Read the full stored bill text
- 2025
69th Legislature 2025 HB 150
- 1 - Authorized Print Version – HB 150
ENROLLED BILL
AN ACT GENERALLY REVISING ALCOHOL AND GAMBLING LAWS; REVISING OWNERSHIP
CONSIDERATIONS IN GAMBLING AND ALCOHOL LICENSES; REVISING LAWS RELATED TO
REGULATED LENDERS AND ALCOHOL AND GAMBLING LICENSES; REVISING LAWS RELATED TO
OTHER PERSONS AND OWNERSHIP INTERESTS IN AN ALCOHOLIC BEVERAGE LICENSE OR
GAMBLING LICENSE; AND AMENDING SECTIONS 16-4-801 AND 23-5-118, MCA.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 16-4-801, MCA, is amended to read:
"16-4-801. Security interest in alcoholic beverage license -- definitions. (1) (a) A security interest
in an alcoholic beverage license is an interest in the alcoholic beverage license that secures payment or
performance of an obligation. A contract for the sale of an alcoholic beverage license, including a provision
allowing the seller to retain an ownership interest in the license solely for the purpose of guaranteeing payment
for the license, may, for the purposes of this section, be treated as a security interest.
(b) For the purposes of this section:
(i) "alcoholic beverage license" means a license issued under this chapter; and
(ii) "default" means that:
(A) the defaulting party has acknowledged in writing pursuant to the terms of a written security
agreement or contract for sale that the defaulting party no longer has any ownership interest or any other rights
to possess or control the alcoholic beverage license;
(B) a court of competent jurisdiction has made an order foreclosing all of the defaulting party's
interests in the license; or
(C) there has been a nonjudicial sale by the secured party made pursuant to the Uniform
Commercial Code and the secured party has provided written proof of the sale to the department.
- 2025
69th Legislature 2025 HB 150
- 2 - Authorized Print Version – HB 150
ENROLLED BILL
(2) The department, after review of the underlying documents creating the security interest, may
approve a transfer of ownership of an alcoholic beverage license subject to a security interest as provided in
subsection (1). A person holding a security interest may not have any control in the operation of the business
operated under a license subject to a security interest nor may that person share in the profits or the liabilities of
the business other than the payment or performance of the licensee's obligation under a security agreement.
(3) (a) Within 7 days of a default by a licensee, the person holding the security interest shall give
notice to the department of the licensee's default and either apply to have the license transferred to that person,
subject to that person meeting the requirements of 16-4-401 and all other applicable provisions of this code, or
the person shall place the license on nonuse status. On receipt of an application to transfer the license, the
department may, pursuant to 16-4-433, grant the applicant temporary operating authority to operate the license.
If the person holding the license places the license on nonuse status, the person shall transfer ownership of the
license within 180 days from the date on which the notice of the default was given to the department. The
operation of a business under a license by a person holding a security interest for more than 7 days after
default of the licensee or without temporary operating authority issued by the department must be considered to
be a violation of this code and constitutes grounds for the department to either deny an application for transfer
of the license or for the revocation of the license pursuant to 16-4-406.
(b) If the person holding the security interest does not qualify for or cannot qualify for ownership of
an alcoholic beverage license under 16-4-401, the secured party shall transfer ownership of the alcoholic
beverage license within 180 days of the notice of the default of the licensee.
(c) The department, on a showing of good cause, may in its discretion extend the time for sale of
the license for an additional period of up to 180 days.
(4) (a) A regulated lender, as defined in 31-1-111, may obtain a security interest in an alcoholic
beverage license or in other assets of a business operating an alcoholic beverage license to secure a loan or a
guaranty of a loan. A regulated lender may use loan and collateral documentation and loan and collateral
structure consistent with that used by the regulated lender in commercial loans generally, and the
documentation and structure used by the lender do not create an undisclosed ownership interest in the
alcoholic beverage license or the licensee's business by a coborrower, or guarantor, or other person who may
directly or indirectly benefit from the pledge of the alcoholic beverage license as collateral if the department
- 2025
69th Legislature 2025 HB 150
- 3 - Authorized Print Version – HB 150
ENROLLED BILL
determines the borrower, coborrower, guarantor, and owner or owners of the assets pledged as collateral meet
the requirements of 16-4-401. As used in this subsection (4), permissible loan and collateral structuring
includes but is not limited to permitting owners and nonowners of an alcoholic beverage license to:
(i) be coborrowers of a borrower's loan;
(ii) be guarantors of a borrower's loan, with or without a requirement that the regulated lender
exhaust remedies against the borrower before collecting from the guarantor; or
(iii) pledge assets as collateral for a borrower's loan or for a guaranty of a borrower's loan; or
(iv) pledge an alcoholic beverage license or the assets of an alcoholic beverage operation as
additional collateral for a loan made by a regulated lender.
(b) A person claiming a security interest in an alcoholic beverage license may submit to the
department copies of documents evidencing the security interest, the license number, and a $30 notification
fee. The department shall deposit the fee as provided in 16-2-108. The department may create and provide a
form to be used for this purpose.
(c) The department shall notify those that have filed information provided in subsection (4)(b):
(i) at least 20 days prior to issuance of an order of default for revocation, nonrenewal, or lapse of
a license; or
(ii) immediately after the department's office of dispute resolution has issued a decision to uphold
the department's revocation or nonrenewal of a license under 16-4-406 or lapse of a license under 16-3-310.
(5) When a licensee is the borrower, an owner of the licensee may make a payment on the
institutional loan. If a payment is made under this subsection (5):
(a) the party making the payment must be vetted and approved prior to making the payment;
(b) the licensee shall notify the department within 90 days that the payment was made and
designate whether the payment will be treated as a loan or an equity investment as follows:
(i) for a payment treated as a loan, the licensee shall memorialize the loan by a written
agreement, which must be provided to the department; or
(ii) for a payment treated as an equity investment, if a change in ownership percentage occurs as
a result, the licensee shall follow department requirements for disclosing changes in ownership percentages;
and
- 2025
69th Legislature 2025 HB 150
- 4 - Authorized Print Version – HB 150
ENROLLED BILL
(c) the funds used for the payment must be the party's own funds or funds borrowed from an
institutional lender.
(6) If a borrower, coborrower, or guarantor, or other person who may directly or indirectly benefit
from the pledge of the alcoholic beverage license or the assets of an alcoholic beverage operation as collateral
is not the licensee or an owner of the licensee, the coborrower, or guarantor, or other person may make a
payment on the a licensee's institutional loan, and the payment does not create an undisclosed ownership
interest in the alcoholic beverage license by the borrower, coborrower, or guarantor, or other person only if:
(a) the licensee notifies the department within 90 days that the payment was made;
(b) the payment is made as a loan that is memorialized by a written agreement; and
(c) the funds used for the payment are the coborrower's, or guarantor's, or other person's own
funds or funds borrowed from an institutional lender.
(7) A regulated lender that obtains a security interest in an alcoholic beverage license or in other
assets of a business operating an alcoholic beverage license has no duty to ensure a coborrower's or
guarantor's compliance with the requirements of subsection (5) or (6) in connection with loan or guaranty
payments it may receive from the coborrower or guarantor.
(8) For the purposes of subsections (5) and (6), the term "borrower" means the party that is
primarily responsible for making payments and that receives the funds or on whose behalf the funds were paid."
Section 2. Section 23-5-118, MCA, is amended to read:
"23-5-118. Transfer of ownership interest -- definitions. (1) In this section, "licensed gambling
operation" means a business for which a license was obtained under parts 1 through 8 of this chapter.
(2) Except as provided in subsection (4), an owner of an interest in a licensed gambling operation
shall notify the department in writing and receive approval from the department before transferring any
ownership interest in the operation to a person other than another approved owner of an interest in the
operation.
(3) An owner of an interest in a licensed gambling operation may transfer an ownership interest to
another owner of an interest in the same licensed gambling operation without prior department approval subject
to reporting requirements provided by department rules.
- 2025
69th Legislature 2025 HB 150
- 5 - Authorized Print Version – HB 150
ENROLLED BILL
(4) This section does not apply to the transfer of a security interest in a licensed gambling
operation under the requirements of subsection (5) or to the transfer of less than 5% of the interest in a publicly
traded corporation.
(5) A regulated lender, as defined in 31-1-111, may obtain a security interest in the assets of a
licensed gambling operation to secure a loan or a guaranty of a loan. A regulated lender may use loan and
collateral documentation and loan and collateral structure consistent with that used by the regulated lender in
commercial loans generally, and the documentation and structure used by the lender do not create an
undisclosed ownership interest in the licensee's business by a coborrower, or guarantor, or other person who
may directly or indirectly benefit from the pledge of the assets as collateral if the department determines the
borrower, coborrower, guarantor, and owner or owners of the assets pledged as collateral meet the
requirements of 23-5-176. As used in this subsection (5), permissible loan and collateral structuring includes
but is not limited to permitting owners and nonowners of a licensed gambling operation to:
(a) be coborrowers of a borrower's loan;
(b) be guarantors of a borrower's loan, with or without a requirement that the regulated lender
exhaust remedies against the borrower before collecting from the guarantor; or
(c) pledge assets as collateral for a borrower's loan or for a guaranty of a borrower's loan; or
(d) pledge the assets of a licensed gambling operation as additional collateral for a loan made by a
regulated lender.
(6) When a licensee is the borrower, an owner of the licensee may make a payment on the
institutional loan. If a payment is made under this subsection (6):
(a) the licensee must notify the department within 90 days that the payment was made and
designate whether the payment will be treated as a loan or an equity investment as follows:
(i) for a payment treated as a loan, the licensee must memorialize the loan by a written
agreement, which must be provided to the department; or
(ii) for a payment treated as an equity investment, if a change in ownership percentage occurs as
a result, the licensee must follow department requirements for disclosing changes in ownership percentages;
and
(b) the funds used for the payment must be the party's own funds or funds borrowed from an
- 2025
69th Legislature 2025 HB 150
- 6 - Authorized Print Version – HB 150
ENROLLED BILL
institutional lender.
(7) If a borrower, coborrower, or guarantor is not the licensee or an owner of the licensee, the
coborrower or guarantor may make a payment on the a licensee's institutional loan, and the payment does not
create an undisclosed ownership in the licensee's business by the borrower, coborrower, or guarantor only if:
(a) the licensee notifies the department within 90 days that the payment was made;
(b) the payment is made as a loan that is memorialized by a written agreement; and
(c) the funds used for the payment are the coborrower's or guarantor's own funds or funds
borrowed from an institutional lender.
(8) A regulated lender that obtains a security interest in the assets of a licensed gambling
operation has no duty to ensure a coborrower's or guarantor's compliance with the requirements of subsection
(6) or (7) in connection with loan or guaranty payments it may receive from the coborrower or guarantor.
(9) For the purposes of subsections (6) and (7), the term "borrower" means the party that is
primarily responsible for making payments and that receives the funds or on whose behalf the funds were paid."
- END -
I hereby certify that the within bill,
HB 150, originated in the House.
___________________________________________
Chief Clerk of the House
___________________________________________
Speaker of the House
Signed this _______________________________day
of____________________________________, 2025.
___________________________________________
President of the Senate
Signed this _______________________________day
of____________________________________, 2025.
HOUSE BILL NO. 150
INTRODUCED BY S. FITZPATRICK
AN ACT GENERALLY REVISING ALCOHOL AND GAMBLING LAWS; REVISING OWNERSHIP
CONSIDERATIONS IN GAMBLING AND ALCOHOL LICENSES; REVISING LAWS RELATED TO REGULATED
LENDERS AND ALCOHOL AND GAMBLING LICENSES; REVISING LAWS RELATED TO OTHER PERSONS
AND OWNERSHIP INTERESTS IN AN ALCOHOLIC BEVERAGE LICENSE OR GAMBLING LICENSE; AND
AMENDING SECTIONS 16-4-801 AND 23-5-118, MCA.