ST. PAUL — A Minnesota Senate committee moved forward with a bill on March 23 that would provide financial relief to small businesses that lost revenue due to the surge in federal immigration enforcement in the state.
The DFL-led Senate Jobs and Economic Development Committee voted to include the bill in a larger package of legislation later this session. The measure would offer up to $20,000 in grants through a lottery and competitive bidding process to small businesses that lost at least 20% of revenue between July 1, 2025, and Feb. 28, 2026, compared with the same period a year earlier.
Though Operation Metro Surge formally began on Dec. 1, 2025, bill author Sen. Susan Pha, DFL-Brooklyn Park, said business owners reported revenue losses due to immigration actions long before December.
The bill would also establish forgivable loans of up to $250,000. Businesses would receive a three-month grace period before their first payment. If they remain open and make on-time payments for two years, the remaining loan balance would be forgiven.
Businesses with fewer than 50 employees that operate a physical location, including licensed home businesses and small farms, would be eligible for aid. The bill asks for $100 million from the state's general operating fund.
“These are extremely trying times for small businesses across the state,” Pha said. “Many have experienced alarming losses in revenue and sales and significant disruptions to their workforce.”
Juan Lopez, who owns a coffee shop and a small grocery store in St. Paul, testified that during the height of Immigration and Customs Enforcement activity, his grocery store’s revenue fell by 30%. He said his business incurred additional expenses due to employee overtime and investments in online ordering systems.
“Many of those decisions did not make financial sense in the short term, but we made them to keep our doors open and support our community,” Lopez said.
Sen. Rich Draheim, R-Madison Lake, said a 20% decline over eight months is too low to justify aid and called for a higher figure. Draheim also asked about safeguards against fraud.
Minnesota Department of Employment and Economic Development government relations representative Deven Bowdry said that the bill's language already reflects the agency’s fraud-prevention processes.
Sen. Carla Nelson, R-Rochester, said the bill was too broad and had too low a threshold for qualifying, given the amount of forgivable loan funding available.
“It does not ensure that the funds will be used, I think, in the way that you are seeking or that Minnesota taxpayers would require,” Nelson said.
The committee also discussed a separate bill that would establish a $100 million loan program for small businesses, with funding coming from a dedicated business fund. The committee will continue discussing that bill in the coming weeks.
If passed by the Senate, the bills would move to the evenly divided House, where they would need bipartisan support. Pha said that without aid, some businesses will not recover.
“I don't believe that small businesses that have been impacted by ICE enforcement and immigration enforcement here, that they should be left out by themselves,” Pha said. “If we do not apply some kind of assistance, these businesses are going to close.”
Report for Minnesota is a project of the University of Minnesota’s Hubbard School of Journalism and Mass Communication to support local news across the state.
