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ND Senate approves $600M disaster package

November 11, 2011

Courtesy of the North Dakota State Water Commission

BISMARCK, N.D. (AP) — North Dakota's Senate unanimously approved a $639 million disaster relief measure Thursday that includes money for low-interest home loans, road construction and repairs to public works.
Final approval was expected Friday in the House as North Dakota lawmakers prepared to finish their week-long special session on Veterans' Day.
The measure's centerpiece is a $60 million fund, to be administered by the state-owned Bank of North Dakota, which would make loans of up to $30,000 for residents of nine North Dakota counties to finance reconstruction of flood-damaged homes or to buy new ones.
It includes a more generous tax credit for developers of low-income housing over the next two years. The amount of money set aside to finance the credits would almost quadruple, rising from $4 million to $15 million.
The legislation includes aid for western North Dakota counties that may not have suffered flood damage last spring and summer but are coping with problems linked to rapid oil development, such as crumbling roads and sharply higher demand for water, sewage disposal, law enforcement and emergency services.
Almost $700,000 is set aside to hire four new highway patrolmen for western North Dakota, where the population and truck traffic has been growing rapidly as a result of the region's oil boom.
An existing state "oil impact" fund, which now has $100 million in budget authority, will get an additional $30 million. Another $30 million in grants will be available for public works repairs in cities and counties damaged by flooding.
During a brief debate on the legislation Thursday night, majority Republican senators defeated a proposal by the Democratic Senate leader, Ryan Taylor, of Towner, that the state make up any shortfall in federal grants that are included in the bill.
The legislation includes authority to spend up to $235 million in "community development block grants" from the federal Department of Housing and Urban Development. The grants were an important source of reconstruction money for the city of Grand Forks when it was swamped by the flooding Red River in 1997.
However, North Dakota is not likely to receive that much money, because it is roughly half the sum that will be allocated for the entire country, Taylor said.
"We don't have any guarantee" the state will get the $235 million, Taylor said. "There's also 49 other states, a number of them who have had disasters."
Sen. Raymon Holmberg, R-Grand Forks, the chairman of the Senate Appropriations Committee, said the provision would allow the grants to be used more quickly.
Normally, if a state agency receives federal grants that it does not have the authority to spend, the agency must get permission from a state board and a legislative committee. That can take three months or more.
At a meeting of Senate Republicans held before Thursday's vote, details of the "re-builders loan program" left some senators agog.
Homeowners may borrow up to $30,000 and take as long as 20 years to repay, at a 1 percent interest rate, with nothing more than their signatures as collateral. Principal and interest payments on each loan may be put off for two years.
A separate provision that allowed forgiveness of up to half the loan's principal was dropped.
The program is available to homeowners in Barnes, Benson, Burleigh, McHenry, Morton, Ramsey, Renville, Richland and Ward counties, which had flood damage that was extensive enough to make their residents eligible for individual grants from the Federal Emergency Management Agency.
Homeowners who suffered extensive flood damage would be eligible. They would not be able to borrow more than it took to repair damage not covered by flood insurance.
Sen. George Nodland, R-Dickinson, a retired bank executive, said the program was "totally unheard of." An unsecured loan usually is given for maybe 36 months, he said.
"We're really being good to people," Nodland said. "And then giving them two years without repay, that's an excellent deal."

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