Purpose

This bill creates a relief program to help small businesses that were negatively affected by federal enforcement activity between July 1, 2025 and February 28, 2026. It authorizes funding to run the program and requires a report on the use of the funds.

Who can receive relief

• Operators of privately owned permanent indoor spaces that host retail spaces or food markets.
• These spaces must have at least 25 tenant businesses, most of which have 20 or fewer employees, and the complex must have a cultural emphasis.

How the funding works (grant structure)

• Each operator can receive up to $250,000 in a grant.
• From the operator grant, all but $10,000 must be used for subgrants to the operator’s existing tenants.
• The subgrants to tenants are intended to help maintain those tenants, and at least 50% of the operator grant must be used to forgive the tenants’ existing rent.

Who is eligible to receive subgrants

• A business is eligible if it:
  • Operates primarily in Minnesota
  • Is at least 50% owned by a Minnesota resident
  • Has a permanent physical location
  • Is in good standing with the secretary of state and the Department of Revenue as of the grant agreement
  • Can show at least a 20% decline in revenue or sales when comparing July 1, 2024–February 28, 2025 to July 1, 2025–February 28, 2026
  • Employs the equivalent of 50 full-time workers or fewer

What the grants can be used for

• Eligible uses include:
  • Payroll and contractor payments
  • Commercial rent and mortgages
  • Utilities
  • Inventory replacement
  • Security upgrades
  • Working capital
• Grants may not be used to refinance debt that existed before December 1, 2025.

How grants are awarded

• The commissioner must create criteria, forms, applications, and reporting requirements.
• Grants funded under certain parts are awarded by lottery after applications are collected within a short window (up to ten calendar days).
• Deadlines for obtaining grants are:
  • By October 31, 2026 for some grant categories
  • By July 31, 2026 for others
  • By October 31, 2026 for remaining categories
• Minimum and maximum grant amounts per business:
  • Minimum: $5,000
  • Maximum per business per location: $25,000
• The entity running the lottery can set the exact grant amounts within those limits.

Reporting and accountability

• By December 31, 2026, the commissioner must report to the chairs and ranking minority members of the legislative committees with jurisdiction over economic development.
• The report must detail how the funds were used, how many businesses were served, and any evidence of positive economic impact from the grants.

Significant changes to existing law

• Establishes a new relief program and funding mechanism to aid small businesses affected by federal enforcement activity within a specific period.
• Creates a structured grant system that channels funds through operators to support tenants, with rent forgiveness as a key feature.
• Introduces a lottery-based grant process and specific eligibility, use, and reporting requirements.

Relevant Terms - relief program - small businesses negatively impacted by federal enforcement activity - July 1, 2025 to February 28, 2026 - operator grants up to $250,000 - subgrants to tenants - privately owned permanent indoor spaces - host retail spaces or food markets - at least 25 tenant businesses - 50 percent rent forgiveness - eligible businesses - Minnesota residents / ownership - permanent physical location - good standing (Secretary of State, Department of Revenue) - 20 percent revenue or sales decline - July 1, 2024–February 28, 2025 vs July 1, 2025–February 28, 2026 - 50 full-time employees or fewer - eligible uses (payroll, rent, utilities, inventory, security, working capital) - debt refinancing prohibition (pre-December 1, 2025) - grant lottery process - minimum $5,000 / maximum $25,000 per business per location - reporting deadline (December 31, 2026) - chairs and ranking minority members (economic development committees)