MontanaHB 6169th Legislature, Regular Session (2025)House

Revise inter-entity loan process

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Bill Overview

Analyzed Economic Effects

5 provisions identified: 1 benefits, 0 costs, 4 mixed.

Loans to cover state agency cash gaps

The Department of Administration allows short-term, interest-free loans between state funds when a fund lacks cash. Loans must be recorded and likely to be repaid within 1 calendar year. In unusual cases, one extra year is allowed with a written reason and a repayment plan sent to key legislative committees. For programs awaiting reimbursements, the department can approve longer-term loans that do not exceed billed receivables, come from non-general-fund sources when possible, and follow repayment terms set by the department or later law. No loan is allowed to a fund owed third-party money unless the agency certifies and then recertifies monthly that it bills as soon as allowed; if it fails to recertify, the statewide system stops transactions for that fund.

Short negative balances allowed, with strict rules

Most state funds cannot end the fiscal year with negative cash. During the year, any fund can be negative for up to 7 working days; after 7 days, the statewide system will not process transactions for that fund. Certain federal special revenue funds may be negative at year-end. If those federal funds stay negative more than 7 working days, the agency must certify and recertify monthly that it bills the federal government as early as allowed, or the system blocks transactions.

Reports on repeated loans or deficits

If the same accounting entity gets a loan or loan extension at two straight fiscal year-ends, the department or commissioner must report by September 1. The report explains why, reviews solvency, and includes a repayment plan, filed electronically and sent to the legislature. If a university accounting entity ends two fiscal years in a row with negative cash, the commissioner must report by September 1 with causes, solvency, and a fix plan.

Changes take effect immediately

The law takes effect on passage and approval. All changes apply right away.

University interfund loans and interest rules

The Commissioner of Higher Education may allow short-term loans between university funds when a subfund lacks cash. Loans must be recorded and likely to be repaid within 1 calendar year. Each covered fund uses one designated accounting entity to make or receive these loans. Loans from the current unrestricted subfund to certain university funds must charge interest equal to last year’s average return on the Board of Investments’ short-term pool. University funds must keep positive cash; an accidental negative is allowed for up to 7 working days.

Sponsors & Cosponsors

Sponsor

Gary Parry
Republican • House

Cosponsors

Janet Ellis
Democrat • Senate

Roll Call Votes

All Roll Calls

Yes: 266 • No: 33

Senate vote • 2/25/2025

Do Concur

Yes: 38 • No: 11

Senate vote • 2/24/2025

Do Concur

Yes: 37 • No: 13

House vote • 1/15/2025

Do Pass

Yes: 94 • No: 6

House vote • 1/14/2025