- Associated Press - Friday, March 18, 2016

HELENA, Mont. (AP) - Montana will issue $5.5 million in coal severance tax bonds as part of a $40.5 million financing package for a dozen drinking water and wastewater projects across the state, Gov. Steve Bullock’s office said Friday.

The package, which includes State Revolving Fund loans and a mix of other state and local money, will trigger additional matching federal funds for a total of $95 million for the projects, according to Bullock budget director Dan Villa.

They will go toward critical projects but won’t cover all the infrastructure needs that were included in bills that were rejected by the 2015 Legislature, Villa said.

“It’ll help. Obviously Senate Bill 416 and House Bill 5 would have done more, but this is a step in the right direction,” he said.

The Republican-led Legislature rejected the disputed bills because they would have been partly financed through general obligation bonds. Conservative lawmakers said they opposed the idea of saddling future generations with debt to pay for the projects.

The coal severance tax bonds approved by Wednesday by the state Board of Examiners - Bullock, Attorney General Tim Fox and Secretary of State Linda McCulloch - were authorized under separate legislation for renewable resource projects.

Those bonds are different from general obligation bonds because they use the revenue from the tax on the coal production in the state, not the state treasury, as collateral.

Rep. Nancy Ballance, the vice-chairwoman of the Legislative Finance Committee, said the Bullock administration was within its authority to issue bonds using the coal severance tax legislation, even though most of the projects to be funded weren’t included in the bill.

The bill had a provision that also allowed the Department of Natural Resources and Conservation to finance specific projects, she said.

“It is based on need, and I think they do a very thorough job in vetting these projects,” Ballance said.

The projects will go out to bid beginning in May, state officials said. They include drinking water projects in Big Sandy, Billings Heights, the Dry Prairie Rural Water system, Great Falls, Laurel and Cascade County.

The wastewater projects are in Columbus, Cut Bank, Dawson County, East Helena, Miles City and Sidney.

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