Education: financing; interest-free loans to school districts and intermediate schools districts from the state's surplus funds; allow under certain circumstances. Amends 1855 PA 105 (MCL 21.141 - 21.147) by adding sec. 2g.

2025-2026 Regular Session Introduced by Kelly Breen and 14 co-sponsors

Allows the State Treasurer to lend surplus funds interest-free to Michigan school districts/ISDs for up to one year when general appropriations bills are delayed.

bill electronically reproduced 06/30/2026

#education:financing #localgovernment:financing

Summary of HB 6144 (2025-2026) — Michigan

Purpose and intent

HB 6144 would add a new section (Sec. 2g) to 1855 PA 105 (the Surplus Funds Act) to authorize the State Treasurer to provide interest-free loans of surplus state funds to K-12 school districts and intermediate school districts (ISDs) under specific conditions. The primary purpose is to bridge potential gaps in school funding during years when the Legislature has not enacted general appropriations bills before October 1, by allowing temporary, interest-free financing from the state’s surplus to affected districts.

Key provisions and changes

Autonomy for the State Treasurer to loan surplus funds:

The State Treasurer may loan surplus funds to a school district or ISD without interest.
Loans are available only if certain conditions are met (see below) and continue only until the next fiscal year’s appropriations bills are enacted.

Conditions for eligible loans (subsection 2g(1)):

The loan amount may not exceed the amount that the district received from the School Aid Fund for the same month in the immediately preceding year.
The loan period may not exceed 1 year.

Temporal applicability (subsection 2g(2)):

The loan authority is in effect only until the general appropriations bills for the following fiscal year are enacted.

Terms and administration (subsection 2g(3)):

The State Treasurer may impose additional terms for loans beyond the basic criteria.

Definitions (subsection 2g(4)):

“Intermediate school district” and “school district” are defined according to the Revised School Code (MCL 380.4 and MCL 380.6).

Who would be affected

Eligible entities: Michigan school districts and intermediate school districts.

They could access interest-free loans of surplus state funds when appropriations bills are delayed, subject to the specified limits and any terms set by the State Treasurer.

Other state actors: The State Treasurer would be the administering authority, with possible additional loan conditions defined by the Treasurer.

Procedural and timeline considerations

Effective mechanism only when annual general appropriations bills are not enacted by October 1 in a given year.

Loans are temporary, lasting up to 1 year, and must align with the prior year’s School Aid Fund monthly allocation for the same month.

The borrowing authority ceases once the next year’s general appropriations bills are enacted.

Legislative status: Introduced June 30, 2026; referred to House Appropriations; multiple co-sponsors; bill electronically reproduced as of June 30, 2026.

Potential impact and considerations

Financial relief during appropriations delays: Provides districts with access to needed funds without interest costs, potentially helping maintain programs and operations when budgets are unsettled.

Fiscal risk and oversight: Requires careful administration by the State Treasurer to ensure compliance with caps and term limits; the impact of interest-free lending on state surplus management and cash flow would be a consideration.

Equity and timing: The cap tied to the prior year’s monthly School Aid Fund allocation could affect larger or smaller districts differently, depending on their historical funding patterns.

This summary presents the bill’s core mechanics and potential effects while avoiding speculative policy outcomes. If you’d like, I can add a quick comparison to existing surplus-fund loan programs or provide a glossary of key terms.