1.1A bill for an act1.2relating to disaster relief; creating a disaster assistance contingency account; 1.3requiring transfer of unused disaster relief appropriations to the disaster 1.4assistance contingency account; establishing a disaster relief cost-share 1.5relationship between the state, local entities, and American Indian tribes and 1.6bands; authorizing state public disaster assistance in the absence of federal public 1.7disaster assistance; appropriating money;amending Minnesota Statutes 2012, 1.8sections 12.03, by adding subdivisions; 12.221, subdivision 4, by adding a 1.9subdivision; 12A.02, subdivision 2, by adding subdivisions; 12A.03, subdivision 1.103; 12A.15, subdivision 1; 16A.28, by adding a subdivision; proposing coding for 1.11new law as Minnesota Statutes, chapter 12B.1.12BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:1.13ARTICLE 11.14DISASTER ASSISTANCE; FEDERAL AID GRANTED1.15    Section 1. Minnesota Statutes 2012, section 12.03, is amended by adding a subdivision 1.16to read:1.17    Subd. 5d.Local entity."Local entity" has the meaning given in Code of Federal 1.18Regulations, title 44, section 206.2 (2012), and also includes privately owned electrical 1.19cooperatives eligible for FEMA assistance.1.20    Sec. 2. Minnesota Statutes 2012, section 12.03, is amended by adding a subdivision to 1.21read:1.22    Subd. 6b.Nonfederal share."Nonfederal share" has the meaning given in section 1.2312A.02, subdivision 7.1.24    Sec. 3. Minnesota Statutes 2012, section 12.221, subdivision 4, is amended to read:2.1    Subd. 4. Subgrant agreements; state share.(a) The state director, serving as the 2.2governor's authorized representative, may enter into subgrant agreements with eligible 2.3applicants to provide federal and state financial assistance made available as a result 2.4of a disaster declaration.2.5(b) When state funds are used to provide the FEMA Public Assistance Program 2.6cost-share requirement for a local entity, the state director must award a local entity 100 2.7percent of the nonfederal share of the local entity's FEMA Public Assistance Program costs.2.8    Sec. 4. Minnesota Statutes 2012, section 12.221, is amended by adding a subdivision 2.9to read:2.10    Subd. 6.Disaster assistance contingency account; appropriation.(a) A disaster 2.11assistance contingency account is created in the special revenue fund in the state treasury. 2.12Money in the disaster assistance contingency account is appropriated to the commissioner 2.13of public safety to provide:2.14(1) cost-share for federal assistance under section 12A.15, subdivision 1; and2.15(2) state public disaster assistance to eligible applicants under chapter 12B.2.16(b) For appropriations under paragraph (a), clause (1), the amount appropriated 2.17is 100 percent of any nonfederal share for state agencies and local entities. Money 2.18appropriated under paragraph (a), clause (1), may be used to pay all or a portion of the 2.19nonfederal share for publicly owned capital improvement projects.2.20(c) For appropriations under paragraph (a), clause (2), the amount appropriated 2.21is the amount required to pay eligible claims under chapter 12B, as certified by the 2.22commissioner of public safety.2.23(d) By January 15 of each year, the commissioner of management and budget shall 2.24submit a report to the chairs and ranking minority members of the house of representatives 2.25Ways and Means Committee and the senate Finance Committee detailing state disaster 2.26assistance appropriations and expenditures under this subdivision during the previous 2.27calendar year.2.28(e) The governor's budget proposal submitted to the legislature under section 16A.11 2.29must include recommended appropriations to the disaster assistance contingency account. 2.30The governor's appropriation recommendations must be informed by the commissioner of 2.31public safety's estimate of the amount of money that will be necessary to:2.32(1) provide 100 percent of the nonfederal share for state agencies and local entities 2.33that will receive federal financial assistance from FEMA during the next biennium; and2.34(2) fully pay all eligible claims under chapter 12B.2.35(f) Notwithstanding section 16A.28:3.1(1) funds appropriated or transferred to the disaster assistance contingency account 3.2do not lapse but remain in the account until appropriated; and3.3(2) funds appropriated from the disaster assistance contingency account do not lapse 3.4and are available until expended.3.5    Sec. 5. Minnesota Statutes 2012, section 12A.02, subdivision 2, is amended to read:3.6    Subd. 2. Appropriation. "Appropriation" means an appropriation provided in law 3.7specifically to implement this chapter, including but not limited to a statutory appropriation 3.8to provide the required cost-share for federal disaster assistance under section 12.221.3.9    Sec. 6. Minnesota Statutes 2012, section 12A.02, is amended by adding a subdivision 3.10to read:3.11    Subd. 6.Local entity."Local entity" has the meaning given in section 12.03, 3.12subdivision 5d.3.13    Sec. 7. Minnesota Statutes 2012, section 12A.02, is amended by adding a subdivision 3.14to read:3.15    Subd. 7.Nonfederal share."Nonfederal share" means that portion of total FEMA 3.16Public Assistance Program costs that is no more than 25 percent and is not eligible for 3.17FEMA reimbursement.3.18    Sec. 8. Minnesota Statutes 2012, section 12A.03, subdivision 3, is amended to read:3.19    Subd. 3. Nonduplication of federal assistance. State assistance may not duplicate 3.20or supplement eligible FEMA Public Assistance Program assistance. For eligible Public 3.21Assistance Program costs, any state matching cost-share money made available for that 3.22assistance must be disbursed by the Department of Public Safety to a state agency, local 3.23political subdivision, Indian tribe entity, or other applicant. State assistance distributed by 3.24a state agency, other than the Department of Public Safety, to a political subdivision local 3.25entity or other applicant for disaster costs that are eligible for FEMA Public Assistance 3.26Program assistance constitutes an advance of funds. Such advances must be repaid to the 3.27applicable state agency when the applicant has received the FEMA Public Assistance 3.28Program assistance, and whatever state matching cost-share money may be made available 3.29for that assistance, from the Department of Public Safety.3.30    Sec. 9. Minnesota Statutes 2012, section 12A.15, subdivision 1, is amended to read:4.1    Subdivision 1. State match cost-share for federal assistance. State appropriations 4.2may be used for payment of the state match for federal disaster assistance to pay 100 4.3percent of the nonfederal share for state agencies. If authorized in law, state appropriations 4.4may be used to pay all or a portion of the local share of the match for federal funds for 4.5political subdivisions and local entities under section 
         12.221. An appropriation from 4.6the bond proceeds fund may be used to fund federal match obligations as cost-share for 4.7federal disaster assistance for publicly owned capital improvement projects resulting from 4.8the receipt of federal disaster assistance.4.9    Sec. 10. Minnesota Statutes 2012, section 16A.28, is amended by adding a subdivision 4.10to read:4.11    Subd. 9.Disaster assistance.(a) The commissioner of management and budget 4.12must transfer the unexpended and unencumbered balance of a general fund disaster 4.13assistance appropriation that expires as provided under this section or as otherwise provided 4.14by law to the disaster assistance contingency account in section 12.221, subdivision 6.4.15(b) Expired disaster assistance transferred to the disaster assistance contingency 4.16account is available for appropriation as provided under section 12.221, subdivision 4.176, regardless of the specific disaster event or purpose for which the expired disaster 4.18assistance was originally appropriated.4.19(c) The commissioner must report each transfer to the chairs of the house of 4.20representatives Ways and Means Committee and the senate Finance Committee.4.21(d) For the purposes of this subdivision, "disaster assistance appropriation" means 4.22an appropriation from the general fund to provide cost-share required for federal disaster 4.23assistance or to provide other state disaster assistance under chapter 12A or 12B.4.24    Sec. 11. EFFECTIVE DATE.4.25This article is effective the day following final enactment.4.26ARTICLE 24.27DISASTER ASSISTANCE; ABSENT FEDERAL AID4.28    Section 1. [12B.10] PUBLIC DISASTER ASSISTANCE; ABSENT FEDERAL 4.29AID.4.30This chapter establishes a state public assistance program to provide cost-share 4.31assistance to local entities that sustain significant damage on a per capita basis but are not 4.32eligible for federal disaster assistance or corresponding state assistance under chapter 12A.5.1    Sec. 2. [12B.15] DEFINITIONS.5.2    Subdivision 1.Application.The definitions in this section apply to this chapter.5.3    Subd. 2.Applicant."Applicant" means a local entity that applies for state disaster 5.4assistance under this chapter.5.5    Subd. 3.Commissioner."Commissioner" means the commissioner of public safety.5.6    Subd. 4.Director."Director" means the director of the Division of Homeland 5.7Security and Emergency Management in the Department of Public Safety.5.8    Subd. 5.Disaster."Disaster" means any catastrophe, including but not limited 5.9to a tornado, storm, high water, wind-driven water, tidal wave, earthquake, volcanic 5.10eruption, landslide, mudslide, snowstorm, or drought or, regardless of cause, any fire, 5.11flood, or explosion.5.12    Subd. 6.FEMA."FEMA" means the Federal Emergency Management Agency.5.13    Subd. 7.Incident period."Incident period" means the time interval of a disaster as 5.14delineated by specific start and end dates.5.15    Subd. 8.Local entity."Local entity" has the meaning given in section 12.03, 5.16subdivision 5d.5.17    Sec. 3. [12B.25] ELIGIBILITY CRITERIA; CONSIDERATIONS.5.18    Subdivision 1.Payment required; eligibility criteria.The director, serving as 5.19the governor's authorized representative, may enter into grant agreements with eligible 5.20applicants to provide state financial assistance made available as a result of a disaster 5.21that satisfies all of the following criteria:5.22(1) the state or applicable local entity declares a disaster or emergency during the 5.23incident period;5.24(2) damages suffered and eligible costs incurred are the direct result of the disaster;5.25(3) federal disaster assistance is not available to the applicant because the governor 5.26did not request a presidential declaration of major disaster, the president denied the 5.27governor's request, or the applicant is not eligible for federal disaster assistance because 5.28the state or county did not meet the per capita impact indicator under FEMA's Public 5.29Assistance Program;5.30(4) the applicant incurred eligible damages that, on a per capita basis, equal or 5.31exceed 50 percent of the countywide per capita impact indicator under FEMA's Public 5.32Assistance Program;5.33(5) the applicant assumes responsibility for 25 percent of the applicant's total 5.34eligible costs; and5.35(6) the applicant satisfies all requirements in this chapter.6.1    Subd. 2.Considerations; other resources available.When evaluating applicant 6.2eligibility under subdivision 1, the director must consider:6.3(1) the availability of other resources from federal, state, local, private, or other 6.4sources; and6.5(2) the availability or existence of insurance.6.6    Sec. 4. [12B.30] ELIGIBLE COSTS.6.7    Subdivision 1.Eligible costs.Costs eligible for payment under this chapter are 6.8those costs that would be eligible for federal financial assistance under FEMA's Public 6.9Assistance Program.6.10    Subd. 2.Ineligible costs.Ineligible costs are all costs not included in subdivision 6.111, including but not limited to:6.12(1) ordinary operating expenses, including salaries and expenses of employees and 6.13public officials that are not directly related to the disaster response;6.14(2) costs for which payment has been or will be received from any other funding 6.15source;6.16(3) disaster-related costs that should, in the determination of the director, be covered 6.17and compensated by insurance; and6.18(4) projects and claims totaling less than $1,000.6.19    Sec. 5. [12B.35] APPLICANT'S SHARE.6.20An applicant's share of eligible costs incurred must not be less than 25 percent. The 6.21substantiated value of donated materials, equipment, services, and labor may be used as 6.22all or part of the applicant's share of eligible costs, subject to the following:6.23(1) all items and sources of donation must be indicated on the application and any 6.24supporting documentation submitted to the commissioner;6.25(2) the rate for calculating the value of donated, nonprofessional labor is the 6.26prevailing federal minimum wage;6.27(3) the value of donated equipment may not exceed the highway equipment rates 6.28approved by the commissioner of transportation; and6.29(4) the value of donated materials and professional services must conform to market 6.30rates and be established by invoice.6.31    Sec. 6. [12B.40] APPLICATION PROCESS.7.1(a) The director must develop application materials and may update the materials as 7.2needed. Application materials must include instructions and requirements for assistance 7.3under this chapter.7.4(b) An applicant has 30 days from the end of the incident period or the president's 7.5official denial of the governor's request for a declaration of a major disaster to provide the 7.6director with written notice of intent to apply. The director may deny an application due to 7.7a late notice of intent to apply.7.8(c) Within 60 days after the end of the incident period or the president's official denial 7.9of the governor's request for a declaration of a major disaster, the applicant must submit a 7.10complete application to the director. A complete application includes the following:7.11(1) the cause, location of damage, and incident period;7.12(2) documentation of a local, tribal, county, or state disaster or emergency 7.13declaration in response to the disaster;7.14(3) a description of damages, an initial damage assessment, and the amount of 7.15eligible costs incurred by the applicant;7.16(4) a statement or evidence that the applicant has the ability to pay for at least 25 7.17percent of total eligible costs incurred from the disaster; and7.18(5) a statement or evidence that the local entity has incurred damages equal to or 7.19exceeding 50 percent of the federal countywide threshold in effect during the incident 7.20period.7.21(d) The director must review the application and supporting documentation for 7.22completeness and may return the application with a request for more detailed information. 7.23The director may consult with local public officials to ensure the application reflects the 7.24extent and magnitude of the damage and to reconcile any differences. The application is 7.25not complete until the director receives all requested information.7.26(e) If the director returns an application with a request for more detailed information 7.27or for correction of deficiencies, the applicant must submit all required information within 7.2830 days of the applicant's receipt of the director's request. The applicant's failure to 7.29provide the requested information in a timely manner without a reasonable explanation 7.30may be cause for denial of the application.7.31(f) The director has no more than 60 days from the receipt of a complete application 7.32to approve or deny the application, or the application is deemed approved. If the director 7.33denies an application, the director must send a denial letter. If the director approves an 7.34application or the application is automatically deemed approved after 60 days, the director 7.35must notify the applicant of the steps necessary to obtain reimbursement of eligible 8.1costs, including submission of invoices or other documentation substantiating the costs 8.2submitted for reimbursement.8.3    Sec. 7. [12B.45] CLAIMS PROCESS.8.4    Subdivision 1.Claims; appeal.(a) An applicant must submit to the director 8.5completed claims for payment of actual and eligible costs on forms provided by the 8.6director. All eligible costs claimed for payment must be documented and consistent with 8.7the eligibility provisions of this chapter.8.8(b) If the director denies an applicant's claim for payment, the applicant has 30 days 8.9from receipt of the director's determination to appeal in writing to the commissioner. The 8.10appeal must include the applicant's rationale for reversing the director's determination. The 8.11commissioner has 30 days from receipt of the appeal to uphold or modify the director's 8.12determination and formally respond to the applicant. If, within 30 days of receiving 8.13the commissioner's decision, the applicant notifies the commissioner that the applicant 8.14intends to contest the commissioner's decision, the Office of Administrative Hearings shall 8.15conduct a hearing under the contested case provisions of chapter 14.8.16    Subd. 2.Final inspection.Upon completion of all work by an applicant, the 8.17director may inspect all work claimed by the applicant. The applicant must provide the 8.18director with access to records pertaining to all claimed work and must permit the director 8.19to review all records relating to the work.8.20    Subd. 3.Closeout.The director must close out an applicant's disaster assistance 8.21application after all of the following occur:8.22(1) eligible work is complete;8.23(2) the applicant receives the final amount due or pays any amount owed under 8.24section 12B.50; and8.25(3) any extant or scheduled audits are complete.8.26    Subd. 4.Audit.(a) An applicant must account for all funds received under this 8.27chapter in conformance with generally accepted accounting principles and practices. The 8.28applicant must maintain detailed records of expenditures to show that grants received under 8.29this chapter were used for the purpose for which the payment was made. The applicant 8.30must maintain records for five years and make the records available for inspection and 8.31audit by the director or the state auditor. The applicant must keep all financial records for 8.32five years after the final payment, including but not limited to all invoices and canceled 8.33checks or bank statements that support all eligible costs claimed by the applicant.8.34(b) The director or state auditor may audit all applicant records pertaining to an 8.35application or payment under this chapter.9.1    Sec. 8. [12B.50] FUNDING FROM OTHER SOURCES; REPAYMENT 9.2REQUIRED.9.3If an applicant subsequently recovers eligible costs from another source after 9.4receiving payment under this chapter, the applicant must pay the commissioner an amount 9.5equal to the corresponding state funds received within 30 days. The commissioner must 9.6deposit any repayment in the disaster response contingency account in section 12.221, 9.7subdivision 6.9.8    Sec. 9. EFFECTIVE DATE.9.9This article is effective the day following final enactment.9.10ARTICLE 39.11TRANSFER9.12    Section 1. TRANSFER; EMERGENCY MANAGEMENT.9.13On July 1, 2014, the commissioner of management and budget shall transfer 9.14$3,000,000 from the general fund to the disaster assistance contingency account 9.15established in Minnesota Statutes, section 12.221, subdivision 6.