Committee weighs major changes to rural-industry grant program — higher caps and grant conversion proposed

Committee counsel described substantial edits to the rural industry development provision in S327 that would change the program’s structure and award limits.

Under the draft discussed April 8, the bill’s language now refers explicitly to a program "fund" within the responsible agency rather than a state special fund. The award language was clarified: an award generally shall not exceed the lesser of $1 million or 50% of total project cost, but the committee discussed allowing awards to exceed $1 million — up to $2 million — for projects on federally impacted property if the secretary certifies the project is in a designated downtown development district and one of two additional criteria (a REAP designation or a recent federally declared disaster) is met.

Members also examined a proposal to convert the existing revolving-loan structure into a pure grant program and to void deed-restriction language that applied when the program required repayment. Stakeholders represented in the session asked that a 50% match change be applied retroactively to four projects that previously received awards; members debated whether that retroactivity would alter program payouts or the fund balance.

The committee discussed policy trade-offs: converting to grants and increasing award caps could accelerate deployment of $2.5 million in funds that have not been used since 2023, but it would also change long-term program design and administrative oversight. Several members suggested an intermediate approach — adjust match rates and monitor results for one or two years — before pursuing larger statutory redesign next biennium.

Committee members said they would continue drafting language and consult appropriations leadership about inserting a convention-task-force provision and other program details before finalizing the bill.