SovereignWealthFunds.comMontana Coal Severance Tax Trust Fund
Montana Coal Severance Tax Trust Fund: what it invests in
Geography Domestic and global
Montana Coal Severance Tax Trust Fund: how big it is, and on what basis
In US dollars: about USD 1.323B. Reported in US dollars.
Montana Coal Severance Tax Trust Fund: what it publishes
Published 5 · Partly 3 · Not published 2
Our 10 item score. It measures what is public, not how well a fund is run.
At a glance. Montana's Coal Trust is a constitutional permanent fund that receives half of the state's coal severance tax. It held USD 1,323.3 million at 30 June 2025 across eight sub-trusts for schools, water, infrastructure and economic development. The Board of Investments runs it mainly for income, and uses part of it to lend to Montana businesses and local governments. S1
Key points
- Fiduciary net position of USD 1,323.3 million at 30 June 2025 (unaudited). S1
- Principal can be spent only by a three-fourths vote of each house of the legislature. S1
- The Board is encouraged to invest 25 percent of the trust in the Montana economy. S1
- USD 126.4 million is lent in Montana, mostly through a business loan participation programme. S1
- The main income pool was 70.2 percent fixed income and 20.9 percent real estate. S1
- The trust also backs USD 161.5 million of state bond guarantees. S1
Interesting facts
Mandate and goals
The constitution requires half of coal severance tax revenue to be held in a permanent trust whose principal stays intact. Income is used as the legislature directs, and part of the trust is invested in Montana to create jobs. S1
How it invests
| Industries | Financial services, Real estate, Industrials and manufacturing, Infrastructure and utilities. Sector agnostic S1 |
|---|---|
| Asset classes | Fixed income, Real estate, Private credit, Infrastructure, Cash and money markets S1 |
| Stages | Credit, Real estate, Public markets S1 |
| Geography | Domestic and global. US bond and property markets plus Montana lending S1 |
| Direct / through funds / co-invest | Yes / Yes / Yes S1 |
| Ticket size | No ticket size for the trust; loan programmes have legal caps. S1 |
| External managers | Part of the income pool is run by external managers S1 |
| Co-investment programme | Business Loan Participation Program: participates alongside Montana banks and lenders S1 |
Asset mix: Trust Funds Investment Pool 81.6%, Montana loans 9.6%, Short-term pool 8.8% (as of 2025-06-30) S1
Published criteria
- Business loans: participation of up to 80 percent in a loan from an approved lender. S1
- Infrastructure loans: for local governments building basic sector business infrastructure; USD 80 million cap. S1
- Relending loans: up to USD 500,000 each to local development groups; USD 10 million cap. S1
- Value-added loans: low-interest loans to firms that create or keep jobs; USD 70 million cap. S1
Past investments
| Year | Investment | Type | Sector | Stage | Amount |
|---|---|---|---|---|---|
| Not published | Montana Precision Products. Participation and infrastructure loans with Butte-Silver Bow to expand an aviation parts plant; 99 jobs pledged over four years. S1 | Co-investment | Industrials and manufacturing | Credit | About USD 3.9M |
| Not published | Kyiyo Bakery & Mercantile. Store, food and lodging business near Browning on the Blackfeet Nation; created jobs. S1 | Co-investment | Tourism and hospitality | Credit | 80% of a USD 2M loan |
| 2025 | Business Loan Participation Program. Loans for land, buildings and equipment made with approved Montana lenders. S1 | Co-investment | Multi-sector | Credit | USD 100.8M |
| 2025 | Infrastructure Loan Program. Loans to local governments for infrastructure serving basic sector businesses. S1 | Direct investment | Infrastructure and utilities | Infrastructure | USD 8.4M |
| 2025 | Montana Facility Finance Authority. Loans plus a USD 96.5 million bond guarantee. S1 | Direct investment | Healthcare and life sciences | Credit | USD 11.5M |
Case studies
Lending to grow Montana jobs S1
- What: Montana Precision Products borrowed about USD 3.9M from two Board loan programmes to expand in Butte.
- When: FY2025 report
- Size: About USD 3.9M
- Why: State law directs part of the trust into job-creating Montana investments.
- Outcome: 99 jobs pledged over four years.
Splitting one trust into eight S1
- What: The legislature split the trust into sub-trusts for schools, water, infrastructure and development; income from two flows to the general fund.
- When: Ongoing
- Size: USD 1,323.3M
- Why: Earmark income for specific public needs.
- Outcome: Permanent Fund USD 548.2M; Coal Endowment USD 269.9M.
Investment process
The Montana Board of Investments, a nine-member board led by Chair Jeff Meredith, sets policy. Staff led by the Executive Director and CIO invest the trust and run the commercial loan programmes. S1
| Committee | Role |
|---|---|
| Montana Board of Investments | Sets investment policy for state funds S1 |
- Half of coal severance tax revenue is deposited into the trust. S1
- Most of it is invested in the income-focused Trust Funds Investment Pool. S1
- Part is lent to Montana businesses and local governments under set programmes. S1
- Income goes to the general fund and sub-trust purposes. S1
How to approach: Businesses apply for commercial loans through approved Montana lenders; programme details are on the Board site. S3
Size and returns
- Headline size: USD 1,323.3M (Fair value of state company holdings, as of 2025-06-30) S1
- In US dollars: about USD 1.323B. Reported in US dollars.
- Permanent Fund sub-trust: USD 548.2M (Fair value of state company holdings, as of 2025-06-30) S1
- Montana loans (separately managed): USD 126.4M (Fair value of state company holdings, as of 2025-06-30) S1
- Returns: the fund does not publish a return figure.
- Staff: Board of Investments staff manage about 49 percent of all Board assets in-house S1
Leadership
Governance and transparency
- Legal basis: Montana Constitution, Article IX, Section 5 S1
- Oversight: Montana Board of Investments; Legislative Audit Division audits S1
- Auditor: Legislative Audit Division S1
- Not an IFSWF member. S2
Transparency score: 6.5 of 10 (band 4 of 5). Our own 10-item rubric; see the methodology page.
History
For family offices
Montana business owners can borrow alongside the trust through its loan participation programme with local banks. It has no fund or co-investment programme for private investors. S1
- Seeking a participation loan through an approved Montana lender. S1
- Commercial Loan Program: Montana businesses and local governments https://investmentmt.com/ S1
Reports
- Montana Board of Investments Annual Report 2025: https://investmentmt.com/_shared/docs/Annual-Reports/ANNUALREPORTFY25.pdf S1
Common questions
How big is the Coal Trust?
USD 1,323.3 million at 30 June 2025. S1
Where does the money come from?
Half of Montana's coal severance tax revenue. S1
Can the principal be spent?
Only with a three-fourths vote of each house of the legislature. S1
Does it invest in Montana?
Yes. It lends USD 126.4 million to Montana businesses and local governments. S1
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All sovereign wealth funds in North America · All sub-national permanent funds · All funds in United States
Sources
Disclaimer
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