Committee hears bill to let Montana Facility Finance Authority issue conduit bonds for broader projects

Senator Roger Lammers, sponsor: Senator Roger Lammers opened the House Business and Labor Committee hearing on Senate Bill 104 on March 17, urging lawmakers to "unlock new economic opportunities and fuel growth across Montana" by broadening access to conduit private activity bonds.

Supporters told the committee the Montana Facility Finance Authority (MFFA) has decades of experience issuing conduit bonds for health care projects and could extend that role to manufacturers, housing developers and other projects that currently must rely on local governments to serve as conduit issuers.

The bill would amend eligible uses in existing statute and expand which nonprofit and private borrowers can access MFFA conduit financing, while preserving the principle that conduit debt is an obligation of the borrower, not the state or MFFA. "Conduit debt is not an obligation of the MFFA, the Montana Department of Commerce, the State of Montana, or local governments," the MFFA's executive director, Adam Gill, told the committee.

Why it matters: nut graf SB 104's supporters say the change addresses a gap that disadvantages rural counties and smaller borrowers. Proponents argued that when local governments lack capacity to act as conduit issuers, projects can be delayed or…