More flood aid? Legislature mulls multiple bills

Minot-area residents still recovering from the 2011 flood could get additional help from the 2013 Legislature.

Minot legislators have introduced bills that would extend the Rebuilders Loan Program and open it to more borrowers. There’s also a proposed income-tax credit for 2011 flood victims in addition to the flood assistance offered by Gov. Jack Dalrymple in his proposed 2013-15 budget.

Rep. Scott Louser, R-Minot, introduced House Bill 1184, which would give flood victims an income-tax credit equal to the taxes they paid for the years 2011 and 2012. The bill was heard in committee Monday, along with another bill that Louser introduced to suspend the state income tax for two years.

HB 1184 allows for the flood-related credit to carry over up to five years so it could be taken once a suspended income tax resumes. Depending on what the Legislature does with the state income tax long-term, though, the flood credit could be affected.

“Clearly, that’s going to have to be addressed,” Louser said of the situation if both bills pass. He said both bills have merit and need to be discussed as part of an overall look at reducing the tax burden in the state.

A tax credit for flooded residents is needed because money from the Federal Emergency Management Agency wasn’t enough to get people back on their feet, he said. Some people didn’t even receive the FEMA money, he added.

Louser said there’s talk of a constitutional amendment that would eliminate constraints on direct financial aid to disaster victims and enable the state to do more for individuals. The Legislature would have to decide whether to place the question on the ballot. Constitutional amendments require voter approval. The next statewide election will be in June 2014.

North Dakota’s aid to flood-affected homeowners has focused on the Rebuilders Loan Program. The program provides up to $30,000 at 1 percent interest to rebuild a primary residence.

Louser is sponsoring House Bill 1185 to enable landlords to access the fund to rebuild flood-damaged rental properties. The bill was heard in committee Tuesday.

A similar proposal failed when the $50 million Rebuilders Loan Fund was created in a November 2011 special session. Legislators might view the proposal differently this session due to leftover funds in the account, Louser said.

The fund has about $8.5 million uncommitted. The Bank of North Dakota still has 18 pending requests totaling $516,000.

As of Friday, the bank had closed on 1,407 loans, although 17 of those had not yet been submitted for funding. Another 26 approved loans had yet to close. Homeowners from the Minot area account for 95 percent of approved applications. The remainder were from the Bismarck-Mandan area. The application deadline was Sept. 30, 2012.

Sen. Karen Krebsbach, R-Minot, is prime sponsor of Senate Bill 2132, which would enable residents of FEMA temporary housing units to access that leftover money for loans to purchase their units. The Senate passed the bill 47-0 on Friday. It carries an emergency clause so it can be implemented immediately if passed by the House and signed by the governor.

Rep. Dan Ruby, R-Minot, introduced House Bill 1297, which would forgive the remainder of a Rebuilders loan if borrowers have been making timely payments for the first five years. The state general fund would reimburse the Bank of North Dakota for the amount of the forgiven loans. The bill is scheduled for a hearing today.

Ruby said his intent is to provide forgiveness of a third of the loan principal after five years. The original Rebuilders loan bill in the special session had included forgiveness of 50 percent of the loan, but legislators removed the provision in committee.

“I heard from many flood victims that they felt the state should do more for them since many believe the flood could have been prevented with proper management by the various governments. I lowered the forgiveness amount with the hope that it will get more support,” Ruby said.

The governor has proposed extending the Rebuilders program into the next biennium without an additional appropriation. Jeff Zent, spokesman for the governor’s office, said the governor would support more funding if money remaining in the account isn’t adequate to cover eligible applications.

North Dakota’s loan aid to flood survivors is similar to programs in other states.

Following 2008 flooding in Iowa, state lawmakers approved interest-free loans up to $50,000 plus $10,000 for energy-efficient appliances to help rebuild homes, make mortgage payments while awaiting a buyout or make downpayments to buy another home. The program forgives a portion of the loan for each year the homeowner lives in the house, with full forgiveness after 10 years. Cedar Rapids residents, whose community was hardest hit, received a little more than $20 million through the program.

Following flooding in northeastern Minnesota last year, the Minnesota Legislature approved $12.2 million to provide a no-interest loan of up to $30,000 for home repair. The loan is forgiven if the homeowner remains in the home for 10 years.

In North Dakota, the Legislature set aside $10 million in addition to the Rebuilders loans for discretionary use in helping with home rebuilding. The Souris Valley United Way received $3.5 million of that money to distribute through the Souris Valley Long-Term Recovery Committee as grants to Minot-area homeowners. The average grant was $4,600.

The programs to assist with rebuilding were part of $199 million in statewide flood aid approved by the Legislature during a November 2011 special session. The assistance included $29.5 million in FEMA matching, $30 million to help with damages not covered by FEMA and $23 million for county and township roads. Another $500,000 went to schools.

Of $50 million appropriated for distribution by the State Water Commission, Ward County, Minot and Burlington shared in $30 million for home acquisitions.

The state also picked up the initial cost of preliminary flood protection design for the Souris River valley. Dalrymple is suggesting the state provide more than $60 million in the coming biennium to continue the work of home acquisitions and project design. Minot city officials have stated that the amount will meet their needs for the next two years but additional funding will be required in the future if flood protection is to be built.

The governor’s budget for 2013-15 also includes $3.5 million in one-time general fund spending to repair flood damage that occurred on the state fairgrounds during the 2011 flood. The work includes an asphalt overlay on the fairgrounds and replacing gravel on parking lots.

In the Minnesota disaster, the overall relief package approved last August totaled $167 million and included $159 million in flood aid. A large portion of Minnesota state aid went to repair roads and other infrastructure. The bill also included funding for debris removal, behavioral health, water systems, school enrollment impact and disaster relief facilities and flood hazard mitigation. It included a $15 million investment fund that provides grants to local governments to use in granting or loaning money to recovering businesses.

In 2009, the Iowa Legislature responded to the 2008 disaster with $165 million in assistance. Of the total, $118.5 million was available for competitive grants and $46.5 million was reserved for targeted rebuilding projects. In 2010, Iowa’s governor signed an extension that made another $60.9 million available for disaster assistance and prevention.

Cedar Rapids benefited from almost $58 million of that money. Cedar Rapids is the seat of Linn County, which also received millions of dollars from the state for repair of its infrastructure and buildings, including $15 million for its human service center.

The Cedar Rapids Community School District identified nearly $24 million in flood-related expenses that qualified for FEMA reimbursement. The state picked up both the state and local share of the match for the FEMA money, which amounted to 10 percent of the total cost.

Last year, the Iowa Legislature created a new state flood protection fund. A portion of an incremental increase in the state sales tax will go into a fund, to which cities can apply if they have local matching funds. Cedar Rapids is interested in obtaining $200 million through that fund.

State disaster programs aren’t universal, however. Following flooding in May 2010 that included Nashville, Tenn., the Tennessee Legislature paid its share of the FEMA match for public works repairs but provided no special appropriations to local governments, according to the Tennessee Emergency Management Agency.

In New Jersey, which took the brunt of Hurricane Sandy last year, legislators still are considering what type of assistance to offer disaster survivors and communities. Gov. Chris Christie promised to make rebuilding businesses his priority and announced $26 million in state funding to train workers in cleanup efforts, retain highly skilled and high-wage jobs and fill a skills gap created by workers who left the state due to Sandy.

Eighty percent of New Jersey homeowners were covered by insurance, according to FEMA.

New Jersey has ongoing programs that assist in the acquisition of lands in floodways of its rivers. Legislation in 2007 provided $12 million to initiate the program, and an additional $24 million was approved by voters in 2009.