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Austin Knudsen, HD34 - Culbertson

Knudsen

HELENA – To keep its options open, a Senate committee on Tuesday revived, amended and passed out a public works bill sponsored by the House speaker that targets eastern Montana.

Two weeks ago, the Senate Finance and Claims had tabled House Bill 402 by Speaker Austin Knudsen, R-Culbertson.

On Tuesday, the committee amended the bill and voted along party lines 12-7 to send the bill to the Senate floor for debate. Republicans voted for passing out the amended bill, while Democrats voted against it.

On Tuesday, Sen. Bob Keenan R-Bigfork, made the reconsideration motion.

“I would encourage the members of the committee to support this motion because we’re in a fluid situation, and it looks like (Senate Bill) 416 may have hit a snag,” Sen. Eric Moore, R-Miles City, said. “It may or may not be resurrected, but it’s important to keep another title and infrastructure bill option moving as we enter into the waning days.”

Infrastructure funding is one of the major unresolved issues in the Legislature’s final days.

SB416 is a bipartisan bill by Sens. John Brenden, R-Scobey, and Jim Keane, D-Butte, and other senators that calls for local and state governments to spend over the next two years $50 million cash, $50 million in bond proceeds and giving local governments the right to borrow $50 million at low interest rates from the state to pay for infrastructure and state buildings. The bill would double and triple those sums if state revenue collections meet certain triggers.

Because the state would be borrowing money by issuing bonds, SB416 requires a two-thirds majority vote in each house to pass. It earlier passed the Senate by 47-3.

In recent sessions, the House has been cool toward passing a bonding bill, preferring to use cash instead.

Knudsen’s bill, in contrast, requires only a simple majority and earlier cleared the House, 59-39.

It appropriated $55 million from the general fund to an oil and gas impact account, which would award grants to local governments for the infrastructure. It would change how the state portion of the oil and gas production tax and federal mineral royalties are distributed to fund this account.

As amended by the Senate committee Tuesday, the general fund appropriation was cut in half to $27.5 million to be used for grants.

“I’m thrilled that you’re giving a butch haircut here,” said Keane. “I’d like to see it cut further, but half is better than none.”

Sen. Llew Jones, R-Conrad, chair of the Senate Finance and Claims Committee, said federal mineral royalties would continue to flow into HB402.

“It would be a $63.9 million spender over this biennium,” Jones said.

Senate Minority Leader Jon Sesso, D-Butte, said one criticism raised earlier over HB402 was that it was targeted entirely at the needs of eastern Montana to the exclusion of needs throughout the state.

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“We need an infrastructure bill that’s going to serve our entire state of Montana, and not just the difficulties that are being faced in one section of the state,” Sesso said.

Sen. David Howard, R-Park City, said taxes from the oil and gas development in eastern Montana are supporting Montana. The damage is occurring in eastern Montana, he said, so it’s appropriate that infrastructure money go to help eastern Montana.

Sesso replied that half of the taxes generated in oil and gas country already are being returned to the areas there facing impacts.

“We have to look at the state as a whole,” Sesso said. “This bill was designed to serve one area of the state and that’s just not appropriate.”

Moore said North Dakota in the past two years has spent $300 million on infrastructure in areas affected by oil and gas development.

He reminded the committee that the 2013 Montana Legislature, nearly unanimously, voted to back a bill to spend $35 million on infrastructure in the oil and gas development areas and at least $10 million a year until 2020. He noted that Gov. Steve Bullock vetoed the bill.

Bullock said he vetoed it to ensure the state budget is structurally balanced – not spending more in appropriations for the two-year budget period than the state collects in revenues.

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