AN ACT TO ENACT THE LOCAL GOVERNMENTS DISASTER RECOVERY EMERGENCY LOAN PROGRAM ACT; TO DEFINE TERMS; TO ESTABLISH THE LOCAL GOVERNMENT DISASTER RECOVERY EMERGENCY LOAN PROGRAM TO BE ADMINISTERED BY THE MISSISSIPPI EMERGENCY MANAGEMENT AGENCY FOR THE PURPOSE OF ASSISTING LOCAL GOVERNMENTS IN RECOVERING FROM CERTAIN FEDERALLY DECLARED DISASTERS BY ISSUING LOANS TO LOCAL GOVERNMENTS; TO PROVIDE THAT NO LOAN SHALL BE ISSUED UNDER THE AUTHORITY OF THIS ACT AFTER A CERTAIN DATE; TO SET FORTH THE POWERS AND DUTIES OF THE MISSISSIPPI EMERGENCY MANAGEMENT AGENCY IN ADMINISTERING THIS ACT; TO ALLOW THE MISSISSIPPI EMERGENCY MANAGEMENT AGENCY TO AUTHORIZE AN ADMINISTRATOR TO CARRY OUT ANY OR ALL OF THE POWERS AND DUTIES ENUMERATED IN THIS ACT; TO EXEMPT THE MISSISSIPPI EMERGENCY MANAGEMENT AGENCY FROM ANY REQUIREMENT THAT THE PUBLIC PROCUREMENT REVIEW BOARD APPROVE ANY PERSONAL OR PROFESSIONAL SERVICES CONTRACTS OR PRE-APPROVE ANY SOLICITATION OF SUCH CONTRACTS FOR PURPOSES OF THIS ACT; TO CREATE A SPECIAL FUND IN THE STATE TREASURY TO BE DESIGNATED AS THE "LOCAL GOVERNMENTS DISASTER RECOVERY EMERGENCY LOAN FUND"; TO REQUIRE EACH RECIPIENT OF A LOAN UNDER THE PROGRAM TO ESTABLISH A DEDICATED SOURCE OF REVENUE FOR REPAYMENT OF THE LOAN IN THE EVENT THAT THE FEDERAL EMERGENCY MANAGEMENT AGENCY DECLINES TO REIMBURSE AN EXPENDITURE FOR WHICH LOAN PROCEEDS WERE USED; TO PROVIDE THAT THE EXECUTED LOAN AGREEMENT WILL OBLIGATE THE LOCAL GOVERNMENT TO REPAY THE PROCEEDS OF THE LOAN IMMEDIATELY UPON RECEIPT OF REIMBURSEMENTS FROM THE FEDERAL EMERGENCY MANAGEMENT AGENCY; TO PROVIDE THAT THE LOAN AGREEMENT SHALL PROVIDE FOR THE REPAYMENT OF ALL FUNDS RECEIVED FROM THE EMERGENCY FUND WITHIN NOT MORE THAN TWO YEARS FROM THE DATE THAT THE FEDERAL EMERGENCY MANAGEMENT AGENCY DECLINED TO REIMBURSE FOR AN EXPENDITURE FOR WHICH LOAN PROCEEDS WERE USED; TO REQUIRE A RECIPIENT LOCAL GOVERNMENT TO PLEDGE ITS SALES TAX REVENUE DISTRIBUTION OR ITS HOMESTEAD EXEMPTION ANNUAL TAX LOSS REIMBURSEMENT, AS THE CASE MAY BE, TO MEET THE REPAYMENT SCHEDULE CONTAINED IN THE LOAN AGREEMENT IN THE EVENT THAT THE FEDERAL EMERGENCY MANAGEMENT AGENCY DECLINES TO REIMBURSE AN EXPENDITURE FOR WHICH LOAN PROCEEDS WERE USED; TO AMEND SECTION 27-104-7, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT ANY PERSONAL OR PROFESSIONAL SERVICE CONTRACTS ENTERED INTO BY THE MISSISSIPPI EMERGENCY MANAGEMENT AGENCY UNDER THIS ACT ARE EXEMPT FROM APPROVAL BY THE PUBLIC PROCUREMENT REVIEW BOARD; AND FOR RELATED PURPOSES.
SB 2632 creates the 2026 Local Governments Disaster Recovery Emergency Loan Program, administered by the Mississippi Emergency Management Agency (MEMA), to help counties, municipalities, and other local political subdivisions in federally declared disaster areas recover from the January 2026 winter storm disaster. The program authorizes MEMA to make loans for eligible disaster-related expenditures that are generally reimbursable by FEMA, with the goal of bridging cash-flow gaps while federal reimbursement is pending or if reimbursement is later denied. Loans are limited to eligible local governments that have applied for FEMA assistance, may be issued only through July 1, 2027, and may not exceed a five-year term.
The bill establishes a special treasury fund, the 2026 Local Governments Disaster Recovery Emergency Loan Fund, to hold appropriated money, bond proceeds, grants, donations, loan repayments, and interest. Loans are initially interest-free until FEMA reimbursements are processed and then carry a 1% fixed interest rate to cover administrative costs. The act also allows up to 0.5% of loan proceeds to be used for administration, requires MEMA to keep detailed accounting and report regularly to the Legislature, and permits the agency to hire an administrator and contract for needed staff and facilities.
A central feature of the bill is its repayment structure. Each borrower must execute a loan agreement with MEMA and the Department of Revenue and pledge a dedicated revenue source to secure repayment if FEMA disallows reimbursement. Counties may pledge use tax or other lawful revenue sources, while municipalities may pledge sales tax distributions or other lawful revenue sources. If FEMA denies reimbursement, the local government must repay the loan within two years under a schedule of monthly, semiannual, or other periodic payments, and the Department of Revenue may withhold distributions to enforce repayment. The State Auditor may audit delinquent borrowers, and unpaid obligations can trigger withholding of homestead exemption reimbursements and other state distributions.
The bill also amends the Public Procurement Review Board statute to exempt MEMA contracts entered into under this program from prior approval and solicitation review by the board, and it exempts related agency rules and procedures from the Mississippi Administrative Procedures Law. In effect, the legislation expands MEMA’s administrative discretion while reducing procurement and rulemaking hurdles for disaster-recovery contracting tied to the loan program. It does not broadly change disaster law statewide, but it creates a targeted financing mechanism for a specific declared disaster and a limited class of local governments.
The overall sentiment reflected in the voting history was strongly supportive and noncontroversial: the Senate passed the bill 52-0, the House passed it 120-0, and both chambers later adopted the conference report unanimously. With no committee transcript available and no recorded opposition in the vote history, the bill appears to have been viewed as a practical disaster-relief measure. The main points of potential concern are the use of state-backed loans for local disaster costs, the pledge of local tax revenues as collateral, and the procurement and administrative exemptions granted to MEMA, but those issues did not generate recorded floor opposition.
SB 2632 adds a new, temporary disaster-recovery financing program to Mississippi law and creates a dedicated special fund in the State Treasury for that purpose. It gives MEMA authority to issue loans to eligible local governments in the federally declared January 2026 winter storm disaster area, sets repayment and collateral requirements, and authorizes withholding of certain state distributions if borrowers fall behind. The bill also amends Section 27-104-7 to exempt MEMA’s program-related personal and professional services contracts from Public Procurement Review Board approval, and it exempts MEMA’s program rules and procedures from the Mississippi Administrative Procedures Law. Local governments, MEMA, the Department of Revenue, the State Auditor, and the Public Procurement Review Board are the primary affected entities.
The bill’s reception was overwhelmingly positive and bipartisan based on the recorded votes. It passed the Senate and House unanimously, and both chambers later adopted the conference report without any dissenting votes. That voting pattern suggests broad agreement that the measure was a needed response to disaster-related cash-flow problems for local governments and that the financing structure was acceptable to both chambers.
No formal opposition appears in the available committee or floor record, so there is no documented controversy in the materials provided. The most notable policy choices embedded in the bill are the use of state loan funds rather than grants, the requirement that local governments pledge tax distributions or other revenue sources as repayment security, and the exemption of MEMA’s program contracts from normal procurement review and administrative rulemaking procedures. Those features could raise concerns about oversight, fiscal exposure, and local revenue flexibility, but the unanimous votes indicate they were not contentious enough to divide legislators.