As federal stimulus rolls out, Minnesota businesses learning specifics on state aid

Two COVID relief packages — one from the state and now one from the federal government — are sending hundreds of millions of dollars to Minnesota's small businesses and unemployed workers hurt by the pandemic.

Minnesota's agencies are still awaiting details of how the $900 billion bill passed this week by Congress will be rolled out. In the meantime, they began providing specifics Tuesday on how small businesses will receive aid as part of the $242 million deal passed by Minnesota lawmakers last week.

An estimated 5,800 businesses in Minnesota qualify for the $88 million in state aid earmarked for restaurants, bars, breweries, bowling alleys and gyms. They will receive payouts based on their numbers of employees, according to the Department of Revenue.

Firms will receive $10,000 if they have 20 or fewer employees, $25,000 if they have between 21 and 100 employees, $35,000 if they have between 101 and 300 employees, and $45,000 for those with 301 or more employees.

These businesses don't have to apply for the grants. Rather, the Department of Revenue will determine which businesses are eligible based on their sales tax and unemployment records as of Nov. 1. The state will notify eligible businesses through their e-services account by Dec. 31 and will mail payments in early January. No electronic payments will be made for this program.

To be eligible, businesses must have had at least $10,000 in taxable sales in 2019, experienced at least a 30% drop in sales from April to September, and must have been required to temporarily close or reduce services as a result of Gov. Tim Walz's executive order that went into effect on Nov. 21.

The Department of Revenue added that it is working on a process for businesses to dispute their payment amount and will provide more details on that when it is available.

The Department of Employment and Economic Development (DEED) is administering the $14 million in state grants set aside for movie theaters and convention centers. Convention centers are eligible for grants of up to $500,000 and movie theaters can receive up to $150,000. These funds are for operating expenses such as payroll, rent and utilities.

Similar eligibility criteria are in place for these programs. However, movie theaters and convention centers will have to apply for the aid, with applications expected to become available on Jan. 5. DEED said it will review applications in January and February with awards to be announced in February.

The largest chunk of state support — $114.8 million — will be distributed to Minnesota's 87 counties, which they can then direct to businesses within their communities that have been impacted by the pandemic.

Businesses that might not be eligible for the other relief programs because, for example, they weren't around in 2019 or they weren't shut down by the most recent executive order, could receive aid through this route. In addition, entities such as hotels, music venues, amusement parks, museums and other nonprofits are eligible for these grants.

There is no limit to the size of these county-based grants, with it being left up to counties how to distribute the funds.

Counties will have to apply to receive this aid, with certification forms expected to be available later this week. They will have until March 15 to award their grants, though they could distribute them sooner than that.

Minnesota's COVID relief package also includes a 13-week extension for unemployment benefits for more than 100,000 Minnesotans whose payments were otherwise expected to expire the day after Christmas. State lawmakers wanted to provide a bridge for unemployed workers in case federal lawmakers were not able to reach an agreement to extend those programs.

However, the $900 billion pandemic relief bill passed by federal lawmakers this week also includes an extension of unemployment benefits, which will likely replace the state extension. A DEED spokeswoman said the agency is awaiting more details from the Department of Labor on the federal extensions.

The federal bill also will extend benefits for about 40,000 Minnesotans who had been receiving unemployment payments through the Pandemic Unemployment Assistance program, which was also scheduled to expire later this week. That federal program is for gig workers, freelancers, independent contractors and other self-employed workers.

The federal package also includes an additional $300 a week in benefits for unemployed workers for 11 weeks starting later this month.

In addition, the federal plan includes $600 in stimulus payments for individuals, half the size of similar payouts that went out in the spring.

It also reopens the Paycheck Protection Program for small businesses to apply for a second loan. And it provides $15 billion for live venues, theaters and museum operators, $82 billion for K-12 schools and colleges, $10 billion for child care providers, and $25 billion in rental assistance.

Kavita Kumar • 612-673-4113 Twitter: @kavitakumar