HB 2543

Present law establishes the governor's response and recovery fund ("fund"") and directs that monies in the fund be expended only in response to Hurricane Helene or another event for which the governor declares a state of emergency. Further, the Tennessee emergency management agency (""TEMA"") may expend monies in the fund in the form of grants or loans to third parties. This bill, instead, authorizes the fund to be used to provide monies to a county, a city, a municipality, a metropolitan government, or a local education agency (together, ""eligible local governmental entities"") and to eligible individuals in qualifying counties following an emergency or disaster. As used in this bill, an ""eligible individual in a qualifying county"" means an individual who resides in a county where the county government or metropolitan government has declared a state of emergency and wh o demonstrates (i) Tennessee residency and lawful presence in the United States; and (ii) proof of loss or need. ELIGIBLE LOCAL GOVERNMENTAL ENTITIES This bill authorizes monies from the fund to be made available as a grant or a loan to an eligible local governmental entity only if all of the following conditions are met:  The governor has declared a state of emergency or issued a disaster declaration.  The local jurisdiction where the eligible local governmental entity is located has declared a state of emergency.  Federal assistance under the federal Stafford Act is unavailable or does not adequately meet the needs of the eligible local governmental entity.  Eligible costs, as determined by TEMA, sustained within a county exceed the most recent countywide per capita impact indicator published by TEMA on its website.  The chief elected official of the local jurisdiction where the eligible local governmental entity is located submits a written request to the director of TEMA for the monies and shows that all of the above requirements are met. This bill requires an eligible local governmental entity receiving monies to use the procurement methods authorized by federal regulations. However, this bill requires an eligible local governmental entity to use monies received from the fund only for:  The removal of ""debris, which may include damaged automobiles and aquatic vessels, as well as vegetative debris, construction and demolition debris, sand, dirt, gravel, pebbles, and boulders.  The use of emergency protective measures to eliminate or reduce immediate threats to life, public health, or safety.  The elimination or reduction of immediate threats of significant additional damage to improved public or private property.  The repair or replacement of roads, bridges, and other transportation infrastructure.  The repair or replacement of buildings, including structural and nonstructural components such as mechanical, electrical, and plumbing systems.  The repair or replacement of equipment, including vehicles and construction machinery.  The repair or replacement of public utilities, including water storage facilities, sewage collection, and power and communication systems. This bill requires local governmental entity projects, as described above, to be completed within 18 months of the date the agency awarded the monies from the fund, unless an extension has been granted. Otherwise, costs incurred for the project after 18 months are not reimbursable. If monies from the fund are made available for an eligible project in the form of a grant, then such a grant must have a local cost share that corresponds with the department of economic and community development's index of co unty status for the county on the date the emergency or disaster began. The cost share for counties with (i) attainment status is 50%, (ii) competitive status is 40%, (iii) transitional status is 30%, (iv) at-risk status is 20%, and (v) distressed status is 12.5%. However, the governor may waive all or part of any required local cost share. This bill requires an eligible local governmental entity to have full coverage for all-risk property insurance and for flood insurance within 120 days from the date of approval for monies from the fund for eligible projects. However, the agency may exte nd this deadline upon a showing of reasonable need. ELIGIBLE INDIVIDUALS This bill authorizes monies from the fund to be used to provide individual assistance to an eligible individual in a qualifying county only if all of the following conditions are met:  The governor has declared a state of emergency or issued a disaster declaration.  State damage totals from the emergency or disaster are unlikely to meet the federal emergency management agency threshold for individual assistance through a major disaster declaration.  Eligible costs, as determined by TEMA, sustained within a county exceed an amount to be determined by TEMA. However, damage to public property is not an eligible cost.  The chief elected official of the local jurisdiction submits a written letter to the director of TEMA requesting that aid to eligible individuals be made available and shows that all of the above requirements for individuals are met. MISCELLANEOUS REQUIREMENTS This bill authorizes monies from the fund to be expended to cover any portion of a loss or need consistent with this bill. However, such loss or need must not be otherwise eligible for coverage through an insurance provider or another federal, state, or local government entity. Further, the monies from the fund must not be used to cover any portion of an insurance deductible. RULEMAKING Present law authorizes the commissioner of finance and administration to promulgate rules to ensure monies in the fund are received and expended for appropriate purposes. This bill, instead, authorizes the director of TEMA to promulgate such rules. ON APRIL 7, 2026, THE HOUSE SUBSTITUTED SENATE BILL 2232 FOR HOUSE BILL 2543, ADOPTED AMENDMENT #1, AND PASSED SENATE BILL 2232, AS AMENDED. AMENDMENT #1 clarifies that the purposes for which this bill authorizes use of the governor's response and recovery fund are in addition to the purposes for which the fund may be used under present law. ON APRIL 13, 2026, THE SENATE CONCURRED IN HOUSE AMENDMENT # 1 ."