Texas House Bill HB99

Texas 2021 - 87th 1st C.S.

Caption

Relating to the creation of the disaster response loan fund and the permissible uses of that fund; making an appropriation.

Impact

The establishment of the Disaster Response Loan Fund represents a significant shift in how Texas addresses disaster preparedness and recovery. By creating a dedicated financial resource, the bill acknowledges the increased frequency and severity of disasters that Texas faces, allowing for quicker response to local needs. The ability of political subdivisions to access these loans at competitive rates is expected to enhance recovery efforts, which in turn could reduce long-term costs for both the state and affected communities. Additionally, the bill contains provisions to prevent loans that might jeopardize a political subdivision's eligibility for federal assistance.

Summary

House Bill 99 establishes the Disaster Response Loan Fund, which is designed to provide short-term loans to political subdivisions affected by disasters. This fund is to be managed by the comptroller of public accounts and is created outside the state treasury, thereby allowing for more direct access to financial resources in times of urgent need. The bill stipulates that the funds will be used solely for disaster relief and recovery projects, ensuring that the support provided is targeted at rebuilding efforts after emergencies. An initial appropriation of $500 million from general revenue funds is allocated to kickstart this initiative.

Contention

While the bill aims to streamline financial support for disaster recovery, it raises questions about the sustainability of such a fund and the criteria for loan approval. Critics may argue about the potential for financial mismanagement or underutilization of the fund, particularly if the application process is perceived as burdensome or if the loans are not sufficiently accessible. Furthermore, as the fund is funded by appropriations from the general revenue, there may be concerns regarding the long-term fiscal impact on the state's budget and whether such a fund can remain solvent in the event of multiple high-cost disasters occurring in a short timeframe.