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HELENA – Gov. Steve Bullock’s proposed infrastructure plan, which would spend nearly $400 million on public works projects across the state, gets its first public airing Tuesday.

Known as the Build Montana Act, House Bill 5 will be heard by the Joint Appropriations Subcommittee on Long-Range Planning at 8 a.m. in Room 317B in the Capitol.

It will the first of many meetings devoted to the proposal and the various projects within it.

The projects run the gamut from university system buildings and a new Montana Historical Society Heritage Center to a new $45 million grant program for the eastern Montana local governments affected by oil and gas development in the Bakken.

It also includes state energy conservation projects, the Treasure State Endowment Program grants, the Treasure State Regional Water Program, Renewable Resource Grant and Loan Program, Reclamation and Development Grant Program and Quality Schools Grant Program.

“We’re going to spend a lot of time on it,” Rep. Mike Cuffe, R-Eureka, who chairs the subcommittee.

Rep. Jeff Welborn, R-Dillon, is sponsoring the bill for the Democratic governor. It is one of Bullock’s top priorities this session.

“I think (Tuesday’s) the day we’re going to kind of look at it from 30,000 feet,” Welborn said Monday. “We’re not going to look at all the moving parts. We’re going to do our best to gather up supporters as we’re moving it along.”

The bill’s Senate sponsor, Senate Minority Leader Jon Sesso, D-Butte, said, “Infrastructure improvements have been identified as one the most important things we can get done this session.”

As proposed, the bill would cost $391.2 million, including $212.2 million from proceeds of bond issues.

Legislators have been debating for weeks whether the state should issue that much in bonds or instead use what they have called surplus cash in the state budget.

Some leaders of the Republican Senate and House majorities have expressed concerns over the bonding levels in Bullock’s bill and said they want to spend more cash instead.

Cuffe said he was part of the House majorities that stopped the bonding bill in 2011 and eliminated some of the projects in 2013.

“It’s a big topic,” he said. “We have a number of bonds we’re trying to get paid off. I believe if we pass this, we’re just going to about going to double what we now owe.”


Bullock’s budget director, Dan Villa, said the state now pays about $14 million annually to service already-issued bonds.

An analysis by the Legislative Fiscal Division estimated the state would have to pay back $192 million over 20 years to cover the Bullock bonding proposal. That would amount to about $14 million annually in all but the first two and last two years of the repayments if the bonds were issued in two phases in October 2016 and October 2017.

However, Bullock’s administration could use cash first to spend on projects, lock in interest rates for bonds and issue the bonds later.

Montana now ranks 46th in net tax-supported debt per capita at $276.

“I’m not trying to sell the bonding projects or kill the bonding projects,” Cuffe said. “Do we really need to bond if we have $300 million in the bank?”

It takes a two-thirds majority in each house for the state to issue bonds because the state would be going into debt.

“I’d like to shift the focus away from whether it’s cash or bonding to how much should be cash and should be bonds,” Sesso said. “I would contend the cost of money is cheaper than the cost of inflation. If capital markets were 7 percent to 8 percent (interest rates), it wouldn’t be a smart investment.”

But legislative attorneys have told Cuffe that HB5 would actually require a three-fourths majority in each chamber because it uses coal severance tax bond proceeds. That requires even a greater supermajority.

Bullock’s proposal combined what had been five bills in the past into one.

Welborn said he hasn’t heard much discussion on whether the plan should be one bill or multiple bills, which would allow the one requiring three-fourths’ majorities to be separate.

“I think everyone can agree we’ve got to finance infrastructure, and no one else is offering a better way to do it at this point,” Welborn said.

Sesso said he’s comfortable with Bullock’s one-bill approach.

“At the end of the day, it takes a strong consensus of the legislative body to move a bill of this importance,” the Democrat said.

Cuffe said it’s “a real possibility” the subcommittee will look at having some separate bills instead of the one large bill, but no decision has been made yet.

“As far as splitting it off or chunking it down, right now I’m just taking it a day at a time,” the subcommittee chair said.

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