of the
following apply:
(i) The amount of the loan shall not exceed:
(A) Seven thousand five hundred dollars per
person in multiperson households; nor
(B) Fifteen thousand dollars in single-person
households.
(ii) The total amount of a loan per household shall
not exceed $35,000.
(iii) The amount of the loan shall not exceed one-
third of the estimated market value of the residence
prior to the small disaster.
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(2) For a documentable loss exceeding the amounts
specified in paragraph (1)(i) or (ii), the administering
agency may make loans to individuals at an interest rate
twice the rate under subsection (d).
(d) Rate.--Except as set forth in subsection (c)(2), a loan
under this section shall bear interest for the entire term at a
rate no greater than the cost-of-living increase.
Section 8. Business loans.
(a) Term.--
(1) Except as set forth in paragraph (2), a business
loan shall be for a term of no more than 15 years.
(2) The term of a loan may be:
(i) extended by hardship suspension of payment; or
(ii) shortened under section 13(c)(1).
(b) Security.--A business loan must be secured by:
(1) a mortgage on real property of the business; or
(2) other suitable collateral.
(c) Use.--A business loan may be used to repair or replace
any of the following when lost or seriously damaged due to a
small disaster:
(1) Fixed equipment.
(2) Major moveable equipment.
(3) Furnishings.
(4) Real property.
(5) A leasehold improvement.
(6) Inventory, if it can be shown that an insurance
policy at a reasonable premium in relation to value was not
available to replace the inventory.
(d) Principal.--
(1) At the discretion of the Department of Community and
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Economic Development, an individual business loan may be
increased up to 150% of eligible repair or replacement costs
to assist in business retention and recovery.
(2) The sum of all business loans may not exceed more
than one-half of all funds available for expenditure in the
fund in any fiscal year.
Section 9. Municipal loans.
(a) Term.--
(1) Except as set forth in paragraph (2), a municipal
loan shall be for a term of no more than 15 years.
(2) The term of a loan may be:
(i) extended by hardship suspension of payment; or
(ii) shortened under section 13(c)(1).
(b) Use.--
(1) A municipal loan may be used for repairing or
replacing any of the following when lost or seriously damaged
due to a small disaster:
(i) A building.
(ii) Major equipment other than vehicles, plows,
backhoes and similar gasoline-powered or diesel-powered
mobile machinery.
(iii) Office machinery.
(iv) A street.
(v) A water and sewer line.
(vi) A public utility.
(vii) A recreational facility.
(2) A municipality affected by a small disaster may
apply for a loan to rectify conditions or inadequate public
facilities that led directly to the small disaster or
contributed substantially to its occurrence or the inability
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of local officials to bring the damage under control. This
paragraph includes the following:
(i) Missing or inadequate storm sewers or other
water management structures, including work within stream
channels.
(ii) Inadequate fire hydrants or related water
lines.
(iii) Watershed plans.
(iv) Engineering studies and designs necessary to
effect mitigation improvements.
(c) Limitation.--
(1) Small-disaster mitigation assistance may be used
only for municipally owned or controlled improvements.
(2) Firefighting apparatus and other emergency services
equipment and vehicles, including trucks, tankers and other
vehicles, are not eligible for mitigation assistance.
(d) Chronic flooding.--
(1) The agency may consult with the Department of
Environmental Protection to identify areas of chronic
flooding that result in frequent damage to communities but
that do not rise to the level of a small disaster.
(2) The agency, in conjunction with the Department of
Environmental Protection, may use up to 25% of the annual
revenue of the fund, exclusive of carryover reserves, to
provide municipal loans to correct conditions described in
paragraph (1).
(e) Hazard mitigation.--Hazard mitigation loans shall be
subject to the following:
(1) A low-interest loan shall be available for the
balance of project work not covered by a grant under section
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11(a). The maximum total assistance of loans and grants shall
not be more than $10,000,000.
(2) A hazard mitigation loan shall be for a term of 20
years.
(3) The interest rate shall be determined under section
7(d).
(f) Formula.--
(1) A municipality shall be eligible for a mitigation
grant of 50% of total project cost if, for the preceding
year, its median per capita personal income exceeds the State
median per capita personal income by more than 20%.
(2) A municipality shall be eligible for a mitigation
grant of 60% of total project cost if, for the preceding
year, its median per capita personal income is in the
following range:
(i) Is less than the State median per capita
personal income by no more than 20%.
(ii) Exceeds the State median per capita personal
income by no more than 20%.
(3) A municipality shall be eligible for a mitigation
grant of 70% of total project cost if, for the preceding
year, its median per capita personal income is less than the
State median per capita personal income by more than 20%.
Section 10. Residential loans.
(a) Use.--
(1) Except as set forth in paragraph (2), a residential
loan:
(i) may be made only for the replacement or repair
of the structure of a primary residence; and
(ii) may not be made for repairs to landscaping,
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ponds, pools or outbuildings.
(2) Paragraph (1)(ii) does not apply to a repair
necessary to respond to serious hazards resulting from small
disaster damage.
(3) An individual who has been forced from a primary
rental residence by a small disaster is eligible for a
residential loan to purchase a home approximately equivalent
to the prior residence in size but no smaller than 400 square
feet per individual of interior living space.
(b) Security.--A residential loan must be secured by a
mortgage on the real property that is the subject of the loan.
(c) Condition.--Section 13(c)(1) applies to a residential
loan.
Section 11. Grants.
(a) Hazard mitigation.--A municipality may receive a grant
for hazard mitigation work in an amount of no more than
$5,000,000 per event.
(b) Conversion.--If individual financial circumstances
indicate that a person eligible for a loan under this act does
not reasonably have the ability to repay the loan, the
administering agency may convert some or all of the amount of
the loan to a grant.
Section 12. Training, administration and operations.
(a) Specialized staff.--The agency and each administering
agency shall recruit, train and develop staff specializing in
small disaster assistance in their respective program areas. The
staff sections shall be deployed by each administering agency in
response to a declared small disaster, as directed by the
agency. These personnel shall also be available to the agency at
the direction of the Governor to respond to any major disaster
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in this Commonwealth.
(b) Funding for staff.--The agency and each administering
agency shall receive up to $1,000,000 annually from the fund to
establish a permanently staffed small disaster response team.
When the small disaster response team is deployed on assignment,
the agency shall reimburse the administering agency from the
fund for standard and necessary travel and living costs for each
team deployed to the small disaster.
(c) Authority to approve expenditures.--In response to a
small disaster, the agency shall have final authority to approve
expenditures from the fund for additional purposes it deems
necessary to small disaster recovery unless the uses are
specifically prohibited by this act.
Section 13. Insurance coverage.
(a) Loans.--A loan recipient must maintain adequate property
insurance coverage for the full value of the subject property
for the term of the disaster assistance loan, including flood
insurance coverage, if the property is located within a flood
plain.
(b) Grants.--Grant recipients must maintain adequate
insurance coverage for 20 years.
(c) Violation.--
(1) If a recipient violates subsection (a), the
principal and interest on the loan shall become due
immediately.
(2) If a recipient violates subsection (b), the amount
of the grant shall be repaid to the fund.
Section 14. Operation.
(a) Initiation.--The agency may not utilize any of the money
in the fund for the purposes under section 4(b) until the amount
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of money in the fund meets or exceeds $10,000,000.
(b) Suspension.--If the agency determines that the amount of
money in the fund has fallen to a level making the fund
actuarially unsound, the agency shall suspend using the fund for
the purposes under section 4(b) and administering the fund under
section 5 until the amount of money in the fund becomes
actuarially sound.
Section 15. Effective date.
This act shall take effect in 60 days.
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