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(1) Money in the fund shall be used by the division, as prioritized by the director, only to:
(a) provide loans to local government entities for:
(i) the costs incurred by a local government entity for providing emergency disaster services as defined in Section 53-2a-602; or
(ii) providing any state or local matching funds to secure federal funds or grants related to a declared disaster, as defined in Section 53-2a-602;
(b) pay the Division of Finance for the costs of administering the fund, providing loans, and obtaining repayments of loans; and
(c) provide funds to state agencies for the costs of responding to a declared disaster.
(2) The division shall establish the terms and conditions of the loans and the repayment schedule consistent with the following criteria:
(a) the interest rate charged and the maximum payback period on all loans shall be:
(i) the state's prime interest rate at the time of loan closing, plus zero percent, with a maximum payback period of 10 years if the applicant has reserved an average of 90% to 100% of the amount authorized in Section 53-2a-605 over the previous five fiscal years;
(ii) the state's prime interest rate at the time of loan closing, plus 2%, with a maximum payback period of five years if the applicant has reserved an average of 70% up to 90% of the amount authorized in Section 53-2a-605 over the previous five fiscal years; or
(iii) the state's prime interest rate at the time of loan closing, plus 4%, with a maximum payback period of three years if the applicant has reserved an average of 50% up to 70% of the amount authorized in Section 53-2a-605 over the previous five fiscal years; and
(b) the division may not authorize a loan from this fund on any terms or conditions to local government entities that have reserved an average of less than 50% of the amount authorized in Section 53-2a-605 over the previous five fiscal years.
(3) If the division receives multiple loan applications concurrently, priority shall be given to applicants based on the extent of their participation in the reserve account authorized in Section 53-2a-605.