Panel approves adjustment tied to capital development fund and 1% general-fund transfer
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Summary
The Section A Subcommittee voted to approve a do-pass motion on DP 103, a present-law adjustment tied to the capital development fund. Legislative Fiscal Division staff said the change implements statutory 1% general-fund transfer mechanics and shifts roughly $9 million tied to prior debt service; the motion passed 5-3 on a roll-call vote.
The Section A Subcommittee on Oct. 12 approved a do-pass motion on DP 103, a present-law adjustment affecting the capital development fund that implements the statutory 1% general-fund transfer mechanism.
The change was moved by Representative Walsh. Joe Triem, deputy director of the Legislative Fiscal Division, told the committee the capital development fund was created in the 2019 legislative session and is funded by a statutory transfer of 1% of estimated general-fund revenues, minus debt service on issued or proposed debt. Triem said the DP before the committee reflects “a little over $9,000,000” that was being used for debt service on previously issued bonds and that approving the DP would result in “essentially just $18,000,000 less of projects that would have to come out of House Bill 5,” because the capital development fund helps pay for HB 5 capital projects.
Why it matters: The capital development fund is the legislature’s primary mechanism for funding capital projects without increasing recurring bonded debt. Triem noted the fund retains its own interest earnings and is capped at 12% of general-fund revenues for the second year of the biennium. He also said last session’s House Bill 251 and related actions effectively retired general-fund general-obligation debt, which is now “100% retired” except for some coal-severance-tax–backed bonds unrelated to the fund.
Committee members asked about the fund’s size and recent activity. Triem said the executive proposal for the fund was about $397,315,000 and that number included a $150,000,000 transfer from the general fund. He described large multi-session projects — including more than $300 million for work at the Montana State Prison — that can leave money obligated in the account for several years while construction continues. The Section F chair had previously indicated a capital presentation around $700 million, Triem said.
Representative Walsh moved the do-pass motion after a prior, unsuccessful effort to reconsider the item. The roll-call vote on the do-pass motion was: Vice Chair Mandeville — no; Senator Cziszek — no; Representative Walsh — yes; Senator Harvey — yes; Representative Muscovich — yes; Senator Flowers — yes; Senator Lamers — yes; Chair Falk — no. The tally was 5 yes, 3 no; the motion carried.
What’s next: With the committee’s recommendation, the adjustment will move forward to the full appropriations process where legislators will reconcile the capital projects list and funding levels.