Legislative Findings

(a)I Liheslaturan Guåhan has determined that in times of Disaster, such as typhoons and earthquakes, there is a critical need for access to money for emergency measures, capital and non-capital improvements and replacements, renovations and general rehabilitation of Guam’s communities. This is exemplified by three

(3)declarations of emergency in the Years 2001-2002 – the December, 2001 earthquake; Typhoon Chata’an and Super Typhoon Pongsona. These emergencies occurred during an extended financial period on Guam where the economy has slowed to its worst levels in several decades.

(b)In addition, funds are needed to repair or replace damaged or worn out Guam assets not resulting from the disaster, but identified during the disaster damage assessment as public purpose projects, for the mitigation of future damage, and determined eligible for FEMA funding.

(c)History has demonstrated that each disaster has devastating financial impacts upon Guam, which are significantly aggravated when repair and mitigation are not immediately undertaken. For example, the table that follows shows the sums provided to Guam after the last three

(3)disasters. Date Name 12/05/01 Earthquake

(1)Federal Public Assistance Projection

(2)Mitigation Projection Matching Participation Fed / Guam $3,182,974 $411,640 75% / 25% COL08222024 Total of

(1)and

(2)CH. 65A THE DISASTER RECOVERY RELIEF ACT OF 2002 Date Name 07/06/02 Typhoon Chata’an 12/08/02 Typhoon Pongsona

(1)Federal Public Assistance Projection

(2)Mitigation Projection Matching Participation Fed / Guam $21,431,672 $8,005,044 90% / 10% $78,760,920 $15,707,917 75% / 25% Total of

(1)and

(2)(Estimated from Typhoon Paka Projection*) $103,375,566 $24,124,601 $127,500,167 * Note: The reason for the estimated figure used from Typhoon Paka is based in part upon preliminary damage assessment still ongoing. Also Typhoon Paka wind strength is comparable to that of Typhoon Pongsona.

(d)The government of Guam (Guam), after Federally declared disaster, relies primarily upon FEMA to provide loans and grants to fund repair and replacement of the damage and destruction. The schedule above sets forth the funds provided Guam by FEMA for recovery from the last three

(3)disasters. While the amount is significant, the amount of matching participation funds obligated by Guam to pay is as low as ten percent (10%), and no greater than twenty-five percent (25%).

(e)Unfortunately, over the years, through a failure at least in part of Guam and its agencies, FEMA has developed a concern over the ability of Guam to provide the supporting documentation for FEMA assistance. As a result, FEMA assistance is not as swift as it should be, and Guam may qualify for larger amounts of assistance with better procedures and knowledgeable assistance to insure the reliability of Guam's applications and supporting documentation.

(f)I Liheslaturan Guåhan believes it is in the best interest of Guam to establish a law which solicits from a lender to provide an available revolving line of credit “LOC” which can be drawn upon promptly in the event of a disaster and repayable with FEMA funds when approved and distributed. The lender will be able to make loans to Guam on the reliance that FEMA will pay Guam a substantially equivalent amount necessary to repay the lender.

(g)In order to assure the best probability of full reimbursement available from FEMA for recovery expenditures incurred by the government, it is in the government’s interest to contract the services of a Disaster Documentation Team “DDT” which possesses the necessary technical and professional expertise to assist the government in the preparation and submission of the project worksheets required by FEMA for funding approval and payment. The purpose of the DDT will be to review and prepare all damage documentation provided by Guam or its agencies to assure that the documentation is in order and in full compliance with all FEMA requirements before submission of the documentation to FEMA by Guam. The DDT will be comprised of personnel that have extensive background and knowledge of FEMA laws, rules and regulations. The government, through use of the DDT, will be in a strong position to assure FEMA compliance in securing the funding necessary for the repayment of the line of credit.

(h)FEMA requires that Guam provide a percentage of matching funds for FEMA grant assistance. By way of this Chapter, the government is authorized to access the immediate cash needs for the matching funds Guam needs for expeditious recovery with an assignment of Section 30 funds, or other assets of Guam for the repayment of the recovery funds needs and not covered by FEMA reimbursements. By using the process implemented by this Chapter, Guam will have reduced its risk for unfunded liability on the line of credit, except for the administrative costs, interest charges, the local matching funds required and miscellaneous expenses not reimbursable by FEMA, since the DDT will be in place to provide the expertise in the preparation of the project worksheets assuring that Guam will receive a like amount from FEMA.

(i)I Liheslaturan Guåhan will require under this Chapter that all amounts loaned by the lender shall have a seven

(7)year maturity at an interest rate that is commercially reasonable based upon market rates. COL08222024 CH. 65A THE DISASTER RECOVERY RELIEF ACT OF 2002 Any amounts not paid within seven

(7)years, which includes interest, administrative cost, non-reimbursed DDT cost, together with loans of the matching funds or funding of PPP, may be rolled over into a longterm loan pursuant to another RFP, with a term no longer than thirty

(30)years, and a commercially reasonable interest rate based on the market.