Yesterday the Minnesota Senate passed controversial legislation that takes $100 million from the Minnesota Forward Fund, a fund intended to attract new businesses to Minnesota, to create grants for businesses that claim they were harmed by protests and boycotts promoted by political leaders from throughout the state. 

“The Minnesota Forward Fund was always meant to be used to draw businesses to Minnesota, and with recent policies that have made Minnesota incredibly unfriendly to business growth and development, we need to preserve that fund for its intended purpose now more than ever,” said Senator Karin Housley (R-Stillwater). “It’s absolutely true that businesses were affected by Metro Surge, and my heart hurts for the small businesses still feeling the effects of those months. But it’s also true that this bill lacks safeguards to prevent fraud. We’ve already seen DEED’s track record when it comes to fraud in their grant programs. If we’re serious about helping Minnesota businesses, we need to learn from those mistakes and put forward legislation that prioritizes the needs of small businesses while reducing the risk of fraud.""

Fraud concerns raised by Republicans led to some safeguards being added to the bill, including language that says up the 5% of the funding can be used to fight fraud. However, attempts to require more eligibility verification beyond self-attestation, ensure the business is in good standing with the state, and banning funds from going to people here illegally were rejected by Democrats.

Notably, an amendment offered by Housley was also accepted onto the bill. Original language stated that businesses only needed to be in “good standing” with the Secretary of State and Department of Revenue when applying for one of these loans. To ensure the grants are going to legitimate businesses, the Housley amendment required businesses receiving loans to remain in good standing throughout the life of the loan.

A similar fund passed after the 2020 riots are the subject of full program review by the Office of the Legislative Auditor’s after local reporting revealed a troubling lack of verification and potential misuse of the funds.