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Committee hears bill to renew rural capacity grants for small Minnesota cities
Summary
Senate File 20-50 would appropriate $627,000 in FY2026 to Community and Economic Development Associates (CEDA) for a Rural Capacity Program providing technical assistance and small grants to Greater Minnesota towns under 3,000 population.
Senator Nelson presented Senate File 20-50 to the Senate Committee on Jobs and Economic Development; the bill would appropriate $627,000 in fiscal year 2026 from the General Fund for Community and Economic Development Associates (CEDA) to continue the Rural Capacity Program. The program targets Greater Minnesota towns with populations of 3,000 or fewer and funds technical assistance plus small implementation grants.
A DEED fiscal analyst told the committee the request mirrors a prior FY2024 appropriation of the same amount. Amy Schaffer, CEDAs rural capacity manager, described the programs structure: 20 participating cities would each receive up to 135 hours of technical assistance (totaling 2,700 TA staff hours) and roughly $13,500 per city, for a $270,000 direct grant pool. Schaffer said the funding has supported revolving loan funds, grant applications (for example DNR and USDA grants), childcare feasibility studies, and commercial facade programs; small initial investments often attracted additional private and public funding.
City administrators and local officials testified to results. Beth Wusso, city administrator for Parkers Prairie (population ~1,000), said the program provided $15,000 and 150 TA hours that helped the newly formed EDA complete a housing study, create business subsidy guidelines, establish a revolving loan fund, and successfully submit a USDA Rural Development grant application. Wusso said the city expects 30 new housing units in 2025 and additional units in 2026-27 and credited CEDA with enabling grant submission despite limited municipal staff.
Committee members pressed on funding source and on how implementation grants are selected; Schaffer explained cities applied via an application process, CEDA conducted outreach (including a contact database for all cities under 3,000), and the $270,000 pool is intended for direct implementation such as establishing revolving loan funds or leveraging matches for larger grants. Senator Nelson said she would continue to explore feasible funding sources if the General Fund proves highly competitive.
Senate File 20-50 was laid over for possible inclusion; no committee vote occurred during the hearing.
