Eligible Borrowers

17-5-1612 Montana Code Annotated

The legislature intends that individual state agencies may borrow from the program established in this part, as specifically authorized by the legislature under the following conditions:

(1) A loan for which the security is an enterprise or internal service fund source may be approved by a simple majority vote of the legislature.  (See also 17-5-2001.)

(2) A loan for which the security is a general fund appropriation, a general fund revenue source, or any type of tax or fee imposed by the legislature must be approved by a two-thirds vote of the members of each house of the legislature and must include language authorizing the creation of a state debt under Article VIII, section 8, of the Montana constitution.

The state agency needs to have the above legislative approval prior to applying for the INTERCAP loan.  If legislative approval is in place, please continue your loan request by downloading and completing the INTERCAP application.

Judgement

Repayment Option  Borrowing Statutes Loan Term* Vote Req'd? Collateral
General Fund 2-9-316 15 year No None
General Obligation** 2-9-316 & 7-7-42 15 year No Full faith, credit &
taxing power pledge


Energy Retrofit Projects

Repayment Option   Borrowing Statutes Loan Term* Vote Req'd? Collateral
General Fund 7-5-4306, 7-7-4101 & 7-7-4201 10 year No Applicable Equipment
General Fund 7-7-4101 & 7-7-4104 15 year No Applicable Equipment
General Obligation** 7-7-4101 & 7-7-42 15 year Yes Full faith, credit & taxing power pledge
Certified Engineer Cost Savings 7-5-4306, 7-7-4101 & 7-7-4201 10 year No Applicable Equipment


Real Property Purchase and Equipment

Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
General Fund 7-5-4306, 7-7-4101 & 7-7-4201 10 year No Applicable Equipment
General Fund 7-7-4101 & 7-7-4104 15 year No Applicable Equipment
General Obligation** 7-7-4101 & 7-7-42 15 year Yes Full faith, credit & taxing power pledge


New and Used Vehicle/Equipment of All Kinds

Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
General Fund 7-5-4306, 7-7-4101 & 7-7-4201 10 year No Applicable Equipment
General Fund 7-7-4101 & 7-7-4104 15 year No Applicable Equipment
General Obligation** 7-7-4101 & 7-7-42 15 year Yes Full faith, credit & taxing power pledge


Water, Wastewater, and Solid Waste Projects

Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
Revenue Bond*** 7-7-44 & 7-7-45 15 year No Revenue Pledge
General Fund 7-5-4306, 7-7-4101 & 7-7-4201 10 year No Applicable Equipment
General Fund 7-7-4101 & 7-7-4104
Solid Waste 75-10-112
15 year No Applicable Equipment
General Obligation** 7-7-4101 & 7-7-42
Solid Waste 75-10-112
15 year Yes Full faith, credit & taxing power pledge


Interim Financing for Construction or Cash-Flow Loans

Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
Revenue Anticipation 7-6-11 Up to 1 year* No Tax/Revenue Pledge
Bond Anticipation 7-7-109 Up to 3 years Yes Written commitment**
Grant Application 7-7-109 Up to 3 years No Written commitment**

* Revenue anticipation notes (RAN) must be repaid within the year they are borrowed.

**7-7-109(2)(b) Before the notes are issued, the political subdivision must receive a written commitment for the purchase of the bonds or for the grant or loan in an amount that in the aggregate is not less than the principal amount of the notes and shall by resolution agree to fulfill any conditions of the commitment.



Special Improvement Districts (SID) Bonds

  • Special Improvement District (SID) loans are payable from special assessments levied against the real property in the district.
  • SIDs are not full faith and credit obligations of the city.
  • All statutory requirements for establishing the Special Improvement District must be met prior to the loan.
  • City funds must secure the SID with a pledge to levy for and maintain their revolving fund to the maximum amount permitted by law.
  • All local government SIDs and the balance in the revolving fund are subject to review as part of the loan process.
  • Maximum loan term is 15 years or useful life of the project, whichever is less.


Street Maintenance District Bonds

  • Street Maintenance District loans are payable from assessment revenue levied against the real property in the district in accordance with 7-7-44 and 7-12-44, MCA.
  • The City must pledge the assessment revenues and ensure adequate annual assessments are maintained.
  • The obligation does not require voter approval.  However, the appropriate steps to create the street maintenance district and set the annual assessments must comply with 7-12-44, MCA.
  • The City must provide documentation of the street assessments currently in effect, any proposed adjustments, and evidence of the process followed to create the district and set annual assessments.
  • Assessment revenue must be set to generate net revenues to cover debt service by a factor of 1.25.
  • If the district has other outstanding debt, bond counsel is required.
  • Reserve requirement is one year debt service, or 10% of the loan, whichever is less.
  • Maximum loan term is 15 years or useful life of the project, whichever is less.


* Eligible governments must adhere to State law when financing capital projects and cannot finance projects for a longer term than allowed. Board staff will consider the maximum loan term authorized in statute, as well as the repayment ability of the eligible borrower, when reviewing loan requests.  In addition, loan terms cannot exceed the useful life of the project being financed.

** Bond Counsel required.

*** Rates and charges must be set to generate net revenues to cover debt service by a factor of 1.25. The Board will require a reserve account (one year debt service or 10% of the loan, whichever is less).  Bond Counsel will be required to ensure parity bonds if Borrower has existing outstanding debt with the same revenue pledge

Judgement

Repayment Option Borrowing Statutes Loan Term Vote Req'd? Collateral
General Fund 2-9-316 10 year no N/A
General Obligation** 2-9-319, 7-7-2202, & 7-7-2221 15 year no Full faith, credit & taxing power pledge

Energy Retrofit Projects

Repayment Option Borrowing Statutes Loan Term Vote Req'd? Collateral
General Fund 7-5-2306, 7-7-2101,
7-7-2201 &7-7-2402
10 year No, unless over 7-7-2402 authorization Applicable equipment
General Obligation 7-7-2101 & 7-7-2201 15 year Yes Full faith, credit & taxing power pledge
Certified Engineer Cost Savings 7-5-2306, 7-7-2101, 7-7-2201 & 7-7-2402 10 year No,unless over 7-7-2402 authorization Applicable Equipment


New & Used Equipment

Repayment Option Borrowing Statutes Loan Term Vote Req'd? Collateral
General Fund 7-5-2306, 7-7-2101,
7-7-2201 &7-7-2402
10 year No, unless over 7-7-2402 authorization Applicable equipment
General Obligation** 7-7-2101 & 7-7-2201 15 year Yes Full faith, credit & taxing power pledge


New & Used Vehicles

Repayment Option Borrowing Statutes Loan Term Vote Req'd? Collateral
General Fund 7-5-2306, 7-7-2101,
7-7-2201 &7-7-2402
10 year No, unless over 7-7-2402 authorization First lien on vehicle


Real Property Purchases & Improvements

Repayment Option Borrowing Statutes Loan Term Vote Req'd? Collateral
General Fund 7-5-2306, 7-7-2101,
7-7-2201 &7-7-2402
10 year No, unless over 7-7-2402 authorization None
General Obligation** 7-7-2101 & 7-7-2201 15 year Yes Full faith, credit & taxing power pledge


Health Care Facilities - County Operated

Repayment Option Borrowing Statutes Loan Term Vote Req'd? Collateral
General Fund 7-5-2306, 7-7-2101,
7-7-2201 &7-7-2402
10 year No, unless over 7-7-2402 authorization Applicable equipment
General Obligation** 7-34-24, 7-7-2201, 7-7-2402 & 7-6-2512 15 year Yes Full faith, credit & taxing power pledge


Solid Waste Projects

Repayment Option Borrowing Statutes Loan Term Vote Req'd? Collateral
Revenue Bond*** 7-7-2501 & 75-10-112 15 year No, unless amount over 7-7-2402 authorization Revenue Pledge
General Fund 7-5-2306, 7-7-2101, 7-7-2201, 7-7-2402 & 75-10-112 10 year No, unless amount over 7-7-2402 authorization Applicable Equipment
General Obligation** 7-7-2101, 7-7-2201 & 75-10-112 15 year Yes Full faith, credit & taxing power pledge


Interim Financing for Construction or Cash-flow Loans

Repayment Option Borrowing Statutes Loan Term Vote Req'd? Collateral
Revenue Anticipation 7-6-11 Up to 1 year* No Tax/Revenue Pledge
Bond Anticipation 7-7-109 Up to 3 years Yes Written commitment**
Grand Anticipation 7-7-109 Up to 3 years No Written commitment**

* Revenue anticipation notes (RAN) must be repaid within the fiscal year they are borrowed.

**7-7-109(2)(b) Before the notes are issued, the political subdivision must receive a written commitment for the purchase of the bonds or for the grant or loan in an amount that in the aggregate is not less than the principal amount of the notes and shall by resolution agree to fulfill any conditions of the commitment.



Rural Improvement District (RID) Bonds


- Rural Improvement District (RID) loans are payable from special assessments levied against the real property in the district.
- RIDS are not full faith and credit obligations of the county.
- All statutory requirements for establishing the Rural District must be met prior to the loan.
- County funds must secure the RID with a pledge to levy for and maintain their revolving fund to the maximum amount permitted by law.
- All local government RIDs and the balance in the revolving fund are subject to review as part of the loan process.
- Maximum loan term is 15 years or useful life of the project, whichever is less.


* Eligible governments must adhere to State law when financing capital projects and cannot finance projects for a longer term than allowed. Board staff will consider the maximum loan term authorized in statute, as well as the repayment ability of the eligible borrower, when reviewing loan requests.  In addition, loan terms cannot exceed the useful life of the project being financed.

** Bond Counsel required.

*** Rates and charges must be set to generate net revenues to cover debt service by a factor of 1.25. The Board will require a reserve account (one year debt service or 10% of the loan, whichever is less).  Bond Counsel will be required to ensure parity bonds if Borrower has existing outstanding debt with the same revenue pledge




Judgement

Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
General Fund 2-9-316 & 20-9-471 10 year No N/A
General Obligation ** 2-9-316 & 20-9-4 15 year No Full faith, credit & taxing power pledge


New & Used Vehicle/Equipment

Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
General Fund 20-9-471 10 year No Applicable Equipment
General Obligation** 20-9-4 15 year Yes Full faith, credit & taxing power pledge


Real Property Purchases & Improvements

Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
General Fund- Remodel within existing walls 20-9-471 10 year No Applicable Equipment
General Fund- New Construction 20-9-471 10 Yes Applicable Equipment
Building Reserve Levy 20-9-502 &20-9-503 15 year Yes Levy Pledge
General Obligation** 20-9-4 15 year Yes Full faith, credit & taxing power pledge

Interim Financing for Construction or Cash-flow Loans

* Revenue anticipation notes (RAN) must be repaid within the fiscal year they are borrowed.

** 7-7-109(2)(b) Before the notes are issued, the political subdivision must receive a written commitment for the purchase of the bonds or for the grant or loan in an amount that in the aggregate is not less than the principal amount of the notes and shall by resolution agree to fulfill any conditions of the commitment.


Energy Retrofit Projects

Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
General Fund 20-9-471 10 year No Applicable Equipment
Energy Cost Savings*** 20-9-471 10 year No Applicable Equipment
General Obligation** 20-9-4 15 year Yes Full faith, credit & taxing power pledge

* Eligible governments must adhere to State law when financing capital projects and cannot finance projects for a longer term than allowed. Board staff will consider the maximum loan term authorized in statute, as well as the repayment ability of the eligible borrower, when reviewing loan requests.  In addition, loan terms cannot exceed the useful life of the project being financed.

** Bond Counsel required.

*** Certified report from a registered professional engineer licensed to practice in the State of Montana showing energy cost savings are sufficient to cover the debt service over a 10 year term.



MONTANA UNIVERSITY SYSTEM INTERCAP LOANS

The Montana Legislature authorizes the Board of Regents of Higher Education for the State of Montana (the “University”) to borrow in accordance with 20-25-402 Montana Code Annotated (MCA) in behalf of the University units listed in 20-25-201 MCA for a any purpose in 20-25-3 and 20-25-4 MCA.

• Governing loan agreements - Agreements are identical for Montana State University (MSU) and University of Montana (UofM).

                   • Stand-Alone Program Agreement

                   • Surplus Net Revenue Program Agreement

• Completed university application (Word | PDF) signed by authorized Office of Commissioner of Higher Education (OCHE) representative required.
• Project may not have been previously rejected by the Legislature.
• Projects over $150,000 require Governor’s letter of consent to project, in accordance to 18-2-102 MCA.
• Loans over $500,000 require:
• Governor’s consent letter as stated above (if applicable)
• Board of Regents - Agenda Item approving project and authorization to secure loan through INTERCAP. 
• Source of Repayment is a pledge of net income from revenue-producing facilities, student fees and other income in furtherance of its general control and supervision of the Montana University System, pursuant to Title 20, Chapter 25, Parts 3 and 4, Montana Code Annotated, as amended; provided, however, that the State is not to be obligated on such indebtedness and no State funds except those specified are to be obligated unless specifically directed by the Legislature, as provided in Section 20-25-405, Montana Code Annotated, as amended.

 

MONTANA COMMUNITY COLLEGE INTERCAP LOANS

The Montana Legislature authorizes Montana Community Colleges to borrow in accordance with and for purposes listed in 20-15-301 Montana Code Annotated (MCA) with concurrence of the Board of Regents of Higher Education for the State of Montana.

POINTS OF INTEREST

• Completed university application (Word | PDF) signed by authorized Office of Commissioner of Higher Education (OCHE) required.
• Last two fiscal year audits and current budget required.

• Loans over $500,000 require:
• Board of Regents - Agenda Item approving project and authorization to secure loan through INTERCAP.

Solid Waste District INTERCAP Loans

The Montana Legislature authorizes a Solid Waste Management District to borrow in accordance with and for purposes listed in 7-11-10 Montana Code Annotated (MCA) with concurrence of its board of county commissioners.

Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
Revenue Bond 7-11-10 Up to 15 years No, unless amount over 7-7-2402 authorization Revenue Pledge

Rates and charges must be set to generate net revenues to cover debt service by a factor of 1.25. The Board will require a reserve account (one year debt service or 10% of the loan, whichever is less).

  • Bond Counsel will be required to ensure parity bonds if Borrower has existing outstanding debt with the same revenue pledge.
  • The County will be the co-borrower on the Solid Waste Management District loan.
  • Eligible governments must adhere to State law when financing capital projects and cannot finance projects for a longer term than allowed. Board staff will consider the maximum loan term authorized in statute, as well as the repayment ability of the eligible borrower, when reviewing loan requests. In addition, loan terms cannot exceed the useful life of the project being financed.
  • For more solid waste financing options visit the Water, Wastewater & Solid Waste Action Coordinating Team (WASACT) website.

The Montana Legislature authorizes a County Water and/or Sewer District to borrow in accordance with and for purposes listed in 7-13-2218 & 7-13-2221 Montana Code Annotated (MCA).

Preliminary Engineering 

Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
Promissory Note 7-13-2218 & 7-13-2221 3 years interest only w/ option No Revenue Pledge

A registered professional engineer licensed to practice in his or her area(s) of competence and expertise in the State of Montana must prepare the preliminary engineering studies funded through INTERCAP. 
• The loan may have principal deferred for up to three years; however, interest payments will be due semiannually.
• If not taken out by another means after three years, staff may amortize as an ordinary INTERCAP loan for an additional three years.
• Preliminary engineering studies funded through INTERCAP must generally conform to the requirements outlined in the Uniform Preliminary Engineering Report for Montana Public Facility Projects.
• If another state or federal agency provides additional grant or loan funds for a preliminary engineering study financed through INTERCAP, written approval from that agency’s engineer would be required stating the scope of work generally conforms to the requirements outlined in the Uniform Preliminary Engineering Report for Montana Public Facility Projects.
• In the event INTERCAP is the sole source of financing a preliminary engineering study, BOI staff will work with other funding agencies that agreed to assist in reviewing the scope of work to determine if it conforms to the requirements outlined in the Uniform Preliminary Engineering Report for Montana Public Facility Projects.
• For more water & sewer financing options visit the Water, Wastewater & Solid Waste Action Coordinating Team (WASACT) website.

Construction, Equipment & Improvements

Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
Bond Anticipation 7-7-109 Up to 3 years Yes Written commitment*
Grant Anticipation 7-7-109 Up to 3 years No Written commitment*

*7-7-109(2)(b) Before the notes are issued, the political subdivision must receive a written commitment for the purchase of the bonds or for the grant or loan in an amount that in the aggregate is not less than the principal amount of the notes and shall by resolution agree to fulfill any conditions of the commitment.

Fire District INTERCAP Loans

Apparatus
Emergency Response Apparatus
Equipment
New Construction & Improvements

Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
General Fund 7-33-2109 10 year No First lien on vehicles & equipment
General Obligation* 7-33-2109 & 7-7-22 15 year Yes Full faith, credit & taxing power pledge

Fire Service Area INTERCAP Loans

Apparatus 
Emergency Response Apparatus
Equipment
New Construction & Improvements

Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
General Fund 7-33-2404 10 year No First lien on vehicles & equipment
General Obligation** 7-33-2404 & 7-7-22 15 year Yes Full faith, credit & taxing power pledge

*Eligible governments must adhere to State law when financing capital projects and cannot finance projects for a longer term than allowed. Board staff will consider the maximum loan term authorized in statute, as well as the repayment ability of the eligible borrower, when reviewing loan requests. In addition, loan terms cannot exceed the useful life of the project being financed.

**Bond Counsel required.

Airports (City/County)

67-10-405

Airport Authorities

67-11-305

Consolidated City/County

Reference County Law

Hospital District (County)

7-34-2122 & 7-34-2131

Interlocal Government

7-11-1

Libraries (Public)

22-1-309

Port Authorities

7-14-1133

Television District

7-11-10

Transfer Site

75-10-112