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Public Funds and Financing - As enacted, specifies the conditions that must be satisfied for monies from the governor's response and recovery fund to be provided to eligible local governmental entities and to eligible in, the official text

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                              PUBLIC CHAPTER NO. 855

                                                    SENATE BILL NO. 2232

      By Johnson, Yager, Bailey, Bowling, Crowe, Hensley, Jackson, Pody, Roberts, Rose,
                                                          Stevens, Walley

                                           Substituted for: House Bill No. 2543

   By Lamberth, Cochran, Tim Hicks, Crawford, Hill, Capley, Davis, Renea Jones, Hawk, Eldridge,
                                                       McCalmon, Howell

AN ACT to amend Tennessee Code Annotated, Section 9-4-216, relative to the governor's response
          and recovery fund.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:

          SECTION 1. Tennessee Code Annotated, Section 9-4-216(a), is amended by deleting
 "commissioner of finance and administration" and substituting instead "director of the Tennessee
 emergency management agency".

          SECTION 2. Tennessee Code Annotated, Section 9-4-216, is amended by deleting
subsections (c) and (d) and substituting:

                    (c)(1) In addition to subsection (b), the governor's response and recovery fund may
                    be used to provide monies to eligible local governmental entities and to eligible
                    individuals in qualifying counties following an emergency or disaster, subject to
                    subsection (d).

                              (2) As used in this section:

                                        (A) "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 who demonstrates:

                                                  (i) Tennessee residency and lawful presence in the United
                                        States, as determined by the Tennessee emergency management
                                        agency's procedures; and

                                                  (ii) Proof of loss or need, as determined by the Tennessee
                                        emergency management agency's procedures; and

                                        (8) "Eligible local governmental entity" means a county, city,
                    municipality, metropolitan government, or local education agency.

                    (d)(1) Monies from this fund may be made available as a grant or a loan to an eligible
                    local governmental entity only if the following conditions are met:

                                        (A) The governor has declared a state of emergency or issued a
                              disaster declaration, pursuant to§ 58-2-107(b)(1)(A);

                                        (8) The local jurisdiction where the eligible local governmental entity is
                              located has declared a state of emergency;

                                        (C) Federal assistance under the Stafford Act, 42 U.S.C. Section 5121
                              et seq., is unavailable or does not adequately meet the needs of the eligible
                              local governmental entity;
SB 2232

                  (D) Eligible costs, as determined by the Tennessee emergency
         management agency, sustained within a county exceed the most recent
         countywide per capita impact indicator published by the Tennessee
         emergency management agency on its website; and

                  (E) The chief elected official of the local jurisdiction where the eligible
         local governmental entity is located submits a written request to the director of
         the Tennessee emergency management agency for the monies and shows
         that the other requirements under this subdivision (d)(1) are satisfied.

                  (2) Monies from this fund may be used to provide individual assistance to an
         eligible individual in a qualifying county only if the following conditions are met:

                  (A) The governor has declared a state of emergency or issued a
         disaster declaration, pursuant to § 58-2-107(b)(1 )(A);

                  (8) 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, as determined by the director
         of the Tennessee emergency management agency or the director's designee;

                  (C) Eligible costs, as determined by the Tennessee emergency
         management agency, sustained within a county exceed an amount to be
         determined by the Tennessee emergency management agency. Damage to
         public property is not an eligible cost; and

                  (D) The chief elected official of the local jurisdiction submits a written
         letter to the director of the Tennessee emergency management agency
         requesting that aid to eligible individuals be made available and shows that
         the requirements under this subdivision (d)(2) are satisfied.

                  (3) Monies from this fund may be expended to cover any portion of a loss or
         need consistent with this section; provided, that such portion is not otherwise eligible
         for coverage through an insurance provider or another federal, state, or local
         government entity; and provided, that assistance has not already been provided for
         such portion from any source.

                  (4) An eligible local governmental entity receiving monies under subdivision
         (d)(1) shall ·use procurement methods authorized under 2 CFR Part 200.

                  (5) Monies received by an eligible local.governmental entity under subdivision
         (d)(1) may only be used on the following types of projects:

                  (A) The removal of debris, which includes clearing, removing, and
         disposing of debris. Debris may include damaged automobiles and aquatic
         vessels, as well as vegetative debris, construction and demolition debris,
         sand, dirt, gravel, pebbles, and boulders;

                  (B) The use of emergency protective measures to eliminate or reduce
         immediate threats to life, public health, or safety;

                  (C) The elimination or reduction of immediate threats of significant
         additional damage to improved public or private property;

         (D) The repair or replacement of roads, bridges, and other

         transportation infrastructure;  •

         (E) The repair or replacement of buildings, including structural and

         nonstructural components such as mechanical, electrical, and plumbing

         systems;                           ••

                  (F) The repair or replacement of equipment, including vehicles and
         construction machinery; and

            . (G) The repair or replacement of public utilities, including water storage
         facilities, sewage collection, and power and communication systems.

                  (6) Projects described in subdivision (d)(5) must be completed within eighteen
         (18) months of the date the Tennessee emergency management agency awarded the

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SB 2232

         monies, unless an extension has been granted by the agency. Otherwise, costs
         incurred after eighteen (18) months are not eligible for reimbursement.

                   (7) If monies are made available in the form of a grant for projects described in
         subdivision (d)(5), then such grant must have~ local cost share that corresponds with
         the department of economic and community development's index of county economic
         status. The portion of the cost for which tlie eligible local governmental entity is
         responsible must be determined by the county's economic status on the date the
         emergency or disaster began, as follows:

         (A) Attainment- fifty percent (50%);

         (B) Competitive - forty percent (40%);

         (C) Transitional - thirty percent (30%);

         (D) At-Risk - twenty percent (20%); and

         •(E) Distressed - twelve and one~half percent (12.5%).

                   (8) Subdivision (d)(7) does not prohibit the governor from waiving all or part of
         the required local cost share.

         (9) Loan repayments must become part of the fund and remain available for

         the purp?_~es described in this section.                                   •

                  (1 Q) Monies from this fund must not be used to cover any portion of an
         insurance deductible.

                   (11) Within one hundred twenty (120) days from the date of approval for
         monies under subdivision (d)(1 ), an eligible local governmental entity must have full
         coverage for all-risk property insurance and for flood insurance. The director of the
         Tennessee emergency management agency may extend this deadline upon a
         showing of reasonable need.

SECTION 3. This act takes effect on July 1, 2026, the public welfare requiring it.

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         SENATE BILL NO. 2232

PASSED:  April 13, 2026

                                                            ALLY

                               SPEAKER OF THE Sl°NATE

                         C.

                         CAMERON SEXTON, SPEAKER
                         HOUSE OF REPRESENTATIVES

/Apri APPROVED this 77-tt day of  I  2026

           UA

         BILL LEE, GOVERNOR
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