Read the full stored bill text
A bill for an act
relating to economic development; establishing a Minnesota business recovery
loan program; canceling prior appropriations; appropriating and transferring money;
requiring a report.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
new text begin
MINNESOTA BUSINESS RECOVERY LOAN PROGRAM; TRANSFER.
new text end
new text begin
Subdivision 1.
new text end
new text begin
Transfer.
new text end
new text begin
(a) $100,000,000 in fiscal year 2026 is transferred from the
Minnesota forward fund account to the Minnesota business recovery loan account in the
special revenue fund established in subdivision 3, for loans under this section. This is a
onetime transfer. Money is available until June 30, 2028.
new text end
new text begin
(b) Of the amount transferred in paragraph (a):
new text end
new text begin
(1) $18,000,000 is for a grant to the Minnesota Initiative Foundations to be distributed
to individual initiative foundations based on the demand of the region serviced by the
initiative foundation relative to the purpose of the loan program to provide zero-interest
loans to businesses in greater Minnesota; and
new text end
new text begin
(2) $82,000,000 is for grants to nonprofit corporations that meet the criteria under
Minnesota Statutes, section 116M.18, subdivision 2, and are a currently certified nonprofit
partner to provide zero-interest loans to businesses in the seven-county metropolitan area.
new text end
new text begin
(c) For purposes of this section, "partner organizations" or "partner" means nonprofit
corporations that have current contracts to enroll small business loans in the Minnesota
emerging entrepreneur program, the state small business credit initiative, or both, and that
will provide loans under this section. For purposes of this section, "commissioner" means
the commissioner of employment and economic development.
new text end
new text begin
(d) Of the amount transferred in paragraph (a):
new text end
new text begin
(1) no more than five percent may be used for administrative costs incurred by partner
organizations in making the loans under this section, and two percent may be used for costs
related to administration and oversight of the program by the Department of Employment
and Economic Development; and
new text end
new text begin
(2) the commissioner of employment and economic development must authorize up to
five percent to be used by the Office of the Legislative Auditor or Bureau of Criminal
Apprehension to evaluate compliance with the requirements of this section, detect and
prevent misuse of funds distributed under this section, and investigate fraud related to this
section.
new text end
new text begin
Subd. 2.
new text end
new text begin
Loan program established.
new text end
new text begin
(a) A Minnesota business recovery loan program
is established to assist businesses adversely affected by activities and events related to
increased immigration enforcement in Minnesota beginning December 1, 2025, to help
rebuild and stabilize affected businesses, protect jobs, and ensure recovery of Minnesota's
economy.
new text end
new text begin
(b) The commissioner shall purchase a participation interest in loans made by partner
organizations to eligible recipients.
new text end
new text begin
(c) The commissioner may negotiate and enter into agreements with the partner
organizations to purchase loans originated under this section. Agreements under this section
are considered financial assistance agreements and are not considered procurement or grant
contracts.
new text end
new text begin
(d) The commissioner may adopt guidelines, forms, and procedures necessary to
implement this section.
new text end
new text begin
Subd. 3.
new text end
new text begin
Account established.
new text end
new text begin
The Minnesota business recovery loan account is created
as an account in the special revenue fund. Money in the account is appropriated to the
commissioner to implement the Minnesota business recovery loan program.
new text end
new text begin
Subd. 4.
new text end
new text begin
Eligibility for loan.
new text end
new text begin
(a) To be eligible for a loan under this section, a business
must:
new text end
new text begin
(1) be located in the state and owned by one or more permanent residents of the state;
new text end
new text begin
(2) operate from a permanent physical commercial location;
new text end
new text begin
(3) be in good standing with the secretary of state and the Department of Revenue as of
the date the loan is awarded and throughout the life of the loan;
new text end
new text begin
(4) have annual gross receipts based on the corresponding loan amount levels provided
in subdivisions 6 and 7; and
new text end
new text begin
(5) be able to demonstrate a loss in revenue that is greater than 30 percent during the
period between December 1, 2025, and February 28, 2026, as compared with the same
period during the previous year.
new text end
new text begin
(b) No loan may be made under this section to any business found guilty of committing
fraud or individual pardoned for committing fraud.
new text end
new text begin
Subd. 5.
new text end
new text begin
Loan participation.
new text end
new text begin
(a) Partner organizations shall enter into an agreement
with the commissioner to make loans under the program.
new text end
new text begin
(b) The commissioner shall purchase a 100 percent participation interest in loans made
to eligible recipients by partner organizations as specified under this section.
new text end
new text begin
(c) Partner organizations shall be responsible for underwriting, servicing, and monitoring
loans purchased by the commissioner.
new text end
new text begin
(d) Partner organizations must conduct outreach to publicize the availability of the loan
program to culturally and linguistically diverse communities within the area served by the
partner organization.
new text end
new text begin
Subd. 6.
new text end
new text begin
Loan amounts; Minnesota Initiative Foundations.
new text end
new text begin
(a) The minimum state
contribution to a loan under this subdivision is $2,500. The maximum loan amounts under
this subdivision are as follows:
new text end
new text begin
(1) for businesses having $150,000 or less in annual gross receipts, a maximum loan of
$25,000;
new text end
new text begin
(2) for businesses having $500,000 or less in annual gross receipts, a maximum loan of
$50,000; and
new text end
new text begin
(3) for businesses having $1,500,000 or less in annual gross receipts, a maximum loan
of $150,000.
new text end
new text begin
(b) Loans must be for a term of no more than 60 months.
new text end
new text begin
(c) Notwithstanding paragraph (a), clause (3), a parent business that is not a franchise
operating multiple locations in Minnesota with those locations individually meeting a gross
annual receipts threshold under paragraph (a), clause (1), (2), or (3), is eligible for a maximum
loan amount of $150,000. A business that is a subsidiary of a parent organization may not
apply separately for a business recovery loan under this section.
new text end
new text begin
Subd. 7.
new text end
new text begin
Loan amounts; seven-county metropolitan area.
new text end
new text begin
(a) The minimum state
contribution to a loan under this subdivision is $2,500. The maximum loan amounts under
this subdivision are as follows:
new text end
new text begin
(1) for businesses having $500,000 or less in annual gross receipts, a maximum loan of
$50,000;
new text end
new text begin
(2) for businesses having $1,000,000 or less in annual gross receipts, a maximum loan
of $75,000; and
new text end
new text begin
(3) for businesses having $3,000,000 or less in annual gross receipts, a maximum loan
of $200,000.
new text end
new text begin
(b) Loans must be for a term of no more than 60 months.
new text end
new text begin
(c) Notwithstanding paragraph (a), clause (3), a parent business that is not a franchise
operating multiple locations in Minnesota with those locations individually meeting a gross
annual receipts threshold under paragraph (a), clause (1), (2), or (3), is eligible for a maximum
loan amount of $200,000. A business that is a subsidiary of a parent organization may not
apply separately for a business recovery loan under this section.
new text end
new text begin
Subd. 8.
new text end
new text begin
Loan purposes.
new text end
new text begin
Loans must be used for business purposes including current
obligations related to payroll, lease or mortgage payments, inventory, insurance, property
taxes, utilities, and other operating costs associated with ongoing operations exclusively in
Minnesota. Borrowers must provide evidence that loan proceeds were used for eligible
purposes. Loans must not be used for consolidating, repaying, or refinancing debt accrued
prior to December 1, 2025, or speculation or investment in real estate.
new text end
new text begin
Subd. 9.
new text end
new text begin
Eligibility verification.
new text end
new text begin
A partner organization that administers loans under
this section must require an applicant to submit documentation to verify that the applicant
is eligible and to determine the loan amount for which an applicant qualifies. Applicant
self-attestation alone is insufficient documentation for eligibility verification and
determination of loan amount.
new text end
new text begin
Subd. 10.
new text end
new text begin
Deferred payments.
new text end
new text begin
Loan repayments must begin no later than three months
after a loan is awarded.
new text end
new text begin
Subd. 11.
new text end
new text begin
Loan forgiveness.
new text end
new text begin
(a) After making 24 consecutive on-time payments, the
borrower may apply for forgiveness of up to 60 percent of the loan proceeds.
new text end
new text begin
(b) For the purposes of taxable income, the forgivable portion of the loans are exempt
from income tax reporting in Minnesota.
new text end
new text begin
Subd. 12.
new text end
new text begin
Fraud deterrence measures.
new text end
new text begin
(a) Any applicant suspected of fraud must be
reported to the commissioner of employment and economic development within 15 days
of discovery. The commissioner must send the report to the Minnesota Bureau of Criminal
Apprehension for investigation.
new text end
new text begin
(b) Each application must display the following notice: "Fraudulent applications will
not be tolerated. Information from any suspected fraudulent application will be reported to
state investigating authorities."
new text end
new text begin
(c) Applicants must certify by signature that they have read and understand the notice
required by paragraph (b).
new text end
new text begin
Subd. 13.
new text end
new text begin
Partner program account; loan payments.
new text end
new text begin
(a) Partner organizations must
establish a commissioner-certified account for the purpose of tracking loans purchased
under the program.
new text end
new text begin
(b) Loan payments received from borrowers by partner organizations shall be remitted
to the commissioner no more than 30 days following the end of each calendar quarter so
long as any balance remains outstanding on the loans.
new text end
new text begin
(c) Loan payments received by the commissioner must be returned to the Minnesota
forward fund account.
new text end
new text begin
Subd. 14.
new text end
new text begin
Reporting requirements.
new text end
new text begin
(a) Partner organizations must provide annual
reports on Minnesota business recovery loans to the commissioner of employment and
economic development that include a description of businesses supported by the program,
an accounting of the loans made during the quarter, the source and amount of money collected
and distributed by the program, the program's assets and liabilities, and an explanation of
administrative expenses.
new text end
new text begin
(b) Within 15 days of the date when partner organizations must report under paragraph
(a), the commissioner of employment and economic development must compile the reports
received under paragraph (a) and submit the compiled reports to the chairs and ranking
minority members of the senate and house of representatives committees with jurisdiction
over economic development. Each compiled report must also identify any business that has
not submitted a report required by paragraph (a).
new text end
new text begin
(c) By April 1, 2034, the commissioner must provide a final report compiling the
information received from a partner organization under paragraph (a) throughout the existence
of the program to the chairs and ranking minority members of the senate and house of
representatives committees with jurisdiction over economic development. The report must
also specify any partner organization or business that failed to provide the information
required under paragraph (a).
new text end
new text begin
(d) Beginning on September 1, 2026, and on January 1, April 1, July 1, and September
1 of each year thereafter, the commissioner must prepare a report describing the amount of
repayments made under subdivision 13, paragraph (c), deposited into the Minnesota forward
fund account during the preceding three months and since July 1, 2026, and submit it to the
chairs and ranking minority members of the senate and house of representatives committees
with jurisdiction over economic development. The report must also describe the current
balance of the Minnesota forward fund account at the date of publication.
new text end
new text begin
Subd. 15.
new text end
new text begin
Expiration.
new text end
new text begin
Subdivisions 1 to 13 expire on December 1, 2033, and subdivision
14 expires upon submission of the final report required under paragraph (c).
new text end
new text begin
EFFECTIVE DATE.
new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 2.
new text begin
ANALYSIS OF ECONOMIC IMPACT FROM INCREASED IMMIGRATION
ENFORCEMENT IN MINNESOTA.
new text end
new text begin
(a) $250,000 in fiscal year 2027 is appropriated from the general fund to the commissioner
of employment and economic development to conduct a comprehensive analysis of the
statewide economic impact of increased immigration enforcement since December 1, 2025,
on Minnesota businesses and the Minnesota economy. This is a onetime appropriation.
new text end
new text begin
(b) The analysis must include, but is not limited to, evaluation of:
new text end
new text begin
(1) impacts on labor force participation, workforce availability, and workforce shortages
across sectors of Minnesota's economy;
new text end
new text begin
(2) impacts on small businesses and microbusinesses, including family-owned,
immigrant-owned, and locally owned businesses, with consideration of workforce availability,
hiring challenges, operational costs, business continuity, and long-term business
sustainability;
new text end
new text begin
(3) sector-specific impacts on industries including agriculture, food processing,
construction, health care, hospitality, manufacturing, transportation, and retail;
new text end
new text begin
(4) impacts on business operations, supply chains, productivity, and business closures
or relocations;
new text end
new text begin
(5) regional economic impacts across Minnesota, including comparisons across counties
and between rural, suburban, and urban communities and regional labor markets, to the
extent practicable; and
new text end
new text begin
(6) impacts on consumer spending, state and local tax revenue, and overall economic
output.
new text end
new text begin
(c) The commissioner may solicit proposals and contract with a nonpartisan third-party
to prepare the report. A public institution of higher education in Minnesota must be given
preference to complete the report.
new text end
new text begin
(d) By February 1, 2027, the commissioner must submit the analysis in a report to the
chairs and ranking minority members of the legislative committees with jurisdiction over
workforce and economic development.
new text end
Sec. 3.
new text begin
CANCELLATION.
new text end
new text begin
$100,250,000 of the fiscal year 2024 Minnesota forward fund account appropriation in
Laws 2023, chapter 53, article 21, section 7, paragraph (c), is canceled.
new text end
new text begin
EFFECTIVE DATE.
new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 4.
new text begin
TRANSFER.
new text end
new text begin
$250,000 in fiscal year 2027 is transferred from the Minnesota forward fund account
established in Minnesota Statutes, section 116J.8752, subdivision 3, to the general fund.
This is a onetime transfer.
new text end