2012 Flood and Windstorm Relief - Overview
S.F. No. 1 of the Special Session of 2012 has a net fiscal cost of $167.5 million. The bill appropriates approximately $180.2 million for relief from the Minnesota floods that began June 14, 2012, and the windstorm in north central Minnesota that occurred on July 2, 2012. This is offset by approximately $12.7 million in appropriation transfers and reductions, for a net cost of $167.5 million. Of the total amount, $74.5 million is from the general fund, $56.7 million is from the proceeds of bonds that will be paid from the general fund, $35 million is from the proceeds of bonds that will be paid from the trunk highway fund, and $14 million is from the trunk highway fund. Many of the appropriations are made with reference to the requirements of Minnesota Statutes, chapter 12A, which provides a framework for disaster assistance, including waivers of certain statutes.
The bill appropriates $24.975 million to the Commissioner of Public Safety to match money from the Federal Emergency Management Agency (FEMA) for the Presidential Declaration of a Major Disaster FEMA-4069-DR. Under FEMA rules, the federal government pays 75 percent of federally approved assistance, with state and local government paying the remaining 25 percent. In this bill, the state pays the full nonfederal match. In addition, Article 2 of the bill provides direct state relief for local governments and state agencies affected by the July 2, 2012, windstorm in north central Minnesota.
Article 1 - Flood Disaster Relief
Article 1 provides state assistance to the 15 counties and three tribes included in Presidential Disaster Declaration DR-4069 for flooding from storms beginning on July 14, 2012.
Section 1. Appropriation Summary. Summarizes the appropriation by agency and by fund.
Section 2. Disaster Relief Appropriations. Explains the appropriation format for the bill. Each appropriation is made in accord with requirements, limitations, and conditions set forth in current disaster relief statutes. Unless otherwise specified, the appropriations in the bill are available through June 30, 2015, except that appropriations of bond proceeds for capital improvements are available until projects are completed or abandoned. Authorizes money appropriated under this article to be transferred as provided in Minnesota Statutes, section 12A.03, subdivision 5.
Section 3. Public Safety.
Subdivision 1. Total Appropriation. Lists a total appropriation of $25.975 million ($23.690 million from the general fund and $2.285 million from the bond proceeds fund) to the Commissioner of Public Safety to match federal money from FEMA and provide state assistance grants to individuals.
Subdivision 2. General Fund and Bond Proceeds Match. Provides that $22.690 million of the general fund appropriation is the 25 percent state general fund match for federal disaster relief funds approved by FEMA (the federal match is $68.07 million). This appropriation funds the following activities:
emergency services measures, including overtime for emergency personnel;
roads and bridges not included in the state highway aid system;
water control facilities;
building and equipment;
parks and other recreational facilities.
Subdivision 2 also provides a $2.285 million appropriation from the bond proceeds fund as the 25 percent state match for approved FEMA projects that, under state law, may be paid for with bond proceeds. The federal match for this appropriation is $6.855 million to the Commissioner of the Department of Natural Resources (see section 9, subdivision 2). These appropriations fund projects in Jay Cooke State Park and St. Croix State Park, as well as projects in the DNR Forestry, Fisheries and Wildlife divisions.
Subdivision 3. Grants for Debris Removal. Appropriates $500,000 from the general fund to the commissioner for debris removal reimbursement grants for individual residences and farms.
Subdivision 4. Long-Term Recovery Grants. Appropriates $500,000 to the commissioner to provide technical assistance and grants for coordination of long-term recovery.
Section 4. Transportation.
Subdivision 1 lists the summary of all transportation appropriations by fund, for the purposes of natural disaster relief as specified in Minnesota Statutes, section 12A.16. Total appropriations in this section to the Department of Transportation in FY 2013 are $79 million.
Subdivision 2. Transportation Infrastructure Operation and Maintenance. Appropriates $3 million from the trunk highway fund for operations and maintenance on the trunk highway system.
Subdivision 3. Program Planning and Delivery. Appropriates $11 million from the trunk highway fund for program planning and delivery activities related to the reconstruction and repair of trunk highways and bridges damaged by the floods.
Subdivision 4. State Trunk Highways and Bridges. Appropriates $35 million from the bond proceeds account in the trunk highway fund for reconstruction and repair of trunk highways and bridges damaged by the floods.
Subdivision 5. Local Road and Bridge Reconstruction. Appropriates $30 million from the bond proceeds account in the state transportation fund for the costs of repairing, reconstructing, or replacing local roads and bridges damaged by the floods.
Section 5. Employment and Economic Development. Appropriates $15 million from the general fund to the Commissioner of Employment and Economic Development for Minnesota Investment Fund grants to local units of government for locally administered grants or loan programs for assistance to eligible organizations directly and adversely affected by the disaster. Requires the commissioner to report to the legislature on the criteria and requirements to be used before any grants are awarded to a local unit of government. Requires all business loan agreements to be executed by December 31, 2013. Provides that any remaining uncommitted balance be transferred to the general fund.
Section 6. Public Facilities Authority. Appropriates $6,000,000 to the Public Facilities Authority from bond proceeds for grants to local governments to replace or rehabilitate public infrastructure.
Section 7. Housing Finance. Appropriates $12.720 million from the general fund to the Housing Finance Agency, including $12.220 million for the Economic Development and Housing Challenge Program, $250,000 for capacity building grants, and $250,000 for family homeless prevention and assistance in the affected area. Limits the loan amount under the Economic Development and Housing Challenge Program to $30,000 per housing structure, with exceptions as provided.
Section 8. Minnesota Historical Society. Appropriates $250,000 to the Minnesota Historical Society for the costs of cleanup, renovation, repair, and replacement of historic structures or historic resources damaged by the disaster.
Section 9. Natural Resources. Appropriates a total of $18,855,000 ($3,000,000 from the general fund, and $15,855,000 from bond proceeds) to the Department of Natural Resources (DNR) for the following:
$6,855,000 from bond proceeds for facility and natural resource damage;
$10,000,000 ($1,000,000 from the general fund, and $9,000,000 from bond proceeds) for flood hazard mitigation grants; and
$2,000,000 from the general fund for debris removal from public waters.
Subdivision 5 extends all existing DNR grants in the disaster area for two additional years.
Section 10. Board of Water and Soil Resources. Appropriates a total of $12,500,000 ($11,000,000 from the general fund, and $1,500,000 from bond proceeds) to the Board of Water and Soil Resources (BWSR) for the following:
$1,500,000 from bond proceeds for Reinvest in Minnesota (RIM) perpetual conservation easements in the disaster area; and
$11,00,000 from the general fund for erosion, sediment, and water quality control cost share grants for local governments in the disaster area.
BWSR may also issue alternative standards for wetland replace statutes in the disaster area to address emergency situations or other disaster recovery efforts.
Section 11. Agriculture. Appropriates $600,000 from the general fund to the Department of Agriculture for grants under Minnesota Statutes, section 12A.04. The Commissioner of Agriculture is required to consult with the Chairs of the Senate and House Agriculture Finance Committees in developing criteria to distribute disaster assistance to affected agricultural producers according to need.
Section 12. Education
Subdivision 1. Provides a total appropriation of $761,000 for K-12 education-related losses from the disaster.
Subdivision 2. Provides $61,000 in disaster enrollment impact aid. This aid is calculated as the basic formula allowance ($5,224 in FY 2013) multiplied by the projected number of projected pupil units lost as a result of the disaster. It is anticipated that only Independent School District No. 97, Moose Lake, will receive aid under this subdivision.
Subdivision 3. Provides an appropriation of $700,000 to the commissioner to make grants to school districts for the costs of facilities cleanup, repair, and replacement that are directly related to the disaster.
Section 13. Department of Health. Appropriates $565,000 from the general fund to the Commissioner of Health for public health activities under Minnesota Statutes, section 12A.08. Of this amount, $222,000 is for behavorial health grants, $302,000 is for community and drinking water systems, and $41,000 is for emergency response reimbursement.
Section 14. Pollution Control Agency. Allows the Commissioner of the Pollution Control Agency to use a portion of the Petroleum Tank Release Cleanup Fund to make grants to rehabilitate buildings if a portion of the rehabilitation cost is attributable to petroleum contamination resulting from the disaster. The estimated amount to be used under this section is $100,000.
Section 15. Bond Sale Expenses. Appropriates $61,000 from the bond proceeds fund and $40,000 from the bond proceeds account in the trunk highway fund to the Commissioner of Management and Budget for bond sales expenses.
Section 16. Bond Sale Authorization. Authorizes the Commissioner of Management and Budget to sell and issue $25.7 million in general obligation bonds, $30 million in state transportation bonds, and $35 million in the trunk highway fund bonds for the purposes of Article 1.
Section 17. Assistance. Provides conforming cross-references to new sections concerning repayment of loan amounts [Section 18] and the requirements for assistance awards [Section 21].
Section 18. Repayments. Requires any loan repayments made by a recipient organization to the local unit of government for business disaster-related assistance through the Department of Employment and Economic Development MIF program to be deposited in the disaster contingency account established in Section 20.
Section 19. Repayments. Requires any loan repayments made by recipient homeowners and rental property owners for disaster assistance to be deposited in the Housing Finance Agency’s disaster relief contingency fund.
Section 20. Disaster Contingency Account; Repayments. Creates a Minnesota investment fund disaster contingency account in the special revenue fund. Requires that loan repayments to a local unit of government be sent to the commissioner for deposit into the account to be appropriated for future disasters.
Section 21. Requirements for Assistance. Provides eligibility requirements and criteria for awards of funds from the Minnesota investment fund for organizations applying for disaster assistance.
Paragraph (a) defines as an eligible applicant any business or nonprofit organization in the declared disaster area directly and adversely affected by the disaster and includes businesses (proprietorship, partnership, LLC, or corporation), cooperatives, utilities, industrial, commercial, retail, and nonprofit organizations. Includes nonprofits that provide residential, health care, child care, social, or other services on behalf of the Department of Human Services to residents in the disaster area. Requires applicants to have been in operation before the date of the disaster.
Paragraph (b) provides eligible activities for use of loan funds to include assistance of businesses in their recovery efforts, but not to provide relief from economic losses.
Paragraph (c) includes as eligible costs the following: repair of buildings, leasehold improvements, fixtures and/or equipment, loss of inventory, and cleanup costs.
Paragraph (d) provides ineligible activities for use of loan funds to include: lending or investment operations, land speculation, or any activity deemed illegal by federal, state, or local law or ordinance. Provides ineligible costs for use of loan funds to include, but are not limited to: economic injury losses, relocation, management fees, financing costs, franchise fees, debt consolidation, moving costs, refinancing debt existing prior to the date of the disaster, and operating costs.
Paragraph (f) requires the following information for a completed application for assistance: MIF recovery loan fund application; business SBA disaster application; regional development organization or responsible local government application; administrative contact; business release for local government to review SBA damage assessment/loss verification; proof of loss statement from insurer; construction cost estimates; invoices for work completed; quotes for equipment; proposed security; company historical financial statements for the 24 months immediately prior to the application date; credit check release; number of jobs to be retained; wages paid; amount of loan request; documentation of damages incurred; property taxes paid and current; judgments, liens, agreements, consent decrees, stipulations for settlements, or other actions; compliance with all applicable local ordinances and plans; documentation through financial and tax records that the business was viable at the time of the flood; business tax identification number; and other documentation as requested.
Allows only completed applications to be reviewed for consideration. Provides that incomplete applications will be assigned pending status and that the applicant be informed in writing of the missing documentation.
Paragraph (h) allows a credit check to be conducted for the company and each of its principal owners when determining eligibility. Requires an owner’s encumbrance report to be completed by the Recorder's Office. Requires assistance recipients to have claimed all applicable private insurance and to have utilized all other sources of assistance provided by the same authorizing act as the grant.
Sections 22 and 23. Lake Superior Zoo. Extend the availability of funds appropriated in 2009 and 2011 from the arts and cultural heritage fund to the Lake Superior Zoo until June 30, 2015.
Section 24. 2012 Flood Loss; City Replacement Aid.
Subdivision 1 requires that county assessors of each qualified county compute a “flood net tax capacity loss” for each city equal to the net tax capacity reduction resulting from the reassessment required under Section 26 and requires that an assessor of a county containing a city that has a flood net tax capacity loss exceeding five percent of its assessment year 2012 total net tax capacity certify the loss to the Commissioner of Revenue by August 1, 2013.
Subdivision 2 provides a onetime aid payment in 2014 to qualified cities equal to the flood net tax capacity loss multiplied by the city’s average local tax rate for taxes payable 2012.
Subdivision 3 requires that the Commissioner of Revenue determine each city’s aid amount and notify each eligible city of its aid amount by August 15, 2013, with payments made after July 1, 2014, and before July 20, 2014.
Subdivision 4 allows a city to spend part of its aid payment to repair county roads located in the city.
Subdivision 5 appropriates the amount necessary to pay the aid from the general fund.
Section 25. Disaster Area; Waiving Property Tax Penalties for Business and Damaged Properties allows qualifying properties to delay payment of the second half of their 2012 property taxes, without penalty, until December 28, 2012. Qualifying properties include:
any commercial-industrial property located in a county that includes an area that qualifies to be designated as a “disaster or emergency area” due to the flooding; and
any property that suffered damage of 50 percent or more due to the flooding.
To qualify, the taxpayer must have been unable to make the payment due to circumstances related to the floods and they must have paid the first half of payable 2012 taxes by May 15, 2012. The taxpayer of a qualifying business under the first criteria must also attach a statement with the payment that all requirements for the extension have been met. If the second half of the payment is received after December 28, 2012, all regular penalties will be imposed.
Section 26. Agricultural Homesteads Extended allows an agricultural homestead to retain its status for assessment years 2013 and 2014, if:
the property owner abandoned the homestead dwelling due to damage caused by the floods;
the property is located in an area designated as a “disaster or emergency area;”
the agricultural land and buildings remain under the same ownership for the current assessment year as existed for the 2012 assessment year;
the owner occupies a dwelling that is located in Minnesota and within 50 miles of one of the parcels of agricultural land; and
the owner notifies the county assessor by December 1, 2013, that the relocation was due to the floods and provides the assessor with any information necessary to verify the relocation.
Section 27. Abatement and Credit Applications Waived. Paragraph (a) requires that, by October 1, 2012, county assessors must reassess all properties located in an area that would qualify to be designated as a “disaster or emergency area” if the designation were to be based solely on the damages to properties caused by the floods and irrespective of executive council approval.
Paragraph (b) waives the requirement that the taxpayer must apply for property tax abatements and/or credits for properties located in an area that is designated a “disaster or emergency area” and requires that before December 14, 2012, each county assessor shall notify the taxpayers or owners of the affected parcel.
Section 28. Transfers, Reductions, Cancellations, and Bond Sale Authorization Reduced. Authorizes $12.671 million in appropriation transfers, reductions, cancellations, and bond sale authorizations.
Section 29. Budget Reserve Account; November 2012 Forecast. Reduces the November 2012 budget reserve forecast requirement to $612,236,000, ensuring that if the forecast is positive, any surplus will be used to buy back K-12 shifts enacted in previous sessions.
Section 30. Budget Reserve Account; Reduction. Requires the Commissioner of Management and Budget to reduce the budget reserve account by $45,382,000 to $612,236,000.
Section 31. Effective Date. Article 1 is effective the day following final enactment.
Article 2 - Windstorm Disaster Relief
Article 2 provides state assistance to seven counties and two tribes for disaster relief from the windstorm on or after July 2, 2012.
Section 1. Appropriation Summary. Summarizes the appropriations by agency and by fund.
Section 2. Format. Explains the appropriation format for the bill. Article 2 appropriates money to assist state agencies and local governments to recover from the damages caused by the windstorms that occurred on July 2, 2012, in north central Minnesota. The general fund appropriations in the bill are available through June 30, 2015. Bond proceeds appropriations are available until projects are completed or abandoned.
Section 3. Public Safety.
Grants for Debris Removal and Utility Repair. Appropriates $5.8 million from the general fund to the Commissioner of Public Safety for state and local assistance in the clean-up and repair of damages caused by the windstorm. These damages mainly include debris removal and utility repair.
Section 4. Natural Resources. Appropriates a total of $2,069,000 ($1,075,000 from the general fund, and $994,000 from bond proceeds) to the Department of Natural Resources (DNR) for the following:
$994,000 from bond proceeds for reforestation of lands damaged by the disaster; and
$1,075,000 from the general fund for the administration of salvage timber sales and lost revenue of timber sales.
Section 5. Bond Sale Authorization. Authorizes the Commissioner of Management and Budget to sell and issue $994,000 in general obligation bonds for the purposes of Article 2.
Section 6. Effective Date. Article 2 is effective the day following final enactment.
Counties and Tribes Included in Presidential Declaration of a Major Disaster FEMA-4069-DR
Fond du Lac Band of Lake Superior Chippewa
Grand Portage Band of Lake Superior Chippewa
Mille Lacs Band of Ojibwe