Sen. Champion-led bill advances $100 million forgivable loan program for businesses hit by 'Operation Metro Surge'

Sen. Champion on April 27 asked the Senate Finance Committee to recommend Senate File 4535, a $100 million business recovery loan program designed to help firms hit by what members referred to as "Operation Metro Surge." The committee approved the bill as amended and instructed staff to make technical and conforming changes.

Champion summarized the package as a $100 million forgivable-loan fund, with $18 million earmarked for Greater Minnesota through community development financial institutions (CDFIs) and $82 million for nonprofit loans in the metropolitan area. "The loans are 0 interest forgivable loans," Champion said. He said loans would carry a five-year term and that, "after on time payments for 2 years, the following 5% can be forgiven," allowing up to 60% forgiveness over the term.

Champion said the bill includes a $250,000 appropriation for a statewide economic-impact study to measure effects of Operation Metro Surge and to inform the jobs committee ahead of the 2027 budget year. He also cited a provision—originating with former Rep. Hodan Hassan—that allows a business to defer initial payments for up to three months to address outstanding obligations before making principal payments.

Fiscal staff told the committee the proposal cancels $100,250,000 of FY2023 forward fund appropriations, transfers $100,000,000 into a newly created business recovery loan account, and transfers $250,000 to the general fund for the economic-impact study. The staff presentation included a bracketed breakdown showing $18,000,000 dedicated to Greater Minnesota and $82,000,000 for metropolitan-area loans.

Supporters said the split was informed by consultations with regional foundations and CDFIs. "We worked with the Initiative Foundation," Champion said, adding that those organizations helped shape the distribution to ensure parity.

Opponents flagged concerns about repurposing forward fund dollars meant for large-scale economic projects and CHIPS Act matching. Sen. Pratt said the measure diverts funds from the Minnesota Forward Fund and expressed worry about forgiveness levels and repayment assumptions. "We're taking a $100,000,000 after the fact and providing loans," Pratt said, and he criticized what he called insufficient focus on the economic impact of fraud in prior programs.

Champion responded that the Forward Fund includes dormant balances that should be activated to help businesses in real time, and he said good-standing requirements for loan forgiveness are part of the bill. He also said the committee has pursued fraud controls in other work and that the loan program does not preclude addressing fraud separately.

The committee adopted a series of technical and policy amendments (A12, A13 and A14) before voting to recommend the bill as passed. A13 gives preference for a Minnesota public institution of higher education to complete the economic impact study; A14 tightens reporting frequency and creates an expiration for reporting obligations. A12 made technical fixes and revised the transfer approach.

The motion to recommend Senate File 4535 as amended passed by voice vote; the record shows the chair called for ayes and an opposed voice response was registered. The bill was described as "on its way" to the floor.

Next steps: with the committee recommendation recorded, Senate File 4535 proceeds toward floor consideration and any further floor amendments.