Representative John Fitzpatrick opened the Subcommittee F hearing on House Bill 12, which would set legislative appropriations for the Montana Historic Preservation Grant Program and consider a ranked list of recommended projects.

The bill funds the program with receipts from Montana’s lodging or accommodations taxes. Fitzpatrick told the committee the program was created in 2019 as part of the Montana Heritage Center authorization and that the account will receive a somewhat larger lodging‑tax share beginning this year. “The program is administered by the Montana Department of Commerce and refunded by receipts received from the lodging tax,” he said, adding the lodging‑tax distribution that supported the program will increase from 5 percent to 6 percent in the coming year.

The Montana Department of Commerce and legislative fiscal staff presented details showing Commerce received 74 applications for the 2027 biennium, 63 of which were eligible and ranked above the program’s cutoff. The department’s ranked list totals about $22.5 million in requests; the governor’s executive budget recommends funding projects 1–17 on that ranked list (about $6.2 million) to match projected receipts. Commerce staff noted revenues for the program are projected to be about $7.9 million for the 2027 biennium but that the fund carried forward a negative balance into the period, meaning the program cannot spend more cash than is actually available.

Why it matters: the program is a state competitive grant source used for preservation, renovation and limited adaptive reuse of historic sites and history museums across Montana. The legislature makes the final funding decisions; Commerce’s ranked list is advisory.

Key program details and committee discussion

- Funding source and change: Legislative staff and LFD analyst Joe Bonn described the accommodation‑sales and lodging‑facilities taxes as separate 4 percent levies and explained how portions of the lodging‑sales tax are allocated to state special accounts, the Montana Heritage Center and the historic preservation account. Commerce and fiscal staff said the preservation account’s share increases to 6 percent under the current distribution.

- Applicants and amounts: Commerce’s project list included 63 eligible projects. Commerce reported the combined requests on the list total about $22.5 million: roughly $6.7 million requested by government entities, $6.9 million by nonprofits and $8.9 million by for‑profit applicants. The executive recommendation funds 17 projects totaling approximately $6.23 million.

- Ranking, criteria and match requirements: Commerce said it scored applications under the statutory review criteria in Montana Code Annotated §22‑3‑1306 (economic activity, project need, timeline and match, historic value, capacity, local contribution and public benefit). Jordan Conley, program manager, said applicants must demonstrate at least a 20 percent match of total project cost (up to one‑third of the match may be in‑kind). She noted matches do not have to be fully secured at application, but must be documented by contract time.

- Environmental review question and proposed amendment: Fitzpatrick told the committee he found it “astounding” that many small interior rehabilitation projects are required to submit environmental reviews while larger infrastructure projects can be categorically exempt. He said he has asked staff to draft an amendment to exempt certain limited interior rehabilitation projects from environmental review.

- Reverted or withdrawn awards: Commerce staff identified several 2025 biennium awards that were returned or for which awardees did not meet startup conditions; staff said reverting those funds would increase available cash this biennium if the legislature approves grant terminations or reassignments.

What’s next

The committee heard dozens of applicants present project overviews in ranked order; the department and applicants answered member questions on project scope, match, timing and public benefit. Commerce stressed that the list it provided is advisory and that the legislature may add, delete or change amounts as it exercises appropriation authority.

Ending note: Committee members pressed for more detail on cash‑flow timing, the extent of Commerce’s administrative share and on safeguards for awarding public funds to private properties with a public use component. Several applicants attending in person said they had matching funds or other local commitments in place.