42 U.S.C. § 5184 — Community disaster loans

The President may lend money to a local government^* that may lose a substantial amount of tax and other revenue because of a major disaster and has shown that it needs financial help to perform its government functions. The loan amount depends on need and is subject to the limits below. Loans do not reduce other assistance under this chapter.

(a) In general. The President may make the described loans.

(b) Amount. A loan must be based on need and may not exceed—

(1) 25 percent of the local government’s annual operating budget for the fiscal year in which the disaster occurs, and it may not exceed $5,000,000; or

(2) if the disaster caused the local government to lose at least 75 percent of that annual operating budget in tax and other revenue, 50 percent of that annual operating budget, and it may not exceed $5,000,000.

(c) Repayment.

(1) Cancellation. Repayment of all or part of the loan must be canceled to the extent that the local government’s revenue during the three full fiscal years after the disaster is not enough to meet its operating budget, including additional disaster-related expenses of a municipal-operating nature.

(2) Condition on continuing eligibility. A local government cannot receive more help under this section during any period when it is behind on a required repayment of a loan under this section.

(d) Effect on other assistance. A loan under this section does not reduce or otherwise affect grants or other assistance under this chapter.

This section does not define “substantial loss,” “need,” “major disaster,” or “municipal operation character.”