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Disaster funds include individual, business aid

Sen. Roger Reinert of Duluth checks during a Thursday legislative meeting about details of a disaster relief proposal. Don Davis /Forum Communications

ST. PAUL -- Individuals and small businesses recovering from summer storms would share in a disaster recovery bill lawmakers are discussing.

The Federal Emergency Management Agency rejected Minnesota's request to help home and business owners, but a proposed funding package of nearly $190 million from the Dayton administration includes more than $30 million of individual aid.

Republicans a week ago said they had sticker shock over the proposal; they had expected something closer to $27 million. But when a legislative committee met Thursday, Republicans seemed more willing to fund a higher amount.

Sen. John Carlson, R-Bemidji, predicted lawmakers meeting in special session, perhaps a week from today, will approve spending $150 million to $200 million.

Sen. Tony Lourey, DFL-Kerrick, and Rep. Bill Hilty, DFL-Finlayson, said more than $30 million will be available for individuals and businesses that sustained damage in June floods, mostly in northeast and southeast Minnesota.

Most of the individual aid is likely to come in low-interest loans. Some of the loans may not need to be repaid if state-imposed conditions are met.

The individual aid comes as good news to some after the federal government denied the state's request for such relief. The Small Business Administration is expected to offer some low-interest loans, but if people affected by floods cannot get that help, they would be able to turn to the state.

The disaster relief plan also includes help for northern Minnesota areas affected by a windstorm in early July. It is not clear how much damage the winds caused because, in part, some townships apparently have not reported all of their damage. So far the state has received information about $6.4 million of damage.

There also is a question about how much flood damage will total.

The official estimate is $108 million, mostly in northeastern Minnesota. However, officials say they expect that to top $150 million just for public infrastructure such as roads.

Sen. Roger Reinert, DFL-Duluth, was concerned about the disaster package a week ago when Republican leaders questioned the size of the spending plan. But he said he felt better after Thursday's meeting.

"We are in the right ballpark," he said.

However, Carlson and other Republicans said some funding requests could be pushed back to next year's regular legislative session if it does not appear the money would be needed immediately.

Senate Minority Leader Tom Bakk, DFL-Cook, warned such a delay would be "very risky." With a new budget deficit expected and other pressures on state funding, disaster relief could have a more difficult time passing in 2013, he said.

On the other hand, Sen. Joe Gimse, R-Willmar, said that lawmakers will know more about what is needed next year.

Sen. Tony Lourey, DFL-Kerrick, said next year's Legislature is certain to be asked to add to whatever lawmakers approve in a special session, tentatively set for Aug. 24.

Legislative leaders and Gov. Mark Dayton are to meet today. Dayton said his goal is to sign an agreement that would set the session for Aug. 24 and limit debate to the disaster-relief bill.

Dayton said on Wednesday he would not require leaders to agree on a specific amount of aid.

On Thursday, lawmakers attending the relief-bill hearing said they were optimistic that not only would they agree to something similar to Dayton's plan but they also would do it in a week.

It was not clear whether more public meetings will be held before the special session.

The $190 million plan includes funds that the federal government eventually will pay the state, leaving it unclear just how much the proposal would cost Minnesota. Some money would come from the state's budget reserves, while other would be obtained by the state selling bonds.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.