Rep. Larry Brewster, sponsor of House Bill 21, told the House Appropriations Committee that the bill would create a temporary state low-income housing tax credit to provide bridge funding for multifamily rental developments and asked the committee to focus on the fiscal note. “This bill doesn’t have any funding until 2028 because this doesn’t pay anything out until after projects are completed,” Brewster said, summarizing how the allocation would be phased and noting the program “has a beginning and an end.”

Supporters from housing developers, trade associations and advocacy groups told the committee HB 21 would expand Montana’s capacity to produce affordable rental units by augmenting federal Low-Income Housing Tax Credits (LIHTC). Becky Brandsborg, an affordable-housing developer and chair of the Montana Housing Coalition, said the bill would provide $1,500,000 in annual allocations over six years and that, when combined with project timelines, the credits claimed by projects would be spread across multiple years. “For the $1,500,000 allocated each year by the Board of Housing, the total credits claimed for those allocations will be $9,000,000 spread over those 5 years,” Brandsborg said, explaining the timing that creates higher annual claims later in the bill’s window.

Margie McDonald of Big Sky 55 Plus and other proponents cited outside research estimating that every dollar of state credit can leverage additional public and private investment. “Over its 6-year life, the credit would generate in the range of $143 million in total residential investment,” McDonald said, citing the leverage effect described in a University of Montana Bureau of Business and Economic Research (BBER) study referenced during testimony.

Cheryl Cohen, executive director of the Montana Board of Housing (administratively attached to the Department of Commerce), appeared as an informational witness to explain the board’s role administering LIHTC and to answer fiscal questions. Cohen said Montana’s federal LIHTC program has produced fewer units in recent years as construction costs rose: where the program once produced about 200 LIHTC units per year, recent rounds have produced roughly 150–160 units per year. She said a state credit paired with federal credits could help projects that are otherwise financially marginal. “With the augment of a state tax credit, that could allow us to produce more units than what we can do with the federal tax credit alone,” Cohen said.

Committee members pressed witnesses on program design and scope. Several legislators noted the bill contains no statutory definition of “workforce housing.” Cohen acknowledged the federal LIHTC program typically serves households at or below 80% of area median income and that whether a project is described as “workforce” or “low-income” can be semantic. She agreed to provide legal and programmatic follow-up on whether the Board of Housing could impose a workforce-only requirement as a condition of awarding state credits. Representative Mercer formally requested follow-up documentation on whether there have been local prosecutions or development gaps that the bill is intended to address; Cohen and other witnesses said they would provide additional materials in writing.

Opponents focused on fiscal transparency and efficiency. Allen Lloyd, director of the Montana Society of CPAs, told the committee his organization opposes tax credits because they can obscure the cost to the state and because syndication discounts mean not all credit value flows into project construction. “Our recommendation is to not do this as a tax credit, but instead to collect that revenue and then actually just invest the money directly into the projects,” Lloyd said.

Witnesses described administrative details reflected in the fiscal note. Cohen and Brandsborg said the program would require roughly a half-time staff position to administer the new state credit, with the fee charged to developers to cover that administrative cost. Witnesses also described how the Board of Housing uses a Qualified Allocation Plan (QAP) to prioritize allocations across urban and rural jurisdictions and noted the Board can and does consider local conditions—population growth and prior LIHTC awards—when scoring applications.

Several committee members asked for numbers on expected unit production from the $54 million authorization (the sponsors’ explanation that $1.5 million annually over six years interacts with project claim timing produced the $54 million figure in the fiscal note). Cohen said the effect depends on project underwriting and pairing with federal 9% or 4% credits: federal 9% awards supply most equity and a state credit could provide incremental equity that allows a project to increase unit counts by a few units on a case-by-case basis. As an illustrative calculation discussed in the hearing, if 200 units per year were produced over six years the $54 million would equate to roughly $45,000 per unit in additional equity; witnesses said actual impacts would vary by project.

Committee members also asked whether credits could be geographically targeted. Cohen said the Board’s QAP differentiates urban and rural jurisdictions (the state’s seven largest cities are treated as urban) and the Board has historically sought to distribute awards where need is greatest, though the draft bill does not impose strict geographic limits.

The hearing closed without a committee vote. Brewster urged passage in his closing remarks and said the limited, time‑bound structure makes HB 21 a test program worth trying. The committee scheduled further executive action on HB 21 and requested follow-up materials from Cohen and other informational witnesses.

Ending: The committee closed the HB 21 hearing and indicated HB 21 would be scheduled for an executive action (EA) on Wednesday, pending the informational follow-up the Board of Housing agreed to provide.