Mississippi lawmakers revive disaster loan program vetoed by governor

Both the Mississippi House and Senate unanimously approved Thursday language recreating the Local Governments Disaster Recovery Emergency Loan Program Act that Gov. Tate Reeves (R) vetoed earlier this week, lawmakers said.

Lawmakers said the program is intended to help local governments recover from Winter Storm Fern. Conferees in both chambers decided to place the loan program language into the conference report for HB 1646, which deals with the state disaster trust fund, before sending the measure back to the full House and Senate.

The new loan program sets the interest rate at 3% annually, up from 1% in the earlier legislation. State Sen. Scott DeLano (R) said the rate is zero while local governments await FEMA reimbursements. “The only time we trigger an interest rate at all, this 3 percent, is when all the reimbursements are made to a local jurisdiction and there may be, and a loan amount is outstanding,” DeLano said. He added, “The House and Senate have come together to propose a 3 percent interest rate, which is much less than the 12 percent the governor wanted.”

Reeves said in his veto message that the prior bill, SB 2632, included material changes after it had been presented to his office and that such action could violate the state Constitution and “may rise to criminal conduct.” Lt. Gov. Delbert Hosemann (R) and lawmakers who worked on the measure rebutted Reeves’ timing claim, saying the governor had his facts wrong. Hosemann said in a statement before the Senate vote, “Our neighbors in North Mississippi have suffered too much devastation, and we must provide financial relief as quickly as possible. This conference report is a second attempt to support our cities and counties. We will pass it out of the Senate.”

The Mississippi Emergency Management Agency will administer the program, and loans will be available to local governments through June 2027, lawmakers said. HB 1646 also increases the amount MEMA may draw from its working cash stabilization funds to $2.5 million from $1 million for a storm event and raises the cap on the disaster trust fund from $2 million to $5 million. The bill now heads to the governor’s desk.

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