Proposal would set aside $6 million for low-interest loans to reopen closed sawmills

A coalition of local economic-development groups, loggers and forest-management interests urged the committee to support House Bill 876, which would appropriate $6 million to the Board of Investments to make low-interest loans (capped at 3%) to entities that reopen sawmills shuttered in the previous three years.

Representative John Fitzpatrick, the sponsor, said the measure — labeled the Montana Sawmill Revitalization Act in testimony — would help rural economies and improve forest health by creating outlets for harvested timber. "This short piece of legislation ... appropriates $6,000,000 to the Board of Investments for the purposes of making low interest loans with a 3% interest cap to an entity that wishes to reopen a sawmill," Fitzpatrick said.

Grant Kier of the Missoula Economic Partnership described the bill as part of a larger capital stack being assembled with state partners and local governments to attract private investment. "This is the first time that my board has allowed us to work on a project that does not need to land in Missoula County," Kier said, arguing the statewide benefits of restored mill capacity.

Other proponents — including the Missoula Chamber of Commerce, the Montana Logging Association and forestry consultants — said mills support jobs, local economies and forest treatments that can reduce wildfire risk by making treatments financially viable. Zachary Bashore (online) and other witnesses warned that loss of local mill capacity raises costs for fuels-reduction and restoration work.

Several committee members pressed sponsors and investment officials on practical questions: where log supply would come from, how workforce and housing constraints affect recovery of capacity, and whether $6 million is adequate to attract the private capital needed. Board of Investments and Department of Commerce representatives said the proposed program is structured as a commercial loan program: applicants typically must pass underwriting by a participating bank, provide equity, and the BOI would participate in a portion of the loan, with the BOI requiring sufficient collateral and frequently personal guarantees.

Sponsor Fitzpatrick said the $6 million would be a two-year, biennial program and that applicants would be expected to assemble the rest of a capital stack; he indicated the funding source would be adjusted in an amendment to the bill. Some proponents asked for a longer eligibility window and larger funding amounts; others asked that an existing Wood Products Revolving Loan Fund be preserved for small-business needs rather than used here.

The committee did not take final action. Members asked staff to schedule executive action only after receiving additional fiscal and technical information.