State lawmakers rushed approval of a $25 million loan Monday for flood-ravaged southern Utah, part of an aid package that could total $40 million before the session ends.

"I just can't tell you thank you enough for the outpouring we've seen," St. George Mayor Dan McArthur told members of the Senate just before the vote. "It is very meaningful. It is heartwarming. And thank you."

HB240 provides money to help communities in Washington County rebuild the infrastructure damaged during January's deadly flood. One man died after being swept from his vehicle, and several families lost their homes to the swollen Santa Clara River.

While the $25 million approved Monday by both the House and Senate is a loan, the Legislature could decide to forgive all or part of the amount borrowed when the loan comes due in a year.

"We do have the power later to look at it," said Sen. Lyle Hillyard, R-Logan.

House budget chairman Ron Bigelow, R-West Valley, amended his bill to clearly say that when the $25 million is repaid, the principal and 2 percent interest will go into the state's Rainy Day Fund, a surplus account used to make up state tax revenue shortfalls.

The $25 million comes out of the current budget year's general fund. Lawmakers have a total of $240 million in surplus funds available.

"We have more than enough (cash) for this," Bigelow said.

House Minority Leader Ralph Becker, D-Salt Lake, said: "We all share the pain and suffering from our friends down in southern Utah. We support the relief reflected in this legislation."

So far, lawmakers are only providing help for public projects, not for repairing or replacing private property hit by the flood. Both policy and legal concerns have been raised about giving state assistance to homeowners.

"It's a slippery slope. Where do you stop? I could come in here and talk about a fire in Cache Valley," Hillyard said. "A lot of us feel remorse . . . but the role of government is to help in the area of infrastructure."

The St. George mayor, who wore a T-shirt on the Senate floor identifying himself as a friend of the flooded families, said people are already stepping forward to help the homeowners with their losses.

Area banks and credit unions are putting together a book about the disaster that they hope will raise $500,000 for the flood victims, McArthur said.

"We did have a lot of flood victims who are not receiving compensation," he said.

State officials are waiting for the county to be declared a federal disaster area by President Bush. That will trigger financial help from the Federal Emergency Management Agency, although local governments will have to come up with a 25 percent match to qualify.

A three-person FEMA advance team was in St. George Monday, trying to find about 12,000 square feet of office space to rent so they can be ready to start work once the declaration is signed, according to Dean Cox, Washington County Emergency Services director.

Monday, Gov. Jon Huntsman Jr. signed an agricultural disaster declaration for Washington and Iron counties, an effort to get even more federal help. The estimated damage is approximately $5 million, and a response from Washington, D.C., should take about 30 days.

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Contributing: Nancy Perkins; E-mail: lisa@desnews.com