The House Taxation Committee heard testimony on House Bill 21, a proposal to establish a state workforce housing tax credit designed to fill financing gaps on affordable rental projects.

Sponsor Representative Larry Brewster, representative for House District 43 in Billings, said the bill is modeled on the federal low-income housing tax credit and would operate with a defined start and end and periodic review, likely by the Revenue Interim Committee. "It basically allocates money over time so that people can gain a tax credit to supplement their projects for low income housing," Brewster said.

Proponents described how state credits would pair with existing federal credits and private investment to create viable capital stacks for affordable housing. Don Sterhan, president of CR Builders LLC, described the mechanics: developers awarded federal credits sell those credits to investors to raise equity, then use that equity with loans and other funds to complete projects. "What it is is it's a conversion. We convert the tax credit to cash," Sterhan said. Sterhan told the committee roughly $15,000,000,000 in federal housing tax credits were sold nationwide last year and described a typical $10,000,000 project example in which roughly $9,000,000 of tax credits may be available and are sold at a discount to generate equity that covers most of a project's capital needs.

Other proponents included NeighborWorks Montana Executive Director Kaia Peterson, Homeward Executive Director Karissa Trujillo, the Montana Housing Coalition, the Helena Housing Authority, the Montana Chamber of Commerce, Montana Bankers Association, Montana Contractors Association, Montana Association of Realtors, local chambers, economic developers and municipal leaders. Trujillo said a proposed state credit would "directly translate into the creation of more homes, more jobs, and more opportunities for Montanans." Proponents gave project examples (Batts building in Great Falls; Bruce Grove in Laurel/Joliet; LB Lofts in Billings) to show how federal credits have been combined with housing trust funds, ARPA, HOME, USDA Rural Development and local contributions to complete developments.

Montana Housing Coalition and an economic-impact study cited by Helena Housing Authority Executive Director Michael O'Neil were offered as evidence that a state credit can leverage substantial private and federal investment. O'Neil summarized a University of Montana Bureau of Business and Economic Research estimate described to the committee that each dollar of state tax credit could leverage an estimated $2.69 in direct public and private residential investment and that a state program could increase the number of affordable units produced in Montana by roughly 40 percent, yielding an estimated 122 additional units per year in the study's example.

The Montana Society of CPAs, represented by John Iverson, opposed HB 21 on tax-policy grounds. Iverson said the Society's core concern is tax-code complexity and that the group intends to oppose new tax credits this session. "We are going to oppose every tax credit this session," he said, and suggested instead that direct appropriations to the Board of Housing would be a simpler way to fund the same outcome.

Informational witnesses included Cheryl Cohen, executive director of the Montana Board of Housing, and Department of Revenue representatives Brian Olson and Shae Daigle, who were available to answer administrative questions about how a state credit would register against income or premium taxes. Representative Brewster closed by urging support and the committee closed the hearing on HB 21 with no executive action that day.

The hearing record includes extensive proponent testimony about how state credits would pair with federal credits, and explicit fiscal figures and project examples provided during testimony. No formal committee vote on the bill was recorded in the hearing transcript.