Purpose

• Establish a state relief program to assist small businesses negatively impacted by federal enforcement activity between July 1, 2025 and February 28, 2026.
• Provide grants to operators of certain indoor, privately owned spaces that host multiple tenants, with the goal of supporting these spaces and their tenants, many of whom are small or culturally focused.

Main Provisions

• Establishment of a relief program

  • Administered by the commissioner of the Minnesota Department of Employment and Economic Development (DEED).
  • Scope covers impact from federal enforcement activity during July 1, 2025 through February 28, 2026.
  • Targeted at privately owned permanent indoor spaces that host retail tenants or food markets and meet occupancy and cultural criteria.

• Grants to operators (Subd.2)

  • Grantees may use grants to make subgrants to operators/tenants within the space.
  • Each operator grant may be up to 250,000.
  • Of the grant amount, all but 10,000 must be used for subgrants to existing tenants.
  • Subgrants must primarily help tenants (existing tenants) and, at a minimum, 50 percent of the subgrant funds must be used to forgive the tenants’ existing rent.

• Eligible businesses (Subd.3)

  • Must have primary operations in Minnesota.
  • At least 50 percent owned by a Minnesota resident.
  • Must operate out of a permanent physical location.
  • Must be in good standing with the secretary of state and the Minnesota Department of Revenue as of the grant agreement date.
  • Must show at least a 20 percent decline in revenue or sales when comparing July 1, 2024–February 28, 2025 with July 1, 2025–February 28, 2026.
  • Must employ the equivalent of 50 full-time workers or fewer (FTE).

• Eligible uses (Subd.4)

  • Grants may be used for payroll and contractor payments, rent and mortgages, utilities, inventory replacement, security upgrades, and working capital.
  • May not be used to refinance debt that existed before December 1, 2025.

• Grant process (Subd.5)

  • DEED must develop criteria, forms, applications, and reporting requirements.
  • Grants awarded by lottery after a short application window (periods no longer than 10 calendar days) with specific deadlines:
  • Some grants must be awarded by October 31, 2026.
  • Other grant categories must be awarded by July 31, 2026.
  • Additional categories must be awarded by October 31, 2026.
  • Minimum grant per business: 5,000.
  • Maximum grant per business per location: 25,000.
  • Each lottery may set the exact grant amount within those limits.

• Reporting (Subd.6)

  • By December 31, 2026, DEED must submit a report on how grant funds were used.
  • The report goes to the chairs and ranking minority members of the legislative committees with jurisdiction over economic development.
  • The report must include data on the number of businesses served and any evidence of a positive impact on economic development from the grants.

Significant Changes to Existing Law

• Creates a new, targeted small business relief program specifically addressing the period of federal enforcement impact.
• Establishes a new funding mechanism and set of grant procedures (operator grants with required subgrants to tenants, rent forgiveness, eligibility criteria, lottery-based awards, and reporting) that did not previously exist.
• No explicit repeals or amendments to existing law are described; the bill adds a new program and related rules within the state’s economic development framework.

Summary Notes

• The program emphasizes support for multi-tenant, culturally focused indoor markets or spaces with a significant number of small, Minnesota-based tenants.
• The rent forgiveness component is a core feature intended to stabilize tenant businesses during a period of federal enforcement-related disruption.
• Grant awards are designed to be rapidly deployed via lotteries within tight application windows, with clear minimums and maximums per business location.

Relevant Terms small business relief grants, DEED, Minnesota, federal enforcement activity, operators, privately owned permanent indoor spaces, retail spaces, food markets, tenants, subgrants, rent forgiveness, eligible uses, payroll, contractor payments, utilities, inventory replacement, security upgrades, working capital, debt refinance, good standing, secretary of state, Department of Revenue, Minnesota resident, ownership threshold, 20 percent decline, 50 full-time employees or fewer, lottery, grant amounts, minimum grant, maximum grant, application window, reporting, legislative committees, chairs, ranking minority members, economic development.