Community Disaster Loans (97.030)
Program
97.030 Community Disaster Loans
Federal Agency
DEPARTMENT OF HOMELAND SECURITY
Authorization
Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121 et seq.; Executive Order 12148; Reorganization Plan No. 3, 1978.
Program Number
97.030
Last Known Status
Active
Objectives
To provide loans subject to Congressional loan authority, to any local government that has suffered substantial loss of tax and other revenue in an area in which the President designates a major disaster exists. The funds can only be used to maintain existing functions of a municipal operating character and the local government must demonstrate a need for financial assistance.
Types of Assistance
Direct Loans.
Uses and Use Restrictions
Loans are made only to local governments or other political subdivisions of the State, and are based on need, not to exceed 25 percent of the annual operating budget of the local government for the fiscal year in which the disaster occurs up to a maximum of $5 million. The funds cannot be used to meet the non federal share of any Federal program, finance capital improvements, or repair or restore public facilities. FEMA may cancel repayment of all or part of the loan. Cancellation depends on the extent that revenues in the 3 full fiscal years following fiscal year of the major disaster are insufficient to meet the operating budget of the local government, as a result of the disaster, including additional disaster-related operating expenses.
Eligibility Requirements
Applicant Eligibility
Applicants must be in a designated major disaster area and must demonstrate that they meet the specific conditions of FEMA Disaster Assistance Regulations 44 CFR Part 206, Subpart K, Community Disaster Loans. To be eligible the applicant must demonstrate: 1) a substantial loss of tax and other revenues, as a result of a major disaster; 2) a need for financial assistance to perform its governmental functions; and 3) not be in arrears on a previous loan.
Beneficiary Eligibility
Local governments in a designated disaster area.
Credentials/Documentation
The loan application is developed from financial information contained in the local government's published financial reports and current annual operating budget. Loan awards will be determined in accordance with OMB Circulars No. A-102 and No. A-87 for State and local governments. Awards made to Institutions of Higher Education, Hospitals and Other Non-Profit Organizations will be required to follow the requirements of OMB Circulars No. A-110 and No. A-21.
Application and Award Process
Preapplication Coordination
The State Governor makes a request for a Presidential declaration of a major disaster through the FEMA Regional Director. Requests for assistance must be made by the Governor in accordance with FEMA Disaster Assistance Regulations, 44 CFR 206.36. This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or officials designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review.
Application Procedure
Upon declaration of a major disaster, application for a Community Disaster Loan is made through the Governor's Authorized Representative to the Regional Director of FEMA. The Associate Director of the Response and Recovery Directorate approves or disapproves the loan. The Designated Loan Officer will execute a Promissory Note with the applicant. The promissory note must be co-signed by the State, or if the State cannot legally co-sign the note, the local government must pledge collateral security.
Award Procedure
Funds are disbursed to the local government when requested in accordance with the Schedule of Loan Increments in the Promissory Note. Funds awarded to Institutions of Education, Hospitals and Other Non-Profit Organizations will follow requirements of OMB Circulars No. A-110, No. A-21 and No. A-133.
Deadlines
The loan must be approved in the fiscal year of the disaster or the fiscal year immediately following.
Range of Approval/Disapproval Time
Appeals
Any disapproval of a loan cancellation can be appealed to the Associate Director with additional information within 60 days of the date of disapproval. Requests to reconsider disapproved loans will be considered by the Associate Director only when additional or new information is provided.
Renewals
Not applicable.
Assistance Considerations
Formula and Matching Requirements
The amount of the loan is based on the demonstrated need, and may not exceed 25 percent of the applicant's operating budget for the fiscal year in which the disaster occurs. The interest rate is the U.S. Treasury rate for 5-year maturities on the date the Promissory Note is executed. The term of the loan is usually 5 years, but may be extended. Interest accrues on the funds as they are disbursed. The Associate Director may cancel repayment of all or part of the loan if the revenues of the applicant in the 3 fiscal years following the fiscal year of the disaster are insufficient to meet the operating budget because of disaster related revenue losses and unreimbursed disaster related operating expenses.
Length and Time Phasing of Assistance
The length of the loan is generally 5 years, but may be extended. Funds are disbursed per the Schedule of Payments in the Promissory Note.
Post Assistance Requirements
Reports
Reports as required in the "Community Disaster Loan Handbook," DAP-5. The applicant must demonstrate a financial need prior to any incremental disbursement.
Audits
In accordance with the provisions of OMB Circular No. A- 133, "Audits of States, Local Governments, and Non-Profit Organizations," nonfederal entities that expend financial assistance of $300,000 or more in Federal awards will have an audit made for that year. Nonfederal entities that expend less than $300,000 a year in Federal awards is exempt from Federal audit requirements for that year, except as noted in Circular No. A-133.
Records
Annual Operating Budgets including revenue and expense and balance sheets must be retained for the duration of the loan. Additional record requirements are detailed in the Federal Disaster Assistance Regulations, 44 CFR 206, Subpart K.
Program Accomplishments
None.
Financial Information
Account Identification
70-0703-0-1-453.
Obligations
(Loans) FY 02 $0; FY 03 est $0; and FY 04 est not available.
Range and Average of Financial Assistance
Not applicable.
Regulations, Guidelines and Literature
"Community Disaster Loan Handbook," DAP-5; Federal Disaster Assistance Regulations, 44 CFR 205 for disaster declared prior to November 23, 1988; Federal Disaster Assistance Regulations, 44 CFR 206 for disasters declared on or after November 23, 1988; "Duplication of Benefits Handbook"; "Disaster Assistance: A Guide to Recovery Programs," FEMA 229(4); "A Guide to Federal Aid in Disasters," DAP-19.
Related Programs
97.035, Individual and Family Grants.
Information Contacts
Regional or Local Office
See Appendix IV of the Catalog for a listing of addresses for FEMA's Regional Offices.
Headquarters Office
Department of Homeland Security 245 Murray Drive, SW., Washington, DC 20528. Telephone: (202) 282-8000.
Web Site Address
Examples of Funded Projects
Not applicable.
Criteria for Selecting Proposals
Not applicable.
