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S.F. No. 2601 - Disaster Assistance, as Amended by the Author’s SCS2601A-3 Amendment
 
Author: Senator Richard Cohen
 
Prepared By:
 
Date: April 25, 2014



 

OVERVIEW

This bill establishes a disaster assistance contingency account that will provide funding for certain disaster relief.  This bill also establishes a new program to provide disaster assistance to local entities under some circumstances when the entities are not eligible for federal assistance.

Article 1:  Disaster Assistance For Public Entities; Federal Aid Granted

Section 1 [Local Government] links the definition for "local government" as the term is used in this bill to the definition provided in federal law for federal emergency management purposes.  That definition is:

“Local Government:  (i) A county, municipality, city, town, township, local public authority, school district, special district, intrastate district, council of governments (regardless of whether the council of governments is incorporated as a nonprofit corporation under State law), regional or interstate government entity, or agency or instrumentality of a local government; (ii) An Indian tribe or authorized tribal organization, or Alaska Native village or organization; and (iii) A rural community, unincorporated town or village, or other public entity, for which an application for assistance is made by a State or political subdivision of a State.”

Section 2 [Nonfederal Share] defines the term “nonfederal share” as it is used in this bill by providing the definition supplied in federal law for the FEMA disaster program.  The term “nonfederal share” refers to the portion of total eligible damages that is not eligible for FEMA assistance.  This is referred to as “FEMA match” in many instances, and is ordinarily 25 percent, with FEMA paying the remaining 75 percent of eligible costs.

Section 3 [Subgrant Agreements; State Share] requires that when state funds are used to provide a FEMA cost-share requirement for a local government, the state must pay 100 percent of the nonfederal share for FEMA public assistance.

Section 4 [Disaster Assistance Contingency Account] establishes a disaster assistance contingency account in the special revenue fund.  Money in the account may be used for:

  1. cost-share for federal assistance; and
  2. state public disaster assistance to local units of government under a program established in chapter 12B created in this bill.

This subdivision also includes a reporting requirement for the Commissioner of Management and Budget that would detail state disaster assistance appropriations expenditures under this subdivision each calendar year.  Also requires the Governor to include recommendations for additional appropriations to the contingency account in each budget proposal submitted to the Legislature. 

Section 5 [Appropriations] provides a technical clarification to ensure that statutory appropriations are included within the meaning of the term “appropriation.” 

Section 6 [Local Government] links the definition for local government as it is provided in chapter 12A to the new definition provided in section 1 of this article.

Section 7 [Nonfederal Share] defines “nonfederal share” as that portion of total FEMA public assistance program costs that is not eligible for FEMA reimbursement, and does not exceed more than 25 percent of the total.

Section 8 [Nonduplication of Federal Assistance] replaces the term “matching” with “cost-share” and includes other technical and conforming changes.

Section 9 [State Cost-Share for Federal Assistance] authorizes appropriations to be used for 100 percent of the nonfederal share for state agencies and local units of government.

Section 10 [Disaster Assistance] requires the Commissioner of Minnesota Management and Budget to transfer unspent and expiring disaster assistance appropriations to the new contingency account created in this bill.  Includes a reporting mechanism.

Section 11 [Effective Date] makes this article effective the day following final enactment.

 Article 2 – Disaster Assistance for Public Entities; Absent Federal Aid

Section 1 [Public Disaster Assistance] provides the purpose for this chapter of law, which is stated to provide cost-share assistance to local governments that sustain significant damage on a per capita basis, but are not eligible for federal disaster assistance or corresponding state assistance under chapter 12A.

Section 2 [Definitions] defines certain terms used in this article consistent with the definitions that are supplied in article 1 of this bill.

Section 3 [Eligibility Criteria] allows the Department of Public Safety to enter into grant agreements with local government applicants for state financial assistance, provided a disaster satisfies the following criteria:

  1. there is a state or applicable local government declaration and emergency;
  2. damages are suffered and eligible costs incurred as a direct result of the disaster;
  3. federal disaster assistance is unavailable;
  4. the applicant incurred eligible damages on a per capita basis that equal or exceed 50 percent of the countywide per capita impact indicator under FEMA’s public assistance program;
  5. the applicant assumes responsibility for 25 percent of total eligible costs; and
  6. the applicant satisfies all other requirements in this chapter of law.

 Subdivision 2 allows the Director of Emergency Management to consider the availability of other resources from other units of government and the existence of any insurance.

Section 4 [Eligible Costs] provides that eligible costs include those that would have been eligible for reimbursement under the FEMA public assistance program, if those grants had been available.

Subdivision 2 specifies that ineligible costs include, but are not limited to:

  • ordinary operating expenses, including salaries and expenses of employees not directly related to disaster response;
  • costs for which payment has been or will be received from any other funding source;
  • disaster-related costs that should be covered and compensated by insurance;
  • projects and claims totaling less than $1,000.

Section 5 [Applicant’s Share] requires that an applicant share of eligible costs must not be less than 25 percent.  Allows the substantiated value of donations-in-kind to be counted toward the applicant’s share of eligible costs.  Provides other limitations on this method of accounting.

Section 6 [Application Process] requires the Department of Public Safety to develop application materials.  Provides a submission and review process.

Section 7 [Claims Process] provides a timeline for a claims process and authorizes a process for appealing the denial of an award, including the ability to contest the commissioner’s decision in a contested case hearing under the provisions of the Administrative Procedure Act.

Subdivision 4 authorizes the Director of Emergency Management or the Legislative Auditor to conduct an audit of the records of local government expenditures of disaster assistance funds and requires records to be kept for five years.

Section 8 [Funding from Other Sources] requires an applicant who subsequently recovers eligible costs from another source to pay the commissioner an amount equivalent to those funds within 30 days after receipt.

Section 9 [Effective Date] makes this article effective the day following final enactment.

Article 3 – Appropriation

Section 1 [Appropriation] provides the transfer of $3,000,000 from the general fund to the disaster assistance contingency account established in this bill. 

TSB/rdr

 
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